Total ARR was SEK74.3m (58.2), which of SEK43.7m (29.8) was SaaS. Our forecast was SEK75.9m and SEK45.2m. The 28% ARR growth and 47% SaaS ARR growth y/y were mostly driven by a 74% increase in the SaaS API Calls y/y – which is what Teneo AI is focusing on increasing and a sign of greater usage among the customer base. Despite the SaaS ARR being somewhat below our expectations, the company continues its streak of strong SaaS ARR growth. As highlighted by the sector-leading NRR of 134% (137), current customers are the main growth driver for Teneo AI, and we expect the NRR to remain solid. Also, two new customers were added during Q2 and another one during the first few days of Q3.

To accelerate the adoption of Teneo AI among current customers (and to attract new ones), Teneo has started using auto-translations of the English model instead of building models for each language. According to management, adding new languages this way greatly improves the economics of the solution. Also, the company has increased its presence in the UK and US markets. Our impression is that management seems confident in continued momentum in SaaS ARR growth, partly driven by the abovementioned factors.

We increase our Base Case somewhat to SEK0.9 (0.8), driven by slightly increased long-term forecasts. Trading at 3.5x sales in 2025e, according to our forecast and 3.9x in consensus estimates, Teneo AI is trading in line with the average listed Nordic SaaS company. While being among the weaker names in terms of profitability, its expected growth, large customers, and global market position stand out. As our SEK0.9 Base Case indicates, we believe a higher valuation multiple is motivated, assuming Teneo AI performs in line with our forecasts.