Hello, good morning, everyone, and thank you for joining Facephi Webcast to discuss our first half 2025 earnings. Joining me on the call today are Facephi CEO and founder Javier Mira and our CFO, Aitor D'Oxandabaratz. Before we begin, just a couple of housekeeping notes. We'll start with a 10-minute presentation highlighting the main aspects of the semester, followed by a Q&A session, and to submit your question, please use the question icon that is located in the lower right corner of your screen. This will help us address them in the order they are received. And also, if you prefer to make your question in Spanish, please do so. With that said, let's proceed with the presentation. Let's start with a brief introduction to Facephi. We provide a 360-degree digital protection.
Facephi is currently evolving from providing individual identity verification and fraud prevention services to delivering a comprehensive solution for identity verification, fraud prevention, and regulatory compliance, offering an end-to-end digital solution to all of our clients. Today, there are several key indicators of the company, such as market cap, stock return, total contract value, and so on. But basically, the summary is that today we attend over 350 clients in 30 different countries and 10 different sectors with a very high retention rate. Our confidence in our outlook is based on an industry that is growing at double digits. Depending on the source, you can see that the biometric systems and identity verification markets are expected to grow over the next five years at between 12% and 50% compounded annual growth rate.
In this slide, I would like to draw your attention to the pie in the lower right corner, which shows the revenue breakdown that is expected for our industry per sector. You know, what I want to highlight here is that around 90% of Facephi's revenues is coming from Latin America, that is the region that represents only 7% of the global market. This means that as we expand into other regions, we are very well positioned to continue growing above the industry's average. The outlook for us is quite bright. Now I will pass the word on to Javier to make an introduction on our services and platform.
Hello, everyone. Thank you very much for joining us in this webcast to analyze or to talk about the results of the first semester of 2025, results that we are really proud of the result that we got because it's showing the growth, the stage of growth of the company, especially coming from years before that we were increasing in revenue in some of the years having a nice EBITDA. But in this particular semester, what we are going to show, if you already have not seen it, is that the company has started to generate positive cash flow. So it's something that has been really important for us and that some of you, of the investors, they've been asking when the company was able to stop burning cash and being able to generate positive cash.
Talking about the presentation, you know that Facephi started being a company that was only dedicated to make authentication using facial recognition at the beginning of the company. But the company today, the portfolio product is covering much more than that. We just came from being facial recognition algorithms using for authentication to IDV, what is called verification using other technologies like Liveness, OCR to read the documents, the passport, et cetera, verifying the face versus the document. And then we moved also to the fraud prevention with technologies like Behavioral Biometrics, the last that we launched that we present in Las Vegas, that is a mule account detection system that are also addressed to banks in order to proceed to this anti-money laundering, et cetera.
So, what you can see in this slide is that now the speech that we have in front of the clients that we cover the three-level security that we call. One is the first step, that is who are you, that we prevent the identity theft using liveness detections, deepfakes detections, et cetera. Second stage or second phase is how do you respond if there is an unauthorized fraud, how we do operate with the bank and that's using behavioral biometrics or being capable to detect the injection attacks, and on the third level is if we are capable, even if the user is allowing to commit fraud, to be able to detect the fraud, and that's what I was talking before, that we use the mule account detection or transaction analysis. With that said, this is the complete portfolio that the company is providing to the clients.
If you start from the beginning, we have the typical KYC, the onboarding system that is just the verification of the person of the digital identity when it's opening an account, trying to access some of the services of any company. Then we have the Facephi authentication. Once you are enrolled, we are capable to authenticate the person before doing any transactions. We combine these two solutions and some others in what we call identity platform. The identity platform is what big clients use to monitor the transactions. We are capable to provide a platform where they can just use this platform to change the flow of the application, charge new models, use different technologies, et cetera. So it's a tool that is very well accepted by our clients. Then on the left, on the bottom on the left, we have the IDV Suite.
The IDV Suite is similar to the identity platform, but this is something very important that is really easy to integrate. In order to integrate the platform with big banks, we need to send the team, make the integration with the banks. It takes some time. The IDV Suite is like a closed box that is very easy to deploy that can be used by any partner that is reselling our product, and there is practically no code needed to make the integration. In the end, the solution is the same, is KYC and is authentication. Then we have the Behavioral Biometrics.
I'm not going to go too deep in that, but basically speaking, what we do is we control the device or the laptop in order to guarantee that the person introducing the data or making any transaction is the authorized person, even though if using a deepfake video or a fake ID, et cetera. Then we have the Mule Account Detection that is capable to somehow flag any account on any bank institution saying if this account is from a victim, is from a mule, or is from a fraudster. And then obviously we have also the Wallet that is becoming more and more in a trend, let's say in the market, in order to be able to manage the digital identity from your phone in order to access different services. Later on, we are going to have some questions.
If you want to ask about the product or the portfolio product that we are being delivered in the last year, let's say, for now, let's continue with the financial report. I invite Aitor, our CFO, in order to go a little bit in detail with that. Aitor, please.
Yes, thank you, Javier, and thank you so much to let us host this today. Thank you. It's a great pleasure to have the opportunity to share with all of you this beautiful information due to the fact that we have some good news to share. Okay, so let's go to the next one. Excuse me, I don't have the opportunity to pass the slides. I don't know if Maite, you can. Yes, thank you. Okay, well, this slide is showing the most, let's say, business rising evolution, okay, where these three main financial indicators, EBITDA, free cash flow, and revenue, okay, well, have this beautiful evolution. Okay, so then let me, sorry, let me go to the side that we have organized the chart. Okay, so on the left, we have the semester figures, okay, and on the right, the annual figures.
Okay, you can see under the headline of 2025 figures, the third chart or the third bar on both sides shows the figures in constant currency terms, so in constant currency basis, which means that it takes away the effect of fluctuation in the foreign currency we have with U.S. dollar. That is the foreign currency we sell. Okay, and then so the company has a significant exposure to the U.S. dollar fluctuation, and this is why we are well organizing this slide like for like speaking to properly compare to previous year. Okay, well, just to say that the impact we have had in the first semester, okay, as a result of the depreciation of the dollar is EUR 500,000 in revenue, EUR 100,000 in cash.
Of course, we are getting savings in cash from July on as a result of closing a hedging contract with the U.S. dollar at 114, okay, when the average value with the dollar is 117. Okay, another remarkable thing to highlight is the revenue was, as you can see, the revenue was going up by EUR 1.5 million, while EBITDA was going up by EUR 2.5 million because in addition to the fact that the fixed cost keeps going flat, the variable cost improves, the variable, the direct cost or variable cost improves so much that the business is now making somewhere about 80% in gross margin instead of 60% last year. Okay, I repeat, 80% gross margin this year instead of 60% of gross margin last year.
Okay, and this is why, well, we are improving EUR 1.5 million in terms of revenue on a constant currency basis. Excuse me, someone has contacted me by phone. Okay, so well, in terms of gross margin, the company has improved so much from 60% last year to 80% this first semester. Okay, to get an idea of how positively the business has evolved, well, on the right side, we have annual figures that are showing in terms of last 12 months, okay, how well the company, well, has evolved, okay, in the three mentioned indicators, revenue, EBITDA, and free cash flow. Okay, in fact, EBITDA has been multiplied close to four times, as you can see.
Okay, another thing remarkable to share is that Free Cash Flow, after several years with the usual increasingly cash burning that Javier has said, 2024 was in fact less burning and breakeven point. So, as a very good news over the last 12 months, joining, let's say, the second semester of 2024 together with first semester 2025. Okay, okay, so we can pass to the next one, please. Yes. Okay, thank you. Yes, so what we want to show at a glance in this chart is the evolution of these four financial indicators where, for example, our commitment to CapEx remains, but it accounts for less and less of sales, as you can see. Okay, so CapEx amount is coming from 2.2 million in 2025 for a little more than 4.5 million in last 12 months' terms in 2025.
Okay, but it represents less and less in terms of percentage on revenue. Okay, of course, the highly visible J effect on free cash flow growth, which allows us to end the last 12 months with breakeven. Okay, and well, this point was announced by our CEO at the beginning of this year, okay, in some road shows in Spain and in France. And then, well, as you can see, finally we have got this beautiful target. Okay, well, let's go to the next one that is that exactly. Thank you. Well, finally, a slide where we are showing a brief guidance highlights on how we expect for this year-end and a preliminary overview on 2026. Okay, well, as you can see, growth will keep going, okay, in the main financial and business indicators.
And so obviously, we strongly believe that we face right now a real investment opportunity period with huge upside for the company compared to the downside risk, let's say. Okay, and well, revenue, EBITDA, free cash flow. It will keep improving, will keep going up. Okay, the main drivers for this growth in revenue will be the growth in EMEA region. Okay, together with the growth coming from behavioral biometrics as a technological solution to prevent complex cases of fraud. And at the end, well, we have set up some partnership, and then we will be using this partnership as a leverage with other companies to be able to offer complementary products to get upselling and cross-selling opportunities and also synergies.
Okay, net financial debt last year was 4.5 million, and for this 2025, we are expecting to get, as a worst case, of the estimated rates coming from the U.S. dollar fluctuation only under the assumption that the dollar could eventually go down to more than 120. Okay, that we don't believe, but anyway, we put the worst scenario. Okay, and just to say that at the end of 2025, 95% of our financial debt will expire, and then we are optimistic about the renewal of a debt that now accounts for only 25% of our revenue instead of what was representing in 2020, that was 100% of our sales. Okay, we are now having some talks with our current banking pool, but also with another financial entities to close next month in December, the financing structure.
Okay, and well, finally, well, just to share the fact that we have some currency risk exposure with the U.S. dollar because 90% of our revenue is in U.S. dollar. Okay, and then, well, as you know, as you can see in the chart, well, the U.S. dollar was depreciating very quickly in just one month from March- April, moving from 105- 115. Okay, and then, well, in June, precisely in the last month of the first semester, we were closing a great contract in terms of a hedging tool. Okay, with a strike in 114. Okay, whenever the U.S. dollar remains in a range between 114 and 120, that, by the way, has been the case.
As you can see in the right side of the chart, the U.S. dollar fluctuation has been and continues being in this range that is in our favor, is positively for our purposes because we, as said, we have closed hedging tooling in 114, but whenever the fluctuation can be in this range between 114 and 119.50. So we are hedging properly the exposure we have with the U.S. dollar, and then, well, we think that is the best way to protect and to have a solid and huge cash position at the end of this year. Okay, and well, finally, let me see.
If you want, I can take this one, Aitor.
Okay, okay, because I don't see it's a little of delay in my line. Excuse me.
No problem. This is your time.
I see. Okay, no, okay. Go ahead, Antonio. If you want, go .
I mean, the summary is that we believe that Facephi now presents a very compelling investment story. We are a leader in a growing industry. We are growing above the industry's average. We are expanding into regions where most of the future growth in the sector is going to be coming from, such as, as I mentioned, EMEA and the APAC region. We are offering a comprehensive platform that addresses all digital security needs of our clients. We are growing both organically and inorganically through our partners, which allows us to maximize cash flow generation but makes lower investments in the new regions and countries where we have expanded. And based on the financial estimates that Aitor just shared for 25 and 26, we believe that our share offers a very compelling valuation. So we are very excited about that look.
We are very excited about the progress that we have made so far, and now we open the floor for questions. Okay, as I mentioned before, I'm going to be using the icon in the bottom to answer the questions in order. Please use the questions icon and not the chat, please. Okay, the first question comes from Michael. Let me translate it for everyone. This is a question for Aitor. Basically, cost of goods sold, supplies drop EUR 700 million. That represents approximately 30%. What is the reason? Aitor.
Well, the reason he has mentioned is that we have changed our direct variable cost in our business, and this is why our direct costs as commissions and biometric supplier costs are different than what we were doing last year and previous one.
Okay, and then this is why the company is becoming more and more productive and more efficient. And then we are developing in this way economies of scale in the sense that we are growing in revenue that is translated directly in EBITDA. Okay, so our direct cost structure is changing a lot, very significantly. Okay, and this is why the growth, the significant growth in revenue will be not directly due to EBITDA, but closely to that, yes. Okay.
Okay, a follow-up question from Michael is our employee base. Basically, there are 20 more employees than in the first half of 2024. What is the reason?
I mean, I believe that the short answer will be basically that, as you know, we have been expanding geographically. So wherever we always need, we need at least one or two people on the floor.
Yes, one point is the growth, definitely, with no doubt, but another point is the fact that we are reclassifying in many cases the way we are hiring. Okay, so as a way of freelancers, okay, as outside costs in the company or as employees within the company. Okay, but in terms of full cost, Michael, keep in mind that we are keeping, let's say, flat. Okay, so if you take all the full cost, operating cost, you will see that the company has got something close to 2% less than what we were doing last year. Okay, so if you take the audit, the KPMG numbers, you will, well, I invite you to do this calculation. Okay, it's nothing more than a reclassification. But in full cost speaking, we are improving more and more compared to last year.
Okay, there is a follow-up question from Michael.
He basically says that if Nice & Green exceeds 30% of ownership of the company's stock, are they obliged to make an offer to buy the rest of the shares? No, definitely not. BME Growth is a non-regulated market, so the same regulation that applies to the main market doesn't apply to us, so definitely that is not the case. Okay, let's go to the next question. Okay, the next question, well, you can all read it. I don't know, Javier, if you want to take this one. What are the main challenges going forward?
Yeah, I'll take this one and by the way, Antonio, I think you are reading the questions from the last to the first. I think you should go below and start in order because it was in the other way. This is from Ben. Thank you very much.
You know, we are very happy about the results of this first semester, especially the last 12-month results. The biggest challenge for the company in the future is to keep growing in other verticals and in other sectors. We've been making a lot of effort and a lot of investments in order to not only be able to sell in Latin America and not only be able to sell in banks in Latin America, but to be able to expand the technology and the solutions into other markets and to other verticals. We've been trying to do that, and somehow we started doing that. We have today some projects with airlines, with hotels, with insurance companies, with gambling companies, and long, etc. In terms of geographically speaking, as Antonio said, we've been growing quite a lot in the EMEA region, especially in Africa and the Middle East.
We believe strongly that the next two to three years, the growth in terms of revenue in a region is going to come from this region. We really believe that. It's true that we came from zero, basically speaking, two years ago, less than 1 million the year 2024, and probably this figure is going to be multiplied by three, four, five times by the end of this year, just in that region. We are very happy. The challenges for the future specifically are to keep going, to keep growing in these sectors and in these regions as much as possible. Another challenge is to be able also to expand the partnership channel that we also believe that is going to bring us a lot of value with big partnerships that we've been signing lately.
One is Hancom, obviously, that the results should come in the near future. And another one is the one that we announced about a month ago with Eastnets. Eastnets is a company that we believe is going to bring us also some revenue. They have more than 820 banks in different regions than Facephi. So the synergies are extremely good for us.
Okay, thank you, Javier. Okay, the next question comes from Miguel. How relevant is Eastnets' relationship to our 2026 revenue guidance?
Well, I think I'm going to repeat a little bit what I just said. It's not that we have put a lot of revenue in our guidance coming from Eastnets' relationship because we still cannot somehow calculate the impact that we're going to have. And when you do guidance, it's much better to be a little bit conservative.
But talking again about Eastnets, just taking into account that Eastnets is a 40-year-old company, 820 banks, specialized in security and fraud prevention. They don't do KYC. They don't do digital verification. And so we really believe we have started already working with them in some events, and our teams are completely aligned. They have already integrated our technology in their own solutions. So we really believe that the results should come in 2026. But we didn't calculate the impact because obviously we don't want to overexpose this relationship in the guidance.
Okay, fantastic. The next question is for Aitor. It's about financing. Aitor, do you have any update on that regard?
Excuse me, can you read the question, please, Antonio? I don't see it.
On syndicated loan, you can send information in the limited review on the size of the new facility.
When do you think you will be able to announce the refinancing and its terms? Well, obviously, definitely at the end of next month. Okay, so next month is the due date of the current syndicated debt. Okay, as mentioned before, this syndicated debt was representing in 2020 100% of our sales, okay, in that time, okay, in 2020. And in this time, what the debt we are thinking about represents only 25% of our sales. So it's not something, let's say, difficult to get. Okay, and for sure, we will be announcing next month or early in the beginning of next 2026. Okay.
Okay, fantastic. Thank you, Aitor.
You're welcome.
Okay, the next questions come from Michael. Asia Pacific, Hancom. A year ago, an agreement was signed to commercialize your solutions in exclusivity with them.
What is happening that we only have less than 1% of revenues from that region? Also, partners in general, you have been saying for a long time that you expect this strategy to contribute to revenues in the future. However, we don't see that much yet.
I go with that. It's true that the Hancom agreement, it seems that it's a long time ago when we signed in order to give the exclusivity for the region. That's true. But at the same time, it's true that to develop a business like the business Facephi has in some markets like the Asia Pacific markets, it takes time. We've been training the teams in Hancom. Hancom has been training their own teams in order to be prepared to resell or to integrate the technology from Facephi in some of the banks in the region, specifically in South Korea and Japan.
We already have some opportunities on the table with some of the banks in Japan and in South Korea, but it takes time. In a normal way, for Facephi in Latin America, any contract is about eight months average since day one. In Asia, it's a little bit longer, and we started training this Hancom team at the beginning of this year. So it's going to take some time to see the impact in sales from Hancom. And we believe that it will come, but it's taking some time. In terms of the other partnerships, what I can say is that we come from zero sales through partnerships in the previous years. And this 2025, we already are going to have, when we announce the results for the whole year, you'll see that we had some good impact in sales through partnerships, and this is going to grow much more.
We needed to have prepared also the technology to be resold by the partnerships, like the IDV Suite that I presented a little bit earlier. With all this, we are just signing contracts with partners that we really believe that are going to bring some revenue. But it takes time. That's the only thing.
Okay, I believe that the targets for revenues coming from partners are still in place. At least 20% of revenues in 2025 should be coming from this strategy. And the goal is that by 2028, we'll represent around 50%. Okay, the next question comes from Bernard. Well, I believe that question has already been answered. I mean, more information about partnership with Eastnets.
Perhaps David and Romain. Excuse me, Antonio. I'm just checking that Romain. Four minutes ago, and perhaps David Lopez coming from KP Capital.
I don't understand.
I have a question here about Eastnets on the screen. Is that the one that I need to answer?
It's not that.
Not really. I mean, basically, Javier has already answered that the potential is huge, but it is too early to provide any kind of guidance on that.
Nice David Lopez, Antonio. See in the right left, in the right side of the.
In the chat.
Yes, good morning. About TCV, reach .
Sorry, Aitor, you're saying that there is one question from David that you would like to answer now?
Yes.
Okay, good morning. Okay, here it is. Okay.
Exactly. David is exactly this one. Okay.
Okay, great.
Well, I think the question is regarding how much of next year's sales we have assured. Is that the question, I think? Well, usually, more or less 75% or 80% on average, we have assured on next year.
Okay, so for example, at the end of 2024, our ARR was EUR 28 million. Okay, and we are talking about 36 million as revenue this year. So in average terms, we are talking about 80%, 75% or 80% of our next year's sales are assured in terms of ARR. I think it's the question that is behind David Lopez from KP.
Let me just go a little bit into a little more detail on that. The way to secure the sales or the guidance for 2025 and 2026, the best number or the best rate you can analyze is the annual recurring revenue. As Aitor mentioned, that, so far, is about 28 million. Those are contracts that normally even if it's more than one year, we only get one year, obviously.
If our contracts that they just last one year, but it's contracts that we really believe that they are recurring contracts. All this combined is making the company about 28 million up until today in annual recurring. And that's the way that we can secure somehow the figures of the numbers that we are showing for by the end of this year, but also for 2026. TCV, the total contract value of 65.4 million, it's contracts that are live today with clients. It doesn't mean that contracts will be invoiced or to be recognized in revenues. It could be contracts that they are alive on production or being executed today, but it can be already recognized or invoiced or maybe not. It's a mix. It's a combination. It's a different ratio.
Exactly. Exactly.
Fantastic. Thank you, Javier. Thank you, Aitor. Okay, the next questions come from Jordi.
Basically, we have been expanding from LATAM to other emerging markets. Why not Europe? Javier, would you like to take this one?
Yeah, of course. Why not Europe? Europe is a developed market. Yes, that's true. But it doesn't mean that some solutions can be more successful in developing markets than in non-developed markets. And we have, it's a fact that what Facephi is doing in Latin America. For example, Europe is a market that is very interesting, but it's highly regulated. And when I mean highly regulated, it's not Facephi, not any of our competitors. It's doing huge business in the banking industry in Europe. Because the regulation, the GDPR, etc., the privacy concerns, the new laws that are applied in Europe are really, really highly restricted in order to implement some of the solutions that companies like Facephi have.
So in the end, what we do is we try to go to markets when we see that these technologies are much easier to integrate and much easier to receive or to be able to close deals with clients, and it happens, I would say, almost all the world, but in Europe, so in Europe, we have some clients, but more or less our fintechs or our gambling or gaming or casinos companies that the regulation is not as strong as in banking industry, but honestly, in banking industry, we try. We have some contracts. Actually, we have some good contracts, but the expectations in Europe in terms of these technologies for the banking industry is not the best, even though Europe is a developed country.
Okay, great. Thank you.
Question from Romain.
Oh, sorry, well, I will take Romain's question next. This one also comes from Michael.
Let me translate. It's about our business. On-Premise SaaS, the change has been dramatic, and the amount of revenues coming from On-Premise is residual. What happened? Why the change?
Yeah, let me get this one too. SaaS definition is not one only definition. You have SaaS, you have pure SaaS, you have many types of software as a service, technologies, and business models. In our case, what we mean is that the company used to do On-Premise. On-Premise means that the technology used to be integrated in the server on the bank. That means the machines, the hardware of the bank is the one that you go, you send some people, you make the integration, and the software is integrated in the bank.
That was 100% of our clients years ago, and it's been changing as long as the cloud technology and the cloud business and cloud world has been changing too. Now all the banks are starting using the cloud in order to integrate the solutions. What we mean coming from on-premise to SaaS is that basically all our clients are migrating from having the technology integrated on their own servers to the technology integrated in the cloud. It can be in our cloud, Facephi Cloud in Amazon or Azure or any other, or it can be in a private cloud for the bank. In both ways, it's a SaaS. A SaaS means that we can update the technology, upgrade the technology, or change or modify the technology from Facephi in order to give a better service that we don't manage the data.
The bank stores the data, but at the same time, it's not a pure SaaS that is a subscription. So what we do is we invoice. Normally, if the contract is a one-year contract and they buy, let's say, 500,000 users, we invoice for that in a cloud-based system, but it's not like we invoice per month as long as they consume the technology. We have that with some banks, but not with all of them.
Okay, thank you, Javier. I believe that the follow-up question in regards to revenue seasonality has already been answered. It's because precisely what Javier mentioned.
The question coming from Romain is, are they saying exactly the same that what has been replied?
Well, the part of the question that has not been answered is the drivers for our growth in the EMEA region.
I don't know if anyone would like to develop on that. Well, also regulation.
I just got the message now. Is the one that is on the screen?
Yes, it is.
Yeah, I mean, as I said, the SaaS in the Facephi's definition is that we are migrating from the on-premise, from the server of the banks to the cloud. And that's giving us the opportunity to grow much faster, to make the integration much easier, and to also give a better service to the clients. Using the SaaS for Facephi is also being able to start introducing the IDV Suite that I presented before. That is a closed box that can be easily reselled by any of our partners without code zero. You don't need to make any integration. So that's giving us the option to grow a lot on SaaS.
On-Premise, we still have some clients, but it's really minimum. So the revenue in the end is going to be, if not 100% on SaaS, almost there. In terms of the second question, the EMEA expected increase, can you explain the regions, growth drivers, and the difference? I mean, it depends. It depends. What we try to do is in those regions like Africa, Middle East, obviously, we use partners. We use local partners that they know the market, they know the law, they know the banks. And depending on how Facephi sees the opportunities, we focus more, we pay more attention, we hire some more people in those markets than others. But basically speaking, as I said, Middle East and some of the countries in Africa, we just noticed that we can somehow replicate the success that we had in LATAM in the last four, five, six years.
Okay, great. Thank you, Javier. Another question from Romain in terms of M&A. Are we looking for targets to acquire as we become more profitable? Do we have any potential targets?
We've been always, always actively looking at companies that can be adding value to the Facephi proposal proposition to banks in terms of technology or in terms of business. We are still in the same way. We have on the table some opportunities always, and we analyze. The thing is that we have to pay attention if the moment is the correct, if the company is the correct. But definitely, we are open to do an M&A operation if it's in the interest of Facephi. We cannot give more information, but we really pay attention to this M&A strategy.
In terms of potential acquirers for Facephi, obviously, it's not on the table today because the growth of the company for the next two to three years is more than interesting to keep the company growing rather than thinking of any potential acquirer for the company.
Thank you, Javier. Okay, these questions are for Aitor. Basically, are we going to activate tax credits this year?
Well, we are expecting to do so because we are expecting to get a significant level of EBITDA and pre-tax profit, and this is why we believe that we will be able to capitalize or to activate or to, well, to show in our balance sheet the tax credits, of course.
Okay, fantastic, and a follow-up is from the loan that we obtained from Nice & Green for EUR 1.5 million. There is 0.5 million still to be used. Have we already used it?
No, the total loan concerning or related to revolving activities is 1.5 million coming from Nice & Green. Okay. And this loan is due to the fact that we are so limited in the current syndicated debt that is, let's say, a little small for our size. Okay. This right-sizing debt, let's say, was measured in 2020. Okay. And this is why today is so small for our purposes. And this is why Nice & Green has to give a loan of 1.5 million in total. Okay. There is no another additional 500,000 in the shadow. The total is 1.5 million, and that's all. Okay. No more.
Okay, fantastic. And there is one last question from Michael. It's software. We have 0.8 million, sorry, EUR 800,000 on software that has not been developed internally. What have we bought?
Aitor, correct me if I am wrong, but I believe that this EUR 827,000 refers to activation, not necessarily to expenses. If I recall correctly, expenses in software during the first half was around 240,000.
Exactly. And this is nothing more than a reclassification that is usually making at the end of the year. So it's nothing more than a reclassification. It's not software or this kind of high purchase we eventually can do. It's not that. It's absolutely the activations coming from our end.
Total investments during the first half was around 240,000.
Yeah.
Okay, let me see what other questions we have. Okay. There is one question from Miguel Medina. Does the 2026 guidance assume a 1.21 U.S. dollar euro exchange rate?
No.
What we are saying is that we strongly believe that the U.S. dollar fluctuation will be within the range we have in our hedging tool contract in June. That is between 1.14 and 1.20. But in terms, excuse me. [Foreign Language] . But in terms of worst case, we are assuming that imagine a U.S. dollar fluctuating above 1.20 or 1.21, for example, will be penalizing the company because we will be in this way with a great exposure, negative exposure with the U.S. dollar. But it's the worst case that we are not expecting, but assuming as a conservative scenario. Okay. Not expecting, I repeat, but assuming as a responsible and conservative scenario. Okay. Yesterday, the exchange rate was at 1.15, and then we are very happy to have this beautiful contract with the U.S. dollar.
Okay. Thanks a lot, Aitor.
You're welcome.
Well, it seems that at this point, we don't have any further questions. So, I mean, I believe we can proceed to close this webcast. I want to thank you very much for your interest and your time on Facephi. I hope you are as excited about our outlook as we are. And if you have any questions, obviously, you know who to contact. Thanks a lot for your time, and have an excellent day. Thanks a lot. Bye.
Thank you very much. Bye.
Thank you. Bye-bye. Have a nice day. Bye.