Good morning, everyone, and welcome to the Q2 presentation from Net Insight. My name is Andreas Joelsson. I am, as usual, responsible for the Net Insight coverage here at DNB Carnegie. With me today, also as usual, I have the Net Insight CEO, Andreas Eriksson, and CFO, Cecilia Höjgård Höök. We will start with a presentation of the quarter and then open up for a Q&A, you are most welcome to send in questions via the website. I know some of you have already sent in a lot of questions, thank you for that. First, I leave the word to Andreas.
Thank you very much, Andreas. Good morning, everyone. Let's get into the Q2 2026 report. We'll go through an overview. We'll deep dive a bit into a business review, looking at the media as well as the sync side. Cecilia will cover the financials, we'll wrap up in a summary, as Andreas mentioned, open up for Q&A. If we start with the overview. This quarter two, net sales amounted to SEK 91 million for the group compared to SEK 143 million for previous years. The shortfall for the difference between Q2 last year and this year is really driven by the absence of larger media orders in the quarter. We thought we'll unpack this a bit because I think this is a question that many might have. What's driving this difference?
I think if I zoom out a bit looking at the Net Insight business and the revenue and customer base, we have a very large installed base. Many customers around the world, which gives us a really strong foundation. For the most part, these customers have chosen us, the technology from Net Insight, and we continue to support them when they build out the network, extend the network, refresh the network, and so forth. That's the one thing that's important to know, the breadth of the customer base. The other thing to note is that our revenue base is significantly impacted by large projects. This is driven by predominantly a few of our largest customers, which they're large, also they come in with large media orders to us at the back of large projects. These projects will be driven by different things.
There could be some major uplifts in their infrastructure, that could be related to capacity uplift and so forth, major refresh. Could be driven by if they win a large deal. Could be at the back of a media right that they need to do some major uplifts of their infrastructure. Could also be driven by new services that they launched. The different drivers that drive large significant media orders. The situation is that these large media orders, because of the sort of swing effect they have, depending when they occur, that means that there could be significant difference between quarter- to- quarter when you do the comparison. If you look at Q2 this year compared to Q2 last year, Q2 this year, as we stated here, we didn't have any of these large media orders in the quarter, whereas in last year we did.
That sort of explains the majority of the difference here when you compare quarter-over-quarter. I think what's important to state, though, when you think about these large media orders is that they haven't disappeared in a way. We still expect large media orders part of our business. That's been part of the business for the last few years. Again, the timing of them and so forth is the challenge in a way when you look at a quarter-over-quarter comparison. If I move on to the EBIT side, again, amounted to SEK -26 million. As many of you know, there's a lot of leverage in the business, so that means obviously a very high gross margin, which means if we have a lower revenue base, that flows down very much in a very big impact on the bottom line.
Obviously works the other way around as revenue growth. If you look at the quarter, we really feel that we have some really good progress in terms of strategic priorities we have set both for the media side as well as for the sync side. On the media side, we have launched the Nimbra 520, and I'll talk a bit more about where that fits in. That's been progressing well. We got the first customer orders for that during the quarter, and we continue to have some good progress on the time synchronization sales funnel, as I'll explain more in detail. The available liquidity amounted to SEK 165 million at the end of the period.
Again, as I mentioned, the focus action we've taken to strengthen commercial execution, drive a broadening of a customer base, and then improve this conversion, in particular on the sync side, is what we are focused on at the moment and will continue to do so. If I summarize what we talked about before, again, the focus actions that we're taking is driven around three areas. The one is to enhance the media portfolio. As I mentioned here, we have launched the 520, where we're starting to get the first customer orders. We've also brought on a new version of the JPEG XS. JPEG XS is one of these major compression technologies that we have in our product. We now have made a major uplift of that, which just means now we're now the market leader in that specific area.
We've already, also there, seen some first customers coming on board on that technology. If you look at the middle one, increased sales efficiency. Here, the focus is very much on the North American market, where we think we have a really good opportunity. We think it's underserved for us. We think we have underlying potential there. We want to get into new customer segments outside our traditional customer segments. Then, of course, as we now build the good market interest for our products at the back of launches and then at back of future launches, we want to make sure that we get customers on those over time. As we stated here, second customer for 400G solution. As 400G at this moment, it's relatively niche. It's for really our largest customers.
That'll change over time because the capacity requirement will be increasing throughout our entire customer base. At the moment, it's relatively few that see the big demand for the 400G. Getting a second customer is very positive for us. The second thing is to, again, growing into new customer segments. As we said, we now have two of the global media and tech segment as our customers, which is really pleasing to see how we can continue to grow with them. If you look at the last part, on the time synchronization side, again, as we said before, really this year is about driving conversion. All of the opportunities we have in the pipeline, make sure they progress, trials, pilot, and then moving on to customer roll-out. That's really the core there, what we see.
As I'll deep dive a bit later, we see good progress. That just gives you a snapshot of the improvement areas that we are driving and the progress we're making in each of them. If I go in a bit more detail, we'll start with the media side. As I mentioned, the media revenue was low this quarter, as I explained, in the absence of large orders through the quarter. However, the work we're doing in expanding the portfolio is really working. We've launched the 400G. We have launched the 520. We're getting customers on those, which is really pleasing. We also, for the 520, have a number of customers that at the moment are testing the technology and the product. We have gotten a very positive response from that product from the market. That's positive for us.
As I mentioned, the JPEG XS is the other compression technology we've made the major uplift this year. It's been used now for a major international sporting event throughout this summer. That's really exciting for us that the latest tech is being used already now into some of these very high-end sporting events around the world. To summarize, I guess, the expanded portfolio, it's really three areas. The high capacity, obviously one area. The internet and cloud connected area. This is again where the 520 fits in. The distributed production environment, again, remote production and when you don't do production at the venue, but actually from home base or from a central place. The solutions that we are developing continue to support those core trends in the market.
We feel that the product launches, the focus is to convert them now into more and more customers and repeatable revenue, also, of course, to make sure that we are expanding our customer base. If I just zoom out a bit and if we think about our growth strategy, as we talked about before, the portfolio plan is really around, of course, strengthening where we are, going deeper into the areas where we are already present, plus grow outside into new markets. If you look at the lower left, what we call managed fiber, that's the current core market. What we're doing there is to make sure, of course, we want to grow the installed base. The customers we have, want to sell more to them. That's, I guess, obvious. Also we want to work with them to be able to serve use cases that we do not cover today.
There are certain situations where we might not be able to be present in a strong way or not be competitive for certain use cases. That's part of the portfolio expansion. For example, towards the end of the year, we'll be launching a smaller version of the 1000 Series, which will fit into certain use case, again, where we are not so competitive today. Again, going deeper and increasing our market share in that area. Same there. We want to grow into the new customers within the segments we already serve, one. We want to go outside the current customer segments that we serve today. As I mentioned, one being this global media and tech customer segment. That's sort of the strategy there. If you go right, internet and cloud.
This is, again, when you use internet or cloud as the underlying carrier, and on top of that, you build live media services for transporting live sports. That's really a fast-growing segment. We've been active there, but we haven't been so competitive. What we see now with the 520 launch and the traction we're getting is actually now we can, in a much more meaningful and powerful way, be active and win business into that fast-growing area. That's really exciting for us. We want to then make sure we continue to do that so we can scale that business up in addition to the managed fiber area we have. That just gives you a bit of a snapshot on how the strategy, what we're doing fits into the TAM growth and also the traction we are having in the market and what we're trying to achieve as a business.
If I jump onto time synchronization. Time synchronization revenue increased to SEK 12 million compared to SEK 4 million in the previous quarter last year, Q2 2025, SEK 4 million. Türk Telekom rollout, that continued well. We now have over 1,000 nodes installed. This is really exciting because obviously that gives us a really strength and reference value in the solutions other operator look to our technology. It's important to have a really strong reference case, not just that a certain customer are using it, but are using it at scale which is quite a different thing, which is really where we are strong. The third point here, partner ecosystem. We now have 23 sync partners, which are really partners for channel resell partners. They also will help us with integration and rollouts as a customer want to do that.
We get the muscles to be able to deliver at scale as well over time. One of them is the WWT partnerships, which we have, and that's quite an exciting one. Predominantly, WWT is really about accessing customers in the U.S. market but also elsewhere. In the U.S. and Americas is where they are particularly strong. As some of you might know, they also brought some of our technology into the future labs where they test and trial new technology solutions for the future, which is also sort of a part of that. Predominantly WWT is really about the resell and the channel to market for us. On the commercial trials, we've been doing outside the 5G market, it's been exciting to see that we have had some commercial trials also on the media side, then we're getting some on the defense through partners.
That's a bit sort of, I guess, we want some media customers, as we highlighted last year or last quarter, sorry. Also getting into defense is another area which we see a bit more interest. On the standardization side, there's been some good progress there with the technical work in the ITU standardization body for the ePTS standard supplement technical work has been completed and agreed in that forum, which is a good step. Now what will happen is that you now need to sort of document this technical work and document down what has been agreed, and then you approve formally the documented endorsement. That's sort of the next step. We expect that the ITU approval will be at the next plenary meeting in February. There'll be work then to do these final editorial updates and document the agreement, and then that will be formally endorsed then.
Again, just to summarize, I think on the time synchronization side, a positive long-term outlook remains. Again, as we said, short-term revenue contribution is expected to build gradually as we progress more customers throughout the sales funnel. Doubling down a bit on the sales funnel. Here you can see the movement since we reported last time. Another two proof of concepts, another two customers in field trial phase, and another two in the pilot installation phase. The one sitting in rollout is the media customer that we talked about in last quarterly report that is currently being rolled out. With that, I'll hand over to Cecilia to take us through the financials.
Yes. Okay, thank you. Starting with net sales. Net sales for the second quarter was weak, as Andreas said, and amounted to SEK 91 million compared to the SEK 143 million in the second quarter last year. Decline was driven by media, and media revenue amounted to SEK 79 million, and it did not include any larger order, whilst the comparison period included one of Net Insight's largest orders in history. Revenue from time synchronization increased to SEK 12 million compared to the SEK 4 million in the same quarter last year. Now to profitability, and starting with gross margin. Our gross margin for the second quarter remained high at 68.6%, and this reflecting our scalability in our business model.
Our operating expenses declined with 4% year-on-year. Our high gross margin and our relatively fixed cost base with the shortfall with revenue, this has a significant impact on our earnings. The earnings for this quarter, we had an EBITDA of SEK -3.8 million. Now to operating earnings. Operating earnings for the second quarter was - 26% compared to break even if we exclude the one-offs last year. The low result is driven by the low revenue in the media. It's important for us to have these activities that we are now doing so that we can turn this revenue and increase it in the future. Cash flow. Our operating cash flow for the quarter was SEK 3 million compared to SEK -35 million last year, and the difference is mainly movements in working capital.
If we deduct the investment activities of SEK 22 million, our total cash flow for the quarter amounted to SEK -19 million. At the end of the quarter, we have a cash of SEK 80 million and an available liquidity of SEK 165 million if we include our unutilized credit facility. After the year period, we have in July signed a SEK 130 million revolving credit facility, and we have incorporated the previous credit facility in that one. We have done this to strengthen our financial flexibility and to support our ability to continue executing on our growth initiatives. Andreas?
Thank you, Cecilia. Just to wrap it up then. As I talked about before, when you look at the strategic roadmap where we address the current challenges we have, but set us up well for seizing the medium and long-term opportunities, they really come in in three areas. Again, on the sync side, it's all about driving conversion of the opportunities we have in the pipeline. On the media side, it's a two-pronged approach, as I've highlighted before. On one hand, enhancing the media portfolio, strengthening it as I explained on the previous slides. On the sales side, it's really about driving sales efficiency, and it's to a large extent focused really on getting into new customers and new customer segments. That's really the output we want. Of course, we want to upsell as well to our existing customers.
We really have quite a special focus on this new customer and new customer segments. I think it's also important to obviously media, the portfolio, and how you bring things to market. That's a very tight collaboration between the product side, the marketing side, and the sales side. We're doing a lot of work to make sure that that sort of revenue machine that we have within the business is working really well in harmony together, so that when we develop new solutions, that they're well tested and so forth. We bring them out in an efficient way, make sure that our sales partner, our sales force in-house is well equipped to go and win customers on this new technology. Then, of course, that we have a really strong sales team and good ways of working.
A number of components we're working on for them to come together as one. If I just sort of summarize the key points here. Again, Q2 was weak, mainly due to the absence of large media orders. We really feel we're making some good strategic progress in both the area of live media and time synchronization, although I appreciate that we don't see it fully, we don't see it in the numbers. We can see that the progress is happening. As Cecilia said, we are really tight on the cost side, that continues to be in place. Again, on the media side, the positive effects on the portfolio, the work we're doing on commercial execution is really important. Again, will happen and will have significant financial impact over time. On the time synchronization, very similar. There's progress in the pipeline, as you could see.
Again, of course, we want things to move, to roll out where it becomes more meaningful revenue contribution. We expect it to build gradually. In terms of the long-term financial targets remain unchanged, though, as we've said, the timing towards 2027 is challenging. That's the highlights. I think then over to some Q&A, Andreas.
Yes, and we have quite a lot of questions, so thanks for that, and I will take them in order. When we look into the autumn, it feels like time synchronization will compensate a little bit for the weakness that we see in media. With regards to the target that you mentioned, how should we put that target for 2027 in perspective, given what you see in the market right now?
I think as we said, I think we look at the targets, the numbers remain unchanged. Of course, the 2027 is looking very challenging. I think that's fair to say. I think we're now building towards putting things in place to really kind of be able to bring the business back to really some good growth again, as well as some solid, good profitability. That's what we're working on at the moment. The 2027, challenging.
Is there a discussion in the board to update those financial targets and maybe a more long term beyond 2027?
Yeah. Of course, this is something that's being reviewed as part of the board work. I think that's absolutely something that is being discussed. I think that's sort of what we're communicating at the moment.
ITU ended their conference in Montreal a couple of weeks ago or one week ago.
Yep.
How did this important meeting go for Net Insight?
As mentioned, the ITU work that I was referencing was at this Montreal meeting where there was agreement around the technical specification and works. What needs to happen is obviously you need to document that to make sure that you're agreeing on the exact wording, the actual documentation of it. The agreement was done at the Montreal summit, now next step is to document and make sure the editorial aspect, you make all the edits for actually how it's been documented. That's the next step. We expect that to be formally approved and agreed in February.
So it's-
Some good progress there.
That explains the long sale cycles if it takes till February to edit documents, I guess.
It's driven by meetings. Obviously this is governance bodies and standardization bodies where in the industry come together and talk about things that should be standardized. There are some regular meetings happening, like the Montreal meeting, there will be another meeting, so forth. That's basically it's the cycle. Of course, you can also say that it taking some time. That's, I guess, how the standardization body works in the telecom industry. I think it's the way the industry works.
How important is that standardization? What does it mean for you in terms of easiness to execute on orders?
I think it's definitely a plus and a positive if that is in place. We should also remember that we have customers that we have won that are in the telco industry that have gone and chosen our technology without this in place. It's not a blocker, but of course, it might help. It will be different from customer to customer. Some are more particular about this and some are not. I think it also comes back to the driver. All the customers that chosen us already have the very strong financial and business drive to be able to solve the problems they have and where our technology helps. I think that will continue to be there. Again, we look around us now with the geopolitical uncertainty continue to remain. They will need to build resilience in the network, and we can help them.
I wouldn't say it's, again, a blocker. I think the business drive will be there, but it certainly will be a good step forward and a positive, for sure.
Given that you are in the industry of transporting data or video, and also in security, is there a business case for Net Insight in data centers and all the AI rollout that we are currently investing in?
At the moment, we are not sort of active in that area. Of course, they need time synchronization and so forth. They also need a similar thing. When you get down into the details, it's not just obvious that on the highest level it's a need. You go into data center, and then it's different use case if you're in the data center. Where we major is more in the wide area network, when the network is spread out. There you can see use case between data center, for instance. I'm not ruling out that there's a role for us to play there at some point in time, at the moment, we're really quite focused on getting traction into the 5G market at the moment. Of course, we're looking, as I highlighted, on other things, media, the defense area.
We're definitely looking into other areas which could be active, and data center could be one of them. For me, it's been very important to make sure we get some traction, and we get focus in the organization to make sure we break through and dig a bit where we stand to get traction because you get traction in this industry, it's easier to come into another industry if you've got some established presence, and you know that the technology's actually been deployed across the world for multiple 5G customers. You have some strong reference case. It's also not just you run from one thing to the other, but you stay a bit focused. Certainly in the short term, I think that's been our priority.
There has been ongoing discussion of a better communication with shareholders. Given the profit warning, you might want to know more about how does the visibility look like in a business like this. For instance, how large part of the quarterly sales is generated in the very last few weeks of a quarter and so on. Is there any better way to communicate that kind of visibility? Because it feels like the downturn in Q2 took us all by some surprise.
Yeah. No, I understand that. I think when you think about, obviously, we have the quarterly reports, where we report and try to bring out some detail and be transparent around, first of all, how the business works. The revenue buildup and so forth, the dynamics around it to make sure it's well understood and people can ask questions around it. We have established the same view on the world. I think that's sort of step one. Then in between, of course, we have press releases on major updates and then other updates that we want to do. I think that's sort of the baseline for it. Of course, we continue to see could there be a bit more that we could do on top of it. That's sort of, I guess, the fundamentals of it.
I think we also want to make sure we remain focused on fixing the fundamental problem and doing that work because I think, again, breaking through on sync and really getting media to a strong place, again, is obviously where we really spend the brain time and try to drive that, at the moment. Also that aspect to take into consideration.
On the media side and the downturn that we saw in the quarter, you highlighted that there is a lack of large orders and that existing customers are maybe a little bit more hesitant.
Yeah.
Could you explain a little bit the environment that they operate in and why they are hesitating, and why they are maybe focusing more on cost reductions and maybe not so focused in investing in new technology.
If you look at the traditional players, the large broadcasters around the world, for instance, which buy sporting rights and then try to monetize them. There have been, over quite a few years, a sort of a transformation of that industry. You see the viewing going maybe away a bit from some of the traditional broadcasters to other, and some of these global media tech and global players. That's one, and that's why we, again, moving with that to make sure we also can serve those new customers. I think that's one part of the chain. When you then look at the monetization and how these traditional broadcasters The broadcaster will buy from service providers who will buy from us, or we sell direct to the broadcaster. Two models, depending on what the end customer want to do. We always remain open to that.
Obviously there's some cost pressure into their economical model that puts pressure down the chain. That's the environment. The good news for us is that we've always been very strong in total cost of ownership. When you think about the building of the network, the running of the network, that's been where we have always majored. We know that when you run our technology, in terms of the operational team that you need to have and also the bandwidth consumption, if you use our technology, it'll be reducing the cost. I think for me, it's an opportunity. Of course, you can look at the market being a bit challenged, but then our ability to compete in the market, which is a bit under cost pressure, is actually quite good when you look at our value proposition that we've always been majoring.
I think what we haven't maybe done as good as we could is that we haven't been so specific on how we can actually help. The financial impact we can have on the customer, rather having maybe a bit too technical in the way we sell. Actually, we now go and have more conversation around the cost side and how we can help the customer in the pain points they have. I think that's one part of it. Obviously, when you have a bit of a challenge in an environment like that, the customer will think a bit more, think twice, if you like, before they spend. They might reuse things they have and so forth. Of course, that'll be a natural thing that you would do as a customer. As any company, if you're a bit under cost pressure, you will then be a little bit more cautious.
You might wait a bit and so forth. I think that's what we are seeing in the market. Again, the market moving, we want to move with it. That's why we're talking about getting into some of these new customer segments that we can serve. Actually, it's very interesting because when you think about some of these new customer group, they actually have a bit of a different commercial model. Some of them not making money only by monetizing sports rights, which is the traditional way a broadcaster will monetize, want to sell a subscription or advertisement at back of buying sport right. Actually, some of these other players, lot of these global tech and media companies, they actually make money in a different way. They have another commercial model.
This is more of a maybe marketing tool or a supplement to it, which means that the way they calculate the return on investment on buying things from us is different. Of course, if they're growing, they also have the muscles to invest more. It's quite an interesting shift, where we need to broaden. Having said that, we also want to get in more into the customer segments we are in, more service provider, more broadcasters. I think we're not ruling out that segment. Still important for us to compete, and again, we're going to compete very much at the back of a strong, low total cost of ownership proposition.
The lack of large orders, that means there are opportunities for larger orders in the market.
Yes.
They didn't happen in Q2 and-
Correct.
slide into later quarters. You also say that Q3 will probably also be challenging.
Yes.
What do you see when it comes to these orders? Is it later this year, or could it also be postponed into next year?
I think as you said, Andreas, I think for our guidance for, and normally we don't provide guidance, but the guidance now for the coming quarter is, as you say, when you compare to the same quarter three last year, we're saying this will be comparable terms, significantly weaker than that. That's, I guess, the guidance. That's really the only guidance we give at this point. If you then just zoom out and look at sort of the big deals, Absolutely. We're not suggesting that large deals have gone away. I think they will continue to be part of the revenue mix for us, but I think what's harder to say is exactly when they come and so forth. I think that's where the challenge lies. There we'd rather be a little bit cautious in terms of that.
Of course, it become hard to maybe understand, and that's why we want to be very clear on explaining that of course, when you look at quarter two this year compared to last quarter, everyone would want to look at the numbers and try to understand what's actually happened. That's why we want to be very specific, that actually when you do this quarter-by-quarter comparison, if you have one quarter containing some large deals, as Cecilia said, then one that doesn't, it becomes a big difference. I think that's what we want to explain to the market. Really our fundamental belief is that, yes, there will be continued to be big projects that they need to continue to do. They need to do uplifts. They need to move to maybe 400G and so forth over time.
We believe there continue to be large orders as part of our revenue mix, again, when they come and so forth, and it's the thing that's harder to predict.
Yep. On the time sync side, you talk about having moved on to two national tenders.
Yep.
When are these in time, and what type of size are we talking about?
I think first of all, to look at these tenders, as a phenomenon, this is very interesting and a bit of a new thing here that we have actually talked about throughout the year. We think that as the market matures, we mature, we can actually be a part of more general tenders around time synchronization and so forth, where we can come in and respond and be compliant against the requirement for that kind of tenders. Then we can come in with our technology at the back of that and have some very interesting differentiating factors that no one else has. Now that's what we're starting to see now with these two tenders that you're referring to. That's a very positive improvement.
We also think that as the market matures and they start to do tenders, it might be a situation where you don't do all the different tests that we have seen so far, as we have highlighted, some customers do two or three different sort of trials and tests along the way to try and prove out the technology, that there might be an opportunity to speed things up. I think that's one thing to state then around the phenomenon of it. We don't guide, I guess, on the size of all the orders and so forth, and either on, I guess, time and the size in the monetary terms of them. Of course, we will communicate that as soon as we know that things have been won and the size of them. That's sort of the guidance we are providing at the moment.
You are six months into your CEO session or tender. What opportunity within Net Insight do you believe the market currently underestimates the most?
I think for me, I think we have on the media side, I think we have a really good opportunity to sort of start with the product plan, all the work we're doing on improving how we work in the sales side, how we bring things to market, doing a refresh on the product side, making sure that how we work between sales, marketing, and product is working really well, really the sort of revenue machine. For me, that's a fantastic kind of improvement area, which will for me, give a lot of uplifts. I think that's that area. I think in terms of the media is for sure one. Also obviously on the sync side, I think everyone been wanting orders to come through to rollout, and I think we see the progress. Things are happening.
I know it's not happening at the time pace that I want, that the shareholders and the market wants, but at least we can see progress. I think as long as we see some good, solid progress, I think we can know that we're doing some of the right things. We got to then figure out how do we accelerate, how do we do more of the right things. I see basically in both areas, I'm optimistic we can turn the media side around and build sort of a quite a robust sort of revenue base there into new customers and more into the existing ones. More product will mean we can do more cross-selling and upselling because when you look at a customer base, no one really kind of leaves us really. It's quite sticky what we have.
We're quite ingrained and central into what they do, which means if you have then more things that you can provide them, more use case, when you go from only doing manage into the internet and cloud delivery area, you can be more relevant across more use case with the same customers. Of course, also an opportunity to break into new customers. I think all that will play over time that will be given impact and effect on the financial results as well. I remain very optimistic. I think we're doing the right things, it just should happen a little bit faster.
Beyond telecom, which sync time market is currently closest to commercial rollout, and become comparable in size as the 5G market?
I think if you just look at what we're doing now, the one area and the question is around how big the market is. I didn't want to comment on that because we haven't sort of done detail work on that level compared to the 5G market. Where we see interest is for instance, and obviously on the media side where we already won some orders. They're a little bit smaller deals, but still interest. We also see interest on the defense side. Those are probably areas where we see currently most interest for us as an adjacent industry in addition to the 5G market.
Also on the sync time side, you seem to hire people for after market within time sync. Is that because some customers are closing in to full rollout?
Yeah. We're doing two things. When you look at sync, as I mentioned, we have sort of 37 now opportunities in the pocket and so forth. A bunch of customers in portfolio. The priority, as I said, has been drive commercial. Obviously drive commercial means, one hand we've got to be able to move the opportunities as fast as possible throughout the funnel. That's really kind of one thing. We've seen that we've been a bit weak because our ability, if we go in and out of a proof of concept or a trial a bit too much, it takes a longer time.
If you can be there and handhold it and have a bit more capacity to work through and finish a whole trial on site over a number of weeks and be on site and help, for instance, that will drive the progress and you keep sort of the progress driven. You drive the customer basically to reach progress. That's one thing we want to do. That's why we selectively just strengthening a bit the front line and in particular the technical sales area to do that. They can also, of course, help with responding to RFPs and so forth that comes. You have a dual use of them.
Same thing with some of the off the market that you mentioned, Andreas, that's similar that they can help on some of the rollout and make sure that, or I'm sorry, on some of the trials and pilots and help with some of that, making sure that we run that tightly. It's a small team, right? You can do a bit, no one does just one thing. You help out and do what's required together with the business, although you might have different focus. Of course, also we want to make sure, I mean, now when you look at the Türk Telekom rollout, it's a massive rollout. We got to make sure that we have built resilience in the organization so we have a few people that can help out when you do these massive rollouts that we have currently.
Of course, for building for the future is part of that as well. Also it's both sort of resilience in the organization to make sure we have some strengths because it's quite specialized what we do. It's something that it takes a bit of time as well to learn. Think again, preparing for the future and shoring up what we have is the drivers for the off the market hires we're doing.
More of a philosophical question from my side on the business model, because you highlight in the report that you have some recurring revenue, and that's the good part of having these larger customers, but it's still fairly small, otherwise you wouldn't have this volatility.
Yes.
Also from a planning perspective with the cost side, even though you have reduced cost, it's still increasing sequentially for a couple of quarters. You have to have some marketing, I guess, for both the new products and for the time sync. Would it be some kind of rationality in having a more of a subscription model also in the media side, in order to better know what type of revenue you have and therefore be able to plan your cost side also in a different way?
No, it's a good question, and actually something we're looking into. When you look in the current commercial model for the service provider as well as the broadcast, it tend to be a very CapEx-centric model for buying hardware and software equipment, the things we sell. I think part of it is that can we change some of the buying pattern, could we offer another model to them? Maybe. That's something we're looking into, trying to be a bit open. We already have OpEx-based models. We both have CapEx and OpEx-based models, it's all there in terms of how we can offer. The customer tend to lean more towards the CapEx side of it. That might change, with some of the changes in the markets, I wouldn't rule that out. I think that's the dynamics there. That's the customer with the current product.
If you look at new products, for instance, if we move in more into the cloud and software area, that's potentially an area where the current industry is a little bit more subscription, an OpEx-based model, so that we think that maybe that could be an opportunity to offer another commercial model there and try to figure out that. There is still an opportunity to offer also some of the hardware and software, of course, as an OpEx to that. It could be, if you get into new customer segments, maybe they're used to buying in a different way. Of course it's very hard sometimes to change a buying pattern in an industry. You cannot drive that yourself unless you make it much more compelling to have an OpEx-based model. I wouldn't rule out, sometimes we even see combinations.
They might want to do a CapEx combined with OpEx. They might say, well, I want to buy OpEx for the things, the sites I know, and then I want to have a more of a ramp-up in other areas. So I want to have a lower step in, and then we grow with their revenue, for instance. It could be different models that we're looking into. There's no doubt in my mind that it's something we are looking at, something we've got to sort of see if we can change a bit and add to our repertoire in terms of having more of a recurring revenue coming in. Obviously, as we know currently, support and service is the recurring. Then on top of it, we have this predominantly CapEx-based model. Again, could we build another layer with more of a recurring revenue?
That's of course strategically very important. We need to see if we can do some of that. At the moment, we're very much in the same model we have now at the moment. We're quite a CapEx-centric model.
Excellent. Thank you very much. There was a couple of double questions, but I hope I have managed to get all of them. Otherwise, please reach out either to us or the company and we will take it from there. With that, I wish you all a very good summer and see you again at the Q3 presentation.
Thank you.
Thank you.