Interim Report Q2 January – June 2026

Financial highlights

April - June 2026

• Organic growth amounted to 54%

• Net sales increased by 53%

• Organic growth in Automotive 128%

• Gross margin improved as a result of high growth in royalty income.

• EBITDA improved by SEK 26.4 million compared to same period last year.

• Free cash flow improved by SEK 14.1 million.

• Available cash and cash equivalents, including credit facilities, amounted to SEK 117.7 (93.8) million.

• Earnings after tax per share were -0.69 (-1.00) and after full dilution -0.69 (-1.00).

January - June 2026

• Organic growth amounted to 52%

• Net sales increased by 47%

• Organic growth in Automotive 125%

• The gross margin improved as a result of high growth in royalty income.

• EBITDA improved by SEK 71.2 million.

• Earnings after tax per share were -1.27 (-2.50) and after full dilution -1.27 (-2.50).

Business Highlights

April - June 2026

• During the quarter, Smart Eye received an additional Interior Sensing AI order from a major Japanese vehicle manufacturer. The order is for two existing DMS models and has an estimated value of at least SEK 60 million over the product life cycle.

• Smart Eye secured four new DMS Design Wins from a leading global automotive manufacturer. The order comprises four vehicle models and has an estimated value of SEK 50 million over the product life cycle.

• The Smart Eye presented new technology for contactless monitoring of vital parameters, including heart and respiratory rate, integrated into the company’s existing DMS platform.

After the period

• On July 7, 2026, the EU’s requirements for driver monitoring and distraction warning came into force for new vehicle models, reinforcing the long-term demand for Smart Eye’s DMS solutions.

• On July 17, 2026, Smart Eye received an additional order for Interior Sensing to three existing DMS programs, with an increased estimated order value of SEK 15 million over the product lifecycle.

• On August 13, 2026, Smart Eye secured a Design Win for a rear-view mirror-integrated Interior Sensing program for three new car models, with an estimated order value of approximately SEK 100 million.

Comments From the CEO

The strong development continued and accelerated in the second quarter. Smart Eye grew organically by 54%, with Automotive delivering a record 128% organic growth. Group revenues reached SEK 141 million, compared to SEK 92 million last year.

Even more importantly, we are now seeing the operational leverage that we have been working towards for many years. The strong growth in high- margin software license revenues lifted gross profit by SEK 44 million and EBITDA reached SEK 27 million, an improvement of SEK 26 million compared to the same quarter last year. For the first six months, EBITDA amounted to SEK 54 million, an improvement of SEK 71 million.

Automotive is clearly the engine behind this development. Behavioral Research, on the other hand, had another challenging quarter, declining organically by 7%, mainly due to lower sales of hardware. iMotions software-based offering developed considerably better, growing organically by 7%.

Overall, Q2 provides further evidence that Smart Eye is entering a fundamentally different phase as years of Automotive Design Wins increasingly translate into production volumes, software license revenues and earnings.

Automotive

Automotive had a very strong quarter. Revenues increased from SEK 42 million to SEK 93 million, corresponding to organic growth of 128%. The main driver was software license revenues from increasing vehicle production, while NRE and AIS grew, albeit at a slightly lower pace.

The production ramp up is increasing rapidly. License revenues grew by over 200% in the quarter. The number of car models in production increased from 155 to 175, while 20 of our 24 OEM customers now have Smart Eye software in production, compared to 15 one quarter ago. As more of our 379 Design Wins enter production, the impact of high-margin license revenues on growth and profitability becomes increasingly significant.

July 7 marked a major milestone as EU requirements for driver monitoring and distraction warning came into force for all newly registered cars. Smart Eye started investing in DMS more than a decade ago, and the rapid royalty growth we see today is the result of that long-term investment. With existing programs ramping and new models entering production, we see this as the beginning of the next phase of DMS growth.

Interior Sensing, our next growth vector, is also gaining momentum. During Q2, a major Japanese OEM expanded two existing DMS programs with Interior Sensing AI, adding at least SEK 60 million in estimated lifetime value.

In August, a major European OEM selected Smart Eye for a combined DMS and OMS program for three new models, integrated into the rear-view mirror and valued at approximately SEK 100 million. Interior Sensing has now been selected for 18 car models by four OEMs.

These wins demonstrate that existing DMS customers select Smart Eye for OMS (Occupant Monitoring System) as well, expanding our value per vehicle. This also demonstrates the versatility of our technology across different camera positions, including the increasingly important rear-view mirror.

Together with new capabilities such as vital signs monitoring, intoxication detection, iris authentication and child presence detection, Interior Sensing represents an important next growth vector alongside our rapidly expanding DMS business.

Behavioral Research

Behavioral Research had a more challenging quarter. Revenues amounted to SEK 48 million compared with SEK 50 million last year, corresponding to an organic decline of 7%.

The weakness mostly comes from hardware, where sales remained below last year’s level. We are not satisfied with this development and are working actively to improve performance.

iMotions, including the former Media Analytics business, developed considerably better and delivered organic growth of 7% during the quarter. This is encouraging given the continued cautious market environment and confirms the strength of our multimodal research software offering.

Sightic, which joined Smart Eye earlier this year, also contributed positively to the business area. Beyond its immediate revenue contribution, the acquisition gives us technology and expertise that are strategically important for our Automotive intoxication roadmap.

Our priority in Behavioral Research remains profitable growth. We will continue to maintain cost discipline while strengthening the parts of the portfolio where we see the greatest long-term potential.

Final Words

The first half of 2026 demonstrates the transformation taking place in Smart Eye. Group organic growth reached 52%, Automotive grew organically by 125%, and our gross margin increased to 91%, mainly because of the growing contribution from software royalties.

Twenty of our 24 automotive OEM customers are now in production. Smart Eye technology is in production in 175 of 379 Design Wins, with an estimated remaining lifetime order value exceeding SEK 7.6 billion. The EU DMS regulation is fully in force. Royalty revenues are growing rapidly, and the operating leverage of our software business is increasingly visible.

And while DMS continues to scale, the next growth vector is already emerging. Interior Sensing has now been selected for 18 models across four OEMs, with several recent orders demonstrating how our established DMS position can expand into broader and higher-value cabin monitoring. We are anticipating further such nominations in the near future.

For many years, we have talked about the harvest that would come when our large portfolio of Design Wins reached production.

We are now harvesting – while planting the seeds for the next generation of growth.

Martin Krantz
Founder and CEO, Smart Eye

The company will comment on its quarterly results during the earnings call hosted by Redeye, taking place live online at 11:00 on August 26, where the CEO and CFO will present the results and answer questions.