Smart Eye

April - June 2024

• Net sales amounted to SEK 89.6 (68.8) million, an increase of 30% compared to the corresponding period the previous year.
• Gross profit amounted to SEK 81.0 million (62.1), an increase of 31% compared to the corresponding period the previous year. Gross margin amounts to 90% (90%).
• EBITDA amounted to SEK -23.2 (-33.0) million.
• Operating loss amounted to SEK -64.2 (-70.7) million. Depreciation of the surplus value created in conjunction with the Affectiva and iMotions acquisitions amounts to SEK -29.2 (-28.8) million.
• Earnings after tax per share are -1.46 (-1.94), and after full dilution -1.46 (-1.94).
• Cash and cash equivalents totaled SEK 110.1 million at the end of June. The cash ending balance including credit facilities amounts to SEK 192.3 million.
• Strong order intake after the end of the quarter, SEK 700 million deal with Volvo Cars, Audi, Porsche, GM and a new European OEM, for 35 car models with a global Tier-1.

January - June 2024

• Net sales amounted to SEK 175.7 (133.2) million, which corresponds to an increase of 32%.
• Gross profit amounted to SEK 158.3 (116.7) million, an improvement of SEK 41.6 million compared to last year.
• Operating loss amounted to SEK -125.7 (-152.6) million. Depreciation of the surplus value created in conjunction with the Affectiva and iMotions acquisitions amounts to SEK -57.6 (-57.0) million.
• Profit/loss after financial items amounted to SEK -124.9 (-152.6) million.
• Earnings after tax per share are -2.99 (-4.26), and after full dilution -2.99 (-4.26).

Comments from the CEO

The demand for DMS and Interior Sensing is booming. Since the beginning of the year, we have been completely immersed in customer requests for our DMS and Interior Sensing products. We are just starting to see the results of these intense sales activities. An example is the orders we received after the quarter ended from Audi, Porsche, Volvo, GM and one more OEM through a global Tier-1. This is just one of the deals we have been working on, and we expect several more to be made public as we are entering this year’s nomination season.

Our short and long-term revenue growth will follow our customers’ ramp-up of car production, and we are focusing our efforts on securing future nominations from key customers. Additionally in Behavioral Research, adoption of advanced quantitative methods will further support the structural growth of our research products.

Automotive
Automotive grew with 66% in Q2. The non- license revenue is decreasing while the revenue from series production licenses is increasing. Especially Korea and North America had a strong growth in licenses. We are approaching the final stage of several large production programs, which means we will go more and more from project-based revenues to license revenues. This is of course positive for our overall revenue growth. However, it also means we might see a temporary dip in engineering revenue, right before the production licenses fully ramp up. We are currently delivering on multiple projects, and the delays that were so frequent during Covid are a thing of the past. The operating expenses rose slightly in Q2, mostly because of sales-related cost increases but also due to salary increases for the engineering team. We are confident that these sales-related investments are well timed and will produce a positive outcome in the near term.

Behavioral Research
The Behavioral Research business area grew with no less than 16%, picking up speed from last quarter and falling just shy of our record quarter in Q4 last year. We are increasing our market share in the research sector thanks to our comprehensive product offering, and that our strategy of long-term partnerships is proving to be successful. The business units are improving topline as well as keeping tight cost control, making the achievement even more impressive.

Final Words
With a continuous solid profitable growth in Behavioral Research, our outstanding order stock, the current car industry program ramp- up and our 192 MSEK in cash and credit facilities gives us confidence to pursue our market leadership for the future, reach profitability next year and maintain a sound financial situation. The most important KPI:s for our Automotive business are the number of car contracts secured and the speed at which these models enter production. This quarter, we successfully increased the number of car models entered into production from approximately 50 to 60, boosted our license revenue, and continued to outpace our competitors in winning new business.

As Smart Eye’s leading position solidifies, we should expect more consolidation within the fragmented market for Tier 2 Interior Sensing. After the dust settles, the companies left standing will be in pole position to invest in two exciting new frontiers; complete cabin monitoring and the measurement of health, wellbeing and fitness to drive. Expect Smart Eye to continue to lead the charge towards new life-saving innovations.

Martin Krantz
CEO Smart Eye

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