Welcome to the presentation of Terranet's Q2 report for 2025. My name is Jesper, and I will be moderating this call today. With me today, I have Terranet's CEO, Lars Lindell, and the CTO, Pierre Ekwall. Throughout the presentation, you can ask your questions by the chat box that you can find below, and we will cover all of your questions at the end of the presentation. First, we will start with a summary video of the second quarter. Welcome to the interview section of Terranet's Q2 webcast. Like I mentioned before, joining me today are Terranet's CEO, Lars Lindell, and CTO, Pierre Ekwall. Lars, this is your second report as CEO. How would you summarize Q2 for Terranet?
For Terranet, Q2 has been very focused on the development of the MVP, which is a product concept defined to enable a customer or partner to make a decision for bleeding fashion. In June, we did live tests at Asacero to verify that we meet the specified performance, and based on this, we launched the MVP, which means that we could start scheduling customer evaluations. We could also start the production of the first systems, with deliveries planned during the autumn, this year.
When we last spoke, you shared what attracted you to Terranet. How does that compare to reality now, about five months into the company?
In many aspects, the company meets what I expected. There's a very clear product concept, you know, targeting a very clear market. The technology is very advanced, and there's a very skilled team supporting it. Even with the high complexity and limited resources, we are following our communicated roadmap, which makes me very happy.
Nice to hear. The outcome of Q2 was the launch of your MVP, which is a major step forward. What has happened during the quarter leading up to this milestone?
Yeah, the MVP development actually started already in Q4 last year with very valuable input from our MobilityXlab partners. Based on this input, we made several improvements of the product and then started the concept development in Q1 for the next generation of the system, the MVP. By the end of Q1, and after some evaluation steps, we were able to go to a concept phase, followed by a product design and verification phase now in Q2. This has now led to the formal launch of the MVP, which in turn enables customer evaluations this fall.
How is the MVP different from the previous prototype?
Good question. The early prototypes were development samples used primarily for internal development and select supervised demos. The MVP takes us several steps further, offering a standalone product that can be fitted to almost any vehicle without custom tailoring or any hands-on support from the Terranet team. Apart from these practical aspects, the performance of the system is also greatly enhanced. The MVP comes as an evaluation kit with everything the customer needs to install and run the system, including hardware, software, a pre-configured computer to control the system, and a detailed instruction manual, all neatly packaged. On our technical side, we have a completely new laser scanner concept for improved performance, an industrially designed IP-classified enclosure that enables us to use the system also in adverse weather conditions, updated data processing software, and an improved AI-trained perception stack.
In addition, the new system has undergone more rigorous testing, including, for example, EMC testing to guarantee correct function in any environment the customer might use it in. The MVP really is quite different from the prototypes used last year, and it's designed to support the next commercialization step of the company.
I understand. What happens after the launch? What is the next development step for you and your team?
Yeah, right now, as mentioned by Lars, the production of the system is ongoing. After delivery and customer evaluations, the feedback we receive on performance, feature requests, and integration needs will guide the next steps in our development. In parallel with the MVP support and customer dialogues, we will also focus on handling interest from other customers with alternative use cases for the BlincVision technology. These are discussions that we've had for quite some time, but needed to put on the back burner in order to focus on the MVP development. These activities are planned to be intensified during Q4, and I'm very much looking forward to the results of this work.
You announced a patent earlier this week. Why is it important for the company?
Part of our strategy is to build a patent portfolio based on BlincVision. When the engineers have made their concept freeze, we know what the implementation will be, and then we have made a thorough review of the system and looked for what type or what part of the system we want to protect. The granted patent is the first tenable result of this work, and we are expecting more.
If we're looking ahead to the path towards commercialization, could you, Lars, share how Terranet is working towards commercialization and engaging with potential customers?
We have now been engaging with customers for quite some time and built up a strong network of contacts and understanding of the market. Since this is a dynamic situation, we need to stay in constant dialogue with customers and partners to understand their priorities. Trade fairs are very valuable because they bring many players in the industry to the same place, and as our industry is very large, we can constantly meet new, interesting partners. It also gives us an opportunity to explain how BlincVision works and how Terranet can add value to their products. What's new now is when we have the MVP is that we can send out so that customers can test and evaluate and prove the value of BlincVision in their own systems. This means we can move from talking about the technology to actually delivering something they can evaluate.
In July, you attended the pre-Key Mobility Conference in the U.S. What were your main takeaways from that, Pierre?
Yeah, one thing that really stood out was the strong interest in autonomous technology and the general consensus that AD isn't just something, you know, waiting around the corner anymore. It's actually already here with deployments from companies like Waymo, Zoox, and Tesla. Now it's all about scaling the technology and addressing corner cases like complex urban environments. We also had the opportunity to meet and discuss needs with a wide range of companies, ranging from discussing autonomous freight with Volvo Autonomous Solutions to low latency needs with NASA in relation to Mars travel. Very wide and valuable discussions. Beyond the conference participants, we also took the opportunity to meet, of course, with many of our AV and ADAS companies in the valley to market our new MVP.
I think a relevant question here, did the trip open any new opportunities or connections for Terranet?
Yeah, the big advantage of being there in person is that it's so much easier to meet the key people we want to connect with. It's really about building trust and opening doors into the companies we are aiming to work with, and those face-to-face conversations can really move things forward in a way that's hard to achieve from a distance.
Lars, you will be at a number of trade fairs this autumn. What do you hope they will bring for Terranet?
As I'm quite new to the company, I'm quite keen to meet with customers. In the phase that the company is right now, it is especially important for us to be visible and present in the right arenas. Trade fairs give us that platform, as I said before. They help strengthen our brand and increase our visibility. They're also a great way to maintain relationships with our existing contacts and open doors to new ones. With the MVP now launched, it's much easier to showcase our technology in a concrete and engaging way so people can really see the progress we are making.
If we turn into some financial matters, you completed a successful financing round in the second quarter, and in Q4, you have a warrant program running. How would you sum up Terranet's financial position right now?
Terranet is a research and development company, and finance is crucial for us to continue our operation. The financing round was successful, and we closed the round without any major impact on the share price. We are very grateful to our shareholders for their continued support.
If we are looking ahead to Q3 and Q4, what will be the key priorities for Terranet?
We have a very well-defined plan for 2025, and so far we are delivering according to that plan. We will, of course, focus on the defined objectives for Q3 and Q4 2025, which are to support as many customer evaluations as possible, and if successful, agree with customers on how we can commercialize BlincVision. We also have to define a plan and target for 2026, which is just around the corner.
Okay, let's turn to the questions from the audience. The first question is about the mining industry. How is the mining industry collaboration progressing?
Yeah, I think it's progressing well. During the autumn, we will visit select mining sites and work on adaptations of the MVP for this specific environment. We have a great collaboration with our main partner, and we are looking forward to the joint evaluation in a confined area setup. This is, of course, an environment where we believe BlincVision can provide some really unique values.
The second question is that have you had interest from outside the automotive industry?
Yes, definitely. This is something that we will be focusing more on after the release and the rollout of the MVP.
Interesting. What are the key steps between the MVP stage and the full commercialization?
As I said before, customer relations is really the first step. What we expect is that after that, we will be able to sit down with customers and have technical discussions on how BlincVision can be integrated with their product. In parallel with this, we also hope that we can sit down and agree on the commercial round such a project, how we will commercialize BlincVision.
How do you select partners for the MVP testing and the collaboration?
Of course, we look at many parameters such as technical capabilities, areas of application, opportunities for long-term collaboration, and where they are based geographically. At the end of the day, it's about assessing the business opportunity.
The next question here is that you highlight strong technical progress with the MVP, but what are the key hurdles that still remain before an OEM contract can be signed, and how long do you realistically expect this process to take?
As I previously answered, first of all, we need to do the evaluations. Then we need to have a technical discussion with them on how to integrate BlincVision into their systems, and finally, we need to be able to reach a conclusion on commercial conditions for this. It's very difficult for us at this stage to put a time plan for this.
I understand. I think we touched upon this earlier, but will you be presenting BlincVision at the shows and what you are attending in the U.S. in September?
Yes, I mean, the system is developed to be able to be used and demoed also in the U.S., yes.
What is the reason or reasons why the partners have chosen to act under NDA? Are they unsure how to apply the technology, or is it to gain a technical advantage over their competitors? I'm also curious to know when they might announce their names and their collaboration with Terranet.
Confidentiality is basically industry standard, so everyone applies that. The reason for that is very simple. They don't want to announce to their competitors what they are doing and what capabilities they will have in their product. Usually, you will not be able to talk freely about them until their product is in the market.
Good answer to a good question. I think that was the last question that we have received here, so I give the word back to you for any closing comments.
We thank the audience for the support, and we hope to stay tuned.