Neonode Inc.

Hi and welcome to the Q2 2023 earnings call for Neonode. We'll start with a company presentation and a walkthrough of the financial results by the company's CEO Urban Forssell and CFO Frederik Nyland. So then we will have a Q&A session in which the company's covering analysts can ask their questions. So with that said, I leave the word over to Neonode and CEO Urban Forssell.

Thank you very much, Jesper. And from me and Fredrik here, welcome to this earnings call. And I don't see the presentation now, so I don't know where we are. Thank you. Today's presenters is me, Urban Forssell. I'm the CEO of Neonode. And with me here today, Fredrik Nylén, our CFO. Before we go into the main part of the presentation, I would like to go through and summarize the following legal disclaimer. This presentation contains and related oral and written statements of Neonode Incorporated, the company and its management may contain forward looking statements. Forward looking statements include information about current expectations, strategy plans, potential financial performance or future events. They may also include statements about market opportunity, sales growth, financial results, use of cash, product development, introduction, regulatory matters and sales efforts. Forward-looking statements are based on assumptions, expectations and information available to the company and its management and involve a number of known and unknown risks, uncertainties and other factors that may cause the company's actual results, level of activity, performance or achievements to be materially different from any expressed or implied by these forward-looking statements. Prospective investors are advised to carefully consider these various risks, uncertainties and other factors. Any forward looking statements included in this presentation are made as of today's date. The company and its management undertake no duty to update or revise forward looking statements. This presentation has been prepared by the company based on its own information as well as information from public sources. Certain of the information contained herein may be derived from information provided by industry sources. The company believes such information is accurate and that the sources from which it has been obtained are reliable. However, the company has not independently verified such information and cannot guarantee the accuracy of such information. Thank you for your patience. And with this, we move on to the presentation. And we have a short agenda today. We're gonna keep this call fairly short. I will start the presentation with a summary of the main points from the second quarter. After this, I hand over to Fredrik, who will go through and summarize the financial results for the second quarter. And after this, I will take you through a short business update before Jesper comes back and leads a Q&A session. So with that, I go into the summary slide. Summary of key points in Q2 for NeoNode. Licensing revenues were stable. We saw clearly that the previous supply chain issues with semiconductors has been resolved, or at least the situation has improved greatly worldwide. This is a factor. And another factor is also that our printer and automotive customers' sales have been strong or at least stable. So that's very good for us. And hence our licensing revenues were stable in the second quarter. Product sales revenues were low and clearly below targets and also below expectations, I can admit. overall weaker customer demand, but also in some cases where we actually have a good relationship with customers and they are developing or have developed new products incorporating our sensor modules. Several of these projects have been pushed out into the future, which of course affects our sales in that quarter. As a consequence of these results and also the sales results in the first quarter of the year, we are adjusting our strategies and tactics to improve sales in the coming quarters. We have started since some time to focus more strongly on certain key geographical markets and segments. We also are intensifying our marketing efforts and we are also fine tuning our product portfolio and our customer offering to be more sharp and to deliver more customer value. We believe this will clearly improve our sales performance in the coming quarter. And even though the product sales in the second quarter was slow, I still believe we can turn this around and that this is a very interesting business for the future. So with these three summarizing points, I would like to hand over to Fredrik.

Thank you, Urban. You can find our 10Q and earnings release on our website, neono.com, under investor section. I will in this presentation just summarize the key points. Revenues for the second quarter of 2023 was 1.2 million. That is a decrease of 5% compared to the same quarter last year. Revenues from license was 1.1 million, an increase of 15% compared to the second quarter last year. As Urban said, this is thanks to the demand for our customers' products within the print and automotive industry is still strong. Our revenue from products was 0.1 million for the second quarter of 2023. It's a decrease of 60% compared to the same quarter last year. And also here, as Urban said, it has to do with low demand from customers and delayed launches. Low volumes give high gross margin for products, and we are at 67% for Q2 2023, 11 percentage points higher than last quarter last year. With increased volumes, the gross margin will decrease. Operating expenses was 2.8 million for the second quarter of 2023. It's a decrease of 2% compared to the same quarter last year. The main reason is lower personnel and related costs. Net cash burn for operating activities was 0.6 million for the second quarter of 2023, an improvement of 79% compared to the same quarter last year. This is mainly due to lower purchases of components, but also the timing of customer payments. As of the 30th of June 2023, we had 21.6 million cash accounts receivable. And with that strong cash position, we'll continue to execute on our strategy. And with that, I will leave the word back to you, Abel.