Interim Report Q1 January – March 2026

Financial Highlights

• Organic growth amounted to 51%.
• Net sales increased by 40%.
• Organic growth in Automotive Solutions 122%.
• The gross margin improved as a result of high growth in royalty income.
• EBITDA improved by SEK 44.8 million.
• The acquisition of Sightic impacted EBITDA by SEK -3.1 million.
• Free cash flow improved by SEK 15.6 million. The acquisition of Sightic impacted free cash flow by SEK -5.6 million.
• Available cash and cash equivalents at the end of the period, including credit facilities, amounted to SEK 131.7 million.
• Earnings after tax per share were SEK -0.59 (-1.47) and after full dilution SEK -0.59 (-1.47).
• Intangible assets increased by SEK 95.5 million as a result of the acquisition of Sightic Analytics.
• Amortization of surplus values for Affectiva, iMotions, and Sightic amounted to SEK -25.6 million.

Business Highlights during the period

• The Company secured several new design wins within Driver Monitoring Systems, further strengthening the order book across both passenger car and commercial vehicle segments.
• On 24 February 2026, Smart Eye completed the acquisition of all shares in Sightic Analytics for a purchase price of SEK 60.5 million, strengthening the Group’s capabilities within behavior-based impairment detection, including alcohol and drug impairment.
• Smart Eye announced the first two design wins including alcohol impairment detections with Japanese OEMs.
• During the period, the company’s offering in alcohol impairment detection was broadened and strengthened, enhancing opportunities for commercial application and future revenue.

Business Highlights after the period

• After the period, a multi-year agreement was signed within a European Police Authority for drug impairment detection. The estimated order value amounts to SEK 40 million.

Comments From the CEO

The positive development continued in the first quarter of 2026. Despite continued macroeconomic uncertainty and currency headwinds, Smart Eye delivered another strong quarter with organic growth of 51%, driven primarily by our Automotive business, growing at 122%. Automotive royalties grew at a record pace of over 200%, developing very strongly as more vehicle programs entered volume production, generating improved profitability.

Behavioral Research had a softer quarter, mainly impacted by FX headwinds and a cautious spending environment in parts of the research market. Nevertheless, the business area remained profitable and cash flow positive, while continuing to strengthen its market position in key segments.

Our focus on disciplined cost control, operational efficiency, and scaling high-margin software revenues continues to yield results. The long-term fundamentals of both our business areas remain solid, and we continue to execute according to plan.

Automotive

Automotive continued its strong momentum during the quarter, reaching record growth levels of 122%. The primary driver was software licenses, which increased significantly as additional vehicle models ramped up production volumes across Europe. The effects of the upcoming EU General Safety Regulation are now becoming increasingly visible in the market, and we expect this trend to accelerate further as we approach the July 2026 implementation deadline.

More vehicle programs are now moving from launch phase into serial production, resulting in a growing base of recurring software revenues. Our unique position, with industry-leading technology, a broad customer base, and the market’s largest portfolio of design wins, continues to strengthen.

The transition toward more advanced interior sensing systems also continued during the quarter. OEMs are increasingly looking beyond basic compliance solutions and toward richer safety and user experience functionality. Smart Eye is exceptionally well positioned in this shift through our investments in cabin monitoring, driver state analysis, and next-generation sensing technologies.

At the same time, we continue to invest strategically in areas where we see long-term differentiation. Features such as intoxication detection, advanced driver state analysis, and iris authentication further strengthen our technological leadership and expand the value we can deliver to automotive customers globally.

Behavioral Research

Behavioral Research experienced a softer start to the year, primarily due to FX headwinds and continued cautious investment behavior in certain research markets. Despite this, the business area remains fundamentally strong, profitable, and cash flow positive.

Our iMotions platform continued to perform well and once again outgrew the broader market, reinforcing its position as the leading multimodal research software platform globally. We continue to see strong customer interest in integrated biometric and behavioral research solutions, particularly among enterprise and academic customers looking for richer insights and more scalable workflows.

While some hardware-related sales remain under pressure during the quarter, our assessment is that we continue to gain market share overall. The combination of world-leading software, strong brands, and unique AI capabilities positions us well for long-term profitable growth once market conditions improve.

Our recently acquired intoxication technology from Sightic had a breakthrough just after the quarter ended. A major European police authority placed the first order of 40MSEK, and we are quite confident there is more business to be done with customers inside Industry and Law Enforcement. The benefits of this deal will be felt for both Automotive and Behavioral Research.

Final Words

The first quarter confirms that Smart Eye is entering a new phase. Our Automotive business is scaling rapidly, with software license revenues now becoming a larger and increasingly predictable part of the business mix. This is an important structural shift for the company and one that strengthens both profitability and cash flow potential over time.

At the same time, we remain disciplined. We continue to maintain tight cost control while investing selectively in strategic technologies and customer deliveries. Our organization is highly focused, motivated, and aligned around our long-term mission: making technology more human while helping save lives.

Although geopolitical uncertainty and market volatility remain elevated, the underlying drivers behind our business are stronger than ever:

• Mandatory safety regulation in Europe
• Increasing adoption of software-defined vehicles
• Growing demand for richer interior sensing functionality
• Expanding recurring software revenues
• Clear technological leadership in Human Insight AI

With a strong order book, increasing production volumes, and growing software revenues, we look forward to the remainder of 2026 with confidence, enthusiasm, and positive anticipation. The upcoming quarters will be even better.

Martin Krantz
Founder and CEO, Smart Eye

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

The company will comment on its quarterly results during the earnings call hosted by Redeye, taking place live online at 09:30 on May 18, where the CEO and CFO will present the results and answer questions.