ATOSS Software SE (AOF) Q4 2025 Earnings Call Transcript

Hello, everyone.

Welcome back to our third earnings call, where we will be discussing our results for Q4 and full year 2025. We are pleased to have you here with us today. I am joined by our Chief Financial Officer, Christoph Leiber, and we are glad to have the opportunity to walk you through our performance and outlook. We will be referring to the Earnings Call Q4 and Full Year 2025 presentation, which was published earlier this morning and is available for download on our Investor Relations website, as well as via the link provided in the webcast. A detailed Investor Relations presentation was also published this morning, which we encourage you to review for further insights, but will not discuss during this call. Please note that today's call is being recorded and the recording will be made available on our Investor Relations website after the call. Before we begin, I would like to start with a disclaimer. Please note that the presentation contains forward-looking statements based on the beliefs of RTOS Software SE. These statements reflect the current use of RTOS Software SE with respect to future events and results and are subject to risks and uncertainties. Actual results may differ materially from those projected here due to factors including, but not limited to, changes in general economic and business conditions, the introduction of competing products, lack of market acceptance of new products, services, or technologies, and changes in business strategy. ATA Software SE does not intend or assume any obligation to update these forward-looking statements. With that, I will now hand over to Christoph Leiber, who will walk you through the key development of the fourth quarter and full year of 2025. He will start with the general business update, then cover our financial performance, followed by our outlook for 2026 and beyond. We will then wrap up with the Q&A session. Christoph, over to you.

Thank you, Carla, and a very warm welcome from my side to all of our to the entire audience. I'm happy to be here today and walk you through our Q4 figures as well as our full year 25 results. We appreciate your time and interest in ATOS and look forward to sharing an update on our performance and outlook including our AI roadmap well beyond 2026. Let's get started on slide four with key takeaways. We are proud to announce that 2025 marks our 20th consecutive record year. 20 years of continued year-on-year growth, top line and in terms of EBIT. Our CAGA for the years since 2014 has been at 15%. Overall, this is a unique success that makes everyone at ATOS extremely proud. We also successfully completed our midterm guidance. that we gave on the back of 2022 for the years 23 to 25. For this period, we projected a CAGR of approximately 19%. Now, we came in at 18.5% CAGR for that period. Also, we projected an EBIT margin by the end of 2025 above 30%. Now, our EBIT margin is two years in a row above 35%. And you've seen the numbers presumably already this morning. So, ATOS once again has demonstrated its exceptional success as a SaaS software company and our delivery ability on demanding guidances. This is a success that I like to dedicate to our employees, our customers, and our clear commitment to our vision. At the same time, we've built a platform at ATOS that's extremely well positioned to continue on this path in the future. But let us first focus on the results for 2025. We've delivered solid results with full-year revenues of 189.3 million and an EBIT margin of 36% well above guidance and reflecting the quality of our earnings. As for the growth within our medium-term guidance, once again, the growth has been driven by cloud and subscription revenue streams. This sort of revenue was up 28% for the full year of 2025. And we closed the year really on a high note. Q4 came in strong with 12% top-line growth quarter over quarter, driven by once again strong momentum in cloud and subscriptions, which was equally up 28% in Q4 as for the entire year. I mentioned last quarter that comparables in Q4 had been expected and actually were tougher. And still the team has delivered. Many thanks to everyone at ATOS for making this possible. On the order intake side, we've seen a substantial improvement in H2 2025 over H1 2025. And we believe that Q1 and H1 2026 should show a continuation of this positive development. In particular, we are pleased with the development on the new ACV generated for cloud and subscription. Here we saw strong growth comparing H2 25 to H2 24 and still good growth comparing full year 25 to 24. Again, cloud and subscription remain our main growth engine, supported by strong order backlog, healthy ARR momentum, and a solid new ACV development. These are the key areas to determine from our perspective the value of Atos. Now, building on this momentum, we enter 26 with confidence. We confirm our outlook of around 215 million euros in revenue and an EBIT margin of greater than 32%. As always, our revenue target is realistic yet ambitious with a bandwidth of roughly 2%. Our EBIT margin target is conservatively set, meaning we have lack room to either outperform, cover the lower end of the revenue bandwidth or or and initiate additional investments for 26 we expect cloud and subscription revenues to grow by 25% plus and total recurring revenues by more than 15% while on-prem licenses will continue to represent a smaller and more volatile share of the mix also in 27 for For 2027, we stand by our projection of around 245 million euros with a bandwidth of 3% and an EBIT margin of at least 33%. Now, on slide five, let's take a look back at the development of the phenomenal 20-year record history that we at ATOS have achieved. Since 2014, Atos has even increased its growth momentum with an average annual rate of 15%. This was substantially driven by strong development in recurring revenues, in particular since 2021. Today, our recurring revenues account for 94% of software revenues and 70% of total revenues. And this share continues to rise. internationally we keep on kept expanding averaging a 30 percent growth over the past five years in 2025 revenue outside of the dark region accounted for six percent of total revenues more importantly we have one great new customers internationally in 2025 and in particular in h2 2025. Two large retailers in Benelux, one retailer in the Middle East, and somewhat as the icing on the cake, one international retailer headquartered in France in Q4. Moving on to margins. Margins have been substantially increasing during our 20 record year trajectory and practically in In all years, we outperformed our guidances on margins. As you know, we tend to keep our margin guidance conservative and we will keep it this way. Now with that, let's move to the income statement on slide six for the full year 2025. We have delivered a solid year 2025, keeping the track we were on in Q3 2025 with revenues increasing by 11% year-on-year driven by software revenue growth of 13%. As that cloud and subscription business continues to be the major driver of this growth with 28% year-over-year increase in cloud and subscription revenues which now account for nearly 50% of our total revenues up from 42% last year. For other Other revenue streams consulting showed continued good growth at 10% year on year, and other revenues including process consulting even stronger growth of 31% year on year, whereas hardware revenues and perpetual licenses, as already alluded to, saw a decline in 2025. On the margin side, we stayed strong despite the investments in our go-to-market organization and its now-completed transformation. Looking at Q4 alone and on slide 7, top-line growth was again strong at 12% year-on-year. Software revenues grew at a similar rate of around 12%, keeping both metrics broadly in line with the levels of the previous year. Overall, this was a solid quarter in terms of order development with particular strength on the cloud and subscription side in order to intake, revenues, and overall very strong margins, once again. This provides good support for our revenue development going into 2026. Taking a closer look at our cloud and subscription and overall recurring revenue ARR performance on slide 8, We continue to see a very positive development. Our total AR grew by 18% to 140 million euros last year. This trend is largely driven by very strong momentum in our recurring revenue streams. Cloud and subscription ARR increased by equally 28% year on year to 101 million euros by the end of Q4 2025 and looking further into the drivers of our cloud and subscription ARR, it is important to highlight that the majority of the ARR growth in 2025 again came from new business rather than migrations. Out of the 22 million ARR increase year on year, more than 80% came from new ARR with existing and new customers, with existing and new customers evenly split. And only 20% or roughly nearly 4 million euros came from migrations. This demonstrates the externally driven momentum of our cloud offering and confirms the attractiveness of our solution in the market. when looking at customer value dynamics our net retention rate came in at around 111 percent for 2025 and as i mentioned already multiple times and some time ago our long-term ambition has always been an nr above 110 that is where we are and that has been expected from the outset as our cloud customer base over time becomes increasingly larger and the share of newer customers with more appetite for expansions of the cohort decreases. Now coming to our backlog which gives us good indication of future ARR development our total ARR backlog increased by 18 percent year-on-year reflecting the strong level of contractually committed additions for the next 12 months. In addition, the incremental cloud and subscription backlog added in 2025 increased. You see that on this slide, it can have increased after two years of rather flattish environment. So this shows a positive change in the last year with 8% growth of that incremental cloud and subscription backlog added in 2025. Both indicators further strengthen our visibility into 26 and underline our continued robustness of our recurring revenue model. Together, these developments provide a solid foundation and support a positive outlook for our ARR development in 26. Now turning to cash flow and liquidity on slide 9, operating cash flow in 2025 came in lower year-on-year. This decline does not reflect weaker underlying operating performance by no mean. It is essentially driven by exceptionally high tax cash outs in 2025. Because of additional taxes set after the final tax assessment for 23 and additional prepayments for 2024 all in total tax payments in 2025 amounted to 28.4 million versus 9.8 so roughly 10 million in 2024 when normalized for the additional tax payments for 23 and additional prepayments for 24 the operating cash flow would have increased year on year in 2025 now on the On the liquidity side, we remain with a very strong position. Even after dividend payment of around 34 million in Q2, we closed the year with a liquidity level of around 123 million, slightly above 112 million at year-end 24. This strong foundation allows us to continue investing in the business while maintaining a very healthy financial posture moving on to people and organization on slide 10 at the year and 2025 our total headcount stood at 856 compared to 820 at year and 24 this reflects a moderate largely planned expansion of our organization which is overall still in line with our transformation efforts With regard to our go-to-market organization, we are clearly on track. At the year end, our sales and marketing headcount stood at 201 employees, which is within the range that I was giving on the last or previous calls between 200 and 210. The particular focus area continues to be our quota-carrying organization at the end of Q4 2025, when combining the staff on board and the already hired staff with entry date up to April 1st, approximately 70 quarter carriers and first line managers will be on board. While this is slightly below the target of around 80, we are making steady progress and remain confident that we will close this gap very soon. And in parallel, we continue to drive efficiency improvements across our go-to-market setup through better processes, AI, and digital tools, ensuring the productivity rises overall. Overall, this gives us a significant stronger commercial engine entering into 2026 with more structure, more capabilities, and greater resilience against macro fluctuations. With a strong finish in Q4, on slide 11, we close out 2025 as our 20th consecutive record For the full year, we delivered revenues of more than 189 million fully within our guided range and achieved an EBIT margin of 36%, clearly above our already raised guidance of 34% EBIT margin. On the recurring side, we saw a continued strong momentum, total recurring revenues grew by around 18% year-on-year, and cloud and subscription revenues increased by 28%, both in line with our expectations. As mentioned earlier, the risk in the model continues to be limited, mainly to the on-prem licenses and a bit on hardware, which represent a very small fraction and a very limited share of our total business. Looking at 226, we confirm our guidance. We expect revenues to come in around 215 million, meaning a 2% bandwidth. and in continuation of our conservative margin guidance practice, an EBIT margin of greater than 32%. This outlook is supported by a strong ARR and backlog in cloud subscriptions and the progress that we've made in transforming our go-to-market organization. Our medium-term guidance also remains unchanged. We continue to target revenues of around $245 million by 2027, representing a CAGA of roughly 14% from 25 onwards. Naturally, the pace of growth will depend on macroeconomic conditions and our sales execution. But overall, the progress we made in 2025, we feel well positioned for the years ahead. Looking toward 2030, we believe that leveraging our position and the market dynamics for workforce management, we can build an organization of around or with around 400 million euros in revenue by 2030. In this direction, we continue to invest to even increase our current organic growth. And we are opening up to selective inorganic growth. But of course, it is an vision and not a guidance. Now moving to slide 12. One area amongst others for our future growth is continued investment in our AI roadmap. ATHOS has started the AI journey in 22-23 with industry specialists like University of Mainz for Hospitals, Fraunhofer Institute, and others, which this led to the initial set of AI services. In 2024, 2025, Atasis started delivery of AI services with a clear focus on forecasting, as this is the base for any optimization of workforce scheduling. This has already positively impacted the development shown in our AR order backlog, in particular for cloud and subscription in 2025. For hospitals, there are substantial advantages in faster assuring the right forecast and thereby building planning decisions on this accurate and faster and readily available forecast. This is applicable, of course, not only for hospitals, but also for the rest of the industries as well. The topics here are general forecasting, illness rate forecasting, as well as vacation. or other absence forecasting. That is what we have already delivered last year. However, the AI roadmap is obviously much more. And as you see on the slide here, it is key to the entire roadmap of ATOS for all of our solutions. Our focus on AI agents creating workforce efficiency, productivity, and simplification is clear. We cater to end-users, employees, and experts, thereby covering the full breadth of the workforce. This year in 26, we will have the first AI agents for the expert users and employees across the product lines. Furthermore, we have a multi-year roadmap with focus industries touching upon every aspect of workforce management. On our roadmap are multiple agents for artists, configuration agents, voice agents for multiple use cases, for managers, casual users, et cetera. Agents for specific industries like retail, just to name a few of this list here. Multiple agents equally for ATC, AI assistants to speed up and automate the planning process. AI support for forecasting, et cetera. business intelligence also for ATC and even for Crewmeister we have multiple agents on the work on the road on the roadmap AI based crew administration as well as AI based scheduling suggestions etc now there's a lot to come and we are just getting started from our perspective success in AI is based on three pillars, if you will. Domain expertise and workforce management is an area with a huge moat for ATOS that is rooted in this domain expertise. Deep embeddedness in customer processes and understanding, for example, of the regulatory compliance and complexity. How else should an AI leverage the potential thereof? Now, and lastly, access and ownership of the data that is relevant to workforce management. Now, ATOS, we are bringing all of this and combine it with our AI innovations. This will further deepen our existing mode in workforce management and still has much more potential. Now, I guess this concludes the presentation part of the call. We'd now like to open the floor for questions and are happy to dive deeper into any topics that you would like to discuss.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question anyone who has a question may press star and one at this time the first question comes from the line of Nicola Herms from Deutsche Bank please go ahead yeah thank you for having me and congratulations on another record here I have a couple of questions, but I would like to start with sort of the obvious question on the risk from AI.

The market appears to be pricing in on application software these days. So, yeah, I mean, you've you've got some some color on that already, but it would just be interesting to hear your perspective on, you know, potential risks you are seeing on your business and how these developments impact your customers. and most importantly do you see any of your customers starting to you know try different tools to respond to needs that were previously addressed Bartos and then on the other hand maybe on the opportunities from AI and the product update that you have given just a couple of minutes before can you maybe share some initial customer feedback from the features that you have

already launched or that you have you know announced before and could you maybe remind us how you're planning to monetize these features thank you oh thank you Niklas for the for the question that you just raised and obviously AI is on everybody's agenda right now let me start with first an observation I think everyone got really excited last and I think wrongfully so in some aspect as last year in August or so it was I just came back from vacation Sam Altman put out that that that claim that the death of software is around now first of all RTOS will not be beaten or eaten by this and secondly I think it's rather the other way around. It is AI obviously is extremely transformative. It will be helping customers to become more efficient. But efficiency is based on three pillars, if you will, and I try to kind of make these, point these out. One is that you need to have domain expertise. And in our core area, that is domain expertise of workforce management. If the vendor of AI solutions or services has no clue of what workforce management is about, and it's an extremely complex scenario or topic, then it is extremely difficult. You can code very fast with AI, but you need to code meaningful. Now, so this is the domain expertise. The second thing is our solutions and workforce management solutions of ATOS with based on this big mode that we have built over the years are deeply embedded with our customers. Now you imagine a company like Deutsche Bahn, for example, or Lufthansa Deutsche Bahn with more than a hundred thousand employees live and they actually last year decided to expand very substantially into RTOS going forward. Now you imagine these processes for multitudes of different companies in such an organization. They can leverage AI but they can only leverage is if you can if you can really deliver end-to-end digitization and that is what we are very much about at least in our enterprise area and this then leads me to the third pillar which is the data access in order to really fully make leverage ai and we've learned that in our forecasting AI service, you need to have access to meaningful data and make use of this data in order to come up with credible, reliable forecast prognosis, but just faster and more adaptable as in the old days where you did have to parametrize a lot of stuff. Now, our AI forecasting service is doing amendments, et cetera, more or less automatically. So, that's why I'm not really seeing the threat. I'm rather seeing the potential that there is for companies like Arthos with a clear mode, with a deep embeddedness with customers. and then bringing AI services on top of our solutions that is actually creating value. Now, you were asking about how this value is being seen and how we can probably speak a bit about making it visual that people understand that already AI is delivering a positive impact on our numbers. Now, I cannot give you a clear number, but what I cannot give you is the indication that last year all of our hospitals, the university hospitals and other hospitals that we've won, and we've won quite a few of them, they have selected ATOS for a multitude of reasons, obviously. But one of the reasons was that we have an AI agenda, that we have AI services for forecasting already readily available. And that made them choose RTOS. That made them choose RTOS as a cloud solution because then you'll get access to the AI services. And this in particular in a market environment where you do have, and when speaking about workforce management, the market environment is a bit different than in other areas. You have very small vendors really. You don't have large vendors for the most part. have smaller vendors, this creates and entrenches really the mode that RTOS has developed over the past years. And lastly, you asked the question about whether we encounter already customers making use of independent, let's say, large language model providers allowing or delivering delivering AI services to these customers. That is not what we encountered so far, maybe in some areas where there's very little complexity, but I have not heard about this at this point. And as I said, we believe that rather we can leverage the benefits of AI. Obviously we need to stay innovative and then this will be a positive for us clearly.

Thank you. That's very helpful, and actually what we hear in our customer discussions as well. I have a quick follow-up, if I may, on the revenue guidance of around $215 million. I recall you previously mentioned that achieving the $215 million would require roughly flat order intake in 2025, which you have now delivered. So I was wondering what are the drivers or assumptions that would lead you to the upper or the lower end of that guidance range?

Yeah, very valid question. Now, first, our order development last year, I would want to make this point. I really had to split the year in two halves. The first half 2025 was not a strong half. We had externally difficulties. I mean, the macroeconomic situation was not entirely good. It didn't really improve throughout the year. In Germany, at least we had negative sentiments by tariffs, at least impacting our potential customers. So the first half was externally not good. And quite frankly, internally, we had a lot of things to do. We had the transformation of our go-to-market organization still very much ongoing. We had to change our CRO during this time. So, first half was not very good. The second half was extremely good by comparison. In the second half, if you compare H1 with H2, H2 was significantly outperforming H1, more than double-digit growth there. And if you look for the full year on the cloud and subscription development there, as I said, we had a strong performance year on year for cloud and subscription, so 25 versus 24. And here again, if you compare H2 24 with H2 25, there will be a strong update. This will is showing slightly in the incremental order backlog for cloud growth, which is now a solid growth, I would say, or good growth as I refer to it in between 5 to 10%. And that's roughly what we increased in cloud and cloud order subscription. So we are actually on a good trajectory there. This leads us to the ARR backlog of 146.5. which if we add to this 43 million roughly of consulting revenues, plus 10 million of other in hardware, and then 9 million roughly of perpetual licenses, we end up with 209. And so, without any new cloud contracts being assigned. So with new cloud contracts, we just barely need 5 to 6 million euros in new ACV or new revenue next year, which should be possible here, as I said, the cloud on the cloud side, on the recurring revenue side, we do have very good visibility. The limitations in our visibility still come from the perpetual side where we do see basically two ways this could go. One way would be the longer trend, a continuation of the longer trend, which ultimately I would see, which would mean a further slight decline. That would pose a risk, a slight risk on our guidance. That's why we came out with the bandwidth of 2% to the lower end. The upper end obviously could be that with all this talk about sovereignty in Europe or in Germany that we do have the the ability at least to see some more perpetual in a short period of time while this sovereign talk will push some customers to the cloud so broadly speaking we are seeing the 215 as a realistic yet ambitious guidance 2% bandwidth and the risk is with the perpetual licenses all right thank you thank you very much very helpful next question comes from the line of Philip Zennewald from new ways AG

please go ahead by Christoph thank you for the presentation and congrats also from my side. You mentioned the order momentum has caught up significantly in the second half of the year. I would be interested in your perspective, is this only a catch-up effect or is this genuinely stronger underlying demand in your view?

Philip, thanks for the question and I try to make the point that we see this as from an organizational point of view from the dynamics of the market in particular in the public sector in our area as something which has the chance to to continue and actually not just the chance we have in particular in h1 and q1 we would envision that our order development will stay on this path for the second half of the year in this kind of environments I cannot really project clearly, but at least for Q1 and H1, based on the development that we're seeing, some deals that could have been closed in Q4 but moved to Q1. So, we have quite a good pipeline for Q1 and H1 should be on top of last year as well. That then would hopefully tie into the further maturity of our sales organization with newly hired people, adding to positive effects in the second half of this year. So that overall for this year, we are quite optimistic in starting on a quite optimistic turn.

Thank you, that's very helpful. Next one will be on Crewmeister. Crewmeister showed slightly weaker net retention this year than last year. What were the reasons here? How do you aim to stabilize it and do you have a long-term target for Crewmeister regarding net retention?

First of all on Crewmeister. I think Crewmeister has added significant customer numbers this year as well. We had hoped initially for a slightly higher number. We ended up nearly at 18,000, so I think it's 17,900 or so that we came in with. We had hoped for above 18,000, so slight decline again. And here again, it was also due to, from my perspective, H1, which came in lower. We reassessed the ways in which we reach out to customers in this area, opened up new channels, relaunched our website, and enhanced traffic there as well. So the second half was quite stronger. So we actually had there as well, the second half, which was pleasing. Going forward for this year, we envision the customers to increase to 22,000 precisely on net retention. Well, I mean, this is a different business altogether. So it's always a bit, I think, maybe not okay if we add this up in our overall net retention, which still with Krumah, so it stands at 111%. We are working on churn. We have improved a bit the churn, but it still stands at 1.5, I think, roughly per month, the churn there, which is our struggle, which is our kind of key point which we need to improve in order to move up the gross retention and thereby then the net retention as well. Still a very dynamic area, a lot of potential, and yeah, we have to work a bit on the churn side.

Yeah, perfect. Thank you very much. That also helps me a lot. And then one last, you have 13.1 million in your clouded subscription ARR from new and migrated customers. Can you distinguish there what of that is new and what of that is migrated customers?

Yes, I tried to do this in my presentation, but once again there I gave the number that 80% of the 22 in total comes from new licenses from existing and new customers. They are evenly split, but to give you the precise numbers, of the 13.1, 3.9 are coming from migrations the remainder 9.1 or 9.2 or so 9.2 comes from new logos so that's quite pleasing seeing that 50 percent basically of the ARR expansion in the cloud and subscription side is coming from new logos and 50% basically comes from the existing customer side and then added 20% from internal customers if you will. So maintenance customers migrating into the cloud.

Perfect, thanks. Sorry I didn't get that new presentation. That's it from my side. Thank you again. Thank you.

We now have a question from the line of Gustav Frohberg from Berenberg. Please go ahead.

Good afternoon. Thank you for taking my questions as well. Just a couple. First on uptake and success of the new product. I mean, you mentioned it a little bit, but could you tell us a little bit more about the uptake you've seen with some of the new products and features you've launched in 2025 and maybe give us an indication as to which industries are particularly active on taking up new solutions? and then a question on on the agentic ai product you're rolling out for q2 of this year are there any other similar products in the market today or do you think that you are very early or first to market with something like this and then lastly just on on migrations etc how should we think about the migration momentum into 2026 do you expect migrations to accelerate or are you making

any concerted effort to push for more migrations or are you expecting the pace to be rather as it has been in the past thank you okay thanks gustav and thanks by the way for the very very deep review that you put out i think just a short while ago on workforce management um maybe it's something worth looking at for others as well now taking a question uptake of the current services now the uptake of the of the of the current services which are forecasting services has mainly been taken and then the feedback that we got was in hospitals As I said in my presentation, we initially initiated the launch, the innovation of our forecasting AI services with the University of Hospital of Mainz. We built the prototype, so it's all geared towards this medical environment, and there it has significantly impacted the deals that we have won since, I would say, end of 2024. And basically all of these deals had, to a certain fraction, this element of we want the AI service for forecasting. So, in that sense, it has already delivered quite a positive effect on our order development and on our AR development, but I cannot quantify this at this point. And we will, however, and it's perfectly possible to use it in other industries as well. This will be something which we probably have to educate people a bit more about and kind of go out more into the market. But generally, forecasting and AI-driven forecasting is always the better way of doing forecasting than the old way that we had done with the classical AI, as I called it for some time. But the classical way was algorithm-based and not machine learning like the new AI service. So, and the classical way is basically installed in all of our retail customers, and they would tremendously benefit from moving to the AI service going forward. Now, to your question on the more imminent new service that we will bring out in Q2 for ATC, the agentic use cases there, In particular, for the SMB product, ATC, I'm always stressing this point that overall, the market for workforce management is a very fragmented market. That holds true from enterprise to the very low end, to the micro company markets where Crewmeister is active. But obviously, in SMB, the lower you get, the more fragmented it is. So in this area, you have competitors that are extremely small, very small. And by bringing out an agentic AI use case, it definitely sets ATC apart from the other vendors that are out there and the competitive products. So in that sense, we hope that this definitely will bring an uptake, a continued uptake. We had a good year in SMB in 25 as well, order intake-wise, but we hope to kind of see even more thereof in 26, amongst other things based on the agentic use case that we have there for ATC in Q2. Lastly, on the migration side, there we are following a two-fold strategy. I think that has not changed. I think I've discussed it in the Q3 earnings call as well, which is, simply put, for the enterprise customers, we stay true to our commitment to our customers of continuously delivering on-prem, in particular in an environment where on-prem customers, enterprise customers, are looking for sovereign solutions. Amongst others, there are sovereign cloud solutions as well, but there's one angle of sovereignty that they can and will continuously get from us with our on-prem offering there. So, this is the starting point. Secondly, we are inviting and we will give incentivize and with the new AI services, we do have tools to incentivize these customers, the on-prem customers, to migrate to the cloud faster than they probably would have otherwise. So we will leverage these new toolbox, if you will, that we have moving our customers that are currently on-prem and moving them into the cloud. We will package this together with economically interesting offerings for them to limit the uplift that they would have to pay for the migration and then make continuous value. And we, of course, would hope for the share in that value that our customers are then generating. So that's the other side, no force, but incentives in moving, and thereby I would see a slight uptick in the migration there, but not a substantial one because we don't force. On the ATC side, it's slightly different there. We do have the clear focus and clear view, or at least ambition, to migrate all of our customers by 2030. And we will start with a combination of incentivization, creating interest for the AI services that we now start to deliver in 26th, firstly to ATC customers. But we will add to this some sort of economic push as well, if you will. We will start to enhance or increase maintenance costs by sometime this year or at the beginning of next year and announce it this year, that maintenance costs for ATC will rise. So there's more economic sense in moving to the higher value cloud solution with embedded AI use cases. So there will be value on this side as well. and at some point there will be an end there as well for the ATC side so that's kind of the two-way approach this two-way approach will mean that our customers that we hope for a slight uptick but I wouldn't I wouldn't counter we don't plan for substantial changes in the dynamic that we've seen in 26, or 25, sorry. Great, thank you very much. Thank you.

As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Gustav Frohberg from Berenberg. Please go ahead.

Hi again, sorry, just a follow-up question. Just on new features again and monetization of those, are you thinking about monetizing them in the form of standalone pricing perhaps on a on a per token basis or per use basis or are you looking to bundle them as part of the existing solution and some kind of upsell motion just be curious on the pricing strategy thanks thank you for that question and a very valid one obviously because there is a different dynamics with AI services as they require some computing power as well and create costs obviously as well.

Now with these forecasting services, currently we embed them or sell them as a separate module. So this has more the add-on or the effect of winning more customers and enhancing the overall ticket volume for the particular customer now going forward for the agentic use cases we will envision of a hybrid pricing structure where we do have then on one hand token-based computing related price methodology and of course in parallel the similar subscription-based pricing as for as we do have today so it will be a combination of both currently for the current modules the forecasting ones we have not implemented that but for the new agentic ai services it will be implemented this way great and is there any gross margin difference between what it is that you envisage to charge for customers on a token basis versus a subscription or not really it's too early to tell really but I would I mean our goal is to keep our healthy gross margins stable and I don't want to go into the details of where our gross margin stand at this point okay no problem thank you very much ladies and gentlemen that was the last question I would now like to turn the conference back over to Christoph Laiba for any closing remarks well thank you and thank you for all the attendees and the your interest your continued interest in Artos just in a nutshell I just want to reiterate the entire team here at Artos is extremely proud to have delivered 20 consecutive years and not just because we have basically we're always looking in the back mirror and And then we celebrate ourselves for having the 20 years. The 20-year success is really about having built a platform that gives us comfort to look into the future. In this area of workforce management, we have the financial means, the innovation capabilities, and a lot more that will put us in a position to leverage the opportunities that there are with AI for a software vendor that has deep embeddedness with our customers. good exchange and continued exchange with our customers. And that is what we hope we will leverage, not just in 26, but all the way to 2030. And there's so many more things that we could talk about, but I hope we leave that to the next earnings calls. And with that, I'll close it. And thank you for your interest.