Welcome to the cBrain Q3 2026 investor briefing conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, please press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. If you wish to ask a question via the webcast, please type them in the question box and click submit. Please note that today's conference is being recorded. I would now like to turn the conference over to your speaker, Lars Møller Christiansen, CFO. Please go ahead.
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Okay, we just go ahead. I hope you can all hear me. I am just trying to go through the slides. My name is Lars Møller. I am CFO at cBrain, and I would like to take you through the main results of our Q3 forecast announcement. I will go straight to the main key messages, and then I will tell you a little bit about the main numbers, and we will go to watch some of the strategy points.
If we can go to slide three, key messages, then we have here the main message from our side is, of course, that we are back in growth, and we were back in growth already in our half-year results, but now we can see that continued solid business development across domestic and international areas in Q3 and Q4 actually confirms that we are back in growth, and we are very happy about that.
We have solid visibility of orders coming in both in the rest of 2026 and 2027, and we look into a strong second half of 2026. Therefore, as you all know, we have also upgraded our 2026 guidance. We upgraded the revenue growth expectations from 10%-15% to 12%-16%. Also in consequence, we upgraded our EBT margins from 22%-26%, and we upgraded that to 24%-27%, reflecting that we expect a stronger business activity as well as higher profitability. This also implies that the growth in the second half of the year is 19%-27%, and this is a very strong growth compared to half year in 2025. What drives the development is that we see the embedded AI strengths, our F2 delivery possibilities across different agencies.
Our product offering seems strong, and we have a lot of leads and a lot of engagement with new customers. The AI-enabled solutions remain a central element of our products strategy and also supporting our international growth ambitions. Of course, as you all know, we have been gaining momentum in our U.S. expansions. in August, we announced the first contract with the State of California delivering on environmental permitting solutions for the state and different agencies within the state. Since August, we have been actively pursuing and supporting the U.S. activities. For instance, we have established our daughter company, cBrain Inc., in the U.S., and also we have entered into a delivery partnership with the company Carahsoft, allowing us to deliver software across the U.S., both at the federal level, but also at the state level.
These things represent important milestones in building up our U.S. activities and also supporting the strategy element of delivering environmental permitting solutions across the world. But it is not only the U.S. that shows that we are growing internationally. Also, if we look at Germany, we have been making progress there, making a multi-annual arrangement agreement with our biggest German client, the Deutsche Rentenversicherung. We have made a three-year contract prolonging some of the existing activities with them. Germany remains our largest customer presence. But also, we made a contract with the Turks and Caicos Islands delivering a tax solution, creating more transparency about the tax reporting from Turks and Caicos. These things really go, altogether, they go to show the broadness of the F2 platform, allowing us to be able to support a lot of different organizations across different sectors and across different parts of the world.
This all goes to show that when we look ahead, we see a strong pipeline of leads and projects expected to start here in 2026, but also continuing into 2027. We are quite confident when we say that we are back in growth. We can see solid signs that the growth is continuing. Before going to the strategy and going afterwards to the questions, I will just take you through some of the numbers in the strategy, or in the Q3 announcement. I am on slide four now with revenue growth. As you can see, we came out of 2025 with, as you all know, a small decline in revenue growth. That, of course, led to that we revised our growth plans and our strategy in late 2025. Now we are actually seeing the results.
You can see we have returned growth in the first half of 2026. In the second half of 2026, you can see the growth is accelerating compared to the second half of 2025 quite rapidly. We now expect a growth in the second half of 2026 of at least 20%. This, of course, reflects that the Danish market also is back in growth. In the spring, we had a general Danish election that made some of the agencies and some of the ministries slow down in their demands for new products. We can now see a pickup in those orders, and we have regained our momentum in the Danish markets, which is, of course, the largest market for cBrain. Things are looking quite good when we both now and when we look ahead into 2027.
We have quite good visibility of the orders and potential orders. One of the things that really is important in this connection is that we made a strategic partnership with Djøf, one of the largest trade unions. We made this deal in September, and the deal is about delivering a new membership solution for the trade union. This relates to CRM issues, for instance, keeping registries of the memberships, supporting all the different processes around this membership solution. This allows us to open up into the private sector towards other trade unions, but it also allows us to support some of to expand our platform towards the government organizations. A lot of the large government organizations have needs that are similar to trade unions relating to, for instance, registries and membership overview or customer overviews.
Some of the CRM elements in the Djøf deliverance are also relevant for our big public clients. In that way, it is a strategic important deal for cBrain as well. If we go to the next slide, the revenue forecast. As you can see, we expect a revenue of DKK 142 million-DKK 152 million in the second half of 2026, and that corresponds to the 19%-27% growth half year on half year. The reason we have a spread here is that the final results depends on the deliveries and the recognition of the related revenues. In that way, there is a little insecurity about that, but either way, it reflects a strong growth.
If you look at the full year, we expect to end up within a range of DKK 282 million- DKK 292 million, corresponding to 12%-16% growth year-on-year. We are quite confident about this. As I mentioned, when we look ahead into 2027, we have a high visibility of some of the orders coming in. We are pretty confident that we are back in growth also when we look into 2027. Going to the EBT, as you can see, our business remains robust. We expect margins of 24%-27%, looking at 2026. That just goes to show that we have a very robust business with high recurring revenues. Last year, our recurring revenues represented 60% plus of the total revenues, and we look into the same order of magnitude when we look at 2026.
All in all, the main numbers are looking really good, and we are very happy about that. I will turn a little bit to the strategy and then open up for questions. When we look at our vision and strategies for the F2 platform, the central issue here is AI, of course. This goes not only for us, but as you all know, for probably all software companies in the world. We consider AI to be a defining moment also for the F2 platform. There are some issues here that I would like to address. Some of you have heard the half year presentation, and some of the issues here are the same. The first point is that AI accelerates the shift towards COTS. As you all know, we have had the ambition to be the leaders in COTS, commercial off-the-shelf software for governments.
We are still pursuing this strategy. AI actually accelerates, in our opinion, the shift towards COTS. This is due to that the AI, of course, makes coding and software development faster. This underpins the importance of having a stable platform for controlling your processes and data. When things change around you need a really stable platform so that you are not bound to rebuild all your and change all your core systems every time there is new technology available. In that way, AI also strengthens the COTS business case because when we have developed AI functionalities in our platform, we are able to scale it across different products and customers and markets.
In that way, AI is both a driver to going to the COTS platform for the customers, but also within the COTS platform of F2, AI drives and strengthens the business case because we are able to use the AI products across the platform. In that way, AI is both a platform that allows you to absorb new technology, and while you are at the same time protecting your critical data and your critical business processes. You have the compliance of the F2 platform, and you have the continuity of being on the same platform. In that way, you can view F2 as a flexible platform, a flexible infrastructure platform that allows you to maintain your data and your processes while changing ongoing, changing the different technologies.
For instance, the editing tools that you use, for instance, the language models that you use, you are able to take those into the F2 platform and change them when there comes new technology without changing your processes and your data. We would like to be seen, and most of our customers see us as this flexible platform that allows you to manage the technological change. On the internal side, we work on our new product strategy. This is based on the F2 blueprint that you have seen earlier, but it involves four strategic areas. AI, of course, being one of the biggest, but also sovereignty due to the geopolitical and ServiceBuilder and enterprise readiness. The sovereignty, I will just address a little bit here because, as you know, the geopolitical situation underlines the importance for most of our customers to actually address some of the sovereignty issues.
In the sense that we are not, the customers need not to be dependent of big tech and specific vendors in the big tech industries, for instance, Microsoft or Google, Amazon, et cetera. The sovereignty issue is really about having the freedom of choice for our customers to be able to change different platforms, to change different editing tools without changing their main infrastructure. That is exactly, as I mentioned, what F2 allows for. You can change the editing tools, et cetera, without changing your process platform. In that way, we work on building the sovereignty position. For instance, we have Collabora, the open source editing tool that we are able to integrate into our platform. You can use Collabora and LibreOffice instead of Microsoft products, for instance. That is just one example of how we work with the sovereignty.
Also, if you look at the AI suite, we have a lot of different products across the platform. For instance, our AI Task Specialist, our F2 AI Case Preparation tools, and our ServiceBuilder tools that are being expanded with AI functionality so that you are able to build new processes even faster in a secure manner. In that way, we have a broad, strong product suite that allows us to gain momentum using AI as a growth driver. Finally, to sum up the whole thing, in that way, our strategy and our ambition remain unchanged.
We are aiming to be the global leader in the COTS for government market, and we are using AI to position ourself in this race, both being able to respond to the customers' different needs, but also expanding our F2 platform with new AI products, embedding AI in all the functions, and reusing these functions across our customers and geographical markets. In that way, we are, as I started to the introduction, we are confident that we are looking into continued growth in the coming years. Those were the words, and I hope you saw the right slides on the way. Now I think we could open up for some questions if there are any.
Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Once again, please press star one one and wait for your name to be announced. To withdraw your question, please press star one one again. If you wish to ask a question via the webcast, please type them in the question box and click submit. Please stand by while we compile the Q&A roster. This will take a few moments. Thank you.
Yes, do we have any questions?
We have no questions at this time on the telephone, so we have a few questions on the webcast. I will be reading you the first question.
Please.
The first questions come from Henning Monch. Could you please give us an update about status and progress in India?
Yes, we can do that. The India activities are at the moment quite There's no real new activity, and we expect no new real activity from the India company at the present. The main focus of our international expansion right now is related to three different markets. The prime market being, of course, the U.S. Here, as I mentioned earlier, we are expanding in different ways. The second biggest market is the consolidation of the German market, not least with our largest customer there, the Deutsche Rentenversicherung. The third market that we have business, where business are in focus right now is the African continent, for instance, in Ghana and Kenya, as you know, and we have different activities there. India, unfortunately, has turned out not to be at present the case that we could build on.
I cannot Maybe in the future we will be able to do business there, but at present we see no real activity.
Thank you. We have now another question on the webcast from Jesper Danisbo. It seems plausible that AI-enabled software such as F2 will increase productivity sharply, and therefore over the time reduce the number of seats needed. Do you agree with this? If so, have you considered how you could change your charging so that you get paid for some of the productivity gains?
I will answer the first part of the question. Productivity gains is a major part of embedding AI across the platform. Working with different agencies, we have a clear focus on in how to use AI as a tool to automate and optimize internal processes of the government organizations. This is from the bottom of the internal processes in the government agencies to also including some of the services that they have towards businesses and citizens. In all lines of these processes, we are able to see efficiency gains, automating small tasks, especially being able to optimize internal work with the AI search in the F2 platform and the assistance of different types. Across the whole, all the processes in the government agency, you can see efficiency gains using on a compliant, secure platform as F2. What does this mean for the pricing?
Well, at present, as you know, in the Danish market, we have a license-based model, also including recurring revenues in the form of, yeah, SaaS construction, basically, where you pay a running fee after you paid an entry license also. This model, I think, we will be able to maintain also with this, because some of the gains that you see here, the efficiency gains, they are not related. You need to have the license and to pay the fee, but then you can actually use the license to You can still pay with the license and gain the efficiency within the organization. I do not think our basic model, at least in the Danish market, is challenged by AI as of present.
For some of the document management systems, we see a price pressure on the market, but we are able to adapt our platform, also selling some more focused versions of the F2 platform to address the price pressure on the document management system. I hope that was the answer.
We have another question from Jesper. Do you need any large foreign orders in 2027 in order for cBrain to achieve the basic 10%-15% revenue growth?
As I started the presentation, we have a quite good visibility when we look into 2027. This relates to two things, one being that we have a high degree of recurring revenues in the form of subscriptions, ongoing long contract-based subscriptions, and this constitutes more than half, almost two-thirds of our revenue expectations. So in that way, we have a really good and stable point of departure. Also we can see now, we have some of the projects that we start in 2026, for instance, the one I mentioned with Djøf, one of the largest trade unions in Denmark. We can see those projects, they have some of the main part of these projects are due to be delivered in 2027. So in that way, we have quite a solid pipeline and a high visibility around the pipeline.
In that way, you can say we need no really big customers or something to maintain our standard revenue expectations of 10%-15%. This is not a declaration about 2027 guidance. We haven't come out with that yet, but if we were to repeat our standard expectations of 10%-15%, we can see a good baseline for delivering those.
We have another question from Jesper. "You have had a very large customer in Germany for several years now. Why do you think it has been difficult to get a second large German customer?
That's a good question, and that's one we've been working on as we reviewed our strategy in the autumn of 2025. I think we now, with the revised strategy in place, we are executing on also expanding the German market, and we have some initiatives going on right now where we have teams addressing new customers across Germany. As you know, in the strategy, the two segments that we are focusing on globally, one is environmental permitting. This primarily relates to the U.S., but the other segment that we focus on is Paperless Ministry, and that is expanding the experiences we have from Denmark relating to how you run government agencies. That is the segment that we're really focusing on in Germany right now to get new customers.
This also relates to some of the things that are happening in Germany, as you know, and as we've mentioned before, there was new legislation introduced, I think it was two years ago, called the E-Akte. This really relates to that the purpose is to drive digitization of government organizations across Germany. We see a pickup in leads, where we are actually trying to deliver Paperless Ministries or F2 platform to different organizations in Germany. So, I hope if we talk again in one year, in a half a year, that we will have more German clients.
Thank you. We have no further questions at this time, so I will now hand back to you for closing remarks. Thank you.
Yes, then I will just start apologizing for that we had the difficulties with the presentation in the beginning. Just to end on a happy note, I think we are really there is a really good feel in the company at the time. We are back in growth, and we can see the growth continuing. It is just not a once-off. We see a steady inflow of orders, both in the domestic markets and internationally. In that way, it is an easy job to be a CFO at cBrain at present, and we are working hard to continue having a steady and hopefully scaling growth in the coming years. That would be my closing remarks, and if anyone has any questions, they are also more than welcome to contact us via the homepage.
This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.