Net Insight AB (publ) ($NETIB)

Good morning, everyone, and welcome to this Q1 presentation with Net Insight. My name is Andreas Joelsson, covering Net Insight here at DNB Carnegie. And with me in the studio, I have Net Insight's CEO, Andreas Eriksson; and CFO, Cecilia Höjgård Höök. You will provide a presentation of the quarter. You can ask corresponding questions on the prompt. I think it should be down in the screen that you see in front of you. Just type in the question and send it and I will read it to the company. And with that, I leave the floor to you. I guess Andreas, you will start.

Yes. Thank you very much, Andreas. Great to be here. So, let's get going. So, let's get started. So, we'll go through a quick sort of highlight of the quarter, deep dive into the business overview. I'll hand over to Cecilia for financials, and then we will wrap up and open up for Q&A. If we start with the highlights, I think if you look at the net sales, we're down a little bit more than 2% year-on-year to about SEK 112 million. If you look at comparable currencies, though, we're up a little bit lower than 5%, but around 5% mark on the net sales. We could see during the quarter improved earnings year-on-year, and this has been primarily reflecting the full effect of the 2025 cost reduction program that we ran. If you look at the quarter, we've done several portfolio launches, which is about broadening our addressable market. And we've also seen some positive customer traction with media operators sort of winning new customers. That's sort of on the media side. If we look at the time synchronization side, as I highlighted in the last report, the focus going into 2026 has very much been around conversion of what we have in the pipeline opposed to significantly adding new things into the pipeline. And it's sort of been pleasing to see that we've been able to progress the value along the sales process into trials and pilots. But as we have signaled before, the sales cycles are taking a little bit longer time than we thought before. I think we also want to highlight that we expect quarterly volatility on the revenue side because it's not until we have a broader portfolio of customers in rollout mode, which we expect the smoother sort of revenue quarter from quarter. If we then go into a little bit more detail, we talked last time about the analysis we've done looking back to 2025, and we said we're going to take actions in three different areas. We wanted to enhance the portfolio on the media side. We want to make sure we drive increased sales efficiency on the media side again. And as I just said, on the time synchronization, the focus is very much around driving conversion. So, if you look at progress during the quarter one then on the first one, we have launched Nimbra 520, which is a new product we have, and I'll cover a little bit more in detail how that fits into the big portfolio. So that's been one thing. We've done some upgrades to the compression side. We strengthened other parts of the portfolio. So this is all about sort of closing the gap we have on the video compression side as well as on the Internet and cloud area. If you look at the increased sales efficiency, as you might have seen, we've sort of put a new leadership in place across the sales and marketing team. We have just announced that we will bring on board a new Chief Product Officer, which is also part of the sort of commercial leadership refresh we're doing, and she will join 4th of May. And then we have won a new customer, a global streaming operator during quarter one. And this has been part of the sort of increasing segment we see around sort of global streaming providers globally. So that's been an important win for us. If you look at time synchronization, again, focus on conversion has been really the key here. We've been progressing several prospects, and I'll outline that a bit more in detail in a separate slide. Türk Telekom, as you know, we've highlighted that they've been through a rollout process, and they've launched 4G now in April -- or 5G, sorry, I should say, in April and progressed now into full operation, sort of moved from rollout into full operations. That's sort of a key progression that we've seen in the time sync area. And I think we've highlighted that we believe we're taking the right actions, and we're doing things step by step here. But I think we also want to highlight the financial impact will happen step by step over time. If I then go into more detail, and we'll start with the media side. As I mentioned, those net sales remain sort of pressured pending the impacts on the measures we're now taking. On the portfolio expansion side, the Nimbra 520, again, fits into primarily the cloud and Internet delivery area. And here, we're moving into more of the new -- another type of encoding HVC that we haven't been so active in so far. We have done a very important upgrade on the other encoding type we have on the JPEG family, where we have now increased sort of the density, the price efficiency, let's say, on that compression type, which is very important for -- as part of our selling proposition. So now we really moved up to become the leading provider on that in the industry. And the next Nimbra Edge next generation, this is about sort of a monitoring operation system, which we have, which we use for the cloud and Internet delivery. So we provide compression, but we also then provide this orchestration. So it's been a really important upgrade that we have done on that area to make sure we remain very competitive on that. So the combination of the 520 with the Nimbra Edge will be, we believe, a very strong proposition. Customer traction side, again, as I mentioned, we have now a new relationship during Q1 with a global streaming operator. We also won a deal in Q4 with a global digital media operator, which got established in Q4, and we've actually now seen additional orders coming in from that one in Q1 as well. So that's been pleasing to see. I just mentioned that we've done some strengthening in commercial product strategy area. We have Larissa joining us as new Chief Product Officer from 1st of May. And I think -- as an overall statement, I think we feel that we're well positioned to benefit from the foundations we now put in place over time. We're active in attractive markets. We've got a good strong heritage of developing strong, innovative leading solutions in the media area. If I just quickly touch on this one, just to position the addressable market that we are active in and how we look at the launches. So as you can see, if you look at the white round sort of mark this year, the 400G on the managed side, that's one we talked about. We've done the first customer on that in the end of last year. That customers have now gone live with the 400G. In Q1, we actually won another customer for the 400G product, which has been good to see. I talked about the JPEG XS upgrade we've done. That's all on the managed side. And on the Internet and cloud area, again, the Nimbra Edge upgrade that we've done as well as the 520 fit into that one. So we now feel that we have a good proposition to attack the Internet and cloud even more aggressively. If we then jump on -- leave media and move over to the sync side, again, 2026, converting existing opportunities, that's really the focus. And we've seen some positive progression on the sync side. So Latin American operator, two smaller operators has advanced to field trials. And we have a large North American operator, which has advanced to pilot installations. So, some positive progress there. Türk Telekom, as I mentioned, moved to full operations. And of course, that's strengthening the reference value of that customer for us. We sent out some press release around an awarded grant we got from the ESA. And this is not as significant in terms of financial terms but, of course, it signals that we have an interesting solution, and we have something that is well aligned with where the market is going. And of course, it will help us strengthen development of the solution, but it's not in terms of financial terms, it's not a significant amount. So, I think that's maybe important, but really positive to see. And again, positive long-term outlook. I think we are signaling the short-term volatility in terms of revenue that we expect until we reach more customers in rollout and full operations, we will see more sort of stability quarter-to-quarter on the sync side. This is just to highlight sort of the change across the sales process during the quarter for the sync side. Again, one additional talk we've got, although it hasn't been a prime focus. As I mentioned, three customers have moved to field trials. We have one customer that moved to pilot installation. And we also won a media customer that's gone to straight rollout, and then plus 1 for full operations is the Türk Telekom that's moved to full operations. Maybe a quick mention around the media customer here. I think it's very pleasing to see that we are able to win customers in media, and we have signaled that we won that previously. So of course, it's a positive that the market is interested in our Sync solution also on that side, obviously being strong in the media is a positive. And if you look at the size of those deals it tend to be smaller. It's not the bigger rollout amounts that we will see on a Sync for a 5G operator, but still good to get more customers on it and good to get more references out there, of course. And then with that, I'll hand over to Cecilia to take us through the financials.

Thank you. And we start with net sales. And in Q1, our net sales amounted to SEK 112 million, and that is a decline with approximately 2% year-on-year. But as Andreas said, FX headwinds is still putting pressure on our net sales. So, in comparable currencies, we had a growth of approximately 5%. Beyond FX, we still have a market uncertainty, and this has effect of cautious spending, and we are pending impact from the measures we have taken. And again, these measures are expected to give results step by step over time. On the right-hand chart, we have a split on the net sales by product group. And starting with media. Net sales for Q1 amounted to SEK 105 million, and that is in line with last year and 8% growth compared to last quarter. Continuing with time synchronization, revenue was SEK 7 million, and that is a drop versus last quarter record high SEK 20 million. And this reflects the volatility that we will have on the revenue until we have more customer in the rollout and the full operation phase. Our gross margin for Q1 was 66%, slightly down year-on-year, reflecting FX and the product mix. If we continue with our cost side, we now have full impact of the cost saving program that we launched last year. And operating expenses declined 11% year-on-year, and we continue with cost discipline. And this resulted in an EBITDA improvement to SEK 20.6 million despite that we still are pressured by net sales. In other words, our cost base is structurally lower and our main lever for further margin expansion will be the revenue recovery. So operating earnings. And operating earnings for Q1 was SEK 1.9 million negative with a margin of a negative of 1.7%. And on a rolling 12-month basis, we still have a modest operating earnings of SEK 16 million with a margin of 3%. This reinforces our focus on scaling on our upgraded product portfolio and the importance of conversion in the time synchronization pipeline. So, to cash flow. And we had a strong operating cash flow in Q1 of SEK 42 million, and this is supported by the improvement of working capital. Investment cash flow was a negative of SEK 24 million, and this is mainly our capitalized development expenditures. Financing cash flow was a negative of SEK 2 million. And in total, we had a positive cash flow of SEK 16.4 million, and we ended Q1 with a net cash position of SEK 99 million. We also have an unutilized credit facility of SEK 85 million. So, in total, we have available cash liquidity of SEK 184 million. And that was it for the financials.

Thanks, Cecilia. So just to summarize then, this is what we outlined last time when we looked at the strategic road map, how we then first address the current challenges that we have highlighted as well as then how we work to seize the mid- and long-term opportunities , and just looking at the left side here is really what we talked about, again, sync here and now and the coming time very much around driving conversion. On the media side, it's about the enhancement of the media portfolio and then on the sales side, driving really high efficiencies and how we bring products to market in a more effective way, how we upsell to our existing customers and then how we break into new customers that can become significant over time. So, to summarize the Q1 for us, we feel we have some really clear progression here on executing on the priorities that we have set. So that's pleasing to see. We're driving the improvements that we had outlined and that we set for ourselves, enhancements of portfolio, increasing sales efficiency on the media side, in particular. The cost actions improved the earnings and the cash flow in the quarter. So that's pleasing to see. And that's both in terms of, obviously, the cost reduction program we ran last year as well as just being very prudent and on how we manage our cost on an ongoing basis. On the net sales side, as highlighted, remains pressured pending the impact of the measures we've taken. And we feel that we expect this net sales to materialize gradually. On the time sync side, some positive sales funnel progression, as I highlighted. Again, long-term outlook remains positive, short-term revenue, we expect some volatilities from quarter to quarter. We are stating that the long-term financial targets remain unchanged, though timing towards the 2027 timeline is challenging. And again, as a summary of the position for the company, we feel well positioned. We are putting this foundation in place over time, and we feel we can really benefit from it over time. And we're present in two attractive markets, and we have really a strong heritage and a legacy to really drive innovation into these two new areas. So, we feel very optimistic from that perspective that we'll be able to take advantage of that over time as we implement and execute on the measures we've highlighted. And with that, I conclude and we can hand over to Q&A. So over to you, Andreas.

Very good. Thank you very much, both of you. We have a lot of questions coming in, mostly on the time synchronization side. I would like to start with the media side. So, I will come back to you. But you mentioned these product launches that you have done. Maybe it could be good to explain how the cycle usually works when you launch a new product. How long does it take before it gets traction at the customers and orders may start to come and what you see the initial reception?

Yes, absolutely. So, let's talk about the 520 maybe as sort of one example of that. I think I just came back from the NAB trade show, which is the biggest sort of Americas-based trade show for our industry last week. And I think that's where we really launched the 520 to the market. And I think it was positive reception on the 520 products. And if you look at the process then typically what happens in this situation will be that people -- our customers new and existing customer will want to get their hands on the product, maybe try it a bit, maybe do a proof of concept. It's not an onerous clearly as on the sync side, but they want -- maybe just sort of understand it a bit more. And then they start to -- if they're happy with it, start to deploy and buy it then overtime. And it depends then clearly on the use case because some might have a bigger rollout in mind and put it in more places. Some will just have a smaller need. But then as the customer grow and as they need grow -- the step by step, it's -- we can ramp up. I think it's also fair to say within product development here as well, when you launch a new product, you don't have -- you still have things that you need to fix with the software and so forth. And this is a very software-centric product, for instance. So, you still need to make sure you have maybe some extra features that's important to some customers as well as just the stability on the product. And that's sort of -- you kind of bed that down and that usually takes some time. It depends three to six months, maybe longer and depending how complicated it is and then stability comes and then more customer interest builds over time. So that's typically how it works, Andreas.

And you mentioned in Q4 that you said you need to broaden your customer base and take on more or new type of customers. And you highlight this in this report as well.

Yes, yes.

Is that the result of the work that you have done? Or is it more coincidence that this happens now, so to say? And also, just as for the product side, what is the usual sales cycle process at a new customer?

So, if you look at the new -- so if I zoom out and look at the customer segment we are covering, so we're sort of big on selling into the service providers, the broadcasters as well as some of the kind of production companies and so forth. We've seen now a more new sort of segment coming up. We start to buy sporting rights with some of these global media operators that we talk about. That becomes an increasingly important new segment for us. So that's very pleasing that we're able to get into two of those now, as we said, one in Q4 and one in Q1. So that's sort of one element. And then, of course, if you look at each segment, then we're not selling to all broadcasters and all service providers in the world. So, we have more to do there to come into more of them. So that's the other aspect of it. And we're seeing sort of certainly progress on getting in this new segment and then also getting traction into breaking into even more new customers. But I think it's -- the sales cycle for getting into these new customers can be relatively long. It depends a bit. If you look at some of the -- let's say, more of the Internet and cloud area, that might be a quicker decision and maybe a little bit less. If you're going to go in and displace a competitor, say, on the managed side, that tends to be a little more complex than its -- and to come in there. It also depends on the use case. If you look at the large service provider, you're going to displace therefore, they're a bigger part of the network, then that, again, is a longer process. If you're looking at the broadcaster connecting, let's say, two studios for a broadcaster that have locations in two different places in a country, connecting them up, that's a smaller decision, a smaller implementation be a quicker decision. So, it sort of depends a bit on the scale and also to some extent on the type of customers. So that's sort of usually what we see. In terms of coincidence, I think, no, I mean, we've done some work during last year to start to break into and build towards getting into some of these new customers. It clearly hasn't happened in a quarter in terms of -- from first contact to a sale, it's a longer time than that to kind of present ourselves and make sure they can do some proof of concept and then they get to know us. So, it's been -- not in that sense, it's not been a quick impact now because we're taking the measures on the sales side has been taken also earlier in 2025.

Yes, thank you. Moving into the synchronization side then. Can you explain why the sales in sync moved down to SEK 7 million from SEK 20 million when you say that Türk Telekom is in full operation, and there will be a number of Zyntai deliveries in Q2. What does that mean that Türk Telekom now is in full operation? Does that mean that Q2 will have a better opportunity to increase sales again? Or how should we see this? And how is revenues recognized within the synchronization side?

I think that Türk Telekom, what they have done is that they have acquired Zyntai for a longer time. And in Q4, they -- since they are launched the system now in the 1st of April, they need -- they bought it in Q4, a larger amount, and they deployed those during Q1. So, they were -- had already the equipment that they needed in order to get to the full rollout. They are going to continue, but we see that it's going to be volatile, and that depends on that. We need more customers to be in the base with rollout and full operations in order to get an even revenue.

And when you write that it is a larger North American operator and a larger Latin American operator, just to set the expectations right, what do you mean by that? And will -- if these customers turn into fully operational rollout, how will that revenue be recognized? Will it be over a longer period of time, so that will sort of smoothen out the volatility?

Yes. And it's over time. So, a rollout, it won't be a large order that we receive. We will receive orders continually during -- maybe one, two, three years. So it will come gradually during that period.

Perfect. And let's see. The hardware investments you have done for 2025 for Zyntai, is there a risk that they are becoming obsolete given that it takes time to execute and converge these customers from pilot and field trials to actual orders?

No, we don't see any obsolete. We have a stock of -- that is needed for us to be able to deliver to the customers, but we have that in control. So, no risk of obsolete for the Zyntai.

And there were no press releases on this North American customer and nothing on the European media customer. Why is that?

I think that regarding the press releases, we need to be cautious because I think that it's the rollout that is the big decision. So, when they decide to go into rollout, that will be an important press release. So, I think that we will continue to be cautious and not say too much until we get these real signals of -- that will impact our revenue.

And can you comment on the progress in standardization related to Zyntai? And can you specify where you are in the process? What milestones remains and how this impacts the timeline for the ITU decision?

So if you look at the Zyntai standardization, so in the summer, then there will be the first sort of key milestone on the synchronization standardization side. So that will be a key milestone. And then -- but then they will continue after that for another kind of another two years to continue to be standardized. So, it's not a one defined milestone in that sense. It's sort of a number of phases that we go through. But I think the next coming milestone will be this summer for the first clear step in terms of the standardization, which is sort of in the plan. So, we're kind of -- we're moving according to plan is what you can say.

And you have now operators and you have media and you have mentioned also some utility companies that are in the process, so to say. You don't mention anything about critical networks in the report. It's a hot topic. So, what do you see in that segment?

I think we have said, let's focus on conversion and most of the customers we have in the pipeline are in the 5G area. But we do have some other prospects that are outside, but we try to say, well, let's focus on the 5G. But we still see opportunities is in other areas in power and sort of government defense and so forth as well. So, we do see sort of opportunities in those but the main focus has been on 5G because that's where our kind of go-to-market machinery is aimed towards. But we do see -- and you could say 5G is mission-critical as well. So, I think when you look at the mission-critical aspect of different networks I think 5G is also one of them clearly. So, I think it's been pointed out that that's mission-critical for most nations and that's what we also can see. But yes, that's been the strategic plan to sort of really breaking significantly in 5G and then start to move into other segments over time.

And maybe the slide you had on the process gives some indication on this, but what would you say about the interest from potential customers, both new ones and the ones that are within the process? How has that developed during the last three months on the sync side?

I think it's developing positively. I think the movement indicate that people want to progress throughout the process. It just continue to be rigid in their evaluations of the product. I think it's sort of, in that sense, it's been positive. I think we have good activity in the different parts. Of course, with the ones that do not move in a quarter, of course, they're not sitting still. They continue to be mature. We continue to be very active in working with them to respond to questions they have and continue to run the proof of concepts or the different sort of trials depending on where they are in the process. So, a lot of activity kind of under the hood on top of the positive progression we have seen.

I'd like to ask also before we run out of time on the gross margin. It is relatively low if you look at history, regardless if you do adjust for the amortization or not. Why is that? I know FX is part of that, but have you done any calculation how much FX is impacting? And is there any other aspects that we should be aware of like input costs? We hear a lot about semiconductor prices coming up and so on. How do you see that right now and going forward?

I think that what we have seen is that I think looking back, we had an unadjusted margin that is the margin without amortization has been around 70% like 69%, 70%, and it's down to 66%. So, it has gone down slightly. And the main effect is the FX, but we also have, when we have larger deals, it impacts the product mix that can be more hardware and then the software eccentric will come later. So that will impact as well. Regarding the cost price that you've discussed then, of course, we see that going ahead, we have those important part of our product that will cost as well. But we have a mix of the hardware and software. So, we see that since we are growing the software, this can even out the effect of the prices of both the cost of our product going up a bit but the price pressure going down. So, they will even out. So, we don't expect our gross margin to go down more. It's more effect of if the U.S. dollar goes up again, we will be able to squeeze it up a bit, but it won't be a huge step up.

But for a simple person like me, you can say that you have a lot of currency exposure on the sales side, but not on the COGS, side. How is the business with the operator in Japan that was communicated before? How is that developing?

So there's one of these sitting in sort of that we're working intensely with. So that's also, everything is just progressing. We just sort of, we just need to work through kind of the timeline and answer questions and follow their plan as well. So that's still active at the moment.

Then I get a question, maybe leading, but do you feel confident that Zyntai will be a success?

I mean I think we have -- if you look at the interest, and I spent some time at the Mobile World Congress in Barcelona a couple of months back. And you can see the mission-critical network banner in most people stand and talking about it. Obviously, we all feel the economical or the geopolitical situation in the world happening. So being resilient -- making sure that the networks are resilient continue to be very important. 5G is now being more and more important not just for consumer but over time also for business and enterprise customers, which means that the requirement of the 5G network to remain resilient and not only have dependency on the satellite and so it will be important. So, uptime resilience will be critical, again, from a mission-critical geopolitical aspect but also from a business aspect for the 5G operators. So, I think -- and then you have a lot of momentum in the industry around timing and precision time and so forth. So, I think the macro trend is very clear, and we have a lot of interest. We've got a number of customers in the pipeline or prospects in the pipeline, as you've seen. So, I think we feel very confident all the data and all the fact that we have is pointing that we're really on to something here. So yes, we feel optimistic that this could be turned into something. But of course, we just need to push through and make sure we progress more deals in the pipeline to really prove that out.

And I guess the reiteration of the long-term financial targets is also an indication of that as you do it again after being CEO now for a couple of more months and still confident.

No. And I think what we have said is that previously is that the financial targets that we have set is really to reach them really dependent on sync taking off. I think we've been clear on communicating that as well.

There is another question just to understand the recognition of sales in the time sync business. Why is it lower even if you have a full rollout in Turkey? Should we maybe see that as the strong number in Q4 that this is sort of, if we smoothen those two out that's the sort of run rate?

I think that is hard to say because a rollout and full operations will not be like linear in the demand from the customers. So, it's more of -- I wouldn't say that this low number is something that is reflecting how it will be in the future. So, we will -- but we will need -- in order to grow more, we will need more customers.

And a question on the cash flow. It was strong and you released some of the working capital, but yet the inventory is almost twice as high as it was last year.

Yes. And the major part of that is still the FPGAs that we invested during last year. And those FPGAs, that investment is for the coming years. So, it's nothing that is going to happen during this year that it goes down. So, we will have a higher working capital and inventory for the coming years, but it will go down gradually.

And has Türk Telekom taking out bigger parts ahead of their rollout? Or should we expect continued strong deliverances even though lumpy within that project?

Yes. They still have an order book.

Do you see a trend that customers await standardization before they place orders?

Not really, not really. I think, of course, that's for a telco, and in the telco industry, standardization is an important part of it. But we do not see -- I mean, many have moved, as you can see, and that's not really kind of a key ingredient. In some, I'm sure it might be a consideration, of course. But I think that's why the progress that we are making is very important, that people feel that they got some line of sight and got some clarity on where we are and that we're moving ahead. And I think everyone working in the industry knows how sort of standardization works. So, I think, of course, I cannot exclude that there will be some customers who might be hesitant and wait, of course that will be unreasonable. But I think we don't see it as a big theme in any way in the customer conversations we're having, that they're sort of holding back because of standardization.

And is there any additional features that Zyntai could add or that you can develop Zyntai for that can expand the sort of usage within both existing and new customers?

Yes. So, there is an element of that. So, when you think about -- we're on the transportation sort of side, not on the time keeping on the sort of clock side in the sync area. So, I think, of course, we can develop more and more features that make our product richer, and we come into a sort of hybrid environment. For instance, we have a unique technology, which no one else has, which is really a strength, of course. And then we see that we're getting more and more involved in more sort of standard types of requests as well. And that's driven by the fact that we have developed and continue to develop the sync feature set to be able to come into more other kinds of hybrid requests. And then we have our USPs in terms of our specific technology that we can differentiate ourselves in those requests. So yes, there is an element of that. And I think it will happen a little bit over time as we -- again, similar to media simultaneous kind of product development. Remember, we launched the Zyntai product in April 2024. So, it's two years really out in the market. And as we get into RFPs and engage with more customers, we learn exactly what kind of extra features they need as well. So, this is sort of an ever ongoing projects, and we continue to kind of add more things into the product to make us more competitive and be able to then compete into, let's say, more use cases and more types of customer situations as we get involved with them across the globe.

And another question on the precision timing. It's gaining traction worldwide, like Microchip building new factories and so on. Do you have enough resources to commercialize this opportunity? Or are you looking for like, joint ventures or licenses, or different sales channels?

Yes. So, we already are working with partners, and partners come really in two different sorts of buckets. Bucket number one is go-to-market-driven partners. Of course, we're a small company. So, we don't have the reach that is required to get into all the 800 5G operators around the world. So, we leverage partners that have the insights, the context, the reach, and the trust among these 5G. So, we have more than 20 partners around the world and more coming to handle the go-to-market part. So that's how we kind of scale the go-to-market dimension and the reach. And then the other bucket is the rollout. So obviously, when we win a deal, rolling out these large projects all around the world will not be something we will scale up to do only with our team that we will have a certain expertise, and we will be core in certain parts of it, but the big sort of flex muscle in terms of scaling will also come from rollout partners. And we signed a couple of weeks ago, a deal with WWT, which is a big integrator, U.S.-based, but also present around the world in the telecom industry. And these kinds of partners will, of course, help us probably with both of these getting into customers as well as help with rollout, but it also gives us some level of market making that they're trusted and so forth among the customers that will help us sort of build and drive the market as well. So that's also something we're mindful about, how do we get sort of more muscles to bring the message out around our unique and strong technology, so that just the word gets out there in a more significant way and not only dependent on the resources we have in the Net Insight business, but actually leverage the other partners to do all these things. So yes, we're scaling with partners is fundamental to our core -- to our strategy for sync.

Perfect. We have two questions on the ESA. First of all, should we see that their involvement means a sort of breakthrough? And secondly, if that helps you avoid a potential new issue?

I think you should be seeing it as a recognition that, first of all, we're on the core macro trend that they give a grant because they see what I think we all see in terms of the macro trend around us. I think it's a recognition of that, really. So, I think that's, I think, how people should read it. Again, as I mentioned, not a significant amount of money in terms of monetary terms, but it signals that this is sort of something that people feel is on trend. I think that's how it should be interpreted. It's another positive sign, let's say.

And then on the cash flow, you had a strong cash flow in the quarter. So I guess the ESA is a marginal part.

Yes. Yes. And that the grant will be -- we will get the cash flow from that over time, since we are building the product.

And final question, I think. No, there was some additional on -- let's take those on the sync side. Why are you not showing the order book as you did before?

I think that we have -- it's something that came from -- the order book that we had was built on the Türk Telekom deal that we set in '21. And going ahead, we see that the orders that we will get from the new customers will not be on the same basis. So, the order book won't be that relevant going forward.

So, orders will be smaller and booked faster.

Yes.

And some information about Zyntai in India.

I mean, India is one of the markets where we're active. It's one of the biggest mobile markets in 5G markets in the world. So, of course, that's an area where we're very active, as well as other core markets. So, I think it's not -- we're active on all the big markets, and India is sort of one of the markets where we are trying to get into customers.

And on the cost reduction program, is it fully up and running? Have you reached your targets? Or should we expect more of that?

No, we have reached our targets, and we actually reached them by year-end, and we're keeping that going through the year. Of course, we are staying cost-disciplined on all the things that we do now. So, I think that the effect is there, and we still continue to look at cost all the time.

Very good. I think that covered all the questions. So, a lot of questions, very good to see that you are active on the Q&A side. Thank you so much. Good luck for Q2 and have a great spring break, also what we have here in Sweden when the spring is coming, even though it's very crisp outside today. Thank you.

Thank you.

Thank you.