Half Year 2026 Tecnotree Oyj Earnings Call
Thomas Koponen: Investor relations. With me today presenting is CFO Indiresh Vivekananda. Today, we have reserved 30 minutes for the webcast and the Q&A. Without further ado, please go ahead, Mr. Dhibikinnana.
Thomas Koponen: Investor relations. With me today presenting is CFO Indiresh Vivekananda. Today, we have reserved 30 minutes for the webcast and the Q and A. Without further ado, please go ahead, Mr. Vivekananda.
Speaker #2: Investor Relations, and with me today presenting is CFO Indrajit Vivekananda. Today, we have reserved 30 minutes for the webcast and the Q&A. Without further ado, please go ahead, Mr. Vivekananda.
Speaker #3: Thank you, Thomas. Good morning, everyone. Let's jump into the performance for the first half (H1) of the current year. Here we go. Let's start with some of the non-financial items—the key deals and what we did in the first half of the year.
Indiresh Vivekananda: Thank you, Thomas. Good morning, everyone. Let's straightaway jump into the performance in the H1 of the current year. Here we go. Let's start with some of the non-financial items, the key deals, what we did in the H1 of the year. I'm happy to present that on the key deals. We did two BSS deals in LATAM, two MVNX deals in Africa, three DevOps across MTN OpCos, and one DevOps with a tier-one customer in Middle East. Also on the Go-Lives. Eight Go-Lives we did in this H1 across North America, Africa, and Middle East. They are basically the key value-add modules and upgrades. Also the industry recognition from the Gartner. We had recognition in four hype cycles, autonomous operations in the communications industry, emerging technologies in the communication industry, telco cloud services, and enterprise communication services.
Indiresh Vivekananda: Thank you, Thomas. Good morning, everyone. Let's straightaway jump into the performance in the H1 of the current year. Here we go. Let's start with some of the non-financial items, the key deals, what we did in the H1 of the year. I'm happy to present that on the key deals. We did two BSS deals in LATAM, two MVNX deals in Africa, three DevOps across MTN OpCos, and one DevOps with a tier-one customer in Middle East. Also on the Go-Lives. Eight Go-Lives we did in this H1 across North America, Africa, and Middle East. They are basically the key value-add modules and upgrades. Also the industry recognition from the Gartner. We had recognition in four hype cycles, autonomous operations in the communications industry, emerging technologies in the communication industry, telco cloud services, and enterprise communication services.
Speaker #3: I'm happy to present the key deals. We did two BSS deals in LATAM, two MVNX deals in Africa, three DevOps across MT and OpCos, and one DevOps with a Tier 1 customer in the Middle East.
Speaker #3: And also on the go-lives: eight go-lives we did in this half-year across North America, Africa, and the Middle East. They're basically the key value-add modules and upgrades.
Speaker #3: And also the industry recognition from Gartner. We had recognition in four hype cycles: autonomous operations in the communications industry, emerging technologies in the communications industry, telco cloud services, and enterprise communication services.
Speaker #3: And what are the achievements we did in the first half of the year? We delivered 452 features in this half-year. We also had BSS stack growth in LATAM, MVNX stack, and Cloud BSS.
Indiresh Vivekananda: What are the achievements we did in the H1 of the year? We delivered 452 features in this H1. We also had BSS stack growth in LATAM, MVNX stack and Cloud BSS, we had a consistent growth. AI operational efficiencies in effect across the different business units. AI-embedded features in all the products with strong market-driven roadmap. We also won the Asian Telecom Awards 2026 for the AI Initiative of the Year, Digital Initiative of the Year. Also the Fast 100, we got the CX Catalyst, The Fast Mode award in this H1. Now, let's get into the top-level financials for this H1. The key metrics are the free cash flow. We achieved almost similar number as of last year, EUR 2.1 million in the first six months of each year.
Indiresh Vivekananda: What are the achievements we did in the H1 of the year? We delivered 452 features in this H1. We also had BSS stack growth in LATAM, MVNX stack and Cloud BSS, we had a consistent growth. AI operational efficiencies in effect across the different business units. AI-embedded features in all the products with strong market-driven roadmap. We also won the Asian Telecom Awards 2026 for the AI Initiative of the Year, Digital Initiative of the Year. Also the Fast 100, we got the CX Catalyst, The Fast Mode award in this H1. Now, let's get into the top-level financials for this H1. The key metrics are the free cash flow. We achieved almost similar number as of last year, EUR 2.1 million in the first six months of each year.
Speaker #3: We had consistent growth, with AI operational efficiencies in effect across the different business units. AI-embedded features are present in all the products, supported by a strong, market-driven roadmap.
Speaker #3: We also won the Asian Telecom Awards 2026 for the AI Initiative of the Year and Digital Initiative of the Year. And also the Fast 100—we got the CX Catalyst, the Fast Mode Award in this half of the year.
Speaker #3: Now let's get into the top-level financials for this half-year. The key metric is free cash flow—we achieved almost the same number as last year: €2.1 million in the first six months of each year.
Speaker #3: Even though the numbers look almost similar, I want to draw attention to the first quarter of the current year, where we could achieve only €200,000 as a positive free cash flow.
Indiresh Vivekananda: Even though the numbers look almost similar, I want to draw the attention to the first quarter of the current year, where we could achieve only EUR 200,000 as a positive free cash flow. The war had just then begun, and we had a lot of difficulties in the Q1, which is continuing still on the cash collection front, mainly due to the geopolitical situation in the Middle East. On the revenue, we did a 7.5% increase over the last year in real currency at EUR 36.8 million, compared to EUR 34.2 million in the last year. Again, in a constant currency, if the currencies had not changed compared to the last year end values, we would have still done a better at 10%, at EUR 37.6 million compared to EUR 34.2 million in 2025. The EBIT, we had a fantastic growth at 38.1% to EUR 13.2 million against EUR 9.6 million in the last year.
Indiresh Vivekananda: Even though the numbers look almost similar, I want to draw the attention to the first quarter of the current year, where we could achieve only EUR 200,000 as a positive free cash flow. The war had just then begun, and we had a lot of difficulties in the Q1, which is continuing still on the cash collection front, mainly due to the geopolitical situation in the Middle East. On the revenue, we did a 7.5% increase over the last year in real currency at EUR 36.8 million, compared to EUR 34.2 million in the last year. Again, in a constant currency, if the currencies had not changed compared to the last year end values, we would have still done a better at 10%, at EUR 37.6 million compared to EUR 34.2 million in 2025.
Speaker #3: The war had just then begun, and we had a lot of difficulties in Q1, which are continuing still on the cash collection front, mainly due to the geopolitical situation in the Middle East.
Speaker #3: On the revenue, we did a 7.5% increase over last year in real currency at 36.8, compared to 34.2 last year. Again, in constant currency.
Speaker #3: If the currencies had not changed compared to last year in value, we would have still done a better 10% at €37.6 million compared to €34.2 million in 2025.
Speaker #3: The EBIT—we had a fantastic growth of 38.1%, to €13.2 million against €9.6 million last year. Net income, which is after deducting all our expenses, also did pretty well, with 73.5% growth to €4.5 million, compared to €2.6 million in the previous year.
Indiresh Vivekananda: The EBIT, we had a fantastic growth at 38.1% to EUR 13.2 million against EUR 9.6 million in the last year.
Indiresh Vivekananda: Net income, which is after deducting all our expenses. We did pretty well at 73.5% growth at EUR 4.5 million compared to EUR 2.6 million in the previous year. Further key metrics, the CapEx to sales. CapEx is basically the development investment, what we do on our BSS Stack. Current year, for H1, the percentage of that to our revenue stood at 12.8%, down from 13.9% in the last year. The ARR, the recurring revenue, in the H1, we clocked EUR 15.4 million against EUR 14.2 million in the last year, about 8.4% growth in the ARR. The DSO days, still at a high at 143, better than last year at 175. The order backlog, which is a combination of the new orders and the revenues, what we generate in a particular period.
Indiresh Vivekananda: Net income, which is after deducting all our expenses. We did pretty well at 73.5% growth at EUR 4.5 million compared to EUR 2.6 million in the previous year. Further key metrics, the CapEx to sales. CapEx is basically the development investment, what we do on our BSS Stack. Current year, for H1, the percentage of that to our revenue stood at 12.8%, down from 13.9% in the last year. The ARR, the recurring revenue, in the H1, we clocked EUR 15.4 million against EUR 14.2 million in the last year, about 8.4% growth in the ARR. The DSO days, still at a high at 143, better than last year at 175. The order backlog, which is a combination of the new orders and the revenues, what we generate in a particular period.
Speaker #3: Further key metrics: the CapEx to sales. CapEx is basically the development investment that we do on our stack. In the current year, the first half of the year, the percentage of that to our revenue stood at 12.8%, down from 13.9% in the last year.
Speaker #3: The ARR, the recurring revenue in the first half of the year, we clocked €15.4 million, against €14.2 million in the last year—about 8.4% growth in the ARR.
Speaker #3: The DSO days are still high at 143, but better than last year at 175. The order backlog, which is a combination of new orders and the revenues that we generate in a particular period, at the end of the current half-year stood at €106.3 million, which is higher than last year at €105.7 million.
Indiresh Vivekananda: At the end of the current H1, it stood at EUR 106.3 million, which is higher than the last year at EUR 105.7 million. This demonstrates that while we got some of the large deals last year, we are able to get the new orders as well to commensurate with our revenues at each point of time. Now, I also want to draw the attention on the performance at each half of the year in the last four years. The revenues, as we can see, has been the highest in the H1 over the last four years. The EBIT has also been pretty high at EUR 13.2 million compared to any of the previous four half years. The financial expenses, which we will discuss a little bit later as well, was high at EUR 7.6 million. And taxes, we had to accrue for about EUR 1.2 million.
Indiresh Vivekananda: At the end of the current H1, it stood at EUR 106.3 million, which is higher than the last year at EUR 105.7 million. This demonstrates that while we got some of the large deals last year, we are able to get the new orders as well to commensurate with our revenues at each point of time. Now, I also want to draw the attention on the performance at each half of the year in the last four years. The revenues, as we can see, has been the highest in the H1 over the last four years. The EBIT has also been pretty high at EUR 13.2 million compared to any of the previous four half years. The financial expenses, which we will discuss a little bit later as well, was high at EUR 7.6 million. And taxes, we had to accrue for about EUR 1.2 million.
Speaker #3: This demonstrates that, while we got some of the large deals last year, we are able to get new orders as well to commensurate with our revenues at each point in time.
Speaker #3: Now, I also want to draw attention to the performance in each half of the year over the last four years. The revenues, as we can see, have been the highest in the first half of the year over the last four years.
Speaker #3: The EBIT has also been pretty high at 13.2, compared to any of the previous four half-years. The financial expenses, which we will discuss a little bit later as well, were high at 7.6, and taxes we had to accrue for about $1.2 million.
Speaker #3: This gave me a net income of 4.5, compared to 2.6 in the last, and 3.7 in '24, but slightly lower than what we achieved in H1 of '23.
Indiresh Vivekananda: This gave me a net income of EUR 4.5 million compared to EUR 2.6 million in the last, and EUR 3.7 million in 2024, but slightly lower than what we achieved in H1 of 2023. The cash collection continues to be a little bit worrying for us. We still collected EUR 27 million in the H1, lower than last year's EUR 30.8 million. The war situation, which began in February of this year, continues to still be an ongoing event. We do have substantial business interests in the war zone, the Middle East countries. We are still facing difficulties in collection from those countries. The order received has been EUR 36.1 million, which is reasonably a high number compared to 2024 and 2023. And 2025 was an exceptional year at EUR 74 million. We got three, four large orders in the H1 of last year.
Indiresh Vivekananda: This gave me a net income of EUR 4.5 million compared to EUR 2.6 million in the last, and EUR 3.7 million in 2024, but slightly lower than what we achieved in H1 of 2023. The cash collection continues to be a little bit worrying for us. We still collected EUR 27 million in the H1, lower than last year's EUR 30.8 million. The war situation, which began in February of this year, continues to still be an ongoing event. We do have substantial business interests in the war zone, the Middle East countries. We are still facing difficulties in collection from those countries. The order received has been EUR 36.1 million, which is reasonably a high number compared to 2024 and 2023. And 2025 was an exceptional year at EUR 74 million. We got three, four large orders in the H1 of last year.
Speaker #3: The cash collection continues to be a little bit worrying for us. We still collected €27 million in the first half of the year, lower than last year’s €30.8 million.
Speaker #3: The war situation, which began in February of this year, continues to be an ongoing event. We do have substantial business interests in the war zone, the Middle East countries.
Speaker #3: We are still facing difficulties in collection from those countries. The order received has been 36.1, which is reasonably a high number compared to '24 and '25.
Speaker #3: '24 and '23, and '25 was an exceptional year at $74 million. We got three or four large orders in the first half of last year.
Speaker #3: The order backlog, as we discussed earlier, continues to be at a very high number, at 106.3, consistent with last year as well.
Indiresh Vivekananda: The order backlog, as we discussed earlier, it continues to be at a very high number at EUR 106.3, consistent with the last year's as well. The earnings per share is at EUR 0.21 compared to EUR 0.15 in the last year, and EUR 0.22 and EUR 0.02 in 2023. In 2023, the numbers had to be recalibrated because of the reverse split of the shares. The highlights are the EBIT margin at 36%, which is compared to the 28% what we achieved last year. The revenue increased by 7.5%. In constant currency, the revenue grew at 10%. The free cash flow continues to be at EUR 2.1, similar to what we did last year. Let's only concentrate on the particular quarter, the last quarter of this year, the Q2.
Indiresh Vivekananda: The order backlog, as we discussed earlier, it continues to be at a very high number at EUR 106.3, consistent with the last year's as well. The earnings per share is at EUR 0.21 compared to EUR 0.15 in the last year, and EUR 0.22 and EUR 0.02 in 2023. In 2023, the numbers had to be recalibrated because of the reverse split of the shares. The highlights are the EBIT margin at 36%, which is compared to the 28% what we achieved last year. The revenue increased by 7.5%. In constant currency, the revenue grew at 10%. The free cash flow continues to be at EUR 2.1, similar to what we did last year. Let's only concentrate on the particular quarter, the last quarter of this year, the Q2.
Speaker #3: The earnings per share is at 0.21 compared to 0.15 last year, and 0.22 and 0.02 in 2023. In 2023, the numbers had to be recalibrated because of the reverse split of the shares.
Speaker #3: The highlights are the EBIT margin at 36%, compared to the 28% we achieved last year. Revenue increased by 7.5% in constant currency, and revenue grew at 10%.
Speaker #3: The free cash flow continues to be at $2.1 million, similar to what we did last year. Now, let's only concentrate on the particular quarter, the last quarter of this year, the Q2.
Speaker #3: The revenues again have been the highest in the last four years at €19.9 million, and EBIT is also very high compared to earlier years’ similar quarters, at €8.6 million.
Indiresh Vivekananda: The revenues, again, have been the highest in the last four years at EUR 19.9 million, and EBIT is also very high compared to earlier years, similar quarter at EUR 8.6 million. The financial items took a hit in the current quarter at EUR 5.7. The taxes at EUR 600,000. The net income is at EUR 2.4 compared to EUR 1 in the last year. Cash collection, as we mentioned earlier, continues to be stable, but not compared to the last couple of years, again, given the situation in where we have the businesses. The order received is at EUR 20.6. Again, substantially higher than what we did in 2024 and similar to what we did in 2023. Again, 2025 had been an exceptional year. Order backlog, we already discussed, and the EPS is also a derived number. The highlights of this particular quarter was our EBIT margins.
Indiresh Vivekananda: The revenues, again, have been the highest in the last four years at EUR 19.9 million, and EBIT is also very high compared to earlier years, similar quarter at EUR 8.6 million. The financial items took a hit in the current quarter at EUR 5.7. The taxes at EUR 600,000. The net income is at EUR 2.4 compared to EUR 1 in the last year. Cash collection, as we mentioned earlier, continues to be stable, but not compared to the last couple of years, again, given the situation in where we have the businesses. The order received is at EUR 20.6. Again, substantially higher than what we did in 2024 and similar to what we did in 2023. Again, 2025 had been an exceptional year. Order backlog, we already discussed, and the EPS is also a derived number. The highlights of this particular quarter was our EBIT margins.
Speaker #3: The financial items took a hit in the current year, at the current quarter, at €5.7 million. The taxes are at €600,000. The net income is at €2.4 million, compared to €1 million in the last year.
Speaker #3: Cash collection, as we mentioned earlier, continues to be stable, but not compared to the last couple of years. Again, given the situation and where we have the businesses.
Speaker #3: The order received is at 20.6, again substantially higher than what we did in '24, and similar to what we did in '23. But again, '25 had been an exceptional year.
Speaker #3: Order backlog we already discussed, and the EPS is also a derived number. The highlight of this particular quarter was our EBIT margin. EBIT margin has been pretty high at 43.2% compared to 29.2% in the previous year.
Indiresh Vivekananda: EBIT margin has been pretty high at 43.2% compared to 29.2% in the previous year, the revenues increased by 14.9% to EUR 19.9, and the free cash flow, which I spoke earlier, was at EUR 1.9 million, compared to EUR 1.1 in the same quarter last year. As we saw, one of the major contributions to our increase in cost is an impairment loss of EUR 5.2 million. I want to draw a little bit more attention to this particular impairment. We recognized an impairment loss of EUR 5.2 million in the Q2 of current year on two specific trade receivables. The majority of this amount relates to a customer in Australasia, and the other one is a customer in Middle East. On the Australasian receivable, I want to call out that we had signed a contract with a customer couple of years back and had completed the delivery and had the receivables due.
Indiresh Vivekananda: EBIT margin has been pretty high at 43.2% compared to 29.2% in the previous year, the revenues increased by 14.9% to EUR 19.9, and the free cash flow, which I spoke earlier, was at EUR 1.9 million, compared to EUR 1.1 in the same quarter last year. As we saw, one of the major contributions to our increase in cost is an impairment loss of EUR 5.2 million. I want to draw a little bit more attention to this particular impairment. We recognized an impairment loss of EUR 5.2 million in the Q2 of current year on two specific trade receivables. The majority of this amount relates to a customer in Australasia, and the other one is a customer in Middle East.
Speaker #3: The revenues increased by 14.9% to €19.9 million, and the free cash flow, which I spoke about earlier, was at €1.9 million compared to €1.1 million in the same quarter last year.
Speaker #3: Now, as we saw, one of the major contributions to our increase in cost is an impairment loss of $5.2 million. I want to draw a little bit more attention to this particular impairment.
Speaker #3: We recognized an impairment loss of $5.2 million in Q2 of the current year on two specific trade receivables. The majority of this amount relates to a customer in Australasia, and the other one is a customer in the Middle East.
Speaker #3: On the Australasian receivable, I want to call out that we had signed a contract with a customer a couple of years back, had completed the delivery, and had the receivables due.
Indiresh Vivekananda: On the Australasian receivable, I want to call out that we had signed a contract with a customer couple of years back and had completed the delivery and had the receivables due.
Speaker #3: However, due to the forex crisis in that particular country, it has been outstanding for a very long time. The old contract is now being restructured into a new contract, and this new contract is backed by the Australian sovereign government.
Indiresh Vivekananda: Due to the Forex crisis in that particular country, it has been outstanding for a very long time. The old contract is now being restructured into a new contract, and this new contract is backed by the Australian sovereign government. In order to allow for the same, the condition was we had to write off the old receivables, and that is how we had to take a complete impairment of the receivable from that particular country. The second one was in the Middle East. Due to the global slowdown in Middle East due to the current geopolitical situation, we had delivered a product to a particular customer in that region. Due to this situation, we were not able to collect from them. We assessed that we may not be able to collect that, and we need to take an impairment loss on that.
Indiresh Vivekananda: Due to the Forex crisis in that particular country, it has been outstanding for a very long time. The old contract is now being restructured into a new contract, and this new contract is backed by the Australian sovereign government. In order to allow for the same, the condition was we had to write off the old receivables, and that is how we had to take a complete impairment of the receivable from that particular country. The second one was in the Middle East. Due to the global slowdown in Middle East due to the current geopolitical situation, we had delivered a product to a particular customer in that region. Due to this situation, we were not able to collect from them. We assessed that we may not be able to collect that, and we need to take an impairment loss on that.
Speaker #3: In order to allow for the same condition as we had, we had to write up the old receivables, and that is how we had to take a complete impairment of the receivable from that particular country.
Speaker #3: The second one was in the Middle East, due to the global slowdown in the Middle East caused by the current geopolitical situation. We had delivered a product to a particular customer in that region, and due to this situation, we were not able to collect from them. We assessed that we may not be able to collect that, and we need to take an impairment loss on that.
Indiresh Vivekananda: The impairments really reflects the prudent and the conservative accounting practices which we follow. However, I want to call out that this does not reflect or affect the company's other customer relationships or any other ongoing programs. Now, again, I'll take a little bit deeper into these numbers. Now let's look in H1 under revenue highlights. The H1 revenue highlights, we had EUR 36.8 million. We have already spoken about it. EUR 37.6 million in constant currency, a growth of 10%. How did this happen? Mainly, this is a delivery-led quarter, driven by ongoing large transformations, for which we received contracts sometime back. If you look at the H1 2025 versus the H2 revenue by type, you can see that last year you had higher license revenue, and this year we have higher delivery revenue. The ARR also, there is a slight increase.
Indiresh Vivekananda: The impairments really reflects the prudent and the conservative accounting practices which we follow. However, I want to call out that this does not reflect or affect the company's other customer relationships or any other ongoing programs. Now, again, I'll take a little bit deeper into these numbers. Now let's look in H1 under revenue highlights. The H1 revenue highlights, we had EUR 36.8 million. We have already spoken about it. EUR 37.6 million in constant currency, a growth of 10%. How did this happen? Mainly, this is a delivery-led quarter, driven by ongoing large transformations, for which we received contracts sometime back. If you look at the H1 2025 versus the H2 revenue by type, you can see that last year you had higher license revenue, and this year we have higher delivery revenue. The ARR also, there is a slight increase.
Speaker #3: The impairments really reflect the prudent and conservative accounting practices that we follow. However, I want to call out that this does not reflect or affect the company's other customer relationships or any ongoing programs.
Speaker #3: Now, again, I'll take a little bit deeper look into these numbers. Now, let's look at H1 on the revenue highlights. The H1 revenue highlights: we had €36.8 million.
Speaker #3: We have already spoken about it. €37.6 million in constant currency, a growth of 10%. How did this happen? Mainly, this is a delivery-led quarter driven by ongoing large transformations, for which we received contracts some time back.
Speaker #3: If you look at the H1 '25 versus the H2 revenue by type, you can see that last year you had higher license revenue, and this year we have higher delivery revenue. The ARR also shows a slight increase.
Speaker #3: As we all know, the revenue cycles in Tecnotree are: we first deliver the license, then it gets into delivery, and then it moves into an ARR model. The large transformations for which we got the orders last year—we had the license revenue out of them in last year’s revenue—and as all of them move into a delivery mode, we will move more into a delivery revenue over the period of time.
Indiresh Vivekananda: As we all know, the revenue cycles in Tecnotree is, we first deliver license, then it gets into delivery, and then it moves into an ARR model. The large transformation, what we got the orders last year, we had the licenses revenue out of them in the last year revenue. As all of them move into a delivery mode, we will move more into a delivery revenue over the period of time. Again, if you look at the revenue in different region, it's almost stable. The Europe and Americas continues to be around EUR 9 million, and MEA and Asia Pacific was slightly higher at EUR 28 million compared to EUR 25 million in the last year. Now let's look at the order backlog. How is it geographically spread?
Indiresh Vivekananda: As we all know, the revenue cycles in Tecnotree is, we first deliver license, then it gets into delivery, and then it moves into an ARR model. The large transformation, what we got the orders last year, we had the licenses revenue out of them in the last year revenue. As all of them move into a delivery mode, we will move more into a delivery revenue over the period of time. Again, if you look at the revenue in different region, it's almost stable. The Europe and Americas continues to be around EUR 9 million, and MEA and Asia Pacific was slightly higher at EUR 28 million compared to EUR 25 million in the last year. Now let's look at the order backlog. How is it geographically spread?
Speaker #3: And again, if we look at the revenue in different regions, it's almost stable. Europe and the Americas continue to be around $9 million, and MEA and APAC were slightly higher at $28 million compared to $25 million last year.
Speaker #3: Now, let's look at the order backlog. How is it geographically spread? In Europe and the Americas, because we started delivering there, we have seen a slight reduction in the order backlog, but still I have €23 million to be delivered in Europe and the Americas.
Indiresh Vivekananda: The Europe and Americas, because we started delivering there, has seen a slight reduction in the order backlog, but still a high EUR 23 million to be delivered in Europe and Americas. MEA and Asia Pacific, last year, we had EUR 78.6 million worth of orders to be delivered, and now it is at EUR 83.3 million. Now we'll spend a little bit time on the EBIT highlights. As you can see, the H1 EBIT at EUR 13.2 million, it's an increase of some 38.1% year-on-year. The EBIT margin is 36% compared to 28% last year. What are the drivers for the increase in the EBIT? One, operational discipline and platform scalability. Full-period effect of the right sizing and the cost efficiency programs that we undertook in 2024 and 2025. Increased automation of internal functions and maintenance through the company's AI operational capabilities.
Indiresh Vivekananda: The Europe and Americas, because we started delivering there, has seen a slight reduction in the order backlog, but still a high EUR 23 million to be delivered in Europe and Americas. MEA and Asia Pacific, last year, we had EUR 78.6 million worth of orders to be delivered, and now it is at EUR 83.3 million. Now we'll spend a little bit time on the EBIT highlights. As you can see, the H1 EBIT at EUR 13.2 million, it's an increase of some 38.1% year-on-year. The EBIT margin is 36% compared to 28% last year. What are the drivers for the increase in the EBIT? One, operational discipline and platform scalability. Full-period effect of the right sizing and the cost efficiency programs that we undertook in 2024 and 2025. Increased automation of internal functions and maintenance through the company's AI operational capabilities.
Speaker #3: MEA and APAC, last year we had $78.6 million worth of orders to be delivered, and now it is at $83.3 million. Now, we'll spend a little bit of time on the EBIT highlights.
Speaker #3: As you can see, the H1 EBIT is €13.2 million, which is an increase of approximately 38.1% year on year. The EBIT margin is 36% compared to 28% last year.
Speaker #3: What are the drivers for the increase in EBIT? One, operational discipline and platform scalability. Full period effect of the right-sizing and the cost efficiency programs that we undertook in 2024 and 2025.
Speaker #3: Increased automation of internal functions and maintenance through the company's AI operational capabilities. Personnel cost declined year on year despite a headcount increase, driven by lower cost of delivery and AI-augmented roles.
Indiresh Vivekananda: Personnel cost declined year-on-year despite headcount increase, driven by lower cost of delivery and AI-augmented roles. If you look at the evolution of EBIT in 2026, the EBIT in H1 of the year is EUR 13.2 million compared to EUR 9.6 million in the last year. The margin we called out is 36% compared to 28% in the last year. The other parameter we very closely monitor is the investment in the development cost compared to the revenue. As you can see, in 2022, it was about 11%. We increased it to 14% and then to 18% in 2024. That is when a lot of investment was made into our product. That resulted in getting large transformation projects in 2025. We continue to make investment in our product, and we are at almost a consistent level at 13% in H1 of current year.
Indiresh Vivekananda: Personnel cost declined year-on-year despite headcount increase, driven by lower cost of delivery and AI-augmented roles. If you look at the evolution of EBIT in 2026, the EBIT in H1 of the year is EUR 13.2 million compared to EUR 9.6 million in the last year. The margin we called out is 36% compared to 28% in the last year. The other parameter we very closely monitor is the investment in the development cost compared to the revenue. As you can see, in 2022, it was about 11%. We increased it to 14% and then to 18% in 2024. That is when a lot of investment was made into our product. That resulted in getting large transformation projects in 2025. We continue to make investment in our product, and we are at almost a consistent level at 13% in H1 of current year.
Speaker #3: If you look at the evolution of EBIT in 2026, the EBIT in the first half of the year is 13.2, compared to 9.6 in the last year.
Speaker #3: The margin we called out is 36%, compared to 28% in the last year. The other parameter we very closely monitor is the investment in development costs compared to revenue.
Speaker #3: As you can see, in 2022 it was about 11%. We increased it to 14%, and then to 18% in 2024. That is when a lot of investment was made into our product, and that resulted in getting large transformation projects in 2025. We continue to make investment in our product, and we are at almost a consistent level of 13% in H1 of the current year.
Speaker #3: One of the things that we very closely monitor, and which worries us a little bit, is our AR. As you can see, the AR has slightly gone up from last year, from 32.5, which was in December, to 34.5 at the end of June.
Indiresh Vivekananda: One of the things that we very closely monitor and worry some, a little bit, is on our AR. As you can see, the AR has slightly gone up from last year from 32.5, which was in December, to 34.5 in the June end. In December, nearly one-third of my receivable was not due. That means less than 30 days. That bucket has moved now to mainly into 90 to 270 days, which was 3%. Now it has gone up to 21%. Above one year still continues to be very high at 31% last December and 36% now. This again reflects some of the challenges what we are facing in collection in certain regions, especially due to the geopolitical issues and the war situation in certain countries. However, the DSO trend, as we collect more, is going to improve, and it's always been cyclical in Tecnotree.
Indiresh Vivekananda: One of the things that we very closely monitor and worry some, a little bit, is on our AR. As you can see, the AR has slightly gone up from last year from 32.5, which was in December, to 34.5 in the June end. In December, nearly one-third of my receivable was not due. That means less than 30 days. That bucket has moved now to mainly into 90 to 270 days, which was 3%. Now it has gone up to 21%. Above one year still continues to be very high at 31% last December and 36% now. This again reflects some of the challenges what we are facing in collection in certain regions, especially due to the geopolitical issues and the war situation in certain countries. However, the DSO trend, as we collect more, is going to improve, and it's always been cyclical in Tecnotree.
Speaker #3: Now, in December, nearly one-third of my receivables were not due—that means less than 30 days. That bucket has now mainly moved into the 90-to-270 day range, which was 3%.
Speaker #3: Now it has gone up to 21%. Above one year, it still continues to be very high—at 31% last December and 36% now. This again reflects some of the challenges we are facing in collections in certain regions, especially due to geopolitical issues and the war situation in certain countries.
Speaker #3: However, the DSO trend, as we collect more, is going to improve. And it's always been cyclical in Tecnotree. As you can see, we had 210 days in Q1 2023, came down to 146 in Q3 2023, Q4 2023, went up again in Q1 2024, where we had lesser collection, and now has come down again to 143.
Indiresh Vivekananda: As you can see, we had 210 days in Q1 2023, came down to 146 in Q4 2025, went up again Q1 2026, where we had lesser collection, and now has come down again to 143. This is something where we monitor very closely. I also want to give a small update on the currency risks. H1 2026, we had favorable FX movements supporting the profitability. The exchange rate difference in the financial items, first off, was EUR 1.5 against EUR -4 million in the last year, and EUR 0.5 million in Q2, driven by strengthening of USD and slight weakening of INR against euro. In H1, we reduced our frontier currency exposure to 4%, a six percentage point reduction from the previous year. Strategic focus on tier 1 accounts and growth in mature and dollar-denominated markets continue as a part of our strategy.
Indiresh Vivekananda: As you can see, we had 210 days in Q1 2023, came down to 146 in Q4 2025, went up again Q1 2026, where we had lesser collection, and now has come down again to 143. This is something where we monitor very closely. I also want to give a small update on the currency risks. H1 2026, we had favorable FX movements supporting the profitability. The exchange rate difference in the financial items, first off, was EUR 1.5 against EUR -4 million in the last year, and EUR 0.5 million in Q2, driven by strengthening of USD and slight weakening of INR against euro. In H1, we reduced our frontier currency exposure to 4%, a six percentage point reduction from the previous year. Strategic focus on tier 1 accounts and growth in mature and dollar-denominated markets continue as a part of our strategy.
Speaker #3: This is something we monitor very closely. Now, I also want to give a small update on the currency risks. In H1 2026, we had favorable FX movement supporting the profitability.
Speaker #3: The exchange rate difference in the financial items for the first half was €1.5 million, against negative €4 million last year, and €0.5 million in the second quarter, driven by strengthening of USD and a slight weakening of INR against Europe.
Speaker #3: In H1, we reduced our frontier currency exposure to 4%, a 6 percentage point reduction from the previous year. Strategic focus on tier one accounts and growth in mature markets continue as part of our strategy.
Speaker #3: I also have a table showing how the USD to Euro trends have moved in H1. While last year, the dollar weakened by more than 13% against the euro, what we have seen in the current year is that it is almost stabilizing. Even though there is a slight variation, it is not as abnormal as it was last year.
Indiresh Vivekananda: I also have a table how the USD to euro trends has moved in the H1. While last year, the dollar weakened by more than 13% against euro, what we are seeing in the current year is it's almost stabilizing, even though there is a slight variation, but it is not as abnormal as it was last year. Percentage of revenue in volatile currencies. H1 last year, we had 10%. As I mentioned, we are reducing our exposure to the frontier markets, and now it has come down to 4% in this current half-year. Let's go to the balance sheet. The balance sheet, minor growth in the intangible assets. This is my own developed products. The trade receivables has gone up slightly. Other receivables are holding on to the similar level, what we had in December 2025.
Indiresh Vivekananda: I also have a table how the USD to euro trends has moved in the H1. While last year, the dollar weakened by more than 13% against euro, what we are seeing in the current year is it's almost stabilizing, even though there is a slight variation, but it is not as abnormal as it was last year. Percentage of revenue in volatile currencies. H1 last year, we had 10%. As I mentioned, we are reducing our exposure to the frontier markets, and now it has come down to 4% in this current half-year. Let's go to the balance sheet. The balance sheet, minor growth in the intangible assets. This is my own developed products. The trade receivables has gone up slightly. Other receivables are holding on to the similar level, what we had in December 2025.
Speaker #3: And, the percentage of revenue in volatile currencies—in H1 last year, we had 10%. As I mentioned, we are reducing our exposure to the frontier markets, and now it has come down to 4% in this current half year.
Speaker #3: Let's go to the balance sheet. The balance sheet shows minor growth in the intangible assets—these are my own developed products. The trade receivables have gone up slightly.
Speaker #3: Other receivables are holding at a similar level to what we had in December 2025. In the same way, cash and cash equivalents continue to be at a stable level of about $20 million.
Indiresh Vivekananda: Same way, the cash and cash equivalent continues to be at a stable level of about EUR 20 million. As all of us know, we had issued convertible debentures, which was at EUR 23.1 million by end of December. In January, when there was a public tender offer, as per the terms of the convertible debentures, the debentures were converted into equity, except for five notes. The entire CCDs got converted into equity. The other non-current liabilities, which is a large amount, represents the retirement and other statutory accruals for our employees across the region. The trade payables continues to be slightly higher compared to the December 2025. The increase in the cash is driven by the free cash flow reduction in interest-bearing liabilities through loan repayments and lease liability repayments. The 2026 guidance.
Indiresh Vivekananda: Same way, the cash and cash equivalent continues to be at a stable level of about EUR 20 million. As all of us know, we had issued convertible debentures, which was at EUR 23.1 million by end of December. In January, when there was a public tender offer, as per the terms of the convertible debentures, the debentures were converted into equity, except for five notes. The entire CCDs got converted into equity. The other non-current liabilities, which is a large amount, represents the retirement and other statutory accruals for our employees across the region. The trade payables continues to be slightly higher compared to the December 2025. The increase in the cash is driven by the free cash flow reduction in interest-bearing liabilities through loan repayments and lease liability repayments. The 2026 guidance.
Speaker #3: As all of us know, we had issued convertible debentures, which were at €23.1 million by the end of December. In January, when there was a public tender offer, as per the terms of the convertible debentures, the debentures were converted into equity.
Speaker #3: Except for five notes, the entire CCDs got converted into equity. The other non-current liabilities, which is a large amount, represent the retirement and other statutory accruals for our employees across the region.
Speaker #3: The trade payables continue to be slightly higher compared to December 2025. The increase in cash is driven by the free cash flow and reduction in interest-bearing liabilities through loan repayments and lease liability repayments.
Speaker #3: Now, the 2026 guidance. The board continuously assesses the guidance we are given, and the board has currently given this guidance: The revenue, in constant currency, is expected to grow between low to mid-single digit percentage growth, and this is in constant currency, on a free cash flow.
Indiresh Vivekananda: The board continuously assesses the guidance, what we are given, and the board has currently given this guidance. The revenue in constant currency to grow between low to mid single-digit percentage growth, and this is in constant currency. On a free cash flow, the guidance is about EUR 5 million in the year. The assumption for free cash flow is based on the company's current market outlook and exchange rate assumption, especially last year, the US dollar devaluation against euro. The assumption is that remains stable. I have one point on the one major event that happened in H1 of the year.
Indiresh Vivekananda: The board continuously assesses the guidance, what we are given, and the board has currently given this guidance. The revenue in constant currency to grow between low to mid single-digit percentage growth, and this is in constant currency. On a free cash flow, the guidance is about EUR 5 million in the year. The assumption for free cash flow is based on the company's current market outlook and exchange rate assumption, especially last year, the US dollar devaluation against euro. The assumption is that remains stable. I have one point on the one major event that happened in H1 of the year.
Speaker #3: The guidance is above €5 million for the year. The assumption for free cash flow is based on the company's current market outlook and exchange rate assumption, especially considering last year's US dollar devaluation against the euro. Our assumption is that this remains stable.
Speaker #3: I have one point on one major event that happened in the first half of the year. As we all know, on January 27, 2026, we announced that Resilience Investment Holdings, acting on behalf of a consortium comprising Helios, Fitzroy, and Padma Ravi Chandra, had made a voluntary recommended public all-cash tender offer for all the issued and outstanding shares and certain other equity securities of the company.
Indiresh Vivekananda: As we all know, on 27 January 2026, we announced that Resilience Investment Holdings, acting on behalf of a consortium comprising of Helios, Fitzroy, and Padma Ravichander, had made a voluntary recommended public all-cash tender offer for all the issued and outstanding shares and certain other equity securities of the company. On 20 July, the final results of the public tender offer for the shares and equity shares of the company was announced. As the minimum acceptance condition has not been fulfilled, the offeror did not complete the tender offer. For any more information on this public tender offer, there is a dedicated web page. The information can be found there. What are the key takeaway in H1 of the current year? Stable growth while delivering on promise on operating efficiencies. Delivery-led quarter driven by ongoing large transformations in MEA, powered by AI-embedded BSS Stack.
Indiresh Vivekananda: As we all know, on 27 January 2026, we announced that Resilience Investment Holdings, acting on behalf of a consortium comprising of Helios, Fitzroy, and Padma Ravichander, had made a voluntary recommended public all-cash tender offer for all the issued and outstanding shares and certain other equity securities of the company. On 20 July, the final results of the public tender offer for the shares and equity shares of the company was announced. As the minimum acceptance condition has not been fulfilled, the offeror did not complete the tender offer. For any more information on this public tender offer, there is a dedicated web page. The information can be found there. What are the key takeaway in H1 of the current year? Stable growth while delivering on promise on operating efficiencies. Delivery-led quarter driven by ongoing large transformations in MEA, powered by AI-embedded BSS Stack.
Speaker #3: On 20th July, the final results of the public tender offer for the shares and equity were announced. As the minimum acceptance condition had not been fulfilled, the offeror did not complete the tender offer.
Speaker #3: And for any more information on this public tender offer, there is a dedicated web page; the information can be found there. What are the key takeaways in H1 of the current year?
Speaker #3: Stable growth while delivering on promise on operating efficiencies. Delivery led the quarter, driven by ongoing large transformations in MIA, powered by AI-embedded BSS stack. The board has maintained guidance while keeping a close watch on the geopolitical challenges.
Indiresh Vivekananda: The board has guidance maintained while keeping a close watch on the geopolitical challenges. As I called out, the challenges are still on. The Middle East continues to be a challenge for us. The war, which started in February, is still ongoing. There are some of the challenges which we face both for our business and the cash collection. We are keeping a close watch on that and the guidance the board has maintained what we had issued earlier. These are my presentation from the finance side. Back to you, Thomas.
Indiresh Vivekananda: The board has guidance maintained while keeping a close watch on the geopolitical challenges. As I called out, the challenges are still on. The Middle East continues to be a challenge for us. The war, which started in February, is still ongoing. There are some of the challenges which we face both for our business and the cash collection. We are keeping a close watch on that and the guidance the board has maintained what we had issued earlier. These are my presentation from the finance side. Back to you, Thomas.
Speaker #3: As I called out, the challenges are still ongoing. The Middle East continues to be a challenge for us. The war, which started in February, is still ongoing.
Speaker #3: There are some challenges which we face both for our business and with cash collection. We are keeping a close watch on that, and the guidance from the Board has maintained what we issued earlier.
Speaker #3: So these are my presentations from the finance side. And back to you, Thomas.
Speaker #1: Thank you, Indraj, for that presentation. I have in the Q&A box below—where you all have sent some questions—the first question that has been sent. I can answer this as the moderator of this session.
Thomas Koponen: Thank you, Indraj, for that presentation. I have in the Q&A box below, you guys have sent some questions. The first question that has been sent, I can answer as the moderator of this session. Someone has wanted to know, what is the situation with the Canadian offer? What I can say is that any development that requires disclosure under the rules of the exchange would be announced as a stock exchange release, given fair equal to all, and will not be discussed or given out any information on in this call. The second question that we have is, you've answered it in your slide, but for the investor also asked it. He asks, Why the $5.2 million impairment and why now?
Thomas Koponen: Thank you, Indiresh, for that presentation. I have in the Q&A box below, you guys have sent some questions. The first question that has been sent, I can answer as the moderator of this session. Someone has wanted to know, what is the situation with the Canadian offer? What I can say is that any development that requires disclosure under the rules of the exchange would be announced as a stock exchange release, given fair equal to all, and will not be discussed or given out any information on in this call. The second question that we have is, you've answered it in your slide, but for the investor also asked it. He asks, Why the $5.2 million impairment and why now?
Speaker #1: So someone has wanted to know: What is the situation with the Canadian offer? What I can say is that any development that requires disclosure under the rules of the exchange would be announced as a stock exchange release.
Speaker #1: Given fair equal to all, and will not be discussed or given any information on in this call. The second question that we have is, you've answered it in your slide, but I'll—for the investor—also ask it.
Speaker #1: So he asks, why the €5.2 million impairment, and why now?
Speaker #2: Sure, thank you. But as we explained in the slide, these results are basically due to two customers: one in the Australasia region and another one in the Middle East region.
Indiresh Vivekananda: Sure. Thank you. As we explained in the slide, these results are basically due to two customers, one in the Australasia region, another one is in the Middle East region. The Australasia customer was located in a country which had a huge local foreign exchange constraints. Now that the country is being supported by Australian government, we are going to get into a new contract, and one of the conditions for that contract is we had to forego the earlier receivable, and that is the reason as a prudent one, we wrote off the earlier receivable from that customer. The other one was in Middle East. Because of the regional issues over there, we are not able to collect that, and we assessed the recoverability of each customer very closely. As a conservative and prudent measure, we wrote that as well.
Indiresh Vivekananda: Sure. Thank you. As we explained in the slide, these results are basically due to two customers, one in the Australasia region, another one is in the Middle East region. The Australasia customer was located in a country which had a huge local foreign exchange constraints. Now that the country is being supported by Australian government, we are going to get into a new contract, and one of the conditions for that contract is we had to forego the earlier receivable, and that is the reason as a prudent one, we wrote off the earlier receivable from that customer. The other one was in Middle East. Because of the regional issues over there, we are not able to collect that, and we assessed the recoverability of each customer very closely. As a conservative and prudent measure, we wrote that as well.
Speaker #2: The Australasia customer was located in a country which had significant local foreign exchange constraints. Now, that country is being supported by the Australian government.
Speaker #2: We are going to get into a new contract, and one of the conditions for that contract is we had to forgo the earlier receivable. That is the reason, as a prudent step, we wrote off the earlier receivable from that customer.
Speaker #2: The other one was in the Middle East because of the regional issues over there. We are not able to collect that, and we assessed the recoverability of each customer very closely.
Speaker #2: And as a conservative and prudent measure, we wrote that as well.
Speaker #1: Thank you. The tender offer lapsed in July, so as of last month. What does this mean for shareholders? And what is the strategy going forward?
Thomas Koponen: Thank you. The tender offer lapsed in July, so of last month. What does this mean for shareholders and the strategy going forward?
Thomas Koponen: Thank you. The tender offer lapsed in July, so of last month. What does this mean for shareholders and the strategy going forward?
Speaker #2: Okay. From the company side, we know that the offer did not complete because the offeror did not meet the minimum acceptance condition. For the company, nothing changes operationally.
Indiresh Vivekananda: Okay. From a company side, we know that the offer did not complete because the offeror, they did not meet the minimum acceptance condition. For the company, nothing changes operationally. We continue executing the strategy and we continue to execute to ensure that we meet the 2026 guidance, what has already been presented to the shareholders.
Indiresh Vivekananda: Okay. From a company side, we know that the offer did not complete because the offeror, they did not meet the minimum acceptance condition. For the company, nothing changes operationally. We continue executing the strategy and we continue to execute to ensure that we meet the 2026 guidance, what has already been presented to the shareholders.
Speaker #2: We continue executing the strategy, and we are continuing to execute to ensure that we meet the 2026 guidance that has already been presented to the shareholders.
Speaker #1: Your guidance remains unchanged despite a strong H1. Isn't that conservative?
Thomas Koponen: Your guidance remain unchanged despite a strong H1. Isn't that conservative?
Thomas Koponen: Your guidance remain unchanged despite a strong H1. Isn't that conservative?
Speaker #2: Yes. As you know, from finance, we want to be very conservative and prudent. As you know, in H1, we benefited from a favorable foreign exchange and some delivery timings.
Indiresh Vivekananda: Yes. As you know from finance, we want to be very conservative and prudent. As you know in H1, we benefited with a favorable foreign exchange and some delivery timings. Given the Middle East background caution, we strategically decided to expand earlier in Middle East region, which is a dollar-denominated market. Given the current war situation, which started in February, which we thought could be a very short one, has been dragging on for so long. We do not know how the H2 is going to develop given the uncertain geopolitical situation. The board has been keeping a close watch on the situation, and based on the assessment, the board has decided to keep the current guidance. If something changes in future, we will definitely come back to the shareholders.
Indiresh Vivekananda: Yes. As you know from finance, we want to be very conservative and prudent. As you know in H1, we benefited with a favorable foreign exchange and some delivery timings. Given the Middle East background caution, we strategically decided to expand earlier in Middle East region, which is a dollar-denominated market. Given the current war situation, which started in February, which we thought could be a very short one, has been dragging on for so long. We do not know how the H2 is going to develop given the uncertain geopolitical situation. The board has been keeping a close watch on the situation, and based on the assessment, the board has decided to keep the current guidance. If something changes in future, we will definitely come back to the shareholders.
Speaker #2: And given the Middle East background caution, we strategically decided to expand earlier in the Middle East region, which is a dollar-denominated market. But given the current war situation, which started in February—which we thought could be a very short one—has been dragging on for so long, we do not know how H2 is going to develop, given the uncertain geopolitical situation.
Speaker #2: The Board has been keeping a close watch on the situation, and based on the assessment, the Board has decided to maintain the current guidance.
Speaker #2: If that's something that changes in the future, we'll definitely come back to the shareholders.
Speaker #1: Your EBIT margin jumped to 36% from 28%. How much of that is structural versus one-off foreign exchange?
Thomas Koponen: Your EBIT margin jumped to 36% from 28%. How much of that is structural versus one-off foreign exchange?
Thomas Koponen: Your EBIT margin jumped to 36% from 28%. How much of that is structural versus one-off foreign exchange?
Indiresh Vivekananda: I would like to say it is not just a one-off Forex. There are a lot of structural things which we have been doing in the last couple of years, which is, in a way, bearing fruit now. There is a huge operational discipline and platform scalability. We showed how much we did the investment in development of the products. Full period effect of right-sizing and cost efficiency programs, which we carried out in 2024 and 2025, is bearing fruit. The most important, in my view, is the increased automation of internal functions and maintenance through a company's AI operational capabilities. That is also evident if you see my headcount has gone up in this H1.
Indiresh Vivekananda: I would like to say it is not just a one-off Forex. There are a lot of structural things which we have been doing in the last couple of years, which is, in a way, bearing fruit now. There is a huge operational discipline and platform scalability. We showed how much we did the investment in development of the products. Full period effect of right-sizing and cost efficiency programs, which we carried out in 2024 and 2025, is bearing fruit. The most important, in my view, is the increased automation of internal functions and maintenance through a company's AI operational capabilities. That is also evident if you see my headcount has gone up in this H1.
Speaker #2: I would like to say it's not just a one-off for us. There are a lot of structural things that we have been doing in the last couple of years which are, in a way, bearing fruit now.
Speaker #2: There's a huge operational discipline and platform scalability. We showed how much we did the investment in development of the products. The full-period effect of right-sizing and cost-efficiency programs, which we carried out in 2024 and 2025, is bearing fruit.
Speaker #2: And the most important, in my view, is the increased automation of internal functions and maintenance through a company's AI operational capabilities. That is also evident if you see my headcount has gone up in this half year.
Speaker #2: But the personnel costs have declined year on year despite the headcount increase, mainly driven by lower-cost delivery and AI-augmented roles.
Indiresh Vivekananda: The personnel costs have declined year-on-year despite the headcount increase, mainly driven by lower cost delivery and AI-augmented roles.
Indiresh Vivekananda: The personnel costs have declined year-on-year despite the headcount increase, mainly driven by lower cost delivery and AI-augmented roles.
Speaker #1: Okay, let me just see if I got this question correct. Revenue grew 7.5%, but free cash flow was flat at $2.1 million. Why isn't the profit converting to cash?
Thomas Koponen: Okay. Let me just see if I've got this question correct. Revenue grew 7.5%, but free cash flow was flat at EUR 2.1 million. Why isn't the profit converting to cash?
Thomas Koponen: Okay. Let me just see if I've got this question correct. Revenue grew 7.5%, but free cash flow was flat at EUR 2.1 million. Why isn't the profit converting to cash?
Speaker #2: Good question. Yeah. Financial items cost rose to 7.6. We talked about some of the write-offs, what they did. And the receivables in the Middle East—the collection was very slow, especially in the first half of the year.
Indiresh Vivekananda: Good question. Yeah. Financial items cost rose to 7.6%. We talked about some of the write-offs, what we did. The receivables in the Middle East collection was very slow, especially in H1. Conversion normalizes as those balances come in, which underpins our above EUR 5 million full-year guidance. Just to reiterate, in Q1, we just had EUR 200,000 free cash flow, which means that we did EUR 1.9 million in the Q2 of the current year. We have maintained a full-year free cash flow guidance of EUR 5 million, which we are confident of achieving.
Indiresh Vivekananda: Good question. Yeah. Financial items cost rose to 7.6%. We talked about some of the write-offs, what we did. The receivables in the Middle East collection was very slow, especially in H1. Conversion normalizes as those balances come in, which underpins our above EUR 5 million full-year guidance. Just to reiterate, in Q1, we just had EUR 200,000 free cash flow, which means that we did EUR 1.9 million in the Q2 of the current year. We have maintained a full-year free cash flow guidance of EUR 5 million, which we are confident of achieving.
Speaker #2: Conversion normalizes as those balances come in, which underpins our above $5 million full-year guidance. And just to reiterate, in Q1 we just had $200,000 free cash flow, which means that we did $1.9 million in Q2 of the current year.
Speaker #2: And we have maintained a full-year cash-guided free cash flow guidance of $5 million, which we are confident of achieving.
Speaker #1: Okay, I'll just wait a little bit and see if there are any questions coming in. We still have a minute left booked for this webinar.
Thomas Koponen: Okay. I'll just wait a little bit and see if there's any questions coming on. We still have a minute left booked for this webinar. Okay. As we don't have any further questions, I'd like to end the webinar. Thank you so much, Mr. Ravichander, for being here with us today. Wait until we have something new to then release to the market, hopefully. If not, we'll see everybody at Q3 in end of October. Thank you.
Thomas Koponen: Okay. I'll just wait a little bit and see if there's any questions coming on. We still have a minute left booked for this webinar. Okay. As we don't have any further questions, I'd like to end the webinar. Thank you so much, Mr. Vivekananda, for being here with us today. Wait until we have something new to then release to the market, hopefully. If not, we'll see everybody at Q3 in end of October. Thank you.
Speaker #1: Okay. As we don't have any further questions, I'd like to end the webinar. Thank you so much, Mr. Vivekananda, for being here with us today.
Speaker #1: And wait until we have something new to then release to the market, hopefully. And if not, we'll see everybody at Q3 in the end of October.
Speaker #1: Thank you.
Speaker #2: Thank you very much. Thank you everyone for supporting the company. Have a great day. Thank you.
Indiresh Vivekananda: Thank you very much. Thank you everyone for supporting the company. Have a great day. Thank you.
Indiresh Vivekananda: Thank you very much. Thank you everyone for supporting the company. Have a great day. Thank you.
Speaker #1: Bye.
Thomas Koponen: Bye.
Thomas Koponen: Bye.
Operator: Goodbye
Operator: Goodbye
