Sound check. There we are, go on sound. Are we live with recordings and everything? Thumbs up. Great. Good morning, everyone, and Welcome to this Capital Markets Day for both Tobii Dynavox and for the new Tobii. My name is Henrik Eskilsson, and I am CEO of the current Tobii Group, and this is a role that will exist for approximately one more week. It was me and John and Mårten who founded Tobii 20 years ago, and since then, Tobii has grown to be the global leader in eye tracking, a company with fantastic technology, world-leading products, 10,0 00 s of customers, and over a million users, and an amazing pool of talent and passion of more than 1,000 Tobiians.
Businesses with a tremendous amount of future opportunity and potential, opportunity to make a real impact on the world, a positive impact on the world, and of course also opportunities to create significant business values. Also during this time, we have evolved and grown into two very distinct businesses. On one hand, we have Tobii, the global leader in eye tracking and attention computing, and on the other hand, Tobii Dynavox, the global leader in assistive technology for communication. Hence, it has become very obvious to us that now is the time to split Tobii Group into these two parts to realize and to unleash the full potential of both of these companies. Each company having a crisper and tighter focus, even more agile and empowered teams, and also opportunity to build even closer intimacy with its respective customer bases.
Each company also with very distinct and different propositions for investors. This is why we are distributing Tobii Dynavox to Tobii shareholders and listing Tobii Dynavox separately on NASDAQ Stockholm. I personally know many of you who are here today and listening in. I know several of you are longstanding Tobii friends and backers. Some of you that are here are also new to us and to our story. Today, we will take the opportunity to present both of these businesses in a fair amount of detail to all of you, and I am confident that we have a lot of content today that all of you will find interesting and that will give you opportunity to learn more about both of these fantastic companies.
The morning will be dedicated to Tobii Dynavox, where Fredrik Ruben, CEO of Tobii Dynavox, and Linda Tybring, CFO, will run the show. In the afternoon, Anand Srivatsa, CEO of the new Tobii, and his team will walk you through that part of the business as well. I am super excited about this next chapter for both companies. I will personally continue to be deeply engaged in the future journeys of both companies, both as a very active member of the board of both Tobii and Tobii Dynavox, as well as being operationally engaged in the new Tobii, but not as CEO. Please enjoy the two presentations of these two companies today, two companies that I personally consider to be the most exciting and the most awesome companies in the world.
With that, I'll hand over to Henrik Mawby to walk through some of the practicalities for the day. Henrik.
Thank you. Sound check. Yep. Thank you. My name is Henrik Mawby, and I am Tobii's Head of Investor Relations. We're super happy today to see so many of you here in person and also so many of you joining on the live stream on the web. We have a super interesting and packed agenda for you today. We will start off, as Henrik said, with Tobii Dynavox in the morning session and Tobii in the afternoon session. We'll break both sessions in the middle for some coffee, and we will have lunch served around 12:30 P.M. For people here in the audience, I really recommend that you take those moments to try to check out our products in the demos outside. I think it gives you a fantastic understanding of our solutions and technology and a deeper understanding for the business.
There will be time for Q&A in both sessions. For the people joining on the live stream, there is a Q&A function, and I will handle the questions and present them to the management team. Note that there is a time lag, so please put your questions in there sooner rather than later. Let me also touch briefly on some key events for the coming days with regards to the listing of Tobii Dynavox. On December 3rd, this Friday, Tobii will have the last day of trading, including the rights to receive Tobii Dynavox as a dividend. That means that on Monday, the 6th of December, Tobii will trade excluding the right to receive Tobii Dynavox.
Then on December 9th, if everything goes according to plan, Fredrik and Linda will ring the bell for the first day of trading on Thursday next week, that is. I hope you will enjoy this day. Without further ado, Fredrik and Linda, the floor is yours.
Great. Good morning. Thank you, Henrik and Henrik. What a beautiful cold day here in Stockholm. Hopefully, everybody is warm and cozy and have filled up on coffees and whatever you need, also at home because we have quite a content-rich agenda. A quick intro about us. Who are you, Linda?
I'm Linda Tybring, CFO of Tobii Dynavox. I'm a mother of two. I grew up in Motala, so I'm Östgöta by heart. Love to spend time with my family and to spend time at the golf course. Unfortunately, Fredrik have kept me busy, so my score just keep going in the wrong direction. I've been the CFO for Tobii Dynavox for three years. Last year, I was working as the acting CFO for Tobii Group. I just love my job. I probably have the best job in the world. I get to work with all the fantastic people, but also I get to work with a product that really gets close to your heart. I also have a background both being CFO and CEO for different software companies. What about you, Fredrik?
Good morning, everyone. I'm Fredrik. For almost the past eight years, I've been in the current position heading up what is today Tobii Dynavox. I'm a father of three. I have another job too. On Wednesdays, I'm a Sea Scout leader, and that's important to me. If you don't find me in the office, you won't find me, unfortunately, on the golf course, but you will find me somewhere outdoors, sailing, skiing, hiking. My background is I'm an engineer by education, and I've been the CEO of a variety of typically software companies, also in the public domain. But again, since the past eight years, I'm a true Tobii-an, and I've been dedicated to creating what is today Tobii Dynavox. Welcome here. Good to meet you.
As Henrik Mawby quickly alluded to, we will split the day as follows, the first 1/2 of the day. We will start by giving you a brief overview introduction about Tobii Dynavox, whereafter we go a little bit deeper into the markets that we're addressing and the products and solutions that we're offering to that market. We'll take a break. I really encourage everyone to meet with my three colleagues, Idaly, Juan, and Björn, who are outside here in the foyer to try out our products in reality. For those of you who are online, we also tried to make some surprises for you so that you feel somewhat included also in the technology part.
After a fill-up of coffee and maybe something to nibble on, we will continue to work to dig deeper into how will we grow this company, what's our strategy for the growth. Then Linda will take us through the financial performance and the financial outlook. Then after some concluding remarks, we will open up the floor both to questions here in the room, but of course, any questions that has come through the online platforms through Henrik. Are we ready? Great. Tobii Dynavox, we are the world leader in assistive technology for communication. This is different from what we'll learn about in the afternoon, but it's also a fundamental part of what we do. It's assistive technology for communication, specifically.
Working in this type of industry and in this type of company, it's a lot about our mission and what we do and what we can enable people to do. Our big tagline for what we eventually provide to our users is the power to be you, the power to be themselves, the power to be their true inner potential come to life. We do this through a lot of our decisions in daily works through our mission statement, which reads, "We empower people with disabilities to do what they once did or never thought possible." In this mission statement, you actually have two distinct stories. The do what you once did, that's the person who maybe could be any one of us, who at some point later in life are diagnosed with a condition such as ALS.
You're in a tragic accident. You get Parkinson's, MS, et cetera. You're rendered unable to do what you once did. We can change that. Because of our solutions, you will be able to once again do what you once did. Then you have the other story. That's the never thought possible. That's the child who at birth or at a very early age is diagnosed with something rendering him or her unable to do what maybe other children can do. This is the children with Cerebral Palsy, autism, Down syndrome, et cetera, where maybe they even get the label, she will never be able to, and we fundamentally disagree. Because of the solutions and the technology and the support that we provide to these users, we believe that they can be much more than whatever people thought.
Never thought possible is a part, the second part of our mission. This is dear to us because we use this as a really important guiding principles when we do business planning, when we build our products, when we go out to the market and market what we do. This is important. I wasn't supposed to click there. I'm gonna train this now. We're gonna watch a video, and I would like to introduce you to one of our super users. Her name is Delaina Parrish. She lives down in sunny Florida, which maybe is a nicer place than where we're at today. Have a look at what Delaina's world look like.
When you're born into a world not designed for you learn to roll with the flow. Pun most definitely intended. I'm the Co-owner of Fearless Independence, a public speaker, a disability advocate, influencer, lifelong adventurer, and a proud university graduate. Oh, and I also have Cerebral Palsy. Hey, can I please have a tropical wonderland? Thanks. Which means communication can be a challenge, but the I-Series cracked open the door enough to let me bust through. Cheers. With it, I've chatted with peers, questioned professors, challenged brands and companies to be more inclusive, and told my story both online and in front of a packed audience. The I-Series didn't make me who I am. It just gave me a voice. My name is Delaina Parrish, and I live fearless.
This is what we do, but this is just one story. The impact of our users, the people around them, their friends, and society at large cannot be underestimated. When we think about Delaina and all of those users out there, if we look at the market that we're addressing, there are roughly 200 million people out there who have some sort of communication impairment. Out of those 200, some 50 million have such severe impairments that they simply cannot communicate on their own unless they have the type of solutions and technology that Tobii Dynavox provides 50 million people. That's what we call prevalence, how many people are currently on the face of this earth. Then we talk about something called incidence. That's how many people are then being diagnosed every year.
We estimate that roughly 2 million people are being diagnosed with conditions such as Cerebral Palsy. Here comes the almost scary number. The estimate is that less than 2% of those 2 million are actually being served. Less than 2% are being able to receive some sort of communication aid and a solution like Tobii Dynavox provides. The rest are silent. We talk about conditions, the ones that you acquired later in life. ALS is a very big user group among ours, but Parkinson's, MS, spinal cord injuries, et cetera. Then among the conditions that you were either born or diagnosed with at a very early age, we have, of course, autism, Cerebral Palsy, Down syndrome, and so forth. Remember, this is a very untapped market.
Tobii Dynavox does not just sell the device that you saw that Delaina had. We do a quite big portfolio of solutions that's what eventually we sell, and this is something I'll hopefully teach you a little bit more about during today. It starts with the content. It's the software that you eventually put into a hardware that is sometimes controlled with your eyes or sometimes controlled with your fingers or joysticks. We take an active part in the assessment and the funding part to make sure that our users eventually can actually get the products, and then we help with implementation and support. This is what Tobii Dynavox does.
If you talk a little bit about the history of Tobii Dynavox, one of the first things I did just six months after I joined Tobii was the acquisition of DynaVox, which was actually founded well before Tobii. DynaVox, by then, was the leader in the U.S. market, typically when it came to the clinical side and the content side. Since then, we have refined and built the company, including launching a completely new set of products and platforms, standing on where we're at today. Just a couple of weeks ago, we announced another acquisition of the Belgian company, Acapela Group, which in our space, in the communication aids, is considered the leaders when it comes to synthetic voices. Then, of course, we're all gearing up for next Thursday when Tobii Dynavox will be a completely standalone company.
We're roughly 500 people in the Tobii Dynavox team, but the majority of these colleagues are in the U.S. Some 70+% of our staff are in the U.S., but our headquarters is here in Stockholm. We have offices also in the U.K. and in China, in addition to U.S. and Sweden. Then we have a set of remote employees that looks after the markets where we don't have our own offices.
Looking at the snapshot of Tobii Dynavox, Fredrik already said we have about 500 awesome employees. Last year, we had roughly SEK 900 million in revenue and about 14% in EBIT. If we look at that 2020 vs 2019, we had a 1% growth. At a first glance, it could look like we were resilient to COVID, but we were highly impacted by COVID. We weren't able to meet our users. They were in the risk zones, schools, etc., was closed. Going into 2020, we had anticipated much higher growth. If we look before the pandemic, we had an organic growth of about 11%. Our products are sold in over 60 markets. We have more than 400 contracts with different insurance companies, both public and private, and 90% of our revenue actually come from those type of customers.
We're not the only player in this space, but we're the, by far, largest and most complete player in this space. If you look at the market for communication aids, as such, regardless of technology, we estimate that we have a roughly 40% market share, making us more than twice as big as the second-largest player, and then a much smaller set of competitors in this space. If you look specifically at the eye-tracking enabled devices, we have an even stronger market position. We are also serving another audience, that's the teachers and the schools in the Special Education segment, and here, our offering is estimated to have a roughly 25% market share, but that in itself is a much smaller market. Linda alluded a little bit to the team.
I'm happy to see actually some of my colleagues are here, even though they're from far, far away, from the U.S. in this specific case. The management team, aside from me and Linda, consists of a set of highly skilled and highly experienced professionals. Some of them bring their experience from outer worlds, and some of them have almost grown up inside of this industry. Just to name one example, we have actually Tara in the back of the room here. Tara is not just the President of our Market Unit, North America, she's also the President for the Industry Association, so we have quite a strong position in the market as such.
If I then look at the Board of Directors for Tobii Dynavox, which has been operational since first of July this year, having meetings and making all kinds of decisions, the Board of Directors consists of three individuals that has an experience from the past within Tobii. The Chair is Åsa, sits here at the up front, leading the work of the board work of Tobii Dynavox. Åsa has, up until recently, also been a member of Tobii's Board of Directors and has been with us since before the IPO in 2015. Henrik probably doesn't need a longer introduction but, of course, is now changing roles to a fairly big degree, I think, Henrik, and serving as a Board member. We also have Charlotta.
Charlotta will continue to serve similar to Henrik as a Board member of the Tobii board but also the Tobii Dynavox Board. Charlotta brings in a wealth of knowledge also from the Tobii Dynavox perspective. We have two additional Board members. We have Caroline, who joins us being one of the most prominent experts and clinicians in the field of ALS, so bringing in an additional competence when it comes to clinical understanding and operation to the Board of Directors. You also have Karl, who joined the Board of Directors. Karl is currently serving as the Chief Financial Officer for the Swedish construction and buildings company, JM.
Maybe more relevant in this space, for the past 10 years, has been the CFO for the Swedish assistive technology company, Permobil, who serves the mobility area, so highly relevant skills and backgrounds. Very much looking forward to already having started the work with not just, of course, our fantastic management team, but also this great Board of Directors. I will conclude today's presentation with just summarizing why do we believe and why we hope you also will believe in Tobii Dynavox as both an investment and as a company in fact. The products that Tobii Dynavox do are life-changing. It's a fundamental part. This is not a nice-to-have, this is a must-have type of product. They have revolutionary benefits, not just for the Delainas of the world, but like I mentioned, the people around her. I have to say an anecdote.
This morning, Delaina posted on Facebook, "I loved making this movie because we had to do so many retakes of the beer cheering because they had to refill the glass every time." Right. That is normalcy. That really says something about what these types of products does. We are the clear global leader, but in a very niche market. We are second to none with our operation and our offering. This market is providing some profound secular growth into the future because people with disabilities are an asset to society at large. We have a portfolio of solutions, again, second to none, not just when it comes to the actual products, but also the distribution and where they're available.
We're there for the entire journey of that user, not just the product part, but we start from day one, and we're their lifelong companion. We have a track record of profitable growth, also during times when it has been somewhat challenging, COVID included. Of course, this is something we believe we will embark on even stronger going forward. Lastly, the separation of Tobii and Tobii Dynavox will have quite a big impact, both to us as a team. We'll be much more nimble, much more focused, much more entrepreneurial, focused on our respective User segment. But also from an investor perspective, you will have two much more clear-cut investment opportunities. We believe that all these things play into a fundamental why we believe, and we believe that you should believe in this company.
I think there's maybe one more thing to add. If you really want to impact the world and make this world a better place and do something, you know, talking with your money to make sure that we building a better planet to live on for everyone, Tobii Dynavox is definitely there for you. That's the high level. Now you can leave if you want to, but I really suggest that you would listen a bit more, 'cause now we'll tell you the really juicy parts of where we're at. Are you with me? Great. Market fundamentals. We need to start by going up with the helicopter a little bit and think about assistive technologies. Assistive technology is nothing new. That has been around since more or less the Stone Age. We're talking about various kinds of assistive technologies out there, however.
We have the mobility aids. I mentioned the Swedish company, Permobil. We have manual and powered mobility aids. Frankly, you have canes and walkers and everything in that space. You have the low vision and blind aids, that's the braille readers, magnifiers, et cetera. You have hearing aids, which is the biggest industry when it comes to assistive technologies. Then we have what we refer to as AAC, Augmentative and Alternative Communication. That is where Tobii Dynavox plays. We provide a quite wide portfolio into that space. It starts with maybe the gestures that you can decipher the grunts or the mimics or whatever your own child says. That probably only takes you that far. We start with something called low tech. That's the symbols, that's the signs, and we all are actually accustomed to low tech and symbols.
There's an exit sign. There's a no parking sign. This is the same thing for our users, but you have the entire vocabulary using symbols. Tobii Dynavox does that. Then you have the high-tech aids. That's when you take the symbols, the communication aids, and you put it into a software, you put it into a hardware. This hardware is rugged, medically certified, has big speakers, big batteries, and can be prescribed for through insurance systems. This is kind of the bigger market as such. If we think then a little bit about the numbers, I showed you briefly the left column here about the addressable market. 200 million people with speech impairments, 50 million of those currently on the face of this earth are unable to communicate unless they have some sort of communication aid.
I say it again, 2 million are being diagnosed every year, and we believe that less than 40,000 of those users, 2% or so, are actually being served. The vast majority are silent.
Okay. Hold on, Fredrik. I'm a numbers person, but this is actually pretty hard. Could you please take it a little bit slower so everyone really understands?
Right. Out of the 50 million people that are unable to communicate or the 2 million that get the diagnosis every year, the vast majority of those are not being served by anyone, not by Tobii Dynavox, not by any other player in this industry. There are some fundamental reasons why that is not happening, and the number one reason is called awareness. The competence and awareness about the sheer existence of these types of solutions is more or less nonexistent, even in very well-developed markets.
What you're saying is that we are hardly scratching the surface.
We are hardly scratching the surface. We need to do more, and we need to help more. If we convert that into numbers, well, of course, if you look at the 50 million people, if we would serve them, we believe that this already today would be a $5 billion market. In fact, as of today, we estimate if we combine the entire market size, including Tobii Dynavox, it's roughly a $230 million market. There is a fairly big discrepancy on the reality and the potential here. We believe that the market as such will grow by roughly 9% over the coming 10-year period or until 2030. What needs to happen is, of course, that the population of the world will grow, the demographics will grow.
We also see good trends that the healthcare systems are developing in most markets. In addition to that, the general awareness about these types of solutions and products, they are increasingly happening. This is a good example of you having you in the audience, and you're learning a little bit more about this. The reimbursement system, so the public or the private insurance bodies that exist around the world will recognize that these types of solutions are also something you will reimburse, similar to how you do with wheelchairs or hearing aids, et cetera. We also see that the competence among the people that are supposed to know about this, the prescribers, the therapists of our products, is increasingly, even though at a painfully slow pace, increasingly becoming better. We see also among these professionals, the awareness is growing somewhat.
We believe as a company, we can put more people on the ground, more consultants, more colleagues in our own team that basically on an everyday basis are out there to educate, assess, and see whether our products can help or not. Then obviously, maybe the most important, and actually the one that probably feels the best, in your belly, is the user success. The Delainas of the world. When she's standing on a stage there, she's fearless, and she's communicating, and there are 100,000 people out there who could be just like Delaina doing that. When we all carry the same water, of course, this is how we grow this market. It's not about innovation, for example.
Fredrik, can I ask another question?
Yes.
This is how we work all the time. Why isn't the market growing faster?
We come back to the point again. If you're diagnosed with a condition, fine, then you know, or you have a label on why your fingers are twitching or why your child isn't developing like the sibling. Then the next part comes to, how can we overcome, how can we compensate for this? This requires competence among the ecosystem that is helping or serving your child or yourself. This awareness is painfully low.
Thank you.
This is how we work. We also have to understand that when Tobii Dynavox produces and sells and services products, we have to think about the entire ecosystem of people around the user. You obviously have the user in the middle of this circle. Most commonly, you have a caretaker, that could be the parent or the spouse, et cetera. We need to make sure that not just the single parent, but the entire family and community, the people around the user, the neighbor needs to understand the implementation because we're all there to support the user. We, of course, need to work a lot with the payers and the insurance companies to make them, A, understand and B, of course, implement the policies to get reimbursement. We need to work with the professionals to teach them what is success in your work.
How are you successful with your work with this specific patient of yours? The schools and the institutions, you know, many of the children are hopefully, in some way, captured by an educational system. We need to be there to serve also that stakeholder group. Then we have the policymakers, the ones that write the laws to make sure that we have equality here and then you know, a plethora of users and stakeholders around there. We need to make sure that when we build and service products, we need to have this entire ecosystem in the back of our heads. Where does this happen? We're trying to make a stab at segmenting the market.
As I briefly mentioned in the beginning, some 75% of our business currently stems out of the U.S., which means that if we wanna bucket the different geographies or markets into some sort of segments, U.S. stands out as a segment of itself. This is actually quite interesting. U.S. was the leading country in the world some 20 years ago to basically put an equality sign between the impairment of being unable to communicate is no different from your impairment of being able to walk or see or hear. Makes the U.S. quite unique. We may have all kinds of thoughts around U.S. welfare and healthcare systems, but U.S. definitely stands out and is the biggest market, not just for us, but for this industry as a whole. We have a second segment which we defined as well-funded or other well-funded markets.
They're okay, but there's a huge discrepancy between these markets, but they're quite few, as you can see. There's only a handful of them. Norway standing out as probably the best market, both when it comes to the rules and the regulations, but maybe more important to the implementation. There's a low level of complexity and bureaucracy in the Norwegian system compared to many other markets. Being here in Sweden, I think that the general conclusion is that the legal framework is okay, but the implementation is very, very unequal depending on which region you happen to live in. We have a third market segment, which is what we refer to as the less well-funded markets.
Here we see markets which have very, very meager support and reimbursement for these types of products, or it's very bureaucratic or very complicated and very slow. Imagine again, the diagnosis of ALS could probably have a quite rapid development. If the process to obtain a communication aid is two years, it doesn't matter how good the laws are written if the implementation is that poor. It's interesting to see that in this less well-funded, this doesn't sound very good, right? We see countries such as France, U.K., Finland, and so forth. We don't have to travel all that far away. These are, in many cases, countries with a fairly generous healthcare system overall, but the implementation here is quite meager.
Basically the rest of the world, there is more or less no infrastructure, no reimbursement in a lot of markets outside of this handful. This is the current addressable market that we're serving today and the reality that we're looking at.
Fredrik, I know that we will come back to how Tobii Dynavox can affect this, but have we seen any improvements of this?
Yes, we definitely see but gradual improvement. To name a few examples, in the U.S., we have three consecutive presidents who have signed a bill to empower the reimbursement bodies to specifically serve people with ALS. That, of course, makes it specifically for that segment. We also see that there is some reimbursement starting, having popped up over the past five, six years in the U.K., for example. Even though it's not great, it's something similar with France, et cetera. We even see some interesting trends with COVID, where people were now forced to do things remote, where there is a lot of typically paperwork and manual processing, face-to-face meetings. They have been abolished and maybe streamlined or digitized.
I have a hard time seeing that we will go back to a world when COVID is over, where people wanna go back to writing papers and doing things face-to-face when you actually don't have to. Some improvements. Where will the growth come from? Again, if we put two different glasses on, if we first look at geography, the markets I just mentioned, we believe in the coming 10-year period or so, there will definitely be growth in all the market segments that we're addressing. The U.S. being the biggest market today, we believe also in 10 years will actually be the biggest market from a total revenue perspective.
We also see that the other less well-funded markets, France, the U.K., and Finland, hopefully and most likely will start to catch up and start to become a fairly sizable portion of this market. We see obviously a good increase in the poorly funded market. It goes from zero to something, and will in turn also mean a fair amount of revenue also 10 years from today. We see that similarly the other well-funded markets will have a growth. What we wanna show with this picture is probably not so important, the absolute numbers. This is guesswork to some degree, but we don't believe that there's gonna be a fundamental change in where the money comes from in 10 years from today.
Similarly, if we look at the types of users that we're serving, we see that currently we have a some sort of split between the people that has acquired a condition, the people with spinal cord injuries and ALS, et cetera, and then the children who were diagnosed at an early age. Similarly here, we see that both these markets will continue to grow. The proportionality will be somewhat different, but we still see that these are two market segments that will continue to grow. I think the mathematical answer to this, maybe to speak Linda's language, is quite simple. It's because the vast majority of people out there are not being served. A lot of these sales, a lot of these prescriber users will actually be first-time users.
You wanna think, well, is there a recurring model into this? Is this all perpetual one-time sales? Well, the communication aids part of what we do, yes, it is typically, as the world looks like today, a one-time sale. We can talk about it a little bit later. We are seeing some tendencies that we might be opening up to recurring models, where rather than us selling a one-time sale to a payer, there is some sort of recurring model. But this is a fairly conservative customer and payer group, so we don't see a rapid development into this.
However, if you look at the dynamics of our users, a user who's diagnosed at an early age, who may, in most cases have a life expectancy as long as humanity at large, he or she will probably replace the communication aid every four, five, six years or so. You don't wanna change your language every five, six years. You don't wanna change the way you communicate. Similarly, provided Tobii Dynavox plays our cards right, we serve our customers, and we stick to our promises, that is likely a recurring customer also for life. We believe that the replacement sales will take a fairly significant portion of our revenue also 10 years from now, maybe a 1/3 or so. It's obviously mainly towards the user groups that are younger, born with the condition.
It's rare that the people who have acquired the condition later in life have more than one replacement sales cycle because of the sheer nature of their condition. If we then look a little bit on who we are in this space, we've been boasting on the fact that we consider ourselves the market leader. To put some numbers behind that, we estimate that we have in the communication aids market a roughly 40% market share. We are followed by a U.S.-headquartered and I would think it's safe to say rather U.S.-focused company called PRC-Saltillo. PRC-Saltillo has a similar offering to us, where of course we have our different flavors and our different ways of working, but they're roughly 1/2 our size or a little bit less. After that, you don't necessarily find a big player.
After that, the third largest segment is actually the makeshift homemade solution, where you take a consumer tablet, some sort of solution, maybe a wrapper. Sometimes you buy a software from us, et cetera. That's probably the third biggest market share in this market. But they are either transitional and definitely if you live in a place where there is reimbursement, that is something that you more use as a proof to, yes, my child is able to communicate this way, but we rather be in a system. About 90% of the users of those 50 million, they don't need eye tracking. They have some sort of capability to control their fingers, their hands, or other parts of their body, then that is probably a better way to interact with your communication aid.
You have touch screens, you know, such as a tablet, you may have various kinds of joysticks or buttons and switches. 10% of the addressable market, but much more when it comes to revenue currently need eye tracking 'cause that's the only part of the body that they actually can control. Tobii Dynavox, of course, with a history of being part of this fantastic Tobii family, we have a quite strong market share in that segment. It's also interesting to see that we don't see a big shift in the splits of, you know, market shares, et cetera, over the past five years or so. It's a fairly consistent market. Now I would like to talk a little bit about this other audience I mentioned. This is the audience of special education.
Give you a little bit on special education, what this is. This is the infrastructure, the system, the model, where the world basically captures children who are diagnosed at an early age with some sort of impairment, rendering them unable to participate in the educational system the same way as other children. It is typically somewhat market dependent. There is some consistency between markets, but some of the markets, this is an inclusive education. You basically have the classroom and then you include children with special needs in the classroom, but they have specific adaptations. You have some sort of the other way around, where you have a specific setting, a specific school, a specific class just focusing on children with special needs, and then you have some sort of hybrid approach.
I would say it varies a little bit between markets. I think this picture here is a good example of what it may look like in a special education classroom. Here we have the symbols. These symbols are fundamental to either just start your communication journey, to go from utters and sounds and maybe some signs into actually expressing something I want, I need, I like. Eventually, those symbols hopefully transition over to understanding letters and numbers and eventually leading you into some sort of literacy. We own these symbols. They're called PCS symbols, and it's an integral part of our offering, not just in the special education classroom, but obviously also in our communication aids. As you can see also by these symbols, they have to be up to date, and we have to work on them every time.
We definitely have a symbol for Donald Trump or wearing a mask or Brexit or COVID, etc., in addition to basic communication. The special education market is much more scattered and much more difficult to kind of put into a frame and define. However, if we think about the offering that you have into this market, it's either the software that enables the teacher to print these symbols, to put things out on the classroom, or maybe, as you can see on the picture here, to write a book. Rather than having text about the animals of the forest or the history of the country, etc., you use symbols and alternative measures to make that curriculum. We also make the curriculum.
We make readymades so that the teacher don't have to wake up every morning and make a new class and start from scratch. Also, there are web-based support materials. Either you consume the material not on paper but on a digital screen or online. The decision-makers, the ones that chooses, okay, I need something in this sense, is can be a parent, a parent who does homeschooling or part homeschooling. It's obviously the special education teacher, but the entire school systems may also be the decision-makers. The users, however, are typically always the same. It's either the child or the student herself, it's the teacher, or it could be the therapist that work in the school environment. They used it, these types of solutions. Again, stressing the fact that this is a market which is much more tricky to define.
It's much, much smaller, both from a Tobii Dynavox perspective and from a market as a whole, but it has some quite interesting potential. We believe, again, if the entire current school systems in special education would adopt this is about a billion-dollar market already today. But currently, we estimate that the total revenue in this space is around $40 million. But here again, we see growth. We see obviously that there are more students in classes. The demographics, there is a growth. But overall, this is a market that is estimated as a whole to grow by roughly 20% per year in the coming 10-year period. Similar here, awareness. Have you heard it before? The awareness of that these types of solutions is also super efficient in the special education classroom.
You also see trends on things such as higher spend in general on special education, that the educational systems developed. We see interesting decisions also in markets such as China, where in the latest five-year plan, inclusion of children and adults with disabilities is an important part of education, eventually the financial system of the country.
There's one interesting little thing as well in addition to kind of growing the market, and that is that this, as well as with every software industry basically current on the market and for those of you who attend a lot of capital market days in the software space, the business model transition, going from perpetual, this is our product that has been sold, you know, on USB sticks and CDs, etc., or download and going now to some sort of recurring model, maybe not drastically, but over time, will in itself actually help to grow then the totality and the size of this market. Again, the estimate is that the coming 10-year period, this market as such, will grow by roughly 20% per year, but from relatively small numbers.
We also see that the U.S. currently, interestingly enough, is by far the biggest market already today when it comes to these types of solutions. It will continue to be the dominant market also 10 years from now. You will have a much faster race when it comes to the developed world or the Western countries in OECD, where the implementation and use of these types of solutions also in the special education environment will grow quite significantly. Again, this space, who's Tobii Dynavox in our offering? Our offering is estimated to have roughly 25% market share, and we are second to another U.S. player called News-2-You, who has a similar offering. After that, the list becomes very long of typically local language or very simplistic types of solutions to make print material, etc.
It's a much more nascent market. The interesting part here is, I mean, you just have to look at the pictures in my previous slides. The overlap and the synergies with having a well-functioning communication aid that uses the same symbols as the teacher is using when explaining about the animals or the forest or the human body or whatever it can be, and that there is also a technical integration so that you can consume the classroom material in your communication aid while also on the screen, makes this highly relevant for us to be, have one foot in each little pond here simultaneously, because it's sometimes very difficult to judge where the overlap starts and ends. Okay, these are the markets.
We talked a little bit about the users, where they are, who they are, etc., and the different settings on where we eventually sell and distribute these products. Leading up until we have the break, we will go a little bit into our solutions and the products that Tobii Dynavox provides to these segments and these users. First of all, it's very, very important that the solution that Tobii Dynavox provide has profound, fundamental, life-changing effects on the user. It makes him or her, it gives him or her the ability to basically be themselves, enhanced independence. It could be as simple as I'm able to call for help myself or I'm able to say, "Go away, I wanna be alone." It's also the ability to have a career, get a job.
You will soon meet one of our colleagues who also is a user of ours in a video. There is obviously a quite fundamental part of what this does to you mentally. The fact that you are independent, you can control your own destiny should not be underestimated. The level of depression and issues when it comes to cognitive and social interaction is quite high among our users and the people around them. In fact, the lady up to the right, her name is Gina. She was once together with her son, James, on one of our big company kickoffs. Over a beer at...
Little bit later in the evening, Gina told me not only what a change this has meant to her son, and James only got his first communication aid at the age of 19. Gina said to me, "This communication aid is of course great for James, but it's the biggest antidepressant pill I have ever received in my entire life." I think we can all sympathize with that to some degree. Tobii Dynavox being there with our solutions, that has to include the caregiver, the caretaker. They are the ones that basically live with the user and the communication aid 24/7, is a super important stakeholder. Similarly, we talked about the educational setting. The educational setting, of course, has to embrace the communication aid and the user and has to have a communication...
Educational setting that adapts to people with communication disabilities. The speech-language pathologist, very important part of our ecosystem, logoped in Swedish, could also be an occupational therapist. In rare cases, it's a neurologist, and in certain cases, it could actually be someone working in the education environment, the teacher, for example. A super important segment that we need to service so that they are successful basically in their jobs. Last but not least, the payers. The products that Tobii Dynavox provide are not typically bought over the counter. As Linda showed in the beginning, 90% of our revenue comes from some sort of public or private insurance system. They could be Medicare in the U.S., or they could be a private provider such as UnitedHealthcare.
It could of course be the NHS in the U.K. or NAV in Norway, etc. We need to be adapting our solutions and our product actually to all these stakeholders. If we forget about one or if we don't service one, our product could actually be rendered more or less useless. That means, and now we'll go in a little bit into more detail, that these five different buckets in which we build up our portfolio are as important, each one of them. You may think about Tobii Dynavox as, you know, the device and the product, but this is just the kind of the enabler in the middle.
I'm gonna walk us through each of these different parts so that you get a better understanding on why this is important and why this makes a difference, and why this makes Tobii Dynavox different. I'm gonna start with content. I briefly talked before about the symbols, the Picture Communication Symbols. This is an asset that is owned, developed, and maintained by Tobii Dynavox. This is the world-leading communication symbol platform in the world. It has the widest spread. It's obviously used in our own communication aids. These are the symbols that you use typically for the children or the ones that are diagnosed at an early age. They're also used by our industry peers. We license our communication symbols also to the other AAC players and other communication aid players in this space, but it doesn't end there.
Anybody here that may be using Microsoft's Office, if you click on Accessibility and the assistive reader. No, it's called som-
Immersive Reader.
Immersive Reader. Sorry, I missed that. Thank you for experts. The Immersive Reader function in Word, PowerPoint, Teams, et cetera, and you turn it on, and you have your mouse hover over a word. There might be a symbol that pops up. You will probably recognize them as PCS symbols. So we also license these symbols to large companies, including Google and Microsoft to use. But you can also find them at playgrounds, et cetera. PCS symbols, a fundamental part of our portfolio, which is the content. They come in various shapes and forms, including for users who have some sort of vision impairment, so in certain high contrast symbols, et cetera. It comes to the next thing, and this one is a little bit tricky to explain. This is about the language system.
Okay, you have the word and you have what you wanna say, but you can't have every word on your first screen. You need to start, and you need to basically put communication into some sort of communication system. We work predominantly with something called Core First, which is around a core vocabulary. That's the most commonly used words. Once you have clicked or chosen your first word, you can then expand, "I want pancakes. I want mommy. I want no more." This is a quite complex organization of words to form language. It's obviously different depending on the actual language. It's different in English than it is in German than it is in Swedish.
This is a very, very important way on how you develop communication if you can't develop it in the same way as our children have. This is also something, once you got accustomed to it, that you don't wanna walk away from. Obviously, again, like I said, if we play our cards right, provided we provide the services and solutions and technology for our users, they have a very, very high loyalty and low ambition to change away from that, if ever. Lastly, and this is maybe the most recent addition to the Tobii Dynavox family, you have the synthetic voice. If you don't have a voice of your own, the synthetic voice is you. That's your personality. We have a lot of third-party synthetic voices implemented into our solutions.
The company that we have been working with the most when it comes to synthetic voice is a Belgian company called Acapela Group, and Acapela Group we agreed to acquire just a couple of weeks ago, looking to conclude the deal in the beginning of next year. This enables us not only to, of course, understand and work with the voices, the way we do today, but more importantly, to innovate around things such as integration with our software, personalization. There are a lot of classrooms out there where it's the same voice being used by five different children, and that's just weird.
We believe that the personality and that we can give by that user by having a voice of their own, having a unique voice, maybe store your voice because you've just been diagnosed with ALS and you know you will eventually lose your voice. We now have the capabilities to store your voice and make a synthetic copy of your voice. Similarly, two siblings, one has Cerebral Palsy and one has not. The older sister can donate a sample of her voice to the younger sister. You make some tweaks, and most likely this sister will sound just like the sisters they were, even if there was no communication aid in between. This is where it starts. This is the content. Then the content needs to be put into software, but the content could actually be printed on a piece of paper or on board.
This is what special ed classrooms look like. Again, if you want to include an entire language in every word, that paper becomes quite big. That's when we start to build software. The software has the symbols, the language system, and of course, navigation. In this case, TD Snap is our leading software when it comes to the typical congenital or the users that were born with the condition. This is a software that you obviously have in our specifically made communication aids. Maybe you can pull that one up, the I-110. This is a communication aid that is built around Windows, but it has the Snap software on it. You can also buy it on App Store for your iPad. It can be controlled using your fingers, using joysticks, switch buttons, but also using eye gaze.
Another example of a software that we have is this software called Communicator 5. This is more towards the users who have acquired something later in life. You can almost think about this as the operating system in your phone. This is where you gather all your apps and your abilities. Of course, you have literate text communication. Hello, hello. As you can see examples on this picture, you also have important things such as social media, entertainment, controlling your home and your environment, and much, much more. Again, typically focused towards the users who want to do what they once did. We have towards the special education audience the software that we center our offering around is called Boardmaker, and Boardmaker has actually been around for decades.
It's the leading software for producing content and solutions for the special education classroom. In fact, Boardmaker is about printing symbols, putting them up on the board. This is what assistive education has looked like for quite a number of years. Here instead, we have. This is the tool for the teacher, or sometimes the parent, to create symbols, symbol content, and classroom material. Here we have millions of students that have or are currently using these types of products. We have 100,000s of teachers who not only use the product, but they also have a big community where they share, "Hey, I have this great activity to pick between different colors or the animals of the wild, the wild animals of the forest," et cetera. The symbols, they're the same symbols. You start to recognize them now.
Over 50,000 symbols translated into some 14 languages, coming in various shapes and forms. If you look at the devices, the communication aids, this is the third step on this journey. We have the content. We put the content into a software, but now we also build specifically designed and made hardware for this, for this software. The majority of Tobii Dynavox's revenue comes from the medically grade high technology types of solutions. This is where you have not only a very well-functioning device, it typically has features that are specific to our users. It can be mounted on a wheelchair. It has enormous speakers so that you can shout and be heard also on the schoolyard. It has batteries that last throughout the day. In certain cases, it has fundamental things such as eye tracking enablement, so you can control it with your eyes.
Sometimes not. There's also other types of technologies that are typically used in the assistive space. In addition to that, these devices and these products, they are sturdy. They don't break because they will last throughout the day in the schoolyard. They're mounted to your wheelchair. Three times a day you go into a wheelchair taxi, et cetera. They cannot break. Because what happens if they break? You're silent. They also have to meet certain medical standards. They have to be medically certified, which means, first of all, it's a lot about documentation, but it's also about durability.
They have to be cleaned with alcohol, et cetera, to make sure that they are eligible to be used and sold into a hospital setting, but also that they're eligible to be funded through the medical insurance systems of the world. This is not just a piece of hardware. It's not just a thing. It's actually quite a complex animal in itself. Again, this is where the majority of our products come from. They're typically MDR certified for Europe or FDA certified for U.S. medical standards, et cetera. We also have a hybrid portfolio where maybe you don't have access to a generous funding system, or your funding system doesn't exist and you have to rely on some sort of charity, et cetera.
Maybe you already have a PC computer. Well, then we have a peripheral that you attach to your normal Windows PC, and it enables it to be used with eye tracking. There are examples of this out in the foyer for those of you who wanna test it. Similarly, if you have access to a product such as an iPad, we have a specific case that not only makes the iPad super rugged, it can be mounted on a wheelchair, it has specific handles for grip ability, it has bigger speakers. Again, the iPad speakers aren't that loud, and if you need to be heard on the schoolyard or in a restaurant or in a cafe, that may actually be quite fundamental. This is roughly what the hardware portfolio from the communication aids looks like. Here, my...
The intent is, and maybe a little bit of a background story here because this is fun. We knew about this setting. We knew that this would also be a hybrid meeting where some of you would be fortunate enough to be physically here to try out the products yourselves, and some of you are, as important, but you're not physically here. We asked our marketing team and two of our colleagues, Victor and Kenta, both working in our support team, to explain to everyone how does eye tracking actually work. Meet Victor and Kenta.
Hi, I'm Victor. I work at Tobii Dynavox. I communicate with my eyes using an i-Series. Today, I will be showing Kenta, my new colleague, how to get started with eye tracking. Ready?
Yep.
First thing is to make sure you are in the right position so you can see the dots in the green zone. Next is calibrating the device. All you do is look at the dots until they pop.
Wow, I'm doing it.
Test it out, and then you are good to go. Pretty cool, right?
Yeah, that's really cool.
Okay, Kenta, open TD Talk. Look at each letter for a second to spell out what you want to say. Now, select Speak. Hello.
Oh.
Pretty easy, right?
Yeah. Thanks for showing me.
It's great. That's it, Kenta and Victor. Kenta is actually Victor's boss. Important to say. Maybe one day they will both be actors, and we will see them on bigger TV screens or cinemas out there. Two weeks ago, we made an announcement to the world that we have made what is probably not as much of a technical advancement, but a very important part in reducing the stigma and increasing the accessibility and user-friendliness of these types of products. That was when we launched a new product, TD Pilot, in collaboration with Apple. Probably one of the most common questions we have received, everybody working here and for me for the past eight years, "Does it work with an iPad?" No, it doesn't work with an iPad because Apple is basically taking care of their ecosystem, both when it comes to software and hardware.
However, for about five, six years, we have collaborated with Apple, and right now this product is available. Also, similarly, everybody that is here will be able to use it. In essence, what it does, it turns.
Set fines.
... An iPad into a communication aid with exactly the types of technologies and features that we have in our previous communication aid, but it's all built around iPadOS, and it's integrated directly into the operating system, making it very, very smooth. Maybe the next video is with another user of ours. Her name is Lane. She's a high school girl from Kentucky, and she's been part of testing and beta testing this product. You will have some more information about the actual features and functionalities. Again, for those of you who are here, please try it out. For the rest of you, visit one of our offices or so and try it out yourselves. Meet Lane.
Let's go.
Normalcy. Do you feel it? This is normalcy. This doesn't make Lane any different from her classmates or anyone. The fact that she's communicating with an iPad, that's not that very much different from any of her classmates or any other person of her same age. I think also the way we design, market, and communicate around our product has to be, you know, not cut and dried, not medically certified. It has to be normalcy. Two last points before we go to the break is then, again, fundamental in order for these products to be successful out there, assessment and funding. Most of our users have one common denominator, they cannot communicate. But apart from that, well, some of them have cognitive impairment, some of them have a physical impairment, some of them don't.
Some of them have issues with social interaction and behavior. We have a fairly large team in the markets where we sell directly of what we refer to as solutions consultants. They are typically former therapists themselves, but they are now working for us to assess how does this work, what's the solution for this specific user and individual. We also have a training organization. The training organization focuses a lot on educating the prescriber, but also sometimes the caregiver and the family members. Then we have a series of tools, et cetera, to make this easy, fast and doable. This is obviously super important, and especially since most of the therapists are quite shaky, or maybe they don't understand all the details and the technologies that we have.
The fact that we can be there and provide them with support, at least for the first one to five assessments, until they eventually feel at ease with doing this themselves. A very, very important part of what we do and how we do things.
Oops.
Another step is the funding overview. Today we have about 400 contracts with different, both private and public funding bodies. This is really a good thing for us because it helps and goes much faster for the user to get the device, and we have already come to an agreement on a lot of the terms. Together with the contracts, we have a team of over 50 people that are experts in this field. We call them the funding experts. They really help both the SLP, but also the user on their way to get their voice. If you take the next. This process is super complex. It's nothing that is standardized, and I would say that on a daily basis, we get between 200-300 faxes into this team.
Could you repeat that?
Yeah, fax. It's something they used in the 1980s.
Okay.
It's still live, unfortunately. This is really, really complex, and you can imagine then getting all of these faxes. What we have done is that both having this team, but we also have built a system, we call it E-Funding, and this system helps then, the funding experts to make sure that we have all the documentation that needs to be in place. Of course, all these contracts have different documentation that they want. It's really, as you said, nothing is, automatic, that perspective. I think with both the team and the system, we have really a significant, what do you say, significant advantage compared to a lot of other companies. When the documentation are in place, the user will then be able to get their device and the voice.
The SLP will then help them getting started, and we, of course, are part of that road. Remember, this is a significant entry barrier for anyone that wants to sell into this market, even for large tech company. Of course, they have money to go there, but this is really a niche and they won't go into this part.
Yeah. That's the assessment and funding part. Last but not least in the offering of what Tobii Dynavox does is implementation and support. I mentioned briefly the training organization. The training organization is of course there on fairly large scale, both with our own staff and sometimes with our partner staff, to educate the people who are supposed to be knowledgeable about this. How am I successful in my own job? How will I be successful with this particular user? We do live trainings. They were probably more common before COVID. They have been transitioning more into digital versions lately, and I think maybe the future will be some sort of combination. We have on-demand training where you basically can go into tools, you can watch classroom material, et cetera.
Even in some markets, this is something you earn credits to keep your credibility or your license as a therapist. We have all types of digital tools that you can log in and constantly refer to when working with these types of solutions. We have a big support team that speaks many languages, that are in many time zones. Again, Kenta and Victor, you already know, two examples of our excellent support staff. But we also of course have a lot of support and knowledge base, et cetera, when you need to troubleshoot or understand and come further with your products. Also, our users are fantastic support assistants.
We have big communities on social media, which I will cover on my next slide, where they actually help each other, and we're just there to seed and help and maybe sometimes rectify. Lastly, we also of course take care since we a part of our portfolio is physical hardware, we're there to support, repair, change a broken screen. If something is you know, something has happened to your device, we're there to either change it and repair it to make sure that again, our users are never left silent. I think the community is quite interesting here. Again, if you would like to get somewhat of the feel for what Tobii Dynavox is all about, do check out, for example, our own community on Facebook or on Instagram, where there is a...
It's a big pot cooking 24/7 of users having, you know, tricky questions or simple questions or how to, or they just wanna shout out with excitement and say maybe sometimes they wanna shout out with something that they are unsuccessful with. On Facebook alone, 65,000 members collaborating. We have staff in our team that are there again to seed, help, and support. Similarly on Instagram and on YouTube, where of course you have videos like the one you saw today, and some of them are even more instructional. Specifically in the education, special education space, these teachers and school staff, they have a big community, typically on our platforms, where they help collaborate and share classroom material. This is a very, very important part of what we do because we may think that we are the world leader, but we're a fairly...
We're a big fish, but in a small pond, and there's never gonna be a way or a day when we can tell everyone everything. Collaborating with the people that are users and are around us is a very, very important and powerful way to get the message out there. It's time for a break. All right. Welcome back. I hope you have re-caffeinated, blood sugar is on a reasonably okay level, and maybe you got to try some of our products also during the break, to get a better understanding what this black magic actually is in reality. We'll shift focus a little bit now and look at this. We know the market, we know us as a company, we know the products, we know our users, et cetera.
How are we planning to go about and expand both the business but also the strategy for profitable growth, which is an important element in how we plan to run this business? I think it's important to start by saying that Tobii Dynavox, we are inclusive by design. When it comes to what we do in the world, this obviously is well in line with the times, whether you call it the UN Sustainability Goals or simply being a decent member of society, this is what we do by the sheer fact of what our product does, not just to the users, but also to the people around them.
I'm sure that everybody can sign under the fact that there is a positive impact on individuals, the well-being of individuals, again, not just our users, but to some degree the people around them. The quality of education for everyone, not just the lucky few, and also the inequality in society at large, making sure that despite whatever disability or hindrance you may have been born with or acquired in life, you are there on equal terms. As an employer, we also need to play this right. It has to be a great place to work. We have to take care and be a fantastic employer and build this creative yet mission-driven team.
We need to minimize the way that the climate is impacted when our products are produced, shipped, recycled, and the way we travel and the carbon footprint that we have as a company. Again, a diverse work environment, almost no matter how you choose to calculate diversity, is of course very, very close to our heart. If I just take some snapshots of the team, again, some 500 people in the fantastic Tobii Dynavox team. It's interesting that even though I think it's fair to say that we're a high tech and technology company, we're almost equally split in the middle when it comes to gender, both when it comes to the staff overall, but also when it comes to management layers and in fact, Board of Directors. We have a diverse set of age groups within the company.
A metric that is more tricky to actually measure is the number of ethnicities or nationalities, but it's safe to say that well above 40 or maybe 50 nationalities or ethnicities in our company alone, which makes it a very, very dynamic place to work at. People tend to stay within our company. We have obviously newcomers as we grow the company, but we have people who choose to make this a place where they wanna stay as an employer.
A very, very dynamic team, which I'm super proud to be part of, to be perfectly honest. Coming back to taking this team, these products, and what we do, how do we, if we have to put into buckets, what are the different initiatives that we can influence, that I can do by not just riding the wave of the industry or the market or demographics, but actually what can we do actively to grow this even further for the coming decade or so? I sound like a broken record when I say awareness. Knowledge is definitely one of the hindrances that we are experiencing almost on a daily basis. We wanna grow our own team and the representation we have in the field.
We want to expand into new markets and also within the fairly well-defined market that we're addressing, there are new user groups and groups of users that we can still address better or really start to address. We want to continue, and this is an obvious thing if you have a Tobii as a part of your name, that innovation and continue to build fantastic products and solutions. We would like to continue to take an active role in the reimbursement process. Last but not least, we believe that M&A is a good icing on the cake that we can make sure that we both grow more organically, but maybe add completely new revenues that we didn't have before.
I will in a semi thorough fashion try to go through so that at least you understand roughly what's behind these headlines, and me and Linda will do that. We start with the increasing awareness. Very interestingly, during the coffee break, this is the most common question I get, "You know, but why don't they know it?" I share your frustration. I think this is exactly what we want it to come around. We have a painfully low % of people that are in need of communication aids that currently has access to these communication aids. The knowledge among the people who are supposed to know about this is painfully low. We are going about and training.
In fact, I will come back to that. Training is the new selling, is what we meant that just three years ago as the main strategy. We don't believe in the box pushing strategy where we actively sell one more device. If we can increase the awareness and competence around this field, as the market leader, hopefully most of that business will also land on our table. In 2020 alone, Tobii Dynavox trained over 100,000 professionals and people engaged around our users. Massive scale for a relatively small company like ours. That we believe is one of the most important levers we can pull in order to create the awareness. We're, of course, engaged a lot in big programs with user groups, with prescriber groups and industry associations, also in order to influence professionals.
We're also engaging in all these grassroots initiatives that happen. How many here did the Ice Bucket Challenge? A few. How many know about the Ice Bucket Challenge? It created awareness around a very rare condition called ALS. In this case, it's our own team using our own communication aid doing the Ice Bucket Challenge. The Ice Bucket Challenge was actually started by two Tobii Dynavox users in Boston, close friends of Tara, who's in the audience here. Unfortunately, none of them are still around. How can we be part of feeding into these grassroots moments? Because maybe we will have a new Ice Bucket Challenge, and exactly what this happens is that it creates awareness around the condition, and if the condition is a user of communication aids, it creates awareness among the condition.
This is something we actively engage in addition to, of course, the hands-on training. That's number one, increase awareness. The second initiative, which is actually closely associated with the awareness, is that we don't have enough people on the ground. By just deploying more people on the ground who walk the walk, who carry these products, who talk about this, who assess a new user, who educates a new professional, we're of course creating awareness, but we're also simply increasing the size of our business. Our solutions are typically sold with a fair amount of physical hand-holding. You visit the user, you assess the user, but more importantly, you probably have a Gerber or a toolbox next to you to mount the device on that person's wheelchair or bed or the environment.
It's a fairly high touch type of business. By simply having more people on the ground who helps more users and more people, that's a very simple, mathematically very simple way of actually growing our business. We have two examples here of how this can be done differently. The first three scenarios is what we call territory splitting. We have a solutions consultant. He or she is responsible for a specific territorial area, Ohio, in the first case. Okay, it turns out that Ohio has more potential users than this single individual can serve. There is an eval center in the north of the region, and there is an eval center in the south of the region. Okay, what happens if we simply cut the territory in two?
The person who used to be there now focus on the north part of the region, and the new individual focus on the south part of the region. The business doubled. We have numerous examples how we'd simply do that, and we realize, okay, how far can we go? We're not really sure. Geographical distances and actually boots on the ground is a very simple way for us to grow the business. Hiring more people, more salespeople is a very straightforward strategy. It's also how they work. Do I really have, as a consultant, to travel to help one patient and then help another prescriber, et cetera? Well, maybe there is a smarter way of doing it. That's where the training is the new selling.
That's where if I instead focus my time on educating the prescribers, the professionals in how to do this themselves, I will, of course, travel less, and I will be more of a second line support or account manager, et cetera. This is an example from what we did in Norway. In the Norwegian market, like I said, it's an important and strong market for us. We shifted the way of working for the Norwegian team to, rather than going out and doing one-on-ones and then rather focusing on training, they have their own podcast on Spotify. The only thing we did different was to add another full-time trainer, a person who's a professional in the actual concept of training.
In this case, she educated her peers, the same people that worked here before, in how do we train rather than doing transactional sales. What happens? With the same people, 50% growth. Again, putting more people on the ground and having them working, maybe one of my favorite sayings is, "Work smarter, not harder," is exactly what we wanna do. We believe that simply putting more people on the ground will linearly grow our sales at the maintained margin. We talk markets. As we may understand, each market is different. First of all, in many markets, you speak a different language. You are likely not that successful in Norway if your product is in Greek. But also each market has its own dynamics. The funding bodies are different.
The education system may be different, for example. Currently, Tobii Dynavox operates in a direct fashion in four different countries. It's the U.S., it's the U.K., Norway, and Sweden. In these four markets, we have our own specialists on the ground. They work directly with the prescriber and the user. That's the dark blue markets here. In the green markets, we work through a network of almost 100 partners. They are resellers. They, in essence, do what we do, but they are, it's a different company. They sometimes are exclusively selling our product, and sometimes they are, you know, a jack of all trades. They may sell home automation products or home adaptation products or low vision blind products, for example.
We notice that also in the markets where we have a partner, if we put a person physically in that market who speaks the local language, probably comes from the local network, we are much more efficient in both doing the training that we talked about before, that trains the professionals in the field or our own partner. They're also there to, in a much faster way, gain market understanding. Maybe we should do something slightly different in the market. If we have our own colleague physically, geographically present in that market, we believe the market basically grows faster. Expanding our footprint of our own staff in the markets where we operate is a very clear growth strategy for us beyond the four markets where we do basically everything ourselves.
I will actually come back to this topic also on my last bullet. If you have anything Tobii in your DNA or in your history, innovation comes quite close to our hearts. I'm an engineer. I have to say I love the fact that we also do quite cool stuff. Sometimes innovation for us doesn't necessarily mean groundbreaking technology that does something that wasn't possible before. I think it's safe to say that with the current portfolio of products, hardware, software, content, we have a very solid foundation to stand on. There is no cold fusion thing that I need to still to invent in order for us to be more successful.
We could also be a little bit critical of our own in saying that maybe some of our past, we made products that are a little bit too engineer-y, products that are a little bit too complicated to get started with. That maybe if you decided early in life that you wanted to become a speech-language pathologist, you probably also with that choice decided, "I wanna work with people, not computers." All of a sudden, me or Linda or one of our colleagues come in, and "Here we have this great product, and you can control it with your eyes." That could be almost intimidating.
By making products that are simpler to use, where you basically lower the barrier to get started, to get your first success, to understand it, and hopefully over time grow, that is an innovation we have, we're focusing a lot on. I think it's safe to say, which I told some of you during the break, that maybe the biggest novelty with the product that we're doing with Apple, it's not that it fundamentally changes everything. This product does exactly what our Windows-based product does. It costs as much as our Windows-based product. There is no fundamental change in the way how we go to market with this product.
Of course, the familiarity with Apple's operating system, that it's integrated directly into the operating system, that there are no seven steps to get started, et cetera, that is the type of innovation we're focusing a lot on. Usability in addition to technology. With that said, yes, there are some cool innovations we're still working on, and some of them are very difficult. Some of them may materialize in a decade from now. Yes, there's definitely some cool things that is in our laboratories and being worked on. I wouldn't say that is the number one priority for us to disrupt it from a tech perspective. It's usability which is important. We have a very strong team here. We have Al in the room, for example, who's responsible for engineering team.
This is a team that works a lot around how we develop artificial intelligence, how the acquisition of Acapela centers a lot around deep neural technologies. How can we make this smarter? This is the type of competence we have in-house, software, hardware, and technology. Linda.
Yes. We talked about the funding system before, and we think one of our strategic initiatives going forward is really to work and improve the reimbursement process. We go direct U.S., U.K., Norway, and Sweden, as we said earlier, and we have all of these 400 contracts. We think that if we continue to get more and more contracts, we continue to work with the process and improve that. For example, I think, I mean, if we can get rid of some of the faxes, it might be a little bit more faster process. We think that if we can lower the cycle time from when you do the assessment as a user until you actually get the device, it's really gonna help us.
We know that other markets are really immature and don't have much of an infrastructure, and we think that we can take this knowledge into other markets, and that's gonna be important for the future.
Right. Because we believe that these products will continue to predominantly be a prescribed product. Again, this, the similarity to other types of assistive technology, cements that position. Because what you get when you get the communication aid is not just a communication aid. It's typically an element, a part of a much bigger solution. You're probably, if at least you're using eye tracking, confined to a wheelchair. Maybe you need help breathing, maybe you need help with nutrition and food, and maybe you need adaptations to your home. The communication aid is one part of a probably more complex total solution around you, hence public and private insurance systems will continue to be a very important payer in this market. Hence, us focusing on the processing and the know-how around that is a key growth factor also for us.
The last growth part is about acquisitions. If you look at the history of Tobii and Tobii Dynavox, and specifically on the assistive space, we've made a fair number of acquisitions in the past, where, of course, the acquisition in 2014 was quite pivotal when we acquired DynaVox. Also before that, we acquired a U.S. company called ATI and a Norwegian software company called Viking Software back in 2007. Cementing our most recent acquisition, again, the Acapela Group, which we made just a month and a 1/2 ago, to also make sure that we have a superb both offering, but maybe more opportunity for engineering and innovation with the synthetic voices. When we look at our strategy for inorganic growth through acquisitions, we can simply put them into two different buckets.
The first bucket is add a solution. That is where you have the Acapela acquisition. Either it could be something that we could acquire to complement our products, it could be a solution that is specific to a specific user group, or maybe it's a solution that exists in a language that we currently don't have support for. It doesn't necessarily have to be some shining innovation per se, but definitely something that makes our products in the markets that we're currently addressing better. That is an interesting opportunity, and we have a quite interesting pipeline of potential targets here. Maybe an even bigger opportunity short term is to add presence through acquisitions.
Because if we want to start fresh in a market where we currently have no presence, signing up for a co-working space, hiring a person, hiring a second person, starting to do everything from scratch, that's probably a quite slow process. If there are players in the existing ecosystem which have geographic presence, staff, and of course, access to the local network, that is a very interesting M&A opportunity also for us. I would say that similarly here, we have a very interesting and compelling pipeline of different targets. From a business perspective, these are typically cash flow positive, quite non-complex in terms of integration, maybe some of them we already know and we're already collaborating.
Doing that and of course, integrating them successfully into our company, which we do have prior experience of, is a very important gravy on this little pie to make sure that we can grow this faster. Right. With that segue, we should now hand over the mic. Do you wanna have the clicker as well?
Yeah, I think so.
To Linda, and we will talk more about financial performance and targets.
To the fun part. We've heard Fredrik talk about the market that we are working in. We have talked about the position that we have and the under-penetration in the market. We have talked about our solution, we have talked about the offering, et cetera. Let's talk about our financials a little bit. Tobii Dynavox has been a business unit of Tobii for a very long time, and we have proven to deliver growth and that with a profit, which is really good. I think from before the pandemic, we could really show that we had an organic growth over 10%. As I mentioned earlier, 2020 might look like we were resilient to COVID, but we were not able to meet the users. Schools and rehab centers were closed.
The sales process was really challenging, and you can imagine having a Zoom meeting with an autistic kid. That is not easy. Remember the need is still out there even during and after a pandemic, so we really need to get out there. 2021 we've also been affected by the supply chain disruption, but adjusted for this, we see a strong underlying performance in the business. To give you some background about the accounting principles, since Tobii Dynavox has been part of Tobii and as of the IPO in 2015, we've been using IFRS. In the beginning of 2019, Tobii Dynavox has been operating as a legal entity, a standalone legal entity, which means that we have had our standalone cost. Therefore, the separation is not a huge big thing for us.
We think that the cost will be actually in line with history. Tobii Dynavox is really a robust company and have a record of delivering profitable growth. First to give you a little bit of background how our currency look like. More than 70% of our revenue comes from the U.S. and U.S. dollars. Our top line can really have some currency fluctuations, but it doesn't mean that we have a big effect on EBIT, because the major costs, actually over 80%, are in U.S. dollars. We have kind of an internal hedging. Where does the money come from? We have said a couple of times that we go direct in a couple of markets. Our direct sales stands for more than 80%. U.S. stands for over 70%.
In 2020, already said that, vs 2019, we had an organic growth of 1%, but still impacted by COVID. In the nine months of 2021, we saw an organic growth of 2%. We still have negative impact of COVID. We also have had both supply chain problems and logistic delays. The supply chain problem and the logistic delay that we had in the end of the period, we actually needed to push SEK 34 million in revenue into future quarters, most likely into Q4. Next slide. Looking at the gross margin, we have actually been pretty stable between 65%-66%. During prior year, we've been able to negotiate the production cost, which have then improved the gross margin. During 2021, we've seen that the component shortages has really affected our gross margin negatively in the later part of the period.
The cost base, of course, has increased in 2021 for the nine months, but majority of that relates to in 2020. We had all the workforce reduction, we had government grant, we didn't travel, and all of that. That means that's a big part why we have the increase. We also started to recruit to be able to gear up for the future. I will talk a little bit more about the R&D on our next slide. If we look at EBIT for the nine months, we had 7% in EBIT. Remember, this is still highly impacted by COVID. We had the supply chain problems. We also pushed those SEK 34 million. If we convert that to EBIT, we pushed SEK 25 million into most likely Q4.
We've also, in the first nine months, have lower capitalization and higher amortization, which affect the operating margin with SEK 9 million. We've also had some costs related to the spin-off, more like one-time cost. That is about SEK 4 million. If we would adjust for both the pushed revenue and the one-time cost related to the spin-off, our margin would be around twelve percent. Back to R&D and the investment. Fredrik has already talked about that we think that we have a product portfolio to go into the future, but of course, we have and will need to continue to invest in R&D. Historically, we've been spending about 14%-70% of our revenue in R&D.
We capitalize around 60% of our R&D spend yearly, and normally we depreciate the capitalized R&D cost over two to four years. With this, I think that we have a good balance both between capitalization, amortization, and the level of R&D spend we have today. Net working capital, I think we have two forces. The majority of our payers, they of course pay upfront for a device. 90% of that revenue we take immediately, but 10% we actually defer on our balance sheet for future commitment. That type of future commitment could be that you break the device or you need to call our support, et cetera. We then use that against those commitments. This is of course in conjunction with IFRS 15. Once again, remember, the payer pays it upfront.
The other force is that we have the special education, which is a subscription model. Normally, customer usually pay between six 18 months in advance, but then we defer it over the period of the contract. That's also really good and attractive cash flow perspective. Of course, we will tie up some capital related to we are gonna grow and we have inventory, et cetera. Overall, our working capital is really attractive, I would say. Once again, remember, the customer that we have as payers are actually public or private funding bodies, which are really reliable, customers. Looking at the financial position, if you look at the left side, you see how it looks at the end of September.
It's happened a lot of things post Q3, which I think is important for you to understand, and that is in relation to the separation from Tobii. During October, we have drawn the term loan with Swedbank of SEK 550 million. We also have an undrawn facility that we will be able to use for acquisition later on SEK 150 million. We have repaid the loan with Tobii. This is really to clear out all the transaction between each other and to make sure that we are two independent companies. As part also as the separation, we have actually purchased a perpetual license to be able to use Tobii in combination with Dynavox. For this, we paid SEK 280 million.
In October, Tobii actually had a direct issue, and what we got then, an unconditional shareholder contribution of SEK 75 million to make sure that we strengthen our balance sheet on our side. We already talked about the acquisition of Acapela. That hasn't, you know, been completed yet, so no change in cash flow from that perspective. Looking at all of these transactions, we feel that we have a strong financial position to becoming a publicly listed standalone company in a couple of this week or so. Fredrik, the important part.
Yes. In conjunction with the communication around the public listing, we issued an information brochure. In that brochure and also in a subsequent press release, we clarified the financial targets for Tobii Dynavox. Maybe this all makes sense now once you looked a little bit and you have a better understanding of our market. There are some forces that of course underpins growth of the markets. There is also some forces that unfortunately slows down the potential growth of this market. We have expressed our long-term targets that we would increase the revenue adjusted for currency of this business by more than 10% per year. Remember, if that is more than 10% per year, at least our ambition is that that is for decades.
Because even with this pace, we will not have served the majority of the people in need in quite some time. More than 10% adjusted for currency over time. We want to have profitable growth. Coming back and delivering on an EBIT margin in excess of 15% is also part of our long-term goal, so profitable growth. If there is one thing to say in conjunction with these two numbers is that if given the choice where we have to focus on growth vs profitability, we will still stick to these financial targets, but growth will take precedence in the priority there. Secondly, given the cash position and the cash flow profile of this company, we believe that this is a company well-fitted for a certain debt leverage.
The goal is to have a debt leverage of around 2.5x the last 12 months EBITDA, ±0.5x , so in essence between 2x and 3x last 12 months EBITDA. When it comes to paying dividends, I think this is a dear topic, especially given what we're doing now. We're gonna land being a publicly listed company. We're gonna, of course, deliver on our plan, et cetera. The Board of Directors has taken the decision as of for now that we will continue to evaluate M&A opportunities and other strategic investment opportunities before we start to pay dividends, but then we will pay dividends. The expression is the Board of Directors shall continuously evaluate the possibility of dividends, taking into account potential acquisitions, opportunities, and other strategic initiatives.
This is what we're gearing up for. We're actually starting to come to the end of the one-way part of this presentation. I am very grateful that you have stayed awake and quite attentive, at least you here in the room. Just to tie everything together on what we believe, both our company, the company we work for, the market we operate in, and also for those interested in having this as a part of your investment. Tobii Dynavox changes lives. We give people the power to be you in a very concrete, fundamental way. What we do has a huge impact on so many millions of potential individuals out there, and we wanna do it in the right way, and we're focusing on empowering people with disabilities to do what they once did or never thought possible.
We have put this into five main reasons why we believe in Tobii Dynavox and why we believe you should believe in Tobii Dynavox. First of all, what I just touched upon, the revolutionary and life-changing impact of what our product does. This is must-have, not nice to have in the most fundamental way, and not just to the user themselves, but also all the people around them. We are the clear global leader, but in a very niche market. We are the specialist. There are significant both entry barriers, but also playing our cards right, we will keep a market very close to us. It's underpinned by the secular growth because we all believe that society is almost wherever you go, moving into this direction, inclusion. Thirdly, we have a very comprehensive offering. It's not just a device, it's not just a hardware, it's not just a software.
We follow the entire journey of our users and the people around them. We take responsibility both for educating the market, having the right content in the right language and the right localization. Also we're there to support you through the funding process and the support process once you have a product. We have a clear record of profitable growth, even when circumstances has been quite tough. We understand how to run this company. It's very, very robust. Of course, to paraphrase one of our colleagues, what will happen when we fire on all cylinders? We believe exactly that this is a huge opportunity also from a financial perspective. There is substantial value creation, we believe, in the separation of what we do. From an internal perspective, we're standing here today, and we're talking about one topic, one user group, one mission.
This is no different from when we talk inside the company, when we spend time on just doing what is the right thing for our users. With that said, I am a big believer in what Tobii does too, but focus is something very, very important when you wanna run a company. The fact that we are cutting the Tobii Group in 1/2, having 500 people on our side and roughly 500 people on the Tobii side, also makes this much more easy to run. Also from an external perspective, we're no longer mixing two quite different fundamental business. We're creating a clear-cut investment opportunity with Tobii Dynavox being centered about exactly the types of users, the markets, and the financial profile that we have, whereas Tobii represents something else which you will be super excited about in the session after lunch.
It is one more thing that I want to add. By doing this and doing it well, we are also, regardless whether you work on the Tobii Dynavox side of this part or whether you're part of the investor community, we're doing some significant impact into the world. What we do makes a difference. Of course, if you can combine that with a super exciting business opportunity, I think this is, this is a pretty exciting journey to be part of, which I am very much looking forward to. With that said, we're concluding, but me and Linda are here, and I see that Henrik is almost vibrating because there are so many questions in your computer and maybe from the audience as well.
Yes. Thank you, Linda and Fredrik, for a great presentation of a truly fantastic company. It's now time for the Q&A. Once again, let me remind you that for people joining the webcast, there is a Q&A function available. Please feel free to bombard us with questions there, and I will present them to the management team. But remember, there is a time lag, so post them sooner rather than later. Let's wait for the audience to come in with some questions online and the analyst to prepare questions. Meanwhile, I have a surprise. Fredrik, you mentioned maybe we should start an Ice Bucket Challenge. I actually arranged an ice bucket here.
How nice.
I will put that here.
Yes.
I'll let that mature in your mind for a while.
We will keep cool.
Yeah. Great. I don't know, do we have any questions from analysts here on stage? For the production team, we will use this mic here. Okay, it sounds like it works, right?
Yes, sir.
Great. Daniel Thorsson from ABG. I start off with a product-related question. How do you think the product portfolio will look in, like, three to five years? Today, you explained the content, the software, the device. How will it look? And a follow-up to Linda on that, how may that affect the gross margin longer term?
It will look largely what it looks like today. There are no fundamental changes in product composition. As I alluded to before, I still believe that this is, for the foreseeable future, a type of product that is prescribed for, which means that it's paid for by a certain type of funding body who have specific requirements on medical certification, ruggedness, et cetera. The simple answer, we will continue to innovate. It will be similar to, in composition, what it looks like today, but better, even better.
If you look at the gross margin, we think that we will continue about the same level as we have today. Of course, we are able to negotiate our production cost, but we also have some scalable parts in the gross margin.
Yeah. We don't necessarily foresee a change in the.
In price, yeah.
...Average selling price for the type of product, et cetera. Similarly, like Linda alluded to, the cost for us to produce and sell a product, the variable part, yes, we will be great negotiators, and we will design products that are, of course, better and cheaper and smarter in every sense. But don't expect a fundamental change in both, you know, sales model, ASP or gross margin.
Okay, that's good. I have a second one on. Does it work? Yeah.
No, not-
No, not now. Maybe now.
No.
Thank you very much. The second one is on TD Pilot, recently launched. Is that a consumer paid product or a reimbursed product?
It's a reimbursed product.
Okay. The follow-up on that is the emergence of consumer electronics important for you to grow longer term so that people can buy products related to what they already have at home?
I think that if you would have asked me five years ago I would have probably expressed that I know, yeah, one worry is that there will be a disruption from consumer tech companies that will basically take over what we do. What has happened in those past five years that rather than that happening, we have come much tighter together with the big tech companies. We have, for quite many years, worked closely with Microsoft to enable Windows operating system, Microsoft Office, et cetera, to also be accessible, used towards the audience that we serve. We launched one year ago a quite close collaboration with Google to enable Google Assistant directly in our devices, so you can control the lights, you know, everything in your home using Google Assistant. Then, of course, the collaboration we're doing now with Apple.
What this is a good example of is this is a niche market. This is a market that has some quite fundamental differences from selling stuff over the counter. For these companies, the accessibility space is super important, both from an ESG perspective, but also from winning big tenders with, you know, national customers or public institutions. What we provide is the enabler. We provide the tick in the box and the collaborations for those big companies. We're working in tandem. The technical solution that you would solve with an iPad, fine, you could do that, but the iPad breaks, the iPad doesn't have the right speakers. There is no speech-language pathologist that comes with your iPad helping you to get success.
Familiarity may be a good thing, but no disruption the way we see it, at least.
Okay. See if it works. Okay, now. Yeah, that's great. Final question on the EBIT margin target. Given that you have a 65%-66% gross margin currently in the business, many similar companies have much higher EBIT margins than your target of 15%. How should we think about that long term? Could it be 20% in a longer-term perspective, or?
Should you or me? I can start.
Yeah, you can start. Yeah.
No, I think for us, considering the market situation, we really want to make sure that we grow the market rather than getting over 20%.
Okay. Do we have any more questions in the audience? We have one at the back here.
Yeah.
Okay. Testing. Hi, Erik Larsson from SEB. Just to follow up on the EBIT margin question there, 'cause you've had EBIT margin targets of 15%-20% historically, so I guess you could reach them in the future, but-
Yeah
After you sort of prioritize growth, what could the long-term margin be, say, 10, 20 years from now, I guess?
I can probably start. What you're referring to is the former financial targets for Tobii Dynavox expressed as an interval 15%-20%, and that has been rephrased to over 15%. The difference is semantics, and the difference here is the fact that it's very difficult to say a span because if I say 15%-20%, everybody hears 20%. We would like to say that when we're over 15%, then I think we've reached a level where we are pacing it right. As Linda alluded to, any excess profit there is most likely more well invested into increasing the growth. Having said that, we have delivered on +20% EBIT margin in the past, also during times when we've been, you know, investing a lot.
I'm by no means counting that out as not being possible. Again, we have a super under-penetrated market, and we are currently at least of the mindset that once we are at the suitable profitability level, 15% or more, the majority of excess funds will be invested into growth.
Okay. Thanks. On training prescribers, you mentioned 100,000 last year, which is up significantly from earlier years. Have you been able to notice or reap any benefits already from that? Presumably, this will compound over time because these can, you know-
Yeah
Meet people every year and such.
In certain markets, yes. Because in certain markets, we're dealing with a prescriber community that is actually a licensed job. You cannot just go out and call yourself a speech-language pathologist. It's a licensed job. And of course, with them, we will be able to, in certain markets, know who they are, their association number, et cetera. And of course, we have metrics where we can then say, "Prescriber A, B, and C attended this seminar or this training," and then we can track that prescriber over time. You know, do we see any difference in prescription levels, et cetera? But it's not everywhere. It's not everywhere where we have that transparency. What we believe, however, and one of the clear focuses for our reps in the field is to try to get the so-called one and done.
The ones who prescribe one device every year to prescribe five or 10. Because the more accustomed they get to our products, the more familiar they get with our products. In fact, the less we have to handhold them every time. We're trying to, with the training efforts, actually try to move prescribers from doing, you know, once every year or so to actually prescribe on a more continuous basis. That in itself will serve both us, but maybe most importantly, the user.
How sort of comprehensive is this training or licensing? Does it take hours or days? What's the incentive for them to do it?
Again, here, difference a little bit on the market, but basic scenario is you have, you know, the get used to training, and then you have level A, become an expert, and then all the way up to becoming a black belt in a certain area, et cetera. We don't believe necessarily that you're away for a week and so, and kind of get the diploma, et cetera. So they're typically chopped up. But you're actually touching on something very important. There are only as far as we know two markets in the world where there is a mandate for you as a prescriber, in order to keep your license, you need to maintain your knowledge by continuing education.
Every year, you need to participate in a certain amount of trainings within your field in order to keep your accreditation as a speech-language pathologist. Those two markets are the U.S. and the Netherlands. There might be other markets, but what we're aware of. We are in most of these markets an accredited trainer, so if you participate in our training, you will actually receive those training credits. Hence, there's an incentive for you to participate in our training, well, to keep doing your job, basically.
Okay. Thanks.
Okay, thank you for that. We have received some questions via email from Daniel Djurberg, analyst with Handelsbanken. He asks, "Have DynaVox experimented on communication aids also including augmented reality or virtual reality headsets for customers? If so, are there any use cases you can share with us?
Yes, no. No, jokes aside, we have experimented, absolutely. I think that there are some exciting potential opportunities, but again, remember, a virtual reality headset is something you wear, the way the technology looks today. It is maybe more, at this point, a part of an educational platform, experience something that you can't experience, et cetera. As a communication aid, we haven't really seen any breakthrough products. We're super excited. Again, we have the Tobii blood in our DNA and the engineering and innovation, so we're definitely experiencing that. I have yet to see a rational and, you know, a implementation that can be taken to scale that makes any sense at this point.
Good. Thank you.
With that said, sorry if I interrupt.
Yeah, no.
There is, of course, a lot of interaction that is happening with specifically eye tracking-enabled devices that not necessarily. It's not a virtual reality per se, but we have a lot of sensors in our products. We know where you are, what time it is, and so forth. We can augment a lot of your communication on a contextual basis. Of course, there are some innovation here on when we can use those sensors to build even more immersive type of products. Wearables at this point is not something we have actually seen technically feasible.
Thank you. DynaVox has signed a license agreement with Tobii with regards to brand usage and also a 60-month-long supply and license agreement. Can you comment on the financial impacts of these agreements?
Yeah, hardly none. As I said earlier, we have been structured as being a standalone company, historically being part of Tobii. The license agreement that we have today is actually more or less the same pricing.
Yep. Arm's length setup.
Thank you. The license mentioned is limited to the current DynaVox products, I-13, I-16, PCEye, and the new TD Pilot. DynaVox also has the right to build further on its own software. Should we expect new licenses for new products ahead, or is there a risk that Tobii Dynavox will choose eye tracking from a Tobii competitor on the back of, you know, price vs quality ratio not being good enough?
If the last comment was true, yeah, we would definitely see and say, you know, if there's something else or something better out there, I can, with a straight face, say that there isn't, that isn't the case. I absolutely expect and assume that also new product launches, et cetera, will include Tobii's eye tracking.
Thank you. That feels good for us, by the way. The PCS symbol language, how is the competitive landscape in terms of languages from a global perspective? Let's, you know, say, for example, the APAC region?
There are a handful of other symbol sets out there, if we start with the actual symbols. I think it's a matter of taste. You know, do I believe that happy should be represented by the way we represent happy or someone else represents happy? What I can say is that once you have embarked on a journey of picking a certain symbol set, there is a fair amount of stickiness to it, because then happy may look different to someone else. You're also alluding to what I interpreted, at least, or the person asking the question, about localization. Here it's something different. Localization is, of course, translation. If you think about the symbol for breakfast, it may look very, very different in Germany, in Japan, and in Sweden, for example.
We are working actively on localizing the content, not just translating the content. Currently, we're localizing our content on the symbols into 14 different languages. As we expand into new markets, then of course, localization, including what breakfast looks like, by the way, into more geographic scenarios, et cetera. I think we have a very strong position there. Localization can also look different. Right now, what we put a lot of effort into lately is diversity, so making sure that we have all kinds of religious beliefs, skin tones, colors, and most recently, together with Acapela and other industry players, we also launched voices that are more diverse, which has, for example, in one example, a more African American sounding voice, which is super important. This becomes a very...
Complex area of localization and diversity at large.
Good. We have some questions on the web coming in as well. From CM, we have you will be very indebted after the split from Tobii. How much financial M&A capacity do you really have?
We have an unused credit facility with Swedbank for SEK 150 million that we are able to use. Of course, our cash flow, as we were talking about, are pretty attractive.
Maybe what I didn't mention during the session talking about acquisition targets, the types of targets that we have on our radar aren't, you know, big, bombastic, billion-dollar deals. I would say it's more on the numbers, and they're quite small. You know, most of them are reasonably small. I think that the Acapela acquisition, again, with a total consideration of under EUR 10 million, and frankly, a pretty decent cash asset as a part of that deal, is somewhat telling of a fairly large deal in our space. With SEK 150 million facility of specifically targeted towards M&A and our underlying cash-generating business, that's the number one route how we're gonna finance acquisitions.
However, we will have a new currency in a Tobii Dynavox standalone share, if that is something that is more preferable, maybe not for us, but maybe by the buyer who wanna be part of the journey. If we do find that super golden nugget who will change the world, then maybe we will talk to the investor community to see how we can raise more cash. Again, the cash, the typical targets that we're looking at are within the limitations that we currently have at hand.
Can you give an update on the component shortages, input cost inflation, and the logistics situation?
Ooh.
It's complex.
Yeah. Component shortage, if you start with that, just so that we decipher what does this mean. Well, a typical component shortage could be, during the spring, we had issues finding 13-inch LCD displays. Why was that? Well, because every institution of the world that did education needed to produce small laptops for their students so that they could do homeschooling, and all of a sudden there was a big shortage of 13-inch displays. These are the type of component shortages that are popping up, and it's very specific, a COVID-related thing, 'cause otherwise these are, you know, the components that would be quite easy to get a hold of. Our way of mitigating that is to either try to find them, pay more and, you know, fix the problem that way.
That will have impact to some degree on our bill of material. The other way is to say, let's no longer be so reliant on that specific display. Let's redesign our product and instead buy components which are in great supply, but we need to do a little bit of a rework. This is what happened this spring. We actually knew about an upcoming component shortage for specifically the displays already January timeframe, I think. We then spent a lot of time of redesigning our this case 13-inch communication aid in order to accommodate for a screen that was not in short supply, and unfortunately, we couldn't deliver that product until just after the cut of the midyear on after July 1. That had an impact, and it was actually a fairly big effort to fix it. That's the one fix we have.
Other types of component shortages, and maybe more importantly, logistics shortages, they are much less complex. It's basically it takes two weeks rather than three days to get a thing from A to B, but we will still get it. It still exists. It's still being produced. It's a complex material. Logistics have also become more expensive. 2021 was rough, specifically during the spring. We still managed to deliver a gross margin pretty much in line with what we did in the past. I think that's indicative of what we believe, what kind of hailstorm can hit us in the future.
Thank you. Can you discuss the historical R&D levels, and the status of your product portfolio? How should R&D grow vs revenue?
We think that we are on the level right now. That's probably how we will have it historic. Since we have the product portfolio, we are I mean, geared for that for the future. Same level as we are now is pretty good.
This is, I don't know if you, the slide is no longer, but we've been historically around between 17%-15%, et cetera. I think it's fair to say that we have a large portion of a product revamp, which actually happened after the acquisition of DynaVox back in 2014. We did a fairly big remake, but we believe that the current product portfolio at large is well-suited for the future. We're gonna still continue to invest a significant portion of it, but think about this on stable level as with the growth of our revenue.
Tobii Main Co seems to control most of the group's core IP assets. What IP assets do Tobii Dynavox have?
We need to go back a little bit and remind ourselves the user group that we serve, the 50 million people, only some 10% of those or most likely less, need eye tracking. Eye tracking is a super important component of our devices that needs to be controlled by people who have a paralysis or are unable to use their limbs. When it comes to the IP on the core components, we continue to buy those components from Tobii, just as we did in the past, and Tobii obviously owns the intellectual property for the eye-tracking component, in the same way as done before. Tobii Dynavox, on the other hand, if you think about where we stand on an intellectual property perspective, that's the next level of the cake, so to speak.
It's either in the interaction method, specific interaction for people with various conditions, but it could also be in the physical design of a communication aid, how it's mounted, and so forth. That, of course, is intellectual property that we will continue to invest and build on and that we also continue to own also post-split.
Great. What are your plans about capital allocation, and where do you see Tobii Dynavox in five years from now? I think it's two-phase question maybe.
Oh, good question. I mean, we need to continue to improve our balance sheet going forward. That's part of why we also haven't done that. We will continue to invest in growth and will continue to deliver profit at the same time. I think that's gonna be our main focus initially.
We should be a company which has debt leverage at a certain point, and I think the targets that we expressed over roughly 2.5x last 12 months EBITDA is where we should from a debt leverage perspective be. When we're in excess of that, as we expressed in our dividend policy, we either continue to do really exciting stuff, or we will share whatever excess.
Yeah
Funds we have there with our dear owners.
Great. Do we have any new questions from the audience that we should take? We have some more down here.
Continue to ask questions because there's a bucket of ice here. We can just procrastinate.
Yes. Daniel from ABG again. Just a question on growth. You have a target of more than 10% a year. Can you split it out on organic and M&A-driven part of that target?
No.
No.
No, but it's gonna be a mixed bag. I think there will be times when it will be, you know, more of one and less of the other and vice versa. We don't have a clear expression exactly how that is being split out.
Okay. The second one is on M&A and the M&A track record. For the ones who have followed Tobii for a couple of years, you did the acquisition of Smartbox a few years back that was not approved by the competition authority.
Yeah.
Is that the risk going forward on the M&A strategy, that you will be too big basically in some markets or product categories?
That was a very specific scenario, which was also completely unexpected by not only us, but the entire profession. Yeah, obviously ended up in a way which we didn't think was favorable, where we eventually bought the company and we were eventually forced. Even though we sold it for the same amount that we bought the company for, it was, of course, an event that was not the way we wanted it to be. I think we still have to understand that this is a market which is barely penetrated. The vast majority of the market is not split up between company A, B, or C, that should be interpreted as being a competitive strain on kind of who has which part of the pie if the pie hasn't really been created yet.
I think that those scenarios are quite unlikely. Black swans and unexpected things do happen, so I'm not gonna stand here on the stage and say, "No, that's not gonna be an issue going forward.
Okay. The last one related to M&A as well. How should we think about continuity? Will it be one or two a year, or will it be one every third year?
More the first version.
Okay, thanks.
Good. Thank you, Daniel. We have some more questions coming in here, and we have more time also. Could you please elaborate a bit more on the importance of key opinion leaders in the process of creating more awareness?
Pivotal, because the alternative is that we will be the ones who will be out on every street and every corner and tell everything, and we're proud of our fantastic team of 500 people. In the grand scheme of things, we're nobody. We really need multipliers, the ones who can carry our water, who can tell our story. Regardless if you're a shareholder, if you're a user or anything in between, it's pivotal. We totally need them, and it's proven to be important also in the past.
Good. One final question. Which KPIs are the most important for the board, we have some board members here, and for the CEO?
I want to answer this, like, in one question and, of course, if I have to pick one, it's revenue growth. At the end of the day, there are some KPIs which are much more fundamental, telling us the quality of what we do and how we do things, and they are KPIs such as Net Promoter Score. Net Promoter Score is we go out, anybody who's been interacting with us and asking them, "How would you rate the service or the product or your experience with Tobii Dynavox on a scale of 1 to 10?" We're putting that probe into a lot of things we do. We have in certain cases, for example, the ones who have experienced our funding service in the U.S., we have from time to time over 90, which is very, very high.
We also have customers who come back and says, "I was not pleased with this." Similarly, we ask our staff, "How happy are you to work for this company and, you know, be part of this team?" At the end of the day, those kinds of indicators is something I can actually monitor. I have it on my starting screen whenever I open up my computer, and they are really good indicators of what will happen to us not next quarter, but a year out or two years out. I say, yes, I do watch our sales numbers every morning, but I also definitely watch our, you know, the quality measures on how we operate as a company, what our customers perceive experiencing dealing with us or dealing with our products.
Great. With that, I think we'll round off the morning session. It's almost afternoon now, so I think that's appropriate. There are a few questions still in the chat, and some of them I do not fully understand, so please email us, and we will try to understand them and answer them separately after later today or in the coming days. We will kick off the Tobii RemCo presentation at 1:30 P.M., so please come back here a couple of minutes before then. I expect that session will not last longer than to 4:30 P.M. today.
Great.
Good.
Thank you, everyone.
Thanks for being here.
I feel like I've done the first part of my presentation quite well, which is, as I tell everyone, don't trip on your way up to the stage. At least part one is going pretty well. Thank you all and welcome for being here. It is great to kick off the first Capital Markets Day for new Tobii. We all know that we are at a significant time in the history of Tobii Group. We're in the process of listing Tobii Dynavox, and this split will create two compelling new companies which are both fantastic opportunities for investors and both great places to work for prospective employees. Now, this session is about Tobii, a company that is quite different after the separation from Dynavox. We have three key objectives to accomplish with all of you today.
The first one is we would like to share Tobii's vision for attention computing, an emerging space in the technology field which is much broader than eye tracking alone. Second, we would like to demonstrate how we are uniquely positioned to capitalize on the significant opportunity that attention computing addresses. Third, we would like to show you some examples of how our technology is being used today, explain in a little bit more detail about some of the market opportunities we're competing with, and explain why we are now entering into a new era of growth for Tobii. We have a pretty comprehensive agenda planned to cover these objectives. I'm up first, and I will give you an overview of the company and describe our immense opportunity.
Following me will be Gunnar Troili, our Senior Vice President of Engineering at Tobii, and he will provide a deeper dive into our technology and give you a sense of why we are uniquely positioned to capitalize on attention computing. Third, Emma Bauer, who is our Senior Vice President of Product and Segments, will give you an idea of how we plan to address these different market areas, show you some real examples of how our technology is being used today, and share some data points that will give you a better sense of the business that we are competing for. Finally, Magdalena Rodell Andersson, our CFO, will share some additional insights into how we are changing our financial reporting to describe Tobii to our investors moving forward and give you additional details about our current financial situation.
Finally, you will have the chance to ask all of us questions, and I hope that today, during the session now at lunch, that you've had the chance to try out some of our innovative technologies that are available for you to try in the demo sections outside. What I want for all of you at the end of this day is to walk out of here with a much better sense of the potential of Tobii. Before we jump in and talk about Tobii, I thought it would be good to introduce myself as well as the Tobii executive management team. Let me start with the Tobii executive management team. This team brings more than 100 years of work experience to the table from a diverse set of industries, from fast-moving consumer goods to telecommunications to medical to semiconductors, as well as computer vision companies.
This group also actually has a very solid mix of Tobii experience. We have a 20-year Tobii veteran amongst our crew, someone who joined the company at the very early stages of the company. If you look at our new head of sales and marketing, she's a leader that's been with us for only a little over a month. We all bring a very diverse background into Tobii, but we share a passion for this company and our mission to improve the world with technology that understands human attention and intent. My personal journey to Tobii was very much driven by the opportunity to make an impact in this world and to help this company achieve our ambitious goal.
I joined Tobii a little over two years ago as the division CEO of Tobii Tech, and prior to that, I was leading the desktop, workstation, and channel business at Intel, a worldwide role where I was responsible for more than $15 billion of annual revenue. My time at Intel, I spent most of it in sales management, product line, or business roles. I had the privilege to not only cover some of Intel's largest worldwide customers, but I also got the opportunity to spend four years immersed in Asia in my stint in Taiwan. I'm now thrilled to be working in this new context at Tobii, to use both my past experience, but also to tackle new challenges and continue to grow my capabilities.
In the last two years in this company, my level of confidence and belief in the opportunity for this company to achieve its ambitious mission has increased substantially, and I look forward to share that insight with all of you today. Let's get back to Tobii and talk about this company. Let's go all the way back to the beginning of the company in 2001. Now, this company was founded by three entrepreneurs who had an idea to use eye tracking as a new way to control the computer. We have a couple of them in the audience today. They thought they were inventing eye tracking. Unfortunately, it turned out eye tracking was already invented.
What our founders were able to do was they came up with a very novel approach that allowed them to disrupt the existing market, a small fledgling market that was covering some small scientific niche research. In the next 20 years, Tobii passed some significant milestones. We closed our first customer in 2002. We entered the assistive technology space in 2004. We delivered our first eye tracking solution for integration in 2010. We went public on the NASDAQ Stockholm in 2015. We delivered our first consumer product in 2016 and delivered our first integration into a VR headset in 2019. While we were marking all these great milestones, the company built itself into the world leader in eye tracking technologies, and we count some of the largest companies in the world as our customers.
Now, if we map the commercial success of Tobii into a historical financial concept or context for new Tobii, that is the Tobii that is without Dynavox, what you can see is that as a constellation, new Tobii has delivered strong and sustained top-line growth. From the years 2014 to 2019, we delivered 20% organic CAGR. The years 2020 and 2021, of course, have been a break in this trend as the pandemic has impacted the ability of universities and research bodies around the world to conduct the kind of in-person studies that are needed to take full advantage of our solutions. During the pandemic, we also, of course, could not travel to meet customers, which made it harder for us to sell a technology that's early in its adoption curve.
The supply chain challenges with semiconductors have impacted our ability to ramp our existing business. I am thrilled, however, that exiting 2021, we are now normalizing our business metrics. Hopefully, all of you saw that our earnings results on Q3 2021 were up 26% organic growth. That's a phenomenal number, and we continue to see growth in the underlying business metrics for us. Looking forward now as a business and a company, we are very much focused on the horizon, and I think it's a good opportunity for us to shift from talking about our history to talking about our future. In order to talk about our future, I think a good place to start is to put Tobii in the context of the broader technology industry. Tobii at the highest levels is a company in the human-computer interaction field.
This field is typically shortened to the acronym HCI. HCI has a rich, decades-long history of bringing technologies that allow machines to communicate with humans on human terms. It has brought us from punch card interfaces to keyboards, mice, 3D graphics, and more. Now, in the HCI domain, Tobii has been focused in one particular area that we call computer vision. Computer vision uses cameras to enable machines to better understand the world and humans. Hopefully, all of you today can see the potential and scope of computer vision when we think about trends in the industry like self-driving cars. Tobii was historically focused in one area of computer vision, specifically in eye tracking. Now, how is eye tracking delivered? The way the industry fundamentally delivers eye tracking is to paint a pattern on a user's eyes.
We use cameras that can read that pattern, and with some complicated mathematics, artificial intelligence, and deep learning, we turn that pattern into an information of where the user is looking, either on a screen or in the world. This is the signal that the founders of Tobii were after, this eye tracking signal that they wanted to deploy in scale in a mass market way. In the next 20 years, we've gone way beyond just eye tracking alone. Now the term eye tracking is not really appropriate to describe the ambitions of our company or the value that our technology delivers. Our company has grown in two major vectors. The first one is that we have added additional biometric or core signals. Many of these are derived by processing images of users' eyes, signals like eye openness, information about a user's pupil.
We also have extended that by deriving signals from a user's face, signals like head pose, presence, facial ID, or landmarks. This is one vector we've expanded, more core signals. We've also expanded the business in a second direction, and we call these attention signals. These signals are derived by combining and extracting value from the core signals that you see below you. This ranges from understanding where a user is looking, potentially in a fixed point in space, fixations, whether a user's eyes are making fast involuntary movements, saccades, to understanding if the user is drowsy or distracted, to being able to measure the level of cognitive load that the user is on. How stressed are you during this task? Finally, we can even assess a user's emotional state.
Now, if you take a step back and look at this picture, it should be clear to all of you that Tobii is way more than just an eye tracking company. We are in a new field, and we call this field attention computing. The goal of attention computing is to much better understand the user, and the opportunity and scope of attention computing is enormous. Now, how is attention computing used? I know many of you were here earlier today. I saw you all laughing at Fredrik's talk, but hopefully what you saw in addition was how Tobii Dynavox's devices are harnessing attention computing. They're allowing users with disabilities to get access to a voice. They're empowering them with access to technology, enabling them to unleash their full potential. That's a fantastic example of how attention computing can be used.
In addition, we use attention computing to make PC gaming more immersive. We use attention computing to make VR headsets more power efficient, to help them deliver better visual quality. Now, I hope most of you recognize these use cases. These are use cases that Tobii has talked about for a while. The truth is that the opportunity for attention computing is broad and massive. I want to give you an example that makes that breadth more tangible for you. Let's start with a problem. According to the U.S. Centers for Disease Control and Prevention, there are over 4 million cases of concussion every single year. In fact, it is estimated that 10% of all athletes that play a contact sport suffer from a concussion, and less than 50% of those are ever diagnosed.
Enter SyncThink, our customer, a partner, and an innovator in the field of brain health. Their device, EYE-SYNC, just received its second clearance from the U.S. Food and Drug Administration as an aid for concussion and traumatic brain injury diagnosis. The EYE-SYNC device is the first mobile rapid test device to test concussions, and it is run on this VR headset. That VR headset is built on Tobii attention computing solutions and delivered on the Pico Neo headset specifically. Now, the EYE-SYNC product is harnessing attention computing as a disruptive way of delivering concussion diagnosis. Imagine being able to diagnose concussions on a field instead of physically going to a doctor's office. That is disruption. That means that we can diagnose concussion at scale, and hopefully every single person who has a concussion can be diagnosed and treated appropriately.
SyncThink is an innovator in brain health, and they are harnessing attention computing to disrupt their field. I firmly believe that attention computing can be that kind of catalyst for innovation in numerous industries. You've seen some examples of how attention computing is being used. It's being used to empower disabled users with access to a voice. It helps technologies be more accessible in a much more natural way. It helps PC gaming be more immersive. It can help your car tell you if you're drowsy and prevent fatalities and accidents. It can even be used to diagnose and treat medical conditions. We're making a pretty audacious claim here that attention computing will be ubiquitous. It will be all around us. That kind of claim can be hard to understand. Do we have any other parallels to look at to consider how this would actually play out?
As a matter of fact, we do, and we don't have to go very far to take a look at it. Let's consider the example of speech recognition. Now, speech recognition is also in the human computer interface domain, much like attention computing. The technology underpinnings of speech recognition are quite old. What you see pictured behind me is actually the first implementation of speech recognition at Bell Labs in the United States. It was done in the early 1950s. This machine, and this is a small piece of it because it was a huge machine, was called Audrey, short for the automatic digit recognition machine. What this machine could do is recognize the numbers zero through nine when spoken by her developer, H.K. Davis. Now, in the decades that followed Audrey, speech recognition continued to progress. There was innovations from a variety of companies.
Even into the early 2010s, what we would all have said is that we understand the potential of speech recognition, but that potential is largely unfulfilled. I have a personal connection to this story because in the early 2010s I was at Intel, and I was working on ways to make PCs more innovative. I said, "Hey, why don't we work on making speech a part of a normal way to interact with a PC?" Our teams tried for a year, and then they gave up because they said speech was hard to use, it frustrated our users, and frankly, it was mostly useful just as a gimmick. Then came 2014 and the Amazon Echo smart speaker. Most of us probably know it with the name Alexa, but it's actually called the Amazon Echo.
This is the first voice-only interaction device, and it completely switched speech recognition. It flipped the entire market on its head. In the next several years, adoption has skyrocketed. In 2021, analysts estimate that more than 150 million voice-only devices will ship. Think of devices like your Amazon smart speaker or your Google smart speaker that you may be using. In addition, billions of devices are now enabled with voice, your smartphone, your smartwatch, your car, even your TV remote. Think back a decade when talking to a machine was awkward and rare, and now children all over the world, my children, are talking to machines to ask them to play their favorite song, to ask about the weather, to call their grandmom. It's incredible what this change can be. Now, clearly, speech has been a huge catalyst for disruption.
When we take the case of speech, even from my own personal experience, what is clear is that looking back, it's quite clear to identify inflections. It's very easy for me to look back and say, "2014, that was the inflection, the launch of the Amazon Echo." It's very difficult when you're in the moment to even perceive inflection points that are a little bit into the future. What we can do, of course, is look for trends of increased adoption and increased experimentation. That can give you a clue that an inflection point is imminent. Let's switch back and talk about attention computing. Where's the inflection point? Once again, what I would say it's quite hard to predict an inflection point in the future.
What we do see is accelerated adoption of our technologies in six key market opportunities: behavioral studies and research, extended reality, which covers both virtual and augmented reality, education and training, gaming, automotive, and healthcare. Now, Emma Bauer is going to talk you through some of these market opportunities in more detail and give you more tangible examples of how our solutions are being used. We, of course, believe that attention computing over time will be deployed in a much broader range of market opportunities than these six alone. Right now, we are seeing accelerated adoption in these areas. If we consider what's the opportunity for attention computing going forward, let's zoom out, put our future hat on, and think forward. It is incredibly massive.
If we think into the future when augmented reality hits its stride, when smartphones are going to be required to have attention computing, when our cars are going to want to understand the state of the driver to make sure that we're safe. When you think about the opportunity with personal computing devices, your smartwatches, smart speakers, even the robots in your home that are sweeping your floor or mowing your lawns. The opportunity for us is billions of devices a year that will ship with attention computing. That represents for Tobii an addressable market that is more than 100x the size of our revenue today. What we can say is that even though we've had a lot of growth and commercial success, we are still just scratching the surface of attention computing. We've covered a couple of important topics so far.
One, that Tobii is in a new field of technology that we call attention computing, that we are the pioneer in the space in addition to being the global leader in eye tracking. Second, I hope you can sense with me the massive opportunity that attention computing can address. Now, I'd like to shift gears and talk about why Tobii is in a unique position to capitalize on this opportunity. Of course, it starts first and foremost with our technology. We have 20 years of experience developing this technology, and it has taught us several valuable lessons. I wanna share two of them with you. Lesson number one, building eye tracking or attention computing technologies that work for a small set of people in a lab, that's not particularly difficult. The real challenge is to make sure that that technology works seamlessly for everyone in all environmental conditions.
That's lesson number one. Lesson number two, deeply understanding what it takes to deliver a full solution is incredibly valuable. Now, as a pioneer in this space, Tobii has had to operate at all levels of the technology stack. We've built custom processing silicon like the Tobii EyeChip that you see behind us. We have built platforms to make it easier for our customers to integrate eye tracking technologies. We've built end-user software, and sometimes we even deliver services in order for our customers to be able to get the full benefits of attention computing. We deeply understand what it takes to deliver the full solution, and that makes us a great partner for OEMs. OEMs are looking for a provider who understands the different parts of the technology stack so they can optimize their solutions for cost, for power, or some other system-level constraint.
That's lesson number two, understanding the full stack, deeply valuable. Now, the benefits for us working in this full stack way has also yielded two other major implications. As you can see, we have a pretty broad portfolio of what we can offer. The first implication is that we can offer to our customers optimized solutions that meet their business needs. They can choose to buy components from us, they can buy platforms from us. If they need end user software, we can provide that in some cases, or we could just license IP and algorithms. Huge benefit to be able to deliver what our customers really need. The second major implication is that this broad technology portfolio allows us to quickly address opportunities in new verticals. This means faster time to market and a much better ROI on our technology investments.
Now, you're gonna hear a lot more about our technology in Gunnar's section when he comes up next, but I wanted to give you this flavor. Our position to uniquely capture this opportunity isn't just limited to our technology alone. We believe we have a couple of other vectors of unique value. Specifically, they're the three that are listed up here. While we've been busy investing in our technology, we've also had the opportunity to curate the leading IP portfolio in this space. This is incredibly important for us and our customers to have the peace of mind to operate in their chosen fields. This is a strong reason why customers choose Tobii. We have a patent portfolio of over 700 filed and granted patents, and this is something that most of our direct competitors cannot hope to match.
The second key differentiator that I'd like to talk about here is actually our brand position. We've talked about the long history that Tobii has in multiple different verticals. This is a huge asset when we approach either new geographic areas or new vertical markets. Our prospective customers can see our track record of credibility, scale, and success. This, again, is a huge advantage for us as we go after new opportunities. Third, of course, is our fantastic team. We are a team of 600+ Tobiians with a substantial footprint outside of our headquarters in Sweden. This kind of scale and reach is super important if you wanna target multiple vertical markets or even sell that broad portfolio of products that you saw we have. The combination of our technology as well as our team, well, it gives us unmatched domain expertise and integration experience.
We believe we are uniquely suited to capture this market opportunity. Hopefully, you all believe me so far, but I'm sure you're asking the question, "Well, how does this fit in the competitive landscape?" Attention computing, of course, is a massive opportunity, and we should expect that as there's increased adoption and time, this competitive landscape is going to get much more crowded. That's great. Now, if you think about the six market opportunities I described before and our competitive position today, it's quite varied. In some areas, we are the biggest player with very little competition. Take the example of PC gaming or education and training. In some other areas, our biggest potential competitors are large tech companies that have their own in-house capabilities. Think of Microsoft or Facebook in the spaces of extended reality, virtual and augmented reality.
Of course, in other spaces where we are entrants into the space, like automotive driver monitoring, we are very much a challenger entering a field with strong incumbents. It's quite a diverse picture if you look at the six market opportunities. If we up-level the picture and say, well, let's consider the holistic marketplace, I believe the competitive landscape breaks up into two pieces. One, who we call indirect competitors, and these are large tech companies that have the ability to build some of our technology in-house. Today, most of these are in the extended reality space. Now, when I look at these companies, I actually don't consider them competitors. I consider them potential customers. In many cases, they are customers and partners of us already. Hopefully, you've been watching the news from the last couple of weeks. We announced collaborations with Microsoft.
Tobii Dynavox announced collaborations with Apple. We've done standards work with all these customers, and they buy product from us already today. Because of our broad and flexible offering, we believe that we can partner with these customers, and in some cases, we can augment their in-house solutions. In some cases where we can demonstrate that we are indeed better than what they have, we think that they will choose to replace those technologies with Tobii solutions. This is the first group of competitors. The second group of competitors, of course, are much more direct. These are competitors whose primary focus is either attention computing itself or a subset of where we are focused. Now, if we compare Tobii against these players, you can see that we have a substantial advantage in terms of scale, revenue, and overall capability.
We have more than 2x the revenue of our nearest competitor. We have more than 5x the number of patents that any of these folks can claim. We have an employee base that is twice as large, and what that should mean for you is better engineering capability, more sales and marketing reach. Today, we count more than 6x the number of active customers. We've talked about why we believe Tobii is uniquely positioned, and if you put us in context with our direct competitors, I believe that you will agree that we indeed are in pole position going after attention computing. Okay, so we've talked about three things so far. Tobii is in attention computing. Attention computing is a large market. Third, that we are uniquely positioned to go after this opportunity.
If we start to sum up and say, "What does this mean for the company going forward?" I wanted to give you a context of what we see in the next decade. First of all, because we are in six market opportunities, we see them in different spots of maturity. Now, we are very much ready to scale our solutions in behavioral studies and research, as well as gaming. In the next one to three years, we expect that our investments in virtual reality, as well as in education and training, will be ready for harvest. If you look a little bit farther out, 3+ years, we think our investments in augmented reality, healthcare, and automotive driver monitoring systems, these investments will be hitting their stride.
If you sum all of this together, what we believe is that Tobii is now entering an era of sustained faster than historical growth. Okay. Let's put that growth context into financial terms. I shared this slide, or at least the left 1/2 of this slide, earlier with you. We talked about the fact that the Tobii constellation has delivered strong and sustained top-line growth from the years 2014 to 2019. Growth will be the primary performance indicator for Tobii moving forward. Because of the reasons we've talked about now, where our markets are in terms of readiness, we see that we are entering a new phase of faster than historical growth. Our number one objective when we translate that into financial targets is that we target to reach SEK 1.5 billion of revenue in 2025.
The second part of our targets is that while we understand that growth continues to be incredibly important, we believe that building a sustainable business is also equally important to meet our long-term ambitions. The dynamics of our business means that we will also reach EBIT breakeven during 2023. You will hear more about this in Magdalena's section later, today. Now it's time for me to wrap up, and I wanted to make sure that when you walk away from this session, you are carrying these key messages with you. One, that Tobii is a pioneer in attention computing. We believe that attention computing has immense potential and that Tobii is uniquely positioned to capture this opportunity. We are now entering an era of sustained faster than historical growth as the significant investments we've made across these market opportunities get ready for harvest.
In terms of financial goals, growth is the primary performance indicator for Tobii going forward. Our number one goal is to reach SEK 1.5 billion of revenue in 2025 and to reach EBIT breakeven during the year 2023. Thank you all for your time, and I'm gonna now invite Gunnar up to talk about our technology in more detail. Thank you.
Yes. Hello, everyone. I'm Gunnar Troili. I'm heading Tobii's engineering department, and I'm actually the veteran that Anand spoke about, being 20 years in the company. I started out as the algo engineer 20 years ago. For five years, I was the only one developing our computer vision. Twelve years ago, I changed direction and from the expert track into leadership track, and that's where I am today. I will talk about the technology, the performances we can expect from this technology, and what it means to attention computing. I actually would like to start out with this number. 80% of the information that your brain is processing is coming through your vision, through your eyes. That means, of course, that it's largely interesting to know where a person is looking, searching, interacting with, or is being attracted by.
80%. Furthermore, the vision can be divided into the central vision, where you see sharply, and the peripheral vision, where you only sense movements. The central vision, that's around 2.5 degrees in the center. It's even down to 0.5 degrees, where you have your most sensitive area. These 0.5 degrees, that's what you have to direct to see things really sharply. Taking an example, if, for example, you want to read, it's not enough to direct your eyes to the page you want to read. You actually have to move the eyes word by word to read the text. Now, if we change that around, imagine a tool that could know where the eyes are directed.
That tool would know not only what page a person is looking at, but that tool would know word by word what the person is being interested by. That is what makes an eye tracking unparalleled in getting insights into the brain. Then, of course, we can add to that other information like drowsiness, distraction, head pose, giving you even more insight into human attention and intent. With that as a background, I want to change into where I am on almost a daily basis on the technology behind attention computing. I want to describe that to you, giving you at least an understanding about the technology. To make it super simple. To build an attention computing system, you need basically four layers. The hardware, the core signals, the attention signals, and the user value.
I will walk you through this giving you some examples. All these examples are not an exhaustive map. It's examples to give you a sense. Tobii do provide these examples in our products, but it's not the focus on Tobii now. It's now the focus on the technology. Starting from the hardware, it's two purposes. One purpose is to create the images to be able to generate the signals, and the other 1/2 is to do the processing. To generate the signals, you need images and images that are not nice-looking selfies, but images that really creates the best possible conditions to build the signals. To do that, you would need cameras, sensors. You would need illuminators, maybe also filters or mirrors. On a processing side, of course, the focus is to do it as power efficient as ever possible.
If you want to design this hardware for attention computing, you would typically need competencies like optronics, but also digital design. Moving up the stack to the core signals, Anand already showed you these examples. You have the eye tracking, but you also have other signals like eye openness, head pose, presence. Those kinds of signals are really fundamental across all the user values. There are like biometric signals, and to build those signals, you need a lot of computer vision, machine and deep learning, but also system-level software or firmware to implement them super efficient and be able to deploy them onto different platforms. If we then move to the attention signals, these are sometimes a little bit hard to understand because often they are very tightly integrated with the user value. I will give you an example.
If, for example, we want to do driver alert in a car, that alert itself, that's a user value. But to give the alert, we need to understand if the driver is drowsy or not. The core signals we can use, that's the eye tracking, the eye openness, the head pose. But we have to transform that into the decision of drowsiness. We have to do the signal fusion, and we have to set the threshold, and that is what comes into the attention signals. Building good attention signal means that we enable people building user values to not have the deep insights into all the core signals, but to really serve them the possibility to do the right user values. On this level, it's still a lot about the algo about machine learning. It's also about biomedical engineering, human factors.
Then if we do the user values, that's where it explodes. That's where you have so many possibilities, and we can group them into different families. We have one family being a direct user value, like doing medical assessment or doing research, and we have other family creating better devices, power saving, safety, better graphics. On this level, of course, the competencies are very, very different, but UX combined with domain knowledge, that's the most important competence. Then there is another competence that goes across all of this to build this together because this is a complex stack that spans a lot of different areas. Really having the insight to build that together is a competence in itself. That's the system engineering competence optimizing through the full stack.
Now you have some sense about the technology that is behind attention computing, and now I will move into the signals and talking about the performance of the signals. I will do that by an example. It was a lot of signals that you had, but let's focus on one of them. Let's focus on the Face ID, which many of us are using every day logging into our phone. Sometimes when I want to log into my phone, the Face ID doesn't work. Is that a problem or not? If you ask me, it's a little bit of an issue every time it doesn't work, but I still can do it because I have the PIN code, of course. But let's talk about it from a general perspective. Do we think it's a problem?
The first parameter to assess, I think, is the accuracy and robustness of the Face ID signal. The more often it works, the better, of course. The second parameter I would consider, it's the use case and the fallbacks. If it's a use case that is super important to me, it gets more important that it works. If there is an acceptable fallback, I can, to a larger extent, accept that it fails. In this example, logging into the phone, of course, is vital. If it doesn't work, the phone is broken. Since I have the PIN code, I can actually survive that it doesn't work. The third parameter when I talk about whether it's a big problem or not, that's around how I as a user can understand and predict when it works.
In this example, when I go skiing and I have my ski goggles on and I can't log in with Face ID, that's actually acceptable. Every time I am at home and it doesn't work, then that affects my appetite for that feature. This was just an example talking about Face ID, but if we up level to attention computing overall, what are the requirements on the signals? What signals are most important in this context to get very, very robust, and what are the most difficult ones? My answer to the last question is eye tracking. We have worked hard on many of these signals, but eye tracking is the most difficult one to get robust enough, and that's in the combination of the value it creates for the use cases and the difficulty in reaching that robustness.
Let's talk about the eye tracking signal for a while. The first question, if we talk about eye tracking is, how hard can it be? If we look at the picture, I can tell where this person is looking. If I look at you, I can tell where you are looking. If I can tell that, of course, the computer can tell it as well. It can't be that hard. Actually, it isn't that hard. When we founded this company 20 years back, we built an eye tracker in less than a year when we were four or five people, and none of us had done it before. It isn't that hard. Of course, there is a but there. It's easy, as long as it's a very controlled environment, then most people could do it.
If you want to go beyond that controlled situation, if you want to make it work on everyone, that's when it becomes difficult. We have a super diverse world. You know that when you look at people look different. People have different eye colors, eye shapes, some people have glasses, and you have to make it work on everyone. You have to make it work also when you behave naturally, when you move your head in front of the computer or when you're playing games in your VR HMD and the HMD is jumping on your head, and it still has to work. When you go outdoors and you're squinting towards the sun and the pupils get super small and it still has to work and work consistently.
People with glasses, thick glasses and you have distortion of the image of the eye and your distortion also of the gaze going out through the glasses, and there are reflections from the sun all over the glasses and it still has to work. I can go on with example for the rest of my 30 minutes, but I will spare you from that. I can tell you there are a lot of cases to solve. We understand it is a bit tricky. Let's now talk about eye tracking performance. This is how most people describe the performance of an eye tracker. 0.5 degrees accuracy. That means that the eye tracker has an offset between where you're looking and what we are measuring of 0.5 degree, which is like 0.5 centimeter on a normal screen. That's good.
This is how Tobii talks about eye tracking performance. On the Y-axis, you have the accuracy that was on the last slide. On the X-axis, you have the population. The population that we tested the product on and this population is designed to match the expected population that will use the product. We have carefully balanced different types of ages, different type of sight correction, genders, et cetera, et cetera, to represent the population that the product will be used by. When we talk about this accuracy 0.5 degrees, that's somewhere over here. It's of course super good, but it's not enough. It's not enough to create this consistent experience that you will have across the population. I can give you two example. First one, in VR, there is something called foveated rendering.
That means that we have a high-resolution spot where you're looking in this central vision and outside that high resolution, we have much lower resolution in the peripheral vision. The reason for doing it, that is to enable higher graphics where you're looking and lower power consumption. That high resolution spot, that has to be where you're looking because otherwise you will perceive the headset as broken and it has to be there all the time, not just often. Every time there is a glitch, that's a problem. Another example is in gaming, where we do immersive gaming, we bring life to the game. That has to be very consistent. Otherwise, the gamer will just turn that feature off immediately. Then it matters not only how good it is for some people, it matters how good it is for everyone.
That is when it becomes tricky. That is where we have spent a lot of our innovation the last 10, 15 years focusing on making it work consistently for everyone, not just for a few. That is honestly where we stand out, one of the areas where we stand out compared to competition. We can see a comparison. This is between one of the products we have and this is an alpha version of the product. We can see if we start looking here, they are quite the same. When we start looking at the full population, we actually see that there are a lot of people that we don't handle well. Now the question will be then for this one, is it good enough?
I would answer that from the perspective of the last 10-15 years. We have constantly managed to shift the graph and the real product performance on real people so that it's getting more and more consistent for more and more people. By doing that, we have seen that we have enabled more and more use cases in more and more products. Where we are now, we have just enabled key use cases in consumer products. That's how good it is. That's how it's being judged by our partners and our customers. Does that mean that we are done? No, because the bar will continue to raise. Because as it's being deployed in more and more devices and more and more used, the expectations will get even higher and we have to continue to innovate here to be ahead of that.
In parallel with that, we're also shrinking the technology, making it smaller, so we get into more and more devices and that actually works in the other direction. This problem gets even more difficult. We will continue to innovate here to stay ahead of the expectations. To summarize that, robustness and accuracy must match the use case. Eye tracking is the most challenging signal from our experience, and we have reached very high, but we know that we will continue to raise the bar. We're not done. Changing perspectives a little bit and walking into the Tobii position and going back to what Anand spoke about, different models. We have a vertical business where we design solutions that include all of the four layers, where we design hardware, signals, and user value together and sell that to end users. That's our vertical business.
Then we have a horizontal business where we sell parts of the stack, but not the complete solution to our customers, who in turn build the full solution and sell to end users. In this later one, what we do actually sell is a bit different between different customer and different markets. We do always sell the signals. Sometimes we also deliver some hardware, sometimes we do some of the software, but our signals are also developed to be able to run on custom hardware or customer-specific hardware, and our APIs allow for our customers to build their own software. These are our two different positions. In this first one, our strength is our knowledge about the specific users in that vertical, together with our strength through this full stack, having all the competence.
For example, we employ scientific researchers that have been working on eye tracking research. They are now part of our team, defining our offering for our research customers. With the competencies we have through the full stack, we can build the full system well integrated and sell to the end users. On this side, apart from the world-leading signals, we also have the competence in designing the full vertical system, so we can be a very attractive partner to our customers, helping them to optimize the full system. We have our patent portfolio enabling them, of course, the freedom to operate. Now, these two businesses are, of course, quite different. You can ask the question whether we should actually do both? Shouldn't we focus on one of them? What we see is that they really help each other.
When we do the full vertical systems, we really understand how to build a system together, and we can build and enhance our competence through the full stack. That competence really helps us in the horizontal business. The fact that we have a lot of deep knowledge across the stack, also outside what we provide, that is a great strength when we work with our partners. In the other direction, of course, maturing the signals for consumer expectations is a great advantage also in the vertical business. That allows us to have this performance, this robustness across the entire population. If you zoom out and you look at this and you ask, "What is Tobii's position? What is Tobii's core?" Of course, you see we are centered around the signals.
Deep learning, machine learning, computer vision, data engineering, that is where we have our core. That in combination with our understanding for the use cases and how to optimize the full system. Then we add to that this fantastic flora of other competencies. That is what Tobii is. Now I'm gonna give you a few examples of that. The first example is an infant researcher that want to analyze eye movements to understand how an infant is developing. That researcher wants to have a high frame rate signal, very good quality, and be able to design studies, record the data, and do analysis. We offer them the Tobii Pro Fusion together with Tobii Pro Lab. We have the Fusion product. This is a hardware we have designed. Of course, we have designed all the signals and the full software.
That is what we offer to these customers. Another example is in gaming. Our gamers want to have an immersive simulation game. They want to have a product that is cheap, easy to start going with, and very, very robust. We have the Eye Tracker 5 together with our portfolio of different games. This is the Eye Tracker 5 that we have built, and all the signals is Tobii signals. The software offering is not our internal. That's our partners, the game studios. They have done that, and they have a much richer offering than we could ever do ourselves, of course. These are two verticals, quite different. If you ask me, or if you would ask our users, they are quite far apart. If you look inside these two, on the hardware side, inside these two different devices, it's actually the same hardware.
It's the Tobii EyeChip, which is the silicon component that processes all the signals. That's a Tobii-designed component optimized for eye tracking. It's one inside the Eye Tracker 5 and 3 inside the Fusion, but it's the same component. Also, the camera system and illuminator systems, that's the same components. Fusion has two to enable the higher quality of the signals, but it's the same component. If you move up the stack, it's the same core signals. In the fusion case, they run on two different cameras, so we can do some fusion on top of that. In the core signals from every single sensor, it is the same.
If we move additionally and look at the attention signals, those are actually a bit different because in this case, you want to understand the eye movements, fixations, saccades, while in this case, you rather go for experiences like extended view. In this case, it starts to get different. Some of them are the same. On the user value, of course, it's completely different. What I want you to take away from this example is we have very good knowledge in two completely separate verticals, but when you look inside, we can reuse a lot of the technology. Let's do another example. Two different VR headsets integrating Tobii technology. What we deliver to them is the core signals and the attention signals. Same for both of them. Apart from that delivery, we're also their partner.
We're helping them to integrate eye-tracking or attention computing hardware into their headsets, the cameras, the illuminators. We do that based on our experience and based on our reference design, and then optimizing that for their specific headsets. We're also their partner when it comes to going into production, setting production tolerances, and production tests. That we can also help them with based on our experience on how to produce attention computing hardware in volumes. That's the kind of partner they expect. They don't want only a software supplier. They also want a partner that can help them integrate the hardware and build the full product. In the end, what we sell to them are three things.
We sell them a license to the software, the signal software, we sell them a license to the system design, how to integrate the hardware, and we also sell them a license to our patents, and the patents covering both the software and the system design, but also enabling them to implement the user values that they're looking for. Now, headsets can be different. There are two types of headsets, the tethered one and the untethered one. The untethered headsets, they are running processing in the HMD, most often on a Qualcomm chip. We are partnered with Qualcomm. Qualcomm has optimized their chip to run attention computing, for example, enabling for foveated rendering. We have optimized our signals to run on the Qualcomm chip. The tethered headsets, they do the processing on a PC.
They send all the signals or all the data from the headset to the PC to do the processing. The attention computing cameras, all that data, that's too much to send to the PC, so you have to find a processing solution in the headset. That we have to help them with. What is good is we have that solution for them. We have the Tobii EyeChip. You already heard about it. I can try to show it. I guess you will not see it, but it's here. It was in the Tobii Pro Fusion, it was in the Tobii Eye Tracker 5, and we're also selling them to the VR manufacturers if they don't have a good processing solution already. Once again, we can reuse a lot what we have done across the different headsets.
Now when we are moving into automotive, we see the same type of relationship with the automotive OEMs and tier ones. What they expect us to deliver is the signals. What type of partner they expect us to be is a partner that knows how to design attention computing hardware, how to make it scale into volumes, and that we can give them because that we know how to do. Even if the car is, of course, completely different to a VR HMD, it's the same type of integration, and we know how to do it. Summarizing, Tobii has a vertical and a horizontal offering. Signals and system engineering is the core, but we are strong through the entire stack. We can reuse the hardware and the signals across different markets and different products. That brings me into then Tobii engineering and who we are.
Tobii is an R&D heavy company. We are investing SEK 300 million per year into R&D. Our culture centers a lot around innovation and also around attention computing and our users and the value that we bring with attention computing to them, and we're really curious about the users and the value we bring. My department has around 250 employees with an unmatched domain expertise. We're super strong through the entire stack, and we have worked with the most demanding researchers and consumer customers in the world, and they have really pushed us for years. We have a lot of experience in building the vertical products, as well as scaling this technology into volumes and into consumer devices. We have this 700+ patent portfolio, pending and granted.
It's the strongest portfolio in this domain, and it spans from system patents describing the full attention computing system into specific patents from the hardware into different signals, both on the core signals, attention signals, and also a multitude of user values across different domains. We invest a lot into our core assets, into our components. I already talked about these small physical components which are easy to see, but another super important core asset or core component is the signal stack. We use the same signal component across all our products, across all camera systems, across all processing platforms, and that enable us to reuse all the innovation we do into creating this robustness and this accuracy.
Connected to that signal stack are all the millions or billions of data we have to mature the stack and to make sure that we have enough data to do training and validation for full population coverage. We are a trusted partner. That's important for us. We already talked about Qualcomm, but we have a lot of other partnerships as well that helps us bring attention computing into different products at a faster pace. Some example could be Intel, who we're working with to define the hardware platform for attention computing in PC or NVIDIA, who we work with to enable foveated rendering for VR. We also have all the game studios, sensor manufacturers, and we're also a key player in defining APIs or standardizing APIs for attention computing with OpenXR and also for the USB HID.
If we move from that and looking forward, what will our priorities and focus areas be? We will continue with this combination of vertical and horizontal approach. It's a lot of synergy there, and we will continue to broaden and enrich the offering we have in the verticals. We will also continue to add signals to increase robustness and accuracy. We have seen that when we did eye tracking a few years back, that opened up a small floor or area of user values. When we have added a new set of core signals and this initial set of attention signals, that creates much more user values. By continuing to add attention signals, we can create more and more user values. The third focus will be around the form factor, the physical form factor.
Anand told me I should bring the initial eye tracker and show you how it looked, and I don't think you know how big it was. I actually have the IS-1, what you said, the first one to be integrated, but it's down there. The current IS-5 we have here, that's the one you can integrate into a gaming laptop, and that's good. It's actually too big to go into any laptop or any tablet. The same you can do for VR. These are the VR systems that I had on the slide before. That's how they look today. Tomorrow, this is how VR will be looking. If you go even more into the future, we of course expect attention computing to be in AR or in any pair of glasses, and then you need to make the technology smaller.
Of course, we have ambitions into other devices as well, smart home devices, info kiosks, cars, medical assessment. That will require us to continue to innovate for smaller form factor and lower power and of course, lower cost. With that ambition also comes the challenge of, as I said before, the robustness of the signals to maintain that or even make it more robust even when shrinking the technology. We will continue to nurture the partner ecosystem to enable more use cases and also to accelerate the adoption of attention computing. Last but not least, we will continue our focus on patents. That has been a central part of the strategy for 20 years. That is what has enabled the strong position we have today, and of course, we will continue that focus. With that, I will summarize. Attention computing will touch us all.
I have a huge belief in the fact that it creates so much insight into human attention and intent and all the user values that can be based on that, and Emma will talk more on these values. We have learned that even though attention computing from a user perspective creates very natural and easy interfaces, from a developer perspective, it's very hard to do attention computing, very hard to design this robust system that works across the entire population. We will continue innovating in this area, and we will continue to raise the bars for ourselves and for others. Our approach going both vertical and horizontal enables scale and a lot of synergies. With that, I say thanks a lot for listening to me, and now I guess it's or you will tell us what happens now.
Yes.
Yes.
Thank you, Gunnar. We are about five minutes delayed on the schedule, and this break was quite short to begin with, so I propose that we prolong it a little bit. Let's meet up here around five minutes to three, and we will continue with the next session of the afternoon stint. Thank you.
Hi, and welcome back from the break. I hope you had the chance to try out a few of our demos out in the lobby. They are available for you after this presentation as well, of course. My name is Emma Bauer, and I'm Heading up the Segment and Product Organization at Tobii. I've been with Tobii for a bit more than seven years, and my passion is high-end technology, people, and business. Now, let's jump into the next topic on the agenda, Tobii's market opportunities. At Tobii, we develop technology that understand human and human intent. This is what we call attention computing. Our technology enable us to understand where you're looking, how fast your eyelids are closing, how your pupils are dilated, your presence in front of the screen, your ID, and much more.
These signals combined allow us to create user values around, among the many use cases across many, many industries. By knowing where a user is looking, we can create tremendous values in a broad set of use cases. Now, I would like to demonstrate what it's like to see the world from another person's view. In this recording, you will see Keith and Natalie wearing our Tobii Glasses. You will see a set of different use cases, and as you will tell from the recording, we will also shift the perspectives between Keith and Natalie during their recording. You will see exactly where they are looking, and that is visualized in the recording as a red little dot. Let's see what it looks like. I think you can increase the volume a bit. Keith and Natalie gets going with the glasses.
Exactly where they're looking, you can tell by the red circle in the recording. Actually, you can also see what Keith is not looking at while browsing his TV. Keith enters the store. He's browsing for the right product, and finally he finds it, pick it up, and then you can see what information on the package he's interested in. When he's browsing his social media, you can see what ads he's looking at, what items he's paying attention to. As Gunnar said, "You have to capture the word to understand the meaning of the book." What this recording demonstrated was what it's like to see the world from another person's view. It's important to see what information you capture, but equally important is to find out what information is not being paid attention to.
When you know where a person is looking, you can tell if the person is paying attention to what's really, really important. If you don't see the ad, it can't influence your preferences. If you don't see the product, you can't buy it. If you don't look at the road while driving, you cannot see the child running across the street. If you don't see the red alarm on your control board, you cannot initiate the appropriate procedures. Connect back to what Gunnar said earlier in the presentation, our brains are only processing the information exactly where we're looking. We don't process anything that is in our peripheral view. By knowing where you're looking, we can tell exactly what information you've been processing. Let me elaborate a little bit more.
By knowing where a person is looking, you're able to understand what triggers the interest and can optimize the customer experience to drive business values. You can develop better and more immersive experiences in games, for example, to allow your avatar to look around when you do. You can also improve natural interaction. When my device know where I'm looking, it can properly respond to my intent and allow for a more natural interaction. By knowing where you're looking, we're able to build better devices with an optimized power consumption and increased graphic performance, which is crucial in the AR and VR headsets. Attention computing is being harnessed in a wide range of different markets already today to deliver, to unlock profound insights, deliver incredible experiences, and enable innovative devices.
The reason that Tobii can address so many markets is that our technology is similar or even the same. To most markets, we offer the horizontal business model. In this case, we provide our core technology to hardware vendors as well as application partners who integrates our attention computing in their end products. We refer to this as the OEM Integration Solutions. In the End Customer Solutions, we deploy our core technology into our own products. This is where you find the Tobii Glasses, eye tracker, Tobii Eye Tracker 5, the Tobii Pro Spectrum, and our software, Tobii Pro Lab. We also group this into vertical offerings to address specific needs and in selected market areas.
Since we can use our core technology across so many markets and in both vertical and horizontal product offerings, we can capture the synergies and also leverage our technology investments. This puts us in a good position to create leading solutions, drive innovations, and scale our business across the many markets. Let's move on and look into Tobii's market opportunities. As Anand said in the beginning, we have six key market areas in focus at Tobii, and I will describe three of them in brief and three of them a little bit more in-depth. Of course, I would love to go through all of them in detail, but if you have any questions today, I'm happy to answer them after, 'cause we have a little bit of a limited time. Are you ready? Let's get going with the market opportunities. Right.
First out is healthcare. In healthcare, we enhance interaction and usability of our different devices. We also enable assessment, treatment, and therapy of different medical conditions, such as the neuro disorders like ADHD and Alzheimer's. We support our customers from research to innovation all the way through commercialization, and our value proposition attracts a broad and diverse customer base. Today, our customers are academic institutions, innovation centers, clinics, hospitals, device manufacturers, medical companies, biotech companies, and many more. You can tell that we are addressing quite many different use cases in this medical field. Long term, we believe that our core technology will enable tracking of different medical conditions from home. This is why we believe that our position is perfectly fit into the mega trends of digital health, digital wellbeing, and the telemedicine.
This is just one of the exciting opportunities we have ahead of us. Moving over to the gaming opportunity. In short, we bring life into games, such as looking around and responding to your interactions or help you to navigate the game. Today, Tobii technology is integrated into many different game titles, such as the Star Citizen, the Assassin's Creed, and Microsoft Flight Simulator. Our technology is also integrated into our own gaming device, Tobii Eye Tracker 5, and into gaming laptops. As you can tell, knowing where a gamer is looking while playing a game has many, many benefits, and this is a huge market opportunity for us. We should recognize, however, that changing the user's behavior takes some time, and candidly, it has taken a little bit longer than we expected. Hence, we're so excited to see an uptick in adoption.
We see that our own gaming device has increased with a 65% only this year. We're even more excited to see that the gamers, the market, starts to demand support for eye tracking and attention computing in their games. We believe that's a huge proof of adoption is starting to take off. There are many application areas for attention computing. There are many application areas for attention computing in automotive. We leverage our core technology and deliver critical values to many of the automotive car manufacturers, like Toyota and VW. We also work with DENSO, which is a huge supplier into the automotive market, and research institutes to support and enhance the process throughout the full vehicle life cycle. For example, we have supported SEAT in their product development.
We help them to improve the user interface of their center console. By using our solution, SEAT was able to pinpoint design flaws early and could adjust their product before they deploy it to market. Hence, they were able to deliver a much safer and better product to the drivers of their cars. However, we believe that the market opportunity is much larger when you deploy our technology into the advanced driver monitoring systems. These systems have the purpose to save lives and to make full use of the semi-autonomous cars. The market for automotive is definitely not static. Regulations such as the Euro NCAP and the coming bill of drunken driving to be accepted by the U.S. Congress are two tokens that will drive adoption in the market.
More important is that market regulations will not only drive the adoption, but it will also drive innovation of the market. For innovation of the technology that is needed in the driver monitoring systems, for example, to drive down cost of the full system. This market is already quite well-known to most of you and quite easy to understand. We expect that majority of the 100 million cars on the street will have advanced monitoring in the system in the future. We believe that the industry is likely to take off in the 2025, 2026 timeframe. Now I've gone through three of the market opportunities, and it's time to move on and go a little bit deeper into the remaining three. We are the market leader in behavioral studies and research.
In this area, our customers want to unlock insights into human behavior. We earn this position by having more than 3,500 enterprise customers as well as 2,500 research customers in our customer base. Already today, we work with 99 out of the 100 top universities in the world, and we have 12,000 research papers referencing Tobii equipment. This makes us by far the largest player in this market area, and our solutions of hardware, software, and services are known as the gold standard on the market. If we zoom in on the academic part of the market alone, our customers use our solutions to go deep into human behavior and understand our brain in depth. Today, eye-tracking is used in fields such as psychology, linguistics, brain research, and vision research, and many more.
I will now give you two concrete examples from the academic market. First, eye-tracking is used to identify visual markers in autism as early as during early infancy. The reason for why it's so important to identify autism at an early stage is that you're able to treat very early. You can give the child good support to enter school and have a good way of education throughout life. A second example is from Alzheimer's disease. The elderly population in the world is growing, and we see that the research into Alzheimer's disease is doing the same worldwide. Again, eye-tracking is being used to identify the visual markers of autism at an early stage.
This will enable not only early treatment, but also a way to measure progression and to overcome symptoms to improve the quality of life. Despite our stronghold in academia, we believe that the market opportunity is actually larger in the commercial space of this area in consumer insights. In a world where competition for consumers and attention is fierce, our solution helps our customers to pinpoint where the customer is looking while making purchase decisions, for example. As Pete Cashmore from Mashable stated, "We're living in a time when attention is the new currency." We help our customers to break through the clutter of information and the impression received by telling them exactly what messages that resonates with the audience.
We have companies like Google who wants to understand how we consume media in our homes, as well as, Unilever or other FMCG brands who want to optimize their packaging, their store layout, their shelf layout, and many, many more questions. Let me expand a bit on three examples on how we deliver concrete values in consumer insights. First, we have shopper research. We help our customers to observe their shopper, the shopper experience of their target consumer. By using the observation, they get access to insights into what drives attention while they browse the store and give input to the decision-making process. Today, we have Unilever, and we will come back to that case in a second. The second example is from product development and optimization.
We help our customers to identify design flaws early so that they can go to market with a better product. One example is Netflix, who are using our solutions when they optimize the user interface of their product. Perhaps some of you have used Netflix once or twice. Third, we measure effects of communication. In these cases, we help our customers to measure and to quantify the impact of their communication in different media channels. It could be an advertising campaign or a social media, or like the study we made for Bacardi, who wanted to understand how their sales point-of-sale material were working for the audience. These are just three short examples. Now, I would like to show a recording from one of our customers, Unilever, and let's listen in to what the customer has to say.
In market research, we saw a very big mountain to climb on. What does my product look like on shelf, or what does my product look like in physical? Using eye tracking, it gives you the opportunity to look through the consumer's eyes. Instead of just only listening to an opinion of a consumer, we now see the analysis with heat maps and gaze path analysis instead of working only with a PowerPoint deck and showing that to an audience. Our experience working with eye tracking is the speed, and we work very close to deadlines. When we need that specific answer on a question, we use a lot of eye tracking because eyes don't lie. Combine these things can give you the right insights to adjust your pack or convince your customer. Eye tracking is part of our DNA.
I'm back, and so is the slide. Good. Let's go. That was the voice of our customer, Unilever, and as you can tell, there are many values by using our solutions in their business. Moving over to the market opportunity. This market is a bit hard to estimate overall, but one can estimate specific pockets. As I've told you, the larger market opportunity lies within the consumer part of the area, but we will zoom in on academic only in this session. Today, we serve 2,500 universities, or actually a little bit more, with our solutions on the market, and they generate approximately SEK 250 million to us. This might sound like a large number, but it's actually not. The truth is that the market is under-penetrated.
We estimate that there is more than 25,000 universities worldwide, and even in the 2,500 that we serve today, we know that we can penetrate more and expand into more departments who would benefit from eye tracking. Basic math tells us that we should be able to penetrate the market and reach more customers, as well as go deeper to our customer base. We say a 10x growth is a realistic number over time. All in all, this confirms our belief that we have just scratched the surface. From a solid market position, we aspire to grow. We aspire to grow this market into a multi-billion SEK per year opportunity. That concludes the first deep dive. Let's move over to the second. The second one is education and training.
Eye tracking is a powerful tool to optimize training and procedure wherever human attention is critical to successful outcomes. Whether it's in a school or in a professional training scenario, where we're looking, it's super important to understand where it's critical for success. Regardless if you're in a professional environment or in a school, knowing where you're looking has a huge value to capture, understand, and improve your outcomes. As you saw in the example with Keith earlier on in the presentation, seeing the world through the eyes of a user has huge potential and a huge value. Being a teacher or instructor, you get immediate input in how you can coach and give feedback to let the person learn in the best way possible.
You see exactly where the person is looking, you get insights into the decision-making process, and you can even tell the person's cognitive state. Let me illustrate this by an example from a university hospital. In this case, an experienced doctor wore our glasses while doing a task, and this recording was made available to students to learn from. Let us have a look and listen to what the customer has to say.
Quality training for medical professionals is vital, but it can be difficult for experts to articulate instinctive and subconscious elements of carrying out a procedure. Eye tracking captures the gaze of an individual and provides a visual representation of where their attention's focused.
You do the procedure, and you don't think about this. All of a sudden, you see something which you do unconsciously during a procedure, and now you have the data on this.
The German Heart Center Berlin has used eye tracking to observe how surgeons and perfusionists perform to help improve the training and evaluation of students.
It's quite a complex machine, and the question is, how do you evaluate the student's performance because you cannot see what they are thinking. Eye tracking is a great tool to evaluate where people are looking at.
The center also believes in the ability of eye-tracking data to illustrate how to combine an individual's skills with imaging technology as minimally invasive techniques become more common.
I think this is very important information for beginners to understand how experts combine visual information collection with doing a procedure.
Now we're back. We have a similar case at DENSO, one of the largest automotive suppliers in the world. They let their most experienced worker wear our glasses while doing an inspection on the factory floor. The outcome was used to set best practices and to onboard new people on the job. The concrete benefits of our solution was to cut training time, and actually, Tencent managed to cut it in 1/2, saving a huge amount of money for the company, but also to enable a faster onboarding and improve the performance. A third example is from the Japanese Railway over in Japan. They transport 1 million people per day. They use our solutions in all their training facilities across entire Japan to enable to train their staff and make a safer workplace as well as a safer experience on the platforms.
These are just a couple of good examples to showcase how eye tracking brings enormous values into the different training scenarios where it's critical where human performance is critical. We had a doctor and an inspector in these cases, but the very same goes for many different people doing the same similar tasks, like pilots and people operating in control boards, in control rooms. These insights are used to define best procedures as well as train to onboard and enhance more people onto the job. In addition, we deploy our core technology in large-scale scenarios in education. Today, we collaborate with many partners, for example, in reading assessment. One of the examples or one example of a partner is the Swedish company Lexplore. Lexplore has deployed their software solution based on eye tracking to 1,000 elementary school in Sweden.
The great benefit of their software solution is that it's objectively and very fast assess the entire class, the reading level of the entire class enabling for good support to all students to develop their own abilities. This application is already available in many communes in Sweden, in Skellefteå kommun, and Lidingö stad. Perhaps some of you already have children who are using this solution. How many have seen Lexplore before? Anyone? Yeah. Some of you have children in the schools, but this is a very exciting opportunity for reading and to improve learning of children in school, I must say. Very innovative. Moving over to the market opportunity. Of course, you understand that the education training market is very diverse, with professional company-wide trainings on one hand and education in school on the other hand.
We know that the market for professional training is huge, and primarily in manufacturing and automotive industries. Their main challenge for the coming years is to onboard, upskill, and reskill their staff, and this is where our solution is a good fit. If we instead zoom in on the educational part of the market, during the past two years, the digitalization has accelerated in schools, both in terms of remote schooling, but also when it comes to software development, enhancing reading, children's learning. According to UNICEF, we have 1 billion children in school this year, and the one-to-one strategy indicates the true aspiration of having one computer per child worldwide. Intel, Tencent, Acer, and Tobii collaborates to develop a new generation of educational laptops for schools in China. These laptops target no less than 170 million children.
You compare this to the Google Chromebook for the western part of the world. Tobii is supplying attention computing technology for these devices to enable an enhanced experience of learning. This year, the number of educational devices is about 40 million units. The industry expects a CAGR of 13%, indicating that there will be more than 100 million units in education by the end of this decade. To conclude, we are in a healthy business on the professional training side, and we're on a journey with innovative partners to enhance learning worldwide, and they are all using attention computing. In parallel, we also see a huge interest from the device manufacturers who wants to integrate attention computing to be positioned in this space in order to enhance learning worldwide.
This is another exciting opportunity, and I think that we'll have a fantastic future ahead of us. Moving over to extended reality, the last market opportunity for today. Extended reality is an integration play to Tobii, and our core technology is being integrated by different hardware vendors and into virtual and augmented headsets. Before we move on, I would like to just set some basics on what I'm referring to when it comes to AR and VR. In a VR headset, you have displays in front of you. You're fully immersed in the digital world. If you compare to AR, there will be more of a glasses with a see-through so that you can see the world in front of you.
There will be an overlay with digital information, so it's augmented with digital information. Is that clear? We have the digital device, the VR headset, fully immersed, and you have the see-through glasses with augmented digital information. Already today, our technology is natively integrated into major headsets such as the HP, HTC, PICO, and Pimax. In addition, we collaborate with almost all the major OEM players in the field. They appreciate our expertise of the full system, the high performance, and of the high-performing eye-tracking that we bring at a cost and form factor that allows for mass market deployment. The VR market has accelerated during the last year. The rationale is, of course, that we have more mature headsets, but also that there are more end-user applications.
The VR market is also being fueled by the pandemic, where our abilities to collaborate and meet in person is severely impacted. You might have heard the word metaverse. I will not linger on that too long, but the aspiration of the metaverse is to envision us to transcend digitally and our physical ill-limitation to naturally interact with other people digitally. Whether you call it the metaverse or something else, we can all agree that the way that we meet and interact with people is undergoing a huge change, and attention computing is a key to make this work. We say that we bring attention to the metaverse to enhance collaborations. Attention computing enables a couple of concrete values in both AR and VR headsets. For example, better devices and better experiences.
Let me demonstrate now why Tobii believe that attention computing is a must in all coming headsets.
The first key to growing VR into the consumer market is by building better devices. Eye-tracking makes this possible by focusing on what matters. Foveated rendering gets you better graphics with faster processing, resulting in lower hardware costs. Humans naturally process only a small area with high resolution, so you can deliver a 4K resolution experience without having to render the whole screen. Eye-tracking also provides better experiences by helping you understand your customer's intent, allowing for intuitive interactions based on natural hand-eye coordination, making devices easier to use and giving users an experience they'll love. Most of all, it unlocks game-changing new possibilities, set to change the way you see VR. Eye-tracking opens the way for richer social interactions through eye contact, allowing for a VR experience that is not isolated but shared.
Boom. You don't have to take my word for it or Tobii's word for it. Look at the quotes that are behind me. I think this proves that attention computing will be in AR and it will be in every AR and VR headset in the future. Let's move on and look into the market opportunity for extended reality. As I just explained, attention computing and eye-tracking is expected to become a de facto standard in all coming headsets. The VR market is entering an interesting phase. This year, there will be about 10 million units shipped worldwide. Next year, there are rumors that Sony and Meta will launch their first headset for consumers, and that Apple will launch next generation of for consumers, and that Apple will launch their first headset.
Sorry for that. The industry experts expect a 40% growth in VR for the coming years, which indicates that there will be headsets in volumes of 100 million by the end of this decade. All in all, we are confident in the performance of our technology and are excited to bring Tobii attention computing into all headsets. If we shift to AR for a second, we see that the market is not yet ready for prime time. Many believes that AR glasses, but in the form and shape of a regular pair of glasses, is going to be the next big computing device replacing our smartphones.
This is why we see all the big tech giants, such as Apple, Microsoft, Meta, Google, and the Asian companies investing enormous amount of money and resources into this area. However, the consumer mass market for AR is still several years out, whereas VR is much more here and now. When augmented reality will reach mass market, industry analysts expects that AR will ship in volumes of more than 1 billion units per year, just as smartphones does today. Time to wrap up. I walked through all of these six market categories. I hope you have learned and got some new insights. All of them are representing an opportunity for Tobii with at least SEK 1 billion per year.
As I mentioned in the beginning, I haven't covered all of them in depth, but if you're curious to learn more, just grab me after the presentations, and I'm happy to tell you more. To wrap up, I have three key messages that I would like you to take away from this presentation. First, attention computing adds a unique dimension to realize customer values in many markets and many use cases. Second, we have a proven track record and a strong position in the market. The solutions we have available are proven to work really well, and we get good customer reviews. That proves that we have a solid market fit. Third, there is a huge market opportunity in all our key markets, and we see clear signs of adoption.
We see that there is an accelerated adoption for attention computing. If I'm to conclude, I would say that we're entering an era of accelerated growth. Thank you, and that was all for me. I would like to invite Magdalena on stage, our CFO, to present the financial part of our business.
Thank you.
Oh, yeah.
Company that wasn't high-tech earlier. What happened to that?
Microphone.
That's a good start.
This is.
High tech and a lot of hair.
Thank you, Emma. Yes. Now, so far into this presentation, we hope you have formed a good understanding of the business we have built so far and the exciting future opportunities that we are pursuing. I will now walk you through the financials of the company. I will explain how we steer the business and how our new reporting structure will look like with two new segments. I will also go through some of the financial dynamics of the two reporting segments and how our financial position will look like after the split. I will conclude with our long-term financial goals, which Anand already has mentioned. With the execution we've had and the exciting future we're now moving into, there is no doubt about it that Tobii is and will be a strong growth company for the foreseeable future.
Prior to the pandemic, and on a pro forma basis, Tobii, excluding Tobii Dynavox, delivered an organic growth rate of 20%, and we had a revenue of SEK 640 million before the pandemic. Came the pandemic, and we slowed down a bit, but hopefully this third quarter this year marked the end of the sluggishness as we achieved 26% organic growth in this quarter, and we also pushed above the pre-pandemic levels achieved in Q3 2019, leading up to a revenue for the last month now, up to September, here in 2021, of around SEK 600 million. Tobii, with our product mix, has in sum been able to deliver around 70% in gross margin, over the past years.
This comes from being a tech company with an ability to deliver value from a hard-to-copy set of solutions. The value we generate is mainly derived from our core technology in attention computing, and our leading product portfolio is elevated further by our excellence also in deploying our core technology in our own devices and software. Given that we expect our portfolio to more and more shift in favor of licensing and software type of business, it is reasonable to expect that we'll be able to at least sustain and hopefully improve this gross margin, but of course, also depending on the product mix going forward. Now, following the spin-off of Tobii Dynavox, our financial reporting will change.
The P&L structure on the group level reporting will look the same as you see here to the left, only the group now being the sum of the merged Tobii Pro and Tobii Tech organizations. On the next level, below the group, we will be steering the company through two new segments. These two segments, End Customer Solutions and OEM Integration Solutions, are thus what we will be reporting on the next level going forward. For our two new reporting segments, we will be disclosing revenue, growth factors like organic growth, FX and M&A, and we will be disclosing gross margin. However, as we are now able to leverage research and development, sales and marketing, as well as central function across both segments, operating profit per segment is not a relevant metric to track.
This means that we will steer and report the two reporting segments on revenue, gross profit, and gross margin, and we will steer and report the whole company on a fully loaded P&L. Now, let's look into our two reporting segments and start with End Customer Solutions. Tobii serves professional business-to-business customers and consumers with a portfolio of eye-tracking solutions, including hardware, software, and services. The products include our strong range of research-grade eye-tracking hardware, our behavioral analytical software, our research service business, as well as our gaming offering within our own gaming peripheral. This is our largest segment today, turning over close to SEK 500 million, and it has been growing at a steady pace the past years. End Customer Solutions has a high gross margin of around 75%.
We are working here with a global sales force, and products call for a relatively high-touch sales, meaning that OpEx will continue to grow with increased expansion, since additional sales and marketing resources enhances the possibilities to penetrate the market. In addition, supporting costs within research and development are necessary to maintain and develop the product portfolio. All in all, though, thanks to this high gross margin, and as we do not have to expand the overhead structure as revenue continue to grow, we do expect to see a strong EBIT contribution. Moving on to OEM Integration Solutions. This segment includes our solutions, where we enable our customers to realize end customer value through integrating our solutions into their products. This is a young business to Tobii, where we are still largely pre-revenue.
Even so, we have been working on our product market fit, and today, we have design wins with around 50 different integration customers. These customers are about to launch or have recently launched innovative products enabled by Tobii's attention computing, and are expected to grow their sales rapidly. As their sales grows, our sales grows. Of course, we keep adding more integration customers at a rapid pace. In addition to the 50 integration customers where we already have design wins, we are also engaged in commercial and technical discussions and collaborations with another roughly 50 different innovative integration customers. Right now, gross margins is around 50%-60% in this reporting segment, and going forward, we will expect to see some lumpiness in the gross margin, depending on the product mix in each quarter.
The dynamics of this business is quite different compared to End Customer Solutions. In an OEM business like this, heavy upfront investments are needed prior to receiving any revenue. We need to develop the product first, meaning that we will have costs from R&D. We need to start out with sales and marketing, which also drives costs. As a next step, we need to work together with the customer to integrate our product into the customer's product in order to show a proof of concept. Finally, we expect to get a design win. This R&D pre-sale proof of concept leading up to a design win phase can take several years. In some instances, during the later stages of the investment phase, customers typically accept to pay for some of the pre-work that is needed. This is what we call non-recurring engineering revenues.
However, this income normally comes after we have invested in core technology of our own and in pre-sales and marketing. When the customer launches their product, however, and we start to ship, that is when we start to generate our real revenue. Typically, our revenue is directly proportional to the scale of the business of the customer's products. However, it does not affect our cost base if the customer sells a thousand or a million products. When succeeding in driving large-scale adoption and mass volumes, the margin contribution and swing in profitability of this kind of business is typically very strong. We have now, the past years, been investing heavily in some markets in this business, and based on what we are seeing right now, we expect a few of them to enter a more significant revenue growth phase in the next coming years.
Now, going back to the group level, how should we think about Tobii going forward? Since the IPO in 2015, we have been through an investment phase characterized by high R&D to sales, ramping of sales and marketing, and we have shown losses. This has been deliberate to put us in a strong position for what we believe is about to come now, being the growth acceleration phase, which we expect to be characterized by strong growth and rapid profitability improvement. Sales and marketing and R&D spend as a % of sales will drop as revenue scale. Revenue growth will thus affect EBIT positively, leading to an EBIT margin that rapidly improves. Give this a couple of years, and then we expect to enter the next phase with continued profitable growth. Now to our financial position.
In terms of the balance sheet, Tobii now has a solid net cash position. If we adjust for a few major financial items that occurred in October as the repayment of the bond, the equity raise that we made mainly to finance recent acquisitions, and add to that the transaction that has been sorted out now between Tobii Dynavox and Tobii to secure two independent companies without any financial liabilities in between, the balance sheet would, as of September 30, have implied a net cash position of SEK 467 million, excluding IFRS 16 liabilities. In other words, together with the operational cash flow for Q4 that will come now, this is the cash flow position for Tobii going into 2022. Now, as a conclusion, I would like to share with you our long-term financial targets going forward.
Our target is that by 2025, we will have reached a revenue of SEK 1.5 billion. When it comes to EBIT, our target is to reach break-even during 2023. With that, back to you, Anand.
Okay. Thank you all. Gunnar, Emma, Magdalena, thank you so much. It would have been terrible to have me up here for 2+ hours, so you only get to see me for five more minutes. First of all, I wanna make sure all of you are still with us, and I wanna actually use this session now to do a quick wrap-up. As I started the day off, I said our objective for all of you today was to give you a better sense of the potential of Tobii and to accomplish these three objectives. I hope all of you will say that we've actually come pretty far in achieving these objectives, and hopefully you are indeed walking away with a substantially better idea of Tobii's potential.
Now, as I step back and try to wrap this a little bit, what I would like all of us to consider is the adoption of attention computing will indeed change the world. We talked about the potential that we see with this technology, comparing it to other major disruptive elements like speech recognition. A decade from now, we're gonna look back and say these type of technologies have fundamentally changed our world in ways we could not have predicted standing here now. The second aspect is I truly believe that the adoption of these technologies will make the world a better place.
We can look at the numerous examples we've talked about today, whether it's DynaVox's devices that help people with disabilities, whether it's the opportunity to do better medical assessments for autism, Alzheimer's, concussion diagnosis, whether we're able to make technology just more accessible to people so that they feel empowered and we can reach our full potential. We're gonna make the world a better place. Third, if we are able to achieve our ambitious potential, we have phenomenal financial growth in front of us. A company that can speak to having all three of these opportunities is incredibly rare. The opportunity to change the world, the ability to make it a bett er place, and to enjoy tremendous financial growth as you accomplish your mission. This unique combination is why I left my job at Intel and came halfway around the world.
This unique combination makes us a great place for future employees. I believe that this unique opportunity and company is also a great opportunity for investors. I hope you will all agree with me on that. With that, we are ready to conclude our day. Thank you all very much for your time. Sorry, we're not ready to conclude our day. We are ready for questions and answers. I thought I would get off pretty easily. We'll do the Q&A session first. Thank you all so much.
It's the only chance I get to steal some limelight as well, so don't take that from me.
That's right. Yeah.
Okay, let's do a few of the questions online first while analysts here in the on site have time to prepare a little bit. We have a bunch of questions actually coming in, so we'll see how many we have time to go through. Can you comment. This is from Daniel Djurberg on Handelsbanken, an analyst. Can you comment on your position in terms of IPR, strengths, weaknesses, and strategy as attention computing materialize?
Do you want to take some of that question, and then I can take the second part?
Yeah, I can start out. We have a strong patent portfolio today. As I said, it's covering both full system patents as well as very specific patents throughout all these layers that I painted that allows us to build truly optimized systems that really enables the user values that we see. Of course, we have a belief in that this technology will continue to grow, so the portfolio we have today will not protect us forever, and that's why we have the strategy to continue to invest both in innovation and also in patents that protect this innovation.
If I can add to that really quickly. Again, as Gunnar pointed out, this is a pretty deliberate strategy for the company. We believe that our investment in this space, which actually goes back almost two decades, puts us in a very good position. It offers concrete value for our customers who are deciding who to buy solutions from. Then, of course, as Gunnar mentioned, this is going to be a continued focus of us. This is something that we are able to, of course, create because of our focus on innovation, but then there is the substantial focus in addition to investing in innovation to make sure you spend the effort to go and harvest the IP. We will continue to build a stronger and stronger portfolio.
Thank you. Let's stay with the IP a little bit and a more specific question on that topic, and that's how about dynamic foveated rendering when it comes to IP rights? And also, what's our status right now outside of NVIDIA with partners? We mentioned Intel, Qualcomm. What about MediaTek, other players? Maybe IP first and then the status outside.
You want to do that?
Yeah, I can take that one.
Okay. Mm-hmm.
Again, I think when you think about specific IP and how it's used, I think there's multiple components in how IP can be derived. Some parts of it related, again, as Gunnar pointed to around core signals, which is the quality of the eye-tracking signal, what you need to go and implement in order to go and get foveated rendering, for example, to work. Then there's of course, use case patents that some of our customers may be filing at the higher levels to go in and decide what use cases that they have to go derive. We think the combination of both of those things are what allows freedom to operate. We think that we actually have good coverage on the base set of IP that's needed in order to at least deliver solutions into the space.
The second part of the question was around.
Partnerships.
Partnerships.
Intel, Qualcomm, NVIDIA, other players.
Let me start with that one, and if you want to jump in post. Again, I think Gunnar alluded to the fact that we have quite a close collaboration with companies like Qualcomm. Qualcomm is a significant leader in one type of VR headset, specifically this area where you have what we call an untethered headset, and you have a chip that is sitting on the headset driving the display and doing the technology enablement. We have a lot of partnerships with other players. We've talked about NVIDIA and Intel, and I assume that we would continue the partnership with other companies who offer processing solutions.
Yes. As we said, we have partnerships with NVIDIA also specifically to enable foveated rendering. As we see this go into more devices, of course, there will be more collaborations.
Great. Thank you. We have more questions here later, but let's see. Are there any analysts here? Yeah, we have some questions down here.
Yes. Thanks. Daniel from ABG. I start with one for Gunnar as well. What is the risk of eye tracking being commoditized and price pressured longer term? Related to IPR, which you just covered, obviously.
You said you want to comment related to the IPR?
No, what is the risk of being commoditized? Yeah.
No, I think we see that there is a lot of potential in this technology. We see that we have just started to scratch on these values with the signals that we have today. We think that by continuing to innovate, both on the signal robustness and also on the amount, on the portfolio of signals, we will also unlock a lot of potential new user values that we can see today and also a lot of values that we actually can't even see today. I think the commoditization is, to me, very far away. It's still a lot of innovation to be done to just unlock this big market.
Okay. Thanks. A question on the 2025 sales target, the SEK 1.5 billion. It corresponds to some 20%-25% annual growth. All of the end markets that have been covered today are growing much faster than that, according to the presentations. How have you really backed that up or come up to the SEK 1.5 billion sales target?
Yeah, I think there's a couple of things. One is, you know, again, we expect that we will see faster than historical growth. While it is true that we see underlying growth in many of these markets that are potentially faster, there are two aspects to consider when you think about the revenue potential for us. Take an example as, you know, virtual reality, for example. There's one, the underlying market growth that it has, and the second, the penetration of eye-tracking. Now, over the last year, we've seen substantial growth in the likelihood that eye-tracking will actually be quite ubiquitous. Today, most consumer headsets do not have eye-tracking as of now. I think both of these things actually play in. We believe that the number that we are putting in is a reasonable expectation for the stage business growth that we expect.
You know, despite the fact that these underlying markets are growing at a certain rate, we have to do our work to go and penetrate them. That's sort of how the number's coming through.
A follow-up on that. How large share of the eye-tracking enabled VR market do you think will be in-house development in three to four years' time?
I think that's a very difficult question to answer. The way that I think it's better to go and pose that question is we've talked about the fact that we have a pretty broad portfolio in what we develop. We have the opportunity to license IP and algorithms. You've looked at the fact that in some cases, when somebody has a tethered headset, they need a chip to go put in their tethered headset device to terminate these signals. When we look at how we collaborate with some of these large tech players in the space, you should expect that we're walking in with a fairly flexible business model in how we can engage with them. What that may mean is they may take specific portions of our algorithms to augment what they have in-house.
Like, for example, let's say they feel like their dynamic foveated rendering could be a little bit better. Maybe there's a way for us to go and parse certain sets of those things. Of course, the second aspect is, as they evaluate what they have vs us and vs their competition, they are in this game to win either the end user experience or the ecosystem that they're trying to go build. We think that approach not only allows us to go build portions of their business to sell parts of it, but the second part for them to evaluate us, in some cases, replace their in-house capabilities.
Yeah. That's good. A final one for Magdalena before I hand over for someone else. How should we think about EBIT margin potential beyond 2023 for this type of business with around 60%-70% gross margins?
Yes. You can think about it in a theoretical way.
We think about it.
I tried to maybe in a theoretical way describe when I went through the segments. Those segments have possibilities to generate one type of EBIT, but right now we are guiding towards actually getting to break even during 2023. That is our target. Then we will come back to you and describe how we believe our company will look like the years after that.
Thanks.
We have some more questions up here as well.
Yes. Hi. Erik Larsson from SEB. Thank you for the presentations, by the way. Very comprehensive, but still intuitive for a stupid analyst. I have a few questions. First off on the gross margins perhaps, and maybe playing into the VR theme here. If I understand it correctly, given, say, that you win a design win for an untethered headset, you will only supply like the signals and the algorithms and such. Presumably, if you achieve high volumes in those kinds of markets, that mix would support gross margins. 'Cause you mentioned that gross margins could be flattish or so going forward, but there's still an upside to that. Is that correct?
Yes. As you describe it, that kind of business drives high gross margins. When we get that is high gross margin. But in the short run, we don't expect to see this curve be straight. We expect some lumpiness in the coming periods.
Is this specific to untethered VR headsets, or is it similar in other verticals as well, that you could basically license your knowledge and technology?
Yeah, maybe I can take that particular answer. I think to Magdalena's point, when you consider the OEM integration business, there are two dynamics that play out that basically drive the lumpiness. One is basically individual product launches by some of our OEMs that drive significant revenue growth. If that revenue growth is based on an integration platform like our IS5, the margin dynamics of that would look quite different. As you point out, if we're in a OEM integration that is really driven by IP licensing alone, that of course, can have very different kind of margin dynamics. As these products launch, you know, in a particular quarter, that can create some level of lumpiness until we get to enough scale that the law of large numbers basically, you know, manages out product variations and customer ramp variations.
Other examples of where we think that there is going to be a more IP licensing type of business. Gunnar alluded to it. We see this very much in spaces like the automotive side. We also have some examples with some OEM integrations we're doing around gaming. If you saw the demo outside, we have a product called Tobii Horizon, which basically is also a pretty rich gross margin type of product. Again, we think that we are looking at the full portfolio. We have the ability to sell this broad mix, and we wanna sell what's right for our customers. In some cases, they are very healthy gross margins, in some cases, they're a little bit different. I think in totality, we're looking to increase the adoption of attention computing in the marketplace.
Very clear. Thanks. On your sales target, I guess it depends on if you get volumes, et cetera, but should we expect it to be like front-end loaded coming in sort of the next year, or should it, you know, be more back-end loaded 2024, 2025? You know, how can we think about that?
Yeah. I think we've been pretty deliberate in providing this guidance on SEK 1.5 billion for 2025. It's not our intention to provide nearer term guidance. I think if you at the most high level consider what business dynamics we're under, we've talked about the fact that our business metrics are starting to normalize. We're getting back to 2019. You know, the drag on that, of course, is any potential pandemic type of issues, but we think that our End Customer Solutions business should scale, assuming that, you know, knock on wood, everything gets back to the way we intend it to be. As we look on the other end, as we continue to accelerate our business, more and more OEM customers should come in line, but our End Customer Solutions should also scale.
We've talked about the fact that behavioral studies and research, we're gonna scale that. Magdalena has talked about in order to scale, that kind of business, we need investments in sales. We see a similar kind of dynamic in education and training, where we think the need for frontline workers to be, you know, upskilled, onboarded, reskilled continues to grow. I think that certainly over time, both of these portions of our business have the opportunity to scale. But again, I think we're trying to keep our guidance pretty clean, on the 2025 level.
Makes sense. One question for Magdalena. Could you just talk a bit about working capital? Is there any sort of, I guess there are different dynamics depending on the vertical, et cetera.
Mm.
What's it like, and how will it develop going forward?
Right now we foresee a slight increase going forward, together with sort of when we expand the business, but not specific in connection with either any market right now.
Okay. Just a final one, if that's fine. Just some flavor on M&A, because we've seen some consolidation in the market this year, including from yourself. What's the strategy going forward? Could we see more consolidation? What's the ideal M&A target, et cetera? Thanks.
Yeah. I mean, I think you've seen us be active as well this year on the M&A front. I think as you look at our ambition around the attention computing side, we've laid out our ambition to grow and grow our capabilities on core signals, on attention signals, for example. The acquisition we made with Phasio was very much an increase in our capabilities around the attention signal front. What you should expect is that we are going to use M&A as a more significant tool going forward, but we are going to be quite deliberate in the companies we choose to acquire. We think there's a significant opportunity for us to go and find players who have the right combinations of capabilities to scale our business. There's a huge opportunity.
I think there's a good view for us to go and complement what we have in-house, and we will continue to be focused on that as an option.
Okay, great. Thanks.
Great. Let's take a few questions from the webcast as well. Coming back to the financial targets, we've had quite a few discussions here, but Jeff Lager is asking if the 2025 revenue target and the 2023 EBIT breakeven target, is that full year targets or run rate ambitions for those years?
The EBIT target is clearly during 2023. It's not a full year, it's somewhere during 2023.
We mean we should reach a run rate.
Yes.
Breakeven in that year? Yes?
Yes. The 2025 target is for the whole year.
Good. Let's go back to Daniel Djurberg. Had quite a few questions here from Handelsbanken again. The SEK 60 billion potential market value, can you give a little bit more flavor and details on how you came to this number?
Yeah. I think if we consider our long-term TAM, I think there's many mass market drivers. Now keep in mind that our business is fairly varied. We have businesses where we are selling into scientific research at ASPs north of, you know, $10,000-$20,000, and then we have other businesses where we are in the scale kind of business. If we go in and take a quite large, you know, back of the napkin kind of view of where is the potential for attention computing going forward, the drivers of mass market adoption actually are very numerous, right? You can look at, for example, augmented reality headsets, which are expected to be the next major computing platform. If they hit their stride, they should be north of 1 billion devices a year. They, we believe, will absolutely feature attention computing.
You look at a device like virtual reality, which will likely be a premium computing environment where you probably get the best kind of gaming interactions. That again, by the time we get past the decade, should be north of 100 million units. You can see proxies for this in things like what the PC gaming market looks like. You know, again, PC gaming has gone mass market, but there's a core of high performance PC gaming that continues to play out. I think that a market like VR can very much enjoy that, which for me would mean hundreds of millions of devices. You think about something like automotive, which has 100 million cars that are being sold, the move towards, you know, mobility as a service.
You have the opportunity with smartphones, if they're still around, smartwatches, home automation kind of devices. I think if you add those type of devices up, it's quite easy to get numbers that are way north of 2 billion devices. If you come in and say, "Well, of course there's gonna be some push in terms of what's the ASP we can expect." We're not gonna be selling devices for hundreds of dollars at that point in time, but we still think there's an opportunity there for either us to be in something like a hardware kind of integration, a platform potentially, or in some cases to be licensing IPs.
If you look at a very conservative number where you'd say over those kind of devices, you can make, you know, $5 or so of ASP counting all the vertical markets we're in, you end up in a number that is well north of the $60 billion kind of TAM. And that's sort of the back of the napkin envelope. Again, I think the point to take away from there isn't that $60 billion in some sense is kind of a magic number for us. What it really should speak to us is, you know, we've grown a lot in the last 20 years, and we're at SEK 600 million now on an annual basis in this company.
The TAM that we're operating in because of the substantial number of verticals that our solutions can be picked up in, that is enormous.
Good. Thank you. On that note also, Daniel was wondering, what about the TAM today then? If we are at SEK 600 million today, what about if we add everything together? We got a number for that?
I don't think we have a number for it today. Again, I think the difference would be, you know, potentially the dynamics of the ASP. You know, think about a gaming laptop that integrates our IS5, you are in multiples of that number in terms of the kind of ASP that we would command. So I would say that it probably isn't super useful to do that exercise immediately. Again, the big opportunity for us is to drive adoption of attention computing. That's the big market opportunity.
Thank you. In extended reality, you collaborate with all the major OEM players. Can you comment on your revenue model in these cases? Maybe you've actually answered this question.
Yes.
Yeah.
To these players, we are having the license model, the horizontal offering.
Yeah.
I think that.
Let's leave it at that. Let's dive into some questions from Mikael Laséen, an analyst with Carnegie. Can you give an update on the revenue outlook for Tobii in VR applications during 2022?
No, we're not gonna be sharing that level of detail. Again, we've been quite deliberate over here. You know, these kinds of markets, as we've talked about.
Mm-hmm.
There are uncertainties in when they are going to specifically hit. Again, we think this is a huge opportunity for us. In the last year, the change in the VR market honestly cannot be overstated. It is really hard, I think at this point in time, to overstate the change in this market from a year and a half ago when the entire industry was focused almost exclusively on augmented reality. We still believe that augmented reality is that home run opportunity. In this year, with all of the news that you see, it is absolutely clear that VR has a completely different level of interest from the industry titans. I think that is a great opportunity for us.
Thank you. How dependent is the revenue target for 2025 on revenue from automotive applications?
I would say that automotive at that point in time, if you remember our staged growth approach, we would be starting to hit our stride. I wouldn't expect that the automotive DMS contribution in the year 2025 is hugely significant relative to that SEK 1.5 billion. We should expect, however, between now and then that we are signing design wins and that we're getting ready for for deployment at that point in time. Again, there's a long cycle between design wins and revenue in the automotive space.
Let's stay with automotive a little bit. What are the key unique selling points for Tobii's automotive solutions compared to competitors?
Do you wanna take that, Gunnar?
Yeah, what we can offer is with the horizontal model, with the experience we have, the signals we have and the robustness we have on those signals, that's extremely central also for the use cases in automotive, of course. If you wanna do driver monitoring, you need that your system to work on every person, and you also need it to work with the difficult sunlight, and other type of environmental changes. Coming to that, of course, also is the value of designing a system that is small, that fits into the car, and that is very, very cheap. The cost for automotive will be central, so achieving this value on a small cost as possible is gonna be super central for the automotive player.
With the experience we have and the technology we have, we think we are very well positioned to deliver that. Combining with that, of course, the patent portfolio and the freedom to operate that we can have.
Good. Thank you. How is the project activity developing in automotive applications, and do you still expect design wins in 2022?
Yeah, I think that, you know, again, our big focus has been to make sure that our technology stack is mature. This has been something that we've been working on for a couple of years, and I think that it's actually progressing quite well, and we are engaging with customers.
Thank you. Let me see here. Daniel Djurberg again. The deployment of 5G SA, I don't know what that means, with low-latency edge computing is starting to build in importance for consumer AR uptake.
Yeah, I mean, I think again, 5G has a lot of promise like many other buzzwords in the industry. It actually gives the promise for us on a really interesting concept that we've talked about, which is that when you wanna develop these kinds of super light devices that have very immersive use cases, the question is: Where is the compute going to be? If edge computing takes off, of course, you have the opportunity to not just do this in your house, but you can do this when you're in your car and basically have the compute sit on, you know, a base station or something else. In those kinds of environments, the power of our technology is even more significant.
If we can go and limit the amount of bandwidth that is used on the network because only a little bit of your field of view needs to be delivered in high resolution, this is a great additive benefit in addition to the benefits of foveated rendering. We've talked about some of these concepts in something we call foveated transport. We think increased adoption of 5G, increased availability of edge compute, I think that works very, very well with some of the solutions we have.
Good. Thank you.
You have a question in the audience.
Yep, sure.
Yes. Thanks. To follow up, Daniel from ABG. Ever since the IPO, Tobii Tech has had a target to reach several SEK billion in sales long-term. If we assume Tobii Pro, the former Tobii Pro, to generate SEK 500,000 million roughly now, it seems like the target in 4.5 years' time is more like SEK 1 billion. Is four years' time not the long-term period for Tobii, or has that ambition reduced?
No, I think, again, when we talk about the opportunity in front of us of multi-billion SEK, I think you have to put that into the context of the TAM that we are actually operating under. Again, I think what we have to consider is as the adoption of attention computing increases, we're largely playing in that much larger field. Now, we can argue of, "Hey, what does the future mean?" Right? Is the future next year? Is the future five years from now? I think what we have to demonstrate is sustained top-line growth to show that we are creating those inroads in attention computing, increasing the user adoption. I think as this user adoption manifests itself, I think we'll see accelerated revenue growth in the horizon. Of course, we understand that some of these things are delimited by technology changes. One good one is augmented reality.
We know that that's a huge, huge opportunity, but the barriers for deployment of that technology are not related to eye tracking alone. There's a whole bunch of other technology elements that have to come together. Those could be solved in the next three years. They could be solved in the next five years. That unlocks a tremendous amount of market potential for us. I think our ambition level stays the same. I think our ability, again, to specifically put a year down, that this is three, four, five years, I think is not as important as considering the fact that we have accelerated user adoption and that the market opportunity continues to be quite large.
It sounds like we should assume a similar growth rate even beyond 2025 for quite some time then, I guess.
I would say that you should look at the overall future TAM we're talking about and say that, yes, you know, this is the place that we're playing in.
Thanks. A final question on R&D. In absolute terms, the R&D cash costs and the expenses, they have declined in the last two years, both related to cost initiatives and also to COVID, obviously. How should we think about R&D levels going forward? Is that a risk that you are losing against competition, that you're not speeding up or increasing your R&D, or is that more a sign that you have already won vs other third-party market competitors?
Should I take that?
You can start, yeah.
Okay. Let me start with some of that, because again, I think when you think about how our R&D investments go, first of all, it is still a very significant portion of how much we invest. If you, again, compare to our investment levels, both in terms of overall personnel and R&D vs our direct competitors, I would still say that we are well out in advance. The second part, of course, is as we think about how we spend our R&D, a lot of it is dependent on where we are in a particular product life cycle. There's a significant amount of investment prior to having products ready. We talked about the fact that we now have this platform, the IS5 platform, which launched in 2019, which is how we are going to get adoption into many segments of the PC industry.
These R&D investments will change over time. We have significant investments now in other areas. VR is one of them right now as we look to support miniaturization there. I think our ambition level is going to be pretty consistent. We are going to invest in R&D because it's a core differentiator. We think there's substantial innovation for us to go and drive additional innovation to go and make sure this adoption happens. I think the year-to-year, month-to-month variation may be governed by things like when has products reached critical mass in a certain segment. When do we think the investment makes sense for a different kind of initiative? I would say that you need to think about a more global trend on a longer basis.
Thank you very much.
Do we have any more questions in? Yeah, we have one question up there in the audience.
Thanks. I was curious, can you talk about the integration process for the eye tracking chip? Are you partnering with companies like Cadence and Synopsys so that circuit designers can, you know, build that chip alongside, you know, FPGAs or other processing units?
Jakstad?
Yeah, please.
This Tobii EyeChip, it's a custom design that we have made that is this chip, and we haven't yet integrated the same logic into other chips. We have, of course, deployed our algorithms on a lot of other chips, but we haven't to date integrated that logic into other chips. As Anand said, obviously, with the assets we have, we have the opportunity to drive different types of business models, so it could be an opportunity in the future, of course. Generally, when we have chosen to deploy our algorithms on other chips, that has been from a total cost perspective where our customer already has some silicon in their device, and they're more interested into deploying our algorithms on that silicon rather than adding additional silicon. From that perspective, it hasn't made sense to do that adaption for specific devices.
Thanks.
One last question from the web, Jeff Lager again. Can you talk to the cash burn in 2022 and 2023 before reaching EBIT breakeven?
I will not talk about the cash burn like I say that, but with the balance sheet we have right now, with the solid cash position we have, we see that with the business plan we have now, that is what we need to be able to deliver, continue our business until we reach profitability, and with the profitability comes positive cash flow.
Good. Daniel Djurberg and Mikael Laséen, you have a few questions in here that I think we've touched upon from different angles in earlier questions. If you're not happy with those answers, just give me a call, and we'll try to answer them after this call. With that, I say thank you from my side and-
Yeah. Thank you.
Thank you all. I can finally say we are at a wrap vs kicking you out before we answered questions. Thank you all so much for the time. I know it's been a long day. I hope it was very good for you. Thank you so much.
Thank you.