Tobii Interim Report for the first quarter 2023

Press release
Stockholm, May 4, 2023

Tobii AB (publ) today announced its results for the first quarter of 2023.

First quarter January – March 2023

• Revenue was SEK 168 million (171), corresponding to organic decline of 7%
• Gross margin increased to 73% (71%)
• Operating result (EBIT) was SEK -53 million (-45)
• The net result for the period amounted to SEK -57 million (-42)
• Earnings per share amounted to SEK -0.55 (-0.42)
• Cash flow after continuous investments amounted to SEK 46 million (-48), including SEK 63 million tax deferrals related to covid-reliefs
• Cash and cash equivalents were SEK 439 million (402), excluding SEK 49 million (61) in finance leases

Significant events during the period

• Tobii received three design wins in the quarter. One for an enterprise VR-headset and two for integration of Tobii Aware in laptops.
• Further strengthened financial position through additional tax deferrals related to covid-reliefs of SEK 63 million and a SEK 50 million revolving credit facility.
• On February 22, 2023, Sony launched the PlayStation VR2 (PS VR2). Reviews of both the headset and its eye tracking performance have been positive.

Significant events after the period end

• Tobii announced that it has been selected by the world’s largest automotive tier-1 supplier based in Germany to deliver its software for driver monitoring systems (DMS) to 25 heavy vehicle models from a European OEM.

Comments from the CEO

Our first automotive DMS design win
During the quarter, we have made substantial progress on many fronts, including in key customer engagements in XR and Automotive. Most notably, this was demonstrated after the quarter end in our breakthrough DMS design win with the world´s largest automotive tier 1 supplier. This design win is with a commercial vehicle manufacturer, with several brands, headquartered in Europe. I expect this to be the first of multiple design wins over the course of the year.

When we entered this market, our ambition was to create a leading solution with the highest robustness, easiest integration, and lowest total cost of ownership. Our software for DMS is highly competitive and we can now succeed in establishing Tobii in the industry. We have continued to mature our engagements with multiple tier 1s, OEMs, and other partners. Our aim is clear - to attain a market-leading position. The automotive DMS software industry is expected to be a multibillion-SEK-a-year market over the next decade. This adds another significant market for our core technologies and enables efficient leverage of development and investments across multiple verticals.

A slow revenue quarter
Q1 2023 revenues declined 7 percent organically. In our Products & Solutions segment, the weakness was primarily attributed to continued headwinds with enterprise customers. In the Integrations segment, we saw a low level of engineering revenues (NREs) recognized in the quarter and we did not receive any license revenue from Sony as they consumed the licenses they have procured in 2022.

We are confident about the potential of our Integrations segment for the full year. As we highlighted in our record fourth quarter of 2022, our business can vary significantly between quarters. Thus, to form a more accurate view, our underlying financial performance should be viewed over a longer time horizon.

We had another quarter with positive cash flow, generating SEK 46 million in cash flow after continuous investments, which resulted in a sound cash position of SEK 439 million. This was supported by SEK 63 million in deferred tax related to covid-relief. We have also signed a SEK 50 million revolving credit facility, giving us a strong liquidity position.

We are building on our successful track record of targeted acquisitions

The macroeconomic turbulence in the last few quarters has created challenging financing conditions for many companies, with more M&A opportunities at attractive valuations as a result.

During the first quarter, we acquired Oculid. Based in Germany, Oculid has a leading solution for cloud-based mobile user research. By joining forces, we will fast-track our product development, create a more complete offering for Tobii and accelerate the commercialization of Oculid´s product. The Oculid deal is similar to our acquisition of Phasya in 2021, which provided us with key complementary technology that accelerated our path to success in DMS.

We expect to continue to be highly selective and prudent in our acquisition strategy going forward.

Breakthrough for our long-term investments

2023 is already a milestone year for Tobii. Tobii is achieving mass market scale for the first time, with millions of users experiencing the power of eye tracking with the PSVR 2. 2023 is even more significant now that we have succeeded in breaking into another large market vertical, automotive DMS. I look forward to capping off this year by once again being EBIT profitable in Q4 2023.

Anand Srivatsa

CEO

Webcast
A conference call and online presentation will be held in English today at 9:00 a.m. (CET). The webcast link and presentation material will be available in the calendar entry on Tobii´s website ahead of the webcast. The year-end report and a recording of the webcast will be available on the same page after the publication and webcast. You can also attend the webcast through the following link.

This information is information that Tobii AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, on May 4, 2023 at 7:30 a.m. CET.

Contact

Henrik Mawby, Head of Investor Relations, Tobii Group, phone: +46 (0)72 219 82 15, email: henrik.mawby@tobii.com

About Tobii

Tobii is the global leader in eye tracking and pioneer of attention computing. We are on a mission to improve the world with technology that understands human attention and intent. Creating tech for a better future, our technologies and solutions apply to areas such as behavioral studies and research, healthcare, education and training, gaming, extended reality (VR, AR & MR), automotive, and many more. Tobii's eye tracking is used by thousands of enterprises, universities, and research institutes around the globe. Headquartered in Sweden, Tobii is listed on Nasdaq Stockholm (TOBII). For more information: www.tobii.com.