Andreas Joelsson: The presentation of Net Insight's Q3 for 2026. We have the usual setup. It is myself, Andreas Joelsson, covering Net Insight on behalf of DNB Carnegie. But more importantly, we have management from the company, Andreas Eriksson and Cecilia Höjgård Höök. Unfortunately, it is the last time you are here, Cecilia, so this is a special occasion. But we do it in the same way as we usually do. We have the presentation, then we open up for Q&A. With that, I leave the floor to you, Andreas.
Andreas Eriksson: Thank you, Andreas, and good morning, everyone. Let us get into it. We will run through the agenda as per usual. We will cover first the Q3 overview. We will then go into a bit more detail in the business review, looking at the two different businesses. Cecilia will cover the financials, then we will wrap up a summary, then we will open up for Q&A. Let us get into it. If you look at the Q3 overall, we could see that we had a relatively weak financial performance if you look at the quarter. But what was pleasing to see was the sequential improvement when you compare to the previous quarter. We could see that we had continued commercial progress in the business.
Andreas Eriksson: Net sales amounted to SEK 104 million. That was down 29% if you compare year-on-year, but up 14% when you look at Q2 2026. If you look at the EBIT level, if you exclude restructuring, the one-off cost amounted to negative SEK 3 million. If you look at the media side, we can see that the broader portfolio is now really starting to create momentum, creating more additional customer opportunities, both with existing customers as well with new. But it is early days on the product launches and the new products we are bringing out. Of course, revenue contribution from those remains relatively limited at this point in time. On the time synchronization side, it is very pleasing to see that we have now two new commercial customers that established in two new areas, and I will talk a bit more about that later.
Andreas Eriksson: Finally, the focus going forward is really execution, customer conversion, clearly on the sync side, but as well on the media side, making sure that we build this more broader and repeatable business. If I then look at the plan we set for the year, when you think about the three strategic priorities we have talked about before, starting with the enhancement of the media portfolio. As you know, in April, early this year, we launched the new Nimbra 520. This quarter in September, we now launched the Nimbra 1020G, which is a new offering we are bringing out in the Nimbra, the flagship product we have, which is a compression-only product.
Andreas Eriksson: If you look at the sales efficiency, as you know, we have a big focus on the North American market, which we feel is underserved for us, and we continue to see expansion of customer engagement in that market, which is good to see. We have also highlighted that we were able to break into this global media and technology customers, and we now see additional opportunities coming from those new segments. The wider portfolio reach, we are getting that now through the broader portfolio, which has again, been part of the plan. If you look at the time synchronization side, as I mentioned, two new commercial customers in new segments outside 5G. We have one national telecom opportunity that advanced to pilot installation in the quarter, and we also launched the Zyntai TimeNode Access, which is a new product.
Andreas Eriksson: The three priorities remains, and we are executing on this plan. If I then zoom in a bit on the two businesses, starting with the media area. The revenue in the media area was on the SEK 92 million compared to SEK 79 million in Q2 2026, but below the corresponding quarter last year. The additional adoption of the Nimbra 520, which we launched again in April, it is really now starting to demonstrate that we are able to expand. We are getting into new customers. We are being able to broaden the customer relationship we have, and one good example of this is DMC. DMC is a Northern European customer, which we started working with in 2024, more on the 1000 series side, more on the flagship product. Now when we had the Nimbra 520, we are able to expand that relationship with them with the Nimbra 520.
Andreas Eriksson: What it means is that we can cover more use cases, more type of services with the same customer, in that case, that we have not been able to do before. So we can see that it is working. Winning new customers. This has been really a beachhead product, but we are able to break into half a dozen of customers now that using the Nimbra 520, which has been really critical because as we communicated before, we really need to broaden our customer base and get into new customers. So we can see that the Nimbra 520 has been a really important tool in achieving that.
Andreas Eriksson: If you look at the Nimbra 1020G, I think this is a really a critical step we are taking now because if you look at historically, we come from an area of transport. If you think about Net Insight providing transport and compression as the core offerings.
Andreas Eriksson: Traditionally, the products have always been transport, and then we have added compression to that, and that is how a lot of the competitors and customers see us. What the Nimbra 1020G means is we are getting into the compression with the compression-only dedicated product into that area, which means we will start to go head-on with the compression vendors. That means that we are broadening the commercial reach. We can actually get into other new market areas which we have not been active in before. So that is sort of the first step in getting into that area, which is really pleasing to see. Nimbra 520 and Nimbra 1020G will actually kind of work together in achieving that. So we are starting to have a good, strong portfolio to break into new areas.
Andreas Eriksson: If you look at the internet and cloud area, this is when the customers want to use internet and cloud as a carrier. On top of that, we build with our technology a stable and robust media transport solution. This is an area and a business that is growing a lot. A lot of customers want to move to internet and cloud because they want to have much more content down from the large events and from leagues and other things, so that they can not just bring out the core video feeds on a robust, managed solution, but actually use internet and cloud to bring out even more content. We can see that there is a lot of interest in that area. Focus in the media side really remains on converting now the portfolio investment we are making into new customers and make sure it becomes repeatable revenue growth.
Andreas Eriksson: If I just quickly touch on this, we talked about before that one big part of the plan has been to increase our target market. If you look at where we are today with the current core, we have said that with getting into the dark blue extension, we are actually going to double the TAM, which I think is step 1. That is what we now are executing on. If I then position the Nimbra 1020G, it is under the smaller Nimbra 1000 version. That fits in under that product. That actually now strengthens our ability to, in the managed area, be active in the pure compression area, which we have not been able to be in the same way before. If you look at the Nimbra 520, that is a really interesting product because it fits into actually the three areas.
Andreas Eriksson: On one hand, you can use it if you want to run a managed solution, so over a fiber solution, but you can also use it, which we see a lot of interest now, on an internet-based delivery model, and you use it for that. As I mentioned before, and as you can see from the CAGR, that area is growing up to double digits. That is actually an area we want to be much more active in, and we can see activities in the market in that area. Then you look at the new compression area, which is actually getting into the second compression family, which we have not been very active in previously. The Nimbra 520 is starting to take us into that area as well.
Andreas Eriksson: This is a core product for us, as you can see, because it is the ability therefore to be active in many more use cases and many more opportunities for the customer is down there. That is why we see that the Nimbra 520 has been the strategic breaking point for us to new customers. That explains that probably in a bit more detail. If I then move on to the sync side. If you look at the revenue side, revenue amounted to SEK 12 million, broadly in line with prior year. I think what was exciting to see on the sync side is that we have, first of all, now two new commercial customers that we secured outside the 5G. I think for me, that is a testament to the focus around conversion.
Andreas Eriksson: Really focusing on driving conversion of the customers that we have in the pipeline and being able to bring them all the way into a commercial customer. I think the other point to make here is that the two deals we have got, one deal is in the defense area and the other one is in an AI data center environment. It is also very interesting and pleasing to see that we are able to show that we have a right to play in those areas. I think we all know that defense and AI data centers is growing. There is a lot of investment going into that. But also, of course, we now see that we have a right to play in those areas.
Andreas Eriksson: It is early days, of course, so the initial order values are limited, and it is early days for us to learn a bit more about those industries and how we can be more active and so forth. But it is promising when you think about it that way. If you look at the telecom side, then we have now moved one national telecom opportunity to pilot installation, which is again showing the progress we are making by focusing this year on conversion of the pipeline we have on the time synchronization side. We also launched in the quarter a new time synchronization product we call Zyntai TimeNode Access. I will cover that on the next slide so you can understand a bit more the business drivers behind that and what that opens up. But in short, it increases our addressable market.
Andreas Eriksson: It makes it possible for us to be active on the synchronization side all the way out in the access of the network. I think for us, when we think about the synchronization, we remain very positive on the long-term outlook. So that remains for us. The short-term revenue contribution is expected to build gradually as we have communicated previously. So that still remains our view. If I then zoom in a bit on the Zyntai TimeNode Access, this is new product that we launched. As you can see, there are two drivers. Driver number one is that it broadens the Zyntai portfolio for us. So far we have been able to, with the synchronization product we have had, be able to be active in the core and the regional side predominantly.
Andreas Eriksson: We have not been able to have an economical solution and a cost-efficient way to go up all the way to access if the customer wants to go there. Now we have that. So now we have a complete portfolio that covers both core, regional, and access, which opens up for more opportunities for us and will be strengthening our overall offering. The second one is that there are operators out there which the connection out to the base stations, they are using leased and third-party access networks, so they do not use their own fiber solution. So in those situations, traditionally, they have not been able to do a network-based synchronization for those use cases. They have been relying only on satellite to bring time out into the network.
Andreas Eriksson: Now with our solution, we can actually address this need that they have in the case that they want to build a much more robust solution to include not only the time from satellite, but also time from a network-based synchronization. This is the business drivers behind this, and I think this is a very important step in having a much more broad and strong portfolio on the sync side. If we then look at the pipeline on the sync, there has been some good progress throughout the quarters. We have one new PoC started. We have another two moved to field trial, and one, as I mentioned, moved into pilot installation. Then in the rollout phase, the two I mentioned, the one defense and the one AI data center deals. So those all in rollout.
Andreas Eriksson: The third one in the rollout phase is this media customer that we communicated earlier and that we have still being in the rollout phase. So that is the summary and the situation where we are now on the time sync side in terms of deals. I will then hand over to Cecilia.
Cecilia Höjgård Höök: Yeah. Okay. So turning to financial performance, as Andreas said, net sales for Q3 amounted to SEK 103.9 million, representing a decline of 29% versus the same period last year. At the same time, revenue improved 14% sequentially from the SEK 91.3 million we had in Q2. The year-on-year decline is mainly related to media. But sequentially, media revenue increased from approximately SEK 79 million in Q2 to SEK 92 million. But remained significantly below the reported level one year ago. Looking at time synchronization, the revenue amounted to SEK 11.8 million, and that is broadly in line with the quarter last year. Continuing with gross margin, gross margin improved to 72.5% compared to the 66.3% in the corresponding quarter last year. The improvement is mainly driven by our revenue mix.
Cecilia Höjgård Höök: In Q3, we have a higher portion of software revenue after two quarters that we have had a relative larger portion of hardware revenue. It is important to recognize that this mix can vary between quarters. Some customer projects begin with hardware deliveries and then they complement with software, while other have the mix directly. So this affects the reporting gross margin from one quarter to another. Continuing with operating expenses and excluding our restructuring cost of SEK 2.1 million, they amounted to SEK 57.8 million and broadly unchanged year-on-year. EBITDA, excluding the restructuring cost of SEK 2.1 million, amounted to SEK 19 million, corresponding to a margin of 18%. The improved gross margin and stable cost base supported earnings during the quarter. However, the revenue level remains the main constraint on our profitability. Continuing to operating earnings, we can see the same relationship as we had in EBITDA reflected.
Cecilia Höjgård Höök: Reported operating earnings, excluding that SEK 2.1 million of restructuring cost, amounted to -SEK 3 million, compared to the +SEK 22 million in Q3 last year. As shown in the left-hand chart, operating earnings have varied considerably between quarters, and this reflects our volatility in revenue that we have had the last quarters. On the right hand, the chart illustrates the corresponding development on a rolling 12-month basis. Last, our cash flow and liquidity. Cash flow from operating activities amounted to -SEK 10.1 million, compared with the +SEK 21.7 million in the corresponding quarter last year. The weaker operating cash flow primarily affects the lower earnings in the quarter. Investment activities amounted SEK 19.2 million, primarily capitalized development expenditures. After investing and financing activities, total cash flow for the quarter amounted to -SEK 31.3 million.
Cecilia Höjgård Höök: Cash at the end of the period was SEK 48.7 million, and in addition to that, we have SEK 128.5 million in unutilized credit facility, bringing total available liquidity to SEK 177.2 million. That was it.
Andreas Eriksson: Thank you, Cecilia. If I just move then to summarize this. This is what we communicated before when you look at our strategic roadmap. Focus on the media side, increase the sales efficiency around how we bring product to market, how we work with existing customers to sell more, which is what is now happening. For instance, my example of DMC is a perfect example of the upsell here where we have existing customers, and through the Nimbra 520 and other products coming, we are able to broaden that engagement with the customer and new customers. Again, broader portfolio is very critical for this because, of course, this is about our sales and organization being efficient on one hand, but also having the tools to be able to break into new customers and new customer segments.
Andreas Eriksson: If you look at an enhancement of the portfolio, that is where the Nimbra 520 launched now. We have now delivered on that, as we have talked about. That has been in the plan. On the smaller form factor, this is where the Nimbra 1020G fits in, because the current product we have in the 1000 series is a larger product which fits more on the core side of a network. Actually now we have a smaller form factor which fits in, for instance, on the access side and more closer to the venues, but also in other kind of applications. So that is where the Nimbra 1020G fits in. That is what we are now delivering on and will continue to deliver on more on the media portfolio side. Then Zyntai has been all about driving conversions, which you now can see is actually tracking and breaking through conversions of the 5G opportunities.
Andreas Eriksson: But as well, we are converting and getting commercial customers also on new segments. To summarize the key points here, sequential growth in quarter compared to Q2 this year. Conversion and revenue recovery remain the focus going forward. That is the key driver for us. Again, Q3 remains weak if you look at it, and this was driven by the media sales side, but revenue improved sequentially compared to previous quarter, went from SEK 79 million to SEK 92 million on the media side, Q3 compared to Q2. The broader portfolio is really creating these additional customer opportunities I have been talking about, both with the existing customers as well as with the ability to break into new customers. But it is early days on these new product launches.
Andreas Eriksson: The Nimbra 1020G, for instance, we will now launch and start to build demand and promote and quote for, but big shipments and volume will build throughout 2027. On the time synchronization side, I think the key pleasing progress here is really that we have broken into now two new adjacent markets. Again, early days and more for us to learn, but proves that we have a right to play into growing and attractive markets. Focus going forward is really about execution. Continue to drive this customer conversion, in particular on the synchronization side. Remain very vigilant on the cost side and cost discipline in the business, and really drive this repeatable business from these new launches, get into the same use cases more and more with new customers. So that is the summary of Q3.
Andreas Joelsson: Perfect. Thank you both. We head into the Q&A session, and as usual, you can send in your questions through the website. There is a box where you can write the question and send it in, and I will read them up once they come in. We have already gotten a couple, and I will start with a question on the targets or the financial ambitions for 2023 to 2027. They are reiterated, and everyone can do the math. To reach them, you need a very strong 2027. Is that your view, or how should we see the reiteration of the targets?
Andreas Eriksson: I think what we have said is that the target levels remain, but we have said also that reaching them 2027 will be challenging. As we also communicate, it is really quite dependent on Zyntai and how that takes off and the timing of that. So that still remains our view.
Andreas Joelsson: Perfect. You also mentioned that it is critical and focus is to convert the customer interest that you see into actual orders, and there might be a perception that this has been a challenge for Net Insight for several years, that there is always interest, but it is hard to get it into the financials. Do you work differently now with that type of interest in order to translate that into actual revenue? Or have you thought through that process?
Andreas Eriksson: Absolutely. I think what we have changed is that because when you think about customer interest, it does not start when you launch the product, it starts when you start to develop the product, really. I think if you look at the product development process we now put in place as of this year, it is being much more driven around deep interviewing with customers, really understanding the pain points they have, how we can help solve them, the competitive situation, who solves that now? Is it a new demand that we can go after? We are creating a very robust way for us to do product development, so that we do that. What it means, we also then work much more deeper with certain customers as part of the development. That means two things.
Andreas Eriksson: One, you are able to make sure that you are close to what the customer actually needs. Two, it means when you have launched a product, they are likely to buy it. Then all of a sudden you have the first one or two reference customers, and then off you go. I think that is one part of it. The other part is how we launch product. We now work much tighter between product marketing and sales so that we start to build demand early, so we do not just launch a product. Then we start to build demand, but actually we start to build demand early. A case in point here is the Nimbra 1020G, launched in September, but we do not expect big shipment until 2027, which means that during this time we can promote it, we can talk to customers, they can try it, and so forth.
Andreas Eriksson: Then we start to build demand. But we build it over time. It is well in sync. I think those are the things we are trying to do differently. Then, of course, I think on the sales side, we need to make sure we have, one, a very strong team in all the regions, but also a very robust and a systematic way of working in how we know who we are going to go after in a very surgical way and go in and build relationships, and then off at the back of that, you can create business. So I do think we are changing definitely the way we work from product to marketing to sales.
Andreas Eriksson: I think some of it is already coming through, although as you can see in the numbers, the launches we made this year and so forth, of course, remains limited in terms of the impact on the financial side. I think Nimbra 520 is another example as well of this. We launched it in April. We already have half a dozen of commercial customers on it, and we continue to build the interest. I do think it is working.
Andreas Joelsson: Should we expect that the sales cycles become smaller and smaller, given that you have this close relationship with the customers already in the development phase?
Andreas Eriksson: Maybe yes or no. I think, when you think about the sales cycle, if you look at the new customer, the sales cycle tends to be a bit longer, of course, because you have to build the perception, you have to promote yourself, and you have to understand more the customer problem and how you can solve that they need to get to know you. Of course, new customer still remains a bit longer. Existing customers for new products, yes, that is shorter because we are able to work closely with them and promote what is coming a bit earlier. I think when you also look at the product type, it is quite important as well to understand it is quite a different sales cycle for a Nimbra 520 product on the media side compared to the 1000 series. 1000 series, bigger investment, more about building a bigger network.
Andreas Eriksson: Nimbra 520, shorter sales cycles. I think this is quite important when you think about getting into new customers because you have to find a way to come into customer. If you only have one proposition or a couple, if they do not want to buy from you for those two, then you come back in a couple of years. If you have a broader portfolio, you are able to get in more ways to get into a new customer. That is why the broader portfolio is very important. We can see that now that we are able to use that as a lever and a beachhead into new customers. The fact that there is a shorter sales cycle on the Nimbra 520, as an example, makes it possible to create a quicker time to create a new relationship with a new customer.
Andreas Eriksson: You are in with the customer, you understand them, they trust you, and you can continue to grow with them. I do think it is changing, and I think we can compress the sales cycle, not just by how we work, but actually thinking smart about the portfolio we have.
Andreas Joelsson: When you read your CEO letter, it senses some optimism about the customer interest and the sort of exhibitions that you have been to. It is hard for us not being on those exhibitions to sort of get the same sense. Could you explain perhaps the difference from these product launches versus previous product launches?
Andreas Eriksson: I think it is a couple of things then, Andreas. I think one part of this is the fact that we are now getting into a new customer segment. We talked about these global media and tech companies. They started to buy sports rights around the world, much more active on that there. It is a new customer segment for us. That is definitely a change in market. We have been successful getting into that sort of segment now, and we have more to do and more opportunities, but that is one part of the change and that we can feel that that momentum has started to build. Of course, these are relationships that you build over time. But I think we are at a good momentum in those areas. I think that is one part of it. I think the other part is on the internet and cloud area.
Andreas Eriksson: Customers are thinking a lot how they can bring more content out from these different sporting events and from the leagues that is happening around the world. The fact that they can now work with us to bring ancillary content like commentators and maybe cameras that are not the main cameras and bring those feeds out means that we can work with them on areas which are really critical for them and something that is very top of mind for them at the moment. I think the third thing is the breadth of the portfolio opens up to more momentum opportunity building because, of course, it is quite clear if you have a broad portfolio, again, you can go in and have more conversation. You are more likely to be able to address a need that they have.
Andreas Eriksson: I think that is quite critical for us as well, and I can feel that that sort of momentum is building. I think we also have a bit of a repositioning of the business to do in the market, which we are now working, much broader, not just traditional transport on the high-end side, but we can also do now, starting to do compression only, be able to be active in the internet and cloud area so that we become a really modern and next generation company for them to work with, not with one area only, but broader. So we continue to be very market leading on our core, critical of course to remain that, but now adding more things into the portfolio. You then just build more momentum. I think when you overlay the different customer segments here, for instance on, let us say, a production company.
Andreas Eriksson: Some of the production company might only want to buy more of a compression offering from someone like us. Well, now we can actually come in with a strong compression offering and use that to get into new customer segments. I think then you can see the momentum building, not with existing customers in our core segments and new in our core segments, but actually be able to get into new customer segments that we have not been able to be active in before. I think all this adds up in the momentum that we feel.
Andreas Joelsson: This momentum that you feel and the optimism, do you also feel that the broadness of the portfolio that you talk about, is that enough now, or do you need more launches as well during 2027 and 2028?
Andreas Eriksson: I think we will continue to add things into the portfolio over the coming 1 to 2 years. Definitely strengthen what we have, continue to make sure that we are remaining strong in the areas where we are currently active and adding more to it, and doing it very much in alignment with how the market demand is moving. I think being able to be quick and agile in our R&D and product development is core part of that and follow the customers closely because it is quite a rapid changing landscape. So I do feel that. But I think it is promising and I think, as you said, though, that you cannot quite see it in the numbers, and we now need to translate all this into the financial output.
Andreas Joelsson: A question for Cecilia Höjgård Höök also from the audience. The cash is declining to SEK 49 million, there is continued significant investments in the technology. Can you rule out the need for a share issue given that you have a lower cash position?
Cecilia Höjgård Höök: I think that as we have had lower revenue the last quarters, we saw that during the spring. Therefore, we went and secured the RCF that we have now for SEK 130 million. So that will ensure going forward that we can continue our investments.
Andreas Joelsson: You had, I think from the slide, you had an outflow of working capital remaining.
Cecilia Höjgård Höök: Yes.
Andreas Joelsson: What is driving that for the quarter? You had a lot.
Cecilia Höjgård Höök: Yeah
Andreas Joelsson: of investments in-
Cecilia Höjgård Höök: In last
Andreas Joelsson: inventory last year.
Cecilia Höjgård Höök: Last year. I think that in Q3, mainly we do have a negative effect on the working capital since a lot of the short-term debts disappear when people have vacation and so on. That is always a constraint in the Q3. We have continued to invest in our inventory that will help us going forward, and that is both in components and stock to meet forward. So yeah.
Andreas Joelsson: Is there any impact from higher memory prices that we see from other companies as well?
Cecilia Höjgård Höök: Yeah. Of course, we have that as well. But when we secured the FPAs last year, we actually secured a bit of that. We are affected, but not that much that maybe some other companies are.
Andreas Joelsson: Perfect. Another thing that you highlight in the CEO letter is new business opportunities, such as the C-band release. I guess that is related to the US. Can you explain what you can do when that becomes available for the telcos in the first instance, and then I have a follow-up on that. Where do you fit in that?
Andreas Eriksson: Yeah. How do we fit? If you look at the C-band and the background on that is that the C-band in the, this is a specific US opportunity situation, that the C-band is currently used by the broadcaster to a large extent. Now the government want to free that up and provide it to the, let's say, the telecom industry as the direction they have taken. That means that now the broadcasters that are on C-band for distributing their TV channels, they need to find another home. They need to move. In that step, there is an opportunity for us to come in. It might be that some of that might move to other parts of satellite solutions. Of course, could be one, and we can still be part of supporting that.
Andreas Eriksson: But then it could also be that they move into more of an internet-based solution, for instance, and that is where, for instance, our new solutions come in. That is a bit how the market is changing and how we then can fit in. I think it is still a bit unclear. I think I actually was in the US last week, and there was a lot of talk about the C-band. I think it was clear for me that it is still a bit early days. Actually how this will all play out is still early. There is now engagement with the broadcast community from the government, and they can now come back with questions and input and so forth, so that they are able to shape the outcome of this.
Andreas Eriksson: Still, I guess a bit early date, but you can see a bit where the market is potentially going, and we are very active in understanding and positioning us and seeing what opportunities this could mean for us.
Andreas Joelsson: But is there a way for us to understand how big this is? Is there a way to say that this share of the total traffic is today going through that C-band and how much is going through other type of applications?
Andreas Eriksson: Yeah, and I understand your question. I think at this point it is a bit hard to predict exactly, because what is happening is how will they actually what solutions will the broadcaster choose? And they might choose a set of different solutions, one which is more satellite-centric, one that is perhaps more fiber and internet and sort of centric around where we play. I think that is one part of it. It is still a bit unclear exactly how that will play out. The other thing is then, there is an opportunity for us, even in the satellite side, to actually contribute to that by providing solutions even into that. That is not an opportunity we cannot be participating in, even though it is maybe more of satellite-centric. But exactly, to your point around how would this all play out, I think it is still forming a bit.
Andreas Eriksson: We are, again, very active in working into the customers, doing trials around that and then being active in that sort of change with the key players, understanding what is happening and so forth. That is, I think, what we are focusing on at the moment, so that we can sort of seize the opportunity, depending on where it goes.
Andreas Joelsson: The timeline for this is, I guess there will be an auction in this spectrum in April 2027.
Andreas Eriksson: Yes.
Andreas Joelsson: You do not have to deploy it with the 5G, I guess.
Andreas Eriksson: Correct
Andreas Joelsson: Until 2030, I think.
Andreas Eriksson: Correct.
Andreas Joelsson: There's a bit of time.
Andreas Eriksson: It's a bit of time, it'll take some time, of course, this is a massive change for the broadcast industry, again, heavily debated through last week when I attended three different events. This was very prominent in terms of all the three different events. That was really top of mind, I think, for the American broadcast industry. I think, as you say, it'll take a bit of time, then again, responding on the government proposal, the broadcast industries, then they will continue to shape that, there'll be these milestones, as you say, with auction, then implementation, and so forth, will happen over a few years.
Andreas Eriksson: I think, as always, with opportunities like this, it's important to be in the beginning early, learn, see where it goes, position yourself, make sure that you can then also have the right propositions to be active and win business in the area. I think more to come.
Andreas Joelsson: The other side of the coin, if you are very optimistic, then you have a time synchronization opportunity when the telcos build the 5G network.
Andreas Eriksson: Yes, absolutely. I think hopefully we will be a winner.
Andreas Joelsson: Play both.
Andreas Eriksson: Wherever it goes, we will be a winner.
Andreas Joelsson: One final question from me, and we do not have more questions from the audience. That is related to the sync unit, where you state that there is progress, but it is still these 38 still in the pilot, or not even pilot side, but in the very early phase. There is sort of a slowness, if you can call it like that.
Andreas Eriksson: Yeah
Andreas Joelsson: to move these into more closer to the endgame.
Andreas Eriksson: Yeah
Andreas Joelsson: and rollout phases.
Andreas Eriksson: Yes.
Andreas Joelsson: Is there any change in how the potential customers look at this? I guess there is no one that has dropped the initial phases, so there is more added and no one is dropping out.
Andreas Eriksson: You think about changes on the timelines on.
Andreas Joelsson: Yeah
Andreas Eriksson: yes.
Andreas Joelsson: Something like that.
Andreas Eriksson: Yeah, no, I think as a general statement, I would say they continue to take time and not because they want to go through this step when you talk about the 5G operators then specifically. They continue to take a bit of time as they move through, and they want to continue to do these tests. I think what is changing, and this is different from different parts of the market or the world, because there is pressure. You can see that when you are in situations where there is disturbances because of geopolitical situation around the satellite, it becomes more important to have resilience and not to be dependent on satellite for bringing time into the network. I think that is a bit of change when we see that that is what is driving a bit more the sense of urgency around those opportunities.
Andreas Eriksson: I think that is one thing that is being piling up a bit more, so you can see that, but that is not across necessarily the whole globe, but in certain parts of the world and for certain operators it might be more pressured. It depends also on the operator's business or they are active on serving the critical services, the police and ambulance force. That might drive them into this being coming more top of mind to really have a resilient network. So that is one drive, but also then the geopolitical situation. I think we see that that is a driver and unfortunately, you can say that the geopolitical situation is continued to be in the world a bit negative in a way, which, of course, on our side, opens up a bit of an opportunity then when those situations are in different countries.
Andreas Eriksson: I think that is the one thing I would say, external pressure. I think the other part is that as we mature and as we get more customers, you increase the trust. The customers then say, "Well, you deployed a number of places. You have reference points." They can rely. They might not do all the different tests that we see and that the early operators needed to do. I think the other thing is you can see that the WWT partnership as an example, when you have a really strong market-making partners in the US and they are also global in that case. They work with the operators and as a trusted partner, as a trusted advisor on technology sometime. That also can have a potential to shorten the time it takes because they almost guarantee a bit that the technology will work and the operator trusts them.
Andreas Eriksson: I think the fact that we build up in strong partnership around the world with some key vendors like that will over time as well, I think, can compress the timeline. But we are dealing with operators which are very rigorous in terms of their process. I don't expect it to be magically shortened to maybe more of a media sales cycle. It will continue to be longer compared to maybe other industries.
Andreas Joelsson: On the data center side, first, what are you managing the time synchronization in a full data center? Secondly, given how the stock market works, we know that there are several data centers being built. How big is this opportunity for you without putting too much pressure on yourself?
Andreas Eriksson: No, it's a good question. I think when you think about the data center, if you look at this deal we have now made, the synchronization is sort of between data centers. So you have, I guess, two use cases, sync within the data center and a sync between data center. This opportunity is between data centers, and that's typically where we sort of play because we're more of a wide area network, more of a network player in that sense, how we bring sync out on longer distances and so forth. So that's our sweet spot when you look at synchronization side, and that's where this opportunity fits in. If you look at the size and so forth, it's early days. I think for us, this is an opportunity now to get in, and you can see that you have a right to play.
Andreas Eriksson: The question and of course, there's no doubt there's a lot of money going into the data center. Of course, sync is a very small portion of that investment, and the question is that what kind of use cases within that can we play in and where do we have right to play? I think that's the big question for us. Again, early days, but of course, when you get a customer in a new segment, you have an an opportunity to learn and understand the segment a bit more. So I would say both on the defense as well as on the data center side, pleasing, promising, exciting in one way, but still early days and even that will, I think, take some time until we can build momentum. But now we have an opportunity to learn more and assess the opportunity and take strategic decisions based on that.
Andreas Joelsson: And one final question from my side. On the regions, the Americas or North America has been relatively stable throughout the last couple of quarters, between SEK 40 million and SEK 47 million in revenue, while EMEA has been extremely volatile. What is the explanation of that?
Andreas Eriksson: I think in the EMEA, we come from a situation where we had done a lot of modernization of the EMEA customers that we had over the last few years. That was fueling a lot of the growth. I think we then seen that when we done that modernization, we then needed either more product to bring to the existing customers to grow, which we necessarily didn't have, or find new customers that we can then continue to grow and continue to have a stable revenue base. I think that's part of the explanation on EMEA. And then Americas, I think we feel that we're underserving that market still. We have a relatively high level of concentration in our business there, and I think we have an opportunity to be active in more customers in the Americas market.
Andreas Eriksson: I think that's our outlook on the two regions.
Andreas Joelsson: Perfect. Then all my questions have been answered, and all the audience questions have been answered. With that, I wish you good luck for the Q4 and good luck, Cecilia, in your new position. And see you next year. Thank you.
Andreas Eriksson: Thank you.
Cecilia Höjgård Höök: Thank you.
