• SaaS ARR amounted to 32.1 MSEK (20.0), +60%
• SaaS API Call Volumes 20.2 million (9.3), +117 %
• Total ARR amounted to 61.1 MSEK (38.9), +57%
• Recurring revenues amounted to 14.6 MSEK (9.1), + 60%
• Net sales amounted to 14.8 MSEK (10.2), + 45%
• Gross margin (*) amounted to 72% (55)
• EBITDA adjusted amounted to -13.9 MSEK (-20.6)
• Earnings per share amounted to -0.2 SEK (-2.4)

• SaaS ARR amounted to 32.1 MSEK (20.0), +60%
• SaaS API Call Volumes 20.2 million (9.3), +117 %
• Total ARR amounted to 61.1 MSEK (38.9), +57%
• Recurring revenues amounted to 28.0 MSEK (17.8), + 57%
• Net sales amounted to 28.4 MSEK (20.3), + 40%
• Gross margin (*) amounted to 64% (57)
• EBITDA adjusted amounted to -32.0 MSEK (-37.5)
• Earnings per share amounted to -0.1 SEK (-6.3)

• Teneo.ai joins Google Cloud Partner Advantage Program and launches Conversational IVR plugin for Google Cloud
• Teneo.ai and OpenQuestion available on Genesys AppFoundry
• Renewal of SaaS agreement with Global American Tech company
• Renewal of SaaS agreement with Medtronic, one of the largest medical device companies in the world
• Renewal of SaaS agreement with Circle K
• Renewal of License agreement with Swisscom and UBS
• New Partnership agreement with CDI Services, a global services company focused on Conversational AI
• AGM resolved to appoint two new board members and approve a new warrant program for employees

• Teneo.ai launched Conversational IVR Plugin for Amazon Connect
• OpenQuestion 1.1 released - IVR implementation time cut to 60 days
• Renewal of License agreement with HRSA
• HelloFresh, a global meal-planning and delivery company, launched a new use case expected to increase API call volumes in the third quarter of 2023

KEY FIGURES

(For definitions please see page 18)

APR APR JAN JAN-JUN JAN
-JUN -JUN -JUN 2022 -DEC2022
2023 2022 2023
Net sales (MSEK) 14.8 10.2 28.4 20.3 45.7
Recurring revenues (MSEK) 14.6 9.1 28.0 17.8 40.7
SaaS ARR (MSEK) 32.1 20.0 32.1 20.0 25.1
SaaS API Call Volumes (Million) 20.2 9.3 20.2 9.3 13.8
Gross margin (*) % 72% 55% 64% 56% 55%
EBITDA adjusted (MSEK) (**) -13.9 -20.6 -32.0 -37.5 -76.6
Earnings per share, SEK -0.2 -2.4 -0.1 -6.3 -13.0
Cash flow from operating -13.3 -20.3 -28.1 -43.1 -77.9
activities before changes in
working capital

(*) The company has changed gross margin calculation and restated previous
year figures for comparative purposes. Sales commission plan has been updated
and is now linked to SaaS ARR growth. See Definitions on page 18.(**) The
company has identified extraordinary costs reported as ordinary in 2022. 2022
EBITDA adjusted has been restated to make figures comparable.

CEO STATEMENT

Dear shareholders, colleagues, customers, and partners:

We continue our strong growth momentum with Total ARR (legacy and SaaS) now up to 61.1 MSEK which is a Y-o-Y growth of 57%. Going into Q2 our focus was on developing existing SaaS customers and to build a pipeline for new logos in OpenQuestion, our SaaS solution that leverages the experience we have gained from the largest deployments of our AI technology.

Our prime goal was, however, to become part of the two other eco-systems that are gaining ground with the shift of telephony systems to the Cloud (aka Contact Center Technology), Google and Amazon. We are now part of all three hyper-scaler eco-systems - Microsoft, Google, and Amazon.

The market added a very strong focus from customers and partners on integrating Large Language Models (LLM's) or specifically GPT (the model behind ChatGPT) API's to their IT landscape.

OpenQuestion

The challenge we address by creating OpenQuestion is the decline in customer experience resulting from companies transitioning to cost-saving keypad navigation systems. According to Contact Babel, 78% of large companies in the English-speaking world use these systems today, resulting in a cumbersome and time-consuming process for customers to reach the appropriate department.

The statistics in the figure here are from a report we commissioned Contact Babel to make on the topic of why the old Keypad IVR is at the end of life.

The initial benefit of OpenQuestion in the first 60 days is a reduction in transfers. That is almost a billion USD wasted in the US alone per year. This is the initial focus of OpenQuestion and once this is solved then the all-important self-service flows can be built.  

The aim is of course to get growing API call volumes over time as the customer gets more benefit from the full Teneo.ai platform.

In parallel to this, we started engaging with customers across Europe and the US and although it's obvious that the interest is higher in the US than in Europe both geographies have strong demand. We have built a sales pipeline which we now are recruiting partners to engage in implementing across these geographies. We believe we will see our first OpenQuestion new customers during this autumn.

GPT

GPT has become a hot word in the boardrooms during Q2. There is a strong pressure to see what this new technology can be used for. And it is a fascinating technology development. That Transformers could develop so quickly with human reinforcement was not really expected in the AI Community. But deploying this new technology is associated with the same effort as deploying older Natural Language Models. Compliance, Security, Testing, Datasets, Data ownership, Cost and Performance are factors to consider - just as it was before the breakthrough of GPT.

After initial experimentation Enterprises have set formal projects during the summer. We are actively engaged in explaining to these projects that the experts managing all these factors are Artificial Solutions. This is the reason large corporations work with us - all the work around the actual Language Model is difficult and full of "did not think of that" moments. The fact that Teneo.ai manages this for our customers enables them to take solutions to market much quicker and maybe most importantly - with the performance and security needed. Using Teneo.ai companies will add "Enterpriseness" to whatever AI model they choose.

The attention that Natural Language gets in the market is still very high, but enterprises are now shifting from "let's play" to "let's build robust solutions" on GPT. That sets us up for a nice growth this autumn.

Revenue Development and Margins

Our customer base is growing the usage of our platform. Taking our most recent July numbers we grew the API calls with 119% y-o-y, a doubling of the traffic in our SaaS solution. We can conclude that this has no effect on our staffing needs.

The platform can manage doubling the API calls several times without a corresponding increase in cost. We saw in Q1 2023 that one customer passed the crucial 90% gross margin threshold. In that light it is natural that we focus on adding new customers during the autumn so that we can add even more API calls next year. We firmly believe that our positioning in the market combined with the initial GPT exuberance dying down will bring us this growth.

Per Ottosson, CEO

This disclosure contains information that Artificial Solutions International AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 23-08-2023 07:30 CET.