Smart Eye Interim Report January – June 2022

April - June 2022

• Net sales amounted to SEK 59.8 (16.9) million, an increase of 254% compared to the corresponding period previous year, of which 41% was organic growth.
• EBITDA amounted to SEK -41.6 (-16.1) million. The lower result is mainly due to the addition of the resources from the future oriented Affectiva acquisition, as well as a significant increase of employees in the Group. These investments are made in order to deliver on the already won projects and further development of Driver Monitoring Systems and Interior Sensing.
• Operating loss amounted to SEK -76.3 (-22.0) million. Depreciation of the surplus value created in conjunction with the Affectiva and iMotions acquisitions amounts to SEK 26.6 million.
• Earnings after tax per share is negative.
• Cash and cash equivalents totaled SEK 160.5 million at the end of June.
• In April Smart Eye was selected by an existing Korean customer to deliver its Driver Monitoring System software to three additional car models. The new models are estimated to go into production in the first half of 2023 and the revenue for the order is estimated to SEK 50 million, based on product life cycle volume projections.
• In July the company received one additional Driver Monitoring System Design Win with a North American car manufacturer. It is estimated to go into production in 2024 and the revenue for the order is estimated to SEK 10 million, based on product life cycle volume projections.

January - June 2022

• Net sales amounted to SEK 113.3 (35.1) million, which corresponds to an increase of 223%. The organic growth amounted to 27%
• Operating loss amounted to SEK -147.8 (-40.5) million. Depreciation of the surplus value created in conjunction with the Affectiva and iMotions acquisitions amounts to SEK 52.1 million.
• Profit after financial items amounted to SEK -148.0 (-40.6) million.
• Earnings after tax are negative.

Comments from the CEO

The second quarter was stronger than this year's first quarter. We also grew compared to the same quarter last year. Both our business areas are growing even though still affected by the pandemic and semiconductor shortages, creating delays in the supply chain. It’s tooearly to say that we have passed the effects of the pandemic, but we are on track to do so.

Automotive
A short summary of the status of our automotive business.

• We have 94 design wins with 14 OEMs and growing. This is industry leading, and more is to be expected. We are well established in every geographic region of importance.
• The value of all the design wins is estimated to be SEK 2.4 billion.
• 6 OEMs have started their series production.
• In July we passed the landmark of having Smart Eye software in 1.000.000 cars that are rolling on the roads globally. The first million was the hardest.
• We continue to be active in several large procurements globally and there are basically no new car platforms that aren’t prepared for camera based DMS.
• Interior Sensing is starting to be procured with expected start of production as early as 2025.

The deliveries of the fleet product AIS have started in small scale with production being ramped up gradually.

Behavioral Research
Behavioral Research has grown significantly, 15% since last quarter and 25% proforma since last year. Experimental research is coming back after the pandemic and Smart Eyes products are in high demand. We have excellent remote eye trackers, market leading facial expression and emotion detection and a multimodal software platform from iMotions to bind it all together. We are very optimistic about the future of our research business and that it will continue its path of profitable growth.

Final Words
We are growing according to plan and of course we are impacted by the supply chain effects that followed in the footsteps of the pandemic. We see ramp-up of new car platforms taking a little bit longer than was previously planned, but the cars are still going towards production albeit with a delay of a quarter or two. The global automotive DMS market was upheaved in a positive sense three years ago when the European legislation together with Euro NCAP started to materialize, and today it is natural in every new car platform project to include DMS as a standard feature. We are investing in the future to maintain our present momentum, taking advantage of our market position and leading technology to even further increase our leadership going forward.

Martin Krantz
CEO Smart Eye