This article first appeared on GuruFocus .
Release Date: August 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Underlying revenue growth was positive 7% in Q2 2026 when adjusted for the large pre-purchase deal and non-recurring revenue in the prior year.
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Gross margin remained strong at 82% for the group, with Products and Solutions improving to 68% from 64%.
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The cost reduction program delivered SEK 163 million in savings over four quarters, significantly exceeding the SEK 100 million target.
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AutoSense achieved 230% organic growth, driven by a DMS license agreement, and secured new design wins with a European premium sports car manufacturer and a Qualcomm-based platform extension.
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Operating cash flow was positive at SEK 22 million in the quarter, and free cash flow over the last 12 months was positive at SEK 35 million.
Negative Points
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Net sales declined 46% year-over-year (organic decline of 39%) due to challenging market conditions and a tough comparison period.
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Liquidity is strained, with cash at SEK 37 million and a risk of insufficient financing over the next 12 months.
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Free cash flow was negative at SEK 10 million in the quarter, and the company is not providing guidance for the second half of the year.
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AutoSense's revenue is expected to revert to normal levels after the DMS license agreement revenue was fully recognized in Q2 2026.
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A previously announced design win with a Korean OEM did not enter production as expected, and new AutoSense wins are relatively small and not material to group revenue.
Q & A Highlights
Q: What level should we roughly expect for AutoSense revenues in the coming quarters, given that the large Tier 1 DMS license deal has now been fully delivered in Q2? Is it back to the 10-15 million SEK level? A: Fadi Faron, CEO: As previously communicated, the revenues from the DMS deal with the major automotive Tier 1 accrued in Q4 2025 and the first half of 2026. Moving forward, that deal is basically finished, and we will revert to our normal business based on existing customers. We do not provide an explicit breakdown of revenue per quarter per business unit.
Q: With competitors reporting installed bases of 8 million and 6 million DMS-equipped vehicles, what is AutoSense's current deployment footprint? A: Fadi Faron, CEO: AutoSense is currently present with a few customers in Asia as well as a very large premium European automotive company. We are engaged in many pre-sales activities to build up the pipeline. These are forward-looking deals that, if they materialize, would have start of production in 2029, 2030, and beyond.
Q: How are you going to reduce the annual cost base for AutoSense by just over 50 million SEK? A: Fadi Faron, CEO: We are going to look at all avenues to achieve that target, including discretionary expenses and, unfortunately, workforce planning. There will be a resizing of the organization.
Q: In 2023, you presented a design win with a Korean OEM expected to start in 2026. Has this program entered production? A: Fadi Faron, CEO: No, this program did not enter production.
Q: Looking at smart glasses and XR glasses, do you see a realistic opportunity in the near future for Tobii's technology to be integrated into a mass market consumer product rather than mainly into high-end and relatively expensive XR devices? What would need to change? A: Fadi Faron, CEO: The improvements of software moving into machine learning, specifically the XR5ML, will drive higher power efficiencies and lower costs. We will continue working on these technologies to enable us and partners to implement them into more mass consumer devices.
Q: Recently, Magna, Seeing Machine, Forvia, and SmartEye announced design wins for European mirror-integrated DMS/OMS programs. Did Tobii participate in these RFQs, and if so, what were the key reasons Tobii was not selected? A: Fadi Faron, CEO: There are many ongoing RFQs at all times. Many of the companies mentioned already have their own existing customer base, so I wouldn't know which specific deals are being referred to. We are focused on engaging with our customers, propelling the unique proposition of our products, and working on winning upcoming deals.
Q: Could you help us better understand the economics of adding OMS on top of DMS? A: Fadi Faron, CEO: Looking at the requirements in the automotive market today, while DMS is a main safety element, OMS is becoming more and more required by automotive OEMs. From a regulatory perspective, OMS will be part of the requirements in a few years as well.
Q: If you announce an automotive design win today, how far out are potential revenues and cash flow from that? Is this one, two, or three years? A: Fadi Faron, CEO: Typically, in this industrial business model, once you have an agreement, there might be an upfront payment for non-recurring engineering, but that only covers initial customization costs. The real payout comes a few years later in the form of license revenues, which may or may not be related to the number of cars on the road. Depending on the start of production and when the commercial decision is made, it could be two, three, or four years ahead, and then it will accumulate over the years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
