Welcome to this post-quarter Q&A with poLight. My name is Ubayd Salem, and today we have with us CEO Øyvind Isaksen and CFO Joakim Bredahl. The management will go through a short slide presentation, Q4 highlights, and afterwards we will have a Q&A where the viewers can submit questions during the live webcast. If you're watching this webcast from Finansavisen Quarter or social media, remember that you have to go to poLight's profile on Investweb in order to submit questions during the live presentation. We also got a little bit of feedback last time that the video quality was low, so if you have low resolution, you can just click on the video player on the bottom right corner. There you can change the settings to 720, I think. With that, I will give the floor to you, Øyvind.
Thank you so much, and welcome to those who join us for today's Q&A. Just for those who are new to poLight, founded in 2005, global player in tunable optics . As you can see on the right, we are distributed basically all over the world where we are. The strategy is to be placed with competent people, with our customers and partners. Strong IP. We have a technology which is enabling really good user experience in several kinds of products. Everything from consumer, e.g., AR/MR, industrial healthcare. As you can see on the top right corner, you show pictures of the different use cases we are exploring. We are just above 50 employees. We are fabless, meaning we can do a lot of things with relatively few people because we have partners supporting us. Headquartered in Tønsberg, as I said, distributed around the world and listed since 2018.
Unmatched technical characteristics, we like to say, and it's about speed. It's about compactness, constant field of view, EI, no breathing, and extremely low power consumption, which is very, very important in all kinds of variable products. As you have seen from Q4, likely the revenue is still low. The kind of ongoing market activity didn't really translate into significant revenue. I think it's fair to say that the position we are building step by step in the market, in different market segments, is extremely promising. I would say that we are more and more, as we profile ourselves, as we participate in shows, we are becoming increasingly known and, I would say, respected. We have design wins in all high-priority market segments. We are consumer. We have references, AR/MR definitely, and industrial.
I think the basis for having good progress in the coming years is definitely established. We also have, the last, say, year, implemented important technology programs, future-proofing the company. The manufacturing setup is step by step improved and professionalized, which is very important when we have kind of due diligence processes with customers. They need to see that we are able to kind of robustly supply quality goods to them. Also, when we have installed these or started these technology programs, this is super important for our customers so that they see that we have a roadmap which fits their future plans. We have built an organization now which is, I would say, extremely competent, very willing, very motivated for all the things of opportunities and challenges that lie ahead of us.
In addition to kind of having established key references in established market segments, which we have put highest priority on, we do have other market segments which also in the future can represent, I would say, big opportunities for us. We have not really started exploring them very actively, but we keep having them in mind when we in our future kind of execution of delivering on the roadmap. We feel that a lot of the basis is there. Still, of course, there are things to be improved by dedication, by working hard, constantly taking a market and customer approach. poLight will progress will continue going forward. Okay, that is the quick intro, and then we are ready for Q&A.
Thank you very much, Øyvind. Can you see us?
Yes, I can.
Good, good. Just to remind you, the viewers again, if you are watching this presentation on all the platforms than Investorweb, you have to go to poLight's profile on Investorweb in order to submit questions. If you guys experience low video resolution, click on the settings on the video player to change the resolution. Okay, let's jump into the pre-submitted questions. The board of directors are responsible for decisions regarding capital raising. What advice and description of the current situation will you provide to the board to support them in this process?
Of course, the need, this is something which is continuously evaluated and is being discussed on a regular basis with the board. What we have said before is that any need for capital rise financing is continuously considered and discussed. As soon as there is any kind of concrete activity ongoing in that direction, we will announce that to the market. There is no doubt that for us, it is important that the customer sees us as well-financed. We are working with big companies, and of course, they are definitely, I would say, considering us as a long-term partner. A long-term partner, they need to see that we are sustainable and will be able to be financed over time. This is, of course, an important aspect. We have been for many, many years well-financed. That will still be the strategy.
As I said, when and what will happen is dependent on circumstances around the company.
Okay, thank you. I have several questions that might be similar. If there's a question that is repetitive, you can just let me know. Based on the previous Investorweb post-quarter Q&A, a NOK 10 million order in 2025 seems less likely. What specific strategies will the company implement to ensure adequate liquidity and maintain operational stability leading up to commercial breakthrough, thereby reassuring both potential customers and investors?
I think the most important thing is, of course, that we are, as a company, able to achieve breakthrough in important market segments. The way we see it today, as an example, if you look at the position we have established in the AR/MR space, it's quite impressive, actually. We are highly engaged with many of the big names and smaller names. In that sense, I think that kind of the market sees that we have a big role to play in such kind of promising market segments, as an example, AR/MR, I think is one of the most important things we can do. We already have reference designs, and we are working heavily with many PoCs and planning PoCs to achieve more.
I think that when the market starts to see, when it becomes more and more visible that we have a big role to play in that market segments, which I said before, I think that could show traces of that in the end of the year in 2026. I think that's kind of building our position is super important when it comes to, yeah, that we are a big player in promising markets. I think also it's important that customers see that we are having a roadmap, which is, as I mentioned before, which they see as compatible with what they need.
Us stepping up on the R&D front to kind of show that there are plans for bigger TLens, for smaller TLens, for TWedge, for resolution enhancement, these kind of solutions they see that poLight as a partner can give them for which fitting the future roadmap is also something which is extremely important. Of course, that also our partners and customers see that we are kind of able to be sufficiently financed is definitely an important part. That is why we have never, ever in my history in the company been anytime financially stressed. There have always been possibilities for us to show that we are robustly positioned when it comes to finance. Of course, we need to be careful with the spending. We need to show that we can manage the situation when it comes to that, do things we can afford to do.
We need to balance that with things we need to do to build a strong position from a technology perspective.
Just comment on both that question and sort of the last one too, just to give you an insight on the inside of how we work with the board and how we work with our financial forecasting. Because obviously all our customer dialogues are translated into a forecast, a financial forecast for several years ahead. The way we work with the board is that we give regular updates on this. They are constantly updated on the forecast, on the current state. They know our prognosis very well. They can foresee quite early any need for a capital raise. They will see that quite early in the process. This is quite obvious to anyone working in a finance function, but it can be good to just know that these forecasts are built bottom up.
It is from customer dialogue built into a financial forecast for the whole company and the liquidity. We follow this very closely.
Yeah, thank you very much for the input, Joakim. This question you might have answered it, but I can read it out again. In the last investor Q&A, you stated that large projects were still a few years away and that near-term NOK 10 million orders were uncertain. Have there been any notable shift in the anticipated timeline for significant orders or the likelihood of such orders materializing sooner than initially projected?
Yeah. As we mentioned in the Q4 Q&A, I think that we are very encouraged about the progress we have in the different market segments and that we feel that quarter by quarter we are strengthening our position. I think it also is fair to say that the AR/MR market is still kind of under definition and the big volumes is probably some years ahead of us. I think it's still a statement. Compared to what we said in Q4, I think nothing new has arised. I would just rephrase or restate that no doubt that many of the PoCs and customers we're working with have us kind of more and more getting more and more mature and from kind of moving from, in a way, technology assessment to more discussing potential concrete projects, which is extremely motivating, of course.
Thank you very much. In light of the projected 2026 consumer AR/MR design win target you shared a year ago, can you provide an update on the progress toward this goal and address any potential challenges that may have emerged?
I feel that, as I said, maybe I'm repeating myself, but we feel, generally speaking, there is good progress. Of course, for us sitting in poLight, it's difficult to be precise on when will what happen because this is completely out of our control. As I said in my last answer, we see we have today enough activity and we hope we can see traces of this activity in the end of the year or in 2026. This is impossible for us to be very specific on, but I think that having some, yeah, what should I say, evidence in that timeframe is still likely.
Øyvind, you mentioned at the Q4, the new project within professional AR/MR is a more interesting project than the two that disappeared.
Can you elaborate on why this is an interesting project and do you expect this product to be released to the market this year?
The last one I doubt, to be honest, because it takes time to develop these headsets. What I can say is that the two cases which we're in, which we're kind of call it replaced by this one, is really something which I say is net positive because this new case is in a market segment which I think have a bigger need. Also, the company which is backing this project is significantly stronger and bigger so that their ability or their ability to kind of go all the way from where we are today into a real product being launched, I think is significantly more likely than the two other cases.
Thank you. What are the reasons for the nearly two-year extended pre-order period for Xander glasses, specifically concerning the production and supply of Vuzix Shield with 2x TLens?
Yeah, I'm not quite sure what the question is all about, but I think that that application for Vuzix Shield for that particular client is basically not in a way related to anything about the camera. It is unrelated to the camera. Of course, the more they need, the better for us because then they sell more units. In a way, the case itself is not related to the camera.
Okay, thank you. What factors have contributed to the lower level of marketing and promotion for the Vuzix Shield relative to their Vuzix products?
Sorry, can you repeat?
What factors have contributed to the lower level of marketing and promotion for Vuzix Shield relative to other Vuzix products?
I think that question, sorry, needs to go to Vuzix. I just met Paul, the CEO, and they are quite optimistic, generally speaking. Vuzix Shield is still, what you can say, in early days of manufacturing process. I cannot speculate on that. I think that question needs to go to Paul. Sorry, I cannot be specific on that one.
Okay, thank you. Remember, viewers, you can submit questions in the chat if you have some follow-up questions. Regarding the display solution that has been on a roadshow since December 2024, when selling the solution to a customer, is the process similar to what we know from poLight product implementation involving PoC design in and design win?
Yeah, we are not selling that solution. That's obviously our customer who's selling that solution. The dynamic and the process in the ecosystem in the industry is typically like that. They do tech evaluation, which we typically call proof of concept. If approved, and if they have a real case, they go into designing. If that is successful in the product development phase, they go into a design stage. I guess the mechanism and the process is the same. Of course, it's not us selling that solution. It's basically the customer itself, our customer itself who's selling that solution. As was correctly pointed, they have been at the roadshow. They're still kind of doing promotion and near-form factor demonstrations. They were at the CES also.
They are seeking for a lead customer so that I think they've done the investment they want to do. Now they're looking for the lead customer to take it from that stage to a potential MP. As I said, we are not directly involved in that. Of course, we talk to the customer. We are not involved in selling their solution. That's something that, of course, they take care of.
Can you share any details on the number of PoCs for the display solution and/or interest in general?
That's quite a few because many of them related to TWedge, which is the other product for resolution enhancement. For LBS, we have that one case. That's the only one we are working with.
Okay, thank you. Now that TLens customers have seen TWedge, are you seeing projects being postponed because they want to use both TLens and TWedge?
No, not really. I would say on the opposite. Or on the opposite, I would just say as a comment, I feel that having more than one product to offer to the same customer is something we see as an advantage.
As mentioned in the previous investor Q&A, could you provide an update on the process of the TLens selfie camera integration with two smartphone OEMs in relation to the camera module suppliers demonstration roadshow?
Yeah, this is kind of ongoing and they are kind of promoting and meeting different OEMs to demonstrate the capability. I think my comment to this, I need to be a little bit more generic. This market segment is a challenging market segment at the moment. It is very, very cost sensitive. Our solution is fitting the selfie camera, which is even more challenging because the budget in the selfie camera is very low. We keep pushing, we keep supporting, and we will continue to do that because, of course, this is a big market. I will say that generally speaking, the most activity from our side in, I would say, in the consumer side is more related to the AR/MR cases. Some also more and more visibility on more like laptop/webcam activity.
Maybe those are more seen from our side active now than smartphone activity. As you know, we have done many things to improve that situation and position us for future smartphone by making solution which is potentially cheaper to integrate and also for having solution which can fit the back camera. These are very challenging projects. I think, as I said, the main push we see from the market now is related to other market segments than for consumer side like AR/MR and others.
Thank you. Are any of the ongoing non-AR consumer PoCs discussing specific products where they intend to use the TLens? Or are these all still in the technical evaluation phase?
Yeah, I think I would still say they are at the technical evaluation stage, but of course, they don't do that evaluation if they don't have any plans. I guess there's a little bit mix of that.
In the Q4 presentation, it was mentioned that you have received a sample order with an industrial field worth NOK 400,000 for a new application or customer. Can you share any details about this application and the potential revenue from this project?
Difficult to say. I would still say it's at an early stage, but it's very interesting because, I say, it's a new application, which we haven't really been exposed to before. Also, it's a quite sizable PoC when it comes to monitors. That is why it felt correct to mention it. I can't be more specific on the application.
Okay, thank you. What is the probability of a smartphone featuring TLens being released by the end of 2026?
Now, what I can say is that, repeat what I said, it is a super challenging market segment. 2026 is still kind of some quarters away. Nothing is impossible. What I can promise is that we will never give up pushing for that. There has to be some changes in the sentiment in that market for that to happen.
Okay. Which do you anticipate will reach the consumer market first in mass production, ARMR, smartphones, or laptops?
Good question. I think if you look at the number of cases we are exploring, I think that, and if you do the probability assessment based on that, I think the AR/MR has the biggest pipeline. I think we also know that the AR/MR has for many years been shifting to the right. That means that maybe other can come first. If you look at the number of cases we're working with and the maturity of them, I feel that AR/MR has a good opportunity to be first. Things can change, and we've seen that before. If you look at the attention to ARMR at the CES and the Photonics West AR/MR section, it was a drastic up in activity and in kind of companies profiling themselves in the AR/MR space. There's no doubt that something is happening.
I met one of the many, but I met one of the major OEMs. We had a meeting with them, and he said to me that, you know, it's not like every major OEMs you can think of, I'm sure, he said, quote, will go into the AR/MR space. Of course, and that's a strong statement. I think that we don't really understand how big this can become. Of course, it is some technology challenges which need to be solved, not at least in the display side, which has to be kind of unlocked. I think there are clear signs of that things are happening. Of course, if you have the smartphone, of course, you have the laptop, you have that kind of already existing markets because AR/MR, high-volume market, doesn't really exist, but it's still in the early days.
Those markets can, of course, also surprise us. As I said, based on the activity we have today and the number of PoC, which is relatively mature, I think it's fair to say that that is something which we are hopeful in.
Yeah, thank you. Thank you very much. We haven't got any questions in the chat. That's actually unusual for poLight. I am not sure if the members or the viewers can send in questions. Can those of you guys that are listening, can you submit some questions so we are sure that the technical stuff is working as it should?
Just send a test question.
Yeah, well, actually, we've got a big question here.
We also have two questions come in to Investorweb during this, the last 10 minutes.
Okay. In the Q&A for your profile?
Yeah.
Maybe you can read them out loud?
Absolutely. Are there more frequent public talks with Øyvind being planned for poLight YouTube channel? Who is your target audience for these videos?
Yeah, so yes, we are kind of trying to get these kind of conversations. We did one with a Mini2P supplier. And then we did one with Paul at Vuzix. We always try to kind of, yeah, try to convince customers to have these kind of chats with us or others. We will continue to do that. Hopefully, there will be a few new ones coming up in the next couple of months. Yes, this is something which we actually were trying to use, and it's quite popular.
Okay, so one more question. Can you elaborate on your thoughts about disparity correction? Karl Guttag mentioned you in his blog post after SPIE 2025, and he's quoted below. I mentioned that I was seeing considerable discussion about disparity correction at ARVRMR, the people from both companies, poLight and Cambridge. And they both indicated that they were looking into it, quote, Karl Guttag.
Yeah. Yes, this is on and off on the agenda. There is nothing, I would say, significant to report or any major activity. Yes, this is something which is coming up now and then. Carl has also been talking to us about TWedge, and he has quite updated information on that. When it comes to TWedge, there are definitely many, many different needs we can apparently cover, which is over and above what we have kind of anticipated. Yes, it is on the table, but nothing concrete we have started developing.
Thank you very much. Were there some other questions, Joakim, on Q&A?
No.
Okay, thank you. We got some questions here from Steinar in the chat. It's a long question. There were two designs in AR glasses that were canceled in Q4, and one new one came in. How would you describe this new design in that came in relation to the two that went out? Can you say something about one of the designs in that went out? Was that with a customer that you have already launched glasses with? Maybe you can answer the first part first.
Yeah. Yes, I guess we were at least part of that question already answered. Yes, I feel that there was a net reduction of one design in. The one which came in and compared to the two who went out is basically, I would say that the one coming in is a much stronger case. As I said, it's backed by a more, I would say, stronger and more significant company. It's also the fact that it's in a market segment which I believe has stronger needs. Still in the professional segment. That's the good thing, backed by a stronger company, probably having a stronger use case. Those are one reflections. Yes, the one of the design wins which was stopped is related to a customer we already have. That's correct. The other one not.
It was basically based on, I would say, strategic reasons in the company. They were so busy with existing glasses which were out, and they put priority in improving that instead of launching a new product. That was the first part of the question.
Yeah. Can you say something about the capacity of this customer and whether the customer is still positive about TLens in future products?
I'm sure, Steinar, what you mean here, are you referring to the one which went out? Yes, I would say that the customer is very positive to TLens and describes it as a key component to achieve what they achieved today. We hope and we think this is a long-term relationship.
Okay, thank you. Let me see what then. Okay, I see. Do you want me? Okay, let's read this one. A very promising order came in for TWedge after you met with customers at CES. Is it a top player from the Bay Area? This customer also has a promising project in the PoC phase with TLens. Can you say something about whether you have promising PoCs with several large customers from the same area?
Yeah, I do not want to be specific on the area where it is. Yes, it is a customer in this case referring to it. It is a customer which has activity now on TWedge and on TLens. I would say it is definitely a major player. I would say it is a tier one. It is extremely interesting that they keep investing in poLight Technology Platform and not only TLens, but also now TWedge. Without being specific where it is, it is fair to say that many of these global, we see more and more many of these global players are actually kind of having, what should I say, set up all over the world. That is where our cross-regional organization is becoming extremely important, where we can support those bigger guys in the different regions where they have teams. Yeah, this is a big one.
We have other big ones in the same area.
Thank you. We've got a question from Don here. Is TWedge interesting also for smartphone applications?
There are some on-and-off discussions on using TWedge for camera, I would say, whether it's smartphone or not. There have been some dialogues related to TWedge, what they can do for cameras. We have done some testing on that. Yes, we can see the application. I would say if that's the case, I think it's in a very early stage.
Okay, thank you. Back to Steinar. How do you experience the development and interest in TLens and ARMR glasses from China?
Yeah, let's take that first, maybe.
Yeah.
As I mentioned, at CES this year, there was a huge uptake of and presence of Chinese OEMs compared to what we have seen before. When I referred to that guy who said that, you know, we believe that all the major OEMs will be kind of active in the ARMR space with products, that was kind of a comment coming from a Chinese OEM. I think that no doubt about it that it has so far been driven by the Bay Area guys. No doubt about that. We can see more and more is coming from other parts of the world also. Japan, yes, Japan is an interesting area. There also, we have famous names from Japan, as you all know, big brands. They are there. In the ARMR space, they are definitely there.
Although I would say that they are a little bit behind the rest of the world when it comes to technology in that area. They are there, and I'm sure they will be there also. When it comes to Japan and other verticals, I would say that the type machine vision, laptop, other kind of products like that is also important verticals in Japan.
Yeah. The last part, can you tell us something about how you are doing on yield on the best batches that are running in production?
Those show quite good numbers, actually. We have a target of yield of 95%+ . I definitely see that potential is possible to achieve. We are quite optimistic on that. We recently had a customer, should I say, due diligence in our factory. They were quite impressed by the setup and what we achieved. Also, it is important to say that to achieve those high yield numbers, you need to produce steady volumes over time. Today, we have a situation that we, as you know, since you have seen the revenue is still low, we have a little bit on and off, stop and go. Those stop and go is actually demanding when it comes to yield. You need more continuous load to work and to see improvement. The signs we have are very promising, I would say.
Okay, thank you. Another question from Steinar. Can you tell us something about whether the LBS projects have actually been showcased to potential customers?
Yes, as mentioned, that is definitely the case. Our customer is on a regular basis having demonstrations with that solution. I've seen it several times myself, so that's a clear yes to that.
Can you tell us something about how difficult or easy it will be for poLight to find a production partner on TWedge when you have one or more customers who say what they want the format of TWedge concept to be?
I don't think it will be specifically challenging for us to find a production partner. We can even potentially use the same production partner. I think it's more TWedge at its current design, it's basically not wafer need. There is no wafer needed. Also, there will be more assembly steps. What we do in the Philippines is basically assembly. I don't see that as, of course, I'm not going to say it's easy to establish a mass production, but I don't see it specifically as a bigger challenge either.
Okay, thank you. Last comment from Steinar. These questions were from Mirag ubben. He sent them to me because of some issues with his setup. Thanks to both Steinar and Mirag ubben for the quality questions. We got a new question on your profile. Let me read it out. Two seconds. A question from Don. Are you planning any additional investment in production lines?
Let me answer that this way. When we have meetings with customers, one thing we always need to present to them is what is the ramp plan, how to do it, what will it take of time and cost for you to ramp. This is always something we keep updating and have a plan for.
Another question. Can you elaborate on your thoughts about disparity correction? Karl Guttag mentioned you in his.
Sorry, this was the question I read earlier.
Okay, okay. I thought we got another question.
I think we read all once.
I just approved one question. I think it just went lost. Okay. Guys, if you do not have any more questions, I think we can just wrap this up. Evan and Joakim, do you have something to say at last?
I think just to restate, I mean, we feel we have built an extremely good position in all the kind of top priority market segments. On that basis, those reference designs, those assignments will lead to kind of more assignments and more revenue. The question is when. It is a big question. It is an important question. We feel confident that we are on the right track. In addition to that, as we've been mentioning several times, it is amazing to see where poLight technology can be used in other market segments. We have mentioned healthcare. We have some Mini2p application. We have mentioned the automotive, which also potentially can show big numbers one day. We have to keep this in mind in our future roadmaps.
I think that we all kind of understand and we all respect the kind of that this has been taking a long time to get where we are. I think also, I was just talking to my CFO before this call. I think also it's important to kind of understand how difficult and how demanding it is to come as a Norwegian small company into these big players in these big markets and how long time it takes and have respect for that and have an understanding for that. We keep pushing. We have a strong belief. We're going to keep fighting and we're going to never give up. I'm sure having that attitude will bring us all the way to success. Thanks for all the support. Thanks for all the, I would say, extremely competent investors we have among us.
We like both the critical questions and of course, we like the positive questions. We take all into consideration and try as good as we can to serve you with honest and true and balanced answers.
Thank you very much. We got some. Thank you for being persistent and working hard every day. Impressive work so far. See you on Q1. One of your shareholders.
Thank you.
I believe I know Christopher Ewan. From Steinar, takk for kjempefin gjennomgang. Translated, thank you very much for a great gjennomgang. Okay, see you next time.
Okay, see you next time. Thank you, bye. Bye-bye.