Smartoptics Group AS

Earnings Release • Jul 15, 2024

Smartoptics Group AS (SMOP) - Q2 2024 financial results

Smartoptics Group AS (SMOP) - Q2 2024 financial results

Oslo, 15 July 2024 - Smartoptics Group AS (Smartoptics, OSE: SMOP) today

reported revenues of USD 13.0 (17.0) million in the second quarter of 2024, and

an EBITDA* of USD 1.0 (3.2) million, reflecting continued softness in the market

as previously communicated. Anticipating a recovery in the market during the

second half of 2024, the company maintains its revenue ambition in the range of

USD 100 million by 2025/2026.

"Smartoptics is in an ideal position to benefit from the robust and lasting

growth trends within optical networks, fueled by the increasing demand for

bandwidth. The revenue contraction in the second quarter and in the first half

-year 2024 mirrors the caution on the customer side due to prolonged macro

uncertainty and large project capex constraints. Our core business, smaller

projects within enterprise and smaller service providers, continues to be firm,

and we see several factors pointing towards a near-term recovery," says Magnus

Grenfeldt, Chief Executive Officer of Smartoptics.

In the second quarter, Smartoptics delivered a gross margin of 47.3% (49.2%),

and an EBITDA margin of 7.8% (18.7%).

"With the current soft market conditions, we put cost discipline high on our

priority list. Hence, it is satisfactory to deliver a consistently high gross

margin. The reduced revenue has lowered the EBITDA margin, but crucially, we

have kept operating expenses steady compared to the first quarter this year and

the second quarter last year," Grenfeldt adds.

With high activity in Americas and improvement in Europe Smartoptics sees

several factors that can lead to a return to growth. New product launches and

solid traction among larger clients, is expected to contribute.

"We have launched our new 34-degree ROADM and SoSmart 5.0, which greatly

enhances our offering for larger networks. The reception has been very good, and

the products were ordered before the release, which is rare in this industry.

Additionally, we are in the final rounds of vendor selection for large customers

both in EMEA and Americas, and in the second quarter we received the first order

from previously communicated cloud service provider customer," Magnus Grenfeldt

concludes.

QUARTERLY PRESENTATION:

Smartoptics hosts a webcast quarterly presentation followed by Q&A today at

08:00 CET. Participants are CEO Magnus Grenfeldt and CFO Stefan Karlsson.

Webcast link: https://channel.royalcast.com/landingpage/hegnarmedia/20240715_1/

A recorded version of the presentation will be available after the live stream

is concluded.

Please find the full financial report and presentation enclosed.

*) EBITDA and other alternative performance measures (APMs) are defined and

reconciled to the IFRS financial statements as a part of the APM section of the

second quarter 2024 financial report on page 13.

For further information, please contact:

Magnus Grenfeldt

CEO Smartoptics

+46 73-366 88 77

E-mail: magnus.grenfeldt@smartoptics.com

About Smartoptics:

Smartoptics provides innovative optical networking solutions and devices for the

new era of open networking. Our customer base includes thousands of enterprises,

governments, cloud providers, Internet exchanges as well as cable and telecom

operators. We have an open networking approach in everything we do which allows

our customers to break unwanted vendor lock-in, remain flexible and minimize

costs. Our solutions are used in metro and regional network applications that

increasingly rely on data center services and specifications. Smartoptics is a

Scandinavian company founded in 2006. We partner with leading technology and

network solution providers such as Brocade, Cisco and Dell and have a global

reach through more than 100 business partners.

For additional information about Smartoptics, please visit smartoptics.com

This information is considered to be inside information pursuant to the EU

Market Abuse Regulation and is subject to the disclosure requirements pursuant

to Section 5-12 the Norwegian Securities Trading Act. This stock exchange

announcement was published by Per Burman, Chief Marketing Officer of

Smartoptics, at the time and date set out above.