Hello, and welcome to Qt Group's Q1 2026 results presentation. My name is Hertta Närvänen, I'm the Communications Lead at Qt Group, and I'm here today with our CEO, Juha Varelius, and our CFO, Anette Zetterberg, who will be presenting the results.

After the presentation, we have time for questions, first from the room, and if time permits, then from the line. Let's get going.

Stage is yours. Please go ahead, Juha.

Thank you. Hello everyone.

My name is Juha Varelius, CEO of Qt, and we're going to go through the Q1. Pretty much the same agenda: business highlights, market trends, and then Anette will talk about financials, and then outlook, guidance for rest of the year.

If I look the Q1, our net sales ended up €52.7 million, an increase of 11.6%, and on comparable currencies, 18.4%. We're pretty happy on that.

EBITDA margin, 9.6% and €5 million on Q1, and that was a pretty much on target as well. ARR, which is the new measure we're now telling, €155 million.

The increase of 32.7% in comparable currencies. That takes away the 1- and 3-year licenses and whatnot.

Of course, we have the IAR in these figures. Overall, a kind of a typical first quarter, which is usually very slow for us, and fourth quarter being the best and busiest quarter, which then reflects on the first quarter numbers.

Foundations for long-term growth, I'm going to comment here a bit. The developer license demand remains strong.

If we look our industries, the defense is nowadays the probably strongest one, medical, and other industrial, they're all doing really well. Automotive industry obviously is suffering, specifically in Western markets.

In China, the automotive market is doing good, but the Western automotive market is suffering, and the growth overall is very slow over there. If I look on the regional trend, we have a APAC.

APAC was actually last year pretty much on our plans. It is still continuing pretty much on our plans, we are happy with APAC.

That's a pretty robust execution over there. In EMEA, we have rather volatile situation where the European export companies are suffering, and that comes mainly from exports to U.S.

The tariffs keep on going up and down, and there is some uncertainty which is shown in decision-making, but if I look on the first quarter, our EMEA overall was showing pretty robust execution, and it was growing as well. In America is actually the only region where we're not performing according to plan, and that was pretty much in same thing last year.

I'm going to talk about a bit of AI, but when I usually say that AI, we don't see the AI effect in our demand, well, we don't when we discuss with customers. Of course, in safety-critical industries like medical, they don't want to use AI.

It's very careful that what type of software goes into devices. Same goes pretty much on defense sector, on many many devices, in automotive a bit more, but if we look and we discuss, we actually discuss quite a bit of with our customers that how are you using AI, how are you utilizing AI.

We see that developers are using AI, but how they use it is that they use it to code with Qt framework. They are utilizing Qt framework in their coding when they're using the AI.

That's what we see. Believe it or not, I've been getting quite a lot of questions about AI and its effect on Qt, we've done customer surveys also.

It's not only my own discussions, we've done a customer surveys that we put an external company interviewing customers that how is your use of AI, and how does it add effect, and how do you see the effects on Qt, and the answer's been that yeah, we utilize it, or we don't use it at all, or the AI usage is forbidden. There are some companies that they actually forbid using AI, but we didn't get any responses that AI is replacing us.

I understand that everything develops, but that is as of today. If I look our execution on regions, it's fair to say that if APAC and EMEA is executing pretty well, and all the headwind we're basically getting against our own plans is coming from United States, it's more than the AI effect, basically.

IAR, we're still happy with the acquisition, and I'm sure we're going to continue being happy with the acquisition. The big theme for IAR obviously is that it's on perpetual licensing, and we've changing that into subscription licensing.

When we do that, the perpetual license obviously is more expensive. When we go on subscription, which is on a yearly based, billable license, the price is less, the IAR revenue is decreasing this year, and the profitability is also suffering.

When looking at things in the beginning of the year, I was wondering, it was a bit slow start. It was going very well in U.S.

and somewhat good in EMEA, and slower in APAC. Now if we look overall, the subscription change, we did set a pretty aggressive target, and we are on that target now.

I'm happy on the execution on that subscription change on IAR. That puts pressure on the IAR profitability this year, and also the revenue will come down, but that means that more aggressive we can be this year on the subscription, the more it'll grow next year.

We're going to do as aggressive as we can and take the hit now and then have a healthy growth. Of course, it's a licensed business, which means that the profitability will follow next year.

IAR integration is proceeding as planned. We've laid the operational foundations: the unified organization, aligned core systems, established data sharing across teams.

We are combining sales efforts with the IAR sales, and onwards. I've done few integrations in my career, and I'm pretty confident that this integration is going to go well, and you can always sense it from the company that's been bought.

All the IAR people that I've met, they are happy for this merge. They are keen on working together, and the mood is very good.

I do expect that this integration will be successful going forward. As there is war on Iran, and as a matter of fact, the high oil price is affecting in not only on gas pump and maybe inflation and whatnot, the oil effects on a price of a class and paint and numerous different products which our customers are using for their production.

That is the thing that makes them cost-conscious, that their production prices will go up because of this oil. It not directly the oil or energy, it's the products that are being used, like paint, for example.

We do have our long-term customer ships. They are very solid.

We've done and we're doing on a second quarter big renewals with our very long-standing customers. Our customer relationships are like years and 10 years and 15 years.

Once companies start using Qt, they are usually so happy with it that they extend the usage, and the customer relationships are extremely long. That's a foundation for our business.

Despite doing these cost-cutting measures we're doing now, our product is very competitive, and that's of course something that we tend to keep good care of. Of course there can't be a presentation in today's world not talking about AI.

Here is a bit of a snapshot that what we're doing in different products. Specifically, there is Qt framework.

Sometimes we kind of think that Qt is a set of tools. It is a lot of tools, too, but foremost it's a framework.

Framework is something that developers like to use because there are reasons for using it, and also AI likes to use it. We do follow, for example, our competitors and what are they doing on AI, what kind of functionalities they have in their products and frameworks and whatnot, and I can say that we are at least on par or better in what capabilities we're offering.

That basically goes on Qt, Squish, Axivion. Across Qt Group, I've always been getting questions that do we use AI in our own work, and yes, of course we do.

Throughout the company, we use AI in pretty much in each and every department, which means that it is being utilized as a tool. Do I see that AI is replacing office people or our R&D people per se in today's world?

No, I don't. It's a tool that makes our people more efficient, but it's not replacing at this point of time.

If we look a bit of these products, on framework side, like I said, we see it as tool for developers to be more efficient. In larger terms, if we think we do have different kind of skills, AI assistants on Qt framework to help developers using Qt, and also we see that we've enabled the general AI language models to learn from Qt so that developers can actually use AI.

I know that I've said this sometime in my earlier presentations that nowadays, the first step, actually, in this world, it's a bit of like on internet that if you have an internet site, you need to make sure that Google finds you. On AI world, you need to make sure that AI finds you.

If developers want to develop something and the AI doesn't find your framework, then of course kind of, it doesn't find, right? We've made sure that with these general language models, they do know how to use Qt, developers can use Qt, and AI agents do find it.

There we have a one great benefit compared to our some proprietary competitors that Qt is open source and has 1.5 million developers out there. There is a ton of material that AI can learn from that how to code with Qt and how to be better on Qt.

I think that that was kind of the first step we did on that. You probably are going to have a question that what about pricing, and I have nothing more to say on that pricing, but of course we're going to go more towards a consumed-based pricing models where whatever is being produced using Qt, the license payment is based on that.

The logic behind that is that now we have per-developer seats, but if a developer is using AI, which is using Qt framework, we see that that's also payable. We've had actually discussions with some of the clients that are doing that already, and there seems to be no problem in that that it's payable.

The matter is that how is measured, what is the pricing, and all of that, and we're working on it, and on that sense, the pricing will change in the future. Squish is very tightly integrated into Qt.

I know it's a bold statement, but if you develop something with Qt, there is really no reason in whatsoever not to use Squish for that testing. They are so well-integrated, and they work so well together.

Over there, we have AI-generated test script exploring applications. Vision IQ, Squish Vision, is visual testing that adapts into interface, the changes into interfaces, and that's been very well-received.

On Axivion, well, it's more like on a partners. We work with NVIDIA and Qualcomm and the likes on different types of solutions.

Axivion is a very complex, very very, very good product. Over there, I think that that is something that AI is not going to be replacing in any matter, and it does so specific job.

Like said, across Qt Group, we're using AI extensively and looking efficiencies over there. On the future outlook, I'm going to come back and talk about a bit of what this changes we're doing currently, but before that, Anette will talk about some financials.

Yeah. Let's talk about the financials.

Yes, as Juha said, we had a growth of 11.6%. The exchange rate impact this quarter was €2.7 million, 18.4% at comparable currencies.

Not too bad. We had distribution licenses was 2.3% growth.

Developer licenses and consulting were about flat compared to last year. The maintenance revenue almost tripled compared to last year.

This is, of course, the IAR effect because IAR has a higher share of maintenance revenue, specifically as we are pushing all of the developer licenses into the balance sheet with a subscription transformation going from perpetual to subscription. Then the ARR, as Juha also said, it was €155.9 million, a growth of 27.7%.

Of course, there is some IAR effect in this, too. The growth at comparable currencies, there was a currency effect of 4.5, the growth of comparable currencies was 32.7%.

We have a very stable customer base, and therefore, we have a very stable ARR growth. Too many Rs.

Too many Rs, yes, too many short. The organic growth, anyway, of the ARR was 11.5%, which is very stable growth over time, also for the Qt Group without IAR.

Also, the IAR transfer into subscription is going to push this further then because more of the perpetual level revenue will then go into being annual recurring revenue. I think this number shows that Qt has a very stable customer base and a very stable business and solid business.

Then looking at the expenses, you can see that the costs grew a bit as they grew by 23% compared to last year. Part of it is because IAR has a lower profitability, and also because we are pushing down the revenue with a subscription transformation.

The personnel costs, then, they grew by 26% almost. It was 1,120 people at the end of Q1.

That was a growth with 232 people, which is almost the number of IAR employees. Basically, that is what we grew with.

Now we have the cost implementation project, and we are aiming to cut about €20 million, then we are moving towards where we were in 2025. See if we will reach that.

There is also, of course, some costs in other costs. External services and so is obviously targeted first: consultants, marketing, various things like that.

There are also other things as that is part of the integration that will over time generate cost savings. That will not happen very quickly, but IAR has 13 offices around the world in pretty much the exact same spots as QT has.

Just merging the offices and the legal entities, which are also in the same spots, will over time save money also under other costs. The profitability was around €5 million EBITDA.

The margin was 9.6%. That is basically because of IAR's lower profitability and so and the need for efficiency work around the cost side.

A little look at the balance sheet, then. We have goodwill of 166 or €167 million.

Most of that, 122, refers to the IAR acquisition. The rest of it is older acquisitions, Froglogic and Axivion mostly.

Then under other intangible assets, you have the other technologies from those acquisitions. It is technology acquisitions, brand acquisition, and customers, as it is split in the PPA.

IAR has €87 million of those intangible assets, and Froglogic and Axivion has been written off over time. They're written off over 10 years, those are a lower values now, and are at 9 versus 17.

Also, as I remember mentioning to you last time, IAR also has 6 million of capitalized assets, capitalized development assets. It's the IAS 38, where we treat development work into specific assets, and we capitalize it in the balance sheet.

This will over time not happen anymore, will be synchronized to doing it the same way as the Qt Group does it. For the Q1, we had capitalized €0.4 million then, so that affects the P&L and also increases the balance sheet.

Under other non-current assets is mainly the right-of-use assets, which are our premises around the world. This is bookkeeping exercise, and then of course the intangible assets, like furniture and stuff in those locations.

Trade receivables, basically at the same level as last year. We have a healthy cash balance of 56 million compared to 80 million last year.

It is lower because of the acquisition in IAR mainly. We also have, because of that, we have interest-bearing debt in the balance sheet of €143.5 million.

Bank loan of that is 135.3, and that refers to the IAR acquisition, which will be amortized over time. The rest of that interest-bearing debt is basically leasing debt related to those IFRS 16 assets.

Under other receivable and other short-term liabilities, still we have those €5.2 million that refers to the acquisition of the last IAR shares. That arbitration process is still ongoing in Sweden, and we hope that it will be closed soon, but it is a little unclear when it will happen, but those money is reserved for that.

Yes, I guess I can end the presentation on the financials by saying that looking at the balance sheet and saying that we have a pretty healthy balance sheet still, with a high share of equity. It is over 50%, even though we made quite a few acquisitions over the years.

With that, I guess I will end and hand over to Juha for the outlook. There.

Yep. You're

welcome.

Outlook. On IAR, the big thing obviously is the subscription change.

Our plan is to transition in the next 3 years. As that goes as planned, year-on-year, that's going to be a decrease on IAR revenue in '26, and '27 onwards, it's going to be growing and then continue the growth.

We did an aggressive plan. We are on that plan, it seems that, well, in United States, it's so typical way of doing business that there the transition is no problem.

In EMEA, a bit slower, and in APAC, slowest. As a matter of fact, the same we had on Qt at one point, but now seeing few months this year how it's been going, I have no doubt whatsoever that we're going to be successful on the next 3 years.

We do have this operational reorganization announced in April where we said that we're looking to improve our cost base by 20 million. Again, maybe taking away questions around that, as in Finland, we have this period of negotiations, and during the period of negotiations, we are negotiating, and now we are in that negotiation period, there are no decisions being made in Finland.

In negotiations, I think that, well, the minimum time is 6 weeks. I think we still have 2, 3 weeks to go, and so there's really nothing I can comment on that part; that negotiation is ongoing.

What comes to other countries, we are doing that in United States and Europe based on the local legislation, but I'm confident that we're going to be able to reach that 20 million cost saving we're looking for, and that includes the overall other cost savings and personnel cost savings. We're also doing those structural changes in a way that it would not affect on the sales targets that we have.

Since we are already on a second quarter, we do believe that once these negotiations are done, obviously in some countries, we've been progressing faster, we're going to get savings already for this year once they're done and whatnot, then we can announce what is the outcome of those negotiations, but we do expect to get savings already for this year, and we do expect to have that 20 million full-year savings on 2027. The challenges in market environment continue, but like I was explaining, in APAC, APAC's actually been performing on plan last year and now in the beginning of this year.

I have no reason to believe that that's going to change in any particular way. The outlook is good, pipelines look good, the execution over there is good.

In Europe, we've had this headwind on this large companies we have that do have large export business, whether to China or to United States, but that's kind of leveling off as well. On Q1, if I look the license sales in EMEA, I was pretty happy about it.

In U.S., I think, well, we've had a lot of headwind last year and whatnot, but that's leveling off now. We do expect that we're going to get the operational efficiency in U.S.

back on its normal track as well, going forward. If I look different parts of the business, consulting business is not a huge part of our business, as but that's kind of performing on a lower end, they are a bit behind what we were expecting.

License sales is doing fine, which is a good sign, and the deviation we're getting, if I look year-on-year comparisons, the only deviation we're getting is going to be on the distribution licenses. As the distribution license sales comes that when new projects are starting, companies may do pre-buys or they launch a big product group, then there are a lot of distribution licenses being bought.

Distribution license growth is not very how would I say, it's not stable on quarter-on-quarter; instead, it fluctuates quite a bit, and that is the fluctuation we're having on year-on-year. Although when we're looking on a whole-year distribution license estimate, what we're having, what we did our budget and what we were budgeting for the whole year, it looks like that the whole year is going according to plan, pretty much.

I talked about AI, I talked about the market environment, I talked about the different regions. As we get the better performance and execution in United States, we're going to get a healthier growth also on a business.

IAR integration is going well, I don't see any problems over there, although the revenue is coming down, but it's a deliberate decision we've made, and I don't see any cultural problems over there. On the contrary, I see two teams really wanting to work together.

I'm not doubtful at all that that integration is going to go pretty well. Of course, it helps that both are global companies, but there is a Nordic culture in both companies, the cultural fit is kind of there naturally.

Long-term, well, the need for software, the need for products being differentiated by software, software defining the value of products, that's not going to go anywhere. We're going to see that more, not less.

In that sense, I do see that there is lots of growth potential going forward. We're not changing our full-year estimate as of now, and so we're saying that we're going to grow at least 10% year-on-year in comparable currencies and operating profit at least 15%, and like I said last time, we're not giving a range, we're giving a bottom, we're giving a floor.

I'm very confident at this point that we can reach those numbers. There's no reason to change them, and yet again, of course, the fourth quarter is the biggest quarter, so that's where really the difference is made at the end of the day.

As we look forward, I think that this market is pretty stable stage at the moment, and things are going forward. Having said that, well, of course there is always this disclaimer that, well, what's going to happen in Iran?

Who knows? I think that it's going to get solved one way or the other, and the reason is that there's going to be so much pressure from elsewhere.

Asian markets depend on that oil export and whatnot, I don't think that there's so many parties that can't afford that conflict to go on forever, it's going to be sorted out. Yes, it's fair to say that we're used to the fact that there is a bit of a surprise every quarter, at least either tariffs or war somewhere or whatnot.

Let's assume that that will continue this year. Life goes on, I'm happy given the circumstances, we had a pretty good start for the year, and things are going into better direction.

I think we're going to have a decent year going forward, and with this cost savings, and then IAR turning into growing revenues, 2027 numbers are, I think they're going to look pretty good. With that, thank you.

Good afternoon, it's Matti Riikonen, Carnegie. Couple of questions, I'll take them one by one.

You mentioned that already last year, and also this year, the U.S. has been a kind of a problem with the execution.

What have you done, and what will you do, also going forward, to kind of amend that so that it would be in the growth again, as your internal plans probably suggest? We've we

well, we've we've done people changes, we've done a bit of an organizational change over there, and there are personnel changes quite a bit. Those are probably the biggest ones we've done.

Then there is a bit of a special emphasis on on bigger accounts, there's been more top management involvement and and and these type of things. The pretty pretty typical measures when when you have issues.

I would say that so we've had a management change in U.S., in U.S. sales, and and we've changed also a bit of structure, there's been changes in middle management, and the that that's those are the biggest changes.

We don't see a need for all the encounters we've had with customers over there being not product-related, I would not say, there is I'm I'm not alarmed by the fact that our product would not be competitive and whatnot. Then, unfortunate headwinds that have nothing to do with our own doings, but not naming any customers, but some customers did have quite a aggressive plans building new platforms for their next product generations with different power plants and whatnot, and they were put on hold, and and these type of things did happen over there so that the they they affected quite a bit on on our performance over there on so that's basically those are the basic things.

The headwinds being coming from United States, and the sales basically those being affecting most of our performance.

Right. Thank you.

Then you mentioned that many of your customers are in a savings mode. How do the customers save?

Do they just buy less licenses? Do they get discounts from you, or do they just postpone purchasing?

When there is uncertainty, then there is postponements. Like I said, there've been some really big postponements on that there were plans to build a totally new software platform for the next set of product line, and then expand that to all products, and then it was decided that, well, let's not do that, let's continue with the old one and try to hang on.

There are those kind of things. Not referring to any particular region or company or country, but it's been on the news that specifically automotive makers being postponing their electric vehicle initiatives going forward and instead let's continue with the old ones.

That's what we've been seeing quite a bit. On medical, not at all, or defense again, but in automotive and in consumer business.

Then another is that people calculate really carefully that how many developer licenses they need and whatnot, and people are more cautious. Of course, then when there is uncertainty, even there is a higher cost, people tend to buy 1-year licenses, prefer over 3-year licenses.

That's the majority, right? Then we do have industries, and we do have customers that would like to buy a 10-year license because they want to make sure that Qt is available and they have a license and there are limited price increases and whatnot, they have control over it because they know that they're going to be using Qt for the next 10 years.

All right. Thank you.

Then finally, you talked about IAR and the license model change. What kind of attractions are you offering the customers that you would like to shift to the continuous licensing model from perpetual?

Does it mean that there is always a discount, or does it mean that just to trigger as many customers as possible to change, you offer some kind of discount, and then try to find the remedies in the next year's pricing increases? Could you just discuss a bit how are you going to drive this change because, obviously, you need customers to move?

You can't just order them to move.

That is true. Majority of that change comes from the fact that if you think from perpetual license sales, on perpetual license sales, it means that you only have new customer sales because the ones that bought the perpetual, they already have a license, and they're never going to buy, right?

For the new customers, for the typical IAR sales, which has been new customer sales, it's kind of easy that the subscription is the only one available. For the new sales, no questions, really.

This is just that you are a new customer, and this is it. This is how it goes.

For existing customer that has a perpetual and is buying new ones, then the discussion is that, well, what is this licensing change? Then it's a discussion about that you have this perpetual license versus you have a new license.

When you have a new license, of course, well, you can call it discount, but the perpetual license always has been more expensive. When you buy a subscription license, obviously the price is less, but we're not pricing it in a way that, hey, that here is a price, take this and get a first-year 40% discount.

That's not the way we do it. Then there are, when you go on this new licensing model, then you are entitled for the fact that when there are updates and whatnot, you are capable of having those, and so that's basically the route to go.

Which means it's less than 10% on Qt base that are still on the old licensing model, but on Qt, and they'll probably never change. They built something 10 years ago, and they're just maintaining it, and they will never upgrade to anything.

When we did it on Qt, we introduced 6.0, and we told to customers that 6.0 is with subscription. If you want to have the latest version, then you have to roll into this subscription.

That's the only model. If you want to stay in the old versions, you can stay with the old terms and conditions.

Nowadays, majority of the people have changed, and over time, it's a really small fraction at Qt base that hasn't changed. Those are typically customers that they've built something one-off, and then they are just maintaining it, and they're staying in the old.

Usually, people do want to get into new versions. Then another thing is that when we did this at Qt, we were not in a forefront of things, but obviously, we were not the last one, since there is IAR, but nowadays, I think it is so typical model of buying software in subscription that you don't have to kind of explain it.

All the software is in subscription mode now. Now, the next change is going to be then on a consumption-based usage, which IAR is moving towards as well, our whole group, of course.

All right. Thank you.

Hi, Jaakko Tyrväinen from SEB. On the ARR growth during the quarter, meaning the quarter-on-quarter growth of 2.4%, could you elaborate a bit how much of this was driven by old Qt licenses, and on the other hand QA, quality assurance tools, and as well as IAR?

Did the transformation to subscription had positive or negative effect here?

Oh, you mean the IAR shift to subscription?

Yes.

Oh. As of now, we don't disclose this BU numbers, I don't even have them out of my head that the what were those, but I can say that they were all growing.

The IAR obviously contributed, but the not, the more than half of the, everybody was contributing. All the ARR ARR's are growing, but we we're not disclosing those separately, I don't have those numbers in my head.

They are all growing, it's it's not something that is coming only from IAR. Okay.

Still on ARR, did you, Anette, say that Qt's organic growth was 11.5%? Yes.

Year-over-year?

Yes.

Thanks. Then on the distribution licenses, which had a pretty nice quarter, but you are referring to certain volatility, do you have any visibility to that volatility over the summer quarters?

Summer quarters? Summer months?

Yeah. I would say that last year on second quarter, the distribution license revenue was exceptionally high if I look on the overall, and I think we're more going to be on a normal level.

We're going to be more on a flat level. Q1, Q2 on a distribution licenses are going to be pretty much the same, maybe a bit higher on Q2.

If I compare last year on the Q1 and Q2 numbers, there were big distribution license deals last year. That's actually the biggest effect.

If I look on all the other numbers, I think the consulting is going to be a bit soft, developer license sales going to be okay, and distribution licenses will be less year-on-year than they were last year. Yet again, they tend to fluctuate, the guidance we're giving on distribution licenses is for the whole year.

The visibility I have, we're going to be pretty much on the same level than we were last year. Last year on distribution licenses were very good.

This year, we're going to be a few million below or somewhere over there, but the biggest deviation on this year is going to come on this Q2.

Good, thanks. Then lastly, on the AI topic, just to confirm, you are stating that you're not seeing customers possibly downsizing their teams, and thus the number of licenses, because of the AI efficiencies?

That's just them if so, that's just them kind of squeezing overall costs.

Yeah. That That is.

They are squeezing costs everywhere, and now they're going to be squeezing more because if you think the automatic automotive manufacturers, like I said, glass is going to cost more, plastic is going to cost more, paint is going to cost more. The automotive manufacturers, because of this oil prices being so high, their manufacturing cost per car is going to go it's just the physical cost is going to go much higher, and on top of that, they have tariffs, right?

It's, it's going to be a a big issue for them. Also other manufacturing companies, on medical, defense, whatnot, it's no issue at all, it varies industry by industry.

It's not only it's not only, our own internal discussions, we hired a external external consultant, and he made a he made a number of, well, he did a market survey on many aspects, but one was AI, and he made a massive amounts of calls and interviews on customers, on our customers, interviewing that the use of AI and and the effects on AI. Developers are using AI to be more productive and whatnot, but we don't see layoffs over there in in this embedded world.

When When we look on the When we look on the web technologies, right? That's a bit different story.

Good. Thanks.

You're welcome.

Hi. Thank you for the presentation.

Waltteri Rossi from Danske Bank. About the pricing model change that we have discussed today, if you don't see any kind of impact on demand from AI, then why do you also say that you will change the pricing model?

What's the reason for that then?

We don't see any layoffs of developers, but of course we see developers using AI. If you think that in an old world, the only way to extend building more software would have been hiring more developers.

Now the same developers are using AI, from our perspective, we see that there is more use of Qt framework, and that's where the world is going. We see more and more that happening in the future, and I think that more and more the new customers will be such that developer will be asking from AI that I want to build something like this, let's use Qt, or what should I use, and then the AI is probably proposing that, hey, let's use Qt, and then they start building something.

That's where the sort of the consumption-based usage is going to go. If our pricing is based on per-developer seat, and then our customers start using automated tools to generate code as well, it's kind of, from our point of view, it's pretty logic that, well, hey, you need to pay for that, too, right?

Then the question is, on a long run, of course this is going to be developing, that's for sure. There is a few things.

That are going to be issues going forward using AI. One is this consumed-based pricing, and the other is that if you use AI on Qt, you build something with Qt using AI, and you don't pay a license, who owns the code, right?

Kind of that if you use AI building software and AI goes and uses frameworks and code being built before, does it make your code and you have automatically copyright for it? No, of course, because many times, AI just copies code.

It's like that if you do proprietary code and you take open source components, put it into proprietary code, and then say that this is my proprietary code, well, you're violating the open source rules, right? If you're using AI and AI just writes you something, can you be certain that you actually have right for that software?

That's one. Then the other is that, like I said, nowadays, all the AI companies are losing money like a ton, right?

At some point, of course they will lure us to use AI, and we start using AI and get the benefits of it, but the cost of using AI will increase at some point, right? Otherwise, these AI companies will never make their money back that they're investing, and billions and billions.

The pricing will change, and then the dynamics that what is really the benefit of AI will change. Now we get to use for everything pretty much free of charge, right?

That's going to change a bit. Then the third is really that what is the behavior, because how it's going to go, so far, I usually see that people want more, and then they want even more.

If you think that you have 10 developers doing code, and then you start using AI, are you happy that you generate the same old level of code and you get rid of 5 developers and you stay on the same level, or do you keep the 10 developers and generate a lot more code and do a lot more products? In the history of people, they usually want more, and they develop more.

This kind of a thinking that AI is going to come, and the productivity is going to get much higher without any coders, well, that's not going to be the case. The assumption that AI comes and all the software industry is going to disappear, that ain't going to happen, right?

Coders' daily work will change, and the simple things will get simpler and they will get done by AI, but then the creative thinking still will be there. There are many things and hurdles we go forward, but it's going to be an interesting time.

What we don't discuss very often is that we see that, well, there is threat there, and there is a threat there and whatnot. Of course, we can turn this coin around that let's assume that AI is so powerful that it does all the coding.

What would it mean to us? We do have these customers that we know that what hardware configurations they're doing, we do know that what they want to put and build on their products, and we do know that we do have tools that we can let them that, hey, design what you want.

If AI does everything, we can become a solution provider. We can start selling total solutions, right?

This doesn't necessarily mean all threats to Qt. I'm not saying that we're going into that direction.

All I'm saying is that, of course, this will give also opportunities for us to expand our business going forward.

Right. Thank you for a good answer.

Maybe two quick ones. First, the Western automotive, do you think that that business will ever recover for you to the point where it was 2 years ago, and roughly how much is automotive of sales today versus 2 years ago?

Is the demand for vehicles going to be about the same in that it was in previous years? I think overall in that market, if we ever get into this vision that I think it was 10 years ago or so that there was predictions that in 2 years, we're all going to be driving self-driving cars.

I have an old Volvo, but I can tell that I drove myself. It's been taking some time.

If we do get in a world that we have a lot of self-driving cars, then you could assume an idea that instead of maybe you have a car, but while you're at work, your car goes and you rent it to Uber, your car is driving people around and then comes pick you up. Is there then a need for total amount of cars that's been sold as of today?

Of course not, but that sense is going to take a long time. Would there be a bit of a consolidation in car manufacturers?

Let's say 5 years from now, are we having the same automotive manufacturers as we are having today? Probably not, there is going to be a consolidation.

We probably will see how that will be evolving. I should know this, but well, I can't give you exact percentage.

We said that it was around 20% long time ago. Now it's substantially less, and defense is the biggest vertical we have, medical right after it, and industrial third.

If I look that what the automotive market is growing this year, probably the market growth probably flat or 2%. That's my educated guess.

European car manufacturers are in real trouble with the tariffs and the competition in China, and so is U.S. car, Ford, GM, they're not doing very well, as you know.

It's going to be a struggle. Are people still buying cars?

Do they need about same amount of cars? Yeah.

When self-driving comes, then that's going to change the world, but many, many years ahead. It depends on that do we get the deals back at that point with the new players.

I think we do.

Maybe one quick one on IAR. I'm not so sure if you said how much IAR sales were of Q1.

If you said, I missed it, but could you please repeat? Once again, the SaaS transformation that IAR is going through, did it already have an impact on Q1 on its sales?

IAR impact on subscription sales is having impact all the time because the revenue, compared last year, IAR revenue is going down. It's having effect on Q1, it's going to have effect on whole year, and then next year, we do expect double-digit growth on IAR.

This year, we expected to go down, and it is going down compared last year. The subscription change being going very well, which means that the downward pressure on IAR revenue is at its highest, let's put it this way, and on profitability as well, which means that next year, more aggressive we can be this year, more aggressive the growth is going to be next year.

It's definitely with this change rate, the IAR growth next year is going to be double-digit, probably starting with the two, but this is not a promise, it's the first quarter, let's see towards end of the year. It's going to be double-digit growth next year, and very healthy over there, and then the IAR profitability will swing back, and the year after that, it's going to be on a very healthy level.

We have no reason at this point doubt that that's not going to happen. On IAR revenue, no, there are too many Rs.

We do tell the ARR, but we're not disclosing the different BUs over here. I didn't say it.

You didn't miss it.

Thank you very much.

Thank you. Hey, you can ask one.

We can go a bit over time, yeah, if it's easy one.

All right, perfect. I don't know if it's an easy one, but I'll ask it anyway.

Antti Luiro from Inderes. On the ARR organic growth of 11.5%, just to drill down on the number, is there any kind of one-off positive effect from IAR's transition to subscriptions kind of boosting that number, or is that kind of not in the numbers?

No. That's the organic growth at comparable currencies for just the Qt.

Right. Okay.

Without IAR.

Yeah. That's helpful.

Okay. Thank you.

We're over time now. Hey, thank you very much for coming.

We're relatively happy on the profitability and the development on the first quarter. Second quarter, we see consulting being on a bit soft, developer licenses doing very well, and year-on-year comparison on distribution, there's going to be quite a lot less sales on last year, but if we look the distribution licenses on the whole year, it's going pretty much where we're predicting, last year and a bit below from last year.

We are not changing the guidance. We're pretty confident that we're going to meet those numbers over the course of the year.

The integration is going well. We've done a lot of work in the U.S.

to turn that around, and we're seeing first signs that that is also happening. Looking forward, we're pretty confident that this year is going to be okay year, and change year, and means that when we built this foundation 2027, we're going to get back on track with the very healthy profitability numbers and sales growth as well.

With that, thank you.