AutoStore Aktie

Good morning, and welcome to AutoStore's Q1 2026 Update. My name is Hiva Flaskjer, and I'm the Investor Relations Officer at AutoStore. I will be moderating today's meeting. I'm joined here today by our CEO, Mats Hovland Vikse; and our CFO, Paul Harrison. We're standing ready to walk you through this quarter and answer your questions.

As usual, we would like to remind you of our disclaimer with regards to forward-looking statements. It can be read here at your own convenience.

Now moving on to our agenda. Mats will begin with an overview of our operational performance and our strategic progress. Paul will then present the financial results in detail. We'll follow with a live Q&A session, and you can submit your questions via the webcast player or ask your questions directly via Teams. The link and information are available on our website. After this Q&A session, Mats will round off with some final remarks. And as a reminder, all financial figures are stated in U.S. dollars.

With that, let's get started. Over to you, Mats.

Thanks, Iva. Good morning, and thank you all for joining our Q1 update. Over the past few months, I've spent quite a bit of time with customers across Europe and North America. And what I hear is broadly consistent and constructive. First of all, it is clear that we live in a world which is incredibly hard to predict, and all businesses need to assume that this will just continue. Against such a world, I'm hearing that it's more important than ever to build an end-to-end supply chain that has the resiliency and flexibility to thrive in a world of uncertainty.

Supply chain is a strategically important area for all companies moving goods, and it's just getting more important with this backdrop, which is also reflected in those conversations. What we bring to market, which is market-leading robotics and software and how we are doing that with our refreshed strategy, i.e., moving closer to customers with a high pace of innovation, resonates well with how these businesses are thinking, and that's also showing through in our results and what we're bringing to market. If we look into our numbers, we are reporting a good start to the year today. Revenue came in at a solid $166 million with an order intake of $179 million. Profitability remained strong with a 73% gross margin and an adjusted EBITDA margin of 44%. Cash flow conversion was 82%, which really underlines the strength and cash-generating nature of our business model.

Moving on to the business overview. In March, we had our spring product announcement. This one was primarily focused on the launch of our new software platform as well as new and exciting AI capabilities. I'll come more back to this in detail later. First, taking a step back, AutoStore holds a clear position as the global leader in a market that is still in its early years. Our scale is unmatched. And as of Q1, we have almost 90,000 robots across nearly 2,000 installations. Central to our success is our land and expand strategy. And in Q1, we saw 55% of revenue coming from existing customers who are either expanding their existing sites or establishing new ones. In the quarter, we also added 25 new customers, bringing the total to more than 1,300.

As we've talked about before, our commercial strategy is focused on building deeper relationships with strategic customers, and these numbers here reflects the importance of that. If you then look to the right side of this page, you'll see that our financial profile is highly scalable with industry-leading profitability and cash generation. This slide here shows our broad customer portfolio across a diverse set of end markets. In the quarter, momentum remained strong, and we saw continued positive development across several segments, including retail, 3PL and industrial, and we saw an increased demand for our high throughput solutions.

Now a year ago, we presented our product strategy, which is structured around 4 clearly defined pillars. Since then, we've delivered 3 separate product announcements, each directly advancing these initiatives across these pillars. Most recently, we announced our core software platform and AI capabilities, which is just further strengthening our product offering and the value proposition to our customers. I'm very pleased with the progress that we've made and the consistent execution against the strategy that we communicated a year ago. These milestones here demonstrate our ability to rapidly translate strategic priorities and customer feedback into tangible product outcomes and value for our customers. And the product that we have released and the direction that we're on has been very well received by our customers and the community overall. Not only are we seeing good initial traction, but it's also clear that we have increased our addressable market by now being able to help our customers address new types of use cases.

So with that, let's now dive into our spring announcement where AI, cloud and data were in focus. In this release, we announced CubeVerse, AutoStore Intelligence and VersaAI. CubeVerse is our new unified cloud and data platform that connects all of our applications, our AI capabilities and integrations into a single ecosystem. Embedded in this, AutoStore Intelligence acts as an AI layer that uses proprietary models to optimize operations, predict issues and deliver measurable performance improvements for our customers. This is a significant step forward. We now have the platform and AI layer to turn decades of data into intelligence that just compounds with every new robot that we deploy. This is delivering real-time insights, actions and continuous improvements for every customer at every site.

And let me remind you that we have almost 90,000 robots deployed at almost 2,000 installations across the world, which is just giving us billions of data points from live operations. No other player in our segment has this insight. So if you take a step back, our world-class hardware amplified by software platform and AI, creates this compounding competitive advantage, one that just deepens with every deployment and widens with every customer. This is what we call intelligent fulfillment.

So now before I hand over to Paul, let me show you a short video that talks to this.

[Presentation]

Thank you, Mats, and good morning. It's really exciting to see our product road map unfolding. Data and insight are what truly sets AutoStore apart. And now with insight driven by these AI capabilities, our value proposition becomes better, and our competitive advantage is stronger than ever before.

Now let's move to the financial highlights on the next slide. Q1 reflects a strong start to the year and continued momentum since Q2 2025. Of course, we are mindful of the turbulent world we live in. But as Mats has noted, it does see customers strengthening their supply chains, and that is where we play an important role. Also, our sharpened operational focus drives revenue and order intake in key segments as well as stable, high margins. I would add that as you look at these numbers, the impact of movements in FX on both sequential and year-over-year growth across key metrics is not material.

And before we move to the next page, let me remind you about the natural quarterly variations we see in our business. However, if you step back and look at the trend line, you'll see that we're clearly on a good growth trajectory. Looking at order intake, we reached $179 million in the first quarter, which is a solid number following a very strong quarter 4. And what is positive in our new commercial model is that we are securing longer-term commitments. What that means is that the order intake we see now includes projects scheduled for 2027 shipments. I'm happy to see that retail, 3PL and industrial all contribute positively. And with that, our order backlog closed at $571 million, another record high.

Moving on to revenue. Revenue was $166 million in quarter 1, showing very significant year-over-year growth. Looking at the geos, Europe once again remained solid, whilst North America delivered strong growth, 25% in this quarter. It was also pleasing to see a positive performance from Asia Pacific. The standard segment delivered steady growth, and we also had a meaningful share of high throughput projects landing in Q1 from both Europe and North America.

Okay. Let's move to margins. Gross margin came in at 73%, which reflects strong operational discipline. At the same time, we're not immune to the price increases we're seeing across various input costs. And these will weigh somewhat on gross margins over the course of the year. But with the resilience we've built into our supply chain, I do not envisage this having a significant impact on that high gross margin. Similarly, our EBITDA margin was stable and strong quarter-on-quarter at 44%, a reflection of our efficient business model and investments in long-term growth initiatives.

Finally, let's have a look at our balance sheet and financial position. In quarter 1, we continued to generate strong operating cash flow with a conversion rate of 82%. Working capital increased mainly due to a rise in receivables, reflecting higher volumes and some normal seasonality. Investment activity remains stable with the majority related to new product development. And as a result, net debt decreased to $136 million at the end of Q1 compared to $180 million at the end of Q4 '25. That corresponds to a net debt ratio of 0.5x, reflecting a very strong balance sheet.

So with that, I'll pass back to Hiva, who's going to lead the Q&A.

Thank you, Paul. And as always, as usual, let's start with the questions from Teams. [Operator Instructions ]. And let's see who has raised their hands. I believe, Luke, you are first in line.

I've just got a couple of questions. The first is on aluminum prices, which I know have risen significantly over the last 12 months. Can you just give us an idea when you say that there might be some impact on gross margin, but some mitigation from your supply chain, can you give us some quantification around the impact given some of the historic impacts that we've seen have been relatively significant? And then as a derivative of that, are you considering raising prices to your customers to help mitigate against those rises?

And then the second thing is, just can you give a bit more color on the conflict in the Middle East and how that's impacting either demand or supply chain management through March and April?

Thanks, Luke. I'll start with a couple of comments there. Yes, we are seeing a significant increase in aluminum costs. And as I say, that will have a bearing on our gross profit for the balance of the year. But we have spent a lot of time really since the Russian-Ukraine situation, diversifying our supplier base, which gives us the opportunity to take advantage of competitive dynamics that exist across our procurement activities. So when I -- if you want to frame this as I look, based on what we know today at the balance of the year, we still expect our gross margin to start with a 7. That hopefully gives you some quantification.

Mats will maybe comment on prices. Just a quick comment on the Middle East. We do a relatively small amount of business in the Middle East, but I will say that, that business continues to be delivered. So modest impact on our overall P&L, but no significant disruption to orders that we have in that region.

Luke, maybe first to add on your first question, Luke. We have learned a lot since we were in a similar situation a couple of years ago. And based on those learnings, we've taken some very clear actions on the operations side of the business, diversifying our supplier base, how we work with them, what type of agreements we have in place, et cetera, et cetera. So based on what we're seeing now, we don't see a need to pass this on to customers because we're able to, at least with the current visibility, have pretty limited impact, as Paul was saying.

But as we've done before, we have tools in our toolbox, should this reach a level where we see the need to do so. But that's just something that we'll observe and follow as we move forward. If you think about the situation more holistically on what's happening in Middle East and the disruptions that's causing globally, I think when we speak to customers, I think they're operating with this mindset that there is uncertainty. There will be unexpected things happening globally. And more important than ever, you need to build that robust supply chain and robust operation that can handle these different shocks. So I think we're in a period of time where customers are living through those types of situations and trying to build resiliency to handle it even better in the future. But of course, it impacts prices, it impacts the consumer, et cetera, et cetera.

That's great. And just to be clear, there's no significant surcharges expected on the pricing side from what you're saying.

Not with the visibility we have today.

I believe, Eirik, you're next one up.

Eirik from DNB Carnegie here. Three from me. I guess first one is for Paul and just kind of housekeeping on the FX impact, particularly on orders because you don't think -- I think, explicitly disclose that in the report. We calculate ballpark 8% to 12% organic growth adjusted for FX tailwind. Is that kind of ballpark in the right range on orders?

Order intake actually on a constant currency basis is slightly above reported, Eirik. But across the key metrics, revenue is absolutely disclosed, as you see in the quarter 1 report, it really isn't significant to these overall growth numbers we're talking about.

Okay. That's clear. My second question is on capital allocation and kind of in light of the numbers presented today. Any updated thoughts here on the buyback potential? You're at 0.5x net interest-bearing debt to EBITDA given what sounds to be a decent rest of the year. How should we think about the potential for a bit more active capital allocation?

Look, it is, as you say, it's a strong balance sheet, and we talked before about our priorities, organic potential for M&A to complement our strategy. And yes, we take and consider at a Board level returns of cash to shareholders and continue to do that. So something the Board debates. Something [indiscernible].

Okay. That's fair. And then lastly, can we get an updated number on the share of recurring revenue? And also kind of how we should think about this number in light of some of the new product launches you've made over the last 6 months or so?

So around about early to mid-teens and proportion of our revenue base is recurring or reoccurring in nature, that includes spare parts and around about half of that relates to kind of software and AutoStore-as-a-Service, Eirik.

Okay, perfect.

What we have released and what we are releasing, you're right, kind of more and more value sits in the software and the AI that we're applying across that portfolio. As you remember, we also released the Essentials Package early in the year where we're providing kind of a nice commercialization wrapper for all those innovations. So it's clearly a focus for us to, a, bring value to customers through that part of our product portfolio and, b, to then monetize that using that Essentials wrapper, which is over time building a better recurring revenue into the business.

That's great color. And if I can follow up on just briefly on that. I guess that's kind of opt-in for the end customers if they want that Essential Package or not. Can you give any indication of kind of the uptake or the penetration of the Essential Package or other opt-in software solutions kind of beyond the router software?

So the Essential Package follows as a standard into the new sites that we sell. And as you know, you need to operate with our core software and that portfolio to have it operating. If you look at those additional software applications that we can offer on top of that, which is kind of CubeAnalytics and some of those products there, we are seeing very strong uptick, both on the new sites that we're selling, but also existing customers are adding those applications into their portfolio. So I'm very happy with the development we've had there in the last 12 to 18 months.

I believe, Tintin, you're next one.

First one, are you able to share more about the success in North America? So color on is that existing new customers, any changes in win rates? Any notable changes in the competitive landscape there?

And then secondly, on -- just an update on AutoStore-as-a-Service, 3PL clearly still remaining strong. What's happening with the proposition there? Clearly, Q1 last year, it felt like a lot of people were interested in it. Is it to do with the macro environment? Just give us a color where you're at with that?

Maybe I'll start and you can chime in, Paul. But very happy to see the performance that we've had in North America because you'll remember earlier in 2025, we talked about reallocating resource into the region because we are seeing such a strong growth opportunity there. If you look into the numbers, it is a mix as it is globally. We're seeing the existing clients we have coming in and buying new sites as well as extending existing sites. And there, we are seeing different momentum in those discussions because of the new commercial model that we have applied where we are deepening those relationships and having different types of discussion now than what we've had in the past.

On the new logo acquisition, we're also progressing quite well also on the -- both on the order intake and revenue side, but also if you look into some of the leading indicators across the pipeline, we're having a fairly good traction in terms of new logo acquisition. The competitive environment in the region is roughly the same as we see globally, which is largely unchanged versus how we've talked about it in the past, and we're seeing that our win rates remains very, very strong.

Yes. And then AutoStore-as-a-Service, Tintin, one deal concluded in quarter 1, around about $5 million in Europe. So that tells you that this remains very much a feature of our business, appealing as you implied there are to certain -- sort of certain key verticals, an important tool, therefore, in our lockers, so we continue to offer it. We continue to have a number of interesting conversations with potential customers about it.

I believe, Martine, you're next.

Congratulations for really good results. I think a lot of my questions got answered, but I have some as well. And I can take them one by one. You have -- you further increased the order backlog conversion rate. How do you see the trend developing to 2026? Was there any like in the sales space, was there any like larger orders affecting that?

I think it's returned to broadly the historic average when you look at recent quarters. I wouldn't point to sort of anticipating a sharp increase in it as we look for the rest of the year. And just as I mentioned in my comments, just keep in mind that we, of course, start now to take in deals for 2027 into the backlog as well as you think about that conversion. But good to see it back up to that historic average.

I think more kind of broadly, we're seeing now customers making commitments, following through on those commitments and having kind of a normal sense of urgency against that. So no special things impacting conversion as such. There will always be a lumpiness in those numbers because of the business model we have. And that's a fundamental feature of our model, and that should also be expected as we move forward. But overall, I think there is kind of a natural good conversion rate, which is something that we focus on coming back to when you now look at the numbers.

That's good. And on the gross margins, you answered the aluminum part, but was there anything other particular affecting like in the product mix that we should be aware of?

Yes. Look, my comment was not intended actually to be confined to aluminum, and we're mindful of the potential for a broad increase in input prices and energy costs. And take my comment, please, when I was presenting the slide as covering a broader sort of take on input costs than just aluminum.

Got it. And a little bit follow-up on Tintin's questions regarding the split on the order intake. Would you say that this -- the region split on sales reflect on the order intake split? And was there any like significant larger order this quarter that we should be aware of in the order intake?

I think we talked, if you go back to quarter 4 about a number of sort of long-standing high throughput debates coming to conclusion in terms of order intake. We didn't see that same feature in quarter 1. So no, I wouldn't point to anything sort of abnormal in the quarter 1 order intake.

Martin, I think, you're next one.

It's Martin from Citi. So the question is just coming back to North America. So obviously, there's a lot of movement on tariffs. And just trying to work out whether the new tariff situation is better for you than perhaps people might have feared a year or so ago. I mean obviously, there are these new Section 232 tariffs, which presumably impacts the aluminum grid that you sell into North America, but just trying to understand what the impact is there. But overall, are your customers now feeling that tariff certainty is now resolved and that's sort of releasing pent-up demand that might have been sort of on hold from last year?

We don't see the tariffs itself limiting conversion as such. So I think that in itself gives an answer to part of your question. If you look at the recent changes, we're seeing that. Yes, some mix shifts in [ better ] but not meaningfully changing the position, and that position is one where I think customers has now gotten used to a world where you operate with a tariff level and across the value chain, you solve for that and drive towards conversion. So no, I don't see that meaningfully impact our ability to do business in North America and the customer seems to have adjusted.

And if I could just have a follow-up unrelatedly, one of the features that seems to be seen in the industry at the moment is this desire for flexibility and scalability just because of end market uncertainty. And obviously, you've got a very flexible solution. I don't know the way you measure this if it's sort of number of robots per order or just simply size of individual orders. But are you seeing more customers wanting to sort of start small with an option as part of your land and expand to sort of upgrade relatively quickly? Or is that not really a feature that we should be sort of thinking about?

Look, even historically, that has been a feature of how our customers are implementing AutoStore because there is no need to try to look into the crystal ball and guess what your volumes is going to be 5 years down the line and scale your system based upon that, you do actually build for the demand that you're seeing today and kind of what you have in front of you and then you scale over time.

So I think looking at the numbers, it will be even clearer once you start seeing extensions come in, in future years. But it's clearly a big topic as we discuss with those customers because you're trying to solve for a situation where you should expect your business to look different 1, 2, 3 years down the line. And that's also how we're designing those systems and designing those conversations that we're having.

Tim, I think, you're the next one up.

So the first one is about your AI capability, you just seem to detailed. And I just want to get like a brief idea how much more value proposition that AI can help in terms of like your order size? I mean if I look at the historical number of the order value is probably like [ $2 million, $3 million ] on average. And how much AI can help in terms of boosting this number in terms of the value that we can get from the platform?

And also if you develop the AI capabilities, are you develop all these things in-house? Or do you consider partnering with some of the third-party solutions, which can further enhance your capability on that?

I think an important feature with AutoStore Intelligence that is that we're applying those proprietary models across the portfolio. So we're creating customer value in different ways. Two of the areas that we highlighted in the spring product release was one in the CubeControl software, which is kind of the routing software and the logic that drives efficiency.

And by creating those customized configurations through AI based on those real individual site situations, we have seen quite meaningful performance increase on sites that has high throughput, high robot density where kind of that optimization challenge is the hardest. And as that creates customer value, of course, over time, that will also show through in our ability to monetize that.

The second example that we got through was through CubeAnalytics, where we're now able to move from just providing data to actually providing insights and predictability and telling the customer what to do with what the data is telling you. So again, as we provide more customer value, that will over time improve our ability to monetize and improve those metrics that you just mentioned, Tim.

And when you look at partnerships, we are building proprietary models in-house, and it's important for us to have those capabilities. But of course, there's a lot of exciting things happening out there. So we are building the right sets of partnerships as well. For instance, across AutoStore Intelligence, we have partnered with Databricks to make sure that we're able to bring the best of breed out there. And on VersaAI, we've also built partnerships to make sure that we're applying the right set of AI and the right vision systems to those products so that we bring the best possible solutions out there to the customers.

Got it. Very helpful. And my next question is about your go-to-market model. I think you have been increasing your resources or input into the sales force or like -- to get closer to the end users. And I think that's probably one of the reasons why you have like an improvement in terms of the conversion, in terms of revenue from the order backlog. How do we think about the further inputs this year or going forward? Are we going to increase more resources in terms of sales, in terms of, let's say, the capability to try to enhance further conversion -- that means if there's any implication in terms of margin on that front?

So look, we have made some targeted good investments, both in our commercial part of the organization and in our product part of the organization against that strategy that we've talked about. As you say, those investments have yielded good returns for us. And as we see those investments also producing a good business case going forward, we will continue to make those investments because it's giving us the results that we're able to present here.

Next one up is Petter, I think.

Yes, sure. Two questions from me. You have discussed the geopolitical uncertainty and I obviously understand that, that creates some uncertainty. But have you observed any, call it, tangible shift in consumer behavior in recent weeks? Are they becoming slightly more cautious? Or is it more or less business as usual? That's my first one.

So in terms of our customer base, we haven't seen any meaningful shift over the past few weeks in the discussions that we've been. Downstream, how the consumer acts for those different types of businesses, I think there's better people than ourselves to answer. But from our perspective, those discussions has not changed.

Okay. Perfect. And then on OpEx, we have seen some volatility over the last quarters, and it's definitely good to see that costs are moving down now Q-over-Q. So on a broader picture, if you look in Q1, I think the clean cost base are up around 8% year-over-year. Is that a good estimate for the full year? Or is Q1 not, call it, fully representative?

I think if we go back to Q4, I talked about some of the features of the OpEx we reported in Q4 with sort of year-end -- a very strong year-end reflecting in sort of various aspects of our cost base, including compensation. And I said then that we would see it come down in Q1 as it has done. As we look forward for the rest of this year, clearly, the usual cycle in our year, which is in Q2, we'll do the usual salary rounds, et cetera. So that will have -- I'd anticipate some impact on OpEx. And then just back to Mats' point, we're not going to hesitate to bring more resource into the business if we see clear growth opportunities. So I'm not going to encourage you to simply take quarter 1 and extrapolate from that for those reasons.

Okay, two things we're balancing as a business is, one, this is a market that is still just in the early years, and we're very early on the overall adoption curve. And if we can make investments that enable us to, a, maintain the leader in which is going to drive that adoption and, b, help accelerate adoption, we will do that because of the early stage that this market is in.

But of course, on top of that and what we're balancing it against is this disciplined approach of making sure that we do the right investments because it is a scarce resource, and we need to make sure that we're making investments that is yielding results and keeping that cost discipline that has created the strong financial profile that we present here today.

Toby, I believe, you're next one up.

Maybe just on the margin side, thanks for the steer on the gross margin dynamics. So still sort of expecting that to start with the [ 7 ]. But if the input costs continue to weigh on the gross margin through the year, as you mentioned, how should we think about the flow-through to EBITDA margin? And what do you see as any sort of key offsetting factors across the OpEx that could allow the EBITDA margin to remain more stable or even improve even if the gross margin trends down a little bit through the year?

Look, I think we -- if you step back from this, we have always seen some variability in our gross margin linked to things like product mix. So I don't think we're in a particularly -- as we look at it right now, a particularly abnormal situation to my earlier comments. And to Mats' comments, we will obviously take gross margin trends into account in the running of the business. But at the same time, they will not -- within the parameters I've set out, they will not see us refrain from putting in the right investment into the business either. So I think just to step back here, I think given the parameters we're talking about at the moment, we're in a kind of normal -- a reasonably normal sort of business situation.

If no other hands, let me just double check. No other hands are raised. As far as I can see, I will check the chat as well. There are no questions. So I believe this concludes today's Q&A session.

And I'll hand over the word to you, Mats, for some closing remarks.

Thanks, Hiva. Thanks, Paul. So let me just summarize what we presented to you today and remind you also of some key points.

First, we operate in a large underpenetrated market that is supported by long-term structural trends. We have remained focused on executing on our strategy with sharpened commercial focus, improved backlog conversion, and we've maintained solid profitability. And while the environment in early 2026 remains broadly in line with last year, we're in a much stronger position than what we were a year ago. We have a solid foundation supported by a scalable solution that goes across industries and geographies.

And with a more customer-centric go-to-market model, we're working closer with customers and just strengthening our land and expand strategy. This also contributes to us being resilient and well positioned to manage the current geopolitical uncertainty with corresponding volatile market conditions while also protecting our profitability. And as you've heard me say many times before, we're not standing still.

During the past 18 months, we launched 18 new products and capabilities that's just seen us extending the Cube into adjacent workflows, solving real customer challenges and expanding our addressable market and AI capabilities. As Paul has demonstrated, our highly cash-generative business model results in a strong balance sheet. Taken together, these characteristics give us the confidence in our direction and ability to create long-term value.

So I'd like to thank you for dialing in today and look forward to speaking to you again soon.

Good morning, and welcome to AutoStore's Fourth Quarter 2025 Presentation. My name is Hiva Flaskjer, and I'm the Investor Relations Officer at AutoStore. I'll be moderating today's session. I'm joined by our CEO, Mats Hovland Vikse; and our CFO, Paul Harrison, and they're standing ready to walk you through this quarter and answer your questions.

As usual, we would like to remind you of our disclaimer with regards to forward-looking statements. It can be read here at your own convenience.

Moving on to the agenda. Mats will begin with an overview of our operational performance and strategic progress. Paul will then walk you through the financial results in more detail. We'll follow with a live Q&A session [Operator Instructions]. So after the Q&A, Mats will round off with some final remarks. And as a reminder, all our figures are stated in U.S. dollars.

So with that, Mats, over to you.

Thank you, Hiva. So fourth quarter marked a strong finish to the year. Look, we can all agree that 2025 has been a volatile year, but it is now clear that the actions that we have taken are starting to show through in our results.

In Q4, revenues grew 29% sequentially and 9% year-over-year to $180 million. Order intake increased 27% sequentially and 35% year-over-year to $194 million. Moving to profitability. We maintained our strong gross margins at 74% and our EBITDA margin ended at 43%. If we look at it through a full year lens, revenues ended at $539 million, down 10% compared to 2024.

And as we stand here today, we still observe a market that holds a lot of the same characteristics as we've seen for a while. What we see though is that certain customers are now investing in automation and building that intelligent fulfillment platform that is needed to operate in a world where changes just happen at a pace and frequency like never before. The customers we signed in Q4 are a mix between those that we've worked with for a long time and new ones that has come in with higher velocity.

In the quarter, we saw continued strength from industrials and other B2B segments, and we're also seeing some traction in retail. I'm also pleased to see that U.S. constituted more than 30% of our order intake. And in addition, we had several high throughput projects converted in the period. As we've talked about before, these are key growth areas for us, and the U.S. was one of the areas where we reallocated investment towards during 2025.

Taking a step back, 2025 has been a year where we've made significant change and progress in the company. The market environment was very difficult at the start of the year as also reflected in our results. Following that, we took decisive actions and focus on what we can control.

First, we have improved our ability to win, getting closer to our customers, reallocating resources and making sure that we're focused on the right sets of opportunities. We've added 150 new customers in 2025. And what is interesting, though, is that still existing customers accounted for about 60% of our revenues. And this to me talks about the potential of our land and expand model and the importance of deepened customer relationships.

Second is that we're taking steps to improve the quality of our revenue. We have continued to invest in and monetize our software products, such as the Essentials Package that we released earlier in '25. Additionally, we've launched new business models with AutoStore-as-a-Service to better align with certain customer segments. And as an example, earlier this year, we won and shipped projects worth $34 million, and all of this has now gone live and started generating revenues for us.

And third is that we continue to expand our leadership position through an improved pace of innovation. In 2025, we released 11 new products, including AutoCase, CarouselAI and Flexbins. And so far, we've seen strong commercial traction with very positive customer feedback, and we've now gotten involved in several projects that we otherwise would not have been able to do without these sets of capabilities. We do not stand still. Our next product announcement is coming up already in March, and I'm looking forward to showing you the progress that we've made.

But altogether, these 3 pillars are setting us up for growth. As mentioned, there is still uncertainty in the market. And even though we see good momentum on several fronts, it's still too early to call how 2026 will evolve. But what we do know is that we are entering 2026 in a stronger position as a company than ever before. And that is partly as a result of the strong foundation that this strategy is built upon.

The scale we have with nearly 2,000 systems across 65 countries gives us a true global presence. We've achieved that through a model that gives us industry-leading distribution with a strong partner network and a broad customer base of 1,300 customers. We do all this with a superior financial profile. We're set up for growth, high margins and high cash conversion. And look, we can achieve this scale with such a financial profile because we have a standardized, modular and flexible solution that works across a wide range of end markets.

There's 2 takeaways I want you to take home from this page. First, we have a diversified customer base with customers using our solution for many different strategies: B2B, B2C, e-com, store fulfillment and much more. Second, our solution is trusted by world-class brands. And even with those that have started implementing AutoStore, it is still early days in terms of adoption.

I always like to end with the customer story. And this time, we want to show our customer Polaris, who is a global supplier of outdoor and off-road vehicles. They have seen great benefit of incorporating AutoStore into their operations. So before Paul takes us through the financials of the quarter, please have a look at this.

[Presentation]

Thank you, Mats, and good morning. That was a great example of a customer requiring an AutoStore solution, which would fall into our standard segment, which clearly delivered strong improvements across their key metrics.

Now let's move on to the financial highlights on the next slide. Over the course of 2025, we saw a gradual stabilization of market conditions. So for the year, revenue came in at $539 million. Gross margin was 72% and adjusted EBITDA margin was 42%. Order intake reached $638 million and cash conversion was 76%.

But turning to Q4, in particular, our performance was enhanced by a number of customers committing to projects that they have been evaluating for some time. The results also reflect strong operational focus, and we're seeing the early results indeed from our sharpened strategy. As a result, revenue came in at $180 million, up 29% quarter-on-quarter and 9% year-over-year. Gross margin was 74% and adjusted EBITDA margin was 43%. Order intake reached $194 million, bringing our backlog to $557 million, and cash conversion for the quarter was 84%.

In Q4, as Mats mentioned, the strong order intake you see on this slide reflects growth across a broad range of end markets with retail showing renewed momentum. In addition and reflecting back to our Capital Markets Day in 2024, it's good to see progress in our high throughput space.

Order intake reached $194 million, which took our closing backlog to a record high of $557 million.

If I move now to revenue, sequentially, revenue grew 29% to $180 million in quarter 4. Europe remains strong, and North America also delivered another quarter of sequential progress. The standard segment delivered steady growth, and we also had a meaningful share of high-throughput projects landing in Q4 from both Europe and North America. So I'm pleased with the sequential improvements in order intake and revenues and the year-on-year growth of 35% and 9%, respectively.

As you consider the year-on-year growth, remember, please, our comments about the unusual euro-U.S. dollar movements in Q4 of last year. If you adjust for those, the 35% and 9% I just referred to become mid-teens and single-digit growth numbers, respectively.

Okay. Let's move on to margins. Gross margin came in at a particularly high 74%, reflecting a favorable product mix. Further down the P&L, the adjusted EBITDA margin came in at 43%, which is lower than the previous quarter. Now as we've said on a number of occasions, we're prepared to invest in growth, and you should expect us to continue to do this, balancing profitability with disciplined investment.

This is a new slide, which we're presenting following the completion of the recent refinancing. As a reminder, we refinanced on the 5th November 2025 with $150 million 5-year term loan and a $350 million 5-year RCF. We continue to deliver strong underlying cash flow from operations with cash flow conversion at 84% in Q4, as I mentioned. Looking at the quarter in more detail, we see a high tax outflow of $48.4 million. This is primarily driven by the timing of tax payments in 2025 with the final true-up being finalized in the fourth quarter.

And looking at working capital, we had an increase in receivables affecting free cash flow in Q4 as part of a normal seasonal pattern and a reflection of a large volume of sales booked in December. All of this took our net debt to $180 million at 31st of December, and our liquidity headroom remains strong at $372 million, split between cash of $90 million and the undrawn elements of the RCF at $282 million.

Going forward, our new facilities will enable more agile and efficient treasury management with surplus cash being more readily applied to debt repayment without any loss of financial capacity. During 2025 as a whole, we continue to deleverage our balance sheet and our current net debt equals 0.8x adjusted EBITDA. As we talked about before, growth, both organic and inorganic, remains our highest priority. However, with these leverage levels and strong cash generation, capital allocation is a topic the Board regularly discusses.

So with that, I'll pass back to Hiva.

Let's open up for some Q&A. And let's start with the ones on the webcast who are joining us on Teams, sorry. Eirik, I think I believe you're first. If you could please go ahead and unmute yourself.

I had a bit of a struggle getting on to the start of the webcast. So apologies if these were addressed early. But if we can start just with some housekeeping, Paul, on the exact FX impact on both orders and revenue. Is it correct to think that FX tailwind was approximately 15% year-over-year on orders and approximately 5% year-over-year on revenue?

Yes, you're in the right place there, Eirik. So to be precise, constant currency revenue growth around about 4%, constant currency order intake growth around about 14%.

Perfect. And also, Mats, I think I picked up on the comment you said that the U.S. was it more than 30% of orders in Q4? How was the order growth distributed between the other geographies? And could you also give some more color on high throughput versus standard in the quarter?

Of course, and you got that right. So U.S., more than 30% of orders. Europe remains strong north of 60% and remaining landing in APAC and some in Latin America. High throughput was also an area where we did make progress in the quarter, both on order intake and in revenue. So a few high throughput projects included in the mix there for sure.

Perfect. And I guess this is back to Paul. Your order book to revenue conversion was around 33% in the quarter, quite a meaningful step-up from both Q2 and Q3. How should we think about your ability to drive orders to revenue for the full year of '26? And are there also other factors such as as-a-service or longer project time lines for high throughput that we should take into account?

Yes. Look, I think it's obviously good to see that 33% conversion in Q4. It takes us back, if I take a long-term historic average to near that average and is better than the conversion rates we saw in quarter 1 to quarter 3, Eirik. I would just remind you that the comment we made about a number of those high throughput projects coming to fruition in quarter 4. So we need to be a little cautious about whether we see a sort of repeat of that conversion rate. What I will say to you is that the quality of our order backlog remains extremely strong.

Perfect. And while I'm still on, I'll go with a couple of more, and that's on the kind of demand side. Are you seeing any impact at all of like pull forward demand due to customers kind of front-running price hikes on memory chips and/or potential supply chain constraints, which has been a theme over the last couple of weeks?

No. I think in general, what we're seeing with customers is that many are now looking to implement automation because it has a meaningful difference for them in their operations. We haven't seen any meaningful difference because of either shortages or price hikes, et cetera. For our customers, I think this is more of a long-term investment that sees them building better operations versus accelerating it.

That's very clear. And just one which also is kind of on timing effects and the U.S. in particular. Are you seeing any impacts or just in the discussions you have with end customers around impact from the Big Beautiful Bill and potentially pulling forward some 2027, '28 projects to 2026?

No, I think in general, because we are now closer to our customers, we are discussing more road maps and longer-term implementations with it. It isn't, again, driven by kind of certain policies or certain supply chain expectations, but more on a long-term strategy basis.

Perfect. And then one last one, if I can bug you. Last -- less than a year ago, you initiated a cost program with about $10 million in annual savings. Today, you're writing that margins come down, reflecting investments in long-term growth initiatives. Can you share a bit more of your thinking here? And is this kind of a read that you've become incrementally not significantly more positive on short-term outlook over the last couple of months?

I'll make a couple of comments there, Eirik. Look, one thing that we were really pleased to do in 2025, we see quite a material proportion of our cost base move to what I call sort of front office functions. So I'm thinking about the commercial function and products. So we saw that mix shift, which is important. And to that end, recognizing that we remain inherently a highly profitable business with a highly standardized product driving a high gross margin, we will -- and we will continue to report a strong EBITDA margin. But within that range, we will invest, as you imply there to drive stronger growth. That's always been our priority.

And if you look at it, right, yes, we took out those costs, which was needed at the time. But we've also sharpened our strategy, and we see that strategy is yielding results. At the core of it, we're a growth business. As we see business cases or areas that we can invest in that will yield positive results for us both short-term and long-term, we will make those investments.

I think next up is Tim. If you could please go ahead and unmute yourself.

So a couple of questions have already been asked by Eirik. So I will just follow-up with some of the questions. So first of all, regarding revenue conversion in the quarter, obviously, this is a kind of step-up. Can I also just confirm whether there will be any projects that you originally scheduled in the first quarter and then it was delivered early in the fourth quarter?

I think there's always, Tim, a desire on the part of customers to close a year, place orders as part of sort of preparing for projects in the coming year. So there's always a year-end push. In that regard, I wouldn't characterize it as being abnormal, but I would draw your attention again to those high throughput projects that we've been working on for some time that came to a conclusion in the form of an order in Q4.

Understood. And then on the high throughput projects you mentioned, can I confirm how long in terms of project longevity cover the normal project for the projects that you got in the fourth quarter?

Tim, I'm sorry, just repeat that question. I'm so sorry.

Yes. So I'm just wondering how long we should consider in terms of project life for the high throughput projects that you got in the fourth quarter.

So I think the high throughput projects in the fourth quarter is likely to convert over the course of 2026. But on average, these projects do take longer time than what we see in the standard segment because it is larger projects, more complexity and project duration is generally longer.

Understood. That's clear. And then my last question is on the margin side. So I think this quarter, we have a margin decline on a year-on-year and quarter-on-quarter basis as I think that's the growth initiative investments. And if I look at the personnel expenses, it is kind of a step-up in the quarter. Can I just confirm whether there will be any one-off incentives in the staff expenses? Or we should consider this like an ongoing level?

You're right to identify that increase has been sort of related to personnel expenses. Of course, it's -- it becomes headcount investment in, as I say, those front office functions, particularly sales. And of course, as you get to a strong close of the year, the usual sort of accruals for sales bonuses and the likes are relevant as well.

So that means there could be some one-off items included in the staff expenses or not?

No, I'd say the item -- no, not one-off items. I'd say the items that you're seeing are partly related to the performance for the quarter and partly related to broader investment in the form of headcount into the commercial and product functions.

Understood. And then for this level of margin, can I assume it is something like a new norm level in terms of the EBITDA margin?

I think it's -- look, it's important to say we're not guiding specifically to margin today. But we are prepared with those dynamics. I talked about the inherent high profitability in the business. We are prepared to invest to return this business to growth. And let's be very clear, that is our #1 priority. But we are going to remain a highly profitable business. And these margins are still after all 43% in the period.

Toby, I believe you're next.

Just on the investments in longer-term growth initiatives, could you just unpack what are the biggest buckets of spend there? And just how you're thinking about this level of spend intensity going forward would be great.

So look, 2 big areas. One is that we're executing a strategy that sees us come -- coming closer to our customers. So building up the types of capabilities that sees us building those relationships and delivering that value to customers, both pre and post sales because that sees us better taking out the land and expand potential that we've talked about.

The second area is around product. We've talked about the product strategy that we have in place and how that is both improving our current position and sees us entering new types of markets. And you'll see us continue that pace of innovation that we've had in 2025 with new product releases coming up now already in March.

And in terms of go forward, as I said, our mentality is that if we can develop good solid business cases, we will make those investments.

Thank you, Toby. Nicolas, do you -- any question? No question there. No hands are raised now, I think. Well, sorry, Eirik, I apologize. Your hand is raised. Please go ahead and unmute yourself.

Just jumping back into your point about the solid gross margins. Paul, two questions on that note. Number one, on the cost side. Aluminum prices have been kind of steadily rising over the last couple of months. Could you just remind us on the contract structure and also hedging policy and when that potentially might impact the P&L? So that's on the cost side of the gross margin.

And maybe more a question for Mats on the revenue side and on the competitive landscape. Any updates there, what you've seen through the quarter, pricing dynamics, anything that we should be aware of for both the short-term and medium-term?

Thanks, Eirik. I'll go first. Look, on the cost side, clearly, we are able to plan production several months forward, meaning we've got at any point in time, several months' worth of work in progress or finished goods in the form of robots in our factories. So that tends to create a lag effect in terms of exposure to commodity price movements. But -- and I will also point out that having moved away from single source providers, we can take advantage of still competitive tension that exists when procuring those raw materials.

At the same time, as I've said before, we're not immune. Of course, we're not immune to those commodity prices, which is why you -- I've characterized for various reasons, the 74% gross margin in quarter 4 has been a particularly high one. And you've seen variability as a result of the fact that you're raising as a result of product sales mix as well, and that will continue.

And in terms of pricing dynamics, we see that our competitive situations remains very similar as it has been for a while now with the same type of players. What we do see though is that because we are getting closer to customers, we can be kind of even more crisp in explaining the value to those customers.

And the second point I'll make is that because of those product releases that we've had during 2025, we're also now competing in projects that we haven't been able to compete in before. But looking at the data, we maintain our very, very high win rates.

Thank you, Eirik. Petter, I believe you had your hand up.

Yes. I'm not sure if you can hear me. I had some trouble getting into the call. But I do have a question on the cost base. It might also have been answered, but nevertheless, I'll go. Is the cost base in Q4 representative for the coming quarters?

I think I will refer back to the answer I gave earlier. We will, at all times, take account of opportunities to accelerate revenue and that will see variability in our cost base. So we're not specifically guiding to the cost base. What I will also say, again, repeat is the inherent profitability, high levels of profitability in the gross margin level and an EBITDA margin level will continue to prevail, but we will be agile.

Okay. Paul. If I might, just giving a follow-up question on that one. Does that mean that it gives you a little flexibility in a quarter which you could see some softer sales, you have some flexibility on the cost side. How should we view that one?

Look, to some extent, a substantial portion of our cost base is people, of course. So flexibility in terms of hiring plans, yes, we do have. But at the same time, with substantial sort of a employee base in the business. So be mindful of that as well. But clearly, on hiring plans, we can accelerate hiring plans where we see opportunity to accelerate growth consistent with Mats' early observations about strategies, including getting much closer to our largest customers.

Well, actually, Petter, if you have any additional questions, please go ahead. There are no other hands raised. So please go ahead and unmute yourself, Petter.

My question has been answered.

Okay. And you are -- there are no other questions as far as I can see in the Teams meeting. I'll just quickly have a look if we've received any questions on the chat. We have one question from [ Simon ]. What does the management evaluate to be the best capital allocation for the future? And what are other key points for future growth?

Okay. I'll certainly take the first of those. Best capital allocation, and I want to stress again, the best capital allocation is to support growth in the business, both organic and inorganic. But clearly, when you're a business that is strongly cash generative as AutoStore with such a strong balance sheet as well, there is also the opportunity, which the Board considers from time to time to return cash from shareholders. And those 3 elements are not mutually exclusive. So that is an active debate that the Board has.

And I'll repeat the headlines of what we've already discussed. We're executing against a sharpened go-to-market strategy that sees us getting closer to customers. We're investing in key product initiatives that sees us both strengthening existing solution, expanding that into new areas and new problems to be solved for our customers, increasing addressable market and also building a software platform that sees us and our customers draw advantages from all of those other key strategic areas.

Thank you, Mats. That was the only question in the chat. [Operator Instructions] No. I think that concludes our Q&A session for today. Thank you. I'll hand over the word to you, Mats.

Thank you. So let me summarize what we have presented to you today and also remind you of some key points. First, we operate in a large underpenetrated market supported by long-term structural trends.

Second, 2025 was a volatile year, but we responded decisively. We've streamlined the organization, sharpened our commercial focus, improved backlog conversion and maintained solid profitability. And while the environment in early 2026 remains broadly in line with last year, we are in a much stronger position than what we were a year ago.

We have a solid foundation supported by a scalable solution across industries and geographies. And with a more customer-centric go-to-market model, we're working closer with customers and just strengthening our overall land and expand strategy.

And as you've heard me say many times before, we're not standing still. In 2025, we launched 11 new products that saw us extending the cube into adjacent workflows, solving real customer challenges and expanding our addressable market. Our upcoming biannual launch in March will build on this momentum, and we look forward to share in a months' time. So taken together, these elements gives us confidence in our direction and the ability to create long-term value.

So I'd like to thank you for dialing in today and look forward to speaking to you again soon.

Good morning, and welcome to AutoStore's Third Quarter 2025 Presentation. My name is Hiva Flaskjer, and I'm the Investor Relations Officer at AutoStore. Our CEO, Mats Hovland Vikse; and our CFO, Paul Harrison, are standing ready to talk to you about this quarter and subsequently answer your questions. I'll be moderating today's session.

As usual, we would like to remind you of our disclaimer with regards to forward-looking statements. It can be read here at your own convenience.

Now moving on to our agenda. Mats will begin with an overview of our operational performance and strategic progress, including some exciting insights into this fall's product announcement. Paul will then present the financial results in detail. We'll follow with a live Q&A session, and you can submit written questions via the webcast player or raise your hand in the Microsoft Teams to ask your questions directly.

The link to the Teams meeting is available on our website and the invitation published about a week ago. After the Q&A, Mats will round off with some final remarks.

And as a reminder, all financial figures are stated in U.S. dollars.

So with that, let's get started. Mats, over to you.

Thank you, Hiva, and good morning. When we met in August, we noted a more stable market environment compared to the peak uncertainty earlier this year. That stability was maintained into Q3 where the positive backlog conversion trend continued. And what we're experiencing here is a market that is still impacted by the global uncertainties, but where customers are making more progress with their plans. In this market, our strategy of becoming closer to customers is yielding results. More than half of revenues was generated from existing customers also this quarter. At the same time, we signed up around 50 new customers, further strengthening the land and expand opportunity. Europe continues to be a stronghold for us, representing more than 70% of revenues in the quarter, but we also see positive momentum in the U.S., which is expected to be an important growth market for us over time.

Moving on to the financials. Q3 revenue was $139 million, up 4% sequentially, showing steady development from Q2, but still down 4% year-over-year. Order intake was $152 million, which is stable sequentially and up 6% year-over-year. Looking at profitability, gross margin was 73%, which is consistent with levels that we've seen over the past year, whilst our adjusted EBITDA margin came in at 47%, again, in line with historical levels. And Paul will provide more details on the financials later.

But now let me touch on some exciting key developments in the business this quarter. We had our fall product announcement where we announced 7 new products and features designed to improve our overall value proposition, make deployments of the systems easier and expanding on our capabilities. And these were all built in close collaboration with customers to solve real operational challenges and open up new use cases, and I'll come back to the highlights in a moment.

Also, building on our successful experience with our grocery customer, Rohlik, we have signed Veloq as a partner. Veloq, which is part of the Rohlik Group, is a new AI-driven global solutions provider for grocery. Together, we're able to offer an end-to-end solution for the grocery market, which is one of many end markets where we have an attractive value proposition.

This familiar slide illustrates the strong foundations of our business and why we're uniquely positioned to lead. It highlights our value proposition, our competitive strengths and financial profile. To date, we've delivered around 1,850 systems with 82,500 robots across 63 countries, serving 1,250 unique customers.

Within Cubic Storage, no other player has an install base of this scale, which is a clear advantage that just reinforces the strength of our solution and provides us with a substantial platform for our land and expand strategy.

And this is a slide that you're also familiar with. And here are the names of a small selection of our over 1,250 customers. And as you can see, we have a broad customer portfolio across a diverse set of end markets. Around half of our revenues come from existing customers, and this growing customer base represents a massive opportunity. It's also worth noting that Europe remains our largest region, representing over 2/3 of our business. And over the past few quarters, B2B segments like industrials and health care have remained resilient. We've also seen strength in 3PL and leading indicators are improving across e-commerce and retail.

And now in October, we had our fall product announcement, introducing 7 new products and features. These products have been very well received by our customers, and there's particularly 2 of the products that I would like to call out. First is AutoCase, which unlocks the combination of case and piece handling in one automated flow. This opens up a new market and new use cases that we couldn't previously offer to our customers.

The second is FlexBins, and this enables mixed bin sizes within a single grid, which then increases storage density and offer more flexibility to our customers. And these customer-led innovation shows good progress on our overall product strategy. We continue to improve on our core, which is further strengthening our leading position. And we're also expanding our capabilities and solving for new use cases, which then expands our overall market opportunity.

And I always like to end with a customer story. And this time, it's an existing customer who started with a high throughput system a few years ago. Since then, Alza has added several extensions and recently, they just expanded their site again. Next year, they will install their second site, which is a great example of our land and expand strategy and how repeat purchases typically follow once the value is proven.

So before Paul takes us through the financials of this quarter, please have a look at this.

[Presentation]

Thank you, Mats, and good morning. It's great to see a practical example of the land and expand strategy.

Okay. Let's move to the financial highlights on the next slide. As Mats mentioned earlier, this quarter reflects steady progress. This slide gives a snapshot of our Q3 financials. Revenue came in at $139 million. Gross margin was strong at 73%, and our adjusted EBITDA margin was 47%. Order intake reached $152 million, bringing our backlog to $543 million.

And on the next slide, I'll go into more details on these key financials. So as I just mentioned, order intake totaled $152 million this quarter. There was no material FX impact on sequential growth this quarter. However, compared to prior year, constant currency order intake was down 6%. Approximately 55% of orders came from existing customers. And as Mats mentioned, we added around 50 new customers during the quarter. We closed the quarter with a backlog of $543 million, which is up 3% sequentially. Sequentially, revenue grew 4% to $139 million in quarter 3. Europe continued to be strong, particularly in the standard segment, but growth in this quarter was primarily driven by North America. I would add that there were no new AutoStore-as-a-Service deals signed this quarter, but that interest remains strong. And we continue to see AutoStore-as-a-Service as an important way to access projects and customers that might otherwise be out of reach.

Okay. Let's move on to margins. Our gross margin held steady at 73%, which compared to 74% in the same period last year. Sequentially, margins improved, though it's worth remembering that Q2 included the B1 robot write-down. As Mats mentioned earlier, this quarter's margin is in line with the average level for the year.

Further down the P&L, our adjusted EBITDA margin was stable at 47%, reflecting continued organizational discipline. And finally, if I move on to cash flow and net debt, we delivered strong operating cash flow of $73 million, which is a reflection of the highly cash-generative business model and also favorable working capital timing this particular quarter. Total liquidity ended at $498 million, which includes $348 million of cash and $150 million of available headroom under our revolving credit facility. Our refinancing has been completed this current quarter following a successful syndication process. Going forward, this will enable more agile and efficient treasury management with surplus cash being more readily applied to debt repayment without any loss of financial capacity. So with that, I'll now pass back to Hiva, who's going to open up for the Q&A.

Thank you, Paul. Thank you, Mats. Let's do it as we usually do it, open up for questions from our participants on teams. So please go ahead -- so let's see if I can get it right. There we go. I believe, Eirik, you are first up. If you could please go ahead and unmute yourself.

Can you please try to unmute yourself again, Eirik? Okay. Eirik, maybe you can try to unmute yourself. If not, we can continue with the next one, and you can ask your question later on.

Olav, can you try to unmute yourself?

Can you hear me?

Yes. Fantastic.

So first one for me. I mean, the backlog conversion is still below historical levels, even though you've had some internal focus on improving this. I just want to hear your thoughts on what's holding it back? How much of the gap would you attribute to internal factors? How much is the market? And what do you see must be needed for this backlog conversion to normalize going forward?

As we've talked about for a long while, we have seen a lengthened conversion cycle in our backlog. It's very encouraging to see that it has improved of late, which is a result of customers moving more ahead with their plans. Internally, our capacity remains very strong, so we can deliver quickly as customers want to turn quickly and get these systems up and running. So it has been market-driven for a while, but we're seeing positive conversion trends.

All right. And then just last one for me, just to clarify. Is there any revenue in today's figures coming from the as-a-service projects?

No. So neither of the as-a-service projects that we announced in Q1 and Q2 have gone live yet. So no revenue recognized in respect of AutoStore-as-a-Service in this period.

Thank you, Olav. Moving on. Let's try again, Eirik. Can you try to unmute yourself? No, then I think we'll try with Tore. Tore, can you please go ahead and unmute yourself?

Yes. Just 2, if I may. First one would be, we hear quite some positive commentary from warehouse automation players, for example, Kion or some of the U.S. players. How do I bridge the gap to you still declining organically? And when would you see this turning around?

Look, as we've mentioned, we have seen a more stable market environment now compared to first quarter. And we're kind of happy with that conversion -- positive conversion trend that we've seen. Order intake has been strong now for a couple of quarters, and we're seeing positivity in leading indicators. However, this is still a market that is impacted by those global uncertainties, and that's the world that we live in.

Okay. Understood. And then the second one would be, could you just speak a little bit more about the different customer groups? We now had some positive trends coming, for example, from 3PL players. How does this affect you as of now?

Yes. So B2B segments like industrial, health care, et cetera, has stayed resilient and been quite stable for us. Of course, the leading indicators of the business, we've seen e-commerce retail or more consumer-oriented segments starting to see growth, which is positive. And 3PLs for us has continued to be quite strong. For us, that's a very attractive segment, particularly also with the as-a-service model because both technically and commercially, we can offer a system that offers one, flexibility, but also two, a standard set of technology that works for such a broad types of customers and end markets. So for us, 3PLs has been strong and our conversations with the 3PL players remains very positive.

Thank you, Tore. Moving on to Giolio.

You mentioned in the release that the volume and quality of proposals and dialogues remain constructive. So could you give us a sense of what that looks like in practice and what you're hearing from customers regarding their spending plans?

Yes. So as we've talked about already, there is some positive trends across some very, very attractive end markets. Europe continues to be strong, but we're also seeing growth momentum in the U.S. As we look further up the funnel, we see that the pipeline intake, i.e., new customers coming to us showing interest and the amount of pitches that is made across our network, i.e., the amount of offers that is being issued across those different markets sees a positive trend.

Thank you. Tim?

So I have 3, if I can. So the first one is about the market development. As you mentioned, there has been some positive developments in some of the end markets. Can you also elaborate a bit more about how the sequential development in terms of, let's say, customer activities or order intake into the fourth quarter? Any trends that you can highlight when we go into the last quarter of the year? And related to that, I think last year, you gave a full year guidance in terms of revenue in the last quarter -- I mean, in the [ third ] quarter call last year for the full year guidance. So this time, it seems like you are not giving like a full year guidance. So is there any reason for that? That's the first question.

Okay. I'll pick up on the guidance question, Tim. We haven't given guidance for quite some time, not least because, as Mats has mentioned, we still see elevated levels of market uncertainty. It's something we keep under review. But hopefully, in the KPIs and numbers we give, we do give plenty of sort of indicators of the go-forward performance. But no, we don't give guidance with no plans to do so for the time being, but we'll keep it under review.

And then for the first part of your question, we're still early in the quarter. But as we mentioned, we're observing and experiencing more stable market conditions now than what we did earlier in the year.

Understood. And my second question and the third question probably both going to Paul. So Industrial working capital, you also mentioned there has been some positive timing effects in the quarter. So how should we think about the development of working capital going forward?

Yes. Look, there's 2 elements to this, Tim. I think, first of all, it's good to see inventories fall from $94 million to $90 million from quarter 2 to quarter 3. So strong inventory control that we've seen in this quarter. And then really on the working capital, it's the receivables that is making the biggest contribution. And really, that's mainly timing. Our standard terms are 30 or 60 days depending on where the customer is. Nothing's changed there. We've just got a favorable timing impact this quarter and good to see it, of course.

Understood. And final one, I see there was a small impairment amount of $0.5 million in the quarter, not really a big amount, but just want to know about the nature of this. Is this also related to the B1 robot that you made the inventory adjustment last quarter?

No, there are no further impairments to the B1 robot. And then actually, when you look at the adjusting items, Tim, there is next to nothing in the way of adjusting items deriving from EBITDA to adjusted EBITDA. It's just a small amount for stock comp. So really nothing of any significance to report this quarter.

Thank you, Tim. Now let's try again, Eirik.

Sorry, I had some technical issues the first time around. Three questions from me. I'll take them one at a time. And if we can start with the new products. I think that the AutoCase looks really exciting in terms of opening up a new part of the total addressable market. Just for our understanding, it's doable to retrofit this on existing installations, right? And kind of how complex is that process?

Yes, you're absolutely right. It is possible to retrofit into existing installations, and it's also not a very complicated piece of effort. You can either add a small piece of grid and insert the machine into that or you can retrofit into existing.

Okay. Perfect. And also, I assume the answer is no, but will the new products launched have any kind of meaningful impact on gross margins? And if so, kind of which direction? And lastly, when do you expect these innovations to kind of contribute meaningfully to order intake and/or revenue?

You're correct. It will not have a meaningful impact on gross margin. And initially, what we've seen is that this is creating real customer demand already from the get-go. One is that we're able to play in a piece of the market or types of projects that we haven't been able to in the past because we're able to offer case handling and this real omnichannel fulfillment capability. And also we see that customers are liking a lot of the, call it, smaller features that we announced as well, which typically will be part of every deployment that we do, for instance, how it's easier with floor remediation and easier to deploy the systems.

That's great color. And my final question is around the Veloq partnership agreement and kind of multiple subquestions there. I'm thinking about factors such as how far they've come in terms of adding external customers, if you guys will be the sole ASRS provider, how actively are you working in collaboration with them when you approach potential projects? And then, of course, lastly, if it's natural for Veloq to kind of take over the -- what seems to be a partnership link between Rohlik and Amazon in Germany.

So look, we're excited about the partnership with Veloq because the combination of what we can offer and the AI-driven software and solutions that they've built on top provides that part of the market with a real end-to-end capability. And as we've talked about before, grocery is in its early days of both e-com adoption, but also building out the necessary infrastructure to truly support that in a profitable way and in a way that meets consumer demand. But it's still early days in the partnership. We are the sole provider of ASRS in that partnership and excited to see what opportunities that will unlock over time.

Martin, you're next up.

It's Martin from Citi. Just a couple of questions. The first one was just on tariffs. I think previously, you said that obviously, it's your customer that pays them rather than you. But obviously, there has been some change with Section 232 over the last few months. Has that changed anything in terms of order profiles or demand profiles from North America? Or is it so far not really impacting the business at all?

So as you've seen from the numbers and also our commentary, we are seeing some positive momentum in the U.S. And what's been important is that we can provide a level of predictability for customers in terms of what tariffs will be. I think the way we are -- where we are in this market now is that there is, of course, an expectations of tariff. We found a good way of operating that together with ourselves, our partners and the end customers and able to provide that needed predictability, as I talked about.

That's helpful. And if I could just have a second question. We're hearing a lot about robotics and automation companies generally adopting AI at the edge to really optimize, whether it's vision and quality, whether it's routing and picking and these kind of things. Could you perhaps give us some indications to what extent you can build that into your offering, whether it's to make the robots more efficient in routing or elsewhere? Is that an incremental driver to see even more efficiency as they adopt software into how the system is used?

Definitely. And it is a key priority with ourselves as well. And if you look at the product strategy that we've talked about before, building that software platform that goes across all of our solutions, utilizing the opportunity that this vast data set that we have offers is something that we are focused on. So we will continue to announce new set of products and new features on a biannual basis also going forward. And of course, building that software platform, leveraging AI to drive up performance and offer new sets of capabilities is a key aspect of that.

Håkon, you’re next up.

Håkon Fuglu, SEB here. I was just wondering if you could elaborate a bit more on the sort of underlying soft numbers that we're seeing in EMEA right now.

Well, I think, first of all, EMEA, as I said in the presentation, remains really the bedrock of our business, in particular, in what we call the standard segment. Our business, as we've said before, will remain somewhat lumpy quarter-on-quarter. This quarter, Europe is stable, still over 70% of the business. And the U.S., as Mats has noted, is actually what's leading growth. But I wouldn't advise you to read too much into one particular quarter. Our EMEA business remains extremely strong.

And I have another one as well. If you sort of look into your backlog and what will sort of lead sales in U.S. dollars into 2026, what sort of verticals are you seeing going to be contributing most to that growth in '26?

So as we talked about, B2B segments remain stable and strong, but we're seeing positive signals on leading indicators across retail and, call it, consumer-oriented e-commerce-driven end markets as well. 3PLs remain strong.

Thank you, Håkon. Tintin, I think you're next.

A couple of questions from me. In the U.S., could you talk about maybe high throughput versus standard in terms of kind of the performance you've seen? And then secondly, just a general question about competition and other types of light ASRS solutions. In this period, obviously, the challenging period and the broadly more stable environment that you're seeing, is there any palpable change in terms of investor appetite in terms of Robotic Cube versus other types of solutions? And if you feel that your proposition has gotten stronger or weaker in this kind of period?

Absolutely. So if I'll start with the first one, what we've seen over a long period of time is that the average size of the systems are larger in U.S. than what they're in Europe. And that trend, we continue to see and we expect to see going forward as well. So on average, more presence of high throughput than standard in U.S. versus, for instance, Europe.

On your second question, we haven't seen any meaningful change. Our win rates remains very, very high, and we feel strongly about our leading position today, but also very excited about this product road map and product strategy that we're executing against so that we continue to strengthen that leadership.

Can I be greedy and just chuck in one more, finally? In terms of the new products, just trying to put it in terms of kind of relative opportunity versus the core systems in my head, sort of kind of obviously, new products introduced in October. Obviously, there was a whole bunch of new products that were also introduced around April. How should we think about it relative to the value of a system in terms of kind of what the potential uplift is from these new products?

So our product strategy remains -- or consists of several elements. One is that we continue to strengthen our core, i.e., we make sure that the Cube continues to improve so that we can maintain that leadership position that we have.

Secondly, we're also working on expanding the capabilities of that cube so that we can sell that into new types of situations like we can with CaseNow, which opens up a new market for us. So even though kind of the typical deal size remains the same, we're able to sell that into new sets of markets.

Thirdly, we're also looking at adjacencies either through partnerships, organic developments or even acquisitions if the right opportunities should come across, which again broadens our addressable market. The Carousel AI product is a good example of that.

And then lastly, the software platform that unifies all of this and takes advantage of things such as AI, as we just talked about. So in total, it's a combination of making our product more competitive, being used in new sets of markets and also expanding into new markets.

If I can add just one thought. The other aspect to the releases that you saw in Mats's slide is there's a couple of quite critical enablers that really apply to any deployment. I think the floor leveling and more refined sort of fire retardant protection apply to all customers. So some of them really are enablers that cut across all deployments as well, Tintin.

Thanks guys. Thank you, Tintin. I actually believe that, that rounds off the team's Q&As. I'll move on to questions that we've received on the webcast player.

So one is from Atle. Could you comment on the demand specifically from public and government clients in general? Is this a customer group that is late in the adoption process for automation? There are 3 questions. So I'll read.

One by one.

Yes. Do you want to go one by one?

Sure. So public and government sector. So it has been a segment where we've sold into different types of subsegments. We've done libraries. We're doing defense sector. We've even done the archiving system for FBI in the U.S. So this is a sector that we also work in. Overall, on an aggregate basis, I will say that government, public customers are probably lower on the adoption curve than the market in general.

And the second question from Atle is, could you comment on the demand from the defense sector?

So we have continued to do business in the defense sector, both in Europe and the U.S., and we've also done some in APAC.

And the third is online shopping has grown over the years. There is potential that the use of AI agents will greatly improve the shopping experience for customers. In turn, this may lead to a step change in growth in online shopping and online share of total retail sale. Such a backdrop could be very beneficial for demand for AutoStore system. Do you agree? And if so, are you seeing such a trend already?

Yes, I do. Look, as e-commerce volumes grow, the fulfillment challenge becomes even bigger, and you need automation to handle that volume and handle that volume in a way that you meet the consumer expectations around speed, precision, et cetera. So what we've seen historically is that as e-commerce volume and that the share of retail handled over that e-commerce channel increase, the demand for automation follows. And that's one of those long-term growth drivers for this market. As we talked about, we have seen some positive trends in our leading indicators, but it's still early.

Thank you, Mats. I do have some more written questions. So I have a few from Martine from Nordea. You increased your order backlog conversion. How do you expect this trend to continue into Q4 and 2026? That's one.

The second is, can you say anything about the regional split in order intake and amount of larger versus smaller orders?

Third, gross -- strong gross margin adjusting for write-down, should we expect more write-downs going forward? That's the third.

And how is the dialogue with customers in the U.S. now? And I believe we've touched upon the third one.

Grocery market is the fifth. How do you see the development and the competitive situation?

There's a few there. I'll kick off, Martine. I think, look, backlog conversion, Mats said it earlier, we're pleased to see the improved backlog conversion. We're not today, as I've said already, providing forward guidance either into Q4 or next year, but it is clearly good to see that improved backlog conversion. It's good to see customers returning to considering projects. And it's good to observe, we shouldn't forget the still highly underpenetrated market that we address. So stepping back, the backdrop remains very good for growth going into the future, but no specific comments on Q4 or indeed 2026 yet.

I think the regional split of orders is not materially different from the revenue split of orders. It reflects the sort of pattern of our business. No particular comments there. Gross margin, no, I do not expect, as I stand here, more write-downs. The B1 matter was discrete and contained as you've seen in our numbers to Q2.

I think the last one was around grocery market. Look, the grocery e-commerce market and related automation infrastructure is still in the early innings of growth. For us, we feel very strongly about our competitive position. Our value proposition in grocery is very strong as it is in also many, many other end markets.

Just a couple of more. So we have one now. In discussions with potential clients, are you seeing an effect of wage levels increasing across North America and the EU? This surely helps the ROI calculation on a relative basis.

Yes, labor cost and also labor availability is key components into the business case for our customers. And we see that business case continues -- that, that business case continues to be very, very strong, and we're seeing our customers achieve paybacks of as little as 1 to 3 years as they make these investments.

And the final one is, can you comment anything on the ongoing discussions or signs of renewed interest from Amazon?

Look, as we have confirmed before, we have a good relationship, but we can't really comment on individual customer relationships.

Thank you, Mats. I think that actually concludes the written questions. We've answered -- we have answered all. So with that, we have no more questions, and I'll pass the word back to you, Mats.

Thank you. So let me summarize what we have presented to you today and also remind you of some key points. First, we operate in a large underpenetrated market fueled by long-term megatrends. The growth opportunity is intact, and we have a winning proven solution. During 2025, we have responded forcefully to the current market conditions by taking decisive actions, securing high profitability and strengthening our competitive position. I'm confident that we're in a stronger position now than 1 year ago with regard to our foundation for long-term growth and resilience. We have multiple ways to win and a scalable solution that works across industries, system types and geographies, all delivered through a very efficient go-to-market model.

And as you've heard me say many times before, we are not standing still. Innovation is embedded in AutoStore's DNA, and we continue to push the boundaries of what is possible. Today, we gave you some insights into our latest innovations, which are solving concrete problems and immediately creating value for our customers. And we will continue our biannual announcement cycle, continue to move forward. Taken all together, these elements give us the confidence in our direction and ability to create long-term value. So I would like to thank you for dialing in today and look forward to speaking to you again soon.

Second Quarter 2025 presentation. My name is Hiva Flaskjer, and I'm the Investor Relations Officer at AutoStore.

Our CEO, Mats Hovland Vikse; and our CFO, Paul Harrison, are standing ready to talk to you about this quarter and subsequently answer any questions you have. I'll be moderating today's session.

As usual, we would like to remind you of the disclaimer in regards to forward-looking statements. It can be read here at your own convenience.

Moving on to our agenda. Mats will begin with an overview of the operational performance and strategic progress. Paul will then follow-up with presenting the financial results in more detail. We'll follow-up with a live Q&A session, and you can submit your written questions in the webcast player or raise your hand in the Microsoft Teams to ask questions directly.

The link to the Microsoft Teams meeting is available on our website, and an invitation that we published a couple of weeks ago. After the Q&A, Mats will round off with some final remarks.

And as a reminder, all our figures are stated in U.S. dollars.

So, let's get started. Mats, over to you.

Thank you, Hiva, and good morning. When I last spoke with you, we were at the peak of market uncertainty. Q1 had been volatile, and that uncertainty also continued into Q2. But as the quarter progressed, we were able to identify and utilize some pockets of resilience.

First, we doubled down on the opportunity that lies within our customer base, which accounted for around 60% of our revenues in the quarter. Secondly, Europe continued to be strong, representing 70% of revenue. Thirdly, we also see early positive signs with regards to demand in North America, reflected in order intake, but not fully in revenue.

As we've talked about before, we strive to be closer to deals and customers, and the development in second quarter shows that this is producing positive results. Q2 revenue was $134 million, which is up 56% sequentially, marking a recovery from the unusually soft Q1. However, compared to the same period last year, revenue was down 13%. And this shows that caution and hesitation still exist, which is fully understandable given the uncertain and volatile market backdrop.

But in this market and with the actions that we've taken, order intake was $150 million in the quarter. This represents a 6% increase both sequentially and year-over-year. And adjusting for the currency tailwinds, the development is roughly flat. What we're seeing so far in the third quarter are similar market dynamics in general, but I'm happy to see how we're able to stay even closer to our customers and the opportunities that are out there.

So, moving to profitability. Our gross margin was 69% and included in this number is the $8.5 million write-down tied to the B1 Robot. If we exclude for that, the gross margin was 75%. For adjusted EBITDA margin, we report 48%, which is back to our historical levels, and Paul will come more back to this later.

So, if we move on to key developments in our business, we will see that during the quarter, we signed another contract with our AutoStore-as-a-Service model and this time with the European 3PL. And while still early days, this model is coming up in more and more conversations. And as we've talked about before, it's a model that resonates particularly well in the 3PL market. So far in 2025, we've shipped products to secure $34 million future as-a-service revenue.

Looking ahead, we're preparing for our fall product release, which will include both software and hardware updates, and it will be an exciting step forward. So, stay tuned for more details soon.

So, looking at it, these results reflect not only our operational execution, but also us making progress on our strategy, which I'll now walk you through.

And our foundation is strong. We've built this platform with a large customer base across a wide variety of end markets and system types with a high degree of repeat purchases. Our technology is leading, and our solution is highly competitive with a strong ROI. And with changing market dynamics, we have taken action and we've realized $10 million of annualized cost savings, and we've reallocated investments towards high-growth initiatives.

Looking further out, we're focused around 3 themes. Firstly, we have a product strategy that sees us continuing to optimize and expand our core, increasing our addressable market for adding new capabilities and further developing the AutoStore software platform.

Against this, we're making good progress. In under 12 months, we've launched 10 new products and features, and we can now do thousands of robots in a site versus hundreds a few years ago. And we're also seeing strong adoption of our Essential Software Package, which offers the complete suite of software with smart routing, real-time analytics and intelligent reporting. And with another major release planned in October, we're continuing to improve our offering and increase our market opportunity.

Secondly, under our new commercial strategy, we have sharpened our go-to-market focus and reallocated resources towards high potential areas. And this shift is already paying off. Since our Capital Markets Day in September of '24, we've added around 100 new logos, including several strategic accounts with long-term potential fueling our land and expand strategy.

At the same time, deeper engagement across that installed base is supporting higher account penetration and reinforcing a customer-first approach, which is leading now to 60% of orders this quarter coming from existing customers.

And then enabled by these 2 growth engines, we're broadening our recurring revenue streams for both software as well as these new flexible solutions such as PO, and more recently, AutoStore-as-a-Service. And we see these solutions appealing to customers we would otherwise not plan, and they also create more visibility and stronger customer intimacy.

But now let's take a step back. And this familiar slide is a good visualization of that strong foundation that I just talked about, and it highlights our strong value proposition to customers, our long-term competitive strength and our superior financial profile. It summarizes the strength of our platform and why we're so uniquely positioned to lead.

We have now delivered 1,750 systems with 79,500 robots in 60 countries. We have a total of 1,200 unique customers. And within the cubic storage space, we're the only player with such a significant installed base, providing us with great advantages. And not only does this speak to the strength of our solutions, it also represents a substantial base for our land and expand strategy.

And this is a slide that you're also familiar with. And here, you can see a small selection of our over 1,200 customers. And as you can see, we have a broad customer portfolio across a diverse set of end markets.

Around half of our revenues come from existing customers, and this growing customer base represents a massive opportunity. It is also worth noting that Europe remains our largest region, representing over 2/3 of our business. And then during the last few quarters, we've seen B2B segments like industrials and health care stay strong, but we've also seen leading indicators improve across e-com and retail segments.

And I always like to give the last words to our customers. You've heard me talk about evolving how we work with strategic accounts and 3PLs. And today, we're highlighting Rhenus, a global logistics service provider operating in over 70 countries with 1,330 sites. And Rhenus runs a high throughput site with AutoSore in Germany. And as you will hear, AutoStore is a key part of their future strategy, thanks to the flexible and standardized approach we can offer.

So, before Paul takes us through the financials of this quarter, please have a look at this.

[ Presentation ]

Thank you, Mats, for that, and good morning.

Okay. Let's move on to the financial highlights on the next slide. As Mats shared earlier, this quarter reflects clear strategic progress. This slide summarizes our Q2 financial performance.

Revenue came in at $134 million. Our gross margin was 69%, which while still strong, reflects the write-down of inventory related to the B1 business line. Excluding this, gross margin would be 75%. Our adjusted EBITDA margin came in at 48%. Order intake came in at $150 million, taking the order backlog to $529 million.

So, on the next slides, I'll go through -- go into more detail on these key financials. As I just mentioned, order intake totaled $150 million, including favorable currency effects of $22 million quarter-on-quarter and $23 million year-over-year. So, when we adjust for the currency tailwind, the development is broadly flat quarter-over-quarter and year-over-year.

Over 60% of this quarter's order intake came from existing customers and over 50% came from Europe. We ended the quarter with a backlog of $529 million, up sequentially 3%.

Although, both orders and revenue remain lumpy due to the project-based nature of our business, we view the overall market as having stabilized somewhat following the peak tariff-related uncertainties we saw at the end of Q1 and the beginning of Q2.

As I mentioned, we delivered sequential revenue growth of 56% to $134 million in quarter 2, with this growth reflecting the unusually weak Q1. As you can see, growth came substantially in Europe, mainly within the standard segment. So that's an example of those pockets of resilience that Mats referenced earlier.

In this quarter, we shipped another AutoStore-as-a-Service deal, and we're very happy to see customers and projects that we otherwise would not be able to access finding this offer interesting. This contract is not reflected in our revenue figures for the quarter, neither are the Q1s from Q1.

Revenues will start to be recognized, when these sites go live and will continue over the length of the contracts, with the potential to increase as customers increase the size of their installations.

Okay. Let's move on to margins. With the significant enhancements we've introduced at both the software and robot level, the B1 solution is no longer an optimal solution for customers. Therefore, in Q2, we decided to phase out the B1 business line. This led to an $8.5 million write-down of inventory in the quarter. And as I mentioned, excluding the write-down, gross margin was 75%, which reflects our strong operational discipline.

Further down the P&L, adjusted EBITDA came in at 48%. This shows that the actions we have taken to restructure the business have started to have an impact in the second half of this quarter. And these will generate annualized cost savings of approximately $10 million, whilst we continue to invest in long-term growth.

If I then move on to cash flow and net debt, I would note that, $40 million of EBITDA on the slide and our final settlement payment leads to closing cash at the end of June of $300 million or net debt of $150 million. Furthermore, I'm pleased to report today that we have secured a fully underwritten $500 million 5-year bank facilities.

So, with that, I'll now pass back to Hiva, who's going to open up for the Q&A.

Thank you, Paul. Mats, do you want to join me? So, I'll welcome the questions from the Teams audience first.

And the first one with -- who's raised his hand is Luke. So, Luke, if you could please go ahead and unmute yourself? Luke, can you hear us? It seems like we might have some technical issues, bear with us. Luke, can you please try to unmute yourself, again? While we are dealing with some technical --

This is Eirik from DNB Carnegie. Can you hear me? I think you are on mute.

I can hear you now. Eirik, can you hear us?

I can. May I go ahead with my questions, please?

Please do, Eirik. Please.

Okay. I got a couple -- you might consider one-by-one, couple of order intake. If you strip out the FX impact on still down 10% sequentially. Are we positively surprised by the Q2 development given the duration and all the uncertainty there? I was also wondering, are there kind of 1, 2 or 3 big orders that really helped the order intake in the quarter? How should we kind of think about that?

You're right. As we were kind of reporting first quarter, we were at the peak of market uncertainty. And that's also what we were hearing from customers that they were trying to maneuver in an uncertain world. But look, as the quarter progressed, we did identify these pockets of opportunities that I'm very glad to see we were able to go out and utilize. So, I'm very happy to see that our performance in last quarter is producing the results that we report here today.

And look, personally, I've also spent that quarter traveling around, speaking to customers across all regions, across a wide variety of end markets. And what has met me is, yes, a set of customers that is trying to maneuver in an uncertain world, but that's also a set of customers that is very high conviction in their investments plans around automation, because the challenges that they're faced with and those challenges that we solve with automation is as relevant as ever.

I think if I can add, Eirik, to your point about are there -- is it characterized by large deals in the quarter? Actually, one of those pockets of resilience was Europe. And that particular strength in Europe still lies in the standard segment actually. So if anything, it's the volume of smaller deals in Europe that has really driven that performance.

That's great color. And would you say that's more company specific in terms of kind of your resilience, your end customer base, you being closer to the customers? Or are you seeing kind of a general, a bit maybe of a step down from the very peak of uncertainty that we saw in end Q1, early Q2 kind of as a general like how much is market, how much is company specific?

I think it's a combination. What we have seen is that the markets have stabilized somewhat from that peak level of uncertainty. But of course, as we talked about these kind of pockets that we've been able to utilize, we are selling a lot to our existing customers and our installed base and customer base is the strongest in this market. And we are selling a lot in Europe, which is that stronghold that we've built. So, I think in reality, it's a combination.

That's very clear. And a follow-up kind of on orders and also on revenue. If you look at kind of last quarter order book to this quarter revenue, the conversion took a big step up from Q1, but it's still below historical levels. Could you help us understand kind of how that's driven by as-a-Service, how it's postponements, longer projects time maybe for high throughput, and also how we should think about that order book to revenue conversion and how that should evolve in the second half of this year?

Maybe I'll start and you can add, Paul. But look, as we've talked about since the Capital Markets Day, we've had a big focus on getting even closer to the deals, even closer to those customers setting up a good deal room and being very, very focused on driving conversion. And we've seen that create some results also as it comes to backlog conversion trends, right. So, I think we're seeing some positivity there. But then, of course, we have the AutoStore-as-a-Service, et cetera.

Yes. And on that, Eirik, we've now got the quarter 1, quarter 2, about $34 million of revenue that has, if you like, gone into backlog, as a result of AutoStore-as-a-Service. And these deals are typically ranging from sort of 3 to 8 years. So, you are right, they will sit and be relatively slowly released literally on a monthly basis into backlog. So that is another effect. But the fundamental point is the one Mats makes there.

That's very clear. And since you mentioned it, just a final one for me. Of the $34 million in Q1 and Q2 for as-a-Service, has any of this been recognized in Q2 already? Or is that something for Q3 and beyond?

Indeed, it is for Q3 and beyond. So, we start to recognize revenues under those deals and when the installation goes live, and they have not gone live as of Q2. So, no revenue in Q2 for AutoStore-as-a-Service, and that will start in subsequent quarters.

Thank you, Eirik. Shall we try Luke? Again, can you unmute yourself?

Hopefully, this works. Can you hear me?

Yes.

Hopefully, you can hear me?

Yes, we can.

And my question was -- yes, was -- sorry, I missed the last question. So hopefully, I'm not repeating in changing my device. But what we saw in Q2 was obviously a rebound in Europe, but North America and Asia Pacific still very weak. I'm just trying to understand what the trajectory for those 2 segments looks like into Q3 and when we can start to see more of a cyclical recovery there?

And then the second question, just you called out the AutoStore-as-a-Service, which is clearly having some traction, but mainly centered on the 3PL base. And I think on your customer slide, you pointed that was about 14% of group revenue. So, I'm just trying to understand here what the overall customer target market is just to get a flavor of where that long-term mix could be?

And then just the final question would just be on the kind of the Big Beautiful Bill in the U.S. on the R&D expense side. Is there any impact for you at all as a result of that?

North America?

Yes. So, on North America and APAC to start there. What we've seen in North America, which is one of the markets where we see the highest potential going forward, we haven't seen that materialize into revenue yet. But if I look at order intake and other leading metrics, we're seeing good developments in North America, particularly then after there's been more clarity on the tariff side. So going forward, we're seeing improvements in those leading indicators.

APAC has been kind of roughly flattish for a while. And we are focusing our resources in those key markets where we see that there is opportunity. But again, going forward, we see North America being a large growth opportunity and then Europe continues to be very, very strong.

AutoStore-as-a-Service, your observation is a good one. 14% of our revenue has been in the 3PL space. And certainly, that model is resonating in terms of conversation in the 3PL space given their particular business model. We don't think it's necessarily confined to that space, but certainly, we think over time, it will be a particular interest there. As to the R&D aspects of the U.S. administration, I think it's really too early to point to an impact at this stage, Luke.

Understood. And just to be clear, you're saying that in Q3, it sounds like the revenue trajectory so far hasn't substantially recovered in North America to Q2. That's the right way to read your comments?

I think for Q3, it's still too early to be specific on revenues. But what we can say is that in Q2, we saw that order intake and other leading indicators track positively for North America.

Thank you, Luke. Moving on, Tore.

One question. I hope you can hear me all right. Just one question on the AutoStore-as-a-Service here. So, on the $6.9 million that you've booked, 2 questions on this. Is this now in absolute terms more than what it would have been, if you sold it over your normal approach of selling solutions? Or does this -- basically the question, does this include over these recurring revenues and overall sum of all revenues over the lifespan of the contract that is just larger than your usual sales? And could you give us a bit more detail of which time horizon should we expect? Will it start in like 2 or 3 quarters? And then is this expected to run over 7, 8 years, just more details here

Yes. Let me try and Mats may well add. So, look, one thing to step back and talk about the first half order AutoStore-as-a-Service deals. The economics for us are quite attractive. We're seeing those deals move into the black in sort of early to the mid-stage of the contract term versus the equivalent CapEx sale of those same solutions. And its early days, and -- but the economics, as I say, have been strong for that reason. And of course, that ignores the potential for customers to increase the size of their installation and or extend over time.

And I think your point is well made. We shipped the solution under these deals. Therefore, as you can imagine, the customer is looking at sort of 2 to 3 quarters before they go live. They wouldn't naturally want it to receive the product any earlier than that.

And then to the last part of your question, the numbers of the $7 million represents the revenues that is to be booked over that contract period, and that contract period is ranging from everything from 3 to 8 years.

Okay. Just to clarify, when you speak about your thinking moving into the black numbers towards the middle of the overall contract span, should we understand this in the way of the profitability level is basically the breakeven? Or should we understand this that the total revenue number that you would have received is already reached basically halfway?

It's a revenue observation.

Okay. So basically, with this AutoStore-as-a-Service, you're doubling your revenues over the contract span?

As I said, the point is compared to the profitability that we would normally make in an upfront sale was -- that was what the comment was linked to.

Thank you, Tore. Tim, you are next.

Can you hear me?

We can.

So, I have 3 questions. So, the first question is a bit more follow-up on your North American market. So as Mats, you just mentioned there's some positive indicator in the order intake or the order indicators. So, can you please also give us a little bit sense about what was the mix of North America in your order intake in the second quarter? And what's the growth that you are mentioning? And what would be the end markets that you see to be having a good indication or momentum in the North American market? That would be the first question.

Yes. So, what we're seeing is on a relative basis, also growth and then hence also taking a larger share of the total order intake versus what it's been in the past. If I look at this from an end market perspective, I think there's 2 things to note. One is that some of those traditional more or less cyclical segments such as industrials, health care, et cetera, continues to be strong also in that market.

But on top of that, we're also seeing some positive trends within the broader retail markets, including e-commerce. So, as I look at kind of the customer opportunity in North America, we're having good conversations across all those segments.

Okay. And the second question is about the order intake again. So, the FX impact in the second quarter is around $22 million. That talk about roughly 16% year-on-year positive impact on the order intake. If you look at the U.S. dollar depreciation, I think this is the main part of the FX impact, right? And the depreciation of the U.S. dollar was roughly 10% on a year-on-year basis, and it's mainly for our Europe business, which is around 70% of the total business, right? And so, it seems like the FX impact is a bit bigger than what we think from the U.S. dollar depreciation. So, what would be the missing parts that I may have in terms of my calculation?

It is primarily U.S. dollar -- the weaker U.S. dollar base and obviously, the functional currencies in which we invoice. And I think I'd have to take offline that sort of reconciliation of your numbers to ours. But we tried to be very open about the favorable impact of currency on order intake. That's our point.

Yes, no worries. And my last question will be on the transformation projects that you have been taking. Any more activities that you foresee going forward? And for example, would there be any other product lines that you think probably that's no longer to be optimal for your customers and there may be any other inventory provisions going forward that you can foresee?

No. So we have no other plans for either further reorganization or discontinuation of product lines. There's particular significance to the B1 end of life, and that is a consequence of quite considerable improvements we've made recently in both our robot performance and software development, but there are no other plans for reorganization or restructuring at this time.

Thank you, Tim. Moving on to Hakon.

Hakon from Kepler Cheuvreux. I'm just have quick about -- a quick question about AutoStore-as-a-Service again because in Q1, it was $27 million and compared to $6.9 million this quarter. And I just wonder, could you elaborate on what drove the difference between these numbers? And how should we think about the more normalized run rate for that AutoStore-as-a-Service system going forward?

Yes. Thanks for your question, Hakon. Look, I'll start there. This, as you know, is a relatively new offering to our customers. And I don't think for some time, we can expect a linearity, if you like, to progression. And what is particularly encouraging actually about the AutoStore-as-a-Service are the conversations it opens up with customers. And some of them may start with a particular interest in AutoStore-as-a-Service, but actually, with fuller consideration, actually revert back to the traditional sort of CapEx model.

So, it's opening up a broader dialogue with customers leading to benefits for both models. But I think it is early days. It's a relatively small number of deals, and we're some way away for any sort of linear progression or industrialization, if you like, of this solution.

Thank you, Hakon. Martin, you are next.

It's Martin from Citi. The first question I had was just on the mix of products. And obviously, you got a rebound in the gross margin, excluding the inventory on the black line. Have you started selling or recognizing revenue on Carousel and some of the other new products? And if not, when those start getting recognized in revenue? Should we expect a bit of mix effect to gross margin?

Yes. So, look, it's still relatively early days if you think about those products that we've launched over the last 12 months. But I am very happy to say that across all of those products, we have made sales, and we're seeing a good proportion of that being in -- also in big stages and late stage opportunities.

As you think about the profitability, those products that we've released are typically part of the overall system. So, from a profitability mix, you should expect similar as we have in our current numbers, but very happy to see that traction that we have across those products that we've released given that they're effectively improving the overall solution that we can offer to our customer.

And the only add to that would be, obviously, with a growing installed base, we've got the software part of our business that grows in terms of its resonance in the mix, and that is obviously a very highly favorable gross margin.

Yes. Now, that makes sense. And just continuing on the gross margin, I mean, obviously, in terms of pricing, is it right to think that any pricing that you've had to put through so far for tariffs or other effects are now fully effective? Or is there still a bit of a lag effect in terms of when pricing might come through in the second half?

We've really thus far seen very limited impact of tariffs. Keep in mind as well, Martin, that it's actually our partners that are the importers and who principally therefore, will bear that tariff cost. But there's a slightly sort of calmer sort of attitude we're seeing at the moment on tariffs, and that perhaps comes as a result of some of these deals that have been secured e.g. with the EU. So, we're not at least thus far, seeing an impact on gross margin of tariffs.

Thank you, Martin. Kristian, you are next.

Can you hear me?

Yes, we can.

Kristian from Arctic. So, 2 questions from me, if that's okay. So, the first one, some of your listed competitors have reported quite strong figures into Q1 and Q2, and showing an improvement in order intake from last year. And if we strip out the currency effect you had, you had some slowdown yourself and your competitors have also been quite constructive on the market outlook for 2025. So just wondering, if you could help us understand this sort of inconsistency versus your competitors this year, while in previous years, you more like outperformed them.

Yes. Good question. So, look, if you look at some of the related markets to where we operate, we are seeing some pockets of good performance. However, if you strip that down to the market that we operate in, we actually see ourselves gaining share in what has been and it continues to be a quite challenging market.

But if you take a broader view on kind of warehouses, e-commerce in general, we were seeing good traction on the parcel side of the world. Some of the nondiscretionary spend is driving some performance within the pallet market. We're seeing that some of those smaller ticket items where operators can slightly improve some of their existing warehouses have seen some good performance, et cetera. But if you drill that down into our market, we're performing well relative to the market overall.

Okay. Good. Makes sense. And just a final follow-up here on AutoStore-as-a-Service. You answered a couple of questions already, but given that you don't provide any KPIs on this still, and it was quite a significantly lower share in the second quarter. Should we understand this as you don't expect any significant uptick in Q3 or in the short-term going forward and that the Q1 share was sort of a one-off in terms of the large share it was?

Look, as Paul said, it is still early days. We're seeing it come up in more and more conversations. But because it is early days, you should expect some lumpiness in terms of how it actually comes out on a quarter-over-quarter basis. So, it has a focus within our organization because it's a good solution that we can offer to our customers and customers are asking for it.

It's healthy for the profile of our business. So, we will continue to have a focus on it. But let's give it some time and see how it actually materialize on a quarter-by-quarter basis before we fully conclude on which KPIs to report and can be more specific in terms of what to expect.

Can I just add a comment back to Tim's earlier question?

Yes.

I think, Tim, we will come back to you on that FX rate point. But I think the possible explanation lies in our use of average rates when we compare period-on-period versus closing rates, which I think you were quoting there, but we will come back to you.

Thank you, Kristian. And [ Tintin ], you are next up.

Can you hear me?

We can.

Sort of 3 things for me. Again, AutoStore-as-a-Service, is very popular topic. More of a philosophical question really. Is it quite a passive sales approach? How much are you pushing it versus how much is pull in terms of the deals that are happening? And if you look at your partners and the salespeople that are involved in the sale of that versus, say, your traditional CapEx model, what is the difference in sort of in the commission structure and how they're incentivized? So that's one.

Can I just dump it all in one go. Gross margin without -- after -- without the exceptional is kind of at that 75% level. Paul, are you happy for us to kind of run the models at that level now? And if so, plus-minus sort of give us the reasons?

And then thirdly, in terms of quarterly seasonality in the business, Q1, Q3, typically lower, Q2, Q4, typically stronger. Obviously, we've had so much impact on kind of tariffs, relative confidence. In terms of the next quarter's seasonality, Q3, should we kind of expect that even though, okay, a bit of stability and recovering, we should expect the normal seasonality we would see in Q3?

Why don't I start, maybe 1 and 3. So number 1, our focus isn't necessarily on exactly what solution we try to push, but our focus is to get close to those important customers that we have and that we're trying to get, understanding the needs that they have and translating that back to our offerings and saying, here is how we can help you solve those needs.

And in some pockets of the market, for instance, the 3PL market, we see that this model resonates very, very well because it matches the contract structures of those businesses. And hence, yes, we often lead the conversation with such a model because we know it resonates very, very well. But at the end of the day, it's the suite of offerings that we have that we're matching against the needs that our customers have.

And if you look at how we incentivize our salespeople, we focus on value creation for the business. So yes, they will be incentivized to also push and sell the AutoStore-as-a-Service offering when that is something that we see can help drive conversion with the customer, help that customer create even more value within their own business model.

And then on the third one, I think taking a step back here, with our business model and with our operations, there will be lumpiness. We've said this since the start, right, because we're exposed to a project-based nature, because it's -- this is, at the end of the day, investments for our customers and now in addition to the as-a-Service model, there is a natural lumpiness within our business model.

[ Tintin ], thank you for your question on gross margins. You are right. 75%, I think, in certainly -- the quarters I've certainly reported is the highest underlying gross margin. But actually, what I would say, stepping back is now for a number of successive quarters, our gross margin has been sort of in the early to mid-70s. I will always have an eye on the LME market and the commodities, the underlying commodities that go into the production of robots, which we don't fully control as we saw with, for example, the Ukraine situation. So, I would encourage you to think about it as sort of early to mid-70s and not necessarily modeling forward as high as 75%.

Thank you, [ Tintin ]. Petter, you're next.

Actually, my gross margin question was just answered, so that I can skip that one. Then I have one more question. Is it possible to share some insight on how activity level has developed during the quarter? I think you must mentioned that, the peak of market uncertainty was around the start of Q2?

Yes, you're right. As we reported Q1, we talked about how that level of uncertainty was very, very high. But I think what we've seen over time is those markets stabling somewhat is our customers kind of getting more certainty, figuring out how to maneuver that world and can then focus on improving the business, which is what we help them do.

And as I said, kind of ahead of summer, during summer, I've traveled around, spent a lot of time with both existing customers and prospective customers. And that's also what I'm sensing is that there is a continued strong conviction on their automation road maps, what they're trying to solve for within their business, and they're getting headroom to actually think about that as well.

Thank you, Petter. [ Tintin ], you have your hand up. Did you have a follow-up question?

No, I don't have.

Just checking. If not then Lasse, you are next.

Just one follow-up, just on, again, AutoStore-as-a-Service. Again, more of a conceptual question, but can you disclose how many of the partners that you have now offering as-a-Service? Or if not, just generally, I mean, what is the feedback you're getting from the partners? Because I guess for a few of them, it probably adds maybe some unwanted complexity to their own business model, or maybe you could explain the mechanics of -- when you're onboarding a partner as a as-a-Service partner as well, how that also then looks from their kind of economics and revenue generation perspective? So, if you could just help guide us a little bit there on what the feedback is and how that looks amongst the 21 partners or is it 22 now that you have?

So, look, we have designed an additional offering that our partners can decide to use to create for success in their business. We've had those conversations and onboarded those kind of large partners that make up a big share of our overall business. And we're collectively with them through those partners going to market with this offering.

So overall, we -- I feel like we're in a very good place with the partners to actually drive adoption in those relevant end markets and segments with this as-a-Service model.

And of course, just again, fundamentally taking a step back, we have designed it in a way so that this is also good business for our partners, because if you think back, we have this important win-win-win strategy where kind of we need to be in a good place, our partners needs to be in a good place and our customers need to win. And as long as we can have that model, we have learned that we get focus and focus creates results.

Okay. Maybe just a follow-up. In terms of -- because with the as-a-Service, I guess you are taking credit risk on the customer to some extent. So, how has that changed the approach with dealing with different customers? Because I guess, you don't want to be looking at customers defaulting on payments a few years down the road. So how has that changed the approach?

Yes. It's a good question, Lasse. I mean, we do take that credit risk ultimately through our partners. But keep in mind one important thing. We continue to own the asset and our products are highly standardized. So, in the event of a credit failure, we do have the ability to recover the assets and redeploy them elsewhere.

It's an important point to bear in mind this highly standardized nature of our product. But obviously, we undertake all the appropriate diligence when it comes to credit assessments.

Thank you, Lasse. I don't see any more hands being raised. I'm just going to check web player as well. I think we've asked or answered the questions here.

I guess one question that, we haven't answered, Paul, is for you, and that's -- if we can please confirm the use of proceeds from the new bank facility?

Sure. Sure. So as I mentioned, I'm pleased with the structuring of our new facility, $350 million revolving credit facility, $150 million Term Loan A gives us a lot more flexibility when it comes to applying the cash we generate to the core debt that we have. Specifically in terms of source and use of the funds, we will use the new facilities to repay the Term Loan B. We will cancel the existing revolving credit facility, which we have actually never used. And therefore, you see a shift of debt initially to the revolving credit facility.

But as I say, think about the greater potential to optimize treasury as we demonstrate -- as we generate cash and use that cash to offset the debt in an RCF without actually losing the headroom in so doing.

Thank you. I believe this concludes the Q&A session for today. And with that, I'll hand over the word to Mats for his final remarks.

Thanks, Hiva. So let me summarize what we've presented to you today and also remind you of some key points.

So first, we operate in a large underpenetrated market fueled by long-term megatrends. And that growth opportunity is intact, and we have a winning proven solution.

As we've already discussed, we're responding to the current market conditions by taking decisive actions aimed at maintaining high profitability, strengthening our competitive position and supporting long-term growth and resilience. And we're not standing still. Innovation is embedded in our DNA, and we continue to push the boundaries of what's possible.

At our last update, you heard us talk about the latest innovations and product launches, and the next one is in October this year. So, stay tuned.

Look, we have several ways to win and a scalable solution that works across industries, system types and geographies, all delivered through an efficient partner enabled model. And taken together, these elements gives us the confidence in our direction, and our ability to create long-term value.

So, I'd like to thank you for dialing in today and look forward to speaking to you again soon. Thanks.