Airthings ASA (AIRX) Earnings Call Transcript & Summary

I have the pleasure to welcome you all to the second Capital Markets update in the history of Airthings. We're going to spend 2 hours together, hopefully, to bring a lot of new insights and a lot of new information to this audience. We have quite many people here today, and there's also quite a bit of people online listening in. I'm the Chairman of the company. I've been that for 7 out of the last 8 years. My day-to-day job is that I'm the managing partner of Firda. Firda is a tech investment company who is investing in the way we say it, Norwegian tech companies. We empower Norwegian tech companies to become global leaders. We believe sort of Airthings is a global leader, but in a niche that is growing and growing. Like that, we are living up to what we are doing. We invest in companies that is making with technology that wins the world and solve problems for the world. And as I will tell you and also what Airthings is all about is solving big global problems. So we are thrilled to be a large shareholder and stakeholder in this company for the last 8 years and for the future. It's been a while since me and [indiscernible] come in the company, we came in 2015. At that time, we had $1.5 million of revenue in 2015 and we had a hyper growth period from 2015 to 2021, with a CAGR of 50%. Profitable, most of those years. We went public in 2020, still with a lot of growth coming in '21. Then facing, as you all know, facing challenges in '22 and so far in '23, where growth has stagnated like many other companies, not that should be an excuse, but we have macro conditions that is influencing. But we also acknowledge that there are things we can do internally to improve the operations and how we run this company. And that has been all about 2023 so far to define a new strategy for the company and a way forward to again, come back to growth and accelerate the path towards profitability. I invested in this company and continue to -- have continued to invest in this company for three reasons. And it's the 3 Ps. First P, purpose. Clean air to the world, energy efficiency to the buildings. Second P, potential. We just scratched the surface on the potential on the consumer side and even less so scratched the surface of the potential on the Airthings for business side. I hope today's presentation will help you see that. And the last is performance. Historic performance, recent performance. Now it's all about turning that thumb up where it belongs for the time to come. Thank you, and good luck Oyvind with the rest of the show.

So the key theme today is the path to profitability for Airthings. And we're very excited to share the evolution of Airthings and how we're propelling our journey to the next level. Earlier this year, we did a pivotal decision, as Geir mentioned, to really hone our strategy, sharpen our focus and amplify our operational efficiency. And we are already seeing enhanced profitability per unit sold and we have a much more focused go-to-market model, both in Airthings for consumer and also in Airthings for business, which are our key business units at the Airthings. And we're also enriching our user experiences with our software offering. And we're also driving more value to each customer and broadening of our customer base. So our presentation today will span about 1.5 hours after which will be eager to engage with some Q&As. And as we wrap up that, we'll invite you also to join us for some refreshments back here, and Team Airthings will be available for some Q&As and more in-depth conversations. So Airthings stands at the forefront of the indoor air quality industry as leaders in the invisible, something that Millie, our CMO, will talk more about during the marketing section of the presentation. We offer sophisticated monitors with cutting-edge software and cloud analytics serving both households and businesses to bring clarity to enable action. We have grown a lot over the last years, and if you take into account the last 12 months, we have about 43% CAGR out in U.S. dollars since 2015. And we also built up a high-margin annual recurring revenue and service-based revenue, which now end of Q3 is at $4.1 million. So Airthings, we are addressing 2 critical issues. It's about health and it's about energy. The influence of air well-being and energy is highly underestimated, how much air can impact that. And the air we breathe has much more impact than we believe. Where is the cause of cancer, the spread of viruses, it can be impact our concentration, our productivity or even our sleep, which you'll also see a lot more about -- from Airthings. Massive amounts of energy are consumed by regulating the heating, ventilation and cooling of buildings around the world. And most of these buildings are not very smarter, enormous opportunities to save energy in running buildings. So Airthings is all about creating healthier indoor environments to reduce energy consumption building and making existing buildings smarter and more sustainable with advanced analytics. So we see that we are at the forefront of some mega trends that are set to evolve over many years to come and very excited to work on that. So at Airthings, we have commercial grade products with consumer-friendly design. Airthings solution is simple, bring clarity to the invisible by providing an elegant suite of products and solutions to enable users to see and take action and control of the air to breath while also saving energy. We do this, we have our top of the line products, providing continuous monitoring of indoor spaces and supplying end users with actionable insights. And Airthings, we are an early mover in a massive market opportunity. And both our business units, Airthings for Consumer and Airthings for Business have enormous potential to grow in the future. And we had these 2 synergetic go-to-market vehicles. We can address the needs of homes, offices and schools. And Airthings is uniquely positioned to capitalize on this. Our dual go-to-market model, targeting both households and commercial spaces, allows us to harness the strength of both sectors. Households benefit from commercial grade performance and security, while businesses enjoy superior product experiences and user experiences. We have a strong brand being recognized as the industry benchmark in what we do and the leader in the market with broad validation. Our partnership with American Lung Association as well as ISO 27001 enterprise security and significant third-party validation further strengthens our position. Another thing that we see that we are serving both homes and offices. We see more and more cases where we have consumers that have our products at their home. They go to the office or schools and ask to monitor also their offices or schools with the same type of technology and vice versa. We see people that see Airthings in their offices, more and more offices around the world are using Airthings, and we see that they go home and they want to do and monitor their homes as well. So there is -- that dual approach is actually something we see is working. So we also have very significant and lasting tailwind supporting our journey. So with our solutions covering everything from Healthx smart home, sustainability, energy efficiency, and we're being supported by regulatory momentum as well. So all this puts Airthings in a solid position for long-term growth. So in our capital markets update from 2021, we presented this figure on the right side here to grow in more or less all directions and growth at almost every cost. While we saw revenue growth of more than 60% in 2021, 2022 demonstrated significant challenges. Facing stagnant revenues and worsening bottom line and a very poor working capital situation, it became clear a change in our approach was required. And the result of this work to revaluate our strategy is what we call Airthings 3.0. Whereas Airthings 2.0, as I alluded to, was really focused on hyper growth. Airthings 3.0 is really focusing on scalable growth and reaching profitability as quickly as prudently possible. With this being achieved, we are disciplined go-to-market approach, focus on unit economics and a customer lifetime value. And even more focus on the software element of our product offering and create really sticky solutions for our customers. So the 3 core elements of Airthings 3.0. So number one is the go-to-market approach and being focused and disciplined in the way we go to market with an emphasis on owning the customer relationship. Being closer to our end customers, understand our end clients much better to also utilize that to form our product strategy moving forward. Number two, it's about enhancing the value proposition of our solutions via our software offering, create much better user experiences for our customers. And number three, it's about developing an automated optimized and scalable way of running our business to improve unit economics. We already see that the new strategy is starting to show results, and you'll hear a lot more about that today. We have a very capable team to deliver on the new strategy. We have a great company culture. We have more than 125 employees from more than 35 different nationalities and it's really a driving team with high performance and a global mindset. And more than 60% of our employees have a master's degree or higher. So the presentation today will have 2 red threads, demonstrating how the actions being taken within our organization and how it comes together to lift Airthings as a whole. So first, the different presentations will focus on different elements of the strategy. So you'll hear from our CMO, Millie, talking about marketing initiatives and how these initiatives support our go-to-market model and the go-to-market approach. Then [indiscernible], SVP of Consumer, will talk about the go-to-market model for our consumer business and the way we are changing the product focus. Similarly, I will present the go-to-market model and product focus for Airthings for Business. And then our COO, Audhild, will talk about how we're making improvements to our operating model to drive down variable costs and improved lifetime value of our business. And finally, our CFO, Jeremy, will round it off and tie it all back to see how this is expected to improve our financial performance. The other red thread is what you see here on the left side. So it's -- it's how we kind of -- you will see this graph where we have the number of customers on the Y-axis and the customer lifetime value on the X-axis. And this will demonstrate how this element of the strategy, you will see throughout the presentation, we will point to this, you'll see it up in the right-hand corner and see what part of this we are talking about. And the whole goal with this is to show how we're taking Airthings from where it is today, to large scale and large profitability, high profitability and take it up there. From there to there, we have the go-to-market focus, product focus and operating model. And for us, it's not enough to simply drive this in one direction. We have to drive in both directions, both in the number of customers and also making more money and have longer customer lifetime value, more lifetime value from every customer we serve. And we are pursuing growth in both of these access with the goal of achieving scalable growth and profitability. So we will see this figure throughout the presentation today. But first, we're already seeing that the new strategy is starting to create some early financial results and going in the right direction. From we kicked off Airthings 3.0 earlier this year, we are seeing, if you compare second and third quarter of 2022 with second and third quarter of 2023, we see an improvement of gross profit margin. We see reduced operating expenses. We still have a little bit of revenue growth in despite a very challenging macro environment. And we are much closer to profitability than what you saw earlier. And this is the way we are going to push the company moving forward along this access. And we presented the third quarter financial results this morning, and you'll find details about that on our investor pages. So that was a bit of an intro. It's going to be an exciting story throughout when we dig more into the details moving forward now. And I want to set it now first over to our Chief Marketing Officer, Millie.

Thank you, Oyvind. I am super excited to share what we do in Airthings marketing going forward. But before that, let's take a look back what we've done so far. Historically, we really have gone after the early adopters and the tech users. And we really wanted to educate the world about the importance of indoor air quality. And we really did that. Because now what we've managed to achieve is we have built an overall category awareness. And we really have established Airthings as the leader in this and secured a lot of third-party validation. The future looks very bright. We are no longer alone. As you can see, all these big brands over here, they have also entered the indoor air quality market. And that's great because they will help us to really reinforce this category. What we can do is that now is we can really take on the opportunity where we can start incorporating more of that emotional and aspirational appeal in what we do. We really want to convey the premium messaging of Airthings going forward. and we really want to tailor the messaging for our key target segments. As Oyvind mentioned, we are also part of the 3.0 strategy, and this is how we're going to do it. It's really about elevating how we communicate our brand going forward, reinforcing that premium value that we know that we have. Streamlining, enhancing and improving our performance marketing and really focus the PR and awareness activities that we do, making the invisible visible with Airthings, an era of clarity. For us, the Invisible is an opportunity. As the global leaders in indoor air quality, we are on a mission to transform the world, changing our relationship with the air we breath. More than just information, it's about action. For something so abundant as air can feel inaccessible, but we are breathing life into an industry weighed down by complex technology and lengthy [indiscernible]. Because at Airthings, our approach is personal. Our overall brand messaging is that we are the leaders in the Invisible. And for the 2 business units that we have, we've tailored our messaging. For the Airthings for Consumers, we are your air coach. We will give you data and insights for you to live healthier and happier life. And for the businesses, we want to be breathing life into the buildings. Our products are designed to help you to monitor the well-being and save energy in your buildings. It is just so important that first moment when you take the product in your hand, that the feeling that you're left with is that you have a premium product that really, really conveys the messaging and that is why we have done our packaging completely new for the Consumer division. This is a sneak peak. It's not out yet. So you're going to have to wait until next year. But what we really emphasize on this packaging revamp is that we wanted to make it more even simplified even more and make it more lifestyle-oriented. We also really wanted to bring the focus for the multiroom monitoring to the front of the box. And Anders will speak to you more about that. When it comes to performance marketing, what we really want to do here is to focus, to focus on the things that we know that work like Google and Meta and target those audiences that we know are already receptive to our messaging and really find those areas where we can offer true omnitalent experience. What we will do is we will test this new messaging and we will test it with new audiences. And those audiences include families and women. But we're not going to get the -- take it either. They are our core audience, and we're still going to go after them. The results are not in yet. This is something we just started, but what we are seeing is a really improved key metrics in everything that we measure and reduce customer acquisition costs. PR and awareness. It's so important for us, and it really, really works. This year in June, we managed to get our biggest audience ever, the estimated reach of 1.1 billion people. We generated 262 articles that mentioned Airthings worldwide. So going from the category awareness building. We really want to be topical and talk about those things that are happening in the news now. This summer, the unfortunate events of wildfires and then, of course, in the U.S., things like gas stops and the health effects of those are trending at the moment. So this is where we can really be thought leaders. Then it's about geographical targeting. We really want to make sure that we are relevant in those areas where we are. So, in California, people are really concerned about high PM levels. And that's what we will be talking to them about. And the same thing with Colorado and Radon. When it comes to social media, well, we have thousands of very happy customers out there. So it's about the time that we start leaning more into the user-generated content, and that's what we will be doing going forward. Just to conclude, these are the things that we will do to support the go-to-market strategy for Airthings, really leveraging the leaders in the invisible being your air coach and breathing life into the buildings, communicating our premium value proposition throughout the whole customer journey and really tailoring our messaging for the key target segments. Thank you. I will hand over to Anders.

Should I do the intro again or, okay. We have a live audience here that I'm sure that would like to hear some of the beginning again. But -- so I'll repeat that. That makes sense. What I said is at our Airthings for Consumer business units, serving real people on a global scale, we've seen strong historic growth. 2022 forced us to take some actions, sharpen our business, tighten the ship to really set us up for future success, refocus our go-to-market approach. And we've seen some early signs of traction we're seeing with the forecast midpoint landing and now in Q4 that we'll be able to get back to growth on an annual basis. Not Christmas Eve yet and the below our ambitions in regards to growth, but turn the ship. And we do that because we have products and solutions that are solving real problems for real people on a global scale every single day, and we've done that since day 1. And as I told the audience, that's not just something I say for the sake of this presentation, it's validated in the market. Go look at our Amazon reviews. People appreciate our products. And we have other third-party validation like Time Magazine Innovation Awards, et cetera. We address the global market, North America and European markets through 3 key channels. We're building on the historic success that we've had with Amazon. We're going deeper with selected retail partners that we developed this [indiscernible] together with, and we're building our direct-to-consumer business with sales through airthings.com, that is now our fastest-growing channel. Our market is maturing. Think about it yourself. I'm sure that most of the audience here have not even -- are not even closed to have turned 40 years old yet, right? And the live audience as well. But think about it, statistics -- statistically in the Western world today, when you hit 40, you spent 36 of those years indoors. That's crazy. We didn't use to be like that. We used to be farmers, hunters and fishermen and living like that has consequences for ourselves, but also our loved ones and upbringing of those. We see that in the development of our market segments. It's changing, and it has been rapidly changing now post and during COVID. You heard Geir in the introduction, you heard Oyvind talking about the mega trends that are really supporting some of our underlying growth of our business. And you heard Millie talking about some of the big players that are entering this category. And what we are seeing in a snapshot in regards to our user base, we're seeing families. We're seeing mothers, regular people households that are buying our products and it gives us a fantastic opportunity to provide them with state-of-the-art products and solutions that are trusted, validated in the market, and that's our Airthings offering. But with that as a backdrop, let's now look at Airthings for Consumers. I got to get used to hold in this mic. Airthings for Consumers in the light of Airthings 3.0. Our business unit is all about selling that first device to more customers on a global scale. But even more so, what's important is that when you buy that first device, we got to make sure that we give you so much value that you want to buy a second, a third and fourth. And that we're seeing early signs of happening now across -- over the last year to a couple of years. People see the value of doing whole home and multiroom monitoring, knowing about what air quality is like at home. So what I will be talking about here today is our go-to-market strategy, essentially how we structure and set our ship up for success on selling more devices to new customers. And now we've taken the learnings from '22, refocused and resharpened our go-to-market strategy. And then our product focus, how our product road map is really designed to support both the acquisition of new customers, but with the goal of taking our customers in the hand throughout their lifetime to make sure that they get so much value that they want to buy a second, third and fourth device when they're educated on air quality and how they can enable people to actually and themselves and their loved ones to breath better. Okay. Let's now look at our consumers' go-to-market strategy. So how do we aim at acquiring more of that -- those first device users. We do that now through 3 key categories: One, we need to, and we are unlocking the potential of our direct-to-consumer business, our sales through airthings.com directly from us. We need to, and we are building on the historical success that we've had with our -- with Amazon and together with our fantastic Amazon team. And we're adding some discipline, and we've added some discipline to our go-to-market strategy when it comes to retail distribution on a global scale. And I'll touch on all of this now in the following slides, but if you look a little bit what has been talked about from guidance intro also in [indiscernible] in regards to 3.0. And what I touched on showing the -- our revenue growth across the last few years, there are some key learnings that really shaped how we have now ended up at a strategy where we go digital first, and then we go with some selected key retail partners that we value, that we go deeper with, to really plough new grounds, as I like to say, really develop this category going forward. Of all our channels, airthings.com has historically been the ones that has the best and superior unit economics versus the others. But we've been focused in other areas internally and not given that channel the focus it deserves. Number two, Amazon has been very successful for us. And we see an incredible opportunity to keep building on that partnership, building this new category of indoor air quality monitoring going forward. And number three, we're honest here, and we can say that, yes, we did go through too broad in regards to our retail distribution, that hunger for world domination in retail distribution, we got a bit too wild. We've tightened that ship up to really focus on some selected key partners and then cutting some of the long tail to put knowledge in the bank so that we at some point of building these key partnerships could take that knowledge understanding in the bank and ramp up at a potential later stage when we feel ready for it. But okay. I'll now just repeat for the audience. We got sales through airthings.com. We got our Amazon business and then how we're adding discipline to our retail distribution. That's what I will be touching on across the next few slides. We're seeing some early signs of traction from our airthings.com business. Sales through airthings.com. Early in 2023, we established an internal task force, a designated group of people really focused on understanding who our customers are, what they like, what they don't like, how they convert to really help how we sell more of that first device to our users. That's led by David, who's here in the audience today. And it's really built on a methodology of multi-variant testing. So AB testing, testing, what works, what doesn't, testing up against each other, iterating, improving and trucking on moving forward. That's a cross-functional team that works together with our sales through airthings.com but also utilizing that really hands-on knowledge on how we expand further through our Amazon channel as well. Being digital first. We're seeing some early signs of traction. And again, it's not Christmas eve tomorrow, as I like to say, but we're seeing some fantastic results, and we're going to keep adding to that fuel of machinery. We see 110% growth year-to-date on airthings.com. We're seeing 20% reduction in customer acquisition costs, and we see 85% increase in conversion rates and there's 35% increase in organic traffic. Also because we've optimized and we're optimizing the system, it sounds fancy, but it's essentially to some extent, it's quite fancy as well, but our website, now how our customer purchasing journey really is and how it's tailored together to ensure that it's easy and feels good to buy a product from us. If you look at our historical Amazon success. It's a cool story. And massive credit to the team that we have internally that are -- have in-depth knowledge, both from having worked at Amazon, but also been working within our Airthings business together with Amazon for a long period of time, really led by [ Julie ] who is also here in the audience today. And historically, we've seen that representing roughly around 55% of our consumer revenues. We have high customer ratings of our products, as I touched on earlier. We have low customer acquisition costs. And we are #1 within our category together at Amazon. And that gives us some opportunities. We've been running some internal analysis, really seeing a direct link between what we spend on our Amazon channel versus what we get through in direct sales right away. And historically, we've been a bit modest in regards to how we set that Amazon channel up for success and how much we spend. That's an opportunity for us. In addition, as a result of being #1 within our category and plowing new grounds and developing and maturing this market, we are also in a position where we work tightly together with Amazon because you have to remember that Amazon, to some extent, becomes almost a search engine for consumer electronic purchases in North America. It's not just the sales channel, but it's actually a place where most consumers buying -- a consumer device actually goes to check whether is this something that is good enough that I should buy. We're really working together with Amazon, to develop this category going forward. And you all know the high-velocity events, as we call them, like the Prime Days, Black Friday, et cetera. Those are set in the calendar every year. We're now also in a position where we actually develop new events. As an example, is now coming up is the rate on awareness bump in North America, teaming up with Amazon, where we go together, of course, put our product on the forefront, but educating North America on the importance of radar monitoring, the consequence of lung cancer, et cetera, and we can do that together. In addition, there are a lot of other opportunities sustainability, positioning, our health and wellness messaging, upsell of multiroom, et cetera. And there are a lot of things that we can do together with Amazon to build this also going forward. Going back to what Geir started with, essentially just scratch the surface when you think of all the million of homes that exist in Europe and North America. Then let's turn to retail. I mentioned that we got -- we went a bit too broad too quickly. And what we saw in the light of 2022, that really forced us to rethink some of our strategic focus on our go-to-market strategy was that roughly 5% of our key retailers attributed to most of our retail revenues. [indiscernible] we also saw that a lot of the long tail of retailers stole a lot of administrative focus internally and sales focus from our team that didn't make a lot of sense. So we cut it. We're cutting it, and we're focusing on going deeper with selected partners do that better, but what's really important going with those is an ability for us to put knowledge in the bank, explore also on the methodology of multivariant testing, AB testing, checking out what's working, what's not working up against each other improve, put that knowledge in the bank, so we can store it. And one day, when we're ready, we can ramp that mindset of that distribution back up again. So I touched on our changes and refocus and tightening up our go-to-market strategy. I also want to now touch on our product focus. How our product focus is really designed to both ensure that we sell more #1 devices; and two, is really a part of building value for the consumers. When you get that device, so you want to see the value of getting more devices and by that, building our customer lifetime value. We do that through 3 key focuses. We need to enhance the customer experience. There's no doubt. And as we've seen early traction for people wanting to buy more of our devices, we need to and we are enhancing this value proposition of move to room monitoring, whole home monitoring, measuring with more of our technology within a home. And then throughout that, we need to assure that we think in a -- that we build a 360-degree customer journey that is really designed to take real people in their hands throughout their lifetime, make this understandable so that they can provide a healthy and good upbringing for themselves and their loved ones in their homes. We're building a true hardware-enabled company, a true hardware-enabled software company. Earlier this year, we launched our new application, our app on the phone so people. And we're humble to say that some of our offerings in the app today, they might be a bit basic. And there are some elements that we're missing that are -- that could be seen as quite basic. But it's essential key vehicle of what we are going to be building on for the future to enhance the software experience. Today, we have notification and detailed historical graphs, also using third-party data to notify and build extra value for our consumers. And we just recently launched what I will be touching on a little bit, the ability for you as a consumer to set a focus per room so that you can in regards to what you care about, like asthma allergies, et cetera, so that we can give you context and understanding of what the air quality has -- means in relation to that, the focus that you set? But our ambition, as Millie talked about in her presentation was this is designed and will be your air coach, making it super tailored, tailored customer journeys, personalized insights. You can think of examples like gamification, comparing your home to others in your neighborhood nationally, larger scale, et cetera. And there's a lot of things that we can do. Our partnership with now building together with matter, home automation that will also be able to enhance energy efficiency and getting contacted by Airthings approved professionals that can come and actually do physical work on your property. There are many things that we're building towards. And the app that we launched earlier this year is a key vehicle for what we're now building on. And we're super proud of having a key strategy of being that we want to launch added value for consumers in our app on a bimonthly basis. That's important to us, and that's what we strive for. Okay, multi-room monitoring. Our hardware is what is enabling our customer journeys. That's the starting point for our customers. And those are designed to be specific for rooms, building out your home. And you think, why do I need more, et cetera? And yes, because rooms, homes are different. There's rate on in basements, different levels of [indiscernible]. Typically high CO2 levels in the bedroom where you sleep, given your poor sleep conditions. There are other elements like line of fire place here in Norway, of course, in northern parts of North America that we're mentioning of gas stoves, homes are different, rooms are different, but people are also very different, right? There's medical issues, asthma allergies, dry skin in the wintertime, we all know that with the body lotion sales in -- specifically here in Norway in the wintertime. There are a lot of different issues for people. And activities in rooms are different, right? Think of your kid in the gaming room, sitting there way too much, your kids bedroom, your own bedroom and the living space. And what is important for us going forward is to keep on adding value for consumers when they buy that first device so that they see the value of equipping their home with more of our devices. We can incorporate multi third-party data into our solution that, again, is coupled we are -- having third-party data into our solution today, coupled with our sensitive technology, and you can use AI and also our data analyst team internally to really provide even more advanced and personalized insights. Score levels of homes. There are many things. I mentioned Matt earlier, but this is a key focus for us, building more value for our consumers that have already bought that first of us through building out multi-room monitoring. But let me take you on like a real customer journey. This is Rachel and her daughter. Rachel is in her end of her 40s. They live in northern parts of California. Rachel owns a Fitbit. She cares a lot about their health, her well-being, and she cares a lot about her family's health and well-being. She cares about eating healthy foods and physical activity. And she cares about how she sleeps at night. Unfortunately, we've seen that wildfires have been spreading along across the world for the last, unfortunately, 10 years at an increasing rate. And this is something that the Franklin family need to live with every single day during certain times of the year. And what is really interesting when you look at the Franklin family is that when they went and bought our Airthings products, they did as a lot of our users have done across over the last 9 months, they didn't just buy one at first, they bought 2 right away. Our most sold bundle via our direct channel, airthings.com, is the living room and bedroom bundle. Because they want to know more of the household also from get go. And as I mentioned, we just launched focuses in our app that enables you to -- as a 1.0 version that enables you to really put your problems in relation to set focuses to your devices per room. In relation to problems that you're interested in from everything from like asthma and allergies, so that we can give you context to what are the values that you're measuring actually meaning in regards to what you care about. And Rachel, that we just talked about, she cares a lot about sleep. She knows that she struggles with sleep. And she also knows that air quality is important for her sleep. And with our sleep disruptors function, we're able to, when Rachel is eating her quite healthy breakfast, she can look at the sleep disruptor report where we can provide context and insights to how she can improve the conditions for sleep throughout the night going forward so that we can ensure that she sleeps better, but also for the rest of her family. In addition, her husband, Robert, struggles a lot with grass pollen. We can give notifications on when that is due to happen in her local community in Northern California, again, touching on wildfires, but also our internal data analytics team developed algorithms that really can tell you and give you insights on the risk of developing mold in your basement, among others. What is interesting and to touch on the development of this market is that historically, we definitely saw that measuring indoor air quality has been for the early adopter, for the innovator, for the techies, right? And as we see that there are new audiences coming in and Rachel and her family coming into our user base actually through wildfires, sleep comfort issues at home. We're also in a fantastic opportunity to actually educate on more topics within her and their home. Specifically here on Radon obviously with the thought of her being a prime customer to buy one of our Radon monitors for lower levels of her home. So to sum it up for our consumer business. I've now touched on the 2 key elements here of adjusting our go-to-market strategy and how we're setting up our product focused road map to support both acquisition of new customers and building lifetime value over time. And how the learnings of 2022 forced us to take some specific actions in step to tighten the ship up set our business up for success for the long run by adding discipline to our go-to-market strategy. So with that, I'll hand it back over to Oyvind and your microphone is working?

Thank you, Anders. That was a delightful presentation of consumer. And I'm going to talk more about Airthings for Business and how we changed our go-to-market focus and also how we're creating a much more sticky and enhanced software experiences to secure fuel and secure long-term growth and also sell more to every customer. So Airthings for Business has grown remarkable since the inception in 2019. Today, we have 100,000 devices installed in more than 7,000 buildings around the world. And you see the revenue fluctuates a lot. There is an underlying growth, but what we're seeing is that there's fluctuations in the revenue because we have few deals with very high value that causes these type of fluctuations. So we'll continue to see that, but it's very also important to see the underlying growth of what we're doing. Earlier this year, we refined our go-to-market strategy as part of Airthings 3.0. And we're emphasizing now much more on the end demand and directly engaging with end clients rather than building a broad partner network that we used to do. The strategic shifts contributed also a bit of softer revenue in the first half of this year as we had to flush out some of those inventories that were sitting at partners. But we are seeing that the business is turning. And excluding those major deals like what we also see now in the third quarter, we see that the underlying business of Airthings for Business is growing now by more than 30% for the third quarter of this year. So the focus we have with Airthings for Business is really to secure end clients, predominantly in North America and Europe. And we also built a robust partner network, including noticeable companies like Lindab, Carrier, [indiscernible], et cetera, and in alignment with our refined strategy, we streamlined our partner base and concentrating our efforts on those that really perform. So we had a much broader part network. We are really taking it down, removing partners and really going deeper with fewer ones. And also focusing our sales, commercial resources more on the end clients. So we have a massive market opportunity with Airthings for Business. And what we are focusing on are on clients that are managing portfolios of buildings, not single buildings. And with Airthings, transforming existing buildings into smarter, more sustainable spaces becomes reality. Our solutions addresses a core challenge that we see all around the world, obtaining accurate data and insights across a building portfolio, or battery-operated sensors are effort led to install, no need of any cabling and it's very truly a plug-and-play experience. Once installed, you get access to a very insightful dashboard experience, which empowers you to regulate the building, heating, ventilation and cooling and offers a comprehensive overview of all your facilities. Occupancy patterns, you can see where in the building are the people, where are they not? When do people come, when do they leave? We see ventilation insights, where do you [indiscernible], where do you [indiscernible]? We also have the energy toolkit, which tells you what the energy leakage you have in the building and what you can do to fix those problems. And we have also health and safety concerns and productivity concerns that we are being taken care of by our solution. So let's step into the shoes of a facility manager for a little moment. They're juggling between numerous buildings. And the different buildings are bustling with energy, with activity and filled with people and some buildings without any people. They're bogged down by manual tasks and tedious responsibilities. Facility teams operate many buildings that are typically buildings from different time periods. And some of these buildings have a building management system or they might be able to read some local data, but many others don't have any system at all. So that's where Airthings really steps in. Our mission is to revolutionize the way facility management teams operate. We want to inject efficiency, intelligence, and even a lot more fun into the jobs. We want to move -- let them move from reactive, being reactive at job waiting for complaints to actually being proactive. And shift from timer-based operations of the heating and ventilation of your building to actually do demand-based control of rebuilding. And this can also cause significant energy savings. And we help the facility management teams to save energy and reduce a lot of the energy consumption. Typically, they say 20% to 40% of energy savings utilizing Airthings in buildings. So we're specifically targeting clients in Europe and North America who own or manage a building portfolio. These are typically enterprise customers, municipalities, school districts and building owners. Despite these differences in the operational scope of these type of customers, the facility management teams have exactly the same problem. The mismeaningful data, no consistent overview of their buildings and have largely a very reactive approach to their job. So even though we are a facility team for an enterprise customer or from our school district, you have the exact same problems. And that's really what we are focusing on helping these type of people. So we are working with some of the largest enterprise customers in U.S. and also in Europe. Unfortunately, we cannot tell the names of these companies. We are working with numerous universities, school districts, and municipalities across Europe and the U.S. And we're also working with many building owners that want to utilize our systems to run their building smarter and more sustainable. I'll show a few examples just so you can see how Airthings is being used in these type of cases. So we were awarded a contract of more than $7 million. So we did it first. Last year, it started and then we got reorders this year from the same type of customer. It's a global enterprise customer and they're utilizing Airthings really to ensure a healthy environment for the people so they can also get -- help get people back to the office post-COVID, and they're utilizing it to get full [indiscernible] older buildings around the world with consistent data and ensure health, wellness and productivity for active facility management and to operate the buildings more sustainable. We are really helping big enterprises to meet their sustainability targets. Another example is Allianz. They utilize Airthings in several buildings and the key value that they're talking about is really about health and productive environments for their occupants and visitors. It's energy-efficient operations. It's building automation, so they actually control the HVAC of their buildings through our IoT data. And they also obtain building certification to increase the value of their assets. We can turn up the rent a little bit. [indiscernible] municipality in Norway, they utilize also Airthings in older buildings really to get consistent data from older buildings so that the facility management teams can operate the building smarter and more efficient. And with data from Airthings, they say they save about 2 gigawatt hour of energy from 2021 to 2022 and they see further improvements also in 2023. One other case is a partner of us in -- based in Bergen. They installed a lot of Airthings devices in buildings in Norway, really focusing on Norway. And they -- what they do is to move buildings from timer based control of the HVAC system to demand-based. And with this, they see enormous reduction of energy, and they already saved several gigawatt hours of energy with Airthings over the last year, and they say they just scratched the surface of what they can do with Airthings only in Norway. So we really help our customers with their net-zero transition plans, and that's part of the -- of really what we're focusing on with Airthings. So what -- what is the transition we're doing in Airthings for Business with Airthings 3.0. It's really about a revamped go-to-market model. And it's about increasing the customer lifetime value with a number of customers and with better and more sticky solutions and especially also the software solutions. So for the go-to-market model. We are focusing our efforts on working directly with end clients. In the past, we worked much more with partners and we're driving partners. So now we focus on fewer partners, and we take our commercial teams to work directly with the end clients and then rather bring the appropriate partner in there if needed. And we also have limited our geographical focus. We have learned a lot from where -- what we have been doing over the last year since inception in 2019. We went way too broad, way too fast. And are really tightening the ship as Anders says. So for our new disciplined go-to-market model, we are spending most of the time from our commercial resources with the end clients rather than partners. We are the best ones to convey our value proposition to our customers and working with fewer partners, we can also help them understand the value proposition of selling Airthings. And we're really focusing on U.S. and Europe. We also went way too broad, too fast in other geographies, and we have pulled that back and are really focusing our capacity across a few regions. Historically, we had a partner only model where our commercial resources dedicated most over time, hunting new partners. What we see now is very few of those partners that really actually performed over time. So we are shifting the focus of our sales team to work directly with the end clients, which also puts us closer in dialogue with these customers and make us improve our product road maps accordingly. So we scaled down the number of partners dramatically. And we see even in 2022, top 20 of our partners, had stand for more than 70% of the total revenue. So now moving forward, we are really focusing on those partners that add real value or reach for Airthings. And then we have implemented automated processes to handle the longer tail of the business, and that's something we'll continue to improve on. We also reduced our geographical focus in North America and Europe. We are only scratching the surface of what's possible in these areas. And we have some partners that sell our products in other areas of the world, but our focus is really on North America and Europe. So that was more on the go-to-market model. Now I'll talk a bit on the product focus and what we're changing with our products also to support the Airthings 3.0. We are really focusing a lot more making facility management more effective and on reducing energy consumption in buildings. And we're also working on getting to tiered subscription. Today, we have only like 1 flat subscription fee. In the future, there's going to be tiered subscription based on what type of solutions you are looking for. So Airthings for Business product strategy is focused on these fronts. It's really about optimizing HVAC systems to reduce energy waste. It's about taking care of the air quality of the building and the wellness and productivity of the people in the building, and it's about transforming facility management to be a lot smarter and more proactive with actionable insights and a full overview of our building portfolio. And we see that facility management teams, they want to optimize for all these 3. And that's really what we are striving to help them with. So on the energy consumption, we have today, energy toolkit version 1. We are working towards energy toolkit version 2 with big improvements, where we're going to include energy tracking, more energy insights and also improved the way we present data. We are adding machine learning and AI to make the solution smarter and more precise for our users. And we are also doing third-party integrations like we are doing with Lindab and we are enhancing that for our customers so we can really scale as a company in these areas. And we are developing valuable features based on advanced analytics in the cloud. We share this data both in our dashboard solution and also through our APIs. And we have virtual sensors like occupancy, mold risk, virus risk and we're coming with ventilation rate. We're coming with ventilation schedule, and we're also improving and coming with a new API. When we look at our competitors, Airthings is standing out when it comes to advanced software features. And we are creating solutions that are very compelling and sticky. As I said earlier, facility management teams they are juggling between numerous buildings and typically buildings from different times with various systems or no systems at all. There are no consistent data from their buildings. And our mission is to revolutionize the way facility management teams operate and make it data-driven. We want to inject efficiency, intelligence and more fun into the job of being a facility manager. We are working closely with facility management teams, with companies around the world. And with them, we learn and we adjust and we create even better solutions -- we see one key area that's very important is to create also go more towards automated work orders. The early adopters like to look at graphs and look at all the data, while most the broad range of facility managers, they just want to know what to do. So we are utilizing AI to generate work orders. That's something we're working towards to release in the future. We're also working on enhanced reports and insights and provide much more analytics of our data to provide much more actionable insights and not just a lot of data. So some concluding thoughts about Airthings for business. It's an early business. We've grown quickly. We learned a lot over the last few years. We are certainly focusing our commercial resources and the go-to-market model and also working with the right end clients, well, before we went much broader. We're enhancing our products, make them more compelling and much more sticky, and we are revolutionizing the way facility teams operate and make it data-driven. So we do all this to get more and win more customers and also increase the lifetime value per customer. We have only scratched the surface of the potential of Airthings for business, and we're really looking forward to show results over the coming quarters. Thanks for that. And now I'll set it over to our Chief Operating Officer, Audhild.

[indiscernible], we have to have cost discipline in the way we operate, and that means always looking for ways to do things more efficiently and reducing costs without compromising the quality of the products we provide and the services that we offer to our customers. So when we talk about our operating model, we basically have 4 elements to it. So on the internal side, we have everything it takes to run the business. So that would be the people we have employed in our company and the systems we use internally in order to run our business. And that could be, as an example, not entirely scalable with the activities that we have or with the number of customers we have. If you have 20,000 customers or 2 million, you need the finance team and you need an ERP system. It might cost you a bit more if you have more activities, but it's not going to cost you 100x more. So on the internal side, we've been working at system rationalization, making sure we had good contracts, and we have -- don't have duplicate system across the way we work. And we have also looked at places where we can reduce capacity for shorter or longer periods of time. When it comes to the external side of our operating model, it's about how we provide products to our customers. So that could be the hardware that we put in our customer hands. It's the software that we run to show the data and make sure our customers can do something about the Air, and it's also developing new products and features. And the last part I won't touch much on today because you've heard about it both [ Anders, Oyvind ] presented and [indiscernible], that we are focusing much more of our product development capabilities around clear use cases and more on the software value side. So today, I'm going to talk most about the variable cost aspects of serving our customers, and that consists of basically 4 parts. First of all, we have to manufacture the hardware that we provide to our customers. Next, we have to sell it and distribute it so that they actually get it and have it in their hands. Third, we provide software that enables them to get the insights from that data. And finally, if you have an issue with your device or with your app or if you don't understand what to do about [ Air, ] you can contact our customer support. So all those 4 elements are really important for us that are efficient because we know that every time we make a sale, we will incur those costs. So unless we can get them at a healthy level, we won't have a scalable business. So that has been really our core focus. And the first point in this, the product manufacturing is a major part of that. And I am not going to talk a lot about that today for 2 reasons. The first is, you've seen our quarterly presentations that we've been working a lot on our inventory days of inventory in the last year. So our main focus with our suppliers has been to reduce incoming inventory. And that doesn't put you in a position where you can negotiate down prices because of volume, as an example. So we've used [ Solar ] power to reduce the incoming inventory, and we've been fairly successful with that in many cases. And the second point is that we have a lot of inventory that's already been produced at a certain price. So we can do changes to our hardware and our components in order to reduce the cost of it. But when we already have that in our inventory, it's too late. So we've had limited room to improve the cost of build. Having said that, every time we talk about new products, [ Anders and I ], he always goes, can you make it cheaper? So we have that as a focus when we are doing development of new products. And also when we get to a situation where we will produce more again, we will also work harder on reducing the cost from our suppliers. So turning to the other 3 elements. We have a set of critical initiatives that we put in place in order to control our variable cost, which will help us increase the customer lifetime value. First of all, we are working to optimize and automate our logistic distribution to the distribution of the physical products that we have. Second, [ Oyvind ] already alluded a little bit to our partner portfolio in Airthings for business being too broad. So we are looking at more no touch ways of serving that long tail of partners and end customers. Third, one of the big cost elements in kind of the use phase of our product is our cloud costs. So we have a lot of data. We run computation, we have in machine learning algorithms several times today, and we have to be efficient around how we do that in order to control the costs of our cloud. And then finally, as many other companies, I would guess, we are looking at different AI tools and ways to make our internal processes more efficient. So first talking about logistics. It's been said several times today, I think that we had really high growth up until the end of 2021. And combined with the situation we had during COVID where there was a component shortage, everything we did was about actually getting products distributed because it was so hard to just get those products out, that it was about doing it as fast as possible. And fast often means that, okay, we have a new use case, that type of customer or we add on a partner who specialized in that. So it resulted in a little bit of a patchwork logistics setup, I would say. And when things started to kind of flatten out, we saw that we had to address 3 main issues about our logistics chain. So first of all, we had too many partners, helping us distribute our products. And too many partners, yes, you have some flexibility and you can have specialized skills in terms of what you need but we're not a huge company in terms of volume of distribution. And if you even spread that out across many different partners, you won't have the benefit of scale in what you're doing. Second, all our products were taken to our warehouse in Oslo, often by air, from our production partners. And one of the main cost elements in distribution is each transportation leg. And air is also not the cheapest way or the most sustainable way to transport things. So as an example, if we're serving an Airthings for business customer in Europe, it would fly into Oslo and then be transported to Sweden and then back to Europe again in order to get into the EU in a good way. And 3 transportation legs is quite expensive. So we did have a sub-optimal flow of goods, which led to both cost issues, but also issues with VAT and packaging for different purposes, et cetera. And then finally, when you do things very fast, you do it in any way that you can. And often that way is manual. So we didn't take the time to integrate our internal systems properly or to integrate with our 3PL partners in an automated way. So every single order that went through our system was hand or it was manually handled by our operations team, which is not the scalable way to do business. So what we are doing now to address this is basically, we are looking at our 3PL partners trying to consolidate that, finding out what are the few right partners for us in order to distribute our product and taking our time to negotiate proper contracts with them where we have both a scalable pricing that means you're not doing one-to-one when you're scaling but also that we have a flexibility because we don't always know where our large volume will come. So we have to have possibilities to scale up and down along the way in a good and sustainable and cost-efficient way. Second is that we built a model, a PSI model, we call it, around production, sales and inventory, which gives us a lot more visibility when sales doesn't come in as it should, so either higher or lower, we can faster make changes and see, okay, this is what we need to focus on now and this is how we should distribute it. And that model helps us react quickly in terms of how we have our goods flow through our system. And we are also -- through that analysis, we've also seen that we need to establish a warehouse in the EU and we are also considering changing the location of our warehouse in the U.S. because of where our goods in the U.S. are distributed. And finally, we are taking the time to integrate our systems internally, so that we can have an automatic flow of orders. And also with the partners that we are selecting, we will have integration so that we can have an automated order fulfillment process. And our operations team can spend their time on deviations and may be hand holding a few large orders that are super important or urgent, but the rest should just flow through the system without anyone actually touching them. Second, so [ Oyvind ] talked about the long tail of our partners and customers in Airthings for business. And Airthings for businesses more complex to handle from a sales perspective or an order fulfilment perspective because we sell subscriptions. So our customers, when they buy the hardware, they buy a subscription for either 1, 3 or 5 years. And when that expires, they have to renew it. And that is a different process than just taking -- paid for -- or getting paid for hardware and shipping it out. So up until now, every single sale and renewal in Airthings for business have been going manually through a salesperson or a customer service person. And we want those people to focus on the customers and not on administrating. Hunting customers, selling our products and also providing the best service that they can instead of manually punching orders basically. So we have just launched a self-service subscription module for our partners where they can create customer accounts. They can purchase subscriptions, and they can reconcile how many active devices does my end customer have versus how many subscription seats do they have and they can adjust them as well. And that's already been implemented, and we are working on doing the same for direct customers of us. And the important thing that this also enables us to do is to implement a downgrade functionality for our services. So if you don't pay, you get downgraded to just the current values or something that we define because that has not been something we have implemented or we have done on a regular basis because it is so difficult to reconcile if you don't have a system that gives you the transparency to know if a customer is actually paying for what they are using. When we have that in place, we can actually have a healthy view on our portfolio and so can our partners and our customers. Third, I talked about the large amount of data that we have and our cloud cost. And for the last little bit over a year, we've been working very hard on keeping the cloud cost in control. So you can see that it was going up quite a lot. And I will not go into the details of how we're doing it. You can see some examples here. But what I'm very happy about is that we have some awesome software developers who actually understand how this works, and who can help us both create the transparency to the teams on what the cost level for the services they are developing and using what it is and how they can improve it. And we have consciously taken some time from product development to actually work on cost optimization in the cloud. And we've had great results that I'm very proud of so far. We have minus 37% in cost per device on our cloud this year, even if we've launched the space utilization feature, which runs several times a day with a lot of heavy algorithms. So I think that's an awesome work that we have been doing, and we still know areas where we can get better, and we are working on implementing that. And then finally, so we have been using machine learning and AI in our products for quite some time, actually. But this last year, we've also been trying to do it internally in the way that we work. So that could be in product management, content creation, market research, et cetera, like many other companies, I would guess. And some tools we test and we see, okay, that doesn't work for us, whereas others we have tested and seen, okay, we can actually get 20% or 50% efficiency from our teams in doing this. Some notable examples are a Notion for project management and Surfer SEO for SEO optimization. And this funny little picture here is our first test on actually taking at a large language model and adding our knowledge library into it and seeing if you ask a question as a customer, can you get a good answer back? And the answer was fairly good, but not good enough yet that it's something that we have launched, but this is something we're looking at as well because we have a lot of content, and we have a knowledge library, but it's hard for a customer to go through an FAQ and look in the web and where can I find information about this. So if they can rather ask that question and get a good answer back, that is something we would love to provide our customers with. So to conclude, cost discipline. Yes, everyone loves that. I love that, actually, which is maybe why I got hired. You do? Yes? But I do think it is really important to have an efficient operating model because when you have a cost-efficient operating model, most of the time -- you actually have a very good operating model that serves your customer as well. That does coincide. And we are improving our cost efficiency through our main initiatives here, a better logistics setup, lower cost in selling and maintaining our products, and lower cost in our internal processes. And with that, I will hand it over to our CFO, Jeremy for some concluding thoughts.

Yes. Jeremy, CFO at Airthings. I'm going to try to wrap up everything and bring it all sort of together everything you've heard today. But before I do that, I want to begin with this slide where we're going to move away from long-term goals. So if we look at what we've done historically in Airthings, when Airthings was listed on the Euronext and originally came out in the stock exchange. We communicated $100 million target in revenues in 2024. We reiterated that goal at the capital market update in 2021. We've also stated some other longer-term goals like that we expected to be profitable on an EBITDA basis in the second half of this year. Ultimately, what has been the result of this? We've eroded our credibility. We haven't been able to meet these goals we've set for ourselves, and we've lost some credibility with the market. So what are we going to be doing forward? Just to be clear, we're going to stop giving these sort of long-term goals. What we're going to do going forward is to continue to be transparent about what the successes we're seeing. We've heard about some of that today, but also our challenges. Over the last year, 1.5 years, we've been very clear about the challenges we've had in terms of working capital. We're going to continue to be transparent about that. We're also going to demonstrate our ability to follow the refined strategy that we've outlined here today by giving you examples on the quarterly updates of initiatives that we've completed that are in line with this strategy and financial results that are in line with it. And of course, we're going to continue to provide revenue and ARR projections for the coming quarter, and come within the guidance window with the aim of establishing trust in the market and also with a focus on long-term value creation. So let's recap -- we've discussed today. I'll try to do it very quickly because I think everybody did a very good job of doing it. So we had Millie talking about the marketing activities that are going to support our go-to-market approach. We heard about how we're going to be incorporating the emotional and aspirational appeal in our brand to really elevate our demand generation, how we're going to ensure that our physical products are giving that quality feeling throughout the entire customer journey because first impressions do matter. That first experience when you get the product, if you've ordered on airthings.com and you unbox that, that leaves a lasting impression in your mind for the rest of your products experience. We've talked about how we'll focus our PR activities and improving our performance marketing. In terms of Airthings for Consumer. We heard with quite a bit of passion from [ Anders ], how we're bringing discipline and focus to our go-to-market activities, how there's significant untapped potential on airthings.com. How there's also significant untapped potential on Amazon, even though we've had strong historical success there. And that with retail by going rather deeper than broader, we can unlock success there. And we've seen success with that with the expansion of our product portfolio in Home Deep over the course of this year. We've also heard about how we're going to increase customer lifetime value by strengthening the software offering on consumer and enabling the sell of the second, third, fourth, ideally fifth device to the consumers and ideally also through airthings.com where we have the most superior unit economics. And Airthings for Business, we've heard a similar story about discipline and focus in terms of our partners, in terms of our geographies and also by having the approach of going more to the end user and using that to be able to inform our product development. And on the topic of product development, we've also heard about how we're going to strengthen the value proposition. We're already addressing the pressing issues and concerns of our key end users and Airthings for Business. By building that offering out even further, it will enable an increase in our customer value through multi-tiered subscriptions, lower churn, et cetera, et cetera. And operations, Audhild did a great job of presenting -- and I think sort of educating about the significant variable cost we have as a company and showing how we're systematically going to work and in a prioritized way on driving down those costs, which warms my heart because I love optimizing variable costs. And that ultimately increases the customer lifetime value. For every percentage we can save on freight, that's more we have in our pocket at the end of the day. For everything we can do on cloud, that's better margins on our software offerings. All of that adds up at the end of the day. And I think you've already gotten the impression of this over the course of these presentations, but just to sort of drive the point home. This is a very coordinated effort across the organization, right? It isn't 4 departments running their own agendas. It's 4 departments that are working in tandem to bring Airthings from where it is today to where it is in the future. I'll talk about that. But there's significant synergies here between Airthings for Consumer, we have thousands and thousands of consumers using our application and consumer. Their user experience informs the dashboard and the software on the Airthings for Business to provide a smooth and seamless experience for our business users and vice versa, the learnings we're taking from saving energy and buildings can inform the integration with matter and the automation of homes to drive down energy consumption in homes. Being closer to our end users through airthings.com and by going and talking to our end users and Airthings for Business informs our marketing activities, right? It knows what messaging is working with them and all of that works together. And then operation is prioritizing the largest variable costs of our business units to make the overall company more efficient. So as I said, right now, Airthings today, we're small scale and we have weak negative profitability. For us to reach our long-term ambitions, and we do -- I said we're not going to provide long-term goals externally, right? But don't let that fool you. We have large internal ambitions and growth aspirations, of course, but to reach where we want to be, which is large scale and strong profitability, it really requires movement along both of these axises. Moving along one of these isn't enough. If we move along miss, we become large scale, but we're still going to be weak profitability. As we move along that, we're small scale, but with good profitability. But at the end of the day, we want to be both large scale and strong profitability. And just -- this is a nice figure for our internally, how we're thinking about it, it's also convenient for communicating it, but these aren't very traditional financial metrics. You're not going to find a P&L where it stands, number of customers and customer lifetime value. So how does this translate into the traditional financial metrics? It means a growth in revenues. It means an expansion of our gross profit margins as we see more and more growth on airthings.com, as we see more and more subscription revenues through Airthings for Business and it means OpEx that isn't growing one-to-one with revenues. And altogether, that means positive and expanding EBIT and EBITDA margins. Of course, I'm just going to put this -- we're not going to lose focus. We haven't discussed that much in the capital market update. We discussed it often in our quarterly presentations. It doesn't mean we're losing any focus on our working capital situation. We've seen positive movement. We had an all-time high of 472 days of inventory at the end of last year. We've brought that down to [ 392. ] This remains a key focus area. It's taking time to turn the ship. The analogy I often use is as you sort of sent a tanker ship out to see. It takes time to turn it, but it's moving in the right direction. We've seen consistently inventory levels, both in terms of days of inventory and the nominal values, go down. And it is a source of capital going forward. So as we free up cash in our working capital, this can be invested into these initiatives that we've discussed today. And finally, to reiterate what [ Oyvind ] mentioned, we are seeing -- it's early days with Airthings 3.0. This really got launched at the start of the second quarter, but we are seeing early results. There hasn't been a sacrifice. We've seen growth in revenues. If we look at the second quarter and third quarter of last year compared to the second quarter and third quarter of this year, we've seen growth in revenues, and that's despite cutting down our retail footprint, as Anders was talking about, and that's despite more discipline in our geographical focus, for example, and Airthings for Business. We've seen an improved gross profit margin. We've seen a reduction in OpEx. And yes, some of that reduction is supported by a weaker Norwegian kroner to the U.S. dollar, of course, but it's also coming despite significant inflationary pressures in terms of wages, prices and here in Norway increases on payroll taxes, because a lot of our employees qualify for those increased payroll taxes. And we do see that we are coming closer to profitability. With that we have finished.

Yes. Do we have a mic so we can -- no, it's coming.

Christoffer here from DNB Markets. So a couple of questions. I know you said you didn't really want to give any long-term guidance, and that's fine. But without kind of quantifying it, maybe give us some view on kind of how you're seeing us in the -- kind of where in the cycle we are with the guidance you gave for Q4, it seems, it's not that bad. So does that mean that we're kind of from next year, we'll see typical seasonality and then back to normal and just like -- how you're thinking about that? And then my second question is more as a user as well, I have a lot of these devices in my home and believe it or not, I look more on the Airthings after then I spending time on Instagram. I think I'm well into it, and I'm a big ambassador. But I'm kind of -- what I'm missing, and I told you this before, is -- I kind of feel it tells me when I have a problem, but it doesn't really help me solve it. Ohh CO2 -- too much CO2 is not good, sure, but what can I do? So for instance, in my house, we have this ventilation system, and I'm not expecting you to become an HVAC company, but what can we expect in the prime prime in terms of all these integrations that you're talking about on the business side for the consumer space, would be guess, simple for the system to automatically increase its flow-through of air and oxygen, at night, for instance, when we are 2 people in the bedroom, stuff like that. So any plans there to kind of help customers and especially consumers solve problems rather than just telling them that they have problems. I guess that's my 2 questions to start with.

Thanks for some good questions, Christoffer. On the first part on the growth, so yes, we cannot say like it's hard to read the world a bit now. And of course, we are a small fish in a big pond. So there's a lot of opportunity to grow. But we also see that, like in Airthings for Business, the decision-making processes, it's taking time. A lot of companies are cautious. We have a like -- even though we have a strong pipeline, it's always difficult to say when will they actually make the decision to buy. Even though we have positive ROI like our customers, typically a positive ROI, quite maybe a year or 2 after they bought Airthings into older buildings. Right now, many companies are struggling with other problems and prioritizing that. So yes, we have a lot of opportunity to grow. We have very high ambitions for growth over the coming year. but it's hard for us to put numbers on that. So we're doing it step by step, taking things in the right direction. And the growth will come and exactly when? It's hard to say. And we see the same in Consumer and Airthings for Business. I don't know Jeremy? No? On the second part, I think Anders should talk about.

Because my mic didn't work. But yes, I think, first of all, it's awesome to hear that you're in a super user of our products. And definitely, right, we see the same things. And we have a very exciting product road map for the future that we can't comment on here as of right now. But parts of what I showed here today, right? It's about the things that you're mentioning. How we, hopefully, we can take you in the hand of providing healthy and happy upbringing for you yourself and your loved ones, but also providing you with specific insights, right? On how to actually improve and fix your problems. Those are natural next steps. And I had here on the graph like Airthings approved professionals. That's kind of a couple of steps in regards to actually bringing someone in the door, but there are several steps that you can start with and then build on going forward. So yes, we're honest in the sense that our application that we've built now is in the starting phase of what it is. But it's -- I hope that you've seen both through Audhild's presentation and also through mine, that building software value for consumers and real value for consumers is the key part of our product focused strategy; two, make sure that you keep on equipping your homes with Airthings products in also other locations.

Also to say on that, that the new app that we built is also built in a way, it's a foundational app, where it's going to be much easier to build features on top of it over time. So that's a big -- been a big investment for Airthings.

Yes. Looking forward to updates. Just a quick follow-up on the strategy. I feel like a lot of people who are now pushing this to people and having them buy this product. It's -- I think people find it rather expensive. And I kind of would love to hear your thoughts on how you think about the pricing strategy in terms of your analysis on where the pain point is, for instance, if you do take the gross margin down a bit in terms of offering lower prices, could sales double -- that kind of thing because it's just about the pain point, where I think for a lot of people, it sounds a bit too expensive. And then alternatively, if you have plans, I guess, for launching lower priced products, so you can have it in further -- in more rooms or just to get the foot in the door with some customers because I think the current price level for a lot of people is much of a big ask.

I guess it's always a bit scary and enthusiastic and passionate person is trying to ask some of these questions because I know certain things of what you're asking for. But -- so maybe, Jeremy, maybe you can touch on some -- some of these things.

What I can say is that we don't discuss our product road map in terms of hardware until we are a tech company. Of course, we're working on new hardware at any given time, but we don't discuss or give any specifics about the hardware that we're coming out with until it's ready to be launched to the market. To your point on the price elasticity question. We've looked at it and certainly, we see we are coming. And what I could say is that informs our product development road map going forward.

But that is also to say that we do have actually quite of a wide portfolio that even serves lower price points on an entry-level perspective, specifically like the [indiscernible], that is a quite attractive price point for mass market as an entry level, right? To understand more, to start the customer journey.

And our goal is not to lead on price. It's to lead on performance and on value that we can bring to our customers. We want to be a high-value brand.

Eirik from Carnegie. Kind of piggybacking on the last question there -- also kind of on price, but find it interesting to see that more of the larger real household brands are kind of stepping into your space now? I guess, it's positive from adoption perspective, building even more awareness. And it also sounds as if you're kind of targeting maybe a bit of a different customer group going forward than what you've done historically? And also, it sounds like you're kind of premiumizing the offering a bit on B2C. Just to be clear, have you done like a thorough due diligence in terms of what the key KPIs are for that customer group premium feel versus design versus price? Where are you on pricing versus these new entrants? And how do you think about that going forward as well?

Yes, I can say that the new entrants like the examples we brought up here, they're coming in very at the low end of the scale and the price with basic features. They're not wrapping it with the software solution, right? So I think one of our sort of defensible moats is our software offering. And yes, it is sort of right now, if we're honest with ourselves, it's a bit basic, but that's why we're going to focus so much of our energy into building out that experience because that is our -- a lot of our defensible moat. And then the more people can get in, the more we can get them to adopt additional devices. And then I think this sort of piggybacks on Bjørnsen's question that, we are cognizant of the price elasticity and that does inform our product road map going forward. I can't say so much more on that specifically right now. But obviously, we want to offer our products at price points that are -- where the perceived value is correct. The prices are matched with the perceived value of the offering and doing what's great is that there's so much value we can add on to existing products today via the software that we can increase that perceived value with the customers and even better justify the price points we have. And then also with future product launches, make sure that we cover the correct price points to where the customer is willing to pay.

Perfect, thanks -- and now it's working. And one on the business side as well, given that you've done this kind of reshuffling on business model, go-to-market strategy, operations, everything. Have you considered kind of factoring in that macro climate but maybe not as favorable on CapEx today as some time ago to bundle kind of more of the total cost on Airthings for Business into the subscription part of the package? Or are you going to content with the upfront CapEx versus subscription costs that you've run historically?

So now you're sort of thinking like Hardware as a Service sort of a model, Sure. I mean, I think that's something we have discussions with end users and clients on it's a potential avenue to explore. It hasn't seemed like there's been a large appetite for it out there right now, but it certainly could be. The flip side of that, of course, is it then put working capital requirements under the company. And right now, we also have challenging working capital situation. So it certainly -- it could be an avenue for us in the future. I'm not going to exclude it, but it is -- it does require -- put some certain requirements on the working capital side of things.

Also see that some of our partners offer that as a service. So when end clients want to that, we have partners that can actually provide that as a service.

Christian from Arctic Securities. So my questions are a bit same as Christoffer -- Christoffer's topic. So the first one, I'm still struggling a bit with Airthings for Business because it's -- it's a small market, and it seems like a higher customer acquisition cost. But then again, you're selling the same device, hardware device as in Consumer. And I totally get why the businesses are buying devices and saving energy costs, hurt customers with paybacks of 2, 3 months last year, and that was with high energy prices, so kind of peak market environment for you. So just interesting hearing your thoughts on pricing strategy or anything to make me understand the Airthings for Business, yes, scale potential?

So first, the products, they look the same. They are not the same. So across Consumer and Airthings for Business. So in Airthings for Business, we sell products that connect directly to the cloud with cellular connectivity to a hub -- and it's a different type of sensors inside the products, really targeting the office environment and commercial buildings.

[indiscernible] is that the all deals -- because I think in some of your press releases, you've been referring to products that you sell to consumers as well.

So if you look now, all the products in the B2B side is called Space. So you have, for example, Space Pro. It looks very similar to our Views Plus, but inside, it's not the same. So it's built on the same platform, but it doesn't do exactly the same. And yes, energy prices was very high in Norway last year. Of course, that's a good selling point in Norway. We see in general that -- one thing is energy prices, but most of what we sell is actually the value to bring people back to the office post COVID has been one thing. And then what we see more and more is to enable facility managers being much more effective at the job because they have a building portfolio, a lot of buildings with no meaningful data that they can see from their buildings. So they use it, yes, for energy, but also to optimize the operations of the buildings, optimize indoor environments in the buildings, and ensure the buildings are in compliance. So when you look and talk to the customers in Airthings for Business, it's not just about energy. It's a full kind of digitizing the way they operate their buildings, which certainly -- there's a lot of value into that. So the market is very big.

Just a follow-up on that. How should we think about the average sales price in Business versus Consumer?

Yes. So we have seen that the average deal size is increasing over time. And we see that our customers buy typically like more and more sensors per building. But it's very hard because some deals could be a kindergarten that wants to have a little bit overview and make sure that the kids breath healthy air and the kindergarten, while then the other -- and there's a big enterprise customer that want this in older buildings around the world. So there's not like a good average there from a kindergarten to a global enterprise customer. But what we see is that with the value we come with the software, they also want to do this in more buildings and also in more sensor per square feet.

And then my second question, a bit back to kind of taking it to the investor side and where we are in the cycle, et cetera, because push back on the case among investors is that it's a niche product, a niche market, which is hard to kind of get a grasp on. There's low revenue visibility, and the company is currently loss-making. So that's kind of the equity story in the market. So could you try to formulate what do you think is the equity story here. When will grow [indiscernible]. How do you see the business scaling? How should we think about operating expenses once growth returns, et cetera?

Sure. I mean I think we've laid that out in the presentation today, at least our opinion of the equity story, right? It's a company that has that is addressing a serious issue. I think on the niche part, I would say, yes, it has been niche to this point, but the entry of other major players is validating the category in and of itself, and that is taking it from where it is now and going back to what [ Anders ] said, sort of being in that early stages and now going into an expand phase. So I think we're seeing a maturation of the category that's going to take it from niche into more sort of mainstream, if you will. And I think on the cost discipline, we've talked a lot now about how we're going to be driving down the variable costs, and we're going to be doing things efficiently. So I think we have laid out a case for how we are -- our OpEx will not be growing 1 to 1 with our revenues. And it really doesn't require that much revenue growth for us to get back to profitability. So I think we have a great opportunity here with not that much top line growth required. Really, if you look at like the historical performance of the company, first to return to profitability and that there is by the actions of others, not just us saying ourselves at this category, there's a reason for it existing. It's going to continue to exist, and it's going to expand and grow larger over time. and we are extremely well positioned to capitalize on that.

So just a follow up on that. Should we expect anything in OpEx? I mean you're going towards more direct sales, right? That's what you're trying, is there anything we should think about in OpEx in terms of marketing plus increase in marketing spend? Or is it sort of like the current OpEx basis is what you expect going forward until you reach kind of profitability? And from there, it's profitable growth.

I think in terms of the fixed costs, you can assume that they hold relatively constant, right? But some of the variable costs will grow with revenues, right? Because, yes, we can achieve cost savings, but their variable costs for reason, they increased in line with revenue, right? But in terms of headcount, things like that, you can assume that those will remain fairly constant until profitability is achieved again. So I don't know exactly how you model our case, right? But -- and how you model it. And then in terms of like you took up the example of more direct sales, right? And there we've talked quite a few times about the unit economics of it, right? And how they're superior. And that's because the MSRP on airthings.com, right? That's what we actually get in revenues, right? We're not having to give away any of that MSRP, the Manufacturer's Suggested Retail Price, away to a third party, like you do in retail, which is a fairly significant percentage, right? 25%, 30% has to be given away to sort of brick-and-mortar retail or even to Amazon, which is lower than for brick-and-mortar, but you're still giving margin away there, right? And then as, Audhild, touched a lot on after the cost of build of the product, the next highest variable cost is freight, right? And I think we gave a very honest portrayal of that as sort of a patchwork today, right, being worked on. Man patchwork for a reason because we're pursuing hyper growth. We wanted to make sure that we serve our customers, but there is significant cost savings there. So as we rationalize with the flow of goods and the partners used in that, that will only strengthen the case for our DTC efforts. My prior employer was a D2C player, primarily only a D2C at that point in time and very quickly got itself to profitability by having a strong focus on these variable costs.

Just one last question, if I may. So just seeing you had quite tremendous growth in [ 2021 ] at least selling to distributors or partners. Do you have a good estimate [indiscernible] replacement cycles here? I mean -- and also, if you have data on customers [indiscernible] repurchasing? because that might end up [indiscernible].

Yes. So speaking to the especially increased revenue towards the latter part of 2021, right? To some extent, also came from the fact that we that we went a bit too broad and too wide in regards to our retail distribution, [ shoving ] more essentially in simple words, [ shoving ] more units into more channels on the global scale, that we suffered with throughout 2022, definitely. And that was a key factor leading to what we presented today, really being more disciplined in regards to our retail distribution, more focused with key partners, building a scalable model, before we ramp that back up again. And so I think that directly answers -- answered that question. And the second question you had was -- replacement cycles. And there's -- and there's no doubt, as we've shown throughout the quarterly reports that we've had elevated levels with our channel partners in markets, and where we've seen for a longer period of time that really kind of getting to healthier levels. And from a consumer perspective, quite optimistic on what we're seeing now going forward into 2024. That being...

We saw, especially in the second quarter last year, right? A lot of the key distribution channels, especially in consumer, have a large focus on getting their own working capital in order and cutting down on inventories, right? And we saw that them take very drastic steps to cut down from what might have been multiple months before now down just a few weeks, right? We see them remain cautious throughout the period. So that's where you just continue to see growth in consumer. When and to what extent they will go back to being -- to being optimistic and be willing to take, that we can't -- we're not going to speculate on exactly when that is. You could say it represents an upside risk/potential, but to try to speculate on macroeconomic or the decision makings of third parties, so we're not going to do that.

We went from a period where some of these retail partners, they were doing whatever they could to secure inventories because they were so afraid of being empty. Right now, they don't care that much. It's super slim inventories, and there's like weekly reorders instead of huge orders that we used to have.

[indiscernible], ABG, I have 3 questions. First 2 on Airthings for Business. One, you typically have like one big contract each year, which has been very significant. What is kind of the trigger for that to go to multiple of those contracts? Does that require just that the market matures more? Does it require more investments in your sales force? You say now that you have a more direct approach where you go and more directly to the customers. That's the first question. Second question is where -- how do you see your offering stack up versus other proptech players, which are maybe more heavily focused on software or other types of sensor solutions. Third questions on a follow-up to what you said on cost [ Jeremy. ] You said we should anticipate a relatively flat OpEx...

Fixed cost OpEx.

Fixed cost OpEx, how much can you grow without increasing your fixed cost OpEx to understand a bit of the scalability?

First on the Airthings for Business side. Yes, we had a few large sales. We are seeing more larger opportunities that we're working on. And I think what you've seen today with the new strategy that we're doing, a lot more focus on end clients and helping them. I mean we'll learn so much of what works and what doesn't work in the past. Working a lot with partners. Yes, that can be nice, but really to win those large deals, you need to work directly with the end clients. So we're totally changing how we go to market in order to get more of those bigger deals. And we see it's working. So that's what I can say about that. There will be quarterly fluctuations also moving forward.

In terms of head count expansion, I think we have a lot of opportunities to grow significantly with the head count we have today. If we just sort of like take baseline, right? And you think of airthings.com, you don't need to add a lot of additional resources to grow that, right? It is -- that is the -- or if you could say, the appeal of a D2C sort of go-to-market model, it requires very few headcount. Similarly with Amazon and with retail by cutting down the scope by focusing on those. And then like we saw with the example of Home Depot, instead trying to expand and go deeper in those, expand the product portfolio, the product offering in those that doesn't require additional head count and similarly, Airthings for Business. But that being said, I want to go back to sort of that first slide I started with in the finance, right? And our focus is really on long-term value creation. So if we see that there's a bottleneck, whether that be in our app development to get even more speed into building. We are going to make calculated bets on the areas where we see that, that will ensure our long-term success, if necessary. So I don't interpret it as like I'm tying myself to a mass here and say, we're not going to increase headcount. There may be areas where we see a need, and it's a very justifiable need for the business and with a long-term perspective on where we want to take this company. We don't want to make decisions now that limit our long-term potential.

So [ Markus from SEP. ] I'll just start clarifying what you think about your channel inventories because I think you said that they were now lower and a more healthy level. Of course, you cannot know when they will start ordering at normal levels. But at some point, you will expect device registrations to grow in line with revenues? Or are there any reasons why we shouldn't expect that? Or just some thoughts on the channel inventories and device registrations and revenue growth that dynamic would be helpful. That's the first one.

Yes. And I think that's just speaking to what Jeremy answered to that similar question earlier, is that we are seeing our channel partners and channel partners in the market being more cautious. And you can see that in quarterly reports from other companies that I'm sure you're following like [ complete ] or other retail partners have taken and are taking significant actions to lower inventory levels. And we're working with, like Jeremy was saying, it's what it is as of today. We can't really speculate on when and how will that just ramp back up again at some stage and if it will, but we're tracking along with what we presented today and been realistic to not really speculating on when that will ramp back up again.

And there is, of course, some disconnect also driven by -- we've had the working capital situation and the high elevated inventory levels. We have run additional promotional activity throughout the course of this year. So then -- so that creates a disconnect, right? Because revenues, you're selling multiple devices that may be a rebate so you get 2 device registrations, but you're not seeing revenue go up by the same amount. So over time, the 2 will more closely -- but there'll always be some deviation just by the nature of it, right? Because if we sell to a retail partner, we recognize the revenue and we sell to the retail partner is not going to get registered as a device registration. But yes, you would expect it to, over time, to meet. I think there's a number of different factors in there right now. And I think once we see our own inventory levels return to sort of normal baseline. We are a little bit less reluctant on are less dependent on promotional activity. You'll start to see them come in. There'll never be 1:1 because of some of these differences. And the other last thing is, of course, the more we're able to grow airthings.com, even closer they'll be, right, because then you'll get that time variable out of the picture.

And there's still the seasonal element of our business, right? But we're seeing that is also changing with us unfortunately, as I talked about today, wildfire has been more prominent also throughout the year, air quality being 300-something that is relevant all throughout the year and not just when we in the northern parts of the western world, at least close doors and windows, now towards the following winter time.

So my final question is more on the business side and the regulations, I think you mentioned some regulatory tailwinds. Can you elaborate a bit on how you see the regulatory environment potentially supporting your demand picture? And are you actually seeing some headwinds. We've got other, I would say, ESG regulations that were very favorable among consumers, et cetera, were more favorable before than probably now with a weaker macro? Are you seeing some of those trends impacting U.S. as well?

Yes. There are several examples, and it's different in different regions of the world. We see, for example, in California, where there's been funding to monitor air quality in classrooms, or to make the schools more efficient. We see in Norway now, there is also more regulatory requirements of actually monitoring air in classrooms. We see in Europe, there's new regulations on ensuring that the existing buildings get smarter and more sustainable. So there's numerous different regulations that -- and legislation that is going to help us. And of course, sustainability as well on top of that. But it's not like that's like a switch and suddenly things takes off. It takes time. And there's a very long cycles from these regulations, and funding and priorities. So we see it's helping us, and it's going to help us for the long term as well.

But you have not seen any changes in the regulatory environment over the past year due to macro and what we're seeing in the economy?

No. I guess I can just add to it. I mean, we do see the regulatory tailwinds in the form of we've had attention at the White House and the summit on indoor air quality. We've seen the CDC come out with guidelines and we've seen [ Astra ] come out with guidelines as well. But if we use the U.S. as an example, there is no federal guidelines in the United States. And as I even mentioned, California has fairly favorable regulatory requirements in terms of -- especially in schools. California tends to be a frontrunner. I'm a little bit biased here, since I'm a Californian, but tends to be a front runner on a lot of these issues. We're closely monitoring the regulatory development in the other 49 states, it's 49 other states to watch, of course. And I can say there are -- we see some legislation moving through different layers of the legislations in these states. I'm not going to mention these states specifically, in case any of our competitors are listening. But we're closely monitoring that and the development on that side. But -- and I can say this because I'm an American, regulatory developments in the U.S. tend to go slowly. The U.S. tends to be not so favorable necessarily to regulatory development. So it does take some time, but we do see not just California, but also in the other large popular states, movement in the right direction, but the wheels of Congress takes time.

Any other questions? If not, then we'll -- oh Christoffer?

Yes, Christoffer from DNB, again. [indiscernible] just one thing that's again a bit like for me, if you -- frustrating as a customer. It seems like you guys started out with kind of talking about how you could scale like benefit from having the same product portfolio basically for consumer and business. So you kind of can share the R&D and so on across sort of a bigger, a broader platform, but I'm seeing a lot of great new products coming out for the B2B space, which I'm not able to use in my system. So for instance, the Space, CO2 Mini is something that I know a lot of people on the consumer side is also looking for. So I'm just trying to understand when you kind of launch new products and hardware on the business side, why aren't they launched for the Consumer side?

I mean it's -- it's very different needs what we see in Airthings for Business and Consumers. And in buildings, there's very different needs on some of the hardware sensors that's required. And in the Consumer, it's not about having the most hardware products. It's about having the right products and having the right products per room. We have a very focused strategy there to enhance our software solution and not just have a very, very wide hardware portfolio. So I don't know, I'm not sure, if you want to add more on that?

I think it ties back to the focus on the 360-degree customer journey, right? Because we could build a really wide hardware lineup. But if we can't really develop super value for those products per rooms, that's not really worth it. So speaking to that, we have a super exciting road map, and there are things happening all the time. And -- but we're developing our hardware solutions based on rooms and the value -- building the value proposition in regards to a 360-degree customer journey so that you can get value and see value other. And doing that also takes sometimes a bit more time from a software perspective, than just launching hardware direct into dashboard. Are there questions?

There will be time to chat later. We'll have opened up for some refreshments back in there. So we'll be happy to speak more. Thank you.