SEALSQ Corp

Greetings, ladies and gentlemen, and welcome to the CLSQ Full Year 2024 Financial Results Earnings Conference Call. As a reminder, this conference call contains forward-looking statements. Such statements involve certain known and unknown risks, uncertainties, and other factors which can cause the actual results, financial condition, performance, or achievements of CLSQ to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. CLSQ is providing this communication as of this date and does not undertake to update any forward-looking statements contained herein as a result of new information, future events, or otherwise. These risks are also discussed in our filings made with the Securities and Exchange Commission. Please be advised that our full year 2024 earnings release was issued on Thursday, March 20th, 2025. Also, our Form 10-K for the full year ended December 31st, 2024, which was filed with the SEC on Thursday, March 20th, 2025, to be found by visiting the investor section of the CLSQ website at investors.clsq.com. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Carles Morera, Founder and Chief Executive Officer of CLSQ. Mr. Morera, you may begin.

Thank you very much and good afternoon to all of you joining us from both Europe and good morning for everybody joining from the United States. So we'll start this call by discussing the business highlights of the full year 2024. Then John O'Hara, our CFO, will provide an overview of our financial performance. Then I will close the prepared remarks by discussing our growth initiatives and also the outlook for 2025 and going forward. So we had a financial year 2024 with revenue of 11 million. It's a bit disappointed about this reduction of revenue from the 30 million we had in 2023, but actually reflects the company transition from traditional semiconductors, the legacy, semiconductors that we were selling for many years to now the next generation quantum-resistant chips, which is the next generation that we started to develop two years ago, and we are reaching maturity now. So, we are still early stage on the post-quantum market potential alongside the impact of market normalization following the semiconductor supply chain disruption that was caused by the COVID-19 pandemic. Also, the excessive inventory accumulation by customers in 2023, we saw the lower 2024 orders volume as clients utilize existing stock before making new purchases commitment. Basically, they are waiting to finalize the use of those stocks before we are able to deploy the next generation chip with them. That said, as we are preparing to take advantage on numerous growth opportunity We scale post-quantum security technology by investing $5 million during 2024 with another $7.2 million plans for 2025. So 2024, as previously discussed, was a transformational year for CLSQ. As we scale post-quantum security technology, started the process to execute strategic acquisitions raised over $80 million in funding, and expanded into high-growth markets. With a strong cash position, no bank debt or convertible loans, and a celebrating demand for a post-quantum and quantum cybersecurity solution, we are very well positioned to drive sustainable long-term growth and technology leadership in the quantum era. Thus, we enter in 2025 on a very strong financial position, and we are well positioned to execute a multifaceted organic growth investment and acquisition strategy. Demand for our post-quantum and quantum cybersecurity solution should drive sustainable long-term growth and technology leadership in the quantum era. We anticipate also a significant revenue increase in 2025 compared to 2024 due to the steps we took to bolster our position in the market we serve on a global scale. I will discuss all these initiatives shortly, but I would like to emphasize how our combined bookings are now 6.8 million, reflecting strong year-to-year growth, while our projected contract pipelines over the next few years stands already at 93 million. The post-quantum cybersecurity market, driven by the need for securing systems against quantum computer attacks, than they are becoming available within the next three to five years is projected to grow significantly with an estimated market size of 302.5 million in 2024, which is then expected to reach 1.8 billion by 2025 at a CAGR of 44.2%. So, due to the highly entry-level barriers, we believe very few players will have the required expertise, technology, and IP to build quantum resistance security chips in the short term, which will position CLSQ as a leading player in this space, especially on a very high growth market, which is the TPM segment. We believe that this factor positions CLSQ to strengthen its market leadership and capitalize on emerging opportunities in post-quantum security. So in terms of being a, financial year 2025 outlook. Although it's very early in the year to provide a definitive outlook number due to the major projects under discussion, CLSQ anticipate a significant revenue increase in 2025 compared to 2024. This growth is expected to driven by the integration of CHIP revenue front of new sources of revenue and expansion in CHIP personalization services as announced during the year. and the consolidated revenue for our planned investment. We expect the full impact of our growth to arrive in 2020 with the commercial launch of our new product scheduled for Q4 2025. We anticipate that the growth in 2025 and beyond will be fueled by the increased demand of post-quantum trusted platform models, what we call TPMs, The successful securing new large-scale contracts with government and enterprise, adopting both quantum cryptographic solution, and this includes also some of the new defense contracts, and they are being negotiated now in Europe. The growth in CO2 cybersecurity certificate and managed PKI services, which is a recurrent revenue on the software side, and the consolidated revenue for strategic acquisitions, some of them being already announced since the beginning of the year. So the post-quantum cryptography market driven by the need for securing system against quantum computer attacks is projected to grow significantly, as I mentioned before, by 1.8 billion. So we believe that this factor positions CLSU to strengthen its market leadership and capitalize on emerging opportunity in post-quantum security. I will now turn the call over to John O'Hara, our CFO, who will provide details on the 2024 financial result. So John, please go ahead.

Thanks, Carlos. As Carlos just mentioned, I will now go into a bit more detail on our FY24 financial results. Firstly, to highlight, we finished the year with an unprecedented balance sheet that was far stronger and debt-free relative to previous years. Our cash reserves peaked at over $90 million on January 6, 2025, which was up from the approximately $85 million at the end of 2024, while being a solid foundation for investments, acquisitions, and scaling production. We had a clean balance sheet at December 31, 2024, showing no bank debt or convertible loans, along with no overhanging warrants following the elimination of the convertible debt and associated warrants in late 2024 and the first days of 2025. This significantly enhanced our ability to fund growth without dilution risks. We raised over 80 million capital during 2024, leading to strengthened capital resources to support our expansion into post-quantum cybersecurity markets. Carlos has already mentioned FY24 revenue was approximately $11 million, down from 30 million in 2023. And this reflects the company transition from traditional semiconductors to next-generation quantum-resistant chips and the still early stage of the post-quantum market potential alongside the impact of market normalisation following the semiconductor supply chain disruptions caused by the COVID-19 pandemic. The access inventory accumulation by customers in 2023 resulted in lower 2024 order volumes as clients utilised existing stock before making new purchasing commitments. As a final highlight point, I'd like to highlight the research and development and strategic investments in post-quantum security. We increased our research and development expenditure by 1 million year-on-year, so a 26% increase against 2023, despite the reducing revenue year-on-year. This demonstrates the strategic importance of the development of our next-generation cutting-edge quantum-resistant technologies. Our investments in research and development included the high costs associated with certification, which are treated as R&D expenses, emphasising CLSQ's commitment to staying at the forefront of post-quantum innovation. The $7.2 million we are planning for 2025 demonstrates our commitment to staying at the forefront of this post-quantum innovation. All of this resulted in a net loss of 21 million for the year, which is primarily due to the migration from traditional semiconductor products to post-comp and semiconductor technologies and the associated reduction in demand for our products during the year. I'll now send it back to Carlos who will provide additional details on our outlook and growth strategy. Carlos, please go ahead.