QUARTERLY REPORT: APRIL TO JUNE 2024
RECORD QUARTER: +74% YoY GROWTH IN SAAS API CALL VOLUMES AND TOTAL ARR OF 74 MSEK
APRIL TO JUNE 2024
- SaaS API Call Volumes 31.5 million (18.0), +74 %
- SaaS ARR amounted to 43.7 MSEK (29.8), +47%
- Total ARR amounted to 74.3 MSEK (58.2), +28%
- Recurring revenues amounted to 19.1MSEK (14.6), +31%
- Net Revenue Retention Rate (NRR) +134% (137)
- Net sales amounted to 19.3 MSEK (14.8), +31%
- Gross margin amounted to 79% (72)
- EBITDA adjusted amounted to -6.3 MSEK (-13.9), +54%
- Earnings per share amounted to -0.1 SEK (-0.2)
JANUARY TO JUNE 2024
- Recurring revenues amounted to 36.1 MSEK (28.0), +29%
- Net Revenue Retention Rate (NRR) +134% (137)
- Net sales amounted to 36.4 MSEK (28.4), +28%
- Gross margin amounted to 79% (64)
- EBITDA adjusted amounted to -14.8 MSEK (-32.0), +53%
- Earnings per share amounted to -0.1 SEK (-0.1)
EVENTS DURING THE QUARTER
- Successfully closed directed share issue of 50 MSEK
- New SaaS agreement signed with MedHelp Care, a company with one of Sweden's most used health platforms
- New SaaS partnership agreement signed with Healthflexx, a premier health management organization
- Renewal of SaaS and License agreements with 6 existing customers including a Global American Tech company, Telefonica and Swisscom
- Teneo.ai Awarded Best AI telecom solution in Remend’s 2023 AI Self-Service Automation Report and Buyer’s Guide
- Teneo.ai Launches Accuracy Booster for Contact Center Voice AI
- Teneo.ai achieves record-breaking scalability and traffic on SaaS Platform, showcasing the platform scalability
- Teneo.ai leads compliance in AI Pact by integrating new standards into its operations
- AGM resolved to appoint two new board members and approve a new warrant program for employees
EVENTS AFTER THE QUARTER
- Artificial Solutions changed name to Teneo.ai and new stock ticker is TENEO on August 20
- Teneo.ai secures major consulting firm as new customer and signs OEM Agreement with Valcon
- Teneo.ai strengthens the sales team in the US by hiring 2 strategic account and 1 technical account managers
KEY FIGURES (For definitions please see page 20)
| APR-JUN 2024 | APR-JUN 2023 | JAN-JUN 2024 | JAN–JUN 2023 | JAN-DEC 2023 | |
| Net sales (MSEK) | 19.3 | 14.8 | 36.4 | 28.4 | 60.5 |
| Recurring revenues (MSEK) | 19.1 | 14.6 | 36.1 | 28.0 | 60.0 |
| SaaS ARR (MSEK) | 43.7 | 29.8 | 43.7 | 29.8 | 31.0 |
| SaaS API Call Volumes (Million) | 31.5 | 18.0 | 31.5 | 18.0 | 18.1 |
| NRR % | 134% | 137% | 134% | 137% | 145% |
| Gross margin % | 79% | 72% | 79% | 64% | 67% |
| EBITDA adjusted (MSEK) | -6.3 | -13.9 | -14.8 | -32.0 | -50.7 |
| Earnings per share, SEK | -0.1 | -0.2 | -0.1 | -0.1 | -0.6 |
| Cash flow from operating activities before changes in working capital |
-8.8 | -13.3 | -12.9 | -28.1 | -53.8 |
CEO STATEMENT
Dear shareholders, colleagues, customers and partners:
The second quarter 2024 was an eventful quarter for Teneo.ai! As communicated and decided at our AGM, we have now officially changed name from Artificial Solutions to Teneo.ai – all to better synch our product Teneo with our corporate branding. Our new stock ticker is TENEO.
We remain committed to our Financial Goals and are delivering according to plan. At the same time we have a focus on new sales and have delivered three new customers (one a few days after quarter close) in 2024. And of course we got the financing to double down on our new customer focus as well as our development in the new LLM world. Teneo.ai now has the platform to build a global player in using AI to interact in Natural Language with Computer Systems.
In the turbulent markets for us since ChatGPT was introduced, we now clearly see our role in the market as proven by our customers:
We are the company which powers the first Agentless Contact Center in a top 500 Enterprises. Our customers are sophisticated buyers that understand the powers and pitfalls of modern AI and the need for a platform that helps to mitigate the risks while harnessing the power.
Only Teneo.ai has the references that prove this is possible on a large scale. Now is the time to show this to the US and UK markets. Gartner recently published an updated forecast of the market development of our space when adding GenAI, which of course we did already last year. (top-genai-opportunities-for-tech-products-ebook.pdf)
Q2 2024 ONCE AGAIN DELIVERS RECORD-BREAKING PERFORMANCE:
We yet again saw stellar growth in this quarter. Quarterly SaaS API Calls grew at a rate of 74% compared to same period previous year. SaaS recurring revenues grew 54% compared to the second quarter 2023 and 23% compared to the first quarter 2024.
Our gross margin has also improved by increasing 7 percentage points, from 72% in the second quarter of 2023 to 79% this quarter. As we focus on new large Enterprise customers we know that this gross margin will shrink in the near-term but this is a proof point of our model in a mature customer base. An example of effects from growth focus is commission costs and the gross margin in the second quarter 2024, excluding these costs, amounted to 82%. Our plan calls for somewhat lower gross margin as we gain foothold in new customers.
MAJOR BREAKTHROUGH FOR MULTINATIONAL COMPANIES
Many US and UK companies serve customers in a multitude of languages. They usually start with English and then traditionally started projects for each additional language. Using the power of LLM´s one of our large customers totally changed the Economics of multi language solutions by simply turning on a translated version of the English solution in 39 languages. The first few days this solution was not the best but now after a few weeks it is as good as the English for most languages. Without a localization project in any one language 39 new languages were turned on over night. This is a major benefit available to all Teneo customers right away.
SCALING
As we remade Teneo in the beginning of 2021, a large focus was on Auto-Scaling. It means that the application can increase resource usage on demand and, thereby, keep usage low when there is little traffic but scale instantaneously when traffic is increasing. In May 2024 we saw this at scale for the first time where we had a 10 fold jump in processed calls in less than a minute with the platform, performing flawlessly. Our Product team is truly amazing.
PARTNERING
This quarter saw some promising developments related to our Partnership Program. We had the first co-bid RfPs with Genesys and Amazon Connect as well as a lead that came in from Microsoft sales. We have put a large focus on these partnerships during 2024 and landing a first customer together will be the kickoff for deeper collaboration. At the same time we have grown tighter with Tech Mahindra where, of course, we have done our first deal and have a number of joint opportunities as well. We also have an interesting Master Agent we are negotiating with for the US market. An interesting concept we will return to in communication during the third quarter 2024. Valcon who has been a partner working to implement our Teneo initiated an interesting model. They have in early July acquired one License of Teneo to be able to build solutions for several customers and already have the first customer onboard. This is a way to provide the benefit of Teneo to customers that do not by themselves have the required volumes. This also means that the number of customers are less important, while our SaaS API call volumes become even more important as our key KPI.
DIRECTED SHARE ISSUE AND STRATEGIC REVIEW
The directed share issue in June 2024 received significant investor interest and due to the high interest, the board of directors decided to upsize the initial intended volume of the directed share issue to 50 MSEK. The directed share issue in June gives us a strong cash position, enabling us to fuel new customer sales in the UK and US as well as to give Gecholog a more consistent possibility to reach the market. It also brought us a new main owner, Stockhorn Capital. Stockhorn Capital is a Swedish based active investor with a very interesting portfolio of tech companies and we are happy to welcome Inna Kaushan on our board of directors as a representative of Stockhorn Capital. This also concludes the board of directors Strategic Review announced in the autumn of 2023.
US & UK
Immediately after the directed share issue we got to work on actions to increase the US and UK market presence. We have already hired two great Strategic Account Managers in the US to complement our team and we will also add a Technical Account Manager in the US. We have also confirmed attendance in two events that will drive demand as well as several webinars and Account Based Marketing for our focus accounts.
IN CONCLUSION
In the third and fourth quarter of 2024, we will focus on providing our value to new large customers in the US and the UK, at the same time as we manage and develop our existing customer base. New customers will affect our gross margin in the short term but to secure new customer accounts is the right way forward given our market position in a very strong growth market. Our technology keeps delivering for the largest implementations of Natural Language solutions in the world. Our product team incorporates the latest AI technology so that our customers can focus on the Business Value. The team is executing according to plan and it´s a pleasure to work with a team this dedicated and strong. Thank you investors for your continued confidence and support. And thank you team!
Per Ottosson, CEO
This disclosure contains information that Artificial Solutions International AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 21-08-2024 07:30 CET.
