Tobii — Interim / Quarterly Report 2024

Jul 19, 2024

Key focus on cost reduction and Autosense integration

SECOND QUARTER 2024 JANUARY-JUNE 2024

• Net sales increased by 8% to SEK 201 million (185), with an organic growth of -16%.
• Gross margin was 79% (77%).
• Operating result (EBIT) was SEK -66 million (-48). Adjusted for structural redundancy-related one-off costs of SEK 10 million, EBIT was SEK -56 million.
• Profit/loss for the quarter amounted to SEK -73 million (-38).
• Earnings per share amounted to SEK -0.31 (-0.36).
• Free cash flow amounted to SEK -125 million (-67).

SIGNIFICANT EVENTS DURING THE QUARTER

• A rights issue was successfully completed, and Tobii received total net proceeds of SEK 267 million.
• One new Autosense DMS design win for commercial vehicles and one expansion of existing OMS design win to a new OEM.

• An expanded cost reduction program was initiated, projected to reduce cash-related operational expenses by approximately SEK 200 million over the next four quarters.

• Net sales increased by 3% to SEK 362 million (353), with an organic growth of -12%.

• Gross margin was 77% (75%).
• Operating result (EBIT) was SEK -140 million (-101). Adjusted for structural one-off costs of SEK 10 million, EBIT was SEK - 130 million.
• Profit/loss for the period amounted to SEK -162 million (-95).
• Earnings per share amounted to SEK -0.99 (-0.91).
• Free cash flow amounted to SEK -251 million (-22).

FINANCIAL PERFORMANCE INDICATORS FOR THE GROUP

	Q2 2024	Q2 2023	Δ	Organic Δ%	Jan-Jun 2024	Jan-Jun 2023	Δ	Organic Δ%	Jan-Dec 2023
Net sales, SEK million	201	185	8%	-16%	362	353	3%	-12%	758
Gross profit, SEK million	160	143	17		279	265	14		567
Gross margin, %	79%	77%	-		77%	75%	-		75%
Operating profit/loss (EBIT), SEK million	-66	-48	-18		-140	-101	-39		-184
Operating margin (EBIT-margin), %	-33%	-26%	-		-39%	-29%	-		-24%
Profit/loss for the period	-73	-38	-35		-162	-95	-67		-198
Earnings per share (SEK)	-0.31	-0.36	0.05		-0.99	-0.91	-0.08		-1.87
Free cash flow, SEK million	-125	-67	-58		-251	-22	-229		-119

For more information, see financial definitions on pages 17-18.

Comments from the CEO

Key focus on cost reduction and Autosense integration

We entered this quarter as a substantially larger organization given our acquisition of FotoNation/AutoSense. We have also been dealing with weaker demand in other parts of our business. Given this reality, our immediate focus has been to significantly reduce our costs to operate within the available cash resources. Therefore, we are executing an expanded cost reduction program. These measures involve focusing our product portfolio and refining our organizational structure, which enables us to reduce our overall staffing and operational expenses. We have also started to realize cost synergies from the integration of Autosense, and this process will continue through the rest of 2024 and 2025.

The current cost measures are projected to reduce cash-related operational expenses by approximately SEK 200 million over the next four quarters, compared to the baseline of the second quarter of 2024. These improvements have yet to be reflected in our financial performance but are anticipated to positively impact our cash-related operational expenses and operating result starting from the third quarter of 2024, with ongoing effects expected into 2025.

This was also the first full quarter operating the newly acquired FotoNation/AutoSense business. A successful integration is a key priority to ensure that Tobii becomes a leader in automotive interior sensing. We are making significant progress, including a joint comprehensive interior sensing roadmap, a harmonized approach to working with our customers and fostering a unified team with a shared culture.

Net sales growth but continued soft Products & Solutions

The expected net sales from the acquisition have materialized as anticipated in the second quarter, resulting in an overall growth of 8 percent. The organic business, excluding the acquisition, faced another challenging quarter, with net sales declining by 16 percent. EBIT for the quarter was SEK -66 million, which includes a one-off charge of SEK 10 million related to the cost reduction program.

Products & Solutions experienced an organic decline of 15 percent, driven primarily by ongoing softness in the Asian market. The segment's development should also be viewed in the context of the exceptionally strong corresponding quarter in 2023, which saw 31 percent growth.

As anticipated, the Integrations segment continues to experience quarterly variations. The quarter showed an organic decline of 16 percent, following a solid performance in the previous quarter. Including the impact of the acquisition, Integration's net sales increased by 52 percent. The segment delivered a positive EBIT result in the quarter, which we anticipate will continue going forward. Customer engagements in the XR space continued to be high this quarter, which is encouraging.

The Autosense segment delivered net sales as expected and we now have our interior sensing technology integrated into more than 500,000 vehicles on the road. We continue to see increased customer interest, securing a new DMS design win for commercial vehicles and expanded one existing OMS design win to a new OEM brand. This brings our total to nine OEM customers with design wins across more than 120 vehicle models.

Software launches strengthening our product portfolio

In the quarter, we launched three software solutions strengthening our product portfolio in line with our priorities. There has been a growing demand for Products & Solutions to provide simpler customer insight tools captured by wearable eye trackers. Our new cloud-based Glasses Explore enables faster insights for real life type of experiments like way finding and shopper studies. Products & Solutions also introduced Tobii UX Reveal, a cloud-based tool for e-commerce and digital services usability studies.

The Integrations segment launched Tobii Nexus, a software-only platform that enables eye tracking using standard webcams. This helps developers create smarter, more interactive devices and applications. With growing industry momentum for attention computing via standard webcams, Tobii Nexus allows customers to capitalize on this trend.

Expanded Autosense business and profitability outlook

Looking ahead, it is fundamental that we continue to successfully integrate our expanded Autosense business and realize our potential as a top player in the automotive interior sensing space. I'm pleased with the progress we made in the quarter and optimistic about realizing the cost and technology synergies that were pivotal in driving the acquisition.

With the comprehensive cost reduction measures implemented across Tobii, we are confident in delivering a significant EBIT improvement in 2024. We have also taken critical steps toward achieving our free cash flow and profitability targets and securing that we are operating within our existing cash resources.

Anand Srivatsa CEO

Anand Srivatsa CEO, Tobii

"We have taken critical steps toward achieving our free cash flow and profitability targets and securing that we are operating within our existing cash resources."

Financial performance

GROUP

SEK m	Q2 2024	Q2 2023	Jan-Jun 2024	Jan-Jun 2023	Jan-Dec 2023
Net sales	201	185	362	353	758
Net sales change:	8%		3%
- of which organic	-16%		-12%
- of which currency	0%		-2%
- of which acquisition	25%		17%
Gross profit	160	143	279	265	567
Gross margin	79%	77%	77%	75%	75%
Operating profit/loss (EBIT)	-66	-48	-140	-101	-184
EBIT margin	-33%	-26%	-39%	-29%	-24%

NET SALES, SEK M, AND GROSS MARGIN, %

PRODUCTS & SOLUTIONS

SEK m	Q2 2024	Q2 2023	Jan-Jun 2024	Jan-Jun 2023	Jan-Dec 2023
Net sales	109	127	220	264	532
Net sales change:	-15%		-17%
- of which organic	-15%		-15%
- of which currency	-0%		-2%
Gross profit	72	90	143	184	365
Gross margin	66%	71%	65%	70%	69%
Operating profit/loss (EBIT)	-26		-49
EBIT margin	-24%		-22%

INTEGRATIONS

SEK m	Q2 2024	Q2 2023	Jan-Jun 2024	Jan-Jun 2023	Jan-Dec 2023
Net sales	84	55	127	86	219
Net sales change:	52%		48%
- of which organic	-16%		-3%
- of which currency	0%		0%
- of which acquisition	68%		51%
Gross profit	80	51	121	78	197
Gross margin	96%	92%	96%	92%	90%
Operating profit/loss (EBIT)	21		7
EBIT margin	25%		5%

AUTOSENSE

SEK m	Q2 2024	Q2 2023	Jan-Jun 2024	Jan-Jun 2023	Jan-Dec 2023
Net sales	9	2	15	3	7
Net sales change:	302%		452%
- of which organic	-93%		-88%
- of which currency	0%		0%
- of which acquisition	395%		540%
Gross profit	8	2	14	3	6
Gross margin	91%	97%	95%	94%	80%
Operating profit/loss (EBIT)	-60		-99
EBIT margin	-710%		-648%

RESEARCH AND DEVELOPMENT

	Q2	Q2
SEK m	2024	2023
Total R&D expenditures	-166	-95
Capitalization	102	47
Amortization	-41	-30
R&D expenses in the income statement	-105	-78

SEK m	Jan-Jun 2024	Jan-Jun 2023
Total R&D expenditures	-297	-186
Capitalization	183	101
Amortization	-77	-59
R&D expenses in the income statement	-191	-143

PERCENTAGE OF NET SALES PER SEGMENT Q2, 2024

Products & Solutions Integrations Autosense

APRIL-JUNE

NET SALES

The Group's net sales increased by 8% to SEK 201 million (185). The organic growth was -16%. Net growth from acquisition was 25% and exchange rates affected sales by 0%.

Products & Solutions net sales totaled SEK 109 million (127), corresponding to an organic growth of -15%. The decrease was mainly attributable to sustained weaker demand in Asia.

Integrations net sales were SEK 84 million (55) which was an increase by 52% stemming from the acquired imaging business, which as previously communicated is expected to decline after 2024.The organic growth was -16% impacted by quarterly variations.

Autosense net sales totaled SEK 9 million (2).

RESULTS

The gross margin was 79% (77%). The strengthened gross margin was an effect of the change in product mix.

Products & Solutions gross margin was 66% (71%). The difference in gross margin was related to the change in product mix and lower volumes.

Integrations gross margin was 96% (92%). The high gross margin reflects the software, service and license-based product mix.

Autosense gross margin was 91% (97%). The gross margin was impacted by a higher cost of goods and services sold compared with the corresponding quarter. The high gross margin demonstrates the substantial share of software in the product mix.

Operational expenses increased to SEK 225 million (191). In addition to the cost reduction initiatives implemented in the fourth quarter of 2023, which lowered operational expenses by more than 10%, the increase was an effect of the expanded cost base associated with the acquisition of FotoNation/Autosense. The quarter was also negatively impacted by structural redundancy-related oneoff costs of SEK 10 million for the expanded cost reduction program.

The operating result was SEK -66 million (-48) and the operating margin was -33% (-26%). Adjusted for the structural one-off costs of SEK 10 million EBIT, was SEK -56 million.

Net financial items amounted to SEK -7 million (10) and included SEK 3 million (11) in currency effects and SEK -11 million (-2) of interest expenses primarily related to interest of interest-bearing liabilities and interests due to temporary covid tax reliefs.

Profit/loss before tax was SEK -73 million (-37).

Profit/loss for the quarter was SEK -73 million (-38) and diluted earnings per share was SEK -0.31 (-0.36).

CASH FLOW

Cash flow from operating activities before changes in working capital amounted to SEK -21 million (-14). Change in working capital amounted to SEK 5 million (-3).

Investments in intangible, tangible, and financial fixed assets amounted to SEK 109 million (50), including SEK 102 million (47) in capitalization of R&D costs. Free cash flow was SEK -125 million (-67).

Cash flow from financing activities amounted to SEK 261 million (-7), of which SEK 267 million is net proceeds from the rights issue completed in April.

JANUARY-JUNE

NET SALES

The Group's net sales increased by 3% to SEK 362 million (353). The organic growth was -12%. Net growth from acquisition was 17% and exchange rates affected sales by -2%.

Products & Solutions net sales totaled SEK 220 million (264), corresponding to an organic growth of -15%. The decrease was mainly attributable to sustained weaker demand in Asia.

Integrations net sales were SEK 127 million (86) which was an increase by 48% stemming from the acquired imaging business, which as previously communicated is expected to decline after 2024. The organic growth was -3%.

Autosense net sales totaled SEK 15 million (3).

Net sales from the acquisition of FotoNation/AutoSense for the period represented five months' worth, reflecting the timing of the FotoNation/AutoSense acquisition closure on January 31, 2024.

RESULTS

The gross margin was 77% (75%). The strengthened gross margin was an effect of the change in product mix.

Products & Solutions gross margin was 65% (70%). The difference in gross margin was related to the change in product mix and lower volumes.

Integrations gross margin was 96% (92%). The high gross margin reflects the software, service and license-based product mix.

Autosense gross margin was 95% (94%). The high gross margin demonstrates the substantial share of software in the product mix.

Operational expenses increased to SEK 419 million (366). In addition to the cost reduction initiatives implemented in the fourth quarter of 2023, which lowered operational expenses by more than 10%, the increase was an effect of the expanded cost base associated with the acquisition of FotoNation/Autosense. The period was also negatively impacted by structural redundancy-related oneoff costs of SEK 10 million for the expanded cost reduction program.

The operating result was SEK -140 million (-101) and the operating margin was -39% (-29%). Adjusted for the structural oneoff costs of SEK 10 million EBIT, was SEK -130 million.

Net financial items amounted to SEK -21 million (7) and included SEK -3 million (11) in currency effects and SEK -18 million (-6) of interest expenses primarily related to interest of interest-bearing liabilities and interests due to temporary covid tax reliefs.

Profit/loss before tax was SEK -161 million (-94).

Profit/loss for the period was SEK -162 million (-95) and diluted earnings per share was SEK -0.99 (-0.91).

CASH FLOW AND FINANCIAL POSITION

Cash flow from operating activities before changes in working capital amounted to SEK -61 million (-30). Change in working capital amounted to SEK 6 million (119). The corresponding period last year working capital was positively affected by SEK 63 million in temporary covid-related tax reliefs. Tobii has been granted a threeyear repayment plan for the tax reliefs of SEK 161 million, which originally expired in February 2024. Half of the amount will be paid in the third quarter of 2025, with the remainder to be paid in the first quarter of 2027.

Investments in intangible, tangible, and financial fixed assets amounted to SEK 196 million (112), including SEK 183 million (101) in capitalization of R&D costs. Free cash flow was SEK -251 million (-22).

Investment of the acquisition of FotoNation in the period amounted to SEK 292 million.

Cash flow from financing activities amounted to SEK 550 million (-15), of which SEK 302 million is additional interest-bearing loan (promissory note) for the acquisition of FotoNation, and SEK 267 million is net proceeds from the rights issue completed in April.

At the close of the period, Tobii had SEK 244 million (360) in cash and cash equivalents. In addition, the company has an unutilized credit facility of SEK 50 million. Consolidated net debt totaled SEK -166 million (276).

The Group

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

SEK m	Q2 2024	Q2 2023	Jan-Jun 2024	Jan-Jun 2023	Jan-Dec 2023
Net sales	201	185	362	353	758
Cost of goods and services sold	-41	-42	-84	-88	-191
Gross profit	160	143	279	265	567
Selling expenses	-81	-84	-156	-162	-350
Research and development expenses	-105	-78	-191	-143	-278
Administrative expenses	-40	-33	-78	-66	-122
Other operating income and operating expenses	1	3	6	5	-1
Operating profit/loss (EBIT)	-66	-48	-140	-101	-184
Net financial items	-7	10	-21	7	-13
Profit/loss before tax	-73	-37	-161	-94	-197
Tax	-0	-1	-1	-1	-1
Profit/loss for the period	-73	-38	-162	-95	-198
Other comprehensive income
Items that may subsequently be reclassified to profit or loss for the period:
Translation differences	-5	-8	5	-6	4
Other comprehensive income for the period, net after tax	-5	-8	5	-6	4
Total comprehensive income for the period	-78	-46	-157	-101	-194
Earnings per share, SEK	-0.31	-0.36	-0.99	-0.91	-1.87
Earnings per share, diluted, SEK	-0.31	-0.36	-0.99	-0.91	-1.87
Profit/loss for the period attributable to:
Parent Company shareholders	-74	-38	-163	-96	-199
Non-controlling interests	0	0	1	1	0
Profit/loss for the period	-73	-38	-162	-95	-198
Total comprehensive income for the period attributable to:
Parent Company shareholders	-79	-46	-158	-102	-194
Non-controlling interests	0	0	1	1	0

CONDENSED CONSOLIDATED BALANCE SHEET

SEK m	Jun 30 2024	Jun 30 2023	Dec 31 2023
NON-CURRENT ASSETS
Intangible assets	1,157	476	517
Tangible fixed assets	30	15	14
Right-of-use assets	98	70	68
Financial and other non-current assets	201	71	70
Total non-current assets	1,487	633	669
CURRENT ASSETS
Accounts receivable	98	97	116
Inventories	74	69	70
Other current receivables	80	54	58
Cash and cash equivalents	244	360	236
Total current assets	496	580	480
Total assets	1,983	1,212	1,149
EQUITY
Equity, Parent Company shareholders	674	654	562
Non-controlling interests	2	3	2
Total equity	677	657	564
LIABILITIES
NON-CURRENT LIABILITIES
Interest-bearing loans	313	14	12
Leasing liabilities	64	44	43
Other non-current liabilities	409	32	33
Total non-current liabilities	786	90	88
CURRENT LIABILITIES
Leasing liabilities	33	27	24
Other current liabilities	487	439	473
Total current liabilities	520	465	497
Total liabilities	1,306	555	585
Total equity and liabilities	1,983	1,212	1,149

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Attributable to Parent Company shareholders
SEK m	Share capital	Other contributed capital	Reserves	Retained earnings	Total	Non-controlling	interests Total equity
Opening balance, Jan 1, 2023	1	1,996	-40	-1,205	752	2	754
Comprehensive income for the period			-6	-96	-102	1	-101
New share issue	0	0			0		0
Share based payments settled using equity instruments				4	4		4
Closing balance, Jun 30, 2023	1	1,996	-46	-1,297	654	3	657
Opening balance, Jan 1, 2024	1	1,996	-35	-1,400	562	2	564
Comprehensive income for the period			5	-163	-158	0	-157
New share issue	1	266			267		267
Share based payments settled using equity instruments				4	4		4
Closing balance, Jun 30, 2024	2	2,262	-30	-1,559	674	2	677

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

SEK m	Q2 2024	Q2 2023	Jan-Jun 2024	Jan-Jun 2023	Jan-Dec 2023
Cash flow from operating activities
Profit/loss after financial items	-73	-37	-161	-94	-197
Adjustment for items not included in the cash flow	52	24	101	67	163
Taxes paid	-0	-0	-1	-2	-3
Cash flow from operating activities before change in working capital	-21	-14	-61	-30	-37
Cash flow from change in working capital	5	-3	6	119	132
Cash flow from operating activities	-17	-17	-55	90	95
Investments in intangible, tangible and financial fixed assets	-109	-50	-196	-112	-214
Cash flow after continuous investments	-125	-67	-251	-22	-119
Acquisitions and divestments	2	-6	-292	-6	-15
Cash flow after investments	-124	-73	-543	-28	-134
Interest-bearing debt	4	-1	302	-2	-3
New share issue, net of issue costs	267	0	267	0	0
Instalments of leasing liability IFRS 16	-10	-7	-18	-14	-27
Cash flow from financing activities	261	-7	550	-15	-29
Cash flow for the period	137	-81	7	-43	-163
Cash and cash equivalents at the beginning of the period	107	439	236	402	402
Foreign currency translation, cash and cash equivalents	-1	2	1	1	-3
Cash and cash equivalents at the end of the period	244	360	244	360	236

CONSOLIDATED KEY RATIOS

	Q2 2024	Q2 2023	Jan-Jun 2024	Jan-Jun 2023	Jan-Dec 2023
Earnings per share, SEK	-0.31	-0.36	-0.99	-0.91	-1.87
Earnings per share, diluted, SEK	-0.31	-0.36	-0.99	-0.91	-1.87
Equity per share, SEK	3	6	4	6	5
EBITDA, SEK m	-12	-10	-39	-26	-27
EBIT, SEK m	-66	-48	-140	-101	-184
Cash flow from operating activities, SEK m	-17	-17	-55	90	95
Free cash flow , SEK m	-125	-67	-251	-22	-119
Working capital, SEK m	-235	-219	-235	-219	-229
Total assets, SEK m	1,983	1,212	1,983	1,212	1,149
Net cash(+)/net debt (-), SEK m	-166	276	-166	276	157
Net cash(+)/net debt (-); IFRS 16 Leasing excluded, SEK m	-69	347	-69	347	224
Equity, SEK m	677	657	677	657	564
Average equity, SEK m	653	670	604	697	645
Equity/assets ratio, %	34	54	34	54	49
Debt/equity, %	61	13	61	13	14
Gross margin, %	79	77	77	75	75
EBITDA margin, %	-6	-5	-11	-7	-4
EBIT margin, %	-33	-26	-39	-29	-24
Return on total equity, %	-11	-6	-27	-14	-31
Average number of outstanding shares	233,606,729	105,936,790	164,293,422	105,938,100	105,973,395
Average number of outstanding shares after dilution	234,237,944	108,964,755	164,814,637	108,966,065	106,267,737
Number of outstanding shares at period end	233,680,462	106,182,266	233,680,462	106,182,266	106,182,266
Number of outstanding shares after dilution at period end	234,201,677	108,310,168	234,201,677	108,310,168	106,476,608
Average number of employees	752	543	719	540	541

¹On June 30, 2024 a total of 3.0 million stock options, and stock units were outstanding, which is an increase of 0.3 million since the end of 2023. Recalculation due to the Right issue in April 2024 has been done. During the year, no stock options have been redeemed. The dilution effect of stock options, and stock units in all the Company´s incentive programs corresponds to a maximum of approximately 1,6%.

BREAKDOWN OF NET SALES¹

SEK m	Q2 2024	Q2 2023	Jan-Jun 2024	Jan-Jun 2023	Jan-Dec 2023
NET SALES BY PRODUCT CATEGORY
Hardware	84	97	167	198	439
whereof Products & Solutions	75	87	152	178	366
whereof Integrations	8	10	15	20	73
whereof Autosense	0	-	0	0	0
Software	83	56	132	97	190
whereof Products & Solutions	23	27	44	53	104
whereof Integrations	56	28	79	43	82
whereof Autosense	5	1	9	1	5
Services	34	32	63	58	128
whereof Products & Solutions	11	14	25	35	62
whereof Integrations	20	16	32	22	64
whereof Autosense	4	1	6	2	3
Total net sales	201	185	362	353	758
NET SALES BY TIMING CATEGORY
At a point in time	193	178	349	324	728
whereof Products & Solutions	100	121	207	236	502
whereof Integrations	84	55	127	86	218
whereof Autosense	9	2	15	3	7
Over time	9	7	14	29	30
whereof Products & Solutions	9	7	14	29	30
whereof Integrations	-	-	-	-	-
whereof Autosense	-	-	-	-	-
Total net sales	201	185	362	353	758
NET SALES BY GEOGRAPHIC MARKET
EMEA	56	59	109	106	253
Americas	92	60	142	103	251
Other countries	53	67	112	144	254
Total net sales	201	185	362	353	758

¹ During, 2023, Tobii has changed classifications of certain products in the net sales by products categories and net sales by timing categories. Also changes between geographic markets have been made compared to earlier reporting. For those reasons, the figures for the comparison period have been recalculated.

QUARTERLY DATA

	2022			2023			2024
	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2
Net sales
Products and Solutions	139	92	121	161	138	127	94	173	112	109
Integrations	32	75	55	101	30	55	53	81	43	84
Autosense					1	2	3	2	7	9
Total	171	167	176	262	168	185	150	255	161	201
Gross margin, %
Products and Solutions	70	67	68	72	68	71	68	68	64	66
Integrations	76	96	90	88	91	92	89	88	96	96
Autosense					83	97	95	97	99	91
Total	71	79	74	78	73	77	75	74	74	79
EBITDA, SEK m
Total	-5	-11	1	43	-16	-10	-29	28	-27	-12
EBIT, SEK m
Products and Solutions									-23	-26
Integrations									-13	21
Autosense									-38	-60
Total	-45	-50	-36	9	-53	-48	-69	-14	-75	-66
Operating margin, %
Products and Solutions									-21	-24
Integrations									-31	25
Autosense									-571	-710
Total	-27	-30	-20	3	-32	-26	-46	-6	-46	-33
Profit/loss before tax, SEK m
Total	-42	-30	-17	-9	-57	-37	-75	-28	-88	-73
Profit/loss for the period, SEK m
Total	-42	-31	-17	-9	-57	-38	-74	-29	-89	-73

The Parent Company

The Parent Company's net sales during the quarter totalled SEK 120 million (134) and the operating profit was SEK -38 million (-55). At the end of the period, the Parent Company had SEK 190 million (307) in cash and cash equivalents.

CONDENSED PARENT COMPANY INCOME STATEMENT

SEK m	Q2 2024	Q2 2023	Jan-Jun 2024	Jan-Jun 2023	Jan-Dec 2023
Net sales	120	134	214	247	570
Cost of goods and services sold	-40	-37	-79	-80	-173
Gross profit	80	96	135	167	398
Selling expenses	-47	-48	-88	-93	-179
Research and development expenses	-38	-76	-109	-142	-273
Administrative expenses	-34	-30	-63	-60	-111
Other operating income and operating expenses	-0	3	4	5	-3
Operating profit/loss	-38	-55	-122	-124	-168
Financial items	-4	15	-13	11	1
Group Contributions	-	-	-	-	0
Profit/loss before tax	-42	-40	-135	-113	-166
Tax	-	-	-	-	-0
Profit/loss for the period	-42	-40	-135	-113	-166

CONDENSED PARENT COMPANY BALANCE SHEET

SEK m	Jun 30 2024	Jun 30 2023	Dec 31 2023
NON-CURRENT ASSETS
Intangible assets	515	382	418
Tangible fixed assets	8	10	10
Financial assets	1,201	370	391
Total non-current assets	1,724	763	818
CURRENT ASSETS
Accounts receivable	97	91	115
Inventories	67	62	60
Other current receivables	40	47	62
Cash and bank balances	190	307	194
Total current assets	394	507	432
Total assets	2,119	1,269	1,251
EQUITY	887	805	751
NON-CURRENT LIABILITIES
Interest-bearing liabilities	394	16	24
Other non-current liabilities	388	30	29
Total non-current liabilities	782	46	53
CURRENT LIABILITIES
Other current liabilities	450	418	447
Total current liabilities	450	418	447
Total liabilities	1,232	464	499
Total equity and liabilities	2,119	1,269	1,251

Note 1. Accounting policies

The Interim Report complies with the provisions of IAS 34, and the report for the Parent Company has been prepared pursuant to the provisions of the Swedish Annual Accounts Act and RFR 2. In addition to the financial statements, disclosures under IAS 34.16A also appear in other parts of the interim report. The accounting policies of the Parent Company and the Group, and the calculation principles used in the report, are unchanged from those used in the most recently published Annual Report, with the exception of the application of new standards. The IASB has published amendments to standards effective from January 1, 2024, or later. These amendments have not had a material impact on the financial statements.

Note 2. Segments

From first quarter 2024 Tobii is reporting three segments, Products & Solutions, Integrations and Autosense. For periods before Q1 2024, net sales, gross profit, and gross margin are reported for each segment. From first quarter of 2024, each segment is reported at operating result (EBIT) level. The Autosense segment comprises of FotoNation's AutoSense business and Tobii Autosense. Tobii Autosense was previously included in the Integrations segment. The additional image processing and computer vision technologies stemming from the acquisition of FotoNation are included into the Integrations segment.

PRODUCTS & SOLUTIONS

The segment´s products include hardware, software, and services and the customers include both B2B customers and consumers. Hardware consists of a suite of eye tracking products, including the flagship eye tracking glasses Tobii Pro Glasses 3, research-grade screen-based eye trackers such as Pro Spectrum and Pro Fusion and the consumer gaming device Tobii Eye Tracker 5. Software consists of Tobii Pro Lab and Sticky, among others.

INTEGRATIONS

This segment provides Tobii's attention computing technology for integration into device manufacturers' (also known as original equipment manufacturers, or OEMs) products. It offers a versatile array of OEM integration products, including software, hardware components, system reference designs, services, and intellectual property licenses. These integrations are deployed in various OEM devices, from gaming laptops and medical technology and communication aids devices to virtual reality headsets.

AUTOSENSE

The segment provides automotive interior sensing solutions, comprising of drive monitoring systems (DMS) and occupant monitoring systems (OMS), to automotive original manufacturers (OEM). The solutions are offered directly to the OEMs or indirectly to the OEM via Tier-1 suppliers and deployed in both commercial and passenger vehicles. The segment has design wins with a number of renowned OEMs and Tier-1 suppliers.

Note 3. Business combinations

DISCONTINUED OPERATIONS

No divestments have occurred during the quarter.

ACQUISITIONS

Eyevido GmbH

On August 9, 2023, Tobii acquired all shares in Eyevido GmbH. Eyevido offers a cloud-based software used for conducting webbased user studies with eye tracking. The software will complement and strengthen the consumer insight offering to enterprise customers. The acquisition is expected to have an insignificant effect on Tobii´s short-term financial results and position. The purchase consideration for the acquired net assets was SEK 9 million. Eyevido GmbH was consolidated into Tobii Group as of August 9, 2023.

FotoNation Ltd

On January 31, 2024, Tobii acquired all shares in FotoNation Ltd, including AutoSense business. This strategic acquisition strengthens Tobii's Interior Sensing offerings, including Driver Monitoring System (DMS) and Occupant Monitoring System (OMS).

The consideration for 100 percent of the shares in FotoNation Ltd amounts to a minimum of USD 45 million on a cash- and debt-free basis, of which approximately USD 30 million will be structured as a promissory note at 8% interest. The promissory note and interest are paid in three annual installments starting in 2027. A future payment of USD 15 million will be paid in four annual installments starting in 2028. There will thus be no upfront cash or share consideration.

Additional earnouts, estimated to be approximately USD 19 million at the time of closing, may be generated by the Autosense segment upon meeting specific volume targets, with payouts scheduled for 2031. This estimation will be continuously assessed and adjusted over time for accuracy.

FotoNation Ltd was consolidated into Tobii Group as of February 1, 2024.

Goodwill consists of the market position as one of the leaders in Automotive Interior Sensing with the potential of future revenue streams in multiple geographies. Goodwill is also attributable to the skills that many competent employees in new attractive markets bring, and scalability regarding both engineering and overhead resources with opportunities for synergies.

Since the acquisition, the company has contributed SEK 58 million to the Group's net sales, whereof SEK 15 million in the segment Autosense and SEK 43 million in the segment Integrations, and operating result of SEK -11 million. If the acquisition had been carried out on January 1, 2024, the contribution to the Group's net sales would have been SEK 90 million and to operating result SEK 8 million.

The costs of the acquisition amounted to SEK 31 million and were charged to earnings in 2023.

A preliminary purchase price allocation is presented on the next page.

Effects of Acquisitions¹

	FotoNation	Eyevido
SEK m	Ltd	GmbH
Cash payment	-	9
Promissory note	312	-
Contingent consideration	352	-
Consideration cash and cash equivalents	115	-
Reduction assumed liabilities	-18	-
Total consideration	760	9
Change in acquired assets and liabilities
Intangible assets (excl. goodwill)	187	12
Tangible fixed assets	58	0
Net other assets and liabilities	84	-0
Cash and cash equivalents	115	0
Deferred tax liability	-17	-2
	426	9

Goodwill 334 -

¹ The acquisition analysis is preliminary.

Note 4. Financial instruments

	Jun 30 2024 Jun 30 2023				Dec 31 2023
SEK m	Carrying amount	Fair value	Carrying amount	Fair value	Carrying amount	Fair value
Financial liabilities measured at fair value
Contingent considerations	378	378	19	19	18	18

Tobii classifies financial assets and liabilities measured at fair value in a hierarchy based on the information used in the valuation of each asset or liability. For level 3 financial instruments, information material to the fair value assessment is not observable and Tobii's own assessments are applied. Interest-bearing loans and contingent considerations are classified under level 3.

Change in contingent consideration

SEK m
Liabilities
Opening balance Jan 1, 2024	18
Acquisitions during the year	352
Payments	-0
Translation differences	8
Closing balance Jun 30, 2024	378

Other than the contingent consideration, Tobii has no financial instruments that are measured at fair value in the income statement.

IMPAIRMENT OF GOODWILL

Impairment testing for goodwill was carried out at the end of the 2023 financial year, without any need for impairment being identified.

Note 5. Pledged assets and contingent liabilities

As of June 30, 2024, SEK 0 million (0) are guarantee commitments in the Swiss subsidiary through subordination guarantee. Tobii has pledged corporate mortgages of SEK 100 (100) million referring to the revolving credit facility and SEK 300 (-) million referring to the promissory note to Xperi Inc. (from the acquisition of FotoNation Ltd.).

Other information

RISKS AND UNCERTAINTY FACTORS

Tobii's business risks include the economic climate, the competitive situation, currency risks, credit risks in relation to customers, financing risks, the risk of impairment write-downs of capitalized R&D and other intangible assets, and regulatory risks. Tobii's risks and risk management are described in greater detail in the risk section on pages 40-44 and note 3 on page 68 in the 2023 Annual and Sustainability Report. Tobii is of the opinion that this risk description remains correct.

SEASONALITY

Tobii's operations and net sales is characterized by variations between quarters. The seasonal patterns are different for the segments Product & Solutions and Integrations and there are also regional variations. The fourth quarter is normally the strongest quarter in terms of net sales and profits as the budget year closes in most of Tobii's geographic markets.

ORGANIZATION

The average number of full-time employees (FTEs), excluding consultants, was 719 (540) during the period January–June 2024. The increase was related to the acquisition of FotoNation/Auto-Sense.

ACQUISITION OF AUTOSENSE

On December 13, 2023, Tobii entered into an agreement to acquire all shares in FotoNation Ltd, including the AutoSense business. The transaction was closed on January 31, 2024. This strategic acquisition enhances Tobii's automotive interior sensing offering, including driver monitoring systems (DMS) and occupant monitoring systems (OMS). AutoSense has design wins with several OEMs across more than 100 models. AutoSense has around 250 full-time employees, predominantly based in Romania and Ireland, with the majority within engineering.

The near-term net sales and positive EBIT contribution stems largely from the image processing and computer vision technologies while the mid to long-term net sales and EBIT contribution will come from automotive interior sensing. It is expected that the net sales generated outside the automotive business will decline after 2024.

For more details on the consideration and transaction, please refer to the related press release, webcast, and accompanying slide deck available at corporate.tobii.com/investors

RIGHTS ISSUE

A rights issue of approximately SEK 301 million was executed in the end of March and completed on 3 April 2024. The outcome showed that the total subscriptions, both with and without subscription rights, corresponded to approximately 139 percent of the offered shares. As a result of the rights issue, Tobii received total net proceeds of SEK 267 million.

AGM 2024 AND CHANGES IN THE BOARD

The annual general meeting (AGM) in Tobii was held on May 23, 2024, at Tobii's head office, Karlsrovägen 2D, SE-182 53 Danderyd. The AGM re-elected Charlotta Falvin, Jörgen Lantto and Per Norman as members of the board of directors and John Elvesjö, Sarah Eccleston and Carl Mellander were elected as new members of the board. Per Norman was re-elected chairman of the board.

For more information about the other resolutions passed, see the bulletin from the annual general meeting.

SHARE CAPITAL AND SHAREHOLDERS

Tobii has issued two classes of shares: ordinary shares and C shares. Ordinary shares carry one vote per share while C shares carry one vote per ten shares. The shares have a quotient value of SEK 0.007256934 per share. The sole purpose of the C-shares is to facilitate settlement of the company's long-term incentive programs. The C-shares are always included in the company's balance sheet and Tobii is not allowed to exercise the voting rights for these shares. Hence, in practice there is only one share class exercising its voting rights and available for trading in Tobii´s free float.

As a result of the resolution to issue class C-shares by the annual general meeting on May 23, 2024, as well as conversion of class Cshares to ordinary share, the number of Class C shares has increased with 714,951 and the number of ordinary shares has increased with 79,478. As of June 30, the total number of shares in the company amounts to 236,572,792, divided into 233,680,462 ordinary shares and 2,892,330 class C shares. The total number of votes in the company amounts to 233,969,695. The share capital has increased by approximately SEK 5,765 to SEK 1,716,793.11.

As of June 30, 2024, Tobii has 23,526 shareholders. The company's three largest shareholders were Öhman Fonder (6.05% capital and 6.13% votes), Mårten Skogö (6.04% capital and 6.11% votes) and Henrik Eskilsson (5.87% capital and 5.95% votes). For more information about Tobii's share and ownership structure, see https://corporate.tobii.com/investors/the-share.

FINANCIAL TARGETS AND DIVIDEND POLICY

On 1 February 2024, the board of directors adopted new financial targets for the Tobii group. Tobii is targeting:

• Positive free cash flow for the full-year 2026
• Operating margin (EBIT) of around 10% for the full-year 2026
• Operating margin (EBIT) of around 20% for the full-year 2028

These new targets focusing on profitability replace the previous targets.

Tobii will continue to reinvest cash flows in growth initiatives and therefore in the near term does not foresee any annual dividends.

TRANSACTIONS WITH RELATED PARTIES

No transactions have occurred between Tobii and related parties that have materially affected the Company's position and earnings.

Alternative performance measures

Alternative Performance Measures (APMs) are financial measures of financial performance, financial position, or cash flows other than those defined in the applicable financial reporting framework (IFRS). These are considered to be important supplemental measures of the company's performance. These measures may not be comparable to measures used by other companies since not all companies calculate financial measures in the same way. The key ratios and alternative performance measures that Tobii uses are defined on the next page.

Reconciliation of APMs

This section presents only the reconciliation of alternative performance measures that cannot be calculated from the information in financial reports in this interim report.

Operating profit/loss before depreciation, amortization, and impairment, EBITDA

SEK m	Q2 2024	Q2 2023	Jan-Jun 2024	Jan-Jun 2023	Jan-Dec 2023
Operating profit/loss before depreciation, amortization and impairment, (EBITDA)	-12	-10	-39	-26	-27
Amortization and impairment	-41	-30	-77	-59	-125
Depreciation	-13	-8	-24	-16	-32
of which Right-of-use assets (IFRS 16 Leasing)	-9	-6	-17	-13	-27
Operating profit/loss (EBIT)	-66	-48	-140	-101	-184

Definitions

Key performance measures	Definition	Purpose
Gross margin	Gross profit in relation to the net sales of the business.	Gross margin is used to measure production profitability.
EBITDA	Operating profit/loss before depreciation, amorti zation and impairment.	EBITDA is used to measure earnings from opera ting activities excluding depreciation, amortization and impairment.
EBITDA margin	Operating profit/loss before depreciation, amorti zation and impairment in relation to the net sales of the business.	The EBITDA margin is used to illustrate EBITDA in relation to sales.
Operating profit/loss (EBIT)	Operating profit/loss in relation to the net sales of the business.	The EBIT margin is used to illustrate EBIT in relation to sales and is a measure of the company's profitability.
Operating margin (EBIT margin)	Operating profit/loss in relation to the net sales of the business.	The EBIT margin is used to illustrate EBIT in rela tion to sales and is a measure of the company's profitability.
Cash flow from operating activities	Cash flow from operating activities including change in working capital and before cash flow from investing and financing activities.	Cash flow from operating activities is used as a measure of the cash flow the Group generates before investments and financing.
Free cash flow	Cash flow after continuous investments, meaning cash flow from operating and investment activities, excluding acquisitions and disposals of subsidiaries.	Free cash flow is used as a measure of the cash flow generated by the underlying business exclu ding cash flow from acquisitions, divestments and the financing activities.
Working capital	Inventories, trade receivables and other current receivables less trade payables and other current non interest-bearing liabilities.	Working capital is used to measure the company's capacity to meet its current capital requirements.
Net cash (+)/net debt (-)	Cash and cash equivalents less interest-bearing liabilities.	Net debt represents the company's capacity to pay off all of its debts should they fall due for payment as of the balance sheet date using the company's available cash and cash equivalents on the balance sheet date.
Organic growth	Change in total sales for the period adjusted for acquisitions, disposals and currency, compared with total sales for the comparative period.	Organic growth is used to measure the underlying growth in local currencies of the business.
Equity/assets ratio	Total equity as a percentage of total assets.	The equity/assets ratio shows the percentage of total assets financed by the shareholders through equity.
Net debt/equity ratio	Interest-bearing liabilities divided by shareholders' equity.	The net debt/equity ratio measures the extent to which the company is financed through loans.
Return on equity	Profit after tax in relation to average equity during the period.	Return on equity is used to analyze profitability over time.
Equity per share	Equity at the end of the period attributable to the parent company's shareholders divided by the number of shares at the end of the period.	Equity per share measures the Group's net value per share.
Average number of employees	The average number of permanent employees, including part-time employees converted to full time employment.	Average number of employees measures the number of full-time employees in the Group needed to generate the period's earnings.

Board's assurance

The Board of Directors and the Chief Executive Officer of Tobii AB (publ) hereby confirm that this half-year report provides a true and fair overview of the operations, financial position and results of the parent company and the Group and describes material risks and factors of uncertainties faced by the parent company and the companies in the Group. The report has not been reviewed by the Company's auditors.

Tobii AB

Danderyd, July 19 2024

Charlotta Falvin Board member

Per Norman Chairman of the Board Carl Mellander Board member

Sarah Eccleston Board member

Jörgen Lantto Board member

John Elvesjö Board member

Anand Srivatsa President and CEO

This is Tobii

More than twenty years ago, Tobii pioneered the world's first plug & play eye tracker. Today we are the global leader in our industry with a mission to improve the world with technology that understands human attention and intent.

WHO WE ARE

Tobii is a leading developer, manufacturer and partner on eye tracking and attention computing solutions across various industries worldwide. Around 700 passionate Tobiians drive our diverse organization, developing technologies for the next leap in human computer interaction, turning groundbreaking innovations into reality.

WHAT WE DO

Our technologies fuel digital transformation across scientific research, gaming, extended reality, assistive tech, and auto- motive interior sensing. Integrated into devices like glasses, headsets, personal computers, gaming accessories, medical equipment and vehicles. They support thousands of enterprises, including global tech and automotive OEMs, and leading research institutes worldwide.

OUR FOOTPRINT

Tobii, headquartered in Stockholm, Sweden, operates in 12 countries across Asia, Europe, and North America. We engage customers directly in key markets and collaborate with resellers in other markets.

12 countries

~700 Tobiians

FOR MORE INFORMATION, PLEASE CONTACT:

Magdalena Rodell Andersson, CFO +46 (0)8 663 69 90

Carolina Strömlid, Head of IR +46 (0)708 807 173, ir@tobii.com

PUBLICATION

This interim report comprises such information that Tobii AB is obligated to publish pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. This information was published through the agency of the persons set out above on July 19, 2024, at 7.30 a.m. CEST.

WEBCASTED PRESENTATION

A webcasted presentation will be held in English today at 9.00 a.m. (CET). To participate, please visit: https://ir.financialhearings.com/tobii-q2 report-2024

The presentation material and a replay will be available at the investor website afterwards.

FINANCIAL CALENDAR 2023/2024

Interim report Q3 2024 October 25, 2024

Year-end report 2024 February 4, 2025

Tobii AB (publ), Corp. Id. No. 556613-9654, Karlsrovägen 2D, SE-182 53 Danderyd, Sweden, phone: +46 8 663 69 90, www.tobii.com