Hello everybody and welcome to Qt Group's Q2 2026 results presentation. My name is Hertta Närvänen and I'm the Communications Lead at Qt Group.

I'm here today with our CEO, Juha Varelius, and our CFO, Ann Zetterberg, who will be presenting the results. After the presentation, we have time for questions, first starting from the room, and then if time permits, then from the line.

Without any further ado, let's get going. Please go ahead, Juha.

Thank you and good morning everyone, and welcome to Qt Q2 results. My name is Juha Varelius and I'm CEO of the company.

Pretty much same old agenda: business highlights, market trends, financials by Anne, and then I'm going to talk about the outlook and guidance for 2026 later. If we go into the Q2, our net sales grew 19.6% and the quarterly net sales was 61 million, €61.3 million, an increase of 19.6% or comparable currencies 20.9%.

EBITDA margin 15.1% and €9.3 million. ARR increased to €160.4 million and so it was a healthy growth on there.

If we look the Q2 a bit more detailed, I'm actually pretty happy about our performance since the distribution license sales year-over-year was a bit over 6 million less this year than it was a year before. Last year, we had a 19 million on distribution revenues.

That we were able to increase our revenues, our developer license sales has been developing very well overall. If we look on the IAR, IAR has been performing very well on their subscription change.

We were expecting on aggressive plan that we're going to have a 40% conversion. Now we are on the over 60%, if I remember correctly, 68% conversion on the second quarter, which means that the IAR revenue obviously compared to last year is in a pressure since we have the already maturity of the sales into subscriptions.

That's a good news because in the beginning of the year we, of course, didn't have an idea that how quickly can we do this transformation, and now it seems that we can do it even quicker than we were anticipating. Quicker we do it, then we get on a healthy revenue growth on the IAR side as well.

Given those caveats, I think that we're pretty happy on the Q2 performance. On a profitability side, we've had the change management negotiations going on.

We've done them in the USA and in Finland, they're still going on in some parts of Europe, and we do have one-off costs of those in Q2. Given those one-off costs, we're pretty happy on the profitability as well.

We're definitely going in a right direction and at the pace even quicker than we were hoping for. I expect that next year the profitability will be well in the old healthy, good numbers that we were used to see.

At the change management negotiations, where we're targeting €20 million cost savings are well on track. I have no doubt that we're going to be able to reach those numbers.

If we look on the license sales, well, it's a mixed bag in a way that we do have different industries. Medical and defense industries overall are doing globally very well.

If we look automotive, obviously all our customers are having challenges in Europe, whereas in Asia-Pacific the automotive industry is doing relatively pretty well. For us, we do have pockets in the automotive industry where we doing okay, and then we have pockets where our customers are suffering along with us and, of course, the Tier 1 as well.

On regions, well, I would not read too much on the regions on a quarterly level, because there is, as you know in this business, quite a lot of fluctuation. EMEA was good, Americas stable, APAC was on this quarter more moderate.

If I look overall on the longer term, let's say that the end of this year and next year, I'm expecting a USA quite substantial improvement still where we are. That's where there is a room for improvement definitely.

I already mentioned the IAR subscription licensing model, no doubts about that, that can we drive through that change in IAR pricing models that will happen and that's been very well adopted, so that's well on track. Depending on these industries, it's always good to remember that we operate on three regions, we are a very global company.

We do have 70 different industries that we serve. Some of our industries are a bit under pressure, like the automotive, but then on the other hand, some industries are doing very well, like the medical and defense.

We also do see overall economy kind of a stabilizing. I think that the latest disruption and uncertainly came from the war in Iran.

Let's see what's going to be the next big disruption because there's been many of them, but if we now look that what our customers are saying and how people are looking for the future, I would say that the market has stabilized pretty much. On APAC it's been more or less stable all along, but in Europe and in US we've seen some disturbances.

I'm not going to talk about much on AI, but I think that if I looked there was a lot of hype in February, March, April, and then there was a conclusion that the software industry is going to disappear and AI is going to take over everything. Now I think it's calmed down a little, and I'm not saying that AI is not coming.

AI is definitely coming, but is it coming so that it's going to take over everything? I have a bit of my doubts.

Here are the kind of the same phrases I said last time, but what do we see in the market is that the companies are not really getting rid of developers because of AI. We do see companies downsizing, but they're downsizing because their business is not doing very well, right?

They're downsizing developers and they're downsizing in certain industries, they're downsizing quite a lot of other people as well. You've read the news.

There are big automotive companies that have announced that they're going to downsize 100,000 employees by the 2030 and so on and so forward. Do we see that companies are downsizing because of AI?

We don't. Do we see that the developers are using AI as a tool to be more efficient?

Yes, of course, that we do see. We also see that the AI adds kind of a complexity in a way that the AI does software very quickly and quite a lot, and it's still in a phase that somebody needs to look into it.

A human needs to look into it that what was done, human needs to look into it that does this actually make sense. AI, as also has imagination of its own.

AI is like a good coworker that never says, "I don't know." It always gives an answer.

I've actually encountered this in real life as well. The AI can be very confident on giving that answer, and AI can do a lot of things.

Also, what we see is that on a Qt, what is a framework? Framework kind of gives an architecture to software, and it's like a plumbing of the software in a way, and even for AI it makes sense to use this.

That's kind of where we are. What do I envision is going to happen is that all those that are now watching and wondering that why I paused, there were people coming in and I started looking that should I say hello or not, so that's why I paused and I didn't say hello, but hello, welcome.

What do we see on AI is the fact that we need to find a way on our monetizing model that it also takes into account that AI does do some coding. This means that we need to start monetizing and invoicing not only per seat, but on the usage of the Qt technology.

When that shift is going to happen, well, it's probably going to be something like the subscription change, that we're going to have a new version of our framework and then we start implementing it. We're working on it and we are now working on different models.

We're monitoring that how to implement it and what not, and you can expect that during next year we'll start moving into that direction once we figure out that what is the best model for us and for our customers, so that we can take into account that there is a developer doing development and then there is also AI doing development. On IAR, well, that's kind of already taken care of because IAR is selling subscription, and then IAR charges per simultaneous compiler compilings already now.

It's based on a usage on that sense. Then on Squish, we think that since everything that AI does needs to be tested and whatnot, we expect the software testing market to grow in the future.

We, of course, use AI extensively internally, not only in our R&D and developers are using AI to understand that how it works and how can they be more efficient. We use it pretty much everywhere in the company nowadays.

I think that the big thing for going forward is that as AI moves into consumption-based pricing models, we need to be careful that how much we absorb cost as a company when we are using AI. I think that these business models will be evolving just because AI's business models will be evolving, and how much we need to pay for using AI, because very easily on R&D, we're using millions of tokens on one go.

What's going to be the cost of it? We do use it internally on many various things starting from sales and marketing.

Of course, for example, sales guys making a sales pitch nowadays, it's much more easier using AI because you can get all the info of the target customer and tailor make a tailored, personalized presentation on each customer meeting you have, and you can do that very quickly. Of course, it's giving a lot of efficiencies.

We're also looking for the opportunities as we go forward, because as nowadays we're looking on the development process, and we're looking that where can we offer services and solutions to our customers so that they can be more efficient on their development process. As AI comes along, well, the most obvious thing that comes to mind, of course, is a vertical integration, because using AI and our tools, on smaller customers we should be able to offer actually ready-made solutions more than we are doing today.

We're looking into those opportunities that we have. Very particularly strong now is, of course, all the functional safety and safety-critical things, because there you need certifications and you can't use open source.

You need to be able to prove that your code meets the criteria that are required for car brakes and whatnot, everything that is somehow functional safety or safety-critical. We do have tools starting from IAR, our compilers are certified.

Using a IAR compiler, you know that you can have a certification that it's done according to the specs. You can use Qt and our testing.

We have a very comprehensive offering in safety-critical, functional safety industries and that's a very, very sweet spot for us in this current portfolio we are having. I think that the AI will be there a topic for the future, but for the investors, I would say I kind of see this twofolded, that yes, it's going to change very many business models, but at the same time, and it does give us efficiencies internally, but at the same time, of course, it also opens up new opportunities for companies that are awake.

I don't see AI only a threat, I see that it will open up us a new opportunities as we go forward. There's going to be a whole service layer on top of that on these data centers we see as of today, and of course, we're going to be on that wave as well.

In that sense, on this AI, I would conclude that we use it ourselves, we are looking for the pricing model change, we're adapting it, and we're looking actively the new business opportunities it potentially will give us. With that, the financials.

Yes, thank you, Juha. As Juha said, this was quite a nice quarter for us.

We had a very good growth. It's fine to repeat it, I think, since it was so nice.

The growth was 19.6% in the quarter with a small exchange rate impact, therefore at comparable currencies this was 20.9%. The year-to-date growth was also pretty decent, 15.8% with a larger exchange rate impact of 3.3%, and it brought us up to 19.7%, about the same level as in Q2 at the growth at comparable currency then.

If we look at the products we sell, as we illustrate them in the interim report, licenses and consulting it grew 10.3% in Q2 and it grew by 5.3% year-to-date. The maintenance revenue almost tripled like it did last quarter because of the IAR effect.

IAR has a lot of maintenance revenue in sales. Historically, it's been about half of the revenue that's been out of maintenance contracts.

Now it's a little less because of the transition into subscriptions, we're selling less of support and update maintenance contracts in IAR, and instead we're selling subscription. The distribution licenses, those declined.

That was totally anticipated. We knew we had a lot high distribution license level last year, we knew those were going to decline.

They declined in Q2 by 32.4% and year-to-date 17%, totally anticipated. That also if you remove that from the development license and consulting parts, we actually had a growth there in Q2 on 30 with 38% on that, and 18% year-to-date, which I actually quite happy with, I must say.

Looking at ARR also, rolling 12, we ended up at 160.4, like Juha said, and rolling 12, it grew 33.8%. Obviously, IAR was not there last year, so that is separate and that is why the growth becomes this large for 12 months.

At comparable currencies, this was 32.2%. For the quarter, it's still also a decent growth, 4.5% increase in ARR, like Juha also showed in his slide, and that is 2.4% growth at comparable currencies.

IAR is growing in ARR as we're moving into subscription, removing perpetual revenue and instead selling subscription, which is annual recurring revenue instead then. Then looking at the cost side, unfortunately, though the revenue side was good, the cost side grew more.

They grew by 31.2% in Q2 and year-to-date 21.7%, we are, as working on lowering those, doing those reconstructions, efficiency work, removing some employees here and there as a result of the acquisitions, of course, but also some cost adaption to various parts of the sales that needs to happen. Looking at the personnel, that grew 38.2% in Q2 and 32.1% year-to-date.

We have had 1,035 employees end of June, and that is a year-on-year growth of 119 people. IAR has 200 people, you can already in that see the effect of the people that we have downsized in Finland, the US, and partly in Norway.

We have still got Germany, France to go, and those are ongoing, and those one-off costs will come in Q3, hopefully, instead. In Q2, we have 3.7 one-off costs under employee costs and 0.6 costs under other costs that are one-off costs also.

Part of it is relating to that business unit security in IAR, which we are removing over time as it was more of a cost burden than any type of revenue really. That relates to the 1.6.

We're also of course looking at other costs also as part of the integration, offices, merging entities, and whatever we can do to be a more efficient and strong company for the future. If we look at the EBITDA then, a 9.3 today is lower than what we had last year, 11.6, and the margin was 15.1%.

If you remove the one-off costs, we're actually up to 22.2%, which is quite in level with what we had last year. The Q2 is still in level with the profitability there if you adjust for that.

The year-to-date, that brings up the EBITDA level 12.6% up to 16.3% if you adjust for the one-off costs also. Still a fairly decent profitability there also with that adjustment, even though it is actually still then lower than last year.

Balance sheet, does not much happens in the balance sheet every quarter. A lot happened when we purchased IAR, but still it can be a good to give it a quick run-through.

Goodwill, 166.9, that is a constant, it doesn't change, we doesn't depreciate it, you don't never do that with goodwill, and most of the goodwill, as you can see, refers to IAR. The rest of it is pretty equally distributed on froglogic and Axivion.

Other intangible assets, 120, those are the technology assets from the purchases of the acquisitions, and we depreciate those over 15 years. IAR also, as I told you before, capitalizes some development asset investments still in the balance sheet.

We have a couple of those, and those will be finalized in 2026. The capitalization for Q2 was €0.4 million.

That increases the results then by that, because we increase the technology in the balance sheet instead with that same number. No large numbers, but it's good to understand that that is still happening in IAR.

It will over time as we harmonize the handling in Qt with handling in IAR, likely not happen much of this anymore. It's not our intention to do that.

The trade receivables are at a pretty good level. They're around 20% of the rolling 12 sales, a little higher now as we don't have IAR in rolling 12 sales looking back, but it will harmonize itself down to that over time.

We still have a very healthy cash balance, 42.4, even though that is of course lower than it was last year, because we put a lot of money into the acquisition of IAR. Looking at the interest-bearing debt, that was €126 million, of which the bank loan is still €120 million, but we have paid off €30 million.

It was 150 initially. We have a good cash flow and a good position there in paying off the debt in good time.

Other receivables still have those 5.2 million under receivables, and under debt, as you remember, the arbitration for us to purchase the 100% of the shares is still ongoing in Sweden. We haven't bought the 100% of the shares, but we have booked the 100% of the shares in the balance sheet, and thus we have an interim booking on the asset side for those 5.2 and a debt to those shareholders on the debt side for when we pay the shares, and those are still there.

It is moving along, this arbitration, but rather slowly, I must say, I hope we can make it move forward in a faster speed. The equity ratio is still decent, 53.6% compared to 83%, which of course is because we expanded the balance sheet with the IAR acquisition and the debt, it's a pretty solid balance sheet still, looking at it.

The operating cash flow was 20.6 compared to 28.9 last year. The main other cash flows apart from the operating cash flow was really the amortization of the debt, which we amortized in Q2 with €15 million.

The total cash flow for the period was 2.3 compared to 27.3 last year, but of course it is lower because the profitability is also lower, which we are working on improving for the future. With that, I guess I will hand over to Juha again to talk about the future.

Sure. Thank you.

We haven't changed our full-year guidance, net sales 10% and operating profit at least 15%, and as said last time, those are the floors, at least, and we're not giving a upper range on that. That's the change.

Usually before we used to give a range, now we give the kind of the floor. Our plan was that we're going to transition the maturity of the IAR customers into subscription in the next 3 years.

That's what it took roughly in Qt when we did that, and of course, not all the customers will change, but the maturity. We're well on track on that.

I'm happy how the integration has gone. It's gone actually so well that I see that we didn't even mention it on the slides anymore because we think that it's already kind of a done deal, but of course, the integration is still there.

It's gone very smoothly, and so we haven't had any big problems and I don't expect to have, and it's going to continue as planned. On IAR integration doing well, the subscription change doing well, and IAR sales on bookings that's been doing really well.

I'm happy on the IAR performance and I expect that to continue. On Qt, on license sales, very happy of the distribution licenses, they do fluctuate from quarter to quarter, and they are of course a result of a deals done before.

Even though they were a lot less this quarter than they were year-on-year ago, that's only natural. They do fluctuate and it's based on the fact that how much our customers distribute.

I'm not worried about that, and we're looking the overall number is heading where we do estimate it to be. On regions, I think that well, there is always a room for improvement.

I think that in United States, we've had some execution issues in the past, I think that there we are in a right track, but in United States, we can still improve our business quite substantially. Other than that, the things are looking pretty good.

On the macro in global environment, of course, if a country overall is doing well, usually our businesses are doing well because our customers are global customers, they're very big customers building products for either B2B or B2C customers, and if the economy is doing well, then usually we're doing well. If I look now how does the rest of the year look, if we're not going to get any big disruptions over here, I'm relatively positive that our numbers will keep on improving.

Next year, they're going to be improving on profitability and also on the top line. This is kind of a slow-moving business, this web technologies they move very quickly and the moves are very rapid.

On embedded businesses, the trends are slower moving, but so if I look on the overall the rest of the year and next year, I am confident that we are going in a right direction. The operational reorganization, well, they are always tough things to do.

We said that we're going to have at least 20 million savings, and I reiterate that we're definitely going to have at least 20 million savings. We still have some change negotiations in Europe ongoing.

Once they're finalized, then we're done. Like I said before, Finland is already done, USA is done, but in Europe we have a few countries that we're still in that process, but I have no doubt that we'll be able to finalize them during the H2.

Challenges in the market environment continue, of course. I think that in a way, I guess we should stop talking about the market because it seems that at least for the next 2 years, we're going to have surprises every week.

I expect that there're going to be some disruptions coming. I don't know where, but they will be.

The market will be volatile for the next 2 years. On AI, it's going to come and it's going to be a big thing, but it's like internet at a time.

It not only changes some business logic, but it also gives new opportunities. I have no doubt whatsoever that Qt will be one of the companies finding also those opportunities and being able to utilize as the years come.

Again, that's like a few-year thingy. It's not like what's going to happen in H2.

Long term, nothing has changed. People do want to have products, they want to have displays, they want to have intelligence mumbling products going into also in the future.

All our customers, if they want to be in a business, they need to improve their products, they need to have new product lines and whatnot, the overall prospect is not going anywhere. I think that also in the future customers will realize that there is a need for developers, there is need for a software testing and whatnot.

Even a lot of things are being automatized, humans are still needed there for a long, long time, and we're not going to let the machines run over. In that, I thank you and some questions which there seem to be.

Hi, Waltteri Rossi from Danske Bank. Thank you for the presentation.

Congrats on a good result. First question related to the US.

You mentioned that you can improve there substantially. What has gone wrong there, if you can go through that once more?

In United States, I think we had some management changes, we did have some, how would you describe, not so great operational efficiencies, some attrition over there, a combination of these things. If I look the operational efficiency in EMEA and APAC, just internally we can do better in US.

Then if I look into region numbers, that now US is improving, but if I look in the previous that the US was a weaker than the other markets, all our customers are pretty much global. If we're doing well with our product portfolio and products in EMEA and APAC, I don't see any reason why it should be.

There've been some people changes, there've been attrition and whatnot, and just the operational efficiency numbers are not in the level that they are in the other markets. Multiple internal things.

All right, thanks. Second question related to the ARR development.

Growth there is quite high, and I guess it's partly explained by IAR.

IAR. Too many three letters,

huh? Exactly, difficult.

How much is IAR from ARR?

I'm having the same trouble with the IAR, we need to change the name. I don't think we've disclosed that number because we've not been disclosing the BU numbers.

Sorry about that. As a matter of fact, I don't have that figure in my mind now.

Is that one of the top kind of drivers behind the growth?

Of course. Yeah.

Okay. You also don't disclose organic growth?

No, we haven't, no, yeah. I think that as we get a bit better, that's a discussion we need to have internally that we start a BU reporting next year because that would kind of give more highlight.

Having the BU numbers myself, I can tell you that you're going to have more questions than you're probably going to get answers when you see them, but and it's sometimes a bit difficult for us to estimate. That's definitely a discussion we're having internally that what would be our next year reporting.

I'm sure it's going to change, and one obvious way probably going forward would be do the BU reporting. Then, well, then you still have a whole lot of costs which are central costs and whatnot, but you would see a bit more the business.

Then you have a lot of numbers that are going like this on every quarter on different directions, yeah, they all fluctuate really randomly.

Right, thanks, and one last one related to the pricing model change that you foresee also for Qt products starting from next year.

Sometime next year, not in the beginning, yep.

Okay. What kind of impacts do you expect that to have potentially for your business or sales?

That's too early to say really, and that's why we need to be testing it so much so that we need to be kind of simulating now that if we do this kind of pricing change, how would that actually affect in a real life so that we don't do a pricing change where we halve our revenue, right? We need to look into it very carefully.

If you go in a consumption-based usage and you would think that people start using AI extensively, you would think that there is a lot more usage than there is as of today, but how do we actually do that pricing? Would there be a different pricing for a developer consuming and AI consuming and all of that?

We need to simulate that and test quite a bit. Our target is not to start charging more from our customers as we do today, obviously, but how that will turn out, that's too early to say.

I wouldn't calculate any revenue increase on that, because at the end of the day, there is also competition, right? We are kind of, I would say that in a market, our products are really good.

They are really, really, really good, but they're not the cheapest either. My gut feeling is that should we do a massive price hikes?

No, I don't think so. Then we would be too expensive, then we would be like on a very high-end usage, like Formula 1, very high price, very small volume.

I think that where we are as of today that we have pretty high volumes and we're not definitely the cheapest. I don't see a whole lot of price increases in a future.

Of course, there always is, there is inflation, but not tens of percent. Then how do we price the AI usage?

Because what AI does is that it does a lot of code very quickly, and it consumes a lot, we need to do simulations on that. If you think from a revenue modeling perspective, I wouldn't put any revenue increase based on that at this point.

That I wouldn't do. Yes.

Felix Henriksson from Nordea. Continuing on the pricing change topic, is it sort of fair to assume that this would change your developer license revenue recognition in a way that it moves the lumpiness stemming from the 1- and 3-year...

SaaS model, yes.

...SaaS model? At the same time, could it even be that the revenue impact will be negative as you start that process?

I don't see that, no. The lumpiness will probably go away, apart from the distribution licenses, of course.

Got it. Then on the quarter, can you sort of elaborate on the developer license mix in Q2 between the 3- and 1-year licenses?

Was there any shifts there?

No, when there is a big shock like the war starts and the oil prices go sky-high, then everybody kind of are scared, right? This is sad to say, but people get used to the wars, right?

There is a war in Ukraine going 5th year soon, and it's like a new normal, right? If people tend to forget it, right?

Whenever there is a big shock, whatever it is, then people tend to go reserve cash flow and then it's 1-year license. As things kind of settle, and things settle nowadays very quickly, as matter of fact.

I think that many businesses are now kind of in normal mode. They're looking forward, they're thinking forward, they're thinking their investment.

Of course, they are still cautious, but no big changes on that. About the same, yep.

No unusually large share of

3-year

licenses

to

explain the revenue? No.

No unusual large deals or near that, yeah.

Got it. To me, that implies that there's a bit of a positive trend shift into developer license revenues.

Oh, yeah.

What's driving that? What are customers telling you differently?

People are more confident about their future, and maybe we've been a bit better in performance, and no secret sauce in that sense. Small improvements here and there.

Got it. Then finally, just a housekeeping question on the revenue split between the different end markets.

Can you sort of provide an update on that because it seems like especially the defense and medical shares have sort of increased compared to past?

You mean industries?

Yeah.

Okay. Good.

Now I was not prepared for that question, but the let's we said that well, they're definitely increasing because at the same time the automotive's been going down. We said I've said, like year, 2 years back, that automotive is roughly 20% or so.

Now I would say that it's somewhere between 10% and 15%, and at the same time medical well, it kind of changes quarter on quarter, but the medical is the biggest at the moment. Defense was actually very small, and it's growing very rapidly, I expect that the defense will pass the automotive even if it hasn't already done so.

I expect the defense to be somewhere in a 15-20 bracket, and the medical over there, and and medical closer to that 20 bracket.

Thank you.

Hi, Jaakko Tyrväinen from SEB. Trying to get a bit more understanding on the organic underlying trends in the so-called old Qt.

You said that you don't provide any growth rate for Qt like you did in last quarter. Is that correct?

I don't think we gave it last quarter either.

I recall you said Qt was 11.5% up organically in ARR. ARR, yeah.

ARR we talked, yeah. Obviously with this development you can make the assumptions that with such a heavy subscription change we're having on IAR we really need to change the name.

On IAR the impact on revenue is negative on short term. That's what we're seeing, and of course, that puts pressure on the IAR profitability as well.

If we look on the Qt revenue on those numbers, six plus something downtrend on the distribution revenue means that the license sales has been on a very healthy growth on this quarter. Squish actually follows pretty much on Qt because if you're using Qt, the only feasible test tool really is Squish, right?

More Qt does bigger deals and whatnot, Squish goes there. Then on top of that, Squish can be sold outside of the Qt ecosystem and the open source and whatnot, there it comes.

Now keep in mind which I've always been saying that the quarters are not brothers or sisters together, there is always this quarterly fluctuation. It's not like that we have one quarter and then we can make a straight line that this is the future, our business is like this.

If I look overall trends that how we are selling licenses, particularly DC licenses, how we're performing on license sales, and how we're performing on IAR, I think we are going in the better direction. Now the question is that what's going to be the speed?

If I look our change negotiations, that we're going to cut that 20 million cost, and where we have this business development as it goes, IAR is going to turn into profitability because of this subscription change next year. We're not going to have this one-off costs, and I can say that already now we're seeing a 30+% EBITDA for next year.

Good. If I may follow...

The

ARR, sorry to interrupt before you, if I just look the ARR number, not dividing it anywhere, I'm pretty happy. It's a sizable number.

Good. A follow-up on that one.

Let's put it this way: you had organic ARR growth of 2.4% Q-on-Q. How much of this was driven by IAR's subscription change and overall IAR growth, and did Qt grew Q-on-Q basis?

Qt grew organically. On the other questions, we don't have them, yeah.

Yeah. Qt is growing organically, for sure, but on the ARR growth for those other questions, I don't have an answer for you.

Sorry.

Then you already touched it a bit, but on the revenue on the P&L and then the volatility there, did you see some significant multi-year deals impacting the strong development license sales growth?

No. Very, in that sense, very boring, typical quarter.

Good, thanks.

Yeah. As as the always in our business, the well the quarters do fluctuate, then the other fact that we do have is the is that a large part of the quarter sales actually comes in to last 2 weeks, and then the fourth quarter is insane.

The we do, large part of the year result is actually done in the, probably the three last weeks of December. That's that's the and I don't know why all this buying tends to go towards the end of the year and towards the end of the quarter, but that's that's very typical for us.

At the same time, of course, seeing what's happening, sensing where we're moving, and and all of that, I say that the the underlining underlying performance, underlying environment and whatnot, it is getting better. The and I have no doubts that the with this cost savings that the we're going to be on a very healthy EBITDA numbers next year, even even with the very modest revenue growth.

When I say the 30%, I'm not expecting that there needs to be a huge top-line growth. That, of course, as affects a lot because the more the top line basically drops directly into our bottom line.

Even with a very modest revenue growth, we're going to have a very healthy EBITDA next year. If we're going to have a decent growth, then it's going to be even better.

Yes.

Hey, Antti Luiro from Inderes. You mentioned in the report that new product sales were going well in defense, aviation, and medical.

I guess that prompted two questions. First one is that which products are kind of flying the best on the new product side in these segments?

Then the second one is you've kind of broadened your product portfolio quite a bit in the last years in IAR, did one step to that as well. Where are the different products you have in your portfolio in terms of their maturity, I guess compared to the kind of not legacy Qt, but, yeah, the Qt framework?

If we talk about defense and medical and whatnot, they're kind of all-regulated markets, safety-critical markets, and our whole portfolio fits in there very well. IAR and the Qt, and so our whole portfolio fits into that particular segment.

When we are actually seeing some light in automotive as well, and just to give you an idea that if we're successful closing some deals in automotive this year, we're going to talk about that revenue in '28, right? If we're successful closing those automotive deals now, we're going to see the revenue starting accumulate in '28 so that you actually see them on numbers.

This is kind of the cycle. We did invest in defense already many years ago, but then the sentiment was something that you didn't want to put that on a website because it was not well received that somebody does defense work.

Now you're seeing being a patriotic if you do that, but a few years back. Our position in defense is a constant, deliberate work that's been carried out for the past 5 years.

Into your question that all our products are, in that sense, pretty mature. They and that's why particularly on embedded we're so successful, because if you think our customers that they start a project and they do whatever they do, usually the lifespan of their product is 10 years, and they don't want to buy a product that they do get the updates every 3 weeks or whatnot that they have to do.

If you look Qt, for example, we do a couple major releases a year, and we have a lot of people using the old versions of Qt. That's one of the cornerstones on this embedded, that people can trust that we are here, we're going to be here in next 10 years, and our products are mature, that they can rely on them, they can use our products for the whole life cycle of their product.

That's of our one of our competitive edges. If you go on a web technologies, it's a different story, but on embedded, that's it.

I would say that we've had a kind of the new product, and let's see how that works, we do have our design tooling and during this fall we're going to come out with the new versions of that design tooling. It's a mature product in a way that we've had it for a long time, but now it's going to have AI functionalities and whatnot.

It's kind of a revamped totally, and it's going to be a bit of a new product launch as a whole. It's a mature product, but it's going to be a new release.

Like said, on embedded, our customers respect the fact that we've been around, our products are very robust, tested, and we don't have to do updates very often to them, and they can rely on them for a long time. That's a good portfolio and that fits very well in the functional safety, safety-critical segment, really resonates over there.

How do we add our portfolio in the future remains to be seen. I think we're going to be doing acquisitions also in the future, adding products into our portfolio.

AI, of course, is changing this scene in a way that if a AI improves a bit, if you think for electric bike manufacturer, for example, we do have lots of engineers in-house as well. We have all these tools if, using AI, we might be able to offer a more vertically ready-made software than we're doing today.

We already do have these customers globally, and we are a definitely market leader in this. Is our next acquisition going to be adding to portfolio in this development process, or is it going to be a product or service that actually enables us to be more vertically integrated?

That remains to be seen.

Maybe continuing on that, and taking the angle of revenue potential in this different products. I guess we've been talking about quality assurance for quite a while, and that could be kind of the next Qt.

Is that kind of

do you see that product being past its kind of fastest growth phase already, or is that still in the very kind of...

No, it's still in the early phases. It's still in early phases, yeah.

Definitely if you this is, of course, you need to disclaimer that don't think about the timings, but if we think on a product life cycle, the Qt obviously is much further down the road on the growth. IAR is, well, IAR is basically going to grow quite a lot due to subscription change.

It can almost double its revenue basically just through this subscription, that's the likelihood. If it was 40-something, just the subscription change will be 80-something when it's done, and of course, that's going to take 2 years.

How to get organic growth after that is a good question, because it's very well integrated into functional safety, safety-critical, but not used so much elsewhere and so I think that during the next 3 years, that's going to be the question that what's going to be the strategy for IAR to find organic growth and where. On testing market, yeah, definitely.

We bought €12 million revenue. It's definitely a €100 million business on the course of the years.

How to grow beyond that, it's then a good question. This is always a good to remember that when we started with Qt, we were probably in a 20 million region or something like that.

People were saying that, "Well, if you can throw a tools business into 100 million, that, you're like a wizard," right? Because 50 million more like it.

Then we got into 100 million, and now we're in a 200 million and it's still growing, right? When I say that I see that the testing business can grow into 100 million, it's the view I have now.

Of course, it will go beyond that, and how and where we're going to position it. If you think on testing, the Qt potential market, if I looked only the developers, it's probably 1.5 billion.

If I look the testing market, because it's not only the Qt technology, it's also other languages. The potential market is like a double basically.

That's kind of the size I'm envisioning. If you add all that together, with the current portfolio, you should be able to build a 400, 500 million business with a very, very profitable operations.

What's beyond that, well, then that needs new markets. Don't forget we're not in the South America, we're not in Africa.

There are a lot of markets where we're not at this point of time, and there are use cases evolving all the time and whatnot, technologies evolving. Of course, the opportunities will grow as we go forward.

We need to do this IAR integration, we need to pay a bit of our debt away, and then we're looking for new acquisitions. We definitely want to be a growth company also in the future.

Hey, time's up. Thank you very much for participating in this second quarter.

We had a very good quarter, and I'm happy with the results, and I think that we are going into right direction and really looking forward seeing you again and really looking forward the building the business going forward in the second half of the year and next year. Thank you very much.