Nordic Semicondctor U/Adr

Welcome to Nordic Semiconductors Q3 2026 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 the call over to Stale Ytterdal. Please begin.

Thank you, Kjeld, and good morning, everyone. Please note that this presentation is being recorded and will be accessible afterwards on our IR website, where you also find earnings press release, quarterly report, and presentation materials. With me today we have our CEO Vegard Wollan and our CFO Paul Elstad. They will share details about our third quarter financial performance and updates on key business developments. Following the presentation we will move on to the Q&A as Kjeld said. 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 come with inherent risks and uncertainties. Actual outcome may differ materially from statements expressed or implied. We highly recommend reviewing our detailed Q3 quarterly report and the 2025 annual report for a deeper understanding of the risks and uncertainties that could impact our business operations. With that, I will hand over the microphone to our CEO, Vegard Wollan.

Thank you, Stil, and good morning. As you will see, Q3 was another quarter of solid profitable growth. Continued market growth and solid customer demand offer good growth opportunities for us. At the same time, we continue to strengthen our competitive position and expand our addressable markets with new products. and we increased the lifecycle value of our products both for our customers and for Nordic. Financially, we achieved record revenue both on a quarterly basis and on a rolling 12-months basis. Revenue for the quarter came in at $235 million. This is up 32% from the same quarter last year and 8% about the second quarter. This brings revenue for the last 12 months to $816 million, up 26% year-on-year. And as in the first and second quarter, we saw year-on-year growth both for the short-range and long-range businesses, and for large customers and the broad market, and across both the consumer segment and the industrial and healthcare segments. We maintained a solid gross margin at 52.8% in the third quarter, up from 51.9% in the third quarter last year and slightly below the 53.1% in the previous quarter. Overall, this generated an EBITDA of $40 million when adjusted for non-cash cost effects related to the Memfault acquisition. This is up from $18 million in the third quarter last year and from $36 million in the second quarter. Summing up, we saw a continued healthy market and good revenue growth, a solid gross margin and an increase in the adjusted EBITDA margin to 17% from the 10% in the same quarter last year. Things are moving in the right direction. While we continue to see growth among our top 10 customers, the strongest growth has come in the broad market over the past year. Regaining traction in the broad market has been a key priority for us, and the current strong growth reflects higher activity with both existing, returning and new customers. I see this as a strong validation of our position as a clear leader in our target markets. Given the high design activity in the pipeline, we continue to see a positive development both for large key customers and the broad market. Looking at the end customer Bluetooth Low Energy certifications, we have a 30% share of the certifications over the last 12 months and we have about three times the number of certifications compared to our closest competitors. Designs based on the NRF54 series now account for more than 25% of our certifications. We expect this to continue to increase in the coming time. As we have repeated many times, this simple design count does not distinguish between high volume and low volume end products. These figures hence cannot be translated into volume or revenue market shares. As I started out, we are continuing to strengthen our competitive position and expand our addressable market by further broadening our portfolio. Our most recent announcement in short range is the NRF54LC10, Nordic's smallest multiprotocol system on a chip. It's especially well suited for tags and trackers as well as compact smart home sensors. End products like these are often low complexity but hard to build. They are made in high volumes and every millimeter and every cent counts. That has traditionally meant choosing between size, cost and capability. The E54 LC10 eliminates these compromises. It is small and cost-effective and still delivers Nordic high-performance wireless capabilities and the advanced security these products need. Like the rest of the 54 series, this new short-range device is part of our complete solution from chip to cloud. Even the smallest tag or sensor powered by the 54LC10 gets access to the same software, Easy-to-use tools and cloud lifecycle services, enabling customers to reach the market faster and to keep their products secure and up-to-date, in line with the EU Cyber Resilience Act. Similarly, we are expanding the addressable long-range market. The NRF93M1 smart modem is generally available now and brings Nordic's long-range offering into a more data-intensive applications using LTE Cat1BIS. These are applications typically using video and audio or payment terminals, metering, healthcare monitoring applications, etc. We are working now with lead customers across many of these applications and markets at the moment. The 93 series smart modem is easy to use and just like our short range products, it can easily access NRF Cloud for efficient and compliant lifecycle management of devices in the field. I am often asked which new applications will require Edge AI. And the answer to that is all of them. All applications. Edge AI is becoming an essential part of almost every connected product. Most design in development today among our customers use Edge AI technology in some form to become more intelligent, more responsive, or to use less power, or all of that. and we are delivering right in the middle of this transformation. Our leading integrated Edge AI solutions combine compute performance, memory, low power consumption and compact size. We see strong traction and a growing pipeline for products with the Axon NPU, our AI accelerator, and we see increasing use of Newton, our easy-to-use software for building ultra-small AI models using customers' own data. Together, these two technologies are unique and add great value to our complete solution. We also see rapid adoption and a fast-growing usage of the AI-assisted development tools, which we launched in May this year. This industry-first launch from Nordic was primarily for coding assistance, and now it includes expanded capabilities, including hardware debugging assistance and AI-assisted power optimization. Our strategy of supporting all language models and AI coding agents is a success factor for the Nordic solution. Additionally, the tools are reliable because they are built on Nordic's mature documentation, software protocol stacks, which the AI assistants are utilizing. This means more accurate results, faster development cycles and higher quality products for our end customers. Nordic is well recognized as the developer's best friend and we are committed to be offering best-in-class developer experiences. With these tools, developers get more done in less time with more confidence. Summing up, we are continuing to strengthen our chip-to-cloud solution across hardware, software and cloud lifecycle services, which is unique to Nordic. Over the last two years, we have now launched more than 50 new product variants of our hardware. We have advanced our leading software and AI capabilities, and we have significantly expanded our cloud services. This has been an effort the Nordic team can truly be proud of. And there is much more to come. With that, I will leave the mic to Paul to take you through the financials.