Sivers Semiconductors AB

Welcome to Sivers Semiconductors Q2 report for 2025. During the questions and answers session, participants are able to ask questions by writing in the chat in the webcast. Now I will hand the conference over to CEO Vikram Vathulya and CFO Haina Thorsgaard. Please go ahead.

Thank you. This is Vikram Vathulya and welcome to everybody for our third quarter 2025 webcast. I'm super happy to have Heine Torsgaard with us as well. He's our new CFO that started in September. So let's get right into the presentation. So the agenda will be an executive summary from myself. Heine will go over the financial results, and I'll come back to talk about markets, customers, business update, and key takeaways. Then we'll have a Q&A session. In terms of our financials, this has been another very strong quarter, Q3. We came in with 72.5 million SIEC as revenues. That's a 24% year-on-year increase for Q3, and that's 34% year-to-date. We also need to note that the dollar has continued to weaken against European currencies. And we do not hedge for currency. And if you look at a constant FX rate, this delivers a 40% year to date growth in our revenues. And that is a remarkable achievement for the company. We continue to focus on profitability and year to date, our adjusted EBITDA has improved by 30%. We continue to manage our expenses. feed the important strategic activities inside the company but we keep a close handle on expenses as i've mentioned before product revenues are a key metric for the company as we make the transformation to become a predominantly product company in five years from now and we had product revenues of 18.9 million cec That's a 15% year-on-year increase for the quarter. And year-to-date, that's a 19% increase in product revenues. So we continue to march very well on that journey. Some key highlights. We have an exciting partnership with POET Technologies for pluggables and external light sources for co-packaged optics in AI data centers. When I come back to the markets and business section, I'll give a lot more detail on this, but this holds tremendous promise. A lot of opportunities, as I mentioned before, ever since our trade shows last year where we presented our latest technology updates in the wireless business. and the fact that we will be providing standard product configuration samples in the first half of next year, a lot of opportunities have been growing in the pipeline, and we expect to show progress against many of these opportunities in the coming quarters. In addition to that, it is very exciting that we are in the middle of multiple technical engagements with SATCOM terminal vendors on the biggest European space infrastructure modernization project. And that's called Iris Square. And again, I'll talk more about it. As we continue to transform the company, we are leveraging the best of the talent we have inside, but also bringing in essential leadership. And we have strengthened our leadership with Heine's appointment as our CFO. And we've also brought on a VP of global operations and quality as we start releasing more standard products in the market that go into production and beyond. As you can see, we did a successful capital raise in September. which was led by an existing institutional investor. But we also added Danish, Polish and Norwegian institutions. And I want to make sure our investors understand that whenever we go to raise capital, we are very, very focused on bringing in high quality, high tech, long term investors that come into the company and are looking for that future to be delivered over the several upcoming years. We also always look at accelerating our R&D, accelerating our go-to-market plans and resourcing with such capital raises. But we continuously look to streamline our capital structure as well. And one of the things we were able to do this time was a partial debt pay down, which also helped us reduce the number of outstanding warrants with the debt provided by 50%. So we continue to shape the capital structure of the company and optimize it to put us in the best place as we deliver to our plans and growth in the future years. With that being said, I want to turn this over to Heine and I'll come back for the markets and business update. So Heine, please go ahead.

Thank you Vikram and good morning everyone. Today I'll walk you through our financial performance for the third quarter, highlighting our revenue growth, business unit performance, product and project execution and the underlying trends that are shaping our results. We continue to execute on our strategy and I'm pleased to share the progress we've made this quarter. Before we dive into the numbers, I want to emphasize that our results this quarter reflect the resilience of our business model and our ability to adapt to a dynamic market environment. We faced FX headwinds and yet we've continued to deliver strong growth and operational improvements. Our focus remains on driving sustainable, profitable growth while investing in innovation and operational excellence. Let's start with our headline numbers. Q3 2025 was another record quarter for Sievers Siemens Conductors. We delivered 72.5 million second sales for the quarter, representing a 24% increase year over year. In constant currency, our growth was even stronger at 34% for the quarter and 40% for the first three quarters. This is the highest Q3 revenue in the company's history achieved despite FX headwinds. Adjusted EBITDA for Q3 was a negative 10.5 million SEC and year-to-date adjusted EBITDA improved by 9.5 million or 30% compared to last year reaching negative 21.6 million SEC. These results show that we are not only growing our top line, but also improving our profitability and maintaining new revenue baselines. Our ability to deliver such growth demonstrates the resilience of our business model and the effectiveness of our strategic initiatives. Looking at the trend lines, you'll see that our revenue growth has been constant over the past several quarters, with Q3 marking a continuation of this positive trajectory. We are setting new benchmarks for the company and this momentum positions as well for the remainder of the year and beyond. Both our business units contributed to this strong performance. Wireless net sales grew by 30% year-over-year in Q3, reaching 53.1 million SEG. Photonics net sales increased by 10% year-over-year, reaching 19.4 million SEG. This balanced growth highlights the strengths of our dual business strategy. In wireless, we continue to see robust demand, particularly from SATCOM customers, and our solutions are gaining traction in both established and emerging markets. In photonics, our focus on project qualification and manufacturing readiness For next generation, AI data centers is paying off. And we're seeing increased requests for our technology, especially from Asia. And our partnership with POET Technologies is opening new opportunities in both pluggable and co-packaged objects. The consistent performance across both units underpins our confidence in the company's long-term growth trajectory. We are well positioned to benefit from industry trends such as SATCOM growth and the expansion of high-speed connectivity and the increasing adoption of advanced photonic solutions. Our transformation towards a product business is progressing well. Product sales grew by 15% year-over-year in Q3, reaching 18.9 million SEG. Year-to-date product sales are up 19%. We are maintaining product sales levels that support our strategic transformation towards higher value differentiated offerings. The steady increase in product sales is a testament to our innovation and our ability to bring solutions to the market that meet evolving customer needs. Additionally, our investments in R&D and our commitment to operational efficiency are enabling us to deliver products that are both technologically advanced and commercially attractive. This positions us well to capture future growth opportunities as the market continues to evolve. Finally, I want to highlight our continued strength and discipline in project execution. Despite FX headwinds and the summer holiday periods, we delivered strong project execution in Q3 resulting in high NRE revenue. NRE revenue was up 27% year-over-year for the quarter and 41% year-to-date. This disciplined project execution is a cornerstone of our financial performance and a key driver of our growth. Our robust project pipeline and execution capabilities positions us well for sustained high revenue levels. We continue to invest in new product generations, ensuring we have the technology and capacity to meet growing market demand. Looking ahead, we remain committed to delivering on our project commitments and expanding our customer base. Our ability to execute complex projects is a key differentiator for SIVA semiconductors. In summary, Q3 2025 was a quarter of strong growth, improved profitability, and continued operational excellence. We delivered results in line with what we communicated at our Capital Markets Day earlier this year and set new records for revenue, all while investing in the technology, people, and processes that will drive our future growth. We are excited about the opportunities ahead and remain committed to delivering value for all stakeholders. Back to you, Vikram.