JANUARY TO MARCH 2026

• Net sales in constant currency (*) amounted to 12.3 MSEK (25.3), -51%
• Net sales amounted to 11.3 MSEK (25.3), -55%
• SaaS ARR in constant currency (*) amounted to 27.5 MSEK (74.7), -63%
• Total ARR in constant currency (*) amounted to 37.3 MSEK (101.1), -63%
• Gross margin amounted to 80% (86)
• EBITDA adjusted amounted to -12.2 MSEK (-1.4)
• Earnings per share amounted to -0.1 SEK (-0.1)

EVENTS DURING THE QUARTER

• Medtronic renews SaaS agreement for two years, adding extra subscription covering expansion to new region.
• Strategic review led by global investment bank JP Morgan initiated by the board of directors
• Updated patent valuation indicating a mid-range value of up to 211 MUSD, +19% vs. previous valuation
• 25 MSEK Subordinated Loan from large shareholders
• Senior Lender Covenant waiver
• ISO 27001:2022 Certification Renewed
• Agentic AI for Airlines, Automating Luggage Updates and Loyalty Support with Enterprise-Grade Control launched
• Agentic AI for Major Household Appliance Brands, Automating Warranty, Troubleshooting and Service Scheduling with Enterprise-Grade Control launched
• AI Agents for Utilities: Automating Outage Peaks, Billing, and Service Orchestration launched

EVENTS AFTER THE QUARTER

• Our partner FGS started implementation of Teneo in a very large Turkish Telco
• EXL (exlservice.com) chooses Teneo for Voice AI for their customers after extensive evaluations
• Our Patent attorneys have finished a claims chart showing infringements on our patents from several of the new entrants in our space
• New top tier legal counsel retained with contingency engagement planned
• The counsel led discussions that are underway with our former partner are expanded to also pursue patent licensing deals with infringing organizations

 
KEY FIGURES (For definitions please see page 20)

^(*) Same currency rate as in the first quarter of 2025.

CEO STATEMENT
 
Dear Shareholders, Team Teneo.ai and Partners,

Teneo.ai has built the technology that solves one of the hardest challenges in artificial intelligence: answering a live phone call, understanding the caller's intent in real time, and orchestrating the actions to resolve it. True Agentic Voice AI. While our first quarter 2026 results reflect near-term headwinds, the strategic value of what we have built has never been clearer. In this letter, I want to focus on where we stand, why the market needs Teneo, and the three strategic paths we are pursuing to unlock this value.
 
First Quarter 2026 Results

Our first quarter 2026 results are primarily a revenue story. Our margins remain strong, but revenue has declined due to the loss of a significant customer relationship following a contractual dispute with a partner. On advice from our legal counsel, we are unable to discuss the specifics at this time. As a result, our annualized recurring revenue has pulled back to levels we last saw two years ago.

However, the underlying business is sound. Our organization is built and ready to serve 20 MUSD in annual revenue at our current cost base, and our pipeline supports that target. The long sales cycles we are experiencing is a pattern familiar from every major technology shift: enterprises experiment, attempt to build in-house, then return to proven platforms when the complexity becomes clear. Companies are already coming back to Teneo after trialling internal builds or lightweight LLM wrappers that cannot deliver enterprise-grade results. Recently one of Sierra.ai’s flagship references came to us with the message that they could not get Voice AI on the phone channel to deliver the results they needed.

In fact, compiling information from articles in publications such as CXtoday, Finextra and Wired the following graphic shows the difficulties enterprises encounter in this experimental phase. Difficulties we have proven in production to solve with Teneo.
 
The Market Opportunity: Why the Builders Win

History teaches us that when a foundational resource becomes cheap and abundant, the real value migrates to whoever can build something complex and lasting on top of it. In the early 20th century, Bethlehem Steel forged the raw material behind the Golden Gate Bridge, the Hoover Dam, and the Manhattan skyline. But as steelmaking spread globally and the commodity became cheap, Bethlehem collapsed. The durable wealth of that era was captured not by the steel producers, but by the real estate developers such as those that developed and built buildings like Chrysler and Rockefeller buildings.

We are living through the same shift in artificial intelligence. Just a few years ago, large enterprises were spending tens of millions of dollars to build their own machine learning models from scratch — effectively constructing private steel mills for a single digital use case. Today, foundational Large Language Models from OpenAI, Google, Meta, and others have commoditized raw AI intelligence. Reasoning and generation are now cheap and accessible via simple APIs.
 
But raw AI power is not an enterprise solution. Plugging an unconstrained LLM into a Fortune 500 company's core systems creates compliance risks, hallucinations, and broken workflows. The market is in an experimental, noisy phase — and the inevitable correction is already underway as enterprises discover that the real challenge is not intelligence itself but governing and orchestrating it safely at scale.
 
Teneo's Position: The Real Estate Developer of Enterprise AI

This is precisely where Teneo operates. We are the Real Estate Developer — we do not mine the iron ore; we provide the blueprint, the scaffolding, and the structural integrity required to build safely. Our platform is entirely model agnostic. When foundational models compete in a price war to the bottom, our raw materials simply get cheaper and better.

For global enterprises, control is not friction — it is the product. Our deep portfolio of patents and our years of engineering in conversational AI and dialogue management form our ultimate competitive moat. While others are scrambling to tame raw LLMs, Teneo already possesses the patented technology to orchestrate them. Our platform delivers the complex logic trees, cross-system integrations, and strict governance wrappers that ensure an AI agent stays on-brand, fully compliant, and capable of resolving complex customer workflows without exposing proprietary data.

The market will settle. The novelty of the experimental phase will wear off, and executives will demand scalable, secure, and governable returns from their AI investments. When they do, they will not be looking to buy more raw intelligence — they will be looking for the infrastructure to orchestrate it safely across their organizations. Teneo has already built that architecture.
 
Strategic IP Monetization: Our Orchestration Patents

As the market races to deploy generative AI, billions of dollars of venture capital are being poured into startups attempting to build the very orchestration layers we architected — and patented — years ago. We recently engaged a leading US patent attorney to review the competitive landscape.

That review analysed three of the most highly capitalized AI orchestration startups in the market, each having raised well above 300 MUSD. The findings were definitive: all three are actively infringing on our foundational patent portfolio.

The strongest infringements centre on three critical pillars of our architecture. First, Natural Language Intelligence — our patented logic that enables dynamic, unscripted intent routing at enterprise scale. Second, Multi-Agent Orchestration — the architecture required to seamlessly maintain context, state, and permissions as users move across multiple AI agents handling billing, support, and sales. Third, Natural Language Analytics — our patented methodology for extracting actionable enterprise intelligence from millions of unstructured conversations at scale.

These patents are not defensive trophies — they are untapped commercial assets. As the enterprise AI market matures and hyperscalers and well-funded startups inevitably hit the governance and orchestration wall, they can see that the most effective path forward is to license our technology. We are moving now to enforce our intellectual property and pursue high-margin licensing agreements, ensuring that as the market scales, we can participate also in the competition’s gains.
 
Three Strategic Paths Forward

Our recently announced strategic review is focused on maximizing the value we hold at the orchestration layer. We see three distinct, highly viable paths forward:

Technology and IP Licensing. As hyperscalers and enterprises inevitably hit the governance wall while deploying raw LLMs, our intellectual property surrounding safe, multi-turn dialogue management becomes an important and monetizable asset. Oxfirst’s recent IP valuation report points to the values we can unlock here.  Licensing offers a high-margin revenue stream that scales with the market.

Standalone Growth. We continue executing aggressively against our robust existing pipeline to reach our 20 MUSD revenue target. Customers are experimenting and demos from competitors look great. It´s at the Pilot stage that we see they struggle to deliver. Which is why we drive customers to Pilot us against the new entrants. And we are engaged in several such Pilots and evaluations.

Strategic Partnership or Combination. We can pair our unmatched architectural engine with a large global distribution network, instantly deploying Teneo's orchestration capabilities to thousands of the world's largest enterprises. We are actively engaged with several such organizations that have wide reaching customer bases. Some of the largest in the world that have actively been questioned about their Voice AI strategy by analysts. Voice AI is at the forefront of the “Agentic AI” revolution and companies lacking strategy here are viewed as part of the SaaSpocalypse. A term used to explain declining valuations due to seat compression. AI reduces revenue as fewer employees do the same job and voice interactions go through integrations not App interfaces. This means fewer employees need to have a dedicated seat in a SaaS platform.
Whichever route we ultimately pursue, and it is probably at least two of the above, our fundamental advantage remains absolute: while the rest of the market fights a price war over raw AI capability, we own the infrastructure that makes it safe, compliant, and actionable.
 
Market Validation

The strength of our technology continues to be validated in the market. In the first quarter 2026, EXL — Genesys Reseller of the Year 2025 — conducted a thorough evaluation of which product could complement their enterprise offering. After rigorous testing, they concluded that only one technology could deliver the needed orchestration of AI models at scale: Teneo.ai. Our technology remains the clear leader, and we are determined to extend that advantage.

Positive Progress in Strategic Review led by JP Morgan

The strategic review is continuing to develop according to plan and is generating strong interest in Teneo’s AI technology and its potential applications. The core of this value is our patented technology, which was valued at approximately 211 MUSD in the first quarter of 2026 by an independent IP valuation firm. Together with our advisor J.P. Morgan, we are currently engaged in several constructive dialogues with key industry players.

To conclude the strategic review and maximise shareholder value, the board of directors intends to announce notice of the Annual General Meeting shortly, where it plans to propose for additional financing to provide the company with more time to complete the process. The board of directors current objective is to pursue a sale of the company, in whole or in part, subject to achieving fair valuation levels given our unique patented technology.

With our current debt maturing at the end of 2026, and if the strategic review does not lead to an exit of the company, the board of directors will accelerate the refinancing of the existing debt. The interim financing will also be used to finance the counsel led discussions underway with our former partner and for pursuing patent licensing deals with infringing organizations.

The board of directors have strong beliefs in Teneo AI as a standalone company, but continuing as a standalone company will require additional financing, including refinancing the current debt and the provision of sufficient growth capital for the operations to monetize our unique technology.
 
Looking Ahead

We are not trying to win the commodity war — we have already built the architecture for the enterprise AI skyline. The challenge ahead is not whether Teneo's technology is the best in the market; it is how we most effectively bring it to the world. That is exactly what our strategic review is designed to answer, and I am confident in the paths before us.

Thank you for your continued support and confidence. The best of Teneo is ahead of us.

Sincerely,
 
Per Ottosson, CEO Teneo.ai