Earnings Call: Q2 2021

Jul 15, 2021

From f Secure, and I will be covering our 2nd quarter results. I will be later joined by our CFO, Erika Soderstrom, to cover some of the financials in more detail. After these two sessions, we will have then a possibility for Q and A. So let me dive right into it. So first of all, we had a strong growth quarter. We saw growth in all businesses. Revenue was up by 10% and both corporate security products and cybersecurity consulting where we're growing as well as our consumer business. If we look at the corporate security products in more detail, which for us means the Business Security Software and then the Managed Detection and Response Business. We saw growth in orders that outpaced the revenue growth. And MDR specifically, we saw many new customers committing to multiyear deals globally. And that, of course, is an important target for us as we seek to increase our recurring revenues. In consulting, our revenues grew by 19%. At the same time, of course, the comparison point from last year was hit severely by COVID, but nevertheless we're very pleased about this growth. And in consumer, the Consumer Security business continued on its growth track. You may recall that we had a record year last year, hitting $100,000,000 in revenue terms for the first time and the growth track has continued this year. We saw a growth of 6%. Our operational costs are returning to pre pandemic levels. We will discuss that more in detail that what were the different items that contributed to this. But overall, our adjusted EBITDA margin was 14%. Positive momentum across all businesses with our enhanced offering and also a 15% increase in our deferred revenue on a year on year basis, give us good foundation for further business development going forward. If we look at then the numbers a little bit more in detail, here again, as previously, you will see in the extreme left side, you will see the revenue split and growth by businesses year on year comparisons. And starting from the top, We had the cybersecurity consulting with dark blue, the corporate security products and then the light blue consumer security. And from the top the growth percentages, respectively, at 9%, 7% and 7%. And then looking at the geographies, how is this revenue split. You may recall that we are predominantly, of course, very much a EuropeanNordics company from a revenue standpoint. But of course, we do have business elsewhere as well such as North America and Asia, and that is shown then in the bottom of these pillars. But as you can see, quite positive development also geographically speaking. And then finally, on the extreme right, we see the adjusted EBITDA development in H1 and the comparison to H1 2020, where 1 year ago our adjusted EBITDA was $17,400,000 and now we are at the level of $17,800,000 so slight increase there. Looking more specifically into Corporate Security Products, we saw a 9% growth as said in the second quarter. And here you see also the respective comparison, how this has developed over the quarters, so compared to last year. So quite good continued growth there. In Business Security Software especially, we've seen the growth in EPP business. And you may recall that this endpoint protection business is something that we are of course known for it is the business area where we have been very prominent in our business side of things. And this has of course been further develop by enhancing our offering with the EDR offering. But overall, this market is developing quite positively, even contrary some market predictions earlier on regarding EPP. We have seen some recent predictions that there actually seems to be quite strong demand for EPP at the moment. And of course, one could speculate that this is related to the publicity that there is around cybersecurity and some of the high profile cases that we have Sien. In managed detection and response and this is the solution, as a reminder, where we have a strong common technology base that we share with the business security software part, but we are complementing that with our own expertise and services we are providing on top. So we are going very deep in terms of the technology, taking advantage of the scale we have from the software and then complementing that with very deep expertise that we have within our consulting and other organizations that are complementing this. I say consulting, I mean consultants working for MDR. There we saw strengthened demand and also many new customers committing to multiyear deals, which, of course, is important because In a way, it's saying that we have gained the trust of these customers, and now they're ready to commit to longer term deals, and we have specifically one attractive business in retail, finance and some critical infrastructure. Several deals were closed also in the U. S. And then of course Germany, France and Finland that continue to be an important part of our European footprint. This picture shows you the elements, the F Secure elements, which is an offering we launched at the end of May. We've got a very strong feedback about that. And what is specific to this offering? It is about Yes, it is about the product offering that it contains, but it's also about enabling our partners so that they can build services on top of this offering. It is about offering the market, our partners, the end customers flexible pricing model. So we offer the customers actually the choice of how to consume our solutions. And this is a trend that we are seeing in the market. We call it the servitization of security that customers increasingly want to buy things as services. And then combining this with the other elements such as also the partner program that we use for enabling our channel partners, this that's been a successful launch, and we expect that to generate more demand going forward, a unified cloud native platform. With the launch of this and also before that we've also seen a strong migration from on premise to cloud based solutions such as our This is an example of a recent case I mentioned that we have won some multiyear deals with our MDR offering. And this is an interesting market because it's one of those sectors in the market that is one of the faster growing segments, but it also is one of the younger segments. And the reason there is such market as MDR is emanating from the fact that many of our customers are looking for us to complement their own internal IT our security team, and they are turning towards us not just for the technology, but also for the people. And how we differentiate from competition here is the fact that we in addition to having deep expertise, we also have the software that is the underlying capability that we are taking advantage of here. Here the customer was a large Nordic retailer, very large, actually 40,000 employees, where we have gradually built the relationship, gained their trust and now we were able to sign a deal with the Covers, which covers 2,500 of their servers and we are taking those under the auspices of our MDR offering and service, and we call it the F Secure Countercept. And we're very, of course, very proud of this reference, which we're taking now forward and hopefully with a lot of other things to follow. Then turning to consulting, where I said we had an attractive revenue growth of 19% in Q2, Despite the uncertainties and COVID impacting us, we clearly saw better performance, and we saw positive momentum in many of the regions, especially in U. K. And Nordics. Some regions still remain negatively impacted by the pandemic. That is a reality. Can't fully take that away. And of course, the fact that this is, of course, very much about, in some cases meeting customers face to face, even though we have managed to move largely our deliveries also into remote mode and also we have taken forward our globalization where we're able to offer demand supply balancing meaning that we can supply delivery from another country than where the customer is residing. And this is yet another example. Here the customer was an international media and telecoms company, where we have built the relationship gradually and as often is the case with corporate cybersecurity that you need to gain the trust, you need to demonstrate capabilities. You need to work with the customers. And we are, of course, very much about that partnership with our customers. That is in the core of what we do. And in this case, we were able to build this from awareness to relationship and showing demonstrating the impact and then finally having the commitment from the customer side to choose us to deliver the service. And of course, we foresee that we are able to build on top of this and turn this into a longer term engagement, which in general is an aspiration we have for our consulting business. And then consumer security, as said, continued the steady progress, the steady growth. And there, you may recall that we have our revenues are coming from 2 primary sources. We have the operator channel, the telecom operators around the world. We have about 200 of those. It is very sticky once you're there because we're often part of their own application for example and we provide the security aspect of that. So long sales cycles, sometimes difficult discussions, but in the end very, very sticky good customer base. And then we have then another part of the business coming from direct sales, direct online sales, which is primarily in the Nordics in terms of the revenues here. Positive momentum there. And specifically like to mention that some of the additions to our portfolio that complement our current offering had, of course, offered us new opportunities and new discussions are underway with completely new operator groups because of that. And that concludes my presentation. I will now invite Erika to join me here on stage. And then after that, we will take questions after Erika's part. Thank you, Annie. So let's move on to look at the numbers more in detail, how they look like when we consolidate them. So starting now with the income statement. And so the Q2 Consumer security grew by 6% at EUR 26,300,000. Corporate security products grew by 9% SEK 20,200,000 and Consulting grew by 19%. And here, let's face that last year, at this time, Q2 of 2020, we were in the middle of the start of the pandemic. We didn't know what's going to happen. And we saw the demand, especially in consulting, taking a hit. So a low comparison point, but a stronger 15% Invisible Now. And adjusted EBITDA, 14% of revenue, EUR 8,100,000. I'm sure that you want to understand better that you guys are growing, but the profitability is lower than it was last year. Here. Here, if I already give like a very short answer, so we are getting back to the operational cost levels before the pandemic. So we were extremely good at pulling the brake and making savings last year, why we wanted to be cautious. And now we see that when we normalize, this is where we are. And the EBIT, EUR 2,400,000. And between the adjusted EBITDA and EBIT, you see the items affecting comparability that we had EUR 2,300,000 as the one off cost related to a strategic review, which is then taking down the non adjusted reported numbers. So the EBIT 4% of revenue in the 2nd quarter. Cash flow was strong at €12,900,000 before financial items and taxes. EPS. We gained SEK 0.01 in the second quarter. And if we just look at the main highlights from the first half, So growth of the total company, 8%, all businesses growing consumer, 7% in the first half corporate, 7%, consulting 9%. Adjusted EBITDA above comparison period to the first half of last year, so SEK 17,800,000, 15 percent and here the EBIT, 7%, SEK 8,500,000. So we have net cash position. And cumulatively, so far, we have EUR 0.04 in EPS versus the 3% that we had a year ago. And we were slightly down in personnel when we compare against a year ago. So let's look at some of the KPIs more in detail. They are the same ones that we have been looking at in the past. So the deferred revenue KPI is an interesting one. And let me remind you about the revenue recognition, how we do it at F Secure when we talk about the software business. So we can get an order as the customer buys a license, for example, for a year. Let's start from that one first. And there so if we sell that license And customers start using it already in June. And we will then book revenue for 1 month out of the whole year, So out of 12 of the total value. And that's how we then recognize revenue across that contract period. And what is then outside of that actual month is called this deferred revenue and that's what we see as a current deferred revenue below 12 months. Then we have deals which are like 3 years, 2 years, even 5 years. I think the longest that I have known is 6 years. And there, of course, the length means that also we divide it with that duration of the contract. And we see that the noncurrent deferred revenue refers to that part of the deferred revenue that goes outside of the 12 months period. So this is about the CRE. But now looking at the numbers, so 15% growth in the deferred revenue shows us that we have a good order intake quarter once again. And then we see that deferred revenue grows 36% on the long tail like the non current but also positive that this current below 12 months is now growing by 8%. So that's the revenue that we have in the back pocket that we will then recognize when the time goes forward. And maybe one thing to mention about this one that where does the deferred revenue in our company come from? So if we look at the second quarter, about half of that came from MDR contracts. They are often multiyear contracts and about half from the business security software. So let's then dive into the operative expenses. As I already mentioned, so the biggest single like conceptual thing here is that Q2 2020, we saved costs successfully. And if you remember, so we also had the revolving credit facility that we drew cash in our bank accounts and nobody knew what's going to happen, if you remember that time. So now in the normalized situation, We see that especially the sales and marketing cost has increased. And there, the marketing activity has been already higher than a year ago also the variable salary elements such as sales commissions or long term incentive plans. Those have been growing compared to the situation a year ago. We also we talk about salary inflation. So we do see that the market is getting now HOT again like also from the industry perspective, but also looking at the employees. So in certain countries, we face salary inflation, but then also taking into account that we delayed the salary increases last year. Those are ones that we agreed in the Q2, we actually started paying in November only. That was in Finland, but that's a big chunk. So there were these COVID-nineteen related elements embedded in these costs. And of course, the cost of revenue like the hosting costs, like when you get more business, so you have also volumes for that part increasing. So that was like for the total. This picture is talking about the operating expenses, the OpEx part. Then looking at the trend now for the adjusted EBITDA. So The bars here reflect now the euro value of the adjusted EBITDA. How we discussed internally, this is now the apples to We look at the operational profitability of the company. This is what we follow. And adjusted EBITDA margin then accordingly against the revenue visible there. So in Q2, as we already discussed. So 14% while a year ago, it was 19%. But if we go 1 year before, so it was 9% that there is this improvement that we have been getting, but now the COVID quarters were very highly profitable, while the cost was down and this revenue model, kept on bringing the revenue, especially on the software side. Maybe not worth Going into the details, I think that most of the listeners here know the table pretty well. But we wanted to open up like in detail that on a quarterly split, what are the elements that are there between the adjusted EBITDA and the EBIT. In the other operating income that was related to these contingent considerations, fancy IFRS language, in practice, meaning the acquisition related earn out that we had reserved and we didn't have to pay it fully, so we got that back. And then in the items affecting comparability, if we look at the second quarter, so SEK 2,300,000,000 was a number that we booked as an one off there. And the depreciation and amortizations gradually declining. That's due to the acquisition related PPA amortizations then declining when the time goes forward. And that explains then how we end up with the EBIT here for the Q2,400,000.4 percent. From the operating cash flow side, as I already mentioned, so it was good. We are in a net cash position despite the fact that we have made a term loan repayment according to the schedule that we have, but also we have paid the dividend payments in the second quarter. So CHF 12,700,000 net cash position and cash and cash equivalents CHF 44,400,000. And net working capital was the one now contributing to the strong cash flow in the second quarter. And then finally, looking at the outlook, which is unchanged. So the corporate security product revenue, we expect to grow at high single digit rate and the consulting business, We expect to grow, but we have the uncertainty still mentioned here in the guidance. And the consumer security, 6% growth we had last year and now we say that we expect to grow approximately at the same rate as last year. And for the adjusted EBITDA, we expect to remain approximately at the previous year's level. So I guess Johan, now it will be time to take the questions, if there are any. And Andre, you probably have received already. So next we'll have the Q and A. We'll start from the room. So we have a couple of analysts following the company here present. Yes. Good afternoon. Jakob Todvanen from SEB. Could Could you elaborate a bit more on the new initiative of Secure Elements? What are what has been the first take from customer and perhaps first signs of new revenue coming in? And secondly, what are your own expectations on that new initiative going forward. Okay. Thanks. Yes, Elements is the Elements launch at the end of May is a result of actually a longer initiative that has several components in it. And I think the underlying thinking was really to kind of look at it, what is required from our partners' perspective, what is required from the channel perspective in terms of the product. So first, we looked at what kind of user interface is required. Then we look at how everything can be automated in terms of the order processing. Then we looked at what kind of training programs are needed for our partners. Then we looked at what kind of business models are required. And of course, ultimately behind this, we have leading edge cloud native cloud based technology as the back end that we are relying on. So it's a combination of all of these things and really a kind of a culmination of that work was the launch at the end of May. And I think some of the commentary that I've heard and this is anecdotal, but some of the commentary was that this is really one of the best things that they've seen so far from many of our partners. And for the previously mentioned reasons that we've really taken a hard look from a customer's perspective what is required, not only focusing on the product and technology, but overall, what is required to make our partners successful. And we have, of course, worked closely together with them as well to accomplish this. And some of the results are coming in, in terms of demand for the product. But of course, it's still early days, and we are hoping that we will be able to talk more about that going forward and share good news. Thanks. Then on the Corporate Products side, you cited that Also EPP is growing nicely currently. Could you elaborate a bit more what is kind of if we split core EPP and then MDR and perhaps EDR as a separate revenue streams, how they are kind of Comparing to each other in terms of growth. Yes. So we don't provide the breakdown between the businesses in terms of revenue numbers. But of course, We have been in the EPP business for quite a long time, so that is one of our most established areas in the kind of corporate security side. And of course, we built a position first on EPP, then that has been later on complemented it by EDR. And this originally were 2 separate product categories. So you had the EPP and then you had the EDR. But I would say that today in today's market, we are increasingly seeing a bundle of these two things. So customers are really expecting to also see the EDR as part of the overall offering. And we have been able to benefit from that because we've had very competitive solution for them. But at the same time, I would say that overall, the EPB market is showing signs of increased activity most recently if we look at the past few months, and that seems to be helping us, but also, of course, many other players as well. And the difference between MDR and this EPP, EDR is that where in MDR, we are taking our EDR platform. So it's the same technology, and then we are providing the customers with additional Expertise Services on top of that. Thanks. Then last one on the geographical split. We can see that the growth is mainly coming from the Nordics and Europe. How should we read this looking forward? Are you perhaps putting more efforts on your core areas? And what are the reasons behind the U. S. And rest of the world not growing so fast currently? Yes. So I think it as you know, we have a broad portfolio in terms of our offering. So we have everything from software for consumers to high value consulting for very large enterprises. And of course, geographically speaking, in certain geographies. He's very focused on certain areas like consulting, for example, there we clearly have the maybe the broadest footprint geographically speaking. We're in the U. S, we're in Singapore, we're in South Africa and so forth. And part of this is due to history because we have grown by acquisitions, so we've already had those customers in those companies that we have acquired. But also there are other reasons. Being present in the U. S. Market, of course, gives us an insight into the largest cybersecurity market in the world. And Of course, it's important for us to understand that what are the latest threats, latest trends in the market, and we are getting an additional benefit from there. But I would say that from a strategy perspective and geography perspective, we are, of course, very European centric, and it's important for us to establish a strong position in those European markets where we operate. Some of our businesses are also local, local in terms of language requirements, for example. And that, of course, means that in those countries, we need to have local presence and local footprint. And then some of our customers are global in nature. If we look at cloud protection for Salesforce. It is essentially an online activity, the whole selling and delivering. We have Fortune 500 customers that we are serving the customers of Salesforce, and they are tapping into our offering through the Salesforce AppExchange. Everything happened almost electronically, you could say. So to sum it up, I would say we are a European based company with global aspirations. Okay. Thank you very much. Good afternoon. It's Feko Silvestre from Danske Bank. A few questions from my Also, firstly, regarding the elements. You said that this was basically for your customers. But who do you consider your customers in this sense? Is it the partners or the end users? Yes. It's both, Of course, I mean, we need to understand the end customer, which in this case is largely the mid market. So we are serving mid market companies through that offering. But We have a broad network of partners, so about 6,000 partners altogether. Having said that, we have the desire also to kind of increase the average end customer deal size. And therefore, we are moving a little bit up in terms of also the partner size, so that we get the right type of partners, but we largely have that in place now. Okay. Thank you. And then secondly, is the pace of order intake growth in corporate revenue maybe slowing as previously you've said that it Has clearly outpaced revenue growth. So how can you describe this? I'm sorry, I didn't quite understand the question. So the pace in order intake growth for Corporate Integrity Products, is the pace slowing down there compared to previous quarters? I could maybe comment on that one because this is somewhat related then to that duration part that as we have also mentioned in those quarters where we said that we've had very, very strong order intake from the business security software that the contracts have been also long by nature. So meaning that the size of those contracts has been creating a lot of deferred revenue as you saw the peak in the earlier quarters. But it It's not the right conclusion to say that it would be slowing down. So that metric doesn't describe you that one. Okay, great. And then maybe continuing a bit in this subject, can you give any color on how large is the monthly recurring revenue or SaaS revenue at the moment. Well, we haven't disclosed that one. It's also detailed. So maybe, Henri, we can look into what we share in the future. Okay. Fair enough. And then maybe regarding the OpEx levels. So Is this the quarterly level we are maybe looking at for the rest of the year? Or are there still some sales and marketing expenses that will probably increase for H2. If I start, you may add, Johan. So clearly, as we know, the world has not returned back to normal. So traveling is still minimal. And that also means from the marketing activities perspective that what will the How much kind of face to face time that we'll then provide etcetera. So it has an element into the travel course as an example. So there will be items that we will see increased cost levels, but also We do have the ambition as a company to grow and that requires then also adding resources that even if You have seen now flattish headcount levels. So the cost levels need to be increased also to support the growth. Yes. We will be talking more about our future plans in the Capital Markets Day in August 31, and we can maybe dig more into detail. Okay, sounds good. Then maybe one question regarding the maybe a bit faster growth than expected in the consumer side. So has there been any fundamental change? Have you changed like have you identified anything in the market that has basically boost your sales growth towards 68% levels. Well, I think it's a combination of many things. At the moment, of course, the market is quite active. So I think there's a lot of focus on security also on a personal level. So regarding consumers, whether it's security or privacy from their perspectives. I think that has increased in importance. That is one thing. Then, of course, some of these partnerships that we have built with our partners, of course, are yielding results now, so that we see that we are starting to scale some of those solutions. And then finally, also there, we have had very good work on the offering in terms of expanding with Router Security SENSE with IDP and then also offering all of the consumer offering under the same umbrella of what we call Total. So instead of actually having to buy separate applications, as a consumer, you can buy Total, which then covers several of the previous independent apps. Great. Then final question for me. So is the operator channel Who's selling your consumer products? Are they selling the total product? Or are they selling partial systems or partial products? That varies, so there's no conclusive answer to that. I think that varies from customer to customer. And also there is a difference. Some customers brand our solution and that they consumer only sees their brand. And in some cases, we are co branding with the operators. Okay. Thank you very much. Thanks. Hi, it's Aptar Igla from Indore. A couple of questions from me as well. So first, your balance sheet starts to look pretty strong right now. So are you looking for M and A targets to boost your growth? Or do you have any other capital allocation ideas. Yes. I would say that regarding M and A, it's in the toolkit. So I think we routinely, of course, look at our portfolio and make this make buyer partners type of decisions and that, of course, can include M and A. All right. And the second question about those $2,300,000 costs related to the strategic review. Can you open those up a little bit? Yes. So as you know, I'm fairly new in this role, and it's important that We were able to conduct a very thorough review of the company, of its strategy, analyzing several scenarios, analyzing current state and seeing where we could take the company in the next phases. And we have used some third party support for this and hence, the cost. And the last one. Do you think that you can keep Keep your adjusted EBITDA in the double digit percentage now when you're getting back to the normal growth mode. Well currently, we are not making changes to our guidance. All right. Thank you. All right. Next, we'll have some questions from the webcast portal. So a couple of ones related to the operative expenses. This one goes to Erika. So have you seen an impact from these long term contracts on sales commissions. Yes, we've had some we've gotten a good auto inflow and we are happy to pay higher sales commissions, as I mentioned, in the Q2 compared to a year ago. What about then have there been any change in terms of phasing of cost items throughout the year? For instance, timing of sales bonuses. No changes like that we could like lead. So it is also dependent on the performance that how the quarters go and how we pay the bonuses, sales commissions. So no change as such. Maybe from the marketing cost perspective, there are some items that might be earlier or later compared to what it was the previous year, Especially under the COVID time, so the timing is a bit different. Okay. Then related to salary inflation that is mentioned in the report, what kind of magnitude are we talking about? It varies country by country. So we can see countries where there's a very high demand for the professionals and we have also faced the situation where we have had to increase salaries Material is maybe the right word. But I want to remind that there's also this issue that I was explaining earlier that the comparison point in the summer last year. We did not actually include those normal salary increases only from November forward. And this was one of the elements of the saving portfolio that we identified To mitigate the risks related to COVID-nineteen. And maybe just to complement that also compared to 1 year ago, of course, we didn't see in a similar fashion accrue bonus payments for people and that, of course, had another impact. So some of this cost increase is simply related to growth. And of course, there are other elements that are related to, for example, cost of delivery in our cloud cost or as such. Yes. And back to you, Hany, and the strategic review. I think you've pretty well already covered the purpose of the review, but then a follow-up. So is the current cash flow enough to keep all the product areas competitive enough? Or is it possible that F Secure decides to exit some of the business areas? Well, as you know, like any technology company, we are conducting a steady review of all of our products and businesses where are and we are frequently analyzing the viability and the competitiveness. And it's not a static thing. We're doing all the time. But currently, we have nothing to announce or disclose. Okay. Still on the same topic, since it was a costly review. Did you get anything concrete out of it? I think the jury is out, and we will be communicating our strategy on August 31. But I hasten to add that what we found during the review was there's been excellent work done in this company, a strong foundation that we are benefiting already now in terms of the growth. And of course, we're building on that good foundation. Okay. Then Erika, have you increased your sales commission percentage in 2021? No? No, no. I was like wondering about what's going to be yes. Yes. And still continuing on the financials. So which year will your acquisition related amortization related to MWI Infosecurity decline to 0. If I remember correctly, so the technology Part was in 7 years. Would you agree with me, Hendrik? Yes, I do. You could have answered that, not to test me. Then on the topic of deferred revenue, which has grown at the rate of 10% to 15% over the past 3 quarters and the non current part of it even more. Is it fair to assume a similar 10% to 15% organic growth rate for Corporate Security Products for H2 and 2022? That would be a forward looking like guess or estimate giving them that we are not disclosing at this stage. Okay. So the guidance that we have for the B2B products remains the same as it has been that for 2021, we estimate the revenue in that area to grow high single digit. Yes. Then one specifically to Erika. So could you provide a bit more color on why you decided to leave the company? And that's a tough one because it's always a lot of things impacting. But So I was telling somebody that, hey, I've been reporting quarterly second quarter in the middle of July since Embarrassed to say, since 1994 for a listed company. So it's been quite a long time, And it brings certain routines, and I think I still have an opportunity to do something different. I have not decided my next step, So I'm just taking some time off and seeing that what the time will bring. All right. Then coming back to you, Hany. We were talking about the consulting and seeing that there's also regional variation in the performance. So what are the countries that are still lagging behind? Yeah. We haven't disclosed specifically countries nor would it be entirely fair because I think that this also varies quarter to quarter. But we have in certain regions faced, for example, heavy price pressure, price competition. And in certain cases, We have decided not to participate in some of those. There have been different reasons for the variation. And I think while we've seen very good progress in consulting and good work done by Ed Parsons and his team. I think the work still continues, and our target, of course, is that all of our regions will be performing very, very well. All right. Then continuing with Johan Johan Johan Johan Johan Johan Johan Johan Johan Johan Johan LifeLock. Well, generally, we don't comment on market rumors, but I can very generically say that we don't necessarily view all consolidation bad because, of course, there is less competition and sometimes also the competition gets tangled up in integration activities, and that's a really good opportunity then for us to accelerate. Sounds good. Do we have any more questions from the room? Thank you. Sovekke Silvertz from Danske Bank. One more question. Regarding the sales commissions again. So could we even or could you even, in theory, decline your sales and marketing expenses and just roll on with your current contracts? Or is it so that the partners who have sold, let's say, a license for 3 years and then When the 3 years has run out and then they will renew the license, will they get a commission again for renewal or how does it work? I think that's probably a bit too detailed to open up here comprehensively. But I would just maybe mention that it's extremely important that we get the good renewal percentage because, of course, those are the customers that we won, and it's always a kind of a easier task, at least in theory, to keep those customers than win completely new ones. So we have a lot of emphasis on that one as such. As to what is the right level in terms of sales and marketing, sales commissions and other costs. When you are a company with growth aspiration, of course, it means that you need to invest in that part as well. And one of the areas that we are clearly very focused on keeping on investing is the marketing specifically, because We think we need to create generate demand. We need to get our message out there. We need to be able to communicate our vision and we need to make ourselves interesting in this very crowded market, and we need to stand out. And having points of view and a credible story is one way to do that. And we intend to roll that out even more than what we have done currently. Interesting. Thank you very much. Thank you. And all the best for you, Erika. Thanks. If there are no other questions, then I'd like to maybe just mention that this is, as said, Erika's last interim, and we've been very fortunate to have her as our CFO. She's come with a wealth of experience, and she hasn't contented by standing still. She has also taken our finance organization to a completely new level in terms of the capabilities and systems we have. So It is my pleasure to thank her for that work. And of course, we would have been extremely happy to keep her, but at the same time, I think there's a lot of sympathy for her personal decision. And I look forward to being able to introduce a new CFO to you at the Capital Markets Day on August 31st, where at the same time, I welcome all of you to participate. Thank you. Thank you.