Yubico AB (YUBICO) Earnings Call Transcript & Summary

Good morning, everybody. Welcome to the Q4 presentation for Yubico. We'll dive straight into it. And just as a reminder, us presenting here today is me, Mattias; and my colleague, Camilla, Yubico's Chief Financial Officer. And I will start by talking about some background as a reminder about Yubico for those of you who are new to the company. We'll talk a little about the significant events during the quarter and the year, and then Camilla will go through some details about the quarter report. I'll wrap it up for the presentation session, and then we'll be happy to take questions from the audience. So without further ado, just a high level look. Since we met last, we've updated some of these numbers. Yubico has reached a position where we have more than 4,500 business customers and millions of consumers as customers and more than 30% of our -- of the Fortune 500 companies are already customers of ours to a varying degree. So there's lots of potential within the already existing customers. Since start, we've sold and deployed about 28 million YubiKeys. We're a hardware-based company, and we're very proud of our product. And what's most important about our products, of course, that for those customers that have implemented our product with their modern protocols, they've experienced exactly zero account takeovers, which is a bold statement, but we intend to keep it that way. And despite that we're a hardware company, software is really at the core of our offering, and that has enabled us to maintain healthy gross margins. Looking over 2023, we had an average gross margin of about 86%. So that's us in a nutshell. And I mentioned that the thing that we're most proud of, of course, is a problem that our products, the YubiKey and the important problem that it solves protecting against account takeover. So it's a phishing-resistant multifactor authenticator solution. The second thing that we're very proud of is our customers. We've worked closely with several of the leading brands. Historically, in the high-tech sector, as you can see at the start of this slide that I hope is visible on your screens. But since then, we've expanded into a very wide set of customers, financial services, public sector, manufacturing and also a global footprint, starting out in the U.S. but growing very quickly now in Europe and parts of Asia. And what's -- one of our unique competitive advantages is that we have a very versatile key. So you can use the YubiKey to access and log in to a wide range of systems. So today, we cover most of the applications used within an enterprise. I would say, all relevant applications used within an enterprise and you can use YubiKey as a Swiss army knife to fit into all the different locks and different systems -- operating systems, access points and software that you want to ensure that you have a secure log-in solution to. So that's been an important journey over the past 10 years plus. Looking a little closer at '23, some of this will be kind of repeating what we said at our earlier calls, but of course, there are some news related to the fourth quarter. There's been several changes at Yubico during this year. We have had important updates to the management. In February, my dear colleague, Stina, who had been the CEO since the foundation of the company stepped down, and I was appointed CEO in February. Similarly, in June this year -- sorry, last year, in '23, Ram Shriram, who had been Yubico's Chairman for, I think, more than 7 years, was succeeded by Patrik Tigerschiöld. It should be noted though that both Stina and Patrik remain very active in the company, Stina as an employee and a Board member and Ram as a Board member and an investor in the company. We then went public through the merger with ACQ Bure in the, SPAC, and our first day of trading was 20th of September in '23. We maintain long-term shareholders. The biggest shareholder today is Bure; second biggest is AMF; then is the founders, Stina Ehrensvard and Jakob Ehrensvard; and Andreessen Horowitz, one the most prestigious venture capitalists remain shareholders in Yubico. And we have appointed a new Board. And it's, I feel, a very competent mix of the boards that was -- that were -- the Board members that were previously with Yubico and those that were with ACQ Bure before. So I think we have a very good balance there of industry expertise, but also knowledge of being on the board of a public company. With that, I'm going to hand it over to you, Camilla. So please go ahead.

Thank you very much, Mattias, and good morning, everybody. So I will just summarize the quarter in numbers as well. And we start here with the main KPIs, net sales, gross profit and EBIT. So we can see that we had a good growth in the fourth quarter of 19.5%; in local currencies, about 17.8%. So from SEK 469 million to SEK 560 million. We also see the subscription share of net sales that we are measuring is also stepwise increasing from 11.5% in Q4 last year to 14% this year. Looking at the full year, we are now 13.8% of the net sales represented by subscription compared to 9% in 2022. Looking at the gross profit, we see a 20% growth from SEK 388 million to SEK 466 million. And it's slightly lower gross margin in Q4 versus the previous quarters 2023, but the gross margin varies between the quarters, and we see a quite stable gross margin, around 85%. So the full year gross margin ended on 85.6%, so also slightly better than last year. Looking at ARR, we also see that our annual recurring revenue portfolio, the subscription portfolio is also increasing. It was SEK 286.5 million at the end of the year and that is a growth of 40% versus last year. Then we have the profit, which we are measuring or [ computing ] adjusted EBIT and we see that we are growing the profit with 31% up to SEK 88 million. And we see a gross -- sorry, EBIT margin improvement from 14.4% to 15.8%. And the items we are adjusting for is, as you know, related to the merger between ACQ and Yubico, which was executed in September when we went live on the stock listing as well. And there was a small effect in the fourth quarter, a positive effect of net SEK 6.7 million and this is a correction of the merger balances due to a reduced tax cost, where we could reassess the tax before the merger and also some additional cost of SEK 4 million. So looking at our bookings. We can see that this quarter was a really record quarter of SEK 684 million. That was a growth of 83% versus Q4 last year. The full year growth is 16%, up to SEK 1.840 billion, a lot of numbers. Q4 was a strong growth primarily in multiple industries and across all the geographies, but especially in American high tech and financial services and also spread of Canadian and European customers. So that's nice that Canada is also starting to move. Looking at the subscription bookings, they amounted to SEK 129 million this quarter compared to SEK 64 million last year and corresponds to 18.9% of the bookings, also higher share than last year. To note here is that this quarter, a large part of the bookings is renewal of contracts as we have now ended the first 3-year cycle where we had contracts signed in Q4 2020 when we received a bigger subscription contracts. So going forward to net sales and annual recurring revenue. Looking at the net sales, we see a nice growth continued, although below our long-term target, as 2022, as you remember, was a very high growth. We had in local currencies slightly about 60% growth in 2022. So that was a tough comparison, of course. The full year growth was 18.1%, 12.5% in local currencies. If you remember, first half year, we had a bigger impact of the currency effects compared to the second half. So now H2 is only a smaller difference between growth in Swedish krona and local currencies. We see also that EMEA shows close to 50% growth. APJ almost doubled the growth while the U.S. then had tough comparisons due to this exceptionally large order in Q2 last year, but anyway had a growth of 5%, the splitting effect. So it's nice to see that EMEA and APJ is really gaining growth effects as well here now coming up. On the ARR side, as said, we had a year-over-year growth of 40%, adding SEK 31.2 million in net new ARR in the quarter. But as said, please then note that quite much of the large bookings we have in subscription is not affecting ARR as that is renewals just for the expectations for Q1. And then we change the slide and go into the profits and the adjusted EBIT margin. Then we -- adjusted EBIT was SEK 88.3 million and corresponds to an adjusted EBIT margin of 15.8%. And as said about the gross margin, already said that we see a stable margin over time on around 85%. This quarter, we see slightly higher commission costs due to strong bookings, of course, but also that we have effects -- late in the year, we have acceleration effects in the commission terms that also drives the cost a bit here. Unrealized currency effect was minus SEK 14.3 million, slightly less than the Q4 last year. For the full year, we can see that unrealized currency effect was close to zero actually and the full year effect of these items comparing -- affecting comparability, then ends up in a negative effect of SEK 87.2 million. And looking at the cash flow and our financial position, which is really strong. We have an operating cash flow of minus SEK 17.7 million in the quarter. And the net change in working capital was minus SEK 99.9 million. And we are continuing the buildup of the inventory, as we have talked about, and that is in line with the strategy and also to meet the future demand where we see a strong demand from our customers and new customers. And so we are prepared to meet that expected growth as well. So we have now SEK 93.4 million added in the Q4. And for the full year, we have increased inventory of SEK 335 million. Full year operating cash flow is SEK 97.6 million. And if we adjust for the investments we are doing in meeting the future growth, we would see a positive operating cash flow of SEK 97 million actually. But of course, we need to be prepared for and meet our customers' demand here. Cash and cash equivalents at the end of the period was SEK 547 million and the big contribution here is also related to the merger with ACQ, which added some cash here. And the net cash at the end of the period is SEK 508 million compared to SEK 231 million. We still have a small loan -- external loan there, which is not very much. And yes, that was the numbers.

Thanks, Camilla. I'll take it from here, real short. I don't think it's lost on anyone that there's been a lot of attention being brought to cybercrime and cybersecurity lately. In the Swedish market, there have been some notable hacks and we've had some visibility in the press, and it's an interesting pattern because these hacks have been very visible in the U.S. for a long time, and we've had a very high stance in U.S. media. And this was further reinforced during January, so after the end of the reporting period, when we saw articles -- independent articles in both the New York Times and Wall Street Journal recommending consumers on how they should best protect their accounts and how companies should best protect their assets. And they are both recommending YubiKey, so long story short, which is, of course, something which reinforces our brand and helps us in customer conversations and increases the attention for the company. So that's very satisfying to see that even during these times of threats, that there are working solutions that significantly increase your security poster. And one of the most efficient ways to increase the security is to implement YubiKeys, either in your personal use or for your organization. And I feel that this is a good segue over to why I feel that we are positioned for continued growth. I should mention that as was communicated yesterday evening, we've updated our long-term targets or how we set the long-term targets moving from order bookings to revenue. And there are 2 reasons for that. One is that we feel that it's important to use a measurement, which is very well defined. Revenue is very well defined. So we feel that, that's perhaps easier for people to relate to than order bookings. We debated before we introduced order bookings at the target, and we felt that, that would better capture the mix between subscription and perpetual sales, but we've come now to the conclusion that it's better to keep something which is easily recognizable and well defined. And the other reason for wanting to update this is because we want to make sure that there is, when it comes to the order booking, some lumpiness. You see swing quarters. We had an extreme one in Q2 2022. We had a very strong quarter now where we see a lot of things lining up. So we got to 83%. But if you look at the revenue, it's a more consistent growth. I think that's a good measurement of how the company develops long term. But the underlying trend is there. Cybersecurity has never been more important, and we are recognized as a market leader in a rapidly growing segment. And the reason for that segment growing fast is because this is one of the most efficient and cost-efficient ways to improve your security as an organization, ensuring that you have phishing-resistant multifactor authentication to ensure that your log-ins aren't compromised. Our business continues to perform well. Camilla mentioned that we've seen an inventory buildup. That's part of the strategy to ensure that we can deliver on bigger works more quickly. I feel that we're at a point now where we have sufficient inventory levels. So that's one point of where we made a bet to ensure that we could meet growth, and I think we continue to perform according to plan. We have a broad customer base going into '24, and we have a healthy sales pipeline. Long term, it will be important for the regulators to set up policies that ensure that the society in critical infrastructure is protected in a good way. And we are working across the EU and in the U.S. with policymakers and legislators to ensure that we have the easiest way to address the big cybersecurity threat, i.e., compromised log-ins is addressed properly. And we're, as I mentioned, at the start of the presentation, we fundamentally do sell a key. It needs to fit into all the locks and it needs to be easy to use our keys. So we're constantly working with tech partners, as we've mentioned in previous quarterly reports to ensure that it gets easier and more intuitive to adopt YubiKeys as part of your log-in solution. And I think this positions us well for continued growth. I think with that, Camilla and I are finished the presentation, and we'd be happy to take questions. I can see that there are 3 live questions in line. So I'll end here, and then we'll wrap up after the questions. First, live questions, and I think we have a few written questions too.

[Operator Instructions] The next question comes from Joachim Gunell from DNB Markets.

So can you just help us here, given the fact that I would assume a lot of your commercial focus in 2023 has been consumed by the whole IPO, et cetera. So despite this and very strong, obviously, bookings momentum we see here in Q4, as you can focus more on the commercial aspects of the business, how do you expect this to basically translate into what you envisioned for 2024?

I'll start. Thanks, Joachim, for the question. And as you say, it was a little bit of a dry tumbler to be in -- at Yubico during 2023. And as I think I mentioned on the Q3 presentation, there were a few orders that including the big one that we got early in Q4 that I would have hoped that we would have got in Q3. And maybe we could have done so if we had our eyes on the ball more closely than. I think both Camilla and I are a little relieved that we're through the going public stage, and now we can operate with a full focus on the ongoing business. And as you say, the underlying trend is there, but this is by no means a self-playing piano. So of course, we need to develop how we work. We need to further enhance our go-to-market and I think we have the people and the process in place to uplift the company. So I'm really excited for the year. Camilla, I don't know if you want to add to that?

No, I think you have covered. Yes.

Okay. But you basically made some nuance shift to your long-term targets here. To what extent are they painting the picture for what you see for 2024 as well?

We only issue long-term targets. Last year, we felt that it was important given the significant growth we saw in '22, where we -- I think we mentioned it on some call that we essentially saw 2 years growth in 1 year in '22. And therefore, we want to make sure to level set expectations on what we felt was attainable for '23, which was slightly below the long-term target in terms of growth and in terms of profitability. But we're not issuing any specific guidance for '24.

Understood. But you commented that there was a high share of renewal contracts here. So can you say anything about what share of today's quite stellar numbers are driven by replacements, which are not -- I mean, you comment on what is subscription, but to more fully capture the recurring elements of your business, can you say anything about how much of today's sales are replacement to them?

That's a great question. I don't have an answer off the bat. We did see a lot of new customers, frankly, in Q4. I think I indicated earlier that typically, we would see -- I think I've explained earlier on the call that we typically see 80% to 90% of the sales during the year from existing customers. In Q4, potentially because of the high -- the large number of attacks and the visibility of those, we did see a large inflow of new customers. So perhaps a little bit mixed -- the mix skewed a little bit to new sales compared to existing sales, which is kind of natural since we have such a strong quarter. If it were just renewals, it couldn't have been this strong. Renewals in the sense, either buying more keys or renewing a subscription.

Understood. And just finally then, what would you see as, call it, incremental growth drivers 2024 versus before? Can you say anything about whether you think you've found the right market fit for your partnership strategy, et cetera?

I mean I divide it in 2 different ways. One is in terms of verticals and geographies, i.e., some customer segments. We can see that there are some new trends when it comes to where growth is happening. Camilla pointed to one, which was visible already in Q4 and actually throughout 2023, that we saw a lot of growth in EMEA and APJ. We're also seeing certain segments -- industry verticals taking off. So that's part of it, which has not so much to do with our offering, but more kind of where the demand is generated. When it comes to our -- what we can do ourselves to support strong growth, as you mentioned, it will be important that we get some of the strategic partnerships up and going. And that is something that we haven't proven yet. So that will be an interesting lever to see how much impact that can have already in '24 and beyond '24.

The next question comes from Erik Lindholm-Rojestal from SEB.

A couple of questions from me. I think starting off on Subscriptions. Subscriptions as a share of orders has been roughly flat here at 15% throughout 2024 with strong growth in both perpetual and subscriptions. I mean do you think this transition to Subscriptions will sort of accelerate in 2024? Or should we expect this level going forward as well?

Thanks, Erik. Yes, you're right, it was -- the percentage, relatively constant during '23. Going into '24, of course, we'll work on refining that product offering. Based on the pipeline and the types of organizations that we see in the pipeline going into '24, I expect the growth in Subscription offering just because of customer composition, but I think the underlying -- what really could drive subscription growth going forward is that we develop the product offering further.

All right. Interesting. So I mean, you mentioned the pipeline here. Obviously, a very strong end to the year, but can you say something about sort of how the beginning of 2024 has looked in terms of developing -- or delivering on this pipeline?

The only thing I can comment there is that we haven't felt it necessary to issue any press release in either direction. Let's put it that way.

Okay. Interesting. Then the gross margin...

But as I mentioned, to be a little bit less of a politician. As I mentioned, I feel we're in a good position to continue our growth journey.

Yes. I guess that's fair to say. So the gross margin was 83% now in Q4, slightly lower than in previous quarters in the year. Is there any sort of factors affecting this and is this a fair level to expect going forward?

Camilla, do you want to take this one?

Yes. Now as I said, the gross margin is fluctuating between months and between quarters depending on customers and specific deliveries, et cetera. And we expect to continue the gross margin -- keep up the gross margin around 85%, 86%. Also going forward, it should be that number, right?

And I think the mirror image of that was in Q3 when we had very high gross margin, if I remember correctly. And that was due to the customer composition and certain variations, pretty much by quarter. So I think it's better to look at that from a -- I think I said so at that time, too, it's better to look at it from a 12-month basis rather than just the recent quarter.

Okay. That's a good flavor. Maybe a final question for me. You mentioned that you had to scale up quickly to meet the heightened demand here in Q4. If you think about cost growth going into 2024, would you say that Q4 is kind of a good indicative level of where you should be, maybe excluding the higher commissions that you normally see in Q4?

Camilla?

Yes. I mean we are continuing to develop the organization as well, of course. And growth, we are still, I mean, building for growth. So keeping a fixed cost level is probably not what we are looking for here. But of course, scaling is still very relevant.

The next question comes from Predrag Savinovic from Carnegie.

Well, decent figures reported today, so congrats on that. Could you maybe double-click a bit on the bookings growth, which really spikes in the quarter and I'm curious how this number is spread? If it's driven by fewer larger orders or evenly spread across a lot of customers?

Thanks, Predrag. And I must say that looking at your analyst reports, you were pretty much spot on everything except for this order bookings number. So you clearly have demonstrated that you have a good sense for our business. When it comes to the order bookings in Q4, again, I should say that this was a very strong quarter, and it's also worth mentioning that if you are -- we're comparing it to Q4 in 2022. And as I think I mentioned on earlier calls, the second half of 2022 was not our strongest 6 months. When we talk about 2022, we do highlight the exceptional order in Q2, but we also have mentioned that we didn't have a particularly strong Q3 and Q4. So it's kind of an easier quarter to compare with. That said, it is a record quarter. And what is very encouraging to me is that it's not just one outlier, whether that explains this. Of course, we had a significant order as was communicated when we delivered the Q3 report for, I think, SEK 86 million. So that definitely had an impact. But below that, you see a pretty nice set of orders in excess of $1 million which is where we want to be. And it's across a very wide range of customers, industries and geography. And when you have that broad-based growth, that, of course, deals even better than when it's limited to 1 or 2 accounts. But again, this was a -- we had a -- we usually have a strong end of year, and that definitely materialized in '23. I'm sorry, I may have missed part of the question there. You asked me to double click. So if you need further color on that, please feel free to add, Predrag.

No, no, that's great. I was mostly interested in how it's spread across different customers and if there were any outliers. But then again, on bookings, what is your best guess for the time line on delivering on these?

What is -- I mean, as you could see, even if we had a 83% growth in bookings, we "only had about 19%" -- correct me if I'm wrong here, Camilla -- in our revenue or net sales. So of course, several of these orders will -- are spilling into 2024 in terms of as they get delivered and as we are able to book the revenue. However, because of the improvement in inventory, we are able to turn around orders more quickly. Now, it's more a question of how quickly the customer want the keys and how they can deploy them. So I'm actually quite happy with our ability to deliver on major orders at this point.

Okay. So is it a fair assessment to say that near-term growth could be trending above the financial targets that you set out yesterday, thanks to the bookings number, which has been quite strong. Your inventory level is high, so you can deliver on them quickly. I mean that train of thought -- correct me anywhere if that is -- if that would be wrong?

So looking at -- since we have a big bookings number in Q4. And of course, not all of that was delivered in Q4, then the revenue would have grown or net sales would have grown at the same rate. Yes, there's definitely going to be some of that spilling into '24. So that, of course, sets us up in itself for a strong start when it comes to revenue growth in '24. But then, of course, we need to keep the pace up. We can't just live off sales in '23, of course.

Yes, of course. Another kind of theme thinking about Okta. During this quarter, we have noted that Okta has undergone hacker attacks twice, I think, which has been successful or -- sorry, I think that was in Q4 actually and once in the first quarter. And intuitively, this should be positive for you, I think. So if I were Okta, I would like to strengthen my partnership with Yubico to combat account takeovers. Is this something you think you would be experiencing or something that you think can boost the implementation of this partnership further in the near future?

Yes, of course, I don't want Okta to be hacked, but I like to say, we're an obvious partner for them and I think this further reinforces the benefit of us working together. So I'm very optimistic about that cooperation.

And finally, we did speak a bit about Accenture last time. But if you could elaborate a bit on how that partnership is developing as well, what kind of expectations are there?

Accenture. I'm sorry, I'm at a loss. Camilla remind me.

Was that Accenture, we talked about that we had an agreement with one of the...

No. As I recall it, we did spell out that there were some major system integrators that we had.

Yes. Forgive me, I assumed there was Accenture?

Okay.

It's a trick question.

Yes. But you were prepared -- I see you were prepared for it.

No. Then I understand the question perfectly. Sure. I mean, for us, when we first had our success within high tech, it was because we were able -- which then turned into us being able to be very active in establishing the standard, which is now promoted under the passkeys name. I mean, then we have the high-tech companies pretty much eating their own dog food first before being willing to recommend it to the customers. And that's exactly the exercise we're trying to accomplish with the major assignments today, to first sign them up as internal customers to gain credibility for them to familiarize themselves with technology, so we can then work together in addressing their huge reach when it comes to global enterprises. I'm afraid I cannot share more than that right now.

That's great. Thank you very much. And again, impressive figures and looking forward to the coming reports as well.

The next question comes from Anders Rudolfsson from DNB Markets.

First of all, congratulations to a monster report, really fantastic. Well, what's going on lately is, of course, not only cybersecurity threats, but also generative AI. And I can see that a number of companies in your world, so to speak, like CrowdStrike and Cloudflare, a number of them are included in the AI world in a way. And I wonder how you see AI? Is it something that's a threat or opportunity for you? And in what way would it be?

I'll try to answer that. Thanks, Anders Rudolf for the question. As we've stated, AI helps the cyber criminals in the sense that they can make much more refined attacks. When you get these spam letters, click this link Dear Mr. Danielsson with a typo, you are now about to win $1 million. I mean those kind of really stupid attempts for you to access and click links and access material, that have been done on a mass scale. With AI, you can have much more tailored attacks. I mean the worst example that I've heard of so far was deepfake using AI, where a person in the finance team in Hong Kong, if I remember it right, was persuaded by someone that he literally thought was the CEO and CFO of the company in a video call telling him to transit $25 million. And that was all enabled by AI. So you can really on a massive scale tailor-make messages that fit people into either transferring money or permitting access into sensitive systems. And there, our stance is that, that makes it even more important to have a robust multifactor authentication. Because then it doesn't matter if that individual clicks the link. It doesn't matter if that individual happens to share their password. So I think our -- the robustness of our solution, where you're not depending on really the user being aware of there being an AI-based attack. That's something which we feel actually speaks in favor of our solution. Now that's on kind of the threat level. Of course, we're evaluating AI for internal use and improving our efficiency for different development tasks and for admin and systems questions. It hasn't had a significant impact in all honesty yet, but that's definitely something that we're interested in. And as you can imagine, with an engineering-heavy organization, there's a lot of people around that find that this is very intriguing and want to explore how we can use it from a business perspective. Camilla, that was a long-winded answer. I don't know if you want to add anything to that.

No. I really look forward to be able to use AI more in our internal processes as well, actually.

So if I try to summarize that, I understand this is a period where we see probably really a new wave of cyber attacks. I mean what we have seen in, for example, a couple of months ago, Microsoft were one where you were hacked there. And you had the Swedish one, Tieto, here where you guys were really, really negative for a number of companies, and I really don't know what actually happened there when they attacked this Tieto. But can you actually position yourself more into those kind of threats? Can you just sort of expand your product offering more than just have the Yubico to make sure -- for sure, right now you have -- you are the one that everyone trusts. Could you actually give more products into the marketing companies to get a wider range of products for protection, so to speak. Do you understand what I mean?

I think so. That would -- if so, it would be more of a long-term ambition. What I think will be the more near term or imminent effect is the fact that people will realize we can't depend on people not being fooled. We need to have -- we need -- we can't rely on people not clicking the wrong link, so sharing the wrong information. We need to have a hardware-based solution, which ensures that only those that should have access to accounts and information can get access to that. So that's -- I would say that's the more important short-term effect.

Well, I guess you don't have much time more now. You have to go out and sell more. So I stop there.

Thanks, Anders. I think that's the last of the live questions. We've received a couple of text questions. I guess, will you transition over to that.

There are no more telephone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Okay. So we've received 2 questions online. The first one was related to the EUID (sic) [ EUDI ] Wallet project that we mentioned in the Q3 report. And the question goes, with the upcoming EU Wallet market, is Yubico positioned to provide competitive hardware wallets? To be clear, we're a member of the EUID (sic) [ EUDI ] Wallet project, which is sponsored by the European Commission, if I'm not mistaken. So the word here is we, of course, want to be part of that in providing a competitive solution. By definition, it's a -- it's an open project which involves several parties. So of course, it's not going to be exclusively designed around a Yubico solution or YubiKeys. We need to -- but we're quite used to working with an in open standards and open technologies. So of course, we want to be part of this. We feel it's an important project, and we feel that we have a unique product and a unique understanding on how to design something which provides the right mix of functionality whilst protecting people and protecting people's identity so that there's not an over share of information. So I think it's an exciting one. I'm not going to tell you that this will have a major impact in '24 and probably not even in '25, but it's one of the things which is driving demand long term, is our thinking. Unless Camilla wants to add on that, I'll jump to the second question that we got. Firstly, congrats on a great quarter. Thank you. Can you explain the strong order bookings a bit deeper, the renewed versus new? How are they divided between customers? Are there any dominant orders in that? I think this question was posed before. Predrag asked a similar question. But repeat, of course, when you see such a big increase in order bookings, it's not just about renewals. Of course, it could be that you scale up from existing customers. But as I mentioned, it was -- we saw a lot of new orders and how they're divided. Yes, there were a number of big orders, including the one that we communicated in the Q3 report. But what was really nice from our perspective was that it was a broad mix of different customers where I think there's a lot of potential for growth going forward. Camilla, I don't know if you want to add on that. You have all the numbers.

Yes. No, I think that is a very good explanation. And as we have talked about it also earlier in the call, I think we cannot give very much more than this.

Excellent. I think that's a wrap on to a busy Friday. And it's an exciting year. I'm optimistic that 2024 will be an exciting year for Yubico too. Thanks for all of the good questions. And I hope that we provided some color to the report that was shared today. So with that, I think it's over and out for us. And we'll be back, I think, it's about mid-May with the Q1 report. Thank you.