# Artificial Solutions Conversational AI leader; customer wins continue

- Link: https://www.directorstalkinterviews.com/artificial-solutions-conversational-ai-leader-customer-wins-continue/412799189
- Published: 2019-11-27T14:58:18+00:00
- Author: Amilia Stone

**Artificial Solutions** (ASAI) is a market leader in the conversational artificial
intelligence (AI) segment. Its customers include some of the world’s largest enterprises
across market sectors, while partners include many of the leading systems integrators(
SIs) globally. Revenue growth remains strong, driven by major new customer wins 
and expanded existing customer commitments. The relevance of AI chatbots to robotic
process automation is a further growth driver as enterprises evolve their IT infrastructures.

 * **3Q’19 results:** Order intake growth remained strong at 65% YoY to SEK6.1m,
   while order backlog was up 101% YoY to SEK46.9m. 3Q net sales were SEK12.8m, 
   up 33% YoY, with an adjusted EBITDA loss, as expected, of SEK26.9m. Growth was
   again driven by a combination of direct and indirect customer wins, together 
   with contract extensions and renewals from the existing customer base.
 * **Three new customers added in 3Q:** These comprised an additional Volkswagen
   brand, Scania; a global recruitment company; and a US Government department. .
   This followed 7 new wins in 2Q’19. 43% of revenue in 3Q came via SI partners,
   up from 34% in 2Q’19. SIs are providing access to customers that would otherwise
   be tricky to access, the US Government a key example.
 * **AI adoption gaining momentum:** Industry forecasts indicate accelerating implementation
   of AI, conversational chatbots in particular. AS is now established as a mainstream
   vendor, regularly listed alongside technology companies hundreds of times its
   size on all metrics. Its patents are also receiving regular forward citations,
   reflecting AS’s clear focus on innovation.
 * **Valuation:** The stock has fallen since the March 2019 listing on the Nasdaq
   First North exchange. Low exchange liquidity, gradual progress in educating the
   market on the company and sales of stock by investors in the company into which
   AS reversed are all factors. With a market cap of ca.€20m, the discount vs. the
   patent valuation of €115m is noteworthy.
 * **Investment summary:** Operational progress continues to be in-line with stated
   targets, while management has prioritised refinancing of the debt that matures
   in 2020 – our expectation is that the new funding arrangements will comprise 
   a mix of debt and equity. Accelerating enterprise take-up of conversational AI
   should create healthy demand for AS’s industrial grade Teneo platform, with SI
   partners increasingly driving new customer acquisition worldwide.

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