Smart Eye

April-June 2023

• Net sales amounted to SEK 68.8 (59.8) million, an increase of 15% compared to the corresponding period the previous year. Underlying invoicing was approximately SEK 6 million higher during the quarter, but as iMotions started periodization of recurring revenue as from Q3 2022, this revenue will instead be recognized over the contract period. With the above effect in consideration, the organic growth for the total group was 25%.
• EBITDA amounted to SEK -33.0 (-41.6) million. The higher result is due to increased sales during the period and that costs are in line with the cost reduction program.
• Operating loss amounted to SEK -70.7 (-76.3) million. Depreciation of the surplus value created in conjunction with the Affectiva and iMotions acquisitions amounts to SEK 28.8 million.
• Earnings after tax per share is -1.95 (-2.92), and after full dilution -1.95 (-2.92)
• Cash and cash equivalents totaled SEK 180.4 million at the end of June.
• During June Smart Eye signed a breakthrough deal for AIS driver monitoring system for fleets with Linde. This marks the first time Smart Eye’s new AIS system will be delivered to a major heavy vehicle fleet owner for aftermarket implementation.

January-June 2023

• Net sales amounted to SEK 133.2 (113.3) million, which corresponds to an increase of 17%. The organic growth amounted to 28%
• Operating loss amounted to SEK -152.6 (-147.8) million. Depreciation of the surplus value created in conjunction with the Affectiva and iMotions acquisitions amounts to SEK 57.0 million. The period was burdened by one-time costs due to the funding process amounting to SEK 2.8 million.
• Profit after financial items amounted to SEK -152.6 (-148.0) million.
• Earnings after tax per share is -4.27 (-5.66), and after full dilution -4.27 (-5.66).

Comments from the CEO

The second quarter ended on a high note with a strong organic growth of 25%. At the same time, the costs are under control in accordance with the savings program implemented last year. Right now, everything is proceeding according to our plans. The demand for our technology in the market remains strong, fueled by favorable safety regulations in Europe.

Automotive
The automotive business area is growing with 73 percent compared to last year. Even though license revenues more than doubled, it is still mostly because of ramp-up of production in Korea and to a lesser extent in China. We are on the verge of ramping up with our US, Japanese and European customers, which is expected to happen in the upcoming quarters. That will further increase the growth rate. We are currently delivering the final software in several projects with global OEMs and we are looking forward to the stable and long-term revenue streams that will come as a result thereof.

Furthermore, the market momentum is very strong, and we are in the final negotiation phase for several large OEM contracts. Our proven technology is very sought after in the market.

We have started to deliver the aftermarket system AIS to Linde, one of the world's largest industrial gas suppliers. Linde started to test early prototypes last year which convinced them to deploy the safety system for all their trucks on the Scandinavian market. The breakthrough order has spurred further interest from other customers representing large fleets of trucks and buses.

Behavioral Research
The research side of Smart Eye had yet another quarter of profitable growth. The organic growth is at 14 percent, in line with our long-term growth rate pre-covid. We are anticipating two upcoming strong quarters since the research market typically is stronger towards the end of the year, due to research equipment budgets being spent before the end of the year.

Final Words
We are only at the very early beginning where OEMs are starting to ramp up new models with our technology. The vast majority of the car models that we have won are not yet produced at full capacity. But as more cars now start to enter production, the increase in our license revenues will accelerate. That is the foundation to our profitability mid next year, given that the research unit is already profitable. We are entering a very exciting moment in the history of the company.

Martin Krantz
CEO Smart Eye

Find the full report and all previous financial reports at https://smarteye.se/investors/financial-reports/.