Cyviz AS (OSL:CYVIZ)
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Apr 24, 2026, 4:25 PM CET
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Earnings Call: Q3 2023

Nov 10, 2023

Espen Gylvik
CEO, Cyviz

Hello, and welcome to the earnings call for the third quarter for Cyviz. I am Espen Gylvik, the CEO of the company, and with me, I have Marius Skagen, the CFO of the company. Today's agenda, Q3 in brief, performance 2020 to 2023. Some business highlights. Of course, the financials for the quarter and year to date. Some around the outlook, and then, of course, at the end of the day, the opening for questions and answers. So with that, let's kick this quarter, Q3 earnings call off.

Marius Skagen
CFO, Cyviz

Let's do!

Espen Gylvik
CEO, Cyviz

Q3, normally a very soft quarter. I mean, last year was the only quarter, third quarter, where things were a bit odd, driven by one large deal in Middle East of $14.5 million. But besides that, Q3, also because it's July, August, and September, tends to be, in our industry, a very soft quarter. I think revenue-wise, we do quite okay, even in the quarter itself, and of course, year to date, growing with NOK 111 million. So we, we are ahead of actually the type of internal yearly target for revenue this year. Gross profit continues to be good, especially on the gross margin side, 47.3%. Stable, around 47-48%. Happy with that. 43% ahead of gross profit year to date, very strong numbers.

EBITDA of minus 6.6. I mean, Marius and I stood here five quarters ago saying we would do everything we can to not have a negative EBITDA by a quarter. This quarter, unfortunately, is impacted by some slippages in the U.S. market that impacts revenue, order intake, and of course, the EBITDA. We are still guiding and growing NOK 15.7 million year to date. And looking at the pipeline and the order pipeline for Q4, we are still very confident that we will land this year on a very good note on revenue, on gross profit, and also on EBITDA. The NOK 92.7 million in order intake compared to last year, as I said, is largely...

The deviation of what we had last year and this year is largely driven by one-off, one large deal of $14.5 million in Middle East and a slippage of a multimillion-dollar deal in US. That deal is not lost. I have to calm people down, about that. We expect a portion of that to come in in Q4, and the remaining portion of that to come in in Q1. So one of the good things I would like to mention is that even though things tend to slip, which is not very unnatural for a project business as ours, is that we so far is not losing a lot of deals. If they tend to not come in a quarter, they tend to move to the next quarter. So...

Again, when we went public late 2020, we guided around CAGR on revenue of 30%. As of today, we are at 46%, so still quite ahead of, I mean, the guidance we have done. And also on the gross profit side, the CAGR, as of today, is 52%, which I would personally consider very strong numbers.

Marius Skagen
CFO, Cyviz

Mm-hmm.

Espen Gylvik
CEO, Cyviz

Knowing how Q4 seems to develop and land, I think both you and me are quite confident that the ending of this year would be very much in line or better than our own expectations. So still very confident that we will end on a good note this year and show ourself and the market that we are capable of continue to grow and also growing more profitable than we did last year. So, Marius, you want to take this slide?

Marius Skagen
CFO, Cyviz

Yeah, or should we actually just jump into the business highlights?

Espen Gylvik
CEO, Cyviz

Yeah, we can.

Marius Skagen
CFO, Cyviz

Because we have some highlights.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

Um-

Espen Gylvik
CEO, Cyviz

Let's do that.

Marius Skagen
CFO, Cyviz

You have said, all right, Q3 is a seasonal slow quarter.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

Also, looking from a historical perspective. But leave no mistake, we're not happy delivering NOK 93 million order intake, but the reason why we are so calm is that there are some slippages right now. Projects being delayed, but they're not lost. They're just delayed. Hence, we like to see the trends, right? Both from a year to date perspective, but also from a rolling twelve months perspective, which we can say that we are confident that this year will land on a positive note, both revenue, EBITDA, and order intake-wise. But leave that aside for a moment. Q3 highlights, we have... The first deal here is good. Returning customer, this is actually the third project we're doing for them-

Espen Gylvik
CEO, Cyviz

Yep

Marius Skagen
CFO, Cyviz

... this year.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

So in total, they are totaling now above $7 million only this year for high-end meeting rooms. It is boardrooms, it is collaboration rooms.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

We're happy about them returning again and again to Cyviz and have confidence in our ability both to deliver and to be the partner going forward.

Espen Gylvik
CEO, Cyviz

Yeah, and I think what it actually says is that when we say that we deliver the best solutions in the marketplace, I mean, the sentiment on that is customers coming back, buying over and over.

Marius Skagen
CFO, Cyviz

Mm.

Espen Gylvik
CEO, Cyviz

It just proves that what we develop, what we deliver, and how we do it-

Marius Skagen
CFO, Cyviz

Mm

Espen Gylvik
CEO, Cyviz

... actually delivers on the expectations and the commitments we have in the marketplace and to our customers. So, I mean, repeating buying customers is probably the best sentiment we can have.... when it comes to the quality of what we provide the customers.

Marius Skagen
CFO, Cyviz

Yeah, exactly, and the next one is an evidence of that. The $0.9 million deal that is for a Cyviz top five customer last 10 years-

Espen Gylvik
CEO, Cyviz

Yep

Marius Skagen
CFO, Cyviz

... coming from the oil and gas sector. Well, that has been sort of in a downslope for some years now-

Espen Gylvik
CEO, Cyviz

Yep

Marius Skagen
CFO, Cyviz

... but ramping up again. When they are ramping up, who do they come to? They come to Cyviz. We are going to deliver the new global information security center this year. Happy to see that. Also, happy, and this is the third, and every quarter in 2023, we have reported new logos.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

Not any logos. I would be glad that in 2024 or 2025, we can stand here and actually post those logos.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

We're not allowed, hence why we're not saying their names, but we can state what kind of vertical that is, or, even more so, they are Fortune 500 and Fortune 100 companies, which makes us proud in terms of Cyviz, small company from Norway, able to do that and able to do those kind of projects.

Espen Gylvik
CEO, Cyviz

Yeah, and I, I think, as a side note to that, I mean, historically, we have been very strong in the energy sector, so oil and gas.

Marius Skagen
CFO, Cyviz

Absolutely.

Espen Gylvik
CEO, Cyviz

And we have ramped up with companies like Accenture and Microsoft. I think one of the cool things, and also very important for the type of strategy going forward, is to, like, broaden not just the vertical perspective, but also the customer base. So seeing some of the most, I mean, top A brands inside FMCG now turning to Cyviz, not just for one solution, but, like, for a global distribution on digitalization and collaboration, is incredibly nice.

Marius Skagen
CFO, Cyviz

Top-tier FMCG, Fortune 100. Wonder who that can be?

Espen Gylvik
CEO, Cyviz

Yeah. We talk about some of the coolest brands on the planet.

Marius Skagen
CFO, Cyviz

Exactly.

Espen Gylvik
CEO, Cyviz

That's how far we can, like, push that line.

Marius Skagen
CFO, Cyviz

But again, you're approaching now one of my favorite words, especially in our earnings calls, and that is diversification. In the pie charts below, we continue to show them because I think it is important. It shows the natural hedge we have in our portfolio. But before diving into that, I wanna highlight a really good contract we signed this quarter, the new strategic-

Espen Gylvik
CEO, Cyviz

Mm-hmm

Marius Skagen
CFO, Cyviz

... partnerships with Aker BP. It's important to sort of elaborate a bit on. Perhaps you would like to do that.

Espen Gylvik
CEO, Cyviz

Happy to do so. I mean, we have previously talked about Aker BP as one of those signal type of projects, especially not just in the Norwegian market, but of course, for the Norwegian market as well, but also in the global context. I mean, the first really large deal with Aker that, like, really helped us getting into Aker BP happened, I think, yeah, early 2019.

Marius Skagen
CFO, Cyviz

Mm-hmm.

Espen Gylvik
CEO, Cyviz

We have helped them build their OCC in Stavanger. Now I think a lot of people are aware that they are building a new, I mean, building. For the first time, I mean, we are now, as a company, not just like a provider of delivering something, I mean, physical, but also a much more type of firm strategic partner, where we work with the customer, in this case, Aker BP, on how to design this, how to, like, get the best value out of everything they would like to accomplish and do in that new office building. This could and should be one of the type of most, I mean, rewarding customer contracts we have pulled in, in the company history.

I think we expect, and the market should expect, a lot of good type of things and advertisement, I mean, through the beginning in 2024, of elements of projects delivered by us together with Aker BP. It's a strong global reference. It's a fantastic strategic and financially good customer for us, and we just have to continue to earn the right with that customer.

Marius Skagen
CFO, Cyviz

Mm

Espen Gylvik
CEO, Cyviz

... to deliver the best possible solutions to the customer.

Marius Skagen
CFO, Cyviz

Just to the people listening, a pling is the internal sort of-

Espen Gylvik
CEO, Cyviz

Yeah

Marius Skagen
CFO, Cyviz

... slang we use-

Espen Gylvik
CEO, Cyviz

When I say P&L, I talk about-

Marius Skagen
CFO, Cyviz

... when we have a contract announcement, just to clarify.

Espen Gylvik
CEO, Cyviz

We haven't done a lot of public announcement of new customers, I mean, the last 3-4 months.

Marius Skagen
CFO, Cyviz

Yep, yep.

Espen Gylvik
CEO, Cyviz

I think people should expect that they will ramp up, I mean, on the way to Christmas, and of course, a lot more of that with multiple customers, including Aker BP.

Marius Skagen
CFO, Cyviz

Mm

Espen Gylvik
CEO, Cyviz

... through 2024.

Marius Skagen
CFO, Cyviz

Well, one, one contract, or this is the year-to-date perspective, right? In terms of what we have signed.

Espen Gylvik
CEO, Cyviz

Yeah.

Marius Skagen
CFO, Cyviz

The top, top sort of business highlights. The $3 million deal for refresh and upgrades, I think that is one of the most important ones to highlight, because this is a returning customer. This is a top corporate customer.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

They have Cyviz solutions. They have had for, since 2014, I think.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

They are now upgrading, refreshing them.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

They come to us.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

They do not want to replace us. That's a good thing to sort of also to see in a diversification perspective.

Espen Gylvik
CEO, Cyviz

Yeah.

Marius Skagen
CFO, Cyviz

We have a lot of customers-

Espen Gylvik
CEO, Cyviz

Yeah, knowing that that customer has... I mean, are running more than 80 Cyviz solutions around the world. They continue to, I mean, invest in new solutions in new places, but also upgrading, I mean, solutions that they acquired in 2014, 2015, 2016.

Marius Skagen
CFO, Cyviz

Mm.

Espen Gylvik
CEO, Cyviz

It is a fantastic customer, and it's, long-lasting, and hopefully long-lasting for many years to come. Where we are also, like, challenged by the customer to come up with new products, new solutions, really help them also develop how they use this type of technology. So beyond just, like, providing us with new opportunities and revenue, they also, like, work relatively well as a sounding board and a challenger-

Marius Skagen
CFO, Cyviz

Mm

Espen Gylvik
CEO, Cyviz

... on the way we develop our future products and solutions. So yeah, a fantastic customer, very important for us.

Marius Skagen
CFO, Cyviz

We used the same studio hosting the Q3 call last year. Then we talked about diversification. We show the pie chart down the bottom right there.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

... how do you feel now, looking at the bottom left?

Espen Gylvik
CEO, Cyviz

I feel-

Marius Skagen
CFO, Cyviz

One year later.

Espen Gylvik
CEO, Cyviz

I feel a lot better. I'm not surprised, because we have worked with this for multiple years now. I mean, as part of the strategy of building a successful company, driving profitable growth, you also need to have building blocks to enable yourself to do that in the best possible way. And I think the value of, like, having more customers to potentially sell to is one thing, when you have more verticals. Secondly, it is a much better place to be because it's also... When you run with multiple verticals, you're also exposed for seasonal type of dips and tops.

So having more verticals to play with to compensate if there is a dip in some, makes me much more confident that when we state that we are on a journey to build a successful company that are capable of providing a much better profitable growth than what we have done historically, this is one of those key building blocks and elements in the foundation to make that happen. I think if I top that with what we now do on the product side, because I think it makes sense to bring that in here.

Marius Skagen
CFO, Cyviz

Mm-hmm.

Espen Gylvik
CEO, Cyviz

So traditionally, Cyviz develops, I mean, some internal software platforms and some key hardware components, and we package that with third-party hardware and deliver fantastic, I mean, collaboration and digitalization solutions to customers. We have now, for a year and a half, two, worked on how do we take advantage of that and build new additional building blocks? So the core Cyviz technology, what we internally call, like, Cyviz Integrated Kit, which is our platform, it's our operating software, it's our controller, it's our video processor, we are now starting to package that, make it partner-friendly, so that global partners and distributors can bring that out to a much larger customer audience than we can do with our own, I mean, salespeople.

Marius Skagen
CFO, Cyviz

Mm.

Espen Gylvik
CEO, Cyviz

It's a fantastic opportunity going into 2024. It is where we have the, by far, the highest margins. But I think the single most important add-on to what we do is actually the legacy of the platform and what we have done now, building a platform that literally can monitor anything, will be cloud-enabled, would be very partner-friendly, where they can build their own plugins and their own managed servers on top, and take that out to a much, much larger audience of customers. So if you think about the verticalization we have on the customer side, and you have three building blocks going into Q3, you suddenly have a much more reliable, solid fundament for a profitable journey into 2024 and beyond.

Marius Skagen
CFO, Cyviz

Good. Let's deep dive into some financial, shouldn't we?

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

Both Q3 and the year to date. Starting with this quarter, yes, we have repeated that now. This quarter is seasonally slow, and quite evident when you look at the bar chart here. If you start at the top, the revenue, same quarter in 2021, we delivered NOK 64 million. Last year, NOK 116 million. But again, remember, that was inflated by the $145 million deal or Norwegian Kroner deal.

Espen Gylvik
CEO, Cyviz

That's correct.

Marius Skagen
CFO, Cyviz

120 is in line with our own expectations.

Espen Gylvik
CEO, Cyviz

It is

Marius Skagen
CFO, Cyviz

... for this quarter.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

But again, project business-

Espen Gylvik
CEO, Cyviz

Mm-hmm

Marius Skagen
CFO, Cyviz

... we do not extrapolate one quarter, especially when we're doing good. So if you look at the Q4 from 2022, NOK 180, we said the same thing there.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

Do not extrapolate that into eternity in terms of expect 180 each quarter. See the rolling 12-month trend, see the year-to-date trend, there we have it.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

From a rolling 12 months perspective, we're now at almost NOK 600 million. We are up 47% compared to the same period last year.

Espen Gylvik
CEO, Cyviz

True.

Marius Skagen
CFO, Cyviz

That's a good figure. Gross profit, even more so, 53% on a rolling 12 months basis compared to same period last year. EBITDA, we are now leaving Q3 with +NOK 25 millions

Espen Gylvik
CEO, Cyviz

Yep

Marius Skagen
CFO, Cyviz

... in EBITDA.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

Same period last year, negative, almost NOK 11 million.

Espen Gylvik
CEO, Cyviz

Correct.

Marius Skagen
CFO, Cyviz

Increased over 36. I think that is a sort of a good proof point that we are on that growth path-

Espen Gylvik
CEO, Cyviz

We are

Marius Skagen
CFO, Cyviz

... that we strive to be.

Espen Gylvik
CEO, Cyviz

I mean, with that said, we are still working on ways of optimizing our cost base-

Marius Skagen
CFO, Cyviz

Absolutely

Espen Gylvik
CEO, Cyviz

... that we use, and you will probably elaborate that a bit later.

Marius Skagen
CFO, Cyviz

Yeah, do it.

Espen Gylvik
CEO, Cyviz

I mean, like any other responsible type of company, we will always look at how do we use and invest our money. Entering into 2024, we will have developed and implemented a cost-optimizing program that is fit for purpose, not just like on cost itself, but also where we will invest the OpEx.

Marius Skagen
CFO, Cyviz

That's important.

Espen Gylvik
CEO, Cyviz

We will move more of the OpEx over to the new type of building blocks, how we work with partners on the Integrated Kit, what type of resources do we put on R&D, and on the sales side, to, like, ignite and drive the platform. Then, of course, as a larger picture, we will also try to rebalance the overall OpEx, so it fit the journey of increasing our profitability as a company.

So if people listening to this call have had doubts around, like, continuous increase in OpEx, I just wanna, like, calm people down, saying: Going into 2024, the programs that Marius and myself and others have developed will be a much more fit for purpose when it comes to also how we utilize and how much we utilize of OpEx, versus what we would like to have as targets on revenue and gross profit and EBITDA into 2024.

Marius Skagen
CFO, Cyviz

Exactly. And it becomes even more evident, or especially easier for the eye, to so look at year to date from 2020, 2021, 2022, and 2023... and just by comparing year-to-date to the same period last year, we see a growth in revenue of 36, 36%, or NOK 111 million.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

The absolute figure is always the most important thing for me. 60 million up on gross profit compared to the same period last year, and as you said, the compound annual growth rate from we went public, Q4 2020-

Espen Gylvik
CEO, Cyviz

Yep

Marius Skagen
CFO, Cyviz

is 52% on gross profit. Correct? EBITDA, we've touched upon. Bookings, no, we're not happy with the isolated performance, but it is postponed.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

So these figures makes us confident that 2023 will be a solid year for Cyviz on those KPIs.

Espen Gylvik
CEO, Cyviz

Yeah, and I think, I mean, I can talk about it now. I was planning to talk about it. I mean, there are multiple factors that I think it's important for people to, like, understand and have visibility on. I mean, we look at Order Backlog. That is like signed value of signed contracts we bring by quarter by quarter or into next year.

Marius Skagen
CFO, Cyviz

Mm.

Espen Gylvik
CEO, Cyviz

We will go out of this year with a larger order backlog than we have ever had. That is, like, the base of, like, building confidence in growth next year. When we started this year, our pipeline was record high at $130 million. As it looks right now, we will enter 2024 with a pipeline of $220 million, which is, like, $90 million higher than what we entered this year with. Those things, with the right cost optimization plans in place, and the pipeline we see for Q1 and Q2, I think there is no reason why we, and everyone else, shouldn't be confident that the growth journey would continue also well into 2024.

Marius Skagen
CFO, Cyviz

Good. That is a good ending note on that sort of that part of the financial highlights. 'Cause we're entering now one of the topics that I know stakeholders and investors are curious about, and that is the cash flow and the cash persistence. So let's use some time here because it's important to understand.

Espen Gylvik
CEO, Cyviz

It is.

Marius Skagen
CFO, Cyviz

This year or this quarter, it is negative by NOK 35 million, isolated-

Espen Gylvik
CEO, Cyviz

Yep

Marius Skagen
CFO, Cyviz

... to that quarter, driven by the negative operating profit, driven by a solid increase short-term in accounts receivable, and decrease in payables.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

Meaning those two go against each other, and then hence becomes really negative when you sort of stop the quarter-

Espen Gylvik
CEO, Cyviz

Yeah

Marius Skagen
CFO, Cyviz

... at that late September. Well, let's do it like this. If there were some weeks later or some weeks before, it would look a lot different. We exited Q3 with receivables of, on the balance sheet, of NOK 167 million.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

Some weeks later, would have been 90. The overdraft facility-

Espen Gylvik
CEO, Cyviz

Yep

Marius Skagen
CFO, Cyviz

... was NOK 43 million.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

Two weeks later, it was NOK 31 million less.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

This is important to understand, because that is an overdraft facility to support the project business.

Espen Gylvik
CEO, Cyviz

Correct.

Marius Skagen
CFO, Cyviz

That is for working capital purposes.

Espen Gylvik
CEO, Cyviz

Exactly.

Marius Skagen
CFO, Cyviz

This will fluctuate, and we... I'm gonna repeat that every single time we stand here, because it is important to understand, and I know this is one of your babies, so perhaps you, you would like to take that.

Espen Gylvik
CEO, Cyviz

No, it is, and, I mean, if you just look at numbers and you don't know the background, and you don't really understand-

Marius Skagen
CFO, Cyviz

Yep

Espen Gylvik
CEO, Cyviz

... how a project business, I mean, runs, and you just look at this slide isolated or the report isolated, I mean, you could speculate that, "Oh, shit! Does the company now need to go out and do an emission to pull in more money?

Marius Skagen
CFO, Cyviz

Absolutely not.

Espen Gylvik
CEO, Cyviz

The answer to that is definitely no. I think Marius tried to articulate that the credit facility is there to support us when things are peaking in the project type of business context, and it could be just in front of the close of a quarter, or it could be in the beginning of a new quarter.

Marius Skagen
CFO, Cyviz

Mm.

Espen Gylvik
CEO, Cyviz

Since we operate in four, I mean, regional parts of the world, I mean, APAC, Middle East, Europe, and U.S., there are also seasonal differences inside those quarters, and some are very good at paying on time, and some you need to chase a little bit more. The credit facility is for us to balance this so we don't overuse or invest time in just chasing payments.

Marius Skagen
CFO, Cyviz

Mm

Espen Gylvik
CEO, Cyviz

... but that we can focus on what we do best, which is the operational part of the business, and give us that flexibility to pull if we need and not pull if we need.

Marius Skagen
CFO, Cyviz

Mm.

Espen Gylvik
CEO, Cyviz

When we monitor and map that, we look at this in a much longer context because we sit with the type of day-to-day insight. I understand it's difficult because we can't share that every day with, I mean, the market and our shareholders, but I just want everyone to rest assured there is absolutely no need to think about any low-priced emission.

Marius Skagen
CFO, Cyviz

Nope.

Espen Gylvik
CEO, Cyviz

We are also working on a couple of concepts to improve this even further. So we are looking at, I mean, looking at the credit facility that is slightly higher, because we are also, again, back to the pipeline of $220 million going into next year. We know that there is a lot of large new projects coming next year, so there will be moments where we might have a lot of that at the same time, where we need to have that flexibility, without, like, stressing the whole organization.

But we're also working on now formalizing with partners, especially in the Middle East, where things are a bit slower, culturally, when it comes to payments, to build a facility with partners that allows us to go in and pick the outstanding values without, like, waiting for 60 days or 30 days or 90 days. So I think those two things together will also improve the flexibility we need as a company to continue to drive growth and also invest in the new type of products and services we are launching into 2024.

Marius Skagen
CFO, Cyviz

Perfect. Let's have a look forward.

Espen Gylvik
CEO, Cyviz

Yep. So I think, as I tried to say, Q4, based on what we see, based on the type of level of facts that we have, looks quite positive. We are confident that we will go out of this year with a very positive growth on revenue, on gross profit, and also on EBITDA compared to 2023. We will go into 2024 with a larger order backlog and a much stronger and larger pipeline than we have ever had as a company.

With the cost optimization program that we apply, that probably also gives us some sort of, like, reduction in OpEx, but more clever, intelligent use of OpEx for new stuff that drives recurring revenue, high-margin projects, will give us the level of confidence we need to continue the profitable journey and also deliver on our commitment of a mid-term EBITDA in the range of 15%-20% for a company. There is a growing demand. Even though we are a project business and things fluctuate between quarters, we are growing way faster, and I think that's important to say, we are growing way faster still than the market. I mean, way faster than the market, and we will continue to grow way faster than our competitors and the market into 2024.

We already have signals from some of the large global key accounts that has been a bit slow this year for a lot of new projects going into next year, and it has something to do with how their budgets are allocated by year as well. So I am very confident that we will continue to see a growing demand for solutions like Cyviz, and we compete better with our solutions than the two other type of technologies in the marketplace. And I can say that because we have never had this high interest from even from competitors, that would like to bring Cyviz solutions out to their customers. Both our core technology, but also, of course, the new platform, and that goes across Europe and US in particular.

That should give us confidence that we can go much broader with way less cost and still sell things with high margin. Yeah, again, we will land 2023 on a good note, no doubt. Revenue-wise, gross profit-wise, and EBITDA-wise. With that, I think we open up for questions.

Marius Skagen
CFO, Cyviz

We do. We have some. The first one is related to dividends. If you could, sort of say something about a long-term strategy of creating dividends or dividend policy to the investors.

Espen Gylvik
CEO, Cyviz

Yes, it's an interesting question. It's a subject for a lot of reasons we haven't, like, had a lot of internal discussions around. I mean, we are still in a phase where we are building up the company. I mean, both on the top line, but of course, on the profitable, profit side. And I think to pay dividend, we need to, like, have a baseline where we have a consistent good growth and base on the profitability side. Happy to bring that question into discussions with the board of the company. I think 2024 will be a very good year, so it might be at least a spur or a starting point for incorporating this question and these subjects also into the board meetings.

Marius Skagen
CFO, Cyviz

Yeah, but as you said, this is a board decision-

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

Not for me and you.

Espen Gylvik
CEO, Cyviz

No.

Marius Skagen
CFO, Cyviz

Thank you for the question, Oliver. That's a good one. Also from Oliver: Could you say something about the value of the slipped or postponed contract now? We cannot state the value. That would be sort of direct guiding, but you can-

Espen Gylvik
CEO, Cyviz

What I can say-

Marius Skagen
CFO, Cyviz

- indicate.

Espen Gylvik
CEO, Cyviz

What I can say is that it is three different projects with one partner to the defense sector in the US market. And in isolation, deals are still quite significant values. So it is, it is a significant value of the three deals in total, without saying anything else.

Marius Skagen
CFO, Cyviz

Mm-hmm. You have sort of answered this one. Will there be a need for an equity issue? No.

Espen Gylvik
CEO, Cyviz

Absolutely not.

Marius Skagen
CFO, Cyviz

from Oliver: What initiatives are involved in the OpEx reduction program in practice?

Espen Gylvik
CEO, Cyviz

So, I mean, without, like, exposing too much, because it is still, like, a project a small group of people are doing, and we will, at some point, of course, have to, I mean, share that internally with everyone. Where do we prioritize our resources, and where do we put our money? Very much in line with the long-term strategy of gradually becoming more and more a company on the tech side and the platform side. So it's quite evident that we will probably move more OpEx over to the platform, more OpEx towards people that can work with partners, so that we get a broad partner network to sell our Integrated Kit and platform next year. And we will, of course, try to optimize every single dollar spent across all the P&L lines to be as prudent and effective as possible.

I cannot say if it means we do cut here or cut there, but it is an important exercise. We have some timelines internally on when we will present, I mean, the final draft to the board and get some approvals, and then, of course, roll that out as part of entering into 2024.

Marius Skagen
CFO, Cyviz

Yeah, but also important, so, so people don't misunderstand now, put emphasis on the word right-sizing.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

If it was a cost-cutting program, we would have called it.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

But we are to reallocate some resources, like you said, to enforce the power behind the new service platform launched in September.

Espen Gylvik
CEO, Cyviz

Yeah, if people want a fact-based answer, there is absolutely no plan at current stage or any need to think about increase in overall OpEx.

Marius Skagen
CFO, Cyviz

No

Espen Gylvik
CEO, Cyviz

... entering into 2024, even though we will have an aggressive growth target on revenue, EBITDA, and gross profit for 2024.

Marius Skagen
CFO, Cyviz

I think this one spurred some interest because, another one, you are talking about cost optimization, and you have previously said you will not increase the FTEs. Despite this, you have increased salary and personal expenses with 20% since Q3 2022, increase in other operating expenses, almost 50%. Please explain. Well, first of all, I have talked to you before, but, if you isolate OpEx or those kind of lines, we need to state the fact that we are a dollar-exposed company. So if you see the dollar NOK, compare the same rate or the average rate to Q3, you will find that a good chunk is dollar.

The reason why we don't state that in the profit and loss, or in the earnings calls, or in the report, is that that kind of sort of weakening in the Norwegian Kroner is overall accretive for EBITDA, but that explains some parts of it. And then when we lay out budgets in October, November for a year, that is sort of a guideline towards the next year.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

If both the right people or the right opportunities or the right new services arrive, we are not sort of strict in terms of following that. So we made some bets again, and you can sort of explain that a bit, but what we did.

Espen Gylvik
CEO, Cyviz

Yeah, I think it's important to understand... I mean, the dollar impact is significant. We don't spend a lot of time, I mean-

Marius Skagen
CFO, Cyviz

No, we shouldn't.

Espen Gylvik
CEO, Cyviz

... using that as excuse or anything anywhere. It is just a fact. And everyone that, I mean, lives in this country and see the value of the Norwegian krone over the last, I don't know, 6 months, 12 months, will understand that. The other element is that we have, in 2023, also invested in the right capabilities for the new building blocks. That is actually the fundament for us standing here talking about a positive development on profitability entering 2024. For us to, like, become a global leading tech and platform company, we need to succeed with our core technology, hence the Integrated Kit that is going to be sold largely through a partner ecosystem. You need developers to work on that. You need someone on the product side to package on that, that the company never had before.

You need actually some people with sales capabilities that can engage with partners and really drive that through the partner ecosystem. You have to remember, it's an investment in the core Cyviz technology, where our gross profit, by far, is the highest one. If we succeed as we think we will with that, it will have a significant impact on the profitability of the company. The other element is the platform. We are now moving ourselves into a slightly different part of the IT tech world-

Marius Skagen
CFO, Cyviz

Mm-hmm

Espen Gylvik
CEO, Cyviz

... where you literally have a platform that can provide managed service, monitoring, management, remote access, remote support for nearly anything that can be monitored. That is built on the legacy of what we have, and it's in a model that will be provided only as a subscription. So that's the first really, really strong opportunity for us as a company to move into a much more subscription-based revenue streams. That requires some capable people that understands partner ecosystems and platform. Those investments are already taken this year. So if you take that and you add the dollar value, you cover probably 70%-75% of this delta-

Marius Skagen
CFO, Cyviz

Yep

Espen Gylvik
CEO, Cyviz

- on OpEx.

Marius Skagen
CFO, Cyviz

All right, time for one more, relating to products and services. You talked a lot about new products and services during the Q2 result call.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

But also the need to sign the right partners. What is the status on that at current state?

Espen Gylvik
CEO, Cyviz

Yeah. So I mean, let's start with the platform. So the platform so far has received surprisingly good type of feedback from the marketplace. We have signed now MOUs with seven local or global partners, and that's just the, like, beginning of the journey. We are now working very hard in what we call our plugin factory, which is just like adding plugins, or so things that can be monitored, for a bigger commercial launch, late Q1, early April, with a broad set of partners. And as of a couple of days ago, we also signed a global agreement with one of Microsoft's best partners, DXC, a US-based company. Not just for the platform, but also to resell core Cyviz technologies, so the Integrated Kit, complete Cyviz solutions, and the platform. So we have interest.

We work and talk to some of the larger integrators, and at some point, also some of the larger distributors on the planet, to bring the Cyviz new platform out to a much larger audience globally than we are capable of doing ourselves. The good thing with that platform, if you think about it beyond what we can do with partners, it is purely subscription-based, and it's a more advanced platform than the one we today provide customers that buys a complete Cyviz solution. Of course, for our existing customers, this is a fantastic opportunity for us from 2024 and beyond to do upgrades with all our existing customers.

Marius Skagen
CFO, Cyviz

Mm-hmm.

Espen Gylvik
CEO, Cyviz

Knowing that we have installed more than 4,000 solutions globally since the beginning of time for Cyviz, we have a good base of customers that we can upgrade. So I think it looks more promising than I hoped for a month ago, but the proof would still be in the pudding. So when this commercially launch, and we will see the effect of it, is when we can, like, at least make some sort of best guesstimates on how successful this will be. But the interest in the market on customer and partner side is better than we anticipated when we started this project.

Marius Skagen
CFO, Cyviz

With that, I think it's time just to conclude this broadcast.

Espen Gylvik
CEO, Cyviz

Yep.

Marius Skagen
CFO, Cyviz

Thank you for your time. Thank you for watching.

Espen Gylvik
CEO, Cyviz

Thank you for good questions. Hope we managed to clarify some stuff, based on that, and wish all of you a happy weekend.

Marius Skagen
CFO, Cyviz

Happy weekend.

Espen Gylvik
CEO, Cyviz

Goodbye.

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