Redeye thinks Q1 was strong, with revenue growth of 113% and adjusted EBITDA at SEK -11.7m. The underlying cash flow (adj. EBITDA - capitalized R&D) was SEK -16m, indicating that Sivers is progressing toward positive cash flow. The Q1 result was a good start toward reaching the financial targets of 100%+ revenue growth and positive EBITDA by the end of 2023.

In this update, we have analyzed who the F100 customers may be - and we believe the first to be Apple with its upcoming Apple Watch, and Meta to be the third. We do not have a clear idea of who the second is. In the Q1 report, Sivers stated that the first F100 customer had ordered 30,000 chips for qualification and system testing. The customer has also asked for an RfQ from Sivers, with indicative volumes of 50m units per year, translating into USD130m in annual revenues for Sivers. The deal, which appears to be getting closer by the day, would render an EBITDA margin of c27%, according to Sivers. This would equal an annual EBITDA contribution of more than SEK330m.

After a recent presentation by Ayar Labs, we have reduced our short- and mid-term estimates of this customer's revenue contribution. However, some of this impact is offset by increasing our estimates on the first F100 customer. We lower our profitability projections and raise our WACC by 0.5p.p, resulting in a reduction of our fair value range. Our new Base Case is SEK16 (19), Bear Case is SEK8 (10), and Bull Case is SEK32 (34).