Nordic Semiconductor Ord

I would like to welcome everyone to this Nordic Semiconductors Q2 2026 presentation. For the first part of this call, all participants will be in a listen-only mode. Afterwards, there will be a question and answer session. This call is being recorded. I would now like to turn the call over to Head of Investor Relations, Steele. Please begin.

Thank you, Rasmus, and good morning, everyone. Please note that this presentation, as Rasmus said, is being recorded and will be accessible afterwards on our investor relations website, where you also find the earnings press release, quarterly report, and presentation material. With me today we have our CEO Vegard Wollan, CFO Paul Elstad. They will share details about our second quarter 2026 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 feature For instruction on how to dial in, please refer to the earnings call invitation available under stock exchange notice on our IR website. Please keep in mind that the dial-in is required only if you like to ask questions. As a reminder, this presentation includes forward-looking statements that comes with the inherent risk and uncertainties. Actual outcome may differ materially from statements expressed or implied. We highly recommend reviewing our detailed Q2 2026 quarterly report and the 25 annual report for deeper understanding of the risks and uncertainties that could impact our business operations. With that, I will now hand the microphone over to our CEO, Vegard Wollan.

Thank you, Stil, and good morning, everyone. Q2 was another solid quarter for Nordic, both operationally and financially. Our product renewal program continues to progress very well, both strengthening our competitive position and expanding our addressable market. At the same time, we continue to develop our software offering and have launched cutting-edge AI tools that enable developers to speed up and improve the quality of their product development processes. And we continue to grow our cloud services business, which increase the lifetime value of our products. Financially, we achieved record revenue in the second quarter, an increase by 33% to $219 million. This was once again at the high end of our guiding range, and this brings revenue for the last 12 months to $759 million, up 21% from the second quarter last year. As in the first quarter, we saw growth both in short range and long range and among both large customers and the broad market and across the consumer and industrial healthcare segments. Gross margin was 53.1% in the second quarter, up from 50.7% in the second quarter last year and from 52.1% in the first quarter this year. Overall, this generated an EBITDA of $36 million when adjusted for non-cash costs effects related to the Memfault acquisition. Up from $21 million in the second quarter last year and from $24 million in the first quarter. As I just mentioned, we continue to see growth both among our key customers and in the broad market. And this quarter we see particularly strong performance in the broad market. Revenue from the top 10 customers are at an all-time high on a rolling 12 months basis, and we are continuing to grow the design activity with our key customers at a high level. However, we have said for a long time that it has been a clear priority for us to regain traction in the broad market, and we now see the strongest growth in this area. Broad market revenue is up by almost 60% from the 2024 lows on a rolling 12-months basis, although still almost 20% below the peak levels from 2022. We continue to see great upside potential, and we see both new customers and returning customers. Looking at the end-customer Bluetooth Low Energy certifications, we account for 31% of the total number of certifications, although we dropped somewhat below 30% in the second quarter isolated. The signs based on the new NRF54 series accounted for more than 20% of the certifications in Q2 and this will continue to increase over time. It's important to note that this is only counting numbers of certifications and it does not distinguish between high and low volume end products. Because of that, this cannot be translated into volume or revenue market shares. Last time, I spoke about four key drug drivers for Nordic. The first is the continuing wireless connectivity market growth, which creates an attractive business environment for us. The other three are up to us, and with an ever broader portfolio of next-generation hardware, cutting-edge software and developer tools, and a growing cloud services offering, we are strengthening our competitive position expanding our addressable market and increasing the lifecycle value per customer end product. What sets us apart in this competitive environment is our complete chip-to-cloud solution. Nordic is continuing to build a position as a trusted partner to its customers from concept idea through product development and all the way to the end products lifecycle. We have world-class ultra-low power hardware offering wireless connectivity on multiple protocols, the highest performance processing and compute capabilities on the market, and a continuously growing power management portfolio. We have a strong stack of embedded software solutions, including the NRF Connect software development kit, that works across the complete chip-to-cloud solution. and the newly launched AI-assisted development tools that I'll get back to in a minute. And we have our growing cloud services business that enable secure over-the-air monitoring, debugging, firmware updating of devices in the field and compliance with the EU Cyber Resilience Act and other regulations coming. Let's first take a closer look by clicking in on our hardware portfolio. This is a very busy slide, but it necessarily is so, if we have to show the increasing breadth of our portfolio that enables Nordic to capture the broad market and open entirely new opportunities. In two years now, we have executed an aggressive roadmap built on the highly competitive 22 nanometer processes from our key partners, Global Foundries and TSMC. In short range, you see the growing number of SoCs in the new NRF54 series, spanning from entry-level parts such as the different 54L05 variants, through the mainstream 54L10, L15, to the high-end large-memory 54LM20A and B and the 54H20, aimed to meet the complexity and functionality that intelligence at the edge now demands. These adds to the NRF54 and the NRF53 series which have also served us so well over the past decade and still account for the bulk of revenue and even still have new design wins. In the middle you see our long-range portfolio. We introduced the NRF91-51 in late 2024. And at Mobile World Congress in March this year, we announced the upcoming NRF 92 and the 93 series, including the new sport mode and variants. This future-ready cellular IoT portfolio now spans LTE-M, NB-IoT, Satellite NTN and CAT-1 BIS, with options for both integrated applications processors with the OpenMCU series and external application processors in the Smart Modem series of the 9X series. Then we have the Wi-Fi portfolio where we expect to make a step change forward with the upcoming NRF71 series based on 22nm technology and our most modern technology platform. Underpinning all three, spanning short-range, long-range and Wi-Fi, are the growing portfolio of power management solutions and range extenders. They complement the entire portfolio, improving usability and extending the addressable markets. Summing up, this represents the broadest and most modern product portfolio for low-power wireless communication in the market. We are addressing an ever-increasing part of the commercial opportunity and we have only just begun to see the financial impact of the overall product renewal program. On top of our hardware, software and services pillars, there is one thing that ties it all together, which increasingly sets us apart. Developer experience has always been Nordic's strengths built on trusted, established development tools, high-performance connectivity and software stacks, documentation and support. That foundation gives developers a proven starting point when building on Nordic solutions. AI has the potential to assist developers across the entire product lifecycle. From prototyping and board bring-up to debugging, release validation, fleet management, and there are many trying this at the moment. However, generic AI assistants often lack the hardware, SDK, configuration and device-specific contexts required for reliable embedded development, which creates a real pain point for developers and end-product development. Nordic's AI-assisted development capabilities address this by giving AI assistants access to verified Nordic contexts. including NRF Connect SDK documentation, API references, device configurations and even field data from NRF Cloud. This is unique and the ground truth is high quality data from Nordic and the high quality Nordic foundation for developers. And this truly solves pain points experienced by developers. This means we are now helping developers to speed up their development cycles and achieve higher quality results. With that, I'll leave it to Paul to take you through the financials.