Elliptic Laboratories ASA — Earnings Release 2020

Mar 10, 2021

Elliptic Labs reports record fourth quarter; with strong EBITDA and positive cashflow from operations

Elliptic Labs reports record fourth quarter; with strong EBITDA and positive cashflow from operations

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 record fourth quarter; highest quarterly revenue in the history of the company with NOK 27 million. Proving the scalability as business picked up after severe Covid19 effects in 1. half 2020, EBITDA margin improved to more than 65% in the fourth quarter whereas cash flow from operations ended at NOK 15m. Elliptic Labs is pleased to see that our business model scales with higher volume as demonstrated in this quarter.

Operating revenue for the fourth quarter totalled NOK 27.3 million (NOK 18.6 million), 2020 in total NOK 44.7 million (NOK 52.7 million). Operating costs totalled NOK 10.2 million (NOK 17.8 million), 2020 in total NOK 55.0 million (NOK 65.7 million). The largest portion of operating costs was personnel expenses which accounted for NOK 5.8 million (NOK 12.7 million), 2020 in total NOK 36.4 million (NOK 45.7 million). Operating profit for the fourth quarter ended at NOK 17.0 million (NOK 0.8 million), 2020 in total ended with an operating loss of NOK 10.2 million (NOK 13.0 million). The profit before tax was NOK 14.0 million (loss NOK 0.7 million) 2020 in total with loss NOK 15.7 million (NOK 17.0 million).

The cash flow from operating activities was NOK 15.0 million (NOK -1,6 million), 2020 in total NOK -4.7 million (NOK -8.0 million).

Equity at the end of the quarter was NOK 191.1 million (NOK 80.0 million) and interest bearing debt was NOK 18.0 million (NOK 43.0 million) at the end of the period. Cash and cash equivalents at the end of the period were NOK 101.2 million (NOK 35.9 million) after having paid down interest bearing debt of NOK 25.0 million during the quarter.

Highlights from the fourth quarter:

- Substantial progress in widening customer base on smartphones

- Launched on two high-volume smartphones with Xiaomi, a world leading smartphone and IoT manufacturer, on their “Mi 11” and “Redmi Note 9 Pro”

- Launched with a new smartphone customer, ByteDance, on their “Nut R2” model

- Established partnership with MediaTek, a leading smartphone chip manufacturer, that integrated Elliptic’s ultrasound API as a standard, making it easier for smartphone customers to use Elliptic Labs’ AI Virtual Smart Sensors

- Secured more PoC’s with laptop customers while working with leading chipset suppliers and aligning roadmaps

- First IoT license contract signed with a smart fridge provider

- Two patents granted, adding to an already strong patent portfolio as we are the leader in patents using ultrasound virtual smart sensors in the consumer electronics market. Today, our portfolio consists of close to 100 patents granted/pending.

“We continue to experience demand for our AI Virtual Smart Sensor platform from current and new customers, in particular in the laptop and smartphone markets. We also see an uptake in interest from strategic chipset partners ensuring that their short- and long-term roadmap is aligned with us to serve our joint customers with innovative solutions. Furthermore, as prices for hardware sensors and components have recently increased, our competitive advantage has strengthened, ensuring that our technology is well-positioned for broader adoption.”, says CEO Laila Danielsen.

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

Seasonal effects going forward will still impact our financial numbers as we expect that the second half will be stronger than the first half. Even though this will apply to the financial year 2021, we expect both the first and second half to be significantly better than for the financial year 2020.

About Elliptic Labs:

Elliptic Labs is headquartered in Norway with presence in the USA, China, South Korea, Taiwan 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 automotive 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 over 100 million 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.

For more information visit: www.ellipticlabs.com