Teneo AI AB (publ) (TENEO) Earnings Call Transcript & Summary

Hello, and welcome to the Artificial Solutions Interim Q3 Report for 2020. [Operator Instructions] And just to remind you, this conference call is being recorded. Today, I am pleased to present Lawrence Flynn, the CEO; and Fredrik Torgren, the CFO. I'll hand the call over to Lawrence. Please go ahead with your meeting.

Thank you. And let me add my welcome to our call as well. Today, we'll be using a presentation that can be found on the Artificial Solutions website. For those of you who are unfamiliar with it, and we have redesigned it. If you navigate to artificialsolutions.com and then in the Investor Relations section, use the Financial Information menu and down to Financial Reports and then in the Interim Reports section, you will see under the Q3 area, you will see the presentation that we are using today. On Slide 2, which is not a slide that I typically spend much time on, I'd first of all like to welcome a new face to you on behalf of the company, which is my colleague, Fredrik Torgren, who has joined the company in the capacity of CFO, taking over from Chris Bushnell. And Fredrik's appointment started in early September. So welcome, Fredrik, to today's call. And one other piece of information regarding the presenters today that you should perhaps also be aware of, is that today will be my last earnings release call in my capacity as CEO as I will be standing down and handing over the CEO responsibility to Mr. Per Ottosson on the 2nd of November, and there will be a little bit more about that later when we come to the forward guidance. Turning to Slide 3. Just very brief recapture -- recap of the company's fundamentals for those of you who are perhaps new to our business. At its heart, Artificial Solutions is a software company based in Stockholm, which has been on the First North Growth Market since Q1 2019. As a software company, it specializes in software for large-scale enterprises. And you can see some examples of our blue-chip customers on this slide, some of which will be familiar to you, like Folksam and ICA in the Nordics, but more globally in terms of companies like AT&T, VW, Swisscom, for example. So we deal with some of the world's largest enterprises. We provide them with a conversational artificial intelligence platform called Teneo, which is our primary product. And they, in turn, use that technology to automate communications between them and their customers. For example, they use it to automate customer service or perhaps a mobile phone application or perhaps an online ordering capability through such things as chatbots and virtual assistants and speech-enabled mobile phone applications. As I said, we're headquartered in Stockholm, but we are global through 11 offices distributed across Europe, North America and one in Southeast Asia. We developed a global solution for global customers, and therefore, our technology is fully multilingual. We've enhanced the number of languages that we cover, so that the applications can be run in any 1 of 40 languages. And in fact, that number is extensible itself. We also have a developer environment where people can familiarize themselves and experiment in a sandbox environment with the Teneo Development Platform, which itself is available in 7 of the 40 languages. Our primary go-to-market strategy in order to have scale beyond our 111 employees is that we go through a network of business partnerships. Broadly speaking, they fall into 2 categories: partnerships with large-scale systems integration companies, and I'm very proud of the sort of blue-chip list that we have here with companies like Deloitte, Accenture and Capgemini, who work every day with the sorts of customers that we seek to engage with and provide the professional services that are required to run the projects to take our Teneo platform and build real-life applications on top of it for the benefit of our customers. In addition to those types of systems integration partnerships, we also have technology partnerships. Partnerships with other technology companies that work in adjacent spaces to us where the collaboration with them is beneficial to both parties and indeed to the customer. So an example of that might be Blue Prism, who is one of the leading players in the robotic process automation space, which automates back-end processes for customers so that they need less people to achieve them. And of course, fronting those processes with virtual assistants and chatbots powered by the Teneo platform further increases the digitization and automation that a customer can achieve and therefore, reduces the cost and increases their profitability. So it makes sense for us also to have such technology partnerships. And indeed, during the quarter, we did add 2 new partners to our already significant portfolio. One is a very important player alongside Blue Prism and UiPath. It constitutes the top 3 players in the robotic process automation space, and we are already engaged with Automation Anywhere, who is a U.S.-based business, in some cooperative selling activities. Additionally to that, we have engaged with a company, again, a U.S. business space from San Francisco, called Talkdesk. Talkdesk is a technology company that is benefiting very much from the challenges that the call center and customer service contact center marketplace is facing as a result of the COVID-19 challenges. Specifically, they provide a remote call center software platform, which means that people, who would traditionally have to go into a call center to fulfill their obligations can do so in a work-from-home environment. And as you might imagine, with lockdowns, restrictions on social distancing and so on, they're enjoying the benefit of growth powered by the COVID situation, and they, in turn, of course, see that, that can be further enhanced by a partnership with somebody, who can augment their physical presence with a virtual one. And then finally, the other partner that is highlighted on Slide 3 is QualityArc, which is a specialist consultancy services company in AI operating in Australasia. And this is important for us, we've already engaged with them in a project with an insurance company in Australia. And they're an important extension of our geographic coverage that we can leverage without having to add our own personnel costs to the sales and delivery infrastructure. So moving on to Slide 4. I think the main takeaway for us in Slide 4 is that following challenges that the company was not immune to in Q2, the main sales engine has bounced back. Traditionally, Q3, which obviously has the majority of the Northern Hemisphere holiday times within it, is difficult time for us to close transactions in sales, simply because of availability of customers and prospects. And likewise, it's a difficult time for us to deliver professional services because people are on holiday within our company, within our partners and within our prospects and customers. So when we produce the documentation for the reverse takeover, we did explain that there was traditionally some seasonality to our Q3 business. However, in this case, I'm very pleased to announce that the sales that we've had, the order intake, this is the contracted obligations that customers have made to us during the quarter, is up by 57%. And for those of you who've tracked the company, you would be familiar that previously, we've indicated that we'd like to see our order intake metric above that of the average growth numbers for the natural language processing marketplace. And I have never seen a number that says that market is going to grow at 50-plus percent. So we are comfortably in excess of the market even though it was traditionally a challenging quarter for us. For those of you that are familiar with the business, you will also know that when we take orders, we do not automatically, necessarily take them straight to revenue and significant portions of our orders will go into what we call order backlog, and we will take them to revenue in line with a solid revenue recognition policy. Because we had some challenges in Q2, we did -- it did mean that revenues were taken out from the backlog faster than the order intake went in and thus the backlog reduced, which Fredrik will cover some more in later slides. And also, because we have limited capacity to deliver professional services during Q3, and we had some challenges as a result of COVID in Q2, the revenue number has achieved only a modest growth. However, I'd like to stress that the sales number bouncing back with nearly 60% growth indicates that we should look to an improved revenue forecast going forward above the 4% number there. Another key metric for us as a company is exactly how much people use the Teneo platform. And previously, I've indicated this to you as being one of our metrics, where we're looking by the end of 2022 for our usage revenues to represent more than 80% of our overall revenues. Obviously, we're anticipating that our overall revenues will increase, not just that the share of usage will go up. But I'm very, very pleased to report that our usage revenue was up 63% on the same period last year. And as a metric to look at our business, that's a very important thing when you're trying to predict the future of our company. Similarly, I'm delighted that our partner revenue, the percentage of revenue that we got through relationships with technology partners like UiPath or Blue Prism or with partnerships with systems integration companies like Deloitte's or Accenture, that contributed to 75% of our overall revenue. And that's a very good metric for us. It's up from 43% 1 year ago. And what that in turn means is that the sorts of revenues that we are booking in the quarter are the highest gross margin revenue streams that we have. Specifically, our license fees and the charge that we make for using the platform, our usage fees. And that has meant that we've beaten our guidance. We provided guidance previously that by the end of 2020, we'd seek to have a gross margin number north of 70%, and we're at 71% at the end of Q3. So I'm very pleased with that. Now as we've already communicated, we've also taken prudent steps, as a result of the COVID crisis, to reduce the cost of the business and still been able to provide an excellent and untroubled service to our customers. But the net result of that is we were able to reduce the cost within the business through a variety of actions, including furlough. And as Fredrik will talk about later in the presentation, that has resulted in quite a significant reduction in the EBITDA loss within the quarter. So moving on to Slide 5. Previously, I've talked to you about this slide to explain that it is not a revenue slide for usage. The revenue derived from usage, you can see, has been trending up quarter-on-quarter. And that is a result because of the actual usage that we see in this graph. But there is a time lag between the usage that customers have and the actual revenue ticking up. But what I think is a truly exemplary performance is that previous quarter, we quoted a 550% growth in usage volume, and that has increased yet further to be a 700% growth in usage figure, which is a really great endorsement of the company and its technology and the use that it's being put to, to create value for our customers. So although the volume that you're seeing in this graph does not immediately correlate to revenues, when we talk about usage revenues representing 80% of revenue for the company by the end of 2022, it is this graph that is powering that. So I think it's possible to have a high degree of confidence in the company because the sorts of use cases that we have out there are very sticky. Customers who deploy solutions tend to expand and grow them. And that segues us nicely into Slide #6. The first point being that 3 very significant players, namely ICA, Sweden's largest grocer, perhaps people who are less familiar with them, they're the kind of Tescos of the Nordics and -- in every sense of that. They don't just do grocery and convenience stores, they also do banking services and so on. And they had previously embarked on a full-scale pilot across a number of business areas, both internally and customer focusing on the Teneo platform. And I'm very pleased to report that as with the vast majority of our projects, it was a huge success. And as a result of that, they've upgraded to a full enterprise license and are already embarked on a significant expansion of the deployment of the Teneo technology across multiple business units. And so as we consider the volumes that will go through the platform, there is a very clear example of how they will continue to grow beyond the numbers that you see in Q3 as a significant retailer like ICA extends its footprint. And the same is true within the VW Group where we extended to a full enterprise license for their subsidiary, Skoda, who were an existing customer, but have committed to a very significant rollout across multiple languages, multiple geographies and multiple use cases. I did speak briefly earlier about the new strategic partnership. I mentioned this again because it is important to us that it's a key aspect of the scalability of our business. Through partnerships with major software companies like automation and newer or fast-growing companies like Talkdesk or specific consultancy services providers like QualityArc, we are able to extend our sales and delivery reach into parts of the world that we could not go if we had to hire the people ourselves and through business relationships that exist long beyond our existing direct sales force. So they are key to the future as well, and we will continue to add partners to our portfolio. I mentioned that we did leverage some furlough support from various governments through the peak of the initial wave of the COVID crisis. But I'm also delighted to confirm that we will be returning to full strength as a business from November 1. And thus, we'll be able to provide yet more sales and projects and support to our customers. And indeed, we look forward to a very healthy delivery of products over the next month. There are 2 points that were additionally covered during the quarter through regulatory and more announcements. Specifically, we entered into an arrangement for a convertible note of flexible nature of up to SEK 60 million. And Fredrik will talk more about that in his section. And similarly, we again further extended some of the credit facilities that the company has in longer-term loans, totaling SEK 117 million and we extended those for a further 2 years, which is very good news for the company's balance sheet indeed. So at that point, I'll just hand over, if I may, on Slide 6, to Fredrik.

Thank you, Lawrence. And -- as Lawrence has a bit kind of talked through in the call earlier, I think we are really experienced a strong momentum across our key metrics. And in the past, we have also kind of provided 4 market guidance metrics to the market. And all of them are kind of being at -- so Lawrence also kind of elaborated earlier or essential part of our business model and also on our execution of our strategy. Table that you see on page -- or on Slide 7. And the ones that we have is basically order intake, gross margin, usage as a percentage of sales and then also cash flow from operations. Order intake, if we start with that, was SEK 9.7 million in Q3 versus SEK 6.1 million in Q3 last year, so up 57%. And I guess also from a kind of market guidance perspective, we also have the kind of metric that we are supposed to grow in line or better than the NLP market in a mid- to long-term perspective. So I think this is a good indication that we are winning deals basically. Looking then into gross margin. We can also see, as Lawrence also talked about earlier, that our gross margin is improving. So in Q3, it was 71% versus 62% in Q3 last year. And this is actually then the first time we actually exceed the kind of 2020 target of 70% gross margin. So really satisfactory that we can reach this level on gross margin. If we then continue with usage as revenue as a percentage of sales, this amounted to 33% versus 21% in Q3 of last year. And there, I think we have a target of 80% in 2022. So I think in this regard, I think, we are tracking on towards our target. And I think also, Lawrence kind of explained a bit on kind of the drivers from volume and deriving into usage revenue over time. So I think this -- we are on track. We have a bit to go, but we are tracking on. Then the fourth metric that we also have in our kind of market guidance is basically cash flow from operations. And cash flow from operations year-to-date, 2020, amounted to minus SEK 48.6 million versus minus SEK 84.2 million in year-to-date last year. And with this metric, we have also kind of a bit kind of adjusted for some things that is all kind of nonoperational character. The ones of you that have been with the company -- follow the company, you know that we actually did an RPO when we went public. And we have also had a number of kind of financing rounds and so on. Also then deriving into a number of transactions and also activities, which really are not of nonoperational character. With this metric, we have actually adjusted for things that we kind of view as being of nonrecurring character and that is not kind of nonoperational. Hence, I think there will be a delta versus the numbers that we also then see in the earnings release. But this is also to indicate that we are actually doing a lot of good things in the company and improving cash flow from the running business. If we then turn to the next slide, please, Slide #8. Just shortly on the P&L in Q3. I think net sales amounted to SEK 13.3 million versus SEK 12.8 million in Q3 last year, so up 4%. As some of the analysts also on the call recognize, we also capitalized some of the R&D. And this year, our capitalized R&D in Q3 amounted to SEK 2.2 million versus SEK 2.6 million last year. So no material change. Then we also have an item called other operating income of SEK 1.4 million in Q3. And this is essentially related to government support that we have received from the government related to COVID-19. So this is, from an accounting perspective, included as other income. And this kind of sums up to total operating income of SEK 16.9 million in Q3 2020 versus SEK 15.4 million in Q3 2019. And also, as Lawrence mentioned earlier, we have taken active measures to reduce costs during COVID-19. And the key items, of course, have been related to personnel, utilizing a number of different kind of government support schemes and salary deferrals, et cetera. And then we also have, of course, quite reduced costs related to travel, entertainment and premises cost, of course. And overall then, I mean, the operating expenses in Q3 amounted to SEK 36.6 million versus SEK 45.3 million in Q3 last year. So a significant reduction basically. And EBIT then correspondingly amounted to SEK 20.7 million minus in Q3 2020 versus minus SEK 29.8 million in Q3 last year. And also, as has been highlighted in the Q3 earnings release and also on the slide, you can also see then that personnel-related actions that we have taken have improved the EBIT in Q3 of SEK 3.5 million in the P&L. And from a cash perspective also savings of SEK 5.4 million. And then on top of that, also we see roughly SEK 3 million in savings coming from other operating costs. If we then go to Slide 9, please. Lawrence also talked about order intake and order backlog. But just shortly, a kind of recap, I mean, what we mean then with order intake is basically the total value of contractual commitments made by customers during a period. And the order backlog is then also the accumulated value of orders received, but -- which we have not yet delivered. So in essence, order backlog is a store from which we deliver from. And order intake then in Q3 2020 amounted to SEK 9.6 million, increasing from SEK 6.1 million in Q3 2019, so up 57%. That's a very strong recovery from both Q3 last year, but also from Q2 2020. And its especially kind of satisfactory that we also managed to deliver this order intake with during the summer months, which are normally slower, basically. And then I think the order backlog, I think Lawrence already kind of went through this in earlier slides, but that kind of then decreased to SEK 39.7 million in Q3 versus SEK 46.9 million in Q2 2019 and basically because revenues during the period kind of exceeded the new order intake. And what we also then can see in the graph to the right on the slide is basically the order backlog as of September 30. And then also, we also can see that the backlog -- the profitability in the backlog is increasing versus last year and also, as is kind of expected, also over the lifetime of the agreement. If we then go to Slide #10, please. This slide basically highlights the scalability in our business model. So as Lawrence already mentioned, our business model is focused on sales through partners and also a focus on higher-margin license and usage revenues. So basically, we have added 3 new strategic partners in the quarter and following the quarter, and this is an essential part of our business model that we basically let our partners take a bit chunk on the services revenue, which inherently has a lower margin. And what is then kind of evident from this chart is also looking at how the percentage of sales through partners has increased. So during the period year-to-date from 2018 to 2020 for Q1 to Q3 for that period, it has actually increased from 29% to 57% during that period, which is really a sign of -- that we are delivering on our business model. And even more than in Q3, that percentage was, as Lawrence mentioned earlier, 75%, up from 43% last year in Q3. So the business model is really working. I think that's the key message here. And overall, we're also then having more partners doing sales for us. And then we also have a focus on license and usage. That is ultimately driving our kind of gross margin up and that we can also see then in the upper part of the graph to the right taking gross margin from 51% Q1, Q3 2018 to 67% Q1, Q3 2020. If we then go to Slide 11, please. Financing. Q3 has been quite intense, and we have managed to secure financing for continued growth. Firstly, we entered into a convertible note agreement with Nice & Green up to SEK 60 million. And the convertible basically provides us with capital for continued growth at a reasonable cost, while also maintaining flexibility to use other forms of financing. And the convertible basically have a structure that means that Artificial Solutions has to utilize SEK 20 million -- draw on SEK 20 million of the convertible, but we can decide if and when the remaining tranches will be drawn. And this also, from a board and company perspective, is also quite attractive since it's providing a limited dilution effect, approximately 4% for the mandatory SEK 20 million of the convertible notes. And we can also kind of communicate that we have drawn SEK 10 million of the convertible note following Q3. Secondly, as also Lawrence mentioned, we successfully also extend our current credit facilities with existing creditors of SEK 117 million. And the credit extension basically provides the company with financial stability and also have limited dilutive effect for the shareholders. And also kind of extending the maturity of the debt from March 31, 2021, to 2 years later, March 31, 2023, basically provides us with financing stability over a longer tenure, as I've already said. And the strike price of the warrants that the creditors received as part of the agreement has a strike price of SEK 0.32 per share. So basically, 3x the current share price. With that, I'm handing over to you, Lawrence.

Thank you very much, Fredrik. So all that fortunately is to talk you through the market guidance. Now we do find ourselves in a slightly peculiar situation, where I am standing down as CEO within a matter of days. And therefore, it's more prudent that you get this update. And therefore, I'm speaking on behalf of the Board of Directors when I give you the forward-looking guidance rather than myself. It's important to note, however, that in terms of a number of these metrics, the business is already proving its guidance. Specifically, you can see there's been a very, very significant bounce back in order intake during Q3 of 57% growth, outstripping any metrics that I've ever seen for the NLP market. So we're ahead of that. The gross margin, which we anticipated, we topped 70% by the end of 2020, where we're already at 71%. So I have a very high degree of confidence -- the board has a very high degree of confidence in that going forward. And as we also talked about, the usage has also been tracking very much towards what is, frankly, a longer-term goal, still fully 2 and a bit years away to get that to 82%. But having achieved -- moved from 0 to 33% over time, we can see that that's good. And that is further supported by an astonishing 700% growth in real term usage of the platform, which only leaves us with our positive cash flow commitments. This is cash flow from operations that Fredrik talked about in his slides. And previously, we stated an aspiration towards cash flow positivity at the end of 2020. However, after the Q1 results, we indicated to you that we would revisit this on a quarterly basis as the impact of the COVID-19 crisis began to unfold. And I think that everybody on the call can see that it is still beginning to unfold. And as a direct result of that, the board wants to revise the guidance, such that rather than cash flow positivity from operations by the end of the calendar year 2020, its current guidance is revised that positive cash flow from operations will be achieved in the first half of 2021. So that's the only change in the guidance on behalf of the board. Otherwise, all the other metrics we've either evidence that we're on track for or exceeded and therefore, are in very good shape around. So I'll just hand back to Fredrik to just cover up the financial calendar before we do the Q&A.

Yes. Thank you, Lawrence. So the financial calendar for the 2 coming interim reports, we have actually done -- kind of changed the reporting based on the announcement date for the interim reports. Q4 or the year-end report will be kind of published on February 18. And the Q1 report will be kind of announced on May 6. So -- and we will also update the remainder of the year a bit further here in November on the other dates for coming interim reports during 2021. So with that, I'm handing over for Q&A from the audience.

[Operator Instructions] Our first question comes from the line of Simon Granath of ABG.

Firstly, given your short time -- relatively short time as a listed company, it's fairly challenging to see any seasonality in terms of your usage sales. So could you perhaps comment how this works? I noticed that usage sales have come down quarter-over-quarter. And hence, I'm wondering if this is a result from seasonality, or if it is that in combination with anything else? Any comments on that would be helpful.

I'm not sure I get the numbers. My understanding is that usage revenues are increasing, not decreasing, and that's a result of the volumes that are going through the platform. What -- the remarks about seasonality, I mean, the company has been going for very many years, long before its entrance onto the NASDAQ market. And therefore, our comments about seasonality are not just based on 2 years of trading. The company has been going for much longer than that. And they tend to affect actually the sales bookings revenue and the delivery of professional services because we have reduced capacity, we have reduced availability of customers and so on and so forth. But in fact, and Fredrik, feel free to correct me if you think that I'm wrong, but my understanding is that the usage revenues have not shown that seasonality and in fact have increased over time.

Okay. I'll go back and check that and come back with that. As a second question, could you perhaps speak a little bit around the lead times topic? How long are your current lead times from pilot sales into a company potentially placing order? And how does that compare with Easter? I know that we have touched upon the topic several times. So what's the current status there?

So we have -- I think the status is largely unchanged. So some customers are doing pilot projects. I discussed one of those on the call in terms of ICA and that was a full-scale live-to-customer pilot project. Something like that would typically be 6 to 9 months in duration. At the same time, we've just done a pilot with a large food -- home-based food recipe delivery company in the U.S. And they've achieved the metrics that they require to go to a production environment within the 3-month pilot. So there is some lead time to do that. It can range between 3, 6, 9 months for a pilot and 3, 6, 9 months for the full production environment to be at full scale. But as you see, and I think this is a very important takeaway from the Q3 numbers, the increments that we get from the conversion of a project like ICA to a full-scale production environment is what actually is going to underpin the longer-term revenues of the company. It's what's actually going to drive the volume of usage, which will become 80% plus of the company's revenues over time. So it's not just a question of doing one thing. What we see in an organization like ICA is that they will do something in groceries, they'll do something in banking, they will do something internally. They'll do things in different geographies and they do things in different languages in the example of Skoda, for example. And we see that this scales up the volume and thus both the value and profitability of an enterprise account over time. So the transactions that we do in Q3 this year will actually significantly enhance revenues, not just next year, but for multiple years thereafter. So it's a layer of revenues that we're building through scaling up projects post the initial pilot project.

Our next question comes from the line of Milan Radia of Hardman & Co -- Oh no, we stand corrected Milan Radia has withdrawn the question. [Operator Instructions] And we'll now go to question from Milan Radia of Hardman & Co.

Yes, I didn't withdraw the question. I'm not sure what happened here. I had a few questions actually. The first was thinking about the kind of broader impact of the pandemic and I guess, in principle, the fundamental boost that should have given to the digital transformation ambitions of a lot of the enterprise players out there. Is that now starting to be reflected in the pipeline? I understand that there'll be constraints in terms of how those discussions might progress given the vast constraints and so on, but how is that starting to emerge in the way that you think about the opportunity set in your pipeline?

That's -- I mean, first of all, your hypothesis or thesis is correct. The pandemic effect upon enterprises is making them turn more towards digitization and is making them focus on technologies such as conversational AI to provide that digitization and other technologies like robotic process automation. So when we look at the very earliest phase of our pipeline, what we call marketing qualified leads, that's up quite significantly. But it still takes time for that to ripple through the processes and machinations of large banks and telcos and retailers and automobile manufacturers. And what that means is that what we are not seeing is a panic buying environment. We're seeing people still making sure that they do proper professional purchasing cycles, making sure that they are fully compliant with their IT security requirements and so on. And that means that sales cycles, whether they're direct result of the company, or they are through channel partners, are still taking 6 to 9-month duration. There's no sort of panic in the market as far as that's concerned. But the longer-term trend, as indicated through levels of interest that we have in virtual events like webinars or inbound inquiries to our website, they are ticking up significantly. But of course, they're not GAAP-related metrics that we can record in a P&L as yet. But as we look to the future, if provided conversion rates remain the same, then we can see the evidence to support your thesis that people are more interested and that logically, therefore, in time, more transactions will occur.

Okay, that's helpful. And in terms of the competitive landscape, responding to that opportunity, I mean, we hear some of the big technology giants talking consistently about acceleration of digitization. So are you seeing any particular change in their offerings or their desire to compete at the higher end of the market versus Teneo and so on?

I think that actually, there has been curiously a bit of a thinning out of the market over time. So I guess a couple of years ago, a number of players took very niche precisions in terms of providing solutions that were not platforms that could be used by multiple different customers, but were single-use case applications like an HR chatbot or something like that. And it's fair to say that those companies seem to be withering, okay? And it's also true that small local players seem to be struggling, at least in the space that we operate in, in the enterprise market. And I would think that, that is a reflection that some of the larger players, particularly Microsoft and Google, are gaining some traction from, if you will, the sort of chatbot market for the medium-to-large enterprise. But when people are looking to make a strategic investment in digitization, they do take a deeper look at the technology and the components within it. And specifically, they consider such things as who's going to own the data. And that tends to drive them actually away from the technology giants who, as you clearly know, are somewhat plagued by this problem that they're competing against their customers for data. And that if you're a bank or if you're in Japan or you're in Germany or so on and so forth, and increasingly, even in states -- in the U.S., this is becoming more and more problematic. And a platform like Teneo, which gives customers full GDPR compliance and yet access to all of the conversational data becomes a key differentiator in those sorts of strategic decisions. And that really allows us to focus exactly in the sweet spot of where our market is because it's much more cost effective for us to sell to AT&T once, where they have 110 million mobile phone customers than it is to sell to 10 different telcos around Europe to get to the same number of volume of interactions.

That's helpful. I mean just touching on that final point you made. When you look at a customer like Volkswagen, how far are you in your journey with that customer? You've kind of obviously made good progress with Skoda and that seems to be kind of relatively comprehensive coverage of their various activities within Skoda. I mean, what next? And how far do you think you are in terms of exploiting that overall group opportunity?

To be candid, I think we've got a very long way to go to get to the true account value of Volkswagen to our company. We're not just in Skoda. We've publicly announced other brands like Scania that we have inside our portfolio. But there are lots of other brands, and there are huge markets such as China that we're not even touching with Volkswagen yet. So for us to develop that account is a real -- really important thing for us going forward and to add additional brands within their overall empire and additional use cases. I mean, it offers us a long-term value, which is way beyond the revenues of our entire company today. So it is an account that we're very, very keen to farm and develop and grow.

[Operator Instructions] And we have no further questions at this time, so I'll hand back to Lawrence and Fredrik for closing comments.

So just from me, thank you very much, once again, for your attendance on the call. As you know, I am stepping down in a couple of days, but I'm very pleased to be handing over the business in what I consider to be excellent shape, having made huge progress in regard to the key metrics that drive the long-term growth and profitability and cash flow positivity of our business. So thank you very much. And I appreciate all the support that everybody has given the business whilst we've been on the public market.

This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.