![Tobii AB Logo](https://ik.imagekit.io/kkbzr2uz4cp/stock/sto/tobii.png?tr=w-200)
Tobii AB
STO:TOBII
![Tobii AB Logo](https://ik.imagekit.io/kkbzr2uz4cp/stock/sto/tobii.png)
US |
![]() |
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
US |
![]() |
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
US |
![]() |
Bank of America Corp
NYSE:BAC
|
Banking
|
US |
![]() |
Mastercard Inc
NYSE:MA
|
Technology
|
US |
![]() |
Abbvie Inc
NYSE:ABBV
|
Biotechnology
|
US |
![]() |
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
US |
![]() |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
US |
![]() |
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
US |
![]() |
Visa Inc
NYSE:V
|
Technology
|
CN |
![]() |
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
US |
![]() |
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
US |
![]() |
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
US |
![]() |
Coca-Cola Co
NYSE:KO
|
Beverages
|
US |
![]() |
Realty Income Corp
NYSE:O
|
Real Estate
|
US |
![]() |
Walt Disney Co
NYSE:DIS
|
Media
|
US |
![]() |
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
2.038
15.55
|
Price Target |
|
We'll email you a reminder when the closing price reaches SEK.
Choose the stock you wish to monitor with a price alert.
![]() |
Johnson & Johnson
NYSE:JNJ
|
US |
![]() |
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
![]() |
Bank of America Corp
NYSE:BAC
|
US |
![]() |
Mastercard Inc
NYSE:MA
|
US |
![]() |
Abbvie Inc
NYSE:ABBV
|
US |
![]() |
Pfizer Inc
NYSE:PFE
|
US |
![]() |
Palantir Technologies Inc
NYSE:PLTR
|
US |
![]() |
Nike Inc
NYSE:NKE
|
US |
![]() |
Visa Inc
NYSE:V
|
US |
![]() |
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
![]() |
3M Co
NYSE:MMM
|
US |
![]() |
JPMorgan Chase & Co
NYSE:JPM
|
US |
![]() |
Coca-Cola Co
NYSE:KO
|
US |
![]() |
Realty Income Corp
NYSE:O
|
US |
![]() |
Walt Disney Co
NYSE:DIS
|
US |
![]() |
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
This alert will be permanently deleted.
![](https://ik.imagekit.io/kkbzr2uz4cp/stock/sto/tobii.png)
Good morning and a warm welcome to the presentation of Tobii's Q2 2024 results. My name is Carolina Stromlid and I am Head of Investor Relations at Tobii. Our CEO Anand Srivatsa; and CFO Magdalena Andersson will as usual take you through the highlights and the financial development of the quarter. After the presentation, there will be a Q&A session. So please feel free to start posting the questions in the chat at anytime. And for those of you who have registered to ask questions live, simply raise your hand to participate. With that I hand over the word to you, Anand.
Thank you very much, Carolina. And thank you everyone for joining us today. We entered the second quarter of 2024. It's quite a different company after the completion of our significant and transformative acquisition of FotoNation. That acquisition firmly establishes Tobii as the #3 player in the automotive interior sensing software market. That acquisition also of course means that as a company we have a much larger set of resources than we have ever had before. And we also face a situation where demand for our other businesses are weaker. With these 2 realities in mind, we had 2 major focus areas for this quarter. The first was around cost reduction and the second was around ensuring a successful integration of AutoSense. On the first front, I am happy that we have initiated a comprehensive cost reduction program to ensure that we can meet our free cash flow and profitability goals while operating under our existing cash resources. Magdalena will share more details about this cost reduction program later in the presentation. The second focus area equally critical of course is to ensure that we have a successful integration of AutoSense to build our long-term position as a leader in automotive interior sensing. I am happy that in the quarter we have made progress on building a joint and comprehensive interior sensing road map, that we have started the work to build a unified team with a shared sense of culture and that we have harmonized our approach towards our joint customers. The work on the customer front has already started to yield more RFQ and RFI request to Tobii. And we expect that this increased activity will mean more design wins in the second half of the year. Now shifting over to the business results. For the quarter we did see an increase in overall net sales, an 8% increase. But our organic business continued to decline primarily with continued weakness in the Products and Solutions segment. Magdalena will walk you through the details on a per segment basis as part of our financial update in this presentation. Now beyond the acquisition, the cost reduction programs, the business execution of course, I am also quite happy that in the quarter we released 3 new software products that are intended to strengthen our product and solutions and integrations product portfolio. On the products and solutions side, we launched 2 new cloud-based SaaS solutions, Glasses Explore and UX Reveal, which help customers get insights easier with attention computing studies. On the integration side, we launched a software called Tobii Nexus, which allows a broader set of customers to enable attention computing into their solutions by only requiring a webcam as hardware to go and enable the power of Tobii Technologies. Now before I shift to Magdalena sharing the financial results, I wanted to remind all of you about the new Tobii organization. We are now organized into 3 business segments: The first is Products and Solutions, which delivers vertical solutions to a range of customers, thousands of them from universities that are looking to push the boundaries of science, to enterprises that are looking to get insight into their customer or employee behavior and to even end-gamers who are trying to get a more immersive experience. The Products and Solutions business is the largest business in Tobii today and as of Q2 2024 represents 61% of our revenue so far this year. The Integrations business segment addresses customers who want to take Tobii Technologies into their own products. Typical customers in this space include AR and VR headset makers, medical device manufacturers and PC OEMs. This business represents 35% of Tobii's net sales for 2024. Finally, the AutoSense business segment is our new business segment, where we deliver software solutions to automotive OEMs and Tier 1s that are intending to deliver driver monitoring and occupancy monitoring solutions in their offerings. This segment is still in its early stages of maturity and represents 4% of Tobii's net sales so far this year. Our intention with these 3 segments is to share with investors on a quarterly basis the net sales, the gross margins as well as the EBIT levels of the different segments, so our investors can better understand where we are on a segment basis and judge their maturity. These 3 segments, of course, are in different phases of maturity already today and our expectation is that the Products and Solutions segment and the Integrations segment will reach profitability in the near term, while AutoSense continues to be in an investment phase for the next couple of years. With that, I'd like to hand it over to Magdalena to discuss our financial results in more detail. Magdalena?
Thanks. Yes. Thanks, Anand. So Tobii's net sales grew with 8% in the quarter, very much thanks to the acquisition, which contributed with 25% to the overall growth, while the organic growth was minus 16%. The EBIT in the quarter was minus SEK 66 million and contained SEK 10 million of one-off costs related to redundancies, without which the EBIT would have been SEK 56 million. With the 8% growth in the quarter, the net sales totaled SEK 201 million compared to SEK 185 million last year. This is the first quarter where the acquisition of FotoNation was part of Tobii during the whole quarter. The acquisition closed on the 31st of January. So in Q1, we already had February and March consolidated. Total net sales for January to June grew 3% and was SEK 362 million in total compared to SEK 353 million last year. The organic growth in the quarter was minus 16%, stemming from both segments, Products and Solutions and Integrations. And the organic growth for the first half year was minus 12%, mainly stemming from the Products and Solutions segment. The acquisition contributed with 25% growth in the quarter and with 17% for the first half year. The majority of the net sales from the acquisition in the quarter was attributed to the Integrations segment. This is a pattern that will continue during the fall, but when going into 2025, the Integrations net sales from the acquisition will decline. The gross margin was 79% compared to 77% last year where the product mix effect drove the margin upwards. The EBIT in the quarter was minus SEK 66 million compared to minus SEK 48 million last year. Now given the reality of both a larger organization through the acquisition with possibilities for synergies and the weaker demand, we are now concentrating on significantly reducing our cost base. That is in order to secure that we are operating within our available cash resources going forward. The current cost measures are projected to reduce cash-related operational expenses by approximately SEK 200 million over the next 4 quarters. These actions are of highest priority for us and I will get back to the topic also later in the presentation. As a result of these cost reduction actions, we have taken extraordinary costs related to redundancy in the quarter of around SEK 10 million, without which the EBIT would have been SEK 56 million -- minus SEK 56 million. The EBIT year-to-date was minus SEK 140 million or minus SEK 130 million when adjusting for the one-off costs and that is compared to minus SEK 101 million last year. And so going over to the segments. Products and Solutions. Today, the largest segment within Tobii with 54% of net sales, had another weak quarter with an organic growth of minus 15%. We saw continued weaker demand in Asia, but the negative development in this quarter should also be viewed in the context of an exceptionally strong quarter last year with 31% growth. Year-to-date, the organic growth was the same as for the quarter and that is minus 50%. The gross margin in the quarter was 66% compared to 71% last year. The combination of product mix and negative scale effect from lower volumes grow the margin down. The margin year-to-date was 65% compared to 70% last year with the same logic for the deviation. The EBIT for Products and Solutions was minus SEK 26 million in this quarter and year-to-date, the EBIT was minus SEK 49 million. Of course, this is not an acceptable EBIT level in this more mature segment and therefore, we continue to take cost actions. The Integrations segment, which stood for 42% of Tobii's net sales in the quarter had a total growth of 52%. The organic growth was minus 16%, affected by quarterly variations and the acquisition contributed with 68%. As mentioned before, the majority of the net sales from the acquisition in this quarter was attributed to the Integrations segment. The level of these additional sales will go down when going into 2025. Year-to-date, the net sales grew with 48% of which organic minus 3% and from the acquisition plus 51%. The gross margin was 96% compared to 92% last year, both in the quarter and year-to-date. The outcome was the result of higher share of software and services. The EBIT in the quarter was a positive SEK 21 million. And with that, also the year-to-date EBIT was a positive SEK 7 million. So the AutoSense segment, which is still in an investment phase, had a net sales in the quarter of SEK 9 million, mainly stemming from the acquisition. Year-to-date, the net sales was SEK 15 million. The gross margin was 91% in the quarter, somewhat lower compared to last year's 97% and then with the numerator and the denominator still being very low percentage points change quickly when you add a bit of cost of goods sold and services as we did this quarter. Year-to-date, the gross margin was 95% compared to 94% last year. A high gross margin reflects the high level of software and services in this segment. The EBIT was minus SEK 60 million in the quarter and minus SEK 99 million year-to-date. And then looking at the balance and cash flow. The free cash flow of the continuous investments was minus SEK 125 million in the quarter and minus SEK 251 million year-to-date compared to minus SEK 67 million in the quarter last year and minus SEK 22 million year-to-date, where last year's Q1 was positively affected by SEK 63 million in temporary COVID-related tax reliefs. In the quarter, the rights issue was completed with a net of SEK 267 million. The cash position in the end of the quarter was SEK 244 million. And in addition, we have an unutilized revolving credit facility of SEK 50 million. Of course, we cannot continue to consume cash at this pace going forward as we have done in these 2 quarters. And we certainly do not intend to do so either. And that conclusion is a suitable bridge into my next slide around costs and operational efficiency. When we acquired FotoNation, we were very much aware that we will start out with high costs and low net sales from this new segment and we plan to work our way forwards from that. In addition to these already known facts for the spring, we have also underperformed during the first half year in our Products and Solutions segment. So what are we doing? Well, besides driving business development to secure higher net sales, we have an expanded cost reduction program going on, which we are executing on to secure that we continue to operate within the existing cash resources. We are breaking the cost reduction program down in 3 buckets. The first bucket is our product investments, which sums up to the research and development expenses in the P&L and CapEx. Here, we are prioritizing hard on what products to [indiscernible] development in, what products that only maintain and what products to exit. The second bucket is the rest of the organization, which sums up to the sales and marketing and administrative expenses in the P&L. Here, we have done reorganizations and new prioritizations, while at the same time, securing the efficiency effects from working more streamlined globally and with a higher degree of low-touch sales. And then the third bucket. That is where the realization of synergies from the acquisition is sorted. As I mentioned earlier, for this package, we already had plans for how to proceed closing -- after closing of the acquisition and now we are executing on these plans. The effect from this work will also be seen in the research and development expenses and CapEx. All in all, the work we are doing in these 3 buckets will reduce the cash-related operational expenses with approximately SEK 200 million the coming 4 quarters using Q2 2024 as a baseline. And when we talk about cash-related expenses, we mean expenses without depreciation, but including CapEx. And we use this term since it's closer to cash, which is what we are focusing on here. In practice, this means that the expenses that will be seen in the P&L going forward will not be reduced as much as the cash-related expenses will and that is for 2 reasons. One, because when we reduce the engineering development expenses, they are normally capitalized and that's not seen in the P&L directly. The second reason is that going forward, depreciation will increase once different parts of the products within the AutoSense segments are ready and we start to get license revenue from design wins, we will also start depreciation of these products. And so in addition to these short-term profitability and cash improvement focus, we are, of course, very much committed to our long-term financial goals, which we introduced earlier this year and for which the short-term development improvement builds the foundation. We are thus working to secure a positive free cash flow for 2026 for the full year of 2026 and an EBIT margin of around 10% for the full year of 2026 and then an EBIT margin of around 20% for the full year of 2028. And with that, over to you, Anand and so to wrap up.
Thank you so much, Magdalena. Thank you again. So now we'll shift over to the other topic we wanted to share with you, which is to share the progress we're making around AutoSense. This being our newest segment, I know that this is an area where some of our investors are not as up to date on versus the other parts of Tobii's business, which we have, of course, been speaking about for several years. I want to start first by laying the groundwork of what is happening in the interior sensing market. The interior sensing market today is in a state of evolution. The first set of technologies that have been deployed in this space are driver monitoring systems or DMS as they're called. These systems have actually been deployed in cars starting as early as 2006. And the primary focus of these systems is to make the cars more safe by ensuring that drivers are focused very much on the act of driving, that they're paying attention to the road, they're paying attention to what they need to do as a driver to keep the car safe. The first set of evolution that we've seen beyond driver monitoring systems is occupancy monitoring systems. Here, Tobii is very much a leader. And these capabilities are really driven around OEMs intending to offer differentiation by providing a unique in-car experience. Tobii Solutions have been shipping in the market since 2021 and we are right now the only provider getting these solutions on cars on the road. As driver monitoring systems and occupancy monitoring systems proliferate, we see the trend towards a new type of system architecture, what we call single camera DMS and OMS. We call this area SCDO. And the driver for single camera DMS, OMS is primarily around getting lower cost for the overall system while enabling the OEMs to both meet the safety regulations that are driving DMS adoption, but also enabling them to offer the kinds of features that they can monetize that really drive differentiation and uniqueness for the particular OEM brand. In this space, Tobii is the pioneer and we expect to be the first technology provider to have our solutions on vehicles on the road in 2025. So how are we doing across these 3 domains of interior sensing? On the driver monitoring side, in Q2, as we have previously communicated, we got a new design win for DMS systems into commercial vehicles. It brings the total number of customers that are -- that have chosen Tobii up to 7 OEMs across 50-plus vehicle models. And as of Q2 2024, our solutions are in more than 200,000 vehicles on road today. On the OMS side, we are once again the leader in this space. And in the quarter, we saw our existing OMS design win expand into a new OEM. Today, we count 2 OEMs as customers of Tobii for OMS across more than 20 models. And as of Q2 2024, our solutions are in more than 250,000 vehicles on the road. Finally, as we think about the future of interior sensing, single camera DMS and OMS, we have 2 OEMs we count as customers today across more than 50-plus models. And we expect that these solutions will come into market vehicles on the road starting in 2025. So if we sum all of this up, from an AutoSense perspective today, we count 9 OEMs as customers across more than 120 models and our solutions are proven to be able to not only win designs, but get that technology into cars on the road with over 500,000 vehicles on the road shipping with Tobii Technologies today. It is this combination, both of having a comprehensive road map that addresses the future of where the space is, coupled with the ability to demonstrate credibility that we can win designs, but also take them into production that puts Tobii firmly in the position of #3 in interior sensing. And we believe as OMS and single camera DMS and OMS continue to proliferate, we are in a great position to build on where we stand today and become a leader in this space going forward. That is where we are on the AutoSense side. Let me now wrap up where we've been for the quarter. As we mentioned earlier in the presentation, the focus for us in Q2 2024 was twofold. One of these was to ensure that we have a successful integration of the acquisition. And I'm happy with the progress we've made so far this quarter, but I do expect that integration of AutoSense will be a continued focus item for us for the rest of the year. The second major objective, as outlined by Magdalena as well is actually the initiation of these decisive cost reduction measures that ensure that we can meet our free cash flow and profitability goals while still operating under our existing cash reserves. Magdalena provided a little bit more context on what these actions are. And I expect that these actions will start to show results in our financials starting in Q3 and in the quarters after that. With these improvements on the cost side, we expect that we are taking further steps towards ensuring that we will be able to deliver significant EBIT improvement in 2024 and also be in line to achieve our long-term financial goals. With that, I'd like to wrap up the presentation and open it up for Q&A. Caroline?
Thank you, Anand and Magdalena. Yes, we will now open up for questions and start with questions that are posted in the chat. And analysts participating, please raise your hand if you like to raise a question live. So let me start with the first question. You mentioned 3 individual product launches for the quarter. Can you elaborate a bit about these products?
Absolutely. So as we said, we have continued to focus on strengthening our product portfolio over the last couple of years. And in this quarter, we've actually delivered 3 new products into our Integrations and Products and Solutions portfolios. On the Products and Solutions side, we launched 2 new cloud-based SaaS products. They are called Glasses Explore, a cloud-based tool that allows our customers to get insight more easily when they do attention computing studies with our wearable eye-tracking solutions, the Tobii Pro Glasses 3. This solution allows the workflow to be much simpler and allows clients to go and get insight in a much more time-efficient manner which, of course, creates much more business value for the studies they execute. The other product that we launched is called UX Reveal and this is really intended to speed insight for screen-based research. And this could be, for example, for people looking at how they can make their digital experiences more compelling. It could be e-commerce websites that are looking at how they can go and make sure that they get the right set of conversion. It could also be people that are looking at their applications to figure out if their applications are designed in the most user-friendly way. So those are sort of 2 cloud-based SaaS solutions for our Products and Solutions portfolio. On the Integrations side, we launched a product called Tobii Nexus. And this product is very much enabled to broaden the set of customers that can integrate attention computing by lowering the bar of hardware required to deliver value. We're able to use standard webcam-based hardware to go and enable our customers to get the power of eye-tracking and attention computing into their portfolios. And we see this trend starting to increase as webcams get to higher and higher quality and you see capabilities of more AI and machine learning in the edge. So I think we are very much well positioned to complement our existing stack and deliver the solution for our customers.
Thank you. Moving on to the next question. On the Q1 earnings call, Tobii stated that we have all the cash that we need until positive cash flow is expected. Is that statement still valid so that the shareholders will not have to participate in one more share issue this year or in 2025?
And I think that is what we are trying to describe or elaborate even more about in this report, the steps we are taking in order to secure this. So yes, we are working on this.
Thank you. Then we have some questions from Daniel Djurberg, analyst at Handelsbanken. I'll start with the first one here. Cost measures of SEK 200 million the coming 4 quarters is very positive to us. SEK 10 million rightsizing cost taken in the quarter. What level of restructuring cost should we expect coming quarters as well as in total to reach the SEK 200 million run rate level? Also from which quarter should the SEK 200 million be fully implemented?
We are trying to describe this that, yes, you have to expect to see the SEK 200 million reduction, if you sum up the coming 4 quarters. The full effect will not come in Q3. So it will come in a sort of starting Q3 and then it will sort of be even more. Additional cost for one-off costs, that is not a projection I can give right now. So I will, if needed, come back to that.
Thank you. Net sales in Integrations -- this is the second question from Daniel, by the way. Net sales in Integrations from FotoNation acquisition represented some SEK 37 million to SEK 38 million of quarterly revenue. Should we expect a similar level in Q3 and Q4 and a slight decline in Q1 '25 and then a sharp decline from the second quarter of 2025? How many customers are represented in this legacy revenue stream?
So let me answer that. We're not going to share more information on the specific amount of customers. We typically don't do that. But again, as we have guided when we also took the acquisition, we shared the impact of the acquisition from a revenue basis for the full year, which we said was between SEK 180 million to SEK 220 million. And again, when we closed Q1, we said that based on the timing of closure that the total revenue for the acquisition in 2024 was trending to the lower end of the range. So again, Daniel, based on sort of the math that you're doing, you can sort of get a sense of how much revenue we think we will get for the rest of the year because we've also provided guidance that the AutoSense revenue will be between SEK 30 million to SEK 50 million for this year. So you can get a quick sense of what the rest of that is going to be. As Magdalena mentioned, we expect that this revenue, which is part of the imaging business that we've acquired, it will actually be at a lower level in 2025 versus 2024. And again, we will continue to share more details as we go through the quarters on where we are on this.
Thank you. And we have a third question from Daniel. Apple is more and more focusing on eye-tracking for XR and also for accessibility offerings. In my world, this should at least trigger interest in eye-tracking by OEMs that lack eye-tracking functionality. Or is your hardware-based technology a tad obsolete, i.e., will it be only a software game and where your technology is more nice to have than need to have?
Yes. I would say that what Apple has demonstrated certainly in the wearable space is that high-quality eye-tracking is critical. And again, in that space today, Tobii is still licensed its software, but we see specific eye-tracking system design where we have expertise. And we have, of course, worked with customers to ensure that the hardware that they develop to get these signals are at the requisite quality level for getting the best kind of performance. So one, I would agree with you, Daniel, that with Apple coming out, there is much more interest in this space to get high-quality eye-tracking in and Tobii Solutions are very much on par for what is required. And what we've seen since the Apple launch is more OEMs engaging with us to evaluate putting eye-tracking into wearable devices. The second trend, which is the broadening of attention computing using webcam, this, again, very much is in line with the launch that we have of Tobii Nexus. What we see on screen-based eye-tracking is that with the advent of higher-performance cameras as well as the capability to do more AI on the edge, we are finally able to deliver eye-tracking solutions that can meet certain use cases with a software-only solution. There still is a very robust market for high-performance eye-tracking and we see that very much in the medical device space, but also for use cases where the precision of the eye-tracking is more improved. Today, Tobii's portfolio ranges from both high-quality, high-fidelity eye-tracking, which requires customized hardware, but now we're augmenting that with a software-only solution. And again, I think this means that more players in the market can pick up eye-tracking. I think that's good for us as a company because there's more customers who can go pick this up, but it's actually also good for the high-quality eye-tracking because eye-tracking becomes more visible as a technology. So we think there are players who will start with a software solution, realize the limitations of what you can get there and many of them will say, okay, for my application, a more optimized solution is better. And again, I think from a Tobii perspective, there's a lot of learnings we have from delivering solutions on that high-quality space that make us a very good provider for even a software-only type of solution.
Thank you. Moving on to the next question that comes from Erik Larsson at SEB, analyst also. Is it possible to say to what extent the SEK 200 million in cost savings are attributable to Tobii and to FotoNation?
The simple answer is, yes, we try to keep track of it, but we will not share the details there.
It seems like we have now covered all questions for today, and that concludes today's session. Please do not hesitate to reach out to me if you have any further questions. And thank you all for joining us today and we look forward to welcoming you back on October the 25th, when we release our Q3 results. We wish you all a great summer. Thank you.
Thank you.
Thank you, everybody. Bye.