Welcome everybody to F‑Secure's Quarter 3 interim report session here in the stream, as well as here in the room. The header for this time's report is that we've been focusing on integration of people, technology and product convergence following our acquisition of the Lookout consumer business in early June. But let's move on. in Quarter 3, the highlights: acquisition integration and following up on our strategy execution. I'll get to the details in a moment. Our revenue growth, thanks to the acquisition, 25.8%, but organic growth only at 0.3%. Our direct business continued its decline year-on-year, yet partner business grew marginally less than in previous quarters.
In terms of strategy execution, we continued with the launches and sign-ups of our partners into Total, our one single app for all things consumer security. There has been, unfortunately, me delays in me of the launches. We looked at 7 launches only in July, whereas we actually Totaled 6 in the full quarter. quite a lot of partner delays. They have been relatively conservative in pushing new services out in the third quarter. We do see me signs of early demand recovery, especially as we have our finger on the pulse of direct business. We can see that September was already showing better numbers than what we have seen up until now this year.
We are naturally looking closely how that develops during Quarter 4, but we'll get back to those sentiments later on. Then, as we have fallen short of our own targets of growth, and our profitability has been affected, therefore, we have today announced that we will commence change negotiations in F-Secure globally. I will talk a little bit more about that in a moment, but that will commence next Monday. these are the bigger news. Naturally, we al gave new guidance, as we gave a negative profit warning towards the end of September. that was always something that's important to remind everybody about, we lowered slightly our expectations for this year's results. Then, about the change negotiations.
We are going to be restructuring our global operating model, and this will have al personnel changes involved. We do this that we align our operational model and our reurces and investments that we can pursue our strategic growth initiatives that we have in the company. We talked quite a bit about those in our Investor Day in September, that if you haven't had a chance to watch that recording, that's available on our web. Naturally, al, we're starting these change negotiations to ensure that we can al financially be on a steady ground as the market has been providing headwind to us in 2023.
A maximum of 70 people in the company internationally may be reduced, and then in Finland, a maximum of 50. We have currently. Or at the end of September, we had 516 employees in F-Secure, to give you a perspective on what we're talking about here. The estimate of the annual savings out of this, both in terms of operational costs that we are looking at, as well as personnel costs, that we're looking at roughly € 9 million. Naturally, this € 9 million is something that we will partially reinvest back into our growth initiatives. me of it will al improve our profitability to take care of our financial obligations.
The negotiations will start next Monday on the 30th, and they will last, as typically here in Finland, 6 weeks, or if we agree otherwise during the negotiations, potentially slightly shorter or slightly longer. here is a snapshot of the kinds of things that we've achieved in the third quarter. slightly slower than expected conversion to Total of our partners. we've signed up 3 new partners, we've signed up 3 existing partners, and we have launched 6 new Total services with partners worldwide. With regards to developing our offering, and both current offering and new products, on a new product side, the first services went live of embedded security. We al made a press release out of this.
Touch 'n Go, which is an e-wallet service provider in Malaysia, launched the service in August, and the service that they are providing is called My CyberShield. And we al talked about this at our investor day, for more details, you can check that one out. We launched SENSE 4.0 to the market towards the end of August, beginning of September, and this is the first fully industrialized, and packaged, and productized version of SENSE, which allows our partners to actually run much more independently with the product, without the need for us to be helping them in the porting of the software onto the many different Wi-Fi router platforms that are out there.
This allows our R&D and our team focus much more on supporting both the ramp-up of the services among our current partners, as well as developing the product further. We launched our first DNS partner in Europe, and we signed another one during the quarter. We have continued very actively working on both existing tier one partners that we have in our portfolio, such as AT&T and NTT DOCOMO, as well as signing up new ones. We have a good pipeline on that front, hopefully more things to share with you in our next quarterly updates. Then, with regards to expanding into new channels, we made two launches.
Allianz, one of the world's major insurance companies, launched our service through their e-commerce channels at the end of September, and, as said, Touch 'n Go, an e-wallet provider insurtech company, launched our service for ID protection in August. Then a few words about the integration that we've been working on very actively now in quarter three. we closed the acquisition of Lookout Consumer Business on the 1st of June, and this was the first full quarter that we had the team, and business within our F-Secure realm. figures have now been consolidated into F-Secure numbers since the 1st of June, seven months altogether for the full year. We haven't seen any attrition from the Lookout Life personnel thus far, which is great. Hopefully, the situation remains as it is now.
Then we have delayed certain growth expectations in the pipeline, actually, very similar to what we're seeing in our own pipeline. the same headwinds that we've been experiencing, me of that procrastination can al be seen in the business that Lookout Life was forecasting prior to the transaction. Our teams from the ex-Lookout Life side and the ex-F-Secure side, who are now all F-Secure fellows, have worked very actively from the end of July, in August, and in September, to plan and kick off a new development program, which comes up with one single product for the new company. combining the best of F-Secure with the best of Lookout Life into one single proposition.
As we shared at the Investor Day, we're going to be launching the products into deployments with partners and customers already during the course of 2024. We're looking at deploying products in the third quarter, most likely towards the end of the 3rd quarter. Finally, we've al done a refresh round of our company strategy, and on that front specifically, we have decided to enhance our partner business focus, al to cover Tier 1 that we haven't addressed actively up until now. This is very much thanks to the capabilities, the technology, the experience, and the very strong references that we gained through the acquisition of Lookout's consumer business. that's something that we have decided to pursue now with a vengeance.
Then, I know that this looks a bit like a Gartner slide with all the text there, but bear with me. With regards to 2023, this, as said many times earlier, is the year of our single app, Total. And here are me of the numbers that, that are, in a way, showing how much potential we actually have left in converting customers and partners into Total. roughly 16% of our partner business, the app-based partner business, 16% of the billings are currently coming from Total. 8% of our partners' end customers are using multi-module Total. By the way, when I talk about these first two numbers, I'm talking about customers who have taken more than just endpoint protection, that they're using a wider set of, of Total capabilities. we talk about multi-module Total.
8% of the users have subscribed to multi-module Total out in our partner business. And finally, the good thing is that we already have 83% of our whole application user base on the Total generation of product. we've already managed to get the same base technology to such a wide base of users, but as you can see, many of them are using only endpoint protection at this moment. In 2024, what's new here is the first bullet point really, which is about expanding our offering to cover more digital moments that we're going to be protecting people from. what are these digital moments?
Messaging, shopping are, for instance, two examples of things that you will see in the market in the fourth quarter of this year and in the 1st quarter of next year, and more is to come. we're coming with more and more scam protection-related use cases that Total will be covering. Then in 2025, the second bullet point is something new. that's when we have the full force of the new converged product between Lookout Life and F-Secure combined, that we can work on that new experience that becomes like the trusted companion to users out there. it not only protects people, but it al helps people understand what's going on in terms of threats, how to protect themselves, and what the service has done for them lately.
And then finally, in 2026, we're looking for leadership in the tier one partner market, which means that we have partnerships in North America, Europe, Japan, and Asia Pacific. we're already strong in North America and in Japan, but we're looking on to expanding that tier 1 partnership business al in Asia Pacific and Europe. And then, what we are intending to offer to those partners, and our current partners who are remaining super crucial for us, is holistic scam protection. And either as an app, which is Total, or full set of embedded capabilities. And the full set of embedded capabilities is specifically important for the tier one partners who already have, oftentimes, a popular, a popular app out there.
And then, thanks to those bigger partners and the existing partners we have, we hope to have over 1 billion addressable consumers out there that we. That can sign up to our services. We already go above half a billion at this moment. But that's all from me for now, and now I hand over to our Chief Financial Officer, Sari Somerkallio.
Thank you. Good afternoon, everybody. Let's have a look at the numbers. , like Timo already said, the growth is close to 26%, and of course, the big growth comes fully through the acquisition of Lookout Life. And the organic growth remained very flat, 0.3. Currency neutral and organic growth is 1.8%, we had me headwinds from the Japanese yen and the U.S. dollar. me growth, but very limited. If you do the math of all the numbers we have disclosed, you can come to a number for Lookout Life as well, that there the organic growth was slightly negative. , but similar level of development as we have on our side, no like ballpark differences.
Looking at the geographies, we have growth, thanks to the acquisition in Japan and Americas. But then if we again look at the underlying business, the good areas we have in Netherlands, Japan, and Singapore, they have been good markets here. And then on the other side, we have challenges in Poland and Germany. And I think that's a story we have heard already for me time. On the direct business side, which al has been weak for a time already, and we al in our profit warning, we referred to the direct channel. new sales have been challenging already a long time, but this quarter al, we saw me challenges in the renewal performance, negative even there.
But, luckily, we are seeing me positive signs, we are finally hoping for something better, going forward. But of course, remains to be seen how things go. I think we've been all disappointed by the consumer sentiment already for me time. On this slide, very much similar information to the previous slide, but here you see how Lookout Life is contributing to our numbers. of course, it is a significant addition, especially on the partner side. D eferred revenue growth is smaller than you see on the Total revenue, and this is related to the DB challenges that it is coming down. And on partner side, we see then proportionally more of the deferred revenue compared to our history.
You see these numbers from the report, not going to walk through the details. I think, pernally, the very happy thing about this slide is now we have comparable numbers. For a year, we have talked about the different ways of allocating. now we actually see here that the admin costs have come down. We see that we have focused on sales and marketing and our technology organization, the R&D here, we see growth there. Of course, the acquisition al has an impact. And looking at the TSAs, a busy table with a lot of information.
Here, if we start with the cost of revenue, where the Total cost of revenue in the quarter was € 4.8 million, cost through TSA is € 2.5 million, more than half of that. , here, the TSAs have a big role and that will continue still from the Lookout side a nd on the OPEX side, in admin, you see a significant change compared to last year. last year, we paid € 2.6 million in TSAs in one quarter, and now it was only € 0.4 million. on admin side, we are really getting independent.
There are me small IT tracks that are remaining, but otherwise, admin is really we are on our own, and those IT things are actually related to the tech TSAs, ensuring that we have access to Lookout and we secure as appropriate. Then coming to the profitability on gross margin now, I think the big thing here al is that now we have Lookout Life for the full quarter, you see on what level the gross margin is now. Lookout Life used to have a lower level. We. Our product mix has changed a bit, causing higher hosting cost and al from Lookout Life, this fair value adjustment for the deferred revenue al pulls it down, and that's something that will reduce quarter by quarter.
Looking at EBITDA, 36.4% for EBITDA, that is, of course, significantly better than in Q2, but we know that we have in our profitability a seasonal pattern. Al, last year, Q3 was 40.8%, quite a good profitable quarter, but still we are clearly lower than that level. But of course, nice to show a good, good number, even if not surprising. A new slide here, of course, with our current situation with the big bank loan after the acquisition, it is important to look at balance sheet and cash flow even more than earlier. If we start with the leverage, there, our target is to be below 2.5 times, and we are still at 3.6.
, of course, we are working our way down, down below that target. With our strong cash flow, we get down the net debt, that's a key driver. And of course, now we al announced the savings plans with the change negotiation, of course, that will al then contributing to ensuring that we improve our profitability a nd with this, improved leverage and paying off the loan, equity ratio will start growing from the low numbers. And in EPS, of course, dividends are paid from the actual EPS, but we are al following this EPS, excluding the PPA amortization, because that tells more about the operative performance. But both KPIs are interesting and relevant in my opinion.
Looking at the 3 first quarters of this year, I think the conclusion from this slide is that we see how top line has improved by close to 13%. Of course, thanks to the acquisition, we've seen that the organic growth has been very limited, and at the same time, EBITDA has come down, both in ablute numbers and in terms of percentages. this is of course where a combination where we had to take action. We've had higher growth plans, and in our business where which is very scalable, when you grow, it becomes very profitable. of course, every cent and euro of growth that we didn't get is hitting the profitability, and this is the outcome of that.
we keep the same outlook that we updated in September, aiming at revenue of € 128 million-€ 132 million. That remains the same, and the profitability between EBITDA between € 41 million and € 45 million. all here remains the same. And likewise, al, the midterm targets until 2026, we have not touched those. this € 9 million of savings that we talked about, that is to ensure that we are able to focus on those growth initiatives that we have planned for the future to deliver the growth, and al to improve the profitability that we keep us on the track that we are targeting for our midterm. that was all for our presentation, and now we are happy to answer questions.
First, regarding the Lookout Life contribution to Q3, if I calculated correctly, the Q3 number was 21% below Lookout Life's previous year, excluding, of course, the impact of prepayments. But what would have been the decline with the prepayments included, that they are kind of wiped out from the equation?
We actually got already a similar question during the morning, and I think you come to around 5% based on the information that is actually in the report. we can send you that calculation if it was not clear from the data.
Okay. Thank you.
-20% is not the right number.
Because it looked like, based on the data that you provided, it looked pretty bad. Okay, then, if we look at the legacy business growth that you had, excluding Lookout Life, it was pretty much flat, and the trend has been negative. When do you think it will be possible to expect that the trend would turn? Because now it seems that the trend that we have seen this year is not going to be over very on. I mean, the trends that the customers are now behaving, they're related to the overall economy, not necessarily your products. is there kind of any reason to expect that you would be able to turn the trend on your own measures, and at what time?
Okay, a few different things there. first of all, the market sentiment that we're seeing for the time being, we don't see a significant change for the better. That's, that's one thing. We, we will act accordingly when we see that. Secondly, with regards to our growth initiatives, me of those are riskier. That mean that, for instance, when you're developing new product, you can't say beforehand what kind of traction it will get, right? there, there is that. But, in terms of delivering on our number one security experience vision, we're doing significant efforts towards that, to actually have a stronger product that gives more rean, even in tougher times, for our partners to convert to Total. that- that's an investment, and in a way, calculated risk that we're willing to take.
And then we are working on certain projects with partners, where we already know that we're going to get a payback immediately, and there is concrete growth potential when we implement them. that's a, if you can ever say this, very limited risk where we are investing, but these require al investments from us in 2024, and the paybacks are not yet as significant.
And of course, at the same time, we continue with our Total conversion, and we make plans on how we help our partners to convert their base and on, because that's an important driver, and that should help our partners, too, in this situation.
Yes. We now have over 1 million households on SENSE service, for instance. The partners that we have have tens of millions of households that they are serving, there's al a lot of potential there. With regards to direct business, we are still keeping our foot off the gas on the acquisition side, and are putting much more focus on excellent or improving our retention, as well as upsell amongst the customers that we already have. When the market improves, we will reconsider.
Then in the direct channel sales, you mentioned you have seen early signs of trend change in the positive. Could you describe what they are?
The KPIs we follow is the renewals, in terms of how do they rate against last year's Quarter 3 or last year's Quarter 4, and the same for new sales. We're looking at those two things: How are renewals and new sales developing? I think we've now systematically communicated for five consecutive quarters that new sales have been negative. In terms of renewals, we've been able to hold the fort. There was a small minus in quarter three, but those are the two KPIs that we refer to. When we see improvement, it's those.
Okay. And, just a check for the renewal sales. How much did they decline?
It is a limited decline, as earlier it's been sort of slightly positive, but we have not given those exact numbers.
I'm just thinking that is it 1%, 2%, more?
No. Well, it's a small decline.
Okay.
Maybe then regarding the gross margin, you said that Lookout Life's gross margin has been traditionally lower than F-Secure's. I don't remember this discussion from the acquisition time, but what explains that? I think at the time of the acquisition, you talked about the profitabilities of the companies are pretty much the same. But what makes the gross margin different if it seems that Lookout has higher OPEX than if the, let's say, EBITDA margins and EBIT margins are pretty much the same? what explains the difference in gross margin?
EBITDA levels were similar, and the gross margin were, that means that OPEX was smaller. I think it's. Of course, there is—we still have much in gross, in the cost of revenue through TSA, maybe we don't know everything yet, and we are learning as we take it into our own hands. But I would say that it is about pricing and volumes. they've had bigger customers versus F-Secure, and maybe the pricing has been more aggressive, but the volumes are big, that they can, with lighter organization, deliver that.
But they've been lighter on reurces. That's clear.
Okay. I'll give a turn to my colleagues, I'll end here. Thanks.
Hi, it's Atte Riikola from Inderes. Matti had already pretty good questions, most of my questions as well, . But still maybe about those planned cost savings. can you give any more color on what functions those cost savings are targeted, and maybe al about those? There's gonna be me non-recurring costs for those, any number or estimate for that at this point?
For you-
I would say that, as we are just starting our change negotiations, we are not indicating anything more detailed at this moment in time. We will let the planning process and negotiation process, move forward, and then at the end of it, we will naturally be able to provide the decisions that we have made. Currently, all of our functions are within the scope of the negotiations. Our biggest units by far are technology, including all of engineering, research, threat engineering, threat intel, and forth, and commercial. Those are the biggest units, and naturally, they will be part of this. if we didn't make me kind of adjustments there, most likely it would be not significant enough.
But, I would say that, irrespective of the number of people that we refer to in terms of, maximum scope globally and in Finland, we're al looking at different kinds of operating expenses as the major contributor to the savings. And, there, for instance, we're looking at our marketing costs very critically, especially on the new customer acquisition side, but that's yet to be determined what the numbers will ultimately be. Because, of course, if you, if you take the foot off the gas too much, you're likely to start eroding your base. , that's a, that's a thing we're still considering.
Yeah, I think you mentioned in the release that you are now focusing even more on the partner business. let's say, in midterm, are you still, like, targeting growth al in the direct business, or should we assume that now you're making me cost cuttings there and decreasing the marketing investment, there might not be growth in the midterm?
What we want to do is that we want to optimize profit in direct business, and the bigger growth ambitions right now in this market sentiment are directed towards the partner business, but this may change. this is the situation right now and what we see being the reality in 2024. But, we'll see as we move along, how the market develops.
Yeah. Maybe still a little bit about the partner channels, organic growth outlook. I think if we think about your message in the earlier part of this year, you were pretty bullish that you were gonna grow pretty fast on the partner side. now we know that there has been me delays, and the Total conversion hasn't been that fast as you have been expecting, but if you look at, for example, the next couple of years, you now have been making lots of new contracts, and I think the things are still progressing there. are you still confident that you are gonna grow organically?
Ablutely. that's the short answer. Ablutely. What we've seen now for about five quarters is that direct business has been impacted first. It's taken a little bit of time to trickle down all the way to the service providers who are serving consumers. I believe that we've started to see that, in a way, procrastination to me. I mean, for good reans. This is no critique whatever. For good reans, they've been slowing down their launches and, in a way, new offerings that they've provided to customers that would require customers to pay more. This has not been an easy time for that kind of launches and updates.
Total, the good thing about it is that it actually increases the average revenue per user, because it is a bigger proposition, but our partners have tended to be more conservative right now. If I would draw a parallel, we have 190 partners, give or take. 140 of those are communication service providers, the very same customers or partners that Nokia deals with, and they are seeing that there is reticence in that market to make investments because of high inflation and interest rates going up. We see that same effect, to me extent, on our side now. It's just taken a little bit of time before we've seen it.
We have not, for example, lost any customers, , all these things that we've been talking about, they are there, it's just delayed.
All right. No further questions from me. Thanks.
Any question - oh, okay.
Hi, Matti Kotilainen. Still a couple of questions. If we talk about the weak trend in direct business, and if we think that it is caused by the big wheel of PC and other equipment replacement cycle, which would seem logical after the COVID times, and we have seen that globally, that the trend of PC sales decline has started from early 2022 and probably has escalated now. And if we think that the replacement cycle typically takes 3-4 years, is it possible that we could see a kind of multi-year, kind of dry sean in the big wheel of the of the demand for your software? And of course, any things that you do on your own is having a impact, but it's still impacted by the big wheel, and it's just small fluctuations in the big trend.
Do you think that this is a kind of a threat, or at least realistic for you to consider, that it might be much more long-lasting than we now expect?
It's a possible scenario. It's not the only scenario. what you are describing here is ablutely accurate. One thing that I would, add insult to injury in a way, is that here in Finland, e-commerce has taken a 39% dip in the last year, according to an analysis company; the survey just came out a couple of days ago. 39% e-commerce decline in Finland. Of course, Finland is not our only country, but this is, in a way, an additional pain. Now, coming to your question, what you're describing is the reality in endpoint protection-driven business. Endpoint protection is still by far the biggest chunk of consumer security, but that image is changing.
there are identity protection, privacy protection, credential management, phishing protection types of capabilities which go above and beyond, and those are growing segments, but they are smaller for the time being. there are, you know. Can these areas of growth, in a way, suppress me of the negativity on the side of, of, people acquiring new devices, remains to be seen. , this is why we're actually putting quite a lot of emphasis in our Total for Life, al into identity and privacy-related capabilities, to make sure that we take our cut from that growth.
Right. And in the direct channel, when you talk about these, you say that in the report that the interest has shifted across product categories. What exactly do you mean by that?
I would say that the identity area is something that is front, right, and center right now, and interest has gone from what used to be called traditionally antivirus, which is maybe a curse word these days. But it has shifted from the Endpoint Protection side very much to things that have to do with identity, and that's something that we're seeing. two years ago, for instance, things like Identity Protection where it was almost like a rounding error. Now it's becoming a relevant new value proposition that our partners are super keen on. Well, Touch 'n Go. The first thing they went for, Identity Protection.
All right. Thank you.
Any questions from online?
Yes, we have a bunch of questions. Let's start with me questions from Felix Henriksson. Could you provide an update regarding the accelerated plan to convert F-Secure and Lookout product offering that you discussed in your Investor Day?
We have the program in full swing. We plan to start shipping towards the end of quarter 3, and what the product will do, and in a way represent, is that it will mesh the different kinds of capabilities in consumer security much more into a single experience, instead of looking like, here's a VPN, here is an endpoint protection, here is a password management. they will be combined, and we will be looking, in a way, much more holistically towards how is your security doing as a user? And the whole user experience will be completely new. But yes, we're looking to start deliveries from the end of quarter 3, but we're not waiting until that.
Already before that, we're coming up with new releases of Total that add new kinds of scam protection capabilities, that there's new value to both consumers and partners all the way. Nobody has to wait for September next year.
Thank you, Timo. And next one is al from Felix Henriksson. Should we expect financial expenses to be in line with the Q3 level for the following periods?
I think that's a good, good assumption, of course, we need to see how interest rates do develop, but yes.
Thank you. Next one. How much one-time costs are you expecting to book from the new restructuring program? Will most of these items be booked in Q4?
Of course, the amount depends on the outcome of the negotiations, because most of the IAC would be people-related costs. it will correlate with that number.
How about the timing?
Timing? Yes, Q4.
Thank you. Let's take the last one. This is from Waltteri Rossi . Can you comment, what is the interest rate on the debt for Lookout acquisition?
I think we have a good competitive offer from our bank.
Thank you. Those were all the questions for today.
Any more questions from the room?
Yeah, Matti.
Maybe just one, and it's not related to the Q4 in particular. When you describe your kind of addressable market increase towards your with your own measures, I was just wondering that it's a bit difficult to quantify that. What exactly is the market that you're targeting, and how big it will be in these coming years? could we just start by saying that, what is your current addressable market with the products that you have today, and what is your market share estimate that you think you have of that market, commercial market?
Okay, market share estimate, I don't have. With regards to how do we calculate this, we're looking at our partner base that we have, and how many customers can they actually address with our offering? if we're talking about Total, then typically, all of the partners' end customer base is addressable market. If we're looking at Sense, it is limited, because typically, Sense has been implemented for a certain Wi-Fi router or a set of Wi-Fi routers that our partner is providing. it may be that a partner has 8 million broadband subscribers, and 1.5 million of them have the kind of router that supports Sense, then that counts 1.5 million more. that's how we calculate it. And what can we do to actually expand that target market?
I would say that anything that we can do to go into me of the more popular apps in the world, or more, populous consumer-serving markets and customers, or rry, partners, like, let's say AT&T. If we can find that kind of partners and work with them, they have a massive end customer base. Not necessarily all of them are, targeted with our proposition, but hopefully many. if we can embed capabilities into the apps that they already have, we have a much better chance to go into those millions of users. For instance, we're currently working with one partner and embedded capabilities. They have roughly 12 million users of their app at the end of next year. And, once the embedded technology is in there, then we're adding 12 million potential users.
But that's how the in a way the logic works. In embedded, we ask end customers to do less to adopt the service. If they take Total, they have to download it. If it's single sign-on, it's the same credentials, but they still have to learn the new app. But the capabilities are much wider and more holistic, and optimized for consumer security in Total. But maybe a long and winding answer, but hopefully that gave a little bit more understanding how we calculate it and what we have to do. Currently, we're around half a billion in terms of how many subscribers we have behind our partners.
Right. the calculations is basically based on not kind of money value, but it's the end users that you are calculating?
Yes, end users who could take our offering through the service providers that they are using.
Right. And how do you then define the potential in the direct business? Because then you don't have any contact to the end users, which are from a particular operator, for instance?
We're not taking direct business into account in this calculation at all.
It would be too optimistic, most likely. We would immediately say that because we're providing product in Germany, let's calculate 80 million-plus as addressable base. We're not taking that into account.
Kind of market share statistics or pictures that you have shown is basically based on the number of end subscribers in your partner networks. Am I-
I think it's number of partners, where we show how we are leading among the CSPs.
That's based on the number of CSPs that we have, and our competitors have.
basically, the connection to money values is not there? It's-
No, not in that graph.
Not in that one, no.
All right, that's all from me. Thank you.
There is, apparently one more question, at least, from online. Let's take that.
Yes, we have one more question from Felix Henriksson. When do you expect to start seeing benefits from the cost savings? And are the targeted € 9 million savings net or gross savings?
Yeah, that's a gross savings number. that you will not be able to find the € 9 million in our P&L. partly, we are using that for the investments that we need to make into our future growth, and partly it will be visible as improved profitability. the net number is different from the € 9 million. And of course, how we are then starting to get benefits from that, that depends on the outcome of the negotiations, which are planned to be finished in around mid-December. it is next year that we'll start benefiting.
Thank you. Those were all the questions from the line.
Okay. Very good. Thanks, everybody, for the good questions. Thanks, everybody, for attending on the stream. See you in our full year 2023 release session, I believe in February.
All right. Thanks for today.
Thank you.