Good morning, and welcome to the Q4 earnings call today. I am Espen Gylvik, and with me, I have Marius Skagen, my colleague and CFO. We will spend the next 20 minutes or so to take you through today's agenda. Welcome. Want to spend short time on the highlights of the quarter. Q4 ended quite well for the company. We had a record quarter on revenue and also a record quarter on EBITDA, with a revenue above NOK 180 million and an EBITDA just south of NOK 20 million. It's the first positive full-year with EBITDA for the company and also in line with what Marius and I have communicated since the Q1 earnings call, that we will, as a company, strive to deliver positive EBITDA quarter by quarter and for the year.
Our gross profit grew with 77%, and we managed to maintain in the best year ever, gross margin, across all sales at 45%. The order intake in the quarter landed at NOK 143 million. We will elaborate a little bit more around the order intake later in the presentation, but it also gives a 46% full-year growth for the company. Probably also worth mentioning, the operating cash flow ended at NOK 57 million, with a full-year cash flow improved to NOK 79 million for the year.
As we are a public company, as part of the type of growth story we presented to the market when we went public, we also want to spend a couple of minutes to take the advantage to, like, show a little bit how the company has evolved over the last couple of years to justify the type of growth strategy and growth plans we have as a company. As you can see here, this is like a rolling view, from end Q4 2020, so the end quarter in the first year of COVID, until end Q4 2022. In order intake, which is like the proxy that indicates how the underlying performance of the company and business are rolling, it is tomorrow's revenue.
We have grown in a rolling perspective with 228%, going from NOK 170 million to close to NOK 600 million in a two year timeframe. That is a good solid testament to the growth strategy that we built as a company entering into 2021. It's also correlated quite well to the ramp-up we have done, both in the partner ecosystem, but not at least in our own organization, by adding close to 50% more employees into the company during 2021. As most of you are aware of, OpEx, when you hire people, are taken quite significantly and immediate. The effect of hiring more people, you can see in the type of graph here coming quarter by quarter after the ramp-up. Quite happy with the growth performance during the last couple of years.
Also when you look at that in correlation with the type of improvement and result you can see in gross profit, which is the second type of proxy giving us and you as investors a good view on how the underlying performance of the company is developing. That also reflects then back to the EBITDA at the end of this year, which has improved with 14 million NOK in that rolling perspective. With that, I think I hand over to Marius to take you through more of the facts and figures and highlights of the fourth quarter.
Thank you. You know, when we sort of now zoom back into the Q4, booking-wise, ended a little bit different than the previous quarter in Q3. Positive. We landed $143 million in new bookings, whereas from the Q3, we set a new all-time high, driven obviously by the game-changing contract that we saw. Q4, we saw a large span of contracts ranging between $200,000-$2 million, in a large range, a wide range on verticals, but also geographies that you see from the pie charts. I think that is important to sort of always reiterate, because the growth strategy has always been, throughout both 2022 and before, from when we went public, that we will expand our footprint in both verticals and geographies.
The fourth quarter is sort of a proof point. It's evident when you see some of the significant wins shown on pair. The demand for mission-critical solutions within the defense sector improved. We saw orders for high-end collaboration rooms, boardrooms also continued. To me, some of the most important proof points is that we have returning customers, wanting to sort of upgrade and enhance already existing Cyviz solutions. That is critical both to Cyviz and also to the growth strategy, and a good proof point that the customer base both evolves, but we keep also the returning customers. The multiple verticals and the commercial regions are then hence the diversification that we have been talking about throughout the whole year. 2022, I believe, sets a good footprint for that growth strategy.
The same view, this is sort of the Q4 drill down per vertical and per region. This is the same view 2022 wise. I don't know, Espen, do you want to sort of elaborate on something there?
I think if I can just like repeat one of the things you said, I think probably the strongest message of having existing customers coming back, buying not just new solutions and expanding their type of tech-digital technology across new locations, but also coming back upgrading their existing solutions with Cyviz technology, is for us the core strength of the company and the quality stamp that our solution provides to customers. I think it is important to have that as a base, and it also helps us as the probably the strongest platform for continuing growing business by being attractive also to new clients, using the value of the existing clients in a smart way.
I think this view here probably gives us, and hopefully you, a good indication that the growth strategy, the base of the growth strategy, has never been to win one single large deal and, like, be happy with that. That is like the icing on the cake. That is also consequences of doing the core part of our business better than our competitors, which is delighting as many customers across regions and verticals as possible with the best possible digital collaboration solution in the marketplace. We see that we are starting now to get effects across verticals. I mean, historically quite strong in corporate.
We have seen now a much higher interest from the federal side and the defense side, and that is now gradually helping us balancing also the type of vertical portfolio and also reducing risk, I mean, external type of parameters that might occur. We will have more cards to play with and more customer type of verticals to balance and compensate with if we see pressure on certain verticals. I'm also happy to see that we are now gradually starting to build three out of four really, really strong, well-performing regions with North America, Middle East, and now also Europe starting to pick up. We have some work to do, to like really get the traction in the APAC region.
Think that we will see evidence in 2023, the first really evidence of the rollout of the strategy and the investments we have done in people in that region as well. I think next year when we are standing here, we will see an even more balanced spread, especially on the region side. It's core for our future growth and also for our profitability to have a good balance across verticals but also across regions.
All right. Shall we look at some Q4 financials? They actually can be summarized in three simple steps. We have all-time high revenues presented in a quarter. We have coherent, stable gross profit or gross margins. We have a EBITDA close to NOK 20 million. That's, I think we're proud to deliver that.
We are.
We said we would deliver a positive full-year EBITDA. We have, and now we look forward to sort of embark on that profitable growth journey. To give you sort of two to three key drivers per KPI, revenue-wise, we entered this quarter with a backlog above NOK 300 million. We have converted that in a short time. The book to delivery have sort of gone down, mostly driven by the award or game-changing contract awarded in Q3, but also across multiple verticals and regions. Gross margin stable above 45%. EBITDA, I think it's worth sort of reiterate that we started this year with a negative EBITDA.
Yep
above NOK 18 million. Still, you said, and I sort of quoted you on that, we will deliver a positive full-year EBITDA, and we have. It's worth mentioning that this is the third consecutive quarter with positive figures, and we see that continuing with the backlog that we now have. Booking-wise, we delivered close to NOK 600 million full-year. We saw that driven by, as I said, the diversified portfolio. We grew for the quarter by 24% compared to Q4 in 2021. I said in the beginning here, I still believe even though the absolute figures for Q4 is not all-time high, I still believe that Q4, booking-wise, it is the best quarter Cyviz ever has delivered. How can I sort of state that? Well, care to elaborate?
I can. I think to, like, explain that, we have to look slightly, I mean, below just like one single deal. As I mentioned earlier, the core fundament besides our type of talented, passionate people is the fact that we are present across four large regions and are appealing and delivering solutions to customers across multiple verticals. The base for a profitable growth in our strategy plans, I mean, for 2021, 2022, and into 2023 and beyond, is the ability and focus around diversifying our platform towards customers so that we reach a lot larger audience of customer opportunities out there. Yeah, in 2021, Microsoft was like a large carrier of, I mean, the successful booking numbers. In 2022, the large Middle East deal we brought in in Q3 carried a lot of bookings and strategic value.
If I should dissect and be honest around which quarter I think is by far the best from an order intake or booking, I would definitely say Q4. It has with the spread, the magnitude, the amount of new deals that actually sums up to the number and without having any type of large elephant deal sugaring or like making the candy on the cake look better. As you can see here as well in this slide, the elements that actually drives and indicates how well do we as a company perform from a diversification point of view. Okay, the slide went off. I mean, in my head, as a fact, Q4 from an order intake, best quarter ever for the company. That doesn't mean that we are not going to go after big animals.
We will continue to say yes to customer cases that are profitable and large and strategic. For us, it's not part of the core growth strategy. It is that type of icing of the cake that at the end of the year just like makes the result even better. The fundament for us is to go wider and deeper with new and existing customers across those four regions, and this is the evidence that we managed to do that better than ever in Q4 2022.
I agree. I also, with all respect, deals ± $2 million is good deals, definitely. We see sort of them spreading out more than we have $10 million-$15 million of deals.
A large part of actually the booking growth in Q4 is also new customers.
Exactly.
It means that the type of pool of opportunities is growing. Yeah, it is a good base. It gives us confidence that the base we bring into 2023 is more reliable, more solid, and more prosperous to continue profitable growth in 2023.
Yep. Good order intake results now in positive EBITDA, as I said, the third consecutive quarter with positive figures. Now the focus will, needless to say, sort of increase on operating cash flow and cash conversion throughout 2023. To sort of wrap up Q4, we improved the profit before tax with NOK 6 million compared to same quarter last year. We have, throughout the whole year, sort of increased the focus on tightening routines on cash collection and hence reducing accounts receivables. We do see that we do need to take some strategic bets, strategic purchases when it comes to inventories.
Yep.
We have a large backlog. It is 273 at the moment. We need to secure that we can deliver on the customers' demands, shortening lead times and always sort of taking care of the supply chain. That is a continuous focus. We will see that throughout this year as well, and it's important to sort of balance that.
Just to add to that, I think that's one of the areas where I personally have to say that the team has done a really, really good job. I mean, managing the risk in the external part with supply issues and component issues and freight issues, made cautious, smart decisions on securing critical components, allowing us to deliver on customer commitments as part of the, I mean, signed contracts we have with them, and also allowing us to have a much shorter type of turnaround time from signed contract to delivered solutions compared to anyone we compete with in the marketplace globally.
Yeah.
That is a strategy we'll continue with. Very valid point, an important point.
Yeah, as we see from the, from the full-year perspective, where the operating cash flow improved by NOK 79 million compared to 2021, driven by the exact same drivers that we have been talking about now. It is working capital improvements, continuous improvement. It is the inventory balancing part and obviously the cash collection that we always focus on now.
Yep.
Leading now to a cash position of NOK 73 million after Q4, up from NOK 48, NOK 49 same period last year. We are solid cash-wise, and we also have the credit facility-
Yep
in hand. I think that wraps up the cash flow outlook.
Yeah. I mean, based on what we have tried to like take you through and also the last type of comments from Marius, I mean, a much tighter discipline in the way we manage cash. I mean, going out of 2022 and also Q4, with the type of performance we have as a company right now, for me personally, it's a strong indication, and also some sort of like a recognition to the talented 150, 60 people we have in the company that, I mean, goes up every morning to delight customers and deliver the best possible solutions out in the marketplace. As well as being very, very disciplined and focused on the strategy that we actually put in place and started to roll out and execute from January 1st, 2021. I mentioned that before.
Before January 1, 2021, the company didn't have the strength by either financially or people-wise to really go after the full potential. I think from January 1st, 2021 until today, we haven't looked back. We focus on opportunities. We will continue to take advantage of the fundament the company have built together with our partner and employees during 2022 to continue to focus and even more focus on running profitable growth. Bringing in 50% more people through 2021, the effect of that, I think we saw partly in 2022, I mean, the last half of 2022. I expect to see even more effect of that in 2023. We have a lot of opportunities to improve the way we scale and collaborate internally.
The professionalism around everything we do is key element of driving the profitable growth in 2022. Also, of course, have laser focus on cash billables, securing that we get paid in time, faster payment from customers versus, like, the time we pay our partners will secure that we will continue to drive a profitable growth for the company and also managing the cash expectations. The last point that I wanna highlight is, I mean, the concept of next level collaboration, which is part of the type of reversed elements in our strategy. We have talked about it previously as well. I think we have a solid fundament. We have reached critical mass, I think, in the traditional type of business we do as a company to drive an even more profitable business going forward.
The key elements, the additional elements that we are working on in 2023 to improve margins, improve profitability, and also improve predictability in our type of revenue streams, are centered around the work we do and invest in R&D from a software application cloud subscription type of concepts. We do plan to launch subscription-based services in 2023 to enhance our recurring revenue, improve our competitive advantage, and build even more stickiness with existing and new customers, and also drive the profitability up from where we are today. With that, I would like to say thank you for participating and listening in. If there is any questions, I think the time is now to raise those questions. Thank you, Marius, and thank you for those who participated.
Thank you. This is actually the first quarter in my period in Cyviz that we have no questions.
True.
I think I should congratulate you by being to the point. Before sort of, before wrapping up, any last remarks on either Q4 or 2022 for that matter, apart from the fact that both you and me are allowed to smile when we present good figures?
No, I mean, again, thank you as well. I think we went out quite high after Q1, saying that that's the last quarter. At least that's our ambition, to make Q1 2022 the last quarter with negative EBITDA. We also said that we had an ambition on making 2022 full-year a result with a positive EBITDA. I am actually quite happy to be here today and talk about that. I think we have given ourselves an opportunity to, like, continue a fruitful, prosperous future for the company and all our employees and customers. We still have a solid cash position. I mean, we have more than NOK 70 million in available cash, and we haven't spent one single dollar on the credit facilities. We have no debt as a company.
There is no immediate need in the near future for us to have to do, like, some sort of cash collection from the market to continue our growth journey. We have the strongest order backlog in the company history. It's like more than NOK 100 million higher entering 2023 than entering 2022. We have a very strong, motivated, dedicated, passionate team of employees that is 50% larger in size and capacity than it was when we entered 2021. I would say despite market conditions outside that we actually don't control, we will continue to focus on doing what we can influence and what we can do best every single day. I am optimistic when it comes to, like, 2023 for us and our products and our people and our customers. Yeah.
We have a last-minute question, actually.
Yeah.
This is a good one. What about previously addressed goal of 30% revenue compound annual growth rate? Thank you very much for that question. That is a really good one. No, we don't deviate from that at all. Now we focus on EBITDA, so it's still there, 30% annual growth on revenues. We didn't state that in the Q4 report this time because now the focus is on reaching that medium-term target of 15%-20% EBITDA margins with coherent operating cash flow and cash conversion. Thank you. That's a good sort of...
My two cents on that, I mean, the market we operate in is huge. I mean, I'm talking about tens of billions of dollars every year. We are, by my definition, one of the better companies and one of the few really global ones in our industry, but we are still just touching a fragment of the market opportunity. I mean, we are in growth mode. The only type of difference in statement going into 2023 versus, like, entering 2022 is that it's going to be a lot more emphasis from our side on profitable growth.
Yes.
We are not even close, I mean, reaching our potential, when it comes to, like, market position, market share size. No deviation in the type of growth strategy and growth commitments we gave during the IPO, but it will be more focused around driving that way more profitable than we have done previously. That has also something to do with the OpEx ramp up you do when you lift the size of your organization with 50%. You get the cost immediately, and it takes 6 to 12 months to start getting the payback on that investment. No worries, no need to, like, be worried that we are not focusing on growing our business. As I said, we are starting this year with more than NOK 100 million more in the bank than we did starting 2022.
That should serve quite well for a growth journey even in 2023.
Great. With that, I think we conclude the broadcast.
Yeah.
Thank you to the whole Cyviz family for delivering this.
Absolutely. I wish everyone happy Friday and a good weekend. Thanks for us. Cheers.