Q2 2026 BTS Group AB Earnings Call

August 14, 2026

Speaker #1: I was updating what the average was. Not 100%, but that's about it.

Operator: Thank you. Please hold.

Speaker #2: Thanks.

Speaker #3: All right, I think we'll start. So, welcome to this presentation with BTS after the Q2 results. With us today, we have Jessica Skon, who will do a short presentation, and then we will move on to some Q&As.

[Analyst 1]: All right. I think we will start. Welcome to this presentation with BTS after the Q2 results. With us today, we have Jessica Skon, who will do a short presentation, and then we will move on with some Q&A. Please go ahead, Jessica.

Moderator: All right. I think we will start. Welcome to this presentation with BTS after the Q2 results. With us today, we have Jessica Skon, who will do a short presentation, and then we will move on with some Q&A. Please go ahead, Jessica.

Speaker #3: So please go ahead, Jessica.

Speaker #4: Super, thank you. Hi, dear investors. Hope you're having a nice summer. Calling in today from San Francisco. Pleased to report our second quarter results.

Jessica Skon: Super. Thank you. Hi, dear investors. Hope you are having a nice summer. Calling in today from San Francisco. Pleased to report our Q2 results. Basically one more quarter of profit growth. Across the group, 9% revenue growth, currency adjusted, 13% profit growth, and EBITDA margin improvement from 11.7% to 12.3%. Reasons for that, BTS North America is back to strong profitability. Maybe I will pause and see if someone can mute the line.

Speaker #4: Basically, one more quarter of profit growth. So across the group, 9% revenue growth, currency adjusted, 13% profit growth, and EBITDA margin improvement from 11.7 to 12.3.

Speaker #4: Reasons for that? BTS North America is back to strong profitability. Maybe I'll pause and see if someone can mute the lines. Is that possible?

Operator: We will start with an overview of the quarter's results.

Jessica Skon: Is that possible?

Operator: The main events in the economic environment.

Jessica Skon: Shall I keep going or shall I pause?

Speaker #4: Keep going, or should I pause?

Speaker #5: At the end of the presentation, the Q&A session will follow.

Operator: At the end of the presentation, a Q&A session will follow.

Speaker #4: Okay, starting again now. Sorry for that interruption. Q2: one more quarter of profit growth. Revenue is up 9%, EBITDA grew 13%, and EBITDA margin improved from 11.7% to 12.3%.

Jessica Skon: Okay, starting again now. Sorry for that interruption. Q2, one more quarter of profit growth. Revenue 9%, EBITDA 13% growth, EBITDA margin an improvement from 11.7% to 12.3%. North America continues to perform, back to strong profitability again in the second quarter. Europe continues to deliver really strong growth. BTS Other Markets, still struggling in the second quarter, similar to the first, but we believe is on track to recover. AI continues to drive really fast revenue growth for us, and we feel very differentiated as an AI partner to our clients. If we double-click into BTS's biggest unit, BTS North America, where we had the turnaround starting in the middle of last year. Second strong quarter in a row, back to strong profitability. Revenue is super nice to see the biggest unit go back to double-digit organic revenue growth. Profitability up 60 percentage points back to 37.5%.

Jessica Skon: Okay, starting again now. Sorry for that interruption. Q2, one more quarter of profit growth. Revenue 9%, EBITDA 13% growth, EBITDA margin an improvement from 11.7% to 12.3%. North America continues to perform, back to strong profitability again in the Q2. Europe continues to deliver really strong growth. BTS Other Markets, still struggling in the Q2, similar to the first, but we believe is on track to recover. AI continues to drive really fast revenue growth for us, and we feel very differentiated as an AI partner to our clients. If we double-click into BTS's biggest unit, BTS North America, where we had the turnaround starting in the middle of last year. Second strong quarter in a row, back to strong profitability. Revenue is super nice to see the biggest unit go back to double-digit organic revenue growth. Profitability up 60 percentage points back to 37.5%.

Speaker #4: North America continues to perform, so back to strong profitability again in the second quarter. Europe continues to deliver really strong growth. BTS Other Markets still struggling in the second quarter, similar to the first, but we believe is on track to recover.

Speaker #4: And AI continues to drive really fast revenue growth for us, and we feel very differentiated as an AI partner to our clients. If we double-click into BTS's biggest unit, BTS North America, where we had the turnaround starting in the middle of last year: a second strong quarter in a row, back to strong profitability.

Speaker #4: Revenue is super nice to see, the biggest unit going back to double-digit organic revenue growth. Profitability is up 60 basis points, back to 37.5. EBITDA margin—nice improvement from last year, and, you know, we still expect that to continue to increase.

Jessica Skon: EBITDA margin, nice improvement from last year, and we still expect that to continue to increase. I can explain more in a bit. We expect North America to continue to be strong for the H2 of the year due to several dimensions. As I mentioned, our ambition is to get back to higher profitability margin levels over the next coming quarters. I will just say one thing that happened in the second quarter in North America was we had one of our smaller businesses that was unprofitable. We actually shut it down second quarter and had about SEK 400,000 of in-quarter severance related to that. Another business, we had another big AI diamond-level breakthrough that really is revolutionizing the way that the team works across our custom certification and content offerings. We also decreased the size of that team.

Jessica Skon: EBITDA margin, nice improvement from last year, and we still expect that to continue to increase. I can explain more in a bit. We expect North America to continue to be strong for the H2 of the year due to several dimensions. As I mentioned, our ambition is to get back to higher profitability margin levels over the next coming quarters. I will just say one thing that happened in the Q2 in North America was we had one of our smaller businesses that was unprofitable. We actually shut it down Q2 and had about SEK 400,000 of in-quarter severance related to that. Another business, we had another big AI diamond-level breakthrough that really is revolutionizing the way that the team works across our custom certification and content offerings. We also decreased the size of that team.

Speaker #4: I can explain more in a bit. And we expect North America to continue to be strong for the second half of the year due to several dimensions.

Speaker #4: As I mentioned, our ambition is to get back to higher profitability and margin levels over the next few quarters. I’ll just mention that one thing which happened in the second quarter in North America was that we had one of our smaller businesses that was unprofitable.

Speaker #4: We actually shut it down in the second quarter and had about $400,000 of in-quarter severance related to that. In another business, we had another big AI diamond-level breakthrough that really is revolutionizing the way the team works across our custom certification and content offerings.

Speaker #4: So, we also decreased the size of that team. Those costs were hit in the second quarter, and it took out a little over $1 million in run-rate costs to be realized over the coming quarters.

Jessica Skon: Those costs were hit in the second quarter, and it took out about a little over $1 million USD in run rate costs to be realized over the coming quarters. Our client demand continues to strengthen in the energy, financial services, and healthcare sectors. We expect continued growth to continue during the H2 of the year. We feel really good about the North America turnaround and continuing to perform. BTS Europe had amazing growth in the second quarter, 25% revenue growth with a 38% increase in profit. With that growth, we have seen a nice improvement in the EBITDA margin at 16.2%. What is behind the growth? Well, it is big deals that we had won in the past that continued to perform. Smaller deals that came in actually grew in size, bigger than the initial order intake.

Jessica Skon: Those costs were hit in the Q2, and it took out about a little over $1 million USD in run rate costs to be realized over the coming quarters. Our client demand continues to strengthen in the energy, financial services, and healthcare sectors. We expect continued growth to continue during the H2 of the year. We feel really good about the North America turnaround and continuing to perform. BTS Europe had amazing growth in the Q2, 25% revenue growth with a 38% increase in profit. With that growth, we have seen a nice improvement in the EBITDA margin at 16.2%. What is behind the growth? Well, it is big deals that we had won in the past that continued to perform. Smaller deals that came in actually grew in size, bigger than the initial order intake.

Speaker #4: And then our client demand continues to strengthen in the energy, financial services, and healthcare sectors. We expect continued growth during the second half of the year.

Speaker #4: So we feel really good about the North America turnaround and continuing to perform. BTS Europe had an amazing growth in the second quarter, 25% revenue growth, with a 38% increase in profit.

Speaker #4: And with that growth, we see a nice improvement in the EBITDA margin at 16.2%. What's behind the growth? Well, it's big deals that we had won in the past that continue to perform.

Speaker #4: Smaller deals that came in actually grew in size. Bigger than the initial order intake, and BTS Europe in the second quarter saw no project cancellations or delays across their clients.

Jessica Skon: BTS Europe in the second quarter saw no project cancellations or delays across their clients. We also see increase in demand from the defense and manufacturing sectors. All of our offices in Europe, except one, delivered double-digit growth. Given their fast growth rate in the H1, we expect Europe to continue to grow in the H2, but at a slower clip. BTS Other Markets was basically flat in the second quarter. A decrease in profit of -26%. That is due to the same problems we talked about in the first quarter with some of the really low-performing units in BTS Asia. EBITDA margin, 12.5% drop from 17.9% Q2 2025. All of this is due to the continued headwinds in Asia Pacific. We addressed those head-on in the first quarter. We have shifted different partners in the region, partner-led activities across different countries.

Jessica Skon: BTS Europe in the Q2 saw no project cancellations or delays across their clients. We also see increase in demand from the defense and manufacturing sectors. All of our offices in Europe, except one, delivered double-digit growth. Given their fast growth rate in the H1, we expect Europe to continue to grow in the H2, but at a slower clip. BTS Other Markets was basically flat in the Q2. A decrease in profit of -26%. That is due to the same problems we talked about in the Q1 with some of the really low-performing units in BTS Asia. EBITDA margin, 12.5% drop from 17.9% Q2 2025. All of this is due to the continued headwinds in Asia Pacific. We addressed those head-on in the Q1. We have shifted different partners in the region, partner-led activities across different countries.

Speaker #4: We also see an increase in demand from the defense and manufacturing sectors. All of our offices in Europe, except one, delivered double-digit growth. Given their fast growth rate in the first half, we expect Europe to continue to grow in the second half, but at a slower clip.

Speaker #4: BTS Other Markets was basically flat in the second quarter, with a decrease in profit of negative 26%. That's due to the same problems we talked about in the first quarter with some of the really low-performing units in BTS Asia.

Speaker #4: And EBITDA, at 12.5%, dropped from 17.9% in Q2 2025. All of this is due to the continued headwinds in Asia Pacific. We took those—we addressed those, you know, head-on in the first quarter.

Speaker #4: We're shifted different partners in the region, partner-led activities across different countries. We've had a big increase in AI marketing events, which have been perceived very strongly in those countries, which has led to a stronger opportunity pipeline we've consolidated some of the offices where we just have less people and we don't need them.

Jessica Skon: We have had a big increase in AI marketing events, which have been perceived very strongly in those countries, which has led to a stronger opportunity pipeline. We have consolidated some of the offices where we just have less people, and we do not need them, and some headcount adjustments to make sure we have the right team moving forward. All of that said, we expect BTS Other Markets to have a strong recovery in the H2 of the year. AI continues to be our friend. It continues to differentiate us, and it is a source of revenue growth for the firm. First, we continue to innovate across the portfolio with AI, and that makes our core services more differentiated and helps our clients experiment within their functions of new tools and services that are available to keep their functions on the leading edge.

Speaker #4: And some headcount adjustments to make sure we have the right team moving forward. All of that said, we expect BTS Other Markets to have a strong recovery in the second half of the year.

Speaker #4: AI continues to be our friend. It continues to differentiate us, and it's a source of revenue growth for the firm. First, we continue to innovate across the portfolio with AI, and that makes our core services more differentiated and helps our clients experiment within their functions with new tools and services that are available to keep their functions on the leading edge.

Speaker #4: Also, we shifted this quarter for services where our clients are hiring us specifically to drive AI adoption, AI workflow reimagination, and AI innovation across the firm.

Jessica Skon: Also, we shifted this quarter for services where our clients are hiring us specifically to drive AI adoption, AI workflow reimagination, AI innovation across the firm. We are going to report those out now in terms of revenues rather than bookings. It is just simply a reflection of it is becoming a more significant part of the total revenue of the business. in the Q2, it hit 10% of total revenue, and the growth of the revenue associated with helping our clients with their AI implementations grew 221% compared to the same quarter the year before, at 76 million SEK. Why invest in BTS? We have a history of sustained profitable growth, and we believe we are back to performing in line with those principles. AI is creating more opportunities for us, not less. The whole market seems to be realizing that AI is primarily not a tech issue.

Speaker #4: We're going to report those out now in terms of revenues rather than bookings. It's simply a reflection of it becoming a more significant part of the total revenue of the business.

Speaker #4: In the second quarter, it hit 10% of total revenue, and the growth of the revenue associated with helping our clients with their AI implementations grew 221%, compared to the same quarter the year before.

Speaker #4: At $76 million, SEC. Why invest in BTS? We have a history of performing in line with those principles. AI is creating more opportunities for us, not less.

Speaker #4: The whole market seems to be realizing that AI is primarily not a tech issue. It is a people, a change, and an innovation issue.

Jessica Skon: It is a people and a change and an innovation issue. With that understanding, it sits with BTS' core capabilities. Our growth, as you know, as a business model, is capital light. If we double-click into those very quickly in terms of sustained profitable growth, sustained growth is in our DNA. At 13% revenue, we had 9% in the Q2, and I believe we are on track to get back to our historical levels. We are back to growth in our biggest unit, which hit double digit and 60% profit growth in the Q2. We have an amazing list of global clients, and our win rates continue to be strong. BTS has a brand in the market as a company who has been innovating how companies learn, change, and perform for 40 years.

Speaker #4: And with that with that understanding, it fits with BTS's core capabilities. And then our growth, as you know, as a business model is capital light.

Speaker #4: So, if we double-click into those very quickly in terms of sustained, profitable growth—sustained growth is in our DNA. At 13% revenue, we had 9% in the second quarter, and I believe we are on track to get back to our historical levels.

Speaker #4: We're back to growth in our biggest unit, which hit double-digit and 60% profit growth in the second quarter. We have an amazing list of global clients.

Speaker #4: And our win rates continue to be strong. BTS has a brand in the market as a company that has been innovating how companies learn, change, and perform for 40 years.

Speaker #4: And that is what every company on the planet needs right now as they retool every person in the company with AI and to reinvent their roles.

Jessica Skon: That is what every company on the planet needs right now as they retool every person in the company with AI and to reinvent their roles. We only have 1% global market share ahead of the competition. We believe we are in the sweet spot for this AI era, given that it is a people change and an innovation problem, and it does not resemble the similarities to digital transformation or ERPs of the past. We continue to realize that we are in the top 5% of companies who have had three different major AI breakthrough innovations across our operations, spanning new products and services all the way to the back end. We can take those learnings of what is required to invent with AI and what is required to mandate the new ways of working to our clients.

Speaker #4: And we only have a 1% global market share, just ahead of the competition. We believe we're in the sweet spot for this AI era, given that it's a people change and an innovation problem, and it doesn't resemble the digital transformations or ERPs of the past.

Speaker #4: We continue to realize that we’re in the top 5% of companies who have had three different major AI breakthroughs and innovations across our operations, spanning new products and services all the way to the back end.

Speaker #4: And we can take those learnings of what's required to invent with AI, and what's required to mandate the new ways of working, to our clients.

Speaker #4: And we continue to do that with many client events, opportunities, and proposals in our pipeline. As I mentioned, it is now 10% of total revenues and growing rapidly.

Jessica Skon: And we continue to do that with many client events and opportunities and proposals in our pipeline. As I mentioned, it is now 10% of total revenues and growing rapidly. Given the AI innovations of the past, I expect we will have many more coming in the future quarters across our functions in particular. We have already realized 74 million SEK in productivity gains related to AI innovation and change implementation. All of this while our core remains in strong demand. Clients are investing in getting actually people together to make sure that they understand the strategy, that they know how to act, and that they are accelerating the innovation of what they are able to do with AI. They also are using us to scale change at big scale and speed. Then some of the AI companies right now, the AI native companies, are our clients.

Speaker #4: And, given the AI innovations of the past, I expect we will have many more coming in the future quarters, across our functions in particular.

Speaker #4: We have already realized 74 million SEK in productivity gains related to AI innovation and change implementation. And all of this, while our core remains in strong demand.

Speaker #4: Clients are investing in getting actual people together to make sure that they understand the strategy, that they know how to act, and that they're accelerating the innovation of what they're able to do with AI.

Speaker #4: And they also are using us to scale change at a big scale and speed. And then some of the AI companies right now, the AI native companies, are our clients.

Speaker #4: And I'll give you an example of our work with Anthropic. You can see a quote from the Chief Commercial Officer, Paul Smith. We brought BTS in early.

Jessica Skon: I will give you an example of our work with Anthropic. You can see a quote from the Chief Commercial Officer, Paul Smith. "We brought BTS in early. They rolled their sleeves up from day one, modeled every stage of our sales cycle, built the playbooks across market segments, full simulations of how we go to market. Incredibly high impact, hands-on work. Now they are part of our Anthropic Service partner network, and our customers get the same." So we continue to learn at the epicenter of how AI is evolving by helping them with our core services and taking those learnings out to the market. Then finally, as you know, for long-term investors, our growth is capital light. Since our IPO in 2001, we have had 12% revenue CAGR, roughly two-thirds of that is organic.

Speaker #4: They rolled their sleeves up from day one, modeled every stage of our sales cycle, built the playbooks across market segments, conducted full simulations of how we go to market—an incredibly high impact, hands-on effort.

Speaker #4: Now they're part of our Anthropic service partner network, and our customers get the same. So we continue to learn at the epicenter of how AI is evolving by helping them with our core services and, you know, taking those learnings out to the market.

Speaker #4: And then finally, as you know, for long-term investors, our growth is capital-light. Since our IPO in 2001, we've had 12% revenue CAGR; roughly two-thirds of that is organic.

Speaker #4: That has been able to fund, you know, one to two, on average, acquisitions a year for the last 20 years. Despite the acquisitive approach to our growth, in addition to organic, we typically pay between 40% and 65% of profit after tax through dividends.

Jessica Skon: That has been able to fund one to two, on average, acquisitions a year for the last 20 years. Despite the acquisitive approach to our growth, in addition to organic, we typically pay between 40% and 65% of profit after tax through dividends. We have done all of that without asking for additional capital from our shareholders. We continue to have a strong net cash position with our cash conversion rate at 84% over the last 12 months. As a result of the strong H1 and what we can foresee in the H2, we are raising our outlook to be significantly better than 2025. With that, I am happy to answer questions.

Speaker #4: And we've done all of that without asking for additional capital from our shareholders. And we continue to have a strong net cash position with our cash conversion rate at 84% over the last 12 months.

Speaker #4: And as a result of the strong first half, and what we can foresee in the second half, we're raising our outlook to be significantly better than 2025.

Speaker #4: And with that, I'm happy to answer questions.

Speaker #1: Great, thank you so much, Jessica. I think I'll start with a couple of questions. Just feel free to write the questions in the chat, or you could raise your hand if you wish to ask a question.

[Analyst 1]: Great. Thank you so much, Jessica. I think I will start with a couple of questions. Just feel free to write the questions in the chat, or you could raise your hand if you wish to ask a question to Jessica. So first of all, obviously very strong on the top line with improving growth to 9% here. Just wondered, looking into H2, when you talk about these outlook statements, both from North America and Other Markets to improve. So what can you say about bookings, or is it more that you expect the continued momentum to remain?

Moderator: Great. Thank you so much, Jessica. I think I will start with a couple of questions. Just feel free to write the questions in the chat, or you could raise your hand if you wish to ask a question to Jessica. So first of all, obviously very strong on the top line with improving growth to 9% here. Just wondered, looking into H2, when you talk about these outlook statements, both from North America and Other Markets to improve. So what can you say about bookings, or is it more that you expect the continued momentum to remain?

Speaker #1: To Jessica: So first of all, obviously, very strong on the top line with, you know, improving growth to 9% here. I just wondered, I mean, looking into H2, when you talk about these outlook statements from both North America and other markets, too—what can you say about bookings? Or is it more that you expect the continued momentum to remain?

Speaker #2: For North America, we expect the momentum to continue. In the second half. And for BTS other markets, we expect them to get back to growth.

Jessica Skon: For North America, we expect the momentum to continue in H2. For BTS Other Markets, we expect them to get back to growth.

Speaker #2: So.

Speaker #1: All right. Perfect. Then just on the costs in North America specifically, I think that was the segment or division where the margin didn't really live up to the expectations.

[Analyst 1]: All right, perfect. Just on the costs in North America specifically, I think that was the segment or division where the margin did not really live up to the expectations. You talked a little bit about severance cost, et cetera. Not sure if you quantified this exactly, but can you just clarify a little bit what the underlying margin you think was in the quarter if you exclude those?

Moderator: All right, perfect. Just on the costs in North America specifically, I think that was the segment or division where the margin did not really live up to the expectations. You talked a little bit about severance cost, et cetera. Not sure if you quantified this exactly, but can you just clarify a little bit what the underlying margin you think was in the quarter if you exclude those?

Speaker #1: You talked a little bit about severance cost, etc. Not sure if you quantified this exactly, but can you just clarify a little bit what the sort of underlying margin you think was in the quarter, excluding those?

Speaker #2: If I exclude the two businesses that we either shut down—or was that your question? Or just more details on the margin?

Jessica Skon: If I exclude the two businesses that we either shut down or was that your question? Or just more details on the margin?

Speaker #1: Yeah, just if you could add some color on the underlying margin development, if you sort of exclude the more one-off related items.

[Analyst 1]: Yeah. Just if you could add some color on the underlying margin development, if you exclude the more one-off related items.

Moderator: Yeah. Just if you could add some color on the underlying margin development, if you exclude the more one-off related items.

Speaker #2: Sure. Okay. If I exclude the one-off items, and keep in mind that those two businesses that we either canceled or reduced the team because the AI innovations were actually hurting our profit through the first half.

Jessica Skon: Sure. Okay. If I exclude the one-off items, keep in mind that those two businesses that we either canceled or reduced the team because of AI innovations were actually hurting our profit through the H1, so now they will be profit accretive in the H2. The third reason for the lower margin was the Sounding Board acquisition from a year ago for scaled coaching, was basically an unprofitable tech company. By bringing them into the firm, they naturally reduced the margins in North America by a bit compared to the old service model that we had. That was a strategic decision. If we actually remove those two unprofitable businesses in the H1 and the Sounding Board one, our margin would have been up 4 more percentage points. My guess is that is probably more what you were expecting, and that would explain it.

Jessica Skon: Sure. Okay. If I exclude the one-off items, keep in mind that those two businesses that we either canceled or reduced the team because of AI innovations were actually hurting our profit through the H1, so now they will be profit accretive in the H2. The third reason for the lower margin was the Sounding Board acquisition from a year ago for scaled coaching, was basically an unprofitable tech company. By bringing them into the firm, they naturally reduced the margins in North America by a bit compared to the old service model that we had. That was a strategic decision. If we actually remove those two unprofitable businesses in the H1 and the Sounding Board one, our margin would have been up four more percentage points. My guess is that is probably more what you were expecting, and that would explain it.

Speaker #2: So now they will be profit accretive in the second half. The third reason for the lower margin was the Sounding Board acquisition from a year ago, called for coaching, for scaled coaching, was basically an unprofitable tech company.

Speaker #2: And so, by bringing them into the firm, they naturally reduced the margins in North America by a bit, right, compared to the old service model that we had.

Speaker #2: So that was a strategic decision. If we actually remove those two unprofitable businesses in the first half and the Sounding Board one, our margin would have been up four more percentage points.

Speaker #2: So that, I mean, my guess is that's probably more what you were expecting and that would explain it.

Speaker #1: Perfect. And that's related to North America margins.

[Analyst 1]: Perfect. That is related to North America margins?

Moderator: Perfect. That is related to North America margins?

Speaker #2: Only North America, yes. Correct.

Jessica Skon: Only North America. Yes. Correct.

Speaker #1: I think we had some questions from Bonitution at ABG. I think the first one we have already answered a little bit. Did the second part of it, I think, is interesting.

[Analyst 1]: I think we had some questions from Daniel Thorsson at ABG. I think the first one we have already answered a little bit. The second part of it I think is interesting. It is about the token cost. Given that you obviously can reduce your headcount quite a bit by improving the efficiency with AI, how has the token costs evolved?

Moderator: I think we had some questions from Daniel Thorsson at ABG. I think the first one we have already answered a little bit. The second part of it I think is interesting. It is about the token cost. Given that you obviously can reduce your headcount quite a bit by improving the efficiency with AI, how has the token costs evolved?

Speaker #1: It's about the token cost. So given that you obviously can reduce your headcount quite a bit, by, you know, improving the efficiency with AI, so how is the token costs evolved and is this, you know, a part of, you know, margin pressure, etc.?

Jessica Skon: Yeah.

[Analyst 1]: And is this a part of margin pressure, et cetera?

Moderator: And is this a part of margin pressure, et cetera?

Speaker #2: Not this year. It will not be a part of margin pressure. Next year, we expect it to increase quite a bit. So, I can tell you more details under our hypotheses there.

Jessica Skon: Not this year. It will not be a part of margin pressure. Next year, we expect it to increase quite a bit, so I can tell you more details under our hypotheses there. We switched from ChatGPT to the Claude suite for the whole company in May of this year. But the deal we struck with Anthropic for the Claude suite was a typical total enterprise license for the first 12 months. We did not shift to a token consumption model, and that gives us time to learn by function and by role which modes to use and at which levels for the tasks that our team needs. We have time. We have time for our leaders to learn this and as a company to learn it, and we have some hypotheses in the IT function that we are testing out across our teams.

Speaker #2: Our so we switched from ChatGPT to the cloud suite for the whole company. In May of this year. But the deal we struck with Anthropic for the cloud suite was a typical total enterprise license for the first 12 months.

Speaker #2: We did not shift to a token consumption model, and that gives us time to learn, right, by function and by role, which modes to use and at which levels for the tasks that our team needs.

Speaker #2: So we have time. We have time for our leaders to learn this, and as a company, to learn it. And we have some hypotheses in the IT function that we're testing out across our teams.

Speaker #2: So, but however, that said, given what we're learning, we expect our token cost with Anthropic to go up 4x probably next year.

Jessica Skon: However, that said, given what we are learning, we expect our token cost with Anthropic to go up 4X probably next year. For us, that is a magnitude of, let us say we are spending $400,000 with them this year, we think then it might be $1.2, $1.5, $1.6 million USD next year. Now, that is not our total software cost. That just would be the cost associated with token consumption from Claude. And we are doing a really good job of reducing our other software and SaaS costs on a regular clip to try and balance out keeping our total software spend. Maybe it will grow next year a little bit, but it is not going to grow 4X. A percentage of that is going to go up. And then we have more pretty big innovations hitting our operations in the H2 of this year.

Speaker #2: For us, that's a magnitude of, let's say we're spending $400,000 with them this year. We think then it might be $1.2, $1.5, $1.6 million USD next year.

Speaker #2: Now, that is not our total software costs. That's just the costs associated with token consumption from Claude, right? And we're doing a really good job of reducing our other software and SaaS costs on a regular basis.

Speaker #2: To try and balance out our total software spend—you know, maybe it will grow next year a little bit, but it's not going to grow four times, right?

Speaker #2: A percentage of that is going to go up. And then we have more— we have more pretty big innovations hitting our operations in the second half of this year.

Speaker #2: We have a major platform that supports almost all of our work for our clients, and we're launching a new one just this month. It is an absolute breakthrough in efficiencies, productivity, and ease for our teams and so forth.

Jessica Skon: We have a major platform that supports almost all of our work for our clients, and we are launching a new one just this month, and it is an absolute breakthrough in efficiencies and productivity and ease for our teams and so forth. As the new platform comes online and the old one starts to go into maintenance mode, and we let that run out with the existing clients, the cost savings from that would easily make up for the increase in token cost next year. But the timing of all this will be playing out over the next four quarters.

Speaker #2: And so, as the new platform comes online and the old one starts to go into maintenance mode, we let that run out with the existing clients. The cost savings from that would easily make up for the increase in token costs next year.

Speaker #2: But the timing of all this, you know, will be playing out over the next four quarters.

Speaker #1: Perfect. And kind of a related question on the efficiency. Another question from Doniel here. The number of employees on a group level is down for the fifth consecutive quarter.

[Analyst 1]: Perfect. On the efficiency, another question from Daniel Thorsson here. The number of employees on a group level is down for the fifth consecutive quarter. Any question on when do you expect that to trough? Also the second part of it is if it is sustainable to continue shrink employees when growth recovers to almost double digits on an organic basis this quarter.

Moderator: Perfect. On the efficiency, another question from Daniel Thorsson here. The number of employees on a group level is down for the fifth consecutive quarter. Any question on when do you expect that to trough? Also the second part of it is if it is sustainable to continue shrink employees when growth recovers to almost double digits on an organic basis this quarter.

Speaker #1: And any question on when you expect that to trough. And also, the second part of it is if it's sustainable to continue to shrink employees when growth recovers to almost double digits on an organic basis this quarter.

Speaker #2: First of all, we are increasing the number of billable consultants that we are hiring, and the total number of billable consultants is going up.

Jessica Skon: First of all, we are increasing the number of billable consultants that we are hiring, and the total number of billable consultants is going up. The group of employees that is declining is, and has primarily been, the operational back end office functional staff of the company. For a while now, you will probably see that reality play out, and at the same time, we will continue to hire as we need. But we are just balancing the impact of the AI innovations specifically on the operational side with growing billable consultants. My guess, it is hard because we need both of those things to be true. Probably we would start to see. It is hard to say. I would give us another four quarters of this back end, front end balancing to play out before we would see total net adds, unless we make more acquisitions in that time.

Speaker #2: The group of employees that is declining is, and has primarily been, the operational backend office functional staff at the company. So that’s been the case for a while now. You’ll probably see that reality play out.

Speaker #2: At the same time, we will continue to hire as needed, but we're just balancing the impact of the AI innovations, specifically on the operational side.

Speaker #2: With, you know, growing billable consultants. So my guess is it's hard, because we need both of those things to be true. Probably, we would start to see—yeah, it's hard to say.

Speaker #2: I would give us another four quarters of this backend-frontend balancing to play out before we would see total net adds—unless we make more acquisitions in that time.

Speaker #1: Sorry, I think we have a question from Jung Hiltner. If you want to unmute yourself.

[Analyst 1]: Sorry, I think we have a question from Jon Hilton, if you want to unmute yourself.

Moderator: Sorry, I think we have a question from Jon Hilton, if you want to unmute yourself.

Speaker #3: Perfect. On the same topic, net reduction of employees. But he's also say that you've added billable consultants. So if you just look at the cost impact, is it negative at so far because you pay severance for the one you lay off and then you add you don't get the reduction on the total salary cost because you add on the other end, so to speak.

Jon Hilton: Perfect. On the same topic, net reduction of employees, but it also say that you have added billable consultants. So, if you just look at the cost impact, this is negative so far because you pay severance for the one you lay off, and then you add, you do not get the reduction on the total salary cost because you add on the other end, so to speak. Did you understand what I tried to ask?

[Analyst 1]: Perfect. On the same topic, net reduction of employees, but it also say that you have added billable consultants. So, if you just look at the cost impact, this is negative so far because you pay severance for the one you lay off, and then you add, you do not get the reduction on the total salary cost because you add on the other end, so to speak. Did you understand what I tried to ask?

Speaker #3: Did you understand what I tried to ask?

Speaker #2: I think so. And there have been a couple of waves of these initiatives. So the reductions that we did last year right now are net positive.

Jessica Skon: I think so. There have been a couple waves of these initiatives. The reductions that we did last year right now are net positive on the P&L. The ones that we just did in Q2 that are resulting in about $1.15 million in annual run rate, those will only start to be positive in Q3, Q4, Q1, Q2.

Speaker #2: On the P&L, right? And then the ones that we just did in the second quarter are resulting in about $1.15 million USD in annual run rate.

Speaker #2: Those will only start to be positive in Q3, Q4, Q1, and Q2.

Speaker #3: But you said you added billable consultants.

Jon Hilton: You said you added billable consultants.

[Analyst 1]: You said you added billable consultants.

Speaker #2: We are adding them. We are now adding them. Our recruitment pipelines are— we have open reqs across the system. So we'll only start to see those coming in now in the second half.

Jessica Skon: We are adding them. We are now adding them. Our recruitment pipelines are, we have open recs across the system. We will only start to see those coming in now in H2.

Speaker #3: Okay, so overall cost levels—what should one expect, really? Will they kind of grow with your top line, or otherwise? I thought you have kind of fixed costs on regular consultants and developers, but then you have pretty variable costs if you have an offsite event, et cetera, where there are just a lot of variable costs.

Jon Hilton: Okay. Overall cost levels, what should one expect, really? Will they kind of grow with your top line or otherwise? I thought you had kind of fixed costs on regular consultants and developers, but then you have pretty variable cost if you have an offsite event, et cetera, where there is just a lot of variable costs. How should one view your ability to scale the margin if you continue to grow?

[Analyst 1]: Okay. Overall cost levels, what should one expect, really? Will they kind of grow with your top line or otherwise? I thought you had kind of fixed costs on regular consultants and developers, but then you have pretty variable cost if you have an offsite event, et cetera, where there is just a lot of variable costs. How should one view your ability to scale the margin if you continue to grow?

Speaker #3: So, how should one use your ability to scale the margin if you continue to grow?

Speaker #2: I mean, the biggest factor in growing the margin right now is the continued AI innovations across our backend operations, because we still have well over 30% of our total employees in backend operation roles.

Jessica Skon: The biggest factor in growing the margin right now is the continued AI innovations across our backend operations.

Jon Hilton: Okay.

[Analyst 1]: Okay.

Jessica Skon: Because we still have well over 30% of our total employees in backend operation roles. But yes, in terms of growing billable consultants and number of sellers, those costs will pretty much grow in line with our top-line growth.

Speaker #2: But yes, in terms of growing billable consultants and the number of sellers, those costs pretty much grow in line with our top-line growth.

Speaker #3: And then, final from me here: the impact on pricing, given that you can now develop a simulation in, I think, some cases over a day—which took two weeks a while ago.

Jon Hilton: Then final for me here, the impact on pricing, given that you can develop a simulation, I think some over a day, which took two weeks a while ago. Do you still bill the same? Do you charge for the value you give them despite you being much quicker to develop?

[Analyst 1]: Then final for me here, the impact on pricing, given that you can develop a simulation, I think some over a day, which took two weeks a while ago. Do you still bill the same? Do you charge for the value you give them despite you being much quicker to develop?

Speaker #3: Do you still bill the same? Do you charge for the value you give them, despite you being much quicker to develop?

Speaker #2: Yeah, two things have happened. One, value, especially for the simulations that are around new strategy creation and strategy execution. And we're doing a lot of working sessions with the clients.

Jessica Skon: Yeah. Two things have happened. One, we are still doing price for value, especially for the simulations that are around new strategy creation and strategy execution, and we are doing a lot of working sessions with the clients. But we have also been able to say yes to deals that have a fast turnaround time that we were not able to say yes to before.

Speaker #2: But we've also been able to say yes to deals that have a fast turnaround time, which we weren't able to say yes to before.

Speaker #2: And in those deals, okay, maybe it takes us three weeks to work, but then it's getting deployed for many people. And so the total deal size is very—I mean, at least the rollout, which is the most profitable part of our project, is the same size as before.

Jessica Skon: In those deals, maybe it takes us 3 weeks to work, but then it is getting deployed for many people. The total deal size is very, at least the rollout, which is the most profitable part of our project, is the same size as before. We have done a lot more projects with very fast turnaround times, being able to meet our clients' speed expectations.

Jessica Skon: In those deals, maybe it takes us three weeks to work, but then it is getting deployed for many people. The total deal size is very, at least the rollout, which is the most profitable part of our project, is the same size as before. We have done a lot more projects with very fast turnaround times, being able to meet our clients' speed expectations.

Speaker #2: So we've done a lot more projects with very fast turnaround times, being able to meet our clients' speed expectations.

Speaker #3: And then just a final question, if that's okay. You mentioned 10% of revenues now come from direct AI-related sales.

Jon Hilton: Just a final, if that is okay.

[Analyst 1]: Just a final, if that is okay.

Jessica Skon: Yeah.

Jon Hilton: You mentioned 10% of revenue is now in direct AI-related sales.

[Analyst 1]: You mentioned 10% of revenue is now in direct AI-related sales.

Speaker #2: Yeah.

Speaker #3: So, it sounds like that's more traditional consulting. Or do you use your normal building simulation type of work style with this AI, or are you just telling your customers how to use AI?

Jessica Skon: Yeah.

Jon Hilton: It sounds like that is more traditional consulting. Do you use your normal building simulation type of work style with this AI, or are you just telling your customers how to use AI?

[Analyst 1]: It sounds like that is more traditional consulting. Do you use your normal building simulation type of work style with this AI, or are you just telling your customers how to use AI?

Speaker #2: No, it's a mix. It's a mix of our core capabilities and core simulation services, with helping them get hands-on keyboard and starting to do actual work activities through their work.

Jessica Skon: No, it's a mix. It's a mix of our core capabilities and core simulation services with helping them get hands on keyboard and starting to work activity, activities through their work. For example, there's plenty of companies who want to introduce new AI tools to specific teams, and they need to just drive early adoption for that. In order to do that, those workshops will feel more like both simulation and hands-on keyboard, a combination of both. We have clients that are giving us 22 different workflows to begin with and working with those teams for each workflow that need to reinvent their work. In those cases, it's a combination of workshops. We simulate what's possible together with them. We do ongoing coaching for the teams in terms of continual AI innovation and the change management associated with it. We're doing our executive advisory work like before.

Speaker #2: So, for example, there are plenty of companies who want to introduce new AI tools to specific teams, and they need to drive early adoption for that.

Speaker #2: In order to do that, those workshops will feel more like both simulation and hands-on keyboard—a combination of both. We have clients that are giving us 22 different workflows to begin with, and we're working with those teams for each workflow that needs to reinvent their work.

Speaker #2: And in those cases, it's a combination of workshops. We simulate what's possible together with them. We do ongoing coaching for the teams. In terms of continual AI innovation and the change management associated with it, we're doing our executive advisory work like before.

Speaker #2: So it's a big mix—core capabilities and some net new.

Jessica Skon: It's a big mix of core capabilities and some net new.

Speaker #3: All right. Thank you.

Speaker #2: Yeah.

Jon Hilton: All right. Thank you.

[Analyst 1]: All right. Thank you.

Jessica Skon: Yeah.

Speaker #1: All right, we had a question from David at Plurum Invest. If you could elaborate on the direct AI service revenues—what does that directly mean, and what kind of services are included in that?

[Analyst 1]: Right. We have a question from David at Plurum Invest. If you could elaborate on the direct AI service revenues, what does that directly mean, and what kind of services are included in that?

Moderator: Right. We have a question from Dovin at Plurum Invest. If you could elaborate on the direct AI service revenues, what does that directly mean, and what kind of services are included in that?

Speaker #2: It means our clients are saying, help us with our AI ambitions. And right now, with those demands, it sounds like we're not happy with the adoption of the tools.

Jessica Skon: It means our clients are saying, "Help us with our AI ambitions." Right now, what those demands sound like are, "We're not happy with the adoption of the tools per team or per role, or for every employee in the company, so help us drive the adoption up." It is also we are realizing this is a cultural leadership issue, so help us get our leaders to shift to create the type of environments where their teams can experiment and innovate with AI. It also sounds like, as I just mentioned, we want to have workflow-specific AI adoption. Can you help us figure out who should be doing the workflow innovation across the team, then how do we make sure it gets done over the coming weeks and months?

Speaker #2: Per team, or per role, or for every employee in the company. So, help us drive the adoption up. We're also realizing this is a cultural leadership issue.

Speaker #2: So, help us get our leaders to shift and create the type of environments where their teams can experiment and innovate with AI. It also sounds like, as I just mentioned, we want to have workflow-specific AI adoption.

Speaker #2: So, can you help us figure out who should be doing the workflow innovation across the team, and then how we make sure it gets done over the coming weeks and months?

Speaker #2: And then, when a team actually drives an innovation that's so profound that we would need to change the ways of working, help us with the change management associated with getting everybody on board with the new way of working.

Jessica Skon: When a team actually drives an innovation that is so profound that we would need to change the ways of working, help us with the change management associated by getting everybody on board with the new way of working. The final piece, which is at the end of that process, is help us understand what it means for our teams to wake up every morning and manage agents. That gets to token consumption and agent management and just how does that look and feel. Help us understand that and help our leaders understand what is coming. So those are kind of four different buckets that we have been asked to support so far this year.

Speaker #2: And then the final piece, which is kind of at the end of that process, is help us understand what it means for teams to wake up every morning and manage agents.

Speaker #2: And that gets to token consumption and agent management, and what type of—like, just how does that look and feel? Help us understand that, and help our leaders understand what's coming.

Speaker #2: So those are kind of four different buckets that we've been asked to support so far this year.

Speaker #1: Right. And are there any specific types of projects that are driving the majority of the 220% AI revenue growth, or is it broad-based?

[Analyst 1]: Right. Are there any specific types of projects that are driving the vast part of the 220% AI revenue growth, or is it board-based?

Moderator: Right. Are there any specific types of projects that are driving the vast part of the 220% AI revenue growth, or is it board-based?

Speaker #2: It's across all four of those categories. It kind of depends on what the companies are prioritizing right now. Most of our clients, other than in software engineering, still don't have very big innovations to look at and say, "This is what it takes to reinvent how a function works or a workflow works."

Jessica Skon: It is across all four of those categories. It just kind of depends on what the companies are prioritizing right now. Most of our clients, other than software engineering, still do not have very big innovations to look at and say, "This is what it takes to reinvent how a function works or a workflow works." I would say maybe as a generalization, they are shifting from one size fits all to specific functional workflow support. Right. That means that those teams could have different AI tools than other teams, and IT has to work differently with those business units and functions. As they make that shift, there is a higher likelihood that they will start to reap the benefits of AI.

Speaker #2: And so I would say maybe as a generalization, they're shifting from one size fits all to specific functional workflow support, right? And that means that those teams could have different AI tools than other teams and IT has to work differently with those business units and functions and as they make that shift, there's a higher likelihood that they'll start to reap the benefits of AI.

Speaker #1: Great. Then I had a question on the cash flow, or more specifically, the drivers behind it. You tied up a little bit more working capital, specifically in Q2.

[Analyst 1]: Great. Then I had a question on the cash flow or more like the drivers behind it. You tied up a little bit more working capital, specifically in Q2. But given that it was increased receivables, could we assume that the revenue growth accelerated throughout the quarter and that June was a little bit better than the start of the quarter?

Moderator: Great. Then I had a question on the cash flow or more like the drivers behind it. You tied up a little bit more working capital, specifically in Q2. But given that it was increased receivables, could we assume that the revenue growth accelerated throughout the quarter and that June was a little bit better than the start of the quarter?

Speaker #1: But given that it was increased receivables, could we assume that the revenue growth accelerated throughout the quarter, and that June was a little bit better than the start of the quarter?

Speaker #2: Yes. That's correct.

Jessica Skon: Yes, that is correct.

Speaker #1: Perfect. And then, just on another sort of cost item, I think you talked a little bit about the Global Conference. Are there any specific types of costs that you maybe don't have regularly in Q2, if you're able to quantify any of that?

[Analyst 1]: Perfect. Then just on another sort of cost item, I think you talked a little bit about the global conference. Is there any specific types of costs that you maybe does not have regularly in Q2, if you are able to quantify anything of that?

Moderator: Perfect. Then just on another sort of cost item, I think you talked a little bit about the global conference. Is there any specific types of costs that you maybe does not have regularly in Q2, if you are able to quantify anything of that?

Speaker #2: Yeah, I mean, that's correct, right? We have a history of doing conferences for our people, but in the last five years, it's been a smaller group than the group we brought together in June.

Jessica Skon: Yeah, that is correct. We have a history of doing conferences for our people, but in the last five years, it has been a smaller group than the group we brought together in June. As a result for that, and normally our conference is in Q1 as opposed to Q2. So you are right in terms of the cost hit our second quarter. However, it basically gets somewhat balanced out because there is less profit pool, then that goes to get shared to the employees. So it is not a one-to-one hit in the quarter, in terms of the total cost to the bottom line. But yes, just a rough range, even after we balance out what goes, just probably a rough range there was $500,000, $600,000 USD, something like that.

Jessica Skon: Yeah, that is correct. We have a history of doing conferences for our people, but in the last five years, it has been a smaller group than the group we brought together in June. As a result for that, and normally our conference is in Q1 as opposed to Q2. So you are right in terms of the cost hit our Q2. However, it basically gets somewhat balanced out because there is less profit pool, then that goes to get shared to the employees. So it is not a one-to-one hit in the quarter, in terms of the total cost to the bottom line. But yes, just a rough range, even after we balance out what goes, just probably a rough range there was $500,000, $600,000 USD, something like that.

Speaker #2: And as a result of that, and normally our conferences are in Q1 as opposed to Q2, right? So you're right in terms of the cost hitting our second quarter.

Speaker #2: However, it basically gets somewhat balanced out because there's less profit pool that then gets shared with the employees. So, it's not a one-to-one hit in the quarter, right, in terms of the total cost to the bottom line.

Speaker #2: But yes, there was I mean, just rough range even after we balance out what goes I mean, just probably a rough range there was 500, 600 thousand dollars USD, something like that.

Speaker #1: All right. Then, just on the guidance upgrade, or the sort of wording upgrade you had in the full-year guidance—so, I think we talked about this in earlier conference calls, or specifically in Q1, that you were tracking pretty well on this. But did Q2 surprise you on the positive side, making you upgrade the guidance, or did you feel comfortable from the beginning?

[Analyst 1]: All right. Then on the guidance upgrade or the wording upgrade you had in the full year guidance. I think we talked about on earlier conference calls, or specifically in Q1, that you were tracking pretty well on this. But did Q2 surprise you on the positive note, making you upgrade the guidance, or did you feel comfortable from the beginning?

Moderator: All right. Then on the guidance upgrade or the wording upgrade you had in the full year guidance. I think we talked about on earlier conference calls, or specifically in Q1, that you were tracking pretty well on this. But did Q2 surprise you on the positive note, making you upgrade the guidance, or did you feel comfortable from the beginning?

Speaker #2: Well, I think, given North America's turnaround was only one quarter old—right, in the first quarter—we wanted to make sure we got through all of the second quarter of the year.

Jessica Skon: Well, I think given North America's turnaround was only one quarter old in the first quarter, we wanted to make sure we got through all of the second quarter and feel really strongly about the H2 of the year. Also, we have a history of changing guidance now as opposed to the quarter before. So kind of sticking with that consistent what's expected of BTS in terms of when we change guidance, we chose to just stay with consistency of our historical approach. It was more the latter. It's also always helpful to have another quarter and see how the turnaround continues.

Jessica Skon: Well, I think given North America's turnaround was only one quarter old in the Q1, we wanted to make sure we got through all of the Q2 and feel really strongly about the H2 of the year. Also, we have a history of changing guidance now as opposed to the quarter before. So kind of sticking with that consistent what's expected of BTS in terms of when we change guidance, we chose to just stay with consistency of our historical approach. It was more the latter. It's also always helpful to have another quarter and see how the turnaround continues.

Speaker #2: Also, we have a history of changing guidance now as opposed to the quarter before, so kind of sticking with that, what's expected of BTS in terms of when we change guidance.

Speaker #2: We chose to just stay with the consistency of our historical approach. So it was more the latter, right? And it's also always helpful to have another quarter and see how the turnaround continues.

Speaker #2: Right?

Speaker #1: Great. And then I just had a question on other markets, given the recovery that you expect in the latter part of 2026. So, can you give some color on how that shift has started?

[Analyst 1]: Great. Then just had a question on Other Markets, given the recovery that you expect that in the latter part of 2026. Can you give some color on how the sort of shift has started? You always talk about maybe three quarters before you see the actual turnaround. I think we saw a step in the right direction with improving organic growth from the lows in Q1. But can you elaborate a bit on how you've seen the development there?

Moderator: Great. Then just had a question on Other Markets, given the recovery that you expect that in the latter part of 2026. Can you give some color on how the sort of shift has started? You always talk about maybe three quarters before you see the actual turnaround. I think we saw a step in the right direction with improving organic growth from the lows in Q1. But can you elaborate a bit on how you've seen the development there?

Speaker #1: You always talk about maybe three quarters before you see the actual turnaround. I think we saw a step in the right direction with improving organic growth from the lows in Q1, but can you elaborate a bit on how you've seen the development there?

Speaker #2: Yeah, I would say it's improving faster than we normally see, and as a result, we expect them to get to growth earlier in the second half.

Jessica Skon: Yeah. I would say it's improving faster than we normally see. As a result, we expect them to get to growth earlier in the H2 than the end of the H2. A couple of the countries in Asia that had a really rough start are turning around quickly, which is really helpful. Then the other ones that are moving more slowly, we're taking out some costs in terms of office closures and all that, but more importantly, the pipelines are growing. The in-market activities that we've done since February are bearing a strong pipeline, and we've had some good wins. So, you're right about historical. It typically takes three quarters, and right now, from what we can see, it will be faster than that. Then the rest of the unit is performing well.

Speaker #2: than the end of the second half. And yeah, I mean, a couple of the countries in Asia that had a really rough start are turning around quickly.

Speaker #2: Which is really helpful. And then the other ones that are moving more slowly—we were taking out some costs in terms of office closures and all that.

Speaker #2: But more importantly, actually, the pipelines are growing. And the in-market activities that we've done since February are bearing a strong pipeline, and we've had some good wins.

Speaker #2: So you're right about historical—typically it takes three quarters, and right now from what we can see, it will be faster than that. And then the rest of the unit is performing well.

Speaker #2: So great.

Speaker #1: And we had a specific question here from the chat: Do you expect EBITDA growth in other markets in Q3?

[Analyst 1]: Great. We had a specific question here from the chat. Do you expect a better growth in Other Markets in Q3?

Moderator: Great. We had a specific question here from the chat. Do you expect a better growth in Other Markets in Q3?

Speaker #2: I do.

Jessica Skon: I do.

Speaker #1: All right. The other part of that question was also related to the balance sheet. It looks healthy, obviously. Do you have any comments on potential M&A or any other types of capital allocation possibilities, maybe?

[Analyst 1]: All right. The other part of that question also was related to the balance sheet. So, it looks healthy, obviously. If you had any comments on potential M&A or any other types of capital allocation possibilities, maybe.

Moderator: All right. The other part of that question also was related to the balance sheet. So, it looks healthy, obviously. If you had any comments on potential M&A or any other types of capital allocation possibilities, maybe.

Speaker #2: Yes. I mean, will we continue to be fans of making acquisitions in order to round out or to strengthen our geographical footprint, find great talent, and add to the portfolios?

Jessica Skon: Yes. We continue to be fans of making acquisitions in order to strengthen our geographical footprint, find great talent, and add to the portfolio. So we will continue to do that. Our current pipeline of acquisitions, I would say there is one in particular we are interested in. We need to build up the pipeline again right now. The last 12, 15 months have primarily been partnerships and trying different AI tech across the portfolio as needed. But yeah, we have a nice list of countries that we would love to make acquisitions in. Yeah, so nothing immediate, but we expect that to continue.

Speaker #2: So we will continue to do that. Our current pipeline of acquisitions—there is one in particular we're interested in. For the rest, we need to build up the pipeline again right now.

Speaker #2: The last 12 to 15 months have primarily been partnerships and trying different AI tech across the portfolio as needed. But yeah, we have a nice list of countries that we'd love to make acquisitions in.

Speaker #2: Yeah, so nothing immediate, but we expect that to continue.

Speaker #1: And a follow-up on that: do you need any sort of specific services, etc., to add or that you hope to acquire? Or is it more about geographical expansion or reaching other types of customers?

[Analyst 1]: And a follow-up on that. Do you need any sort of specific services, et cetera, to add or that you hope to acquire? Or is it more geographical expansion or to reach other types of customers?

Moderator: And a follow-up on that. Do you need any sort of specific services, et cetera, to add or that you hope to acquire? Or is it more geographical expansion or to reach other types of customers?

Speaker #2: First priority is geographical expansion. Second priority could be, we could bolster it probably with a boutique firm that is good at systems integration. I know that sounds similar to, like, an ERP or digital transformation of the past, but for some of the workflow work that we're helping our clients with in really complex cases, right?

Jessica Skon: First priority is geographical expansion. Second priority could be, we could bolster it probably with a boutique firm that is good at systems integration. I know that sounds similar to an ERP or digital transformation of the past, but for some of the workflow work that we are helping our clients with, in really complex cases, they need to have more support. The way that we are balancing that right now is they are getting the support from their primary tech providers. So they are getting the forward-deployed engineers from Palantir or from Anthropic or OpenAI or whatever to supplement. I do not mean that we would go that deep in technical, but that could probably help. We have not lost deals because we are lacking it right now, but I can imagine at scale, consultants who are more able to do that would probably be helpful.

Speaker #2: They need to have more support. And the way that we're balancing that right now is, they're getting the support from their primary tech providers.

Speaker #2: Right? So they're getting the forward-deployed engineers from Palantir or from Anthropic or OpenAI or whatever to supplement. And so I don't mean that we would go that deep in technical, but yeah, that could probably help.

Speaker #2: We haven't lost deals because we're lacking it right now, but I can imagine at scale, consultants who are more able to do that would probably be helpful.

Speaker #1: Great. I think we had another question from your heater. Could you mute, please?

[Analyst 1]: Great. I think we had another question from Peter. Can you please?

Moderator: Great. I think we had another question from Peter. Can you please?

Speaker #3: Yes. The change in provision from the Boda acquisition on that earn-out adjustment.

[Analyst 2]: Yes. The change in provision from The Boda Group acquisition on that earn-out adjustment.

Speaker #2: Yes.

Speaker #3: Is this the final one, or could it be more, if even?

[Analyst 2]: Yes.

[Analyst 2]: Is this the final one or could it be more?

Speaker #2: No, this is the final one.

[Analyst 2]: No.

[Analyst 2]: Even-

Jessica Skon: No, this is the final one.

Speaker #3: So it must have developed really, really well then. They are the max targets, or...

[Analyst 2]: It must have developed really well then, if they are the max targets.

Speaker #2: Absolutely incredible. I mean, probably the most successful one we've ever done. So, yeah, they're hitting.

Jessica Skon: Absolutely incredible. Probably most successful one we've done ever.

Speaker #3: Is it after this earn-out that the whole team has left, or how does it look?

[Analyst 2]: No.

Jessica Skon: Yeah. They are hitting.

[Analyst 2]: After this earn-out, is the whole team left or how does it look?

Speaker #2: Yeah. The founder is moving to a part-time, full seller role for us and wants to continue to be the coach. And we have two successors that are stepping up in her place.

Jessica Skon: The founder is moving to a part-time full seller for us and wants to continue to be the coach. We have two successors that are stepping up in her place. That was part of the earn-out rules. Not that she would move to part-time, but that we would have two successors, one who will be head of sales and one who is running head of operations. We are going to start. They know about it now. We are starting the transition real time, but the earn-out is not over until the end of April. We are thrilled that she is staying on as a seller and a coach.

Speaker #2: And that was part of the earn-out rules. Not that she would move to part-time, but that we would have two successors: one who will be Head of Sales and one who's running Head of Operations.

Speaker #2: And we are going to start—they know about it now. We're starting the transition in real time, but she will not—the earn-out's not over until the end of April.

Speaker #2: And we're thrilled that she's staying on as a seller and a coach. So good.

Speaker #3: Thank you.

Speaker #2: Yeah.

[Analyst 2]: Good. Thank you.

Speaker #1: Great. We had another question from the chat. That reads: As unit economics improve and your way of changing workflows continues, how should one expect your sales mix to change?

Jessica Skon: Yeah.

[Analyst 1]: Great. We have another question from the chat that reads: As unit economics improve and your way of changing workflows continues, how should one expect your sales mix to change? Licenses are still quite low percent of revenue, which one could expect maybe to increase given what you are saying.

Moderator: Great. We have another question from the chat that reads: As unit economics improve and your way of changing workflows continues, how should one expect your sales mix to change? Licenses are still quite low percent of revenue, which one could expect maybe to increase given what you are saying.

Speaker #1: Licenses are still quite a low percent of revenue, which one could expect maybe to increase given what you are saying.

Speaker #2: Yeah, right. I mean, right now, I don't see anything that's really changing the mix so dramatically in the short term, right? If I think about all our deals and projects, they still tend to be a mix of consulting, facilitation, license, ongoing consulting.

Jessica Skon: Yeah. Right now, I don't see something that's really changing the mix so dramatically in the short term. If I think about across all our deals and projects, they tend to be a mix still of consulting, facilitation, license, ongoing consulting, as our clients need more and more support around changing the ways of working. At the same time, the license is still driven by the cool new AI stuff that we've been working on the last couple of years and keeping our simulations modern. So I think right now I would expect the mix to kind of continue as is.

Speaker #2: As our clients need more and more support around changing their ways of working, and at the same time, the license is still driven by the cool new AI stuff that we've been working on the last couple of years.

Speaker #2: And keeping our simulations modern. So, I think right now, I would expect the mix to kind of continue as is. And—

Speaker #1: Perfect. I think that was all the questions I had. If there's anyone else that has a question, if you could just please write it in the chat.

[Analyst 1]: Perfect. I think that was all questions I had. If there's anyone else that has a question, if you could just please write it in the chat now or raise your hand. Can just wait, think few more seconds to see. All right. Jessica Skon, do we want to have some final remarks?

Moderator: Perfect. I think that was all questions I had. If there's anyone else that has a question, if you could just please write it in the chat now or raise your hand. Can just wait, think few more seconds to see. All right. Jessica Skon, do we want to have some final remarks?

Speaker #1: Now, raise your hand—or you can just wait. Let's think a few more seconds to see. All right. Jessica, do you want to have some final remarks?

Speaker #2: No, I don't think so. I mean, we're happy with the momentum. We feel like we have some wins at our backs, our win rates are strong.

Jessica Skon: No, I don't think so. We're happy with the momentum. We feel like we have some winds at our backs. Our win rates are strong. We're excited for the second half. I'm happy to see BTS Other Markets, I think, turning around relatively quickly. So, yeah, for us right now, we're focused on the Q4 and setting up next year. So that's how it feels inside BTS right now. All right. Thanks, everybody.

Speaker #2: We're excited for the second half. I'm happy to see BTS in other markets. I think things are turning around relatively quickly. So yeah, for us right now, we're focused on the fourth quarter and setting up next year.

Speaker #2: So that's how it feels inside BTS right now. All right. Thanks, everybody.

Speaker #1: Okay, thank you very much, Jessica. And thank you all for listening in.

[Analyst 1]: Okay. Thank you very much, Jessica.

Moderator: Okay. Thank you very much, Jessica.

Jessica Skon: Okay.

[Analyst 1]: Thank you all for listening in.

Jessica Skon: Okay.

Moderator: Thank you all for listening in.

Jessica Skon: Okay. Bye.

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Q2 2026 BTS Group AB Earnings Call

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