poLight ASA (PLT) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to poLight's First Quarter Presentation. Together with me today is Board Chair, Grethe Viksaas, as usual; and my CFO, Alf Henning Bekkevik. The agenda of today is key events, a quick introduction to poLight for newcomers, update on the market side, financial review by the CFO and outlook and in the end, Q&A. So since this is webcasted, when you leave your questions through the portal, please leave your contact details in case there is no time to reply. And also, if there's a question from the audience, please wait for the microphone so that people also in the webcast can hear your question. Okay. Key events. Another barcode customer step-by-step, they are becoming more and more of these cases and also, as you will see, the pipeline is increasing. So this company released 2 products using TLens. Interesting, this Mini2P is developing in a very interesting direction where commercial companies are taking this design, commercialize it and are selling turnkey solution to labs and universities. This is kind of for the labs and universities to buy turnkey system instead of themselves doing the development of these kind of systems. This was all started by Kavli, Moser's team. But of course, they are not a company to supply this solution. So now you can see commercial companies coming and supplying the market. So this is interesting. Of course, the volumes will be small, but the value of these -- each order is quite significant. Another kind of, you can say, similar case, Thorlabs, which is very well recognized. If you go to labs, you will see a lot of Thorlabs equipment around the world. So they're quite known and respected. So they have made an Optical Cage System, which is used for scientific purposes for engineers and researchers to test different equipment, and they then also have released TLens-based test equipment. Again, it will be, I would say, more for the niche market. But of course, in those niche markets, there are engineers and professors and PhDs, which will, in the end of the day, go out in the industry, many of them and bring along the experience with TLens. So I think for a long-term, this is super important activity. Yes. And then as mentioned last time, 5th (sic) [ 15th ] of January, we had the changes in the Board. Marianne Boe, who is heading IR at IDEX joined in, and Jean-Christophe from Yole joined, whereas Ann-Tove decided to had to leave us due to workload. She is then the -- she was the acting CEO of Investinor, been there for a long time. So she had to step down. Just want to mention that specifically, Jean-Christophe Eloy, he has started a company called Yole and is the Chairman and the CEO of that company. And they are very well recognized for market analysis for this -- the ecosystem we are in. So the fact that he is willing to join poLight is it -- an kind of interesting signal in itself. Okay. So post Q1, Q1 is delayed due to the share issue. So post Q1, we had finally design win from Vuzix Shield, super nice glasses. For those who will be at the Capital Market Day tomorrow in Horten, you will see the real glasses. And hopefully, we can demonstrate them in a good way. And then there, we are used in the 2 RGB cameras fronting the -- facing the world. We have also, interestingly now more and more activity around TWedge. And by the way, TWedge will also -- we're planning to demonstrate tomorrow for those coming to Horten. And we are now receiving orders. Lately, we have several of the big OEMs who is buying technical samples of TWedge. So the interest in this technology is, I would say, very high. Wooptix, another, I would say, scientific type examples compared to like Thorlabs and what we do with this PhenoSys and others. Again, small volumes. They are still in, I would say, Eval Kit stage, but going to release the real product later this year. It's a Wavefront Phase Camera, very compact, nice device. There are papers out in the public describing this development and this product. Then, we had rights issue, which resulted in NOK 124 million in net proceeds. Thanks to all of you who participated. Great support and very important for the company to be strongly financed in all the projects we are doing with big names. Okay. Very quickly, I will try today to be a little bit shorter since we're going to spend half a day together tomorrow. But a global player, tunable optics, many application areas. We have been there since 2005, developed, I would say, a very advanced technology in tunable optics. We claim the best. We have a strong IP platform. We are now 46 in head count and slightly increasing still. We are headquartered in Horten, as you know, and distributed all over the world, as you can see from the map. The latest addition we have is one person in Berlin, who is addressing the German language speaking countries. And particular focus maybe on the industrial application areas, including barcodes and machine vision and what have you. Listed since 2018 and the attributes of our technology is extremely fast, very compact, constant field of view and extremely low power consumption. The product you see animated on the left side. So we have the lens metal, which is the blue white field in the middle there, which is being bended shaped by a membrane. The membrane is being bended by applying a voltage through a driver we have developed. And by doing that bending, you change the optical power, changing the focus from infinity to close. When you bend and you apply, say, 50 volt, you're focusing very close. When you are flat surface, you're focusing in infinity. So replicating, as we said, the human eye. Here you can see the implementation on the left side. And you can see a picture on the top right, where you see the picture of the TLens itself compared to a tip of a pen. So it's a really compact small device. Our technology likes to go small. And the limitation we have today is the size of aperture, which we are currently addressing in new development projects. Supply chain, we are doing the Gel, the lens metal ourselves at the headquarter, then we don't have to share the recipe with anybody. It's a heart of our technology. We master that very much so. We can tune it depending on application, et cetera. The eye muscle, the membrane being bended is produced at MEMS fab. So 1 8-inch wafer is a couple of thousand dies. So we are shipping these components to assembly partner, which is assembling to complete TLens, either with or without package. We sell to camera module partners who integrate this TLens in different ways, like on top, like you see in the upper camera module or as an integrated part of the lens stack, which you see on the bottom there. And then we, of course, sell to OEMs. And as I mentioned many times before, we are spending a lot of our sales resources and tech resources in convincing the OEMs, and they kind of instruct the camera module player how -- which kind of AF technology they would like to use. Okay. So as I mentioned in the beginning, it's a technology, which I have to say, it's amazing for me to see how many different applications we can facilitate. If you say -- if you ask me about this wavefront sensor from Wooptix as an example, is coming like -- and also, you see this Thorlabs type activity. This will generate new type of application, which we didn't think about. So it's very, very interesting to see this. Also, if you think about the display solution, laser beam steering application, which we are also involved in, we didn't really think about that initially when we developed this technology. So it's interesting to see how kind of application is coming into us and finding new use cases. Anyway, market side, consumer is definitely key for us due to the volumes. AR/MR is becoming more and more important. And mind you, this market AR/MR will sooner or later become a significant consumer market. Also, you can see it already now. You see Apple Vision Pro, whey they start to address these markets, we know that what that means. So this is, in a way, a new market. I've said it before, the innovation happening is really much in that area, whereas in the, say, in the smartphone, which is a very mature market and flattening market, it's more about cost. So being early in the AR/MR space is we see as a key for success for the company. Then Industrial/Barcode/Machine Vision, and as I said, those are the 3 main activities we are supporting. But there is -- we have half an eye on other applications such as automotive and health care. So this started to be a busy slide, which we like. You can see here on the left -- on the right side, you see the industrial. So the latest one is the Action, which has 2 products on the bottom there. So here, you can see the Honeywell, SuperLead 4, Hikrobot 1, [indiscernible] and then Teledyne 2, Action 2. So there's starting to be a significant number of products out in the market and the pipeline will show us that there are more to come. Then also finally, Vuzix was released. So here, you see the picture of the Vuzix Shield. So there are 3 AR applications here and 1 MR, where we use for the VG see-through camera. And then the consumer products, you know from before, it's the webcam, the watches and the smartphone. Smartphone is still selling. They have released new MEIZU 21, but no one of MEIZU 21 versions, there's no MEIZU 21 Infinity. So the MEIZU 20 Infinity is still shipping. And the MEIZU 21 as far as I know do not have any AF. So the MEIZU 20 Infinity is the flagship when it comes to that respect. Okay. Let's go into consumer. I would say still a relatively challenging sentiment. I was just back from Asia, and you can see still people are extremely careful with spending. Focus in the quarter was definitely augmented/mixed reality. Most of the consumer activity we are preparing for now is actually related to that, which is interesting, and of course, smartphone. Other application webcams, laptops, smart-home, wearable is also -- are also in our kind of PoC and planning PoC list. Not much new to say on the market side of smartphone, other than that it's still kind of relatively challenging. They are kind of putting priority on cost optimization. Selfie camera is still kind of having a low budget compared to the main camera. So that is still the case. VCM is also being -- started to be used with some of the OEMs on the selfie camera. So even though they admit that we have a better solution, they are so concerned about cost that they stick with that for now. But of course, we are knocking the door on a regular basis. And also, as we mentioned before, we have initiated R&D activity, which hopefully will make our solution on system level easier to do for more camera module makers, reducing the cost of the -- the total cost of the camera module using TLens. That will be an extremely important activity to increase the chances, and this is currently ongoing. Then also in addition to that, to be able to fit the bigger image sensor on the back, we have started a project related to a bigger TLens. And that bigger TLens is -- that project was started end of last year and has progressed quite well during the quarter. So we are being very persistent. We -- this is a market we will continue to explore. We will continue to push. It is important because of the volumes is that today, whereas the AR/MR is kind of volumes tomorrow. So we will keep on pushing here. But it's important also to say that whatever we do for this market is highly relevant for other markets, eg, AR/MR. 4 design win, 38 completed PoC, 1 ongoing PoC and 7 planning PoC. So a bit quite increase in the planning side. Okay. So here, we can see another way of presenting it. Here, you can see the same numbers, but here we take in the AR/MR consumer-related activity. So as you can see, a lot of PoCs and planning PoCs related to AR/MR, related to consumer AR/MR. So this, I feel it's a very nice illustration how important AR/MR consumer is for the company. In the -- actually in -- as far as we know, the AF solution from poLight is the only solution used in AR/MR devices. So I think that speaks for itself. Yes, AR, again, we have seen this before. Key selling points, compactness, low power consumption, fast focusing speed, constant field of view, no gravity impact when you move your head, athermalization, meaning when the temperature drifts, the TLens by design is compensating for that. So many different type of use cases is basically fast focusing to capture image regardless of situation around you, replicates the human eye in see-through cameras. See-through cameras is the display you are not seeing through it. It's kind of you have a video see-through on the screen. And you can imagine if you had an AF technology there, which was slow and if the field of view was changing and pumping, you can imagine how dizzy you would feel. So here, we have a unique proposition in this application. Barcode and object recognition for AI and focus tuning of laser projection display. So there are several use cases. As I said, we are in 4 products. We have built an extremely strong position in becoming the preferred AF solution. As far as we know, we are the only one being used in this kind of application. I would say that the potential consumer-related activities are maturing and also increasing in numbers. So in that sense, I think the quarter has been really good to see how things are getting from PoC to actually concrete discussing project with the customer. And we are talking about many interesting names. Another thing, as we're mentioning, TWedge, which is kind of this enhancing resolution for AR micro LED display. I would say it's receiving very good interest. And major, as I said, consumer OEMs in AR/MR is now ordering technical samples, and they are not cheap. We are basically resolving a show-stopping trade-off between resolution and brightness. So for the user, it will be an impressive improvement with or without TWedge. You will see that picture so much nicer. And as I said, we will try to demonstrate that tomorrow at the headquarter. Now I'm sure going to be 100 people at the headquarter tomorrow, which there will not be space for, sorry. So yes, so this is a super, super interesting development. You can see here, we have 4 design wins, 4 design-ins. We have 18 PoC completed. We have 11 ongoing PoC and planning PoC, 18. Yes. Again, you can see the distribution between the consumer part and the enterprise part. So it's a good mix. Consumer, of course, more important for the volume. Industrial/Barcode and other things, I should say. So here, we have 2, 3, 7, 9, 10, 11 barcode products using TLens. Action Prowave, the latest one. So 6 companies using an 11 products, all cases still shipping. It will take time to develop this market. I've been saying this again and again and again. It's true because many of these cases is kind of 5,000, 10,000, 20,000 yearly volumes. So it takes time. Our hope is that the customer sooner or later will bring us into more -- closer to the point of sales, where the volumes is higher. This will, of course, take time to develop. Of course, they need to establish kind of confidence, and we need to break into the right companies, so we're keeping pushing for that. And by the way, tomorrow at Capital Market Day, our VP, Business Development in the North America and global marketing guy, Tristan Joo, he will be giving you an in-depth presentation of all market segment and our opportunities and our tactics in that area. So that's worthwhile following. We're also doing a Teams live webcast, so you can follow if you cannot be there. So he will explain more about the details. I would say that the Barcode/Industrial, even though it takes time, it -- we can see a trend of pipeline increasing. And as I said, we talked about Thorlabs. We talked about Wooptix, which is kind of completely different thing, but still things which come sooner or later trigger new markets for us. 7 design wins, 2 design-ins, 34 completed PoC, 14 ongoing PoC and 16 planning PoC. So 16 up from 8. Yes, again, just an illustration, I try to show you a difference between the different markets. You have the barcode and then the eye is more the machine vision, so then you see approximately the distribution on these different phases. Healthcare, yes, mainly related to Mini2P. The Mini2P has become super famous, to be honest. PhenoSys is the first one coming out with a commercial system. There will be other coming. I think before we leave the year, there'll probably be 3 companies selling these systems. So -- and in addition to that, we are directly also engaging with university and labs. So -- and as I said before, I think it's an extremely important brand building. These guys are doing research. Look at Moser, got a Nobel Prize for his brain research, which wouldn't be possible if we understand it correct without research and experimental did with Mini2P. They have tried other tunable optics. It couldn't do it. And when they get a Nobel Prize, they are publishing. They're getting worldwide attention. All the labs in the world would like to do something similar to do similar research. And of course, this will sooner or later will be very well known in related also industry, which we hope can bring us into new cases and new products. We are also involved in, even though we have said before is that we don't really have any short-term breakthrough in endoscope or laparoscope, which we did hope we had. We had -- remember the cynical, which ended up with -- due to time to market issues and problems in manufacturing, they ended up with a low megapixel standard camera with no AF. And that's a little bit -- we see that the trend still is, they're using standard fixed focused cameras, 2 mega, which really doesn't gain so much using AF due to the low resolution. But we also see that when we talk to the players that there is a road map towards like 5 megapixel cameras and then the answer will be they probably need AF. So I think we keep an eye on it. We still have quite a few PoCs ongoing actually, some long-term, some more medium term. So this is -- but I wouldn't be kind of with the expectation management a little bit. There's nothing kind of short term coming in that era, but longer term, we believe. Okay. 2 design wins, which is both Mini2P, 2 design-ins, which also in that area, 14 ongoing PoC and 8 planning PoC. I described more about the details in the quarterly report itself, if you are interested. Automotive, yes, this is really one of my wet dreams also. We have a clear signal that there is a need for AF sooner or later in this industry. We also have a clear signal that they don't believe that the mechanical moving a lens stack is a good way to go. So they are considering other technologies. And as far as we understand, we are one of the technologies. They -- we will -- it's going to be a tough process and tough qualification process, which will take a long time. And it was also likely they will need a bigger aperture TLens. And what I said about TLens and aperture TLens for back camera smartphone, which we are targeting, we are also having this kind of application in mind when we are doing that TLens. So that not only for the smartphone, but even for AR/MR and even for automotive will -- and industrial. So that is kind of whatever we do on the product portfolio has really a, I would say cross-market segments relevance. There are current ongoing PoCs. There are no new PoCs during the quarter, but they are all -- and they are all based on existing products. Yes. As you see here on the pipeline, 17 design wins, 8 design-ins, 100 completed PoC, 43 ongoing PoC and 54 planning PoC. And this is [ Owens ] patent. Here you can see the graph how this is nicely developing in the quarter, we have up in the quarter. Alf Henning, financial review.

Thank you. And good morning to you guys. Deliveries of TLens and ASICs gave NOK 900,000 in the quarter and NOK 400,000 was invoiced when it comes to NRE for development projects. In the quarter, we had an EBITDA loss of NOK 18.8 million compared with NOK 14 million in Q1 last year. The main drivers for the increased loss is an increased provision for inventory obsolescence of NOK 2.3 million, which is reflected in the cost of sales. We also have increased the number of employees and consultants of approximately 9, offset by NOK 3.6 million in reversed share option expense. Due to the decline in the share price, the accrued employer's national insurance contribution was kind of reduced in the quarter. When it comes to the balance sheet, cash position of NOK 95.3 million, and that's before we take the share issue into account compared with NOK 114 million at year-end last year. Inventory stands at NOK 67.8 million compared with NOK 70.1 million at the end of last year, and the decrease is due to the inventory provision for obsolescence. On net cash flow, we started the quarter with NOK 114.8 million in cash. We used NOK 19.2 million in operating activities compared with NOK 30.6 million in the first quarter last year. And the reason for the less spending in cash is we haven't purchased any wafers this quarter, which we kind of purchased for NOK 11 million last year. We used NOK 600,000 in investing activities. We received NOK 200,000 in financing activities and NOK 100,000 due to FX. So at the end of the quarter, we had NOK 95.3 million in cash. Okay. Thank you.

Thank you, Alf Henning. One slide to go and then Q&A. Yes. As hopefully you have seen from this voice over AR market, MR market, both for our AF solution and following, I would say, successfully technology demonstrations of TWedge is making us feel very good about this development of this market. As I said, AR market is now -- AR/MR market, our solution is the only solution used so far. And meaning that there is -- we have already established a very strong fundament for this market. I'm not saying that they're never going to be a competitor, but at least we are in at a very early stage. The current design wins in AR/MR is directed at the professional market/enterprise market, which is why the current volumes are low. If you say tech Magic Leap, as you know, we are in, Magic Leap is constantly reducing the forecast because of the ecosystem around them is not mature enough. It's a matter of time. On the good side, the potential consumer-oriented customer cases are increasing in number and becoming increasingly mature. When I say increasingly mature, I mean we are getting from a tech assessment only discussion to more real discussion on which products we fit in. Okay. When it comes to TWedge, repeating myself, but it's important, major consumer OEMs are showing a high interest and order technical sample for review. And this activity, I think it's not unlikely to see AR glasses/MR glasses with multiple TLens products in. So AR/MR market is super promising. The consumer market is challenging still, I would say. Regardless, we are extremely persistent. We are very stubborn and we continue pushing that and using actively our first smartphone reference. We have been initiating, we feel key action to improve our chances in this market, and we feel that they are progressing quite well. The industrial market step by step coming in, new applications also showing us new opportunities. In general statement, I would say, poLight and its technology and products is becoming increasingly known and respected, and key references has been established in all key markets. Yes, it has taken time. Yes, it's taken a lot of investment from you as a shareholder and employees. But there's no reason to not even stronger believe on what we are on its way to manage and create. As I said, further initiatives to strengthen further our position has been taken so that we have a future-proof portfolio. Thank you. Alf Henning, do you want to join me for Q&A? Should we start with which has been submitted, Alf Henning?

Yes. Okay. Are you ready?

Yes.

The AR vertical is super exciting at the moment, but perhaps most interesting is the incredible from the functionality we see in [ Varjo's ] headset, where the camera externally focused on the ROI, the area that the user turns his eyes towards. Is this a function you think could become more widespread? And can poLight possibly supply something for such functionality?

Yes, you have many creative ways to try to trick me. But without referring to [ Varjo ], I would say that video see-through function is something we think we have the solution for, really the solution. And that's what I can say.

PoLight now has approximately 200 projects that you are involved in. What proportion of these can contribute projects where a possible positive outcome with a choice of poLight in the product launch could result in sales of significant volume?

I would say every case is on consumer AR/MR and also other AR -- sorry, all consumer-related project like all the OEMs, which has been doing PoC with us on the smartphone, all the PoCs we are doing and have been doing on more, should I say, IoT or wearables. I think all these markets have that significant potential.

Which of the projects you are involved in now, would you rank as top 3 when it comes to potential, it can be about both sales volume and technology interesting solutions, not necessarily just economics?

I would say that in the short, medium/long-term, I would say that without that being specific on project, I would say, it is the AR/MR and it's the consumer. Those are the big things which can happen. And then, of course, longer term, you have automotive, which also is a significant market, of course, but that's -- yes, that's long, long, long-term.

Can you say something about -- more about the possibilities for passive athermalization and the use of TLens for this? Is it an area of activity?

Yes, in a way, you can say, yes. Some of the design wins we have is -- was initially triggered by that fact. If you have a fixed focus camera and you have a change in temperature, that fixed focus camera, which will be at focus at certain temperature will be just out of focus at another temperature that was triggered that we have to have AF. But there is actually the TLens, it has in by design, even without activation, it actually compensate, not perfectly, but somewhat. So we have talked about releasing that athermalization TLens as a standard product without activation, which, of course, mean a much cheaper product. So far, we have not started that, but it's something in -- or something which we have on our mind.

Can you say something about how the work with CMMs or camera module makers is going now? I'm thinking in particular of the work to reduce cost for complete modules with TLens.

Yes. Now we are engaging with many camera module players. And one other thing which I said some of the initiatives we have started to cost -- reduce the system level cost of selfie camera, as an example, is to make not only the high-end camera module players able to make this happen in an add-in design as they would like to have because of the nose size. But we then try to make an integration of the TLens at extremely small package around the TLens, which makes it easier to integrate it inside the lens stack without needing all the processes other high-end players have. That is the -- one of the initiatives we have been kicking off. And that is -- yes, that is clearly one thing which can help to reduce the cost on system level. Then also I would say that definitely, one of the cost elements in what they call active alignment, which is you have 2 different lens groups and you align them relative to each other and the sensor. And that is needed because they are making so extremely compact cameras with so high resolution and low f-number. So this is meaning that they need to be super, super tight tolerances. This is what they do. This is a very expensive process today, but more and more cameras is moving in that direction due to the spec. And of course, when more and more camera and more and more volumes moving through that process, that process will become cheaper. So it's also time will help.

One of the camera module makers, Sony Optical, seems to value the competence in active alignment highly. How can poLight help to bypass active alignment in other camera module players production...

Yes, I think I answered to -- I think I answered to that in the last question.

How many have ready-made camera modules with TLens in add-in design?

Shipping today is 2. Looking into solution and doing PoC, maybe another 3. Yes. So step by step, more.

Can you say something about how many projects are taking place with TWedge now?

Oh, I think I have that in the report, but I think there is 5 ongoing PoCs and I think 7 on planning PoCs. But check the report. It's there.

Have you laid out our road map for TWedge possibly decided whether you want to go for engineering alone or together with others?

Yes. Good question. So we have really been trying to sample a potential customer. And as I said, we have major consumer OEMs who are now doing review aberration of the technical samples. So we really like to have a lead customer or lead customers, so that we don't do kind of full-fledged product development without having a strong signal that this is something we want. And so that we prefer. But together with somebody, what does that mean, it still would mean that it will be a TWedge product from poLight, but that will hopefully be a lead customer who is enabling this to happen all the way into the market and also potentially do finance it partly through NRE.

You have an ongoing AR project developing our display solution with a custom package design, how is this project progressing?

Very good.

Will the new automotive TLens revision you are developing feature or larger aperture? Is this the same larger aperture revising being developed for smartphone, rare cameras and other market segments?

Yes, that's the plan.

Sharp has previously promoted TLens as the eyes of the AI. Does Sharp still show the same level of engagement in their interest for TLens as before?

I think Sharp is quite active and Kantatsu, I would say they are. Of course, project is up and down always, but obviously still there's a high interaction between Sharp and poLight. So yes, I would say so. Then it's, of course, the question is that when will they be able to? Because Sharp is also selling cameras and they are having own products. So where it will end up, where TLens will end up first in own product or them selling camera modules, that we don't know. But yes, high activity with Sharp.

Which industry are Thorlabs products containing TLens aimed at? And is Thorlabs increasing their product portfolio containing TLens?

I had one comment the other day because we constantly receive POs from Thorlabs. And I was asking if they are eating TLenses for lunch and breakfast. But yes, there is constantly coming in something from Thorlabs, and there seem to be an activity inside Thorlabs in many, many different departments. So quite interesting. But it is more the scientific area, not anything big volumes initially, but quite interesting activity. It's difficult for us to see where this could lead to, but we definitely are very keen to support them.

Does poLight expect to have enough funds for -- to operate until the first purchase order of significant financial importance?

Super good question. And I think I need to stick to what I said when we started the share issue is that this share issue will bring us into 2026 when it comes to cash. Then of course, the rest of the answer relies on what's going to happen on the sales side. I think I need to stick to that. I fully understand the question, of course, but that's why we need to -- that's what we have communicated before and that we need to stick to.

PoLight has unique technology and has been featured in their first smartphone. However, there is a very limited available data for tech enthusiasts who want to see what this technology is capable of. Could poLight create some promotional videos that can be shared on various platforms?

Again, a good comment. I think we can definitely do more here, to be honest. We did a series -- sorry. We did some movies just related to the design win, didn't we, where we produced some videos, which we did share in the social media. But yes, we are likely to do more. So we can take that as an input.

What would you say is the estimated project lifetime in the market for projects like Magic Leap 2 and Vuzix Shield?

We don't know the details, but of course, we are in dialogue with these customers. And they are typically longer lifetime than consumer products and typically less lifetime than a barcode. I think there's something in between there.

Do you see potential improvement in the build configuration to the current TLens modules for AR/MR modules going forward or will improvement mostly happen on the software side of things?

A little bit uncertain what you mean, but I think there will be a constant push from the market, including AR/MR market to improve the performance of the TLens. We talked about better coating to have higher transmission. We talked about bigger TLens, smaller TLens. So this will be a constant battle. And that's how this industry is. There's no time for relaxes, pushing, pushing more performance, cheaper. So this is -- will never stop. So I think the simple answer is, yes, there will be a big push on this.

What are the developments regarding software that enable focus, bracketing, stereo vision, HDR and other use cases that take advantage of speed and constant field of view, like robotics, automotive, AR, et cetera?

Yes. Again, a super good question. And of course, this is where poLight is weak. We do not have our own capability to do these kind of software development. We have been talking about it in many strategy session. And we have been -- we did establish that capability, but it was difficult to maintain. But this is something which is we are trying to do through partners. Wooptix, remember, they did this All-in-Focus, touch and refocus and [ Bokeh ]. So this is -- we did our own demonstration in our [ Tampere ] office. So this is something we currently have to rely on partners. And in a way, if you take the AR/MR side of it, the video see-through and the ecosystem and the software and the algorithm to make that a good product is super advanced. And that's over the capability and resources that we can afford to do. So there, yes, we need to rely on our end customer or partners. But really good question.

You mentioned Internet of Things. Can you say something -- anything more about the outlook for that market area?

Then I will refer to Capital Market Day tomorrow because Tristan Joo, he will go through all the market segments we're addressing with size, how we address it. So if I can please do that.

Are the new head count in Berlin handling OEM customers only like Bosch and Fraunhofer? Or are the person also doing active sales activities in different markets there? Typical automotive, VW, [ only ] automotive and other?

Yes. It's -- the starting point is more the Industrial/Barcode/Machine Vision. That is the starting point, and then that will develop from there.

It is very good that you agree with the shareholders that things have taken time and investment. But going on, the development still shows cash burn and no signs of high-volume case, which can give more liquidity. How do you access this ongoing development after 10-plus years?

Let me just read that question once more. Yes. But I think that as this -- we have been saying, we are positioning ourselves for certain markets. And we have -- we are trying to very transparently mentioning and explaining our position, what we do and what we think is possible. Then time will show. I can't -- I don't know how more to -- how specifically to answer that, the question better, to be honest.

Will the new CFO take over the Q&A for current CFO or will still see him on Q&A?

At least one more quarter.

Will AI become our competitor or a coworker to TLens? Does poLight have any projects using integrating AI?

I'm hoping to see here today, [indiscernible]. But anyway, I will answer your question. No, I think actually TLens is something they need to enable AI. We see many of these use cases is very much AI-related. They need AF because of AI.

That was the last one.

Okay. Super good. Is there any question from the audience? Happy. Okay. So thank you all for participating. Hope that I will see some of you also in Capital Market Day tomorrow. There is limited seats, but are still some available. And as I said, there will be very much a deep dive into the sales and marketing side. It will be a deep dive into the R&D road map and more into showing the new concepts. COO will talk about our operational readiness and why that is important. We will -- I will talk more -- together with Grethe, talk more the bigger picture and the strategic direction. We have luckily a person from Yole, who will talk about relevant market trends, an external presenter. We have a Q&A session in the end. And then in the end, while we're doing -- having some snack, we will show you products, OEM products, the TLenses and hopefully, a demonstration of the TWedge by the man who is in charge of that development from Oxford office of poLight. So I really hope to see you there. Then we have Q2 report, 15th of August. So that will be the next time we will see you in Oslo. Super good. Thanks for you following the webcast. Thanks for your coming. Thanks to attending and [ for Grethe ], and have a nice day.