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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good morning, everyone, and welcome to the presentation of the Addnode Group Q1 Report. I'm Johan Andersson, CEO of Addnode Group. And with me, I also have our CFO, Lotta Jarleryd.
Good morning.
We'll briefly walk you through our Q1 report, talk a little bit about the Addnode, what we do, sustainability, sum up our investment case. And there will be time for Q&A. And you will also find in the presentation some appendices with our acquisitions, our shareholders and our share performance. For those of you who are new to Addnode group, what do we do?
We provide digital solutions for a sustainable future. We generate sustainable value growth by acquiring new businesses and actively support our subsidiaries to drive organic growth. We are organized in 3 divisions, Design management, Product Lifecycle Management and Process Management. We are providing digital solutions for sustainable design and product lifecycle management, efficient management of real estate and facilities and effective public administration. The foundation of the group's overall offering of digital solution consists of proprietary and partner owned software. We work continuously on enhancing our portfolio of proprietary software while simultaneously consolidating our offering by developing applications that can be used in combination with software from our partners. We complement this with a strong services proposition based on a high level of skills, long-term experience and good industry knowledge. Looking at rolling 12 months, our net sales are close to SEK 7 billion and were up 71% is recurring revenue. So looking in at Q1. Q1 was another quarter with robust growth and improved EBITA. We started 2023 strongly. Net sales were up by 49% to almost SEK 2 billion and currency adjusted, our organic growth amounted to 19%. The demand for design management digital solutions remain high. Customers demonstrated good willingness to invest, especially in the U.K. and U.S A. Product Lifecycle Management continued to experience good demand for PLM systems and related services in the U.K. and German market. However, the Nordic market was impacted by low capacity utilization in our own consulting organization. Process Management organic growth remained positive, corroborating the leadership status of the division's offerings to Sweden's public sector. Our recurring revenue increased by 57% to SEK 1.4 billion. Looking at EBITA, if we adjust for a capital gain that we had last year due to property sales, it increased by 29% to SEK 202 million. EBITA margin was, however, somewhat lower than previous year, primarily due to that sales from third-party solutions show stronger growth than other revenue types. And with that as an introduction to Q1, I would like to hand over to our CFO, Lotta Jarleryd.
Thank you, Johan. I would like to share a few more details on net sales. In the first graph to the left, we have set out net sales for the first quarter over the last 5 years. As you can see, the current quarter was very strong with net sales totaling almost SEK 2 billion. Total growth was 49% compared to the same quarter previous year. It is also evident from the graph that recurring revenue was a revenue category that increased the most with about SEK 500 million. That increase derived from both acquisitions and organic growth. The main contributor was the sign division and by that predominantly Symetri and Microdesk that accounted for more than 80% of the increase. The most important driver was the multiyear deals following strong demand, especially in the U.K. and U.S. markets.
As we come in to the graph in the center, I would like to stress that certainly it's important to have such a high share of recurring revenue, 72% as a stable foundation in our business model. Service revenues admittedly not included in our definition of recurring revenue, but many customers return to us again and again for our service offering. In the third graph, we have set out a breakdown of net sales by geography. Interesting to note is that Sweden is still our single largest market with all 3 divisions operating in this country, representing 30% of total sales. But after the last couple of years, acquisitions in the U.K. and the U.S. and the consecutive organic growth, we are now a true international group with 70% of that sales outside Sweden. Back to you, Johan.
Thank you, Lotta. And looking into more detail our 3 divisions, we'll start with design management. As label says, Symetri and Microdesk continues to impress. Net sales increased to SEK 1.2 billion. It's a growth of 72%, organic growth 28%. And adjusting for currency, the organic growth was 25%. Demand for the division's digital solutions and services remained high as reflected in significant organic growth of net sales and earnings. EBITA was up 47% to SEK 131 million. The EBITA margin was reduced to 10.8%, mainly because Symetri and Microdesk continued to win market shares and the revenue mix changed with a higher revenue share from third-party solutions. Looking at Symetri's operation in the U.S., the newly acquired Microdesk, it continued to perform well due to positive demand in the AEC segment. Demand for Symetri offering in Europe remained also strong, especially on the U.K. market. There are some signs of a slowdown apparent on the Nordic AEC market, while demand from manufacturing remained positive in the Nordics. Tribia, our company that provides collaborative portals for construction, civil engineering and SWG, providing digital solution for facility management made also a strong progress in the quarter. Product lifecycle management, solid growth in the quarter, EBITA impacted by low utilization. I'll come back to that later. Looking at net sales, it increased to SEK 433 million. It's a growth of 28%. Organic growth was 18% and 13% currency adjusted. U.K. and U.S. business experienced continued positive demand as reflected in significant organic growth of net sales and earnings. In Germany, demand was stable, while the market in Nordic was somewhat weaker. The trend of customers increasingly demanding time from leasing of licenses instead of the previous license purchase with perpetual right of use continued. EBITA in the quarter was reduced to SEK 26 million and the EBITA margin decrease to 6%. The Nordic consulting operation was negatively impacted by low capacity utilization, work on improving the organization's efficiencies ongoing. Also, a few of the operations acquired over the past year have lower profitability than the division's other businesses. Integration work is continuing with the aim of lifting profitability. Process management. Organic growth and our belief is that it continued to outperform the market. Net sales increased to SEK 335 million. It's a growth of 16%. Organic growth remained good at 10%. This is despite that we can see that some municipalities and public authorities are showing some restraints in terms of investment. The division is positive and established relationships with a large public sector customer base frequently present opportunities for recurring sales or the expansion of current assignments. Additionally, the division's businesses are well positioned in public sector tenders owing to attractive digital solutions, in-depth experience and good references. The division is continuing to invest in enhancing its customer offerings. And looking at acquisitions in this division, decisive that was acquired in June '22. It's a leading provider of rule-based digital decision management system for the new Norwegian public sector also experienced continued positive demand on the Norwegian market. EBITA increased to SEK 64 million and the EBITA margin was a little bit down but still on a very stable high level. Acquisitions year-to-date. We have made 2 complementary acquisitions so far this year. FAST2 develops ERP system for municipal housing corporation and is a supplementary acquisition for Service Works Global. Key performance consolidates TECHNIA's offering in model-based design. Our pipeline of acquisition candidates in Europe and the U.S. is still well filled and the group's relationship-based acquisition process combined with our financial strength means that we can keep growing through carefully selected acquisitions. I would like to hand over to our CFO, Lotta Jarleryd.
Thank you, Johan. I would like to continue with an overview of the consolidated cash flow. The operating cash flow for the first quarter 2023 amounted to SEK 269 million, which was slightly better than in the same quarter previous year. Cash conversion rate that is operating cash flow to EBITA was about 115%. Please also note, as described already in the Q4 '22 report that Symetri and Microdesk's partner Autodesk altered its invoicing and payment terms for software contracts lasting more than 1 year by March 27 this year. Payments both from customers and to Autodesk are now annual even if the customer signed a 3-year contract. This will have an initial effect on cash flow.
As currently, revenue and costs for the entire contract value will be continue to be recognized when the contract commences. Investing activities in the first quarter amounted to SEK 155 million, primarily related to the 2 acquisitions made in the first quarter as well as to considerations to sellers for acquisitions made previous years, EI mainly earn-out payments. In addition, investing activities include development of proprietary software. Financing activities predominantly refer to an additional loan under revolving credit facility.
In the same quarter previous year, we financed acquisitions by borrowing SEK 300 million of the revolving credit facility. Please also note that the Board of Directors has proposed to the AGM a dividend of SEK 1 per share. This corresponds to a total dividend of SEK 133 million to be paid out to the shareholders in May 11. Continuing with a few comments on the balance sheet. We continue to operate supported by a resilient balance sheet, which is an important foundation for our continued growth organically and through acquisitions. Changes in the balance sheet during the first quarter 2022 were limited. We made 2 acquisitions, as Johan said, in the first quarter, adding another SEK 39 million to goodwill and other intangible assets. The increase in provisions, taxes and other debt included future earn-out payments depending on the financial performance of the recently acquired companies. Net debt was on the lower side, SEK 0.4 billion and decreased during the beginning of the year due to strong cash flow from operations. Cash position amounted to SEK 0.7 billion and outstanding bank loan was just below SEK 1 billion as per March 31. Consequently, we had funds of SEK 1.4 billion in total by the end of March that is available for continued growth. include cash position as well as the unutilized portion of the revolving credit facility. Back to you, Johan.
Thank you, Lotta. Sustainability. I would like to -- and the group's biggest contribution to a more sustainable society, is the digital solutions that we offer to our customers so that they can simulate design, make and build more sustainable products, buildings, infrastructure and cities. That's our major contribution and where we can make a difference. So with that, as a reminder, I would also take the opportunity to introduce you to 3 case studies that are displayed also in our report, and you will find at our website as well that shows how our digital solutions supports our sustainability development goals. Example 1 to the left is from Symetri in the Design Management division, fire safety planning with digital BIM processes.
The Brandskyddslaget is Sweden's leading fire and safety consultants and they are now investing in digitalizing fire safety and project planning work using Symetri Bimfire Tools. It's a fire safety of planning application with 3D-modeling technology. Example 2 in the middle is from TECHNIA. It's in the Product Lifecycle Management division. It's an example of more efficient product development with fewer faults and superior quality. TECHNIA is supporting Helix, a leading manufacturer of electrical powertrains for electric and hybrid vehicles on implementing Dassault Systeme's 3DEXPERIENCE platform for better design and long-term maintenance of their products. Example 3 to the right is from our company Canella in the Process Management division. Canella has developed a digital delivery system Candos for dosage dispensation of pharmaceuticals. Distribution method eliminates the need for drug packaging and portioning tablets manually, increasing patient's safety. You will find a full version of these cases at the Addnode Group website. So summing up Addnode Group as an investment. Our strong position in segments with underlying structural growth, a diversified business in terms of geographies and customer base plus a business model with a high share of recurring revenues means that we have good potential for continued value creation. I'm very confident that Addnode Group will continue to deliver profitable and sustainable growth. And with that, we would like to open up for questions. Both Lotta and I will be able to answer them. So please.
[Operator Instructions] The next question comes from Daniel Thorsson from ABG Sundal Collier. Please go ahead.
I start off with the first question on PLM and the low utilization you mentioned in the consulting business in the Nordics. Is that a market thing? Or is it internally for your division here? And what will you do in practice to improve it ahead?
I would argue that the majority of that is internally. It's our own efficiency and we can do it much better. And how do you handle that is that we need to be I think the market is there. We are doing more business. It might be that it's -- so we need to be more efficient and more efficient means that we need to deliver the same with less people.
Okay. And does that mean in practice that you're going to deliver more with the same amount of people or as you said, deliver more with less people.
I think that the capacity, we're a little bit -- we are too many people right now to be order because we have a good sort of market. There are customers working with us, we can see that, but we need to be more efficient in how we deliver it. So it's probably less people rather than increasing top line even more.
Okay, clear. Second one on M&A. You mentioned that you feel positive on the M&A pipeline when I read the report. Can you give us some more insights into that in terms of regions or maybe type of companies you find most interesting right now?
For those of you who have been following us for a while, it's quite a boring answer. And the boring answer is that we're looking into all 3 divisions. And we are also looking into all the regions where we're active. We are today active in both Europe and U.S. And with us, as we have really more of a relationship-based M&A process that it means that we spend a lot of time discussing with the entrepreneurs, making sure that we're ready to do the businesses. And that means that we have a lot of those discussions ongoing. And hopefully, we'll be able to do more acquisitions this year.
But will it be in Q2? Will it be in Q3? Will it be in Q4? That's more dependent on when sort of the entrepreneurs are ready to say yes. So I can't give you any distinct answer more than saying that we are looking into all the 3 different divisions. And hopefully, we can look at. For us, U.S. is probably a new market as we entered it with Microdesk last year. That was the first step. So hopefully, we can look both at the European market and the U.S. market.
Yes. Okay. So if I rephrase the question a little bit then, do you see higher interest to sell businesses for a SaaS company today, for example, than a year ago? Or is it more interest to sell a reseller business today for some reason across the world? Do you see like incoming calls from sellers for any type of those different businesses?
I think we have the same interest that we have. We will never part of the craziness a couple of years ago when people pay like 6, 7, 8x net sales of a SaaS company. We are still looking into. But of course, there are more -- with the pricing that we are willing to pay, there are more companies available. It's more like that, I would say.
And I have a question for Lotta as well. I think working capital contribution was down year-over-year in Q1, Q1 is typically a strong working capital quarter figure and despite earnings growth. Is that due to changed seasonality from any of the acquisitions made? Or anything else you see that have changed in the market. We know, obviously, the Autodesk change payment terms for the 3G licenses, but anything else?
No. I think that as we grow and as we grow in markets outside Sweden, I think customers tend to have sort of a little bit longer payment terms. And I think that is something that is reflected, but we have no other big changes besides the change that I described, which started on the 27th and haven't had any effects so far related to the outer desk, but no other sort of -- I think the difference is quite small actually, if you compare to last year.
Okay. So no drama on your side.
No dramas.
Okay. Second one for followup on my final question here. You have a total interest-bearing debt of around SEK 1.1 billion and the financials more than doubled here in Q1. Can you give an indication of roughly the interest rate. The interest you're paying on that debt? It seems to be around 6%, if I annualize the quarterly figure here, but I guess there is something more within that net financials. So probably slightly less than 6%. Is that a fair assumption?
Yes. I mean included there is also currency differences, of course, as usual, and they can go up and down. But I would rather say that we are around -- more around 5% and 6%, I would say. And then we also included -- we do this with discount the liability we have for the Microdesk earn-out, which is also included there.
The next question comes from Alain Garten from Carnegie Investment Bank.
Alain here from Carnegie. I have a question regarding machine. So they reported a good quarter. So they saw a lower gross margin in their Autodesk operations. So I wonder, do you see the similar tendencies. And could you elaborate a little bit on that?
Just for me to rephrase was the question that one work, other bigger Autodesk partners in the world management machine that they saw a margin drop in their Autodesk related business?
Yes. The gross margin Yes.
Yes. We also have a slightly lower gross margin in this quarter. And if -- it is something that sort of can go up and down by quarter-by-quarter, depending on what deals we are having. So in the -- we have a mix with a higher portion of third-party sales. And there are somewhat slightly lower margins on that sales as well in the quarter for us. I don't -- I haven't seen the reports. I don't -- can't compare really the drop between them and us. But compared to last year, we have a slightly lower gross margin as well.
And could you explain a little bit more about that? Are they price pressure from Autodesk or how come that the margins are lower now?
No. I wouldn't say the price pressure is not for Autodesk. It's more up to us on the market and the market share and there's a competition for market share rather. So I would say that's probably reflected. So we are gaining market shares and we are taking it. But sometimes when you gain market share, there's a price component in that as well.
Okay. So you will prefer sales growth instead of margin growth.
I would rephrase and say that what we are sort of that by the end of the day pays, our cost is our gross profit that we're able to deliver. So the increase, the sum of the gross profit, that's probably what drives us going forward. And that's the net of that. That's sort of main focus. We always want to be profitable over time. So profitability is always our sort of key drivers in our business.
Sounds good. And I also have a question. Have you seen that the demand for multiyear agreement has come down because you talked about Altus having less what its called lower prices? And are you seeing some less multiyear agreements?
So far, we haven't seen any major changes in that. But as Lotta mentioned, there are new financial models with regard to the 3-year deals starting as of March 27. So we have -- so we are -- we have to follow that going forward. But there are no sort of major changes yet.
Okay. And one last question. If you could elaborate a little bit more about the organic growth and Product Lifecycle management and what we should expect going forward as well?
If we look at -- was the question on organic growth, specifically for PLM or for the total business.
Yes. Actually, you can describe the total business but going through the divisions, that would be great.
Yes. If you can see that we had the strongest organic growth in our design business. I think it was 25% this quarter. And we had 13%, I think it was in the PLM division and then 10% in the Process division. And that is a trend that we have seen the last year that we have had the strongest organic growth in design and we are able to hold on to -- for us, a very strong organic growth as well in the division. So we're expecting organic growth for this year as well. How much we are glad that we are able to have this high organic growth, but we're not able to make any prognosis on that, but that we are still expecting organic growth. But if you look at, for example, process where we have 10%. For that market, the public sector in Sweden selling software to municipalities and state agencies, that is a very strong organic growth of that market. So we are not expecting that to sort of expand even further. That's a very strong organic growth for that market. And then we can see that we are able to in design, we are driven it both by a solid organic growth in the market and that we are also gaining market share. So they're part of that in organic growth as well, both that we are -- have a strong market and we are taking more of the market, so to speak.
In PLM, we can see that we are going with the market and we are able to gain somewhat market share, but not as much. But we have one of the sort of geographies overall that is driving the businesses in the U.K. market. We can still see that U.K. market was very strong, both for the design division and the PLM division last year, and it has continued in Q1 as well to show strong organic growth. And that is due to both the AEC market, but also that we are able to attract customers who are in the EB businesses that you find electrical vehicle is supporting that with both the powertrains and part of that, so we can see. So it's a mix. So yes, we are expecting organic growth, how much still to see. And then if you -- to the other part of your question, going back to PLM and the margins there. And it's like I mentioned before, we need to be more efficient. To be very blunt, so to speak, we have too many people that we probably need and that goes to our utilization in the service organization in the Nordics, specifically. We still have a very strong market in the U.K. and U.S. performing very well. We are sort of solid or stable. I don't know what the right wording is with Germany. But we have been struggling in Q1 here in the Nordics with our utilization of the service business. And then we did some acquisitions last year, who by itself had a lower margin at the time of the acquisition and we are working with them sort of to grow their operating margins. So it's a mix of things there. In the Nordic market, there were some acquisitions that we are still working with to raise. And then sort of overall, we can be a little bit more efficient. But we have a good momentum on the market and we can see that in PLM, the U.K. and U.S. are driving. And Germany, we were a little bit more last year, less for this year. So it's a mix as usual.
The next question comes from Eric Larsson from SEB.
I have a follow-up that you basically already answered, but on PLM organic growth. It seems like the lower capacity among Nordic consultants is not really -- I mean, you have enough consultants and you have the tools necessary to grow nicely, but the capacity is essentially too low. That's what you're addressing in terms of the margin, whereas you have the tools to continue to grow nicely if the market does.
Yes, we have the tool. But we have probably to rephrase that in that we had too much tools. The market is coming. But as of now, we have too much tools for the growth of organic growth of 13%. To see that we can get a good margin out of that.
Yes. Okay. Perfect. Then just last final question on M&A. It is a bit of an uncertain market in general. It feels like you're a bit confident still. But does the uncertainty affect your willingness to execute any larger M&A in any way in the absolute near term here?
No. I wouldn't say that because larger M&A for us is still add-on acquisitions to what we are doing. In near term, we did the acquisition of Microdesk. It was our biggest acquisition so far. But it was also bolt-on acquisitions to Symetri what we are already doing. So if we can -- we are still able to do what bigger acquisitions from a group perspective, but they're still a bolt-on acquisition. But that means that we know the businesses, we know how to run that type of businesses. We have the people who sort of understand the spectrum of where they operate and we have a healthy balance sheet that Lotta described, meaning that we sort of have the financial power to make it happen as well. So we are still looking at both small and bigger acquisitions.
The next question comes from Anton Hu from Red Eye.
Given out the exchanges, invoicing and payment terms, I mean, have you seen any behavioral changes from customers. For instance, if the new center of 3 licenses have been postponed somewhat into Q2 to get more favorable premium terms.
No. I can't really say that we have seen that change that they are sort of holding on to sort of making it an order and increase the number of subscription and et cetera. Because looking at Q1, you can see that we have the very strong organic growth as well there. So no, I can't really say that we've seen any sort of restraints in their investments in Q1 to make that happen in Q2 based on the specific note.
In the last quarter, you mentioned that the high organic growth in the design management was partly due to a COVID-19 catch-up effect. Would you deal say that -- that is still the case or...
It's tough to say because we can't say that quarter after quarter because the U.K. market is still a very good market and the organic growth has continued both in the Design division, but also in the PLM division. So that gives us more confidence to say that there is a good push in the U.K. market for design and product data management solution, both from the construction and the manufacturing. And I think it also has to do with the fact that we are also working with sort of the newcomers to the market with regards to electric vehicles and supporting that type of businesses as well.
Okay. And the last one, I mean, now that's Microdesk has within the group for a year. How would you like to summarize the first year? I mean it's clear that the performance has been good, but could you give some color in terms of top line development versus the margin improvement in the business?
I think Microdesk has been -- or are a very good contribution to both Symetri and to the Addnode Group. They have very much contributed to both top line and they have also been a very good margin for that type of -- for this type of businesses. So they have been a very good contribution from both a financial perspective, but also from an operational perspective. And we are still working with making sure one of the triggers for this was that we can see that we have been able to develop a very broad portfolio of own technology that supports the Autodesk platform. That is still to come to see that. We have a very good sort of first start this year of making that happen, but the outcome of that is still to come. We were very fortunate to sort of timing perspective with regards to the U.S. market has been a very good market by itself this year. So looking back so far with the rate at Microdesk as a very good acquisition for Addnode Group.
The next question comes from Alain Garten from Carnegie Investment Bank.
I have a follow-up question on U.S market. Are you seeing that demand is holding up similar as to U.K market? Or could you please elaborate a little bit more about the U.S. market?
If you look at in the business where we are active, there is a strong demand in the U.S. market, a strong demand in the U.K. market. But compared to a year from now and we don't have that sort of visibilities in the U.S. market in our figures as Microdesk has only been part of any group for a year. It seems like percentage-wise, there is a stronger growth in the U.K. market compared to a year before, but it's still a strong driver in the U.S. market as well.
There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.
Yes. We have some questions coming in through e-mail here. So I will read the question and then we will respond. From [ Jesus Sogot Handelsbanken ], we have 3 questions. The first one, could you give some more color on the gross profit margin development affected the EBITA margin. Licenses is down 32% year-over-year in design and lower for the group. Is this the main reason? And you should then contributor from Microdesk or Symetri or should we -- or how should we look at.
But I think looking at gross profit, as I think we have touched upon that earlier. It relates to the mix, meaning that if you look at our net sales, the one that has been overperforming is our sales of third-party partner software. And that means that we will have a gross profit mix with a lower profit borrowing by itself and that shows in the group's gross profit. So that's the main contributor for that.
And then we had a question about licenses why going down? And overall, we can see a shift moving from perpetual licenses to SaaS models, rental models, subscriptions, meaning that customers move from upfront payments in a license to paying yearly quarterly or every third year for the right to use the software. So that's a trend. And it's been ongoing for the last 10 years and we can see that clearly in our figures. So that is happening and we welcome that. And then was there some -- and I think that probably answered those questions.
Yes, I think so. The next question is, how is the demand part right now? And do you see any differences between Europe and U.S.
Yes. I would say. And the differences in Europe as well. We can see that U.S. market still going ahead. In the European market, as we have described earlier, we can see that still a good demand end market in London in the U.K. market. Somewhat lower in the Nordic market. And there, we have to separate between public projects and building condos in Stockholm. The part of the market that is more focused on building condos in Stockholm, less demand right now. But in the public market, we still see a demand. So there's a mix in that difference. So it's a difference in regions and the difference between the regions and in the regions, there's also a difference.
And the last question here in regards PLM division and the low utilization in the Nordic market. And the question is if there are customers facing out their projects right now. And how does it look in your other European markets?
So going back, you can see in the organic growth, the customers are still working with us and we would like to do that. So it's not a fact that the customers are phasing out the projects. There are still projects out there and we continue to work with our customers. And that goes both for PLM and the other businesses. And like we have described earlier on, it's more of our execution and ability to plan and man the projects. So the market is there.
And the follow-up question is how big is the consulting operation in the total PLM division?
What you can do is that if you look at the Q1 report, you will find that there's a schedule on Page 18, showing that we have a net sales of SEK 433 million in the PLM division in Q1. And out of those SEK 433 million, you will find that SEK 114 million out of 433 million is professional services. And that's where we are needs to be a little bit more efficient.
Okay. And then we have another question here also from . The question is how much of the recurring revenue growth is organic.
We don't disclose that, but you can sort of look at what we do disclose is the organic growth per division. And you can also see how much compare that with the total growth of the recurring revenue in the same schedule, which I said on Page 18 and you're probably able to draw some conclusions out of that.
Okay. And then a question from . Your EBITA margin came in a bit lower year-over-year and you said it is due to lower gross margin. As your service revenue as a share of revenue comes down to 22% from 25% previous year. I would have assumed it would help the gross margin. So could you please elaborate on what the drivers are behind the gross margin move in the quarter, both positive and negative.
I think if we are able to -- if our portion of services goes down, it actually doesn't help us. It's the other way you run, I would argue, because on the services, we don't have 100% gross profit of that because there are some sub-consultants. But it's a much higher gross profit on that compared to our third-party products where we share the revenue with our partners. So that means that when we increase -- when we -- the mix -- when we both grow on top line and that mix also has a higher portion of partner software. That means that our gross profit will be affected -- gross profit margin will be affected negatively even though we grow the gross profit.
Okay. That was the last question we received by e-mail.
Okay. Thank you for taking the time to listen in and asking very good questions. And with that, we would like to close for today.