Micro Systemation Aktie

So good morning, and welcome to MSAB's presentation of the interim report for Q2. We would really appreciate if you could just put in the chat that you can hear us loud and clear. If you have any questions, put those also in the chat and we will have a question and answer at the end of the session. So, without further ado, I am going to hand over to our CEO, Peter Gille.

Good morning, everybody, and welcome to the Q2 report. So, this quarter has been a good quarter for us. We have achieved some good results. We are at sales at around SEK 122 million, which is 50% up compared to this quarter last year.

That said, we had one big deal that was transferred into Q3 last year. So it might look even better than it is, but it's still a significant growth in the quarter. We keep to have a good margin on the business according to the plans we have. So our gross margin is still high at 94%, but we think we will keep it at those levels throughout the year.

We are also profitable, which is not common at this time of the year. Usually, we get all the profits in the second half of the year, but we are already profit for the first half year and significant profit this quarter with SEK 12.6 million compared to minus SEK 17 million last year.

Our yield measurement, the ACV, or the annual contract value grew with 35% compared to this quarter last year, which is also a good sign that the business is really growing significantly. If you look over the regions, we have had a solid quarter in EMEA basically, we are growing across the region.

The growth is really fueled by the XRY Pro adoption that is getting more and more all over the region. We also have a very big UNIFY implementation, our new product that released to the market, where we have a big organization in U.K. that is really implementing this in a big way. And that project is going well. And we think that will be something that we can show off to other customers and repeat in other markets.

The Defense segment, we haven't seen any revenue contribution from that yet, but we have a really positive development in the EMEA market. We think we will see some significant deals coming later in the year from that. APAC had a very, very strong second quarter, a little bit weak first quarter, but a fantastic second quarter.

The growth continues in APAC in many of the countries we are operating there. And the good thing with this market is that it's more open than the mature markets and the labs are being created, and we are being a big part of that business. So we think that this will continue during the year.

And we also had a good win this quarter in Australia with a big organization that took a 3-year contract, which is super interesting for us. In the U.S., we had a solid quarter. We are growing, but it's still cumbersome with the administration. It's not really working 100% yet, but it's getting better and better for each quarter. So we think next quarter will be fairly interesting in the U.S. It's also their closing quarter for the year.

What we also see is that in Latin and Canada, business is picking up significantly. In Canada this year, we closed a lot of contracts, both new and renewals. But we also see that Latin America is taking off, and we will invest more in sales capacity in Latin America going further into the year.

The growth is driven, as in many regions, by mainly new sales in Latin, for instance, and the XRY Pro upgrade and upsell. This market is continue to grow based on the structural drivers that we see in the market. So we -- people are using more and more mobile devices and keeping more and more data in it.

And almost in all investigations today, criminal investigations or others, digital evidence is an important piece. I think it's up to 80%, 90% of the investigations that use digital evidence. So this -- the need for that type of solutions that we can provide, which makes it possible for law enforcement, for instance, to access that information from the mobile devices continue to be super important.

There's just a few companies in the world that can do this, and we are one of them. So that makes the demand for this kind of solution continuously being strong. Also, the criminality and the bad guys in the world, the physical money is getting more and more difficult to get to and is also decreasing in importance.

And that means that they are going over to digital crimes instead, and that also fuels this market even more, unfortunately. So the market drivers is strong for us and -- as we see it, continue to be strong. Our strategy, we have the -- since I joined MSAB as a CEO, we have created a strategy, and we have adapted that strategy, and we have executed that strategy, and it seems to be working really well.

And that means basically the strategy is centered around that we do investment in our products and that we professionalize the whole company when it comes to processes, people and how we go to market and so forth. And also that we're focusing on more emerging markets where we have growth opportunities and where the market is not so set because in the mature markets, a lot of agencies, labs and so on, they have based their solutions on the process they have, and it's difficult to get them to change the processes.

Even though we are also increasing our market share in those markets, it's a longer run than in the newer -- in the emerging markets where they are more open to other solutions and other products basically. We're also looking at different verticals like the defense and others where we think that it might be an opportunity going forward in the future.

We are also the only European vendor. It hasn't shown in the revenues yet. But I think going forward, it will be more and more important to be a European vendor when you are selling to Europe. I think we will see that in the next coming quarters.

Also, AI continues to be both an opportunity, but also a threat for us. We are really adapting AI within the company and also in the products. So we are adapting it basically in every part of the company, and we're getting big benefits of it, for instance, in development or adding some product features that will come in the products later in the year. But we're also adapting it in other processes.

So we see the positive things, but it's, of course, something that also can be used against us for when the Apple and the others are using it to close the exploits that we are using to access the information. We also have today a really, really good organization.

We have a new management team in place overall since about 6 months, and we have a really good tech organization that keeps delivering the things that the customer wants. So we are really executing on a really good level. That's my view at least. And we are -- it's working with marketing, with sales and the products and the tech organization. So basically all good, I would say, which shows in the numbers this quarter. I'll leave it over to Tony, our CFO.

So hello, everyone. I'm Tony Forsgren, the CFO of the company. So let's have a look at the sales to begin with. We did a record Q2 with a growth -- net growth of 52%, small adjustments in FX. As mentioned before, we are exposed. 95% of our sales are in foreign currencies.

But this quarter, there were small effects due to the FX and then the Swedish krona versus the other FX then. So rolling 12, we are pacing SEK 511 million. That is to be compared with SEK 462 million last year. Also looking back on a quarterly isolated Q2 '25, we grew 25.6%. And where did we grow? We have a really, really strong momentum in APAC.

Looking at the numbers versus last year, we grew 173% in APAC region. We also have a strong momentum in the EMEA region, and that is mainly driven by the MEA, Middle East, Africa. In total, EMEA region grew 44% versus the same period last year.

Peter mentioned it's cautious in Americas, even though we grew 0.4% versus last year as we have higher expectations and expectation going forward looking at Q3 when they close their books. New sales share is improved versus last year. We are up at 50% now compared with 36% last year.

And new sales is really important to us due to the recognition of revenues. So we're glad to increase that portion of new sales and adding to our contract base. Next slide, please. We really have a business model that enables scalability, and that we proved in Q2 then. So even though we are increasing revenues, we are stable in OpEx and gross margin.

For the first time ever, we had a positive half year 1 in this company and the contribution in the second quarter added to that. We did a profit of SEK 12.6 million in the quarter. Personnel costs-contains approximately 77% of the OpEx. Net-wise, we have increased the staff by 20 people. So we keep on investing in this company and it is addressed to sales and marketing personnel and research and development.

And on top of that, investments in our products. So gross margin-wise, we are stable. We have been stable now for 3 years, and we are cruising around 93%, 94% in gross margin. 2026 is still an investment year. So we keep on having focus on our products to be in the top.

Balance sheet-wise, nothing much has happened since before. We still have a debt-free balance sheet. We did a small purchase in intangible to add up some features in our frontline business. The tangible assets is driven by the office move mainly in Stockholm, the head office. We signed a new contract office lease 7 years.

So we also added that to the balance sheet according to IFRS 16, as you can see. The big changes actually is on the cash line. We added cash of SEK 55 million since -- versus the same period last year and that is really connected to our way of doing the business with a lot of cash upfront.

So equity still improving, and we keep on giving dividend. So a strong balance sheet going forward and clean. So some repetition here. Since we introduced a new KPI last quarter, active contract value. We did a 35% growth in active contract value if you compare the June numbers '26 versus the June numbers '25, going back then. So some repetition.

When we do a license deal, we recognize revenue 84% day 1, and we distribute 16% over the contract length. That is what is showing up in the profit loss to the market. But when doing the ACV, as we call it, we take the contract and split it into even parts over the contract length and bring the revenues on lines.

And then we cut a month as illustrated in the table in the red and take all the active contracts and all the parts distributed to that month and multiply it by 12, then we get an annual value, which we compare with the previous year, the same month, and then we get the ACV.

So still strong momentum. But keep in mind, investments started investments kicking off and contributing to the revenue. So we're going for lower levels when coming into Q3, Q4, where we started to improve our revenue, and we will have a tougher base to beat then, but still very positive and still according to plan. Thank you.

Okay. So to really conclude, it is -- we will continue to invest. We have invested this year, but we will continue to invest and it will be, as Tony said, it's tougher quarters to be compared to going forward. But I have good faith in that we will achieve our targets for the year.

We will continue to build on the momentum that we created in the market around our products, and we will continue to focus on new verticals and the emerging regions for creating the growth. And also the portfolio we currently have and that we are also developing new functionality is really a portfolio that now can be used for expanding within the customers.

So we have a full solution where it can cover everything from the investigators to the forensic analysts then. And that is something that we think will be possible to do more upsell on now. That is basically selling UNIFY to more customers and also adapting more customer from our XRY Logical and Physical to the XRY Pro portfolio now.

So with that, a good quarter with really good growth. And I look very positive also for the future. So we have a momentum in the market, and we are going to take care of that momentum basically. And we have some questions also. So some good questions, I would say, also. So I can read them out loud if you don't see it in the chat.

So first, did Q2 include any deals pushed into it from H -- the second half year? Did it include any deals which had previously been described as delayed?

And the question -- the answer to that is basically very simple, no. So there has not been any deals pushed in from H2. And there's some of the deals that has been delayed has not been executed in this quarter. This quarter has been a quarter where we have performed as a business and we have had momentum in the market, and we have had the growth that we should have. And this quarter is on the level it should have been last year as well, I would say.

Does the strong Q2 gross margin change your expectation for the full year gross margin versus what you said in Q1?

And the answer to that is no, we expect the gross margin to be in the levels -- in the high 90s, but not the high 90s, above 90s that I would say. And that is our expectation for the full year as well.

And then number three, how to mitigate potential risks to margins or delivery capacity related to component constraints pricing.

As you know, the AI has made it difficult to get components as computers or things that you need for it when we deliver with hardware. However, we are suffering from this. We are -- have longer delivery times from the suppliers that we use for hardware, but it's also a very small part of our business today. We don't think it will affect our margin.

It might, in some cases, delay deals because we cannot take the revenue until we have delivered also the hardware. So far, we have managed, but it can happen in the future. But still, the number of deals today that include hardware is limited. So it's not a big part of our business today. So we don't see a big effect on that.

We have more questions here. Why does not AVC (sic) [ ACV ] increase more due to increase in revenue? We have a question here from Nils Ake. It's because the model we have where we take upfront revenue, we take 84% of the revenue upfront, while the ACV model models this out more based on the contract length.

So ACV gives a better view of the business, while the revenue model that we currently have can give more variations in the business. So I think the ACV reflects more how the business is really going, and it's 35% growth. So I'm okay with that, and I hope you are as well, while it's 50% in the recognized revenue.

So it means there's been some contracts, maybe one big contract is over 3 years, we take all the revenue now, it affects this quarter more while the ACV doesn't reflect that.

The U.S. market was affected by the government shutdown in the second half of last year. How do you view the market today?

I would say it still has effects not from the shutdown, but the big changes that's been done in the administration makes it more difficult, for instance, to locate budgets to find people that can take decisions and so forth. So we are still experience effects from more the current administration that affects us than the shutdown.

Is there any specific customer segments or niches that are currently performing particularly well?

I would say no. It is growth -- sorry. The growth are driven by XRY Pro, and it's in all markets, all verticals everywhere. Then, of course, there are different markets like emerging markets are different from the mature markets. But there is -- we don't see any specific segments or different. We see big opportunities going forward, for instance, in defense. But in this quarter, it has -- it's all over the place, I would say, the growth.

Was the strong sales in the performance in the quarter mainly driven by new customers or by existing customers purchasing new products as XRY Pro and UNIFY. It is a mix. It's not -- it's driven mainly by XRY Pro, the revenue growth, and it can be both upgrades with existing customers, which, in our case, is defined as a new sale, but it can also be renewals of XRY Pro or other products. So it's not clear. We have more new sales now than we have had previous years, but it's defined mostly by the XRY Pro.

UNIFY doesn't give a big impact on the revenues this quarter. So it's more of an add-on product that I think we will see more revenues in the coming quarters.

Looking at the competitive environment, is it broadly similar across your geographies? Or are there any markets that stand out as either more or less competitive?

Yes. As I mentioned, the mature markets, it's more -- much more competitive. All the labs, they usually have competing solutions from Cellebrite and Magnet and our solution, where they might have least licenses from us, a little bit more of licenses from Magnet and maybe Cellebrite is the leader.

And that means that their processes normally starts with that they take Cellebrite, test that. If that doesn't work, they take either Magnet or our solution. And what we are working with that is to show that XRY Pro should be the first choice for these organizations based on that we are better -- we have better capabilities today than many of our competitor in it always depends on the phones or the mobile devices.

That said, it's difficult to compete against the existing people and the processes. So it takes time. But we are seeing now that it gives more and more results in the market. So we are growing in the existing market. And that means that we are -- they are buying more from us than they used to do.

In other markets, it can be more of tendering for a new lab and so forth, and then it's much more an open race. And it's a different competitive race where it really means that you need to show what the product can do and then win the tender and then it can be a significant deal for you. And that's what we see in the emerging markets that it's more that kind of processes. Yes. Everything is competitive, but it's competition on different terms, I would say.

You mentioned that you continue to invest in your product. Should expect this to come through as higher OpEx or increased CapEx going forward? If OpEx, how to think about cost increase.

I wouldn't go into if this will be an increase of CapEx or OpEx. I would just say we will continue to invest in our products that's key to this market, and you should have that in your in the thinking when you think about the company that it will increase the cost. But we are also planning to increase the revenues. So we think we will still have a good results out of this.

Can you open the latest Apple phone? If no, when? We cannot open the latest Apple phone and no one else can do it either. And I'm doubtful that it will be possible going forward. Then then I'm talking about the locked iPhone, an open iPhone, we can definitely access the information out and that can others -- others can do that as well.

This might seem as a very big problem, but it is not such a big problem. The number of cases that involved locked iPhones are not a lot in numbers. But when they do, it's, of course, maybe an important case. And there are other ways of convincing the people that they should open the phone for you.

So normally, the suspect or the person opens the phone because otherwise, they might go to prison for not opening the phone anyway. So it's less of a problem than you think. But it is clear that we cannot open the latest Apple phone. And to my knowledge, no one else can either.

And I have no forecast if we can do it later on. I think that was all the questions we have. All good questions, I think. So if no more questions, thank you all for listening. Again, a good solid Q2 quarter, and we look forward to the rest of the year. Thank you.

Right. So good morning, and welcome to MSAB's Capital Markets Day. I'm Carolina Marteus, and I will be moderating today's session. So, we're here today to get a better understanding of the company, where it stands, what's driving the business and how management sees the opportunities ahead.

Before the break, we'll hear from the CEO and CFO on strategy and the financials, and we will also open up for some questions. And after the break, we go deeper into the market and the products, and then we move into a panel discussion on AI.

So, with that, let's go. Peter Gille, the floor is yours.

Okay. So, my name is Peter Gille. I've been the CEO of MSAB now for almost two years. Before that, I was in the Board. It's been some exciting times these 22 months or so. And today, I want to tell you a little bit about how I see MSAB and our future. So, I hope you will find it interesting. I'm sure you will find it interesting.

So, let's start with a little bit about MSAB. What is it? It's a small company. We're around 200 people. But still, we are #3 in the world in our niche. So, we are -- it's a high technology niche with high barriers of entry. There're very few companies in the world that can do what we can do. That's the reason we serve customers in over 100 countries. 200 people serve customers in over 100 countries. We cover over 50,000 devices. In our office, we have 15,000 physical mobile phones that we can go down and pick up. Some models that I promise you, you have never seen before. So that is really this small company with a high technology expertise.

But what do we really do for our customers? What we do is really that we pull information out of these devices. Many of our customer cases we can't speak about. There's a lot of test about MSAB, they don't communicate. And the reason is that in some cases, we can't communicate. We help terrorist fighting units to prevent terrorist crimes. We've done that in several cases in different countries. But we also help the police, for instance, getting the data out of burner phones where they have drug dealer lists and things like that, as well as we help the FBI monitoring how the guy who tried to murder Trump moved around. So, there is a variation of cases. We have border control, check people that comes to the border, if they are terrorists or check that their story that is the correct one by taking data out of the mobile phones. So that's really what we do for our customers.

And to do that, we need to use vulnerabilities in the mobile devices. Exploits, which we use to get into the phone and get the data because they are usually locked and the criminal, the drug dealer, he doesn't want to give this away freely. So, the police need to use our technology to really get the data. And that's something that we use within MSAB, get the data. That's what our customers want to do, get the data and analyze it.

So how did it start? It was a long time ago. It started really with the birth of the mobile phone. There was this small company doing cables, working with mobile phones. And then they got a question from the police in Sweden, where a police officer needed to get a telephone list out with calls. It wasn't a lot of data in the mobile phones at that time. But he wanted to solve a case, and that could help him solve the case. So, with the technology that MSAB had, they could utilize that and get the data out and the officer could solve the case. And of course, there was -- maybe this could be used by other police forces, maybe there was an interest. So that's how it started.

And MSAB was really first out on this industry and been in the industry so far and being quite successful but had a very typical Swedish approach by being careful, making sure that you grow steadily, slowly but always making a profit. At that time, competitors also discovered this niche with bigger resources, more aggressive approach and some of them grow bigger than MSAB. I think that was a mistake that MSAB was so careful. We're not careful anymore. We are here to grow. We're here to invest. We want to make profit as well, but it's not our #1 priority.

So, you are here as investors. Let me give you some reasons to why I think you should invest in MSAB because I really think you should do that. Most of you have done that already, but you can invest more. When I joined, we defined really a strategy for how to grow. And in my first report, I said we have defined a strategy. In essence, it's invested in the products. We changed the way the company works. And then we have executed to that strategy. And we said also at that time, after 12 to 24 months, we will see the results. We now start to see the results already. And in the 3 last quarters, we have grown double-digit numbers in local currencies. So, we have a strategy that works. That's a good reason, maybe the most important reason.

Also, one of the things that I like most with MSAB is that it's so scalable. I love scalable businesses. And most investors do that as well. We have a high 90% gross margin. We don't need a lot more staff if we sell a lot more products. It's really scalable. Even if we invest, we will have stairs when we increase the cost. But in essence, we are a really scalable company. So that's the second good reason. The third is we have a really good market position. We are #3 in the world, but we are also the only European player. And Europe starts to become more important nowadays, buying European. I hope that will give results as well, especially in the important sectors like military and other defense organizations.

So, being #3 in the world is most companies dream about that. We are already there. Also, our products, we have really invested heavily in our products, and they are today world-class products. They are really high class. It's the best products in the market. It goes a little bit up and down depending on how the patches from the mobile vendors apply. But in -- we are on the top now. We will hear more about that later on when Tomas comes in. But we have really, really good products. And this is a product business. Our customers, they buy the things that can get the data. So, if you can't get the data, if you are -- you cover only 75% of the phones or the mobile devices, they will not use your solution. So, you need to be there at the top. And that's one of the things we changed.

Then we come to the organization. We have done a total makeover of the organization. The management team, I think Tony now is the most senior guy in the management team, and he's been in the company for 3 years, and he's done a fantastic job. Many are younger than me. All are younger than me in age but have been with the company less time than me. So, we really have a totally different management team. Before, I think we had the management team's been there a long time. They got stuck no matter how good you are. After a while, if you've been there for 10 years, you get stuck in your different patterns. So, you need change. Okay. We've done a lot of changes now. but it seems to be working really well.

But we haven't only changed the management team. We have also changed a lot of other people in the organization, and we have also changed how we work, how we do processes. And I think we have a really, really good organization working now. It's the best product and R&D organization I've ever seen -- ever seen in the companies I've been to. And that's an important part. But it's also starting to be a better and better sales organization. Marten will talk a little bit more about that. He is new, but he's already doing changes that's needed to the organization. So that is five reasons to invest more in MSAB or invest in MSAB.

If you look on the market, it's really also -- it's growing at least the needs. We have a lot of more data. The complexity of the device is increasing all the time. It means that the barriers of entry for new players to coming in is higher and higher and higher. It also means that we, as existing players, have more challenges. There's a lot of regulatory changes that our customers need to adapt to. The geopolitical things that is happening is also affecting this industry. And then we have AI. I think we will see both a positive and a negative impact of AI for us in this industry.

I think, in essence, we are more protected than a normal software company because we have a lot of hardware solutions here or close to hardware solutions. But -- and we can have the fruits of developing faster with AI and so forth. But it's going to have an impact. That's for sure. Mostly, I believe, positive impact.

Looking at the market, it's a market that doesn't change a lot. We have the biggest player here, an Israeli company, Cellebrite, fairly aggressive. They are the biggest player in the market. They are American, but everybody are from Israel in the company. So, we say they are Israeli. And we have Magnet, a North American, Canadian company, which we're partnering with, but we are also competitors in some cases. They are more specialized on the U.S. And then we have MSAB, being smaller, having a smaller market share, but are growing. And then we have the rest. We are, as I said before, the only European player in this aspect. So, I think that's a good thing to keep in mind.

Who are our customers? What is the industries that we serve? We serve law enforcement, as I said, the police organizations, various law enforcement. It's about 50% of our business. It's a big part. Custom and border, utilize our solutions, utilize our frontline solutions, sits at the airport, checks people that comes without the passport, but you have a mobile phone, okay, let's check if you really are the one you say that you are and if you are a terrorist and so forth. Military and defense, it's super interesting. We serve the military police. We serve special ops and so forth with our solutions.

Government related is our second biggest. That's where we have all the 3-letter agencies that use our stuff, but we also have a lot of other government facilities that use our products. And then we have the private sector, very small for us. We are being careful in the private sector because we are under the -- we need to act in according to the European or the American act how and who we can sell to, the regulations. And if you sell to a private company, you never know where they will use the product or end up. So, we are very careful with the private sector today.

The users, they are investigators and analysts. They are using our software. It can be forensic examiners digging deep into the technology. It can be frontline personnel in the police station. You can take a witness statement out from the phone. You can be at the airport in the border control. Well, being in the Frontline. It's a kind of a unique offering we have also there. And then it says managers, but it's more the IT tech people that are setting up the solution, how it should work and so forth. So, it's more the IT manager side that use it. But let's see how it looks for a real customer, what they are doing for us. Should come a movie here.

So, while they are fixing this. So, this is really about the case in Nevada. It's about child exploitation. We work with CRC, which is the Child Rescue Coalition, which is an organization that really focus on exploited children. And we work with them as a part of our sustainability and social response. So, we give them our solutions to really help the police in various cases around. It can be things in the Philippines or in other areas. This is more a normal case, but this is a typical case where police use our solutions. Here it comes.

[Presentation]

So, in this case, they caught the perpetrator. Another example is the long-term customer for us, the U.K. counterterrorist policing, been using our products for a long time and have prevented a lot of bad things happening with them. So that are two examples, but you will hear from a real customer here today. And I know that I will tell you more.

Our ecosystem is really -- it looks like this. We have our products, our software, to that, we have a number of services and then we have the hardware aligned to that if you have a frontline solution, depending on how you use it. And then we work with a number of selective technology partners because in some cases, you want to have information from a vehicle, then we work with Berla. You want to have it from a PC; we work with Detego. If you want to have it from a drone, we work with V2. It's a very similar technology to us, and we can analyze all the stuff, but we need to use the partner technology.

Okay. Last but not least, how are we going to grow? What do we see the way we're going to grow going forward? First of all, we see now that we are winning share in the existing markets. In the mature markets, this is really the game. All the customers in the Western world, you would say, they have bought the solutions normally from all the major three vendors. But we are the smallest one, and we are now growing on each of these customers by providing the best product in the market. And we see that that's happening. So that is one growth avenue we see if you look on a geographical space.

But we also think emerging markets, for instance, in APAC, in Asia, is super interesting for us. They have more Android devices, which is really our core. And it's not -- it hasn't established itself that market yet. So, it's a much bigger opportunity for doing national-wide deals, doing bigger deals and establish yourself. They are more open to look at different solutions right now. So, we think that will be a growth market for us going forward. And it's something we're really focusing on right now.

Then we have military and defense. What we have sold historically to the military side has been -- normally, we sell to the military police, or we sell to special unit forces, which go into a country and grab the phone and check it. But what we see in Ukraine, is that they are using our tools really as an offensive weapon in the field. So, they grab a soldier's phone, they check in the Frontline, okay, where did he sleep last night? How has he moved, what messages has he sent and then they can shoot in that direction. So, it becomes a more -- much more offensive weapon. To utilize that even better, we need to do some more investment and development. But we think that this would be a really interesting segment going forward. And it's a lot more licenses to sell if you sell to the whole army rather than to the military police and the special forces.

Private. We think that private can be interesting, but only in the way that we want to help identify malware on the phones. If it's been infected, you've been traveling, you want to check your phone. We think that can be an interesting market. That's something we're looking on.

So, from a product side, these two solutions, an easy-to-deploy triage solution for the Frontline that also goes into the military and the malware detection side that goes into the private. So that's really where we see that growth will come from growth avenues in the future. We are already growing, but this is for the future.

So, with that, I will give you what you really want to see the numbers from Tony, our CFO. Thank you.

Thank you, Peter. So, before starting off then with this morning's news, the financial goals for the company, I'm Tony Forsgren. I'm the CFO of the company since a little bit over 3 years. Yes, this morning, we released some financial goals. Our long-term targets, and they are to serve as guiding targets for the company and our strategic direction through 2030. By year 2030, we are aiming to reach SEK 1 billion, an EBITDA of at least SEK 200 million and last and not least, a dividend target of between 25% to 50% of the net result.

The long-term financial goals are forward-looking statements and should not be taken as forecasts. I know you are sitting and calculating already. That said, let's have a look at our financial situation. But before that, also a little bit of a history. I'm going to present more a forward-looking slide show here but also talk about a little bit of the history, which Peter touched upon. This is our first CMD. We are proud to have it, and we feel that we have a stable platform to have it. We didn't have that platform 3 years ago, but we have it today, and we are confident in the numbers we are showing internally and externally to the market.

We know that MSAB has been hard to follow as a company. And we have made huge changes, both in personnel, management, strategic direction, also our systems, ERP systems, product portfolio, price segments, terms and conditions with customers, everything I can tell you. It's been a hard work, but we have a stable platform for growth now. The aim is also to improve our communication with the market.

Let's start off with the revenue. This is a tricky one for some. So, I'm going to spend some time on explaining how we take the revenue. We sell perpetual licenses. Previously, that was a long -- they didn't -- there wasn't an end to the license. It was really perpetual. We have changed that in our terms and conditions. So XRY Pro, our most advanced product, is ending day 1 if they don't pay the new license. So that is not really perpetual. And our biggest product, Logical-Physical, it ends after 12 months of the expiry. So, it's not really perpetual anymore. And that's also gaining the revenues to us. So, you can see to the left here, the pie chart, the perpetual and the model we have today, we take 84% of the revenue day 1. And the rest of the 16% is distributed evenly over the contract length and that stands for support, service and updates of the software.

The 100% cash upfront is really good for our cash flow. But it gets -- if you look to the right, it gets really volatile between quarter-to-quarter in what numbers we present to the market. And as you can see in the dark blue colors, it's the half year 1. The light blue is half year 2. We really do better in half year 2, and that follows our customers' budget processes. But also, if you look at the status between quarter 1 and quarter 1, it gets bumpy. So, with that said, we have reliable customers. We have strong cash flow. And I also want to tell you, we have a really, really low churn. I will come back to that.

So, what we have done then and for the first time presented in this Q1 reported for 2026, we have an internal KPI called annual contract value. We have been following that internally for a while to see it, to see the growth, to see stabilization of it, et cetera, and talked internally, are we going to release this to the market. And we feel confident that we did this Q1 report. So, what is this annual contract value and how do we measure it and how do we calculate it? You can see up to the right again then how we're taking revenue today, 84:16. And if -- like in this example, having a 1-year contract and extracting the numbers to the annual contract value base that we count, we split it evenly over the 12 months. So, for each and every contract, this is not real numbers. I can tell you that. This is an example, it's illustration. So, for each and every contract that we have, we pull it line by line, year-by-year and distribute the revenue in even parts over the contract length. And it's a lot of contracts; I can tell you that.

And what did we do then now in March in the example I'm showing January? What do we do? We take a snapshot in March, what is the revenue for every contract that are active this month, and we multiply it by 12. So, we get the annual value of the active contract base that we have today. And then we look back 1 year and see what was the value 1 year ago. And that was what we are presenting in the Q1 report now. This is really following, in some cases, the revenue recognition growth, but not -- it's not 1:1, and I will tell you why. But as you can see, we grew 38% March this year versus March last year. And you can also see we have been flat, and that has also been reflected in our reported revenues for -- if you exclude 2025 last year, which was a real successful year. Look back, it's ForEx and FX and stuff like that, but we have been flat for like 5, 6, 7 years due to no investments in the company.

So, this -- finally, this is not to be compared with what we are reporting in our external report as recognized revenues, and it cannot be bridged. I know we're going to calculate when you come back and try to bridge it to our reports. But I can tell you, we have all the facts and the data about contract lengths, the volumes, the price mixes, the FX, the discounts, et cetera. We have all the data and have ourselves tried to bridge it. We cannot do it. So, we have to see it as a snapshot of the annual contract value today.

Okay. Since we are selling perpetual licenses, new sales are very important for us. I will give you an example now again. So, if we have a contract of 100 for a new sale year 1, the second year is approximately 55% to 65% of the total value for year 1. So, we really have to fill the bucket with new sales. And we do that. And we measure and monitor this KPI very closely because we have to bring in more new sales to our business. And we do that, and that is showing in the growth. So, our goal is to be at least 50% new sales of the total sales and now we are there. We haven't been there. We see '24 wasn't that good, and that showed up in the reported numbers as well, '25 is really good. And rolling 12, '26, we are still there, 51% in new sales. So, as I said, we are following this really close. What is it driven by? It's mainly driven by our product investments and mainly with our outstanding product, XRY Pro.

Okay. I'm following the P&L going down from revenues, and now we are at gross margin. We have a stable and we have stabilized our gross margin, and that is a key driver for scaling our business. Hardware represents a really small cost in our P&L, and it's based and attached to new sales. In the past, we have low margins, unstable gross margins, but that was due to pure hardware business with customers. We don't do that anymore. We have stopped that. And the seller, to be really honest, they got bonus for selling those hardware. They don't. So, we don't incentivize it at all. So, we are just scaling and cleaning and want to be a pure software company with a high gross margin scalability.

Okay. Costs, OpEx. 77% of our OpEx is personnel costs. And as Peter said, it's approximately just above 200 personnel. So, this really sets a good foundation for not scaling the cost in the same pattern that we scale the growth or the sales. We can do more sales. It doesn't drive -- it's no connection, no direct connection to the costs. Maybe if we sell more, we have to have some more support personnel and stuff like that, but it's not driving in the same pattern as we grow with the revenue.

So, we invested in our products. You can -- you saw that for the first time last year in the balance sheet. We invested SEK 30 million. We bought exploit capabilities to the software externally, which we balanced. We still have an agreement with that vendor. But now, we are buying support and updates on the software that we bought last year, and that is taken in OpEx. We explained that in the quarterly report. It cost us SEK 4.7 million quarterly, so close to SEK 20 million in support as well as we sell support, the 16% we distribute and updates, they sell support to us to maintain the capabilities with our iOS features in XRY Pro which is really important and really XRY drive the growth.

So that said, 35% of the total OpEx consists of R&D. And even though we cover all internal R&D costs upfront, we can keep OpEx stable. So, I've been through revenues, gross margin, OpEx.

Now we're coming to the scalability. Revenue gross margin OpEx summarizes a scalable business model. The platform is established now. We haven't had it before. It's now it's established and it's highly scalable. And according to our strategies, we want to expand in emerging markets, new verticals and gaining market share. Also new sales, as I mentioned before, and upgrades in current licenses. And the base for that is XRY Pro, which has a price point of 4x versus the Logical-Physical.

So that said, 2026 it's somewhat an investment year. We will grow in sales, but we will also continue to invest in products and know-how, personnel. However, this is an investment year our EBIT is planned to be at least on par with last year, maybe a little bit growth in EBIT as well, even though it's an investment year.

Yes, cash conversion. We have a really strong cash conversion case here. This results in average 86% cash conversion ratio between year '21 to '25. We have a good -- nowadays, we have a good and stabilized DSO, Day Sales Outstanding, which is important for us and the cash. We have a light and debt-free balance sheet. We received payments upfront, resulting in the strong cash flow generation. And investments, as you can see, started off in 2025 and are going to continue.

Finally, my last slide, capital allocation. The diagram to the left is just for illustration, so no calculation here. What we did before 2024 was the capital allocation. We have been handing out dividends. We have been handing out dividends to the shareholders in average with 109% between year 2022 and 2024 in payout ratio. And the proposed for the Annual General Meeting next week is 60% of the net result. So annual dividend is brought from '24 and in history. We shifted in '25 to a growth journey. We started to invest. We will keep on investing. And looking this year, '26 and going forward, we will keep on investing. We will keep on giving a dividend to our shareholders. We will also look into M&A. This is where we're going to spend our money going forward. With that said, thank you very much.

Thank you, Tony. Please stay. And Peter, will you please join us for a few questions. Okay. So maybe let's begin with growth in APAC. Asia Pacific is a big focus, but still a smaller part. What gives you confidence you can really scale there?

As I said, it's not really -- it is an emerging market in every way. So, it's an open game, I would say. So, it's more about the best supplier can win a lot of big business. So that's one reason. The other reason is that they are more Android focused. And I think we have -- we are on par with iOS. But when it comes to Android, we are really outstanding. So that's the other thing that makes us win those deals. So, I think that is the main reasons.

All right. But what's the -- I mean, what's the main risk in the execution?

The main risk, I think it's -- those markets are, you never know how the sales processes will end. It's kind of -- it's a market far away with different politics and different ways of doing it. So, I think that is the risk. But we have some really good salespeople and organization down there. So, I think we can -- so far, we've been able to manage that risk.

Okay. And just to make sure we don't miss anything, how do you see the U.S. market? And what's your biggest challenge over there?

I think we have a challenge in the U.S. market as well as others have with the current political situation that's been in the U.S., which has really made it difficult to allocate budgets. I think now that starts to happen. But also, it's been a lot of changes in staff, and you don't even know who to contact. People don't know what they can do. So, I think it's been a turmoil in U.S. the last year. And that is difficult to handle for everybody. I hear this from also the competition. Of course, you can get renewals, but getting new business has been difficult. But we see that, that starts to change now.

So, the U.S. market is super important for us. It is a big market for us, but the geopolitical situation needs to kind of stabilize. I mean, when President Trump came, we thought he would invest heavily everywhere where we are important, police. ICE is one of our biggest customers, for instance, on the software side. But he didn't do that. He tripled the ICE budget, but he cut the IT budget in half. So, it's been difficult to predict what will happen. But it starts to stabilize. I think we will see some good developments this year. And we still grow last year in local.

Okay. Good to hear. Let's move on to competition. Let's say your competitors have more scale. How do you catch up?

We don't. I mean it's -- we can't scale as they do because they are bigger than we are. But what we need to do is to focus on what we do better. We are more adaptable. So, we can be much more adaptable as, for instance, with AI, you need to adapt. It's much more difficult to turn around with a big ship than a smaller ship. And so far, also when we look on it, where they -- if you look on the product side, we are really keeping up. We don't see that they produce better stuff than we do, with the organization we have. So, on that side, and that is really key. We are keeping up. Then, of course, they have more salespeople, but they also need to pull in a lot more revenue to keep the position. So, we see we are growing faster than they are right now. And to keep on doing that, we need to be smarter, better and more adaptable.

Okay. Now let's talk a little bit about this year. It's an investment year. So how should investors think about the near-term impact? Exactly. Maybe, Tony.

Yes, it's an investment year. We keep on investing. So, there will be some investments during this year, but maybe you should not exaggerate the investments that we will do. We still think that we will have a healthy profit. We think if we grow the business as planned, we will grow also the profit. So, it's not like we will invest, so we will take the costs to a higher level. But it's not the scalability that I want in the company this year that will come next year.

So, the revenues, will it come -- when will it come?

The revenues will come this year, will also come next year. But this year, we will also grow the cost a little bit more than we will the year after in proportion to the revenues. So, we will scale, but we will not scale as much as we should.

And a little one adding to that. Investments is new for us, this company. So, we started investing. But looking at the numbers of investments we do, it's a small portion to the business to drive and it gives a really good return. That's what we're talking about when we're talking about investments, smart investments.

All right. So, this question maybe is for you, Tony. You're introducing ACV. Just to be clear, what does it tell us that previous metrics didn't? And why is that so important? Could you explain that?

I think it's important for us to describe to the market how the underlying business is going. And that is not told by the revenue recognition we report in the annual -- in the Q1 reports and the annual report. The underlying growth is really on the active contract base, and that is really growing. We saw good efforts and revenues in Q3, Q4 last year. We did almost 15% organically in Q1 '26, even though it's lower numbers than the half year 2. So, we're really growing the base, and that is not reflected in the same way in the revenue recognition since we are taking 84% day 1. If we sign a 3-year contract, we take 84% day 1, and we don't see so much revenue for 3 years. But if we distribute it evenly over the contract length, you can see the underlying contract base that are active and not churn. I'll be back to the churn then. So, I will tell you, we have a churn between 0.5% to 2.5% in value each and every month. So always below 3%.

But how can I, as an investor, use ACV?

Yes, you can have, as a metric, a snapshot on what is the actual contract base today this month.

Okay. But not the future revenues.

No.

Okay. Maybe we start with some questions if we have any questions from the audience. We have a mic. Kim, could you...

So, I have two questions. First one, how long is the average length of the contracts? And the second one is when you're talking about investments, what exactly is it that you're meaning? Is it in staff? Or is it software development seen as CapEx?

So, the average contract length we have been working on, we have been working on shortening the average contract length. It sounds strange. But since we don't have a churn, we want to have shorter contracts to gain the price increase we do on a yearly basis, because if we sell a 3-year contract, we lock down the price for 3 years. If we do it annually for 3 years, we have a price increase in average of 10%. So, we're gaining more revenue. And the annual contract length is 17.6 months today. It's been closer to 2 years before, 17.6 months today.

So -- and investments, we are investing in capabilities in our products, which you saw last year in the balance sheet. And now we told it's approximately SEK 20 million in the OpEx for running that service. But we're also investing in personnel this year. So, we are increasing personnel with approximately 15 FTEs this year. And when we've done that in '26, as looking of today, Peter, correct me if I'm wrong, we see we will not do it in the same pace. We will also monitor in AI and see what brings to the organization, and we will scale.

Yes, that's right. And a lot of the investments this year goes into the sales and marketing side as well.

Okay. I think we have some more questions.

Magnet is #2, isn't it?

Yes.

Didn't you say that you partner sometimes with Magnet?

We do.

In what respect?

There are customers that can buy a solution where they use Magnet for, for instance, for iOS, they use us for Android. And so, they use that -- we have a package like that. But some customers I can't give the name on.

No. So they are not strong on Android.

They are capable on Android, but customers think we are stronger.

Okay. Another question. The information you find within the phone. But if the information transform to the cloud, what do you say about that?

Yes. What do I say about that? First of all, it's not we find the information, it's our customers. So, we don't check any information. And today, what you have is normally a mix between mobile data and cloud data. So, what we help our customers with is, for instance, to find the password to the cloud service. And we -- and that's normally in the phone. So, if we can do -- use our tool, the Ramanalyze, for instance, which checks the ROM memory of the phone, we can find the password to, for instance, WhatsApp in the cloud. And then we can give that to our -- or the customer can use that then to access the data in the cloud. But if everything is in the cloud and nothing is on the mobile phone, then we don't -- but that is not the case. I think it's going -- it will be a mix.

Today is a mix.

Yes. Today is a mix, and I think it will continue to be a mix.

All right. Thank you. I think we have to leave it there. Thank you, gentlemen. Let's take a short break, and we will be back in 20 minutes.

And also, if you have more questions, talk to Tony and me in the breaks or in the lunch or wherever, whenever.

[Break][Presentation]

So welcome back, everyone. I hope you had a good break. We'll now continue the program with a session on market and customer presented by Marten Blixt. And with that, Marten, the floor is yours.

Hi, everyone. Really, really happy to meet all of you here today. My name is Marten Blixt, and I'm the Chief Commercial Officer here at MSAB. I'm actually quite new to the business. I started 3 months ago in beginning of February, but I'm super excited and happy to what I've been seeing and be part of this transformation and growth journey that we have ahead of us. And what I've seen during my brief tenure here is that we have a growing market, a proven product and a commercial organization that is really ready to scale.

So, let's start looking at the market, how it looks today and what are the main growth drivers. First of all, it is a market with strong structural tailwinds that really plays to our advantage for MSAB. Some of the growth drivers that we're seeing is, of course, the data explosion. And I'm not just talking about number of volumes of devices. I'm talking about the pure volume within each device. We're not talking about gigabytes and megabytes any longer. We're talking about terabytes within each of the phones.

Secondly, it's the encryption and complexity. It's getting harder and harder to actually extract the information from each of the devices. Thirdly, the geopolitical realignment. We're seeing an increased need from customers that are looking for trustworthy, European and with long-term experience in the field.

And then last, the AI-enabled workflow that we're seeing entering our space as well. And as Peter and Tony are saying, the size of our company, our adaptability and flexibility makes it easier for us to incorporate and implement AI in many parts of our product and organizational workflow. And if we look at the competitive landscape, you saw this pie chart from Peter's presentation before, but I'd like to digest a little bit what it means to us and how it plays to our favor that we are the runner up in this game.

First of all, it's a stable three vendor race. And as Tony talked about, the churn in the market is super low, and it's hard for competitors outside of the top 3 to enter this space. Secondly, it's clear that no vendor rules them all. So, you actually need all of the top 3 to solve these cases, and that highly plays to our advantage where we have now an extremely potent product and are able to grow and take market share. And what I've been seeing is also our fantastic complete offering from frontline to the digital lab. So, we have a really compelling competitive advantage where we cover the entire customers' workflow in multiple different customers' use cases. And last but not least, being in sales, the larger part of my life, what I've seen with our existing accounts, the number of accounts that we have to grow and penetrate within, sell more number of licenses, sell more products and also sell the complete end-to-end offering. That is one major growth lever we have that plays to our advantage.

Secondly, the emerging markets. When I've been out meeting customers all over the world during this brief tenure, I've seen the need, and they're building up their forensics labs, their frontline offices for the first time, and they really need someone like MSAB to lean upon doing so.

So why are customers choosing us? There are multiple reasons, but I try to dissect some of them. First of all, we're European and trusted. We're Swedish listed and European headquartered. And it plays to our advantage when it comes to being compliant with all European data regulations out there.

Secondly, our frontline advantage. There is a clear trend and a theme where police officer and law enforcement wants to solve the crime closer to where the crime has been committed. The use case and how you use our product is a little bit different there. But we, thanks to the product development team, have a really potent product to address that specific need. And it's a clear differentiation compared to some of our competitors that we have this complete end-to-end workflow.

Thirdly, our global footprint. As Peter is saying, we have customers in over 100 different countries, and we have local representation in all of the major geos, Americas, Europe and Asia Pacific. And I'll talk a little bit more about the products, but our complete product portfolio is extremely interesting and rewarding and add value to the customers. We're having the right product at the right time. I'll talk more about XRY Pro, XAMN and UNIFY in a slide or 2.

So, who do we serve today? This is -- Peter talked about the various customer types, law enforcement, government, military and defense. And here, you have an understanding of the coverage. But looking at public safety. That is definitely our heritage, our DNA and a core in our offering.

Civil government is expanding. Governmental agencies, central intelligence. It's an area of interest for us, which we believe is going to grow significantly in the years to come.

Private sector is a sensitive topic, as Peter mentioned. We want to make sure that our product is being used for the right reasons, definitely. But there is also a clear white space for us. Our competitors are there, and we want a piece of that lunch. And there's a clear white space opportunities, and it doesn't really do any major changes from the product point of view. So that's an area we want to tap into definitely.

And the beauty of this, if I was an investor, is that we don't depend on one single customer. So, we are spread quite broadly. We are not depending on one single product. And the product evolution, as Tomas will show you later on, is really, really compelling. And the feedback we're getting from customers are super positive.

So, what are then the products we're selling? I just want to take you through some of it on the high level. We have our XR -- XRY product. To make it easier, it's the product we are using when we have a mobile phone that is unlocked. Secondly, the upgrade and the growth journey we've had over the last couple of quarters is our XRY Pro. Now we're talking about more advanced capabilities. We're talking about not only Android; we're talking about iOS. We're not just Samsung, but also Apple. It's when you need to enter locked phones. So, we're talking about password lengths that are severely long. We do brute forcing to make sure that we really, really can extract the full file system from these mobile phones.

Secondly, we have examined. It's where you do the analytics parts. When you extract the data from a mobile phone and there are thousands and thousands of chat messages or pictures and you want to find this image with a gun or with a certain individual. Our tool and analytics to find this information is best of the best.

And last but definitely not least, UNIFY, the product to be used to collaborate. And when I've been talking to some law enforcement today, they're using USB sticks. They're having hard drives, SD drives to send and share. It's highly vulnerability. UNIFY helps agencies across the world and across and within the agency to collaborate, share and reduce significant time and money as they solve these type of crimes.

So, I'd like to take you through how a typical deal comes together. I thought that it could be an interesting way for you to understand and to see. So, starting with the law enforcement here. And to make it easier or simple to understand, it's pretty much twofold. One, we have the law enforcement and the lab community. And secondly, you have the frontline police. And of course, their use cases is vastly different. So here, we're doing complex case extractions in the lab to a very fast triage need in the frontline police officers. We're leading with XRY Pro, XAMN and UNIFY within the lab, but they're using our tools as XRY Pro Express or Kiosk in the Frontline.

Looking at our customs and border agencies. As Peter mentioned, they have a very short period of time when they have and detain an individual in the border. They're talking about minutes that they need to extract information and take a quick decision, should we keep this individual or not. So, using our XRY Express and Kiosk solutions with built-in workflow to support the agent at hand to make a fast and right decision.

Secondly, the military and defense units. We're talking about defense-grade triage solutions, that are military adjusted and adapted. We talked about rugged also hardware, but also, again, when you're being shot at, you need to make sure to take quick and easy and correct decisions. We have a similar use case as a law enforcement. So, some on the analytics side on the military, but definitely on the frontline police and the more offense part, as Peter is also mentioning.

And last but not least, the enterprise space. Here, we talk about corporate security, insurance companies, banks, et cetera. They're mostly often are working with mobile phones that are unlocked. So, we lead with XRY, XRY Pro and some other parts of our offerings as well. So, the beauty in this is that we have both the breadth as well as the depth in each of our customer segments that we're focusing on.

From sales, what we have been working on and will be working on is to make sure that we have a really structured way of going to market in each of these verticals and that we support sales as well as our partners ensuring that we push and lead the sales journey. So, we adapted our sales journey to the customer buying cycle. Who is our audience, what are they looking for and how are we selling to it? So, we're following it to identify, qualify, evaluate, procure and then deploy solutions. So, we have a structured way of adapting into each of these customer segments.

So where does the growth sit? I have taken the 2025 revenue results from MSABs last year and try to dissect where what is driving growth in each of the geos and what is our focus within. So, starting with our foundation market, EMEA, representing 54% of the total revenue. We'll see a clear growth driver where they're favoring European first vendors. It's a perfect match to us. We're seeing increased budget coming from defense and border controls, and we're seeing a modernization going on and again, more into the frontline use cases, as I talked about.

So, our focus will replicate the growth pattern we're seeing in Europe, and we play that to fit our strength in the business. So, government and defense border use cases. So, we're building up a repository on that to make sure that we attract, and we are easy to understand what we're doing and how we're solving each of these use cases. But more importantly, EMEA is our foundation market. Here is where we have the largest number of existing accounts, and we have a massive opportunity to grow within each of the existing accounts, upgrade to XRY Pro, move over to XAMN and then the full suite with UNIFY, and they need it and they need it badly.

Secondly, Americas, our scaling market. So, what's driving growth there? Well, it's the largest digital forensics market in the world. We need to be there. We need to actively proceed with new customer wins there. There is a trend of growing federal investments in the market as well as within the Americas regions, we have LatAm as a geography that is untapped and super exciting to be part of. So, our focus, we need to be there when we are being evaluated in each of these cases. So, we have done account mapping with every single of our competitors. So, we know when the renewal is up, what is installed, what are the price mechanisms, and we want to be part of that evaluation process for sure. Secondly, the federal enterprise deployments. Here is a classic land and expand, but we know who is being funded. We want to be part of those conversations, and the team is really aligned and set up to be part of this growth trajectory onwards.

And last, LatAm, of course, been part of the growth channel. And I can just say that we had 2 weeks ago, we had a partner event in Athens, where we had 70 partners from over 40 countries. And the feedback from those partners on a grade 0 to 5 and 5 was the best, the average score was 4.9. And that is a beauty for me to see that what we are showing, what we're talking about to the customers, how the product development that the investments has been doing over time is being perceived from these customers, more importantly, in this case, from the partner's prespective.

Last but definitely not least, APAC, the emerging market. We are investors, you have seen the growth trajectory we are on to in that market, and we feel extremely excited based on the conversations we're having in the region. It's the fastest-growing region in the world as in regards to the forensics market. And many of these customers, they're building their forensics labs for the very first time. And they need someone trustworthy. They're looking for -- really love a European supplier. And as Peter was saying as well, Android plays to our strength in that area. Coming in as new, I like to challenge the Android piece at least.

We -- that's a definite thing for us, but that won't be enough if we're going to reach the SEK 1 billion in 2030. We need to be as potent and as skilled in Android as iOS as well. And the conversation I've seen so far, it seems very promising. So, focusing our APAC, we have a direct sales force focusing on the more direct markets like Japan and Australia and the other markets we're working with our extended arm in our partner ecosystem.

So, when I were looking through the entire global market, I've identified 3 engines of growth. And those are focusing on where we're strong. We have 1,000 customers in 100 countries. Three priorities. Number one, upgrade, get every single one of our XRY customers up to XRY Pro, and we know the value they will see from this upgrade. Secondly, more seats. Once they're in, once they're hooked, once they see the beauty of our technology and the results from these extractions, we're supporting them on, we're going to spread within the agencies. And thirdly, the development that we have done in XAMN and UNIFY moved from just one product to more products to the full platform suite. It's exciting times to speak to our existing customers and see their feedback to us.

Second growth engine, new markets. And I have to say that I'm super impressed that in every single geo we're in, we're having emerging markets. We're having new markets, even in Europe. So, APAC, again, fastest-growing region. The response we're seeing extremely positive. Americas, Latin America, some of the largest deal we closed in Q1 as well as we're working on for Q2 will come from LatAm market, super interesting and nice to see. And EMEA, yes, we have some mature markets, the Nordics, U.K., the DACH region, France, to mention a few, the Netherlands as well. But there are other countries outside of Europe that are really, really interested in working with us, and we are definitely targeting those markets as well.

And last but definitely not least, we have been talking about verticals as a highly important part of the puzzle. And I'd like to mention three verticals. First, the trend we're seeing with the frontline police. That's definitely something that we are different compared to our competitors. It's a huge political use case because the labs currently, they've been overflown and drowning with lots of devices. So, we can solve and reduce that workload by solving the crime closer to the crime is committed, we're making a huge impact, plus we're reducing efforts on the forensics digital labs.

Secondly, the military and defense it's a great market for us. Our focus here will be to make sure that we are structured in the way we go to that market. There's a little difference in vocabulary and how we are penetrating those markets. But we have the product, we have the technology, and we have the resources of translating those messages.

And the same really is for enterprise, definitely white space for us. We are definitely going after that market as well.

So, three engines of growth leads up to some sort of a conclusion. Where do we go from here? Well, as a summary from my point of view, the market and the market drivers that I spoke to you about before really plays to our advantage, local supplier, trustworthy and our capabilities around frontline. Secondly, our customer base, thousands customers, spread over 100 countries. That's a massive opportunity for us to go deeper and wider within plus the opportunities we have in the emerging markets. And last and absolutely not least, 3 months in, the commercial transformation is prioritized. It is resourced. We know what to do. The market is moving, and we, for sure, are doing so as well.

But don't take my word for it. The best thing we learn and evolve as an organization is by working close in relationship to our customers. And it's with great pleasure that I'm introducing Arnaud from the France law enforcement, who will take us through his views from a daily forensics' operations in one of the largest police forces in the world. So please put your hands together and make Mr. Arnaud Bristielle welcome. Coming all the way from France. We're so happy to have you here. Arnaud, welcome.

Thank you very much. So, thank you very much for inviting me. I will today try to share with you the use that I made of the MSAB solution with a small presentation. I will start by introducing myself and the main mission that I handle, make a quick overview of the digital forensics, okay? And then show you our MSAB enable mission with a case study.

So, I'm a sergeant major in the French Gendarmerie. I work as digital forensics investigator. I have 23 years of experience in law enforcement, and I spent 16 years in digital forensics. My main mission in order of involvement, forensic analysis of digital devices such as computers, mobile phone, IoTs, USB storage, anything with digital data on it. Support to search operation. We go every week on field to help to our colleague to perform search operation to detect the device and identify them.

We provide technical assistance to the investigation. When my colleague has difficulties to find evidences or when they don't know how they can find evidence in the cloud or in Internet before we are going to the arrest phase, we'll help them to gather information. And I will also perform technical monitoring and process adaptation. We are in a moving field. Every day, there is a new solution, new application, new hardware. So, you need to stay sharp and to always be looking for the new things. And I'll also train and transfer knowledge to the front investigator to help them to get the data on field.

I work -- the main type of offenses that I handle are on the upper end of the spectrum. Most of them are rape and sexual assaults against minor, offenses related to child sexual abuse materials, so downloading video and photos with children on it, serious crime like homicide, very violent crime, things like that and also organized crime, drug trafficking and theft and things like that.

Rape and offenses related to child sexual abuse are 80% to 85% of the case we handled. We are involved during all the investigation. During the initial investigation, we support field investigators, as I said, to the digital investigation looking for, I don't know, IP address, things like that, help them to interpret data provided by site like Facebook or things like that as they collect sometimes quite a lot of data. So, we have them to sort them and find what is important.

During the arrest and search operation, we will go on field. That's real photo from case we are handling. We are there to identify devices, okay, because sometimes for a field investigator that seems not important or sometimes too old, we go there and say, no, we can't find evidence on that. We need to take it to the lab. We also put the devices in the right condition. If you need to -- especially with mobile devices, you need to perform some things on field to be able to extract the data later. So, we are there to do that.

After the arrest of the guy, during the police custody phase, we will deploy labs in the units we are assisting to quickly uncover initial evidences so the judge can, in the first hour, take decision against the perpetrator.

And during the follow-up investigation, when the case is a bit complex or we have some issues with the devices, we'll go to the lab, and we will sometimes disassemble a computer to get the hard drive or sometimes change part on mobile phone because on this case, the USB port was not working. Without USB port, we cannot extract data. So, we ask for spare devices, and we switch the component or in this case, I was able to recover the bullet shot by a guy, so we can try to extract the data from the phone later by replacing some part on it.

A quick digital forensic overview. So, when is digital evidence important? Almost every crime leaves digital trace. In violent crime, we are looking for location, pictures and video. We have often people who are filming or taking pictures of aggression of violent crimes on the street. Chat exploitation, for chat exploitation, we are looking for, of course, media, but also Internet navigation, messaging and things like that. Cybercrime, we're looking for hacking tools, ransomware, tools for phishing and other stuff. For drug trafficking, communication, location and financial crime, you are looking for spreadsheets, mail and things and so on.

Why is digital evidence is crucial in front of court. Those are facts, not opinion. It's based on data, not on human memory, okay? You can say what you want to do. It's very difficult to remember something precisely 1 or 2 years before. In phone, it's not a problem. The data will stay as the same. It's persistent because the data can remain for years, sometimes over decades. If, for example, you have rape videos stored on a old hard drive, the hard drive stays in a shelf or something like that. 10 years later, the data is always on. We just need to plug the hard drive in, and we can get the information.

There is a massive data collection, especially since the introduction of smartphones. Your smartphone is for a user -- I don't remember the things -- excuse me, in French. No. To help you to get more from your phone, your data, we store a lot of information like location, the way you type on your keyboard, some terms and things like that. And there is a very large number of data collection. So, it's very interesting for us.

And it's often invisible to user because in the mobile devices, you are not -- you don't have access to all the data of your phone. If you are using, for example, a Windows, you can go to the Windows folder and see what's inside. You cannot do that on an Android phone or an iOS phone. A lot of the data is invisible. And even if you delete things, for example, you can delete pictures you made from the crimes or things like that. You go on the bin, okay, it's completely deleted. You think that, but we are able to recover some thumbs or things like that in the system side.

What challenge we faced in the mobile forensics? During the acquisition phase, we have more and more device locking and encryption. And it's so very difficult to get the data. We need tools for that. We have no administrator access. Even if I have the password of the phone, I'm like a user. I cannot go in the system files. I cannot go in the system folder, so I cannot find directly the hidden treasure, the hidden evidence, so I need a tool. And as I just said, it's -- most of these data are hidden or inaccessible.

And during the analysis phase, we have a massive data volume. It's usual to get 2 million pictures on a phone extraction. That's pretty common, okay? So -- and that's the same for location, message and things like that. Many, many data are stored in a way that is not human readable. Before you can interpret the data, you need to process them to decode them so they are -- you can exploit -- not exploit, you can work on it.

And the structure of the data is continuously evolving. You can see on your phone; you have regularly new version of your application. And so, you need to be -- to stay sharp and to be up to date. And it's difficult when you are in front end. That's the reason why we need tools.

So, I will share with you a case study. It should have some difficult thing to hear. So, I prefer to say that before I start. So, this case study is very recent. I've handled it in the late March 2026. At first solicitation of a minor and during the investigation, we discovered sexual assaults involving a minor. So, the initial findings, the suspect is a school bus driver, okay? He's 30 years old, nothing -- no bad particular background. He is accused of sending inappropriate messages to a girl aged 12 to 14 that he transported. At first, he asked a number of the young girl to say, okay, I can tell you when I'm late or when I am in advance, so you don't need to wait in the rain. And then he say, "You were cute today." I want to hug you; do you like me? Maybe we can see each other outside and things like that.

But the messages were deleted by the victims. And we were not able to recover those messages because the lack of space of disk space available on the device. As the victims' phones was -- have a very few storage, the data were erased and replaced by other ones. So, we decided to put -- to go on early morning arrest at the suspect's residence, 6:00 a.m. We cannot go earlier. And to use the surprise to prevent the evidence destruction. We always said at 6:00 a.m. when the police knock on your door, your brain juice is not fresh yet. So, you don't have all the things aligned. The goal is to place the guy in the police custody for interview. Seize all his devices and during the custody proceed to the examination to find some evidence.

We do that even though we think it's easy in a sense, because if you think, you don't have a lot of evidence against this guy and you don't put all the -- everything on it, you don't take this seriously. You cannot say that he is innocent. Maybe there is -- there will be people who said, no, you are not innocent. The police didn't put all the effort to catch you. So, they lost you, okay?

So, during the arrest phase, the suspect took 10 minutes to open the door. As we don't have a lot of evidence, we didn't break the door, okay? When we tell him why we are there, he showed no sign of surprise at all. In fact, he tells me, okay, I understand, but she got no evidence. That's really not the way some people tells you said that, okay, well, we'll see that. We found one device on him, okay? He gives us immediately the password, and we can continue to -- continue our investigation. We didn't know that he was a single father of a 5-year-old son. So, we get -- we handed this young boy to the family, so they can take care of him during the custody of the father. It's important for later.

Okay. So, after the other thing, we are -- during the search phase, -- we found a second phone on the bedroom, power on, locked and charging on the bedside. The suspect appeared suddenly very uncomfortable, okay? And said, I don't have the code of the -- I don't use this phone anymore. I don't have the PIN code, say, that's quite strange. I don't have a cell phone plugged, powered on my beds side, and I don't remember the code, especially if it's my old phone, most of the people keep the same passcode on the phone, but that was not the case. It was not the same passcode say, okay, that's not a problem. We will handle that later. We will end the search operation.

So, the first phone analysis, we perform a full data extraction using XRY Pro, including system data that's not accessible to the user. And I was able to say that he deleted a folder at 06:05. We knocked on door 06:00 and he opened at 06:10 just before he was arrested. Over 200 CSAM file in this deleted folder, videos, most of this were videos with children between 18 months to 8 years old, okay, having sex with adult that he get from Internet. And Snapchat conversation with the victims, for the reason why we are at first there. So, we recover on this phone, the deleted conversation.

The most important -- the most interesting thing were on the second phone. On the second phone, we were able to unlock the devices using MSAB XRY Pro. Full data extraction performed as well, including system data and user data. And we found evidence that the father sexually abusing his son. More than 20 videos recorded on the devices. That's the reason why he didn't -- as I said before, his brain juice was a little bit fresh, but not fresh enough to think about the second phone. Maybe you think he thought that we will not search this one.

In conclusion, an effective tactics and tools enabled to recover data -- deleted evidences related to the initial case, okay? We got the messages and messages over little girl and uncover intrafamilial sexual abuse. After that, we can safeguard the 5-year-old boy to his family. The father was directly in jail, waiting for his trial, all within 48 hours. So, in something very quick. So, imagine when you arrive and you know that the children were abused to be so effective in the term of timeline is very, very important. Thank you for your attention. I have nothing else to say.

Thank you, Mr. Bristielle, and thank you, Marten, also. So, we will now move on to the products and the underlying technology.

And for that, I hand over to Tomas Taesler.

Thank you. I'm Chief Product Officer at MSAB. I joined the company about 1.5 years ago. And I'm going to give you a bit of a more introduction to the different products of our portfolio. And I'm going to start doing that by illustrating the use of products through a video that sort of is showing -- what could be a real case from extraction to sort of analysis and arresting a criminal.

So, I take you back to the city of Grayport. Let's imagine that's in South of England in December last year. And the police station gets a pretty routine call about the car accident happening. So, they send the officers to the scene to investigate. And when they get there, they discover that the driver is missing and the passenger is unconscious and not cooperating. They soon realize that this car is actually stolen. So, they collect evidence from the car, two mobile devices, from the passenger which is turned on but locked and one from the supposed-to-be driver, who's missing but left this device into the car, which is then also locked and turned off. So, they bring these devices to the police office and do an examination. They connect the passenger device to XRY to try to figure out who this guy is, where they have been potentially connecting to where this car has been stolen, still thinking this is only a car theft.

They can do selective extractions for the last 7 days to examine that content on his device. And when they have that content, they move that into XAMN, the analytics tool to look into who is the owner of the device, looking into all the content available, choosing to look for geolocations where this device has been moving around. They see some interesting connections with sites where there have been other crimes committed. And they look into the message history to find out there are some interesting message correspondence between the owner of this device and another person called Anota. In the message log, they can see the actual messages exchanged between the two people and something indicating that these guys has come over quite a lot of cash.

So now this opens up to something else. It reveals a connection to an armed robbery, actually, that happened a couple of weeks ago. So that, of course, initiates an interest in the other device found also that was turned off. So, they bring the evidence back to the Grayport forensic lab, where they have XRY Pro, and the forensic experts can try to break into the other device. For that purpose, they use an application we call BruteStrom Surge. This is a GPU-powered hash cache-based brute forcing application.

And after a while, they're able to crack the passcode of this device to get into analyze all the data available on that one. So, with cracked password, the locked device can be accessed, and they can now start to connect the information from the two devices, see how they have been communicating, with whom they've been communicating and what they have been communicating about. And as they do so, they actually find one of the messages an address that looks interesting. It happened to be an interaction between Mr. Justan and Anota and a message confirming a delivery address for food delivery. They take that as an indication of a site of interest, they get the search warrant, and they go to this address and find evidence from the robbery.

So together with Arnaud's presentation and this illustration, I think that gives you a good picture of how our products are used and the purpose of the business we're in. The portfolio we provide is addressing all the steps in the workflow of a police department, law enforcement organization from ceasing information on the field to bringing devices to the lab for more advanced analysis to the investigator office for trying to connect the dots and find what is very relevance to creating a report that holds up in court.

Important through this change, especially for law enforcement, that what is presented in court can be proven was unchanged from when it was ceased on the device, of course. So, there are ways in this process to guarantee that nothing is manipulated along the way. And in addition to that, we then also have, of course, management tools for network management to help the IT department to operate the software on the endpoints that are installed with any law enforcement organization. Basically, the use cases applied here is the same also for defense and special ops type of customers, just that the requirements on the, sort of, evidence is not as hard as it is in law enforcement, of course.

So, looking at the different steps of this value chain, as mentioned, at the core of it is getting the data. And with the data, we mean everything you have on the phone. We can do this by different means. We can politely ask the operating system on the phone to give us the data they want to share. As I said, that's pretty limited on mobile devices. It's not like the PC where you have full access to everything on the workstation. So instead, we use both physical extractions, and we use full file system extractions by getting underneath the hood of the operating system.

The media we capture is everything from geographical information, as you saw in this example, where had this device been located? How has this person been moving around? We can track messaging through a wide range of messaging apps, of course, call data records, media of all types, pictures, movies, whatever you have on the phone, passwords used for logging into networks. You will be surprised when you see the extraction that we can present on XAMN, the vast amount of information available on the phone. All your life is on that phone, and everything is accessible for us basically.

So, when we do this extraction, we put the information into a secure container that we call the .xry file. That is the entity that goes on in the investigation going forward. That is the format, proprietary format that is then locked down and secure and audited for any type of reading that is done on it. So, we can prove that nothing was changed from extraction to the courtroom. So, this is what XRY does. And we package that for different purposes for use in the field, we package XRY into what we call XRY Tablet or XRY Express, which is sort of a laptop-based solution for the purpose of being able to capture data already at the crime scene or for that matter, also to get data easily from victims and witnesses. Imagine you have been witness of a crime. You maybe have a picture you want to share, but you don't want to hand off your phone for a couple of weeks to be sent to a lab. You don't want the police to have access to all the information on your phone. You just want them to have that picture. We can support that by selective extractions on site at the victims or the or the witness location.

The other option is the Kiosk that I think was mentioned. The XRY Kiosk is sort of more stationary frontline equipment, which offers you a little bit more capable interfaces for data extraction that typically then is deployed at the police station, which was used in this case in the movie where the device was brought into police station and they could do the examination there. All of this gives you that folder, the same folder then as being extracted in the lab, where we can do more advanced extractions. Typically, the device is locked. You want to get into a specific type of device and operating system that is not as easily done as with some other devices. So, this is where the forensic experts are working. They have more competence and then more powerful tools also to work with.

We also use -- here, we use XRY Pro, and we also use that when we help customers through our access services where our own consultants can help them to get in data from phones that maybe they have tried and failed with themselves. Quite often, we can do tweaks to the solutions that is released for customers to get into even more devices than what is otherwise available.

The simple sort of positioning of XRY and XRY Pro is that XRY gives access to unlocked Android. It's a little bit simplified. We do actually get into locked Android as well, but it depends on what type of device it is and so on. Unlocked iOS with sort of a limited extraction. That's kind of the polite asking the system to provide this information. Feature phones, burner phones, more often used in crimes than maybe anyone in this room would think. So quite an important sort of range of devices to have support for and different accessories. We talked about drones, we talk memory cards, other type of associated accessors that hold information that we can get into also. XRY Pro does everything what XRY does, plus gets into locked Androids, complete extraction, full file system extraction of unlocked iPhones and also ROM and memory extraction. So that's a simple sort of differentiation between XRY and XRY Pro.

Once we have that container of extracted data, we move it to the investigator's office and start looking for the evidence, connecting the dots, finding that picture that holds the evidence they needed in the stack. And for that, we use XAMN Pro. It's a very capable analytics tool that gives you tailored filtering and search possibilities for mobile forensic purposes. It helps you to follow conversations between different parties, as you could see in the movie here also, independent of what different messaging apps they have been communicating across. You can see the complete chain of communication for two or more parties and follow sort of the conversation that they may have had. You can see how people connect to each other. You can see everyone that I have been communicating with and everyone that those I have communicated with have communicated with, so you can follow the chains of people relationships. Geolocations, as I mentioned, and yes, everything available on the device is then possible to search and filter and analyze through XAMN Pro.

If you want to do that investigation at a larger scale, you may have 50, 100 gigabytes of data on a device, even more. There's thousands of pictures, as Arnaud mentioned. It's just too much data for one person to dig into. You have a team of investigators working on different focus areas in parallel. We're offering the UNIFY Suite as a way of collaboration to make it possible for more investigators to address the same data at the same time and create one consolidated report that can go to the court for presentation of evidence.

Of course, this is an area where AI becomes very powerful. It's a lot of data to be analyzed. So already today and on our road map, we have a lot of initiatives where we are utilizing AI to make this XAMN Pro more powerful in terms of being able to find what is relevant for the investigation. We, of course, have media content recognition to find specific type of media automatically by content recognition, pictures, including CSAM material, guns, drugs, face recognition, those kind of things. Of course, also language models for transcription and translation, language detection. More and more now looking with the more powerful large language models to have natural language queries to have even more powerful searching and filtering of information and also fake media detection tools.

Also in research, I mean, what makes it possible for us to get the data depends on our research. This is dependent on knowing how the hardware and the operating system on any device is working together for us to find the vulnerabilities on that, that can help us get into device even if it's locked. And also, if we get into device, actually being able to access the full file system extraction. So, we use AI more and more now in our research to sort of elevate the performance of our very skilled researchers. And then, of course, as in any software business, agentic development for application development, we see that with AI, we can scale the number of flavors of applications, use cases we can support for specific customer segments and use cases.

Then in the court dimension, XAMN produces a report that holds as evidence for a court case. And on top of that, we have the network management tools to help the IT department to operate an installed base at the customer site. This is still very much an on-prem business. We're starting now to have more requests coming for the cloud deployments. We do support cloud, but our customers for legal reasons very often are very conservative in terms of storing this kind of data in the cloud environment. So typically, they have the need to operate this installed network themselves. And this can range from just a few nodes with XRY and XAMN licenses installed to several hundred at a big customer. So of course, you need efficient ways to update the software when we do releases, to manage user access, to update watch lists and hash list on those clients that are doing extractions and everything can then be done centrally in an efficient way.

Looking forward, some of the key investment themes we are seeing is, of course, always continued the research and development of our access capabilities in XRY. Tools for quick triage, as mentioned, as one of our growth avenues also, field triage solutions for specific use cases military special operations, not the least, where you quickly can seize a device, see if there's something of interest on that device, maybe looking for some specific contact names, phone numbers, pictures, having the tools that gives you a quick way of on the field getting like a green light or red light that this is of interest or not.

Cloud deployment, going into more of an optimization of the platform and the whole solution for that. Client network scalability to maybe to handle even bigger states of installed applications and also then, of course, in XAMN AI augmented analysis tools. So that's, in a nutshell, what was in our product portfolio. Thank you very much.

Thank you, Tomas. Please stay on stage. We'll now move into a panel discussion. Maybe we can have some help to get the chairs. Okay. And for that, I'd like to invite CTO, Anders Jonson. Please join us. And we are also joined by Jim Dowling, CEO of Hopsworks, an AI expert and lecturer at KTH Royal Institute of Technology. And Jim is working with companies like Saab and Ericsson on developing large language models or more specific LLM solutions.

So welcome, everyone. let's spend a few minutes on AI and what it means for MSAB and the broader space. Let me start broadly. How is AI changing the industry, Jim?

Digital forensics industry. I mean what we saw earlier in some of the demos were analytics. I think, first and foremost, I had a quick look at the demo out there. And it's great you can search around and find things, but I think natural language has become an interface that people can use to dive deep quickly, find correlations, find patterns with natural language. So, I think it's going to improve the productivity of the people using these tools, such as MSAB. I think that's the main kind of thing we're going to see here in the near future. In the long term, agents and LLMs are going to change many industries.

Do you agree, Anders?

I do. From the customer side, absolutely. I mean, I think with a growing volume of data in the software or in the phones, there will be a different way of accessing the data. And there need to be new workflows, which is aided by AI definitely. But then since I'm the CTO, I think the way of working is also changing inside when we produce the software.

And in R&D, we have basically two departments. It's research and research is using AI even more than they did just a couple of months ago actually. And development, as Tomas mentioned, we are using agentic engineering to sort of leverage the play field compared to the competitors, so we can produce more with the amount of stuff we actually have today, which is pretty cool.

Do you want to add something, Tomas?

Yes, the product perspective in that case it's obvious with the kind of data volumes we're handling and the different types of data that AI can simply be a superpower for investigators.

But is it like everything happens faster than you expected?

I mean I can take this. I mean I've been around a long time. I mean I've seen the Internet bubble. I've seen the mobile phone revolution. I've seen deep learning come and I've been working in AI for 30 years. But this is beyond anything. The change even in the last 6 months. So, my company, Hopsworks, we've gone from some people playing around with coding agents 6 months ago to 95%, 99% of our code is written with coding agents now. And I guess we're at 5x the productivity of before. So, software is going to be built incredibly quickly and with high quality, not just -- it's not going to be just slop. I mean a lot of people think it's slop, but you can actually engineer this thing. So, we're going to see a lot of changes in how software is built and deployed. That's going to be the main thing. And it's going to affect a lot of workflows that may not have been digital before, they'll be digitalized.

And I'm sure that's going to affect digital forensics. I mean if we take the example of digital forensics, we have large data volumes. And typically, how we process large data volumes is we need to search through that data, and we might have something like an index, and there's many different types of indexes from database technologies. LLMs won't change that, but they'll change the way you interface, and you access that data, primarily through natural language. So, if you have data analysts that need to learn how to use SQL and build dashboards, that will be revolutionized as well as the interfaces to all digital forensics' products in the near future.

How do the rest of you see it, Anders?

Can you repeat the question?

Yes, if it happened faster than you expected.

Yes, most definitely. I mean a while back; we had 4 releases per year. Now we are down to basically biweekly. This is in response to the increased release cadence from the different vendors we are sort of competing against. So, we are releasing more often. And also, I mean, the sort of, it's become a bit more problematic. I mean, Peter mentioned in his open speech that you heard about Mythos, I guess, and Anthropic's new model. It has increased the difficulty of sort of answering the more frequent releases from the vendors. But we, in turn, have started to use AI internally more to -- in response to that. So, we are releasing more frequently. And yes.

But is it like hard to -- for the companies to adapt to the path?

It could be, I guess. So, it has to do with the amount of investment you can do, but also, of course, you need to be very, very, very skilled. So, we got 20 researchers in our department, a total of 19 in my department in total. But those 20 persons are very, very skilled. We're actually recruiting globally. So, they're not living in Stockholm, all of them, in order to find the best ones in order to have -- in order to respond to the increased difficulty basically.

And Tomas, will you be able to adapt the technology?

I mean it's a trick question because the speed of development in terms of increased capacity for large language models the last year or two or whatever timeframe you look at this is basically logarithmic. So, it's hard for the human brain to adapt to logarithmic development, right? It's just -- it's a matter of catching up rather than foresee what will happen. But clearly, what we -- the capabilities that AI offers today compared to just a year ago is mind-blowing when it comes to how that can be applied in a mobile forensic solution for analysis and research and so on.

Yes, exactly. So, in 5 years, where will we be?

You tell me.

All right. So, I just also have to ask you, maybe start with Jim about Mythos. Yes. I mean, is it a threat or an opportunity or ...?

I think it's the near-term threat to a lot of system software companies, including my own and MSAB. I think there's two parts to it. One is that large language models now work with any task that is what we call verifiable. So, if I have a program and I can write it, run it and verify that it works as expected or it could be mathematics, any tasks that we have out there that are verifiable and could be based on natural language will be nailed by LLMs. So that's kind of the first part. And programming has been the first main one that we've been talking about.

Mythos has taken it to an incredible extent. So, for us, internally, we're like scrambling to kind of do threat analysis of our software because when some of these are released, the bad actors will, of course -- and the bad actors can be your competitors so that can basically -- you can down a competitor with this. So, it's not necessarily going to be just -- I think if we take back to mobile forensics, when models become so much better, it's also the users it will affect. So, they're going to spin out messaging apps with crypto that you haven't seen before, and they're going to be even harder to crack. And then we have the quantum issue as well, quantum of computing. So, there's a lot of -- I think it's an industry with a lot of kind of change will happen in the next few years.

What do the others -- what do you think about?

I mean it's -- it's definitely a kind of threat. It is absolutely. But I mean, MSAB has been doing this for 20 years. So, playing this sort of attack-defense game, we are quite skilled at it. We are not so nervous. But yes, it's a new landscape, absolutely. But again, we are prepared for it.

But will it make your moat stronger or weaker?

We have had a lot of discussions internally regarding this and the reply from research is actually mostly positive. They say, yes, it's more difficult, but we are using the same tools as our competitors or -- and the vendors. And in some instances, we can increase our effectiveness tenfold or even more depending on what area we are doing it. But it's also produces a lot of new possibilities.

Do you have any thoughts about Mythos, Tomas?

Yes, who doesn't. I think...

Should we be afraid?

No. This is a great opportunity, to be honest, it gives us as a small company, as Anders says, the same powerful tools to do research as anyone else in the industry. So, we are levering the odds a little bit with that, in my opinion. And also, when you look at what we do and for the purpose we're doing it, what any large language model can do today technically may for different parties in this ecosystem, not be interesting or profitable. The business case looks different for us versus the vendors versus our competitors.

And where we have a good business case to use the full power of large language models for research and product development. The vendors of mobile devices may not always have that. So, it remains to be seen sort of how that power game will sort of end up. But as Anders said, this is -- that is not really a dramatic change. The sort of the power balance has been there for years.

But where do you actually see AI creating the most value in your products?

If I may answer that, clearly, in analysis, for all the reasons I described. It just gives us the investigators a superpower in terms of finding the needle in haystack that otherwise you would have to have many investigators in the police offices to try and do. You have -- I mean, the biggest iPhones holds 1 terabyte of data, I think. It's just too much to -- for one person to go through. With AI analytics tools, you can all of a sudden change that completely. So, in law enforcement, you'll need less people to do the same analysis.

In research, it just gives us a superpower to do more. And in product application development with agentic development -- sorry, vibe coding or agentic engineering or whatever it's called now, which name changes monthly. We -- I see an opportunity we can do more flavors of the applications we have -- the moat is to extract the data. That's very hard for anyone to copy. And it's both hardware and software architecture combined. So, I don't really see that being threatened by AI. The capability of getting the data is our moat. And on top of that, we can now all of a sudden build much more flavors of applications for specific user segments that basically just helps expanding our offering.

Anders, what's your take on that? Or do you agree?

I totally agree with Tomas. And I think, I mean, looking at the competitors, Cellebrite and Magnet foremost, I mean, yes, they are bigger, but with the help of agentic engineering, I mean -- and the amount of token we are willing to use, we can basically produce the same output as they do now. So that's only a positive thing.

But just to clarify, what's the biggest risk with AI actually? Jim?

Risks. I mean there's risks in -- if you're in the area of digital forensics, there's risks that there's going to be new attack vectors that are going to appear that will overwhelm the ability of law enforcement to actually deal with them, right? So, everyone is using WhatsApp, Facebook, Signal and so on. And I guess you've cracked all of them, maybe not Signal, I don't know about that.

But the new software will be just put out there that will have very good quality encryption and there won't be existing tools there to crack it. So, it's -- I guess the biggest risk for the industry as a whole is that new tools will appear at a rate that you can't keep up with. I do think because of the agentic engineering, you will be able to move a lot faster and keep up. But the arms race will get faster. I think that's the biggest probably most likely outcome.

All right. Your industry, MSAB industry, law enforcement and the military tends to be quite skeptical in some markets like U.K. How do you break through? Tomas, maybe.

In what way are the skeptical?

No, but I mean, there have been several cases where evidence has dismissed, because it wasn't evaluated by...

I know. Typically, I would say it's often in the hands of how you have used sort of public AI tools in sort of -- yes, in a not so clever way sometimes that you have used it to -- which has led to -- in the U.K., there's been some situations where they have went to court with evidence of what produced by AI and we just don't do that in our products. We use AI to help find what could be of interest. We never manipulate; we never draw conclusions. We just expose it for the investigator to do the judgment. So rightly used, it is not an issue from a sort of any point of view. But there will be some cases which has influenced the public debate in the U.K., for instance, that has been a bit unfortunate.

Okay. And there's a lot of -- I mean, we've touched on this, but there's a lot of talk about AI replacing software and SaaS companies. And could AI replace parts of what MSAB does today, Anders?

I would say no. The reason is that we are in a very specific market, requires knowledge and skill, especially to extract the data that requires humans to create the exploits. I know Mythos, Anthropic, says they created exploits themselves. But the ones we are sort of finding are very, very difficult to find. So that won't be replaced by AI anytime soon.

Then also to create the softwares we are creating, we need to be very, very careful about automating the code generation. We need to review every line of code in order to have a software which is guaranteed to produce court admissible stuff basically with holds up in court. And if we automate the entire production line by AI, that would be pretty unfortunate, I think. So that makes this sort of business area, it creates a bigger moat, and we are not that replaceable, which is a good thing for MSAB.

Is it like that, Jim?

I can't comment specifically. I only know the tool briefly. I can't comment about SaaS in general because, I mean, at our company, we do marketing with a tool called HubSpot and pay them EUR 3,000 a month. Our marketing person, who is not a programmer, built an equivalent tool and sort of integrated a couple of open-source tools. It wasn't too much work, a few weeks' work, pretty profitable. We've replaced a few other SaaS applications like a managed webpage, Webflow, something ourselves.

Now our marketing people are writing the website with cloud code. Because it's easier to -- if you're making changes, it's spread across the whole website and so on, it's very easy to do those globally and it would have been much harder on the SaaS platform. So, I think a lot of SaaS software is under threat. But I don't know how fast it's going to happen. It will happen, but it will be industry kind of related, right? I think in different industries, like it will go faster and others, it will go slower.

So -- but where is the real boundary if there is any?

I don't know if there is a boundary to be honest. I mean we're a database company. We build a database, right? This is the lowest of low engine. Our code is open source, RonDB is a database. And we -- our Head of database, Mikael Ronstrom, he's written 150,000 lines of code in the last 2 months. He's written a query optimizer that he hadn't touched. He's been working at different layers, and it's really good. And this is the hardest code you would expect to write with agentic coding, but it's actually quite good. So, I don't know where the layer is. I really don't know where the moat is.

Do you want to add something, Tomas?

Yes. No, every software that is exposed on the Internet user interface-heavy will be copied. Can be copied, will be copied. So, the question is what you have beneath the hood that is not exposed and copyable. That is what the value you can protect and that's what you can build on.

I mean I get contacted regularly by analytics companies who want access to our data. We're not giving them our data. So simple as that. So, what applications we build and expose -- yes, I agree. I don't see why they could not be copied. But the question is they will just be empty shelves if you don't have the data.

Are you agreeing?

I do.

Okay. You don't want to add anything. Okay. But as talking about competition as a smaller player, how do you stay competitive in an AI-driven market? I mean, there will be many competitors.

Should I answer? I don't think there will be actually. We have three on this market. And the barrier of entry is increasing -- getting quick -- more difficult quickly, which is to our advantage. Smaller companies using or creating exploits single-handedly, et cetera, they are -- is my guess going to disappear. So, I think MSAB is in a very, very good position to scale and to compete using AI also, of course.

So, Jim, do you agree that this favors specialists?

I mean I think definitely, if you have a niche that has a high barrier to entry and you have a good moat, that's not going to be the first software company be appended. I mean there's tons of workflows that are not digitalized today that will be digitalized in the very near future. There's tons of incumbents that basically charge huge, huge margins for something that you can vibe engineer. Those will be appended first. So, it's going to be a journey.

And I mean, I saw, for example, Legora, who are a Stockholm company who are massive. And I saw someone the other day, well, I've open sourced the vibe coded version of Legora. Now how true is that? I don't know. But I think there will be a deflationary aspect to AI and software. If you're -- we have a competitor called Databricks, they're valued at $150 billion. They charge huge margins, and we can do the same thing. We could be the Lego version of data AI analytics. And when times are good, maybe it's fine for databases. But when times don't turn a bit and you need to save cash, there will be a deflation aspect to this, I think.

Right. So good to know for the investors. In other words, you're saying AI can replace others, but not you. All right. What is one thing investors might underestimate about AI in this space. Anders, do you want to start?

Underestimate. That's a difficult -- not prepared for that one. I'm drawing a blank here.

Do you want to...

Well, I'm underestimating AI every day. So, I guess investors are too.

Jim, do you want to help us?

I just think that there will be more attack vectors and maybe going to need more forensic and digital forensics in the future. It's going to be a higher cost if it's going to be easier for people to hide digital trails.

I mean with Jim here also, I mean, there's a saying there is no such thing as a perfect code. And I do think that applies to AI, too. We will see more apps popping up in both Android and iOS and more apps is more attack surface. So that may be to our advantage actually.

But what is like the weirdest thing you think we will use AI for that we like can't imagine right now?

Well, I have been sort of theorizing about maybe the police will be using agents themselves. So maybe humans aren't clicking through our software, who knows in the future because the amount of data. So maybe they just point an agent to our software and say, find evidence for this case, whatever and present this when you're done. Voila, it sort of presents this, hopefully holding in court as well. Maybe that's a future, but not, but that would be interesting.

Jim, what do you think?

I work in the area of data, right, scalable data. And in data, we typically say data is either structured. So, it has -- it's stored in tables and it's organized and you can search through it. And then we have this big bucket we call unstructured data, and that's everything from files to text to images to videos and so on. I think AI is going to organize that unstructured data in the next few years. I think in theory the idea that we're going to have these like big dumps of unstructured data that no one has a handle on and there's a lot of tooling around. I think we're going to just organize all that.

So that's the weirdest thing you think we're going to use.

It's weird for me, it's weird. If you work in data, it's like it's a revolution, but yes.

But do you think, Tomas?

The most weird thing about AI.

No, no. But I mean the most rare thing that we are going to use AI that we can't really imagine.

Yes. Well, that's -- Personally, it's already -- I see people using AI as a psychologist and so on. That's to me crazy. Within forensics, I don't know. It's not really -- I don't see any crazy use cases. But again, I don't have seen it all yet.

I wrote a book on AI for O'Reilly, just came out in December. And I kind of described LLMs as it's an amnesiac brain and a jar. I'll try and break that down. So, it's a brain in a jar in the sense that large language models are brain. They understand language, and they have language going in and language going out, but they're not connected to the physical world. They're not connected to. They don't have vision. They don't have sensors that we have. They're also amnesiac because I can tell something has forgotten it immediately. It's like that movie Memento, write it down. But he had better memory than LLM because he wrote stuff on his body. to, but they don't. So, at the moment, they're amnesiac brains in a jar. And I think when they get connected to the physical world and they're interfaced into things; we're going to see big changes. Yes.

Interesting. Maybe we have some AI questions in the audience.

[Foreign Language]

[Foreign Language]

The -- yes, the professor at KTH, Hannes Alfven, he wrote this book about -- actually, it was the computer writing the book about the development of the computer, the big computer. And at that time, of course, the humans, they were so dangerous that they were kept in lakes or very, very, very carefully taken care of. So actually, the humans were only the way to produce the great computer. This book was written in about the '60s by the Nobel Prize winner KTH Professor Hannes Alfven, but you didn't know about it. When will it come true?

The question was... when will it come true?

I mean there are many people think that that's the next step in evolution that we're just a steppingstone. A lot of people in the tech field aren't particularly unhappy about it. They just think it's a natural evolution. But that's not my opinion, but that's what I hear.

Okay. Do we have any more questions? No. Okay. So, guys, is there anything else you want to add on AI that you think it's good to take with us from today?

I can ask if you're not programming, I expect you will be programming in the next 12 to 24 months. I think most people in most jobs will be producing software of some kind with -- powered by large language models. So rather than wait for the future to come to you, maybe you want to move to that future earlier. That would be my take.

Tomas, do you have any closing remarks? No?

Just say that internally at MSAB, we are quite energized with the dawn of agentic engineering. And I know some of our product owners in the audience here, they're also using agentic Engineering and sort of have started using and producing proof of concepts, real software just to show that something actually is working, which they then can hand over to R&D for proper development. But it creates a quick cycle of new things actually, which is it's very energizing and everyone can be active sort of in the development, which is very fun.

Great.

That actually makes me really tired because I'm not sleeping because I'm so much programming. That's another side effect.

Okay. Thank you, everyone. That brings us to the end of today's session. And before I hand over to Peter for some closing remarks, I just wanted to tell you that the panel will be here for a quick chat, and there will be light lunch served and some products you're welcome to have a look at. And with that, I hand over to Peter to wrap things up. Thank you very much.

Thank you. Yes. AI, both a threat and an opportunity, and we are keeping our eyes on both. I can promise you that. But talk to these guys during lunch. When we had dinner with Arnaud yesterday, he told us -- first, he told us about he lives in this beautiful little village where they locally provide very good things that you can eat and drink. It seems to be a fantastic place. But he also told us that he brings a sleeping bag to work. A sleeping bag to work? Yes, because he has only 48 hours to find the evidence for the criminal. So, it's not the time that you go home and sleep. That's the kind of commitment our customers have and the crimes that he solves pretty important. So that is what we -- the customers we serve with our products. And I think that is a reason to invest in MSAB.

But maybe you want more reasons. So, I mean, I put up five reasons. We have a good strategy that we are executing on, and it seems to be working. We have a good organization in place with a lot of new people, new energy, but not only a new organization, we also have changed the way the company operates. We -- today, we have the data we need to take important decisions. We have more efficient processes and so forth. We have great products. We have really, really top-of-the-line products today. We don't have a lot of products, but the ones we have, they are really great products. We have the growth avenues that we see in front of us that we talked to you about, both in geographically, in the products and new verticals. We haven't stepped into those yet, and we are still growing with really, really good speed. So, I think there's a lot of reasons to invest in MSAB. You have invested this half day in MSAB, and I want to thank you for that. And I hope you got some value for it.

So, thank you for coming. Now go to the lunch, spend it talking to the people, the management people we have here. They are all really easy to talk to you. Thank you.

So good morning, and welcome to MSAB's Interim Report for Q1. Presenting today will be our CEO, Peter Gille; and our CFO, Tony Forsgren. If you have any questions, so please put those into the chat, and we will answer all questions at the end of the presentation.

So without any further ado, I'm going to hand over to Peter Gille.

Good morning, everybody. So let's go to the first slide. And I think we have a good first quarter. It was solid. The currency adjusted growth was almost 15%. We still have good high margins. The operating profit EBIT was, of course, hurt by the currency effect with almost SEK 7 million. So it's not where we want it to be. On the other hand, we have increased the cost during the year, and we had really low cost in the quarter 1 last year. So the comparison quarter 1 over quarter 1 really isn't adequate in this setting. So maybe better to look at quarter 4 last year and compare with the costs now. It's a slight increase in cost. We have also introduced a new metric, the annual contract value, to give investors a better view of where the business is going. Tony will talk more about that, but it's a good number. I think we are really growing our contract value compared to last year.

If you look on the strategy side, we have worked hard with the strategy now for over 18 months, and we are really where we want to be. But we continue, of course, to work with the different challenges we have. We have a good foundation now to going forward on based on what we are doing, but we need to continue to invest in our products because that is the key to growing the business. We feel that the market position we have has really been strengthened during this year, and we hope that, that will -- you will see the results in the numbers this year. We have also strengthened the organization with our recent leadership team is now fully equipped. And we have Marten on board as our new sales manager. And we continue to professionalize how we work within the company. And that is an ongoing work all the time.

If we look on the product side, as I said, we continue to invest in our products, and we have increased the timing of our product releases. So we release much faster now, and we release a lot more features within the products. With XRY Pro, we have a momentum, and we continue to keep that momentum by also releasing new things. Like, for instance, support for GPS devices, which we are the first vendor to deliver to the market. We have also delivered something for the front line, which is the XRY Pro Express. It's only aimed towards very educated user and a limited number of users that has the need of having more advanced extraction possibilities in the front line. But it's a really useful tool, and we think it will be very appreciated by our customers. It's been a signal we got from the customers that they want to have this also advanced tool in the front line.

We have also enhanced our workflow capabilities across the whole product portfolio. So XAMN Pro and XEC, they are all now involved in different workflows. So we just continue to work with the workflow and expanding it towards the product. We have also continued to invest in the products across the portfolio. So that's something we continue to do. We are a lot more people today in the development department than we were this time last year. And that means that we continue to invest in all the products.

If you look on the regions, EMEA had a good quarter. I would say, a stable quarter. Continue to sell mostly XRY Pro. And we can see good movement in all the markets basically. We also have a strong belief that we have opportunities within the defense segment. We are the only European supplier among the top vendors in this space. And we think that the European defense segment should really invest in our solutions because it's very useful also in the battlefield.

In APAC, we had a slightly weaker quarter, mainly due to that some of the procurements didn't come in. It's a sensitive business. We're still a small business. We don't see any risk for not fulfilling the year in a good growth. It's just that the deals didn't come in the numbers this quarter. XRY Pro is also there being the most wanted product. So that's really what we see that the customers are buying. And it's a good demand across the all, and we have had good development also in New Zealand during this quarter.

In the Americas, yes, it's been a tricky year, I would say, last year, but it starts to see the light in the tunnel now. There's still uncertainties around the budgeting and so forth and also with people and processes and all that stuff, but it starts to clear out. So we see that America will come back this year. We grow the business organically in U.S. also in currency adjusted numbers last year. But this year, we think the growth will increase even more. We also have some good wins in Latin America and Canada during this quarter, which is good to see. And also there, the growth is really driven by mainly XRY Pro and also new sales.

With that, I leave the word to Tony to explain the financials.

Thank you, Peter. So let's run through the financials for the quarter. So we continue to see a growth. And actually, we did a record sales in isolated Q1. The first time we are reaching 3-digit numbers for a quarter 1. So as mentioned, the net growth is 7.6%. But FX adjusted, it's 14.7% in the quarter. So we are losing SEK 7 million in the net sales compared with last year. And looking at the rolling 12 numbers, we actually gained some further sales. So we reached up to SEK 469 million compared with SEK 462 million last quarter. So a net growth of 15.7% in Q1 versus the same period last year. But FX adjusted, we keep on growing. So we are at 23.5% FX adjusted for the rolling 12 months.

As mentioned, we have a strong momentum in EMEA. We are seeing new customers, which you can see on the diagrams to the right. And we are also improving a lot with the product XRY Pro. It's cautious in Americas, which also shows in the numbers. And there are some delayed transactions in APAC. We have not lost them, but they are delayed in the momentum.

Our new sales are growing. That's good for the contract base, which I'm going to present later in this presentation. So last year, we reached -- exceeding that one and filling the contract base with new sales of 60%. It's primarily driven by XRY Pro. Approximately 70% to 75% of the growth is XRY Pro. Next slide, please.

So we are keeping on investing in the company, and that is also showing slightly in the OpEx, but we are designed to establish a foundation for scalability, which we are improving as well. Starting with the gross margin. We had a gross margin of 95.4% in the period. Rolling 12, we are still about 93%, ending at 93.4%. As you can see on the yellow line in the table to the left, we have a stable gross margin now looking back 2, 2.5 years back. So we are not doing any isolated hardware sales as we did previously.

We are investing, as I mentioned. And looking at in the OpEx, you can see a shift between other external costs and personnel costs. The other external cost was inflated by consultants last year. And on the vice versa, the personnel costs were very low because layoffs, and we took the cost in Q4 the year before that. So the comparison number is not to be compared with this Q1 number. It's better to look at the Q4 number for last year, as Peter mentioned. We had a core personnel cost of SEK 71 million in Q4, and now it's SEK 74 million. It's mainly driven by the salary increase, which effects from January. So all according to plan with OpEx, but the shift between other external costs and personnel costs.

And also, we did some investment in external exploits, which we balanced last year to the balance sheet. Now we have signed a service and support contract with the same vendor for 1 year ending in December this year. It cost us close to SEK 5 million a quarter, and that is recognized in other external costs.

Yes, we have moved. We have a new office. It's really nice. We are sitting at Sveavagen. It's really appreciated, but it's also affecting our cost and our balances. But we are gaining a lower rent all according to IFRS then, so it's balance and taking over depreciation. So we are saving like SEK 2 million a year -- on a yearly basis for the Sveavagen office now.

[Audio Gap]

Now I can see the next slide, sorry for that. So balance sheet. Normally, there are not so many changes in the balance sheet. There has been not -- I'm going to explain them a little bit further, but we still have a stable platform for continued growth, and we still have a net debt-free balance sheet. So no debt is taken. We activated intangibles, you can see a big shift there. We haven't activated anything now in '26, but it's down '25. We are gaining some tangible fixed assets due to the office move. It's installations with IT, it's furniture and infrastructure in the new

[Audio Gap]

Leased assets. So we moved up the Hornsbruksgatan office agreement, and we moved in a new 7-year agreement for Sveavagen. That's why you see the big change in these fixed assets. And cash, we have a good cash situation. So we're gaining cash, and we have good momentum in converting cash EBIT to cash still. The strong cash flow. However, in Q1, it was affected by the investments balanced and some -- yes, we have higher accounts receivable, but no customer loss receivables.

Looking at the debt side, you can see we are also moving up to other short-term noninterest-bearing liabilities, and that is due mainly to the good sales in Q3 and Q4. So the 16% of the revenue that we balance and split over the contract period is brought to the debt side and moved in as revenues on a monthly basis when fulfilling the contracts. Final slide, please.

And let's run through our new KPI, which we have followed internally for a while and decided to release to the market this quarter. The KPI is active -- it's showing the active contract software base as it is. And I'm going to try to explain what is the difference between recognized revenue and this measurement. So as you know, the quarterly result is subject to volatility due to the way that we report revenue. And the new KPI is to present the underlying trend in the current software base.

So let's have a look at the table up in the right corner then and the circle to the left. So the way we recognize revenue today is that day 1, we take 84% revenue and we move 16% on a monthly basis split over the contract length, meaning we have a big revenue in the first day. And if we sign, as in this example, a 12-month contract, we split the 16% over 12 months. So the first month is a big revenue, second month not so big. That's the way we recognize our revenue. But looking at the circle to the right then, so what do we do to measure this in another way. So in this example, we still have a 1-year contract and a base of, let's say, 100%. So we split the revenues evenly over the contract period. So each and every contract is split over the contract length. So the contract length doesn't [Audio Gap] even parts over the contract value there.

So looking at the table below that to explain this in a theoretical example. So let's say we have all contracts, we have seven contracts and the contract value is 100% for all of them. It's different lengths on these contracts. The first contract is 1 year. So we split the 8.3% over 1 year. And the second contract is 2 years. So we split the 100% over 2 years gaining 4.2% evenly every month for 24 months. So we do that with each and every contract that is active and that we have. And then we do a snapshot in a period as we have done now in March 2026. So we take the value of each and every active contract and summarize that, what is the active contract base and then we multiply it by 12 to get the number which we are presenting in the report, SEK 436 million in the report, in this example, SEK 467 million.

And then we take that number and compare a snapshot from March last year -- the year before in March 2025 and see what is the value of the active contract base. And as we have reported, we see a really good growth of 38%. And as mentioned before, that is mainly driven by XRY Pro. But it's -- the growth is also driven by product mix, pricing and the new sales versus renewals, et cetera. We don't give out the churn number, but the churn is very low.

So now you're thinking how can I bridge this towards our recognized revenues. I can tell you that it's going to be hard because there are so many factors in this. In the way we recognize revenue, we have the FX factor. We don't have that when we split this evenly over the contract base. We have the product mix. We have different pricings. We have contract length, et cetera, and et cetera. So even though we have all the numbers, we cannot do a bridge. So please challenge me in doing that. That is it from me. Thank you.

Okay. So to sum this up, my view is really that we are in a good place with the company right now. We have a good management team in place. We have a good strategy that we have executed on, and it seems to be working well. But we still, of course, need to continue to work with improving our processes, improving everything we can in the company and it's continuous work that we do and also to deliver [Audio Gap] continue to invest in the products.

What we also will do is according to our strategy is to intensify the efforts we have in the military segment. We think that is a good segment for growth for us, and we hope to see some results now already in 2026 on that. And then our focus is on emerging markets where the competition not has established itself so well yet, but also on increasing the market share in the mature markets like EMEA, which we see we really are doing right now and expand our existing customers' engagement.

But to sum it up, I think we are in a good place. We have a lot of challenges in the market and outside the market, but I think we're handling them in a good way. And I'm looking forward to present our next quarter. Thank you. And don't forget to visit our Capital Markets Day on May 7 in Epicentre in Stockholm. We will present 9:00 to 12:00, and then we have a small lunch where you can ask the staff questions and so forth. Don't miss this fantastic event where we really will have a lot more insight into our strategy, our products and also get a presentation from our customer. So looking forward to meet you all there. Thank you.

Okay. So if you have any questions, there don't appear to be any questions at the moment in the chat. So with that, I think we wind off, and thank you all very much for -- okay, here we have a question here.

So you flag for increased investments to weigh on profitability temporarily. However, also say that you want to maintain stable level of profitability for the remainder of 2026. How does one square those two comments? Do you expect just a small negative effect on EBIT this year versus in 2025? Please take that one.

Yes, absolutely. It's a good question. And what we really mean, I would say, we have a fantastic scalability in MSAB, but we will not get the full effect of the scalability this year if we -- of course, we need to continue to do some investments. But they are the short term, and then you will see the scalability going forward again. So we don't expect to reduce the [Audio Gap] we expect the EBIT, but it will not grow in the scalability that I really like in MSAB, the full scalability. Do you want to add?

No, that's correct. So 2026 will be investment year, and we're looking forward to scalability after that.

Yes. Let's move on to the next question then, which is the service and support costs for the third-party iOS product now run as an OpEx until December 2026. Do you expect to extend this for the next couple of years as well in OpEx? Or will you see another upfront CapEx investment such as that seen in 2025?

I think we will expect it to continue, I would say. That is the kind of nature of the agreement. Then it will, of course, depend on what will happen in the market. But we don't expect it to be -- we expect it to continue.

And then a question on the product mix. Do we still expect 92% to 93% gross margin looking ahead?

Yes. That's [Audio Gap]

And then the final question that we have here is what was the organic growth of the [Audio Gap]

In the earlier annual contract value, we don't have any FX effects at the number that we are presenting. Why? Because when we enter a contract, we do it with a fixed amount and a fixed FX entering the full month and the full period with the same amount. So if we signed, for example, 24 months contract 12 months ago, it's going to be the same value in that. So it's no FX effect in the annual contract value presented.

Okay. Thank you, Tony. That appears to be all of the questions we have for now. So again, thank you very much for joining this presentation, and we hope very much to see you at the Capital Markets Day on May 7. Thank you.

Thank you.

So good morning, and thank you for joining the Q3 interim report presentation for MSAB. This morning, we will have Peter Gille, CEO; and Tony Forsgren, CFO, who will be presenting. If you have any questions, then please put those into the chat, and we will handle those at the end of the presentation. And I think we're almost time to start.

Yes. So with that, I'm going to hand over to CEO, Peter Gille.

Okay. Good morning, everybody, and welcome to the quarter report. So Q3 was a very good quarter for us. We made around almost SEK 147 million, which is an increase with 27% and almost 35% in the currency adjusted growth. Even though we had 1 big deal that came from Q2, we still have a good growth both in the quarter and even more interesting over the 9-month period where we actually also have a growth.

So I think everything was good in that sense. We also have the costs on track with the planned investments we're doing and the increased investments in product development, which shows also in the EBITDA and the EBIT result.

If you look on the different regional developments, we see that EMEA which is one of our core market is -- continued to execute really, really well. We see that our best-selling product nowadays, which is the XRY Pro is performing very well in EMEA. And we are fulfilling also our engagement with the military and the defense sectors where we see some interest and we have good discussions.

In APAC, we have a very strong growth in this quarter. We also see that as a coming market for the next coming quarters. There are big potential all over the region and a lot of interest in our products.

In the U.S., we have had very high expectations with Mr. Trump coming in, and we thought we would invest a lot in border control which actually did and -- but also in the different federal governments, but we have not met the expectations in the U.S. when it comes to investments. It's been budget cuts and also a lot of confusion in the administration where the people that has been forced to leave and difficult to understand if they have budgets and if they were allowed to buy things and so on. So it's been a little bit of disappointment in the U.S. still, we have performed better than last year over the quarter. So it's not all bad, but we have higher expectations for that.

Also going forward, in Q4, of course, with the shutdown that currently is in the U.S. of the federal government, which is our key customers are in the federal government. So of course, one difficulty that we have to calculate with going forward. So we have -- we're hoping for the shutdown to end and that they will be able to put the orders that we are waiting for there.

Yes. In the product side, we continue to invest in XRY Pro. We see now that the market really appreciate it. We have also had some KPIs for the sales of the number of XRY Pro, which we achieved the yearly target already now in Q3. So it's really a high interest of the product. And we can see that the things we are doing and the things we are investing in is appreciated by the market, especially the latest versions that we have, which is the brute-force and the RAM extraction capabilities has been very, very appreciated in the market. We have also added a new functionality, which is called BruteStorm Surge, which basically makes the capability to get data quicker than anyone else in the market. It's -- you can scale it over the servers and have a lot of power to achieve then -- get access to the data quickly.

And we continue to invest in there. We also have the iOS, which is also -- we also have actually got to the benchmark we set for the whole year in Q3. So it's a big interest.

If we look on the market then, we see that the things we've done in the products exactly as we have planned in the strategy, is starting to pay off now in the market where customers really are buying our products in a bigger scale than earlier. We see that we have big potential in the emerging markets like in the APAC market, but also in other emerging markets where there is more an open market where customers really buy the most -- the hottest products there is right now.

But we are cautious down of the shutdown of U.S. administration. We don't see that it will affect that we will lose business, but we see that it might be the effect that it will delay business in Q4. So that is, in a sense, the market dynamics that we are looking at. And the shutdown is, of course, not affecting only us. I think they are affecting everybody.

With that, we go to the financial summary. I'll leave the word for Tony.

Hi, everyone. Let me introduce and present some numbers for the quarter. So as Peter mentioned, we did a record sales isolated quarter with recognized revenue of SEK 147 million. That represents a net growth of 27% and FX adjusted growth of 35% since we have approximately 95% of the revenue in foreign FX, we are a little bit hurt by the strong Swedish krona.

Rolling 12-month sales amounted to SEK 439 million, which FX adjusted corresponds to approximately SEK 460 million. The growth are mainly explained by underlying growth in our core business in addition to the orders received as previously communicated in the quarter. Accumulated revenue are slightly ahead of our business plan for 2025.

Looking at our different regions. All regions contributed to the growth in the quarter. EMEA was up 23%; Americas, 34%; APAC; also 23% compared with the same period previous year. And sales of our most advanced product, XRY Pro continued to increase in all regions and we are seeing several customers choosing to upgrade to Pro from our historical best-selling product, XRY Logical/Physical. This is very positive for us in terms of revenue since the Pro version is priced at around 4x higher than the Logical/Physical.

So in addition to the record sales for the quarter, we also reported a record high operating profit with an EBIT of SEK 46 million and a margin of SEK 31.3 million for the quarter. Gross margin-wise for the quarter that was negatively impacted by a one-off cost in the form of a write-down of inventory. The write-down amounted to SEK 4.1 million and are mainly related to items that had not moved in the past 2 years. Approximately SEK 3.5 million of the SEK 4.1 million was consisted of Mk [ 3.5 ] kiosks that we scrapped as we introduced the new Mk 4 Kiosk.

Gross margin for the quarter was 19.5% and accumulated gross margin for 2025 was 92.3%, and we expect to improve the gross margin slightly in Q4 since we have taken the write-down in Q3.

Investments in marketing activities, particularly in the APAC and EMEA regions continues. And the transition to permanent employees replacing high consultants has reduced other external costs. However, since approximately 75% of our OpEx consists of personnel costs. Our long-term investments in personnel are reflected in slightly increased personnel costs. We continue to maintain good control over our operating costs, and they are within business plan for the year.

Finally, let's have a look at the balance sheet and some cash flow. We continue to have a debt-free balance sheet that provides a stable platform for future growth. During the quarter, we invested in Android FFS of SEK 2.3 million that was balanced like previous intangible investments. This will be written off over a 5-year period. The investment strengthens our product offering, and we currently consider ourselves to be at least on par with competition in both Android and iOS.

As mentioned, an inventory write-down took place during the period. The write-down was related to other items that had not moved, as I mentioned, and the balance sheet with regards to the inventory consists of all the current items that move going forward.

The increase in sales, particularly in its later stages in the quarter is expected to significantly strengthen the company's cash flow during next quarter. Since a lot of the received -- accounts receivable was taken in September.

Other short-term receivables and primarily the other accounts receivable has resulted in a negative working capital, but that is going to -- expected to be changed in Q4, as I mentioned. Closing cash position was SEK 86 million.

Yes. So in summary, we had a really great quarter. We also have a positive overall trend if you look over the 9 months. Of course, we still have volatile quarters depending on when the deals come in. But now we have 1 deal that came in Q3 instead of Q2, which affected Q2 negatively and Q2 positively then.

We are gaining ground in APAC, but also in other emerging markets where we see big potential and we will continue to focus there. But we are growing in all the markets basically.

We will continue to closely market -- what's happening in the U.S. We don't see that we will lose customers or lose deals, but that the shutdowns might cause delays indeed, depending on when it stops and how much they will have in the queue to handle after that. We also see very clearly that the strategy we have taken is now paying off.

The product investments we have done is really appreciated by our customers and the market and the regional strategy we have will drive growth going forward.

So with that, we conclude and wish you all a great day, and then we will take questions, of course.

Okay. Thank you, Peter. So far, no questions in the chat.

Okay. So if there are no questions, I think we wind off there, and thank you very much for listening in. Thank you.

Thank you.