ContextVision AB (publ)

Welcome to Comtex Vision and thank you for joining our Q1 2025 webcast. Today with Richard Hallström, our CFO, and myself, Gerald. As usual, we'll give you an update on our business, we'll look into the financials and we'll close with a summary and outlook. Looking into the first quarter. The first clear highlight, which is also a very important milestone in the journey of the company, is the execution of a partnership agreement with the University of Washington in Seattle, United States. This is to support our journey in delivering and building digital organ-specific ultrasound-based biomarkers, a clear step forward in our journey towards data quality. In line with that partnership agreement and to enable clinical research, we have also executed investments into ultrasound equipment, which is going to be shipped in the second quarter to the University of Washington for clinical research. We have also seen ongoing fruitful collaboration with leading OEMs, expanding our footprint into the image processing chain. Financially, revenue came down to 26.3 million SEK, which is an adjusted EBITDA of 2.1 million SEK or 8.1%. Those investments in data quality are adjusted in those EBITDA figures. Overall, the first quarter was clearly impacted by seasonality, currency and the investments I mentioned. Now let's go a little bit more detailed into the operational highlights for the first quarter. As mentioned, we've attended the radiology conference in Vienna. Particularly when we discussed our opportunities in the image processing chain, which is a clear expansion of our service and product portfolio, we saw excellent feedback and leads for new customers and businesses. We can fairly state that we had a record number of customer meetings and also extended contracts with existing accounts. Now, also important to mention that the journey into the image processing chain, which is significantly more complex than previous post-processing image enhancement work, requires a fruitful collaboration, as we call it even, a co-creation of new solutions. So again, a proof point executing our successful expansion in image quality. Now, likewise, I'm extremely happy on the progress in our data quality venture where, as mentioned, the major milestone and probably the most significant step forward in the journey of the company was the signing of the partnership agreement with the University of Washington. That partnership covers mainly our clinical research aspect. In parallel, we have also been able to pull in additional partners into the data quality venture, namely the University of Waterloo, and that's in Canada, and InFace Solutions, a research partner out of Norway. Now those partners will focus on technical expertise and capabilities in building out specifically the data quality solutions for advanced liver imaging. Now, having that said, we should look a little deeper into the financials for the quarter.

Thank you, Gerald. Now, looking at our revenue development, we saw a decline of 24% in revenue compared to our record high quarter one of last year, now reaching 26.3 million SEK. During the quarter, we've seen the Swedish krona strengthen against both the US dollar and the euro, thereby affecting us with a negative 1.8%. We've also seen some seasonality effects in this quarter, which is not uncommon given our customer sales cycles and is outside of our control. This has affected sales from some of our largest customers, along with an unfavorable ultrasound customer mix. Another factor to take into account is the sales push from a customer in Q4, which we mentioned last quarter, and this one affects also this quarter's sales. To summarize the development here of revenue, we see an uncertainty in our market with an increased volatility in the short run, although we are confident in our long-term strategy and that our revenues will gradually increase over time. To be noted also is that our direct exposure to global trading tariffs seems to be very low. Now looking at our profitability. Our EBITDA adjusted for investments in data quality came in at 2.1 million SEK with an adjusted EBITDA margin of 8.1%. The main reason for this is the decrease in sales due to factors mentioned previously. Transactional FX, where we have moved from FX tailwind to FX headwind with the strengthening of the Swedish krona against the US dollar and the euro. This affected our EBITDA with almost 4 million year-on-year. We've increased investments in data quality as we're entering the clinical study start with the onboarding of new partners and investments in equipment. We've also invested more in IT and related equipment. There will be higher costs going forward compared to historically, mainly related and limited to our clinical study and data quality. However, we are optimistic about future revenues and new revenue streams and will keep you regularly updated on the progress in our data quality venture. Now looking at our cash flow and financial position. Our cash flow came in at the negative 3.7 million with cash flow from operating activities reaching negative 6.2 million in the quarter. The reason for the negative cash flow is a mix of lower revenues and the increased investments in Q1, leading to lower profitability. As you can see in the left bar, we had a share buyback of almost 8 million SEIC in 2024, which took place in December. To sum up, our cash position is still strong at 70 million, giving us plenty of headroom for both further investments in image quality and data quality, M&A explorations, and also shareholder value increasing activities, such as share buyback program. In times of change, it's more important than ever to have room for the execution on your long-term strategy for growth.

Thanks Richard for guiding us through the Q1 figures and the reasons behind those numbers, very enlightening. Let me just summarize the first quarter from a highlight perspective and give you a little glimpse into the future. Clear highlight again was the execution of the partnership agreement with the University of Washington in the US supporting our clinical research for development of digital biomarkers, added with partnerships from University of Waterloo in Canada and Inphase Solutions from Norway. In our image quality business, we also saw an increased interest in context vision products, but also in collaborations with larger OEMs around the image processing chain. Short term, we need to stay alert on volatile market conditions that are really difficult to predict and have still a high level of uncertainty, especially regarding currencies, fluctuations and tariffs and trades. Now, midterm, we're more confident and can predict additional partnerships or can see additional partnerships to be added to our data quality venture as we progress with the clinical studies. So, thank you for today and stay tuned.