Thank you, everybody, for joining us for our Q3 results session. We will be breaking the session up into two. We will start with a bit of a presentation from my side. We will then basically hand over to Mattias, the Deputy Group CEO, to give us some additional views, and then Vikas Gupta, our CFO, will talk us through some of the results. We will then open it up for questions, and then, please feel free to add your questions on the chat, or you can also put up a hand, and we can then take the questions in turn. If that is good for everybody, we will start the presentation. Thanks, everybody. My name is Ebrahim Laher. I am the Group CEO of White Pearl Technology Group, and it gives me great pleasure today to present our Q3 nine months results up until the end of September 2026.
In terms of a summary of the results, as we have seen today through the reports, record revenue across the group, and I think also very strong Q3 cash recovery. What we are doing is we are seeing significant AI traction in the group, not just in Aixia, but I think in the rest of the group as well. I think we certainly focused tremendously on our margin as well as our sustained free cash flow, and I am going to be very proud of the improvements in the cash flow in Q3. In terms of summary on the numbers, revenues up year-on-year 32.7%, up to SEK 482.9 million. Our guidance on this is that we expect during 2027 for the group to get very close to SEK 1 billion in revenue. EBITDA for nine months was up 29.1% year-on-year to SEK 84.8 million.
EBITDA margin for the nine months came in at 17.6%. Because we have been bringing in so many Nordic acquisitions, we expected the EBITDA margin to come down, but obviously the quality of earnings is significantly stronger. Q3, the revenue, like I said, was a record quarter. We did SEK 179.1 million. We expect that number to be beaten in Q4. EBITDA for Q3 was SEK 31.3 million. Operating cash flow for Q3 came in at SEK 38.6 million. In terms of some strategic comments from my side, what we really see is that AI and our platforms are accelerating. It was 27% of our revenue in Q3, up from 20% in the first quarter of the year. I think certainly we can see some great momentum there.
I think you have been seeing some of our press releases as well, and I mean, we are seeing it across the group, not just in the Aixia business. We said about 18 months ago that we were going to go down a significant Nordic expansion, European expansion, which we have done now in the last 18 months. We are proud to say that Europe, specifically the Nordics, mainly made up 37.4% of our Q3 sales number. We see that trend continuing, and in 2027, our forecast models shows Europe moving over 50% of the group's revenue. Recurring business, we believe, adds resilience to our group, and we are very happy to see that our recurring services are now making up 38% of our total revenue, as well as the very healthy gross margin of 41%. What are the three execution priorities on our side?
I think, number one, it's really the Nordic acquisitions that we've brought into the group. Yes, the EBITDA margins have dropped, primarily because of that. We are working in terms of integrating, and on the next slide, I'll talk to you about some of the things, and so will my colleagues. We certainly want to sustain the stronger cash conversion that we've seen during Q3. I think for nine months now, the cash conversion is at 50.6%, and we were over 100% for Q3, which is traditionally quite a slower quarter, especially for the Swedish businesses and the Nordic businesses because of the holiday season. I think integration and capital structure are our priorities in the group. I mean, we need to have that in place for the next phase of our inorganic activity.
In terms of the early evidence with regards to the platform, I mean, I get questions all the time in terms of, how does this platform work? Is White Pearl not a roll-up? No, we're not a roll-up. We're a platform company integrating businesses. I'm just giving you a view in terms of some of our large enterprise customers. We have our own AI system that we've developed within the group called NEXUS, which basically allows us to do cross-selling and upselling across our businesses. At the moment, 26 of our group businesses are fully utilizing our CRM system. We then share customers across this. So, at the moment, we've got 24 customers across the group, across geography, that are now served by two or more group companies. Lastly, I took the snapshot at month end.
There's now 64 cross-selling opportunities where we've got either one or two of our businesses selling into another of our businesses' customers. Okay? So it's not yet booked revenue. But what I'm trying to say is that this is how, I'm giving you a quick snapshot in terms of how cross-selling and upselling works within the group and how we integrate businesses from a selling perspective. A lot more goes on around operations, et cetera, and we're happy to take these questions. Our Group COO is on the call. I think AI and platforms now making up a large part of our revenue, and I think certainly we see that increasing. In terms of how the platform for us works, ultimately, it's about one customer and it's about selling more solutions.
Now, this has been guiding our acquisition strategy, our inorganic strategy over many, many years, and I think it's really about building deep relationships with our customers. We have shared operating services from finance, HR systems, et cetera. I showed you a bit of a snapshot now. I explained the snapshot around NEXUS, our CRM system, as well as then basically using AI infrastructure to also drive some of the services internally. What should you be tracking, I think, from the group as our AI-first platform starts taking greater foot and starts generating value for you, our shareholders? I think the cross-sell realization that I've introduced today, I think is very, very important. The recurring revenue mix in terms of recurring services, as you see today, it's up at 38%, which almost gives us a good position to be in, but I think we need to do more.
We need to continue doing more. I think lastly, cash-backed earnings. I think the Q3 conversion was 123%, so there was a big catch-up on what happened in Q2, which is notoriously a slow quarter, and I think that's certainly where a lot of our focus is. Last slide, in terms of our next phase, we want to integrate, we want to commercialize, and we want to grow selectively. Ultimately, we're building one group. This is not a roll-up. This is an end-to-end platform which provides high-level and significant IT services, solutions, and hardware to customers on their journey of growing as businesses. Our execution priority remains disciplined reporting as well as then shared delivery across our group companies, as well as then value creation by cross-selling, upselling, developing joint proposals, and selling more into the large amount of customers that we already service across the group.
The AI Factory, Mattias will talk a little bit about it in his presentation, but I think that's certainly driving our future vision of where we're going. I guess our vision as a group is slightly different in terms of us helping customers along their AI journey with regards to agentic AI in terms of governance, compliance, and trying to get your businesses in place for the new world which beckons in the future. I think ultimately for us, it's now about discipline scale. I think the business keeps growing. We will target high-margin, growing cash-generative businesses that will add to our capabilities. I think we've put it out there to say we want to pay more with cash as opposed to shares because we want to create and grow shareholder value, and I think that's ultimately resulting in what we're doing with regards to the capital structure.
In terms of how we measure execution for ourselves, organic growth, and you can see around cross-sell, upsell, we think that we're definitely in strong two-digit territory in terms of organic growth. The quality of our earnings are absolutely improving in terms of the mix we have, in terms of the customers, in terms of the geographies, in terms of how we're engaging and collecting money now from our customers. Cash generation is absolutely essential, as you've seen from our set of results, and I think ultimately it's about increasing our earnings per share. I think that's it from my side.
Fantastic. Thanks, Ebrahim. Firstly, apologies. It would appear as if nobody heard my introduction, so I do apologize for that. Yes, I think now if we could perhaps hand over to Mattias, he's going to give us a view on the European expansion, and as Ebrahim said, a little bit more on some of the AI initiatives, et cetera. Mattias, over to yourself.
Yeah. Can you put up the slide from So can I start? Hi, everyone. My name is Mattias Bergkvist. I am Deputy Group CEO. Nice to see so many who are showing interest in our latest report here. We can see that we have a slight change in our mix, and in this quarter report, Aixia is a part of it. It is not the whole report for the whole period, but we can see that AI is now 27% of the revenue in the organization. Of course, all the revenue around AI is not from Aixia, it is just a part of it, but we are doing a lot of the whole ecosystem in AI, from AI Factory up in the stack to generative AI, agentic AI, and bespoke and applied AI.
The higher up we come, the more we can see that the recurring revenue coming as well, when it goes from experimental solutions to directly into operation or the production in our customer's business, so to speak. That is why I see that we can see even higher revenue in the future around recurring revenue. We also can see that we have, as Ebrahim mentioned, more than 37% is coming now from Europe. When we are looking ahead, we can see that Europe going to be more than 50% in next year. That is great to see that development.
If you look at the margin in the different part of the revenues, we can see that if we look at the AI Factory solutions that you have all seen a lot of press releases the latest time, we can see that it drives revenue, but the margin is a little bit lower in that perspective. As I said, the higher up in the stack we come, the more margin we have in the solution, and we can see that development. What is driving the AI Factory business right now, and we can see that the sovereign AI is in the agenda in almost every company and organization today. It is not about isolate the AI-driven business. It is ability to choose, I would say, to choose where I want to have the critical information, the critical data for my organization, and ability to change that over time.
That is who drive the business right now. When we are looking at Aixia, for example, we are now integrated and a part of White Pearl organization, and we are operating fully in the group. We can see that we are working together with all the companies in Europe, but also in the global perspective. We are looking at new entities in both Africa and Middle East and other part of the world. I think we have a great start in the new group, I would say. I also want to highlight the whole Europe organization. For instance, we have a weekly business collaboration meeting with every entities in Sweden that we can share and learn around what we can do and support each other in the group. As Ebrahim says, we are not a roll-up company.
We're one company who is building this organization together, and we take new steps every day, I would say. To take a couple of concrete examples, what we are doing when we organically grow the type of Aixia business that we have. We started to form a playbook to roll out the business model in different entities in the group. We also have started a talent program we call Greenhouse to organically grow new talent in our organization. I'm looking forward to continue this part of the organization, and I'm looking forward for it, actually. With that said, I think I hand over to you, Vikas.
Thanks, Mattias. Vikas will now take us through the numbers. Vikas, we are all excited to see what you've got to tell us. Thank you.
I think you're on mute, Vikas.
Apologies. Thank you, everyone. Sorry. I won't talk about revenues and margins because it's all been spoken. I'm focused largely on the financial aspects of the business. If you look at the trajectory, our balance sheet has grown significantly, and our equity today sits at around SEK 500 million. If I look at our equity per share, it's around 12.5. That means our market cap is equal to book value of the business. The business is highly capable of taking more debt because our debt-to-equity ratio is only 19%. It improved from 29% in December last year. Our net debt to EBITDA is 0.5. That means our borrowing capacity is quite high. That debt is only sitting at SEK 52 million. The key priorities for the next three to four quarters is going to be enhancing and optimizing on capital structure.
Like Ebrahim has mentioned, our profit profile and our debt profile is very attractive. We would like to, and we aim to take more attractive debt on more attractive terms, and that leverage will be used to fuel the growth. We are also working a lot on the integration and resource optimization, because through the lot of acquisitions we have done in the last quarter and throughout the year as well, there is a lot of talent pool that is now available at our disposal. We are now in the process of repurposing some of the resources, and expanding shared services to enhance the value per business. As Ebrahim mentioned, one of the other ways of increasing the shareholder value is to pay through cash, through operating cash for the new companies that we acquire in the future.
If you look at the cash conversion, I think this is the key point, and I think a lot of people who are privy to the report internally have spoken about it. If you look at the chart, our EBITDA has grown from 23.4 in Q1 to 38.6 in Q3, but our cash conversion has grown from -47% to 124%. I remember in the beginning of the third quarter, there was a mandate from the group that we need to focus on cash conversion. We need to focus on retaining operating cash as high as possible, and that is what is visible from the numbers. One of the other reasons why this cash is up is also because the previous companies that we acquired, now they are well-integrated into the business, and that shows that how this integrated and well-oiled platform is working.
There is a cash conversion through the higher cash conversion, higher optimization from the acquisition integrations that has taken place. DSO remains at 72, in line with group's overall long-term average. Third quarter is relatively slow from a DSO perspective, because slow second quarter, now we are transitioning into higher order, new orders, new sales, so that cycle will basically generate higher results into December, where the DSO goes down historically. If you look at the operating cash flow, free operating cash flow is SEK 38.6 million. Another lever for us to prove that the platform is working, there is a lot of value in the platform, is through cross-sell. Ebrahim has spoken about it, Mattias has spoken about it.
There are live examples in the business that we acquire a business and we take the business into different markets, into different geographies, and the same is happening for new acquisitions also. Obviously, we are going to carry this discipline of collections from the customers, payment terms, into the Q4, and that will result into better cash conversion in the future. Cross-sell is also working fine. We are a well-integrated business now, and there is a lot more to come. Obviously, cash conversion discipline results into improved working capital measures, where the new companies that we are acquiring, we are also integrating them through a platform. Also, there is a tighter control on payments. The group's discipline is now percolated to those newly acquisitions also. The payments, the new contracts, there is a process-oriented approach to that.
I think all of this, there is a lot of hard work that goes into this, but the results are very, very clear. It is in front of all of us. With that, my presentation ends. Any questions? Any comments? We are happy to address. Thank you very much.
Thank you, Vikas. Okay, so thank you for that. That is the three presentations. We are now going to move on to questions. I have received one question in advance. It is from an Igor. I apologize, I am going to butcher your surname. It is from Igor Todorovic. And Igor's question was in multiple parts. Igor, I have summarized it and simplified it a little bit, just in terms of asking it. If I do not nail it, please just correct me. Essentially, Igor's question is that currently the practice of paying for acquisitions using new shares, why does it work for existing shareholders, is essentially the question, and will we keep doing it? He makes some examples. Obviously, the first one is cheap shares. So, new shares go out at a low price against White Pearl's earnings and growth.
Thin trading, low volumes would suggest that institutional investors still have to come in, and his view is that it is a vicious cycle. Sellers of small businesses sell their shares, the price stays low, and the next deal dilutes further. Essentially, Ebrahim, I am going to ask you if you could answer this question. Paying for new acquisitions in new shares, why does it work for existing shareholders, and is this a practice we are going to keep doing? I will hand over to yourself, Ebrahim. Thank you.
Yeah, thanks. Okay, I think, Igor, that is a very good question, and I think that is one that we spend a lot of time discussing and, I think, working. I think, let me put forward an answer to the question as well as our stated principles going forward. You are absolutely right. Issuing the shares at lower prices does, over time, become a cycle, and I think this is why we have been very clear to tell the market that we have done this up until now for the Nordic stage, which was done specifically to get shareholders on board, okay? So what we are trying to do is to bring entrepreneurs into the business that help grow the business. So it is about Christian from Bravissimo joining us, and I mean, having shares in White Pearl, becoming White Pearl like the rest of us.
White Pearl is his company, as opposed to somebody coming in, selling their shares, and then exiting, like you see now. The Aixia team, Mattias, Christian, et cetera, are large shareholders in White Pearl. I think that was the purpose of that phase of the growth, which was to bring Nordic businesses on board, Nordic entrepreneurs on board, that become White Pearl like the rest of us. I think that's the focus. Clearly, the vicious cycle that you mentioned, absolutely right, absolutely spot on. Why does this work for existing shareholders is that you're bringing high-quality entrepreneurs on board that are still very focused on their own businesses that they're bringing into White Pearl, as well as the rest of White Pearl with regards to cross-sell, upsell.
I mean, you hear how Mattias talks about the cross-sell, upsell, how he talks about we, how he talks about us. So it's very much about getting that activity on board. We've got some really great examples in the group of people that have joined us who are now shareholders in White Pearl, and as committed they were to their original entities, they are now committed to our entities. So that was the stated process and, I guess, principle for this phase of Nordic European growth. Moving forward now, as Vikas was saying, we will be paying more with cash and less with shares because we need to generate shareholder value. We can't have the share prices responding and reacting to every deal we do like it has.
I think it's very important for the investors to understand that when you acquire a business and you pay them cash, the entrepreneurs very quickly leave the business, and then you end up with an asset that doesn't generate value, and in any way, it then destroys value in the group. So I think it's a fine line in terms of getting people vested, invested in the new organization when you do an acquisition, as opposed to people selling us their companies, we pay them in cash, and they leave. I think this is what we're trying to balance. But I think our stated principle is very, very clear where we are in the cycle, and I think what we plan to do in the next phase of getting growth. I hope, Igor, that answers the question, Steve.
Yes. Thanks, Eibs. If there's no comment from Igor, I'll move on. So thank you for that. The next question comes from Sergey. Sergey has said the following. A question on Aixia. Firstly, he just wanted to congratulate the company on a large number of large orders recently, which obviously we've seen. It looks like a testament to high technical capabilities of this company. However, as far as I understood, recent orders came mainly from pre-White Pearl clients. So this is a question for Ashley. So Ash, if you could just get ready, I'd appreciate it. The question is really, when can we realistically expect that cross-selling will begin to contribute meaningfully to, and obviously to Aixia, but I think there's a broader point here, which is, when will we see cross-selling contributing meaningfully to the revenues of not only Aixia, but White Pearl in general?
Ash, if you wouldn't mind, I'll hand over to yourself, and then if Ebrahim or Mattias would like to come in at the end, happy with that. Ash?
Yeah. Thanks, Steve. Let me answer the question in two parts, because I'm looking at the question on the screen here. I think on the one side, Sergey is asking, with Aixia joining the group, when are we going to see the impact of cross-sell as it relates to Aixia? Because right now, the revenue's been pre-White Pearl revenue. The way I can answer that question, Sergey, is Aixia's been in the group for a couple of months now. Already, yesterday, there was a team in South Africa that went to see a manufacturing company, specifically with Aixia Solutions as part of the pitch that they are busy doing in South Africa. We are busy.
There's an opportunity that we're working on in Malaysia, in fact, and Mattias doesn't even know this because I was just updated on it today, but there's an opportunity in Malaysia, and that comes as a result of us, Ebrahim said this in his introduction, that we're busy setting up nodes for Aixia Solutions, or I think Mattias may have said it, in different parts of the world. Southeast Asia being one, in Malaysia. That's been ongoing now for a while, but we're starting to see I think the point is, there are opportunities already in the pipeline that we're working on, and that's in a very, very, very short space of time. That as it relates to Aixia Solutions. We're working on a couple of opportunities here in the Middle East. There's one specifically in Abu Dhabi that I've been working on personally.
Already we're starting to see these things coming to the pipeline, and that's specifically to Aixia. On the rest of the group, there's a case study, in fact, where one of our businesses out of India is busy implementing an ERP solution, which is our own IP, for a customer in South Africa. The customer ownership sits in South Africa. It's a telco customer, but the delivery is coming out of India, and that is as a result of, obviously, the company starting to work together, the cross-pollination, what Mattias was referring to earlier in terms of sharing information about customers. For us, that is the measure of the success starting to already show results. In terms of meaningfully, I think, I guess we are watching this very carefully, and we look at the pipeline.
For us, what constitutes a cross-sell opportunity is where there is more than one group company that is busy pitching solutions to a customer. I will use another one. We have an agricultural customer where there are now six companies involved in putting together a consolidated proposal to the customer. You will see this gaining momentum more and more and more, Sergey.
Fantastic. Thanks, Ash. I do not see any more questions. I will give everyone just a little bit of time if anyone would like to add a question onto the chat.
I think, Steve, there is another follow-up question from Sergey for Mattias.
Oh, okay. Apologies. Yes. Sergey said, "Thanks a lot for the answer. Question to Mattias. As a new member of the White Pearl team, what are your thoughts on the interplay between decentralized, non-bureaucratic, and entrepreneurial culture of the company, and the necessity of larger integrated offers for clients that require cooperation and coordination? It is probably not easy to strike the right balance between the two.
Yeah, thank you for that question, Sergey. I would say that the combination between entrepreneurial culture that I come from by my own, and high knowledge around how we are building a global company, who is actually spread all over the world, I would say it is an honor to be a part of that group. And the management team that I have been a part of now, how we look at how we are going to increase and develop the organization from now and further on, is I am humble on it, and I see it is a huge opportunity for us as an organization to combine this different culture between the geographic experience from small and bigger organization, and the entrepreneurial culture that we have in the organization. I think it is going very well, I would say. Thank you.
Thank you, Mattias. Just checking if there is anything else.
We have something from Jörgen here.
Yep, there we go. Okay.
No, Steve, I think Jörgen has got his hand up, and I think he was
Oh, apologies. Apologies. Yeah, I've got one from Johnny. But yes. Yeah. Jörgen, if you wouldn't mind, go ahead.
Please, Jörgen, if you're here. If you're saying something, you are not. Maybe you're muted or something. No, you are not. If it don't work, Jörgen, maybe you can write in the chat so we
Yeah, post it in the chat. I think that'll be better, if possible, Jörgen. I think maybe while we're waiting for Jörgen, Mattias, there's a question from Johnny with regards to AI and CapEx. AI is much about CapEx. Will White Pearl have some of this? And I presume he's referring to CapEx spend in the support of AI.
Yeah.
Mattias, I think you might be best placed to answer that.
Yeah. What we see in the market right now, it's a huge investing in larger AI Factory solutions, not only in Sweden or Nordic. You see it in the Europe organization and the whole world. I think it's a mature thing. It's a timing question, and we see what's happening in the development in the AI area, so to speak. I think it's most important to know that most of the deals and the business we're doing right now is to many data center company who deploys AI solutions around the world and to other organizations. That's between the layers that we're operating around, I would say. We have the AI Factory perspective, then we have all that bespoke or applied solutions, or agentic AI in that matter. So, it's more of an OPEX point of view. So, yeah.
Perfect. Thanks, Mattias. Much appreciated. So yeah, we've got the question from Jörgen. "Is Aixia consolidated into the accounts, or when will that be?" Vikas Gupta, maybe you can pick this up?
Yeah. Thank you. Aixia is consolidated from the date of acquisition, which is around the mid of August. So, we consolidated Aixia for 45 days approximately. In the next quarter, we'll have full consolidation of Aixia, if that answers the question.
Okay. Thanks, Vikas Bhai. Thanks, Jörgen. And then from Peter. Peter asked a question to the financial policy and priorities. "What about reducing net debt EBITDA versus paying dividends?" I am not sure, Ebrahim or Vikas would like to pick this one up.
Yeah, let me start first, and Vikas can join. Look, yeah, I think our immediate priority is to strengthen the balance sheet and to improve cash generation, as we have said today. Okay? That means maintaining a prudent net debt to EBITDA ratio. We absolutely recognize the importance of shareholder returns, including dividends, right? But at this stage of WPTG's development, I think we believe that retaining the capital to reduce financing costs, strengthening our liquidity, acquiring more of these kind of businesses that we have successfully done in the past, and adding to what we have, we believe will create, at this point, a greater shareholder value. Okay? Obviously, given the market eventualities, and I think the way things are happening, absolutely, we may have to look at paying out dividends if we are unable to improve value to the shareholders.
I think this is absolutely topical, and I think it is something that is really at the forefront of what we discuss, and I think how we basically set the strategy of the group.
Fantastic. Thanks, Ebrahim. Vikas Bhai, do you have anything to add?
No, I mean, I think Ebrahim summarized it pretty well. We are a growing business. I know we have grown a lot, but there is a lot more to come. At this stage, reinvestment into the business, that will generate greater shareholder value. Absolutely, I think this is the view. But obviously, eventually, even depending on this environment, situation, growth opportunities, there will be discussions, there will be considerations, but that's the future. At the moment, the focus is on growing cash, developing, integrating, reinvesting back into the business are the priorities at the moment.
Okay. Thank you, Vikas.
Thank you.
Much appreciated. Okay. Any other questions? I think we've done Peter's, we've done Jörgen. Okay. Cool. With that all being said, Morgan, Jörgen, apologies. You've still got your hand up. I'm not sure if it's accidental or if it's something else. It might be a legacy hand, as they say in the movies. It's down. Thanks, Jörgen. Okay. Thank you very much. Okay. Fantastic. Perfect. With that all being said, I would just like to firstly thank our presenters and speakers, to our CEO, Ebrahim Laher, our Deputy CEO, Mattias Bergkvist, and our CFO, Vikas Gupta, as well as then our COO, Ashley de Klerk, who came in at the end. Thanks, Ash. Then just all to some of our MDs.
You'll see a number of our MDs have joined us for this call, that's much appreciated, as well as then obviously some of our executive and senior management. If we didn't get to anything, if there was a question you wanted to ask and you didn't get a chance, please feel free to email myself. It was on the invitation, so you'll see my email address there, and we'll definitely get back to you. Lastly, just to say that the actual report is on wptg.ai, as well as then a whole lot of very interesting investor information. You can subscribe to our CEO's newsletter there, as well as then updates on shares, on the actual share price, as well as any other meetings like this, for example, strategy sessions and the like.
Please feel free to register there, and we'll make sure you get all of the information in a timely manner. Perfect. With that being said, I would just like to say thank you again. Thank you to those who joined. It's always encouraging for our shareholders to take an interest in the organization, and we thank you for your time and consideration. Lastly, thank you for being shareholders in our organization. We love it, and we are proud of it, and we're also proud of the fact that you've chosen to become shareholders in White Pearl. Thank you to everybody, and we will see you in Q4, which I'm hoping, and I know will be a very exciting presentation. Thank you again to everybody. Have a lovely afternoon, and we'll see you soon. Take care.
Thank you.
Thank you. Thank you, everyone.
Thank you.