Clavister Holding AB (publ.) ($CLAV)

Welcome to our Q1 2006 (sic) [ 2026 ] Interim Report Presentation. My name is Kate Linwood, and I will be your host for today's session. And with me today, I have John Vestberg, our CEO; and David Nordstrom, our CFO. So we will start today by John giving an overview of the report and sharing some insights and elaborating on detail on that, and then David will follow with the financial details. And yet, you have the chance to ask questions after. We'll have a Q&A session. So please post your questions in the question box throughout the presentation, and then we will pick those up after. So yes, the session is also going to be recorded. So you will find that on our website after. So with that, let's hand over to you, John.

Thank you very much, Kate. And yes, again, welcome to this report presentation. I'm really happy to see that we have a lot of attendees, maybe even a record number of attendees. That's really, really good to see. Speaking of record, I think we can be proud of and happy to report what we consider to be really a record quarter for Clavister from really many, if not, all the perspectives. So if we would sort of phrase Q1 2026 in just a sentence, it would be really a strong start to the year. Some of the highlights, of course, then includes the major defense contract that we were awarded by the Norwegian Defence Materiel Agency earlier in the year. We'll come back to that, which, among other key growth drivers has really driven a strong revenue growth in the quarter with 35% net sales growth, which is among the highest growth numbers we've recorded. Not only that, we've seen that our profitability is picking up significantly, actually, despite cost drivers in the quarter related to a number of one-off effects and so forth. But despite those, we were able to show significant profitability improvement as well. With all of that taken together, we are now sitting on a significant backlog, really a robust order backlog that gives us a strong visibility for the foreseeable number of years. If we start zooming out a little bit and looking at the geopolitical drivers, we've talked about this before. We will repeat a bit again because it is a clear trend. It is something that sort of dictates the market and drives the market as we speak. So if we would sort of single pick one growth driver that dominates the cyber industry right now, it is the geopolitical development in the world. So moving back a few quarters, a year, we were essentially seeing the war in Ukraine as the main geopolitical tension, if you like, or geopolitical driver. But since then, as you know, we have the escalations in Gaza, we have the U.S. intervention in Venezuela. We have, of course, then the Iran war. So a lot of increased tension that continues to drive the need for security, obviously. That, in combination with the more and more distinct requirements on moving towards a European digital serenity. Those 2 factors are strongly contributing to high interest, high-growth and high market demand for European solutions. And we've sometimes received the question, what happens if the war or wars end tomorrow, won't that change narrative back again? Our answer here is quite clear, absolutely not. This is a structural and sustainable change in demand for European cybersecurity. What has happened in the past few years cannot be undone, not at least in the many, many 10 years from now. So that trend is here to stay. We see this more practically in prospect customers, partners and larger customers that we have been approaching for a while, seeing their narrative changing or the mindset changing from curious interest in the beginning to concrete tech evaluations and actually procurements happening with clear requirements on moving away from the dependencies that Europe has for -- of U.S. and other technologies. And this is on a level that we have not seen before. Then again, it's a process. It doesn't result in revenues overnight from new customers, but the trend is there. The levels are there on a level that we haven't seen before. If we move over to our civilian business and just as a quick recap, we consider Clavister to be a dual-use vendor, meaning that our products are equal suitable for the civilian market as for the defense market. In the civilian business, which represents -- if you look at the last 12 months, it's the majority of Clavister's business, around 70% of our sales is coming from the civilian business. It is clearly a central part of our long-term growth strategy. So we anticipate our civilian business to be a fast-growth market for Clavister in the -- both near-term and absolutely long-term periods. We have been working actively on a gradual shift or gradual complement, I would rather say, from a more diverse type of sales operation within the civilian business to a more strategic selection of customer segments, especially segments where the Swedish heritage, the Swedish technology, if you like, is important and where the geopolitical tensions are really important or drivers for those type of customers. This is a process that is a bit of a transitional process. It takes time. It is an investment in time, but it's clearly something that we see is building foundation and sets the conditions for building even higher growth and profitability. One concrete example of this is, it's just one example, but a concrete one, the extended partnership that we entered into with our distributor, Arrow back in the autumn. With Arrow, we've seen us establishing distribution in more countries than the countries we've been established in being the Nordics and Germany. So we've expanded that to the Benelux countries and the Baltic states and to Poland as well. Now in some of those countries, we are now establishing new partnerships with new resellers, new system integrators. We are adding our own local presence in terms of our own salespeople, our own presales technicians and so forth to build those relationships on those markets. So gradually expanding the civilian business. That being said, if we just look at a few number comparisons, going back to the same quarter last year, we had a significantly high volume of hardware deliveries, extraordinary high, I would say, which temporarily boosted the revenues. Keep in mind, we're getting one-off spikes in revenues from hardware deliveries and then the gradual increase of software revenues coming from the term-based licensing. If we then look at this quarter, I would refer to this quarter in terms of hardware volumes to be a bit more normalized. And of course, that means that from a comparison point of view, it results in somewhat lower revenues in hardware deliveries in comparison, but I would say, more to a normal level. If we, however, then look at the underlying base of contracts, so the software licenses and specifically in the civilian side, that continues to develop positively. So that is a growth business, and this is clearly visible in our increasing ARR. If we move over to the defense side and a bit of a repetition from -- for those who were in the Q4 call as well. We were awarded a significant contract, a strategic contract by the Norwegian Defence Materiel Agency in Norway in mid of January. This is a contract that is part of a large digitalization program called Mime. It's essentially the full digitalization of the Norwegian Armed Forces, and I'll come back a little bit to that as well. We consider this contract to be a breakthrough contract. It's a game-changer contract for Clavister, not only for defense, but it sort of sets the tone and it gives the credibility also in other civilian larger type of business prospects. The actual contract includes development. It includes delivery of our standard products. It is mainly a software deal, which means that obviously giving very substantial margin contributions as well. After the initial delivery, we're looking at a 4-year maintenance and support commitment. After which, of course, we expect the relationship with this customer to continue for many more years. It's a system that should be active for very many years. The deal itself, the order is at SEK 280 million. That's the committed order value. We have already started delivering on the project during Q1, which means that we see both revenue and margin contribution from the project already. And the project, as mentioned, is supposed to be running for a few years after this initial start and then moving over to maintenance and support phase and/or further development. That's to see. I mean it's a system that will expand and live for a long time. If we look at the actual sort of -- what are we delivering? This becomes a little bit of an educational part, but I think that's super important for the understanding of what we're delivering and to get an insight how that could potentially lead to growth business elsewhere. Going back a bit in history, again, this is part of the large Mime program. It's a double-digit billion Norwegian krona program in digitalizing the Norwegian Armed Forces. Many years back, the special forces in Norway implemented or developed their own in-house communication system to be able to support high levels of mobility, high levels of secure communication and so forth. That system was rolled out. It's still in operation, and it's really, really appreciated by the Norwegian Armed Forces. However, coming up to end of 2022, there was a political insight, if you like, or a political decision made that the Norwegian Armed Forces, they should be the users, they should not develop solutions. The industry should develop solutions. So when looking at the next generation of this system, they essentially turn to the industry and started a significant large procurement process where we and many other vendors and honestly, Clavister was by far the smallest vendor. We're up against many, many large international defense contractors. So a long procurement process, which ended in -- yes, end of 2025 and beginning of 2026 with Clavister then being awarded the contract in -- again, in strong competition. What is it then we're actually delivering? Well, we refer to this as the Tactical Core Network System, or TCNS. So in essence, you could see this as a brain or the brain of the network connecting all units, all soldiers, all vehicles, all tactical posts, all of the units within the Norwegian Defence are connected through the Clavister system. So, obviously, it's a prestige project from that point. Everything is connected. Everything is dependent on the quality and the performance of the Clavister solution. To give a bit of sort of more flavor to it, you could see the Clavister Tactical Core Network System as the backbone, as the spine, if you like, of the entire network in Norway. So on the one hand, you have a number of so-called battle management systems, a few examples on top, could range from Norway's own battle management system. It could be Saab's battle management system, could be any of those. We are agnostic to any system. At the bottom of the picture, you see a number of tactical radios and other connectivity links could be commercial 5G networks, could be private 5G, could be Starlink or other satellite links, but also common military radios or digital radios from Kongsberg or Elbit or Bittium or Thales or others. We are, again, agnostic to the system. So what we essentially become here is a system of systems that are interconnecting all other systems into one cohesive system that sort of interconnects all the units, all the operations in the Norwegian Army. If we look at some of the benefits of this, first of all, it brings an always connected type of philosophy to the network. So regardless of -- if you're behind the forest, behind a big mountain in the Norwegian fjord, wherever you are, you should have connectivity. That's obviously super important in this highly digitalized environment. But even more so, it's a nice nationwide communication. So whether you're in the south of Norway or in the top north of Norway, you're connected to the same system, you have the same capabilities and the same communication abilities as everywhere in the country. Furthermore, one key aspect of this is so-called interoperability, which means that whenever Norway is running federated missions, NATO operations, NATO missions, the system as such is fully compliant with other NATO systems. So essentially, you can have a group of vehicles belonging to different NATO nations, and they are immediately able to connect and communicate. And finally, as one final example, also a global access. Obviously, NATO countries, Norway, not excluded, is participating in a lot of global operations or global missions. If you have soldiers or units elsewhere on the planet, they are still able to communicate. They are still forming a part of this national network in Norway. So many operational benefits and a lot of, of course, security and connectivity demands on the system. If we then move slightly from the actual contract in Norway and look at the defense sector in more general. If you recall from Q4, we had a number of supply chain challenges with hardware deliveries that were postponed into the new year and thus, negatively impacting our fourth quarter. Now we have been working very thoroughly with our suppliers on this matter in the past months and quarter and are happy to see that we have been able to mitigate many of those supply chain challenges in this quarter. We are, of course, monitoring the situation going forward. We are ramping up our deliveries. We -- again, from our order backlog, we have large volumes of deliveries coming up. So it's highly important for us to monitor this and make sure that we have long-term stability now in our deliveries. But so far, looking good. With that, moving over to the numbers and David.

Yes. Thank you, John. So we're looking at a record high order intake and quite obviously so given that we won the contract in Norway of SEK 280 million. So that is clearly boosting our order intake in this quarter. Comparing to Q1 last year, which was in itself quite strong with a quite large BAE order, there is no such BAE order in Q1 this year. So -- but with this, this is clearly our largest order intake quarter so far. And then leading to an order book of SEK 640 million. And to put that into perspective, that's almost 3x last year revenues. So that's a significant support for revenue growth going forward in the coming years. And I think it's important to reiterate that this is a committed order book with a delivery time line tied to it. So we have a strong certainty on how this order book will translate into revenues over the coming years. Then seeing then that the order book that we're sitting with are able to fuel net sales growth in this quarter. And I think important to say, John said it, and I think it's important to say it again, the Norwegian order is starting to support net sales already in Q1. We don't see net sales support from this in January. This project is being ramped up in February, continuously ramping up in March and still growing somewhat here in Q2 as well. So the full net sales support that you would see from a contract like this is not yet visible in our P&L. And we will come to the looking at kind of the civilian and the defense business, how it's performing in Q1. But we can say that, okay, the defense business has been very important in driving net sales growth in this quarter. Ramping up the Norwegian contract is one reason, growing deliveries to the BAE system is another. There are others as well, but these are the 2 main drivers and then able to recuperate a lot of the -- we did profit borne in Q4 because of the supply chain issues that John talked about. We have been able to deliver a lot of that delay in Q1, which also generates support and growth here. Then comparing the civilian and the defense business, the defense business are showcasing a very large growth in Q1. I mean, more than 300% net sales growth in the defense area. But important to state that the civilian business still is 70% of our revenues. And with somewhat -- I think this is something we can elaborate a little bit on because this is important to look at and understand that Clavister are seeing a robustness in the civilian business. Comparing to Q1 last year, then we saw a more than 100% growth of hardware deliveries in Q1 2025. And as John said, we have more normal levels of hardware deliveries in this quarter. So that might give the impression that the civilian business is shrinking. It is not, but it does not have the very large revenue support of one-off hardware sales that we saw in Q1 last year. But saying that, it's important to say that there is more growth capabilities in the civilian business that we're showcasing here and now. And then why? Well, Clavister is doing a transition in building larger markets, as John were talking about, building larger partnerships, working with larger end customers, and this takes time. So we are moving also sales resources in creating a better foundation for larger growth going forward. And to us, it is important to make this investment and give this investment some time, so we're able to capture growth in larger customer segments. And that, of course, have a somewhat dampening effect on the growth capabilities here and now, but we believe in making this investment to create a larger growth vehicle in the civilian business going forward. So I think -- so we -- and we see good proof points of this. And I think just mentioning this very quickly. Some time back, people were talking about European alternatives. Then going to investigating European alternatives. And we are in a phase where we more -- do more technical proof of concepts, signing new partners, building a distributor landscape and seeing active procurement happening in a civilian area. Not making promises on where the growth will be in a quarter or 2 quarters from now, but we have a situation where the European market is moving from curiosity to action. And this, over time, will benefit Clavister and our growth capabilities. ARR-wise, we're still seeing and continuing the growth trend in ARR. And that means that, even though we don't have the hardware support compared to Q1 last year, the installed base of the software contracts is growing. Then, of course, the ambition is to grow this faster, and I think we will, but this will take some time and reflect on what John and I said before about how the civilian business is evolving. Profit-wise, I mean, we're seeing a 45% increase in our gross profit, maintaining or showcasing a strong gross profit margin in this quarter. And then why? Well, there are 3 reasons to why the gross profit or the gross margin is this strong despite the high-growth level. One is, of course, that the contract in Norway is a software contract, meaning that there is really -- there are no third-party components, there are no hardware. So the sales here have more or less close to 100% gross margin. So that in itself gives support. On the other hand, we were able to recuperate a lot of the delays to BAE in Q4, delivering a lot of that now in Q1. That has a dampening effect. But the strong gross margin in the Norwegian contract boosts this. Then the civilian business, which was a bit lower on hardware volumes, then, of course, generates a strong gross margin on its own. So there, you see a good margin support in civilian business as well. So when you take these 3 effects together, we're landing on a gross margin that is above our target of 80%. So this is something that we're happy with. On the operational leverage, we're seeing a continuing a trend of maintaining reasonable deltas between our net sales growth and our OpEx growth. But there are kind of a lot of things to talk about here that OpEx growth is 22% in the quarter. However, we are burdened in Q1 with one-off costs related to winning the contract in Norway. These are SEK 3.6 million. So if you take that into account and also adjust for nonrecurring items, we are actually sitting with an OpEx growth of 11% compared to a net sales growth of 35%. So I think we're able to grow and grow with cost control. And this, of course, have been a key focus for us for quite some time. So glad to see that. And on a profitability level, the growth that we are demonstrating the gross margin and the gross profit expansion is then leading to profitability increases as well. So on an adjusted EBITDA level, we're sitting at SEK 15.1 million. And then worth mentioning here, those SEK 3.6 million that being one-offs related to Norway, they are not in this number. When you adjust for them, we are at SEK 18.6 million, but we're not adjusting EBITDA with the one-off effects for Norway. So that's important to state. Sitting with an adjusted EBITDA margin of 20%, we are seeing that we're able to grow our EBIT level, so sitting at SEK 3.6 million and leading to a net result of SEK 1.4 million compared to a positive result last year of SEK 3.2 million. So let's just -- a few words on that. Last year, we still had the debt to EIB, and that debt was in euros. So Clavister was subject to large FX effects in our financial net. And we had a substantial revaluation last Q1, where the SEK were improving versus the euro. So that gave a very positive accounting effect impacting our financial net. But if you adjust for that, this is actually the first quarter where the Clavister business is generating positive net results without support of one-off accounting effect. So this is actually the performance of the business that's generating a positive net result. And that, I think, is a clear highlight for us as a company.

Good. Thank you, David. Looking a bit on the outlook going forward. And we are essentially continuing the trend of the momentum. We're not changing our outlook as such. Again, just reiterating that one of the key drivers here is the sort of European movement towards the digital and military sovereignty and that really drives demand for our types of products. We see that we have structural growth opportunities, and I think we're demonstrating them. But as David alluded to, we believe that there is much more growth to fetch in -- specifically in the civilian business that we have not showcased as much so far, but we're building the foundation for it. The order backlog that we're having, those SEK 640 million, they are, again, as mentioned, they are committed contracts. So that means that we are very -- have a very good visibility on the deliveries for the coming years, which also means that we can more confidently invest in growth factors, growth drivers going forward. So if we look at the coming 3-year period, what are the planning ambitions? Well, we want to see a revenue growth that exceeds the market growth. That's clear. We already mentioned the target gross margin of 80%. And I think the past years have clearly demonstrated that this is a reasonable target. We have most of the quarters been slightly above this, some quarter slightly below. But clearly, this is doable given the type of products we have. And there is a big market and Clavister is a small fish in a very big pond still. So we need to grow. We want to grow more, which means that the focus reaching -- after reaching sustainable positive cash flow is to reinvest a big part of that cash flow into growth-driving activities, mostly in sales and marketing buildup, but also, of course, in delivery capacity. So that's important. With that, leaving back to you, Kate, for Q&A session.

Perfect. Yes. Thanks very much for elaborating on the report and sharing your insights. So now let's move over to some questions. We've already got a lot of questions. So -- but please post them now also in the question box, and we will get back to them. Yes. But I think let's -- I mean, of course, the Norwegian win with the TCNS deal is a big topic for this quarter, and we've got a lot of questions around that. So I think let's dive first into that area. One question is along like, okay, is there a new potential business that can come with such a win? Can the system be distributed to other countries? How does the pipeline look like there? Is there any action already happening around, yes, leading up after this win? John?

Yes, with regards to the Norwegian contract, you mean, right?

Yes, exactly. The TCNS deal. Yes.

I mean starting looking at sort of zooming out a bit. The good thing here is that, we are in this contract following the principles that Clavister has been having as a product company for always. We are never building bespoke products or solutions for single customers. We're investing in product development that creates more and better standardized products. Sometimes our customers are part of financing that, but it's still Clavister's IPR. We can still replicate that as part of our product portfolio to other customers. Now a system like this in Norway is, of course, it's a large system. It's a huge rollout. We shouldn't sort of take lightly on the effort it takes to implement this in other countries. That being said, however, if we look at where Norway are on a maturity level in digitalization compared to other countries, they are definitely in the forefront. And we know that there are other nations that look with envy on Norway on what they are doing. So clearly, our defense sales team, they are picking up those signals and seeing, can we replicate, can we do this in other countries? I think theoretically, conceptually, the answer is yes, we can. Is it an easy effort or an easy task? No. But clearly, we will try.

Yes. So staying with the TCNS deal though, there's another question around the current one now. So what is the potential of mishaps around this contract? What could go wrong? Do you see risks, for example, cost overruns or other liabilities? And how do you plan to manage that?

Any large project could, of course, have their challenges. What we did, which is -- and I would like really to state this that the customer in this case is a highly professional party, a highly professional customer to work with, which means that we, together with the customer, have spent a lot of time identifying risks, setting up plans for mitigating risks in advance, added proper safety margins in time lines, in budgets and so forth so that, of course, there could be mishaps, but at least we've proactively took a lot of sort of precautions to mitigate them. I think one benefit here, if we just reflect on the fact that the market is a bit suffering on a broad level from supply chain issues and component shortage. This is a software deal. So it's entirely in our hands. We're not dependent on third parties to that extent as we are in other business. So I think we have a very good chance on delivering this project on time and also the fact that we are scaling up so much already in Q1 that demonstrates a bit -- the readiness as well the organization had or became forced to have, I would say, in delivering these type of contracts.

Yes. Yes, staying with that, we've got another question around how high were the contributions from the Norwegian contract in Q1 in sales and EBITDA? I think David, you have elaborated on that. Is there anything else you want to add there or elaborate further on?

No, not really. We're not exposing the exact number of a certain specific customer contract, neither in absolute volumes nor its contribution to the underlying profitability. But what we can say is just restating that this project -- the contract was signed end of January. So there is no revenue support from this contract in January, then starting to build up a delivery organization consisting of both our own employees, new recruitment and consultants. That means that there is a buildup in this project. So, of course, the full revenue potential from this contract was not there in Q1. So a higher degree there in Q2, where this -- then you have a full quarter to work on it and you have more of the organization in place to deliver on it. So I think that's what we can say.

Yes. Okay. Yes, I think we've covered a lot of questions around that deal now. So let's move on to defense in general, I've got a few questions. There was a big order for CV90s for BAE. And the question was, is there any -- yes, what is the impact on that for Clavister? Or is there any business coming for us with that win?

I'm not entirely sure what that refers to. Maybe the person asking that question could perhaps detail a little bit.

But isn't it relating to the -- as I understand it, the Nordic Edition and the potential going forward, how would that...

I understand that. Okay. So yes, just to be clear, that's obviously a business that BAE is discussing. They have not won it yet. The -- I think here, we can just do what we made in previous BAE deals referring to the public announced information that BAE is giving to the market. So, of course, we are closely following that -- those business discussions. We hope and believe that we can be part of those, of course. But as always in business, nothing is done until it's done. But we're fairly positive.

That probably also answered the question. There's a question around, yes, both Sweden and Norway have a large legacy base of old CV90s that will be upgraded in the near future and where do we see our business potential in that as well, yes.

Yes. I mean, in this large so-called Nordic Edition prospect that BAE is working on, Sweden and Norway are 2 of the 6 nations that are sort of cornerstones in the deal. So both Norway and Sweden will most likely then see a large addition to their fleet and as part of that potentially also upgrades. The current fleet of CV90s in Sweden, they are already being part of a semi midlife upgrade. It's not a full digitalization upgrade. It's more a mechanical upgrade. So we're not really part of that. It's still a bit too mechanical. But in general, both Sweden and Norway sees a lot of upgrade potential here.

Okay. If we move out of the defense business for the moment and look at the civilian business, questions around that. We've got a question here. Last quarter, you spoke about somewhat cautious customers in the civilian business. Could you explain if this has changed during this quarter?

I can start. I mean, civilian business is a wide church. So it depends on what we're talking about. So if we talk about certain sectors, energy, public sector, I would say that there is -- they are not cautious per se. It's rather, okay, looking more actively at European alternatives. So that's where we're investing with our sales organization, meeting up that demand that is growing. These are typically not quick wins, but we are investing a lot here and having very many good dialogues. I think that will translate to business over time going forward. Then if you look at the private sector, I would say that the cautious behavior that we have been seeing is there because in Q1, we have also the war between the United States and Iran with all the ramifications that have on private individuals and business when it comes to increasing fuel prices and access to oil. And that, I would say, have -- that at least it injects more uncertainty into the private sector. And that uncertainty could and to somewhat delay investment decisions in whatever, including cybersecurity. So that's, I would say, uncertainty in that part is not beneficial for anybody being exposed to a kind of a private sector. So let's see where that uncertainty takes us. I don't know if you want to elaborate, John?

No, I think that's a relevant answer, I think.

Yes. And just adding, I mean, when it comes to Clavister as a business, to a certain degree, will benefit from geopolitical risk because it puts the spotlight on the question about geopolitical risk. And that, I would say, benefits Clavister and makes more organizations subject of kind of nearshoring and reducing risk by procuring solutions, cybersecurity among them more locally in Europe. But on the other hand, uncertainty has a negative effect as well, and that will also impact all businesses, including us that uncertainty might defer investment decisions. And I think that's what we can say.

What is the targeted trend in terms of ARR growth for '26?

We're not explicitly guiding anything around ARR. So I think we have to be a bit vague, but we can say like this, that even we are seeing a bit cautious growth in the civilian business. That's the main source of ARR. The defense business is not very ARR-centric. So it's a low ARR support in defense. We have tried to explain how is the growth outlook looking for the civilian business. So with quite low growth in the civilian business, as we've seen in Q1, we saw it in Q4 as well. We are demonstrating a 6% growth of ARR. When -- and I think it's not a question about if, it's a when question, when growth starts kicking in, in the civilian business, that will, with a little bit of lag, have an impact on ARR. And why is it a lag? Well, it's because we record ARR when the license we have sold has been activated. And typically, the duration there is 30 days. So there is a little bit of a lag in ARR compared to net sales. And then, of course, we would strive for double-digit ARR growth. And then it will be a gradual shift. I don't expect very large kind of booms where ARR -- it has -- it is a slow-moving metric to a certain degree. So I hope that answered the question. And maybe not the answer that you were looking for in the question, but we're not able to express an explicit number.

Thanks for elaborating, David. Could you share a bit more around how your own sales force is working in relation to the partner network in order to drive growth in the civilian business? Yes, David, I think that's for you.

Okay. Yes. I mean, we're doing several things. Mainly what we're doing is focusing on certain customer groups where we know our message resonates very strongly. These are customer groups who mainly value 2 things. One is, they are concerned about geopolitical risk, and they're looking for very secure cybersecurity solutions. This type of customer fits as well as we are a European supplier, so we can check the geopolitical risk box in a good way. And we know compared to others that our security solutions are very secure when we look at kind of public accessible data about known vulnerabilities and such. These customers are, for example, energy companies, energy grids, it's public sector -- it's public agencies and so forth. And what we do is then, of course, we do 2 things, working with our salespeople to create demand among end customers can be in customer pool, but also building larger partner relationships where over time, the partner will be able to generate more and more business to us. But in order to attract and win larger partners, there needs to be an end customer traction. So we do mainly these 2 things, creating demand among end customers, while at the same time, attracting larger resellers, which can, in turn, generate more growth and have the ability to handle larger customers as they come in. So this is what we're doing.

Okay. We have some financial questions. Well, you activated some tax assets last quarter. Are there potentially more tax assets you might activate?

Yes. So the tax losses accumulated in Clavister is roughly SEK 800 million with a tax rate of 20.6%. That means that roughly there is SEK 160 million in a potential tax asset. We have recorded SEK 30 million. That means that's roughly SEK 130 million that is not recorded as an asset in the balance sheet. We are taking a very conservative stance on this. But yes, as the business evolves, we will revisit this and see is there room for adding larger deferred tax assets as we move forward. I would assume, yes, but let's look at it when we move forward.

Can you please comment on the cash collection from Norway? You build up WC now and the cash will come in H2. So should we expect a jump in your cash position in the second half?

Yes.

That's a very distinct answer.

Some answers can be so easy, yes.

I can elaborate a little bit on that. I think we alluded to that in the report as well that these type of contracts, especially with government customers, they are almost always associated with delivery or performance guarantees, which means that we will have to deliver certain parts of the projects until we see cash flow and have proper bank arrangement in place as security for our delivery. Following the restructuring of the balance sheet we did in Q4, as it happened, that also opened up the good ability for us to combine those type of performance guarantees in commercial banks together with still abilities to benefit from cash flows from those projects. So yes, David's -- short answer is absolutely correct. We will see a jump in cash position.

Okay. Yes, we released a great quarterly report, but we still see the stock prices plummeting. Can you elaborate on that?

I think I believe everyone agrees that the valuation of a company is hopefully and likely much broaderly covered than just 47 minutes of trading. So I'm not too worried about that.

Okay. So someone asked looking at the company today, are you ahead or behind if you compare to your thoughts 3 years ago?

That was a very good question. I think in -- of course, this is a question that never has a clear yes or no answer. In some areas, we are definitely ahead. I think some areas have accelerated and moved faster than we were able to anticipate. We have had certain expectations in some areas that did not materialize as much as we hoped. I think we've been clear that the sales we've seen in telecom, for instance, due to the 5G challenges on the market, that's one area that we had higher expectations of in the past, but didn't really materialize. Whereas the defense side has, I wouldn't say skyrocketed, but at least grown faster and added much more opportunities than we really had in the pipeline initially. I think the civilian side is picking up more or less according to plan. Of course, we can always ask for more and faster growth, but also, just repeating a bit what David said, we're coming from a background with a very diverse sales and fragmented sales which really put a strict glass ceiling on the growth abilities. And we needed to take actions to change that and to become more relevant in certain sectors and in certain geographies. And we've been executing on that transition. We are in the midst of that transition. We're nowhere through it yet, and I think that shows in the numbers as well. But the data points and the proof points we're seeing from the market, from the customers, from the dialogues from our sales teams that all of them are positively indicating that we're absolutely on the right track there.

And may I add one thing because -- and I agree with everything you're saying, but I think it's worth mentioning, did we -- because we were -- 3 years ago, we were talking about geopolitical risk and the need for Europe to arm itself with European solutions. Did we expect that, that narrative would be so clearly understood broadly today? No. And that means that the potential for us going forward is larger than we would have anticipated 3 years ago because now the dependencies that Europe has on non-European communications and security solutions are now understood on a level that it was nowhere near to be understood in this way 3 years ago. And that creates a business opportunity that is significantly larger. Then, of course, we need to be able to capture that and handle that opportunity that we're seeing, but the opportunity is there, and it's larger than we would have ever anticipated it to have been 3 years ago. I think that's also important to remember.

I got a question, it says, we saw Airbus acquired 2 cybersecurity companies this year. Do you see a trend of consolidation? And what is your role?

A bit jokingly said, I think it's good that some smaller vendors are absorbed by large corporations because then they will stop to being competitors really because they are just absorbed. Jokes aside, yes, a little bit of a trend, yes, depending on the market. I mean, some areas like the identity and access management market is highly fragmented. There are many, many, many small vendors out there. The firewall business, firewall market, a bit more consolidated, if you like, fewer vendors. Clavister potentially standing out as one of the very few or maybe even the only vendor in Europe not being part of a large conglomerate or a large corporation. I mean, our role in this going forward at the end of the day, it's, of course, a shareholder question. From a management point of view, from a business point of view, we see that we have a lot of growth to capture based on the structure we have today and the organic growth that we're doing today. That being said, if there are important or interesting, I would say, pieces to our portfolio that could come our way, that could be interesting for us to take a look at from an acquisition perspective. Naturally, I mean, we're not looking for new homes for Clavister. Again, that's a shareholder question, but that's really not part of our directive right now. There's a big market to capture for us right now.

Talking about where we are at now, there is also a question about how is the cooperation with Saab developing?

It's developing quite fine. We did not talk about it in this call, obviously, but we mentioned it briefly in the report that Q1 saw the first commercial deal for our joint cross-domain solution with Saab. This was for a European defense contractor or defense system producer. We are continuing the product development coming up with new products, new generations during the autumn and in active dialogues together with Saab building up a joint prospect base there. So I would rate the cooperation as fine and with initial data points now in Q1, but hopefully, more to come.

Okay. Yes. So thank you very much for answering all the questions and sharing your insights. Now to finalize, I have some -- 2 questions to you. So one to you, John, what are your highlights of the last quarter?

Yes. I mean, in a quarter like this, there are, of course, many highlights to choose from. If I'm forced to pick one, yes, of course, I need to pick the contract award from the Norwegian Defence. Why? Because it's -- first of all, I mean, the size of it, but more so the fact that we were scrutinized by the customer and up against a handful of really, really large vendors, and we managed to steal the contract, to win the contract ahead of those large corporations that it signifies 2 things or symbolizes 2 things for me. One, that our technology is really edge. It's really, really good. And secondly, that we have built the type of business, the type of company that is big enough and robust enough to deliver on these opportunities. So yes, if I were to pick one, that has to be the one.

Yes, I think that's one to be proud of. Definitely. So David, your highlights.

Yes. It's -- I would say that we are able to showcase such high growth because it is a record high growth and still maintaining such strong gross margin. That combination, I would say, we haven't seen before. And then adding still -- even though we're investing in growth, we're able to maintain a decent level of cost control. So we have, I would say, a healthy delta between our growth and our cost buildup, meaning that we're able to grow our business that we're growing with profitability, but also expanding our organization to capture more potential going forward. So maybe a long answer, but yes, on the cash question, I had room to elaborate a little bit.

Your chance to tell, yes.

Yes, yes.

Thanks very much for that, David. Yes. And thank you also to our audience today for joining us today for this session. There will be, as I mentioned, the recording is going to be available on our website. And if you have any further questions, yes, please reach out to us. So yes, with that, I would say thank you, and have a great rest of the day.

Thank you.

Thank you very much.

Bye.