Good morning and welcome to today's presentation, where we have Albert Group presenting the year-end report for 2024. With us presenting, we have the CEO, Jonas Mårtensson, and CFO, Katarina Strivall. If you have any questions, please use the forum to the right, and we'll take that up during the Q&A. With that said, please go ahead with your presentation.
Thank you, Martin, for that introduction, and a warm welcome, everyone, to this morning's conference call. We are going to talk about 2024 and Q4 for the Albert Group. What we will talk about today is, first, start with a quick summary, then go through some general things about Albert Group. Then we talk about the full year 2024 and the Q4 results, both some operational key points and the financial key points. We will elaborate a little bit on what things look like going forward before we look forward to a Q&A session. As Martin said, please ask any questions you have in the forum. Before getting started, just a refresher and summary of who we are and the quarter in general. The Albert Group, we are a leading Nordic edtech group with focus on the Nordics, U.K., and U.S.
We develop, market, and sell different types of learning tools for schools and private persons. These products, they are curriculum-based and especially focused on the core subjects of mathematics, literacy, and science. There are many products out there, but our USP is really engagement, which I will come back to later. Financially, we are on a journey to profitability, where we have set the financial target to reach a positive EBITDA this year in 2025 and a positive cash flow in 2026. That is something we should be able to manage with the cash we have at hand today, so we are well funded. Looking at full year 2024 and Q4 in short, 2024 was very much for us a year with focus on profitability, and we have taken many actions to set us up for achieving this in 2025.
I think the biggest thing is probably the big restructuring we did in the first quarter and then continued in the fall, where we reduced the staff cost, something that we now start to see the effects of and that we will bring with us into 2025. We've also spent a lot of focus in commercial readiness in terms of marketing and the people to really drive sales growth in 2025. We enter now 2025 with good preparedness and a strong business plan for achieving our goals. Looking at 2024, sorry, at the fourth quarter in particular, we have continued to see a good momentum in invoice sales, which is up 15% compared to the fourth quarter last year. Some of it also started to materialize in the recognized revenue, so it's also up.
We have continued to see good momentum in customer acquisition, so we have spent more money on marketing to build a pipeline, which has been our biggest change in cost and therefore also resulted in a dip in profitability in the fourth quarter being -SEK 8 million . Now we'll go forward and talk much more about these things. Let's start with a recap of Albert for those of you who are new to us. We are here because formal education in the world has a problem. There are many children out there who are struggling with school, especially mathematics. Some of the reasons for that is that there is a lack of equal access to qualified teachers. Typically, if you grow up in socioeconomically strong areas, there's good access to good teachers, or if you're in a poorer area, it might be worse access to good teachers.
Depending on the support you can get from school, the support you can get from home is much more important. Not all the kids can get the support they need from school from home, either because the parents may not have the competence, they do not have the time or the money to support. Therefore, school results are in general declining and the socioeconomic inequalities are increasing. This is not something we like. I mean, as both parents and entrepreneurs, we want to go to work every day with a mission to really help every child reach their full potential through engaging and personalized learning. What do we then really mean with this?
We think especially the word engaging is so important because for many kids out there in schools, I mean, they do have a negative attitude to school, either because they might be struggling or there is a group pressure that school might be boring or nerdy and so on. That is something we want to turn around. You also have the talented students, which might be ahead of the rest of the class, and they maybe not get challenged enough by school. Not to forget as well, there are a lot of kids out there who have special needs. It can be due to ADHD, autism, or other learning disabilities. For them, traditional teaching can be difficult. Having engaging learning tools really can sort of get all these groups of kids interested in learning so they actually get into it.
What we really focus on is to create, take the position of having engaging learning tools which are strong educationally and really based on the curriculums. That is something we think is very important because looking at traditional textbooks and other teaching methods, they are typically very high educational value, but perceived as quite dry and not so engaging. There are a number of different edtech companies out there who try to provide different solutions. Either they are typically in the lower right corner, where they have just digitalized textbooks, or they are more in the upper left corner, where it is more games, which are educational. We see that the very important spot to be in is in the upper right corner, where we combine education and engagement.
To do that, some of our, I mean, lead words are strong pedagogy as the foundation to ensure they are educational, but then add gamification and creativity and storytelling and other things to really make it engaging learning tools. When working with learning, obviously, we really believe in placing the learner in the center and both work with the learner in school together with the teacher and at home together with the parents or guardians because children typically learn, I mean, in everyday life, so we need to work with them in both places. To do that, I mean, we are and have been during the last couple of years built a portfolio of different learning tools because we really believe in blended learning, which is using books, using apps, using construction kits, films, and different types of learning methods.
Although, I mean, our definite core is digital learning apps. We also have construction kits and educational films to really cater to different interests and learning styles for the kids. These different learning tools, we sell under eight different brands: Sumdog, Strawbees, Holy Owly, Albert Junior and Teen, Swedish Film, Film & Skola, and Jaramba. Each brand has their unique identity and positioning for the different tools. They are all collected under the Albert Group name, which stands for trust and quality and higher educational standards. We are mainly focused in the Nordics, the U.K., and the U.S., and we have headquarters in Gothenburg, Sweden, with another office in the U.K. We are also present in a number of markets, especially across Europe.
A new market on the map here today is Czechia, where we just launched a couple of weeks ago. I will come back more to that later. That is it about sort of the Albert and who we are. Now we want to go more into depth and talk about 2024 and Q4. I will start with some operational key points before handing over to Katarina to take us through the financials. Trying to sum up 2024 in general, obviously, a lot of things have happened. I think it can be grouped in four different areas. We have spent a lot of time in restructuring the organization. We have refocused the company on really our high-performing areas. We have started to grow sales again and improve user engagement. To go a bit more in depth and starting with then restructuring the organization.
After a couple of years now with rapid growth, both organically and having acquired a number of different companies, we were in a state where we were a group of different companies who were operating quite independently without many synergies. During the year now, we focused a lot on getting this group together into a united organization, but also making that organization more functional. We have like a head of B2B sales, selling our products, or a product development organization working with all different products. That has made it much easier both to sort of identify and extract synergies and also reallocate resources much more quickly. This organization is also flatter and required fewer people to work efficiently. That made it possible for us to lower staff costs and reduce the size. We have also right-sized the B2C organization.
It was designed initially for very rapid growth, but as we switched to profitability, we also redesigned the B2C organization to match with the ambitions and revenues that we had. We have spent a lot of time on focus on high performers. We quite early in the year set up the model of we want to identify the high performers and double down on them and reallocate resources there. We have conducted a number of strategic reviews and so on and really set now focus on Albert Junior, Strawbees, Sumdog, and Swedish Film, and also decided to really focus on the Nordics, U.K., and the U.S., and then reallocate resources there. By doing this, we get more resources in the areas where we have a good return on those resource investments, but it also gives them better conditions to really succeed with those brands.
Also for those brands, there is a very clear road to profitability. Now we have a laser focus on achieving those ones. Moving on to growth and growth sales, which during 2023 and 2024 has not really been our focus since we are mainly focused on the cost side. As we are preparing for 2025 and 2026, it is about getting growth again. Back in last summer, we started to see a nice friendship, especially on the B2C side, where it became much cheaper to acquire customers again, and the acquisition volumes that we got were back to sort of pre-recession levels. We decided to increase more marketing during the fall, especially in B2C, but also in B2B to really build the pipeline. We have also grown the RevOps or commercial organizations.
We have more people who can work with marketing, with sales, and customer success to really convert those leads to sales and then ensure they stay and they see the full value of the product. This has resulted in increased marketing costs during the second half year, in increased staff costs. That is just a little fraction compared to the savings we had on the big restructurings. We have, of course, which is the end goal, increased the number of leads, invoice sales, and ARR, which was really what we look for. Once the customers are there, it is really about keeping those customers and engaging them in the product so they stay as paying subscribers for as long as possible.
This we have addressed by both restructuring our customer success team so we can provide better customer service and really focus on the customers that matter. We have also worked a lot in the interface between the user experience, the product, and the communication to ensure that all new customers are getting much better onboarding, and we can help them in building a habit of using the products in their everyday life in schools or at home. This has resulted in better product usage and lower churn. These things that we did now historically, obviously, remain important going forward as well. That summarizes 2024 as a whole. Zooming in now on the fourth quarter, it has been a lot about sort of pegging up for more sales in 2025. We have actually seen, I would say, surprisingly good sales in the fourth quarter as well.
Because normally this is quite a slow quarter for us where parents are getting ready for Christmas and schools are also getting ready for the Christmas breaks. It's not that much activity. This year it has been it. We had a 14% more invoice sales than in the fourth quarter the year before. The strong momentum in B2C continued from the summer. The quarter four campaign that we were running during October, November, and December also continued to perform very strong with high volumes, good CAC, and initial low churn. Now we've just monitored those customers for two months after year-end, but it looks promising so far.
As a result of the good momentum, we continued to increase marketing, which added cost during the fourth quarter, but will pay off during 2025 as we ended the year with more paying subscribers than we had really planned for initially. On the B2B side, as I said before, it's typically a slow quarter. This year we had surprisingly good work in especially Sweden in selling educational films on a title-by-title basis. It was also a very good quarter because that was the quarter where both Strawbees and the Swedish Film brands, they hit their all-time high sales on an annual level. It felt like we really ended the year in a strong momentum.
On the product development side, we had also really spent a lot of time in focusing on what are the key areas to develop the products into really dry business in the future. We haven't made any big launches in quarter four, but we were in the final stages of finalizing product development that is or has already been launched now in the first quarter or will be launched. For instance, for Albert Junior, it was another localization to a new market, the Czech Republic, which was launched a few weeks ago. It's Albert Teen for children between in the middle stage and higher stages in Sweden, really turning it into the national exam preparation tool. In Swedish Film, we have invested a lot of work in developing a new streaming site, which makes it possible to sell films on a title-by-title basis.
We have released the first beta version of that already to existing customers, and we will release it to all customers here during the spring. In Strawbees, where we especially focus on the U.S., and we have had a laser focus on Texas, we decided to do a tight curriculum alignment to the new curriculum TEKS in Texas, which was also launched a few weeks ago in connection to a trade show in Texas and showed that it really helped in sort of selling it into the Texas customers. Sumdog is our fluency math practice tool. To really emphasize and strengthen this position, we have now worked for a long time in developing something we call the Fluency Booster, which is a feature to really in an adaptive way make fluency practicing both fun and engaging. That was something we have also launched here this quarter.
That was it on the operational side where a lot of exciting things have happened. Katarina, please take us through the numbers.
Thank you, Jonas. During the year, we have focused on setting the stage for enabling future profitability. As a part of this work, we have been reviewing our cost structure to ensure that we have the right cost base to drive profitability. This has involved a restructuring in Q1 affecting personnel costs, followed by an additional restructuring in the autumn, which was communicated in October and concerned our French subsidiary Kids MBA. Also, this affected personnel costs as well as revenue. As a result, we have significantly reduced our personnel costs, as Jonas mentioned, and the restructuring of the French subsidiary also expects to contribute with a positive impact on EBITDA with approximately SEK 8 million.
Personal costs are now about SEK 1 million lower per month year -on -year as we enter 2025. In parallel, we have significantly increased our focus on sales and sales processes, as we mentioned, as well as refining and developing our customer success strategy and work. This has already yielded results during the second half of 2024 with increased invoice sales, which have exceeded last year's figures for the same period, as mentioned. Marketing costs have increased due to the strategic efforts that we have made, capitalizing on strong market momentum. These efforts have delivered strong revenue in B2C and are expected to continue having a positive impact as we move forward. If we look at the graph to the right, last year's adjusted result, excluding one-off effects, was -SEK 16.1 million. This is compared to -SEK 30 million this year.
This development is primarily driven by our increased marketing efforts, as we have mentioned, as well as a lower proportion of capitalized cost this year. Net revenue has improved by 2% quarter -over -quarter. This is in line with our plan to maintain stable revenue levels in line with the previous year. As we mentioned, there is a strong focus on sale and sales process to increase revenue and sales. We have increased invoice sales by 13%, as Jonas Mårtensson mentioned, compared to the previous years. This will have a positive impact on the future net revenue since a significant portion of our invoice sales is recognized over time, and this is due to our subscription-based business model.
We did have a strong Q4 with B2B sales reaching an all-time high for the quarter, and B2B also had a strong quarter towards the end of the year, as school sales resulted in full-year all-time high revenue for Swedish Film. Looking at the composition of our revenue, we see a continued increase focus on B2B with a larger volume compared to B2C. This aligns with our strategic plan. As mentioned, B2B sales through Swedish Film were particularly strong in Q4, driven by the digital non-subscription sales where Swedish schools purchased educational films on a title-by-title basis. We can also conclude that we continue to follow our expected seasonal patterns. EBITDA for the quarter was -SEK 8 million , which is SEK 2 million lower compared to last year's adjusted EBITDA.
Last year's adjusted EBITDA is due to adjustments connected to the earn-out reversal from acquisition that was not materialized. The change is driven by slightly higher net revenue, increased marketing costs due to our B2C efforts, and lower personnel costs following the restructurings. However, we also had a lower proportion of capitalized costs. The effects of our cost reduction initiatives have started to materialize in the second half of 2024 and are expected to contribute to profitability as we end 2025. Cash flow for the quarter was -SEK 15 million, and this is primarily due to the lower result. At the year-end, our cash balance stood at SEK 44 million, and this is as a proportion of late year's sales will be paid in the coming period. Our plan remains to become cash flow positive in 2026 with cash at hand. Then Jonas will go on.
Looking at the future. Yes, thank you, Katarina. Looking at the future, I just first wanted to start by zooming out and talking about our four-step plan, which I mentioned before. You know that back up until 2022, Albert Group's strategy was all about taking and building a strong market positioning by organic investment, but also buying new companies. In 2023, we sort of started to stop for a bit and lay a solid foundation, sort of restructuring and structuring everything that we have done. We can then do what where we are right now, which is about reaching profitability before returning to profitable growth in the future. We will now zoom in on the yellow stage here, reaching profitability. These things, they match very well with the financial objectives we have set.
The two first ones are related to this yellow stage of first achieving positive EBITDA in 2025, really prove that the business model is profitable and scalable. In 2026, reach positive cash flow, really show that we are self-funded with the business model we have. With that in place, we can go for profitable growth and strive for that double-digit profitable growth to really drive long-term value in the company. Talking and zooming in a little bit more on this and how we're going to approach it. Obviously, the equation is simple. Profitability is a combination of increasing revenues and reducing costs. On the revenue side, I mean, for the future, now our mission is to continue to grow sales and recognize revenue from 2024 to 2025.
We started to see that good growth momentum during the second half of 2024, with the invoice sales being 11% up in the third quarter and 14% up in the fourth quarter. Now going into 2025, we're going to continue to focus on sales. I mean, sales will be the primary focus instead of just cost reductions. Also to drive new sales, but some of the invoice sales, which Katarina mentioned before, it will also financially be recognized during the year. We do believe that, I mean, the normal seasonality will apply in 2025 again, which typically means that the start of the year in Q1 is about marketing and building pipeline for the more important sales periods in the second and third quarter where the actual sales will come.
Moving over to direct cost and gross margin, that was something we had also had a lot of focus on during last year, and we managed to keep the gross margins on stable levels around 77%. I think it's just gone up and down like a one percentage unit. Although we have started to grow invoice sales, the gross margin levels have remained intact, which is a good sign if we continue to grow going forward as well, that we can keep it stable. Marketing, it's an area where we really need to keep laser focus on to ensure we have profitable return on investment on every SEK, $1, GBP 1, or Euro 1 we spend on marketing. Marketing is super important to drive sales, especially in B2C, but also in B2B, to be honest, although it's a little bit more sales incentive there.
Marketing costs are paid up front in order to drive their customers, and then we sort of get the revenues over time as the customers remain a subscriber, which means that the cost will come first, and then we will get revenues over time. Therefore, in order to really ensure over time that we get profitable, we are looking into every campaign and sort of look at how much do we invest in it to spend on it and how much money do we make from it to ensure that we get positive return on it. That focus and principles will continue into 2025 as well.
Fixed running cost, which was really in the spotlight during 2024, will continue to be an area where we need to have strong focus in 2025 to ensure we keep control of that because we did a lot of improvements thanks to the profitability program. Now we want to ensure that we can preserve those improvements. As Katarina mentioned before, the running cost, especially in terms of staff, is now a bit more than SEK 1 million lower per month. Those are areas where we continue to focus on to keep that. In combination, now we hope that the, I mean, improved revenues in combination with the focus on cost will take us to profitability. Some actions for really achieving this are summarized like this. On the B2B side, to grow that business, it's about really doubling down on some of the areas.
We have a super strong position in Scotland. There it's about reducing churn by improving product and customer success. We're, for instance, centralizing many of the contracts on a local authority level, which has proven we're very effective in reducing churn. We're also growing down in England, and here we're going to try to win new business, which we have started to take market share already this year. I think I mentioned it when I wrote the report that we thought early on that, I mean, the partnership with YPO would be a very important driver of this in combination with the direct sales efforts we're doing with marketing and sales. It has been slower than expected to drive growth through YPO, so we will now in 2025 shift more focus towards our direct sales and direct marketing efforts.
We have seen during 2024 that U.S. is going very well, especially in the sales model we have for selling the Strawbees product. We have doubled down on that area in terms of increased resources on it, both the people working with it, but also the money spent on marketing and going to events. Really doing more of what has worked well. In Sweden, we are focusing on growing and taking market share in the film market. We have a lot of upside there. We've actually today sent customers to other streaming sites, but now we have with the new streaming site that I talked about before, we can offer this ourselves, which should enable us to take more market share.
To make this happen, we are now seeing how we can improve the Swedish B2B RevOps or commercial function to work more efficiently, effectively by learning best practices from other parts of the group. On the consumer business, consumer side, it's really about doubling down on Albert Junior, as we said before. We have a good position in many markets already, so there we're going to focus on really capturing the full potential, which typically is about ensuring new customers get into the product, they get engaged, they stay and pay over a long time, but also scaling to new markets because that is a good opportunity for us to add more customers while keeping the customer acquisition cost low. Looking internally on operations, last year was very much about restructurings, cost savings, and so on.
This year is going to be more about working in a more efficient and effective way. For instance, automation of a lot of internal processes, seeking cost synergies and between different brands with the people we have, we can get more output from them. It feels like we have a strong plan for 2025 to achieve our goal. Going for landing and try to summarize the entire presentation now. I mean, we in general, we now stand strong for turning to profitability in 2025. We spent a lot of time in 2024 on the profitability program. It has now been executed. We now have a focus on the high-performing areas. We have restructured the organizations. We have now lower running cost and a strengthened commercial organization. We have a lot of strategic product launches in the pipeline.
Some have already been launched now early in Q1, some will come during the spring and year. We have seen and hope for a continued good momentum in sales. With that, let's get back to you, Martin, and hear if we've got any questions to talk more about.
Thank you very much, Jonas and Katarina, for the presentation. Yes, we got plenty of questions that we got from the audience here. We'll start with the first one. You've mentioned positive sales momentum in this report and in the Q3. What do you exactly mean by that?
Yeah, good question. I think we can probably break it down in two parts. I mean, for a subscription business, sales and growth is very much about both customer acquisition and keeping them for a long time. We then mean positive sales momentum. It's partly about, I mean, acquiring customers at scale while keeping the cost of customer acquisition cost at a good level. We get the desired LTV to CAC ratio that we want.
Secondly, it's about keeping the churn low so customers stay and generate value. That's the sort of definition-wise. Why we think we have good momentum now is that, for instance, in B2C, I think we have since June last summer, seen that we've been able to attract higher volumes and at the desired CAC level that we have been able to do during the, actually since the economic downturn started a few years ago. Another example is on the B2B side.
We've been able to have good retention with the customers so they choose to stay in their subscriptions and pay, but also in terms of the repurchases in both like Strawbees and what Katarina mentioned before, the title-by-title purchase of educational films that even though it's not a subscription, the loyalty is super high with those customers and they tend to come back more and more. The combination of those is what I mean with positive sales momentum.
Thank you, Jonas, for clarifying that. Are you done now with all the restructurings now, or do you expect more to come?
What I would say, I mean, the big things that we had identified as part of the profitability program when we entered 2024, we are done with them. I mean, the big changes to the organization is done and we have identified the strongest performing areas like the four main brands and the three key regions where we're selling. I mean, we have put focus on them. We have reallocated resources there and we have downsized in other areas.
Those things are done. Having that said though, I mean, I think the benefit of being like a portfolio business, which we are with multiple brands and multiple markets in two business models, B2B and B2C, is that we can like continuously optimize the business and double down on the areas that are performing well in terms of the brands, the products, or the markets. I mean, just one good example I think is if we go back a few years, we had absolute focus on B2C.
We got headwind as the economy turned down a few years ago, and then we shifted focus to B2B, which was the right decision back then. Now, since last summer, when the wind turned to tailwind for B2C, we could very quickly shift back some resources to B2C and utilize that positive momentum and conditions. With that, I mean, we're never satisfied. We'll continue to optimize the business every time, but all the major restrictions should be done.
Thank you. Let's move on to the next question here. You said that the focus in 2024 was on profitability, but your EBITDA in 2024 is actually worse than in 2023. Can you explain why and also your plan for reaching your 2025 goal of positive EBITDA?
You take that one.
Thank you for the question. I understand that you need to really understand the numbers to see the logic. If I start with explaining the change between 2023 and 2024, the reported EBITDA in 2023 was - SEK 6 million. In that, one of a number of one effects were included. We had a positive effect from a reversal of a provision from an earnout related to the acquisition of Sumdog that did not materialize. 2023's EBITDA was also affected negatively by SEK 3 million in transaction costs related to the acquisitions of Strawbees, Swedish Film, and Holy Owly in the beginning of last year.
Adjusted for those things, the EBITDA was minus SEK 16 million. In 2024, the EBITDA was minus SEK 31 million, which is SEK 13 million lower than that. Those SEK 13 million are mainly explained by three things. First, two things, we have made the short-term EBITDA worse. As Jonas mentioned before, the customer acquisitions momentum has been good.
We decided to increase marketing spend to ride this momentum and build a bigger portfolio of paying subscribers. Those marketing costs hit the result now, whereas the subscription revenues will come later. Secondly, we have capitalized less R&D in 2024. Our products have become more mature, and we therefore allocated more resources to selling and maintaining them. As a result, the proportion of R&D that we capitalized has decreased. We still carry out a lot of new product development, though. We have also seen positive effects. We have managed to lower our personnel costs. The financial effects of the Swedish restructuring in Q1 started to show up in the numbers in the second half of the year. During the autumn, we also did the restructuring in France. We do not yet see the result of that.
If we compare the running rate for the personnel before and after this restructuring, it is more than SEK 1 million lower per month. Although these effects together make the EBITDA worse this year, we think they are all signs of a more long-term and healthy business. That brings me to the second part of the question. What is the plan for raising profitability in 2025? In short, that is about leveraging what I just talked about. The increased focus on marketing and sales combined with the more favorable market conditions should have a positive effect on the revenues. The restructuring that we have done makes the fixed running costs lower. Combined, the revenues will be higher than the cost, and we will get profitable.
However, as it both takes time to see the restructuring cost and the cost savings and the new sales at subscriptions revenue, this will be a gradual shift during the year.
Yeah. Thank you, Katarina, for clarifying that answer. We'll move on to the next question here. Can you describe the decision to enter the Czech Republic and Romania? How was the product being received by the market?
Thanks for that question. Just to clarify for all of you, I mean, we entered both Czech Republic and Romania with the Albert Junior product. Really, there are two reasons for it. One is obviously to grow Albert Junior here in the sort of short to mid term. Second, it's also a bigger purpose of, let's call it being a scout for testing new markets for the group in general.
Because although we have focused on the three main regions right now, I mean, we over time will enter new markets, and then it is good to sort of test them out with a product, which is easy to do it. And Albert Junior is one of those, which is quite cheap and easy to localize to new market. But focusing on sort of growing Albert Junior, I mean, in essence, we can either grow Albert Junior by acquiring more customers at the lower cost, as I mentioned before, or increase the lifetime value. Expansion is about increasing volumes while keeping the CAC low. Why then Romania and Czech Republic in particular? I think the answer goes the same for both of them, actually. I mean, we started out doing market research about a year ago, looking at which should be the next market to enter.
On paper and based on desktop research and so on, both of those ones looked very promising. We then ran different experiments on those markets in terms of testing marketing and interest for these types of products and so on. Both those markets came out as high scorers in that test. Thirdly, I think we can mention that, I mean, we're sort of interested in and believe in Eastern Europe. Because looking at Eastern Europe in general, it's attractive. It's not as crowded as Western Europe or the U.S. The interest in education is high. Often you have to take a lot more responsibility for education at home if you want to be successful. Also, the purchasing power in those countries is increasing.
We have also seen and learned from others that there are a lot of similarities in interest in Eastern Europe. If you sort of manage to crack how to sell into them in terms of product and marketing and things and so on, it's a good opportunity for growing across the different Eastern European countries in general. Another thing which I think has been very useful for us when we did the first international expansions was that we had people on the team who came from those countries. By coming from such a country, I mean, you understand how people there work, you know families and friends and the school system, you can see what they're interested in, ways of marketing, local competition, you understand the language and many of those things. That proved very important for us in the early launches.
Now when we have also chosen the later launches, if two markets have been equally promising, we have chosen to go with the one where we have people on the team who come from those countries and can really help out with all those local understandings. If I recall correctly, I think you also asked how the product had been received so far. When we had our last poll here, I think I talked a bit about Romania, and we were very early on there. Now we're similarly early with Czechia. I think in general, you can say it's gone as expected. I mean, we are definitely strongest in the Nordics, Sweden, followed by Norway and Denmark, where we have been present for some 10 years, spent a lot of money on marketing and so on.
Both those new markets, Romania and Czechia, have sort of come in in our second or third year, like on the levels with Poland and the U.K., where we have been selling Albert Junior for a few years now, which showed that, I mean, initial interest seems to be good in terms of volumes. For these markets, at least for now, I mean, we have positioned us as a little bit of a lower price point. The LTV is a little bit lower than the other markets. That also means that the customer acquisition cost needs to be lower to get a positive LTV or a desirable LTV-CAC ratio. That we have managed to achieve as well, which is good. I mean, they are really nice additions to the B2C business. However, right now, the bread and butter comes from the Nordics.
As we get stronger and stronger in these new markets, they can definitely contribute in the future. I would love to update you all when we know more. We have just been live for a few weeks in these markets. All right, Martin.
Thank you, Jonas, for that answer. Yes. How has the return on marketing been in the quarter? How is the spend on marketing compared to Q4 last year?
Yes, of course. I can probably separate this question in B2C and B2B. In B2C, we see the effects much quicker than we see in B2B. Without, I mean, saying any specific numbers, I mean, the return has been good in marketing. We were running out the Q4 campaign, which ended in the end of December. We have just seen the result, the sort of churn behavior for those customers now for one and a half, almost two months.
The volumes were good, and the customer acquisition cost was attractive. The initial churn behavior and the output we get from those customers give us sort of in our simulation models that we can simulate the lifetime value of them. By combining them, it really looks like the return on investment will be attractive with a lot of margin as well there, which is good for the quarter. I think you asked spend versus last year in Q4. Yes, as we mentioned throughout this presentation, we have increased spend a lot.
During 2023, I mean, we reduced marketing spend a lot because the conditions in B2C were not favorable, and we did not see it as a good business decision to spend more. As it has been more favorable now, we have increased marketing, I mean, with quite a lot, actually. Talking quickly about B2B, I mean, marketing there in terms of it is more, I mean, we use more channels in B2B marketing, both like the digital channels, but also physical channels and trade shows and so on. When we have spent money there as well, it has shown we have got a good number of leads and so on. It typically takes a longer time to convert those leads to business. In terms of the cost for attracting leads and so on, it has been good in B2B as well. I think that's my answer on that one, Martin.
Yes, thank you. Adding on that, how has the feedback on the campaigns been during Q1?
Yeah, I mean, we launched the Q1 campaign in mid-January approximately. Now we've just been live for some five, six weeks. I could say that, I mean, it started well. It is a little bit too early to say because it will keep on until Easter. That is when we really will see how many of the free trial customers convert to paying and how that influences the paying subscriber portfolio in the end. Early on, in terms of free trial sign-ups and customer acquisition cost, it has continued to look promising. We hope that will continue.
Can you please discuss the YPO partnership and what are the main reasons for it underperforming?
Yes. To provide some context, YPO, we talked about it during the autumn. It's a big distributor to schools in the U.K., and they're pretty much selling to all schools. They have been selling computers, papers, and pencils and all those stuff for decades. They decided now, as they had an anniversary, to sort of get into Edtech as well and launch something they call the Learning Box, which is a combination of different Edtech tools where they have scanned the market, and to make it easier for customers, they bundle it in the Learning Box to sell. Our Sumdog product was chosen as one of the core products in there. That was the quick background and why I think it has underperformed. I guess, I mean, in our early discussions with them, it was very, very promising.
Of course, we were a little bit not skeptical, but we did not manage to, yeah, fully believe in that we were able to achieve that. Now since the launch was delayed, actually a couple of months, which was a little bit first initial disappointment. After the launch, a lot of, like, let's call it startup mistakes have been made because it is run a little bit like an internal startup. It takes a bit of time to learn how to sell Edtech products in general. They have now tried a few different setups for making that work. They have also now lately done a little bit of reboot, got new people on board, changed approaches and so on. Now we are much more positive towards YPO than we were maybe some weeks or months ago when we were a bit disappointing.
However, we also realized that it's a little bit risky to just sit and rely on a reseller to drive the growth there. Before, we said we have the direct sales, and YPO is the combination of it to drive sales. Now we're shifting more of the resources to direct marketing and direct sales. I would rather see YPO as a nice icing on the cake or bonus.
Thank you.
That's my answer.
Yes. And do you expect a continuous strong performance from Strawbees in the U.S?
I guess short answer is yes. I mean, we have in Strawbees had a very good growth history during the last years. There have been many years where we just with the existing team have been able to grow quite a lot. That was the same from 2023 to 2024, where we hit all-time high in 2024.
Again, I think it was already back in September sometime where we beat 2023. I mean, we hope that that will continue in the upcoming year as well. We do not just hope as well. I mean, we are increasing more resources to it. We have grown the teams. We have hired people in marketing and in sales. We have also, for the first time ever, introduced the customer success team in Strawbees, learning a lot from how successful that has been in Sumdog to really ensure once we have sold the product to really work with the teachers to get it used. Especially in Strawbees, since a lot of the salespeople, they are focused on selling on a decision-making level on the districts or school leadership, we now also really need to work with the teachers.
I mean, on top of that, we have also added more money to marketing. The combination of more people and more money on marketing, and as an example, we're going to go to the double amount of trade shows this year than we did last year. We really hope that this will be able to pay off in more leads and sales throughout the year. As I mentioned before in the call as well, I mean, we, for instance, have realized the importance of really focusing on some of the states in the US, like a state like Texas is almost like a country of its own and adapting the product to there and aligning it to their specific curriculum, like TEKS in Texas also makes it more attractive for them to buy it. That's my answer.
Yes, thank you. We will take one final question here before we wrap up the Q&A section. Is it correct that you have a forecast for positive cash flow in 2026?
Yes, that's correct.
Okay, thank you for that quick and good answer. Thank you very much, Jonas and Katarina, for presenting today. Thank you everyone who followed this presentation with Albert Group. I wish you all a great rest of the day. Thank you.
Perfect. Thank you.
Thank you.