Okay. I think I'm gonna go ahead and start with just some housekeeping stuff, then we'll kick off in 30 seconds. You are all muted by the system. If you have a question, raise your hand. I will unmute, after that you will have to unmute as well, so that there's two unmute procedures. And that's. The presentation, you will find this recording. It's being recorded, you will find the recording on our website probably later today. With that, I think I'm gonna go ahead and kick off. I think you've seen us before. It's Fredrik, our CFO, that you see on the screen, and I presenting this.
This, of course, expresses what we did before we arrived here, but at this point we've been here for about 2 .5 years, so now it's probably more, more relevant to speak about what we're accomplishing here. In February of 2021, we launched a completely new platform. It was a cloud-based platform, multi-tenant.
It's based on Microsoft Azure, and it's a real software-as-a-service platform. What I mean by that, real software-as-a-service means that you don't install one platform per customer. You have one platform that you run all the customers in, meaning that you reach a state where everybody has the same code base, which is a very important step in making sure that you can that you can have increasing gross margins as you grow.
It's a very important step for us to be a pure SaaS company. Two years later, today in 2023, and in March of this year, there were 7.3 API calls per second into this platform. 7.3 times per second. This is a platform that didn't exist in 2020. We launched it in February in 2021, put the first customers on it in April, May of 2021, and now 7.3 time per second an API call happens to this platform. It's B2B enterprises, professional users that are putting these systems into place. It's not consumers, it's not gaming, it's really business processes that are running on top of this platform. I just think it's an astounding and amazing accomplishment by the team of engineers that we have here at Artificial Solutions.
It's not a big team, but it really is world-leading. This is what I know, in my experience, I have no concept of any platform in the AI space, which is B2B, with this type of volume. There's of course lots of gaming-type and chat-type applications out there, but this type of volume for real business processes, 7.3 times per second, is just absolutely astounding. Very happy with our accomplishments. If we then translate that into kronor, which is also quite important, we see that our growth in ARR is 134% year-over-year. The ARR went from SEK 12.9 million-SEK 30.2 million. We're just talking about the new SaaS, right? The platform that we launched in 2021.
Something that didn't exist in February 2021, it was launched at the tail end of 2021, is today a SEK 30.2 million ARR business. On the API call side, even more astonishing growth, from 5.4 to 18.9, that means that the growth rate in using this massively outperforming the market. As you probably or some of you may know, we were already at 15% of the technical side of the market, so the amount of transactions in Gartner's projections for this virtual assistant market in the contact center. Since we're growing with 243%, this last 12 months, obviously we're also taking more and more market share in there, although we don't have any updated numbers from Gartner in there.
That said, astonishing by the team. Customers really love using our platform since they're growing their usage. It is a small team of B2B customers that are really more and more embedding this into their business processes, which we really, really like, and that builds the foundation for us going forward. I wanna quickly touch base on what is conversational AI for those of you who are new shareholders. Of course, we have some new shareholders this quarter. Also very happy with that, and welcome to the team. Conversational AI is you have a piece of software where a person comes in and asks for something. It's a service request, it's a request for information, or can you help me get something done?
The software orchestrates understanding what the customer is talking about, finding the information, connecting the information, and maybe also doing something like, for example, reconfiguring the person's router or ordering an iPhone for them or sending them a box to send their iPhone back in. An action needs to be taken.
The system needs to understand what the person is talking about, also co-coordinate the business process throughout this. What you get is you're gonna get better Net Promoter Scores and cost savings if you implement this in the right way. An example is where AT&T today has more than 300,000 support calls per month that are managed totally by the system, no human even gets involved in that. Those are support calls about routers in the home, what they call smart home solutions.
Very, very powerful cost savings if you implement this in the right way. We'll come to a bit how we think customers should be implementing this going forward. The market we are in is called the contact center software market, and we are a part of that, which is the virtual assistant market. I'll come to that in the next slide.
The global contact center software market was worth $29.5 billion in 2021, and it's growing with a CAGR of 21% to $165 billion in 2030. This is relevant because of the size of this market, a lot of new players are coming into the market. Probably most important is that today it's the large hyperscalers which are taking this market.
It's the Microsoft, Google, Amazon that are taking a large portion of this market. We have the largest references in building a virtual assistant in this market in the world. We have official, very large references that nobody else has in this market, and that includes the hyperscalers and other associated companies along there.
Very proud of the achievements we've done in the last few years in getting these references. For example, Swisscom recently became the third highest valued brand in the world, according to Kantar BrandZ, and partially because of the high customer satisfaction they have, which the CEOs have been out commenting is born on this solution that we have. Very interesting market. It's growing. In that, there's a sub-market that we call virtual assistants in the contact center.
That's the one I mentioned in Gartner that's growing 48%. We are roughly 15% of this market today from a tech perspective. As customers grow their usage, we will also get more and more revenue. Today, this market is largely a services market. Most of our sort of legacy competitors, they build services for their customers.
They have a lot of professional services. They install on a virtual server, and then they maintain that for the customer on-prem. We, of course, have a different model, so we have less revenue in the beginning, but more as we grow. We're 15% of the total transactions in this market today. Obviously, OpenAI has changed the trajectory of this market, so I think this forecast is probably gonna need to be rewritten.
What happened for the last two, three quarters is that all of a sudden, CEOs are talking AI. That was not the case, four or five quarters ago. Since, let's say, December timeframe, the kids of CEOs have been coming home and saying, "Oh, I used this great product called ChatGPT," and now everybody talks AI. Of course, different strands of AI, but also I'm very happy to say that we're part of the Microsoft Inner Circle. When we made the bet in 2021 which hyperscaler to go with, we had no idea that Microsoft would be the lead investor in OpenAI. That also means that we get the first beta versions of everything that comes out from there.
We are leveraging today GPT-4, which is the model that is not the one you would normally access, but the next model in OpenAI, leveraging that through Azure in beta still and still not ready for enterprise use. Several of our customers are trying what they can do to enhance the platform effectivity even more using the OpenAI platform. It's a very interesting space.
Lots of stuff happening with OpenAI. Even more interest, and specifically, I would say, from investors in the U.S. and CXOs in the U.S. and Europe. That fits us very well from a customer perspective. I'm not gonna read all of this. I wanna point to the graph at the bottom. The SaaS ARR is SEK 30.2. You also see we still have a sizable legacy business that's also growing.
That means our legacy customers are also growing their usage. Quite happy and proud of that as well, of course. We are trying to move everybody over to SaaS because that reduces our cost of maintaining them, and we definitely hope that our customers will follow us into the SaaS world as well now that they see that very large customers are using this.
O2 Telefónica official reference, they spoke in June about having about 1 million calls per month into the platform. Highly likely that they have a lot more now without officially. Of course, we know how many they have, but they haven't really officially spoken about that since actually July last year. With O2 Telefónica, a highly regulated market is Germany, and they're using this platform. That means that pretty much anybody could be using this platform.
It's being used in healthcare, also very highly regulated environment, HRSA, public sector in the U.S. We see that customers are really able to use this platform, even if they're in highly regulated industries, which means most customers should be able to move over as well to our SaaS platform. That also, of course, increases the growth in the SaaS platform.
It will, of course, also gradually move the legacy out. As you see, our total revenue is also growing. We're quite sure that we're gonna keep growing that total revenue. Partners, we've been working quite hard to sign up new partners 'cause partners are implementing our solution.
With the momentum in AI and with the momentum in our growth and seeing that we're closing the gap on our cash flow, we're also investing now in getting new customers. The first one is an interesting one. It's AVH. AVH signed with us in, I think it's February, March of this year, maybe January. Is a partner and a customer, so they're gonna be building for themselves but also going to market with a solution. The interesting thing is they're using the solution in reverse of what all the other customers are doing. In the U.S., if you have affiliate networks, you get a lot of leads. Those leads, you are allowed to call.
In Europe, this is not a business that's very appreciated, but you can then call these customers or prospects and ask them some qualifying questions, and then put them in with an account manager. That today is done by call centers, primarily in Mexico, but they're now looking to replace those with technology.
Having Teneo, so our solution, call out and do that prequalification and then connecting or scheduling with an account manager or a salesperson. The volumes here are very, very big. This is a very interesting area. AVH is an investment company that has lots of these types of companies underneath and very interesting to see. We just started the implementation there about a week ago. That's probably gonna be done somewhere in the range of Q2.
Azure, of course, still a very important partner to us. We are a, what they call marquee ISV, independent software vendor, in the cognitive space, which of course is also where all the OpenAI solutions are in. We were also ISV of the Year for Microsoft here in Sweden. Of course our contract with Microsoft sits in Sweden since we're a Swedish company.
We are using Microsoft to help us appear a lot larger than we are. We're of course large from a tech perspective, but not from a company perspective. That's very important for us in the U.S. market primarily. Tech Mahindra, some beautiful implementation in Germany and are working now with several new prospects. CGI as well, we're doing events together. CSG growing healthily as well.
Very interesting partner base, growing quite a lot. I need to just highlight this as well. I know we said in the Q4 report because it was delayed, but it's quite important. We have also ISO certified this new platform, also that in record time. Very happy with the team in this. Let's move to the thing that happened during Q1.
I touched on this during the Q4 call as well, and some of you might have noticed this on the website. We've moved to using Teneo.ai as the brand that we take to market, and in that brand we have a solution, and that's made possible by the advancements in AI in the last few quarters, maybe even months. This really came to us when we were talking to Swisscom and Telefónica that are using our technology for many things.
What this executive layer of those two companies said was, "The thing that has really transformed how we work is that we no longer force our customers to listen for 200 seconds to different choices and then choose with a keypad or with a keyword where they want to come to when they call us." The keypad navigation or the old IVR or the old phone system, why everybody still has that is that it's been incredibly difficult to implement an IVR-type system in the world with. Sorry, I'm getting sun here in Sweden. That's very, that's very uncommon, so I need to just move around a bit.
We, instead of having keypad navigation when you come in, press one for, press two for, press three for, what Swisscom and Telefónica were talking about, the executive management were talking about, is, "We really like that we got rid of that." Now they greet their customer with, "Why are you calling us today? Please state in a full sentence why you are calling us today." If the customer can't clearly state why they're calling, the system will ask disambiguation questions. It will ask questions to understand why you're calling, and this is made possible by Teneo.
Many have said that they do this before, but nobody has really succeeded, which means that today a large portion of the world, when you call a large company, it's gonna be keypad navigation, and that's something that we can get rid of thanks to the new development.
On Teneo AI, which is our platform, which lots of customers are using and building new solutions, we built a solution which can now be implemented in 90 days, and that is also a much easier way for us to go to market. We don't need to sell to AI people necessarily. We sell the end product, so the use of the AI. Getting rid of press 1, press 2, and all the way to 10 is something that's really gonna impact customer experience, and we've already seen that.
ContactBabel, which does research on English-speaking companies in this sector, they say that 82% of the enterprise world still has keypad navigation. A further 9% has keyword navigation. The type of OpenQuestion that we have implemented, they're not aware of any such references. We have them, and oh boy, are they big. Swisscom, for example, every time you call their hotline, you will be talking to Teneo, and you will be doing that in 5 languages. If you happen to be speaking French, which people of course do in Switzerland, then you will be able to speak French to it. If you're speaking English, it will speak English to you. It switches this automatically.
You see here that Christoph, who is the CEO of Swisscom, he talks about this as he's out talking to customers and to investors about how this really changed the hotline experience for them. In here, there's a video. I encourage you to look at that on YouTube or Vimeo, which is Roger Dill, who implemented this at Swisscom.
He's a Swisscom employee, and he talks about how this was implemented in 90 days. It's a new solution where you utilize all the latest technology, ChatGPT, OpenAI, CLU from Microsoft, which is also a revolutionary new product that arrived in Q1. All of this you can utilize and build fantastic experience in the contact center by just picking up the phone and routing to the right person, so getting rid of the keypad.
You don't have to force your customers to pay attention. You don't have to force your customer to listen in and understand your divisions. You can just have them quickly say why they're calling. You see that ContactBabel says that 42% of your customers are irritated before they even come to stating the question.
Arriving at the right person, arriving at the right queue is something that already irritates customers. It really is a problem. Customers are frustrated. If you reroute, if I now, let's say, and I called this morning, for example, Danderyds Kommun to ask about if I have to submit a change request for changing the color of my house.
Apparently, I had to, but before I call, I had to listen, and I chose the wrong one because there were 5 choices, and none of the choices was really what I was looking for. It was how they're organized. It's always inside out. Instead, with OpenQuestion, it's outside in. The customer states what they want to do. Again, it's something we implement in 90 days.
The total cost of ownership here is very low. We're talking that routing is gonna cost you very little. It's gonna cost you a few cents on the dollar. However, rerouting customers is gonna cost you a few dollars. When I now arrived at the wrong person, I had to speak to that person, and they had to reroute me, so reconnect me to somebody else, and that costs a lot of money.
We launched Open Question, which is a solution. It sits on the platform, Teneo.ai. That's now our main website. That's our main go-to-market. That's our brand. It's a registered brand since many years back. artificialsolutions.com, which is a bit long of a name, is now where our investor collateral sits. When you, as investor, want to find that, you go to investors.artificial-solutions.com. If you wanna look at our platform, our solutions, it's in Teneo.ai.
With that, I wanna give over my the presentation now to Fredrik. Actually, no, I'm gonna do the first one, Fredrik, if that's okay, because there's still some non-numbery stuff there so that I would really like to... Q1 operational highlights. First one, we just discussed launch of Open Question. It is what we're taking to market.
We're really pumping this in the market space today. Lots of emails going out, lots of meetings happening as we speak. This is how we're gonna be attracting new customers. Because with the revenue base, seeing the growth in customers, we're now comfortable with also going out and recruiting new customers. Although we do know that it takes a little time to start making cash on new customers, we believe that this is really the time, especially with what's happened with ChatGPT. The integration that we've done through Microsoft Azure Cognitive Services is gonna be something that our customers are gonna be able to use in real production usage, probably at the end of Q3.
And this has to do, of course, with data protection, with who owns the data, who processes the data, but also it's a bit of legal ramifications right now around this. We believe at the end of Q3, they'll be able to use this in Teneo. Teneo is the process layer that manages the dialogue with the customer, manages your processes, and then calls the different AI solutions that are needed to fulfill the request of that customer.
Also calls the more mundane things like your inventory system, your CRM system, your invoicing system, et cetera. We are the orchestration layer for that, and that's where we excel. We launched Teneo.ai, the new offering website. I encourage you to go look at that too. We're really working on the search engine optimization of this.
Our marketing department has been working overtime, we now at number three in generic search. Generic search is really what drives traffic. Ad-based search is not that effective. Generic search, we're now number three in Google in the U.S. for this Open Question solution. If you search for conversational IVR, of course, this depends a bit on time of day and so forth. In general, when we test it, we are on the third place.
We also, of course, successfully closed the rights issue, SEK 96 million . Very thankful for investors and very much for our new investors. Welcome. Fantastic to have you with us in these times of AI. The first outbound calls trials initiated when I spoke about AVH. Also very interesting, that could open up a whole new revenue, so like a new solution.
OpenQuestion, not sure what that would be called, but outbound calling could be something in the same space. Of course, SaaS ARR, very high growth, 134% year-over-year, March to March. Again, in a product that really was launched in February, March of 2021. First customer sold in April. A brilliant result. Growth in SaaS API call volumes, 243% year-over-year. This is really something that customers like, and customers are really using this. Very happy with that. We also made some simplification measures. We found that our organization was set up more maybe according to what it was before we took the 25% cost down in 2021, 2020, 2021.
We also simplified the organization further, which leads to some cost reductions as well. Really the point was to just make decision-making faster and less focused on anything else than building and selling at this point, which is really the most important things to drive, of course, our revenue and cash flow. With that, I'm handing over to Fredrik, our CFO.
Thank you, Per. Thank you. Let's move to the next slide there. Thank you. A bit of a continuation of growth and ramping up. We are, as Per already said, I mean, we are very, very excited about the development we have on our platform and also the revenues and API call volumes generated there. I think it's a key message in this report, which we are also very satisfied with, as you can probably imagine. On this slide, you see this SaaS ARR development quarter by quarter. We can just see that the two KPIs that we are tracking is SaaS API call volumes. That's the key operational measure that we drive the business on.
We will also showcasing in this presentation a bit more on why this is important and so on. We also see that our SaaS ARR has grown to SEK 30.2 million in March 2023. That is a kind of year-over-year growth of 134% and also quarter-over-quarter. Q4 2022 versus Q1 2023 with 21%. A continued strong growth on SaaS ARR. If we also look on this slide there, we also showcase that actually our SaaS API call ARR revenues have grown with 46%.
That basically means that our volume-linked revenue base is growing faster than our subscription piece on SaaS, which is also very much linked to what we have driven the business against. We can just conclude that overall, I mean, very strong growth, and it's also looking very promising going forward with significant volume potential on our existing customer.
I think we can go to the next one, Per. Continuation of growth and graphs. With this slide, we just want to showcase, as I already said, I mean, API call volume is a key KPI that we track and follow monthly and over time. Here we can just conclude that we grew volumes with 243% year-over-year and 36% quarter-over-quarter.
A very strong growth on the usage of our platform. We can go to the next slide, Per. Here also, showcasing, I mean, what I already said in the initial slide. It's basically to showcase that a key driver of our SaaS ARR the last year and also quarter-over-quarter has been API call growth. As you can also see then, we have less of growth in the other piece, which is basically, I mean, the revenues that are not linked to API calls, so subscriptions, data, et cetera. That is also, I mean, an effect of the fact that we have focused the organization on driving growth on our existing customers.
The reason for that is also, I mean, that it costs less for us as an organization to drive that type of growth. Also a kind of evidence that what we have driven the business against or towards is also materializing in results that we wanted to achieve. Very positive with this development. Also, I mean, coming back a bit to where Per started, I think, I mean, we have close to 600% growth on API call SaaS API call revenues year-over-year and 46% quarter-over-quarter.
This is also, I mean, an evidence of what we have communicated, I mean, the last two years, I would say, that we have some really interesting blue-chip customers that can, on their own behalf, continue to grow and scale dramatically from the levels that we have seen in the past and also from the current levels. This is clearly, I mean, an evidence of the scalability in our model. Also what is interesting is also that we now have 1 large SaaS customers generating +90% gross margin at the current API call volumes.
For those of you that have been on similar calls previous quarters, also recall that we have, you know, showcased this hypothesis, and it's very satisfying that we now can showcase with actual numbers that we also reach this + 90% gross margin on a customer level. Yeah, this showcases our hypothesis and that we also will reach those gross margins on our existing organizational levels with our customers. Very, very pleased with this number as a CFO, I would say. Next slide, please, Per. This slide is a bit crowded slide, but also, I mean, what is important here is of course, I mean we're growing the valuable revenues.
We are growing recurring revenues with 53% year-over-year. We are also more importantly also with our, I mean, ARR metrics and SaaS metrics. We are growing total ARR 70% year-over-year. That also means that our legacy customers are also growing quite a bit, which is also very pleasing. Of course, I mean, the key metric here is of course our SaaS ARR growth of 134%. Also looking forward, I think, the ARR metrics are of course essential because it also then projects into our installed base of customers and the levels that they use our platform. We also see in April going forward that the month has started in a very positive way.
All in all, very pleasing numbers, we look forward to drive the growth further. Next slide, Per. Lots of text in this number, but I'll start off with the graphical parts of the slide. What I'm very pleased with is also now if we look at the lower right-hand side where we have recurring revenues as a percentage of net sales.
This is a metric that we have used when we have a bit kind of transformed the business from a hybrid, you know, software, professional services company. Now we are truly, I would say a software as a service company, software company, when we also generate 98% of our revenues from, you know, valuable recurring revenues. Very pleased with this metric.
We can also conclude that the SaaS portion of our recurring revenues are also continuing to increase, even if also the legacy leg is also growing. We already mentioned the SaaS ARR growth, 134% year-over-year, the total ARR +70% year-over-year and recurring revenues +53% year-over-year. As you can see, I mean, net sales is not growing as much, but that's also part of that we are no longer generating professional services that we have done in the past. That's just a result from that. As we already mentioned, I mean, we have growth in basically all relevant, you know, revenue metrics on high 2 and 3-digit numbers.
Very pleased on that one. Gross margin-wise, we reported a gross margin of 56%, a bit lower than last year. Here I just want to touch upon why this is the case. I think in our Q1 report, if you read the more detailed text in the report, we also showcase that we have initiated a new compensation plan for sales, which is very much linked to the SaaS ARR growth. Basically, a sales guy has to deliver 10% growth on a quarterly basis in order to get commission. That is hitting us a bit in Q1. That also means that when we look into the next quarters, our SaaS ARR level is also at the higher level.
A lot of commission also means that we are creating a lot of long-term value when we are also increasing the base of our SaaS ARR. Just to mention there, I mean, if we would have had the same commission levels as in Q1 2022, our gross margin would have been 65%. 65% instead of 56%. This has a big impact on our gross margin. EBITDA adjusted, relatively flat versus last year. Here also we see the impact on our adjusted cost base and the initiatives that we have initiated during Q1 and which will also to some extent continue in Q2 as well.
Lastly, I think we can just kind of close this slide with, I mean, we have a solid cash position, SEK 83 million in the bank when we ended the quarter. Yeah, feel very confident with that cash position going forward. Next slide, Per. Just briefly on costs. As Per mentioned, I mean, we are simplifying our activities and focus on what is essential to drive, you know, shareholder value ultimately. That is also, I mean, a bit kind of streamlining our organization to be better fit for purpose. This means that we have reduced the cost base on a run rate basis, SEK 121 million versus SEK 160 million in Q1 2023.
This will also start to be visible in the reported numbers in Q2. Potentially we can also see some further, you know, cost reductions from this level as well. Mainly it's very much, I mean, to drive the business in the best possible way to ultimately create shareholder value. I think that's the key here. Next, over to you, Per.
Thank you, Fredrik. Just some highlights to end this call before we go to Q&A. Remember, if you do want to ask a question, raise your hand. I will unmute you unmute yourself as well. That's how it works in Teams when you are a large crowd. Artificial Solutions is a prominent player in this market. It's growing 48% CAGR. We are growing at 134%.
Our ARR is growing 134% year-over-year. We are doing a lot of transactions per second. 7.3 times per second an API call is made in our platform and is with very large customers and large usage. It's very much a professional platform for B2B use. Gross margin, as Fredrik just showed, fully onboarded customers are going to approach 95%. We already hit over 90% on one of our customers this quarter.
That's just going to continue. Of course, that's quite key for us to hit our cash flow targets as well, our cash neutral targets as well. Technology that we have is made for enterprise solutions. It's for blue chip customers. We did sign a partnership contract with Swisscom in Q1. That means that Swisscom is going to start selling this.
They'll probably sell it where they make one solution for many customers. From our perspective, it's still for a large entity. Of course, they can sell it to many smaller banks, for example, in Switzerland. It is a blue chip customer enterprise solution, but it has potential to go down if we find the right partners. Hopefully Swisscom can make this happen in Switzerland. The way that our system is built up. We lost a customer during Q1.
This customer is somebody that had an area of business which they shut down. They were using this for sort of automated insurance trading type thing where they were trying to have people change their insurance plans, health insurance plans without speaking to a person. They shut down that business because they couldn't really attract customers to come into it.
Once somebody's built out like the one, the customer we saw here, which is approaching our fully onboarded 95% margin, that type of customer, once you're in there, because of our approach, if you look at all other AI approaches, they require lots of data. This has become even more apparent now with OpenAI, which of course has a huge data set that they're training on. First it was machine learning, deep learning, and now we're talking about transformers.
You stack transformers on top of each other and that requires even more data. With our approach to this, you have much less data to train on to build a solution like this, which means first of all, it's faster. Second of all, also, once you started using this, you're not really, you're not going to be able to just replace it with one of those data hugging solutions because it's going to be quite costly to do that.
Since you make money on every session, when would you actually take that step? We believe that our revenue retention is very high, which is also how we arrive at saying that we have a growing ARR and the recurring revenue is going to keep growing. We don't foresee that somebody would switch this out because there's just no point.
We are the main enterprise virtual assistant in the Azure ecosystem, ISV of the Year, et cetera. What this means is that we get credibility in the enterprise segment. It also means account managers from Microsoft can make money when they sell together with us and watch this space as we work to get even more ecosystems involved here during this quarter. This is really the way for a smaller company like us to do this.
It was a bit of a, I have to say, a lucky guess maybe from our perspective to choose Microsoft, turning out that they now have something that's way ahead of the others. Of course, Bard from Google is still not launched. Amazon is coming with their own solution as well, but Microsoft is already out there with the OpenAI partnership. Very happy with that.
Orchestrating running processes on top of these AI solutions in the Microsoft space really turned out to be a great bet for our customers and for us. Again, 7.3 times per second an API call is made. Let's see if we can get some questions out here as well. Any questions today? Yeah, I had a question here from Forbes. I allowed your microphone. Now you need to unmute Forbes. There we go.
Yes. Hi, Per.
Good morning.
Good morning. Good morning. Hi. Congrats on the very nice ARR growth in the quarter. I assume that a lot of this stems from the increased volumes with your large undisclosed software customer. Could you please tell us a bit more about what this customer has done in the quarter and also provide some color on what you think this customer can go on to achieve in the coming one or two years?
Right. Yeah. What they did was they started a solution. They keep building solutions, and they started with just pure routing and only in the U.S. and for a specific set of customers. When a specific set of customers call in, they would be routed. That's the OpenQuestion type solution that we call it now, which we productized. Then in the end of last year, they started building out and testing to use this for support purposes. If you have a product from them, then you will call into a support number, a 1-800 number, and then the customer will talk in natural language about their support issue.
You know, it could be my keyboard is not working or my computer or that phone is not working, whatever that might be, or a piece of software. It's actually only implemented for hardware right now. That customer then calls in and can also now get solutions and resolutions. That means the call is longer, and it opens up a new volume. That's how that growth comes about. There's other areas where they also provide support. I would say that from a support perspective, U.S., this is probably 10%-15%. That's one portion of increase that they can do going forward. The other one is that they do have an okay to roll this out to other countries, and they are in 130 geographies.
That could also provide a healthy growth once they start that project. Usually, these projects are hindered by availability of resource, so availability of resource to roll them out and test them. That's usually why it comes step by step. From a quality perspective, I would say they've already established that that's so good that it's just to roll it out.
Okay, very interesting. no, like concrete, forecast for API calls or sessions, in the coming 1 or 2 years.
I think on a customer by customer basis, this is difficult. If you take, for example, the healthcare customer we have in the UK, they have a solution that's built and been tested, but the solution needs a new contact center platform from another vendor. We of course don't provide that.
That contact center platform keeps having problems, which means they keep rolling back and going back to the old way of working, which just takes time to get it up and running. Once it gets up and running, it's gonna ramp, of course. It's always difficult to say on a customer by customer basis. It's much easier to look at the sort of all the customers and realize that they are definitely gonna keep growing.
If one grew this quarter, I'm pretty sure somebody else is gonna be growing a lot next quarter. We do know that one of our customers is just deploying their voice solution. They've had a chat-only solution, and they're now deploying OpenQuestion, together with the company Five9 that we never worked with before. It's also quite interesting, and also together with Google Cloud. They're basing this on Teneo. That's another one of our customers going voice, and that will also open up new volume. We don't know who's gonna grow, but we do know it's gonna grow.
All right, excellent. Yes, looking at OpenQuestion a bit, obviously you're investing a lot in the sales organization, previously I guess you spoke a bit about adding a handful of customers each year, but what are your expectations now for this year?
With OpenQuestion and with the development in AI, we wanna bring in more customers, and we do need to monitor this from a cash flow perspective. We do wanna bring in more, and we do see that there's much more demand now than there was a year ago. It's really a changed market. That probably driven by the fact that customers need to cut cost, and we do cut cost with OpenQuestion, but it's also driven by this, that the CEOs are saying AI. I heard that just yesterday that it's the CEO of a very large manufacturing company in Europe who said, "I want a solution based on ChatGPT." It's not like, "I want a business solution." It was just make sure it's based on ChatGPT. This is really driving demand right now.
Of course, those open APIs, those AI APIs that we have to OpenAI, through Azure are quite interesting for customers.
Great. Another question on OpenQuestion is how has the competitive landscape changed now that this is your main, like, offering? Because there are, I guess, simpler versions where it uses keyword navigation. Could you please provide with some comments about what the competition looks like now compared to perhaps a year ago?
What we do see is that a lot of companies are talking about doing this, what they call conversational IVR, and they have websites that look quite professional, but they don't have the references. If you look at us, we come into this market with references in the millions. For example, Amazon, which has their Connect platform, had a component in there that is Lex, which also looks like it could provide this. We're not seeing that deployed in any customers that have millions of calls. The ones that deploy sort of what I would call the other solutions to do OpenQuestion like solutions are the smaller companies, tens of thousands of calls per month.
When you get to these type of levels, like 7.3 times per second, then, there's only one out there right now. It is a landscape that where we see people talk more about it since we started talking about it. It's also a landscape where we have really strong references, and that's what we're pushing. If you look at our website, there's lots of customer testimonials and stories which we believe is the way forward.
All right. Great. Well, that's all from me for now. Thank you.
Thank you, Forbes. We have Viktor. I am allowing you, and now you need to unmute yourself.
Thank you. Can you hear me?
There we go. We hear you.
Yeah, great. Start with one here. Previously you have primarily focused to grow with your existing customers, and now you mentioned in the report that you have increased the focus on signing new customers. Have you changed the strategy a bit since the a higher adoption rate for AI solutions, or how should we think?
Yeah, we have changed our strategy a bit, so we need to monitor this. We're not really sure how many customers we can bring in and still balance on the cash here. So setting up a new customer is quite costly, and they really start making money for us once they go live. We wanna try the first OpenQuestion customers now and see if they're live in 90 days, that should also mean that they're cash positive in, let's say, 120 days. That's what we wanna try to see if we have that traction and then gradually increase.
Definitely opening up now and building a pipe to close out some, let's say, Q2, Q3, and then testing that out and see how that works from a cash flow perspective. We do wanna be cautious and not not take in so much that we that we negatively impact this trend we have now on the cash flow side.
Yeah. Great. On your financial targets of reaching an ARR of, say, SEK 200 million, how much do you expect to come from volume versus prices, pricing and signing new potential customers?
It's like 60% volume, or is it even more volume?
I think, I mean, we are increasing prices on the subscription in 2023. That's something that will gradually impact, of course, on the subscription parts. On the variable parts, we have decided not to increase prices from the 0.08 USD, euro rate. In 2023 we will see price increases, but they will come, you know, gradually. In Q1, I think we didn't really see any material impact from the price increases, I would say. On the other hand, as Per also said, I mean, we are cautious in how we drive, I mean, the acquisition of new customers in the way that we want to have high volume customer because that fits our model the best.
Also, as Per also mentioned, I mean, on our healthcare provider, for instance, I mean, we don't rarely see any volumes on the API call side there yet. That is also, I mean, a customer where we see has the potential to become, I mean, the biggest customer for us in, you know, one years to three years' time. I think to large extent, I would still say that the main driver of us reaching this is also to continue to grow on existing customers and obviously then also adding new customers who will also contribute as kind of growing volumes. Setting a percentage I think is a bit tough at this stage.
Considering that we are, you know, we have launched OpenQuestion quite recently and don't have the same, you know, visibility when it comes to actual outcome on those customers yet.
Maybe just add one thing here. We also see our price model, of course, drives behavior. What we also saw this quarter is that we have primarily one customer that deploys endpoints, which we did not charge for before, but with low volume. The biggest customer we were talking about today, they have five endpoints, and this customer has the 30 endpoints. An endpoint is a cost driver for us, and it needs to have a certain volume. We just didn't think anybody would do it the way they've done it. That means we charge for endpoints now. That hurt our margin in this quarter. Now in the new contract with that customer, we charge for endpoints if they don't have a certain volume on the endpoint.
It's also a bit of tweaking, and may at some point actually would be a revenue driver. We don't think so. We think we wanna drive the behavior for volume, who knows? That could maybe also have a bit of an impact. It's a new thing to charge for. We just never thought that that would be interesting to customers.
Right. Great. Thanks for clarifying. That was all for me.
Okay. Any other questions? Then I thank you very much. As we've been doing this call, there's probably been about 250,000 API calls going on as well. It's very, very happy to see this technology being used this much. It's really, really fantastic. Old patents, new code, fantastic technical team. Very happy with the results. Thank you all for joining, and for those of you invested, thank you very much. For our current shareholders, thanks for sticking out with us. Thank you all.
Thank you.