Q3 2025 Interim Report

Revenue in the third quarter of 2025 amounted to NOK 183.1 (140.8) million, exceeding Q3 2024 revenue by NOK 42.2 million representing an increase of 30.0%. The quarter was defined by high activity across all major regions, with several important Tier 1 deliveries, particularly in Europe and North America.

Gross earnings for the third quarter amounted to NOK 135.2 (104.1) million, achieving a gross margin of 73.8% (73.9%), the margin decreased slightly with an adverse impact from U.S. tariffs almost completely compensated by a positive product mix effect and higher share of service revenues. The cost of raw materials and consumables used was NOK 47.9 (36.7) million.

Overall, operating expenses, excluding raw materials and consumables, for the third quarter amounted to NOK 90.0 (75.0) million, an increase of 19.9% year-on-year.

Employee benefit expenses of NOK 51.5 (49.6) million, increased by 3.8%. The increase in costs reflects higher number of employees (including sales consultants), 208 FTEs compared to 177 in the same period last year, and sales growth resulting in uplifts related to sales commissions and performance-based bonuses.

One key change from 2024 affected the variance, with opposite effects. Employee benefit expenses of NOK 17.4 million (nil) related to commercial technological development projects have been capitalised and classified as internally developed intangible assets, reducing operating expenses.

Depreciation and amortisation in the third quarter amounted to NOK 4.8 (3.6) million. Amortisation began on capitalised technological development expenditure in the quarter with a charge of NOK 0.6 (nil) million; amortisation is dependent on the completion status of the development projects combined with the timing of commercial product launches of fully developed products.

Other operating expenses increased to NOK 33.8 (21.9) million, costs incurred were in line with our long-term strategy of building a scalable, efficient, and customer-focused organization. This included costs incurred for the IPO, ERP implementation, and increased market presence including office expansions.

EBIT for the third quarter amounted to NOK 45.2 (29.1) million. EBITDA amounted to NOK 49.9 (32.7) million, corresponding to an EBITDA margin of 27.3% (23.2%), and EBITDAC (EBITDA less the impact of capitalised development expenditure) amounted to NOK 32.6 (32.7) million, and an EBITDAC margin of 17.8% (23.2%).

Net financial income and expenses for the quarter amounted to an expense of NOK 3.4 (income of 3.0) million, attributable to foreign exchange losses.

Tax on the ordinary result was NOK 12.9 (6.9) million directly attributable to the positive profit before tax, with an effective rate of tax of 31% (22%), impacted by non-deductible IPO related expenditure for tax purposes.

This resulted in net profit for the quarter of NOK 28.9 (25.2) million.

At the end of quarter, Appear maintained a solid financial position with a 60.8% (57.3%) equity ratio and NOK 318.3 (231.8) million in available liquidity comprising net cash and cash equivalents of NOK 158.7 (99.5) million and financial assets held in money market funds of NOK 159.6 (132.3) million. Appear has no interest-bearing debt.

Total assets at 30 September 2025 increased by 40.6% to NOK 631.8 (449.4) million and was up 37.8% (54.7%) from 31 December 2024 (31 December 2023), the increase explained mainly by the strong performance, but also increased investments.

The investments in the third quarter was NOK 21.2 (41.2) million, of which NOK 17.4 million related to capitalisation of technological development expenditure and NOK 3.8 million to property, plant and equipment.

In the third quarter no amounts were paid into money market funds.

Furthermore, the Group executed a new lease agreement for our Singapore office for an initial term of 2 years with an option to extend for a further 2 years. This resulted in an increase in the right-of-use asset and a corresponding increase in our lease liabilities.

Cash flow from operating activities amounted to an inflow of NOK 134.7 (inflow 27.4) million. The increased cash flow from operating activities is primarily attributable to customer receipts from strong sales in the previous quarter.

Cash flow from investment activities amounted to an outflow of NOK 21.0 (outflow 41.1) million and is primarily attributable to capitalised technological development expenditures of NOK 17.4 (nil) million.

Cash flow from financing activities amounted to an outflow of NOK 2.6 (outflow 1.7) million related to repayment of lease liabilities and lease finance expenses.

Total cash inflow amounted to NOK 111.2 (outflow 15.5) million.

Revenue in the first nine-month period of 2025 amounted to NOK 616.4 (453.3) million, exceeding the same period last year by NOK 163.1 million representing an increase of 36.0%.

Revenue for the last four-quarters ended 30 September 2025 amounted to NOK 769.2 (594) million.

Gross earnings for the first nine-month period of 2025 amounted to NOK 444.5 (325.8) million, achieving a gross margin of 72.1% (72.0%). The margin increased slightly despite the impact of U.S. tariffs which increased our costs of goods sold from the second quarter onwards. The cost of raw materials and consumables used was NOK 171.8 (126.9) million.

Overall, operating expenses, excluding raw materials and consumables, for the period amounted to NOK 287.6 (256.5) million, an increase of 12.9% year-on-year. Employee benefit expenses decreased by 2.8% to NOK 174.0 (179.0) million and the decrease in employee benefit expenses in the income statement was due to capitalisation of NOK 42.3 million (nil) of employee benefit expenses relating to internally developed intangible assets. Total employee benefit expenses including capitalised expenses increased due to a higher number of employees, 199 FTEs in first nine-month period 2025 compared to 169 in the previous period.

The increased activity level brought natural cost increases tied to sales commissions and performance-driven bonuses.

Depreciation and amortisation amounted to NOK 12.5 (10.3) million for the three quarters to date. Amortisation began on capitalised technological development expenditure in the quarter with a charge of NOK 0.6 (nil) million; amortisation is dependent on the completion status of the development projects combined with the timing of commercial product launches of fully developed products.

Other operating expenses of NOK 101.2 (67.2) million, increased by 50.6%, costs incurred were in line with our long-term strategy of building a scalable, efficient, and customer-focused organization. This included costs incurred for the IPO, ERP implementation, office expansions and increased market presence.

EBIT for first nine-month period of 2025 amounted to NOK 157.0 (69.9) million. EBITDA amounted to NOK 169.4 (80.2) million, corresponding to an EBITDA margin of 27.5% (17.7%), and EBITDAC (EBITDA adjusted for the impact of capitalised development expenditure) amounted to NOK 122.4 (80.2) million, and an EBITDAC margin of 19.9% (17.7%).

Net financial income and expenses was an expense of NOK 8.5 million (income 7.1) million attributable to foreign exchange losses.

Tax on the ordinary result was NOK 34.9 (17.8) million directly attributable to the positive profit before tax, with an effective rate of tax of 24% (23%). The effective tax rate was higher in the nine-month period ended 30 September, impacted by non-deductible IPO related expenditure for tax purposes.

This resulted in net profit of NOK 113.5 (59.1) million.

At the end of quarter, Appear maintained a solid financial position with a 60.8% (57.3%) equity ratio and NOK 318.3 (231.8) million in available liquidity comprising net cash and cash equivalents of NOK 158.7 (99.5) million and financial assets held in money market funds of NOK 159.6 (132.3) million. Appear has no interest-bearing debt.

Total assets at 30 September 2025 increased by 40.6% to NOK 631.8 (449.4) million and was up 37.8% (54.7%) from 31 December 2024 (31 December 2023), the increase explained mainly by the strong performance, but also increased investments.

The investments in the first nine-month period were NOK 78.3 (44.5) million, of which NOK 47.1 (nil) million related to intangible assets arising from capitalisation of internal technological development expenditure.

In addition, NOK 20.0 (40.0) million was deposited into money market funds.

Furthermore, we executed a renewal of the lease agreement for our U.S. office securing larger office space for an initial term of 4 years with an option to extend for a further 5 years. This resulted in an increase in the right-of-use asset and corresponding increase in our lease liabilities.

Cash flow from operating activities in the first nine-month period amounted to an inflow of NOK 143.6 (inflow 76.5) million. Collection of trade receivables with the majority of Q2 invoices collected in Q3 2025 lifted cash flow from operating activities and reduced non-cash working capital.

Cash flow from investment activities in the first nine-month period amounted to an outflow of NOK 77.6 (outflow 44.0) million and is primarily attributable to capitalized technological development expenditures of NOK 47.1 (nil) million and the purchase of money market funds of NOK 20.0 (40.0) million.

Cash flow from financing activities in the first nine-month period amounted to an outflow of NOK 3.4 (outflow 6.2) million. The group received consideration of NOK 2.5 (0.0) million from the sale (purchase) of treasury shares.

Total cash inflow for the first nine-months amounted to NOK 62.5 (inflow of 26.3) million.