poLight ASA (PLT) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to poLight's Second Quarter Presentation. Together with me today is only the CFO, Joakim Bredahl. Our Board Chair, is enjoying still her summer vacation. So she is not here today. The agenda. Key events, introduction to poLight, market review, financial review and outlook, and in the end, a Q&A. So on the Q&A, since this is also webcasted, when there is any question from the audience, please wait for the microphone so that they all can hear your question. And also from those following us from the webcast, please leave your contact details in case we run out of time and have no time to answer your question or you can post it in the investor web portal. Okay. Key events. So we had quite a lot of activity with one customer, which is in the AR/MR space. And also, we have -- post quarter, we had another PO for them. So in sum, there is actually 3 mass production POs, which led us to kind of regard this now as a design-in. I'll come back to it, but of course, a major milestone. We also -- you'll remember that we had a project together with an OEM, which was related to the Q Tech investment. And that has also been progressing, and we also received a PO based on that project. Also towards the end of the quarter, quite an exciting milestone was also achieved. You know that we have this program where we received some significant NRE to develop -- support developing a camera module based on TLens. So now finally, we have shipped some cameras to the OEM, which is now currently being tested. Yes. And then we participated in Automate in 2026 with, I would say, good interest, focusing on the industrial segment. Okay. So for those which is not so familiar with poLight, we are definitely on the growth path. Not every quarter-by-quarter we'll see growth, but definitely, we are on a good trend, focusing on both consumer-related markets and enterprise markets. Related to consumer, the by far most important market segment for poLight is the AR/MR. It's quite interesting to see the -- I would say, the increased momentum we see in this AR/MR space. It's -- if you only go back a year, I would say, it's tremendous to see all the activity in the industry. And as we have said many years in poLight, we believe that this is going to be the big thing. And also restating due to our unique technology platform, speed, compactness, very low power consumption. You can imagine that these kind of AR/MR devices, which is so, I would say, the power budget is so tough and limited. The compactness is so important. It's supposed to be very light, very easy to wear. So all this -- and it has to somehow replicate the eye so it needs to be as fast. And all these kind of demands is exactly what our unique technology platform can offer. So it's a little bit like, I would say, you can call it luck, but this was invented in 2005. AR/MR was not at all in focus at that point in time. But this market has evolved. Now I would say it's more than evolving. It's starting to really, really show a lot of traction. And we happen to have a technology, which is fitting extremely well for that market segment. Yes. So as I said, founded in 2005, headquartered in Norway in Tonsberg. We have people in Finland, France, U.K., U.S., China and Taiwan and the Philippines. And we have a growing worldwide patent family. When it comes to the technology platform, the first product we have released to market is the TLens, it's the tunable lens, which is used for making fixed-focus camera enable to focus. But we also have, as you know, a huge activity related to another product based on the same technology platform called TWedge, which is enhancing significantly the user experiences when you're using AR displays. That product is still not in mass production. So here's the first product. On the top left animation, you see that we are bending a glass membrane by a piezo membrane. We then shape a polymer, which is the lens material, which is similar to your eye, the lens in your eye and the piezo membrane is the eye muscles. And by changing the voltage on the membrane, it bends from being flat to being bended and you see that that changed the focus of the light. So on the right side, you see how it's implemented. And on the bottom side, you see the supply chain. So poLight produces the polymer. We have an [ extra ] wafer supplier, which is actually the membrane itself, which is bending, which is the eye muscles. We send these 2 components to our assembly partner who is then assemble the complete TLens and test it. And then we sell to camera module partners who integrate it in a camera, either on top of the camera, on the upside there or in between somewhere in the lens stack. And this is then being shipped into different products, different OEMs. PoLight has an extensive activity direct with the OEMs. It is the OEMs which normally decides which technology to use. That's why we have to have an extensive activity towards the OEMs. But of course, we need to support the camera module and enable them to integrate the TLens technology. Okay. So as I said, these are the market segments. There are quite many. And you may say there are too many. Focus is important in an early-stage phase of the company. But I would say the main activity and resources being used is, I would say, there are 2 market segments, which is kind of getting most of the attention. For sure, the biggest attention is on the AR/MR because of the opportunity and the good fit we have. But also the industrial machine vision market is something which we invest in. But as I said, AR/MR is definitely the main focus as we believe that that's where we will get the volumes. But machine vision and industrial are also important. It's basically the same product, the same TLens at much higher pricing. So margin-wise, it's quite an attractive market segment. So combining high volume with low volume, high prices is a good match. The high volumes we manage will enable us to cost optimize, selling into niche markets like the industrial will give us much better gross margin than you typically have in the consumer world. So good combination. There are other markets which we also look at. We don't spend a lot of time to look for those opportunities. It's more that those opportunities typically will be kind of incoming calls, which we sometimes support. Yes. So there is no new design wins in the quarter. So this is the same slide as last quarter. But it's a good basis. We have references in all the key market segments, and this is the best sales tools we have. If you have proven that you can deliver, if you've proven that you are a good fit for different market segment, that is basically the best sales man you have. Yes. So we are extremely proud, even though we are not there as a design win, but we have the first design-in in a consumer AR/MR device. That has been an extremely tough fight in all aspects, being able to support demanding customer, being able to integrate the technology in a good way into their products. Yes, and always proving that we can deliver, convincing them that we are sustainable. So it's been a long, long, long fight. And we have managed to kind of convince the customer. And we believe that this design-in will go all the way into a design win. There is, of course, always a risk, but now, we have 3 mass production POs. We have shipped quite a few lenses already and are still shipping. And that is a very, very good sign, and I would be very surprised if this go away. And -- but we waited a long time for classified as design-in. And I'm typically very careful in doing that because I don't like to reverse it. I've done that once too much. So that's why I've been very conservative. But now I feel there is no way back, I feel. There can be other things which happens, there could be strategic things in the company, I don't know. But from a technology and TLens perspective, I don't really see that this can go away due to TLens. So we are very happy with this one. And of course, it is the first, and we believe actually a launch this year of the product. We believe that it's, of course, what will be the volumes will be a natural question, and we don't know. But I don't think -- as I said many times before, these companies taking a new technology into use will be very careful, and they will try to not stress the situation. So I said also related to the smartphone area that they will typically take it into some flagship lower volume things. We don't know, but that is my assessment. But anyway, what it is, I think the volume is not the most important thing. The important thing is that we are in, that it will be released, that it will be a product which will be kind of tested and referred to as state-of-the-art, and hopefully then be -- and be the basis for future high-volume cases for sure. So this is probably one of the most, if not the most strategic milestones we have achieved in the company for a long, long time. So if you do not see that I'm smiling, it's because you don't see. Generally speaking, I would say that in the AR/MR market segment, as I said in the beginning, it is -- it feels like it's happening now. Of course, it's always a question of when will the big volumes come, who will be the players. But what I feel is that there are so many players now who is taking a position with a product in this market segment. So it's -- I feel it's a matter of time before we will see quite a few volumes opportunities. And also, we talked about is it really needed with AF? Well, if you see the products being launched today, they don't have AF, most of them. And -- but we are, of course, as I said, we are very close to the OEMs. And the way we read them, more than read them, what they say is that they don't see that it's possible to move in this direction with a high-quality performance without sooner or later implementing AF. So that's what we are -- that's what they're telling us. And that's, of course, why we have all these PoCs because they need to be prepared for that. And then a little bit back to, okay, are we the only one? No, we are not the only one. But again, we feel based on the interaction we have that we are definitely one of the preferred ones. So that's -- but will we be alone? No. Will it be VCMs? I'm sure. Will it be other tunable optics? Maybe. But we feel that we have a very strong position, a very strong position. Some of the PoCs, many of them actually is becoming more and more mature. But what you also see, they are spending a lot of time to evaluate both the company and the technology. So they are not rushing crazy fast. But I think that when they see that somebody starts, of course, that puts a different kind of pressure on other actors to move. So step-by-step, we see this maturing. And of course, this design-in is proof of that. When it comes to the camera module, which we shipped in the end of the quarter, the last bullet, this is, of course, I mentioned before, a little bit like a reference type platform assessment. So outcome of that program will be very important. When do we know more? It's difficult for us to say. I will meet the customer in a few weeks to discuss status and assessments they have done and future. I think maybe -- I think it will be towards end of the year, we'll have more visibility on what's going to happen on that one. But regardless, of course, we have tested a camera and it works very well. But then it depends on the use case. What is the use case for that particular OEM for the camera because that is very different. But the typical use cases we can foresee, we see that this camera works. That was TLens. TWedge, I said it before, it's surprising to see how this interest continues, but it's really a few players. So it's a TWedge I feel is today a Tier 1 high-end guys who is kind of able to kind of understand how to utilize. So I don't see TWedge being -- have big deployments in the Tier 2 and the Tier 3s, at least not in the first years. But who is driving this is it's not in a way us. It's actually some big guys who is saying, we need your technology to have a successful deployment of quality display. So it's -- we are being pushed. And then we are saying, listen, we cannot move on with this big development without any kind of support/commitment. And this is what we are trying to conclude with a few players. And we are in, I would say, intense dialogue how to do that. What we are saying is that we're not going to do it if you don't support us. So -- and then, okay, but what do we get for giving you money? You get the components you need. That's not good enough, they say. So this is the discussion we have. So there was actually a quote from -- I would like to use from one of our important OEMs. And he was saying in a meeting or a dinner or whatever is that is it -- do you really understand how important this technology may become? A statement from a customer. So that's a very strong statement. So let's see. We are hoping that we will be able to kick off a real program. So far, it has been prototyping, selling prototypes to a high price to make sure that there is a clear interest. But we need to take it from there to a real program, and that is a costly program. We are having a plan on the next phase, and we are, as I said, trying to get some financial support from the market/commitment. So yes, amazing to see and also amazing to see how many different ways the different customers are planning to use it. And as I said, TWedge will make the display in AR/MR devices much better, much nicer in all aspects. So then the technology platform give us TLens, which we today are in mass production with and the next product is hopefully TWedge. But it is a niche product, and that's why we really would like to see somebody financing at least part of it to bring it to the market. Yes. So here's the status on the consumer side. This one do include AR/MR. And as you can see, now finally a design-in. And as you can see, a high activity on the PoC and planning PoC and many, many of them is related to AR/MR, the glasses, the green, light green there. 19 on PoC and 17 on planning PoC. So it's basically the -- but you can see also there are some laptop accessories, which also have some promises, but too early to say. So I think we are clearly betting on the AR/MR market, and not only us, by the way. Enterprise AR/MR, nothing new this quarter, but low volume still. But I believe that as the technology mature, these kind of glasses become more user-friendly. I think also 5 years ago, 4 years ago, I was talking about sitting on the flight with a big screen in front of me. I think that's also when I look at some of the big guys presenting their solutions, this is one of the applications they are talking about. But finally, it's happening. I talked about it 5 years ago. Yes. So on the barcode side, it's kind of slowly kind of giving us more business. And there's a mix between -- which is good, existing customer order more and releasing new products and new customers starting PoCs. M12 has definitely helped to bring awareness. This is the MLens, which is the off-the-shelf device that actually contains 2 TLenses. And as I said before, why is this important? Because that solution is not only TLens, it's more a lens camera solution, which is more like plug and play and make it much easier and faster for players to adapt our technology. So that's why we believe MLens will be important. We got good feedback when we went to Automate. Here in the picture on the bottom, you see Marcia. She's smiling. If it wasn't for the ears, she will be smiling all the way around. And she is showing there the MLens suitcase and good feedback. We have also now released 2 new products, which complement what exists from before. Okay. Yes. Here, you see the status on the barcode industrial. It's quite a lot, 15 machine vision and 11 barcode and some other applications. So -- and most of these are still shipping. There may be 3 or something who is end of life and been replaced. Healthcare, not really a lot of things happening, but there are some. I said before that I have 2, 3 cases now in mind, which I see some strategic importance in. What has happened before is that they -- in the end of the day, the customer finds out that maybe AF is not needed. And the reason for that is they -- today, many, many uses a 2 megabit -- megapixel, sorry, sensor solution, which basically doesn't need AF, most of them. But what we see now in the other cases we are now active in is that they have moved up to 5, 5 mega. And that means that that changed the optics, that changed the game, and that may trigger a need for AF. So it's not zero activity. There are some activity. But again, it's more based on incoming calls than anything else. But some of them we do support because we believe long term healthcare can be a very interesting market for us. And of course, the visibility we have achieved through the Mini2P, this device, which is imaging the brain activity in animals is quite massive, and that's still shipping well. Automotive, that's -- it's, in a way, I would say, close to zero activity during the quarter. But we still kind of keep it there to remind ourselves and to remind the market that we have a technology, which potentially can be important for that market also. But today or today's portfolio, we don't see any major opportunities. But there are on and off somebody contacting us in this market segment, and we do meet with them and we do explain our technology. But I think it's a long-term opportunity, which we cannot today use time on because of all the other things we are doing. But still, I would like to kind of remind ourselves that it is an opportunity. Yes, I don't need to go through this, but we are -- you see the various segments and you see the various categories and the trends. And here, you can see the [ Oyvind Buo ] slide, which shows the development on planning PoC, PoC and completed PoC and also design-in and design win. So since 2020, quite a bit has happened. We could always dream that things go faster, but at least this goes in the right direction. Okay. Joakim, the floor is yours.

Thank you. Good morning, everyone. So the financial review, we can start with the income statement, P&L. And one focus point is naturally the revenue. We reported revenue growth this quarter as well. The last 2 consecutive quarters, I have stood before you and I have said now this is a record quarter in terms of revenue for poLight. Unfortunately, that's not the case this quarter. But if we remove the first quarter of 2026, this quarter is still the highest. So it's the second highest revenue in poLight's history. That being said, this is not the revenue we're aiming for. This -- we still have a far way to go until we are where we want to be, and that's referring back to the pipeline that Oyvind just showed. So this revenue that we're seeing now is still very much positioning revenue. So we're positioning ourselves for the higher volumes. That takes a lot of work. So that requires us using the full supply chain. And that's why we're also very much executing on our hiring plan just to make sure that we have all the right people in all the right places. It's worth to mention, I think, that if we combine the first 2 quarters of the year, we have in the first half of 2026, actually surpassed the full year revenue for 2025. So that's a good start to the year. Again, that being said, given that we are now positioning revenue, I would say, we still could expect quarters to become volatile. It can still go up and down quite a bit because we're not seeing -- we're not in that place where we see that steady state of growth yet. Also in terms of size of revenue, I mean, we are still loss-making, and that's because we need to have a very qualified organization working with this area. And if we look at the OpEx -- well, we could just look at the gross margin first because the profitability in the quarter is around 50%, which is -- which we're quite satisfied with. 86% of the revenue is in the AR/MR segment, which corresponds well to what I've been saying about where we're putting our energy. We usually say about 90%, so we're 4% off that target. But -- so satisfactory gross margin. Then we look at the OpEx. And I think if we take a look at the R&D, because if we look at the R&D here, on the surface, it looks a bit like we are spending less on R&D or it's flat. That's actually not the case. Up until 1st of January, 2026, we reported customer service because that was -- took more the form of business development actually. We reported that as R&D. Now it's the same work. It's the same people doing it, but it's more repetitive now, it's more taken a form of sort of sales support. So we have now reported that -- since the 1st of January, we reported that as sales and marketing. So we haven't gone back and corrected earlier numbers because we feel it was correctly reported in 2025, and we're also reporting them correctly now. But that means that it's not completely -- we're not completely comparing apples and apples when we look at R&D between the years. So we have -- actually, we're spending quite a bit more on R&D than we did a year ago. Correspondingly, sales and marketing has increased, and that's not surprising given what I just said. Since customer service has moved there, that's also an increase in sales and marketing spending. Then for the supply chain operational expenses, that's increased. That's basically down to strengthening of that team and increasing the head count. And administrative expenses has also increased. I think an explanation factor for the OpEx increase is actually not really related to things we do internally, but the share option program and employer's NICs, which increases when the share price increases. And in Q2 from the start -- during Q2, the share price developed very positively, which is fortunate, but it also leads to higher employer's NICs. And that's actually NOK 7.4 million higher than the same time last year. So one number that I thought is more interesting to look at is if we rinse out that factor because that's really down to things that we do and how we spend money and it doesn't have a cash effect. Then if we look at the OpEx and compare it to the revenues, if we look at the first half of '25 compared to the first half of '26, the OpEx over revenue ratio was 2.75x higher last year compared to this year, which means we're getting far more revenue out of our spending. It's a very positive sign. So yes, we can leave the income statement. If we look at the balance sheet, of course, there's the -- as always, the most interesting part of our balance sheet is the cash, and I'll get back to that. But if we also look at the inventory, that's also more sort of complex part of our balance sheet, and that's seen a reduction in the quarter of NOK 4.4 million, which is cost of goods sold. It's the provision for obsolescence that happens every quarter. And there's -- it's a small increase due to some assembled goods. So if we take the wafer out of the inventory and we assemble it into the TLens, that increases the value of the inventory slightly because we have the work done. Looking at the cash flow development. Again, I don't want to really compare the 2 numbers without rinsing out the factor here because Q2 2025 was a quarter where we had the private placement of NOK 161.5 million, which makes it, of course, a net increase of NOK 137 million in that quarter. But if we take away that factor, we actually have a cash net decrease that was NOK 6 million less this quarter compared to the same quarter last year. So cash burn has been lower. And that is mostly explained by a decrease in working capital. That is, the decrease is higher than it was in that quarter and then slightly offset by the net loss that was slightly higher. And we also have CapEx in the quarter of NOK 1.3 million, which is related to investments into new test equipment. And this leaves us with a cash at the -- cash balance at the end of the period at close to NOK 244 million, which we consider to be still quite healthy at the development stage that poLight's in currently. I think that concludes the financial review, and Oyvind can lead you through the outlook, and then we'll have room for Q&A after.

Yes. Thank you, Joakim. Yes, outlook. Restating something we said before and we would like to repeat, we feel very confident -- more and more confident on poLight and our success and particularly in the AR/MR segment. We now have our first design-in for consumer, which will be an extremely important platform for new design-in and wins. It's -- I would like to kind of thank the team for achieving that because that has been a really, really tough fight. As I said, autofocus capabilities in these products seem to be on the road map for all the major players. And then typically, all the others will follow more or less. So that's -- but it's not going to happen in one big bang. It's going to happen step by step. We're going to get into design-ins and design wins, which will kind of maybe starting in the beginning, not be high-volume products, but kind of, as I said before, trying new technology, careful release into key products and then ramping. So -- and also competition will be there. But again, we feel that we have, I would say, the way we read the market, we feel that if -- what should I say, if cost is not super important and performance is most important, I think we have the best technology. But we are not able or willing to sell at the kind of cheap, cheap, cheap VCM price level. We also don't think VCM is a good solution, but there will be a solution based on VCM. So we are positioning us based on performance, which I think is business-wise more healthy. TWedge remains extremely strong. I used a quote from one of our customers, you don't understand how important this technology may become. I think about that every night I go to sleep. So -- but as Joakim indicated, we are in an investment phase still, and I have to thank you shareholders for patience and support, but it will be a mistake to save money at this stage. Now we need to take care of the opportunities and that cost. But we will take care of the cash as good as we can, of course, but we need to optimize future success. That's the focus in the company. Okay. Joakim, would you join me for Q&A?

I will.

Is there any questions today? A little bit lighter today, isn't it?

We'll see. So yes. We can start with the ones that we received before the session started. First, to sign in, in Consumer AR, congratulations. In Q4 '25, it was mentioned that there was a big guy behind the PO on lenses for this project. Can you say anything more about the geography of this customer or say anything more about the schedule or anything else about the way forward?

No, I do not like to comment on where this customer is. Having said that, most of the people -- companies we are dealing with, they are all over the place. But yes, so I don't want to say that or comment on that. But what I can say is that -- is that the way we understand the situation is that the release plan is this year. When this year is still for us a little bit uncertain, but I think it seems to be quite certain this year. When it comes to next steps, we have already, as I mentioned, received 3 mass production POs based on mass production prices. All those has been announced. We -- typically, these customers, they would like to have as close to 0 inventory. They want us rich suppliers to take care of that. And so they're typically not one kind of big PO. They are taking -- we try to force them to place as big PO as possible, especially the first one. You may see that the first one we received was bigger than the follow-on POs. You saw that. That's typically how we try to massage it. But they will typically give us a forecast and then they will potentially place a PO per month or per second month or something, depending on their demand. So now they have built a certain inventory, which they don't like. And then when they release, they will see how the sales go. And based on that, they adjust the forecast and place PO when they see that the inventory is at an unpleasant low level. This is completely unknown for us how this will develop. But as I said, we don't expect OEMs, major OEMs to bring new technology immediately into super high volumes. That will be too risky. I've said this many times in many years. So I also expect this is the case here. It's probably a high end. It's probably high performance. That's why they use us. So -- but we don't know and the customer doesn't know.

So -- and then this is a fun question. Have you seen or tested any glasses from the customer?

Normally, we are not allowed to see them, extremely secretive. But we -- in some cases, we jump into them because we are together within the factory and debugging situation. So sometimes, yes, but not in any way that we have tried them and understand how they perform or like that. It's more like -- so they are extremely sensitive on that. They don't -- when we are meetings, they don't bring it in when we are in their offices on the lab, they remove everything which is sensitive. So it's -- they are very, very careful. They want to have control of the market release, of course.

Should we expect to see further and potentially larger purchase orders as we approach the mass production and launch phase, this is sort of answered. And also, there's a question here about the volume potential of this specific project. Based on precedent, poLight declared a design win simultaneously with the product announcement. Could you describe any -- what specific milestones would be required before the current design-in can be classified as a design win?

Yes. Good question. Typically, that will be when we know that this is being released to market. Will that be based on some product presentation, early marketing or will it be when you see it in the shop? We don't know. But typically, there will be some announcements upfront of release. That's when we define design win, meaning when we are sure, it will be in the shop.

And then comparing a few of the projects, I understand people want to puzzle together what project is what. The Q2 report clarifies that the new 2026 design-in is a separate case from the consumer OEM backing the Q Tech assembly line investment. Could you share some color on the maturity of this Q Tech-related OEM case and what milestones and validation steps remain before that project might also reach a formal design-in status?

Yes, that is another extremely thorough process with an extremely important OEM in the U.S., as we have said before. So we had another PO this quarter as of Q2. We are in constant dialogue with both the camera module supplier and the OEM, which I also will meet in a couple of weeks. So I feel that, that program is doing quite well, but it is a relatively slow-moving process. Again, very advanced glasses, high-end glasses, big OEM that means that they are extremely thorough. They -- you wouldn't imagine even acquiring themselves very advanced optical test equipment to basically do what we have been doing for 20 years, characterizing. So it's -- and what the management is telling me when I'm complaining a little bit about speed and all the effort we need to support them and for no money -- this is how we work. We cannot take a risk of not doing a good job. We have to be as thorough as this. This will sooner or later, maybe not in the beginning, ramp in huge volumes, and we cannot do that before we are going through this thorough assessment. So it's slow, frustrating slow, but hopefully, for good reasons.

poLight has several major projects underway for which it has -- which POs have been announced. I am curious about the major players you have not announced POs from. Do you have ongoing projects with several top tiers and leading OEMs that are maturing?

Yes. I would say we have -- as mentioned before, we have activity with many of the big names and less big names. And several of those have not been exposed through announced POs. So yes.

Completed PoCs jumped from 43 to 49 in 1 quarter. Can you give any color on what these 6 new completed PoCs represent in terms of market segment and commercial potential?

That was a question I need to -- that seems a little bit high, to be honest. Maybe I did a mistake. I need to check that. But if this is related to consumer, it could potentially be a few laptop cases, but I felt that was a little bit high number. I need to double check that, I come back.

Yes. The report confirms that the first camera modules for -- from the October 2025 project were shipped to the customer for validation as you mentioned in the presentation. What is the next milestone for this project? And what is the expected time line?

Yes. I mentioned that -- the honest answer is that we don't know, but I'm going to meet key management in a few weeks discussing results they have achieved so far. And my understanding from last meeting I had with this company is that there may be some kind of visibility towards the end of the year. Very important program, by the way.

So okay. So this question is a bit back to the Q Tech and the backing OEM. This project seems to go well from what I can understand. What will the next phases be? We've answered that. This project is a qualification for a specific product. Can you say something about whether you have seen any demonstration [ blast ] in this project? I guess the same answer as earlier. Can you say something about the lenses that have been produced at Q Tech?

Yes. So that's -- those have been tested and qualified, I would say. So it seems to be good. So we are tuning some of the processes still, but what has been delivered as good lenses out of Q Tech line are good and qualified. Then there are some tuning to be done in some of the processes, but it seems good.

Then a question. We recently saw that Ant Group showed a demo glasses with a TLens camera at an event in Asia. It was mentioned by someone there that the camera and the glasses was chosen to have a TLens so that payment solutions could -- such as Look to Pay could work optimally. Can you tell us more about this project? There are many glasses available on the market with fixed focus and a few with VCM.

I'm so glad that you are able to pick up all these details. It's more than I looked, to be honest. And yes, but of course, we know that initiative. It's Alibaba, a small company in China, which have -- of course, it's a big payment machine. When I'm traveling to China, I'm using Alipay and WeChat. And of course, if I could -- instead of taking my phone and scanning a QR code and you can just look at something and pay, that would be much easier. And that's what they want to do. They want to have glasses, which is AI glasses, which are smart and which can automatically kind of -- you can pay through but just looking at the QR code instead of using your phone and losing your phone on the street. And so a very, very good idea. And I think that's a big use case. And Alipay and WeChat Pay is extremely used. You don't have cash. Only a few years ago, we always had cash when I go to China. Never cash, only Alipay and WeChat Pay.

It's dangerous like window shopping is now.

Exactly you buy something, you look at a dress and you buy it before you know it. Exactly. So that's going to be expensive trip. I need a higher salary.

No, we'll look into that.

So they, of course, this kind of function would mean that they need a very good fast capture, accurate capture. And that equals if, different live conditions, different distances. So that means that -- and that's what -- and which is kind of a subset subgroup of Alibaba is -- have presented because they saw and they got some feedback that this Look and Pay didn't work so nice. And so they kind of said we will improve. We will make a proposal to a better design, which then is exactly that, reference design, which was shown at this conference in China, big conference. And that -- and they even mentioned TLens. Then they have a camera. They have a glass brand. I can't -- or something I can't remember, which is being produced by an OEM. That is currently using fixed-focus, but kind of the reported challenges with these kind of glasses is claimed to be solved by using AF and in this case, particularly mentioned TLens. So of course, if this Look and Pay becomes something big and which it can. And only after that, when that was kind of announced, we saw another boost of incoming calls to poLight in China. So of course, it's fantastic. But still early to say what it will imply, but it's only positive, of course, that they do marketing for us.

Then a few questions about TWedge. And we talked about the -- finding a partner for TWedge project development. Are there one or more stakeholders in dialogue with poLight about this?

Yes. We are working with a small hand, I would say, 3 at least very active. And we are discussing kind of how to bring this to a mass production product with at least 2 of them. And hopefully, that could mean that we can get some kind of support/commitment, but we don't know yet.

Vitrealab was listed on the stock exchange with the laser LCoS demo version with TWedge by poLight a while ago. Vitrealab is expanding its clean room facilities considerably and preparing for future scaling. How is poLight's further cooperation with Vitrealab?

Yes. It's interesting in a way. They use our -- I think I talked about a little bit more in detail last quarter, but they use our TWedge for other applications, more laser-based, as you said. So we supply to them and they implement it and we invoice and they pay. That's the relationship. We don't really engage on the technical side. They seem to be more than capable to implement this themselves. So we just ship TWedge, which is kind of a little bit out of spec for the AR TWedge display and because the laser have other specifications. So we're kind of using part of the stock into that and support them, but we only support them on supply because they do it themselves. What is interesting is to see what will be the display solution in AR/MR? Today, it's a lot of LCoS. And there's a lot of talk about microLED. There is also maybe a wave coming later on back from LVS, laser, which you remember we were involved in. So -- but it seems like whatever display solution, TWedge can find its way in to improve that solution. So this is very interesting. So we are not kind of betting on one particular display technology, which seems to be needed in different types of display solution. Vitrealab, one example. And we do see that some of the OEMs we're working with, they are asking us to support Vitrealab. So clearly, they have some traction.

Then a question about MLens and machine vision. How is the response to the 2 newest MLens units been? And have any other customers on any of the 4 MLens units provided feedback that may indicate that they will be ordering products?

I think, generally speaking, I don't have any particular feedback on the 2 latest because it has been always communicated to customers that this will be the portfolio. And first, we launched this and then we launched that. So that was not a big surprise to the market. But generally speaking, I feel that the feedback is good, both from the OEMs, from partners, it's good. But yes, we still -- I think next year, we will see how things pick up and the year after. So I would say it's quite promising.

And then about medical. So this is quite a long question, so pay attention. A few months ago, TS Precision posted an update on LinkedIn that they are working with TLens and have projects in both AR and medical. They mentioned that there is a Chinese endoscopy case in the early stages for which they are supplying lenses. Is poLight aware of how this project is going or if there is any development in other medical-related projects from other camera module makers?

Yes. We know TSP very well, very well. We've done many things for them. So I think I know which projects they're talking about. So -- and this is one of the cases which I'm referring to. There are some interesting health care endoscope cases, which start to use higher megapixel sensors. And so that can be relevant. So yes, we are aware of it. And yes, we know them very well.

Then we're skipping into the questions from -- that have arrived during the presentation. So firstly, having followed poLight for over 10 years, please let me express my gratitude to you and the whole hardworking and persistent team for impressive achievements. That's pleasant to hear. How about competition regarding TLens and TWedge? You've mentioned it briefly. Is there any comments?

I don't feel there's anything new, but it's a good question to ask. So no, I would say that the competition is -- on TWedge, we haven't really seen a lot of competition. I think the competition is not using it. On TLens, there is -- depending on which market segments you're talking about, there is a very tough competition from VCM for sure. There are other tunable optics who can do better, higher optical range and bigger aperture, which in some industrial use cases is preferred. So there's a competition there also. So -- but then if you look at our major main focus, the AR/MR market -- on TLens, we feel that we are from a performance perspective, size, power, speed ahead of competition.