Thank you. Hello, everybody. I'm sorry for, for my voice. I talked too much during this day, so I hope you can hear me and understand me. I will do my best so that I can at least present to you the result and answer your question with Denis. As you understood, we will have a presentation in English tonight.
The reason is that, we had obliged to announce the latest news earlier today, so we actually had the first presentation earlier this morning in France, and that's the reason why we will have this presentation in English. So let's start, and let me share with you the agenda of today. So usually we will start with first, a very high-level reminder about Kalray.
I'm sure most of you know very well the company, but it's still very important to make sure that we can have a couple of slides to remind you what we do. Then we will, of course, focus in explaining the results that we announced this morning. I will present the key takeaways, and then I will let Denis go into the details of the financials.
Then we will take some time to share with you the update on the business activity. And at the end, we will explain what we announced this morning, the very important collaboration that we announced with Arm, and I will explain how this collaboration, in the context of our next generation called Dolomites, fit.
And then, of course, as we mentioned, we'll be very pleased to answer to any question you may have with Denis. So let's start with a very rapid overview of what we do at Kalray. As most of you know, we are, of course, a semiconductor company, and we design a new type of processor, which is called a DPU, which is a massively parallel processor with capability to run a lot of data processing, including AI.
And then, during the last few years, we built a complete solution to help our customer be much more efficient when managing and processing data in data centers and new, especially AI-based product. We are about 200 people, mainly based in Grenoble, but we've got also about 60 people in U.K. and, and about 20 people in U.S.
We enjoy both very strategic partnerships, like companies like Dell, IBM, Amazon, and have very well-known shareholders, like NXP or Safran. In terms of what we sell, let me remind also that we've got two types of products and two types of offerings, and which is very interesting to have that in mind going through the rest of the presentation.
On one side, we sell what we call acceleration cards, which are cards embedding our processor, which are offloading usually main processor, and running very demanding data processing algorithms. And then we have built, in the next few years, what we call a data acceleration platform, which is a complete solution, including software and hardware, to accelerate the process and the management of data.
Now that I did this very fast reminder, let me go to the 2023 results. What are the key takeaways? The first one is about the revenue and the EBITDA. As we already announced in January, we grew by about 60% in 2023 compared to 2022, and our revenue in 2023 amount is EUR 25.8 million. Which is obviously a very strong revenue growth versus the previous year. In terms of EBITDA, you may remember that one of our key objective, of course, is to get the company closer and closer to the profitability. And of course, the EBITDA is one of very important financial metrics in this route.
So we improve the EBITDA significantly, actually, a little bit more than what we announced in February, since the EBITDA has been in 2023 of -EUR 1.1 million. In terms of how we split this revenue, let me give you a little bit more information. First, in terms of split between the hardware and the software, you remember that, actually, today, most of the time, we sell our engineer solution, which includes both software and hardware. It happens that in 2023, one third of our revenue was hardware related, and two thirds of our revenue was software related.
If we zoom a little bit more about this number, you can see that actually 90% of this revenue is coming from our Ngenea data platform, which is, of course, very consistent with our strategy, which has been to package our technology into a platform which is easy to use for our customer, with a sales cycle which is much faster than selling cards to large players.
That's the reason why we can experience this growth today, is because we've got this platform available and that we can sell in the market. Once again, as a reminder, this platform, Ngenea, include both software and hardware, and of course, this is very obvious in these numbers. Second number I want to share with you, because it's a question that we have been asked many times, which of course very relevant, is the percentage of recurrent business.
So this percentage is 15%, which is an interesting number for a company like ours, and which is, of course, due to the fact that we sell software in addition to hardware, which allow us to sell recurrent business, which includes mainly maintenance support. But in addition to recurrent business, there is a number which is, of course, also very important, which is what we call repeat business.
What we mean by repeat business is the business that we do with existing customer, and when they need more performance, when they need more capacity, they will purchase additional license and additional hardware. So this is what we call repeat business. It's not recurrent business, but anyway, it's a much easier business than to transform a new customer, because the customer is already convinced, the customer already used our solution, and it's really related to its own business activity.
As you can see, 45% of our business in 2023 was repeat business, which is an interesting number, which means that, of course, we can and we will continue leveraging both this level of recurrent business and this level of repeat business in the coming years. Which also indicate that, we've got a level of what we call new logo, which is basically adoption by new customer, which is 40%.
Which of course is due to the fact that we are growing very fast, and which shows also that we've got a high rate, a high success rate with new logo. In terms of location of the revenue, as you can see, we have very similar revenue allocation as last year, since we've got a very balanced split between U.S. and Europe. So 40% in U.S., 50% in Europe, and you can see that we start having some business in Asia. We will continue growing the business in Asia, but it is still a limited part of our overall revenue. One important point that we share this morning is the level of gross margin.
As you can see, we had in 2023, a very good gross margin, 67%, which is more than 10 percentage points above the margin we had in 2022. The reason for this very good gross margin is obviously that, the value we generate for our customer, is perceived as very high, which allow us to have a, a interesting, price policy, which secure for us a very good gross margin.
As a reminder, our target, for gross margin, for the type of company that we are compared to the different, other, competitors, should be between 60% and 65%, and this is the overall long-term target for Kalray. So very good gross margin, 67% in 2022. In terms of cash, in terms of cash burn, which is of course a very important data. We have a pretty solid cash in bank right now, at the end of last year, which was EUR 13.2 million.
Of course, this is down from EUR 32.2 million that we had end of 2022, and this burn rate can easily be explained by the heavy investment that we are doing right now. More specifically, you can see, and we gave you a certain number of data here. One part of this needs in terms of cash is due to an increase in terms of working capital, but then the rest is mainly due to investment in our new product.
One part is for Coolidge Two, is what we call the tape-out. The tape-out is when you initiate the manufacturing of a new chip. This is one short expense, which has been EUR 4 million in 2022. And the rest of the investment, the amount is EUR 8.5 million, is actually gathering the investment that we did both on Coolidge Two and Dolomites, and which especially include on Dolomites, what we call IP licensing. So what do we mean by IP, IP licensing? That means licensing some IP.
Usually, these are high-speed interfaces that we integrate into our chip and which are provided by company like Cadence or Synopsys, and which are pretty expensive. And in 2022 for the 2023, the total amount for Coolidge Two and Dolomites has been EUR 8.5 million. So I think, of course, which is very important to share with you, is that in addition to this cash we had at the end of the year, we are actually finalizing the setup of both a bank loan, and we are preparing a launch of a Euro PP, and I will let Denis give you more details later on.
The idea, of course, is to make sure that we've got the cash to fund additional investment. We expect 2024 to have a need in term of investment lower, because we will not have any tape-out. But anyway, we need to still invest in our Dolomites, to be able to deliver what we committed to the market in term of product features. Now let me, let Denis give you more details on the financials. Denis, all is yours.
Thank you. So, in the introduction, I would like to just remind that the financials we are presenting have been finalized by the executive board on Friday, April nineteenth, and they've been approved by the Supervisory Board the same day, April nineteenth.
All legal audit procedures have been conducted by KPMG, and the certification report is being issued, and along with our full financials, the certification report and the financials will be available on our website before the end of this month, before April thirtieth. So back to the income statement. So, as Eric mentioned earlier, the revenue amounts to EUR 25.8 million.
The subsidies we've posted amount to EUR 1.9 million, slightly lower compared to last year, but due to our methodology in terms of subsidies recording, and which is basically based on the amortization of the technology for which the subsidies are financing. R&D capitalization is just 4% higher than the previous year, so stable.
Now we go to the cost of sales, which are related, the increase is related to the increase of the sales. Eric mentioned earlier, our gross margin on net sales for the whole year is 67% versus 56% last year. Operating income increased by 25%. It's mainly due to the payroll expenses and especially the U.S. team and the reinforcement in sales, support, and management.
At the end of the year, we have a net count for 23 of 205 employees. So now back to the EBITDA. It's minus EUR 1.1 million. Amortization is EUR 2 million lower than the previous year, but includes on top of the depreciation of Coolidge One, which started in August, and the remaining depreciation of Coolidge One, which is now over. It includes a EUR 1.7 million goodwill amortization. I can go back if you have any question about that, but on the balance sheet, you will see that the goodwill has been reduced from EUR 13.7 million-EUR 2.3 million, based on the allocation we've made, following French GAAP. next.
So again, in terms of cash flow statement, Eric disclosed some figures already, but operating cash flow is stable at EUR 2.2 million, and it includes the EUR 6 million change in working capital, mainly due to the customer invoicing at the end of the year, especially at the end of the year and in December. We've had capital expenditure for EUR 8.4 million.
Again, Eric mentioned it's mainly related to Coolidge Two, and we have capitalized R&D for EUR 12 million versus EUR 1.7 million the year before. The investment cash flow is EUR 16.5 million versus almost EUR 16 million the year before. The free cash flow then amounts to EUR 18.6 million.
The bank debt you can see here is the reimbursement of our government guaranteed loans, which were started in 2022 for a four-year period. Cash at the end of the year, EUR 13.2 million, as shown earlier. So in terms of balance sheet, our total assets amount to EUR 80 million. The most significant movement is in intangible assets.
As I mentioned a little bit earlier, the Arcapix goodwill went from EUR 13.7 million to EUR 2.3 million, according to French GAAP, and it's an allocation in technology, trademark, and customer portfolio. This new intangible asset will be depreciated over a period of five or seven years. Seven years is for the customer portfolio. In terms of assets, accounts receivable have increased following the revenue increase.
Inventory increased because of the manufacturing of some cars which have been booked in the inventory, and we booked as well some components which will be used in the future production. In terms of... Sorry, in terms of debt, sorry, in terms of debt, in terms of liability, sorry. So, R&D refundable advances are flat and stable.
... The bank debt is now EUR 3.2 million versus almost EUR 7 million last year, and the EUR 3.3 million here is the remaining bank loans I just mentioned earlier in the cash flow, and it correspond to-- it will be reimbursed at the end of next year, fully reimbursed at the end of next year. Accounts payable grow as well, like the rest of the business, and I think it's all for the liabilities.
No, sorry, one point is in the other debt line, you see a decrease from EUR 16 million to EUR 7 million. This difference is mainly due to the Arcapix price complement financial BSA, which have been actually converted in shares and which are now in equity, and we have a remaining EUR 4.5 million instruments.
That's all. Good. Okay. Thank you, Denis. So let's go to the business now, and let me give you an update on the business side. I will start with the Ngenea solution platform. As you understood, with the Ngenea solution platform, which include both the software and hardware components of our solution, is the bulk of our revenue, 90%, 2023.
And this is what we would sell with, of course, a pretty fast sale cycle. So Ngenea actually is positioned on three main segment. The first one is media entertainment, the second one is HPC, and the third one, growing, is AI. So let me go through all these three segments. About media.
So media, as you may have seen in one of our press release, we were having a booth at the NAB 2024. NAB, for those who do not know, NAB is the largest event in the media entertainment market, based in Las Vegas. It happened two weeks ago. NAB has been extremely busy, and we've seen a lot of interest, and actually, this is converted into a very strong growth of our commercial pipe in general. A certain number of large contracts have been closed, some of them actually were already announced in January.
We mentioned at that time that we had a contract which was very close to signature, so we confirm that we signed a very large contracts. Contracts, when we say large contracts, usually means more than EUR 1 million and over are under negotiation. Something which is very important, as you may remember, is that we are enforcing using channel to expand our sales, and we had a very interesting partnership with JB&A, who is a reseller in U.S.
So JB&A setup has been completed. We actually had two sessions with them, with all their resellers. One in January, one just before NAB, and really this partnership is ramping up, and we start to have some immediate, actually, outcome of this partnership with the first customers that we signed in the last few weeks. And we will continue, of course, investing in this relationship, and more globally, we continue investing in building our partner program. We already initiated this effort last year.
This is a very important effort for a company like us, which actually involve most of the teams, which is marketing, sales, channel management, operation, support. But of course, this is an investment that we expect to see an outcome, and we already see first outcome right now. What we can also share is that we experienced in the last few months a small slowdown of decision process, and we believe that this is due to the current overall environment, business environment.
What we see is that the overall sales cycle remains the same, but when it is at the last mile, when it is about the final signature at the exec level, it could be a CFO, even a CFO, CEO, there we see that we may see some additional, a couple of months delay due to a certain number of expectation when it's about to actually close significant expenses. Regarding HPC business, what we call HPC is mainly everything about industrial high-performance computing research.
So it's mainly research industry. And it happens that we, as you know, we had set up a partnership with Dell early last year, and we've been investing a lot with Dell to make sure that this partnership is ramping up. As you may remember from last year, we were actually disappointed with this partnership because we were expecting a faster ramp-up.
But what we see now is that this partnership is definitely up and running, and actually, it happens that we recently, the last few weeks, closed, as an example, a couple of very interesting deal. One with a large, well-known car maker. Another one with also well-known aircraft maker, and both of these deal, of course, has been closed, thanks to this partnership with Dell. It would have been. It would have been very difficult for us, being a much smaller company, to close these deals directly without having this partnership with Dell...
So these are very good references, and as you know, any partner, whatever we do in a partnership, of course, the most important is to have references and to leverage references, on the field to close more deal. So this is very encouraging. Then the last segment, which is a little bit fresher, but which is of course very promising, is about AI. So we have an implementation engineer, which is really fitted for AI, and the goal of this solution is really to maximize the usage of a GPU of our customers.
So it's about bringing the best performance for GPU by having GPU storage, high-performance GPU storage. It's about also supporting what we call data indexing, which allow our customers actually to leverage that data, in the usage of GenAI. More globally, it's about leveraging and integrating AI technologies for our customers. So this is, of course, a domain where we invest a lot, both on the software side and on the hardware side.
You may have seen at NAB, we had announced a certain number of new features and also new partnership in this domain. Good news is that we start closing a certain number of customers, and of course, we expect to see much more business in the coming months. Now, moving to the other part of the business of Kalray, which is related to sales, the direct sales of our cards. As you remember, we have a very important contract ongoing, that we call Jumbo contract, with a very large American company, a well-known American company.
The good news is that this contract is really experiencing a flawless execution. So right now we are in the second phase that we call a pre-series phase. It happens that this phase includes the production of our TC4 new card, and actually, we have 250 cards, more than 250 cards, which are right now in production for these customers. And we are actually in discussion for additional orders for both the end of the year, and we start also talking about 2025. 2025 will be even moving forward in terms of revenue, since we should go to what we call a volume production.
And we are already having some feedback that we should have at least a couple of thousands of card that should ramp up in 2025. So this contract is moving extremely well, and what is very important to note that this contract is completely on track with a schedule that we announced and we signed our customer nearly back 2 years ago. You may have seen also that we more globally announced the availability of this TurboCard 4.
So this card actually includes 4 of our chip. It has actually a compatible format, a standard GPU card. And this card is really focused on mainly smart vision algorithm, merging actually both traditional algorithm and AI algorithm, as well as data indexing. So very, very hot markets, and where we really expect to be able to ramp up the usage of this Turbo Card even of course, obviously, one of our key focus is to satisfy these leading customers.
One additional information on another market, which is 5G. You may remember, last year, we discussed that we were working with a certain number of partners to start evaluating the usage of our solution for 5G. It happens that we made a lot of progress and that we are close to sign a strategic partnership in this market, and we are also qualifying the final version, so that we will we expect to have first sales by H2 this year.
This was hopefully an interesting update on our business activity. Now, what I would like is to take some time to further explain the announcement we shared this morning about the collaboration with Arm. So what has been announced this morning? Arm and Kalray decided to extend our collaboration on AI, and that means that we've been invited to join a very interesting initiative, which is called the Arm Total Design. So what is the Arm Total Design? Actually, it covers about 20 partners, mainly very large companies in the semiconductor industry.
For example, the large foundries, like, TSMC or GlobalFoundries, large ASIC design house, like Cadence, like Capgemini, like Synopsys, IP vendors, EDA tools, and basically, very, very interesting companies who are driving the innovation around Arm processors. It happened that this partnership help us to on two sides. First one is by being of this program, we have access to privilege and advance usage to Arm technology, especially what is called Arm Neoverse technology, which is the latest processor technology available in the market.
And the second and main goal here is to be able to provide our AI technology, our Dolomites, faster to Arm partner and to Arm user. And this is, of course, a very interesting and valuable collaboration for us because Arm processors are used widely in the industry. And, of course, being able to extend the existing Arm ecosystem with our AI solution in our Dolomites is extremely important and strategic for us in the future. So how does that actually match with our Dolomites strategy?
Let me give you a little bit more insight about Dolomites. So the goal of Dolomites is really that we continue being a unique provider of technology for data processing, and not only data processing, but also what we call I/O processing. I/O meaning input/output, which are all the technology to accelerate the exchange of data.
So our goal is to be able to provide unique solution in term of performance, dollar, and power consumption, and to make sure that we can deploy this unique solution, either be in our own solution as standalone, typically our acceleration cards, but also as part of other solution, and this is what is the bulk of a collaboration with Arm.
To do so, we will leverage with Dolomites a new approach. We start to be more and more embraced by the industry, which is what we call a chiplet approach. What is the chiplet approach? Which means that the hardware actually are designed like Lego brick, and these Lego bricks can be assembled into a package to deploy new data processors.
The idea on our side has been to design our technology as a Lego brick for I/O and data processing, and we are collaborating with ARM to make sure that this Lego brick can easily be connected to the ARM-based Lego bricks that ARM and its partners will develop in the future, so that we've got a complete set of bricks, our own ARM chiplet, memory chiplet, to build advanced solution for AI in the future. This is the way it works. As you can see, you have what we call the MPPA chiplet, with these Lego bricks using our unique patented MPPA architecture.
It happens that we can put one or several chiplets in the same package, depending the level of performance and price point that we target, and that these actually chiplets can be connected to Arm-based chiplets that are optionals, and that can be developed by our partners. What is, of course, very interesting is that means that the existing solution for our partners, including all the software that they've been designing and deploying in the past on the Arm solution, can be reused and doesn't have to be changed.
Maybe a word about Dolomites. Dolomites is a huge step forward for us. In term of performance, we expect to multiply our performance by 20, which is, of course, massive. We expect to increase the memory bandwidth, the memory available for the application by more than 15. In terms of number of cores, we will actually multiply by four the number of cores. As you can see, we have an improvement in terms of performance, which is much faster than what is called in the industry the Moore's Law.
And the Moore's Law, as a reminder, is about doubling the performance every 18 months. You can see here we are going much, much faster, and the reason for that is that we are using unique technology that are called massively parallel processor technology, and like for GPU, so basically, we are capable of increasing our performance much more than what we see with traditional technology.
In terms of main advantage of Dolomites, in addition to this much higher performance, as you can see, thanks to this chiplet approach, thanks to this capability to connect to CPU like Arm, but also like RISC-V, the goal is to ease the portability and to really reuse existing software ecosystem, which is available on the market.
The second point is really to bring as much flexibility as possible, thanks to our technology and thanks to this DPU chiplet approach, and obviously, to continue improving the performance. So let me give you a couple of use cases where this approach can be used. Of course, in data centers, we'll continue to sell acceleration cards, and we will also be able to increase and to add AI performance to Arm servers, typically.
But you can also envision other use cases, so such as telecom. For example, for telecom, the telecom industry is widely using Arm processor and is requiring more and more AI capabilities. And of course, by having the capability to connect Arm solution with our AI solution, it will bring to our customer this capability to extend what we have today with AI solution.
For example, for telecom, there is a lot of demand to actually replace the existing algorithm by AI algorithm in order to improve the performance, in order to reduce power consumption, and this require to extend the existing solution with AI solution like ours. So I thank you very much. And before I let the floor to questions, I just want to conclude what we presented today.
First, I want to emphasize how strong are the mid-term perspective of the company, because we've got very exciting drivers to drive our growth and our growth acceleration in the coming years. On one side, you have, and you can see that every day, a huge dynamic on the market where we play the AI market. The second is that you see that we've got the capability to execute very complex contract flawless, and especially to run and to execute flawless contract, like Jumbo contract, which are already in production.
We've got a production ramp up, and then we go to volume next year. Then we putting in place strong partnership. We mentioned Dell in the past, but here we can see that having strong partnership with leader in the semiconductor industry, like Arm, is of course a very good evidence that we play with the leaders and that we by partnership with leaders, we'll be able to have a very solid role in the—in this market. In addition to this strong midterms evidence, of course, we have a short-term dynamics.
On one side, we've got a very strong commercial pipe, as I mentioned to you, and especially comment of the success that we experience with our data acceleration platform. As you understood, we are leveraging distribution and reseller partnership, and we are investing in packaging solutions so that we can really leverage and doing more and more to leverage the effort of our partner to grow our business. And all these drivers, of course, will help us grow very rapidly our business.
We still need to keep in mind indeed, what I mentioned, that what we face right now, that we expect a little bit longer sale of decision, and that, of course, due to the existing economic environment, that we need to take it into consideration. As a key takeaway, our objective definitely, especially in 2024, to still have very strong annual growth, and we can see our pipe is definitely aligned with the objective. And we anticipate, obviously, based on that, a stronger revenue in the second half of the year than in the first half.