Gapwaves interim report July-September 2021, Strong development and strengthened positions

Gapwaves operations continue to develop in a positive way and the strong sales development from the first six months continues in the third quarter. Revenue for the period July-September amounted to 8,5 MSEK (2,6 MSEK)

We continue to see the highest interest for Gapwaves technology within radar applications for automotive active safety, last-mile delivery and traffic surveillance. Driven by the development of more advanced active safety-systems and automated vehicles, the market for vehicle radar and radars with higher resolution and range is expected to increase heavily in the next few years. The expectation is that it will increase the demand for Gapwaves technology since it enables significantly improved performance and cost benefits.

Volume deliveries and intensified discussions
We see an increased inflow of follow-up orders and new projects from existing customers where the projects increase in both scope and value. Furthermore, we see an increased interest from new players, which is partly a result of the publicity surrounding the deal with HELLA.

Revenue has increased by more than 200% compared to the same period last year, which is partly a result of large deliveries of advanced high-resolution 77 GHz radar antennas to Uhnder, Smartmicro and the tech-giant we have been working with since 2020. These antennas are all mounted and tested in our own production facility in Gothenburg. In total, we have delivered over 14 000 antennas to our customers, which confirms our internal production capacity.

During the quarter, Uhnder ordered new projects. In addition to robotic transports, they are now also choosing to develop a 77 GHz antenna intended for vehicle radar based on Gapwaves technology. In parallel with the prototype production of this antenna, discussions are ongoing about an industrialization project with the aim of qualifying the antenna for high-volume deliveries to the automotive industry.

Furthermore, we have started a new collaboration with another Tier 1, one of the world-leading suppliers to the automotive industry, which has long been high on our wish list. During the quarter, the customer ordered three parallel projects with the aim of developing a more advanced and complex antenna for a high-resolution vehicle radar. The customer is pleased with the outcome so far and confirms that they see Gapwaves waveguide antennas as a crucial component for the next generation of radar modules.

The collaboration with HELLA, with the aim of producing the next generation of corner radar, is proceeding according to plan and after the end of the period a new order was received. The order is a follow-up to previous 77 GHz vehicle radar projects. The prototypes produced will meet the antenna specification of the final high-volume product.

Since we have now delivered over 14 000 antennas and that several of our customers have initiated discussions about long-term agreements for high-volume scenarios, we feel that the future looks positive. Gapwaves is well on its way to taking the step from being a prototype supplier to entering into more long-term agreements with global suppliers to the automotive industry and other radar applications.

Continued interest from the telecom market
We continue to monitor the rollout of 5G on millimeter waves and are ready when it picks up. Driven by the development of smart cities, automated vehicles and 5G / 6G at higher frequencies, it is our belief that we will see an increased interest in Gapwaves technology in the near future. We are in close dialogue with the part of the market that is at the forefront of the commercialization of 5G and the customers who continue to evaluate Gapwaves 5G modules. Among other things, after the end of the period, we received an order for two evaluation kits for 28 GHz Phased Array Antennas from our Japanese distributor Cornes.

Another exciting area that we are exploring is satellite communication, where Gapwaves is part of a Vinnova-funded research project together with Forsway and Satcube, among others, with the aim of developing the next generation satellite terminal.

Long-term strategies are followed
Gapwaves strategic plan remains unchanged, and we have laid a solid foundation during the first three quarters of the year to end the year in a continued positive development. We follow our long-term strategy to make Gapwaves technology the standard for waveguide-based antennas and to build a broad and diversified customer base that chooses Gapwaves antenna technology for its products.

One area that we follow extra closely is the development within the next generation of radar. The higher levels of automated vehicles require extremely high-resolution Imaging Radars, a sensor that is vital in self-driving vehicles. For this type of radar sensor, we see a new market taking shape where a waveguide antenna will be necessary for a high-performance system.

Third quarter: 1 July – 30 September 2021

• Net revenue amounted to 8,5 MSEK (2,6 MSEK)
• Operational result amounted to –9,4 MSEK (-12,6 MSEK)
• Net result amounted to –9,2 MSEK (-12,6 MSEK) corresponding to -0,30 SEK (-0,45 SEK) per share
• Cash flow for the period was –12,4 MSEK (-12,8 MSEK) and cash and cash equivalents at the end of the period amounted to 219 MSEK (85 MSEK)

CEO Lars-Inge Sjöqvist comments on the report:
”We see an increased interest in our technology throughout the period and in the last few weeks we delivered around 500 prototype antennas to some of our customers. After the period, we have delivered an additional 1 200 antennas to our customers. I would like to thank all the employees at Gapwaves who contributed to what we achieved during the third quarter. As CEO of Gapwaves, I am very grateful to be a part of this team and to take further steps together into the megatrend that the industry for active vehicle safety and automated vehicles constitutes.”

The report can be downloaded here.

For more information, please contact:  
Lars-Inge Sjöqvist, VD 
Phone number: +46 736 84 03 56 
E-mail: lars-inge.sjoqvist@gapwaves.com

Gapwaves Certified Adviser is G&W Fondkommission  
Phone number: +46 (0)8 503 000 50  
E-mail: ca@gwkapital.se   
www.gwkapital.se   

About Gapwaves AB 
Gapwaves originates from research conducted at Chalmers University of Technology and was founded in 2011. Gapwaves vision is to be the most innovative provider of mm-wave antenna systems and the preferred partner to those pioneering next generation wireless technology. By leveraging the disruptive Gapwaves technology we help pioneers in telecom and automotive to create highly efficient mm-wave antenna systems that contributes to re-defining everyday life. Gapwaves markets are e.g. mmWave in 5G telecom and automotive. 

Gapwaves share (GAPW B) is traded at Nasdaq First North Stockholm with G&W Fondkommission as Certified Adviser.