Welcome everyone to Tobii's Q1 2023 quarterly earnings call. Joining me today are the CFO for Tobii, Magdalena Andersson, and we also have Henrik Mawby, who's the head of investor relations for Tobii. We're gonna focus of course on the quarterly earnings results. We will be taking questions after this session. Feel free to start posting questions if you already have them. If you're looking for more background information about Tobii, please visit our investor relations resources on our website, or feel free to reach out to Henrik Mawby after this call. Let me start very briefly by first talking about Tobii the company. Once again, we are a Swedish headquartered company that has been traded on the Nasdaq since 2015. We started the company with a focus on being the world leader in eye tracking, and over the last two decades we have done that very thing, become the global leader in this space. We now have an ambition to become the world leader in attention computing with a mission to improve the world with technology that understands human attention and intent. We are very much on this journey this quarter as we've been over the last couple of years. Now let me shift gears and talk about our Q1 business. Q1 was a weak quarter for us from a revenue perspective, and it comes of course on the heels of our record-breaking quarter in Q4 2022, where we saw record revenue as well as record profitability. What we said a couple of months ago when we described our Q4 results was that from a Tobii perspective, the right way to measure our business performance is on a longer term horizon, whether we have very strong quarters or weaker quarters. We continue to believe that the right way to look at our underlying business performance is to take a longer term view on our results. That being said, of course, in Q1 this year, we saw a 7% organic decline in revenue. We saw this come up in two parts of our business, both in the Products and Solutions segment and on the Integrations segment. On the Products and Solutions side, we see continued weakness in sales to enterprise customers who are still tightening their belts as they all operate in a uncertain macroeconomic environment. On the integration side, we saw a lower level of non-recurring engineering revenue in Q1, and we also didn't see any Sony revenue this quarter as they continue to consume licenses that they have bought from us in 2022. Beyond sort of the financial and profitability results, which Magdalena will talk about a little bit more, we're also quite keenly aware of our financing position, our cash flow, balance, et cetera, and I'm quite pleased that this quarter we've taken further steps to improve that. We think this is a critical aspect of us reaching profitability and self-sustainability moving forward, but Magdalena will comment about where we end the quarter from that perspective. Now I wanna shift gears and talk a little bit about sort of the long-term progress that we've made this quarter. In Q1 2023, we received three design wins, two in the PC ecosystem for our Aware software and one for an enterprise VR headset. In the quarter, we also acquired a German company, Oculid. This is a small targeted acquisition which extends the portfolio that we have available for our Products and Solutions segment. Specifically, Oculid enables us to deliver market research and user testing natively for mobile phones. That is a gap in our current portfolio. With the addition of Oculid, we are going to be able to accelerate our product development roadmap and enable our customers with tools that allow them to do research in the ways they prefer, whether it's on the screen with a PC, whether it's in real life in stores or in public places, or of course, using mobile phone applications. We're looking forward to seeing this small acquisition yield us results in the mid to long term for the company. In Q1, of course, we also saw a couple of other major notable improvements in our long-term objectives. The first is with the reach of Tobii's technology into mass market scale, and that was with the launch of the Sony PS VR2. For the first time, eye tracking technology is coming to the masses with millions of users getting to use the technology every single day. I know that awareness of Tobii's technologies, eye tracking, attention computing, our company itself, is one of the limiting factors in scaling the business the way we intend to, and I believe that the launch of the Sony PS VR2 will actually improve awareness overall and help us in our business ambitions across our entire portfolio, not just in VR. The most notable aspect of improving our long-term foundation for success is actually the design win that we've celebrated this quarter, in automotive DMS. We made significant progress through the quarter, and I'm quite happy that we broke through with a design win in this new emerging important market for us. We talked about last year that we felt we were making more and more progress with our technology, getting ready to get to a design win, and I will talk a little bit more about automotive at the end of this presentation. With that, I'd like to hand it back over to Magdalena to talk about our financial performance in more detail. Magdalena? Thanks, Anand. Yes. I must admit, first change for them, that while last quarter financials were a real pleasure to present, this quarter I'm not as cheerful about the figures. However, there are of course many highlights this quarter as well, as there always are within Tobii. Let's start with the performance of each segment. Products and Solution had an organic growth of -6%, which is primarily related to our enterprise customer cutting spending. The sales to our academic customers were okay, although we are not fully seeing the strong growth that we would like to see here either. On a positive note, the gaming peripheral Eye Tracker 5 showed continued strong growth as we continue to demonstrate product market fit with existing games. Gross margin was 68%, down 2 percentage points, primarily in, on account of the product mix shift to Eye Tracker 5, our gaming peripheral. We do have a solid belief in this segment long term. We have a strong market position with plenty of opportunities to grow, and our already strong product portfolio is filled with various development leaps, and contributing to this development is also now the acquisition of Oculid, as Anand mentioned, which will add a complementary technology that we can leverage across several of our products. Looking into the integration segment. Revenue declined 9% organically, a low outcome on a low base. Again, we are reiterating the fact that this segment can vary in between months. In Q4 2022, we had an all-time high, but this quarter is not. It is important to note that in this quarter, we had no revenue related to PS VR2 as Sony consumed the licenses procured already in 2022. Gross margin was 91% versus 76% last year, an improvement with 15 percentage points. Similar to the previous quarters, the improvement was derived from a continued product mix shift towards more software licenses. On a group level, these two segments summed up to a revenue of SEK 168 million. That was down 7% organically versus last year. As mentioned, we continued to see challenging conditions in Products and Solutions and received no PS VR2 license revenue in the quarter. Gross margin continued to trend positively, and we improved 2 percentage points to 73% in the quarter. This is a result of a continued mix shift towards more software-related revenues. You should not expect to see this every quarter, over time, we expect this trend to continue. EBIT was SEK - 53 million in the quarter, with an EBIT margin of - 32%. A small deterioration versus Q1 last year, which is a result of a negative leverage from the revenue decline. OPEX increased 2%, mainly due to increased R&D investments in XR and automotive. We are maintaining prudent cost controls as we flagged also in the second half of 2022. Of course, we are not happy with the financial performance in this quarter. It should be viewed in the context of a record-breaking profitable Q4 last year. Over to our balance sheet and cash flow. We had another quarter with positive cash flow. Our cash flow after continuous investments was SEK 46 million. This cash flow was now positively affected by SEK 63 million in tax deferrals related to COVID tax relief from the Swedish tax authorities. With that, we ended the quarter with SEK 439 million in cash and cash equivalents and a net cash position of SEK 424 million, excluding leases. We have also secured a SEK 50 million revolving credit facility, providing us with even further flexibility in managing our balance sheet. With that, back to you, Anand. Excellent. Thank you very much, Magdalena. I want to spend a few minutes talking about automotive and our design win that we announced last week. As you see on the slide that we shared from the last quarterly earnings, we talked about the progress we were making in automotive, which was a part of the market we re-evaluated and reinvested in starting in 2019. We've been here on a pretty long journey, and all through 2022, we were engaged with customers in demonstration and evaluations. We felt through the course of the year that we were making very positive progress with customers, very much on the doorstep of winning business in this space, and I'm really happy that we have finally broken through and now have a design win in the automotive DMS segment. Of course, for us, this is super exciting because it is a demonstration of our of the value we can create with long-term investments in Tobii, and of course, also a validation of our approach to use our core technologies in new market areas. The reason that automotive DMS is so exciting for Tobii is that this is a segment where you see approximately 100 million new cars, light trucks, and commercial vehicles manufactured every single year. Today, DMS has a penetration rate in the low single digits, but by the end of the decade, it's expected to exceed more than 50%. This massive growth creates an opportunity for disruption because as of now, while DMS has very much been in premium cars only, legislation and other requirements are driving the need for DMS in all cars, including the lowest and most economical cars available in the marketplace. This creates tremendous pressure on the cost of DMS systems to become more affordable so that they can be included in all of these new vehicle platforms and models. That is where the technology that we've developed at Tobii can be so interesting for tier ones and OEMs. As we see this market grow, we think this is a huge potential for us to establish ourselves as a leader in this new DMS software space. What I wanted to share with you is some of the findings we've already seen as we've gone through this RFQ process and what we expect as behavior in the market going forward, and how you should expect us to communicate our ongoing success. Now, what we've seen with the RFQ we announced is that this RFQ that we were awarded is for a new start of production. What you see in the chart is how this process typically runs. We are usually in a phase of demonstration and evaluation with tier ones and OEMs. As we mentioned, we've started this very much in 2022. A lot of our activities are very much focused in the European market. The feedback from customers, both tier ones and OEMs, have been very positive. This enables us to start getting invited into the RFQ process. Typically, the RFQs are for new start of production. What the RFQs are evaluating is both the technical capabilities of our solution, but also the ability of Tobii to deliver a solution that meets the exacting demands of the automotive industry. Now, RFQs are almost always competitive bids, and in our experience, these can come either from a tier one who's won a piece of business with an OEM, but in some cases, of course, the OEMs or the OEM brand groups are themselves issuing RFQs for technology providers for DMS software. With the RFQs we've seen, we have seen that these RFQ processes can represent quite a different realm of business. They can include multiple OEM brands inside an RFQ. They include potentially multiple models and even multiple platforms. The design win that we have won is for an RFQ that represented 25 separate models. The way that we are going to communicate our progress in this space is to equate an RFQ award with a design win. That is what we've done with our communication in last week, and we will continue to use this metric as a way to describe the progress we're making in this space going forward. Now, how do we expect to build a leadership position in this space? Again, I believe our approach, which is quite laser-focused on delivering the lowest cost of ownership, is going to be the right angle as tier ones and OEMs think about how they have to deploy DMS systems in scale across their full portfolio. What do we mean when we say total cost of ownership for a DMS piece of software? There are fundamentally three components to consider when you think about the cost of ownership of implementing DMS software. The first, of course, is the cost of the algorithm itself. The second is the cost of the components required to go and deliver the performance from a particular algorithm. This could include the cost of the compute needed to host the algorithm, the optical components, the lens, the sensor, etc., that are required to get the right quality images for algorithms to run on, other elements of the systems to run the overall software, memory, etc. Typically, these BOM elements in many cases are high multiples of the algorithm itself, in some cases up to 10x. One of the benefits of Tobii's approach is that we are able to support lower cost cameras, lower cost compute, which can help tier ones and OEMs reduce the overall system cost to deliver a DMS solution. In addition to the bill of materials, which includes the components and the software, we also see cost in implementing DMS software related to integration programs. What that refers to is the engineering required to take a DMS system and implement it into a particular car model. This could mean that we have to tune algorithms based on a particular optical path that's chosen, a particular sensor with a particular lens. It also could mean that we have to tune the algorithm based on where a camera is placed in a particular vehicle model. You can imagine that in some cars, the best place for a camera could be on the A-pillar to the side of the driver. In some cars, these cameras could be placed in the rearview mirror or even on the central dash. Each of these different camera positions provides a different view of the driver, and in some cases, algorithms have to be retuned to deliver the kind of performance expected in a particular system, depending on that location. There's also additional integration work that typically is involved, including potentially porting the algorithm to new systems on a chip or new types of operating system. The Tobii approach to DMS software allows us to deliver a more robust algorithm, which prevents the need for expensive data collection when you have to tune the algorithm for either new optical paths or new locations. This means a less complicated, less expensive integration. This is what we mean about reducing the total cost of ownership for tier ones and OEMs. Certainly, an aspect of that is the license cost itself, but there are fundamentally larger sets of costs that we can go adopt. We believe that our approach is quite novel in how it helps address these problems. Our view is that by focusing on the lowest cost of ownership, we are going to be a very attractive partner for tier ones and OEMs, looking at how they have to implement a much larger scale of DMS systems across a much broader set of vehicle platforms hitting very, very different price ranges. This is our strategy to build a long-term leadership position in the space. Again, with the size of the market that this represents, I think it's a great opportunity for Tobii for future success and revenue growth. Let's sum up the quarter. Again, from a financial perspective, we believe that the Q1 result was weak. It comes very much on the heels of a strong Q4, and I still believe very highly in our capabilities for the rest of the year as we think of the Tobii performance on a longer-term horizon. Beyond sort of the financial results in Q1, I'm very happy with the foundation we are building for future long-term success, both in achieving mass market scale with our technologies, which is a really important step for us to take to make eye tracking, attention computing, and Tobii more prevalent in the marketplace. Taking that step with the Sony PS VR2 is incredibly important to us. Of course, validating our approach of investing in the long term and investing our core technologies to address new marketplaces with the automotive DMS win. Both of these are substantial progress that we can demonstrate in building the foundation for future success. We are very much committed to our externally communicated goals of delivering improvements in profitability, as well as creating growth in the future. I'm looking forward to capping off this year with a return to EBIT profitability in Q4 2023. With that, I'm going to open it up for questions. Great. Thank you for that, Anand, and Magdalena. In the Q&A, we have a chat function in the Teams client that you are free to use if you would like to ask a question. Let me remind you that there is a small lag here, so post it sooner rather than later, so that we don't miss anything. For analysts, please indicate in any way or form, if you would like to ask a question, and we will invite you into the call. With that, let me see how many questions here. Erik Larsson with SEB, and you have indicated you would like to ask a few questions. Yes. Good morning. I hope you can hear me. Yes, we can, Erik. We can hear you. Thank you. Okay, great. A couple of questions on automotive. First of all, congrats, I guess, good news. After this design win, will associated costs increase? Further, should we assume that any potential cost increases will be covered by project milestones and such? Yeah. The nature of these design wins is that there is an integration program, and we certainly will have that as well. We of course, did expect to have a design win, so some of the costs associated with the design wins that we are going to get have already been factored into our business case. That is part of the plan. Typically, there is NRE payments based on milestones when you execute to the integration. The level of coverage varies on a per customer basis. I would expect that as we have more success here and get more design wins, that we would need to make investments in engineering to go and deliver on these integrations. Okay. In customer discussions within automotive, how often have, over this last year or so, counterparts pointed out that you don't really have a reference customers in the space? Do you think that type of hurdle will be lowered given this, the announced design win? Absolutely, for sure. Again, I think that we, of course, in the European markets, I think we actually have significant brand value for the capability of eye tracking and also that I think we're more of a known commodity. I would say that as we think about our engagements outside of Europe, you know, in Asia, in China, Korea, Japan, et cetera, there is more hesitation, of course, to look at a technology provider that hasn't won yet. I think that this will benefit us in Europe, in the United States and certainly in other markets as well. I think that this is definitely there. We explicitly have heard it from some customers, but I also believe that there are some customers who, after evaluating our technology, may have reservations that they don't always share with us. Getting this first proof point, of course, is incredibly important that, you know, we're demonstrating the ability to win. Okay, great. A final question on some financials. It seems like CapEx came up quite a bit this quarter, and capitalizations in the PNL are up by almost SEK 10 million from last quarter. Can you just give some color what's behind the sudden increase, and is it a new level, we should assume? Sure. Well, it's more a build-up. I would say we started the build-up already last year. It is our investments, both in automotive, but also within XR, that we can see in the CapEx. Okay. I'll interpret that as a new plateau-ish. Yeah. You can do that. Okay, great. Thank you. That's all from me. Thanks. Thank you, Erik. Daniel Thorsson, you also indicated that you would like to ask some questions. Please unmute yourself. Okay, now can you hear me? Yes. Yes, we can. Excellent. Thank you very much. Okay, first a question on product and solutions. Can you say something on how China developed in Q1? I guess that was one of the key drivers for the strong Q4 figures. We definitely had a very strong Q4 in China. Again, we thought that part of that was catch-up and maybe some pent-up demand. The good news is in Q1, China continued to remain strong after a very muted last year when there was a lot of COVID lockdown. We're starting to see China come back. This is especially true for our scientific customers. We see similar trends on the enterprise side in China as we see in other markets, that there's still belt-tightening. The education part of our portfolio, the scientific research part of our portfolio had a strong Q1. Okay, excellent. Yeah. Excellent. I have a question on projects. Okay, give us an update on ongoing projects within XR. Should we expect any news flow during 2023, for example, or how does the plan look? Yeah, I think that, you know, what we've seen is with the addition of eye tracking in the Sony PS VR2 and the really positive reviews that we've seen so far, more and more customers are very clear that this feature is something that they need to have. When we talk about engagements with customers, those are going pretty positively. Now, the dynamics of announcing wins and things like that are quite different. As you saw with the Sony news itself, I mean, we announced quite late in the cycle, that is more of a normal kind of behavior in the space. What I see is the, you know, where we were last year or the year before, we saw that eye tracking was quite important feature set for enterprise VR headsets. Of course, those headsets don't drive a lot of volume. Where we see it now is that it is becoming much more of a must-have for consumer VR headsets. I think we are quite well-positioned with our technology and track record to be a vendor for those kinds of designs. That's what we see in the engagements here. Specifically, in terms of news flow in 2023, I think it really depends on per customer basis, it's hard to specifically call. I am still very optimistic on XR as we've been over the last couple of quarters. I think both automotive and XR right now still stand out as highlights for us in building our long-term value. Okay, excellent. Makes sense. A question on the PS VR2 launch within the quarter. Have you got any indications from Sony about the launch? Has it been roughly as expected or any deviation you can share with us? Yeah, we don't actually get any forward-looking forecasts from Sony, and typically they're not talking about how they're doing on a real-time basis. What we typically see from them is a report after the fact. Very much I think the news that we get from Sony is from the press, as you would expect, Daniel, that you are getting as well. Our view, of course, is that when we look at both the tech reviewers, et cetera, the headset itself is reviewed very positively. It's a very high-performance headset. The eye-tracking capabilities, the fact that games have included that in their interaction, modality is also looked at as very positive. I think from a press perspective, there are a couple of, you know, areas that they would like to see Sony go and improve on, the price point being one of them, more games, and potentially of course, the standard challenge of this being a tethered headset, which limits, you know, mobility in that. That, of course, has been known about the PS VR2. I would say that those things are things that we see, but it's very much what the press reports. Okay, I see. Follow-up, should we expect any Sony revenues in Q2? We do expect Sony revenues for this year. I think it's very difficult to comment on specific quarterly timing, because again, that really depends on their decisions, and we don't get to see visibility on that after, until quite late at the end of the quarter. I would say that we feel like we are gonna get revenue for the rest of the year. But I think beyond that to be more granular at this time, I think is not, is not something that we'd be comfortable sharing. Okay, fair enough. Thank you. That's all. Thank you, Daniel. We have one question from the chat here. It's from Seamus asking, "How many auto manufacturers do you have in the pipeline? I think, we have been talking to multiple tier ones. Again, when we talk about where we are from a pipeline perspective, we are talking to many of the tier ones that are based in Europe. I would say we still need to scale up now, in our engagements on the other geographies, in Japan, in Korea, in China, et cetera. The good news there is, of course, we do have a substantial presence in those regions from a sales perspective. And that's also where I indicated that, you know, in our early outreaches to some of these customers, they've been quite curious, and interested in our technology. At the same time, they're looking for reference customers to prove that we've actually reached the level to go and win. I would say that in Europe, we feel like we have good outreach already. We've built a decent pipeline. In the other regions, we've started some initial work, but now we would like to accelerate that, having this reference, design win in our pocket. Good. Let me see. We have some more coming in here as well. Seamus continuing, "What part of DMS market share are you planning to reach?" I guess, how large market share are you aiming for, or what position are you aiming for? Yeah. Again, our expectation is that we would like to be in the long term, a leader in this space. Again, you know, we can talk about what the definition of long term is, but these cycles take a while for start of production. The win we just received was a 2025 start of production, we're really thinking second half of this decade. In my view, the definition of being a leader is, you know, being in the top two. You know, based on how this market plays out, I would say that's the kind of market share that we should expect to win. There is one last question also here from Seamus again. "Can you give us more light on the heavy vehicle manufacturer you have won the design win with? At this point, we can't share more than we've shared in the press release. That's sort of what we're authorized to share at this point. With that, I know there's a very intense morning out there with a lot of reports, so I propose we close this call here and say thank you. Well, thank you very much. Thank you, Henrik and Magdalena. Thank you, all. Appreciate the time. Thank you, everyone. Thank you.