Aiforia Technologies Plc's Financial Statements Bulletin 2023: Steady progress in building on the foundations for future growth 

Aiforia Technologies Plc, Financial Statements Bulletin 2023 (unaudited), March 7, 2024 at 9:00 a.m. EET  

This release is a summary of Aiforia Technologies Plc's Financial Statements Bulletin for the financial year 2023. The full Financial Statements Bulletin is attached to this release.

Aiforia Group has transferred from the Finnish Accounting Standards (FAS) to International Financial Reporting Standards (IFRS). The date of transition to IFRS was January 1, 2022. The figures for 2022 have been adjusted to comply with the IFRS accounting standards, so they may differ from the figures previously reported by Aiforia. 

Unless otherwise indicated, figures in brackets refer to the corresponding period in 2022.

July–December 2023 

• Group revenue increased by 39% to EUR 1 438 (1 032) thousand. 
• EBITDA was EUR -4,616 (-5,656) thousand. 
• Operating loss (EBIT) was EUR -6,363 (-6,994) thousand. 
• Profit for the review period was EUR -6,393 (-7,348) thousand. 
• The Group’s net debt at the end of the period was EUR -8,126 (-20,984) thousand. 
• Cash and cash equivalents at the end of the period amounted to EUR 13,974 (24,698) thousand. 
• Unadjusted earnings per share (EPS) were EUR -0.25 (-0.28). 
• The Provincial Health Authority of Catania in Italy selected Aiforia Technologies Plc as a partner for AI-assisted diagnostics in the anatomic pathology laboratory of Gravina Hospital. The collaboration involves the use of the Aiforia Clinical AI solutions for the analysis of tissue samples from breast and prostate cancer patients, as well as the use of the Aiforia AI model development platform. The total value of the contract is approximately EUR 250 thousand for three years. 
• Aiforia initiated the path to secure regulatory approval for its first product in the United States, and the company is planning to implement the necessary steps to submit an application to the FDA during 2024. 

January–December 2023 

• Group revenue increased by 49% to EUR 2.398 (1.606) thousand. 
• EBITDA was EUR -9,699 (-9,652) thousand. 
• Operating loss (EBIT) was EUR -12,879 (-11,878) thousand. 
• Profit for the review period was EUR -12,925 (-12,156) thousand. 
• Unadjusted earnings per share (EPS) were EUR -0.50 (-0.47). 
• The parent company's loss for the financial year is EUR -9,716 thousand, and the distributable free equity is EUR 12,332 thousand. The Board of Directors proposes to the General Meeting that the loss for the financial year be retained in the retained earnings account and that no dividend be paid.

Key figures

*Personnel expenses include capitalization of development expenses. 

**The Company’s potential dilutive instruments consist of stock options. As the Company’s business has been unprofitable, stock options would have an anti-dilutive effect and therefore they are not taken into account in calculating the dilutive loss per share. Thus, there is no difference between the undiluted and diluted earnings per share. 

Jukka Tapaninen, CEO: 

During 2023, we took significant steps toward becoming a market leader in AI-assisted image analysis in pathology. The first implementations of our clinical AI solutions were started in key markets, and we launched the measures to achieve regulatory approval for the first product in the US. Our order book grew to EUR 2.4 million. With the financial statements, we report our financial information for the first time following international IFRS accounting standards, which increases the transparency and comparability of financial figures.  

In December, we announced our second major clinical project in Italy this year, when, in addition to the Veneto region, the province of Catania in Italy chose Aiforia as a partner for AI-assisted diagnostics in the anatomic pathology laboratory of Gravina Hospital.  The collaboration further strengthens our position in the European clinical pathology market and demonstrates that our solutions respond nicely to the needs of pathology laboratories.  

The licensing agreement with the US-based Mayo Clinic for an AI model that may improve prediction of colorectal cancer recurrence announced after the end of the financial period can also be considered concrete progress in the implementation of our strategy. This is a nice continuation of a major milestone reached in March 2023, when the Mayo Clinic started analyzing tissue samples from breast cancer patients with Aiforia's software.  

Cooperation with the pharmaceutical industry is an integral part of our growth strategy. We have gained new customers in the preclinical sector and continued to develop our product portfolio to better serve the needs of pharmaceutical development.  

During the review period, we developed the technical features of our software, which, for example enable a smoother integration with customers’ various information systems and speed up the introduction of software. Thanks to these improvements, we can offer a smoother and more efficient user experience for our customers.  

Aiforia’s growth strategy is based on the continuous development of AI models and product functionalities and promoting sales both in the Americas and in Europe. Our goal in the next few years is to scale the business by acquiring new customers, increasing sales within customers and establishing key strategic partnerships. After the review period in January 2024, we updated our short- and medium-term business objectives. We met or even exceeded our previous business objectives set for 2021–2023 in connection with the IPO. Our new targets, stretching even up to 2030, will guide our investments and business priorities.  

Finally, I would like to thank Aiforia’s personnel and shareholders for the past year 2023. We continue to promote our growth strategy, with our mission to revolutionize the analysis of pathology images with AI to give every patient access to better care.  

Business targets (updated January 19, 2024) 

Aiforia does not publish short-term outlooks or financial targets. However, the company has set short- and medium-term business targets:  

Aiforia’s short-term business targets 2024–2025 are:  

• Expand pre-clinical offering with new AI models and study-centric GLP workflow 
• Expand clinical offering with 10 new regulatory-approved AI models 
• Form at least three new strategic partnerships
• Achieve 15 key accounts (potential for over 500 EUR thousand in annual recurring revenue) 
• Achieve a positive cash flow from operating activities. 

Aiforia’s updated mid-term business targets by the end of 2030 are: 

• Create a product offering that covers 80% of the pathologist’s diagnostic workflow 
• Achieve profitable business by the end of 2027 
• Achieve revenue of over EUR 100 million 
• Leverage technology beyond diagnostic support for pathologists 
• Achieve 50 key accounts (potential for over 500 EUR thousand in annual recurring revenue). 

Proposal by the Board of Directors on the treatment of the result for the financial year 

The parent company's loss for the financial year is EUR -9,716 thousand and the distributable free equity is EUR 12,332 thousand. The Board of Directors proposes to the General Meeting that the loss for the financial year be retained in the retained earnings account and that no dividend be paid. 

Significant events after the reporting period 

Update on short and mid-term business targets 

On 19 January 2024 Aiforia's Board of Directors approved the company's revised growth strategy and updated business targets. The revised strategic focus areas and the updated short- and medium-term business targets can be found on page 5 of this financial statement bulletin.  

Licensing agreement with Mayo Clinic for an AI model that may improve prediction of colorectal cancer recurrence 

Aiforia entered into an exclusive licensing agreement with the Mayo Clinic in the United States to globally commercialize an AI model that may improve prediction of colorectal cancer recurrence. The AI model, which was developed in collaboration with the Mayo Clinic, identifies features of colorectal cancer and provides a recurrence prediction estimate. The licensing agreement with the Mayo Clinic enables us to market and sell this AI model for colorectal cancer recurrence risk evaluation globally. 

Financial reporting in 2024 

The calendar for Aiforia Technologies Plc’s financial reporting concerning the financial year 2024 is as follows: 

• March 13, 2024: The Financial Statements and the Board of Directors’ Report for financial year 2023 
• August 29, 2024: Half-Year Financial Report for 1 January–30 June 2024 

Aiforia Technologies’s Annual General Meeting is planned to be held on April 4, 2024.  

Financial reports are available after publication on Aiforia's website at https://investors.aiforia.com/en/. 

Webcast 

Aiforia arranges a live webcast for investors, analysts, and media on March 7, 2024 at 10.00 a.m. Finnish time. The event will be held in English. The financial results will be presented by Jukka Tapaninen, CEO and Veli-Matti Parkkonen, CFO. 

The webcast can be followed at https://aiforia.videosync.fi/q4-2023. 

A recording of the event and the presentation materials will be available at https://investors.aiforia.com/ later in the day. 

Further inquiries 

Veli-Matti Parkkonen, CFO, Aiforia Technologies Plc

tel. +358405009878

https://investors.aiforia.com/ 

Certified Adviser

UB Corporate Finance Ltd

ubs@unitedbankers.fi  

About Aiforia

Aiforia is a trusted provider of deep learning artificial intelligence (AI) solutions for pathology. Aiforia delivers software solutions that elevate diagnostic capabilities in image analysis, enabling remarkable medical discoveries now and in the future. With thousands of AI models already developed on the Aiforia platform for research use and several diagnostic solutions deployed, Aiforia is already significantly impacting pathology and healthcare.

Founded in 2013, Aiforia is a publicly traded company operating internationally with thousands of platform users across the globe. The company is headquartered in Helsinki, Finland, with offices in Cambridge, Massachusetts, and Rochester, Minnesota, and local representatives across Europe and North America. The diverse team at Aiforia includes experienced pathologists, medical scientists, AI and software developers, and a dedicated commercial team. Together, they are working to transform pathology with AI, enabling better care for each patient.

Find out more at www.aiforia.com