Huddlestock Fintech AS (HUDL) Earnings Call Transcript & Summary

Welcome, everyone, to this first half year 2023 Financial Report Presentation. My name is Leif Arnold Thomas. I'm Head of corporate development at Huddlestock and also Head of Investor Relations. And this is an English presentation of today's announcements and a recording of this presentation will also be published on our website and also through our social media. With me today, I have John Skajem, Group Head and CEO of Huddlestock. He will do the presentation in a few minutes. And we have a quite packed schedule today. So the time that is set for this presentation is 1 hour. It will start and mainly be filled first with the presentation from John. And we have also a plan to have some time at the end so that any one of the participants can ask questions at the end of the presentation. [Operator Instructions] If you have any questions always during this presentation or after the presentation, both myself and John is always available, and we also have an e-mail address that is [email protected] that can also be used. So there should be many ways of getting in touch with us if you have any questions. So with that said, I think I'll give the word to John.

Yes. Good afternoon, everyone, and welcome to our second quarter first half 2023 earnings release. It's great to see so many of you that are joining the English version. We had a record number of participants this morning in the Norwegian one. But always, we are very pleased to see that our international footprint is growing and our eminent leader of the Danish office has joined as well. We can see you all over the screen, Lars. But nevertheless, I will share my screen. And as Leif Arnold is saying, we go through this step by step. And if you have some questions, we'll have a session at the end of it, okay? So with that said, let me just make sure that you all can see my screen. Everybody can see the screen now I presume. Just need to click, click forward. Okay. so let's get going. As everybody knows, we are headquartered in Stavanger. We were established in 2014 here in Norway. And it was a buildup from the university environment, where a couple of the people that decided to create this fintech company. We listed on the Euronext growth market in November 2020. So we've almost been listed now for 3 years. We've had our ups and our downs. But all in all, I would say that the listing on the stock market has been very successful for the company for not only attracting many, many shareholders. We're now up to 2,500 shareholders. But also it gives us a visibility and it also adds a stronger quality assurance in all the work we do because we have to comply with not only the regulatory environment, but also the auditor and the whole legal structure of the Oslo Stock Exchange. Furthermore, we are having 2 companies that are regulated by its national regulators and that's the Finanstilsynet in Norway, which is responsible for Huddlestock Investor Services and the we have BaFin and Bundesbank in Germany, who is responsible for monitoring our activity in Huddlestock GmbH, which is located in Munich. We have grown and we're now up to 88 employees across Norway, Sweden, Denmark, Germany and Romania. And as we announced this morning, we have pro forma revenues in the first half of NOK 54.7 million. When I say pro forma for everybody, just so you're aware, that means we've taken all of our companies, including Bricknode and Dtech, Trac systems and so forth, as of revenue streams from January 1 until June 30. And the pro forma numbers, that gives us a number which is relevant for the speed that the company is operating as we speak. So this number is relevant for seeing where we are and what we can expect going forward. Our annual recurring revenue, which is also a very important number for us, we have now in the first half of 2023, we've grown to NOK 20.2 million. And in the second quarter, we have NOK 10.7, which is up about 12.5% from our first quarter, which was 9.5%. If we compare that to 2022 numbers, they were very insignificant back then. So we didn't feel it was relevant to say that we've grown hundreds and hundreds of percent. So -- but we will track the recurring revenue month -- quarter by quarter and publish, of course, as we go forward. And we have, as I mentioned, headquarters here in Stavanger. Other than that, we have a small little office in Oslo. We have a bigger one in Stockholm and Skövde and Copenhagen, Munich and Constanta. So we have a very nice footprint across Europe. Highlights for the first half, numbers first, consolidated group revenues of NOK 45.9 million when compared to same period last year, that was NOK 21.3 million. That's a year-over-year growth of about 116%. Of course, most of this growth comes from acquisitions of several new companies. However, it's very pleasing to see that also the organizational growth is present, and we're seeing that our business is growing. That's very important and very good for us. The pro forma numbers is NOK 54.7 million compared to last quarter of -- sorry, last year of NOK 30.9 million, that's a year-on-year growth of 77%. I've already mentioned the pro forma recurring revenue of NOK 20.2 million. Yes. On the business side, we've had a busy first half, we've had a busy summer. And I know that Stefan is going to come into this a little bit more when we speak later on. But I wanted to address that our Swedish team has been very successful with implementing and putting into production a new Swedish client who signed up at the end of 2022, which went live on our system on June 30. The client has more than 60,000 end clients on our platform, and we digitally process approximately 15,000 trades per day. So this is a real test not only on onboarding all these positions and the customers but also to see that our systems are handling the volume and that it's all digital processes and that we're seeing the opportunities going forward. I also wanted to just mention in the sense that we have a business model in this case with 2 different revenue streams, one being the platform being Software-as-a-Service where we have a fee based on the technology, but we also have another variable fee, which goes for assets on the platform, assets under management. And even though we have 60,000 clients, they're all relatively small, and the 15,000 trades are also very small. So we're seeing that the potential for growth here is very strong. So we will, of course, report not only this client, but also all our other clients and our new clients coming on board in the quarters coming up. But basically, this is a major milestone and a very congratulations to everybody in Sweden that managed to get this hard work done in the spring and the summer to make this reality. This is really good work. And I'm pleased to see that all lights are green. So that's good. Our Professional Services division, they are currently rolling out more contracts, extending their current contracts and the outlook for 2024 is stable. In Germany, we have experienced that the market has been a little bit slower than we first expected, but we're seeing very nice signs of recovery now and the activity is picking up. During the first half, we also completed and have now incorporated all of the acquisitions we have. So we have no outstanding issues in that regards. And that this Dtech, Trac Services, Tracs Technology and Bricknode. Just to be specific on the Bricknode, we bought their 3 operating companies, which is Bricknode Software, Bricknode Platform and Bricknode Ltd. And in regards to getting all of our employees and particularly the people that are out in the field talking to clients and generating leads and generating sales, we have now everybody converted onto the same CRM system. We've taken Salesforce as our system and working hard to gather everyone to collect -- calibrate and to bake it into our system. And we hope to be able to then improve our efficiency and increase our prospect generation and to see how we can work more efficiently together and hopefully then win more contracts going forward. Also, it will allow us to monitor our existing clients so that we can make sure that we serve them in a good way as well. As we all know, it's easy to keep an existing client than to get a new one. So we always need to make sure we have focus on both issues. One, make sure that the current clients are being served and taken care of in a good way and hopefully even grow their business with us and, also work on getting new prospective. As a part of our cost reduction program, we work continuously to reduce our dependency on external consultants relationships, particularly on the technology side. So we're taking more and more in-house. I'll show you some numbers later on, but we have managed to become much less dependent on external resources and increasing our own in-house resources. We are now buying and selling services between the various operating companies in the size of NOK 30 million roughly. Now for those of you that have been following in previous quarters, we say that it's a proof of the synergies we're taking out in our business operations. And by people working together in the company, we are now generating NOK 30 million in added internal activity. And this is money that we used to spend with external people, but we're now spending internally. So this is a good little benchmark to have as well. Last quarter, we presented our cost-cutting program based on taking out synergies with all our acquisitions and all the new operating companies. We have delivered on many of these factors, and we continue to have a few more that we're going to close the rest of this year. But we also have a new program coming into place where we're now trying to focus on making sure we are all using our resources best possible and making it very important for us to get the most out of every dollar we spend. And last but not least, we signed a letter of intent with a Norwegian client called Stack By Me, which will be our first trading client in Norway. And we very much look forward to continue to grow our relationship with Stack By Me. Today, they are on our platform for buying and selling mutual funds and onboarding clients and so forth, but we're looking to now also to expand their product range. So this is also very pleasing to see. Okay. So the numbers. Top NOK 45.9 million, that's 116% year-on-year growth. These are the consolidated financial numbers. And year-over-year improvement of about 25% on our EBITDA. We're now reducing our negative EBITDA to NOK 4.2 million. Total equity in the business is NOK 182.5 million, and this based on the increase in number of shares, which we had to pay in the first tranche of the Bricknode acquisition. So this number is going to continue to grow as well when we do our second and third payment as well. On the pro forma numbers, we managed to get to NOK 54.7 million, which is a year-on-year growth of 77%, and the EBITDA was at minus NOK 6.5 million. The key priorities going forward for the rest of '23 and also into 2024. We're going to continue to be very specific about serving and growing our clients in the B2B world. We want to make sure that we assist and work with our clients to make them be successful in serving their end clients. Therefore, our logo and -- importance here is that we're empowering our clients to deliver investment as a service to their clients. We're never going to be -- never say never, but we're not planning on being into the C market on our own brand. But we want to be working with all our clients so that we're going to try to help them have the best product and best services to their clients. That's going to be our mission, and it will continue to be our mission. We're going to prioritize to focus on growing our business. We're going to grow on profitable deals and recurring revenues. This is very important, and that's why we also have recurring revenues as one of our key benchmarks. We think that it's important to see how we can grow the business step by step by step. So -- and we have many products. So of course, that's live in the market today, and we're going to continue to focus on selling the low-hanging fruit of everything that is working today. And also get more clients on that. At the same time, we're going to now create our Brokerage-as-a-Service, B2B brokerage offering to our existing clients but also to new clients. We're working on finalizing our Nordic white label solution, which Daniel will talk about a little bit later, where we need to have a few more technology integrations which we need to hook on board with APIs or so forth. But we will get back to that a little bit later. But the key thing that I want to stress in this presentation is that we, as a company, are now focusing on delivering to our -- to the existing clients and our new clients, a top Nordic white label solution for brokerage services. And that could be that they want a whole white label solution or they can take parts of it. We have many modules that you'll see a little bit later. And some, for example, need to have our regulatory umbrella, while others have their own regulatory approval, so they don't need that service. But they both, for example, may need to have broker -- back-office as a service. So we'll get into this a little bit later. But nevertheless, we have many modules, which all put together becomes a white label complete solution. Germany is by far our largest opportunity going forward. As I mentioned initially, Germany has been a little bit slower than what we anticipated. However, we're starting to see that there's activity coming up and we're starting to get very good traction with some significant clients. So this will be important for us going forward that we're going to grow our presence in Germany, and we're going to invest money in our German growth. On the regulatory platform in Germany, we have complete passported the German license to all of the European countries. So this means that Robert and his team in Germany can sell our services to everybody in the all of EU. In Norway and the Huddlestock Investment Services, we have passported our regulatory license to most of the Nordic and the Northern European countries, but we also want to expand that to the rest of the EU. Now that's going to happen now in the next few months coming up. We're also looking to always implement new ecosystem partners, making sure that we have good preferred vendors that we work closely with. We're not going to be world champions in everything. But what we are focusing on, we are going to be a world champion. But it's important that we associate ourselves with others that are world champions in their particular field, for example, a Morningstar data provider, they are a partner of ours and they are a leading brand in the world. And we have, for example, Trapets, which is very good at monitoring trades and yes, compliance issues. We have a bank ID, ID now as partners and so forth. So we're growing our ecosystem. And speaking of that, we're going to continue to focus on delivering, getting new clients, keeping our customer control and making sure that we expand our business. And to the last bullet point here, I just wanted to address that we, as a company, need to make sure that we have a good plan for our short-term to medium-term financial situation. And with this, we're working the management, like Arnold and me and Daniel and Stefan and others, we're working very closely with our Board of Directors to explore and to create a very strong and solid short-term to medium-term financing plan for helping the company grow its activities. And of course, growing our activities cost money, so we need to have a plan for this. And we are on top of that ball. Okay. Road to a positive EBITDA. This is a responsibility for everybody in the company. We need to start becoming operationally positive. And this means that we basically need to continue to grow our revenue and keeping our costs under control. So expanding our relationship with clients, getting more products on to the management of the fees and so forth is going to be really important for us. And we're going to stay focused on the cost control, and we will continue to improve the organizational efficiency and remove any bottlenecks in terms of onboarding clients and bottlenecks in terms of processes and so forth. So we are clearly on our path, and as you could see that we had improved our EBITDA, and we're on our way to having positive EBITDA numbers. And in order to do that, here are our cost savings plans for 2023, but also we have added to this program. And as you have seen before, we have identified just short of NOK 10 million in various reduction activities. And then now we come up with more, where we, for example, are going to reduce office cost. We're going to reduce our Ukraine tech team further. This became actually 2 weeks ago, now we have only 1 person in the Ukraine tech team, before we used to have 7, 8 of them, and we're now down to just 1 person. We have operational costs. So we need to streamline it. We need to be focused on taking out the unnecessary expenses that we have, okay? So on that note, I would like to introduce Daniel Risberg, our Chief Product Officer, that's going to talk about some of the deliveries that we're working on. And then afterwards comes Stefan Hillebrand, our Chief Technology Officer. He's going to talk a little bit about his summer. So Daniel?

Yes. I will give you a brief update from the product department. We will continue to deliver functionality that are in line with our Investment-as-a-Service strategy. But of course, we need to take care of day-to-day maintenance as well. Anyhow, we have pinpointed 4 key deliveries that we will be focusing on the upcoming period, and that's a fee manager that we will complete. It's a flexible and very powerful tool to handle recurring and event-driven fees. So it will be a very appreciated function for our clients, but also for our own services, of course. And then we'll have the FIFO. FIFO is book value method used in, for example, Norway and Germany. We need to implement that into our back office solution so that we can enter the new markets. We already support the average method, which is implemented and used, for instance, in Sweden. And then we have the third key delivery, the end client user interface. It will be the user interface for our clients' client, and it could be either a white label solution or only uses an API, depending on our clients' requirements on UX, et cetera. And if they think that our solution is good enough, then they will stick with that. They can have their own logos and colors, of course, but it's a standardized scalable solution. And we must focus on things that scale. Any specific features that we would like to mention, client onboarding, of course, it's a very important function with AML and KYC checks. We will have an integration with DMA and of course, our Huddlestock trading engine so that the clients can place an order and have them put on the market. The end client user interface will also be very tight integrated with our back office services, so that users can have a full overview of their investment portfolio with holding transactions, et cetera. And the fourth key delivery will be the Norwegian adaptation. We will need to take care of some specific rules and requirements for the Norwegian market, including tax reporting and the tax wrapper ASK, so we've put that this time priority delivery for the upcoming years, just to make sure that we can use our own services within the Norwegian market. And all of this will be delivered and developed by our own team, headed by Stefan Hillebrand, our CTO. So I'll leave the word to you, Stefan.

Thank you, Daniel. So hello, everyone. Usually, with many industries, the summer is a slower period of time. But not so when it comes to our business, it tends to be extremely active with new regulations and things that happen all over the world that we need to attend to during the summer period. So I will highlight a few things that we have done during the summer and also during Q2. And to start with, we have the Huddlestock Solutions team that are fully engaged with enterprise customers extremely busy and with a very wide project portfolio. The main industries there are within construction, med tech and irrigation. And the technology that has been developed there is applicable to many, many different industries in a generic manner. So for example, finance, which is very relevant for us. So there's a lot of good things being developed there. And tested and used with real customers within various segments. So fully engaged on that side. So on the next one, we have the professional services, which was mentioned, which is very high demand for this with the brand Visigon, that we're working very much with large financial institutions and continuing to make really good progress, and we're also finding out a lot of synergies now when it comes to Visigon interacting with these institutions and being able to awaken the interest for the products and services that we have in other areas. So we are seeing that now and are looking forward to that during the autumn and winter to start to generate some additional data flow for us. But that has really been speeding up, and we are working more tightly together. So and then, on the product side, we had a very big switch in Sweden from the payment service called bankgirot, which was an association made between the Swedish banks in 1959, and has been in use and still is in use. But the custody banks and most of the ones that we deal with, decided to change this on the 30th of June, which is obviously a perfect day for a big change like this just in the middle of summer, but we performed on that and switched into a more modern system that we integrated with. So we have done that. We involved our broker and lending applications. So that was a very big task. And the next thing is this large customer that we've been talking about that has about 60,000 end customers and are extremely active with 15,000 orders per day. So we have been serving customers like this in the past, but not that are this active and not making any big migrations like this on specific dates either. It's always been a longer-term project. But we really performed on this and we got everything done also in the middle of the summer. And as I'm saying here, it's a great stress test for expanded real-time trading. And since we can handle this without any real issues on this. We are very much dressed to expand on this and have significantly higher activities going for the future when we look to the larger markets in Germany and so on. So a big success on that debt. And we also, from this project, it generated a few very dynamic modules for us that we can use in other areas. Like, for example, we have a module for -- a new module for handling payments in essence, deposits made into customer accounts that can come from different banks, from payment service providers, it can be credit card institutions and so on. So we built this as a very generic application that can be used by our SaaS customers and also by ourselves. And we made a dynamic framework for making these integrations, which means that with very little effort, we can basically integrate with any institution and payment service in the world. And it's 100% automated and using the broker application as a hub to kind of communicate what has been done and kind of just supplying information for the back office teams, which don't really have to do anything. So that is a, I would say, a concept that we are going to use going forward to really take the automation of back office services to another level. So there's a lot of great things that has happened during the summer that we see results from and are very happy to use now going into the autumn. So with that said, I'm passing the word over to John again, and thank you for listening to me.

Thank you, Daniel, and Stefan. Always very interesting and inspiring to listen to the progress being made and the deliveries that are coming now successively going forward. I wanted to now spend a few little minutes on -- a little bit about the Huddlestock and our vision and our purpose, why are we here and so forth. And I think we cannot stress this enough, but there's a few key aspects of what we're doing here. Very important is that we are here to help and assist and be a part of our clients, our B2B clients so that they can serve their clients with digital transformational innovation, financial inclusion. And all these things are only possible if you have digital processes. There are so many small clients out there and medium clients and big clients. However, if the trades become too small and you have too many manual processes, you're not going to be able to serve them. And for example, the client that Stefan now just talked about, with 15,000 small trades going through. Now imagine if you're going to do that in a manual way. It has to be digital. Otherwise, you're not going to be able to serve the client. So this is really the key here is that we're helping our clients serving their clients. And that's our mission in Huddlestock. And then I wanted to say a little bit about how do we do that? And why are we relevant? Well, we have developed now all of the bits and pieces that we need to have in order to have the whole value chain for a full white label offering. We're starting over to the left with our B2B clients. They come into the Huddlestock world. We onboard their client. We have the custody of the money coming in. We do the regulatories watching of the clients. We do the safekeeping of their money. We do the reporting, the portfolio management of their assets. And we take our jobs very seriously in this matter. It is after all other people's money. So we need to be able to have a rock-solid system in place. And we have that through our Bricknode broker concept. Then you come into the next part, which is the trading and the buying and selling our financial products and so forth. So all of these things is very, very important. But then we come into the reporting, the settlements, the confirmation of trades and then the back office services and so forth. And in this whole thing, our clients can either choose part of the modules or they can choose all of the modules. That's up to each and every one. Some of our clients have their own regulatory licenses, so they don't need our umbrella, but they -- others who do not have the regulatory umbrella license, they need our umbrella. But fees are onboarding fees. We have a standard, call it, base fee. We have safekeeping fees for financial instruments. We have back office as a service, and then we have an annual fee per client, which means that in order to have a client on our books, we are regulatory bound to be monitoring that client. We need to do continuous checks on that, that client is who the person says they are and also that we're reporting to the regulatory bodies. For example, all transactions have to be reported now to the regulatory umbrella. So there's lots of things. And for that, that costs money. So then we need to have a per client fee. Then we have the trading fees. And lastly here, I have 2 fees that also is going to be very interesting, and that is stock lending. Stock lending is important part of it and then equity financing, the leveraging of positions can also be very a good fee to have. And then considering the foreign exchange or converting currencies from one place to another is also important. We have Norwegian kroner, we have Swedish, Danish, we have euros, we have dollars, all these things, and that also ticks the box. These fees are not necessarily going to be the one that each client are being required to pay, but it's a part of the negotiations. But these are at least some of the possibilities of where we can make money in this process. And everything has to be worked together with the client in order to find the best possible solution. And then you guys that have watched this before, you know I love this slide, and I'm not going to spend a lot of money -- time on it. But the point here is that the financial services industry is changing. The legacy banks, the legacy investment banks, they're no longer relevant in the sense that they are on top of the technology. They are digital processes and so forth. So Bill Gates says banking is necessary, but banks are not. And here, you have Banking-as-a-Service with Solaris leading the way in Europe. You have investment-as-a-service with Huddlestock leading the way in Europe, where we are taking the new financial services into the new world. And it's all through digital processes, collaboration with other eco partners, API connections, all these things make it all very important. And that brings us into our value proposition. Now this slide is a little busy, I know, but we will work on making it a little bit more specifically as we go along. But consider upper right corner, you have institutional investors. You have individual investors. They come then into our B2B partner. Our B2B partner, they come into us as an Investment-as-a-Service. And here, you can see the boxes that we are able to have in order to either have the full value proposition or they can pick 1 of them, 2 of them, 5 of them whatever suits their business. But basically, these are the modules that we have now developed in order to have a very unique value proposition. If you now go to the upper left corner, you see some of the suggested potential clients, we have many of -- we have actually all of them in one way or another. But typically, we can serve wealth managers and asset managers. We can serve savings platforms. We can serve online banks, news portals, private banks. Private banks are very similar to wealth managers, but they are a little different. It's structure, but nevertheless, private banks will be a very good potential upsale for us. And then we have brokerage companies and, of course, pension providers. All of these are potential clients that would love to be a part of our network and be a part of our system. And then our value proposition is that we work with our B2B clients. We're never going to compete with them in serving their clients. We're going to help them grow their business. We're going to provide to them a good world-class technology and service proposition. And here is very important that if we look at some of the samples of competitors in the Nordic space, for example, we have the Saxo Bank in Denmark. We have NuNet in Sweden and Norway, we have Avanza. They offer B2B clients to use their platform. However, they are also offering direct relationships with end clients. So they're actually competing with their existing clients. Well, we say, no, no, we're not going to compete with our B2B partners. We're going to support our B2B partners and I think this is a very unique offering. And that is something that we think we're going to be able to materialize going forward. Of course, we all have great trading engines. We have order management system. We have onboarding safekeeping and investment aggregation and so forth. Regulatory umbrella is also something that sets us aside from everybody else. Yes, there are specialized firms that offer regulatory umbrella, but not as a part of a whole investment-as-a-service suite of products. And then, of course, the user interface is there. And the last word there, the scalability. As Daniel and Stefan just went through. What we're doing and what we have focused on is to create a scalable technology platform that allows for many clients to efficiently onboard. We shouldn't have to customize everything all the time in order to get a new client. It needs to be seamless and it needs to be simple. So therefore, the creation of a call it scalable, general offering that can serve many clients, so-called multi-tenant, it's very important to us. Some of the revenue drivers. Of course, some of the basic fees, onboarding fees, license for the Software-as-a-Service model and so forth, that's a nice foundation to have at the bottom. Then we have some of the variables on top. Stefan talked about the large new client in Sweden, they have also a fee on top for assets under administration, assets under management, where we get X number of basis points for just growing the business. Then we have the transaction fees. And this is probably where we're going to see the peaks coming forward. And implementation fees, customization fees will also be a part of it. So I hope that this slide underscores why Huddlestock has a very strong and unique value proposition. Together with our value proposition, we have been very, I would say, focused and successful in growing our ecosystem. Here, you can see world recognized brands that are a part of our ecosystem. I mentioned earlier, Morningstar, we have Additiv in Switzerland. We have Duvi Pensjon in Norway. We have Amazon Web Services, et cetera, et cetera. These are all world-class organizations that wants to work with Huddlestock and we're very proud to have -- to be partnered with them. Okay. Over to the financial numbers again. We've been through this slide before, so I'll just quickly jump over it and the same goes for this one. If you're looking at operating revenues as a part of a diagram, we have them in Q2, 2022 to 2023, we have grown 140%. Quite impressive and most of it is from acquisitions and so forth, but I'm also very pleased to see that it's organic growth as well. If we look first half 2023 versus first half 2022, we see 116% growth and going forward, our speeds going forward, as the pro forma number is indicating we're now at NOK 54.7 million. Having said these things, I would like to just point out that the first and the second quarters are usually better than the third and a little bit better than the fourth quarter. So I wouldn't recommend that you just take the number and multiply it by whatever factor you want. But be aware that there are seasonality here. Also, I know that Lars from Denmark is on the line, and I want to congratulate him on yet another great quarter and the first half of 2023. Denmark has been performing much better than anticipated, and we're very proud of our Danish team as we are, of course, of our Romanian and Swedish and Norwegian as well. But this quarter, Denmark has stood out to be world-class. So well done, guys. On the operating cost, as you can see, they are growing slower than our revenues, and this is important because it -- if we're going to get to our EBITDA positivity and eventually make money on the bottom line, we need to make sure we control our cost, and we need to grow our costs less than we grow our revenues. So it's pleased to see that the cost is not increasing as quickly as the revenues. On the EBITDA, if you're looking at the second quarter isolation, we have, in this quarter, NOK 1.8 million in negative EBITDA versus NOK 4.8 million in 2022. For the first half 2023, we have NOK 4.2 million in negative EBITDA versus NOK 5.6 million a year ago. The pro forma number is NOK 6.5 million and we're seeing that the EBITDA for the group is heading in the right direction. On the recurring revenue we can see that on the right-hand side, you see that the graphs are going up, and this is, of course, very pleasing to see, and we will continue to focus on making sure we grow our recurring revenues. And the consulting is stable year-to-year. We had a big jump in January to June last year and this year. And that's thanks to well performance in our Swedish and the Danish team specifically, yes. Okay. The numbers. Here they are. You can go in and look at them and see for yourself. I think you will see some, yes, the highlights is the important thing. But if you want to dig into it and see, here is more detail. On this slide here, the consolidated balance sheet, I want to bring forward that we're seeing that the balance sheet is growing. And that's, of course, because we have more companies coming in, and you saw even the equity in the business had grown to NOK 188 million here. And one specific thing is that if you go to the lower right corner, you see other short-term liabilities. It's jumped up significantly to NOK 89 million. It's not that we have taken on board big new loans or anything like that. But as a part of the acquisition of Bricknode, we agreed to pay in 3 tranches. The first tranche is gone and paid successfully. The second one will be made up with sending more shares to the Bricknode shareholders. So this short-term liability is just a registration on our balance sheet that we owe the shareholders of Bricknode X number of money, which will be payable in shares. So that's why that number has grown. But of course, as we go along, that number will be reduced when we're done with paying our shares. And then you'll see that the equity on top will grow with the same number, okay. Then cash flow, always interesting to see, we have, at the end of the day, managed to get through our investments. We were spending a lot of money on investing in our technology. We have so far in the group invested NOK 240 million into technology development. And of course, that cost money that need to be funded. And we have been successful in funding this, and as you can see, we run a tight ship, but we have been managing, and we are, again, I would like to address it for how are we going to continue to finance our growth. Of course, we could shut down the development of many things. However, we believe that we need to continue to invest in technology in order to serve our clients better and in order to grow our presence of revenue streaming. So it's a function of financing the growth going forward. Okay. Now this is the end of my presentation. I hope it has been enlightening. And then we open up for some questions.

[Operator Instructions] Okay. Marina, you're asking what options are likely to be considered for the short term to midterm financing? In terms of financing our growth, we need to evaluate what are the options. Many of us in the Board and the management for shareholders in this company as well. And we want to make sure that we do the right thing for everybody as shareholders. That means we need to be cautious about what models and how do we select it and what are we going to do? We do have, as you see some NOK 10 million in liquidity on the bank account. And we have some shares, treasury shares that we can sell in order to raise money. We've also been very successful in creating a group-wide banking relationship with the Norwegian bank. And with that, we have managed to get a nice loan facility that can manage the group's liquidity requirements. And then, of course, we also need to evaluate if it's a good time or good -- very important to go out and raise money in the market. So we will together with the Board of Directors, like Arnold and me, and the rest of the management team are going to come up with some good solutions and we will see which part of it is smart and the best way to do. And then there may be one solution or it might be several solutions. So the last thing that we also potentially can evaluate is debt financing. We have now become a solid company with nice revenues, and we are becoming more relevant for debt financing as well. So that's another option. But we're going to -- we will announce once we have done our work and come to a conclusion of how do we see best going forward, okay? Yes. Okay. So what are the terms of existing debt financing? The debt financing is mostly just bank loans. We do have some individual loans here and there, but all in all, it's bank loans and the banking fees are standard for most corporate bank loans. What is implied with streamlined organization mentioned in additional cost savings program of NOK 5.2 million? We are focusing on making sure we spend the money we have available as best possible to get the most impact out of every dollar we spend. And with that, very often, you see that administrative costs tend to become less relevant for growing the business. So there could be some office reduction. There could be some restrictions on traveling, entertainment, there could be restrictions on recruiting services and so forth. So we're just looking at every line item to see how can we best possibly manage the cost savings program. And I think that's something that we need to be very cognizant of, that we need to be careful, cautious and make sure that we do the right thing in order to manage our money best possible, okay? Then I think that was it. Anybody else have a question? Here we go. Is it possible to somewhere access the slides to some more digging into them? A lot of them are rich on Intel. Excellent. Yes, when it comes to the slides, they have all been published on our web page. Also on the stock exchange Newswire. Also you can in the homepage, see the recording with the slides. But I would recommend that you just go into our Investor Services part of the huddlestock.com, and there you can find the Powerpoint, okay? On that note, I think we are through.

Yes we are. And as I said in the starting of the meeting, please do some questions also by directly to us or to [email protected]. Call us anything. We really want to be available for any questions you might have. So please feel free for that. So thank you very much for all of you for listening and also for these relevant good questions that has been typed in the chat area.

Okay. Okay. Thank you, everyone. Have a great remainder of the day, and let's have a strong fall and winter in Huddlestock. All the best. Thank you.