Airthings — Earnings Release 2024

May 15, 2024

May 15, 2024

Emma Tryti, CEO

Magnus Bekkelund, Interim CFO

Q1 24 Presentation

Q1 highlights Q1 revenues of

Consumer segment with all-time high quarterly revenues of USD 7.8M, up 22% YoY driven by strong sales across all channels

Positive cash flow from operating activities

from realized revenue growth, improved gross profit margin, reduced operating costs and reduced net working capital. This is expected to fluctuate between quarters

Airthings Renew smart air purifier launched:

Sold out initial batches following high market demand with production ramp-up underway

USD 9.5M

up 9% YoY impacted by strong consumer sales and no large contracts from the Business segment.

REVENUES (USD M)

Q1 gross profit of USD 5.8M

gross profit margin of 61% compared to 56% in Q1 23.

4.9 4.6 6.3 6.5 5.8 56% 62% 62% 63% 61% (USD M)

GROSS PROFIT

Q1 23 Q2 23 Q3 23 Q4 23 Q1 24

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0

ANNUAL RECURRING REVENUE (USD M)

Q1 total ARR of USD 4.2M

up 14% YoY supported by increased software sales and low churn in the Business segment.

Airthings 3.0 strategy is paying off

Drivers for growth

Uniquely positioned to capture growth in a global market, capitalizing on two megatrends:

• We spend 90% of our time indoors, where the air is 2 to 5 times worse than outside
• Radon is the leading cause for lung cancer among non-smokers
• About 55 million people have asthma in the US and Europe combined; particle pollution is a major cause of asthma
• Rapid increase in instances of wildfires increase the risk of both cardiovascular- and respiratory-related effects

Energy Business segment efficiency

• 30% of global energy consumption comes from commercial buildings representing an enormous opportunity to cut costs and CO₂
• Important to find ways to improve the energy efficiency in buildings automated HVAC control is key
• 6 of 10 school children globally are exposed to CO₂ levels higher than the recommended threshold of 1,000 ppm
• Regulation and legislation for building energy performance and health of workers and school children driving change in public buildings

tech

Strategic priorities for profitable growth

Improved profitability

Executing Airthings 3.0

Growth in revenues LTM +6% YoY

Expansion of gross margins LTM +4%-points YoY

OPEX growing less than 1-to-1 with revenue LTM OPEX-to-revenue -14%-points YoY

Clear and faster path to profitability LTM EBITDA margin +18%-points YoY

Q1 results

YoY revenues increase.

On segment level, the quarter has a two-fold outcome

• Sales revenues of USD 9.5M, up 9% YoY
  • Revenues from the Consumer segment at alltime high USD 7.8m, up 22% YoY
  • Lower than expected revenue contribution from the Business segment of USD 1.2M, down 34% YoY
• Gross profit margin of 61%
  • Up 5% points from Q1 23 from consumer margin expansion due to less aggressive promotions

Consumer segment Q1 update

• Record-high quarterly revenue of USD 7.8M, up 22% YoY
  • Strong underlying demand across all channels
  • Solid performance, with Amazon and increasing organic traction on internal digital sales channel
  • Seasonal activities and more precise targeting
  • Boosted by January Radon Awareness month in US
• Gross Profit Margin 57%
  • Up from 49% in Q1 23 due to increased internal channel sales and lower levels of promotional activities

Consumer Sales Revenues (USD'000)

All-time high consumer device registrations

• New devices are registered when linked to an Airthings app
• Healthy underlying demand:
  • New device registrations for connected products up 8% in Q1 24 vs. Q1 23
  • Q1 last year had unusually high registrations due to campaigns for certain products that quarter
  • Targeted sales on airthings.com
  • Higher prevalence of repeat purchases
  • Increased bundle sales and multiroom monitoring

Consumer device registrations

(Indexed – 1Q2020 = 100)

Airthings Renew: Initial batches sold out

• Smart Air Purifier first direct mitigation device, representing a new category for Airthings
• Answer to all our customers who want to actively clean the air while having an air purifier working seamlessly in the Airthings ecosystem
• Introduced at CES 2024 in Las Vegas in January, market launch in March
• Solid market reception with strong pre-orders as well as reviews and awareness across our key markets

Business segment Q1 update

• Sales revenues of USD 1.2M, down 34% YoY
  • No large shipments in Q1 24
  • Timing of individual deals has a great effect on revenue opportunities
• ARR reached USD 3.1M, up 19% from Q1 23
• 74% Gross Profit Margin, up 5%-points from Q1 23
  • Large share of high-margin software income

• Healthy pipeline

• Won RFP with global healthcare company, too early to know the full impact
• Commercial opportunities maturing with US school districts, municipalities and commercial real-estate
• Installed 1,300 devices with Fortune 500 customer

Devices in the field continuing to expand

• Devices in the field grew by 33% in Q1 24 vs. Q1 23
• Driver of underlying growth in ARR in Business segment

Pro segment Q1 Update

• Sales revenues of USD 0.6M, down 7% YoY
• 88% Gross Profit Margin up 1%-points from Q1 23

Annual recurring revenue (ARR)

• ARR of USD 4.2M, up 14% YoY1
  • Business segment's share of ARR USD 3.1M, up 19% YoY
  • Growth despite limited hardware sales
• >80% gross profits from ARR
• Negligible churn
• Q2 24 ARR guidance of USD 4.3 – 4.5M, mainly driven by continued new sales in the Business segment

1) Downward revision of ARR in the Pro segment in Q1 23 caused a reduction from USD 4.0 million to USD 3.7 million in Q1 23. The year-on-year ARR growth would have been 6% prior to the revision.

Note: ARR equals annualized sales from all active subscriptions, licenses and service contracts within AfB and Pro. (i.e. subscription service revenues booked in December multiplied by 12).

Annual Recurring Revenue (USD'000)

Financials Magnus Bekkelund, interim CFO

Income statement

Sales revenues of USD 9.5M in Q1 24, up 9% YoY

Sales gross margin of 61%. Up 5 percentage points from Q1 23

EBITDA-loss of USD 1.8M at -19% EBITDA-margin compared to -37% in Q1 23

EBIT-loss of USD 2.2M

(USD'000)	Q1 24	Q1 23	2023
Total revenue	9 511	8 752	36 592
Cost of goods sold	3 755	3 887	14 302
Gross profit	5 756	4 865	22 290
Sales Gross Margin	61%	56%	61%
Employee benefit expenses	3 643	4 172	15 090
Other opera�ng expenses	3 956	3 899	14 033
EBITDA	-1 843	-3 206	-6 832
Deprecia�on and amor�za�on	377	387	1 516
Opera�ng profit / EBIT	-2 220	-3 593	-8 349
Financial income / (expenses)	1 199	988	319
Profit (loss) before tax	-1 020	-2 605	-8 030
Income tax	-222	-524	-1 772
Net profit (loss)	-798	-2 081	-6 258
Earnings per share (USD)
Basic earnings per share	-0.00	-0.01	-0.03
Diluted earnings per share	-0.00	-0.01	-0.03

Reducing inventories

• USD 1.2M decline in overall inventories over the course of Q1 24
• Decline in Average Days of Inventory from 386 to
• Reflecting active steps taken, such as promotional activities and reduced inbound supply
• Aim to reduce inventory to 250 days at year end
  • Assuming no major currency effects to boost value of inventory

Note: Days of Inventory calculation – Inventories / (4 quarter rolling average COGS) * 90 days in quarter

Balance sheet

Change in assets

• Deferred tax asset
• Inventories
• Trade receivables
• Cash

Change in liabilities

• Non-current interest -bearing liabilities
• Trade and other payables

(USD'000)	31.03.2024	31.03.2023
Goodwill	2 621	2 702
Intangible assets	3 619	2 599
Deferred tax assets	8 552	7 246
Property, plant and equipment	502	752
Right -of-use assets	2 154	3 004
Other non -current assets	98	129
Total non -current assets	17 546	16 432
Inventories	14 155	17 116
Trade receivables	9 395	10 378
Other receivables	5 696	6 204
Cash and cash equivalents	13 231	15 427
Total current assets	42 477	49 126
Total assets	60 023	65 558
Total equity	46 564	52 890
Non -current interest -bearing liabilities	1 296	0
Non -current lease liabilities	1 585	2 396
Other non -current liabilities	101	119
Total non -current liabilities	2 982	2 515
Current lease liabilities	805	864
Trade and other payables	6 106	6 207
Contract liabilities	1 798	1 360
Income tax payable	25	36
Other current liabilities	1 742	1 686
Total current liabilities	10 476	10 153
Total equity and liabilities	60 023	65 558

Cash Flow Statement Q1 24 (USD'000)

• Positive cash flow from operating activities of USD 0.1M
  • Negative EBIT offset by reduced inventories and reduced trade receivables
• Cash flow from investment activities of USD -0.3M
  • Development expenditures, PPE and interest received
• Cash flow from financing activities of USD -0.3M
  • Lease liabilities
• Net unrealized foreign exchange difference of USD -0.9M

Summary and outlook

Summary and outlook

• Solid quarter, two folded outcome on segment level
• Record high Consumer segment, up 22% YoY, mainly driven by solid performance with Amazon and increasing traction on Airthings.com.
• Business segment lower than expected revenues contribution in the quarter
• First quarter with positive operating cash flow, mainly driven by reduced trade receivables and reduced inventory
• Airthings Renew launched with solid market reception, strong pre-orders, and good reviews and awareness across our key market

• Q2 marks the start of the wildfire season and is peak pollen season. We recently released a new pollen feature in the app and are continuously working on improving customer experience

Guidance (USD M)	Q2 2024
Revenue	8.0 – 10.0
Annual Recurring Revenue	4.3 – 4.5

Disclaimer

The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated ("relevant persons"). Any person who is not a relevant person should not act or rely on this presentation or any of its contents.

This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Airthings ASA (The Company). The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions.

This presentation includes and is based, inter alia, on forward-looking information and contains statements regarding the future in connection with The Company's growth initiatives, profit figures, outlook, strategies and objectives. All forward-looking information and statements in this presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for The Company. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions.

Important factors may lead to actual profits, results and developments deviating substantially from what has been expressed or implied in such statements. Although The Company believes that its expectations and the presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the presentation.

The Company is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the presentation, and neither The Company nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.

This presentation was prepared in connection with the Q1 results released on May 15th, 2024. Information contained herein will not be updated. The following slides should also be read and considered in connection with the information given orally during the presentation.

Breathe better. Live better.

Q&A