Elliptic Laboratories ASA — Earnings Release 2021

Nov 10, 2021

Third Quarter 2021 Financial Results

Third Quarter 2021 Financial Results

Elliptic Labs, a global AI software company and leader in AI Virtual Smart Sensors for the smartphone, laptop, Internet of Things (IoT), and automotive industries, reports progress since Q3 last year, with total revenue and other operating income up from mNOK 7.1 Q3 2020 to mNOK 16.2 Q3 2021, a 127.6% increase YoY. YTD 2021 also sees an increase from the same period in 2020 from mNOK 17.5 to mNOK 28.4, a 62.4% increase. As previously disclosed, we foresee seasonality, and we expect revenue for 2H 2021 to be higher than 2H 2020. EBITDA has improved from Q3 2020 mNOK -6.2 to mNOK -0.4 Q3 2021, following the positive development in revenue. Similarly, the EBITDA improved from YTD 2020 mNOK -23.2 to mNOK -12.6 YTD 2021. Cash flow from operations is in line with expectations at mNOK -9.5 for the quarter.

The development is in line with management expectations and guidance, and we see increased demand for our software in multiple verticals.

Highlights from Q3 2021:

• Signed three new license agreements with current smartphone customers Xia-omi, Honor, and Black Shark

• Signed an enterprise license agreement with one of the top-three global PC manufacturers; on target for product launch

• Launched with the world’s second-largest smartphone company, Xiaomi

• Announced collaboration with Maxime Integrated, Inc. to deliver lower-power sensing features

“In Q3, demand for our AI Virtual Smart Sensor Platform™ continued to strengthen as new and current customers chose to integrate and expand the use of our technology in their mass-volume product portfolios. Elliptic Labs signed several substantial new license agreements with current smartphone customers, as well as a solid enterprise license agreement with one of the top-three global PC manufacturers. We see accelerated interest in our unique platform solution to replace hardware sensor due inherent benefits of our core value proposition,” said CEO Laila Danielsen. “We have continued to hire globally to capitalize on market demand, and we are confident we will continue to execute our customer contracts successfully. We maintain close collaborations with our partner ecosystem, building our pipeline, signing more Proof-of-concept projects for technology qualification and having a strong focus on converting these into license agreements. We have a unique technology platform and are well-positioned for growth.”

We re-confirm our 2021 expectations, which are based on the robust demand for our AI software platform particularly across the smartphone and PC markets. We are excited about the opportunities ahead and confident in our long-term strategy as we continue to execute and scale with current and new customers.

About Elliptic Labs:

Elliptic Labs is headquartered in Norway with presence in the Europe, USA, China, South Korea, and Japan. Founded in 2006 as a research spin-off from Norway’s Oslo University, it is now a global enterprise targeting the smartphone, laptop, IoT, and au-tomotive markets. The Company’s patented AI software combines ultrasound and sensor-fusion algorithms to deliver intuitive 3D gesture, proximity and presence sensing experiences. Its scalable AI Virtual Smart Sensor Platform creates software-only sensors that are sustainable, eco-friendly, and already deployed in hundreds of millions of devices. Elliptic Labs is the only software company in the market that has delivered detection capabilities using AI software, ultrasound, and sensor-fusion deployed at scale. Elliptic Labs’ technology and IP are developed in Norway and solely owned by the Company.