Aiforia’s Half-Year Financial Report January–June 2023: Key openings in the clinical diagnostics market – strong growth in the order book

Aiforia Technologies Plc, Half-Year Financial Report (unaudited), 25 August 2023 09:00 a.m. EEST

This release is a summary of Aiforia Technologies Plc's Half-Year Financial Report for January–June 2023. The full Financial Statements Bulletin is attached to this release.

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

January–June 2023

• Group revenue increased by 25% to EUR 920 (733) thousand.

• EBITDA was EUR -4,749 (-3,510) thousand.

• Operating result (EBIT) was EUR -6,182 (-4,389) thousand.

• Profit for the review period was EUR -6,254 (-4,380) thousand.

• The Group’s net debt at the end of the period was EUR -14,339 (-29,503) thousand.

• Cash and cash equivalents at the end of the period amounted to EUR 19,045 (32,398) thousand.

• The order book at the end of the period was EUR 2,357 (751) thousand.

• Unadjusted earnings per share (EPS) were EUR -0.24 (-0.17).

• Aiforia was chosen as the AI solutions provider for the PathLAKE Plus consortium, comprising 25 NHS hospitals in the UK. The contract award was solidified when the first NHS Trust signed a contract for the adoption of an AI model in clinical diagnostics.

• Aiforia received a funding decision of EUR 7.3 million from Business Finland to accelerate the development of AI-assisted software solutions for clinical pathology and drug development.

• The Veneto Region Health Authority in Italy selected Aiforia as a partner for AI-assisted diagnostics in its clinical pathology laboratories. The total value of the contract is over EUR 1.2 million, and the payments will be spread over the three-year contract period. The contract is not yet reflected in Aiforia's revenue for the period under review.
  
   

Key figures
 

EUR 1,000 Group	1–6/2023	1–6/2022	Change, %	2022
Revenue	920	733	25%	1,868
EBITDA	-4,749	-3,510	-35%	-8,108
Operating loss	-6,182	-4,389	-41%	-10,203
Net loss for the review period	-6,254	-4,380	-43%	-10,607
Equity ratio, %	78%	88%	-11%	85%
Net debt	-14,339	-29,503	-51%	-22,008
Cash and cash equivalents at the end of the review period	19,045	32,398	-41%	24,698
Order book	2,357	751	214%	1,041
Balance sheet total	30,845	40,732	-24%	35,336
Number of employees on average	69	56	23%	65
Personnel expenses*	3,801	2,820	35%	6,592
Investments in tangible and intangible assets	3,083	3,265	-6%	6,333
Earnings per share, undiluted and diluted, EUR**	-0.24	-0.17	-42%	-0.41

 

*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:

In the first half of 2023, we achieved one of our company's most significant milestones to date when the analysis of breast cancer patient tissue samples using Aiforia’s software began at the Mayo Clinic Hospital in the US in March. During the spring, we made important openings in the clinical market in Europe and also won new preclinical customers. Our order book more than doubled year-on-year to over EUR 2.3 million. This growth reflects well the size of our clinical customer base, which is, on average, much larger than in the research sector. However, the new clinical clients in Europe are not yet reflected in the revenue for the period under review. We updated our revenue recognition practices to comply with the IFRS standard, and as a result, about a quarter of the comparable revenue for the period under review will be deferred to future periods.

I am very pleased with the development of our operations. Our chosen strategy to make the AI model development tool available also to our customers has been a significant advantage, creating new opportunities for us in both the preclinical and clinical markets. Some of our customers require ready-to-use certified and validated AI models that can be deployed rapidly. Others also value the ability to create and customize AI models to meet their own needs. We are proud to be able to serve both interests. We have also seen some interesting first research results on how tissue features identified using Aiforia’s software have been combined with patient follow-up databases to create predictive models that can influence patient care. It is great to see how our technology can be used to generate information that helps to choose the best possible treatment path for the patient.

Over the past six months, we have developed the technical features of the software that, among other things, allow for smoother integration into our customers' various information systems and speed up the implementation of the softwares. These improvements will allow us to offer a smoother and more efficient user experience to our customers.

The pathology sector is becoming increasingly digitalized, and our customers are actively looking for solutions to improve work efficiency. The market will open up rapidly in the coming years, and we need to be close to our customers to provide them with the right solutions. Business Finland's funding decision for a loan of up to EUR 7.3 million in April 2023 will help us bring our planned products to market faster and thus secure our position in an accelerating competitive environment.

We are still well on track to achieve our short-term goals set for the IPO by the end of 2023. At the end of the reporting period, we had five CE-IVD-marked AI models for clinical diagnostics and CE-IVD-marked viewer software, five clinical diagnostics accounts, ten large pharmaceutical accounts, and more than 5,000 users.

I would like to thank our staff, customers, and shareholders for the achievements of the first half of 2023. We will continue our work to advance AI-assisted tissue sample analysis so that every patient could receive an accurate diagnosis and the best possible care.


Business targets

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

Aiforia’s short-term business targets are:

• Obtain a CE-IVD marking for six AI models intended for clinical diagnostics 

• Acquire five customers in clinical diagnostics 

• Acquire 10 large customers in the pharmaceutical industry 

• Reach more than 5,000 users.

Aiforia’s mid-term business targets are:

• Create a product offering that covers 80% of the pathologist’s diagnostic workflow 

• Achieve a positive cash flow from operating activities by the end of 2025 

• Achieve revenue of more than EUR 100 million 

• Reach 20,000 users 

• Achieve 50 key customer relationships that would generate annual recurring revenue of at least EUR 250,000 per customer.

Short-term refers to the company's business objectives by the end of 2023. In the medium term, the company's business objectives are to be achieved by the end of 2030.

Webcast

Aiforia arranges a live webcast for investors, analysts, and media on 25 August 2023 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/h1-2023-results.

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 Securities Ltd

tel. +358 9 25 380 225 

 

About Aiforia

 

Aiforia equips pathologists and scientists in preclinical and clinical labs with powerful deep-learning artificial intelligence software for translating images into discoveries, decisions, and diagnoses. The cloud-based Aiforia products and services aim to escalate the efficiency and precision of medical image analysis beyond current capabilities, across a variety of fields from oncology to neuroscience and more. Find out more at www.aiforia.com