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Elliptic Labs reported its Q2 2025 earnings with a notable 4.11% rise in stock price, closing at 12.64 USD. The company announced a revenue of NOK 24.6 million, marking a 27% year-over-year decline. According to InvestingPro data, the company maintains strong financial health with an overall score of "GOOD" and analysts expect 34% revenue growth for FY2025. Strategic partnerships and future growth prospects appear to have buoyed investor confidence.
Key Takeaways
- Revenue for Q2 2025 was NOK 24.6 million, a 27% decline from the previous year.
- The stock price saw a 4.11% increase, closing at 12.64 USD.
- A new partnership with Lenovo is expected to drive future growth.
- Positive EBITDA maintained at NOK 1.1 million.
- Strong momentum in smartphone and laptop verticals.
Company Performance
Elliptic Labs experienced a challenging quarter with a 27% drop in revenue compared to Q2 2024. However, the company maintained a positive EBITDA of NOK 1.1 million, suggesting operational efficiency. The decline in revenue contrasts with a 44% increase in total revenues on a trailing 12-month basis, indicating potential for recovery and growth.
Financial Highlights
- Revenue: NOK 24.6 million, down 27% year-over-year
- First six months revenue: NOK 51 million, down 9% from 2024
- EBITDA: NOK 1.1 million, positive
- Cash position: NOK 57 million at quarter-end
- Equity ratio: 91%
Market Reaction
The stock price of Elliptic Labs rose by 4.11%, closing at 12.64 USD, indicating a positive market response. This increase places the stock comfortably within its 52-week range of 8.33 USD to 15.48 USD. InvestingPro analysis suggests the stock is currently undervalued based on its Fair Value calculation, with analysts maintaining a bullish consensus and setting higher price targets. The market’s optimism may be attributed to strategic initiatives and partnerships announced during the earnings call. For deeper insights into valuation metrics and 8 additional ProTips, consider exploring InvestingPro’s comprehensive research report.
Outlook & Guidance
Elliptic Labs remains confident in achieving double-digit revenue growth for 2025. InvestingPro subscribers can access detailed growth forecasts, valuation metrics, and comprehensive financial health scores through the Pro Research Report, available for over 1,400 US equities including Elliptic Labs. The company plans to recognize the majority of new contract revenues, amounting to NOK 55 million, in Q3. The focus will be on replacing hardware sensors, enhancing device interoperability, and developing contextual intelligence.
Executive Commentary
CEO Laila Danielson remarked, "We are building the future of AI sensing, making devices smarter, seamlessly connected and intuitive." CFO Lars Helmei highlighted the scalability of their business model, stating, "One license or 100 million licenses is the same cost base for us."
Risks and Challenges
- Geopolitical risks, particularly in the Chinese market, could impact operations.
- The significant year-over-year revenue decline poses a challenge.
- Operating expenses increased by 9.5%, which could pressure margins.
- The transition from third-party to internal software integration may present short-term challenges.
- Market competition in AI sensing technology is intensifying.
Q&A
During the Q&A session, analysts inquired about the implications of new contracts with Lenovo and potential geopolitical risks. Management confirmed that new Lenovo contracts do not replace existing agreements and emphasized their focus on monitoring geopolitical developments.
Full transcript - Elliptic Laboratories AS (ELABS) Q2 2025:
Laila Danielson, CEO, Elliptic Labs: Good morning and thank you for joining us today. I’m Laila Danielson, the CEO of Elliptic Labs. And joining me as well today is our CFO Lars Helmei. We’re excited to share with you Elliptic Lab result for the 2025. Let’s start off with the highlights.
We are proud to share with you the solid commercial progress we have achieved in the 2025 and the milestones we have reached so far this year. Before the summer, we announced a groundbreaking agreement to deliver our AI Virtual Smart Sensor platform directly into an existing laptop customers proprietary software stack to enable seamless multi device connectivity across their device portfolio. This agreement marked a solid commitment from a global leading PC laptop player, enabling wider and broader deployment of our technology. As part of the new agreement, certain revenues were pushed from Q2 to Q3 and some into Q4 due to a shift in licensing structure. This is only a one time effect.
The agreement significantly strengthened the outlook long term, we have with our of this partnership. And while we didn’t specify any specific laptop models, it enables a more seamless deployment going forward. In fact, earlier this week, and as well as yesterday, we announced two new contracts with the customer covering a series of laptop models in the commercial and consumer segment, also including PC accessories. These new contracts give a combined minimum commitment of 55,000,000 and majority which will be recognized in Q3 in 2025 and contribute towards a significant uptick in the year on year growth in the next quarter. This represents our largest revenue contracts to date and we’re excited to share with the continued progress with this customer going forward.
Due to the deferral of income, the revenue from contracts with customer was muted in Q2 and ended just under million. This is however just a matter of timing. And with basis from our existing and new contracts makes us confident that we are on track for double digit revenue growth for the full year 2025. Okay. So next, our mission stays the same.
It is to build the leading AI software platform for all user experience, making every device smarter, interoperable, and more human and environmentally environmentally friendly. We are building the future of AI sensing, making devices smarter, seamlessly connected and intuitive. With advanced AI, sensor fusion and as we are moving up the software stack, we’re not just improving technology, we’re 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. Alright.
So, looking at the smartphone vertical, we are maintaining the strong deployment momentum from the first quarter of the year. We have launched two zero four smartphone models to date, with 42 smartphone launches announced so far in 2025. ’26 of these models were launched during the first six months of 2025 and six additional models so far in the third quarter. This compares to 66 models for the full year in 2024. And we are well on our way to deliver meaningful growth in deployment.
The continued high number of launches demonstrates the strength of our strategic partnerships with leading global OEMs, including Xiaomi, Vivo, Honor and Transcend. To the right of the screen, you can see some examples of the innovative launches made in 2025. Alright. So, as explained in the highlights, I want to dive a little bit more into these various contracts. We signed an agreement for a multi device connectivity solution with the world’s largest PC and laptop player just before the summer.
So this is Lenovo. And I want to give some color of what this entails. Firstly, the customer previously used a third party software integration app to deliver inter interconnectivity solution. The customer now has integrated this functionality directly into their own software stack. So that integration of new model devices and accessory can be deployed with ease across their entire device portfolio.
Again, this specific contract did not include any laptop models for future launch, but enables a strong fundament for more seamless deployment going forward. This functionality would not be possible without Elliptic Labs AI Virtual Smart Sensor platform. The key driver of this new true interoperability connectivity solution between devices. Our team has worked tirelessly with the customer to deliver this groundbreaking feature. And I am extremely proud of what we have accomplished together.
With our technology at the core of their internal connectivity solution, we’re confident in the strength of our partnership and the potential for a high pace of device rollouts going forward. So this new interconnectivity setup has cemented our position as an essential essential technology provider for the laptop customer. Earlier this week, as I mentioned, we signed two new multi year laptop contracts. The lap with this laptop customer covering both commercial and consumer laptops, as well as PC accessory to be included in both contracts. The contracts contain a mix of AI virtual seamless sensor, as well as a second sensor, the AI virtual human presence sensor.
These agreements have a combined minimum commitment of value for approximately million. The majority of the revenue from these contracts will be mainly recognized in Q3 with some falling into q four. For those who follow us closely, you will know that we normally don’t disclose contract sizes due to confidentiality obligation. In this particular instance, the customer has allowed us to report a minimum commitment due to the change in the license structures. And the impact this had on revenue in this Q2 quarter.
In other words, just to underscore, we will not, going on reporting minimum commitments amount for contracts in the future as a general statement. Alright. So summing up, we are maintaining significant commercial momentum both in terms of pace of model launches and new contract signed. So far in 2025, we have launched on 25 laptop models and 43 smartphone models. Of the top of the 25 laptop models, nine models have been deployed dual sensor configuration, meaning both the AI virtual human presence sensor and the AI virtual seamless sensor.
And we continue to see increased demand for both sensors. As such, we have launched 34 virtual sensor year to date across 25 laptop models compared to 16 virtual sensor for the full year in 2024. So the number of sensor is important as we charge a license fee per device we ship to the end customer. And this is also charged per product, so per virtual sensor. With our current launch pace and outlook going forward, we have set a solid foundation for revenue growth for the full year 2025 and onwards.
With that, I will leave the word to Lars to take you through the financials.
Lars Helmei, CFO, Elliptic Labs: Thank you, Olara. Now let’s move into the financial review for Q2 twenty twenty five. As we continue to building a solid foundation for a durable profitable growth, our goal is to ensure sustainable profitability by combining growth in top line revenue with disciplined cost control. I will walk you through the numbers and trend shaping our financial performance this quarter and the broader outlook for Elliptic Labs. So in Q2 twenty twenty five, revenue from customer came in at NOK24.6 million, making the first six months of the year to just over NOK51 million, it’s down about 9% from the same period of 2024.
As Laila mentioned, the decline in the quarter was driven by deferred laptop revenues from the new laptop license structures from Q2 twenty twenty five into H2 or 2025. We continue to remind you that revenues tend to fluctuate from quarter to quarter due to the timing of these revenues or contracts and new product launches and shipments into the market. With announced laptop contracts containing a minimum commitment of NOK55 million majority of which will be recognized in the third quarter. We are already positioned to deliver strong year on year growth in the third quarter from these contracts alone. This is before taking the smartphone business and other laptop contracts into the consideration.
With that in mind, we are confident in our ability to continue delivering on growth and the company is well positioned to generate meaningful year on year growth for the 2025. Despite the muted revenue in the quarter, we are maintaining a profitable business on a running twelve month basis. Total revenues increased just over 44% trailing the twelve months to Q2 twenty twenty five, a period in which total operating expenses only increased by 9.5%. We maintained a positive EBITDA in the second quarter and with a relatively stable cost base, the company is set to generate a solid profitability during the second half of the year. Looking more thoroughly at Q2 twenty twenty five, we generated revenue from contracted customers of NOK24.6 million, down 27% from last year.
Smartphone contracts are mainly pay as you go above minimum committed volume. With the contribution from other operating income, the quarter ended with a total of revenues of 25,000,000. Operating costs total at NOK23.9 million, compromise of employee benefit expenses at NOK18.3 million, up from NOK17.1 million last year, reflecting an additional three FTEs year on year. It should be noted that employee expenses are typically lower in the second quarter of the year due to holiday pay adjustments in Norway specifically. Other operating expenses remained largely stable at NOK 5,600,000.0, slightly down from NOK 570,000.00 in Q2 twenty twenty four.
In sum, EBITDA remained positive at NOK 1,100,000.0 despite a top line affected by revenue deferral. As always, we remain focused on balancing investment in growth with cost management. Turning to the cash flow, we delivered a negative operating cash flow of NOK 9,300,000.0 in the quarter compared to a positive cash flow of NOK 12,100,000.0 in Q1 twenty twenty five. Key contributors were a loss of NOK 10,100,000.0 before tax, NOK 2,200,000.0 increase in receivables from new contracts and NOK 8,000,000 decrease in payables, including payout of holiday pay and board remuneration. In comparison, we generated NOK 18,500,000.0 from outstanding contracts in the first quarter of the year.
Investments remain relatively stable and are primarily reflecting R and D, supporting our AI virtual smart sensor platform. The financing cash flow reflected repayment of NOK 1,600,000.0 for lease liability and the final repayment for Innovation Norway of NOK 1,000,000 for short term debt and NOK 400,000.0 of interest payments. All of our revenue is invoiced in USD, so exchange rate fluctuation can affect cash flow. In this quarter exchange rate had an adverse effect of about NOK $05,000,000. Our balance sheet remains robust despite a reduced cash position to NOK 57,000,000 at the end of the quarter.
As I just mentioned, other current assets increased by NOK5 million due to increased receivables from new contracts, while non current asset remained relatively flat. We continue to work with our customers to better our payment cycles related to the milestone revenue. Liabilities are down in a quarter, mainly from payout of holiday pay, but also the repayment of Innovation Norway. And other equity ratio is slightly up to 91%. With our current cash position and the outlook from our contract base, we remain well funded to execute on our growth plans, with the financial flexibility required to invest in innovation and new customer deployments.
With that, I will hand the final words back to Laila.
Laila Danielson, CEO, Elliptic Labs: Thank you, Lars. All right. So before we run off, I want to remind you of the direction we are working towards as a company. We have spent decade, a decade building a solid platform. We have developed deep expertise in AI, software, operating system, sensor, application, large language model.
Yes, so basically the whole full software stack. As I’ve said earlier, we separate our journey into three phases. Each building on top of the previous phase. We started out our journey in phase one, replacing hardware sensors with AR Virtual Smart Sensor and building a foundation with our customers. We continue to do so and to expand our position with our customers.
And we’re currently in the second phase, focusing on device interoperability where we’re moving further up the software stack and deliver through device device interoperability. Going forward, we will continue to work our way into the third phase together with our partners and customers to deliver through contextual intelligence on the edge. Finally, let’s revisit our assumption to drive future success. We are focused on maximizing our contract base, strengthening customer relationships, expanding partnerships and increasing AI Virtual Smart Sensor adoption. Our AI Virtual Smart Sensor technology 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 smartphone. Our focus is clear, optimize contracts, increase adoption and scale product deployments per device. From our existing contract base and recent announcement, we can say and we can say that we are confident on achieving a double digit growth rate for 2025. Thank you. Now we will take a quick break to review the questions and we’ll be right back.
Thank you. Welcome back. First, just thank you to the investor gentleman that sent gathered a lot of questions and sent it in beforehand. So I appreciate that. So we’ll we have lots of questions.
Lars Helmei, CFO, Elliptic Labs: Lots of questions. We’ll jump right in?
Laila Danielson, CEO, Elliptic Labs: We’ll jump right in. Yep. So I’ll just start
Lars Helmei, CFO, Elliptic Labs: please start.
Laila Danielson, CEO, Elliptic Labs: Start and then we can sort of. Yep. Lots of questions around the contracts. It’s understandable. Do the new contract from July 11 replace all existing contracts with the customer, HPD, etcetera, etcetera?
And the answer to that is no. This is a restructuring of the frame agreement. So the old contracts will continue as before, and they are not changed. And so all the contracts that are following the announcement of July 11 for the internal software comes under the new framework. And these contracts actually also follow the same revenue pattern.
So basically upfront minimum commit and then sort of pay as you go because it’s a minimum and then when it succeed we get, of course, we will keep getting more revenue. So the July, just to sort of shed maybe a little bit more light here on the call. Yes. Because as I mentioned before, when we send out a press release, we have more restriction on what we can share and not share due to the customer. This is obviously Lenovo Mhmm.
That we’re talking about. And so the for the contract that for July 11 was basically us helping them migrating from a third party software application to their own internal software. Yes. So at least we can we can share that here today. But it’s not something we can broadly share in the in Business Wire and and sort of over OSE.
Alright. Shall I
Lars Helmei, CFO, Elliptic Labs: Just please continue. There’s quite a few questions.
Laila Danielson, CEO, Elliptic Labs: Yeah. So I went there with a new contract July 11, will it be rolled out on all new laptops for that customer? So it’s not on every we haven’t signed to be clear. The two contracts we have signed is
Lars Helmei, CFO, Elliptic Labs: This week.
Laila Danielson, CEO, Elliptic Labs: This week is the is the is the beginning. So that this is not covering their whole portfolio. I can say that
Lars Helmei, CFO, Elliptic Labs: Yeah.
Laila Danielson, CEO, Elliptic Labs: At least. So the but this will, you know, us helping them to migrate over to the internal, I would say app system or app ecosystem that they have. And also this will support they’re now deciding to also support and want to roll out an accessories. We can’t talk about the timing on that. But that’s the purpose of the contract.
So basically, going from an external application to their own internal. So that is the major major difference. Okay. Will will which quarters will be affected by the new structure? So the revenue was pushed from Q2 to majority of it in Q3.
I think we also addressed this in the presentation, but obviously these questions came before we presented.
Lars Helmei, CFO, Elliptic Labs: Yep.
Laila Danielson, CEO, Elliptic Labs: So majority will be in Q3 and the remainder in Q4. And the timing of new potential contracts will not be affected at all by the new structure. Yeah. So should I just or you want to
Lars Helmei, CFO, Elliptic Labs: No. I can just add that this was a, yeah, onetime thing as you mentioned, the migration part like and then, of course, contracts coming after. So it is was a onetime thing. And new contract will potential new contracts will not be affected by this.
Laila Danielson, CEO, Elliptic Labs: Yes. No. So will the new license structure push the midterm revenue target closer or further in the future? It would not really have an impact. This was a short term effect.
Okay. Are you still are you in dialogue with other PC OEMs? When will you sign those contracts? Yes, we are working with other PC OEMs. We cannot comment any further of when contracts and any potential rollout will occur.
But of course, as soon as we have any specifics that we’re able to share, we will do so.
Lars Helmei, CFO, Elliptic Labs: Yes. I close to do the how big do you see the political market risk to and then specifically Chinese customers. Mhmm. And we address this in the report, but we we continue to monitor the situation and and thus far so far. We are we are not directly impacted by it, but, of course, we’re monitoring.
Laila Danielson, CEO, Elliptic Labs: Yeah. Yep. Okay. So another one.
Lars Helmei, CFO, Elliptic Labs: Yeah, please.
Laila Danielson, CEO, Elliptic Labs: Do you pursue long term partnership with other major chip manufacturers than Intel that was announced in May 2025? And do you see such partnership as critical for Elliptic to gain new customers such as other PC OEMs? Okay. So Intel is the largest for now. Yes.
They are the largest
Lars Helmei, CFO, Elliptic Labs: by far largest. Yes.
Laila Danielson, CEO, Elliptic Labs: That work with the PC OEMs. Also AMD, we work with AMD. We have already also in the past launched with laptops that are running the AMD platform. Mhmm. As well as Qualcomm has We a small work with we work with Qualcomm.
Of course, we’ve been working with them for a decade in the in the smartphone market, and it’s basically the same processor. So we work with them. It’s not a problem. It’s the same. And I also can bring up NVIDIA.
NVIDIA has also as public information. They have also been talking about potentialing a processor platform for the PC as well. And we we talk to talk to them as well. So yeah. So we work with the other and this is you have to sort of work with all the chips at the manufacturing to make sure.
And this is also like it’s it’s let’s face it, it’s the the customers are pushing the PC mono I’m sorry, the chipset manufacturer to work with us as well. So this is something we have to do make sure that we can deliver. I can ask this now.
Lars Helmei, CFO, Elliptic Labs: Yes, please.
Laila Danielson, CEO, Elliptic Labs: Is the current cash position sufficient?
Lars Helmei, CFO, Elliptic Labs: Yes, it is.
Laila Danielson, CEO, Elliptic Labs: Okay.
Lars Helmei, CFO, Elliptic Labs: There’s question about expenditures or cost base, I think I addressed it quite clear in the presentation. But the cost base has stayed relatively flat over the years. Past one or two years, 9.5 represent growth last twelve months. So we do not need to add that many people to do the growth we foresee now. We will add we have addressed, I think, every quarter we address it.
We will add some people, but not on a high level. And as we sell more licenses, we do not add cost. One license or a 100,000,000 licenses is the same cost base for us. So it is a very scalable in that respect. And that’s also why we can keeping the cost base flat.
Laila Danielson, CEO, Elliptic Labs: Yeah. I also got a question here about competing technologies. I mean, this is very, very broad. Can you elaborate on competing technologies and companies?
Lars Helmei, CFO, Elliptic Labs: Please do.
Laila Danielson, CEO, Elliptic Labs: Yeah. So I’m just going to focus sort of for the interoperability this device device connection. So we have what we see in the market right now to have a software solution. So just to shed a little bit more light as a reminder and for also for people that are new, what we are doing with some of this device device connection is basically, know, we let’s say if you have a Lenovo laptop with a simple tap tap on the side of the device with either an Apple or a Android Android phone, you can connect the two devices and start moving application pictures, etcetera, between the devices very easily. Or if you’re on a Teams call on the phone and you want to like easily put that over to a laptop, can do so by just tapping on the side of the display and then move that conversation over.
Also, in regards to, for example, if you want to attach any type of accessories, you can just simply tap your headset or your mouse, etcetera, and then it will very very seamlessly connect between the devices. So Can I
Lars Helmei, CFO, Elliptic Labs: just there’s a the
Laila Danielson, CEO, Elliptic Labs: point I that was just gonna say that this this is we are the only one in the market that doing software? We also have a strong patent around that as well.
Lars Helmei, CFO, Elliptic Labs: Yes. That’s great. And just because it’s on the tail end of another question that we have addressed already. But the move, like we did the strategic move with now, does it carry any operational risk when we move from the external third party app to
Laila Danielson, CEO, Elliptic Labs: the It’s actually better.
Lars Helmei, CFO, Elliptic Labs: Yes.
Laila Danielson, CEO, Elliptic Labs: I would say because we get we get a greater stickiness with the customer when we go in and look at their own technology solution, they will also, without sharing too much information, we know also that we are talking to them and other customer about supporting other type of sort of general standard applications out in the market. But all laptop providers have their own sort of internal proprietary software. And to get in the middle of that and get, you know, and really have a close integration, that creates a very good stickiness because they get very dependent on us for this broader rollout when they’re going to deploy this I call it like smart share or an easy way to seamless create device to device interoperability. So this is I I would say this I’m very pleased that they moved away from that third app. Mhmm.
Honestly, say that was from Intel, the Unison. I’m very happy that they moved over to their own internal Yeah. That they did that. So we’re we’re happy. Okay.
I think we have covered most of the
Lars Helmei, CFO, Elliptic Labs: Yep.
Laila Danielson, CEO, Elliptic Labs: Most of the question. Alright. So Thank you. Thank you very much, and have a good day.
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