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Elliptic Labs (NASDAQ: ELLI) reported a remarkable financial performance for the fourth quarter of 2024, showcasing a 416% year-over-year increase in revenue. The company’s stock surged 10.37% in pre-market trading, reflecting investor optimism. According to InvestingPro data, the company maintains a strong financial position with more cash than debt on its balance sheet and a healthy current ratio of 8.41x. Despite a significant rise in operating expenses, the company maintained a positive cash flow and expanded its product offerings, including new AI-driven solutions.
Key Takeaways
- Q4 2024 revenue climbed 416% year-over-year to NOK 47.6 million.
- Full-year 2024 revenue increased by 93% compared to 2023.
- The stock price rose by 10.37% in pre-market trading.
- Operating expenses grew modestly by 4.8% despite revenue growth.
- New product launches include AI virtual sensors and Lenovo Smart Share.
Company Performance
Elliptic Labs demonstrated robust growth in 2024, with total revenue reaching NOK 131.9 million, marking a 93% increase from the previous year. This performance was driven by a significant rise in demand for AI virtual smart sensors, which have been integrated into a wide range of devices, including smartphones and laptops. The company also expanded its market reach by securing new contracts and launching innovative products.
Financial Highlights
- Revenue: NOK 47.6 million in Q4 2024, a 416% increase year-over-year.
- EBITDA: NOK 25.1 million, representing an 18.9% margin.
- Operating cash flow: NOK 13.6 million in Q4.
- Cash balance: NOK 76.4 million, up by NOK 9.3 million from Q3.
Outlook & Guidance
Looking ahead, Elliptic Labs has identified laptops as a primary growth vertical and plans to continue expanding its AI virtual smart sensor platform. The company aims to maximize its contract base and strengthen partnerships with major OEMs. Future projections indicate a potential revenue of USD 22.42 million for FY2025, emphasizing continued growth and innovation in device intelligence. Analysts tracked by InvestingPro maintain a positive outlook, anticipating continued sales growth in the current year, despite the company currently trading at a high revenue multiple.
Executive Commentary
CEO Leila Danielson highlighted the company’s impact, stating, "Today, over half a billion devices are using our AI platform to make them greener, smarter, and more user-friendly." CFO Lars Holme emphasized the business model’s efficiency, noting, "Our business model not only supports rapid growth, but also ensures that each incremental revenue dollar contributes significantly to our bottom line."
Risks and Challenges
- Supply chain disruptions could impact production and delivery timelines.
- Increased competition in AI-driven device markets may pressure margins.
- Dependence on OEM partnerships for growth and expansion.
- Potential regulatory changes affecting technology and data privacy.
Elliptic Labs continues to leverage its unique software-based sensor platform, positioning itself as a cost-effective alternative to traditional hardware solutions. With strong relationships with major OEMs and a focus on innovation, the company is well-positioned for future growth, despite potential challenges in the competitive landscape. For deeper insights into Elliptic Labs’ financial health, valuation metrics, and growth potential, investors can access comprehensive analysis and 6 additional exclusive ProTips through InvestingPro, which includes detailed research reports covering over 1,400 US equities.
Full transcript - Elliptic Laboratories AS (ELABS) Q4 2024:
Leila Danielson, CEO, Elliptic Labs: Good morning, and thank you for joining us today. I’m Leila Danielson, the CEO of Elliptic Labs. Joining me is our CFO, Lars Holme. Let’s jump into the presentation. We are proud to share our outstanding results for q four and the full year 2024, a year of remarkable growth and profitability.
We now nearly doubled our revenue, delivered our strongest quarter yet and set the stage for even a greater innovation ahead. We ended the full year 2024 with revenue reaching almost NOK 132,000,000 and EBITDA just over NOK 25,000,000. This gives an EBITDA margin of just under 19%. Our revenues were driven by high launch activity in the in the market with 66 smartphones and 15 laptops being launched during the year. Q four was our best quarter yet with revenue growing over five times to nearly NOK 48,000,000 and a strong 34.5% EBITDA margin.
And note, cash flowed improved by over NOK 9,000,000, reaching more than NOK $7,576,000,000. As it says to the left of the screen, our numbers tell a clear story. We are building the future of AI sensing, making devices smarter, seamless seamlessly connected, and intuitive with advanced AI, sensor fusion. And as we’re moving up the software stack, we’re not just improving technology, We are redefining how it interacts with the world. Today, over half a billion devices are using our AI platform to make them greener, smarter, and more user friendly.
Starting off, looking at our progress in the smartphone vertical, we have seen significant progress during the last year. We have launched 66 smartphone models to date, 66 of which will launch in 2024 and another four models during the beginning of 2025. As many of you know, our journey started by building a solid platform in the smartphone segment where we, since our inception in 2016, have built an impressive portfolio with some of the largest OEMs across the world. We currently see a solid growth in our smartphone deployment based on our leading market and ecosystem position. Rapid pace of launches are translated into significant revenue growth for smartphones.
We launched three times as many smartphone in 2023 compared to 2024, and our smartphone revenues grew by an impressive 144% for the full year. We are seeing high demand for our AI virtual proximity sensor, driven by the market requirement for AI driven efficiency. As many of you are aware, our revenues are based on how many smartphones our clients shipped to the market. The global number of smartphone shipments grew by 7% during 02/2024. A promising development, however, our clients capture meaningful market share.
Elliptic Labs customers had an average smartphone volume growth of 13%, almost twice the overall market growth. We are proud that our customers continue to select our AI driven technology to drive new functionalities for more models and our ability to grow our presence in the market. We are continuing to expand our presence in the laptop market as a key growth vertical. Elliptic Labs increased laptop revenues by nearly 50% in 2024, reaching approximately 54,000,000 for the full year. Our expanding laptop portfolio has established a strong foundation for future growth.
Laptop revenues typically follow a three year cycle, starting slowly, peaking during mass adoption, and then declining as newer model emerge. However, we are only in the beginning to unlock the full potential of this opportunity. We continue to deploy human presence detection sensors and our AI virtual tap sensor across an increasing number of models. Our clients recognize the groundbreaking functionalities we provide. Lenovo Smart Share, basically, the Apple (NASDAQ:AAPL) airdrop killer, is a prime example of how we are shaping the future.
An important point is that we recently started shipping multiple AI products per device. And this is a key driver for future growth as we move forward. This strategic shift is a key driver for sustained growth moving forward. As I said, but adding more products per device on more models, we’re enabling strong growth. We started out by announcing two AR virtual smart sensor on one model in the third quarter and continued rollout of multiple sensors per laptop in the start of twenty twenty five.
Elliptic Labs is ideally positioned to drive the future growth of AI capable PCs, leveraging our AI driven strategic vision and proven ability to deliver innovative solutions at scale. The PC market is undergoing a significant transformation with manufacturers increasingly integrating AI driven features to enhance user experience, enable seamless device interoperability, and provide greater contextual intelligence. Elliptic Labs AI virtual smart sensor platform is uniquely suited to meet these demands, offering OEMs a cost effective and scalable software solution that replaces traditional physical hardware sensors while delivering advanced functionality. As demand for smarter AI enabled PC accelerates, driven by the hybrid work, growing connectivity needs, and consumer expectation for intuitive intelligent devices, Elliptic Labs stands as a key enabler of this transformation. With a strong foundation in the tiered AI, a proven track record with global OEMs and a focus on delivering high value software solution, our company is well positioned to capitalize on the rapid expansion of the AI capable PC market.
We continue to scale rapidly, making model launches a key driver of our revenue growth. In 2024, we launched 66 smartphones and 15 laptop models, bringing the total to 166 smartphones and 41 laptops. 40% of all shipped products to date were launched in 2024, highlighting strong growth. As we move in to 2025, the year has started with strong momentum. By the February, we shipped on eight laptop models, already already surpassing half of the total laptop launches from 2024.
Two of these models feature two AR virtual smart sensor, reinforcing our innovation leadership. Additionally, we have introduced four smartphone models in 2025 so far, welcomed even a new smartphone customer, and secured two smartphone expansion license contracts covering twenty and ten smartphone models, respectively. Overall, we have built a robust foundation to sustain our growth trajectory throughout the year. And with that, I will hand over to Lars for financial insight.
Lars Holme, CFO, Elliptic Labs: Thank you, Leila. In FY 2024, our revenue from customer reached NOK 131,900,000.0, up 93% from NOK 68,300,000.0 in FY 2023. In Q4 twenty twenty four alone, we achieved record quarterly revenue of NOK 47,600,000.0, reflecting a 416% year over year increase and underscoring the accelerated pace of our business. This increase is a direct result of our strengthened OEM relationships and rapid market expansion in both smartphone and laptops. We have also turned our EBITDA positive at NOK 21 point NOK 25,100,000.0, which translate to an EBITDA margin of about 18% for the year.
This reflects our ability to grow revenue at scale while maintaining a lean cost structure. Our journey toward profitability demonstrates the power of our scalable AR virtual smart sensor platform. Even as our revenue nearly doubled over the past year, our operating expenses increased by only 4.8%, a clear indicator of our operational leverage. As we scale, we do not need to add manpower or other operating expenses at the same pace as our revenue growth. The 24 results validate this efficiency.
Our business model not only supports rapid growth, but also ensures that each incremental revenue dollar contributes significantly to our bottom line. In Q4 ’twenty four, we set new records on multiple fronts. Revenue from contracts with customers climbed to our NOK 47,600,000.0, our highest quarterly figure to date, marking a 416% increase over Q4 twenty twenty three numbers. This surge reflects both milestone based revenue from key smartphone contracts and growing shipments in the smartphone and PC segments. On the cost side, our total operating expenses ended at NOK 31,400,000.0 versus NOK 28,000,000 in Q4 twenty twenty three, driven primarily by employee benefit expenses that increased from NOK 21,800,000.0 to NOK 25,600,000.0.
This uptick stems from three new hires year over year, salary adjustments and the full year effect of the 23 hires the twenty twenty three hires in total. Meanwhile, other operating expenses were stable at 5,900,000.0, down slightly from NOK 6,200,000.0 same period last year, reflecting disciplined spending. Putting it all together, our EBITDA reached NOK 16,500,000.0, yielding a margin of 34.5% for the quarter. We’re capturing revenue while maintaining cost efficiency, underscoring the robust strength of our revenue engine and our disciplined approach to managing expenses. Our focus on cash conversion has paid off.
In Q4 twenty twenty four, our operating cash flow turned positive at SEK 13,600,000.0, an improvement over previous quarters. This jump is a direct result of both increased and collected revenues from previous quarters and disciplined cost control. In parallel, our cash balance grew by SEUR9.3 million from Q3 to Q4, reaching SEK 76,400,000.0 at quarter end. Moreover, already entered contracts give us confidence in our funding of our current business plan. We are also improving payment terms in new agreements already resulting in reduced days outstanding compared to past levels.
While milestone revenue can cause fluctuations, improved terms will increasingly lighten our working capital burden over time. It should also be noted that we have repaid not CHF 4,000,000 in interest bearing debt during 2024, leaving us only with CHF 2,000,000 in short term debt at the end of the year. Our working capital ratio current assets over current liabilities is at 7.8 and we are highly solid and able to pay our obligations. Our balance sheet is robust. Current assets has grown significantly while current liabilities remain low.
Cash position, as mentioned, improved to NOK 76,400,000.0, 9 point 3 million increase from Q3 ’twenty four. Current assets reflect 14,000,000 increase in trade receivables and CHF 5,900,000.0 reduction of other receivables. Increasing trade receivables is connected to our increase in revenue in Q4 twenty twenty four. With an equity ratio of approximately 90% and a strong cash position, we are well funded to pursue our growth initiatives. This financial strength enables us to invest in further in R and D, expand our market reach and continue to build on our momentum.
And with that, I thank you and I will leave the stage for Leila Danels. Thank you.
Leila Danielson, CEO, Elliptic Labs: Thank you, Lars. So to summarize, we are achieving substantial growth across both smartphones and laptops. The number of launches is accelerating, and we are successfully converting our commercial progress into meaningful revenue expansion. Our revenue trajectory is rising sharply. And as and as illustrated in a chart to the right, our growth journey is just only beginning to take off.
Laptops will be our primary growth vertical moving forward. We are now reaping the rewards of our efforts since introducing our AI virtual human presence sensor with our first laptop in 2022, expanding into device device connectivity by the end of twenty twenty three and now scaling with multiple AI virtual smart sensor per device. We are confident in our path ahead and look forward to sharing this exciting journey with you in the coming quarters and years. And finally, let’s revisit our assumption to drive future success. We are focused on maximizing our contract base, strengthening customer relationship, expanding partnerships, and increasing AI virtual smart sensor adoption.
Our AI virtual smart sensor platform is rapidly expanding across industry, improving device intelligence and user experience. We are working closely with OEMs to integrate AI virtual smart sensor into more devices, including laptops and smartphones. Our focus is clear, optimize contracts, increase adoption, and scale product deployments per device. By driving continuous innovation, we enhance device capabilities and create create more value for our customers. With strong momentum and growing market presence, we are well positioned to drive future growth in AI powered capabilities.
Thank you. And now we will take a quick break to review the questions that have been sent in. Thank you. You you Welcome back. And first, I want to start by thanking the investor that submitted some questions before and appreciate that.
Thank you. So we’ll dive into the questions here.
Lars Holme, CFO, Elliptic Labs: Yep.
Leila Danielson, CEO, Elliptic Labs: I’ll just start.
Lars Holme, CFO, Elliptic Labs: You can start.
Leila Danielson, CEO, Elliptic Labs: We have a good list here. First question about laptops. How many laptops have you launched on in 2025? We officially launched on two laptops, but we shipped, as you probably saw from the presentation, an additional six. So eight in total are new laptops in 2025.
Mhmm. And this is, sort of back to we when we are launching a laptop officially, we have to follow the guidance and the policy of the the customer. So here is an example where we indeed shipped on eight laptops, but we were only permitted to announce two. And we can’t really comment beyond that because that is part of, the Novos strategy. Mhmm.
Okay. Jumping to next. Last Q4, you stated that you expect launch of a second PCOM in second half of twenty twenty four. Why didn’t it happen? And do you expect to launch on more on more laptop OEMs in 2025?
And so this is, yeah, it is we did I mean, we did we were hoping for that. But once again, this is back to the customer’s overall strategy. And so, you know, we are still continuing working with several OEMs, and I think that’s the only comment we have about that. And then once again, we are up this up to the customer’s overall strategy when they’re planning to launch or not. Obviously, the it’s been, we we see that for sure the the PC market is stabilizing, but for when we look at some of the bigger PC OEMs, there’s been a lot of reorg and so forth.
So but now we see things are stabilizing.
Lars Holme, CFO, Elliptic Labs: Yes.
Leila Danielson, CEO, Elliptic Labs: Okay. So another question here about more products. Yep. Is the contract announced in q three, November ’11 ’20 ’20 ’4, thank you for being specific, with Lenovo for the products, HPE tap sensor and accessory sensor. So just for clarification, the accessory sensor is a virtual test sensor.
We don’t have an accessories sensor. But oh, but,
Lars Holme, CFO, Elliptic Labs: good but
Leila Danielson, CEO, Elliptic Labs: we understand the question. It’s good good phrasing. So, yes, the contract is with Lenovo. Once again, we were not allowed to precise say use the name Lenovo, includes the AI virtual signal sensor for laptops and accessories. So that’s correct.
More questions about products. Would all existing accessory products be able to use Allop’s accessory sensor? To clarify once again, this is the AI virtual tap sensor that is also being used for accessory, or would laptop OEMs bring special accessory products for the market for this function? So in general in general, our AR versus smart sensor platform can be used for all today’s accessory. So, you know, our goal is when we’re making these type of capability is that you don’t have to add on special hardware or anything, make any changes to the design or anything else to be able to use our technology.
We’re % software. We wanna make sure that we can we can work everywhere. So no no special requirements needed, or custom accessory. So I’ll jump. I mean, there’s a bunch of we’re we’re coming to cash flow.
How is this a bit of a finer question too. How is accessory sensor price level compared to human presence or AR virtual, presence sensor? Same level on for each accessory product. So we I’m not gonna dive into all the different details. But on high level, the price structure for for the accessory sensor is basically competitive with the human presence sensor.
And obviously, as we have in the human presence sensor, it varies based on volume commitments and integration depth. Another question. In theory, can a laptop already launched to the market be updated with other AI virtual smart sensor, and is this realistic? So yet again, basically, all laptops can receive an update to, you know, enable our functionality. Do I expect that this would happen?
No. I’d we do expect. And what we’re seeing, particularly when we are looking here, if I go back and I look at Lenovo story, we started out a few years ago with one sensor, one virtual sensor on one model. Year to date, we are at 41 Mhmm. Models and with several models with multiple sensors.
They’re all launched in new products. Yeah. This is what, I expect Yeah. We expect. Can there be a possibility?
Lars Holme, CFO, Elliptic Labs: Sure.
Leila Danielson, CEO, Elliptic Labs: Yes. But, you know, I think, it fair to say that a customer would like to deliver new innovation on new products to sell more new products. Okay?
Lars Holme, CFO, Elliptic Labs: Okay. I actually got a few few of those questions on new products for the smartphone, so it’s good.
Leila Danielson, CEO, Elliptic Labs: Okay. Alright. Well, yeah, we will answer that one. No problem. Does Ella Labs or Elliptic Labs have a focus on new products for the smartphone vertical?
And yes, we do. We continue to invest in new products for the smartphone market as well. And this is, you know, looking at the set of use cases and leveraging all the fundamentals of our AI virtual smart sensor platform to expand on application beyond traditional virtual proximity sensing. So the the proximity detection that, basically, when you are on a phone call, the screen is on, take it up to the air, screen turns off, take it away, it turns on again. So we’re looking also at capabilities beyond that.
And then, we get another questions about Wi Fi. Okay. The new Wi Fi standard is said to be more precise, which showcase and claiming Wi Fi can Wi Fi sensing can do much of the same as Elliptic Labs, a virtual, presence sensor. Is Wi Fi sensing a relative competitor to Elliptic Labs? So to be firm on that one, no.
And I’ll elaborate a little bit. Well, Wi Fi sensing has approved. Does it offer the same precision level as as, you know, this the capability that we are delivering for the virtual human presence answer? It doesn’t. And let me also just underscore this and be crystal clear.
How when we are making our technology for human presence sensor. There’s about 30 different components and sensors on a laptop that we can leverage, including, if we wanted to, Wi Fi. However, we have looked at that ourself because we could easily just put that put pull that information into our virtual smart sensor platform and use it as part of our human presence sensor. The capability the underlying capability for Wi Fi is not good enough. And it was a comment here about, you know, Intel (NASDAQ:INTC).
And also, you know, with our customer, we get feedback that Wi Fi is not good enough, so they told us to not even spend time on it. It. And and we see that also that Intel is not spending any type of resources on Wi Fi. So note to that question. But good question, though.
To your more questions about product. Sorry. So to your knowledge, are there any software competitors for human presence detection out there? So no, not to our knowledge. And in general, our customer would have brought that up.
Yep. For sure. And we’re doing more than just human presence sensing. I mean, we’re moving up to softer stack, but Let me see. Is there any price pressure on the on the human press all about human presence sensor?
Yeah. When we talk about the virtual tap sensors, it’s way more sexy. Is there any price pressure on the detection sensor from legacy hardware sensor or new disruptive competitors? So, of course, traditional hardware sensors still exist and with higher cost, integration complexity. So, obviously, our technology is extremely scalable and very cost efficient and so have a strong competitive advantage.
And then on top of that, what we have a lot of focus on is moving up the software stack that we did here last year, launching with Lenovo on the AI virtual seamless answer or Tap2Connect. And we continue. Just wanna mention this to a tremendous expertise we have internally around machine learning and AI. You know, we are moving up to software stack and and and working on new capability. Oh, and talking about that, has has all the focus on generative AI gotten in the way of launching PCB on Lenovo?
Are you still confident of further rollout? So I mean, we’ve gone from one to one to 41 models. And also let me just reiterate that this. Last year, we launched with 15 with Lenovo alone. This year, thus far, we are with Lenovo.
We’re only in February here on eight already.
Lars Holme, CFO, Elliptic Labs: Yep.
Leila Danielson, CEO, Elliptic Labs: And I am confident that we will continue to to roll, to roll out and, you know, with Lenovo. And also, as we said, we are working with other OEMs as well. Okay. Here we go.
Lars Holme, CFO, Elliptic Labs: Okay. Thank you.
Leila Danielson, CEO, Elliptic Labs: Okay. Are you 100% comfortable with the cash runway to cash positive? Are there any requirements for OEM customer regarding minimum cash holdings?
Lars Holme, CFO, Elliptic Labs: Yeah. I was just Mark, yes. Thank you. Okay. So the last one first.
Our OEM partners does not impose specific minimum cash requirements, though we always prioritize financial stability, of course. Yeah, we are confident in our cash runway to reach profitability. Our solid cash position basically and combined with already entered agreements, gives us confidence in funding our current business plan. And we also, as we mentioned last quarter and we also reiterated, improved payment terms of new entered into new contracts is reducing data outstanding compared to past levels, while milestone revenue might light cause fluctuation, but that’s short term and temporary. And over time, it will increasingly lighten our working capital.
I also have received some questions about net working capital levels, and we don’t give specific guidance on this. But based on the current momentum, we expect a positive trend. So in both in the cash flow and the net working capital and for all the reasons I all mentioned. And again, there might be fluctuations based on milestone revenue, but we believe I would say the combined factors that we improved over contracts, more license more models in the market that that in meaning increased license revenue, will continue to drive our favorable cash conversion cycle for us
Leila Danielson, CEO, Elliptic Labs: and, of course, improve working capital as part
Lars Holme, CFO, Elliptic Labs: of this. Mhmm.
Leila Danielson, CEO, Elliptic Labs: Perfect. So we know our customers. They pay in time. Yeah. We’re reducing the payment terms.
Lars Holme, CFO, Elliptic Labs: Yeah.
Leila Danielson, CEO, Elliptic Labs: And we have more shipments. Yeah.
Lars Holme, CFO, Elliptic Labs: That’s correct.
Leila Danielson, CEO, Elliptic Labs: Yeah. So Yeah. Overall, looks good. You will come to build
Lars Holme, CFO, Elliptic Labs: Yeah. And there’s no overdue outstanding receivables either.
Leila Danielson, CEO, Elliptic Labs: So Okay. Good. So we got another
Lars Holme, CFO, Elliptic Labs: Yeah. Smartphone.
Leila Danielson, CEO, Elliptic Labs: Yeah. As you are charging a license fee per smartphone Unisole, and I think they’re probably referring to this new chart that we we shared here.
Lars Holme, CFO, Elliptic Labs: Yeah.
Leila Danielson, CEO, Elliptic Labs: How do you see the growth for your smartphone customers in China? So last year, which was quite pleasing to see, was that the overall smartphone market grew 7%. Mhmm. However, our customer base in the smartphone market, Huawei, Huawei, Weibo (NASDAQ:WB), Honor, etcetera, grew by 13%.
Lars Holme, CFO, Elliptic Labs: Yes.
Leila Danielson, CEO, Elliptic Labs: And this year, in mid January, the Chinese government announced that they would do, subsidized smartphone products under, to be exact, $818 Mhmm. With 15% subsidization. So this, I think is one customers. Yeah. So this is, obviously, we go in and we get a 15% discount over Apple and Samsung (KS:005930) products.
Yeah. And also this would stimulate consumers to buy more. So obviously, we can’t view and look into it completely in the future, but we expect this to stimulate growth for our smartphone customers in China.
Lars Holme, CFO, Elliptic Labs: I just got a question about lifetime life expectancy of smartphones versus laptops. So in general, laptop has a longer lifetime than a smartphone. Yeah. Yeah. Longer lifetime than smartphones.
But we smartphone and on the trend, it’s also
Leila Danielson, CEO, Elliptic Labs: I think no. Sorry. I think I said Huawei. I meant Honor.
Lars Holme, CFO, Elliptic Labs: Sorry.
Leila Danielson, CEO, Elliptic Labs: Yeah. Honor.
Lars Holme, CFO, Elliptic Labs: Good. Good. Good.
Leila Danielson, CEO, Elliptic Labs: Yeah. Good.
Lars Holme, CFO, Elliptic Labs: Yeah. But in general, smartphones have a shorter lifespan than a than a PC. And you probably know this from your personal life as well, when you keep your PCs longer. But the trend is, of course, it’s, yeah, somewhat fewer SKUs, basically, but the volume is increasing.
Leila Danielson, CEO, Elliptic Labs: Yeah. Absolutely. And I think do you have any more questions here? No. No?
I think we
Lars Holme, CFO, Elliptic Labs: have covered them all.
Leila Danielson, CEO, Elliptic Labs: Okay. Very good. Thank you so much, and have a good day. Take care.
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