Welcome to Appear's First Quarterly Presentation. My name is Thomas Bostrøm Jørgensen. I'm the CEO of Appear, and I'll be taking you through the presentation we prepared as part of our Q3 report. Now, the agenda for today: we're going to go through some of the quarterly and year-to-date highlights, going to repeat a bit about the Appear growth story, and then go into depth on some of the Q3 numbers. I'll invite our CFO, Per Øyvind Stene , to go through financials, and then we're very happy to answer some of the Q&A questions at the end of the session. Let's just dive in. For Q3, Q3 has really been a good quarter for us. We've seen strong momentum across all the regions we operate: South America, EMEA, and Asia-Pacific.
Growth is really driven by business from Tier-1 sports broadcasters, content owners, and sort of the ecosystem around live sports. We've also seen a lot of larger sort of long-term support agreements and further adoption of what's become the gold standard in the acquisition market, the X Platform. We've spent considerable time in the business preparing for launch of several of our new products and solutions that we're very excited about. Of course, we successfully listed Appear at the Oslo Stock Exchange on the 6th of November, which was a huge accomplishment for the entire business. Financially, we delivered NOK 183 million in revenue, which is a 30% increase year on year, and an EBITDA at NOK 32.6 million. Now, EBITDA is basically EBITDA less capitalized development expenses, for those who wonder.
Our gross margin came in at the same as last year, 73.8%, and we had a really strong cash flow in Q3, NOK 110.9 million, which really comes down to collecting cash from really large sales in Q2. Now, further on, if we go kind of to the we put on the year-to-date glasses and look at the year as a whole, we really continue to see very strong business coming from the Americas. Again, the sports acquisition market, the live sports tier one, we've also had a really strong momentum with the ecosystem around soccer, so football, in the EMEA markets, and we have established ourselves with a local center of excellence in Asia-Pacific and starting to see much better traction in that market as well.
Our revenue comes both from new customers and existing Tier-1 customers, and most of the revenue growth that we're seeing is coming from this X Platform, as I said, the gold standard in the sports or in the live production acquisition market. As I said before, we've spent considerable time this year developing and preparing for launch of new products and solutions to expand our product offering going into next year. In terms of financials, we ended the first three quarters with revenues of NOK 616 million, which is an increase of 36.1% year on year, and I'm happy to say that our revenues already surpassed the full year of 2024, so that's a great achievement. Our EBITDA came in at NOK 122.4 million, which equals a 19.9% margin, and that's including IPO cost, and ex-IPO cost, the EBITDA margin would come in at 21%.
Our gross margin, again, stays where we want it to be and stays on par with last year, so 72.1%, and free cash flow ended at 79.3%, which is up 20.7% year on year, and really sort of reflects a solid cash conversion rate. All right, now, before we move on and talk a bit more deeply about our result, I wanted to repeat some of the sort of key aspects of Appear's growth story, particularly for those of you that are new to the company. Appear is a leader in the live production technology market, and we really define this market as all technologies, so hardware, software services that are involved in getting all the audio and video feeds live from a live event at a stadium all the way to the customer's device, TV, tablet.
That entire sort of technology ecosystem deployed to make that happen is Appear's market. Now, the company is 21 years old, right? We were founded in 2004, and all the founders came out of Tandberg Television, one of the real pioneers in the broadcast industry, and as such, the company really has a lot of, let's say, Tandberg heritage and legacy still within our company and our walls. We're 215 employees at the end of the first three quarters. We delivered NOK 796 million revenue the last 12 months leading up to the third quarter, and we delivered 16.8% EBITDA margin in the same period. Now, our footprint, so how are we set up globally? We're a Norwegian company. It's a Norwegian mothership. We're based in Oslo, just a stone's throw away from the old Tandberg Television offices. We have around 160 employees.
Most of our engineers are based in Oslo. We have wholly owned subsidiaries for sales and marketing, one significant out of Southampton to cover the U.K. and Ireland markets. We have another wholly owned subsidiary in the U.S. based in LA to cover the North American market. We just got established in Singapore to cover the Asia-Pacific region, and we also have a subsidiary in Stockholm that is housing our Swedish development team that we're looking to expand going forward. Now, if you look at the market that we operate in, as I defined earlier, the live production technology market, it is a big market. It's a market worth around $5.5 billion. We divide the market into three segments. The first one is acquisition.
Acquisition is really technology deployed at the stadium to capture, process, and transport audio and video from the stadium to wherever that content is being produced. That's really the next phase of the value chain. It's content production, or we call it processing, and that's the phase where the finished goods are made. That's where we mix audio, video, graphics, and really create the content and the product that we all consume. The final stage and the final segment here is consumption, and that's really delivering the finished goods to the viewers, either via linear, so good old satellite, terrestrial, cable, TV, or via LTT. Now, if you see, if you look at the growth rates in acquisition and processing, those are markets that are growing between 4% and 5%.
Consumption is a market in decline, but Appear going forward is focusing strongly on the acquisition and processing part of the markets. In terms of customers, who do we address? Who are the buyers here? We like to categorize them in these four categories. The first is content owners and rights holders, and as I'll get to, this is an industry that is driven largely by premium live sports rights. It's the money coming from those rights that really drive this industry. Of course, you have production companies. They're involved typically in the entire value chain. You have sports broadcasters that usually buy rights, portfolios, and packages that they produce and turn into products that they sell to their customers.
You have connectivity providers that are involved in carrying live content with as low latency and as high quality as possible between the stadium and the production facility, and then between the production facility and where content is consumed. Now, as I said, looking at the drivers in this market, in this global live production market, as I said on the previous slide, a lot of the, let's say, the value that is created in this industry comes from sports rights, and you probably, if you follow the industry, you'll have seen several notable announcements in the market. Paramount, for example, buying the rights for Champions League in the U.K., and Major League Baseball now inviting Netflix in as a rights holder in Major League Baseball. The value of rights are increasing, particularly for Tier-1 rights.
For those who buy rights and live off monetizing rights, they have to increase production value to be able to monetize the rights they bought and to capture viewers around the world. Higher production value is really translated into more cameras, more slow-mo, more replay, more graphics. It is more technology, which is great for Appear's business. That is really where we excel.
After typically putting down a lot of CapEx and investment into production value when you renew rights or you buy rights, the ecosystem is really intent on then delivering the content operationally efficient, and this is also an area where Appear really adds a lot of value, both in enabling remote production or centralized production, which is a big way of delivering operational efficiency, and also in the transformation from sort of bespoke traditional video infrastructure to IP and IT-based solutions, which are more readily available and much less costly. I think those are some of the big trends that are forming our industry. In terms of Appear's history, as I said, we're a 21-year-old company, and we've gone through a couple of big pivots in order to end up delivering 34%-35% annual growth as we've done in the last five years.
The first big pivot Appear went through was moving from the consumption market into the acquisition market in the sort of period between 2017 and 2018, really enabling us to tap into that premium live sports market. Then in 2021 and 2022, Appear went through a significant commercial pivot where we moved our market focus from EMEA into the U.K. and U.S., where most of these large premium sports broadcasters, production companies, and rights holders are located. Then we moved into direct sales, so we set up our own direct sales organization, and that really transformed the commercial outcome of Appear. All right, from that, we are going to go into Q3 in a bit more depth, and we are going to start looking at our very strong and consistent growth trend on revenue.
We've had 35% CAGR from Q4 2021 to the third quarter this year, which is really significant growth and obviously outgrowing the market significantly. You'll see that we've also grown 30% from Q3 2024 to Q3 2025, and we've had quarter-on-quarter growth consecutively for the last 10 quarters. Again, the main driver for this revenue growth is the X Platform targeting tier-one sports organizations, broadcasters in the largest market in the world, in the Americas, but also more and more in the U.K. and in EMEA, as we'll get to. If you look at the revenue by product type for this quarter, you'll see that we have a higher share of support revenue compared to software and hardware, and that's really helping our lifting our gross margin.
If you look at the regions, America has had 2% growth in Q3 compared to last year, but still represents 50% of our revenue year to date. I also want to say that the Americas secured a significant amount of long-term service contracts in Q3, which will be recognized over a much longer contract period going forward. For the EMEA market, we've had great success in the EMEA market. Some of you might have seen the announcements we made with LaLiga as a representative of our business in European soccer, and EMEA continues to deliver strong growth in Q3, even at the back of a very strong quarter in Q2.
In terms of margins, we continue to deliver strong growth and solid margins in Q3. If you have a look at the green line here, which is gross margin, we ended the quarter at 73.8%, which is really great, and again, it really points to the mix of hardware, software, and services. We had, again, NOK 183 million revenue and a NOK 33 million EBITDA, which leaves us a 17.8% EBITDA margin. We are investing in growth. We are in a significant and, let's say, long-term growth trajectory, so we are investing in a controlled way in teams, in facilities, in infrastructure, and we are also building a very sort of scalable, efficient, and resilient organization going forward. As we ramp up our revenues, we are also ramping up our investment to keep that growth going, and that is very, very important for us, and you will see that from us in the long term going forward.
All right, with that, we're going to hear from our customers before I hand it over to Per Øyvind for Financials.
The demand for video content is growing significantly, and this is a massive global market with so much potential for a premium player like Appear. Broadcasters and media companies alike used to turn up to events with lorry loads of media presses and equipment that adds risk, adds expense, and takes us away from meeting our sustainability targets. Appear brings something that is missing in the marketplace for me: a box that can be small, that can have proper power management, can supply everything that I need in a small footprint. We found that we have massive saving in power consumption, and Appear's solution can easily do its job for more than 10 years, and that's what I call sustainability. Working with partners like Appear, it's a no-brainer for us so that we can deliver the best quality product. We couldn't be happier.
Hello, I'm Per Øyvind Stene , the CFO, and I will take you through the financials. As Thomas has mentioned, the revenues for the quarter was NOK 183 million, 30% up from last year, and due to these beneficial product mix effects compensating for tariffs, the gross margin ended up at 73.8% at par with last year, with gross earnings at NOK 135 million. Going to the more comparable figures, the EBITDA, as we have capitalized, started capitalizing development expenses in 2025. We capitalized NOK 17 million in the quarter. We didn't capitalize anything last year. The EBITDA margin for Q3 was 17.8%, with a resulting EBITDA of NOK 33 million compared to EBITDA of also NOK 33 million and 23.2% last year.
The last year's numbers were high due to prioritization effects on the salaries and lower other operating costs, but still, EBITDA at 17.8% was a good quarter for us. The operating profits was NOK 45 million versus NOK 29 million last year due to adverse currency effects. Net financial expenses in the quarter was NOK 3 million versus net finance income of NOK 3 million last year, so profit before tax at NOK 42 million. We've had some IPO-related expenses that we cannot have tax deductions on, so the effective tax rate for the quarter was 31% versus 22% last year, with a profit for the period at NOK 29 million versus NOK 25 million last year. Going to the nine-month period from January to September 2025, our revenues, as Thomas mentioned, NOK 616 million, up 36% for last year. We have stable gross margins at 72.1% at par with last year, with resulting gross earnings at NOK 445 million.
With the comparables on the EBITDA, after having capitalized NOK 47 million of development expenses for the year to date, we have EBITDA at NOK 122 million, with a year-to-date margin of 19.9% versus 17.7% last year. Also, for the full year, we've been hit by adverse currency effects, so the net financial expenses for the year-to-date period is NOK 9 million versus a net financial income of NOK 7 million last year. Profit before tax NOK 149 million, and then the effective tax rate 24% versus 23% last year, resulting in a profit for the period at NOK 114 million. Looking at the cash, as Thomas alluded to, we had a very good cash flow in the period, where the main contributor was a reduction in trade receivables.
Going out of Q2, we had a hike in trade receivables that we have collected, so we have had a decrease in our working capital of NOK 92 million. We have, of course, the positive contribution from the EBITDA. We have investments in NOK 17.5 million in capitalized development expenses, NOK 3.5 million in PP&E, totally resulting in a positive net cash flow of NOK 110 million for the quarter, which means that we are going out of the quarter with the cash equivalents of NOK 159 million. In addition to the cash and cash equivalents, we consider money market funds that we can liquidize within a few days as part of our available liquidity. Going out of the quarter, Q3, we had NOK 160 million in money market funds in addition to the cash and cash equivalents of NOK 159 million, so totaling NOK 318 million of available liquidity.
With that, I will leave it to Thomas to conclude the presentation.
Thank you, Per Øyvind . In terms of our financial targets for 2025, we are guiding around NOK 800 million in revenue, and in the medium to long term, we're guiding our revenue growth at between 25%-30% per annum, our recurring revenue share at 15%-25%, our gross margin at around 70%, and our EBITDA margin at or around 17%, in the interval of 17%-20%. With that, we are going to go to Q&A.
Thank you very much, Thomas. Lots of questions coming in from the webcast, and it's still possible to post more by clicking on the button in the player. First question, how is it possible to have both the streamer, for example, Netflix and Apple, and also the sports organization, the rights holder, for example, NHL or NFL, as customers? Are they both using your products, and how is that working?
That's a really good question. The big dynamic in the industry is that the streamers are actually buying content rights. I mentioned MLB earlier, so Netflix just bought a good chunk of Major League Baseball's content rights. As such, the streamers are getting into the business of delivering premium, actually, producing and delivering premium live sports. That's really kind of taking them from their existing business, which is video on demand, to now producing and delivering, actually, buying rights, producing and delivering live. As such, they are now competing head-to-head with the likes of ESPN.
In the example of Major League Baseball, ESPN was the original rights holder. Now they're kind of pulled back, taking a smaller part of the Major League Baseball rights package, and Netflix is taking a bigger, and then NBC is also taking a part of that package. Their entry into this live, yeah, into premium live sports production is really a big driver for investments in the market.
Thank you, Thomas. There's a couple of questions from different participants on Net Insights, having talked about negative growth year to date, citing tough macro. Is this something that you notice as well, or are you now gaining market share from them and potentially others?
Our business is driven by premium live sports rights. A lot of the triggers for investments into Appear are driven by rights being renewed, rights changing hands, rights, value rights going up, and then big sports events. For us, this is a very dynamic market where there are a lot of very active players. As I said, for example, streamers coming in and taking a big piece of these large rights packages. For us, this is a very dynamic market with a lot of activity, and it is a big reason why we are growing at a substantially higher rate than the average market.
Very good. A few questions from different participants also on Q4, your implied growth in Q4, given your NOK 800 million target for the year. Can you elaborate a little bit on how to think about the dynamics for Q4 with regards to revenue growth?
We are not guiding on quarters or Q4. I would say, on average, Q4 will be closer to what Q3 looks like. Traditionally, when Appear operated in the consumption market, our revenue was usually fairly back-ended, so Q4 heavy. With the transformation of the business and the pivot into the acquisition market and much more into the live production market, we actually see that, at least the last two years, the second quarter is the biggest quarter. We believe that's really driven by the seasonality of the start of these major sport leagues that typically start up in the fall and make sort of investments in Q2 to improve their production value and make improvements in operational efficiency. Those are the trends we're seeing in the market.
Yeah. A quick follow-up on that with regards to regions. Do you have any additional flavor to give on the activity and momentum in the regions in Q4, potentially next year?
I would say the Americas is our big growth engine. That's where we've had very substantial growth over the last four years. We believe that it's going to continue going forward. However, we've also taken the EMEA market now through this transition from indirect to direct sales. We do believe that we will have significant growth in the EMEA market as well. I would say in terms of percentage growth, having just established our regional center of excellence and our direct sales presence in the Asia-Pacific market, percentage-wise, we believe that the Asia-Pacific market is going to be our biggest growth driver. Overall, we have a very positive outlook.
Thank you. Can you comment as to whether the Winter Olympics 2026 has been an important driver for growth during Q3, given the strong performance in EMEA?
I would say the biggest impact from the Olympics came in Q2 because most of the investments were made into infrastructure supporting live production from the Olympics, yeah, were made in Q2. Most of the solutions are actually already sort of installed, configured, and are being deployed and ready for live production more or less as we speak. Q3 is too late for the Olympics.
Can you give an update on the VX rollout?
Yes. The VX platform is our software-based platform for the processing market. We are getting into the market now with pilot customers. The exact timing of when we start invoicing customers for this is slightly dependent on kind of the traction with pilot customers. The product has been, the platform has actually been used in kind of live scenarios already. We are very encouraged about that and the pilots that we are now getting started with.
Good. There is one little bit technical question here that you might be able to answer. How does the X Platform work? Is every camera and mic linked to a single X hardware, or do the cameras and microphone need one unit per camera or microphone?
No. I think overall, the Appear X Platform is a highly modular and scalable solution to process audio and video. In just a two RU frame, so it's like a two rack unit frame, so about this high and wide, the Appear X Platform can process up to 96 full HD cameras, which is better than, well, it delivers better sort of spatial density and also power efficiency than any other platform in the market. We can process a very, very large amount of audio and video streams at the stadium in parallel in a very condensed footprint and with, of course, low latency, low power consumption, and the best possible quality.
Perfect. One more question on Q4. How do you think about EBITDA margins? Will bonuses, etc., typically impact margins in Q4, assuming revenue at par with Q3? Any comments around that?
What we can say in general is that we are accruing for bonuses throughout the year according to how we are doing towards targets. We have done accruals up until now, and we will do accruals accordingly to the development in the fourth quarter.
Right. A couple of questions on the market as such. There has been some media coverage on potential consolidation among your customers, for example, Comcast, Netflix, Paramount, Warner Brothers. Obviously, you can't comment on these specific events, but can you share some thoughts on how broadcaster consolidation can impact your business?
I can only talk from experience. We have, I would say, most of the large broadcasters, content owners, and production companies as customers today. Our experience as they consolidate or spin out parts of the business, that really drives new investments in solutions and infrastructure because whatever was spun out or kind of merged typically has to again invest in increasing the quality of their product, which is production value, which is basically technology that we excel at, or have to invest in initiatives that drive operational efficiency for the spun-out company or the joint-up business. For us, it's a business driver.
One question on the soccer world championships coming up next year. When will we see revenues from that?
We see revenues from that in, I would say, Q3 and Q4 this year. We have significant business from the, we're seeing significant take-up of business from the World Cup.
All right. We have one more question from the viewers. Still possible if you are quick to post some more. What should we expect from M&A going forward, and how much growth are you targeting from M&A?
What we said is that we will do add-on acquisitions, particularly into the VX domain and the production processing market at some point going forward. We haven't specified exactly when. We just came out of listing. We will take our time to make sure that we acquire the right add-ons as we move down the line.
Perfect. There are no further questions from the webcast, so I'm handing it back.
All right. I think that concludes the Q3 presentation. Thank you for watching, and see you all again in a quarter. Thank you.