Teamviewer Aktie

Thank you, operator, and good morning, ladies and gentlemen, and welcome to TeamViewer's Q2 2026 Earnings Call. I am Bisera Grubesic, Head of IR at TeamViewer.

And today, I am joined by our CEO, Oliver Steil; CFO, Michael Wilkens; and CRO, Mark Banfield. Oliver and Mark will run you through the quarterly business update, and Michael will present the financials. And the presentation will be concluded by a Q&A session. Please note that you can find the important notice and the APM disclosure on Slides 2 and 3 as per usual.

And with this, I'd like to hand it over to Oliver to kick off our presentation.

Thank you, Bisera. Good morning, everyone. Welcome from my side as well, and thank you very much for joining our call today. The second quarter marked a real inflection point for TeamViewer. The strategic and operational progress we saw building in Q1 is now really translating into tangible business outcome. The DEX turnaround is fueling growth. Churn improved to its lowest level since the 1E acquisition. And importantly, major enterprise customers recommitted through larger multiyear agreements.

At the same time, we are seeing customers increasingly consolidate remote connectivity, DEX and AI capabilities on TeamViewer ONE. This drove double-digit year-over-year constant currency growth in our highest value enterprise ARR bucket. And I think it underscores the growing customer buy-in to TeamViewer's integrated platform for autonomous endpoint management.

Our momentum was further reinforced by recent external recognition from leading industry analysts and by our landmark partnership with ServiceNow. Combining TeamViewer's endpoint technology with the ServiceNow AI platform and backed by long-term commitments and joint investments, the strategic partnership is built to grow and shape the future of autonomous IT operations. We also saw encouraging progress in SMB, where churn is starting to stabilize as expected. Targeted retention initiatives and improving sales execution are taking effect here. And we expect SMB headwinds to continue moderating throughout the second half of 2026.

And while the top line growth in the second quarter continued to reflect the previously disclosed headwinds, these effects are unwinding as expected. And more importantly, the key leading indicators across the business all improved during the quarter.

Profitability remains strong with an adjusted EBITDA margin of 43.2%. And at the same time, we continue to invest in innovation in AI and go-to-market capabilities, which really demonstrates our ability to balance growth investments with financial discipline. And taken together, these developments reinforce our confidence in accelerating the business dynamics during the second half of 2026, and we are, therefore, reaffirming our full year guidance.

Next, we will zoom in on the most relevant results of this quarter. Let me spend the first few minutes on what I think are the most important developments which we saw in Q2, the improvement in enterprise momentum driven by the DEX turnaround and the rapid adoption of TeamViewer ONE. Let's start with the chart on the left, which shows the quarter-over-quarter change in enterprise ARR in constant currency. As we explained last quarter, enterprise growth in Q1 was temporarily impacted by one-off 1E churn. These effects are now leveling off as we expected. You can see a clear inflection point in the second quarter. This reflects the DEX turnaround, stronger customer engagement across the board and growing expansion activity.

That brings me to the chart on the right. What I find particularly encouraging is the continued acceleration in TeamViewer ONE adoption. Looking at our standard and advanced tiers, you can see how momentum built steadily throughout the quarter, reaching its strongest levels in June. Customers are increasingly embracing the TeamViewer ONE platform and the value proposition behind it. Importantly, this momentum is broad-based and demonstrates growing demand for a unified approach to remote connectivity, digital employee experience and automation. Taken together, the DEX turnaround and the accelerating adoption of TeamViewer ONE provides strong evidence that our platform strategy is gaining traction.

Let me show you what this means for the broader enterprise picture on the next slide. The key message on this slide is simple. Our platform strategy is gaining traction, and we see that in tangible commercial benefits. Total enterprise ARR grew plus 8% year-over-year in constant currency, supported by improving customer engagement, expansion activity and the recovery of the DEX business, which I just walked you through.

Enterprise NRR improved sequentially to 94% and to 98% if you adjust for SMB to enterprise upsell. What is particularly encouraging is what we saw in our highest value customer segment. Customers with more than EUR 200,000 in ARR grew 11% year-over-year in constant currency. Several strategic DEX customers expanded onto TeamViewer ONE during the quarter, generating meaningful ARR uplift and validating the rationale behind the 1E acquisition.

Let me now turn to SMB on Slide 8. As expected, SMB ARR remained under pressure in Q2 and was down 4% year-over-year in constant currency. This continues to reflect the lagging effect of the strategic cost correction measures that we implemented to improve the quality of the customer base and thereby strengthen our long-term economics. But the important message is the underlying improving trends that we saw in SMB.

The chart on the right shows that SMB ARR momentum improved sequentially in the second quarter and SMB churn stabilized in June, consistent with the trajectory we outlined earlier this year. We are seeing early benefits from targeted retention initiatives, pricing actions and improving sales execution. There's clearly still work to do, but the key operational indicators are moving in the right direction, and they support our expectation that SMB headwinds will continue to moderate throughout the second half of 2026. Michael will explain our respective financial results later in the call in more detail.

Let me now walk you through some of the strategic highlights from the past quarter. The most important one we announced just a couple of days ago, our multiyear strategic partnership with ServiceNow. This is a landmark endorsement of TeamViewer's technology, our strategy and our position in the market. It's worth spending a moment on why it matters. The logic is very straightforward. This partnership brings together ServiceNow AI orchestration layer and TeamViewer endpoint execution layer. And that means we help ServiceNow to bridge the gap between identifying issues and then resolving them.

Together with their own Agentic AI offering, this enables automated and ultimately autonomous IT workflows for ServiceNow's customers. Among them, of course, many of the largest enterprises in the world. As Bill McDermott, the Chairman and CEO of ServiceNow has put it, "ServiceNow and TeamViewer are closing the loop from inside at the edge to outcomes at scale." And the partnership has both a commercial and a technology dimension.

On the technology side, our DEX and remote connectivity capabilities are being integrated into the ServiceNow AI platform, which extends the reach of our solutions into one of the most widely adopted enterprise software ecosystems in the world. And on the commercial side, we agreed on dedicated joint investments across sales, marketing and channel activities. This significantly expands our access to ServiceNow's global customer base, their partner network and their enterprise relationships. This creates a really powerful route to market for our platform.

And just as importantly, this is designed as a long-term strategic partnership. So ServiceNow and TeamViewer have committed to exploring deeper integrations, additional use cases and future innovation opportunities together. That gives us confidence that this partnership can create meaningful value over time and scale well beyond its initial scope. For us, this announcement is about more than a partnership. It's a strong external validation of the product strategy and technology investments we've been making over the past years.

Let me stay with the ServiceNow partnership for one more moment because there is a piece of recent Gartner research, which I think is worth putting alongside it. Just this month, Gartner published its innovation insight on agentic remote support, and you can see the key points on the left-hand side of the slide. Gartner recently published research discussing the emerging category of agentic remote support and digital workplace operation automation. We believe these research pieces together highlight themes that are becoming increasingly relevant across enterprise IT organization.

TeamViewer continues to invest in capabilities designed to help customers address these opportunities and challenges of autonomous IT. And when we look at the building blocks that each site brings, we believe our agentic remote support, digital employee experience and endpoint management capabilities combined with ServiceNow's IT service management and agentic AI orchestration put us in a really strong position and that there are very few players who can offer that combination. So we think we're on the right track and the ServiceNow partnership isn't the only proof point we picked up this quarter.

Let me show you on the next slide. Here's an overview of some important external recognition we received during the quarter, which spans our entire portfolio. Starting with DEX. Gartner again recognized TeamViewer as a leader in its 2026 Magic Quadrant for digital employee experience management tools, making this our third consecutive year of recognition. Shortly thereafter, IDC also named TeamViewer a leader in its worldwide DEX Vendor Assessment.

And together, these recognitions reinforce the strength of our DEX platform and our position in a highly strategic market. Two other flagship reports from leading analyst firms focused on TeamViewer Frontline, which you can see on the right-hand side of the slide. Frost & Sullivan recognized TeamViewer as a visionary leader, while PAC once again named us as the sole best-in-class vendor in its INNOVATION RADAR. These reports highlight both the maturity of our technology and our ability to deliver differentiated value for customers.

And when it comes to our Remote and Tensor solutions, the picture is really encouraging, as you can see in the middle of the slide. On peer review platforms such as G2 and TrustRadius, we continue to hold leading positions across multiple categories. These platforms are particularly relevant because they reflect direct customer feedback, and they often play an important role in software buying decisions, especially in the SMB segment.

Taken together, these recognitions are valuable proof points that our focus on innovation, product quality and customer value continues to translate into market leadership across multiple parts of the portfolio. Beyond partners and industry analysts, we also received an important recognition in our largest market in the United States. This one is a bit different in nature because it opens access to a significant new market opportunity.

Let me show you what I mean on the next slide. We achieved a significant milestone on our path forward towards FedRAMP authorization, the Federal Risk and Authorization Management program for TeamViewer DEX. FedRAMP is a key gateway into the U.S. federal market where security, compliance and operational resilience requirements are among the highest in the world. In June, TeamViewer DEX received the FedRAMP in progress -- in process, sorry, designation and was officially listed on the FedRAMP marketplace. This reflects the significant progress we've made together with our sponsor, which is the U.S. Department of Veterans Affairs.

FedRAMP creates access to a market with very high barriers to entry and long-term demand for trusted software platforms. Once we are authorized, federal agencies can leverage the certification, which significantly expands our ability to serve this customer segment. And the opportunity extends well beyond the public sector because the standards required for FedRAMP are also highly valued by customers in regulated industries such as financial services, health care and defense.

So we believe this investment strengthened our position across a much broader set of customers and use cases. The authorization process is still ongoing, but this milestone represents an important step towards expanding our addressable market and further strengthening TeamViewer's position as a trusted enterprise platform. Ultimately, however, the most important validation comes from our customers.

Let me give you a few examples here as well. The feedback of our customers remains one of the most important indicators for us. It gives us an early view into the value customers are realizing and how our AI capabilities are performing in real-world environments. What is particularly encouraging is how consistent that feedback is across different industries and customer segments. Whether it's reducing manual effort, accelerating issue resolution, improving visibility into IT environments or proactively identifying risks, customers are reporting tangible operational benefits from using TeamViewer's AI-powered capabilities.

For us, this is an important validation of the strategy we have been executing against. It reinforces our conviction that AI is becoming a meaningful competitive differentiator for TeamViewer while creating additional value for customers and supporting the long-term opportunity around TeamViewer ONE and autonomous endpoint management. This customer value is not only reflected in testimonials. We continue to see it translate into commercial success and new customer wins across our business.

Mark will now walk you through some of recent customer wins and how TeamViewer ONE adoption continues to gain traction across our customer base.

Thank you, Oliver, and a warm welcome from me also. These 3 customer examples really illustrate the breadth of our opportunity and the relevance of our portfolio across very different customer requirements. Let me start with the world's leading technology provider for the airport transport industry, supporting operations of more than 1,000 airports in over 200 countries. They selected TeamViewer DEX to manage and optimize some 60,000 endpoints that underpin mission-critical airport and passenger processing operations. They ran a rigorous head-to-head evaluation against a broad field of vendors and chose to replace a competing major digital employee experience platform they had in place for many, many years.

For them, a degraded endpoint is not just an employee problem. It can delay flights and disrupt airport operations. Analytics alone do not protect uptime at scale, and that is exactly where TeamViewer's DEX separates itself. Real-time automation at the edge that remediates issues rather than just dashboarding them. That is clear evidence of the strength of our enterprise DEX offering and our ability to displace long-standing incumbents in the most demanding uptime critical environments.

The second example is GTS, a growing managed services provider, and is a good illustration of how TeamViewer ONE is resonating with customers that are looking to consolidate their tools, improve automation and scale their operations through a single integrated platform approach.

And finally, on the Frontline side, we continue to see strong demand for digitizing Frontline and warehouse operations. This customer deployed Frontline across multiple warehouse locations and integrated it directly into their existing SAP workflows, which helps increase productivity and operational efficiency. While these customers operate in very different industries and environments, they ultimately book TeamViewer for the same reason to remove operational friction, improve productivity and enable more efficient workflows through a trusted platform.

The upsell engine is working and the numbers back it up. Increasingly, some of our largest DEX customers are choosing to move to TeamViewer ONE at renewal and that momentum accelerated further during the second quarter. What is especially encouraging is that these customers aren't simply renewing. They are expanding their relationship with TeamViewer as they consolidate vendors and move towards a broader platform approach.

In many cases, we are replacing solutions that only ever address part of the workflow, while TeamViewer ONE offers a much more integrated proposition. The reason we are seeing this growing platform pull becomes clear on the next slide, where I will talk to you -- talk you through the innovation road map behind TeamViewer ONE.

So let's take a closer look at our innovation road map for this year and how we are advancing our autonomous endpoint management vision. Just to briefly recap, the power of our AEM approach lies in its self-reinforcing nature. Every support interaction generates new insights. Every resolved issue expands the knowledge base and every proven resolution can ultimately be operationalized at scale. As a result, the platform continuously evolves, helping customers move from reactive support towards autonomous IT operations.

During the quarter, we made really good progress in bringing this vision to life. A key milestone will be our upcoming August release, which introduces new automation capabilities and marks another significant step towards autonomous endpoint management. I will show you this innovation in more detail on the next slide.

For TeamViewer, this further differentiates our platform, expands our addressable market and contributes to the accelerating platform pull we are seeing for TeamViewer ONE. The innovation we will introduce is automations, a new capability that turns proven resolutions into scalable workflows and brings us another step closer to self-healing IT. These automations are built on insights captured across more than 2.8 million AI-powered support sessions that happened so far with hundreds of thousands added each month by now.

They let IT teams transform recurring fixes into repeatable actions that can be executed automatically whenever a known issue reappears. Put simply, IT teams no longer need to solve the same problem twice. Instead of repeatedly diagnosing and resolving recurring endpoint issues, they can capture a successful resolution once and apply it consistently across their entire environment at scale. Ultimately, this is about turning knowledge into action. Every resolved issue makes the platform smarter. Every automation increases customer value and every step brings organizations closer to autonomous IT operations.

What makes this structurally different from anything a competitor can offer is that we are the only company that owns both data streams natively at scale, expert remote session data and real-time endpoint telemetry.

As you can see on the slide, the benefits are clear, less manual effort, faster resolution times and greater operational consistency. At the same time, customers remain fully in control through approval workflows and policy-based governance. So this release really is about tangible examples of how TeamViewer ONE combines AI, endpoint intelligence and automation. The mechanism I just explained is the reason why AI adoption generally and the number of AI sessions specifically has become one of the key metrics for our success. The scale of this adoption becomes really concrete when you look at a single month.

In June alone, customers ran more than 500,000 AI-powered support sessions on our platform. That compares to over 300,000 in March, which we highlighted last quarter. The trajectory is steep, and it compounds. Every session strengthens the data foundation and makes our platform harder to replicate. This adoption is broad-based. We are seeing customers incorporate AI capabilities into their everyday support and IT operations workflows, creating tangible productivity gains and operational efficiencies. From a commercial perspective, this matters because adoption drives expansion.

Customers that actively use our AI capabilities increasingly recognize the value of a more integrated platform approach, which creates additional opportunities around TeamViewer ONE and our autonomous endpoint management proposition. Overall, the adoption trends we see today give us real confidence that AI is becoming an increasingly important driver of customer value, platform engagement and future growth.

AI adoption is accelerating at an unprecedented pace. As organizations deploy more AI agents, autonomous workflows, connected devices and edge systems, managing these environments becomes significantly more complex. What we increasingly see is that customers need more than visibility. They need intelligence, control and automated remediation capabilities to operate these environments safely and efficiently. At the same time, they need greater transparency into how AI tools are being used across the organization, including workloads, performance, costs and potentially unapproved applications.

This is particularly relevant in highly regulated industries and mission-critical environments where reliability, governance and operational resilience are becoming more and more important. We believe this creates a structurally growing demand for autonomous endpoint management. And importantly, this is not a future concept anymore. Through the increasing adoption of TeamViewer ONE and the conversations we are having with customers every single day, we are already seeing organizations beginning this journey towards more autonomous IT operations.

So the question becomes, how do organizations actually make that transition? And that brings me to our vision for the self-healing agent for IT. At its core, autonomous endpoint management is about moving from reactive support towards intelligent, proactive and ultimately autonomous operations. What you can see in this slide is what we call the self-healing agent for IT. The platform continuously observes activity across every endpoint, application, device, workflow and increasingly AI agents. It detects friction early. It understands the underlying issues, and it takes action before productivity is impacted.

In other words, we are moving from a world where IT teams react to problems towards a world where issues can be increasingly predicted, prevented and resolved autonomously. This is the vision that shapes our innovation road map and increasingly is defining our go-to-market approach for TeamViewer ONE. TeamViewer ONE is the commercial vehicle that brings this vision to customers, while our investments in AI, endpoint intelligence and automation continue to strengthen the underlying platform. In a market that is moving in this direction, we believe TeamViewer is uniquely positioned to lead this transition.

What differentiates us is not a single product or feature. It is the combination of several advantages that come together on one platform. We operate the world's largest remote connectivity platform in the world. We have deep expertise at the endpoint, and we benefit from proprietary data that is generated through millions of support interactions, and we are embedding AI directly into our platform. At the same time, we have aligned our organization around this opportunity. Over the last quarters, we have sharpened our enterprise motion, evolved our go-to-market model and built an operating model designed around platform selling.

The accelerating adoption of TeamViewer ONE and the momentum we are seeing across our customers are encouraging signs that this approach is paying off. Combined with our large installed base, our proven upsell engine and expanding ecosystem of partnerships, these advantages create a strong foundation for long-term growth. Ultimately, we believe autonomous endpoint management represents a significant market opportunity and at TeamViewer is exceptionally well positioned to help shape and benefit from this transition.

With that, let me hand over to Michael, and he will take you through the financial results.

Thank you, Mark and Oliver, and good morning, everyone. Let's look at our key financials for the second quarter of 2026. Top line growth continued to reflect the effects of previously disclosed headwinds in SMB and the one-off 1E churn in Q1 2026. More importantly, the key leading operational indicators improved throughout the second quarter. And as a result, we saw improving growth trends sequentially month by month, providing encouraging signs of improving momentum as we reach the end of Q2.

ARR was broadly stable year-over-year in constant currency and reached EUR 737 million. Revenue was EUR 183 million, down 1.4% year-over-year in constant currency. We delivered adjusted EBITDA of EUR 79 million and maintained a strong margin of 43.2%, demonstrating continued financial discipline despite temporary weakness in the top line. Net income increased by 33% year-over-year and adjusted EPS was EUR 0.27 this quarter. Net leverage ratio was 2.5x, and we remain firmly on track for our around 2.3x year-end target.

Before I share the details, as Oliver and Mark already explained, the leading indicators all moved in the right direction during the quarter. Enterprise momentum strengthened as the DEX turnaround fueled TeamViewer ONE adoption and SMB churn showed signs of stabilization. This gives us confidence in the expected ARR growth acceleration that we have committed to for the second half of 2026.

Let me now go through our key financials in more detail on the next slide. And let me start with the P&L. As I mentioned earlier, revenue growth in Q2 as a lagging indicator continued to reflect the effects of previously disclosed headwinds in SMB and 1E one-off churn in Q1. Reported revenue was also negatively impacted by foreign exchange movements, resulting in a 2.8 percentage point headwind compared to last year, primarily driven by the U.S. dollar.

The actual average FX rates in Q2 are provided to you on Slide 31. SMB revenue decreased by 3% year-over-year in constant currency to EUR 124 million, and this reflects the continued impact of the SMB strategic measures mentioned earlier. Enterprise revenue showed positive momentum and increased by 3% year-over-year, reaching EUR 59 million. Gross profit was EUR 168 million with a gross margin of 92%, broadly stable year-over-year and reflecting the high quality of our subscription revenue base.

COGS decreased by 2% year-over-year, reflecting lower variable costs in line with top line development and lower Frontline related implementation costs. Total OpEx decreased by 3% year-over-year to EUR 89 million, which shows our disciplined cost management even as we continue to organically invest in growth and innovation. Sales costs increased 5% year-over-year, driven by investments to strengthen customer acquisition capabilities and to support long-term customer retention. This is intentional and ongoing.

Marketing costs decreased 28% year-over-year to EUR 22 million. As previously indicated, marketing activities increased sequentially from Q1 '26, supporting brand and demand generation. R&D costs were up 12% year-over-year, which reflects continued investments in product innovation, AI capabilities and the expansion of the combined platform. We are investing in our innovation capabilities to fuel our next leg of growth.

G&A expenses increased 4% year-over-year, primarily reflecting timing effects between quarters. On a year-to-date basis, G&A expenses were down 2% year-over-year. Other expenses amounted to EUR 740,000 compared to a gain of around EUR 600,000 in Q2 '25, which reflects lower positive impact from derivatives. The adjusted EBITDA was EUR 79 million, down 6% year-over-year. This decline mainly reflects lower revenue and a 5.4 percentage point FX headwind in the quarter.

Adjusted EBITDA margin was strong at 43.2%. Excluding the negative effect from the FX headwinds on the margin, adjusted EBITDA margin would have been at 44.4%. Net income was up 33% year-over-year. Total interest expenses were EUR 10 million in Q2, down EUR 0.5 million as we have reduced our net debt position. And the adjusted EPS was EUR 0.27 this quarter.

Then moving on to leverage. Net debt was EUR 833 million at the end of the quarter, which is an improvement of EUR 37 million quarter-over-quarter. And the net leverage ratio remained stable at 2.5x. As mentioned, we have a clear path to reach our year-end net leverage target of around 2.3x. The details of the free cash flow will follow on the next slide. Levered free cash flow conversion in the quarter was 52%.

Let me give you a clear picture of cash flow drivers of this quarter. Pretax cash from operating activities was EUR 66 million, down 21% year-over-year, primarily due to lower top line growth and even more or less by upfront paid multiyear deals compared to last year and compared to our internal expectations. We are seeing fewer customers opt for upfront payments on multiyear deals, which may reflect a more cautious spending environment likely caused by current macro uncertainty.

Interest cash outflows increased by 7% year-over-year due to quarterly phasing effects of fee payments between periods, offsetting the benefit of lower average debt levels. This was partially offset by lower expenses for CapEx, lease payments and income taxes. With the free cash flow seasonally stronger in the second half of the year, we will continue investing in growth while staying committed to bringing the leverage down to around 2x to 3x by year-end.

Let me now move on to the next slide. Beyond the operational progress, we also continue to strengthen our financial position. During the quarter, we extended the maturity of our EUR 75 million revolving credit facility to 2031. We secured a new EUR 40 million bilateral financing agreement, and we initiated a new Schuldschein placement. The European Investment Bank backed bilateral facility supports us in further diversifying our funding sources while also providing attractive financing conditions. Together with the above-mentioned new Schuldschein placement, which is progressing as planned and expected to be closed by mid of August, the proceeds will be used to repay the 1E acquisition-related DCM bridge facility and further optimize our financing structure.

These actions enhance our financial flexibility, support future growth investments and keep us firmly on track with our deleveraging objectives. With that picture of Q2 in full, let me close with the guidance on the next slide. In summary, Q2 was a quarter of disciplined execution and ongoing strategic progress. Underlying leading indicators being DEX turnaround, accelerating TeamViewer ONE adoption, strengthening enterprise momentum and stabilizing SMB churn drove sequential monthly growth improvement throughout the second quarter.

This supports our confidence in the expected growth acceleration in the second half of '26, and we reiterated our full year '26 guidance. We expect a constant currency revenue growth in the range of 0% to 3% versus pro forma '25 revenue. Current trends support the expectation of ARR growth acceleration in the second half of '26. At the 30th June 2026 spot rate, the expected total FX impact is negative 2.1 percentage points for Q3 '26. The expected total FX impact on full year '26 revenue growth is negative 2.4 percentage points. Further details are provided on Slide 31.

We continue to guide for an adjusted EBITDA margin of around 43%. We continue to demonstrate disciplined execution while investing in our strategic priorities. Our strong and industry-leading margin performance in the first half of the year supports our confidence in achieving the full year adjusted EBITDA level of around 43%.

With that, I would like to hand back to the operator to open the Q&A, please.

[Operator Instructions] The first question comes from the line of Victor Cheng from Bank of America.

Maybe 3, if I may. I guess, first of all, looking at the guidance, obviously, we're expecting H2 reacceleration. I think about easier comps in SMB and in DEX continue to grow strongly. But can you give us some sense of where you see you might land in the guidance range? Kind of what scenarios give you confidence on the higher end and maybe kind of what needs to work to get to the low end as well, that would be great.

And then secondly, I just want to talk about ServiceNow partnership. Clearly, still very early days, but can you talk about kind of any tangible benefits you would expect from this partnership, both in terms of maybe ARR contribution down the line, but also the pipeline, the reach to customers and other nonmonetary benefits and potential there?

And then last question is on customers using AI, very strong growth there, jumping to 49,000 versus 26,000 in Q1. But can you provide us some more color on kind of the split of these customers are more enterprise customers using it? Where are you seeing more momentum? And where do you think that can be maybe 12 months down the line?

Yes. Thank you, Victor. Let me start with the first one on the guidance for the top line, 0% to 3%. I mean it's too early today to see a landing point between the 0% and the 3%. This is why we have the range. But as you pointed out, there are lots of driving factors to get us up from now on in Q3 and in Q4. Number one is, of course, the improving trends in SMB. We saw a stabilization in churn. And in July only, we see already an improving in churn on the SMB side, plus continue with SMB, obviously, the high demand in the upper end of the SMB side of the house for AI capabilities and the move into our platform game, which is clearly showing a testament of our strategy that also from the upper end of the SMB side, we move now into TeamViewer ONE. These are some leading indicators which are needed and which we see.

The second one is if we move then on to enterprise, I mean it's a big basket of various indicators on the enterprise. Number one is, of course, again, TeamViewer ONE here on the enterprise side. We had some really nice deals, big ones, existing customers who moved from DEX only now to DEX and Tensor. So a reverse TeamViewer ONE. And we see from the pipe perspective, additional big prospects out of our base who might do that in Q3 and also in Q4.

Another one is from the pipe stand-alone on new customers, we have very few but very massive deals or prospects, which we are working on, which is, of course, another ingredient to make it in H2. And last but not least, it's not only the ARR momentum, which needs to kick in and will kick in. It's also so-called one-off revenues, be it professional services, be it from the Frontline deals, which have a different revenue recognition and obviously also some hardware sales, which might continue in the Frontline business. So it's a very broad basket of diverse and meaningful ingredients. And with that, we have full confidence that we will accelerate in H2.

Yes. Thanks, Michael. Maybe I'll do the second question around the -- partnership -- ServiceNow partnership. Clearly, very interesting. I mean, primary goal our target is to have an end-to-end proposition. So the workflow engine, the intelligence of the ServiceNow ITSM workflow platform combined with our endpoint intelligence. So what we see on endpoints, what we learn from interactions with the endpoints through our remote sessions and with our large automation and remediation platform.

So if you put that together, you have the sensing on the endpoint to understand what's going wrong and the state and what could be better, then the workflow orchestration and then actually the action on the endpoint through our remote capabilities and the automation. And very interesting for us because it's, I would say, the partner which is closest to what we've been doing in the past, and therefore, very happy to have a more integrated approach there.

Clearly, customer reach will be enormous. ServiceNow is serving more than 8,800 very large enterprise customers, very much the upper end of what we typically do. And that addressable base will increase significantly for us. I think it's a massive endorsement of our solution towards the customers across all verticals, also the most critical verticals, federal, health care, defense, where we also have strong customers. We will work now on building pipeline together.

Clearly, there will be no short-term ARR impact because this is enterprise sales cycle. There's deals in play on both sides where we can see whether we combine the offering in the short term. But generally, I would think about more typical enterprise sales cycles. Go-to-market mechanics are very interesting. So we will integrate ServiceNow, will introduce TeamViewer product SKUs into their platform. So a very direct way of being able to offer our platform solutions to ServiceNow customers, which I think is the most efficient way that you can do and that their sellers will sell our proposition as part of the platform with [indiscernible] so forth and we will invest on either side into marketing development.

So there's -- to your question, Victor, there's a lot of non-short-term tangible -- non-tangible short-term effects, I should say, in terms of market positioning, endorsement, joint thinking through the innovation pipeline, how to improve strategic platform from both sides. And that's why we're so excited about this partnership.

And then maybe AI, some color on AI. Yes, so third question, adoption is quite rapid. So we -- effectively, the way we work is we have Tia, the TeamViewer Intelligence agent. That agent is orchestrating the learnings from session insights, the code generation and then bringing this into the automation library. And we're adding functionality with every release. There will be a next big release coming in a few weeks from now to really continue to build this infinity loop of self-reinforcing and self-learning to get us to self-healing IT.

We expect a good continuation of the growth. So adding first-time users to the platform, as you said, doubled to 49,000. I think we quickly reached 50,000 towards the end of this month. And then from there, adding during -- day by day and then also increasing the usage of Tia and within the usage of Tia, the depth of the functionalities within Tia. So we don't have an outlook in terms of how the numbers will grow, but it's a significant addition that we're seeing day by day.

You [ asked ] segments, it's across all, I would say, segments, SMB, upper part of SMB. So every customer that has regular usage in the IT sphere in our product, so not very occasional use at the consumer side, but really like day-to-day users of the product, whether it's SMB or the largest enterprises, it becomes part of their usage very clearly. And especially on the enterprise side, the feedback is very encouraging because you saw some of the quotes, they really see the improvement in productivity that's coming from that. And I think that's the ultimate measure that we need to watch.

The next question comes from the line of Alice Jennings from Barclays.

I'd first just like to understand a bit more about the weakness in SMB ARR. So it was slightly weaker than last quarter, I believe. How much of an impact, for example, did the commercial measures that were taken last year have? Or have you seen any kind of change in the competitive environment or any change in customer decision-making, particularly in that lower bucket? And then also just with reference to that lower bucket, do you expect that to remain a drag in H2 and the improvement in SMB is largely driven by that higher end? Or how should we think about that?

And then I just have a second question as well on enterprise. How does the pipeline look? I know you mentioned that there's a few deals. Is this largely relating to kind of TeamViewer stand-alone? Or are they 1E DEX-related deals? And what kind of level of pipeline conversion are you assuming for the rest of the year?

Yes. Thanks, Alice. Let me start with the SMB question. First of all, yes, it's shrinking in Q2, but it's less shrinking in Q2 vis-a-vis Q1. And this is why we also brought the Page 8. So clear stabilization, which we indicated in Q2 already for Q1 on churn. That was important, and we delivered on that one. And not only that, we project also an improvement on churn and in churn for Q3 and for the remainder of the year and very early indicators in July actually show us that we are actually improving already on churn. So that's maybe message number one. And of course, it's important.

On the lowest end in the SMB side of the house, we cannot do much, right? It's the base. It's the licenses between 200 and 300, and there's lots of competition. There's less so interest in any AI features. And if we would ever consider any price changes, the demand supply curve would not work. So let's stick with the lowest end of the SMB part as it is.

More importantly, from the upper 2 segments, 500 to 1,500 and especially the 1,500 to 10,000 here is, of course, accelerating interest also in AI features, especially in the upper end. And in the middle block, this light blue block, if you would adjust for the movers within SMB from light blue to purple, the minus 6% would be close to 0%. So stabilization there as well. And there are lots of positive trends actually, which give us an encouraging feeling for the remainder of the year, which is one ingredient also for the acceleration in H2 and therefore, for full year.

Maybe on the SMB before you go on enterprise, Mark. The competitive landscape, you were asking, has anything changed in the competitive landscape? No. I mean it's effectively kind of same type of players, kind of the same activity on the competitive side, but with one major exception, of course, and you can see that in our TeamViewer ONE acceleration. We deliberately shown the TeamViewer ONE Standard and Advanced. There's also TeamViewer ONE Enterprise, which we had the big deals that Mark talked about. But Standard and Advanced is very much focusing on the SMB, and we have a much, much better offering now.

So our TeamViewer ONE offering where we combine the [ roots ] proposition with the [ platform ] proposition, the DEX proposition and AI is giving us really a very strong product to compete in the marketplace against RMM players and against the smaller platform players to differentiate ourselves from remote pure play, so to say. And that starting to work you clearly see on the numbers. If you take TeamViewer ONE Standard and Advanced Q1 versus Q2, there's very significant growth.

Now it's not translating yet in SMB growth because it's a smaller number relative to the big base, and we have this churn stabilization topics, which we need to get to and are starting to see, as Michael mentioned. But it's going to come. It's a new product, which comes with very good upsell into the SMB base. And as this is working through the base, we will see improvement there. And that's a much better strategic positioning, competitive positioning than we ever had before on SMB. So that's why we are very confident for the second half of the year to see acceleration there.

And Mark, on Enterprise pipeline?

Yes, sure. Thanks, Oliver. Yes, Alex, specifically to that question around the type of pipeline, the volume of pipeline and then the conversion expectation in second half, there's a couple of points to make. First off, one of the things underpinning our confidence around pipeline development is around TeamViewer ONE. So if you think about these large enterprises, every single one of them uses remote control every single day to resolve employee issues. Most of that data is lost directly after a remote control session is completed.

And of course, the TeamViewer ONE vision not only takes that data, understands it, turns it into autonomous capabilities, it really helps them become sort of really realize this autonomous endpoint management vision. So whilst many organizations use remote access, remote control alongside a DEX platform, no one has this vision of bringing the 2 together where one feeds the other. So that's really resonating, and that's definitely fueling our pipeline, both in terms of the volume of pipeline, but also the conversion expectations in the second half.

The second kind of major tailwind, I'd say, is around AI. So obviously, AI is being deployed at an alarming rate across every enterprise organization at the endpoint. I mean it's being deployed all over the place. And the reality is that most enterprise organizations have realized that they have a lack of control and governance and management of what's happening across those devices. We showed that slide in the deck there, which talks about this. This is a major tailwind is what we're seeing. We're seeing increased demand for a platform that can manage and govern AI across the enterprise. And we -- that's specifically what we're doing with TeamViewer DEX. So really, we're creating this control layer above the endpoints, which is key.

And the last point to make is just really all around sales execution and productivity. So as you know, as we've communicated in previous quarters, we've significantly transformed the go-to-market engine in terms of investments made around certain leadership and talent that's come into the organization, in terms of the go-to-market strategy and approach, we're clearly very focused now on platform selling, land and expand as we shift customers left from reactive support to proactive IT autonomous capabilities. That requires a very specific kind of solution sale methodology, and we continually enhance that on a day-by-day basis.

And you're starting to see, I think, the results of those investments around -- we made around go-to-market start to play out in Q2. And I expect it will go up and up from there as we go into the second half. So that really underpins how we view and how we look at pipeline for the second half of the year.

The next question comes from the line of Ben Castillo from BNP Paribas.

Question, just some nice examples of the DEX and TeamViewer ONE deal wins. How can we think about the impact of selling more on endpoints and platform adoption on the impact on your enterprise ARPU? Is it possible for you to help us with some color on the typical impact on deal sizes you're seeing?

And I guess a follow-up, just on Slide 15 with those deals that you've mentioned there, how should we think about how endpoint price contracts work? If I just -- again, maybe oversimplifying, but if I look at the sort of price per endpoint on the ARR, it seems like quite a wide variance. So is there a rule of thumb? Or can you just give us a sense on how those contracts are structured?

Yes, I'm happy to start.

Go first, Mark.

You go first, Oliver.

No, no. Go.

Okay, sure. So look, I think -- yes, obviously, there's a couple of things to say here. One is the Slide 15 that you're talking about, clearly, where we migrate and upsell people to the platform, we're achieving a higher endpoint price because we're combining DEX and Tensor together with this TeamViewer ONE vision, and we are achieving uplift. Now the varying levels of uplift across those customers. It very much depends on the particular sales situation, what price point we sold at in the past, where they're at in terms of a contractual standpoint. So we're being -- we're sort of taking it on a case-by-case basis, but we are seeing uplift across the board.

And I'd say that it's helping us also become more -- it's certainly helping us become much more competitive in new logo opportunities as well as expansion because effectively, we're bringing together 2 technologies that no one else is able to bring together. So it's allowing us to offer different outcomes to customers. I think that's the key point here is that this is outcome-based selling. We're able to offer different outcomes to customers. And therefore, I think over time, we'll be able to command a better price point. Oliver?

Yes. So generally, general direction of [ travel ban ] is significantly larger deal sizes when we go to endpoint pricing -- endpoint-based pricing. Why is that? The value of the platform is coming through if you roll it out across the company, across the footprint, so to say. Now that requires companies, customers to take a view of managing devices regularly. And if you look at TeamViewer historically, there has always been a combination of managed devices and non-managed devices, so ad hoc remote support. So we have an environment.

And from a TeamViewer perspective, old world, we would see that, I don't know, 10,000 devices are managed devices that are registered. So we see them in our registry. And then there's lots of remote report sessions that happen to other devices, which is ad hoc support without really registering the devices and paying for these devices. But therefore, the pricing logic is per technician because we charge per seat or per technician independent of whether it's a managed device or unmanaged device.

With TeamViewer ONE as a proposition, we're really addressing those customers that want a managed platform consistently across their environment. And that then requires to register all the devices. And in that sense, we move to a pricing logic, which is the pricing logic of a platform player or a remote management player or other DEX players or other endpoint-orientated players. And therefore, we typically see, as Mark just said, a significant uplift in the deal size, in the deal volume. And that's quite consistent now actually across TeamViewer Standard, TeamViewer -- sorry, TeamViewer ONE Standard, TeamViewer ONE Advanced and TeamViewer ONE Enterprise.

If I could squeeze in a follow-up just on the sort of selling environment, what you saw through Q2. Obviously, lots of puts and takes in terms of geopolitics and conflicts and so on. Just any comments on what you saw in sales cycles, pipeline conversion, customer decision-making?

Yes, I can go first. Clearly, from the geopolitics, we have seen better times and at least some of the customers, especially on the bigger ones, they tend to become a little bit more cautious, especially on upfront paid multiyear deals. And some of the deals take a little bit longer in decision-making. We don't know whether there's a direct combination or correlation between [ geo ] and them or whether it's partially AI topics or other problems they have to cope with, but it tends to take a little bit longer in some of the deals.

Definitely. I mean the thing to add, Ben, I think, is what I see is there's a growing anxiety in the enterprise environment to get control and management of this proliferation of AI across the enterprise. And that's really what we're offering with TeamViewer ONE and with DEX is the ability to automate the whole workflow on how you manage IT. But it provides a level of governance and control.

And certainly, it's even more accelerated with our partnership with ServiceNow, who's the AI control tower for the enterprise. But you combine what we're doing on the endpoint at the edge with what ServiceNow is doing, I think it's really -- we're seeing a lot more acceleration in terms of -- I think it will help us with buying cycles because it really is kind of a necessity to move very, very quickly for enterprise organizations now.

The next question comes from the line of Toby Ogg from JPMorgan.

A couple from me. Just firstly, on the free cash flow, as you mentioned, down year-over-year. You talked about various drivers there, including that lower upfront contribution from multiyear deals than expected. Could you talk a bit about your expectations for that dynamic in the second half and just confidence levels around cash conversion evolution for the full year in light of that multiyear deal dynamic?

And then just on the SMB churn, you mentioned, Michael, you've seen an improvement in July on the SMB side. Can you help us understand what you think have been the biggest drivers that have contributed to that improvement in churn? And yes, which of those do you think is sort of having the biggest impact on that improvement?

Yes, clearly, Toby, let me start with 2. Clear drivers are certainly the massive price increases and the commercial blocker of last year, which is clearly washing out now. And we -- this is the main driver, which we think -- which we see already for Q3, and it will continue for Q4. When we do price ups now, it's a more-for-more logic. It's an offer to the customers and they get AI ingredients and features and the customers opt for it or they don't and then they don't get a price up. And this is obviously helping tremendously into customer satisfaction and therefore, less so churn. That's the main driver.

And the other one is obviously with our platform game in the context of TeamViewer ONE, once you combine the product features into a suite and once you are in, you have obviously lesser and lesser reasons to think about others because you de facto get all of -- all out of one basket. These are the 2 main drivers. I think I would leave potentially remaining ones to Mark. On the first one on cash flow, yes, indeed, as mentioned, cash flow a little bit softened in Q2 for various reasons. And this is why we are also confident that, that will change for H2.

Number one is the upfront paid multiyear deals. This is what we can change. We had an expectation there. It didn't work out. This is certainly related to macro. And hopefully, this will ease now in H2. Number two, and that is a technical one. Some of the former -- sorry, the former 1E customers needed to change their addresses, their data in the system in order to become TeamViewer customers, and that caused a technical delay in their payment. This alone is rough cut EUR 5 million, and this will come now in Q3. So it's only a delay and not a change.

And last but not least, to your question on cash conversion, yes, we were at 52%. Now we guided or we said we didn't guide on cash, but we said something around 60 %. And this is clearly what we see, whether it's now 56% or 57% or 58% doesn't matter for us, especially as it is very important to us also to keep on investing into growth. Remember, '26 is a transformation year and the growth is important for us, especially as we walk into 2027, super important. And in the end, the name of the game is our net debt leverage ratio, which we indicated to be around 2.3x, and this is what we can clearly see as we're heading towards the end of the year. So all in all, all good.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Oliver Steil for any closing remarks.

Yes. Thank you. Thanks for your questions all. So as you see, I think Q2 was really all about proving the plan and building momentum. And it's clear that the developments that we were expecting at the beginning of the year are now materializing. So that's really good. We have the DEX turnaround that's taking hold. We have SMB churn stabilizing as it was anticipated. So all operational indicators across the business moved in the right direction throughout the quarter or towards the end of the quarter. So that's really good. We are very excited, particularly encouraging is the momentum on TeamViewer ONE across the segments really. That's why we showed the number and disclosed the numbers. We see continuation of acceleration there in adoption and customers do really embrace the platform approach.

So I think from a strategic development of the company where we were like a few years ago and where we are now in terms of platform play, and seeing that the largest DEX customers are expanding and moving on to TeamViewer ONE is a very, very attractive one. And then yes, there is the AI discussion or has been the AI discussion, clearly. But I think what we see on our end is AI adoption continues to scale rapidly, and that's strengthening the foundation behind autonomous endpoint management.

So we believe we're getting stronger and stronger with our innovation pipeline around AI, customers, analysts and not the least, ServiceNow are validating our position there. So our competitive position is significantly improving. And therefore, we believe we have a clear plan. We have a differentiated platform. We're executing and second half of the year will be important, as always, but we feel really good about the momentum and the pipeline that's building there.

So with this, thank you very much for your time, and speak again soon. Thank you. Have a good day.

Good morning, ladies and gentlemen, and welcome to TeamViewer's Q1 2026 Earnings Call. I am Bisera Grubesic, Head of IR here at TeamViewer. And today, I am joined by our CEO, Oliver Steil; CFO, Michael Wilkens; and CRO, Mark Banfield. Oliver and Mark will run you through the quarterly business update, and Michael will present Q1 financials. The presentation will be concluded by a Q&A session.

As per usual, kindly note that you can find the important notice and the APM disclosure on Slides 2 and 3.

And with this, I hand it over to Oliver to kick off our presentation.

Thank you, Bisera. Good morning, everyone. Also welcome from my side. Thank you for joining us today. 2026 is the year of delivery and Q1 was the first proof point. Top line was broadly stable and profitability was strong as expected. The building blocks for acceleration in the second half are firmly in place, and we are reaffirming our full year 2026 guidance.

The 2 effects that moderated our Q1 results, the one-off 1E customer churn and our SMB course corrections have been shaping out as flagged in February. Good visibility gives us confidence in the ARR growth acceleration, which is expected for the second half of the year.

Strategically, we are focused on where the highest ROI and future upsides are while we continue to benefit from strong cash generation in the core SMB business. We are leaning into higher-end SMB and Enterprise, where we see clear demand and willingness to pay for premium capabilities, including AI.

Looking at the underlying business, Enterprise ARR grew despite absorbing the anticipated one-off churn in 1E. If you strip that out, then Enterprise ARR would have been up by 11%. The core is performing well. Mark and Michael will take you through the details shortly.

TeamViewer ONE is gaining real commercial momentum. Its ARR doubled quarter-over-quarter. The Enterprise tier was launched in February, and it closed its first deal almost immediately. The value proposition is clearly resonating at the top end of the market. We are building market-leading Autonomous Endpoint Management innovations, which will expand our total addressable market meaningfully. What connects these proof points is a single direction of travel. Customers are moving towards autonomous IT operations, and TeamViewer is the platform they choose to get there.

Let me now take you through the details starting with how we see ARR across our base. I want to take a moment to explain how we are presenting this chart because we have refined the view from what we have seen before. We have kept the customer groupings that you are familiar with, SMB and Enterprise. And we've broken them down in a way that we think is more useful to understand the underlying dynamics of the business. We wanted to be clear about exactly where we are facing challenges and where we are not. And here, you can see that the message is encouraging. Approximately 2/3 of our ARR base is healthy and growing.

Let me walk you through the 4 customer groups. Enterprise excluding DEX grew 18% in constant currency year-over-year, representing 24% of total ARR, continuing the strong double-digit momentum that we saw throughout 2025. Higher-end SMB accounts, which are between EUR 1,500 to EUR 10,000 contributed 35% of ARR and grew 1%. This is a large base of customers with real upsell potential.

The 2 areas that face challenges are exactly the ones which we flagged before. DEX ARR was down 16%, driven by the one-off customer churn of 1E, which is confined to Q1. If you strip that out, then Enterprise ARR overall would have been growing 11%, not 8%. Within lower-end SMB, which accounts below EUR 1,500 ARR, ARR was down 6%. This reflects the impact of our last year's deliberate cost corrections to revitalize the business. Both headwinds, the one-off churn in 1E and the SMB course corrections are known, anticipated and fully reflected in our 2026 guidance.

The core of the business is performing well. This is where we've made significant investments, and we have not yet even seen the full commercial impact flow through yet. TeamViewer ONE, Autonomous Endpoint Management or the TeamViewer Intelligent Agents, these products are still in their early innings commercially. This is a very strong foundation to build on, and we expect the momentum to increase. Notably, net upsell from SMB to Enterprise was EUR 10.5 million in the quarter. This demonstrates again that our strategy to migrate the most valuable SMB customers into richer product packages continues to drive growth. And the primary engine of this growth is and will be TeamViewer ONE.

Let me walk you through TeamViewer ONE, as this is where we are investing significantly, and which is driving the commercial story of 2026 and beyond. What you see on the left of this slide is the product architecture. There are 3 tiers: standard, advanced and enterprise, and they span from SMB through to large enterprises. The products are all built on the same core stack of Tensor, DEX and AI. While the tiers assemble our core offerings for each customer group, across the board, we are delivering what our customers are increasingly looking for, a simpler unified platform that reduces complexity, enables predictive problem solving and supports the move towards autonomous IT operations.

The right side of this slide tells you what is happening commercially, and the trajectory is clear. In October, daily average billings were only EUR 4,000. By March, they reached EUR 45,000 already. What excites us most is the pace of that rapid increase. Let me point out 3 key milestones in this chart.

First, the December release of the major standard and advance update gave the first real commercial push. And you can see that billings step up meaningfully from that point. Second, in January, dipped as expected with normal seasonality. Third, and excitingly, February and March showed a clear execution ramp after our sales kickoff. The sales force came out of Munich energized with a playbook that works and a product that addresses a key need of our customers. That ramp is real, and it continues to build.

The enterprise tier launched earlier this year. And as you can see in this chart, only 2 months in, it is already contributing meaningfully to that March number. The fact that we are closing this quickly when sales cycles typically run much longer is a strong early signal that the value proposition is resonating at the top end of the market. All in all, this early commercial momentum confirms customer demand and marks the beginning of our transition to an endpoint-based pricing model from seat-based pricing.

To understand where this goes from here, it is worth looking at what we have achieved before. This chart here demonstrates our ability to repeatedly up and cross-sell our products. I want to spend a moment on it because I think it's one of the most important frames for how to think about TeamViewer ONE's commercial potential. What you are looking at is illustrative annual recurring billings per upsell motion since 2018. Each layer represents a distinct growth rate. We identified an opportunity to build the product and go to market and executed the upsell at scale.

The first wave was Perpetual-2-SaaS. We migrated a large global customer base to recurring SaaS licenses across all products. This was a fundamental commercial transformation.

The second wave was driven by corporate channel upgrades. As customers scale their usage, we grew with them. This sounds straightforward, but it required the right product market pace with continuous innovation and a disciplined sales motion to capture the potential at scale.

The third wave is Corporate-2-Tensor and is still very much alive today, a functionality led migration of corporate customers to our advanced Tensor licenses, purpose-built for enterprise IT environments. This meant higher value and higher stickiness. Tensor went from initial traction to a core share of Enterprise ARR within 6 quarters, driven by a strong value proposition and focused commercial execution.

TeamViewer ONE is the fourth wave, and I believe it is the largest and most exciting opportunity we have had. We are at the very beginning of this wave, but early proof points confirm that the journey has started. We know how to do this as we'll expand on later. What makes this wave different from the prior ones is the AI accelerator. TeamViewer ONE is self-reinforcing in a way superior to any of the prior 3 product improvements. Every AI session makes the platform smarter and every automation makes it stickier. The more customers use it, the harder it becomes to replace. This is a genuine differentiator.

The shift to endpoint based pricing means the revenue opportunity scales with a device footprint, not just with the number of users. This is structurally larger and significantly more durable growth engine. So when we talk about extending our growth runway, this is what we mean. We are not relying on market expansion alone. We have a proven internal engine. One, we have run multiple times before. We are now running it again with a highly differentiated product, a larger addressable market and a data advantage that compounds with every interaction.

Let me now explain the mechanics behind that compounding effect, what we call our flywheel for Autonomous Endpoint Management. What you see on this slide is the core of what makes TeamViewer ONE structurally different from anything a competitor can bring to market. The infinity loop shape is deliberate because it is a self-reinforcing cycle that gets smarter with every single interaction. And it is powered by 2 proprietary data streams that no competitor owns together, expert remote support session knowledge and deep endpoint telemetry from DEX.

On the right-hand side, the loop starts with the remote support session. Our TeamViewer Intelligent Agent called Tia joins the session and helps the IT expert diagnose and fix the issue, often in seconds rather than minutes, and an increasingly agentic way. Once the session ends, AI automatically creates a summary, capturing what happened, the root cause and the resolution. That summary then flows into the left-hand side of the loop. Each session becomes a data point. Patterns emerge across thousands of sessions, which our DEX intelligence translates into proactive recommendations for IT teams.

The next step is automated and autonomous remediation. Instead of fixing the same issue manually every time the system creates an automation that resolves it across the entire endpoint estate. And as it says in the middle, fixed an issue once and it is fixed forever. The more the platform is used, the smarter it gets because every session sharpens Tia's intelligence, which enables continuously more automations across the support operations. The result is a self-reinforcing flywheel. More AI sessions mean better detection, faster resolution and smarter automation, which reduces friction for end users and drives greater adoption and stickiness. This translates directly into measurable productivity gains for our customers.

What makes this generally hard to replicate is the data. We are the only company in this space that owns both data sets natively. The session data from remote support and the telemetry data from the endpoint occurs. We own both at scale across more than 620,000 customers globally, tens of millions of managed devices and billions of connections.

Our flywheel is not even fully in motion yet and already early customer feedback is outstanding as you see on the right side. The full flywheel capabilities are being unlocked this summer, which will be a major milestone for TeamViewer. This is what drives our confidence in our growth story. TeamViewer ONE is the commercial vehicle. The AEM flywheel is the platform pool. And our data advantage compounds with every session, widening the moat and deepening customer stickiness in a way that directly fuels our path to sustainable growth.

Let me zoom into one element of that flywheel, the rapid growth of AI adoption across our product and customers. By the end of April, more than 26,000 customers have already used TeamViewer AI, and cumulatively, we have generated more than 1.3 million AI sessions with over 300,000 added in March alone. These are paying customers making a deliberate choice to use our integrated AI. That level of active adoption is a strong signal that the customers see real value. This growing customer traction underscores the structural data advantage that powers our Autonomous Endpoint Management innovation.

There has been considerable debate in the market about how AI will shape the future of the SaaS industry. For TeamViewer, we have a clear eye view on why we see AI as a structural tailwind organized around 3 dimensions: the market, our moat and our business model.

Let's start with the market. AI does not shrink our opportunity. In fact, all indications point the other way. As IT shifts from reactive to autonomous management, the number of end points need to be actively managed actually grows. AI moves to the edge, Internet of Things penetration accelerates. And every new connected device is a potential TeamViewer endpoint.

Gartner estimates more than 50% of organizations will adopt some form of Autonomous Endpoint Management by 2029. That is the market we are moving into. It is meaningfully larger than the remote support market we are coming from. With our unique AI innovation, we are leapfrogging into that autonomous IT market and its massive opportunity.

On TeamViewer's moat. The reason AI strengthened our position rather than threatening it comes down to data, trust and integration. We operate at the endpoint where the friction occurs and where the remediation happens. This gives us 2 proprietary data streams we described earlier at scale that no competitor can match. We are also deeply embedded in global IT infrastructures across more than 620,000 customers and in mission-critical environments around the globe. We have built trust, reputation and expertise over 20 years as a vendor-agnostic software provider. That entrenchment is a structural advantage. This is then amplified by the AI flywheel effects discussed earlier.

And on the model. Our expansion into AEM is driven by our existing go-to-market approach since we are already selling to the relevant buyers through Tensor and DEX. We are bringing a strong new best-of-suite value proposition, a proven upsell motion. The transition from seat-based to endpoint based pricing is a natural evolution as we sit on the endpoint and do endpoint management. There is substantial upside from this alone in our massive global device footprint.

Zooming out and putting all of this together, the shift towards autonomous IT management validates the importance of our proprietary data advantage. If anything, the pace of AI adoption tells us that there is more potential ahead than we initially anticipated. The early commercial data confirms it. For a company with our data, our endpoint footprint and 20 years of customer trust, AI is not a threat, it is a structural tailwind.

Let me give the floor to our customers because they say better than we can. You will see 3 earlier adopters sharing the real-world impact of our market-leading AI innovation, 25% faster resolution on recurring issues, 25 to 50 hours saved per month, recurring issues identified, countermeasures defined, automations written automatically, instant proof of service at the click of the button. This is what it looks like when AI moves from promise to tangible business impact. Our full AEM capabilities go live this summer and the compounding effect of this data advantage will only accelerate from there.

And with this, I would like to hand it over to Mark to detail how the commercial engine is set up to capture the opportunity in front of us.

Thank you, Oliver. Let me walk you through what the commercial engine looks like on the ground. We came into 2026 with a clear mandate to accelerate global sales and go-to-market execution. I want to share the progress that has been made and the early evidence of our efforts. Let me start with the organization since structure is what makes everything else possible. We took decisive action to level up the organization. We have exceptional new leadership in place with Tim Koubek as President of Americas, and Finn Faldi as our new EVP of Inside Sales, combining deep domain expertise and strong executive presence.

Tim and I worked together previously at LogicMonitor, so I know what he is capable of. He has already hit the ground running. Americas is our second largest region, and he and I are fully aligned on the mission to reignite growth in this exciting market. We both see strong upside as the go-to-market motion matures there.

Finn is a TeamViewer veteran rejoining. He is -- he was the key leader driving the upsell motions discussed earlier and will now drive the same for TeamViewer ONE in global inside sales. He has already had a material impact in the short time he has been onboard.

We have a unified sales in a global organization under my leadership and rolled out a very highly sophisticated sales playbook operating across SMB and Enterprise. Our revenue operating system will take a further leap forward with the rollout of Salesforce, which is in its final stages. This will give us better pipeline visibility and sales discipline to execute at scale. The organization is truly energized by the new momentum around TeamViewer ONE. This was evident at our global sales kickoff in January, where we set the course for this year.

On go-to-market activation, TeamViewer ONE is resonating. The market feedback on the unified value proposition has been very strong. Customers understand the consolidated value proposition and they're responding to it. We're also strategically scaling our marketing presence, deliberately ramping up brand campaigns and events ahead of the AEM general availability this summer. So the commercial activation and the product milestone arrive together. And the channel motion is stepping up, too. We had a fantastic EMEA Partner Summit in March with the Americas to come. The partner network is an important multiplier for us, particularly for managed service providers, and we are investing accordingly.

On deal momentum, we are very confident in our pipeline. The leading indicators are moving in the right direction across both segments. In Enterprise, TeamViewer ONE is already winning strategic large deal flagship customers less than a few months into launch, demonstrating that the value proposition is clearly landing and the sales motion is effective. In SMB, we can see the course correction is stabilizing the base, which is the foundation for new growth momentum on the back of TeamViewer ONE.

TeamViewer ONE ARR more than doubled quarter-over-quarter in Q1. This is the commercial engine turning. We have the organization, motion activation and deal momentum. And with the AEM launch ahead of us and the pipeline building across both segments, we believe we are set up for growth. Q1 shows tangible evidence that our strategic positioning is translating into wins on the ground.

Three flagship deals stand out. First, a German bicycle retailer with more than 40 local shops, they chose TeamViewer ONE to manage internal IT across a distributed retail and workshop network, ensuring frictionless store operations and excellent customer experience, a clear example of TeamViewer ONE resonating with mid-market customers where simplicity and reliability matter most.

Second, a global digital transformation provider with thousands of endpoints. They selected TeamViewer ONE to seamlessly integrate acquired companies into a centralized IT model with real-time automation and response, delivering tangible ROI from day 1. This is exactly the unified proposition we have been building towards with TeamViewer ONE.

And third, a global leader in agricultural machinery with some of the most iconic brands, they have selected TeamViewer to embed Tensor OT directly into their remote portal across an estate of almost 100,000 connected machines. This is a multiyear strategic partnership built on joint engineering going well beyond typical software deployment. They plan to use TeamViewer to deliver a new digital service to dealers and farmers, reduce on-site technician costs and improve uptime in time-sensitive harvest operations. Their CEO described this capability as a "must-win bet." This is the kind of strategic OEM use case where there are very few credible alternatives to Tensor OT in the market.

And looking ahead to Q2, we have already secured a significant contract expansion in one of our flagship DEX accounts. The customer, one of the largest integrated health care systems in the United States with approximately 600,000 endpoints under management is scaling their commitment with us. The expanded contract now exceeds $10 billion in annual recurring revenue, a clear validation of our DEX platform, a mission-critical scale and a strong indicator of how flagship customers deepen their investment once real-time remediation is proven across the fleet. This is an excellent example of how our leading value proposition in digital employee experience and Autonomous Endpoint Management continues to translate into tangible growth. TeamViewer ONE is clearly resonating with our customers.

Finally, just last week, we announced that the Mercedes-AMG PETRONAS Formula 1 team has upgraded from Tensor to TeamViewer ONE. This is a textbook example of the upsell motion playing out at the top of the market, a high-performance organization running thousands of critical endpoints across factory, office and track side with 0 tolerance for downtime. And importantly, under the Formula 1 cost cap, sponsor status does not automatically translate into operational deployment. This is particularly true for the Mercedes sponsor roster. The fact that they actively chose to expand with us is, therefore, a strong validation of the TeamViewer ONE and AEM value proposition at the highest performance tier.

Taken together, customers are choosing TeamViewer because we can deliver outcomes of scale that point solutions cannot. That is the value proposition working, and it gives us real confidence in the pipeline ahead.

With that, I hand over to Michael for the financial overview.

Thank you, Oliver, and Mark, and good morning, everyone. Let's look at our key financials for the first quarter of 2026. As Oliver already mentioned, everything is tracking to plan. The first quarter reflects the phasing we expected. Top line broadly stable alongside strong profitability and normal anticipated cash flow timing effect.

Let me give you a brief overview of our financial performance, starting with the ARR. We delivered EUR 737 million ARR, flat year-over-year in constant currency. As we explained during our Q4 2025 results, Q1 top line growth was impacted by 2 factors: one-off 1E churn and strategic SMB course correction measures. Importantly, one-off 1E churn effects are largely complete and the remaining customer base is stable. Enterprise fundamentals remain strong. Enterprise ARR excluding DEX increased by 18%, demonstrating continued and strong underlying growth.

On the P&L, revenue was EUR 183 million, broadly flat year-over-year in constant currency. This is fully consistent with internal expectations and in line with our 2026 revenue growth guidance. Adjusted EBITDA increased by 2% to EUR 83 million, delivering a strong adjusted EBITDA margin of 45.3%, 2.4 percentage points above Q1 last year. I will explain the cost phasing behind this in a moment. Reported net income and EPS both increased by 15% year-over-year. Adjusted EPS was EUR 0.29 this quarter.

On the balance sheet, net leverage ratio sequentially improved to 2.5x, which demonstrates that we are actively and remain firmly on track for our around 2 to 3x year-end target.

Before I share the details, I want to reiterate that Q1 was going to be a soft start as we said in February this year. The one-off 1E churn effect of EUR 8 million and the headwinds from the SMB course correction measures were known, disclosed and prepared for. What you see in Q1 is, therefore, the phasing we plan for. The numbers are in line with our expectations and behind that phasing, the leading indicators tell us that we are moving in the right direction. The commercial momentum Oliver and Mark walked you through gives us a clear confidence in the ARR growth acceleration that we have committed to for the second half of 2026.

Let me now go through our key financials in more detail on the next slide. Let me start with the P&L. Constant currency revenue was broadly stable and in line with our expectations. Reported revenue was negatively impacted by foreign exchange movements, resulting in a 3.3 percentage point headwind compared to last year, primarily driven by the U.S. dollar. The actual average FX rates in Q1 are provided on Slide 23.

SMB revenue decreased by 1% year-over-year in constant currency to EUR 126 million, reflecting the impact of the SMB strategic measures mentioned earlier. Enterprise revenue was flat year-over-year and reached EUR 57 million. We saw strong underlying growth in TeamViewer excluding DEX which was temporarily offset by one-off 1E churn effect. Gross profit was EUR 168 million with a gross margin of 92%, broadly stable year-over-year and reflecting the high quality of our subscription revenue base. The COGS decreased by 8% year-over-year, reflecting lower variable costs in line with top line development and lower frontline related implementation costs.

Total OpEx decreased by 8% year-over-year to EUR 85 million, demonstrating our disciplined cost management even as we continue to organically invest in growth and innovation. Sales expenses increased 6% year-over-year, driven by investments in the sales organization. This is intentional and ongoing. Marketing costs decreased 28% year-over-year, reflecting deliberate phasing of marketing costs ahead of our major brand and commercial activation, including the Autonomous Endpoint Management innovation launch in Q2. This is not structural, it will normalize.

R&D costs were up 7% year-over-year, reflecting continued investments in the combined product offering, AI capability and a higher number of internal developers. We are investing in our innovation capabilities to fuel our next leg of growth. G&A expenses declined 8% year-over-year due to phasing and continued cost synergy realization. Other expenses amounted to around EUR 900,000, down year-over-year, reflecting lower bad debt charges. Adjusted EBITDA margin of 45.3% is higher than our full year guidance and is a Q1 phasing effect. Our full year guidance of around 43% remains the right reference point.

Net income was up 15% year-over-year. Total interest expenses were EUR 9.5 million in Q1, up EUR 0.8 million year-over-year. As in prior quarters, this was driven by 1E financing. Adjusted EPS was EUR 0.29 this quarter, stable year-over-year.

Then moving on to leverage. Net debt was EUR 870 million at the end of Q1 2026, which is an improvement of EUR 31 million compared to net debt at year end of 2025. Net leverage ratio sequentially improved to 2.5x. As mentioned, we have a clear path to reach our year-end net leverage target of around 2.3x. The details of the free cash flow will follow on the next slide.

As I mentioned earlier, Q1 shows normal anticipated cash flow timing effect. Levered free cash flow conversion in the quarter was 29%, which is unusually low and not representative of the full year trajectory. Let me give you a clear picture of cash flow drivers for this quarter. Pretax cash from operating activities was EUR 55 million, up 18% year-over-year. The step down in growth to levered free cash flow adjusted for 1E acquisition reflects cash flow timing effects of taxes, interest and lease payments, as well as a temporary negative impact from net working capital. We expect these effects to normalize over the course of the year. I would like to reiterate that for full year 2026, we expect levered free cash flow to be between EUR 190 million and EUR 210 million, broadly stable in absolute terms and in cash conversion terms compared to 2025.

With that picture of Q1 in full, let me close with the guidance on the next slide. We delivered stable top line performance in line with our guidance and maintain best-in-class profitability. Our focus remains firmly on driving sustainable profitable growth while advancing our strategic road map. We are reaffirming our full year 2026 guidance. We anticipate in constant currency revenue growth in the range of 0% to 3% versus the pro forma 2025 revenues. ARR growth acceleration in the second half of 2026 is on track. We expect SMB churn to remain elevated in Q2 and then to stabilize in the second half of 2026. SMB headwinds and 1E one-off churn effects are developing as expected, and visibility remains good for the remainder of the year.

At March 31, 2026, spot rates, the expected total FX impact of our guidance is negative 3 percentage points for Q2 2026, and negative 2.5 percentage points for full year 2026. The expected currency impact is shown on Slide 23. We continue to guide for an adjusted EBITDA margin of around 43%. Q1 was higher than that. With the marketing cost normalized during this year, the margin should move towards the full year guidance level.

With that, let me hand back to Oliver to bring together what we have covered today.

Thank you, Michael. 2026 is the year of delivery and Q1 was the first proof point. The 2 effects that moderated our results, the one-off churn in 1E and our SMB course corrections are developing exactly as we said in February. What is new is the commercial momentum. TeamViewer ONE is gaining real traction. Customers are choosing platform consolidation over fragmented point tools and AI adoption is compounding with more than 300,000 session summaries generated in March alone.

The early commercial data follows a pattern that we know very well. Tensor went from initial traction to a core share of Enterprise ARR within 6 quarters, and the leading indicators tell us that we are on the same path.

We are reaffirming our full year guidance across every metric. The building blocks for second half ARR growth accelerations are firmly in place. We have the right strategy, the right priorities and a clear path to unlock the next stage of performance.

And I now look forward to your questions.

[Operator Instructions] And the first question comes from Victor Cheng from Bank of America.

A couple, if I may. Maybe on the recent TeamViewer ONE contracts that you have signed where you move from per seat per endpoint, what are the early signs of pricing uplift that you're seeing? And how should we think about the impact to the LTV of a customer when you make such a move, both currently and in the medium term?

And then secondly, just a clarifying point on the EUR 45,000 daily average billings, how should we think of it in ARR terms?

And then lastly, a question on EBITDA margins. Obviously, you guided 43%. So how do we think about the phasing of EBITDA margins going forward? Is marketing spend going back up starting Q2 already?

Yes. Thank you, Victor. Let me start with the last question on the EBITDA margin phasing throughout the year, and then maybe Mark takes the first and Oliver will take the second on the [ EUR 45,000 ] daily billings to ARR.

On the margin exactly as you thought, so 45% was phasing Q1. You should expect something for Q2 in the vicinity between 42% to 43%, and then it will level out throughout the year. So for the full year, we are bang on with the around 43% guidance.

Maybe Mark, the first one on TeamViewer ONE pricing?

So yes, on the pricing, Victor, thanks for the question. So look, we are seeing some good uplift from existing customers where we might upsell them to TeamViewer ONE. Of course, there's 2 sides to that, right? So it's a way of retaining customers. But also, we are seeing some meaningful uplift. So we're seeing some healthy progress there overall. We didn't disclose those numbers, but we are seeing good progress.

Yes. Maybe on the second question, I mean, I think it's a general topic. The kind of per seat to per endpoint, and then the EUR 45,000 billing. So generally, obviously, we are steering the business for ARR firmly, as you know from all our disclosure. But the TMV ONE upsell is mostly happening in inside sales, and they are looking at the daily transaction volume at the actual invoices. So the invoices for cash that we're sending to customers. And therefore, we chose that billings number as an indicator here just because it really shows the daily traction, and we expect this to grow significantly from here throughout the year, as you can expect.

Typically, what we see is an ARR conversion, billings per ARR conversions between [ 0.7, 2.9, ] Sometimes it's a 1:1 conversion, really depends on the deal. So there is a little bit of a step down typically because there's also a little bit of 2-year deals or so even in inside sales, but generally speaking, quite close to the billings. And again, this is just an indicator.

And then the upsell depends a lot on the number of devices. There is a -- in most situations, there's an in-built meaningful upsell because people have more devices under management and want to move to more devices under management than they were paying in seats for remote control and remote support. So this is almost like a mathematic effect of customer footprint. There's also opposite customers that have a different behavior that has no managed devices and only need to grow from the start, but it typically comes with a nice uplift.

And the next question comes from Alice Jennings from Barclays.

A couple from me as well. So just firstly, on the SMB KPIs, so thinking about the subscriber numbers and then also churn. How much of this is driven by that decision to abandon the free-to-pay campaigns? And then I guess, therefore, what can we think about as being a more normalized level for these KPIs once that effect has come to an end, I think, in Q3?

And then the second question is just on 1E. So I mean the acquisition has been integrated for a little over a year now. So wondering how the cross-selling between is progressing? And I guess, how this compares to internal expectations at the time of the acquisition?

Yes, Alice. Let me start with the second one. The first one, sorry, I didn't hear it correctly, but someone will help me, who takes that one. On the 1E integration, actually indeed fully integrated. I give you also some synergy elements, both on the cost side but also on the top line side. Cost first, we gained de facto EUR 3 million of savings in 2025, and it will ramp to EUR 6 million this year, including the EUR 3 million of last year. So with all of the integration done, number one, on the cost side, especially FTE, G&A area, we gained a lot, but also on consolidating contracts and also in the COGS area, we were able to optimize our costs, which is good and nice and needed.

Moving then to the -- so the top line element, it's a good one. Remember, we told the market that we expect a rough cut EUR 10 million revenue synergy on the top line. And we see this actually tracking and trending nicely. Number one, the full pipe is rough cut in the vicinity of EUR 70 million. So with a conversion ratio of 1/3, something in the vicinity of around EUR 20 million. And that means EUR 20 million ARR then would obviously be bang on kind of on the EUR 10 million revenue synergies. And we mentioned -- as Mark explained that now with one big deal, which we just explained in the [ U.S. ] of this additional upsell of EUR 2 million ARR, this is obviously already fueling this revenue synergy, and there are many more coming and also came some already.

Can maybe just to add one comment. I think the examples I explained, pretty -- most of them are really good evidence of cross-sell working. The strategy here of bringing together the 1E DEX proposition with the TeamViewer remote proposition and TeamViewer ONE, as we've explained it, and the strategic benefit to customers of that infinity loop that Oliver explained in the presentation, that's what's really fueling our cross-sell opportunity, and that's where we're starting to see significant wins and it's where we're seeing real significant growth in our pipeline.

Yes. And on the free-to-pay campaign, I think you asked for what is the normalized motion on the free-to-pay. So all of the, let's call it, the hardcore free-to-pay commercial broker has been stopped, and the normal vicinity and there's some normal movement of free-to-pay, and this should be in the vicinity also around 1 million to 2 million.

Yes, I think the -- just said, I think it's also on the subscriber number, I think, look, whether if you don't do free-to-pay you're missing a few thousand subscribers that you bring in every quarter at the entry level. And that's what we're missing. So obviously, if we see very, very strong usage of free users first, we observe them and then we speak to them, and then we convert them into paying customers. So that's still moving. That's the kind of, I would say, the normal conversion funnel that we obviously operate from marketing to paid conversion. But what we're missing is the inflow of few thousands every quarter, and that's noticeable in the subscriber numbers. So if you would normalize for that. If you go back, when we still have this running, we were keeping the subscriber numbers stable. But then we had elevated churn. So that's what we're correcting now. So that's the order of magnitude to think about.

Next question comes from Ben Castillo-Bernaus from BNP Paribas.

First one, really on TeamViewer ONE Enterprise, the momentum there sounds encouraging. Could you just touch really on what's resonating with customers? Tensor is not new, but adding DEX and then the AI overlay and AEM to come. I think you mentioned some sort of consolidation, customers want cleaner platform. Can you maybe just touch on who you might be replacing there? And then just coming back to the discussion around the price point moving to endpoint pricing, clearly a sizable increase over a typical Tensor [ ELA, ] how are the sales cycles different? And how are you kind of balancing the direct sales versus channel versus MSP? Mark, you mentioned some investment required in the MSP partner network. So what does that look like? And how big can that become in the mix?

Yes. I think these are both for Mark.

Sure. First one, so the value around TeamViewer ONE Enterprise. So basically, as we kind of explained in the presentation, the infinity loop, the ability to utilize the remote control sessions that you are doing on a day-to-day basis across your devices and then turn them into autonomous capabilities that live on the endpoint. This is completely unique in the market. So there's no one else that can provide that kind of solution. And when you take that proposition to the enterprise, it's somewhat of a no-brainer for customers because they're already running a remote control solution, which -- and very often, they're a little bit losing that data that happens. They're not collecting. So leveraging that very rich data that could be taken from those sessions. And of course, we enable them now using AI to sort of leverage that data and more importantly, turn them into autonomous capabilities.

And I doubt there's any CIO on the planet that isn't really focused on taking their IT organization towards autonomous IT. So that's really what's resonating. And in terms of who are we replacing, all the usual suspects. I mean, we come with a joined up proposition, a single platform, single agent, single price point that allows our customers to invest in a platform for Autonomous Endpoint Management. And therefore, we're able to swap out the existing remote control vendor that's there. Same as to on the other side, by the way, is if they are coming from a DEX angle, it's also an opportunity to replace the current DEX vendor.

On pricing and sort of investments around channel, maybe just talk about investments around channel, clearly, yes, that's a big opportunity for us. It's already a significant part of our market. I mean, a large part of our customer base are managed service providers. If you break it down, we have the traditional MSP channel, which is servicing the SMB market where we already have significant traction in customers today. So there's clearly a very big opportunity there with TeamViewer ONE, and that's where we're seeing a lot of our early success with TeamViewer ONE standard and advanced. And then as you move up the ranks into sort of mid-market and enterprise, there's a different breed of MSP right up to global system integrators, and we're addressing all of them as well with dedicated channel and sales teams focusing on those types of partners.

And maybe to add on -- sorry. On the endpoint based pricing and the sales cycle there. The sales cycle is not different, really. I mean the proposition is very strong, as Mark laid out. So it's really is a deliberate move of customers to consolidated platforms and have kind of the joined up offering of the infinity loop, so to say, from us, so the DEX part, the AI part. And the remote part in one package, so to say. That is the decision they're taking, and that is a decision which is not a difficult one, as Mark said, because people want to consolidate and want to simplify.

Then the -- we move with this, you need to have a measure, and the measure in this can only be endpoint because it's outcome-based, so to say, it's endpoint under management. So that doesn't influence the sales cycle. It's more that it influences the rollout cycle sometimes. So customers move on to the new proposition and then you see how they are step-by-step adding endpoints because they might have a certain number of endpoints under management, which they then move to TeamViewer ONE. And then over time, they're expanding it or they still have a vendor existing in the base, as Mark just said. And then when that contract comes to an end, then they're adding end points. So that's more the dynamic at play. It's not so much a sales cycle. It's more a deployment and rollout and then land and expand cycle, which is, I think, the very interesting piece of TeamViewer ONE is that there is much more land and expand opportunity now with the endpoint number growing and proliferating into OT and IoT environment.

And the next question comes from Florian Treisch from Kepler Cheuvreux.

I have a question as well on TeamViewer ONE. You flagged your excitement around the midterm potential of the product or even near-term potential. So can you maybe provide us, let's call it, an at or exit level for the fiscal year, what do you believe might be a good approximation for daily run rate at the end of '26 to really get a feeling about how fast you can ramp up the revenue stream?

Oliver, do you want to take that?

Yes, I can take that. So obviously, as you point out, early innings, I think we've never seen a run rate, daily run rate increase like this in any product that we have been launching. And clearly, we are -- we want to be cautious in what we provide as guidance to the market. But we really want to make TeamViewer ONE a double-digit million contributor as quickly as possible. So with the current run rate, if you do the math on ARR quite soon, this is the case, and we want to grow from here clearly throughout the year.

I would probably look at it like doubling from here on the standard, advance, which is happening in inside sales. So getting to EUR 100,000 ARR a day throughout the year is something which we want to do. And then that doesn't include TeamViewer ONE Enterprise, which only started and it's hard to give a prediction of how many deals we will get there over time. But you can expect a meaningful step up throughout the year.

Yes. And Florian, to add on what Oliver just said on Enterprise, take the one big customer, which we just explained also, which is a reverse move to TeamViewer ONE from DEX to Tensor now. I mean this alone will make the equation explode. So the Enterprise move can be very significant but very early or too early to indicate anything, as Oliver also outlined.

And the next question comes from n Gustav Froberg Berenberg.

Just two on the lower end side of the SMB kind of customer group, if you like. Could you just give a bit more color on what you are rolling out or the initiatives you're putting in place to bump up growth as you progress through 2026? And sort of in line with that question, how do you see competitors and the rest of the market trying to address this segment? And how does your approach differ or compare?

Yes. Maybe I can start or Oliver, you go ahead.

So if I can start like more generally, I think the -- as we've shown that picture of the different segments, I think what is clear is that there is a very, very healthy SMB base, which we are addressing an untapped growth or generate additional growth. And the initiatives on that one are TeamViewer ONE, AI, AI usage, ARR price-ups, so more for more over time when people get to use AI even more. We're focusing on adoption at the moment, but monetization is following suit. So there's a lot going on in this.

If you go at the entry level, speak at the entry level, where the usage from customers is quite confined to remote support, we are working to keep the base as stable as possible. We have reduced kind of strategies, which are kind of upsetting customers more, so like-for-like price increase, as we had mentioned before. But there's not so much upsell motion you can do in this one. So it's all about keeping the base as stable as possible. We don't see a significant change in competitor behavior on this end, quite honestly. And I think I'd say more of the same. But with the negative effects of price ups and the likes washing out throughout the year, we will see improvement towards the second half of the year as well.

Sorry, Michael, go ahead.

So only mini add-on. So Gustav, especially from 2027 onwards when the price ups in the commercial blocker completely washed out also in the lower segment, that should also keep on stabilizing them more and more. But in the end, and you know it and we know it, it's a commoditized business on the very low end and competition is high. And if we would think about lowering prices or so that is -- the back book effect would just be too high. So keep it as much as we can, but it's difficult on the low end to enrich via feature set.

Ladies and gentlemen, this was today's last question. I would now like to turn the conference back over to Oliver Steil for any closing remarks.

Yes. Thank you, operator. Thank you, everybody, for joining. I know it's a busy morning. So thanks for the interest in TeamViewer and the questions, and I hope you have a good day, and talk soon. Thank you. Bye-bye.

Good morning, ladies and gentlemen, and welcome to TeamViewer's Q4 and Full Year '25 Earnings Call. I am Bisera Grubesic, Head of IR. Today, I am joined by our CEO, Oliver Steil; CFO, Michael Wilkens; and CRO, Mark Banfield.

Oliver and Mark will run you through the quarterly business update. Michael will present Q4 and financial -- and full year financials, followed by the full year guidance and midterm targets. The presentation will be concluded by a Q&A session. Same as in the previous quarters, we will present non-IFRS pro forma top line and adjusted EBITDA performance. And also, please note that you can find the important notice and the APM disclosure on Slides 2 and 3.

And I now hand it over to Oliver to kick off.

Thank you, Bisera. Good morning, everyone. Also welcome from my side. Thank you for joining our call today. As the last year was clearly a year of transition after the 1E acquisition, I would like to start differently this time and give you some broader context before we dive into the results.

When we look back at the year 2025, we see a lot of progress and proof that we are on the right track. But of course, there were also some challenges that require our full focus and which we continue to address in 2026 as we are firmly committed to reaccelerate top line growth. 2025 was again marked by macroeconomic difficulties and geopolitical tensions, which affected customer decision-making and made it more challenging for us to execute and operate as initially planned. And as you know, AI was one of the defining forces in 2025.

At TeamViewer, we clearly view AI as a significant opportunity to drive platform growth. We progressed significantly with embedding AI into the core of our product to improve our offering. Our webinar for the Capital Markets last year November made it clear how we and our customers will benefit from AI. We are unique as we are the only company within our industry that can deliver what we do. This is based on our technology and proprietary data and the combination of TeamViewer and 1E product capabilities, which I will elaborate on later.

While our Enterprise business continued to grow, we were disappointed with the SMB business as growth was slowing down. We needed to course-correct our approach regarding SMB customers and decided to suspend all short-term monetization activities like free-to-paid campaigns and pure price up to revitalize the ecosystem of noncommercial users and smaller SMB customers who are very price sensitive. Also, the 1E business performed below our expectations as integration work temporarily slowed momentum and some key talent left. With the new global sales and customer success setup under Mark's leadership, we are now focused on customer retention and rebuilding a strong pipeline, and we are already seeing early strategic wins.

2025 was clearly a pivotal year for TeamViewer. We integrated TeamViewer and 1E capabilities, invested heavily in R&D and sales and go-to-market. We launched several new products during the year. The first one, DEX Essentials, is an easy-to-implement DEX version for smaller IT teams. It was built in record time after the 1E acquisition and represents a stepping stone to our most important new product, TeamViewer ONE, our all-in digital workplace management platform, unifying DEX, AI-based remote support and RMM to create a new differentiated offering for companies of all sizes. We could see that our efforts paid off already in Q4 with a strong traction of TeamViewer ONE, highly strategic customer wins in DEX and Frontline as well as an overall continued strong TeamViewer Enterprise momentum.

Let me now talk you through our full year results. We closed the year with 5% pro forma revenue growth in constant currency year-over-year. ARR grew 2% in constant currency and TeamViewer stand-alone Enterprise business was 19% up in constant currency and therefore, the main growth driver. New ARR from TeamViewer stand-alone even doubled year-over-year. The Enterprise business overall showed strength in Q4 with highly strategic wins in DEX and Frontline. At the same time, we were able to deleverage as expected and improved our net leverage ratio to 2.6x. Our profitability remained high, and we closed 2025 with a pro forma adjusted EBITDA margin slightly above 44%. 2026 will clearly be another transformational year for us. I will elaborate later more on what that means and which priority areas we will be focusing on.

Let's now take a look at the regions and customer categories and how we have developed during the year. Revenue grew in constant currency across all regions in 2025. EMEA was our strongest region, contributing slightly above 50% to our revenue. The region delivered EUR 402 million in revenue, up 6% year-over-year. In the Americas, revenue reached EUR 292 million, up 3% in constant currency despite an ongoing difficult market environment in the U.S. Especially towards the end of Q4, the U.S. team brought in a few very important strategic deals, which I will show in a few minutes. APAC delivered EUR 73 million in revenue, up 4% in constant currency, driven by a good Enterprise performance. We were especially happy about a few DEX, Enterprise deals in the region. This is noteworthy as 1E didn't have any business in APAC, but TeamViewer was able to bring DEX to the region due to our dedicated APAC go-to-market efforts.

Looking at our customer categories, Enterprise continued to demonstrate strength. Revenue as well as ARR grew by 11% year-over-year in constant currency. With this, the Enterprise business now contributes more than 30% to our business. In SMB, revenue grew by 2% in constant currency, while SMB ARR was down minus 1% in constant currency. As already explained, we were not satisfied with the SMB performance in 2025 and already took measures to course correct.

Let us now look at the respective ARR value ranges in Enterprise and SMB. In Enterprise, all value ranges delivered double-digit growth, reflecting the enterprise momentum we saw throughout the year and especially in Q4. Notably, also the highest value range of above EUR 200,000 picked up again with the strategic DEX and Frontline wins in the quarter. In SMB, the highest value range grew by 3% year-over-year. The lower value ranges were down mid-single digits. This reflects successful upselling into richer product packages within SMB on the one hand, but also the price sensitivity of smaller customers that I already talked about. As usual, we saw net upsell from SMB to Enterprise of EUR 12 million reported, which demonstrates the effectiveness of our sales strategy to move customers up to higher value ranges.

Let me now tell you a bit more about some of the Enterprise deals of Q4 that we are particularly excited about. In the fourth quarter, we won a few highly relevant large deals. I would like to highlight 3 of them, all from the U.S. First, we were able to convince a large and well-known U.S. company from the defense sector to introduce our DEX solution and use it across the vast IT landscape. For these customers, the capabilities customers -- the capabilities of our platform for real-time remediation and autonomous endpoint management were the decisive reasons to choose TeamViewer DEX.

This equally applies to the second deal with Thrive, a large U.S.-based managed service provider with a growing presence across the globe. They will integrate our DEX solution into their managed services platform to enable better insights and more automation for their customers. They chose TeamViewer as we are a clear leader in the DEX space and in IT support automation and secondly, because of our ServiceNow integration.

The last example I would like to highlight is the largest frontline deal in our history. It's one of the world's largest consumer food and beverage producers who will deploy our frontline picking solution across more than 350 warehouses, which also offers great potential for the future. We have been working with these customers on this project for quite some time and are very excited that we were able to close the deal now. Frontline is an integral part of our digital workplace platform as it is very much needed to digitalize physical work environments such as production lines or warehouses.

We are a recognized leader in this space and have built a unique and differentiating positioning over the last years with large customers such as DHL, Coca-Cola, Nadro and now this additional win in the U.S. Some of our largest enterprise customers use TeamViewer Frontline to digitalize manual work in industrial settings. All in all, we see that whenever the requirements are complex, when critical processes are affected and real-time operations needed, we are very well positioned as we create very real business value for our customers in these environments.

Let me now explain our strategic priorities for the year 2026 and beyond so that you know what to expect from us. We have a clear plan to make TeamViewer even stronger going forward. In this section, our CRO, Mark will also present a few topics. First, let me take a step back and look at what we are seeing in the market. Quite simply, IT is reaching an inflection point. Over the last decade, companies have layered tool upon tool to solve individual problems. The result is a highly complex and fragmented landscape with overlapping solutions, rising operating costs and frustrated users despite very significant investments.

Too much time and money are being spent simply just keep the operations running and far too little on true innovation and value creation. At the same time, we are witnessing a secular technology shift with AI. Companies clearly recognize the potential of AI to transform IT operations, automate work and meaningfully improve productivity. But fragmented tools, manual processes and reactive operating models make it difficult to deploy AI at scale. And in many cases, AI even adds the complexity instead of reducing it.

Taken together, this IT breaking point and the AI opportunity drives a fundamental market shift. Companies are now demanding simpler, more cost-efficient, AI-powered IT management. They are looking for consolidated platforms that reduce complexity, enable predictive problem solving and support the move towards autonomous operations.

So the obvious next question is, who is best positioned to help customers drive this shift from reactive to predictive IT. Doing this well requires several things to come together at the same time. Seamless connectivity across very heterogeneous environments, a high-performing operational engine, proven automation capabilities, a large customer base and increasingly a unique AI advantage built on access to hard-to-get and high-quality data.

And this is exactly where TeamViewer differentiates. Our core TeamViewer heritage is built on over 20 years of experience in remote support and connectivity at global scale. And with 1E, we added unmatched and proprietary capabilities for real-time remediation and autonomous endpoint management. Together, this gives us unique broad visibility into devices, applications, performance and user experience, the kind of data foundation that AI actually needs to deliver value.

With TeamViewer ONE, we have deliberately unified these capabilities into a single best-of-suite platform, purpose-built to simplify complex IT environments and to drive a shift left towards proactive and predictive operations. It brings together all of TeamViewer's best-of-breed solutions and connects them through a shared data and AI layer. Every AI-powered remote support remediation generates insights that continuously reinforce our DEX-driven self-remediation engine. And that is why we believe TeamViewer is uniquely positioned to shape this market inflection. Our integrated capabilities position us at the very center of the shift towards intelligent consolidated IT operations.

Looking at 2026, we have defined 4 key priorities that we will focus on in the coming months and that form building blocks for our transformation journey. We will elaborate on each of them in more details afterwards. Firstly, it is crucial to revitalize the SMB business as well as the performance of the stand-alone DEX business. Secondly, we will continue to invest organically in our market-leading product offering. Thirdly, we will accelerate global sales and go-to-market execution. And while doing all of this, we remain committed to our deleveraging goal of around 2.3x net leverage at the end of this year.

We have clear actions in place to reignite revenue growth in 2026 and beyond. The first building block is the turnaround of our SMB business and the reacceleration of the 1E performance, meaning DEX for Enterprise. As we have already mentioned end of last year, we have started initiatives to revitalize the ecosystem of noncommercial users, for example, through avoiding aggressive free-to-paid campaign. Price increases will be tied to clear additional value in the product, for example, bundling our AI capabilities or automations into the remote licenses. We appointed Finn Faldi as Executive VP, Global Inside Sales to strengthen the global sales organization.

And on top of that, we have set up sales and customer-facing organizations more efficiently and according to best practices with new sales and AI tech stack to ensure more focus and improved customer retention. This goes together with better onboarding and customer support throughout the entire life cycle to unlock potential and create value. Of course, also TeamViewer ONE will play a key role in retention and upselling strategies and represents a key strategic differentiator against competing RMM products.

For 1E and DEX, we've also identified and implemented measures, in general, an enhanced product focus on the core DEX and automation use cases to release features the customers were waiting for. We enabled our global enterprise sales force to sell DEX, and we have improved relationships with long-standing 1E customers through a comprehensive customer success management framework and a structured customer advisory board program. Again, the TeamViewer ONE platform and our AEM proposition play an important role in this context, and Mark and I will elaborate on this in a few minutes.

Now let's have a look at our ongoing organic product development. As part of these organic investments, I would like to show you again how we position our product offering in the market. All our different solutions are leaders in their respective space, Tensor and Remote in remote access and support, DEX in digital employee experience and Frontline in the connected workforce space. We will continue to improve them as stand-alone products. Additionally, through the 1E acquisition, we were able to successfully position us at the forefront of the emerging digital workplace and autonomous endpoint management categories, which we will naturally extend into frontline workplaces.

With the unique combination of TeamViewer and 1E technology within the TeamViewer ONE platform, we are able to deliver an industry-leading one-stop shop for IT operations and AEM, covering the full spectrum from proactive auto remediation capabilities to remote expert support. Customers across the globe understand and embrace the value of DEX and the strategic road map towards more automation and ultimately autonomous endpoint management. All of this is powered by AI as this is horizontally embedded across the entire product portfolio and at the core of our offering. We will continue to invest organically in AI and develop more agents that can leverage the unique proprietary data we have access to.

Our AI products saw good and quick adoption since the introduction of the growing suite of AI-powered features in summer 2025 as well as the announcement of TeamViewer's new intelligent agent, Tia at Microsoft Ignite in November. At the beginning of February, more than 13,000 customers had already opted in for the AI Session Insights feature and had used it to summarize more than 600,000 TeamViewer sessions.

To illustrate our unique position in the autonomous endpoint management space, I would like to quickly explain again how the complementary capabilities of DEX and remote access and support work together and strengthen each other. In an ideal scenario, a new and until now unsolved digital friction occurs on one of the devices inside a company's IT landscape. A human expert will now take care and use remote support capabilities to look into the issue. Obviously, the expert will appreciate AI supporting him or her on root cause analysis and remediation of the issue. The session will be captured and automatically summarized by AI to make it available as a foundation for the future and increase intelligence across support operations.

At the same time, our DEX technology is constantly analyzing device and system data in real time. This is matched against the DEX insights library with preconfigured automation for frequent issues. Closing the loop, we are able to build new automations out of the previously generated session summaries resulting from expert support. And this loop is constantly increasing the amount of automations across the support operations. Fixing an issue once means it is then fixed forever and can be executed autonomously at scale.

With this, I'd like to hand over to Mark, who will talk about TeamViewer ONE as well as our go-to-market strategy.

Thanks, Oliver, and a warm welcome from me, too. TeamViewer ONE, as we said 2 weeks ago at our global sales kickoff in Munich is clearly our #1. It's a unified digital workplace platform to enable autonomous IT and endpoint management. It combines all of our leading solutions and capabilities, remote access and support, DEX, RMM, AI at the core, and we are the only vendor who can unify this range of capabilities in a single platform. We will offer it to all our existing as well as all of our new customers across all geographies, all industries and across all customer categories as it is equally compelling for both SMBs, Enterprises as well as managed service providers.

It adds enormous value to our customers as it unifies all IT operations under a single platform. This makes it our #1 go-to product, go-to-market product for this year and beyond. Of course, we will continue to sell our stand-alone solutions, but wherever there is a case of TeamViewer ONE, we will go for that as it offers endpoint pricing and therefore, financial upside, but also higher stickiness as we will become much more relevant to our customers.

We have the right ingredients, the right products, the right proprietary data, the right customer base and an enabled global sales force to sell this leading solution and win in this space. Only recently in December, we released a major product update to TeamViewer ONE with a very compelling design and user experience. This gave another push to marketing and sales to focus on TeamViewer ONE, and we already see the first results.

Now let me wrap up this section by talking about our go-to-market strategy. Our first focus area is to retain and grow customers. We need to set strong focus on churn prevention and work across sales and all customer-facing departments in lockstep. Of course, Enterprise customers need to be treated very differently than SMB ones. But overall, we need to reduce churn and instead drive demonstrable outcomes for our customers, satisfying them and using the momentum for upsell and cross-selling as we migrate them to TeamViewer.

As I already outlined on the previous page, TeamViewer ONE is the leading go-to-market product for our sales force. If there is no direct entry point to TeamViewer ONE, we will go with the most suitable stand-alone solution and follow up with a very clear land and expand strategy. For all scenarios, we have developed a very comprehensive global sales playbook, and we have trained our entire sales force on this at the recent global sales kickoff. The third set of measures that will move the needle this year is ruthless prioritization of leading KPIs and a rigorous data-driven approach to decision-making. We will continue tracking and managing our pipeline as well as sales productivity and focus on operational excellence everywhere. This is not rocket science, but gives us a clear path to a strong global market -- global go-to-market execution.

With that, I'd like to hand over to Michael for the financial section.

Thank you, Oliver and Mark, and good morning, everyone, from my side. Let's look at TeamViewer full year 2025 results on the next slide, please. In 2025, TeamViewer delivered a solid financial performance with revenue reaching approximately EUR 768 million, reflecting a 5% year-over-year increase in constant currency. This growth was broad-based with all regions contributing. Revenue landed within our guided range, aligned with the FX assumptions communicated at Q3 2025.

The annual recurring revenue grew by 2% year-over-year in constant currency to EUR 760 million, meeting the updated guidance range also issued in October. Profitability further strengthened in 2025. Our pro forma adjusted EBITDA rose by 8% year-over-year to around EUR 340 million. We achieved again an industry-leading adjusted EBITDA margin of 44.3%, representing a 2 percentage point improvement versus 2024. Adjusted basic EPS also increased by a strong 17% year-over-year. We also continued to deleverage as planned. The pro forma net leverage ratio improved to 2.6x, down from 2.8x in Q3, fully in line with our targeted trajectory.

Now let's look at the details of our Q4 2025 results. Pro forma revenue in Q4 increased by 2% year-over-year in constant currency, reaching approximately EUR 195 million. This performance reflects the continued transformation in the SMB segment and the expected softer revenue contribution from 1E. TeamViewer stand-alone delivered a strong quarter with revenue of EUR 179 million, up 3% year-over-year in constant currency. And the ARR grew by 2% year-over-year in constant currency to EUR 760 million. Profitability remained strong in Q4 with an adjusted EBITDA margin of 45%, underscoring the strength of our business model.

Let us continue with our Enterprise business on Slide 22, please. Enterprise continued to deliver strong momentum, reinforcing the resilience of TeamViewer's core business. Enterprise ARR grew by 11% year-over-year in constant currency, reaching EUR 241 million now. As I mentioned earlier, TeamViewer stand-alone Enterprise had an excellent quarter with ARR increasing 90% year-over-year in constant currency. Growth was again broad-based across all regions, supported by a particularly resilient EMEA performance.

As Oliver highlighted, the positive trajectory was bolstered by several notable new logo wins in Q4, including the largest TeamViewer frontline deal ever signed, contributing a mid-single-digit million ARR in the quarter. As a result, the new ARR doubled year-over-year in Q4 2025. 1E also showed encouraging progress. Q4 2025 marked a turnaround quarter with sequential ARR growth returning. This momentum was driven by 2 highly strategic DEX, Enterprise wins, together representing a total contract value of approximately EUR 10 million or around EUR 3 million in ARR. Our Enterprise customer base continued to expand, reaching 5,262 customers by the end of the fourth quarter.

The pro forma Enterprise ASP increased to around EUR 46,000 per customer, reflecting continued success in delivering higher-value solutions across a growing customer set. The Enterprise net retention rate was 96% in Q4 on a constant currency basis. Adjusted for the upsell from SMB customers during the period, the Enterprise NRR reached 99%. This NRR trend preliminarily reflects a subdued ARR expansion among existing customers, lower SMB to Enterprise upsell and the stand-alone performance of 1E, combined with a higher share of new ARR in the quarter that is, of course, not captured in the NRR calculation. We have implemented measures designed to drive Enterprise NRR above the 100% mark in the midterm.

Let us now move to our SMB business on Slide 23. Pro forma SMB revenue reached EUR 131 million in Q4, increasing 1% year-over-year in constant currency. The SMB ARR declined by 1% year-over-year to EUR 519 million. This development was fully in line with internal expectations and reflects 2 key dynamics: continued successful upsell of SMB customers into Enterprise and the deliberate SMB cost correction measures, which we introduced in the third quarter. These measures include discontinuing short-term monetization initiatives and price increases. As outlined in Q3, this strategy is focused on reinvigorating product usage across both the free user ecosystem and the broader SMB base.

Encouragingly, the free user ecosystem is already demonstrating early signs of stabilization. The actions taken in Q3 2025 have a negative impact on ARR and the related KPIs shown on this slide. While SMB customer churn increased, value churn remained broadly stable quarter-over-quarter. As we work to revitalize the SMB business and to establish the foundation for sustainable growth, we expect SMB KPIs to remain soft through the first half of 2026. End of 2025, we served approximately 631,000 SMB customers. Our SMB ASP grew by 2% also year-over-year to reach EUR 822, underscoring the resilience of our monetization model.

Let us now turn to our cost base on the next slide. For the full year 2025, our pro forma adjusted EBITDA margin was very strong at 44.3%, representing a 2 percentage point improvement compared to 2024. This performance reflects our disciplined cost management even as we continue to invest in growth and innovation across our product portfolio. Overall, pro forma recurring costs remained broadly stable throughout the year. Cost of goods sold increased by 5% year-over-year, driven by our ongoing customer platform investments and by development support for our frontline projects.

Sales expenses rose by 8% year-over-year as we expanded our sales force and strengthened our enterprise technology stack to advance our transformation into a fully data-driven sales organization. Marketing costs decreased by 15% year-over-year, primarily due to optimized sponsorship spend. At the same time, we continue to invest in targeted branding initiatives and in the launch of new products. In total, marketing costs represented 13% of revenue, down from 16% in 2024. And as a result, overall sales and marketing efficiency improved meaningfully.

In 2026, we will maintain a clear focus on driving further efficiency gains, sharpening our go-to-market execution and scaling data-driven demand generation. R&D expenses increased by 7% year-over-year, reflecting significant investments in product innovation, including our TeamViewer AI offering and the TeamViewer ONE platform. These investments form the foundation of our AEM strategy and position us strongly for future growth. G&A expenses developed in line with revenue, demonstrating consistent cost discipline. Other expenses amounted to around EUR 7 million for the year.

Let us now turn to net income and EPS development on the next slide, please. Pro forma adjusted earnings per share was EUR 1.23 in 2025, a strong increase of 17% year-over-year. Our strong profitability and our continued focus on optimizing operating expenses supported this performance. This was partially offset by higher total interest expenses, which amounts to EUR 40 million in 2025, up EUR 22 million year-over-year, which is primarily driven by the financing of the 1E transaction. The FX result reflects negative translation effects related to an intercompany loan as required under IFRS.

With this, let's move on to cash flow on Slide 26. In '25, adjusted levered free cash flow amounted to EUR 208 million after adjusting for nonrecurring items. This represents a cash conversion of 61% and demonstrates the continued strength of our underlying business model. Cash flow for the year was influenced by several factors, including moderate top line growth, FX headwinds and higher interest payments related to the 1E acquisition. In addition, cash flow reflected the acquisition-related payments for 1E and the settlement of a legal dispute in the first quarter of 2025. These effects were partly offset by lower tax payments resulting from changes in our tax scheme, which had a positive impact on cash flow in 2025. Looking ahead, we expect cash taxes to increase from 2026 onwards and return to normalized levels despite some positive one-off support because of the 1E deal structure.

With that, let me now provide a brief update on our financing on Slide 27. We continued to deleverage in line with our commitments following the 1E acquisition. Our pro forma net leverage ratio improved further to 2.6x, demonstrating our clear focus on balance sheet strength and disciplined capital allocation management. At year-end, cash and cash equivalents amounted to approximately EUR 42 million and net debt was EUR 901 million. As mentioned in Q3, we also successfully refinanced EUR 30 million of the EUR 175 million bridge loan through a private placement, further strengthening our financial position.

Looking ahead to 2026, reducing leverage remains our top financial priority. We reiterate our commitment to continued deleveraging and expect to reach a net leverage ratio of around 2 to 3x by year-end in 2026, subject, of course, to FX movements. At the same time, we will continue to invest organically in the areas that matter most, particularly R&D. These investments are essential to drive sustainable long-term growth and continued innovation across our product portfolio and our AEM platform. With that, let me now move on to our full year 2026 guidance and to our midterm targets on the next slide.

Turning to our outlook for 2026. We expect another year of disciplined execution and continued operational progress. Our focus remains firmly on driving sustainable profitable growth while advancing our strategic road map. For the full year 2026, we anticipate a constant currency revenue growth in the range of 0% to 3% in full alignment with the lower end of our preliminary outlook for 2026, which we provided already back in October 2025. The guidance reflects the cost correction SMB as well as the seasonal ramp of Enterprise later in the year. Please also note that Q1 will be a soft start into 2026 as we face a few large but fully anticipated one-off churn effects in 1E. These effects are unavoidable, known and confined to Q1.

We also expect to deliver another year of strong profitability. We guide our adjusted EBITDA margin again at industry-leading levels of around 43%. This is supported by continued cost discipline, operational efficiencies and the benefits of our increasingly integrated product and platform strategy. At the same time, we will continue to invest in the areas that drive long-term value creation, particularly R&D to capitalize on the significant opportunities in front of us.

In addition, we remain fully committed to further deleveraging. As mentioned, we expect to reach a net leverage ratio of around 2.3x by year-end 2026, assuming FX remains stable. Strengthening our balance sheet is one of our core priorities, and we will continue to manage capital allocation with discipline. Finally, for our midterm outlook, we expect a reacceleration of growth into the mid- to high single-digit percentage range. This outlook reflects the inherent strength of our business model, supported by our focus on revenue expansion, consistently strong margins and robust cash flow generation.

With that, let me walk you through the details of our '26 guidance and the midterm targets on the next slide. We guide revenue in constant currency, but reported figures will naturally move with FX. To keep the transparency high, we will show the expected quarterly FX impact on revenue growth and separately highlight the FX effect from releasing older deferred revenue to avoid systematic over or underestimation of these impacts. This helps to distinguish true operating performance from currency noise. Based on the 31st of December 2025 spot rates, the FX reduces Q1 2026 growth by 3.1 percentage points and full year 2026 by 2.8 percentage points with U.S. dollar as our largest exposure.

Before we hand over back to the operator for Q&A, let me briefly sum up full year '25 and our outlook. 2025 was clearly a challenging year. Yet despite this backdrop, we delivered solid revenue growth and outstanding profitability. At the same time, we made substantial operational progress that strengthens our foundation for sustainable long-term growth. Looking ahead, 2026 will be another transitional year, but with our guidance and the measures already implemented, I'm very confident in our trajectory. We have the right priorities, the right focus and a clear path to unlock the next stage of our performance.

With this, I would now like to hand the call back to the operator to open the Q&A.

[Operator Instructions] The first question comes from the line of George Webb from Morgan Stanley.

I want to kick off with a couple of financial questions. I guess the first one, as we think to that FY '26 guidance range on revenues for 0% to 3% in constant currencies compared to that kind of 2% exit ARR growth level, it's quite a wide range on where ARR growth could exit in FY '26. So perhaps could you add a bit more color on how you think about that shape of growth in 2026? You've mentioned, Michael, kind of expect that softer Q1 on the 1E churn factors. If you could also kind of just highlight maybe the size of that 1Q headwind, that would be helpful.

And then secondly, around levered free cash flow, you've kind of flagged the EUR 181 million you delivered in FY '25 overall pretty healthy EBITDA development will be quite muted year-over-year in '26. You kind of flagged that EUR 12 million one-off headwind you still had in '25. Are there any kind of other swing factors for free cash flow we should think about in 2026 or your ability to grow that EUR 181 million year-over-year?

Yes. First one on ARR, you're spot on. So the 1E part is in the vicinity of EUR 8 million of churn, more or less the same like in 2024 in Q1, always a tough quarter. But what we need to keep in mind, last year, we had the positive swing against this 1E churn in the SMB space of TeamViewer with price ups and commercial blocker, and this is de facto gone this year as we have the tougher comp. So this is why especially the ARR in Q1 and maybe partially in Q2 will be a little bit muted.

But the important part is that ARR by year-end will be significantly higher than last year. So we will grow from there. That's the name of the game. The problem then starts, of course, with the revenue, which is obviously lagging, and this is also why we took the 0% to 3% guidance, which is fully in line with what we did in the earlier outlook. So that was number one.

On the cash flow, indeed, a couple of swing factors. First, we are always a little bit prudent in the context also from the EBITDA guidance, you see the around 43%, which is more or less the same as last year. But with the top line range of revenue, then you have de facto the outcome on the EBITDA, which is one very decisive factor. And then there are 2 others. Interest should improve a little bit year-over-year in '26 vis-a-vis '25, rough cut EUR 5 million or so.

And we expect a little bit of a positive impact on cash taxes based on the structure of the 1E deal, rough cut EUR 10 million, but that will be de facto balanced with the normal uptick of the normal cash taxes, which is actually a good one to have. So all in all, in the vicinity, cash flow, let's say, again, EUR 190 million to EUR 210 million. So broadly stable in absolute and also in cash conversion terms.

The next question comes from the line of Victor Cheng from Bank of America.

Maybe to start, can you talk a bit about the DEX market? Obviously, there are a lot of industry reports out there showing kind of good growth. But what are you seeing with competitors? Are they maybe slowing down a bit in growth as well? What are you seeing more broadly in that field?

And then 2 other quick ones. On the medium-term outlook, you said maintaining the current margins. I suppose that's referring to the 43% for '26. And then lastly, maybe any updates on the metrics for some of the newly launched products like DEX Essentials and Tia? Any updates on kind of usage and momentum there, please?

Yes, Victor, let me take your second one first. You're spot on. It's in context of the 43% out of -- for '26, which we then also confirm for the outer years.

Mark, do you want to take the DEX market?

Sure. Okay, sure. Look, I think overall, the DEX market continues to show strong tailwinds. I mean it's a growing market. It's -- there's clearly -- there is a movement within the IT market to invest in DEX as the kind of the next sort of platform for end-user computing. Some of our challenges last year, I think we've talked about quite a lot as they were specific challenges around the integration of the businesses.

Q4 showed some real highlights actually. I mean the deals were mentioned there by Oliver, a couple of significant wins. These were head-to-head competitive wins and there were many more than that as well. So we're starting to see nice wins, larger wins. We're also starting to see TeamViewer customers start to adopt DEX, which we said at the time of the transaction would take some time to build that pipeline, but we started to see those deals convert in Q4. So I think we feel much better going into 2026. But yes, overall, I think the DEX market is continuing to accelerate.

Yes. Maybe I'll take the last question. Metric on new products, obviously important and something we track. Important to say, Victor, that we launched these products all around last year, and it takes time to kind of mobilize -- enable and mobilize the sales force to really take this on and move this forward. And especially on TeamViewer ONE, this is a very new platform approach as we had laid out. So we had to connect different capabilities from 1E and TeamViewer into one place, make the user flow easy, easy onboarding and easy to add, manage devices and the like. So that took a while.

That release was only done beginning of December. And what was really good to see that then in December, in the year-end business, we really saw a good number of TeamViewer ONE deals, although we hadn't enabled the whole organization. So that was very positive. Then obviously, year-end cleaning the pipeline and then moving into new year. And then we had the sales kickoff just 10 days ago. Super high excitement across the sales organization inside sales and enterprise. And why is that? TeamViewer ONE is selling and has been selling and is increasing to sale day by day. So there's transactions every day.

The proposition lands with customers. Our sellers really feel this is a very competitive proposition, a clear step change compared to what we offered earlier in the marketplace, so confined remote support and some additions with partner products. But now it's really our own product bundle, and we see increase in billings and ARR additions really on a weekly basis. So very exciting. We will come with more color around it as we go through the year for sure. But this is starting to be meaningful on a daily basis really, especially on the TeamViewer ONE side.

On AI, focus is on adoption still. As I mentioned, well above 600,000 sessions now have been done, have been used. There's customers opting into this. We will bundle it even more into the product. TeamViewer ONE will be a key catalyst for that because it is a built-in functionality in this product. We will also think about pricing and monetizing throughout the year. So we continue to see very good progression there in line with what we had anticipated when we did the AI webinar.

We now have a question from the line of Alice Jennings from Barclays.

So my first one is just there's a lot of AI-driven headlines in the news at the moment where we're seeing like really rapid innovation and lots of new products in the market. You've mentioned kind of already how you see the competitive environment for DEX specifically. But just wondering more generally, how do you see the competitive environment for endpoint management evolving? And are you seeing kind of any change in customer behavior as a result of these headlines?

And then my second question is just on the medium-term guidance. Do -- can you tell us anything about your expectations for when you expect to be in the mid- to high single-digit range? Is this something that's realistic for 2027? Or is this a little bit further down the line?

Yes. Let me start with question number one. AI drives the headlines, 100%. I think there's a lot of discussion around how customers' buying behavior will change. Obviously, we see that. As I said already in my presentation, customers want automation. They want to use AI. They want autonomous IT. They want simplicity. They want platform approach. They know that more is possible using AI, and that's why it's so important to build AI into the product range.

This is not a stand-alone on the side AI gimmick, if I may say, but it's really a functionality and a capability across the product range. So taking what we see in sessions, learning from it, synthesizing it and making it available in the DEX automation library. That is the key thing which we're building and what customers really expect.

We also believe that what you need is access to data, proprietary data, for sure, and we have that. Out of our 630,000 customers, you might call it an unfair advantage because we come there with this massive customer base and the millions of sessions that we're doing every month that we can tap into and leverage to build inside. So that's really important.

We also believe what gets lost in the discussion about AI and application software risks is clearly that it depends a lot on the layer you are in. We are an infrastructure piece. We are connecting very heterogeneous environments. We're doing end-to-end solutions at very high security, and this is not easily replicated and being built by AI code in a few days or so. So this is a complex thing.

It's touching the heart of operations. It's at the core of our customer, highly security relevant. And that's where we built our experience over the years, and that's why we are so strongly positioned in this because customers take very deliberate choices and what they try and what they not try and how they want to move forward in the use of AI. So we see that as clearly a tailwind for our product and our positioning in the market. Midterm outlook?

Yes. Midterm outlook, let's remind ourselves the distinction between the ARR and the revenues and the revenues, the lagging KPIs. So on ARR, we expect that already to uptick in '27 after '26, which is the first uptake important. But on the revenue, because it's lagging, it's more or less an inch-by-inch kind of thing. So it's mid-single digit and then rather in the outer years, '29, higher single digit. This is how we need to think about it.

The next question comes from the line of Ben Castillo-Bernaus from BNP Paribas.

Firstly, just on the SMB part of the business. I mean could you help us with what might be a realistic outcome here for 2026 if we're exiting at slightly negative ARR growth. We're digesting no price increases, commercial blocker. How can you help us think about that? How do we square that decision to, I guess, stop those campaigns, again, no pricing, we're seeing churn increasing. But presumably, we need to return to some growth here. And if we look at that sort of midterm outlook, in your internal assumptions, what does that SMB business need to do to help underwrite that?

Yes. I can start also with the ingredients. So first, full year versus full year, so minus 1% last year, '25, we expect the same vicinity in the end of '26, so around a minus 1 maybe. So kind of stabilizing in the full year. And indeed, especially Q1 and Q2 will be a little bit under pressure because of the tough comp. And the numbers that we need to climb is EUR 20 million versus last year, price ups and commercial blocker. And this needs a little bit of time.

Oliver laid that out, 2nd of December, a strong launch of TeamViewer ONE, and this is firing on all cylinders, basic, advanced and enterprise, but especially basic and advanced are very important ingredients. And whenever we would do price ups, then clearly in a more-for-more logic. So where the customer actually also really gains new product features, new services and then gets the offer of a price up where they can also say, no, thank you. So that's one part of the equation, very important.

And the second part of the equation in order to stabilize it throughout the second half of the year is, of course, the expected positive churn impact. Remember, we were faced with churn in the SMB business. And with the stop of the, let's call it, rather unfriendly price ups in commercial blocker, this negative churn effect should wash out over time and customers will come back and will stay, but this is rather expected for the second half of the year.

So this gives a little bit of an outlook for '26. You asked also how we think further. So if we stabilize, of course, with the very strong injection of the TeamViewer ONE platform autonomous endpoint management across all business lines, we expect then from '27 onwards, obviously also a slight uptick in growth back in the SMB business. That's more or less the function.

Yes. Maybe just to add, if you look at the TeamViewer ONE, it's a very central proposition for SMBs. It's the best of suite offering management platform, as Mark laid out and described. Now when we sell into SMBs, what we see at the moment is with kind of TeamViewer ONE advanced, this is a few thousand euro most of the time as a ticket size. Ultimately, this will be very important to drive SMB growth potentially in a way.

But quite often, we also see ticket sizes than EUR 14,000, EUR 15,000, EUR 16,000. So by doing so, the valuable SMB customers move into enterprise in just one go. And that will also determine how much of the growth from TeamViewer ONE will actually land in SMB or in Enterprise. But obviously, we will be very explicit about how this is working because it's fundamentally obviously also a very good thing to move customers into the double-digit or lower teens euro range and have endpoint-based pricing, which is much stickier, much stickier and has more growth potential. So that's what in play here, and that will impact the SMB outcome as well.

That's very helpful. Can I just squeeze in a follow-up just around the Enterprise business. You mentioned that the net retention rate, you hope that gets back above 100% over the midterm. I just wondered what's holding that back from happening sort of towards the latter part of 2026, given the new TeamViewer ONE solutions, the 1E integration, the upsell capabilities? What sort of time frame would you consider that to be?

Yes. Clearly, cautiousness. So this is -- this was our learning of 2025, to be a little bit more caution. And then, of course, the tougher situation in Q1 or the muted or softer Q1 index, we need to work against that.

The next question comes from the line of Deepshikha Agarwal from Goldman Sachs.

This one is more on SMB as in terms of just trying to understand like we have -- you have put out the strategy around like, again, normalizing the price increases, et cetera. So how should we be thinking about how SMB is going to track over the course of FY '26? And more -- like how will that be contributing to that growth improving to mid- to high single digits? So that will be the first one.

And second one is more on the cash conversion. Now for this year, it's indicated to be roughly similar to what we saw in FY '25. Once the growth sort of starts picking up better and the margin sort of again, normalizes and it stays at a certain level, how should we be thinking about a more normalized level of cash conversion?

Yes. Let me take the last one first. Cash flow, indeed, stable in relative and absolute terms in '26 over '25. And you should de facto think in the same vicinity also in the outer years, maybe slightly growing the cash conversion from the 60% ranges into 63% or so. But let's talk about that when we get there, once we get there.

On the SMB question, I'm not sure whether I just explained that, but let me do that again and then you come with a follow-up question. So Q1, Q2, SMB should be rather more muted, so i.e., negative based on all of the comp and what we explained from -- also from the churn effects. And from that moment onwards, SMB should clearly accelerate and go really back into sequential growth in Q3 and Q4, which then would mean that we are back into kind of stable [ month ] around minus 1% for the full year of '26. So that's the name of the game.

With all what is kicking in, with all what we have had innovation features, platform, autonomous endpoint, topics at play, also what Oliver mentioned, from '27 onwards, SMB should be rather in the vicinity of 0, which would be then a slight growth, maybe even 1%. But it's also -- it will be determined also by the higher lower 10,000 range, whether this will be then an accelerated growth into the Enterprise space or whether we will see this in SMB. It's a little bit too early to quote victory yet.

[Operator Instructions] We now have a question from the line of Gustav Froberg from Berenberg.

Just 2, please. First, around the SMB segment as well, just talking a little bit about churn. I was hoping you could give us a little bit more color as to kind of the continued uptick there, what you think is driving it and how you view competition on the SMB side and maybe also some of the action points that you are implementing to stem that churn?

And then second is just on the pipeline for 1E. I'm just wondering if you could talk us through the pipeline there as we head into next year, churn aside and maybe what needs to happen to get customers across the line and signing those deals earlier in the year as opposed to later in the year?

Yes. Let me start. So SMB segment churn, as you see, I mean value churn is broadly stable. I mean we've always communicated logo churn, and we're losing customers at the lower end, price-sensitive market in our what we call remote access product, the basic license. If there's not a lot of usage on the product and the user is clearly not a professional user that uses the full reach of our product, it's hard to keep those customers. We are not reducing prices there because we believe they have the premium product, and it's all about usage and adoption.

But if the customer is a very occasional user, then it's tough. So that's where we see the logo churn. But we do see a good upsell motion. We have lower churn in the higher segments, and we're improving the product significantly in these higher segments, in these professional segments. And therefore, we do see reasonably and better churn development.

Now what we have been suffering from is clearly in this segment, high usage, loyal users, that has been the segment where we had these like-for-like price increases. They didn't land well with customers, and this is washing itself out. So that will be a positive churn impact, plus positive churn impact through new products, cross-sell, stickier products and also the ability to expand our footprint across more managed devices. So whenever we go from seat-based to device-based or endpoint based, there is more upsell potential as you had historically also seen in the Tensor product range. So these are the forces at work there, and that's why we see an improvement in churn coming through driven by, I would say, the bulk of the loyal heavy use customers that get new propositions.

On pipeline 1E, Mark, maybe?

Yes, absolutely. Yes. I mean generally, pretty strong pipeline going into 2026. We focused heavily last year on enabling all of the sales organization. And it takes some time to enable sellers to become competent on positioning and selling tech, both to new logos as well as going back to existing customers. But we have a good pipeline going into this year.

In terms of acceleration, how do we land those deals earlier, a couple of things to mention there. First off, just discipline around sales process, sales methodology. We use a tried and tested sales methodology called MEDDIC. We put this into a very prescriptive sales playbook, which I mentioned in the script there, which was -- which is really designed to enable all sellers to use a very consistent sales methodology, sales process, clear stages, clear gates that we move through and really educating sellers on how to drive value at every stage of the sales process. And so that will help us drive deals quicker. It will help us drive deals to closure quicker.

The other thing to mention is we've talked a lot about TeamViewer ONE and quite rightly so because it's absolutely strategically critical for us this year. And we see really great early success with this product set. And that's a product that spans both SMB and Enterprise, very specific sort of a go-to-market approach for both those segments. One of the things that's absolutely critical is if you take the Enterprise space, where traditionally, we go up against head-to-head with traditional DEX players, we are, of course, taking a very differentiated approach now to DEX because we are combining it with TeamViewer Remote.

And as Oliver outlined, with the ability to take these Session Insights and turn them into autonomous capabilities at the edge is totally unique. And it's not something anyone else is able to bring to market. And so far, we've seen tremendous traction from going out and talking to customers about it, so much so that it has accelerated already sales cycles and helps us win really. I mean we mentioned some significant wins in Q4. And I think we'll continue to see that trend because it's really setting us apart from the traditional DEX competition and given us a lot of differentiation.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Oliver Steil for any closing remarks.

Yes. Thank you, operator. Yes, before we close, maybe a few general comments, important to note. In 2026, I think as you've heard, we have a very clear plan. Yes, last year, we had PMI glitches for sure. Now the organization is very energized. I think everybody internally gets it that we have a very highly innovative product platform, which is also resonating very well with our customers, but also industry analysts.

I think we have a very good news flow around what we've put together now, and that's obviously very encouraging. We believe that we are exceptionally well positioned to shape this emerging, call it, super cycle of autonomous IT management. On the back of the capabilities we have, unique capabilities, proprietary data sources and really the massive customer footprint and endpoint footprint and remote session footprint. So we are excited.

Clearly, 2026 will be a year of a very focused execution to capture this value, which is ahead of us. But we feel good about it because we do see, as Mark just said, also very encouraging traction already across the business and across the segments. So we look forward to continue speaking to you to update you on the progress. And as always, thank you very much for joining us today. Thank you for your support and partnership.

Thank you, operator. Good morning, ladies and gentlemen, and welcome to TeamViewer's Q3 '25 Earnings Call. I am Bisera Grubesic, Head of Investor Relations here at TeamViewer. And today, I am joined by our CEO, Oliver Steil; CFO, Michael Wilkens; and CRO, Mark Banfield. We rescheduled this call to today from the originally planned date of 4 November in the financial calendar following the publication of our ad hoc statement yesterday evening. We wanted to provide you with a comprehensive overview of our Q3 performance and the updated full year guidance today. Today, Oliver and Mark will run you through the quarterly business update, and Michael will present the financials. The presentation will be concluded by a Q&A session. Same as in previous quarters, we will present non-IFRS pro forma top line and adjusted EBITDA performance. And also, please note, you can find the important notice and the APM disclosure on Slides 2 and 3. With this, I hand it over to Oliver to kick off our presentation.

Thank you, Bisera. Good morning, everyone. Also welcome from my side. Thank you for joining our call today, which we had to organize in short notice, as Bisera just mentioned. Apologies for that short notice. But based on our Q3 performance and following a comprehensive review of the remaining deal pipeline for the fourth quarter and 2025, we decided to update the full year 2025 pro forma guidance yesterday evening and then obviously worked hard to be able to provide you today with the complete picture of where we are. But let me begin with an overview of the last quarter.

Closed the quarter with 4% revenue growth as well as 4% ARR growth year-over-year in constant currency. Pro forma ARR reached EUR 757 million now at the end of the quarter. Our Enterprise business remains the key growth driver with TeamViewer stand-alone enterprise ARR up 18% year-over-year in constant currency. Our profitability continued to be high in Q3 with pro forma adjusted EBITDA margin at 46% and adjusted EPS up 15% year-over-year. This demonstrates the resilience of our operating model and our ability to deliver strong margins through all macroeconomic cycles.

Additionally, we improved our pro forma net leverage ratio to 2.8x, in line with our deleveraging target. We also made further progress with product innovations and integration, particularly in the emerging category of autonomous endpoint management or AEM, which is the main building block for the future digital workplace offering. We also progressed with DEX Essentials, which is our SMB DEX offering as well as with TeamViewer One, which is the digital workplace platform.

Moreover, we are well on track regarding our Agentic AI road map. I will share a few more details on this topic later in the presentation. But obviously, also need to address one topic where we clearly performed below our expectations, the 1E stand-alone business. 1E's ARR decreased by 2% year-over-year in constant currency, and Mark will provide more details on this later. But I can already say that we have immediately taken first actions. We will continue to implement further measures, and we are confident that these actions will strengthen this part of the business going forward.

Ultimately, the slow pipeline conversions of 1E stand-alone business negatively impacts our top line guidance for this fiscal year. Michael will explain the guidance update in the financial part of the presentation in detail then. And as usual, let's now take a look at the regions and customer categories and how they developed in the quarter. So revenue grew in constant currency across all regions in Q3, demonstrating the resilience and adaptability of our business. EMEA was once again our strongest region, delivering EUR 101.5 million in revenue, which is up 6% year-over-year in constant currency.

This very solid performance reflects the continuous robust enterprise momentum, and it underlines the relevance of our offering in this market. EMEA remains a reliable growth engine for TeamViewer, supported by strong demand for our high-value solutions. In the Americas, revenue came in at EUR 72.1 million, which is up 2% in constant currency despite a generally subdued market environment in the U.S. This impacted deal volumes and slowed decision-making, particularly regarding the 1E business and in the public sector, where the recent government shutdown has been overshadowing customer conversations for quite some time now after DOGE in the second quarter. This was the next topic.

APAC delivered EUR 18.3 million in revenue, which is up 3% in constant currency, also driven by solid enterprise performance. We also secured promising DEX pilot wins in markets like South Korea, which is really reinforcing our strategic directions in the region because it's clearly a new topic in the regions where we can position ourselves very nicely. If you look at our customer categories, Enterprise continued to demonstrate strength. Revenue grew by 8% year-over-year in constant currency to now EUR 57.9 million and enterprise ARR increased by 12%, reaching EUR 230.5 million in constant currency. And as I already said, this performance was driven more by TeamViewer stand-alone enterprise, which grew ARR by 18% year-over-year in constant currency.

This growth was then partially offset by the already mentioned disappointing performance from the 1E business. If we turn to SMB, revenue grew by 3% in constant currency, reaching EUR 134.1 million, while ARR remained broadly flat at EUR 526.3 million. This reflects the course correction regarding our free user ecosystem and our SMB subscribers. To reduce churn and encourage product usage, for example, also AI, we started to abandon all short-term monetization measures like free-to-paid and price up campaigns in the third quarter and we will continue with this approach in Q4 and beyond.

As a consequence, short-term billings are negatively impacted and ARR growth is stabilizing around 0% constant currency. And of course, after significant upsells from the highest value segments into enterprise, as always. I mean, we take the highest value customers and move them up into the center product range. And what you see on SMB is the net effect after these migrations. Let's now look at the ARR value ranges in enterprise and SMB, where you can see some of the underlying dynamics.

So all value ranges delivered good growth in enterprise, underlying the healthy demand for our solutions across a wide range of customer profiles. The EUR 100,000 to EUR 200,000 range showed strongest momentum with 30% growth and even the largest value range of above EUR 200,000 grew by 4% year-over-year despite the weak performance from 1E because 1E with its generally much bigger ticket sizes is clearly affecting that value segment of the stack and therefore, with the most negative impact in this segment.

If we look at SMB, the new customer inflow was more muted. As I said, some strategic decisions we did on free-to-paid monetization, for example. And hence, the ARR declined slightly in the lower value ranges. However, highest SMB value range of EUR 1,500 to below EUR 10,000 still grew by 5% year-over-year, reflecting the successful upselling into these higher product packages. So from the middle bucket into the higher bucket and then also of the higher bucket into enterprise, as you know.

This is further supported by a continued net upsell from SMB to enterprise, which was EUR 15.6 million this time, which I think demonstrates the effectiveness of this strategy of moving customers up the chain. We continue -- let me quickly explain where we stand in the post-merger integration process with 1E. Obviously, a lot is progressing as planned and as expected. I already mentioned our product launches. We had DEX Essentials and TeamViewer One as our new digital workplace platform to the market -- presented to the market.

Mark will talk in a bit about our go-to-market approach around this, where we also clearly needed to adjust and harmonize our approach as we had lost some momentum in the transition in the original sales motion of 1E, which is a very strong and dedicated enterprise motion, which we want to roll over across the company. We are making good progress from our perspective with the processes and infrastructure harmonization. For example, all former 1E colleagues are fully integrated into our organization and application landscape, and we're also progressing well with the role of Salesforce as our new joint CRM system. 1E was on Salesforce before, and we're going to roll this out across the whole company, which will also bring even more structure and rigor and processes in the enterprise motion.

Unfortunately, we had a few former 1E people that left the company. This is natural, obviously, in an M&A process, but it was slightly more than expected, and that slowed down the progress, especially on the sales side a little bit. And with this, I'd like to hand over to Mark to explain what happened to the 1E business and how we are going to move this forward or turn this around. Mark?

Thank you, Oliver. Good morning, everyone. As Oliver already said, the standalone business for 1E was not good in the third quarter. We -- it was significantly below expectations compared to the pre-acquisition growth trajectory which I was proud of as 1E's CEO last year. Unfortunately, we lost a few key customers in Q3, and we were not successfully converting the pipeline and bringing in new DEX enterprise deals.

We have to admit that the strong focus on the post-merger integration and the launch of the new joint product combined with the departure of some 1E employees impacted 1E's original sales motion, product prioritization and customer relationships.

Moreover, the muted macroeconomic environment in Europe and the ongoing macro challenges in the U.S. also impacted 1E sales by slower customer decision-making and reduced deal volumes. The U.S. was traditionally 1E's strongest market, we're focused on public sector, as you know. It's obvious that discussions about the current government shutdown have been impacting buying behavior in the U.S. way before the shutdown started.

The good thing is we clearly identified these weaknesses and took immediate action. For example, I'm excited to have taken over leadership for all global sales teams and channels. And I'm currently in the process of harmonizing and unifying our go-to-market approach across all regions and product divisions to be able to scale. We have now enabled more than 200 sellers to sell the entire product portfolio, which is a massive potential for us.

At the same time, Oliver has taken over responsibility for all marketing functions to support sales and go to market globally. Additionally, our new Chief Customer Officer, Debbie Lillitos, is building us a -- building up a global customer success and support organization with the clear goal to improve customer experience satisfaction and loyalty.

In the next weeks and months, we will jointly focus on retaining the existing 1E customers as well as converting pipeline for Q4 and, of course, building new pipeline for next year and beyond. Of course, we will continue with our successful activity to cross-sell DEX essentials into the CMB or SMB customer base as well as develop TeamViewer ONE as the one-stop shop digital workplace platform.

It's obviously very disappointing that the 1E business delivered in the first quarter, but this doesn't diminish the strategic value of combining TeamViewer and 1E technology to build something new and market-leading to set us up for long-term sustainable growth.

I'm proud of what we've accomplished since the acquisition. We've made significant progress integrating DEX technology into the TeamViewer portfolio and platform. The introduction of DEX capabilities to our existing customer base have delivered promising results. Within 9 months, TeamViewer has doubled the number of customers using DEX solutions. Today, customers are using DEX essentials of more than 100,000 endpoints.

In short, we positioned the company to deliver meaningful customer benefits and succeed long term in the ever-changing market environment. In my new role as Chief Revenue Officer, I'm committed to driving pipeline and conversion for Q4 and beyond. Back to you, Oliver.

Thank you, Mark. And I'd like to say that we are really very happy to have Mark and his experience in our Management Board and really to see -- your commitment and his commitment for the joint company. And I think it's moving very well ahead on the harmonization on the go-to-market side. Very important topic besides DEX and DEX Essentials. Of course, we were also working on our AI capabilities, clearly, very important proposition. We've successfully bundled them into what we call the TeamViewer Intelligence suite and embedded AI at the core of our digital workplace offering. We have around 9,000 customers that have already opted into these new features as of now. So it's an opt-in, customers allowing us to inspect the data within sessions.

So 9,000 opt-ins, which is a very meaningful number. And in September, last month of Q3, we had around 80,000 AI-generated session summaries that have been created by the TeamViewer Intelligence users. Basically, they use them to optimize their IT service desk task with automated documentation. Early days, but this is very promising, significant number. And I think it's a promising sign for our future success in Agentic operations, and it's growing from here.

Based on the large customer base and user base, the data that we can derive from our solutions and integrations and millions of conducted remote support sessions, we have access to a unique and unmatched data pool and are really very well positioned to leverage this and create an intelligence layer that generates business value for our customers like faster problem resolution, less downtime, higher productivity of the service team.

So clearly, a stepping stone towards automation and autonomous endpoint management in the Agentic world, and that's why we're pushing it so decisively. With session insights, analytics and Copilot, which we already introduced into the market, we are driving this forward, and we're working on launching more Agentic offerings around this platform soon. To round up my presentation, I would like to show you a visualization of how we see our product offering positioned in the market, so-called [ house ].

I would like to underline again the strategic value of the 1E acquisition as it enabled us to successfully position us at the forefront of the emerging so-called digital workplace and autonomous endpoint management categories at the site of our leading frontline offering for the connected workforce.

Through the unique combination of TeamViewer and 1E technology within the TeamViewer One platform, we were able to create an industry-leading one-stop shop for IT operations and autonomous endpoint management, which covers the full spectrum from proactive auto remediation capabilities, the old tax positioning to the remote expert support, which is the TeamViewer side. And I think it's fair to say that customers across the globe do understand and embrace the value of DEX or AEM or automation and really buy into the strategic road map towards more automation and ultimately autonomous endpoint management. All of this is powered by AI, as I said before, as this is horizontally embedded across the entire portfolio and at the core of our offering. And with this, I hand it over to Michael for the financial update.

Thank you, Oliver, and good morning, everyone. Let's now turn to our key financials for the third quarter of 2025. We go to the next slide, please. In Q3, TeamViewer delivered revenue of around EUR 192 million, up 4% year-over-year in constant currency, and all regions delivered again, pro forma revenue growth in constant currency. Our profitability remains strong. Pro forma adjusted EBITDA increased to nearly EUR 88 million, resulting in a margin of 46%. Pro forma adjusted EPS was up 15% year-over-year compared to TeamViewer stand-alone in the prior year, reaching EUR 0.34 for the quarter. And pro forma net leverage ratio further improved to 2.8x, down from 2.9x in Q2 2025 and fully in line with our deleveraging targets.

Now let's take a closer look at the details of our Q3 results. Next slide, please. Pro forma revenue in Q3 grew by 4% year-over-year in constant currency to around EUR 192 million. TeamViewer stand-alone delivered revenue of EUR 177 million in constant currency and grew 6% year-over-year. This was supported by strong enterprise momentum in EMEA and in APAC. 1E stand-alone pro forma revenue was EUR 50 million in pro forma revenue, reflecting an 8% decrease year-over-year in constant currency. This decline was primarily driven by transformation-related headwinds and persistent macroeconomic challenges in the U.S. The ARR grew by 4% year-over-year in constant currency and reached EUR 757 million.

As Oliver explained, enterprise ARR grew by a double-digit percentage year-over-year, driven by the continued strength of the TeamViewer Enterprise business. This growth was partially offset by weak performance from 1E. Sequentially, the ARR was broadly flat, primarily due to the challenging U.S. market negative FX impact. Importantly, our profitability remained strong with an adjusted EBITDA margin of 46%. Let's continue with our Enterprise business on Slide 16, please.

Enterprise continued its high-single-digit growth path in revenue and double-digit ARR, highlighting the underlying strength of TeamViewer's core business. Enterprise ARR grew by 12% year-over-year in constant currency, reaching over EUR 230 million by the end of the quarter. This performance was primarily driven by the EMEA and APAC regions, both of which demonstrated robust enterprise momentum with growth exceeding 20% year-over-year. This was driven by the continued strong performance of TeamViewer Enterprise on a stand-alone basis.

As mentioned earlier, 1E stand-alone performance was impacted by transformation-related headwinds and ongoing macroeconomic pressures, leading to notably weaker results in the U.S. market. On the right side of the slide, you can see that the number of enterprise customers continued to grow both sequentially and year-over-year, reaching 5,216 at the end of the third quarter. Pro forma enterprise ASP remained stable at EUR 44,000 per customer. Enterprise net retention rate was 97% in Q3 on a constant currency basis. Adjusted for upsell from SMB customers during the period, the enterprise NRR reached 102% in constant currency. However, it's worth noting that the weak contribution from 1E slightly dampened the overall sequential trend.

Let's now move on to our SMB business on Slide 17. SMB ARR was EUR 526 million, flat year-over-year in constant currency. This reflects TeamViewer's strategic decision to pause all short-term monetization initiatives. This approach is aimed at revitalizing product usage across the free user ecosystem and the broader SMB customer base. However, in the short term, this impacts ARR and the other related KPIs on this slide. We deliberately halted all short-term monetization measures to reduce churn going forward and to encourage deeper engagement while strengthening the long-term value of our SMB offering.

Pro forma SMB revenue reached EUR 134 million for the quarter, up 3% year-over-year in constant currency. The number of SMB customers was 640,000 at the end of the quarter. Our SMB ASP was up 3% year-over-year and reached EUR 822. Let us now take a look at our cost base on the next slide. Pro forma adjusted EBITDA margin was strong at 46% in the quarter and benefited from cost optimization. Cost of goods sold remained broadly stable year-over-year. Sales expenses increased by 5% year-over-year, primarily driven by investment in enterprise technology stack to drive transformation into a data-driven sales organization.

Marketing costs increased by 3% year-over-year, aligned with planned phasing from the previous quarter and also reflects investments in branding and in the launch of TeamViewer ONE and AI-related products. R&D costs were flat year-over-year and represented 11% of revenue. G&A expenses were 40% higher year-over-year, mainly due to phasing and regulatory-related costs. Other expenses amounted to EUR 1.7 million. The EUR 700,000 increase in other expenses is mainly driven by bad debt increase, which is mostly phasing related.

Let us move on to net income and EPS development on Page 19. Pro forma adjusted earnings per share was EUR 0.34 in Q3, which is an increase of 15% year-over-year compared to the prior year. The main driver behind the increase was our robust profitability and our continued focus on optimizing operating expenses supported overall performance. Total interest expenses for the quarter amounted to EUR 10.4 million, which is an increase of EUR 6.1 million year-over-year. This was driven by the financing of the 1E transaction.

FX result reflects negative translation effects related to an intercompany loan as required under IFRS. Compared to the prior year, income taxes were lower in Q3 2025, reflecting a catch-up effect from the German tax rate decrease. With this, let's move on to cash flows on Slide 20.

Adjusted for nonrecurring items related to the 1E acquisition, the levered free cash flow amounted to EUR 21 million in Q3. This translated into a cash conversion of 24% for the quarter and 49% year-to-date. Other factors influencing cash flow in Q3 included higher working capital, driven by seasonal patterns at 1E, higher operating costs and increased interest payments related to the 1E acquisition. This was partially offset by lower tax payments, which mainly result from changes in our tax scheme and phasing effects. For the full year, we continue to anticipate a cash conversion rate of around 60%, which includes FX headwinds in the cash flow.

I will now give you a short update to our financing on Slide 21. We continue to deleverage in line with our target following the 1E acquisition. Our pro forma leverage ratio improved further to 2.8x, down from 2.9x in Q2. Cash and cash equivalents amounted to around EUR 28 million at the end of the quarter. Net financial liabilities totaled EUR 970 million at the quarter end. We successfully refinanced EUR 30 million of the EUR 175 million bridge loan through a private placement. This was structured as a bilateral agreement with a bank already engaged in one of our promissory notes. Private placements offer us a flexible alternative to traditional bank loans and help diversify our funding sources.

Despite ongoing macro challenges, we remain firmly committed to disciplined capital allocation. Combined with our strong cash profile and solid cash conversion, this positions us well to achieve our leverage target of around 2.6x by year-end of 2025 and below 2x by the end of 2026. Let us continue with our financial guidance on the next slide. Based on the Q3 results and following a comprehensive analysis of the Q4 2025 pipeline, we have decided to update our full year 2025 pro forma guidance.

Slower-than-expected conversion of the pipeline into ARR, which subsequently delays the conversion of ARR into revenue contributed to the revision of the full year 2025 pro forma ARR and revenue guidance. At the same time, our adjusted EBITDA margin guidance has been raised, driven by rigorous cost management. The table on this slide outlines the changes with previous guidance on the left and updated guidance on the right. Under guided FX rates of 4 main categories, including the U.S. -- euro-dollar exchange rate of EUR 1.05, we now expect a total ARR to range between EUR 780 million and EUR 800 million.

Despite this ARR shortfall, our full year revenue guidance is expected to remain within the original full year 2025 guidance between EUR 778 million and EUR 797 million, albeit at the low end. Our adjusted EBITDA margin guidance has been raised to approximately 44%, driven by the rigorous cost management. Let me explain the currency impact for the ARR and revenue guidance changes on the next slide. Let's start with the update to our ARR guidance on the left. As we saw on the previous slide that the ARR guidance for 2025 has been revised downward by EUR 35 million to EUR 40 million due to operational impact, which is mainly 1E related and partially due to our deliberate decision to rebuild the SMB ecosystem.

Oliver and Mark discussed in detail the 1E performance and the actions we have taken to return the 1E business to growth. In addition, updated FX assumptions for our 4 main currencies result in around EUR 20 million FX headwind in the ARR. For revenue, updated FX assumptions led to around EUR 12 million FX headwinds, as you can see on the right-hand side. Let me now briefly discuss our preliminary view on the full year revenue impact in 2026. Management remains highly committed to accelerating ARR growth in 2026 and beyond.

The reduced full year 2025 ARR expectations have, however, a negative impact on the 2026 revenue. This slide presents our preliminary view for the full year 2026 revenue. Under the guided FX rates, we now expect a revenue growth of approximately 2% to 6% year-over-year, corresponding to EUR 790 million to EUR 825 million. In addition, our updated FX assumptions for our 4 main currencies based on full year 2025 expectations result in around EUR 25 million FX headwind, as shown on the right. Please note, we will provide official full year 2026 guidance and the further outlook for 2027 to 2029, including currency updates with the publication of our Q4 and full year 2025 results. With this, I would like to hand back to the operator to open the Q&A.

[Operator Instructions] And we have the first question coming from the line of George Webb from Morgan Stanley.

I've got a few questions, please, and maybe I'll keep them to the core business. I want to ask you -- not sure, I was going to 1E first. If we talk about the reasons why 1E saw weakness in Q3. I guess you gave a range of potential reasons, macro impacting deal closures, some sales employees leaving, several churned customers. On the customer churn side, what information have you collected around why perhaps 1E lost those customers, that'd be interesting to know.

Secondly, on the SMB side of the business, you flagged that kind of change in strategy around free-to-pay monetization to aim to reduce the churn. That churn ticked up slightly in Q3. Why do you felt the need to make that pivot there at this stage? Is anything in that SMB market changing?

And maybe one for you, Michael, on free cash flow generation for the year. I think the prior messaging was around 70% conversion before 1E's one-offs. To me, that starts a little bit tougher after that Q3 free cash flow number. Was that -- was there anything in there we should be aware of? And I guess, when you think about the full year free cash flow, could you provide any updated view that would be helpful.

Yes. Maybe I can actually start with the last one, George. Fully right. Q3 is, by the way, was more or less expected. That is a normal seasonal effect that is mainly due to the seasonality of the 1E business. So that's more or less not a surprise. However, you are spot on. Originally, beginning of the year, we expect a rough cut cash conversion of around 70%. But with this situation now, we think we will still deliver a very strong but still muted 60% cash conversion, which is the result when you put a relation out of a cash number ARR, which is the basis for the change and the still very strong EBITDA, which you see in the margin. That's the reason.

Mark, do you want to cover the 1E reason for churn and what's going on there?

Yes, absolutely. Yes. Look, if you look at it, there's basically sort of 3 or 4 sort of fairly large churn items and the rest are fairly small. Not to sort of name them and go through one by one by detail, but the sort of trends are -- one was really around a partnership type of arrangement where various reasons with the acquisition, it's just -- it was unlikely we would continue with that. So that's one explanation. As you know, we're -- our federal government business is pretty significant, and there was some compression there with the sort of DOGE effects earlier this year had some compression impact on that. And then there's like, I think, one example where we've had an issue in some delivery of the product and some challenges integrating. So there's good reasons for it. There's not a sort of systemic problem there. It's more a couple of sort of like high-value items that impacted us.

Yes. And then George, on -- if we come to SMB strategy change, market change, I mean, picture, I would see is -- what we're seeing is, I mean, we have been seeing slight increase on churn quarter-by-quarter, so to say. And I think we discussed multiple times that we're going against it and try to have better onboarding for customers, which we have customer health checks implemented to understand the sentiment of our customers when they come, when they join, when they activate throughout the life cycle, but then also when it gets closer to the renewal date. So this is in place. And one of the effects we were seeing by looking at this health analysis and the feedback we were getting more consistently now is that we have a slight deviation compared to the past with our price value positioning.

So customers have been quite vocal about the repeated like-for-like price increases upon renewal and frankly, didn't like it. It's not a market change in that sense. Certainly, as we know, entry level, more price competitive, slight price pressure at the level below EUR 500 compared to the upper part of the segment. So that has always been the same, so to say. So I wouldn't say the market has changed, but we have changed over the last years, quarters in how we treat our customers. And I think we came to the conclusion by looking at the health checks that we need to correct this.

So we need to put customer friendliness and happiness front and center again. And that does mean that we need to suspend some of these price increases. Now we had now 3 years of price increase rounds. So I think it's probably more natural than not to suspend this and focus on customer health more. So that's one element where we needed to correct. The other element is, as you know, historically, we have a vibrant free user ecosystem. We have cut down on the free -- we had cut down -- cut off free users some years ago by starting in some markets where we felt monetization of these users in the long run is not helpful. That will not work.

That was clearly something which made sense to have kind of proper usage on the platform and avoid misuse and scamming. But I think we have gone -- or I think we have gone too far in strict monetization too early when users come to the platform. That does impact virality, and it does impact the development of the free user ecosystem. And there's always a part of the free user ecosystem serving as a funnel for usage for paid customers, for paid subscribers and for the proliferation of the product into companies and thereby bringing us new business leads. So that's an important dynamic, which obviously we know of that's nothing new. But from our analysis, we have been too tight on monetization and thereby, we have dampened the virality effect, which is an important thing.

So that's also something which we're correcting. And the third element is we've always positioned additional products to the SMB customer base, so i.e., cross-sell with endpoint protection, backup, remote monitoring and the likes. This needs much stronger focus, and we're implementing much more of this and have implemented over the last quarter and 2 quarters almost because now we have many more cross-sell products where we have, as Mark discussed, the DEX Essentials product for SMB. We have the TeamViewer ONE proposition early, but obviously something we want to position. We have the AI product. So there's much more to cross-sell and that requires additional focus.

So our SMB strategy going forward and the go-to-market initiatives there is really strengthen free user ecosystem again, avoid like-for-like price increases, rather sell richer products and position this new cross-sell product. And that is a shift in focus, which is needed and which we have started to implement. Obviously, it will take some time, and there is a short-term negative effect on billings, which Michael pointed out. But even with this, we were able to keep the SMB ARR flat.

The next question comes from the line from Victor Cheng from Bank of America.

A couple of questions from my side. I guess, first on margins. Obviously, you're not guiding on '26 now. But I think previously, you've talked about like aspirations for '27 and '28 margins. Should we -- given the margin progression already this year, should we expect that to continue into '26? Or do you need more reinvestments on a lot of the kind of products that you're building out?

And then second question is on the maybe focusing on the new products like DEX Essentials, TeamViewer intelligence. And the customers, you mentioned, I believe a lot of them will likely be on a free trial of 30 days. So how has they responded after the trial? And how have you -- have you baked in any of these upside on the guidance for Q4?

And then maybe last question, maybe a bigger picture, stepping back and thinking about the impact of AI as well. Are you seeing maybe less demand and use case for remote support because maybe AI is helping a lot of users self-helping themselves? And a lot of these smaller businesses might not necessarily be taking on the DEX Essentials and TeamViewer intelligence yet? And how might you be addressing that?

Yes. Thanks, Victor. Let me take your first question on the margin. Maybe the most important message upfront, the future outlook to 2028, slow margin improvement to 44% and 45% is in full swing and full impact. That's very important for us. And there's no change, and we clearly see this. With the updated or raise of the margin for 2025 to 44%, we should not continue from here or believe that we are already there because 2026 is number one, cost of the slower revenue growth, which we explained, there's obviously a little bit of margin pressure, but even more important, as you rightfully say, we may also need a little bit of funds, which are very important to invest into the expected and clear growth pattern from 2027 onwards. So we should not continue for 2026, but for the outer years, fully in swing 44%, 45%.

Then maybe to the next question. So the second question about DEX Essentials, TeamViewer Intelligence, TeamViewer ONE, all these new products what we're seeing. It's not only free trials. As you point out, yes, we have -- if you go to the website, there is business trials. And there is good conversion from the trials. So this is obviously self- set up or self-serving of customers. And we do see good conversion there, varying by the product, but that works.

What is more important though on DEX Essentials, TeamViewer ONE is using our inside salesforce. I mean, very strong inside sales footprint globally, as you know. And DEX Essentials and also TeamViewer ONE needs a little bit of handholding because it's a shift of customers, many customers, to move from unmanaged devices, so ad hoc connections to devices to a managed device fleet, which makes it much stickier for us, but also for them. If you think about the service provider serving its customers, -- if you -- if that service provider can convince their customers, his customers to move devices under constant management, that stabilized revenue streams makes it more sticky and also more interesting for our customers or the service provider.

And that's why we handhold there with our inside sales to help them manage devices -- move devices to the management base. And then we changed the pricing structure, which is an endpoint-based pricing and the likes and the like. So that's early days. We only launched these products recently. But as Mark pointed out, we have been able to win a good number of new logos already on DEX Essentials. It's smaller ticket, clearly. It's made for SMB, but we see the inflow coming. TeamViewer ONE very early. So this is in restricted access trial and testing also trying the pricing. And TeamViewer Intelligence, Session Insights, as I mentioned, 80,000 sessions. Every customer has a -- every licensed customer has a free session volume. And then when that customer has used up the volume, then there's a pricing mechanism and we see the customers -- first customers converting.

So it's in the range towards between EUR 0.5 million and EUR 1 million on any of these products. So starting to be visible. But obviously, in the large SMB ARR base, it will take a while until this contributes meaningful growth. Therefore, we haven't baked any upside from these products into this full year guidance. And we have a very good visibility on how this SMB base is moving currently. We've been cautious in the outlook for this year and we really see this as an early phase and land grab driving market penetration with these new products.

And then that links to the -- into the third question, what is AI doing to us? Clearly, everybody speaks about AI. We have a good first proposition with Session Insights, which we're using to improve the product proposition. As I said, every license has a free volume. Customers need to opt in and then they can use the Session Insights in every license. So that's happening. Are we seeing compression, less remote support needs from AI because of self-service users? Not really yet. I think there's still a significant difference between what you can fix yourself when you are an educated IT user, which I know you are, and many of us are.

But the overall situation is still that service providers are growing and having more devices to manage and more complex application landscape. So there will be a shift coming more and more over time. There will be more automation coming and there will ultimately also be autonomous endpoint management coming. That's why we believe the acquisition of 1E is so strategic to us, and that's why it's so strategic to put these propositions together into a platform proposition for digital workplace management and TeamViewer ONE. So more relevant than ever. I think, if anything, also coming back from Dreamforce conference last week, there's so much talk and chatter about AI that what it does maybe is a little -- introducing a little bit of hesitation also on the enterprise side because people really assess and evaluate the different solutions out there at this point in time.

The next question comes from the line of Alice Jennings from Barclays.

I've just got a couple. So firstly, on the weakness in 1E's ARR growth, would you be able to break that down into churn versus new customers and maybe quantify those elements for us? And then the second question is just on the churn for 1E. Do you expect any additional headwinds from churn in the fourth quarter? And when can we expect 1E to return to ARR growth?

Mark, do you want to take those?

Sure. Yes. Not to go into immense detail on the numbers, but it's sort of twofold, Alice. One on the churn side, yes, as I mentioned, there were some churn events that impacted us, but also it's coupled with like weaker bookings than we would have expected. We have a very good pipeline. Some of that pipeline that we would have expected to close through the year has been -- it hasn't gone away, but it's been slowed down. And there's a couple of sort of things that have impacted us, as I've sort of mentioned, we did lose quite some important members of the 1E team. It's been disruptive as we've integrated the companies very quickly. So that's caused some disruption to the sort of normal cadence and flow of how we run the business.

The benefit, of course, is that this huge focus on integrating 1E into TeamViewer and then enabling all of the TeamViewer go-to-market to be accomplished to be able to go out and sell decks and sell this automation story was key. That was the major strategic reason for the acquisition, as Oliver mentioned. And we have worked really hard on sort of really enabling the entire organization.

So we definitely believe we'll see a return to growth in Q4 on the DEX side as we start to see some of that pipeline that has been elongated start to close. And as we start to see some of the early signs of those cross-sell opportunities subsequent as well. Other churn items coming up. We obviously monitor very, very carefully every single customer, re-interaction. Nothing substantial in Q4 on the DEX side, really focused on deal execution really now in Q4 just to get back to some growth on the pure DEX side.

The next question comes from Ben Castillo-Bernaus from Exane BNP Paribas.

A couple from me really on the 1E business, please. Just trying to assess with regards to the customer churn, how much is just single customer concentration risk versus a broader trend? Is this a trend you just saw in Q3? Did that start sooner? Why did it accelerate so much in Q3? And then I guess, following on from Alice's question, but if you look at your customer base here, we're approaching the year-end, the important enterprise renewal cycle. What are you assuming for 1E's retention rates into Q4? Should we be thinking that as stabilizing from here or further downside to come? And then again, sorry to labor the point here, but on the employee departures at 1E, could you maybe give us a sense of were these important employees sales focused or product focused? And when you look at your sales force today, how much of that is kind of new bodies in there versus the existing sales force you had 12 months ago?

Yes. Maybe I start first and then Mark, please chime in. So I think 1E customer concentration. So yes, as you know, the 300 enterprise customers. So I think clearly, single customer events do make a difference. I wouldn't say from what we see, this is a broad trend across the customer base, as Mark has already pointed out. I mean there was a larger deal here, which started as a partnership deal, which we then converted into a customer relationship, but then sell strategically doesn't make much sense. Another big deal that had the downsell, which we were discussing in Q2 already. A few customers, a couple of customers not happy with the road map development because of the kind of shifted focus to integration and new product development.

So in hindsight, it's probably a little bit too much overexcitement maybe on resource allocation to the new offerings versus the old road map delivery. I think that's fair to say. And that has then also led to customers walking and then some price pressure overall or lack of upside. So not a major trend, but yes, here and there, a customer, also not an acceleration in any way in Q3. I think it's more the opposite that in a quarter like Q3, you obviously normally would see more deal inflow, which then compensates for the churn. And therefore, you would normally see the nose lifting in performance.

That didn't come on the new side, on the deal conversion because we had lots of slip deals, and that then creates this overall more negative picture than it is in Q2 and Q1. And that hence also the reason why we said, okay, what is the outlook for the year. And so therefore, that's the dynamic there. That leads to your second question, what are the assumptions on 1E retention. No major change go forward. So when we look at the remainder of the year, obviously, we assume, again, to my point, new deal conversion. There is pipeline deals, good pipeline deals and we would want to convert a few nice ones of them towards year-end, which we always said.

But there is no significant change on the churn side. As Mark pointed out, is relatively calm now towards year-end. We know the deals one by one. We're very close to the deals. And I don't think we have any visibility of any major deal not renewing at this point in time. So I think that the assumption towards year-end until year-end, I think it's pretty deal-by-deal discussion.

Organization, who did we lose? A few senior sellers, especially the senior seller leaving the Americas, there was a loss. The senior seller leading the lever in Europe is with us and is fully integrated into the sales organization now. We have enabled the TeamViewer sellers to position the product, which is starting to work. We have a very significant pipeline and POV starting, as Mark said. So they are not totally new untrained. They have been out there in the market positioning, and it's great to see the pipeline build, especially in EMEA, but also already first POV started in Asia. So that's going in the right direction. But it was a discontinuity from 20-odd trained or 15 to 20 well-trained sellers down and distributing the knowledge across the TeamViewer sales force, but that is largely done. And now it needs rigor, cadence, systems and pipeline -- additional pipeline build, which Mark is working on together with the President. I don't know, Mark, whether you want to chime in.

Yes. No, absolutely. Obviously, it's always disappointing when you lose people. And that was a shame because it does disrupt the way that we ran the business. I think we have retained really key individuals. I mean, as with all these things, I mean, we can hire new sellers, we can train the TeamViewer sellers and we have done, we can ramp people quickly and me now taking over sales and putting in the same rigor and discipline we had on the 1E side last year into the wider entire TeamViewer enterprise motion, I think, will be beneficial because we really drive that kind of deal execution across the board. But we have retained a lot of really key product people, which is really important because there's a lot of deep domain expertise and knowledge around end-user computing, automation, decks. And a lot of those people remain within the business and committed, and we've even elevated some of those people. So not all doom and gloom really. I think there's actually -- we've retained a lot of good people. But yes, obviously disappointing and it has impacted our performance this year by losing some key personnel.

And maybe one mini add-on from my end, Alice, to end also on a high, what is important to the loss on some of the sellers. What we did not lose is the CSMs, the former 1E CSMs. They are with us, and they're obviously super key and vital. And this is what is important for Mark now ramping the overall seller team of 250 into full DEX capability, sales capabilities. The CSMs play obviously a vital role. So that is obviously maybe a little bit on the high end.

The last question comes from Mohammed Moawalla from Goldman Sachs.

I had 2. The first one was just on 1E. I remember at the time of the acquisition, you sort of anticipated stand-alone growth in the sort of mid-teens and I think post synergy in excess of 20%. How feasible does this sort of target look at least in the next sort of 12 months given some of the issues that you need to work through? And then secondly, I noticed sort of R&D was flattish. Was this just a sort of quarterly blip? Or do you feel that R&D will start to kind of grow again?

I can start with the second. So it's a positive mix of seasonality and in-sourced, which was formerly outsourced and hiring in, let's call it, less cost-intensive areas like India and Portugal. This is the mix of the 3.

Yes. First question, maybe, yes, you're right in how you describe the targets. I think the targets are the right targets. Obviously, we're working through sales methodology, building pipeline, significant building pipeline converting the deals. I think if we look at the comp base, comparable base of 1E, clearly, this year, not a strong year as we have discussed multiple times and significant headwinds we had this year with the downsell in some quarters of some customers and loss of some customers. So if we take that picture and look at kind of 2025, it is a difficult picture, difficult performance. I think it's -- when you go back in history, 1E didn't have that for a long while and never for this. And then if we look at the pipeline, it doesn't need a significant deal conversion or need some deal conversion, but not miracles to get back to double-digit growth and then towards mid-teens.

So when we will be there, we don't know. That's why we're cautious also for 2026 revenue. Clearly, this is enterprise and enterprise is always back-end loaded. So the way we think about it is this year, we gave clear guidance on ARR outcome. This will translate into revenue effect. We will work hard to convert the pipeline in Q1, Q2, Q3 and then also Q4 next year. But because we don't know when exactly this will kind of really accelerate, we have been taking a very cautious approach to revenue development next year. I think it's fair to say that we really kind of put in the floor there at the bottom to make sure that we're in a great position towards next year. But 1E needs to accelerate, and that's what Mark is working on and the pipeline is developing very nicely for that. Mark, I don't know if you want to add.

Yes, absolutely. I mean, I think one thing I would say is that, obviously, through this year, as we know, we've been talking about 1E stand-alone performance hasn't been great. However, we now have more than 200 sellers enabled on selling the 1E solutions, the depth and automation. It's a very high-profile topic in enterprises. I mean, effectively, what we're taking to market with DEX is a way to take an agentic approach to how we think about IT support. And that's a very relevant topic for every enterprise today. And every enterprise is looking at how do we automate more, how do we use AI in order to improve the way that we do IT support and cut down costs, et cetera.

Look, this is a really hot topic, and now we have way more sellers out there talking about this and talking to customers. So we're seeing pipeline go up significantly. It was a short-term pain to go through that process of integrating their businesses very quickly, train everyone, disrupt the 1E way of working. But I do believe that we're now set up for success. And as we go into next year, now we can really focus on deal conversion, and I think we'll see -- start to see a better performance. But as Oliver said, we're cautiously taking a cautious approach there. But we're very, very focused now on how we run the business, the deal flow, the discipline around the sales organization, the number of POVs coming in, et cetera, et cetera. So all hands on deck really to drive that performance.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Oliver Steil for any closing remarks.

Yes. Thank you very much. Thank you once again. Thank you for the questions and your time. Also early and on short notice. Actually, honestly, thank you, Mark. It's 2:00 a.m. or was 2:00 a.m. based out of Florida. Thank you for joining. And look, we look forward to keeping you updated on our progress. All hands on deck, as Mark said, working through the quarter. I think we now have a guidance out there for Q4 and also for next year, which is kind of kitchen thinking. And from here, I think we can work towards performing against this new baseline.

And we feel we have all the instruments and pipeline in our hands to move this in the right direction. So looking forward to speaking soon again, keep you updated. And obviously, we will engage with investors quite a bit also during the course of the day and the next few days to answer all relevant questions. Again, thanks for the time. Appreciate your questions. Bye-bye.