Good afternoon, everyone. I'm Martin Marandon. I'm a semiconductor analyst at Oddo. And today, we are very happy to have Vegard Wollan, CEO of Nordic Semiconductor, Pål Elstad, CFO, as well as the investor relations team. What I propose for the call today, which is a follow-up call on the following yesterday's Q4 results, is that you know, question can be asked on the chat. If you want to ask a question, you can directly put it on the team's chat, and I will ask it for you. And I have a question myself, so yeah, feel free to ask question.
So maybe I would start there, and maybe an important, I mean, a good starting point could be to come back on the drivers of the strong performance in Q4, notably for the Short-range business, and kind of do a hierarchy of what do you think have been the most important drivers between, you know, the cyclical recovery component that have been industrial, new product launch, maybe that are, you know, where we are seeing the results now, and maybe possibility of some restocking in anticipation of higher memory prices.
Yeah. Thanks, Martin. That's a good start. Good question. Yes, we did see 2025 happen a bit stronger than we had expected when we entered the year, so with 31% growth over 2024. And it did also print somewhat more towards the end of the year. And I think through dialogue and engagement with, of course, with many, many customers and our forecasting machinery, we also did see, probably, particularly in the last three months, that some of our customers were selling more than they had forecasted of their end products.
We have seen that in quite a few cases, which do leads to either pull-ins or new orders that made Q4 quite strong, strong exit of the year and also seems to be continuing into 2026. So that's—I think that's clearly a positive, and it's clearly demand there. At the same time, it's also clear that there are media coverage, rumors, talks about potential shortages in other and price hikes in other semiconductor components.
We do understand that that is also creating some worries in certain areas, and that's why it's also clear to us, without having seen clear signs of it, we do say that we cannot rule out the fact that there is an element now of people assuring a bit and restocking or securing inventories. Because also, I think it's clear that we are coming from a situation where we believe that inventories are probably somewhat on the lean side, which some customers have been, and they are also somewhat on the lean side, our distribution channels. So I think that's a bit how we see the market right now. No longer visibility than before, so it's an interesting picture, interesting situation.
For us, I think we are clearly focusing on our efforts to grow Nordic to a larger and stronger semiconductor company in the years to come, and hence, our focus remains on our key product renewal program, where we are developing products which we are collaborating with our key customers to develop. I think we are at a strong pace of developing that at the moment, launching lots of new products. And particularly then on the Short-range side, which is our main engine in the business, of course, we are happy on the fact that we have a fairly complete offering with the nRF54 Series, with the 7 SoCs we have launched over the past 15 months.
We are now expecting that to gradually move into production and gradually be ramping more and more, becoming more meaningful for us throughout 2026.
Okay, great. Just a follow-up on this memory topic. When you look at the Q1 strong guide that you communicated yesterday, do you have... I mean, not giving any precision, because I know you don't give that kind of precision, but do you have an idea about how much is driven by consumer, industrial, et cetera? Because it seems that if there was restocking elements of restocking, it would be more on the consumer side for memory than industrial?
Right. Yeah, so we usually don't guide for our segments, but I think, I think we can say we are seeing a similar picture across consumer, industrial, and healthcare.
Okay.
That's.
Okay.
Right.
Clear. And the last one on this topic is maybe on the supply side, because you integrate also some DRAM in the SoC. Is there any, you know, specific, you know, worries about this or discussion around pricing because of these elements, or it’s not that much of a worry at the moment?
Yeah. So just to clarify that, Martin, if you look at our SoCs, you know, typically 20 square millimeters of silicon area, it consists of a radio, it consists of analog circuitry, it consists of a lot of logic and digital circuitry, and it consists usually of a non-volatile memory.
Yeah
... either flash or MRAM or RRAM. And then it also consists of static memory, so SRAM. But all these memory modules are integrated in our SoCs and being manufactured in the processing technologies and the fabs we are using. So either mostly in 55 nm for the 52 and 53 series family and older products, and in 22 nm processing technologies. So we do not incorporate any DRAM or, or, or-
Okay
... very large RAMs in any of our products. And I think it's also fair to comment on that side, that we are mostly also in the devices where our products are being utilized on the IoT edge now. It's very rare, I think, that there are these kind of memories of the sizes and the complexity which are in shortage now, which are for the data factories and AI factories. So there isn't a correlation there. I think it's fair to comment that we have heard some products might be constrained because of this, or some people may be concerned that some products might be constrained because of this, which would be potentially smartphones, potentially laptops.
And should that happen, there could be an indirect correlation of course, which you need to speculate on in one way or the other. Could also be the other way, that people are buying more accessories if you cannot buy a smartphone. But that'll only be speculation, and we are usually not sitting in products which are constrained by these larger RAM memories.
Okay. Okay, clear. Maybe going to the Cellular IoT division now, and what you said during the presentation, notably on the certification for Skylo satellite. When do you expect this, you know, contribution, let's say, to be meaningful for that division?
Yeah. It's. We have big expectations to our Long-range business in the coming years and strong ambitions there as well. I think it was a major milestone and effort which I'm extremely proud of, that we did last year, engineering-wise, to enable our leadership position technically, to enable and connect the nRF9151 to satellite systems, both GEO and LEO satellites. And we started piloting with the first customers during the summer last year. And we do have quite a lot of customers piloting with that at the moment. Probably as many as around 100. And that is also for these customers usually taking a fairly... These are complex products.
You need to develop the product, you need to develop the software, the system, you do testing, industrialization, qualification, and certifications. So it usually takes quite a bit of time. But I think, when it gets to the satellite enablements, I think probably from the mid of this year is about the timeline where the first of these customers are starting to move into production. You should expect at least a year. That's very fast, I would say, in that space. And then you have other customers spending two years or even more on their development. So that will vary.
Our expectation is that we will see a gradual strengthening and growth in our Long-range business in the coming quarters and in the coming years.
Can the customers, can you start using it just for cellular connectivity? ... Right, and then if they later want to use the satellite, it's software upgrade. Okay? So, so they can actually start, I think, base stations, and then at a later stage, use the satellite. And then we see lots of interest in, and that's not necessarily immediately connecting to satellites. 'Cause there are some other challenges there, but, but they can design the products for us already. That's, that's-
Okay. Okay, very clear. Maybe a question on the Memfault acquisition and also Atlazo that you bought last year. You know, I'm not that interested in terms of contribution to revenue. I know the question was asked yesterday on the call, but you don't communicate on this. But anyway, I think the contribution is quite small, and I'm more interested about the synergies that it has with the other businesses. So, you know, for instance, do you have some customers which already some feedback from customers which are using more this kind of AI capabilities and get to higher-end products using more Edge AI, et cetera?
So how do you think about this acquisition in terms of improving Nordic's offering overall?
That's a great question, which we, which we love to have, Martin, and we are almost going to be cautious about talking too much about it because we don't want to let our competitors learn what we are doing either. But, I think that strategy of having the connectivity services, cloud lifecycle management part of it, as the software complexity becomes so large, is clearly proving very valid and very, very positive. We do see... We do see that we have taken the first phases of integrating that and making it a seamless offering for Nordic already. And we do see wins and customers very highly appreciating the solution already.
Either it's in their development, where they get the products across the finish line and launch products because they are using it for testing, observability, and debugging in their final stages of their development. And we see other customers falling in love with it and clearly want to use it as their safe and secure rock bottom technology to always be safely connected, always be upgrading their system over the air. We even see some customers onboarding it with Nordic, where we also upgrade the chips from other semiconductor suppliers, which also goes through our system and our services.
So we have lots of positives and wins happening, and we even have lots more in the pipeline on truly integrating that very seamlessly in our offering coming in later this year. So it's really something we are excited about, and also why we believe so much in this seamless solutions pillar techno strategy.
And, on your comment that, you know, other semiconductor suppliers, Qualcomm, can also use a... I mean, your customers can also semiconductor suppliers and this Memfault solution. Is it right still to think about it, like, there is a clear synergy between having the hardware and the software at the same time? It's not two completely separate products, meaning it's, maybe, makes more sense to use it with your hardware.
Absolutely. That's the key point, Martin. And since we are the connectivity hub in our customers' and devices in many cases, we are the hotspot for connectivity and upgrading, updating, and then connect to the device. So if there is an MCU or an apps processor or something sitting in the system which doesn't have connectivity, it does make sense to upgrade and update and be connected to that device through the Nordic device as well.
Okay.
You wanna talk, mention the cyber attack too, or is that-
Yeah. And then, of course, in addition, I think which we are also seeing is the fact that which I think we mentioned on the call yesterday, the CRA in Europe and the Cyber Trust Mark in the U.S., which are regulations coming on, and coming quickly on our customers. They need to comply to that and to future-proof products, which should be shipped in Europe and the U.S., from next year onwards. You need to have a safe and secure and solid lifecycle management system. And you go with Nordic, you are ready to go.
... Okay, great. And, and when you compare it to your competitors, like, Silicon Labs, et cetera, or Chinese players, they don't have a similar offering?
I haven't seen that at the moment. So I think we are quite unique at the moment, and we are driving fast to keep that leadership. Lots of customers, of course, have their home brewed and their own solutions, which in many cases are requiring specific engineering teams specific efforts. Sometimes they also break their systems, and it creates sleepless nights for engineers and management and everyone in those companies. It's just to do a few Google searches, and you will easily see how many companies has gone wrong in this area.
So it's also to give people rest in this area and, you know, if we can provide this to 100s and in a time, many, many 100s of customers, we will, of course, be making sure that we are a rock solid and continuing to be a rock solid provider of that which you can trust on. And you can then move your own engineering higher up in the stack and be focusing at other problems which are related to your product.
Okay. And how do you think it will help the business the most? Meaning that do you think it's first about market's position, you know, more stickiness among customers, market share wins, possibly? Or do you think it's it also helps potentially the ASP, or you sell more high-end products when you combine the software? Yeah, how... What's the most important?
It's of course a combination of that. The more value we can provide to our customers within their total technology and total solution, the better, of course. So it is a value for us, and it's as you say, incorporating hardware, software and services as one seamless offering is also making us more important, more sticky, as you say, in that sense. And of course, we are cost efficient, but we don't give it away. So it's also a value for us from that point of view, adding value for the Nordic value at the customer end node.
Okay. Okay, great. Yeah, staying on the topic of competition, maybe you can give a bit more, let's say, track record on this. Maybe I'm a new analyst on the stock, so maybe I don't have everything. But, you know, when I look at the design win share that you know you communicate on your presentation, so it was, I think, 32% in the last quarter, slightly up versus the previous one. But it's still down from the 40% plus levels before 2024. So what's the reason behind, and is there a scenario where you come back to this kind of share?
Yeah, that's a good question, Martin. I think it has varied for Nordic, if you look at the past. And I think. But probably, as you say, we have also seen the 40 plus minus level more so in the past than the 30 level. So it's obviously something we are also watching. It's important there to be aware of the fact that small wins or small designs, small volume designs are counting one, and large volume designs are counting one. And I think it's- there is probably a bit of a correlation to the fact that Nordic, over some years, have grown more with larger customers than in the broad market.
It's also an effort which we have emphasized a lot on and are currently emphasizing a lot on. And we do see that design win pipeline in the broad market coming very strong. And that's also a re-engagement and re-energizing we do with our distribution partner in the broad market as we started to launch new products, because that's a very effective and meaningful combination creating energy there. So we are expecting to see more, much more, many more broad market wins coming in also in the statistics in the coming time. But any forecasting on that, we don't provide and we don't have.
What we can say is that we typically believe that if you think about an average customer spending maybe about 1.5 year on their development of their products, they typically certify towards the end of their development cycle when they are starting to approach their production. So it could be a few weeks, could be a few months, away from them starting their production.
Okay, very clear. By the way, I repeat that you can feel free, of course, to ask a question on the chat. Yeah, maybe I know you already commented a bit on this yesterday. Well, let's give me maybe a... Oh, we have a question. So please,
No, I just wanted, I do have some questions, but I just wanted to flag that, I don't think you can, I don't think we're allowed to comment on the chat. At least it's not available for me.
Ah, okay. I'm sorry.
That's all right.
Okay, so, let's do it differently then. If someone has a question, he can raise his hand, and I will allow him to, yeah, to ask a question. So I don't know if you have one, or it's just-
Yeah, I mean, as I'm here, I might as well. Hi, guys. Thanks for organizing and, yeah, thanks, Vegard and Pål. My question was just around, you sound like you're getting fairly positive on the Cellular IoT opportunity. I know kind of if you look back five to 10 years, it's been something that's been in the works for a long time, and I think it's one of those things that, you know, the technology was probably there, but then the ecosystem wasn't necessarily ready for it. But it seems like you're kind of pretty positive looking forward, and I'm wondering whether you can maybe mention a few things that you're seeing that make you think that the market's really ready to take off.
Yeah, I think, yeah, that, that's a great question, Harry. We have done a lot of changes in that area, which I think it's probably also worth mentioning because I do think also, and maybe, you know, as you mentioned, there has been promise, hiccups, and people have been... And of course, we have had progresses in the past and lots of efforts being spent on it. We do realize that. I think if you go a few years back, we had maybe a few maturity issues ourselves. We have had the service providers being a bit on and off, and it has been various things.
I think a couple of things which we have done, which are important, is that we have also changed our strategy to focus on, I would say, somewhat slimmer, cost-effective, less into that market, taking a step with the nRF9151 , taking another important step with the nRF 92 Series coming up. That has been very important, as well as the fact that we currently have a whole organization behind driving it, which is probably one of the areas where we see the biggest change on that, the way we have reorganized ourselves in that space. So I'll give a lot of kudos to that team, for how they are driving that at the moment.
In the market, I think, we do have a history, and we currently have a business which is relatively focused on trackers and positioning, so trackers for pets, people, goods, and lots of that. We have seen, probably in the recent year, that we have won a bit more, let's say, traditional, stronger customer businesses in the Industrial IoT space and also in metering. We have strong collaborations in the metering space coming there, and these are people that are moving into production gradually now through this year. And on top of that, with that satellite enablement we did last year, we do see even further expansion of the applicability of that technology.
So you can utilize that positioning, the technology, and the tracking capability integrated into more consumer-type related products. So I think that's a change we are seeing, change we are working and we are quite optimistic on that.
Yes, I think it's fair to say also, Vegard, that we're a lot of the customers we've had the last years has been smaller design houses, startups, from a lot of startups, et cetera. We're now working with bigger customers, maybe not the, the top 10 customers, but a lot of important customers. Yeah, so-
Great. Thank you. That's super useful.
Cool.
And we have a-
A chat also, I think.
Yes, we have a question on the chat. I think some people can put it on the chat, and some cannot, depending on their organization. So yeah, do it as you can. But yeah, so we have a question on the chat from Andreas, and I don't know to what extent you can answer it, but yeah. In light of the recent Texas Instruments purchase of Silicon Labs, has there been any approach from TI towards Nordic in the last six months?
... It was so too cheap or is it? No.
No, so, we cannot comment on that.
Yeah, yeah. I understand.
Maybe you want to comment on the acquisition in general. That question is coming, I'm sure.
Yeah, I mean, we can comment on it in general, and I, I think it's-
Yeah.
TI acquisition is a kind of a testament to the sector and the IoT connectivity space. And clearly expecting that they have done the due diligence and seen that this is a space where we expect to have a somewhat higher growth rate in the coming time than maybe other sectors in the broader semiconductor space. So that's probably a good signal which we can read out of it. And other than that, some degree we'll miss Silicon Labs as a competitor because we have respected them but we have not been fearing them technology-wise. And we are very confident that with our 22 nanometer technology platforms and the rollouts we are doing product-wise now, we are in a very strong leadership position.
Great. We have a question from Guillaume.
Yes, hi. I'm asking a conversation on the behalf of one of our investors here. Two questions, in fact. First of all, could you please extrapolate Q1 guidance to the rest of the year, please? And the second question, as there is a shortage of memory, not connectivity, why are customers restocking, securing inventory on your chips, please? Thanks.
Yeah. So on the first question, our guiding institute is very firm with us these days, and been for some time, and we are not guiding further than the current quarters. That's why we're guiding for Q1 and not commenting further for 2026. I think generally what we can say on that is that, of course, we are long-term thinkers. And we are - our ambition is to grow our annual revenue by more than 20% on average from 2024 through the end of the decade.
And, to do that, it's clear, it's been very clear that a successful execution on our own product renewal program is key to taking advantage of the long-term growth opportunities and to be winning and taking market share in this growing market. So, we are, as we talked about yesterday, I think we are well on track to our plan on that. That's what we are communicating.
And just can I add something just before you answer the question on memory? Is it... So I know you're not guiding for the rest of the year, but is it fair to assume that at least for nRF54, the contribution in Q1 will be lower than in the rest of the year, logically? And so that could be a tailwind.
Yeah.
It's fair to assume it's lower in Q1 than in Q4.
Yeah.
Okay.
We cannot communicate.
Yeah.
So,
The second question was on the, why do you could potentially-
So-
see some restocking on your chips, while it's a memory topic in the end?
Yeah, it's a good question because these products are being manufactured in relatively different fabs and different suppliers. So it is a very good question. But I think having worked all my life in this industry, and it is a bit of a cyclical industry, and from time to time, you get into situations where there are shortages. And of course, there are... You have this anxiety that sometimes spread when there is a shortage of a certain area. And of course, there are some common resources, some common materials.
Back end.
Backend capacity could be part of a shared capacity between different types of semiconductors. So there is a—you could rationalize why it makes sense to be concerned, and you could rationalize why you don't need to be concerned. And that's probably.
Let me say, so while our customers, we're not saying we might be restocking, we're not really saying that they are. We-
Yeah
... we see some small, and then this is, I think, a little bit the same comment we had during tariffs. There was lots of talks about customers stocking because of tariffs. But at the end, when you look at how inventories have developed throughout 2025, we don't think there's been much stocking in-... So it's, I think it's, it's a little bit same situation as with the drivers.
Okay, very clear. And just on a quick follow-up on the extrapolation of Q1. Another thing that, you know, you know, I wanted to address is seasonality. Because in the past, Q1 was always down versus Q4, but you had also more consumer related businesses there, more broad market exposure. So is it fair to say that, you know, seasonality still exists, but will maybe be a bit lower now versus what it was in the past?
Yeah, it's going to be speculations again. So, but it could maybe be fair to say that, Martin. But we do see some customers launching products on their cadence with their confidence, which is following their patterns. We do see some consumer customers perhaps trying to even out a bit their manufacturing, because that's more efficient. So there are some people taking attempts for that. And it is, of course, mainly in the consumer segment where you previously have also seen it. So it could probably be fair to guesstimate that. We don't talk so much about it anymore, which probably is another sign.
Yeah. Okay, good. We didn't talk that much about margins. But yes, you did, 52% gross margin two quarters in a row now with the Memfault acquisition. So, yeah, I guess the question is, the continuing to guide on above 50% gross margin, is it slightly conservative in a way?
I don't know if it's conservative. It's things change, and there's changing in the product mix and also the technology mix. So, so our ambition is to maintain above 50%. That's, I think that's all we say.
Okay. Okay, good. And,
Yeah.
Yep.
Do you wanna say?
It is quite a lot depending on customer and product mixes-
Yeah.
-as well.
Yeah.
So we might expect to see some swings on that. And-
Yeah.
There is also a bit of a positive contribution from services, so.
Okay. Okay, good. And on OpEx, same, I know you're not guiding for the year, so I'm not expecting a guidance for the year there. But I'm just, you know, trying to know about how do you think about it, because you have this, 60 employees, I think, from Memfault that are now part of the company, in 2026. So, do you think about, you know, OpEx outside of this, acquisition of new employees as a, you know, this year we try to be, you know, a bit conservative on the head count, not increase it too much, because we already have these new employees, or it will depend maybe on the trajectory of the sales? Don't know.
No, no. So in the short answer is we looked at the run rate in Q4, which also included 60 people, and also included quite a lot of activity. We look at Q4 as probably run rate for at least Q1 and probably for the rest of the year also.
Okay.
Just bear in mind that weakening of the U.S. dollar is a slight headwind, underlying OpEx is on level from before. And then we're not planning to hire lots of... Well, that's all.
Okay, clear. And yeah, maybe a question on the, on the long-term revenue target and, if we try to, to take maybe a, a step back there, because, so you have this target to grow by more than 20%, per year on average, until the end of the decade. It implies something like 18% plus per year, starting now. This is kind of the growth that you did in the last 10 years, was kind of the average. But in the last 10 years, you, you had, you know, gaming peripherals ramping up, wearables, IoT also starting. So, my question is, you know, what do you think will drive similar goals? Do you think it's, you know, adoption and new type of, Bluetooth waves?
What do you think will be the biggest ones? Do you think it's about nRF 54 and maybe the next one? Yeah, how do you think about this target?
Yeah, that's a great question, Martin. I think it's going to be a sum of lots of things we do simultaneously. I think the underlying market in connected IoT connectivity is growing. I think various industry analysts, you could probably see it between 10%, 13%, 14% a year. Which also we believe is going to be the case without talking specific applications in that area. But we do see reasons to absolutely believe in that. And I think it's also clear that we are going to take market share, and we are definitely going to grow a lot more in our long range PMIC and Wi-Fi businesses, which are coming from a smaller base. They obviously need to grow a lot more than 20% per year.
And, on top of that, it's also a high focus for us, and we do see that that's happening to do multi-SoC upselling and PMIC upselling and value upselling with services, such that we are adding a higher ASP and value to each and one of the edge node that we are participating in. So it is in the communication combination of that we do see this target. And, we believe it's going to be also to be growing with our key customers. There is clearly a growth point there. But also, we are taking specific efforts and continuing to take very specific efforts to regain and grow back and win more in the broad market.
Okay, great. I don't know if there is a final question. Otherwise, I will end the call.
So that's perfect.
Okay, great. Well, thank you very much, Vegard. Thank you, Pål, and thank you, Alexander.
Hello, everyone.
Yeah, have a great day.
Thanks. Have a great day.
Bye.
Thank you. Bye.