<a id="bm-comp-413ddbc4-954d-4d90-b00e-7acc5e044571" name="bm-comp-413ddbc4-954d-4d90-b00e-7acc5e044571" class="BMCustomAnchor"></a><table><tr><td bm-component-id="413ddbc4-954d-4d90-b00e-7acc5e044571" style="vertical-align: top; width:100.000000%;"><ul><li>20% revenue beat driven by high watch sales, EBITDA 66% above</li><li>Opex was above, but likely due to extraordinary items</li><li><font color="#000000">Cons to lift '25-'26e EBITDA, positive reaction warranted</font></li></ul></td></tr></table><a id="bm-comp-34ddb896-ce07-4b58-9516-bac586aeaa2f" name="bm-comp-34ddb896-ce07-4b58-9516-bac586aeaa2f" class="BMCustomAnchor"></a><table><tr><td bm-component-id="34ddb896-ce07-4b58-9516-bac586aeaa2f" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Number of watches sold grew 30% y-o-y</h3><p>Xplora reported total revenue of NOK 257m, 20% above Factset cons of NOK 214m (ABGSCe NOK 218m). The beat was driven by device revenue of NOK 182m, 28% above ABGSCe and corresponding to a growth of 36% y-o-y. Number of units sold was strong at 163k units, which was 23% higher than the 132k we had expected. The ASP was NOK 1,116, slightly above our expectation of NOK 1,073 but in-line with NOK 1,102 in Q2.</p><h3 class="bm-h3">Service revenue spot on expectations</h3><p>Recurring service revenue of NOK 75m was in line with ABGSCe. This corresponds to 36% growth y-o-y. The total number of subscribers at the end of the quarter was 326k as pre-announced, of which 243k were Connectivity (ABGSCe 247k), 60k Premium (ABGSCe 60k), 19k B2B (ABGSCe 17k), and 4k Service fee (ABGSCe 4k). The ARPU was NOK 81 vs. our expectation of NOK 83. This is down from NOK 90 in Q3 last year driven by Premim and B2B becoming a larger part of the subscriber mix. Xplora now says that it has reached a recurring revenue share of 15% outside the Nordic markets in Q3, a the high end of its target of 10-15%.</p><h3 class="bm-h3">Majority of opex deviation seems to be driven by temporary factors</h3><p>Gross profit was NOK 125m. This corresponds to a gross margin of 48.6% slightly below cons of 49.4% (ABGSCe 49.7%) likely driven by a higher share of hardware revenue in the mix. Opex was NOK 94.6, 8%% higher than cons of NOK 87.5m (ABGSCe NOK 88.8m), which seems to be driven by a NOK 6m increase in legal/consulting expenses. This is likely driven by among others the proposed deal to acquire Doro which means that at least part of this increase is likely to be temporary. Marketing expenses were in-line and marketing as a share of revenue was flat y-o-y. As a result strong device revenue, EBITDA of NOK 30m was 66%% above cons of NOK 18.2m (ABGSCe NOK 19.3m). This corresponds to an EBITDA margin of 11.8% vs. cons of 8.5% (ABGSCe 8.9%). EBITA (before non-cash M&amp;A amortisations) was NOK 24.6m vs. ABGSCe of NOK 14.1m.</p><h3 class="bm-h3">Cons to lift '25-'26 revenue and EBITDA on strong watch sales</h3><p>In terms of outlook, Xplora says that it expects reduced seasonality in H2 this year, due to a more balanced distribution of watch sales and revenue across Q3 and Q4. In other words, parts of the strong growth in device sales could have been driven by a higher sell-in to distributors. However, with 30% volume growth higher sell-in is not enough to explain everything, meaning that underlying demand growth was likely strong in the quarter. The company reiterates its FY'24 capex guidance of NOK 15-20m. Regarding Doro, the company awaits 90% acceptance to finalise the acquisition. Following today's report, we expect cons to lift '25-'26e revenue driven by the strong growth in watch sales in the quarter. The majority of the opex increase seems to be temporary therefore we expect the increase in revenues to also drive higher EBITDA estimates.</p><p><a href="http://www.xplora.com/investor" target="_blank">Xplora will host a conf call at 08:00 CET.</a></p></td></tr></table><a id="bm-comp-051b389a-ff3a-4265-aac9-4d535979a92f" name="bm-comp-051b389a-ff3a-4265-aac9-4d535979a92f" class="BMCustomAnchor"></a><table><tr><td bm-component-id="051b389a-ff3a-4265-aac9-4d535979a92f" style="vertical-align: top; width:100.000000%;"><table id="bm-img-b403bb8d-01da-4d5b-8bcf-a65a658fff29" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">Deviation table</td></tr><tr><td><img bm-img-encrypt="b403bb8d-01da-4d5b-8bcf-a65a658fff29" bm-img-original-height="747" bm-img-original-width="843" bm-img-svg="image:image_upload/83046_9e62cc69-a52a-4316-9cc4-f5a1567df592.svg" bm-img-width-hint="100%" id="bm-id-b403bb8d-01da-4d5b-8bcf-a65a658fff29" src="https://abgsc.bluematrix.com/images/image_upload/83046_9e62cc69-a52a-4316-9cc4-f5a1567df592_727.png" svg="/nas/web/clients/abgsc/images/image_upload/83046_9e62cc69-a52a-4316-9cc4-f5a1567df592.svg" width="727" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier, Xplora Technologies, FactSet</td></tr></table></td></tr></table>