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Elliptic Labs (OB:ELABS) presented its Q2 2025 financial results on August 28, 2025, revealing a temporary revenue decline offset by significant new contracts that position the company for stronger performance in the second half of the year. The stock has responded positively, rising 4.11% to NOK 12.16 following the presentation.
Quarterly Performance Highlights
Elliptic Labs reported Q2 2025 revenue from contracts with customers of NOK 24.6 million, representing a 27% year-over-year decline from NOK 33.9 million in Q2 2024. Despite this decrease, the company maintained positive EBITDA of NOK 1.1 million, though significantly lower than the NOK 11.4 million reported in the same quarter last year.
The company attributed the revenue decline to a new laptop license structure that deferred revenue recognition into Q3 2025. Despite the quarterly dip, management expressed confidence in achieving double-digit growth for the full year 2025, supported by recently signed contracts.
As shown in the following quarterly revenue chart, the company has demonstrated consistent growth over recent years despite the Q2 setback:
Elliptic Labs continues to expand its product deployment, with 25 laptop and 43 smartphone models launched so far in 2025. The company has now deployed its technology on over 500 million devices globally, with a cumulative total of 205 smartphones and 58 laptop models launched since 2016.
The following chart illustrates the accelerating pace of product launches across both smartphones and laptops:
Strategic Initiatives
Elliptic Labs announced two significant developments that strengthen its market position. First, the company signed an agreement with an existing laptop customer to power their internal multi-device connectivity solution. This integration directly into the customer’s software stack streamlines deployment across their device portfolio and eliminates the need for third-party software integration.
Second, the company secured two major multi-year agreements with an existing laptop customer covering commercial laptops, consumer laptops, and PC accessories. These contracts include a minimum committed value of approximately NOK 55 million, with the majority to be recognized in Q3 2025 and the remainder in Q4 2025.
CEO Laila Danielsen emphasized the strategic importance of these agreements: "We are establishing our position in the AI PC market and developing our footprint in smartphones."
The company’s AI Virtual Smart Sensor Platform continues to gain traction in the smartphone market, with rapid deployment across multiple manufacturers. The following chart demonstrates Elliptic Labs’ growing smartphone presence:
Detailed Financial Analysis
Despite the revenue decline, Elliptic Labs maintained financial discipline with total operating costs of NOK 23.9 million in Q2 2025. The company reported a pre-tax loss of NOK 10.1 million compared to a profit of NOK 6.2 million in Q2 2024, primarily due to lower revenue and negative net financials of NOK 5.2 million.
The complete profit and loss statement reveals the financial impact of the revenue deferral:
Cash flow was negative in the quarter, with operating cash flow at NOK -9.3 million compared to positive NOK 12.1 million in Q1 2025. This represents a significant shift from the positive cash flow reported in the previous quarter. The cash position decreased to NOK 57.0 million from NOK 76.8 million at the end of Q1 2025.
The following chart illustrates the cash flow components:
Despite these short-term challenges, Elliptic Labs maintains a strong balance sheet with an equity ratio of 91%, slightly improved from 90% in the previous quarter. The company has also completed repayment of its loan from Innovation Norway, reducing long-term liabilities.
Forward-Looking Statements
Elliptic Labs outlined an ambitious growth strategy centered on capitalizing on market momentum in the AI PC sector. The company presented a mid-term revenue target of NOK 500 million with an EBITDA margin exceeding 50%.
The strategy focuses on four key drivers:
1. Fully monetizing existing contracts as end-customer sales grow
2. Expanding positions with existing customers through volume commitments
3. Launching multiple models with more customers, particularly in laptops
4. Adding more AI Virtual Smart Sensors per device to increase value
The company’s strategic roadmap is illustrated in the following slide:
Elliptic Labs is also developing its AI platform to deliver more value across three segments: replacing hardware sensors, enabling device interoperability, and powering contextually aware AI agents. This diversification strategy aims to increase the company’s footprint in both consumer and commercial markets.
Looking ahead to the remainder of 2025, management expects strong growth in the second half of the year, primarily driven by the recognition of the NOK 55 million in contracted revenue from recent laptop deals. The company’s Q3 2025 report is scheduled for release on November 27, 2025.
While the Q2 results show a temporary setback in revenue growth compared to the 20% year-over-year increase reported in Q1 2025, the new contracts and strategic positioning suggest Elliptic Labs is on track to achieve its growth targets for the full year, supporting the positive market reaction to the presentation.
Full presentation:
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