Nordic Semiconductor — Investor Presentation 2025

Feb 5, 2025

Quarterly Presentation Q4 2024

© Nordic Semiconductor

February 5, 2025

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This presentation was prepared in connection with the Q4 results released on February 5, 2025. 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.

Today's presenters

Vegard Wollan CEO

Pål Elstad

CFO

Continued revenue recovery in Q4

Q4 2024:

• § Revenue of USD 150 million
  • § +39% from a Q4'23 affected by inventory adjustments
  • § Sequential decline reflecting underlying seasonal demand patterns
• § Gross margin of 49%
• § EBITDA USD 9m (USD -7m in Q4 2023)

Q1 2025 guidance:

• § Revenue of USD 140-160 million
  • § Healthy demand in Consumer and Healthcare in Q1, still slow in Industrial
  • § High growth from a Q1'24 affected by significant inventory adjustments
• § Gross margin expected at ~50%

Quarterly revenue development (USDm)

Laid solid foundation for profitable growth

• § Putting the groundwork in place
  • § Nordic 2.0 set course with strategic clarity
  • § Reorganized to enhance efficiency and cut costs
  • § Launched the nRF54 Series in Short-range
  • § Launched the nRF9151 SiP in Long-range
  • § Maturing our next-generation Wi-Fi and power management technologies
• § Change takes time but we end 2024 on a strong note!

Facsimiles from Nordic's CMD 2024

Top-10 and broad market split stabilizing

Bluetooth revenue composition (USDm)

• § Maintained strong relationships with key customers
• § High priority to regain traction in the broad market

Remaining the clear design win leader

35% share of certifications, 4x the number of #2

Unique growth opportunity Driven by the launch of nRF54

Product launches supporting growth through the decade

• § Ramp-up of the nRF54 Series set to drive growth through the decade
• § Gradual transition from current nRF52 Series
• § Rolling out a competitive portfolio covering our full SAM

Launched three nRF54L variants at Electronica 4x more nRF54L development kits shipped vs. nRF52 launch

§ nRF54 – fully integrated 22nm wireless SoC - built on

• Nordic proprietary ultra-low power technology and IP
• § Strong customer feedback on low power performance, integrated memory, security features, and the new advanced radio technology
• § Both key and broad market customers actively designing with nRF54L for product launches in 2025 and 2026

Nordic booth at Electronica

Kicking off the year at CES 2025 Nordic showcased groundbreaking products

• § High activity at the booth main focus on nRF54 Series for use in existing and new end-user applications
• § Several customers demonstrated end-products using nRF54 Series SoCs
• § 12 different module makers promoted modules already incorporated both nRF54L and nRF54H in modules

Bode Miller (6x Olympic medalist & co founder Peak Ski) and Andy Wirth (CEO Peak Ski) presenting at Nordic's booth at CES 2025.

© Nordic Semiconductor

nRF54H – Focus on key customers and early adopters Accelerating time to mass production of end-products

Cherry demoing at CES 2025 world's first true dual 8K keyboard using nRF54H

• § High design activity with key customers working to provide the software support required to enable design and mass production of end-products
• § Key customers recognize that Nordic IP and low-power technology in the 22nm process node puts us ahead of the competition
  • § High-speed USB, higher security, increased compute performance
  • § Strong platform for AI/ML on the edge

11

Nordic powers next-gen AI/ML products

Financials Pål Elstad, CFO

© Nordic Semiconductor

Revenue by technology

Consumer leading the revenue recovery

Revenue for the individual markets excludes ASICs and consulting revenue 15

Gross margin

• § Stable underlying development
  • § Changes mainly reflecting customer and product mix
• § Expecting gross margin around 50% for Q1 2025
• § Reiterating long-term ambition to maintain gross margin >50%

Operating model performance Q4 2024

Gross Margin 49.1%			Q4 2024	Q4 2023	△
R&D Short-range	15.2%	Revenue	USD 150.2 m	USD 108.2 m	+38.8 %	Y/Y uptick in Bluetooth revenue across all the end-user markets
		Gross margin	49.1%	52.0%	-2.9pp	Changes in customer and product mix
			USD 73.8 m	USD 56.3 m
		R&D Short-range	15.2%	23.1%	-7.9pp	High investments in products launched during Q4
R&D Long-range	8.8%		USD 22.9 m	USD 25.0 m
		R&D	8.8%	11.3%
R&D Wi-Fi	2.7%	Long-range	USD 13.3 m	USD 12.2 m	-2.5pp
SG&A	14.5%	R&D Wi-Fi	2.7%	3.6%	-0.9pp
			USD 4.0 m	USD 3.9 m
		SG&A	14.5%	15.9%	-1.4pp
			USD 21.7 m	USD 17.2 m
EBITDA	7.9%	Adjusted EBITDA	7.9%	-1.9%	+9.8pp	Improvement mainly reflecting the revenue recovery
			USD 11.9m	USD -2.0m

Cash cost development

• § Cost effect of workforce reductions neutralized by salary increases after salary freeze in 2023
• § Number of employees reduced by 9% year over year
• § Other costs stable
• § Continuous focus on adjusting spending to improve margins

Cash OPEX* (USDm)

Underlying capex intensity remains low

Focus on cash spending

Cash position and Cash Flow Q4 2024 (USDm)

• § Operating cash flow of USD 49.2m in Q4
• § NWC/Revenue LTM remains high at 34%, mainly due to high inventory
• § Low capex spending and continued focus on cash spending
• § Currency translation relates to the natural cash hedge of the bond, resulting in a minimal overall impact
• § Other items mainly reflecting other short-term placements

Summary and Outlook Vegard Wollan, CEO

© Nordic Semiconductor

Revenue recovery continuing in Q1

Q1 2025 guidance

Revenue	Gross margin
USDm 140-160m	~50%
+88% to +115% -7% to +7% y-o-y q-o-q

• § Strong year-on-year revenue growth outlook for Q1, reflecting both higher demand and significant inventory adjustments in Q1'24
• § Orders from individual customers set to offset the typical seasonal demand downturn in Q1
• § Gross margin expected at around ~50%

© Nordic Semiconductor