Operator: Good morning, everyone, and welcome to the Nordic Semiconductor's Q4 Quarterly Presentation. [Operator Instructions] This call is being recorded. I now turn the call over to Steel. Please go ahead, Steel.

Ståle Ytterdal: Thank you, Patrick, and good morning, everyone.

As Patrick said, this presentation is being recorded and will be accessible on the Nordic website in the Investor Relations section. Additionally, our earnings press release, quarterly report and presentation material can also be found on the IR website page. With me today are Vegard Wollan, our CEO; and Pål Elstad, our CFO. They will share details about our recent financial performance and updates on key business developments. Following the presentation, we will move on to the Q&A segment.

During this time, live questions can be submitted through the Q&A dial-in features. The instruction on how to dial in, please refer to the earnings call invitation available under stock exchange notice on our IR website. Please keep in mind that dial-in is required only if you like to ask questions. As a reminder, this presentation includes forward-looking statements that comes with inherent risks and uncertainties. Actual outcome may differ materially from those statements expressed or implied.

We highly recommend reviewing our detailed Q4 quarterly report and the annual report 2023 for deeper understanding of the risks and uncertainties that could impact our business operation. With that, I will now hand the floor over to our CEO, Vegard Wollan.

Vegard Wollan: Thank you, Steel. My name is Vegard Wollan, and I'm the CEO of Nordic. And with me, I have our CFO, Pål Elstad.

Let's get straight into the main takeaways from the fourth quarter. Revenue amounted to $150 million in the fourth quarter in the very high end of the guiding range. This was an increase of 39% year-on-year, though bear in mind that we also had some inventory adjustments negatively affecting revenues in the fourth quarter last year. The revenue increase is quite broad-based across all our end-user markets and with higher revenue in both short range and long range. The gross margin came in at 49% in the quarter, generating a positive EBITDA of $9 million in Q4 compared to a loss of $7 million in the same quarter last year.

Looking ahead, we are guiding for revenue of between $140 million to $160 million for the first quarter. This reflects generally healthy demand and somewhat higher shipments to individual customers in the quarter. Generally speaking, we continue to see stronger demand in consumer and health care than we do in industrial, especially in Europe. It's been a year now since I took over as CEO in Nordic, and we have done quite a lot of work to lay a foundation for renewed profitable growth in the years to come. You know that we have strengthened the management teams and established a business structure of 4 business areas in short range, long range, Wi-Fi and PMIC.

We have reorganized and reallocated resources to enhance efficiency and cut costs, meaning that we intend to grow on a flat cost base in 2025. We have successfully launched the nRF54 series, offering our short-range customers a step change in performance. And we have successfully launched the smaller and greatly improved nRF9151 module, which will improve cost benefit and begin to open a larger part of the long-range market. Finally, we are continuing to develop our Wi-Fi and power management offerings, which are still in the early commercial stages. It will take time to capture the full benefit of our changes made, both the operational changes and the product launches, but we ended 2024 on a strong note and in good shape.

As we have talked about repeatedly, we have built and are maintaining and further developing very strong relationships with our key customers. If you look at the development from the peak levels in 2022, you see that revenue from our top 10 customers are down by less than 10%. However, from the other Bluetooth customers in the broad market declined with around 50% in the same period. And we have made it a high priority to regain traction in the broad market. And as we showed you on our Capital Markets Day, we have begun to see the total number of customers beginning to grow again.

However, we also said that renewed growth in the broad market will build on the success of the nRF54 series. That's going to take some time before that's reflected in our revenue numbers. On the same note, we remain the clear design win leader in terms of number of Bluetooth Low Energy and product certifications. But in Q4, we saw a drop both in the absolute number of product certifications with Nordic inside and in the share of certifications. And there are main, 2 main reasons for this drop.

Firstly, we see a larger portion of designs in the market that are relatively low-cost products in the lower end of the market, where we have been clear previously that we are currently not participating. Secondly, and maybe most important, our transition from our nRF52, 53 series to the nRF54 series creates a bit of a timing gap for us. I want to make it clear that these are product certifications, and there are 0 nRF54 designs in these numbers. We see a very high design activity with many customers designing with our nRF54 product, and we expect this to gradually translate into more product certifications throughout 2025 and into 2026. I also want to make it clear that these data doesn't differ between high and low-volume products as this is reporting the count of certifications.

We are maintaining our strong foothold and activity with our high-volume customers. And thus, we believe we are keeping our market share in terms of Bluetooth Low Energy volumes and revenues. As we stated on our CMD, we have a unique growth opportunity with the introduction of the 54 series, and we look forward to rolling out a competitive portfolio covering the entire serviceable market. But since design cycles take time, we'll see only a limited effect of this in 2025. We will launch more products throughout 2025 and 2026.

And as we continue launching products, you will see that we will both expand our portfolio upwards in complexity and value as well as expanding downwards to lower end to increase our overall serviceable market. We are very confident with the competitive strength of our 54 series meaning that we will see accelerated growth in designs and revenue for many years. We launched the first 3 variants of our nRF54L series at a large Electronica Show in Munich in November, and we received very strong and positive feedback from our customers and many new customers. The nRF54 series are fully integrated system-on-chip products built on the smaller 22-nanometer platforms, and they are built on our proprietary ultra-low power technology and IP. Customers obviously appreciate the low power, advanced security features and our new and more advanced next-generation radio system.

And many focus on the fact that we are the only one offering fully integrated single-chip solutions with multiple CPUs and all the memories integrated on the chip. That saves the customers from having to add external memory solutions that add costs, take up space and increases power consumption. We carried the same focus and energy into CES in Las Vegas at the beginning of 2025, focusing on the nRF54 for use in both existing and new applications with our North American customers. As I'll show you in a minute, we also saw the first customers demonstrating end products with the nRF54 Series SoC at the CES 2025. Module makers are also eagerly awaited our launches, and we showcased new modules incorporating both the 54L and the 54H from 12 different module makers at our stand.

Coming from a skiing nation, it was also great to see Olympian and World Champion Bode Miller present his peak skis with a Nordic-powered tracking and sensor system integrated. As I just mentioned, we saw the first customer presenting end products with the nRF54 series at the CES. One example was the gaming accessory company, CHERRY, launching the world's first true dual 8K rate wireless keyboard, powered by our new high-end nRF54H SoC. The nRF54H offers great compute performance with its 4 CPUs on chip and is more complex compared to the 54L series and our previous products. While the early adapters like CHERRY are already launching products with the 54H, we do see a strong and increasing design activity with the 54H over the last months.

With such high interest and activity for this complex product, we are intensively working our world-class software support and solutions to enable the ramp of both our key customers and other selected early adapters. Summing up, the introduction of our nRF54 series has truly been great, and we're really looking forward to work with our customers on new and exciting designs over the years ahead of us. We are already a technology leader in our markets and continue to enable pioneering products such as smart rings, smart watches, smart eyewear and other wearables. We are seeing -- what we are seeing now is that more and more of our customers are looking to enable Edge Note, AI and ML in their local sensor processing algorithms, either for performance or latency, bandwidth, power consumption, security or cost reasons. With the launch of our new fully integrated SoCs in the 54 Series for short range and in the 91 series for long range, we are very well positioned to benefit from the increased compute requirements in these products and applications.

Truly looking forward to it. On that note, I'll leave the microphone to Pal to take you through the numbers.

Pål Elstad: Thank you, Vegard. Nordic drove as we see a very solid end to 2024. Before I give further commentary on this, I will update on reporting structure going forward.

To get more focus on the different technologies during 2024, Nordic reorganized its operations into 4

business units: short-range, long-range, Wi-Fi and PMIC power management. While the technology development in Wi-Fi and PMIC is progressing as planned, these business units are still on early commercial phase. In 2025, the company will shift to reporting revenues for short-range, including proprietary and Bluetooth, long-range and other, with the latter including both Wi-Fi and PMIC, with separate reporting on the 2 business units once they start generating meaningful revenue. Of course, we'll give regular basis data points so that meaningful evaluation of the technologies can be made. We believe that this will -- this change will more align to how we manage our business.

The change will take effect from Q1 2025. I'll come back to later that we're also planning to make changes to the markets we report under. Revenue amounted to $150 million in the fourth quarter of 2024, an increase of 39% from the same quarter last year. The revenue increase reflects a gradual demand recovery among both key customers and the broad market. Compared to the fourth quarter of 2023, Nordic experienced improvement year-over-year across both short-range and long-range wireless components and in all end user markets.

The decline of 5% from last quarter is driven by lower seasonal revenue in a few markets, offset by strong demand in other. The year-on-year increase is mainly driven by Bluetooth. Bluetooth revenue amounted to $132 million in Q4, an increase of 46% year-over-year and down 8% from the previous quarter. The Bluetooth revenue development reflects improving demand from both larger key customers and smaller customers in the broad markets. Proprietary revenue amounted to $8.3 million in Q4, a decrease of 15% year-on-year and down 31% from the previous quarter.

Proprietary share of total revenue was 6% in Q4 and 7% for the full year. Proprietary is a market with higher seasonal effects, therefore, important to also look at full year numbers. Proprietary revenue for the full year 2024 increased by 9% to close to $38 million, reflecting a demand recovery for PC accessories and home office equipment. However, we have long communicated that we expect a gradual technology transition from proprietary to Bluetooth. The development for the 2 technologies should be seen in combination, which is why we are now moving to reporting short-range Bluetooth revenue and proprietary revenue as one unit with effect from the first quarter 2025.

Long-range or cellular IoT revenue amounted to $7 million in Q4. This was an increase of 16% year-on-year, reflecting improving demand from customers in the industrial asset tracking market. Revenue increased by 181% from the previous quarter. However, last quarter was impacted by distributor inventories adjustments. Nordic series increasing interest and demand for its new nRF9151 system-in-package, which was launched during the third quarter.

The nRF9151 is 25% smaller, more energy efficient and more cost effective than existing nRF9161 long-range products. Turning to end-user markets. Given the overall strength in our business, we see year-on-year growth in all markets. Consumer amounted to $94 million in Q4 and remained by far the largest end-user market with 63% of total revenues in Q4 and 66% for the full year 2024. Revenue in the fourth quarter increased by 40% year-over-year while declining by 13% sequentially.

The year-on-year increase reflects a broad-based improvement across consumer electronics with PC accessories and gaming continuing to lead the market recovery. Industrial revenue amounted to $25 million in Q4, accounting for 17% of total revenue and 18% for the full year. Revenue increased by 35% from Q4 and showed a 4% revenue decline quarter-on-quarter. Although the year-over-year increase is strong, remember that last year was very weak as this industry had the largest inventory adjustments during late '23 and early '24. Demand from the industrial market remained particularly slow in Europe during the last periods.

Healthcare revenues amounted to $26 million in Q4, accounting for 17% of total revenue '24 in Q4 and 13% for the full year. This was an increase of 38% from Q4 and up 23% from Q3 this year. As discussed in the previous quarterly reports, revenue in the health care area remains dependent on a relatively small number of customers and is exposed to relatively wide variations from quarter-to-quarter. To avoid speculation about the performance of individual customers and protect the integrity of our customers and customer relationship, Nordic has decided to change the reporting of its end-user markets with effect from the first quarter 2025. Industrial and Healthcare will be combined into one reporting unit, which in 2024 would have had revenue of $158 million and accounted for 31% of total revenue.

Turning to gross margins. There is not much to say about gross margins. We delivered gross margin at 49%, so just below our target of 50%. So it was in line with the guidance. And as always, the variations mainly reflects changes in customer and product mix in the quarter.

It's important to emphasize that we maintain our long-term ambition to keep gross margins above 50%. As communicated on the Capital Markets Day, our operating model is set up with an ambition to move towards EBITDA margins of around 25% over the next 5 years. However, our organization and operating model is obviously geared towards a significantly higher revenue level than what we've seen during the last year. However, we see a significant improvement compared to last year, even though we're not satisfied with 8% adjusted EBITDA levels, it is the second quarter in a row with improvements and shows that higher revenue combined with cost focus leads us towards returning to profitability. Despite improving revenues, we are still spending more than 26% of revenue in R&D compared with the model target of 15% to 20% and 15% on SG&A compared to the model target of less than 10%.

To achieve our long-term EBITDA margin targets, we are working along

3 axis: grow our revenues, support our gross margins and contain costs to benefit from operational leverage as our revenue grows. We are going to deliver on all these accounts over the years to come. Now turning to the cost discussion. Nordic has a sharp focus on returning to operating profitability, as I just mentioned, requiring strict cost control, while at the same time delivering on all key projects. We have been working to align the new business unit organization that was implemented in 2024.

And during Q4, we carried out the resource realignment, including global workforce reduction of approximately 8% of the company's total workforce. The full effect of the reduction in workforce will not be visible until Q1. Total expenses of $3 million related to this was accounted for in the Q4 numbers. We originally estimated cost of $5 million. However, the lower figure reflects that some of the costs will go partly into 2025 also.

We did a similar restructuring in 2023 and 2023 numbers includes $5 million in restructuring expenses. The number of employees was reduced by 9% year-over-year to 1,363 employees and is down 10% from the peak at 1,543 in late 2023. Despite this, we saw the payroll increase by 5% year-over-year. This is partly explained by higher salary increases in 2024 after salary freeze in '23. The 2024 numbers also include higher accrual for variable pay compared to 2023.

And as already mentioned, $3 million in restructuring expenses. Going forward, we have communicated that we target a flat OpEx in 2025, and we will continue to focus on adjusting our spending level to support margins also going forward. CapEx continues to be pretty low. CapEx in the quarter was $3.5 million or 2% of revenue. This was down from $4.7 million a year ago and compared to $3 million last quarter.

The low CapEx reflects that we are still utilizing the high investments in test capacity that was made during COVID. Current CapEx is mainly driven to IT equipment and R&D investments. Finally, I'll turn to our cash flow. You can see that we generated a total cash flow of approximately $27 million during Q4. Operating cash flow was a very strong $49 million during the quarter.

This compares to outflow of $9 million in Q4 '23. The reason for this strong cash flow that we had strong operating -- or reduction of net working capital as well as operating profits in the quarter. The reason for the reduction in net working capital is high customer payments during the quarter. Customer payments was a record high during the quarter, and as such, customer days outstanding is record low. Inventories decreased $10 million in the Q4 to $171 million, but was up $8 million versus end of last year.

We commented earlier that we expected a decline in inventories during the year. However, we continue to strategically source materials that have capacity for future growth. The value of inventory at quarter end will fluctuate some due to lagging pipeline of arrival of wafers and customer shipments. With that, I'll leave the [mic] back to Vegard for his closing remarks.

Vegard Wollan: Thanks, Pal.

I'll get straight on our outlook for the quarter before opening for questions. Forecasting in today's geopolitical environment is somewhat more challenging. And as always, should materially new information arrive during the quarter that changes our guidance, we'll naturally inform about this. We do see and expect our underlying revenue recovery to be continuing in the first quarter. And given that we saw significant inventory adjustment in the first quarter last year, we will see quite a strong year-on-year revenue growth from our revenue of only $74 million in the first quarter last year.

The guiding range of $140 million to $160 million in the first quarter this year, hence corresponds to approximately a year-on-year doubling of revenue in Q1 2025 versus '24. We would normally expect to see a seasonal decline from our fourth quarter to the first quarter. And this time around, we see orders from individual customers offsetting the seasonal trend, with the guiding range corresponding to between plus/minus 7% compared with the fourth quarter. With that, I believe it's time to open for questions, and over to you, Steel.

Ståle Ytterdal: Thank you, Vegard.

At this time, we are opening the floor for questions through the Q&A dial-in features. For details again, refer to the earnings call invitation posted on our Investor Relations site under the stock exchange notice. To ensure we can address as many questions as possible before the market opens, we kindly request that participants restrict themself to one question and one follow-up. With that, I will now turn it over to our operator to start the Q&A section.

Operator: Thank you, Steel [Operator Instructions] Our first question will be from the line of Harry Blaiklock from UBS.

Harry Blaiklock : First is just on the 2025 outlook. I noticed you're no longer saying that you expect modest growth in short range. It seems like inventories are kind of starting to get to a healthier position in terms of customer inventories and demand is returning solidly, albeit kind of still some weakness in industrial and other pockets. And would it be fair to assume typical seasonal trends now through 2025? Or is there any other color that you could provide beyond Q1?

Vegard Wollan: Yes, it's a good question. And I think you summarized quite a bit of it there, Harry.

So thank you. I think we do see demand gradually continuing to recover for us as we do see in Q4, Q1 with some additional ordering from some individual customers as we are commenting on. Other than that, we are not obviously guiding beyond the current quarter. So we're not commenting further on 2025. We are currently seeing in at least the main part of the consumer market, an underlying seasonality, but we also see some revenue volatility with individual customers that may offset these patterns for -- in individual quarters.

But as I said, our guiding principles remain clear, and we provide guidance of revenue and gross margin for the upcoming quarter. And as such, would not provide any more specific details for 2025.

Harry Blaiklock: And then just one other question around the market share dynamics. I understand that you -- the color that you provided there, it's quite a meaningful drop considering you typically always stayed around 40%. And obviously, it hasn't been gradual.

I was just wondering whether you could give any color around why has that shift away from low-volume applications come through kind of so meaningfully in Q4? And just what your assessment of that is.

Vegard Wollan: Yes, it's a great question. And obviously, we are and have been analyzing that in depth. We -- it is, as I said, 2 main reasons as we see it. One and firstly, the fact that there is a changing degree of which type of designs being certified.

And this time, there is a slightly higher portion of the low-end, low-cost type products where Nordic hasn't been participating up until now. Having said that, there is also a slight element in that of a China -- somewhat more designs registered in China, where our share is somewhat lower. But we believe that, as I said, the second and main effect of this is the transitioning from our main runners today, the 54 -- 52 and 53 series transitioning to 54 Series. And as I said, currently, there are no 54 Series designs certified and registered in those numbers.

Operator: The next question will be from the line of Olivia Honychurch from Jefferies.

Olivia Honychurch : A couple from my side. So I just want to go back to the Q1 guidance. Can you give us a little bit of color on where exactly the strength is coming from that's offsetting your typical seasonality? And I guess, extrapolating that for the whole year, has that Q1 strength changed your expectation for 2025 revenue growth, which you laid out at the Capital Markets Day last year, i.e., to be below 17% or so in the whole year?

Vegard Wollan: Yes. Thanks, Olivia. We appreciate and understand your question.

At our capital Markets Day in September, we commented on the 2025 outlook of our short-range business only in the context of our ambitious long-term targets, which we set at that point in time. So with that, we are not going to provide any more specific details for 2025. If we look into Q1, we believe we see an underlying gradual demand recovery, which is mainly happening with healthy demand in consumer and health care, still being slow in industrial and relatively slow in Europe, though we do see some pockets of improvements and the broader part at least of inventory corrections also being behind us such that we have, let's say, more normalized, stabilized type markets as we see it.

Olivia Honychurch: Great. And my follow-up was actually just around the European industrial that you mentioned just there.

Obviously, that was still weak in the quarter. Are you seeing signs of improvement in that specific pocket? Or I guess, put another way, when exactly would you expect that segment to see more of a recovery? Because it feels like it's really now the last[sheet]to drop in terms of your end markets returning.

Vegard Wollan: Yes. I think we do see, as you see, some fluctuations in industrial, which is a positive on a year-over-year if you compare Q4 to Q4. So -- but it did remain particularly slow for us in Europe, as we said.

And if you look at 2024 as a full year, industrial revenue still declined 20%. And it's clear for us that it is Europe there that is lagging and our overseas revenues are slightly back for us at the moment.

Pål Elstad: I think it's fair to say that we also see good design activity with 54H, especially in the industrial market and also in Europe, which is good for the future for the company.

Vegard Wollan: Absolutely.

Operator: The next question will be from the line of Christoffer from DNB.

Christoffer Bjørnsen : So first of all on the seasonality you noticed in your remarks that there is something going on in Q1 with few customers and then also just a little chatter in the market about [Technical Difficulty] tariff, is there -- you kind of trying to say that we should not expect Q3 to be stronger which have been [Technical Difficulty] how should we think about this...

Vegard Wollan: It was a bit difficult to hear all of your question, Christoffer, but I think we got most of it. So we will be trying. I think it's fair to say that, as of today, and then we obviously may not have the absolute full picture of this. We do not see a major pull-in effect related to tariffs, but there may be some of that happening.

We don't necessarily see all and have visibility to all of that picture. So that's probably what's to be said on that. Obviously, we do have certain lead times on our manufacturing and shipments. So these are -- these changes we do see within a quarter are obviously orders from some time back. I don't know if that answered your question, Christoffer? Because it was a bit difficult to hear you.

Pål Elstad: Yes. I think that was correct.

Christoffer Bjørnsen: Is there any reason why we shouldn't expect typical seasonality in the coming quarters like Q2, Q3 are typically larger quarters and Q1 is the smallest quarter. So is there any reason why we shouldn't expect this pattern to pan out in the coming quarters? That was the question.

Vegard Wollan: Yes.

I think it's fair to say that we currently see a -- with many of the consumer -- customers of Nordic, we do see the previous or the same underlying seasonality. But there is also revenue volatility with individual customers that might offset these patterns in the individual quarters. And other than that, I have to refer to that our guiding principles are clear. We are not talking about anything beyond Q1 at the moment. Christoffer Bjørnsen : And then my quick follow-up is on the cost base.

You said you target [Technical Difficulty] in '25 versus '24, but your growth is now carrying out nicely. And some of your peers have guided for material growth in their investments and kind of now think that you are more [glued] to potentially accelerate [Technical Difficulty] investments in talent in '25 potentially? Or why should we expect it to still [Technical Difficulty]

Pål Elstad: Did you ask about OpEx? It was a little bit difficult to hear. Correct, Christoffer?

Christoffer Bjørnsen: Yes.

Pål Elstad: Yes. So as I said, we made the basis for our OpEx now in latter part of 2024, and we really target to have the same OpEx going into 2025.

Of course, there is some inflation that we -- salary increases and we are investing a lot. We're going to release a lot of very exciting products in 2025. So there will be some OpEx driven by that. But I think it's -- we've also reduced the number of employees compared to going into 2024. So we're pretty confident that we're going to be able to keep OpEx flat year-over-year despite higher investments within some areas.

Vegard Wollan: Yes. I think we can add to that comment. We see that our rebalancing our resources on the R&D side is working actually very well, and we are extremely proud about the Nordic team's execution on the engineering side at the moment. And as you will see, we have a lot of very exciting product launches ahead of us in this next year.

Operator: The next question will be from the line of Sébastien Sztabowicz from Kepler Cheuvreux.

Sébastien Sztabowicz : On the inventory, just a clarification. Are you back to a more normal level of inventory, both in the distribution channel and at the end customers? This will be the first question. The second one is linked to prices. How do you see prices trending in the coming quarters, globally? And do you see any kind of tension on the cost of foundry, any kind of increase there as well?

Pål Elstad: Yes. So if we start with distribution inventories throughout 2024 or going into 2024, we had very high inventories, and then we've been consciously reducing them during 2024.

So I think we can fairly say that we're now back to what we consider normal levels. So I wouldn't expect any adjustments up or down going forward. In relation to Nordic inventory, I commented that we've done some strategic buying. We believe it's important in today's environment to have a healthy inventory. We're also coming up with new products and new variants.

So a higher inventory than we maybe have seen previously is needed. When we come to pricing, I think in the semiconductor industry, you've seen we've been through a very cyclical environment where there was price pressure on both sides. When we believe we're back now to a normal situation where we negotiate with the foundries and the customers negotiate with us. So we're back to a very normal situation today. And other than that, we're not going to comment on these commercial discussions we have.

Operator: The next question will be from the line of Kristian from Arctic Securities. Kristian Spetalen : Just a bit back on the design win ratio in Q4 at 26%. It seems to be some sort of vacuum here in between the 52 and 54 chip. But just to be clear, do you expect this to change going forward as the design win ratio or the 54 chip comes in with design wins?

Vegard Wollan: Yes. Thanks, Kristian.

Yes, I think as there are 0 nRF54 designs in the Bluetooth SIG certification numbers as of now, we obviously expect -- since we have so high design activity, we certainly expect many products to gradually translate into product certifications through 2025. Having said that, I think it's important also to repeat that we -- for us at Nordic, it's obviously key for us to be growing, and we want to be driving our profitable growth plan and strategy. And with that, we are obviously looking at the volumes and the size of the wins we have, which is not reflected in that data. It is still interesting data, and we believe it's important for us to show that, and we have shown that for a long time, and we are going to continue to do so. But certainly, no 54 designs in it today, and we gradually expect that to come in that material throughout this year.

Kristian Spetalen: Okay. And just a quick follow-up on that, so I understand it correctly. Would you say that it's more kind of low-end products in the overall market? Or is it more of a price pressure in the low-end market? And if yes, on that price pressure, do you expect to be competitive on that with the 54 chip?

Vegard Wollan: Yes, it's a very interesting and broad question, Kristian, but let me try to -- so obviously, there is a high competitiveness and pressure down in the low-end part of the market, which is happening and also driven to some degree by Chinese competitors and Chinese players. We haven't previously participated there, which I believe Nordic has communicated such that we have been, let's say, mid-range, high-range player as our main focus. I think we have also made it clear now that we are growing our serviceable attack span in the market with our current 54 strategy, which is something you will see throughout the year.

And of course, then our plans are to be competitive wherever we participate.

Operator: The next question will be from the line of Sandeep Deshpande from JPMorgan. Sandeep Deshpande : My question is, I mean, the upside you're seeing in the first quarter, which is in terms of the revenue, which is not normally seasonal as such really. How much of that is coming from some particular customers where you won some new wins versus customers who are always Nordic customers and they have essentially that is because of the end of the inventory correction and that they are placing these orders. So in terms of a percentage, it would be helpful to understand how much of that revenue is coming from that sort of source?

Vegard Wollan: Yes.

I think we understand the question. I do think we -- we clearly won't be giving that level of detail on individual customers. So I think it is -- we are not talking about a single customer in this case. And I think in Q3, we do see healthy underlying demand generally. And it's a bit boosted by high demand from individual large customers, resulting in the $140 million to $160 million guiding.

And as we have commented, that's predominantly driven in the health care and consumer markets.

Sandeep Deshpande: Understood. And in terms of orders, I mean, how have the order patterns changed through 2024 and including in Q4, has the order pattern changed at all in Q4 versus the prior 3 quarters?

Pål Elstad: I think we've commented earlier that we are now a little bit back to how it worked before COVID that we're now really good covered for Q1, Q2, pretty good coverage. And then going out beyond that, there's little orders. This is how we operated before COVID and before the supply crunch happened.

So we're happy with the way the orders are developing.

Operator: The next question will be from the line of Oliver Wong from Bank of America. Oliver Wong : You mentioned something about Chinese competitors kind of seeing that potentially affecting pricing even in sort of the mid-end categories that you play in. I was wondering if you could give just a bit more color on that, please.

Vegard Wollan: Yes.

It's good to bring that down because that wasn't my intention. I think the intention was clearly that that's what we see happening in the low-end part of the market. So that's clearly a certain subsegment of the overall short-range wireless connectivity market. But it's clearly, that's in the low-end space.

Operator: Our next question will be from the line of Øystein Lodgaard from ABG.

Øystein Lodgaard : Øystein Lodgaard from ABG. Just one question on the broad market or long tail of smaller customers. Their revenue is not yet back to historic levels. Do you -- is your impression that there are still elevated inventory levels among your range of smaller customers? Or is the reason they're not back to historic revenues more to do with the end market demand?

Vegard Wollan: Yes. Thanks, Øystein.

It's probably a mixed bag among all these answers. So it's some of them -- some selected ones, some of them have inventories. Others still have demand issues compared to larger players. And yes, thirdly, some may have struggled a bit through the pandemic and the chip shortage. So it's probably a combination of all of that and a mix of that.

Øystein Lodgaard: Okay. And one quick follow-up on cellular. Solid cellular revenues this quarter compared to the other quarters in 2024. Is this still very lumpy on a quarterly basis? Or is this kind of a new level that we should assume more in line with this Q4 -- revenue posted now in Q4 and the quarters to come?

Vegard Wollan: Yes. As we -- answering that first then will be to start guiding further out.

So we won't be saying that. And we do see improvement in cellular, we do see our 9151 module having a very solid traction both because of its size competitiveness with the satellite systems we are enabling on that side at the moment and the additional features that provides also some geopolitical tailwind for Nordic on that side. So there are positives absolutely happening in our long-range and cellular business, which we are really pleased about. On the other side, we are not pleased at the current level of revenues either. So -- but I do think all of our scale-up and early-stage businesses at the moment are performing fairly well according to the plans we laid out at our Capital Markets Day.

Operator: [Operator Instructions] The next question will be from the line of Oliver Pisani from Carnegie. Oliver Pisani : I think most of my questions have been taken, but just a follow-up on the market share discussion there. Do you expect this kind of design win market share loss to translate into a revenue transition window as well where you will see a growth headwind from this dynamic?

Vegard Wollan: It's an intricate question, Oliver. Because of our guiding principle, that's the sole reason. I do think it's fair to say that I'm going to be answering that with the fact that we are keeping our very strong and solid relationships with our customers.

We are keeping and adding sockets and design wins to the picture of the -- of, I would say, all of the major and key engagements we have. So that's something we don't see happening. Is there a bit of that in the broad market? Perhaps. And that's why we are also saying that the 54 now is coming at a very right and powerful time for us as we are now so actively regaining our focus on regaining the traction in the broad market.

Operator: As no one else has lined up for questions, I'll now hand it over to Steel for any closing remarks.

Ståle Ytterdal: Thank you, Patrik. Before we're wrapping up today's session, I'd like to let you know that Nordic is organizing 3 post Q4 result Q&A group calls with analysts and investors tomorrow, Thursday, 6th of February. These sessions will include our CEO and CFO with moderation by the covering analysts from each respective firm. For information on how to register, please check the IR calendar available on our website. We kindly request that the participants register for just one group call based on your region.

With that, I now bring today's Q&A session to a close and pass it over to Vegard for the final remarks.

Vegard Wollan: Thank you, everyone, for joining us and participating in today's call. And this concludes the call of today. Thank you.

Pål Elstad: Thank you.