Nordic Semiconductor Ord

Welcome to Nordic Semiconductors Q4 2025 presentation. For the first part of this call, all participants are in a listen-only mode. Afterwards, there will be a question and answer session. To ask a question, please press 5 star on your telephone keypad. This call is being recorded. I will now hand it over to Steele. Please begin.

Thank you Kjell and good morning everyone. Please note that this presentation is being recorded and will be accessible on the Nordic website in the investor relations section. Additional for those of you who missed the release, you can find the earnings press release, quarterly report and presentation material also on our IR website. With me today, we have the CEO, Vegard Volland, and our CFO, Paul Elstad. They will share details about our recent financial performance and updates on key business developments. Following the presentation, we will move on to Q&A segments. During this time, live questions can be submitted through the Q&A dial-in features. For instruction on how to dial in, please refer to earnings call invitation available under stock exchange notice on our IR website. And please keep in mind that dial-in is required only if you like to ask questions. As a reminder, this presentation includes forward-looking statements that come with inherent risk and uncertainties. Actual outcome may differ materially from those statements expressed and implied. We highly recommend reviewing our detailed Q&4 quarterly report and the 2024 annual report for a deeper understanding of the risk and uncertainties that could impact our business operations. With that, I will now hand the microphone over to our CEO, Vegard Wolland.

Thank you, Stil, and good morning, everyone. Today, I'm going to quickly go through the main points of the quarter, then leaving the word for Paul to take you through the financials before I'm returning with my review of 2025 and how we see ourselves progressing towards our long-term goals and ambitions. So let's start with the headline figures of the fourth quarter. Revenue amounted to $170 million in the fourth quarter, an increase of 13% year on year. As expected, revenue declined somewhat from our third to the fourth quarter, and the revenue ended in a higher end of our guiding range. The year-over-year growth was on par with what we saw in the third quarter and reflects that our strong competitive position enabled us to benefit from the market improvement throughout 2025. We see growth both in short-range and in long-range and among both large key customers and in the broad market. In terms of end-user markets, we saw continued growth in the industrial and healthcare segment, with more modest year-on-year growth in the consumer segment. This is roughly the same picture as we saw in the third quarter. Gross margin was 55% in the quarter, but as Paul will get back to with more details, this included some reversal of an inventory write-down we took last year. If we exclude that, we still see healthy gross margin levels of 52%, a clear improvement from Q4 2024 and on par with the previous quarter. The product and customer mix is improving and cloud services revenues after the acquisition of Memfault also contributes positively. Reported EBITDA was $15 million and adjusted EBITDA $13 million. This excludes the positive effect of the reversed write-down, partly offset by the quarterly non-cash cost effect related to the Memfault acquisition. The top 10 customer share of our revenue has stabilized at 57%, meaning that revenue has grown equally strong among our key customers and in the broad market over the past year. Revenue in 2025 exceeds the 2022 peak level for our top 10 customers, showing our strong relationships and developments with these customers. We will see many more exciting products coming out from these collaborations in the quarters and years to come. As we have said repeatedly over the past year, it has been a key priority for us to regain momentum also in the broad market. And the revenue in this customer segment is still around one third below peak levels, though we see gradually improving revenue also here. We remain the clear design win leader when we look at the Bluetooth low energy and product certifications, with 32% of the design certifications in both Q4 and for the full year 2025. This is about three, four times as many designs as our closest competitor. And please note that this is counting of certifications that does not differ between high and lower volume products. So you cannot translate this directly to revenue. The NRF54 is now beginning to have a meaningful impact and accounted for about 15% of certifications in Q4. This will continue to increase going forward. Turning to our products, I would like to highlight some recent product news. The first is the NRF54LV10A, which we have specifically designed for next-generation healthcare wearables, such as biosensors and glucose monitors. These products are typically powered by silver oxide coin cell batteries using lower voltages, and ultra-low power is crucial. Compared to the previous 52 series generation, we achieve between a 30 to 50% lower power consumption while increasing the performance substantially. And this new product positions us perfectly for these high volume markets. At the CES in Las Vegas in January, we also introduced another great addition to the NRF 54 series. Many applications require local data processing to save bandwidth cost and energy consumption. Other requirements for local processing are applications where you need low latency and on-site response in milliseconds without the round trip to the cloud or other devices. Our new NRF54 LM20B chip goes a long way in meeting those demands. This is the first SoC integrating our Axon Neural Processing Unit, a very fast and energy efficient hardware AI accelerator. The Axon NPU is built on technology we acquired with the acquisition of Atlaso a couple of years back and it offers seven times faster performance and eight times better energy efficiency compared to today's competing technologies. Following the acquisition of Newton AI last year, we offer a complete ultra-low power edge AI solution, which in addition to the F54 LM20B chip includes pre-optimized Newton models, which are 10 times smaller, faster, and more efficient than competing solutions, and the Nordic Edge AI Lab, which simplifies development of custom Newton models based on customer data. The Newton models and the Nordic Edge AI Lab are ideal for all Nordic SOCs, also including our long-range modules and products. Altogether, this offering dramatically lowered the barrier to bringing AI to battery-powered IoT devices at the edge. We are uniquely positioned to serve the next wave of AI-powered IoT growth across wearables, healthcare devices and smart sensors. Within the long-range area, we have seen positive development last year. And besides the stronger commercial development in the cellular operation, one of the most exciting things has been the qualification of our technology on satellite networks, positioning us as a leading technology and solutions provider within satellite-enabled IoT connectivity. In the fourth quarter, our NRF9151 module was certified for Skylo's satellite network and we have now established connectivity across multiple leading satellite operators such as Iridium, Myriota, Satellite IoT and OQ technology in addition to Skylo. Many customers just want a single solution that just works everywhere, also beyond cellular network coverage. And with seamless coverage across both satellite and cellular networks, we can offer true global IoT connectivity on land, on sea, all around the globe. We're looking forward to the next chapter in our long-range business unit with the launch of the NRF92 approaching this year. With that, I'll hand over to Paul to take you through the financials before I will return with a wrap-up of our developments through 2025 and into 2026.