Tobii AB (publ)

For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by raising their hand or typing them in the form below. Now I will hand the conference over to CEO Anand Srivatsa and Interim CFO Asa Wuron. Please go ahead.

Welcome again, everyone. Joining me today on this Q2 earnings presentation is Osa Viren, our interim CFO. And I'm going to walk you through some of our results and also we'll talk you through some of the detailed financials. Now, in the second quarter, Toby continued to execute on our communicated strategies to stay on a path of sustained profitability and improved cash flow. Specifically, at the end of Q1, we shared our intention to strengthen our cash position and to continue a strategic review to focus our business via cost reductions and portfolio optimization. I am pleased that we can clearly demonstrate progress on all of these fronts. Our free cash flow for Q2 2025 improved by nearly 200 million SEC versus Q2 2024. A significant contributor to the improved cash flow was the new agreement we signed with Dynavox Group, which included a 100 million SEC pre-purchase of components. On the cost reduction front, we have achieved 263 million SEC of cash-related OPEX savings versus our Q2 2024 baseline, significantly exceeding the 200 million SEC target we set last year. These reductions have also played a significant role in the improved cash flow. Finally, as we have reviewed our product portfolio with an emphasis on focus, we have made the decision to take a one-time write-off of intangible assets of around 48 million SEC. Given all of these activities, there are significant one-time effects in this quarter, but in total, we were able to deliver a positive EBIT of 24 million SEC, and we have a positive EBIT result as well on a rolling 12-month basis. Beyond working on our financial health for Toby in the quarter, we've continued to make progress on strengthening our product offerings. We launched our new GlassesX product, a cloud-native wearable eye tracker, Our Glasses product lines are the largest revenue contributor to the company today, and the new Glasses X product enables customers to accelerate their workflows in market research and training assessment. I will speak to this product more at the end of this presentation. After the quarter in July this year, we also achieved a significant milestone, achieving homologation in the European Union for our single camera DMS and OMS offering. Achieving this regulatory approval for our innovative approach into interior sensing is confirmation of the robustness of our solution and will increase our credibility when we compete for new business in the automotive segment. Now, before we discuss our financial results in detail, I want to do a quick overview of our three business segments. Tobii is organized into three business segments with each of them at different stages of maturity and scale. Our expectations are that the product solutions and the integrations business will be profitable in the near term while AutoSense is still in an investment phase. The products and solutions business delivers vertical solutions to thousands of customers every year, ranging from university research labs to enterprises and PC gamers. In Q2 of 25, the products and solutions business represented 33% of Tobii's net revenue, The EBIT result for this business segment was minus 59 million SEC, which is lower largely because of the one-time write-offs we spoke about earlier. If we remove the effect of those one-time write-offs, the EBIT was largely flat year on year with the decrease in revenue balanced by reductions in OPEX. The integration business segment engages customers who integrate Tobii's technologies into their offerings. This segment also includes some revenue from the acquisition that we made of Photonation related to legacy imaging business from that acquisition. In Q2 2025, this business represented 63% of Tobii's net sales, and this business was profitable for the fifth straight quarter. The result for this quarter, as mentioned earlier, does reflect one-time effects related to the Dynavox contract. The AutoSense business segment sells driver monitoring and occupancy monitoring software solution to automotive OEMs and tier ones. In Q2 2025, this business represented 5% of Tobii's overall net sales and delivered significant organic growth on a year-on-year basis. Again, the revenue in this business right now is largely non-recurring engineering revenue prior to our major programs going into production. And so there is some lumpiness in the revenue profile for the business so far. The business delivered a minus 28 million sec EBIT in Q2, which is a 32 million sec improvement versus the quarter last year. Now I'm going to hand it over to Osa to provide more details on the financial development.

So thank you, Anand, and hi, everyone. The overview of the second quarter shows that we are continuing in the right direction. There are some one-offs to consider in this quarter which I will come back to. Reported net sales were up by 41% and the organic growth was even higher at 54%. We reported a positive EBIT of 24 million SEK and as Anand mentioned EBIT positive on a rolling 12-month basis. So let's turn page and look into some details. Net sales were up by 41% in Q2 and the organic growth was 54% since we excluded the acquired revenue stream as previously explained. The non-organic revenue stream amounted to 25 million SEK in Q2 and currency impacted revenue negatively by 4% in the quarter. Gross margin was 83% compared to 79% last year. The improvement is thanks to a mixed shift with more integrations business. A positive EBIT of 24 million SEC, an improvement of 90 million SEC compared to the same quarter last year. And I believe the graph speaks for itself regarding the trend. Our cost level is reduced and the cost savings program has delivered above target. During the quarter and as part of our strategic review, we have written down some intangible assets in total 48 million SEK, mainly in the products and solutions segment. The new agreement with Dynavox also had a positive impact from the pre-purchase and the royalty catch up. So if we then move to the next page, we can see that the cost savings programs that was initiated a year ago has delivered 263 million SEK in savings compared to the target of 200 million SEK. Our cost and efficiency focus continues to be of utmost importance. If we then turn to page nine and take a look at the segments. For products and solutions, the organic net sales continue the negative trend from Q1 with uncertainty in Americas and lower demand in the gaming part. EBIT was negatively impacted by a write down of 33 million SEK. And when excluding that, EBIT is actually flat compared to last year, even with lower sales, which is mainly thanks to our cost reductions. The integration segment was significantly impacted by the Dynavox deal with the pre-purchase where 70 out of the 100 million SEC was recognized and delivered during the quarter and the 45 million catch-up also recognized in the quarter. The remaining part of the pre-purchase, that is 30 million SEC, will be delivered and recognized in the third quarter. The acquired imaging-related revenue amounted to 25 million SEK and this was the final quarter with that revenue stream. Gross margin decreased due to a mixed change with a larger portion of hardware sales in 2025. On the next page, we find more details relating to the Autosense segment, which reports an organic growth of 44% or an increase from 9 to 12 million SEK. The business is in a phase with non-recurring, quite lumpy and timeline dependent revenue. EBIT improved heavily year on year by 32 million SEK, even with a substantially lower level of capitalization. And then finally, when it comes to our balance sheet and cash flow, our free cash flow improved almost 200 million SEK compared to the same period last year. The improvement is partly due to specific actions taken as agreement with customers and prepayments, but also thanks to the lower cost level. Our cash position was at 150 million SEK at the end of the quarter, and we repaid 89 million SEK of the COVID-related tax deferrals in mid-July. All in all, we continue to focus on right-sizing the business and strengthening cash flow. And thank you for your time. And by that, back to you, Anand.