Smart Eye Interim Report Q2 January–June 2025

April – June 2025

• Net sales amounted to SEK 92.1 (89.6) million, an increase of 2.8%. Adjusted for significant negative currency effects from the USD and EUR, underlying growth was a solid 12% in the quarter.
• Gross profit amounted to SEK 82.8 (81.0) million, equivalent to the corresponding period of the previous year. Gross margin amounted to 90% (90%).
• EBITDA improved to SEK 1.0 (-23.2) million. Exchange rates affected EBITDA with SEK -6.3 million. EBITDA excluding FX effect, improved to SEK 7.3 million.
• Operating result amounted to SEK -40.6 (-64.2) million, whereas the amortization of the surplus value, regarding acquisition of Affectiva and iMotions, amounted to SEK -26.5 (-29.2) million.
• Earnings after tax per share were -1.00 (-1.46), and after full dilution -1.00 (-1.46).
• Cash and cash equivalents totals SEK 11.8 million at the end of June. The available cash ending balance, including unutilized credit facilities, amounted to SEK 93.8 million.

January – June 2025

• Net sales amounted to SEK 182.2 (175.7) million, an increase of 3.7% compared to the corresponding period the previous year. Growth excluding exchange rates effects in the six- month period amounted to 8.2%.
• Gross profit amounted to SEK 162.7 (158.3) million, an improvement of SEK 4.4 million compared to last year. Gross margin amounted to 89% (90%).
• EBITDA improved to SEK -16.9 (-46.2) million. Excluding FX effects and one-time items in the first quarter, underlying EBITDA has improved significantly during this period.
• Operating results amounted to SEK -101.9 (-125.7) million, whereas the amortization of the surplus value, regarding acquisition of Affectiva and iMotions, amounted to SEK -55.4 (-57.6) million.
• Result after financial items amounted to SEK -109.3 (-124.9) million.
• Earnings after tax per share were -2.47 (-2.99), and after full dilution -2.47 (-2.99).

Comments from the CEO

Quarter two came in almost precisely according to our planned base case, with organic growth coming in at a solid 12%. One thing deviated slightly, namely the strengthening of the Swedish krona which affected us more than anticipated. It decreased both topline and Opex, with net effect being positive EBITDA for the first time in a long while, +1 MSEK. Without FX effects our comparable EBITDA came in at +7 MSEK.

Our target for cost savings was achieved with some margin, and we anticipate continued low operational expenses in the third quarter. Together with steady acceleration of the license revenues, quarter three is expected to become even stronger, as per our previous communication.

Automotive
The main takeaway in Q2 was the acceleration of the OEM production programs, as was observed by the surge in license revenue. This is the well-earned reward for many years of hard work, first to secure the contracts and then to deliver the production-ready software. It’s incredibly satisfying to see the number of manufactured cars increase from all geographic markets. Japan, Korea, China, Europe and US, all of them are finally rolling out, with license growth substantially above 100%. A total of 90 models has entered production with 12 OEMs, and we expect that number to continue to increase rapidly. As the non-license revenue decreased, it resulted in 42% organic growth for the whole business unit.

We are in the race for several large ongoing procurements, and as usual we are standing strong thanks to the industry’s by far most complete product portfolio combined with our solid reputation as a high quality, trustworthy and dependable supplier. The fact that we have successfully turned around the company financially is positive. It helps us by decreasing the risk and comforting our present and future customers, the world’s largest OEMs. There is continued consolidation going on in the interior sensing industry and two competitors have merged with larger companies during the period, driven by the need for economies of scale, only available for a select few market players including Smart Eye.

Behavioral Research
We came in slightly below target, mainly because of FX and continued headwinds in the US. Other markets have been delivering as expected. We landed in the end with organic growth of -1% for the business area. However, looking at the whole market, we performed better than industry peers, meaning that we likely are increasing our market share. We have seen some positive signs during the summer, so we expect a strong second half of the year, particularly a solid fourth quarter supported by seasonal effects. The business area is both profitable and cash flow positive at current levels.

Final Words
During the spring we recognized that our cost-saving initiatives, combined with license volumes ramp-up, might be enough for positive EBITDA as early as Q2 – and by a narrow margin we succeeded. It opens the door for alternative and more attractive financing options, since it makes us eligible for regular bank credit, should it be needed or wanted. We expect the coming quarters to be continuously stronger as our customers roll out their car programs. We ended the quarter with 94 MSEK in cash and credit facilities, which we consider sufficient given the strong outlook in the coming quarters. No further cost-saving measures are planned at this stage.

Martin Krantz
CEO Smart Eye

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