Good afternoon. Welcome to Modulight's Q2 webinar.

My name is Seppo Orsila, and as usual, I'm here with our CFO, Mrs. Guina.

Hello everybody.

I'll again give a short wrap about what we are, what has been done. Anca will cover the financials.

Then I have some good news about the R&D pipeline, and then we'll recap the outlook that remains unchanged before summarizing, and then we'll take all your questions, as usual. We are a life science company that fights cancer with science and technology.

We have ample scientific evidence of that in the most prestigious journals with leading cancer researchers in the world. We also sell the same laser technology to other high-value-add applications, including flow cytometry, microscopy, semiconductor, quantum, and defense.

Also on this sector, we have made some progress during the summer. Here are some pictures from the recent therapies, and I guess the highlight of the month clearly was the one of the trials, a Phase 3 trial to be more specific, completing its patient recruitment.

This obviously means that now we have started so-called follow-up period and will be following the condition of those patients in the Phase 3 trial. This will last about a year.

After that, we can make conclusions, and then there will be discussions with the FDA based on the results. Overall, the pipeline is progressing on many fronts.

We have 36 projects in the end of last quarter, a little bit more than a year ago, but I think quite importantly, we made progress in several areas. Also progress to some of the projects outside the life science space.

I'm gonna talk about those a little bit later. I think, for example, it's worth mentioning that one of the largest semiconductor players in the world, we have a couple of them as customers, but they gave us formal approval to be a supplier.

Also with them, we have worked on number of different prototypes to number of different instruments in their portfolio. EBITDA improved significantly, and we continue the positive trend started last year.

We increased kind of customer activity, and during the summer and before and after, we actually continued to have several high-level visits from the customers, which we always felt as a good sign. I think Anca also felt that order collection-wise, things were good during the summertime, or...

Cost savings continue to improve our productivity, but I'm also wanna talk specifically about the platform thing where we have been kind of investing heavily since 2022, and now we are seeing the results in many ways. Revenue, 1.6, slightly down, but I think within our expectation as projects are maturing, and there's gonna be this kind of let's say, slow phases, but we retain our outlook with intend to grow also this year.

Free cash flow from operations, improving slightly as well. Anca, if you cover the money side a little bit more in detail.

Sure, my pleasure. In Q2, the PPT business continued the triple-digit growth and now is generating more revenue than we would have used with the previous business model.

We revised the pricing structure and updated the agreements with the customers to introduce a higher degree of stability, long-term stability, into the contractual structure, which is very important for us as the business matures and that the treatments are approved. By revising pricing, I don't mean that we decreased the prices, but on contrary, we did increase monthly fees and treatment prices, basically.

The revenue declined by 18%, partly due to project delays and rescheduling of some of the deliveries, but also due to the growing number of early-stage prototypes we delivered to large customers with mass production price. We consider that this business approach is justified because of the short- and long-term potential.

Profitability improved also this quarter, as Seppo already mentioned, and remained positive despite the decrease in the revenues. EBITDA percent was 2.3%, which corresponds to an increase of EBITDA of 185% from Q2 2025.

This improvement was given by better margin structure for certain products and increased operational efficiency. Special thanks for this has to go to our technical team, who over the years developed our laser platform so that it would require a minimum amount of configuration per customer.

Also, the diversification of our customer base, along with the progress of growing number of projects, supported this development of the profitability, but at the same time, it increased the costs. Modulight's broad product platform is suitable for an increasing number of customers, while the amount of configuration required is decreasing.

Our financial performance evolution, together with the feedback we received from our customers and the relationship we developed with our customers over the years, proved the versatility of our product platform and the efficiency of our investments, and once again, confirm our view on the scalability of the business. The operating cash flow in Q2 was €22,000 versus -€478,000 in 2025, and the net cash flow was -€1.3 million versus 2 -€2.2 million in 2025.

Next slide.

Maybe, Anca, I want to make one additional comment. I think it was an excellent clarification when you talked about the revised pricing, and based on some investor IR feedback, we saw that people felt that this revised pricing is reduction, but as Anca said, it means price increases, or how I would rather put it is that now that the product is more mature, it produces more value, it is more verified, and thus it is justified to have a higher price tag, yet deliver more, even more value to the customer.

This is, I think, something that you see in pharmaceuticals overall that when something is very uncertain, you use less money, but when things become a little bit more solid, you are obviously happy to pay more. I think this is exactly same simple phenomenon that we're seeing here and expect to see also in the future.

Thanks, Anca, for reminding this fantastic work that our engineers have done. Technical team has worked very hard since early 2022 to improve the platform configurability and applicability.

Frankly speaking, even we don't have a slide on that, we could not possibly deliver all the prototypes, and especially at a much higher quality than we are doing today, to many of the leading companies in semiconductor, quantum, and other industries in the world, and, obviously, not forgetting the pharmaceutical companies, if we had not managed to do this several years of work to invest into the platform, its configurability and flexibility. This is really astonishing achievement, and that shows as reduced cost, but also in the number of units that we're able to ship.

Yes, it's a little bit pity that we on the sales side have not been able to sell to the big companies the prototypes at such a high price as we used to 5, 10 years back to startups, but on the other hand, I believe that things are now on a more solid basis. Thanks, Anca.

Please, continue.

Yes. For H1, the PPT business grew again, and it was an increase of 137% than in first half of 2025.

We see for this first half positive EBITDA of 10%, despite of the decrease of 13% in the revenue. EBITDA percentage improved by 29% from H1 '25.

There was also positive development in operating profit, EBIT, and the results for H1 in '26. The importance of our vertically integrated manufacturing facility continues to increase, and together with the versatility of our technology platform, it's strengthening our competitive position in our market.

Operating cash flow was €841,000 versus -€1.8 million in 2025, and the net cash flow was -€1.8 million versus -€5.1 million. Next slide.

Here you see a decrease in revenues and improved profitability for both quarter and half-year periods. The headcount as full-time equivalent at the end of the period was 62 versus 70 in 2025.

The objective of our updated strategy for period '26-'27 is strong annual growth and return to strong profitability. In addition, we aim to achieve positive cash flow by the end of the strategy period.

We expect still quarterly fluctuations, but our diversified customer base and increased maturity of our projects give us confidence in growth over the strategy period.

Thank you, Anca. Quite a few things about the progress and the business already discussed, but as said, the highlight of the month or the quarter, I should say, is clearly the completion of patient recruitment in one Phase 3 project.

I I must say that, and in the end, it happened actually a little bit sooner than than we were hoping for. This is a good basis to to now work on the other projects, and then we'll we'll see what the results will be after after a year or so.

We continue to to support our sites, and as said, we've been increasingly rewarded for that, and the economics of the PPT are undisputable compared to the earlier business model. The strategy change by going into heavily on the PPT around '22, '23, in my mind, is now starting to show fruit, and we have a clear direction and validation of the business model.

Our vertically integrated factory, as said now already quite a few times, is attracting more customers and being seen as a more and more value. The fact that we are also or especially started the company as an indium phosphide fab, more specifically, has particularly this year increased customer interest.

For those of you who don't know, basically all the telecom lasers are made of indium phosphide, and this is what the company was started on 26 years ago. We have a quite robust technology stack there, and we're seeing several interest as the data center boom is exploding the demand for indium phosphide and indium phosphide-based products.

Pilots production is process progressing now with increasing number of customers, and they are progressing with their qualifications and ramp-ups. Very recently, we also learned that one very large quantum computing company from the United States has installed one of our prototypes into actually two of their different quantum computers, which are commercially running at the moment.

We also were awarded kind of supplier status by a major semiconductor manufacturer. Customer base continues strong, and while there are some drawbacks to that, like Anca mentioned, overall, we feel good about increasing the number of customers, which are very large, and especially on the other high-value-add segment, many of them are literally top leading companies in their own categories in the world.

We are obviously honored to be be their partners, very often exclusive technology partners. Our outlook remains the same, as noted.

We expect to grow revenue and EBITDA in the financial year of 2026, and Anca outlined already the overall outlook and the strategic objectives. In summary, pipeline is increasing or developing, and number of big customers actually is flat compared to last quarter, but on growth year-on-year.

Phase 3 project patient recruitment completed earlier than expected. Approved as supplier to one of the largest semiconductor companies in the world, semiconductor equipment companies to be to be a bit more specific.

Delivered lasers to a major quantum computer, also now in production combine unit. EBITDA improved, and sales reduced slightly.

Customer activity remains high and even, to some degree, kind of accelerating. Our efforts to improve the company's productivity and cash flow have kicked in as expected, and we have returned to a slight positive EBITDA, but obviously far away where where we traditionally were and what makes us happy.

This is a good good moment to be in, and I must say that I'm super proud of the of the technical team, and I think that this is is really something that will make us a good basis to come back from the holidays and go into the second half. Thank you, and Antti, do you want to have some questions?

I believe that Daniel is not not today in... Sounds like we don't have Antti on the line either, or at least I don't hear any.

No questions, nor we have open questions on the Q&A panel either.

Maybe we have a problem with Antti's voice.

I'll take this opportunity then to advertise the Inderes. I think they have a nice website, and they will probably add some Modulight content later there, as I believe we have actually a dedicated chat with them, as many times before in the past.

I'll take Antti's questions there. Now we have a question on the line.

"You referred to, we also successfully revised the pricing structure and introduced greater long-term predictability into the contractual structure, which is expected to support profitability going forward. What does this mean in practice?"

I guess Anca touched upon that a little bit, but it basically means, like Anca said, that there are several elements in our pricing, but very simplistically, all those elements were either increased or maintained flat. In fact, I believe that in this particular case, all of them were increased.

Why they were increased is that now we have a more mature thing. The trials have progressed, our technology is more proven, thus I wouldn't talk about price increase, but rather revision to reflect more the more mature value.

We're delivering more value to the customer, and thus the pricing can be a little bit more. There are several components in the pricing.

Obviously, our main offering has always been that you just pay for the patients you treat, but over the years, it has become apparent that especially for clinical trials, which can sometimes have delays or no patients treated, etc., some time ago we introduced monthly fees, and that obviously is one side of the predictability so that even if there's no patients being treated, there's still a certain amount of fees to cover the costs. These are actually not too modest either from our perspective, and they're definitely helping to steady the incoming cash flows and revenue streams.

I hope this kind of clarifies the point. Then there's a question from the same person asking about the magnitude of the price revisions.

They are not huge, but they are double-digit in percentage. I don't see further questions on the line, thank you everyone for joining, and take a look at the Inderes panel over the weekend or Monday, and look forward to a nice autumn, and please enjoy the remaining days of the summer, and talk to you again in October.

Thank you very much.

Thank you. Bye.

Bye.