Super, thank you. Hi, dear investors.

Hope you're having a nice summer. Calling in today from San Francisco.

Pleased to report our second-quarter results. Basically one more quarter of profit growth.

Across the group, 9% revenue growth currency adjusted, 13% profit growth, and EBITA margin improvement from 11.7% to 12.3%. Reasons for that: BTS North America is back to strong profitability.

Maybe I'll pause and see if someone can mute the lines? Not possible?

Shall I keep going or should I pause? Starting again now.

Sorry for that interruption. Q2, one more quarter of profit growth.

Revenue 9%, EBITA 13% growth, EBITA margin an improvement from 11.7% to 12.3%. North America continues to perform, back to strong profitability again in the second quarter.

Europe continues to deliver really strong growth. BTS Other Markets still struggling in the second quarter, similar to the first, but we believe is on track to recover.

AI continues to drive really fast revenue growth for us, and we feel very differentiated as an AI partner to our clients. If we double-click into BTS's biggest unit, BTS North America, where we had the turnaround starting in the middle of last year, a second strong quarter in a row back to strong profitability.

Revenue's super nice to see the biggest unit go back to double-digit organic revenue growth. Profitability up 60 percentage points, back to 37.5.

EBITA margin, nice improvement from last year and we still expect that to continue to increase. I can explain more in a bit.

We expect North America to continue to be strong for the second half of the year due to several dimensions. As I mentioned, our ambition is to get that back to higher profitability margin levels over the next coming quarters.

I would just say one thing that happened in the second quarter in North America was we had one of our smaller businesses that was unprofitable, we actually shut it down in the second quarter and had about $400,000 of in-quarter severance related to that. Another business, we had another big AI diamond-level breakthrough that really is revolutionizing the way that the team works across our custom certification and content offerings, we also decreased the size of that team.

Those costs were hit in the second quarter, and it took out about a little over $1 million USD in run-rate costs to be realized over the coming quarters. Then our client demand continues to strengthen in the energy, financial services, and healthcare sectors.

We expect continued growth to continue during the second half of the year, we feel really good about the North America turnaround and continuing to perform. BTS Europe had amazing growth in the second quarter: 25% revenue growth with a 38% increase in profit.

With that growth, we see a nice improvement in the EBITA margin at 16.2%. What's behind the growth?

It's big deals that we had won in the past that continue to perform, smaller deals that came in actually grew in size, bigger than the initial order intake. BTS Europe in the second quarter saw no project cancellations or delays across their clients.

We also see increase in demand from the defense and manufacturing sectors. All of our offices in Europe except one delivered double-digit growth.

Given their fast growth rate in the first half, we expect Europe to continue to grow in the second half, but at a slower clip. BTS Other Markets was basically flat in the second quarter, a decrease in profit of -26%.

That's due to the same problems we talked about in the first quarter with some of the really low-performing units in BTS Asia. EBITA margin 12.5% drop from 17.9% Q2 2025.

All of this is due to the continued headwinds in Asia-Pacific. We addressed those head-on in the first quarter.

We've shifted different partners in the region, partner-led activities across different countries. We've had a big increase in AI marketing events which have been perceived very strongly in those countries, which has led to a stronger opportunity pipeline.

We've consolidated some of the offices where we just have less people and we don't need them, and some head count adjustments to make sure we have the right team moving forward. All of that said, we expect BTS Other Markets to have a strong recovery in the second half of the year.

AI continues to be our friend. It continues to differentiate us, and it's a source of revenue growth for the firm.

First, we continue to innovate across our portfolio with AI, and that makes our core services more differentiated and helps our clients experiment within their functions of new tools and services that are available to keep their functions on the leading edge. Also, we shifted this quarter for services where our clients are hiring us specifically to drive AI adoption, AI workflow re-imagination, AI innovation across the firm, we're going to report those out now in terms of revenues rather than bookings.

It's just simply a reflection of it's becoming a more significant part of the total revenue of the business. In the second quarter, it hit 10% of total revenue.

The growth of the revenue associated with helping our clients with their AI implementations grew 221% compared to the same quarter the year before at 76 million SEK. Why invest in BTS?

We have a history of sustained profitable growth, and we believe we are back to performing in line with those principles. AI is creating more opportunities for us, not less.

The whole market seems to be realizing that AI is primarily not a tech issue; it is a people and a change and an innovation issue. With that understanding, it fits with BTS's core capabilities.

Then our growth, as as a business model is capital-light. If we double-click into those very quickly, in terms of sustained profitable growth, sustained growth is in our DNA at 13% revenue.

We had 9% in the second quarter, and I believe we are on track to get back to our historical levels. We're back to growth in our biggest unit, which hit double-digit and 60% profit growth in the second quarter.

We have an amazing list of global clients, and our win rates continue to be strong. BTS has a brand in the market as a company who has been innovating how companies learn, change, and perform for 40 years.

That is what every company on the planet needs right now as they re-tool every person in the company with AI and expect [them?] to reinvent their roles.

We only have 1% global market share ahead of the competition. We believe we're in the sweet spot for this AI era given that it's a people, change, and an innovation problem and it doesn't resemble the similarities to digital transformation or ERPs of the past.

We continue to realize that we're in the top 5% of companies who have had three different major AI breakthrough and innovations across our operations, spanning new products and services all the way to the back end. We can take those learnings of what's required to invent with AI and what's required to mandate the new ways of working to our clients.

We continue to do that with many client events and opportunities and proposals in our pipeline. As I mentioned, it's now 10% of total revenues and growing rapidly.

Given the AI innovations of the past, I expect we will have many more coming in the future quarters across our functions, in particular. We have already realized 74 million SEK in productivity gains related to AI innovation and change implementation.

All of this while our core remains in strong demand, too. Clients are investing in getting actually people together to make sure that they understand the strategy, that they know how to act, and that they're accelerating the innovation of what they're able to do with AI.

Where they also are using us to scale change at big scale and speed. Then some of the AI companies right now, the AI-native companies, are our clients.

I'll give you an example of our work with Anthropic. You can see a quote from the Chief Commercial Officer, Paul Smith: "We brought BTS in early.

They rolled their sleeves up from day one, modeled every stage of our sales cycle, built the playbooks across market segments, full simulations of how we go to market. Incredibly high-impact, hands-on work.

Now they're part of our Anthropic Service Partner Network, and our customers get the same." We continue to kind of learn at the epicenter of how AI is evolving by helping them with our core services and taking those learnings out to the market.

Then finally, as for long-term investors, our growth is capital-light. Since our IPO in 2001, we've had 12% revenue CAGR, roughly 2/3 of that is organic.

That has been able to fund 1 to 2 on average acquisitions a year for the last 20 years. Despite the acquisitive approach to our growth, in addition to organic, we've typically paid between 40%-65% of profit after tax through dividend.

We've done all of that without asking for additional capital from our shareholders. We continue to have a strong net cash position with our cash conversion rate at 84% over the last 12 months.

As a result of the strong first half and what we can foresee in the second half, we're raising our outlook to be significantly better than 2025. With that, I'm happy to answer questions.

For North America, we expect the momentum to continue in the second half, and for BTS Other Markets, we expect them to get back to growth, so.

Was that your question? Or just more details on the margin?

Sure. If I exclude the one-off items, and keep in mind that those two businesses that we either canceled or reduced the team because of AI innovations were actually hurting our profit through the first half, now they will be profit-accretive in the second half.

The third reason for the lower margin was The Sounding Board acquisition from a year ago called for scaled coaching was basically a unprofitable tech company. By bringing them into the firm, they naturally reduced the margins in North America by a bit, right, compared to the old service model that we had.

That was a strategic decision. If we actually removed those two unprofitable businesses in the first half and the Sounding Board one, our margin would have been up 4 more percentage points.

My guess is that's, [laughter] probably more what you were expecting, and that would explain it.

Only North America, yes, correct.

and

Not this year. It will not be a part of margin pressure.

Next year, we expect it to increase quite a bit, I can tell you our more details under our hypotheses there. We switched from ChatGPT to the Claude suite for the whole company in May of this year.

The deal we struck with Anthropic for the Claude suite was a typical total enterprise license for the first 12 months. We did not shift to a token consumption model, and that gives us time to learn, right, by function and by role which modes to use and at which levels for the tasks that our team needs.

We have time. We have time for our leaders to learn this and as a company to learn it.

We have some hypotheses in the IT function that we're testing out across our teams. However, that said, given what we're learning, we expect our token cost with Anthropic to go up 4x, probably, next year.

For us, that's a magnitude of let's say we're spending $400,000 with them this year, we think then it might be $1.2, $1.5, $1.6 million USD next year. Now, that is not our total software costs.

That's just would be the cost associated with token consumption from Claude, right? We're doing a really good job of reducing our other software and SaaS costs on a regular clip to try and balance out keeping our total software spend, maybe it will grow next year a little bit, but it's not going to grow 4x, right, a percentage of that is going to go up.

Then we have more pretty big innovations hitting our operations in the second half of this year. We have a major platform that supports almost all of our work for our clients, and we're launching the new one just this month.

It is an absolute breakthrough in efficiencies and productivity and ease for our teams and so forth. As the new platform comes online and the old one starts to go into maintenance mode and we let that run out with the existing clients, the cost savings from that would easily make up for the increase in token costs next year.

The timing of all this will be playing out over the next four quarters.

We are increasing the number of billable consultants that we are hiring, and the total number of billable consultants is going up. The group of employees that is declining is and has primarily been the operational back-end office functional staff the company.

For a while now, you'll probably see that reality play out. At the same time, we will continue to hire as we need, but we're just balancing the impact of the AI innovations specifically on the operational side with growing billable consultants.

It's hard because we need both of those things to be true. It's hard to say.

I would give us another four quarters of this back-end front-end balancing to play out before we would see total net adds, unless we make more acquisitions in that time.

Perfect. On the same topic, net reduction of employees, but it's also say that you've added billable consultants.

If you just look at the cost impact, is it negative so far because you pay severance for the one you lay off, and then you don't get a reduction on the total salary cost because you add on the other end, to speak? Did you understand what I tried to ask?

I think so, and there's been a couple waves of these initiatives. The reductions that we did in last year right now are net positive on the P&L, right?

Then the ones that we just did in the second quarter that are resulting in about $1.15 USD million in annual run rate, those will only start to be positive in Q3, Q4, Q1, Q2.

You said you added billable consultants.

We are adding them. We are now adding them.

We have open recs across the system, we'll only start to see those coming in now in the second half.

Okay. Overall cost levels, what should one expect really?

Will they kind of grow with your top line or? Otherwise, I thought you have kind of fixed costs on regular consultants and developers, but then you have pretty variable costs if you have an offsite event, etc.

where there's just a lot of variable costs. How should one view your ability to scale the margin if you continue to grow?

The biggest factor in growing the margin right now is the continued AI innovations across our back-end operations.

Okay.

Because we still have well over 30% of our total employees in back-end operation roles. Yes, in terms of growing billable consultants and number of sellers, those costs will pretty much grow in line with our top-line growth.

Then a final from me here, the impact on pricing given that you can develop a simulation, I think some over a day, which took two weeks a while ago. Do you still bill the same?

Did you charge for the value you give them despite you being much quicker to develop?

Yes. Two things have happened.

One, we're still doing price for value, especially for the simulations that are around new strategy creation and strategy execution, and we're doing a lot of working sessions with the clients. We've also been able to say yes to deals that have a fast turnaround time that we weren't able to say yes to before.

In those deals, okay, maybe it takes us three weeks to work, but then it's getting deployed for many people. At least the rollout, which is the most profitable part of our project, is the same size as before.

We've done a lot more projects with very fast turnaround times, being able to meet our clients' speed expectations.

Then just a final, if that's okay. You mentioned 10% of revenue is now in direct AI-related sales.

Yeah.

It sounds like that's more traditional consulting, or do you use your normal building simulation type of work style with this AI, or are you just telling your customers how to use AI?

No, it's a mix. It's a mix of our core capabilities and core simulation services with helping them get hands-on keyboard and starting to work activity by activity through their work.

For example, there's plenty of companies who want to introduce new AI tools to specific teams, and they need to just drive early adoption for that. In order to do that, those workshops will feel more like both simulation and hands-on keyboard, a combination of both.

We have clients they're giving us 22 different workflows to begin with, and working with those teams for each workflow that need to reinvent their work. In those cases, it's a combination of workshops, we simulate what's possible together with them, we do ongoing coaching for the teams in terms of continual AI innovation and the change management associated with it, we're doing our executive advisory work like before.

It's a big mix of core capabilities and some net new.

All right, thank you.

Yeah. Right.

It means our clients are saying, "Help us with our AI ambitions." Right now, what those demands sound like are, "We're not happy with the adoption of the tools per team, or per role, or for every employee in the company, help us drive the adoption up."

It's also, "We're realizing this is a cultural leadership issue, help us get our leaders to shift to create the type of environments where their teams can experiment and innovate with AI." It also sounds like, as I just mentioned, "We want to have workflow-specific AI adoption, can you help us figure out who should be doing the workflow innovation across the team, and then how do we make sure it gets done over the coming weeks and months?"

Then when a team actually drives an innovation that's so profound that we would need to change the ways of working, help us with the change management associated by getting everybody on board with the new way of working. Then the final piece, which is kind of at the end of that process, is, help us understand what it means for teams to wake up every morning and manage agents.

That gets to token consumption and agent management and just how does that look and feel. Help us understand that, and help our leaders understand what's coming.

Those are kind of the four different buckets that we've been asked to support so far this year.

It's across all four of those categories. It just kind of depends on what the companies are prioritizing right now.

Most of our clients, other than software engineering, still don't have very big innovations to look at and say, "This is what it takes to reinvent how a function works or a workflow works." I would say maybe as a generalization, they're shifting from one size fits all to specific functional workflow support, right?

That means that those teams could have different AI tools than other teams, and IT has to work differently with those business units and functions. As they make that shift, there's a higher likelihood that they'll start to reap the benefits of AI.

Yes, that's correct.

That's correct, right? We have a history of doing conferences for our people, but in the last five years, it's been a smaller group than the group we brought together in June.

Normally our conference is in Q1 as opposed to Q2, right? You're right in terms of the cost hit our second quarter.

However, it basically gets somewhat balanced out because there's less profit pool then that goes to get shared to the employees. It's not a one-to-one hit in the quarter, right, in terms of the total cost to the bottom line.

Yes, [sighs] even after we balance out what goes, just probably a rough range there is $500,000, $600,000 USD, something like that.

Well, [chuckles] I think given North America's turnaround was only one quarter old, right, in the first quarter, we wanted to make sure we got through all of the second quarter and feel really strongly about the second half of the year. Also, we have a history of changing guidance at now as opposed to the quarter before.

Kind of sticking with what's expected of BTS in terms of when we change guidance, we chose to just stay with consistency of our historical approach. It was more the latter, right, and it's also always helpful to have another quarter and see how the turnaround continues, right?

I would say it's improving faster than we normally see. As a result, we expect them to get to growth earlier in the second half than the end of the second half.

A couple of the countries in Asia that had a really rough start are turning around quickly, which is really helpful. Then the other ones that are moving more slowly, we've taking out some costs in terms of office closures and all that, but more importantly, actually, the pipelines are growing.

The in-market activities that we've done since February are bearing a strong pipeline, and we've had some good wins. You're right about historical typically takes three quarters, and right now from what we can see, it will be faster than that.

Then the rest of the unit is performing well,

I do.

Yes. We continue to be fans of making acquisitions in order to round out or just strengthen our geographical footprint, find great talent and add to the portfolio.

We will continue to do that. Our current pipeline of acquisitions, I would say there's one in particular we're interested in, We need to build up the pipeline again right now.

The last 12, 15 months have primarily been partnerships and trying different AI tech across the portfolio as needed. We have a nice list of countries that we'd love to make acquisitions in.

Nothing immediate, but we expect that to continue.

First priority is geographical expansion. Second priority could be we could bolster it probably with a boutique firm that is good at systems integration.

[laughter] I know that sounds similar to an ERP or digital transformation of the past, but for some of the workflow work that we're helping our clients with in really complex cases, right, they need to have more support, and the way that we're balancing that right now is they're getting the support from their primary tech providers, right? They're getting the forward deployed engineers from Palantir or from Anthropic or OpenAI or whatever to supplement.

I don't mean that we would go that deep in technical, but, yeah, that could probably help. We haven't lost deals because we're lacking it right now, but I can imagine at scale, consultants who are more able to do that would probably be helpful.

Yes. The changing provision from the Voda acquisition on that earnout adjustment.

Is this the final one or could it be more if it even

No, this is the final one.

It must have developed really really well then, they are the max targets, or?

Absolutely incredible. Probably the most successful one we've done ever.

They're hitting

After this earnout, is the whole team left or how does it look?

The founder is moving to a part-time full seller for us and wants to continue to be the coach. We have two successors that are stepping up in her place.

That was part of the earnout rules, [chuckles] not that she would move to part-time, but that we would have two successors: one who will be head of sales, and one who's running head of operations. They know about it now.

We're starting the transition real time, but The earnout's not over until the end of April. We're thrilled that she's staying on as a seller and a coach, so.

Good, thank you.

Yeah.

Yeah, right? Right now, I don't see something that's really changing the mix so dramatically in the short term, right?

If I think about across all our deals and projects, they tend to be a mix still of consulting, facilitation, license, ongoing consulting, as our clients need more and more support around changing the ways of working. [sighs] So, and at the same time, the license is still driven by the cool new AI stuff that we've been working on the last couple years and keeping our simulations modern.

I think right now I would expect the mix to kind of continue as is, and

No, I don't think so. We're happy with all momentum.

We feel like we have some winds at our backs, our win rates are strong, we're excited for the second half, happy to see BTS Other Markets, I think, turning around relatively quickly. For us right now, we're focused on the fourth quarter and setting up next year.

That's how it feels inside BTS right now. All right.

Thanks, everybody.

and

Bye.