Hello, welcome to our second quarter presentation. I'm Øyvind, the CEO, we also have our CFO, Jeremy, presenting today. Please send your questions in the chat, there is about a 20 seconds delay, we can take those at the end. I just want to remind people about the purpose of Airthings, which is to empower the world to breathe better. Airthings is all about creating healthy indoor environments to reduce energy consumptions of building and to make existing buildings smarter and more sustainable with advanced analytics. Air has much bigger impact on energy consumption, on our health and well-being than we think. Airthings has been a fast-growing business over many years, as we said in the last update, we expected limited growth this first half of 2023. However, we see a stronger pipeline of projects and more positive outlook for the second half. We're continuing to sell down inventories and converting it to cash. We are reducing our OpEx. We are improving our gross profit margins. These are some of the results from our new strategy that we started to talk about during the last quarter. We have worked intensely on executing on this new strategy. For the consumer segment, we are investing more in our direct channel to reduce. We are reducing the number of retailers and really working more intensely with a few successful ones. In Airthings for Business, we are reducing the number of partners and spending more of our commercial efforts on the end clients. It takes time for the changes of our refined strategy to take effect, we are proud to present some of the first results in this update. Our second quarter ended at $7.5 million, which is up 9% year-over-year. The second quarter is normally our weakest quarter of the year due to seasonality effects. We had 14% growth in the consumer segment, despite a very tough consumer market these days. Airthings for Business was flattish in the second quarter, where we had strong growth in the US, but weak results in Europe this quarter. We have improved our gross profit margins this quarter, and improved by four points year-over-year, and six points quarter-over-quarter to 62%. We are guiding our third quarter this year with a revenue window of $9 million-$12 million. Some of the highlights from the second quarter is that we had the 14% year-over-year growth in consumer revenue, despite a very tough market. We have significant improvement in the gross profit margin, both year-over-year and quarter-over-quarter. We launched a space utilization tool in Airthings for Business, which have got us a lot of attention in the commercial real estate space. I'll talk a little bit more about that later. Our relationship with Home Depot in North America is strong. We are working strategically together with Home Depot. Are now expanding the portfolio to also include the Wave Radon product. We have several products with at Home Depot. Now they're adding the Wave Radon as well. We also talked a few weeks ago that we won this project in California with about 5,000 devices. This project is only for 15 schools, there are thousands of schools in California, and this can be a very interesting opportunity in the coming months and quarters. In general, we see more regulatory tailwinds, I will talk more about some of the specific important ones in a later slide today. As we talked about at the last update, we have changed our strategy to be a lot more focused. We are getting a more optimized operating model at Airthings. We are getting closer to our end customers, both in the consumer segment and in Airthings for Business. We are more focused on our direct-to-consumer channels and or in e-commerce in general, and less on retail. We are focusing a lot on improving our unit economics, and we see that this shift in strategy results in improved gross profit margins and also OpEx reductions. We see now that we have 10% reduction in operating expenses, both year-over-year and quarter-over-quarter. Overall, we still see a challenging market. We see that deals takes time to close and there is risk, but we also see a more positive outlook for the second half of this year. We will provide an update by the segments. In Consumer, where we will be your air coach. We'll also present Airthings for Business, where we will be breathing life into buildings. The Professional Home Inspector segment will present as well. In the Consumer segment, we had revenues of $5 million, which is up 14% year-over-year, and this is typically our slowest quarter of the year for consumer. The team has delivered good growth despite a very tough market. Also a much stronger gross profit margin of 58%, which is actually up 9 points from the first quarter. The focus on our own webshop, airthings.com, is showing early results, with year-to-date growth of more than 70%, and this channel has naturally much higher gross profit margin than other channels. We're also further deepening our relationship with some of our key partners, such as Home Depot and Amazon. Consumer device registrations continues to grow year-over-year. We see that the end demand of our products is continuing to grow. In the second quarter, it was up 28% year-over-year, and we believe this also is gonna help us to have a strong second half. In Airthings for Business, we had a flattish revenue with $2 million for the second quarter. We have strong growth in North America, but the second quarter was weak in Europe. Gross profit margins is strong at 67%. We are working in Airthings for Business, we're doing a shift in the way we're doing business, it's not about hunting new partners, but it's more expanding our focus, working with end clients on really key projects, and this shift has created a bit of delay in revenue now for the second quarter. We believe that the second half is gonna be much stronger. Several of the rollouts we've been working on are pushed out in time, as still customers and clients are cautious in the current macro environment. We really believe the long-term growth for Airthings for Business and the opportunity we have is very strong. I'll dig a bit deeper into Airthings for Business. We have devices in the field grew by 54% year-over-year in the second quarter, and our annual recurring revenues in Airthings for Business grew by 46% year-over-year. Looking at this case study we have with California schools, we have been working with schools in California for a long time. Finally, we're seeing some larger rollouts, now with 15 schools and 5,000 devices. This says something about the opportunity. It's a very large opportunity, as there are thousands of schools just in California. We are also seeing traction at school districts in other states of U.S. These opportunities are not gonna be converted into projects, all of them, very short term. Schools and school districts in the U.S. have many competing priorities. This is a long-term opportunity, where we're gonna see many more rollouts with schools. Looking at some of the regulatory agendas happening. There are many regulations that are working in our favor, both in the U.S. and also in Europe. We have the CalSHAPE, which is the funding that schools in California get to utilize air quality monitors, but there are several states that will require air quality monitoring in schools in the U.S. CDC also recently issued new indoor air quality standards for U.S., requiring more air exchanges per hour. ASHRAE, which is a very important regulatory organization in the U.S., are now aligning with CDC and also updating their standards, and there will be requirements for more air exchanges per hour, which is gonna drive a lot more air quality sensors in commercial and public buildings over the coming years. In Europe, we have the Energy Performance of Buildings Directive from EU that aligns very well with our energy toolkit and the building control solutions that we are building in Airthings for Business. We also have the Taxonomy Regulation coming, and we will see more regulations moving forward, also in Europe, that will drive more air quality sensors and systems for commercial and public buildings over the coming years. Yesterday, we launched our partnership with Rentokil Initial. Rentokil Initial is already a global leader in pest control and hygiene services for commercial buildings around the world. They have large sales forces, and they are now starting to also sell Airthings as an additional service to their clients. We are training their sales force now, and we'll work with them in many countries around the world to ensure they can provide a great service with Airthings to their clients. We launched our space utilization feature in June. We are seeing very good traction on this advanced feature. We can now count the number of people in a room by analyzing the air quality data. This is based on advanced analytics and machine learning. It's a very non-intrusive way of detecting occupancy, as there is no camera in these systems. It just monitors air over time and are able to tell how many people are in room and where in the building people are, and you can utilize this for space usage and optimize your spaces, and also for demand control ventilation, heating, and cooling. We see that facility managers and building owners really are looking for data like this. For the professional segment, we did about half a million dollars in the second quarter, slightly up 10% year-over-year. We have still very good gross profit margin in this business, with 86% in this quarter. We still see this as a challenging market, we don't expect big changes over the in the near future, but it's gonna be a business we'll keep harvesting. Looking at our annual recurring revenues, we ended Q2 at $4 million. The growth is really driven by Airthings for Business, with 46% year-over-year growth. There are some seasonal effects on the Pro side in Q2. The Pro side had a bit of decline in recurring revenues. We still have very strong gross profit margins from our service revenues, so more than 80%. As recurring revenues continues to grow at Airthings, we're gonna see that this gross profit margin is gonna improve the overall gross profit margin of the company. I'll send it over to Jeremy to talk a bit more details about the financials. Yes. Thank you, Øyvind. Starting first with the inventory situation. In the second quarter, we saw a $900,000 decline in overall inventories over the second quarter, and we also saw a modest decline in the average days of inventory from 422 down to 399. This represents the second consecutive quarter with improvements in both the overall inventory level and in terms of the average days of inventory. This reflects the active steps we've taken in terms of promotional activities and also achieving reductions in inbound supply. However, the continued elevated nature of the inventories warrants some further steps being taken over the course of at least the third quarter. Turning to the income statement, as Øyvind mentioned, revenues in the quarter came in at $7.5 million, which is up 9% year-on-year, and year to date, revenues are $16.2 million, which is up 2%. Gross margin came in at a solid 62%, with the high margins in Airthings for Business and Pro offsetting somewhat reduced margins in consumer. When we look at EBITDA, it came in at -$2.7 million, which represents around, in terms of margin, around -37%. And what we see here is reduced payroll expenses and other operating expenses compared both to the prior quarter and to last year. Even when we account for the one-off expenses that we saw in the second quarter of last year, just to recall, there was a range of one-off costs in the second quarter of last year, around $1.3 million in terms of OpEx. When we remove those, we still see that payroll and other OpEx is down $700,000. To Øyvind's point, we're really starting to see some of the proof points of the new strategy. In terms of EBIT, that came down at -$3.1 million, and that's, you know, mostly reflecting the depreciation of right-of-use assets. In terms of the balance sheet, looking first at asset side, major changes, we see that the deferred tax asset continues to grow. This is due to the losses occurred over the period. Inventories, here we actually see the first quarter where year-on-year inventories are down compared to 12 months ago. This is a positive sign that inventories are moving in the right direction. We also see a decline in trade receivables despite higher revenues than the second quarter of last year, which also shows a heightened focus on working capital in general. Cash is down year-on-year, reflecting mostly profitability and some exchange rates. However, and we'll come to this in the next slide, we see that cash is up quarter-on-quarter. In terms of changes in liabilities, there's a decline in the total equity year-on-year, with a significant portion of this, around 50%, attributable to the exchange rate between the Norwegian krone and the US dollar. Again, our functional currency, I've mentioned this in prior presentations. Our functional currency is Norwegian crowns, but our reporting currency is the US dollar, and this creates some effects on different parts of the balance sheet, including equity. We also see a new line here in terms of non-current interest-bearing liabilities coming in, and this represents the loan, a portion of the loan from Innovation Norway, our first installment of that support that we mentioned in the last quarter's presentation. Yes, we also see some declines in trade payables. Coming over to the cash flow statement, the cash flow from operating activities was up $2.6 million, and here we see the operating losses were more than offset by working capital improvements. Cash flow from investment activities, minus $300,000. This is largely attributable to internally generated intangible assets and R&D activities. Cash flow from financing activities was $1.1 million, and this represents the loan from Innovation Norway. We also have a net unrealized foreign exchange difference of minus $1.4 million. Again, this is the functional and, yeah, reporting currency difference. All in all, our cash increased from $15.4 million up to $17.4 million, which represents a positive sign in terms of the company's liquidity situation. Giving it back over to Øyvind. Thank you, Jeremy. I'll provide a little summary and outlook. I just want us to recall the new refined strategy. This strategy that we are working so intensely on is really focused around three key pillars. The first is the go-to-market strategy, where we want to own the customer relationship and move towards a digital-first go-to-market model. We are improving the scalability and also unit economics, and we are narrowing in the geographic focus and go much deeper rather than broader in the way we go to market. When it comes to the product, we are really moving the next level of becoming a hardware-enabled software company, and really ensuring our software experience is much more engaging, and we're engaging our customers in a much better way and coming with really good customer experiences. It's around the operating model, where we are transitioning to a more automated way of operating. This is really to, to scale us for further growth and also to have better unit economics. We are really happy to see early results from this refined strategy. We are seeing improved gross profit margins, we are reducing our operating expenses, we are seeing more engagements from our customers, and more customers are actually buying more than one device in the consumer segment. We will share more details of this at our capital market updates, on October 26, please stay tuned for that. In summary, we had a revenue of $7.5 million, annual recurring revenues of $4 million, and gross profit margin of 62% in the second quarter. At 14% growth in the consumer segment, despite a very tough consumer, overall market, while the Airthings for Business, we had strong growth in US but weak in Europe. That made the revenue growth more or less flattish. We are seeing very positive signals in the Airthings for Business segment in the form of regulatory momentum, new partnerships, new customers and clients, and what we see also, like expansion into the California educational system. We have modest reduction of overall inventories, that we see a reduction seen in days of inventory, alongside with increase in cash. We have progress achieved in terms of our strategy refinement and focusing on both the go-to-market model, more software-centric product focus, and also the way we are improving the operating model of the company. We are really setting up the company to come out of the difficult macro situation as a much stronger company. We had 46% year-over-year growth in recurring revenues in Airthings for Business. We also saw more than 70% growth on airthings.com, which certainly have much higher gross profit margin than other consumer channels. There is a lot of excitement happening in this company now, and we are looking forward to the coming quarters. The third quarter outlook, we're guiding between $9 million-$12 million, and with an ARR of $4.1 million-$4.4 million. The long-term outlook of Airthings is really supported by lasting factors and mega trends. Fresh, healthy air and energy optimization will still be very important over many years to come. Just in the U.S., 25 million people have asthma, and there are 1.6 million emergency visits per year due to asthma. There is increasing number of wildfires, and the wildfire seasons are getting longer. Millions of people die due to air quality every year. More than 41,000 people die of lung cancer due to radon in the U.S. and EU every year. Most people have their sleep heavily affected by poor air quality. Most buildings in the world are not smart at all. There are huge opportunities to save energy in buildings around the world with our solutions and our advanced analytics. I want to thank you, and we'll open up for questions. Yes. questions. We have a question from Christoffer Wang Bjørnsen with DNB, and a similar from Oda Lund in SEB. What early indications makes you confident that the second half of this year will be strong despite macro headwinds? Some of the, what we work in Airthings for Business, we have been working on projects that are being pushed out in time, and that's been taking a longer time, but that we see are gonna happen most likely in the second half. We also have a much stronger. We have set up consumer, we have taken down some of the inventories at our channel partners, and we know that the second half is a much stronger seasonal effects in the consumer segment. That's gonna help us through the second half. A new, another question then from Christoffer with DNB: Were there any temporary tailwinds to the growth in the second quarter, or shall we expect all quarters going forward to see year-on-year growth? I mean, we cannot know that. I mean, I can say that we didn't see any temporary tailwinds in the second quarter. Quite the contrary, I think as we've talked about a bit, there's more headwinds than there have been tailwinds in the second quarter. In terms of the third quarter, I mean, we've come with our guiding range, and the midpoint certainly implies year-on-year growth from last year. In terms of the fourth quarter, we can't comment right now in terms of the growth, but we do expect, as we've communicated, a very strong and solid second half of the year. There are no more questions. Thank you very much. Thank you.
Loading workspace