Huddly : Q1 2024

Q1 2024 Report

Inclusive and productive team collaboration

Huddly camera systems are intelligent. They understand how people communicate. Using disruptive AI, Huddly camera systems automatically spotlight the point of interest in a room, creating an authentic meeting experience.

Video meetings become more inclusive and cater for new hybrid collaboration standards - saving energy and cost while adding efficiency.

Content

Key highlights Q1 2024	4
Q1 2024 review	6
Operational review	6
Financial review	8
Outlook	10
Risks and uncertainties	11
Huddly Q1 2024 Financial statements	14
Notes to the financial statements	20

Key highlights Q1 2024

Q1 2024 results:

• Gross Margin of 48 %, compared to 38 % in Q4 2023 and 46 % in Q1 2023, and in line with guidance of ~50% for full year
• Revenue of NOK 33 million, compared to NOK 44 million in Q4 2023 and NOK 51 million in Q1 2023
• Continued stabilization of cost level, number of FTEs reduced by 15 % to 112 year-on-year

Channel sales improvement - Strategic partner sales still unsatisfactory:

• Revenue generated through Channels increased by 7 % year-on-year, growth expected to continue
• Sales through Strategic partners decreased by 65 % year-on-year due to continued inventory build-up in downstream supply chain
• Revenue split in Q1'24 was 68 % from Channel sales and 32 % through Strategic partner sales

Re-focusedgo-to-market model

• Focus shifted from Strategic partners to Channels, improving predictability and margins
• Channel Partner Program simplified to allow greater access to Huddly products
• Commenced building out hubs in the US, starting with New York Office

Huddly Crew and Huddly AI technology receive industry recognition:

• Huddly Crew certified for Microsoft Teams in January 2024. Huddly's full product line is now certified for Microsoft Teams
• Strong presence at Integrated Systems Europe (ISE) conference in January, with 800 people attending demos of Huddly Crew

Huddly Q1 2024 Report

4

Q1 2024 review

Gross margin of 48 % in Q1 2024, compared to 38 % in Q4 2023, and 46 % in Q1 2023. Channel sales increased by 7 % year-on-year. Revenue of NOK 33 million in Q1 2024, a decrease of 25 % compared to Q4 2023 and a decrease of 36 % compared to Q1 2023.

Roll-out of Huddly Crew is improved after significant changes in the go-to-market model and sales organization.

Operational review

Huddly's technology enables human collaboration in the hybrid workplace and is key in creating inclusive and productive meetings.

The roll-out of Huddly Crew is improved after significant changes in the go-to-market model and sales organization. The AI multi-camera system increasingly receives recognition across the industry as a new generation of team collaboration technology rather than just an improved product.

In parallel with strong cost optimizing measures, Huddly has continued the substantial investments in research and development to stay well ahead of the competition. Continuing to be the industry technology leader is Huddly's primary competitive advantage as well as a protection of shareholder value.

Huddly is focusing on managing the cost base to achieve maximum effect both in marketing and sales as well as from continued R&D.

Go-to-market and sales

Huddly's go-to-market activities have so far not delivered the necessary results. The key priority is to translate Huddly's technological lead and the industry-wide recognition into sales.

Huddly's Strategic partners incorporate Huddly's products and technology into their product offering. Channel partners market Huddly's products separately or as part of meeting room and collaboration solutions.

In Q1, Huddly executed a full review of the go- to-market model and implemented changes to achieve the necessary results.

Fraser Park has been appointed Chief Commercial Officer. With over two decades of experience in the Unified Communications Industry, Fraser has been an integral part of Huddly since 2017.

Huddly's sales organization has shifted focus from Strategic partners to Channels, improving predictability and margins:

• The Channel Partner Program has been simplified to allow greater access to Huddly products.
• Build out of hubs in the US market, starting with a New York office to better address end customers and the partner channel.
• Distribution Partner review to facilitate a better engagement with key distribution partners to support and grow run rate business.

Huddly Q1 2024 Report

6

Channel partner sales are improving. Recognizing that Channel partners are central to Huddly's market success and a balancing factor against cyclical changes among the Strategic partners, the changes have significantly improved the follow-up and service level provided to the Channel partners.

Strategic partner sales have suffered due to inventory build-up in the downstream supply chain. To mitigate this, Huddly has a close dialogue with its Strategic partners to improve sales.

Huddly Crew is set to be the main medium to long-term growth driver, and marketing and sales of the pioneering AI-directed camera system remain the top priority.

The market is expected to grow with increased penetration rates in existing meeting rooms, enabling the workplace transition towards hybrid.

At the ISE conference in Barcelona, 30th January to 2nd February 2024, Huddly had a strong presence, and demos of Huddly Crew were attended by more than 800 people.

Huddly Crew has been certified for Microsoft Teams as a multi-camera system for medium and large meeting spaces. Microsoft Teams is the leading collaboration platform, and Teams certification is often a purchasing criterion for corporate buyers. This will further support the go-to-market of the product. Huddly's full product line is now certified for Microsoft Teams.

Strategic review

Interest from a global player contributed to a strategic review initiated in Q4 2023. The process is currently ongoing, and an update will be provided at the appropriate time. The Board of Directors is assisted by Sansa Advisors.

Huddly Q1 2024 Report

7

Financial review

NOK million	Q1 2024	Q1 2023	Change	2023
Revenue	33.0	51.2	-36 %	210.7
Gross profit	15.9	23.5	-32 %	100.9
Gross margin	48 %	46 %		48 %
Other revenue	1.5	0	100 %	1.0
Total operating expenses	-52.5	-56.5	-7 %	-221.1
Operating profit (EBIT)	-35.1	-33.0		-119.2
Net financials	-6.2	4.8		-3.9
Profit/Loss before tax	-41.3	-28.2		-123.1

Income statement

Total revenue in the first quarter 2024 amounted to NOK 33.0 million, a decrease of 25 % from the fourth quarter 2023 and a reduction of 36 % compared to NOK 51.2 million in the same quarter last year.

Sales through Strategic partners decreased by

65 % year-on-year due to inventory build-up in downstream supply chain, but revenue generated through Channels increased by 7 %, which is a result of Huddly's efforts to build the Channels business. The revenue split in Q1'24 was 68 % from Channel sales and 32 % through Strategic partner sales.

Gross margin Q1'24 increased to 48 % vs. 46 % in Q1'23. Gross profit in the first quarter 2024 declined to NOK 15.9 million, compared to NOK

23.5 million in the same period last year and NOK 16.9 million in the fourth quarter 2023. The year-on-year decline primarily reflects the lower sales through Strategic partners, partly offset by a higher share of high-margin sales through Channels.

Revenue from subleasing a part of the Oslo office for the second following quarter is reflected in Other revenue at NOK 1.5 million in Q1'24.

Efficient cost management is essential to management who actively works to keep Huddly's cost base, which mainly consists of

salary expenses and depreciation of R&D assets, at an optimal level. 112 FTEs were employed at the end of Q1'24 vs. 131 FTEs at the end of Q1'23.

A decrease in total operating expenses in the first quarter 2024 amounting to negative NOK

52.5 million compared to negative NOK 56.5 million in the first quarter 2023.

EBIT came in at a loss of NOK 35.1 million, compared to a loss of NOK 33.0 million in the first quarter 2023 and a loss of NOK 40.4 million in the fourth quarter 2023.

Net financials amounted to negative NOK 6.2 million in the first quarter 2024, compared to positive NOK 4.8 million in the same quarter last year. The change primarily reflects foreign exchange losses and interest expenses.

The first quarter 2024 ended with a loss of NOK

41.3 million before tax, compared to a loss of NOK 28.2 million in the same period last year.

Cash flow

Cash flow from operating activities was negative NOK 17.8 million in the first quarter 2024 compared to negative NOK 38.4 million in the same period last year.

Cash flow from investing activities was negative NOK 19.0 million for the first quarter 2024,

Huddly Q1 2024 Report

8

compared to a negative NOK 26.8 million in the same period last year. Investments in the development of Huddly's products were stable at NOK 18.8 million in the first quarter 2024, compared to NOK 20.2 million in Q1'23.

Cash flow from financing activities was positive NOK 18.6 million in the first quarter 2024 due to the subsequent offering following the equity raise in 2023 and negative NOK 5.5 million in the same period last year.

Cash and cash equivalents were NOK 153.5 million at the end of the first quarter, up from NOK 114.3 million in Q1'23.

Financial position

Intangible assets amounted to NOK 198.5 million at the end of March 2024, an increase of NOK 28.0 million compared to Q1'23, primarily due to capitalization of R&D investments. Total non-current assets amounted to NOK 299.8 million, up NOK 72.7 million since end of the first quarter 2023 mainly due to an increase in intangible assets and a right-of-use asset related to office premises.

Excluding cash and cash equivalents, current assets decreased to NOK 213.6 million compared to NOK 243.5 million at the end of the first quarter 2023.

Inventories increased by NOK 19.0 million to NOK 43.7 million, whereas consignation inventories held by third parties declined by NOK 11.1 million to NOK 94.5 million.

Trade receivables declined by NOK 39.7 million to NOK 32.6 million since the end of the first quarter 2023, whereas other current receivables increased by NOK 1.9 million to NOK 42.8 million.

In Q1'24, the equity increased due to the issuing of 60,000,000 new shares, resulting in a net increase after capital expenses of approximately NOK 27.8 million. Please see note 6 and 7 for further details. The total equity on March 31 2024 is NOK 385.5 million, increasing from NOK

358.0 million at the end of the first quarter 2023. The equity ratio was 57.8 % at the end of March 2024.

Non-current liabilities increased by NOK 104.8 million to NOK 111.8 million in the first quarter of 2024 compared to the of first quarter of 2023. The increase is mainly due to the office lease liabilities of NOK 58.1 and long-term debt of NOK 50 million.

Current liabilities amounted to NOK 169.7 million, down from NOK 220.1 million at the end of the first quarter 2023. Trade payables decreased by NOK 17.1 million to NOK 27.3 million.

Huddly Q1 2024 Report

9

Outlook

The long-term market outlook for collaborative video solutions remains strong. 2023 and Q1 2024 has seen a temporary weaker demand due to a difficult macro backdrop and temporarily high inventory levels. The Company anticipates demand and re-stocking to gradually improve throughout 2024.

Changes in the revenue composition have entailed a positive development in the gross margin. The gross margin was 48 % in Q1 2024, compared to 38 % in Q4 2023, and 46 % in Q1 2023.

The cost base has already been stabilized and reduced and is expected to remain stable throughout 2024.

Huddly is guiding revenue in 2024 at a comparable level to 2023. Channel revenue is expected to increase. Furthermore, Huddly guide gross margin in 2024 at around 50 % and to reach positive cash flow during H2 2025.

Huddly will continue to lead with technology innovation as demonstrated with the launch of Huddly Crew, build the Channels business, closely follow up on Strategic partners, and manage costs to address near-term challenges without jeopardizing long-term opportunities.

This is expected to establish a solid platform for future profitable growth.

Huddly Q1 2024 Report

10