Artificial Solutions

OCTOBER TO DECEMBER 2024

• SaaS API Call revenues amounted to 14.8 (3.8) MSEK, +294%
• SaaS API Call volumes amounted to 60.3 million (18.1), +234 %
• SaaS ARR amounted to 75.1 MSEK (31.0), +142%
• Total ARR amounted to 103.9 MSEK (63.0), +65%
• Recurring revenues amounted to 26.3 MSEK (15.7), +67%
• Net Revenue Retention Rate (NRR) +135% (145)
• Net sales amounted to 26.5 MSEK (15.8), +68%
• Gross margin amounted to 80% (77)
• Gross margin % (excl. commission) amounted to 87% (75)
• EBITDA adjusted amounted to -1.7 MSEK (-5.8), +71%
• Earnings per share amounted to -0.0 SEK (-0.2)

JANUARY TO DECEMBER  2024

• Recurring revenues amounted to 83.5 MSEK (60.0), +39%
• Net sales amounted to 84.1 MSEK (60.5), +39%
• Gross margin amounted to 79% (67)
• Gross margin % (excl. commission) amounted to 83% (72)
• EBITDA adjusted amounted to -22.3 MSEK (-50.7), +56%
• Earnings per share amounted to -0.2 SEK (-0.6)

EVENTS DURING THE QUARTER

• Teneo.ai surpasses 17,000 AI Agents in production, redefining the future of Customer Service
• Teneo.ai launched ACCelerator Pack for seamless migration from end-of-life Nuance IVR Technology
• Teneo.ai partners with Business Systems Ltd (BSL), a Genesys and Nice contact center integrator in Europe & UK
• Partner BSL, signed a contract for contact center solution at a new Swiss customer in the EV Automotive space 
• Renewal of agreements with 3 customers in the financial services industry
• Teneo.ai unveils groundbreaking LLM orchestration solution for customer service automation
• Teneo.ai leads the industry when launching AI-Driven, Generative AI-Powered Agentless Contact Center
• Successfully completed full ISO certification cycle, showcasing assurance to compliance, security and reliability

EVENTS AFTER THE QUARTER

• Teneo.ai raises 60 MSEK through an oversubscribed directed share issue
• Raizor and Teneo.AI join forces to deliver Generative AI and Conversational AI for Enterprise Contact Centers

KEY FIGURES (For definitions please see page 19)

CEO STATEMENT

Dear Team Teneo.ai, Partners, and Valued Shareholders,

As we conclude 2024, and reflect on a significant fourth quarter, I am pleased with the progress and achievements of Teneo.ai. The fourth quarter 2024 has been a period of substantial growth and development, further establishing our position in the Agentic AI space for contact centers.
 

Agentic AI – Market Momentum Builds

We have achieved a key milestone this quarter, surpassing 17,000 AI agents in production for our customers. These agents are autonomously executing actions at an impressive rate of 25 times per second, demonstrating the increasing real-world application of Agentic AI. This quarter reinforces the emergence of Agentic AI in the contact center as a tangible and impactful reality.

The launch of our Agentless Contact Center solution in the fourth quarter 2024 represents a significant advancement. Teneo.ai now offers the capability to fully automate tier 1 support, delivering notable efficiency and responsiveness improvements for our clients. This advancement positions us at the forefront of evolving customer interaction models.
 

Financial Performance – Achieving Key Targets

Financially, the fourth quarter 2024 reflects strong performance. We achieved a significant milestone, exceeding 100 MSEK in Annual Recurring Revenue (ARR). Furthermore, we realized a cash flow positive month during the quarter and annualized API calls of 1 bn, highlighting our sustainable growth trajectory and operational effectiveness. These financial results validate the market demand for our Agentic AI solutions and the strength of our business model.

Strategic Market Positioning – Capitalizing on Nuance Transition

The recent announcement from Nuance (a Microsoft Company) regarding the discontinuation of their IVR solution, a widely used solution in our target market, presents a clear opportunity for Teneo AI and our partners. We have responded proactively with the launch of our Nuance Accelerator Pack. This targeted offering provides Nuance partners with a streamlined and effective path for their clients to transition to Teneo.ai's advanced Agentic AI platform. We anticipate this initiative will contribute to continued market expansion and strengthen our market position.
 

Operational Excellence and Reliability – Maintaining ISO Standards

Our commitment to operational excellence remains a priority for us and the trust customers put in us. In the fourth quarter, we successfully maintained our ISO certifications once again, without any infractions. This ongoing certification underscores our dedication to quality, security, and reliable operations, providing assurance to our customers and partners.
 

Strategic Partnerships – Expanding Market Reach

During the quarter, we strategically expanded our partner network, joining forces with four key organizations:

• BSL Business Systems Ltd (UK): A leading contact center integrator in the UK, extending our reach within the European market. BSL closed the first deal already in Q4 – a Contact Center solution for a Swiss EV Charging Network.
• Kenway (US): Experts in Google Dialogflow, enhancing our capabilities within the Google ecosystem.
• AppDirect (US): A Master Agent with broad US coverage, providing significant distribution capabilities for both Genesys and Amazon Connect.
• InterVision (US): A reseller and integrator of Amazon Connect with a strong presence on the West Coast of the US.
• NWN Carousel (US): A major Genesys reseller in the US, aligning us with a key player in the Genesys space and driving the adoption of the Agentless Contact Center.
   

These strategic alliances are important for scaling our market reach, deepening market penetration, and facilitating the broader adoption of Agentic AI solutions.

We also started a new go to market journey in the US to complement the Direct motion in order to shorten the sales process. Michael Kenney, who has built the go to market for Dropbox, Symantec and Ingram Micro, has taken over the full US sales and will drive through these new partnerships.

Sales Development

As stated in our third quarter 2024 report, we are now sharing our sales pipeline to provide investors with insights into the impact of our sales investments. This pipeline reflects the status at the time of this statement. 

Our new sales are measured as a 12-month subscription value, excluding future API calls—though API calls make up most of our revenue. The pipeline is weighted based on the sales stage of each opportunity and does not include additional revenue from existing customers. 

For example, consider a sales opportunity for a new customer similar to one of our large existing clients. If this opportunity is in the *qualified* sales stage, it would be valued at: 

9,900 times 12 months times 20 % (weight for qualified stage) = approximately 24,000 EUR.

While the long-term potential revenue from such a customer could be 3.5 MEUR per year, our pipeline reflects only 24,000 EUR at this stage. 

Our weighted pipeline for new customer agreements in the next 12 months has grown 72% to 461,000 EUR from October 2024. This means that once API call revenue is factored in, we have identified opportunities that more than double our current revenue.

Strong Shareholder Interest – Raised 60 MSEK in Q1 2025

We thank the strong vote of confidence that investors delivered in January 2025.  Teneo AI executed an oversubscribed directed issue raising 60 MSEK in gross proceeds. The funds will be used to drive continued growth in the US primarily and secondly in the UK.

Looking Forward – Continued Growth in Agentic AI

The fourth quarter 2024 has been a period of solid progress for Teneo AI. We have demonstrated significant growth, strengthened our financial foundation, and advanced our product offerings. We enter 2025 with a strong momentum, a robust product portfolio, and a valuable network of partners, as well as a sales team in the US with the objective to be the alternative to customers that need to replace Nuance, which is end of life.  

Thank you to our shareholders, team, partners, and customers for your continued contributions and support. Together, we are shaping the future of customer interaction through Agentic AI.

Sincerely,

Per Ottosson, CEO