Hello, and welcome to today's webcast with Checkin, where CEO Kristoffer Cassel and CFO Martin Bäuml will present the company's Q2 report. My name is Ludwig Sjöström, and I work with Finwire. After the presentation, a Q&A will be held. With that said, I leave the word over to Kristoffer.
Thank you. So thanks for everyone listening in and viewing this webcast. My name is Kristoffer Cassel, I'm the CEO, and with me I have Martin Bäuml, who is our CFO. The setup for today's presentation is basically the same as we have had previous quarters. We assume that you as listeners have a basic understanding of the company and our background, and also have read the quarterly report that we've published today. We will focus on some highlights from the business and some figures that we would like to highlight.
If I start, I say in my comment in the report that we are in a very fortunate position. We have strong tailwinds from big macro trends like regulation that is driving a really strong demand from almost all our customer sectors. We are yet again posting a strong and increasing growth. The growth year-over-year is 111%.
This is driven both by these trends, as I talked about, a strong demand from our existing and from new clients. Mainly we also have a strong organic growth of 75%, which is the highest organic growth we have had since prior to the IPO even. The combination of strong organic growth, strong demand from new clients, strong Net Revenue Retention, which is 137%, puts us in this fortunate position where we have a very strong growth.
We're also slightly ahead of our plan for 2025, where I'll come back to it, but the plan is to keep growing at 86% year-on-year and reach a revenue on the full year of half a billion SEK. We're posting a strong quarter again, SEK 17.6 million.
Yeah, basically the year continues very strong. The only thing that goes against the general trend we're seeing is the German iGaming market, and I thought I would comment a bit on it. I mention it in the report, but regulation for us is generally very good. It drives our business, drives requirements for identification of end users. Within the iGaming sector in Germany, there is several factors like high taxes, low limits, and really strict rules for the operators, which means that several of our customers have reduced their operations there, and some like Kindred have withdrawn from the German market completely.
This, of course, indirectly hits our volumes as well. It is a top three market for us, which means sensitivity, and it will push down the Net Revenue Retention during a sort of transition period over the coming quarters. Here, I think it's important to note that we are in a very strong position in the German market. We have really good technology. We have signed clients this year with very strong presence in Germany. Of course, we are depending on our customers to also have a successful business and grow, and expand for us to keep the Net Revenue Retention that we've previously seen in this market.
That's against the tide, but as I said, almost all other sectors and markets are very strong right now. I also say in the report that we're sort of easing off the gas pedal a bit. I think the focus here is a bit. We're still investing heavily in the growth-driving parts of the company. In a percentage, we're reducing slightly, but in absolute numbers, we keep investing heavily.
We can do this partly because our efficiency internally, how much bang for the buck we get for each unit we're spending in marketing and sales is increasing. We have said previously that marketing should level out at around 25% long term. As Martin will show later on, we were slightly below that at 21% for this quarter. That's thanks to this efficiency.
We also continue to invest heavily in R&D, and a lot of the efforts we put in there will not be seen this year. It's actually a longer perspective and several quarters away. We already, thanks to the R&D we put down, we already see a very strong scalability of our software.
This means that as we grow, we should continue to gradually improve the EBITDA margins. We have shown that in the past quarter, and I think this should continue in the coming quarters, thanks to the scalability of the model.
Another part to mention from a commercial perspective, North America right now is a big focus for us. It has traditionally been more or less a blank spot on our map. At the same time, we know that the biggest enterprise clients, the biggest actors online are based in the U.S.
I talked about this many quarters now, and we see this as really important for our future success that we grow in the U.S. and Canada and that we can get a strong presence also on that market. We just hired our first boots on the ground, first sales guy in the U.S. and we also looking forward to the iGaming sector in Canada, which is kicking off now and several other things. As I said in the report, we believe that if rightly played, North America can already contribute to the growth already at the end of this year. That's quite exciting, and that's where the key commercial focus is right now.
We are also looking for further acquisitions. The turbulence that we have seen in terms of valuations and multiples makes it a bit difficult. The actual sort of shift in multiples makes it difficult to proceed and finalize M&A deals. We have seen that the two acquisitions we did last year, we have managed to integrate technology-wise. We have managed to create a stronger commercial proposition with those technologies.
We are also seeing some early signs of synergies also on the cost side. This really strengthen us to again look for further acquisitions and hopefully if the markets stabilize a bit, we think that there is a lot of interesting technology companies out there. To remind you all, we're looking for leading technologies within niche areas that we can add to our offering.
We're looking for teams with excellence in certain parts which can increase our innovation for the long run. We are looking for product-driven companies that has a strong momentum and growth. We are not looking to make acquisitions to add revenue in that quarter when we make the acquisition. We're looking for companies which technology will add to the growth with several years perspective. I think we sort of show that in the numbers we're posting this quarter and how we have managed to integrate the acquisitions we did last year. This is hopefully an area where we can come back a bit. Strategy remains firm.
It's the same strategy we've had now, and we are focusing on getting new customers, expanding the business we have with our existing customers, and also acquire teams and technologies. For those of you who have really studied the report closely, we are posting slightly lower number of customers this quarter, and that's mainly because of a pricing change where our absolute smallest customers, we have more than fivefold their minimum fees, which makes that group of customers a lot more profitable for us. But some of the really smallest long tail have left. We're still adding customers, and for us, the key to success is of course how we handle and add the enterprise-level clients, the really big ones.
I started off saying that we're slightly ahead of the plan to reach the 2025 targets. Just to remind about those targets, it's to grow 86% annually up until 2025, and that includes acquisitions. If we do this, we will reach a net revenue for the full year 2025 of half a billion SEK. We feel confident in this goal, and that's what we keep targeting. With that, I think I will leave to Martin Bäuml, who can dig into some of the financial highlights of the quarter.
Yes. Thank you, Kristoffer. The report itself is full of numbers and details, but I thought I'd go through the financial highlights on this call. To start with, the net revenues increased by 111% during the quarter, ended up at SEK 17.6 million. This was driven largely by organic growth, which was at 75%. As Kristoffer said, it was the best quarter since 2020. Gross profit more than doubled during the period, and the gross margin was at 84% in line with the previous quarters.
After a few quarters of heavy investments and negative EBITDA, we're now back at EBITDA around the breakeven mark, at 0% margin and -SEK 21,000. Here you can note that some of the news outlets actually reported a EBITDA loss of SEK 21 million, but that is actually SEK 21,000, so pretty much breakeven now. The cash flow from operating activities was -S EK 3.8 million, and we ended the quarter with a cash and cash equivalents of a little bit more than SEK 50 million krona, and the equity ratio was 82%.
If we go into the details on the net revenue, those of you who have followed us before recognize this picture where we once again add the biggest building block in the company's history with the 17.6 million in Q2. That was a growth of 111% from last year and 75% organic. As you can see here in the picture, during the first two quarters, we're actually beating the first three quarters during last year, and now in July we passed the full year 2021 in terms of revenues.
It kind of exemplifies the growth journey that we're on. If we turn to gross profit and gross margin, we more than doubled the gross profit in absolute terms, and the gross margin was at 84% for the quarter and 85% year to date, which is also in line with the number from full year 2021. As we've highlighted before, it's the high gross margin that enable us to invest to continue to invest in growth-driving activities and mostly then product development and also sales and marketing. Turning to sales and marketing specifically, as you can see here, we continue to increase the investments in absolute terms.
As Kristoffer was highlighting a little bit before, we're easing off the gas a little bit, so in percentage-wise, it's come down. We're at 21% for the quarter and 24% year to date. I think the optimal level is somewhere around 25% for the longer term here in terms of sales and marketing cost in relation to net revenues. If we flip to EBITDA, as said, we're now back to break even after a few quarters of more heavy investments, that was the whole reason why we went to the stock market to begin with and raised money was to raise money and invest that money in growth-driving activities.
Now we see that that's starting to bear fruit with the growth we have this quarter and also EBITDA now coming back to break even again for the quarter and at - 2% year-to-date. This is something we expect to gradually improve over the coming quarters. Then the last slide with cash and equity ratio, we ended the quarter with a cash position of SEK 50 million and an equity ratio of 82%. With that, I'll hand it back to Kristoffer for some final remarks.
Thank you, Martin. Just very short summary of what Martin said, and this is actually a slide I've reused more or less exactly from the previous quarter presentation. We have a strong and increasing growth. We have high gross margins, which allows us to invest in the business and grow in capital efficient way. We also see improved EBITDA margins, and that's something we expect going forward. We are in a strong financial position, which gives us confidence in the long-term plan that we're having. With that, I think we should open up for questions. Yes.
Yes. Thank you for the presentation. We move on with some question. Has the agreement you signed with Playtech in May starting generating revenue yet?
The short answer is in this quarter, there is no revenue from that deal, and the 111% growth does not include any effects from that deal. We, as we said when we published that, we believe very strongly in the platform strategy that we're having, and Playtech is one of the largest platforms and iGaming technology providers in the world.
We have started now cooperating with the sales and marketing efforts that we're doing together with them. We have seen our previous experiences that the big enterprise clients usually takes several quarters to get going, so to speak, not only from a technical side but also from sales and all the different steps that's needed. Hopefully, that will come in the coming quarters and will be quite exciting to see how that cooperation develops.
Yes. The North American market is referred to as a growth market for you. What are your expectation for it, looking forward?
Yes. I commented a bit in this presentation and also in my comments in the report. What we're saying is that we think that, rightly played, North America can contribute to our growth at the end of this year in a material way. How you define material is of course a question, but we think that it will contribute quite a lot. It's, as I said, we're starting the year with North America more or less a blank spot in terms of revenues. Long term, this is a huge opportunity for us as a company to scale even further. I look forward to see how that develops, and as I said, we have just hired our first boots on the ground, and we have spent quite some effort on that. Hopefully that will show off in the coming quarters.
Thanks. The report mentions a likely gradually improved EBITDA margin in the second half of 2022. What is behind that development?
The basis of it is the scalability of our software, but also the high gross margins, which means that every revenue we add, we keep at around 85% that trickles down, so to speak. It's a combination of high gross margins and scalability. We also see, as I said, some synergies with the acquisitions we have done, which also helps. In general, it's according to our plan that step by step, the EBITDA margin should increase as we grow.
You developed a hybrid software where you combine your own technology with the ones you acquired. Can you tell us more about that work?
Definitely. We started the work to integrate the technology of GetID, which we purchased, but also Datacorp OÜ. That started already last year, at the end of last year, and we have more or less finalized that work now, which means that we have a stronger offering but also have, how should I say?
We are prepared for innovation that hopefully we'll see in the coming quarters. We are pushing a lot of investments into R&D, and we have done so for many quarters now, and as I said, most of that is just yet to be shown. I look forward to show more of that in the coming quarters and maybe in the beginning of next year as well.
Yes. Another question about Playtech. Do you have any update regarding the agreement, and has it started to contribute to the growth yet?
I just refer back to my previous answer. I think it's the same question. It has not contributed to these figures. We still have big hopes and rightly played, it will be exciting to see in the future.
Thanks. There's often a lot of talk about skin in the game, and you are sometimes raised as an example. How important is that to you?
Oh, wow. Difficult question to answer for me. I think, of course, the fact that both me and my co-founder are the two biggest owners or shareholders, of course, it has some type of effect. It must have. I think maybe the main thing is that we share the incentives of the shareholders.
Personally, me as an owner, I focus quite a bit on sort of revenue per share and thinking from that perspective, and you can find that in the report. The year-on-year revenue per share grew 86%, which shows a bit that we're growing quickly, but we're also doing it capital efficiently. Both our organic growth that we have, but also that we've done quite smart and good acquisitions, to be honest. Otherwise, I'm not sure how to comment on that.
Yes. Moving on to the last question here. What are you most looking forward to in the remainder of 2022?
Good question. Martin, maybe you wanna start off answering.
Yeah. Yeah, sure. Yeah, I think the most exciting part is hopefully that we can get back on the M&A discussions again. It's been rather difficult during the last six months with a lot of volatility in the market to reach kind of a, you know, to continue discussions as value expectations of many sellers hasn't really adjusted to the public markets. So with some stability, I think that's gonna improve, and hopefully we can find some good acquisitions. Yeah. That's gonna be interesting to work at.
I can add from my end, I look really forward to focusing on North America a bit. I think that's a huge potential, and it will be interesting to see how that develops. I'm always super excited about the software and some of the innovations that we have in the pipe and actually the sort of next level software that we are developing and some of the R&D pieces, which are fantastic. I hope that we can share that with you guys and with the market going forward. We're working hard, and that's quite exciting.
Thank you, Martin and Kristoffer, for the presentation, and we wanna thank all the viewers for tuning in, and we wish you all a pleasant day.
Thank you.