Good morning, everyone. Thank you for joining us. Welcome to Elliptic Labs' fourth quarter 2025 results presentation. My name is Ola Sandstad, Interim CEO of Elliptic Labs, and with me is Mathias Norderud, our Interim CFO. After taking on the role as CEO last November, I have initiated a series of initiatives to further develop our company from the strong position we already had. It's been a busy few months, and we look forward to share with you the results of the fourth quarter and the outcome of our strategic review, including some color on the road ahead. Let's jump in. Starting off with the highlights and outlook. Revenue for the full year 2025 ended at $102.7 million, down from the previous year, and also lower than we indicated on the Q3 presentation.
The main reason for this is a revision of milestone revenues that were recognized in Q3, a decision that was made following the audit process of the 2025 financial statements and made us restate our Q3 2025 revenue accordingly. The milestone revenues for the laptop contracts are now being evenly distributed between 2025, 2026, and 2027, starting with $16 million in Q4, and then approximately equal amounts in the third or fourth quarter of 2026 and 2027. This does not affect the execution of the contracts or the cash flows. The audit process has also led to removal of deferred tax assets from the balance sheet, which Mathias will come back to. Revenue for the fourth quarter ended at $42 million, with EBITDA at $1.4 million, in a quarter with high one-off costs, which Mathias will also detail further.
Looking at our underlying portfolio, we continue to see positive momentum, with both laptop and smartphone verticals demonstrating positive shipment volumes and entering of new contracts. Our focus forward is clear: leveraging our existing portfolio and broadening our scope to enable and secure profitable growth. Our announced strategic review concluded on a few takeaways to that end. We will continue to drive growth in laptops and smartphones. We have implemented targeted cost measures and resource allocation to further improve profitability. We have set in motion a plan to expand into new verticals, and we are working to productize parts of our platform to empower the landscape of embedded devices. I look forward to providing you with more insight about this later in the presentation. Moving to the volumes of sensors shipped across our portfolio, we're seeing a positive and increasing trend for both laptops and smartphones.
This is a key indicator of performance, as our business is ultimately linked to the shipment numbers from our customer portfolio. The figures are indexed to Q3 2023, a two-year horizon since we started reporting on these metrics last quarter. Compared to Q4 last year, shipped volumes ended with just under 40% increase for laptops and a clearly rising trend. The smartphone volumes were approximately on par with the same quarter last year, but aggregated growth was about 25% for 2025 compared to 2024. For those that follow us closely, you'll note that the smartphone volumes have changed since the presentation last quarter. This is because we have now also included shipments from fixed price contracts.
These contracts stipulate volumes for the full year, we have therefore distributed annual shipment figures across quarters based on historical seasonality patterns to give a better view of our full smartphone portfolio. Another important indicator for our business is the number of models launched with Elliptic Labs AI Virtual Smart Sensors. This chart shows the cumulative number of smartphone and laptop models brought to the market with our technology since 2016. What stands out is the acceleration over the past few years. In 2025, 25 laptop models were launched, containing a total of 34 of our AI Virtual Smart Sensors, compared to 15 models with 16 sensors in 2024. To date, this totals 58 laptop models.
We have also signed a new contract with a current laptop customer this month for a minimum of 11 upcoming models in the consumer market, scheduled to begin shipping in 2027. For smartphones, 65 models and sensors were launched in 2025, with another 5 models launched so far in 2026, totaling 232 models in aggregate to date. Our ability to deploy our technology stems from a position as a trusted partner to globally leading technology players. We are fully embedded with leading global OEMs, ODMs, and chipset partners, positioning Elliptic Labs at the center of the device ecosystem. Our technology is commercially deployed and proved at scale, with repeated launches and expansions, validating performance and relevance. Deep integration into customer software stacks and chipset platforms lowers deployment barriers and strengthens long-term roadmap alignment.
In sum, this position is a strong enabler of continued deployment growth in laptops and smartphones, elevates our ability to branch into new verticals, and productize our platform to empower Edge AI on embedded devices. As already mentioned, our smartphone position has been built as a trusted partner to leading global OEMs, driving sensor deployment and shipments to the markets. This has led to smartphone revenues growing meaningfully over the previous years, reaching $78 million in 2024, and $60 million in 2025. 2024 was a very strong revenue year in the smartphone vertical, with high launch pace and high milestone revenue levels, with a mix of existing and new contracts falling into the financial year of 2024. The portfolio growth is what provided the foundation for the strong shipment volumes seen in 2025.
For the contracts announced in 2025, milestone revenues were comparably lower than in 2024, partly due to timing of contracts, as well as lower minimum committed volumes across models. Looking at the laptop vertical, I would like to put our progress with our current customer into perspective. We are growing with the customer. Being the largest laptop OEM in the world, they've grown number of units shipped by 20% over the last two years to 71 million units in 2025. During the same period, our deployment share has risen from 4% in 2023 to 9% in 2025, and the share is set to grow further from unlaunched models under contract. This shows their commitment to our technology.
There's undoubtedly a clear potential for further growth within the customer, as a meaningful portion of the portfolio remains untapped, and we continue to work closely with the customer to expand our footprint. Before we move into the laptop revenues, I want to remind you how we convert our laptop portfolio to revenue and cash. The chart we are looking at shows actual revenue and cash generation for the laptop contract we announced in the third quarter of 2022, which is now end of life. There are normally three main stages involved in the process and our communication: contract announcement, market launch, and shipments. The latter two are sometimes combined, but where shipping represents the start of the cash generation. When the shipping volumes exceeds the minimum committed in the milestone revenue, incremental revenue will be recognized in our books.
Incremental volume revenue has previously been referred to as pay-as-you-go revenue, but we are replacing that terminology. You can see the cash generation reflected in the light gray cumulative cash curve. Cash builds steadily as devices ship, regardless of whether those units are above or below the minimum commitment. Our sensor launches, shipment volumes, and revenues have increased significantly over the last years. I would like you to view this development from left to right. Number of sensor launches on model drives the volumes of sensors being shipped to the market as the OEM ramps up its unit sales. It's clear to see that shipments in 2025 are meaningfully higher than in 2024.
Of these volumes, only models launched from 2022 to 2024 have exceeded minimum commitments, meaning that they have started to generate incremental volume revenues, as can be seen in dark green on the chart. These models alone have doubled the incremental revenue from $6 million in 2024 to $12 million in 2025, and continue to generate revenue into 2026. The models launched in 2025 contain 34 sensors, have yet to reach minimum committed volumes, and can generate incremental revenue later in the model life cycle. This is, of course, also goes for unlaunched models from recently signed contracts. With restated laptop contracts from second half of 2025, milestone revenues for the full year ended at $29 million, not including the milestone revenue backlog of about $32 million.
Going into 2026, the year started on a strong note with an additional contract for minimum 11 models to be shipped in 2027, which, with attached milestone revenue, expected to be recognized in Q1 of 2026. Let's go deeper into the financial numbers. Mathias, the floor is yours.
Thank you, Ola. As Ola told you, we are reporting revenues from contracts with customers of $101 million for the full year, which is $31 million below 2024. On the other hand, we end the year with an order backlog for the first time of $32 million relating to the contracts that we will be recognized in 2026 and 2027. For 2026, we expect 16 out of the total $32 million to be recognized as revenue in the second half of the year. Splitting revenue into verticals, you can see smartphones declining to $60 million from a very strong year in 2024, whereas reported revenue from laptops declined to $41 million. This was partly due to timing of contracts, as well as lower minimum committed volumes across models.
Looking closer at the fourth quarter, we had revenues from contracts with customers of $42 million, including $16 million milestone revenue from the two major contracts we announced in August. This was down from $47 million in the fourth quarter last year. Operating costs increased by approximately $10 million to $41 million in the quarter. All of that increase reflects special items in the quarter. Close to $8 million in losses on trade receivables from customer deliveries dating back to 2022 and 2023, and close to $4 million related to management changes in the quarter. Underlying operating costs were hence actually somewhat lower than the fourth quarter last year. EBITDA ended at a positive $1.4 million, despite the high costs in the quarter, with an operating loss of $6 million and a loss before tax of $5 million for the quarter.
Moving toward the bottom of the P&L. We have reassessed the recoverability of our deferred tax assets in accordance with IAS 12 at the end of the year. The viewpoint of IAS 12 is backward-looking and purely based on contracted revenue and not on any potential upsides from expanded deployments or any new revenue not yet contractually secured. On this basis, we have derecognized the tax assets in full in the balance sheet, although the underlying tax losses remain available indefinitely and may be recognized later if the criteria are met. This is a non-cash accounting adjustment that does not affect our cash position or operational performance. It results in a net loss after tax of -$95.1 million for the fourth quarter and -$138.2 million for the full year 2025. Moving on to cash.
We had a negative operating cash flow of NOK 3 million in the quarter, mainly due to the losses in the period. Cash flow from investments amounted to another NOK 7 million, mainly related to capitalized development costs. Financing added a cash outflow of NOK 2 million. All in all, the cash position declined by close to NOK 12 million in the quarter. Going forward, note that we have implemented cost measures and reductions in development costs in Q1 2026, aimed at lowering employee and other operating expenses by around 15% combined. Capitalized development costs down by around 12%, which all other equal, will reduce the cash burn. Looking deeper into our net working capital, specifically trade receivables. Our receivables are dependent on the contract mix in any given quarter.
The majority of trade receivables represents milestone revenues recognized but not yet received as cash. These are billed as volumes are shipped by OEMs to the market. Following the restatement of Q3 revenues, accounts receivables in the third quarter were reduced from $104 million to $70 million, and days sales outstanding increased from 260 days to 314 days. In the fourth quarter, receivables increased by $10.8 million, with days sales outstanding reduced to 304 days, driven by revenues in the quarter. The incremental volumes revenue, previously pay-as-you-go revenue, that were recognized in Q4 2025 will be received as cash in Q1 2026.
Ending off before leaving the mic back to Ola, we ended the year with an equity ratio of 86% of a total balance of NOK 190 million, after the derecognition of deferred tax assets. We have limited liabilities and a cash position of NOK 43 million. With that, I hand over to Ola to guide you on the road ahead. Thank you.
Thank you, Mathias. Now that we have looked at the figures for Q4 and the full year 2025, let's move on to what lies ahead. I'm sure many have been waiting for the outcome of the strategic review announced in conjunction with Q3, and I would like to start off by summarizing the key takeaways. As I said in the introduction, our focus forward is clear: leveraging our existing portfolio and broadening our scope to enable and secure profitable growth. We have implemented targeted cost measures, strengthened operational efficiency, and improved resource allocation. We have started the work to expand into new adjacent verticals, leveraging our solidified position in the AI ecosystem. The review reinforces our strategy to scale within smartphones and laptops while increasing multi-sensor penetration.
At the same time, we are prioritizing our platform to empower Edge AI on embedded devices, addressing aspects of great importance and value to our future customers. Let's start off with our strategy within existing verticals, laptops and smartphones. We'll continue to increase value per device through multi-sensor deployments, leveraging our existing platform at a limited incremental cost. Signing new contracts on existing products is a key enabler in ensuring a well-positioned seat at the table when our customers work out the strategy for their upcoming devices. At the same time, we are working to expand our footprint across both existing and new customers, building on our position as a trusted supplier to globally leading OEMs and a strong partner ecosystem we are a part of. This includes working with main chipset partners, but also other component providers, part of the device architecture.
The growth will be achieved through a combination of deploying proven products to new customers and through development of high-value use cases. There's a vastly growing demand for context-aware AI-capable devices, providing tailwinds that support broader and deeper deployment across smartphones, PCs, and adjacent categories. An important growth lever going forward will be to increase the exploitation of our technology and leverage our existing platform and customer relationships to expand into adjacent device categories. Utilizing the same core technology as in laptops and smartphones, we can enable contextual, privacy-aware intelligence across new form factors, prioritizing adjacent verticals where we have identified clear value propositions. Two such verticals are smart glasses and enablement of targeted content and advertising models for smart TVs, where our technology can drive capabilities such as user intent, contextual intelligence, and high-value functionalities. We will also think differently about how we commercialize our platform.
As part of a new strategic direction, we are in the process of productizing our AI platform to enable frictionless development and deployment of Edge AI on the embedded devices, a new and potentially high-margin revenue stream. This introduces a new conversation path beyond sensors, allowing partners to build and scale their own products directly on our platform. The offering will leverage our validated technology and existing partner base while expanding our addressable markets. The outcome and value proposition towards customers and key stakeholders is strong: faster time to market, lowered engineering cost, scalable production AI, and empowering every edge device to become AI-capable.
It builds on the insight of what challenges Elliptic Labs have met and overcome during the journey of delivering our AI Virtual Smart Sensor platform, and seeing how this can be of clear value to other companies trying to enter and succeed in the embedded AI space. It's important to underline that our existing product portfolio consists of several layers of innovation and expertise. This is not a matter of cannibalizing our current offering, but expanding into the endless potential of AI-driven features. To put it in so many words, Elliptic Labs isn't just building AI features, but providing a solution that makes deploying embedded Edge AI frictionless. Enabling Edge AI on embedded devices represents a vast and structural opportunity. The global Edge AI market is expected to grow more than 10x towards 2034, driven by billions of connected devices and demand for real-time private intelligence.
However, development friction remains a key bottleneck, with complex handovers between AI and embedded teams, slowing deployment and increasing costs. Elliptic Labs is positioned to remove this friction by productizing a proven Edge AI platform that moves AI from lab demos into scalable production. In summary, we are excited about the road ahead and our opportunity to utilize our market-leading technology and position to drive growth in existing and new verticals, and rethinking how we can approach and expand opportunities ahead. Our platform and organization is highly scalable, rigged to deliver profitable growth as we move ahead. With that, we will open the floor to questions from the audience. Thank you.
We've gathered the questions from our Q&A platform, trying to structure them a bit here. We have a laptop in front of us that will start, you know, picking questions one by one. One of the first questions is whether there's a defined time limit, which minimum volumes needs to be shipped, and what happens if they're not?
During our negotiations with our customers, when we define the contracts, we always try to land on the minimum commit that makes sense, both for Elliptic, for visibility, but also, you know, lies within the forecast of the customer on the safe side. This is, of course, to try to avoid getting in a situation where you are on the limit, and you need to have these tough discussions on whether or not, you know, to push for it or not. So far, this has not been a topic at all for Elliptic Labs, we have always exceeded the minimum commits on all of our contracts. That's not a topic of concern for us.
Yeah. One more question here, to Ola. Can you present a similar path for smartphones as you have done for laptops?
Yes. The laptops, they have a, let's say, yearly cycle, and next generation always comes in a yearly cycle. We do see somewhat of the same for smartphones. However, the smartphones have a much higher frequency. There's more models being, you know, shipped or launched throughout the year. When we write a contract, an agreement with a smartphone customer, it's normally for a year, for the next year, and they've done their initial product planning. I'll touch a bit also on the topic of that product planning, how that process actually is executed. When they plan, let's say, in the five or 10 models for that year, then they start to execute.
From contract signing until the first launch, you know, you could see three to six months as a typical number. That's the first model they put to market. Then there are, you know, consecutive launches, let's say, you know, every third month or something like that, for our customers.
When it comes to some of the financial questions that have arrived, there's one for you here, for you there, Mathias: "What drives the relatively large quarterly fluctuations in the net financials?
Yes, that's a good question. We do have all our revenues in the USD. Basically, depending on the exchange rate between USD and NOK, the financials will, you know, fluctuate. As you know, in 2025, the NOK to USD exchange rate has, you know, declined. That's the reason why we have a downturn there in 2025, basically.
Okay, good. Let's scroll a bit further down here. There's one which is: "Can you elaborate more on the deal with Intel?"
Last year, we announced we did some PR regarding an agreement with Intel, which is on the strategic partner side of things. What we'll do moving forward now is try to be even more crisp on what represents a launch, what represents, you know, a new commercial contract, what is indeed a more strategic partner agreement, which is key in this market. You could have the best, you know, products in the world, but if there's no one backing you in this fairly complex ecosystem, you're not in the best position. The thing that the Intel deal actually represents is we are working with them, they are backing us.
When we have discussions with the customers, they can easily state that, yes, they've been working with Elliptic Labs. There is a solid relationship underneath it, we're a trusted partner that can deploy globally mass markets. It's more on the strategic side. We'll make sure moving forward to be even more crisp on that communication so that you, our stakeholders, understand whether this is a direct commercial agreement or not. Of course, having, you know, this type of relationship with Intel or AMD or Realtek or Cirrus Logic or, you know, all of these vendors that we work closely with, is key for actually being able to deploy our product the way we do. That's good.
Okay, one more question for you, Ola. Could the tight RAM market increase adoption of your solutions?
I would say yes. This is a big topic nowadays, the cost of memory for all types of devices. We are seeing. This goes into some of the product planning topics that I touched earlier. We are seeing some delays and some more extensive processes at our customers when it comes to planning for 2026, and the memory situation has indeed been a delaying factor. Take the example of one contract that we normally receive in November, December timeframe, that arrived this year in January instead. This was primarily due to that type of factor. You know, they used a bit longer time on their product planning compared to earlier. When it comes to what that represents for us, you know, is it a threat or is it an opportunity?
It's absolutely on the opportunity side, when it comes to what we provide as a software company. We are, you know, executing within the already existing hardware, including the memory that they decide to put in. The incremental cost of our software is not affected by the direct increase on memory prices.
Okay, one more question for you as well. How are you working to convince additional OEMs the need for Elliptic Labs’ ELABS technology going forward?
Yeah. Now, of course, it's a mix of pitching, our groundbreaking ideas and, you know, the things we've been cooking in our lab that we think can make sense for their customers and their value proposition to the market. It's also having these close conversations on what their strategy is. We, as a Norwegian software company, global software company, can, of course, and will also pitch ideas to them, but getting into those close conversations where we understand what they want to achieve and how our innovative software can mix into that to actually enable that even further, that's the type of way we are working with our sales teams. It's both on the high executive level and more, you know, both from a top-down and from a bottom-up sales approach.
After having, you know, worked over several years now with the main players in these markets, so take the ODMs or take the partners that are part of these devices today, really working through there to make sure that people understand how smooth and beautiful ride it is to work with Elliptic Labs.
Okay, one more question for you, Ola, as well. Are you expecting a new mobile contract soon? It seems one is missing compared to last year.
Yeah, it goes back to what I just mentioned, when it come to planning. You know, for those of you who have been following Elliptic Labs for some time, you know, there is a cycle to contracts, and, you know, whether there is a new contract around the corner is, of course, not something I can state right now. We are, you know, continuously working with our existing and potential new customers on contracts.
Okay, I think that concludes the overall. Let me just do a final scroll here, whether there's anything more that's not touched.
No. I think you covered most of the questions here.
Yes.
Well done.
Good. Thank you for spending time and looking into our presentation for the fourth quarter results. Really looking forward to start sharing also even more updates from our company moving forward. Thank you.
Thank you.