I guess we can start. Per, please go ahead.
Okay, Björn. Thank you very much, Björn. Let's start. Hi, everyone. It's good to have you here. It's the fourth day of our Capital Markets Week, and we're super happy to have Dave Waiser here. Dave, we know Dave for a long time now, and it's a particular pleasure to have Dave present Gett, where we've been around since 2014, I think.
That's right.
Time flies. We're super excited about this portfolio investment of ours. Like the previous days, Dave will do a presentation of Gett, and then after that, we'll open up for questions. If you want to raise a question, you type it into the Q&A or chat function here on Zoom, and I'll read them out to Dave. Good. Without further ado, thank you Dave for joining us.
Pleasure. Let me take you through where the business is today and what is taking us forward. Just a quick reminder, Gett is a B2B business. More than 85% of our revenues come from B2B. It's a category we created in 2010. We made our very first ride with Google and Disney back in 2010, and since then we have more than a third of Fortune 500 companies using it. Being a B2B company for more than 10 years, it means that we built an infrastructure to support the portfolio of companies we have, including strong sales and support organization. That experience enable us to keep signing and winning about 500 new corporate clients every month. Some of the good names, a few names that will be familiar, trust Gett, the corporate ground transportation in the locations where we have service today.
Interestingly, when we look back and we analyze what is the most important KPI in a B2B SaaS service, that would be the net dollar revenue retention. When we look back and look in the cohorts of our clients, we're actually pleased to see that the net dollar retention is 150%, and it's actually stayed flat this way even after the first year, and second and third. Just as a good reference, what is known in the public B2B SaaS companies, the net dollar revenue retention stands for 126%. We feel pretty good where we are today, and obviously we expect to increase this number with the product that we are now launching across our territories, and we'll speak most of the time today about this. We also see our customers being happy.
That net dollar retention tells us that they must be happy to stay with us and actually contribute more revenues year-over-year. We also find that we save on average about 25% in the ground transportation spend after they install our software. Some of the clients even report 44%, that's more of the outlier, and indeed an average is 25. This is a good example of some large customer being more than 330,000 employees, and we generated 44% in our first ride. To understand the Gett corporate solution, we need to look both into experience that we generate for the employer and employees. What we like about the service we provide today, that we established comprehensive and robust corporate solution from one hand, and from the other, we deliver best-in-class mobile experience.
Well, as we like to call it, consumer-grade type of experience in enterprise, which is today a key when you have a solid corporate platform combined with a great user experience. I believe that up to now I didn't share much new to you. Last year we've been discussing exactly the differentiated strategy that Gett follows, being the leader and following the corporate segment. Today I want to speak about the most important thing we ever developed and something that we are developing the last three years and launched in recent times. This is the most important and fascinating announcement. What is Generation 10? Obviously, it's our 10th generation B2B. It has all the knowledge and value we've generated until now.
We also ask ourselves, what if we're able to develop a technology that can connect to third-party supply, not exactly our own supply, but non-native supply. By connecting in a way that it becomes seamless for the corporate user, and if we succeed in making this, we will be able to help companies to aggregate all of the best ground transportation options in one single platform. That's what we've been after in recent years. Just to give you perspective, the global corporate market span is $1.4 trillion a year. That's how much the companies are spending. Until now, there were no solution that can cover all of the footprint to provide in one platform that actually does it for all.
understand the problem that companies are facing today is that any global company has usually about two vendors in every major city and then few supplemental, and they end up having more than 100 different vendors. That's pretty much how the map look like now. if you're any global company, you can check with your procurement. This is the map of all different ground transportation vendors. Some of them you're familiar with from tech, and there are thousands you don't know or might be not that familiar, and they have limited technology or no technology. yet they serve the global corporations. Eventually, they are the ones who provide the service for $1.4 trillion a year. you need to connect to all of them, and you need to work separately with each and everyone.
Means you need to go through the integration, security, privacy, user definition, project allocation, addresses, payments, and many other things. All of that should be done manually and in each different system. That's the reality of today. This is what Gen 10 does. We enable and organize all of the ground transportation vendors on one single platform. We enable access to all of them and maintenance through one cloud platform. As a result, you can compare the prices. Though before you had multiple vendors, you couldn't even compare the prices. You can control your spending, fraud prevention, user management, project allocation, travel budget policies, and so on and so far. Everything, it goes through one system, one interface, and obviously, you have one unified invoice. You don't need to run your own back office with this situation.
Today, most of the companies have more than 100 people in IT just to do this. Easy way to compare what we do is I like to say that there are hundreds of British Airlines, and there is only [Amadeus]. There are thousands of different fleets and ground transportation vendors, and there is Gett. This is how the system look like, obviously web and mobile with cloud solution, so you have an access from anywhere. It offers the best ground travel providers in one platform, so you can focus on what you do best. Our mission is to organize all the best ground transportation vendors in one single platform. The only solution practically that company might need to serve their needs.
It's not simple, and that's what took us about 10 years of experience to build the whole tech across the spectrum. We just touched about it, we reviewed the B2B brain, the one that maintain all the travel policy pricing and management and mobile solutions as well. There are also back office technology that actually enable that magic I described in the beginning, that we found a way how to connect to non-native supply. Means we don't run the supply, we don't have operation. We just connect to third party. That technology is very unique because eventually you use a system like if it was the native marketplace or native supply. Again, very unique, we stumbled actually to accomplish this technology development.
Once it's done, the service we're able to provide today beyond our native marketplace is that we aggregate and offer all of the options on one single platform. Also, the reason why the partners are signing a contract with us, because the market understand that Gett is not a ride-hailing company. Gett is not competing with other ride-hailing companies. We are a partner with them, and it's a win-win cooperation. We focus on B2B. We have a large portfolio of clients. Once we connect, we give them a lot of value, and it's a win-win partnership. They're not afraid to partnership with us as we only have one aspiration, is to bring our corporate clients better coverage, and we bring them high-value rides at no cost. The supply coverage is how it look like. We keep adding many every quarter.
We expect to be in a 50% world coverage in supply during next year. Importantly, we already have a full national coverage in U.K., U.S., and most international airports. This is important. We just shared the vision, and it's obviously ambitious vision, where Gett software might help and touch each and every business around the globe. The beauty is that when you try the solution today in U.K., it already works as a charm, and it's the only solution that actually offer you the entire range and variety of vendors available in the country on the national scale in one platform. All of our new contracts in U.K. goes to the new platform, and any global or local customer can experience that live. The market I mentioned is as big as SEK 1.4 billion.
Though we expect to be somewhere around 50% supply coverage next year, the commercial sales will be still at the 35% of coverage. The reason for that is it takes time and lag. After we sign enough critical mass of supply vendors, the commercial sales start from within, it's always has some lag. In 2021, our expectation is to be in 50% technical coverage, but sales and service of around 35% globally. Just to remind you, U.S., U.K. alone is 25%. It's where we are today. Plus international airports is very close to the goal, which is already almost achieved. Some financials. I know that there's a lot of negative sentiment in the travel and ground transportation. We're especially proud that we maintain discipline with our financials across last five years.
Every year we present, we've been happy to share the progress, and the company been improving year-over-year its financial profile up to the point that, and as promised in our last meeting, we reached operational profitability in last December. It was still a goal when we presented last time, but we reached that goal exactly on December. It was the first time company generated operational profit. Since then, we keep growing. What is interesting is that even during the COVID and now times, we actually managed to meet our original pre-COVID budget and keep improving in profitability. Since December, when we first reached operational profit, as you can see here, we actually in June broke our first record during the COVID times, actually meeting the budget and exceeding our past record. We are on track year-on-year to continue improve our financial performance.
we outlook the new records for the next session that we'll have next year. For the clarity, our operational profit is the consolidated EBITDA. When you look across all of our markets, each market has its own P&L. All consolidated P&L and EBITDA is positive today. That excludes R&D. When you look on the right side, since our R&D cost are flat, you can learn that we expect to be already fully profitable early next year. With that in mind, I think we can pause here and take questions.
Okay. Thank you, Dave. It's a good overview. I think we'll start with a question from Björn here.
Yeah, sure. If the audience want to ask questions, just a reminder, put them in the chat, and we'll put them forward. Just to start, could you elaborate a bit on how you're signing up all these third-party suppliers, and if that's a challenge or they're very happy to be integrated in your platform? Are there challenges in the integration as well?
Yes. It's a critical question. When we had this ambitious vision three years ago to develop technology and sign third-party suppliers around the world, that was the very key question. Would it be possible? Would they be willing to join the platform? I'm happy to report that today we have more than 100 different vendors join the system. The short answer is yes. The long answer is that, as I said, the reason why we are the only company who managed to sign external supply is because Gett is not a ride-hailing company, and those partners don't see us as a ride-hailing company, and they see us not as a competitor, but rather partner. I believe should we be any other ride-hailing company, you name it, some good names you can mention.
I think they will have a difficulty to sign such partners since everyone will see them as a competitor. Difference with Gett, by the time we sign a partnership, we immediately generate value for those partners by driving traffic from our portfolio of corporate clients. Another benefit of Gett, very unique one, and we immediately generate value for our partners, and it become a winning partnership. We believed in that, but it was the biggest risk for us when we developed the Generation 10, and I'm happy that we now presenting something that's been accomplished and validated by the market.
Okay, thanks. On a follow-up on that, I guess, could you elaborate a bit on how much of rides on platform today is native supply versus third party? if you know, a year or one and a half year out, where would you think the mix will be?
Right. We'll be happy to report it in a way that our non-native supply revenue rides are growing by a factor of four year-on-over-year. Actually, the first time we launched our Gen 10 technology in low volume just three years ago in 2018. Since then, it's been growing in production and commercial acceptance. Since 2018, we've been growing by the factor of four, 5x, including this year, COVID year, where our non-native grew by four times compared to 2019.
I guess another question we got in the past also is how, if you could elaborate a bit on how the revenue, what type of revenue and how that has evolved, from more transaction-based revenue that we've got in the past to a software service type of revenue.
Yeah. Go ahead. Yes, I believe it's a public event, so I will be careful answering the question. What is interesting is that when we look in our existing revenues that are, by the way, also growing even in this COVID year. I mentioned in the beginning we met our budget, triple the version of the budget, and we actually slightly overperformed. It means that the underlying business lines, both the increasing B2B and the Gen 10 B2B are both growing. What we like about our transaction of B2B, though the revenues are not based on subscriptions, those are transaction revenues to the nature. The behavior of those revenues is exactly as a subscription SaaS type.
Actually, the numbers I shared with you are coming from our existing business, and 130% net dollar retention across several years shows you that the predictability and stability which we so like in subscription is well maintained already in our existing platforms. I brought a reference of 126% average being a good metric for the best SaaS company. As of now, we're doing 130, so at path, at the level of the best SaaS companies. The performance and behavior of transaction revenue is very similar. The only difference is in the billions. The belief is that the new services that we add to the non-native will have even higher retention since the value we generate for the client, for our corporates, is much stronger and much deeper. We also cut the cost they have in the back office that they spend today to connecting to services.
once they join on Gett, it replaces this back office, and it's very unique and become a very valuable piece for the corporate. we expect to have an even stronger benchmark for our revenues. I hope I answered your question. If not, please say.
No, great. Thanks. Another question got in several times is if you could elaborate a bit where you are today in terms of geographic mix between your, I guess, four markets, Israel, Russia, U.K., and the U.S.
Fantastic question. To bring clarity. We have our own marketplace historically. Have a national operation in U.K., national operation in Russia, and national in Israel, and we still have that marketplace, again, being profitable and growing. With Gen 10, the answer for that question become really global. As of now, we rolling out coverage in the U.K. and U.S. and global airports. As I showed you on this slide, we expect to have 55% coverage in next year and 50% coverage in technical supply integration. Let me show you here. I think that's the best answer for that question.
Thanks. We have a question, Dave, from the audience here, which is on customer churn.
Yes.
The question is why it drops from 2% to 10% from year two to three. Is that because you have mainly two-year contracts?
Mm-hmm. Fantastic. Let me touch that. I guess that was related to this slide, correct?
I guess so.
Yes. First of all, those are factual results, okay? You can see that the churn is 20%, actually it's less than 20%, about 17% something after three years. To give you perspective if it's bad or good, the golden standard for B2B companies, the public ones that you can find on the internet, stands for churn being 20% in the first year. Public companies that demonstrate churn of being less than 20% in the first year are considered to be golden. We are happy to report that the corporate churn is 20% in three years. In the first year, we lose much less. It's actually very good dynamics. Interestingly, these dynamics achieve not by having a long-term contract. If anything, the contract can be terminated at any time.
It actually shows that the reason why we have such a good retention is that probably the value we generate delights the customers, and they keep working with us, not that they're obligated. It's not exclusive. They can stop at any time. The factual results demonstrate that actually it's not a legal contract or some kind of commercial tricks that hold the customer engaged, but rather the value we generate. I like that result even better because that's actually driven by the service and product.
Another question we have is around COVID, and if you can elaborate a bit how you navigated through the very volatile time in the order of spring, and how the recovery has been from the system in terms of rides and overall operations?
Yes. As everyone, it was devastating. When the COVID started, we've been all very concerned how we'll pass that period. Gladly and factually, you can see that our results have been actually better than before the COVID and better than the budget. Reasons for that is, again, Gett is entirely focused on B2B. Most of our revenue is coming from corporate. During the COVID, what happened is, we saw them also reducing the traffic. There were less people using corporate solutions as well. What was different is, and it's interesting, is that companies, because they have a duty of care, but they also care really about their employees and their health. They started to spend more money in budget on people who actually come to the office. They would rather use safer options such as personal ground transportation rather than public.
they compensated by this to the reduction in volume that we saw across the boards. In consumers, there is no money back to compensate that. In the corporate, the dynamics is different. Less people coming to the office, but the ones who come to the office, the company is actually willing to pay and motivate those users to use the corporate solution, individual corporate solution, so they will come to office safe rather than risking others. beyond just human care and duty of care, it's also financially it's a smart decision since unlimited potential damages for the company should they have the COVID situation in the office and paralyzing everyone. that compensated, and as I said, we started, we've been very worried, but eventually we saw that we are performing according to the budget.
We also used other opportunities when we've been acted promptly and bold across all verticals and all levers. as you can see factually again, we actually delivered our very best performance in the month financially on the both operational profit and company EBITDA. we feel comfortable with the outlook that we had before and keep having the same outlook for now. We didn't update our budget, and the board is aware that we reported according to original budget. We keep reporting according to original budget. if all goes right, we expect actually to slightly over-perform the original budget by the end of the year for the annual results.
Thanks. I have another question going back to the product and again, the TEM platform. Of all those corporates, do you target specific segments of corporates in terms of size, or is this a platform small and medium-term size businesses as well, or is it more you have a minimum number of employees for it to be relevant?
The most value, it's interesting. The product we have is a true enterprise product. When people talk business, your question is very important because we need to make sure that we speak about the true enterprise. Our classical and the best customer is the Fortune 500 type of client, because those customers experience the pain the most. They are the ones who have tens of thousands, hundreds of thousands employees across the world, different locations, and they have different vendors. There is no system in the world, there is no Amadeus of ground transportation. Gett. Amadeus of ground transportation today is that you only can manage that. The bigger the client, the bigger the pain, the more value we can contribute.
The value, as I mentioned, is both in savings, which is very direct, and I think the COVID times, if anything, motivated customers to upgrade infrastructure. A, to achieve better savings and cost. B, to manage the remote workforce. The IT infrastructure and transportation infrastructure already was for disruption, but with the COVID, this process being expedited. Answering your question, global companies, large companies, the ones that have many vendors, are the classicals. They already reflected in our portfolio. Gladly, as I started the presentation, we are not new into corporate sales. That's what we've been doing for the last 10 years. We're building infrastructure and organization that work like well-oiled machine, as we came up from the very first year, but by now, after 10 years, and we have all support and sales organization that keeps signing about 500 new corporate clients every month.
I think as a follow-up to that, there's a question from the audience on the TAM. You talked about the addressable market and how you see that sort of changing, if at all, on the back of COVID.
Work from home and less business travel, et cetera.
Yes. Clearly, no one knows if it's by now how much it will be affected long term. I believe the common knowledge is that in the horizon of one or two years, there should be full rebound to the full traffic. We need also to remember that out of SEK 1.4 trillion, the traffic that is local, not international, is more than 95%. It's a very good question. When I say addressable market SEK 1.4, this is how much companies spend on ground transportation. Most of that spend is local. Only 5% of the ground transportation spend goes for moving from one location to another. The problem I mentioned before, the pain the customers are facing, is not about maintaining international travel.
This is they have a pain around the local national solution, and from the level of the company headquarters to aggregate all of those invoices and maintenance. That's where the problem is. The biggest problem is within international, but it's just 5%. Internationals might take a long time until rebound, something like two years. The local spend, as we see from our existing budget performance, is actually back to where it's been. Again, please understand me right, there are less people coming to the offices, but the money spent per person almost compensated the decline. I guess from what we see from the actual budget performance as of now, they're probably spending locally the same amount of money they've been spending before. Clearly, they spend almost zero on international, which is 5% of this SEK 1.4 trillion. That's as precise as I can answer that particular question.
Good. Looking out, Dave, if you allow yourself five years from now, what are your ambitions for Gett in terms of financial, size, markets?
Yes. that's really fascinating because by now we have an ability to expand our footprint in a very short time without having any operation. it's the first time then there is a solution in the ground transportation space that is not limited by financial cost, operational hassle to expand. you asked about five years. It's probably complex in our terms, but in a few years, maximum three years, we expect to have a full global coverage means we can cover and serve any global company in full, 100% spend can go through us. we might help big business to thrive by actually focusing on what they do the best and delegate all the ground transportation management to us, the same way Amazon did or any other services, or AWS, right? You don't hold an own service anymore.
why should those companies keep holding hundreds of people in a team finance just to do reimbursement? by integrating or using our solution with Gett, they both save cost, about 25%, some cases more, and they also use the infrastructure and to the section of the employees in a much better way. yes, the vision is to help businesses globally to thrive. by this, we have an opportunity to touch each and every business on the planet. by this, we have an opportunity to touch the employees with the mobile solution we provide. this is really fascinating and promising to us.
two years to cover the entire world with the non-native supply, et cetera. We stretch it out a couple of more years, what can that mean in terms of P&D that you take to your system and revenues to you? Where will you be happy?
We focus on actually making our product available globally as I described, because once that's achieved, the financials will be really favorable. Imagine managing 1.4 trillion in ground transportation spend goes through the system. It might be very significant profits. On average, we generate 10%, 15% of margin for the services we provide. This is after we save 25% for companies. It might be very significant for our future prospects. That's the market opportunity. First and foremost, we need to keep rolling out the service that we already created live in U.K. and keep signing customers and winning customers using that product. Once that happens, there is no other way for the companies really to run the infrastructure efficiently, and that's about the time for them to upgrade the infrastructure to become modern.
To your question in the five years timeframe, we hope to help companies to upgrade the infrastructure to modern and digital and mobile infrastructure to move the remote workforce, which I believe will become now permanent. By bringing the value, we believe to make significant profits for our shareholders as well.
Okay. yesterday we had Voi here, and then I was wearing this cap because it said I got this cap when they reached a million rides, but now there are 30 million rides, so they're giving me a new cap. I'm looking for some Gett-
I like this challenge. Accepted.
Gett, what do you call it?
Merchandise.
Merchandise. We have a guest here on the panel or on the speaker who thinks that you have one-third of the Forbes companies now, and you should send us a cap saying 200.
I will be happy to do so.
When you go to half.
I will do it.
Thank you very much for being generous with your time.
Yeah.
Good luck. We're very happy to be shareholders, and it's a very exciting sort of project that you are the product you are very advanced into launching. It's super exciting to follow. We'll do this in a year's time, and then high expectations.
Thank you very much. Expectations should be high. I want to use the opportunity to thank you for continued support. It's been really instrumental to us, and now it's up to us to deliver on results, and we'll keep doing and hopefully towards the progress that we've been outlining right now. Thank you again, and good luck.
Thank you everyone.
Thank you.
Bye-bye.