Translation: Original comment published in Finnish on 3/4/2024 at 6:49 am EET

Nightingale will publish the figures for the second half of the calendar year 2023 on Thursday at around 9 am EET. In the report, we are particularly interested in comments on the initiated cooperation with Terveystalo, the steps in the Pathology Asia cooperation, and the progress of the Welltus cooperation. In the company’s figures, our attention is, in addition to revenue development, focused especially on the development of the cash position, although we believe these are of lesser importance in the report. The earnings call can be followed on March 7, at 2 pm (EET) here.

An intermediate step expected in revenue growth before the ramp-up of important customers

We expect Nightingale’s revenue for fiscal H1 (07/01/23-12/31/2023) to remain at the previous year’s level (+4%) at 2.3 MEUR, slightly increasing from the previous half year (+20%, 1-6/23: 1.9 MEUR). In our forecasts, research customers have continued to generate revenue, whose project delivery timing brings a component that is difficult to predict. We estimate that the Welltus cooperation in Japan has stimulated growth and this would be a positive sign of the progress of the cooperation (1-6/2023: revenue from other countries incl. Japan: EUR 350,000). However, in terms of Nightingale’s growth, we believe that the most significant current cooperation (Terveystalo’s occupational health, Pathology Asia) will only be seen in the figures for the first half of the calendar year 2024, so the significance of the revenue for the company’s investment story is limited in our view.

Cash is still burned at this development stage, just as it should

Nightingale’s H1 profitability has remained clearly negative on all lines, and in our forecasts EBITDA is -6.7 MEUR and EBIT -9.9 MEUR. As a whole, we expect net cash adjusted for lease liabilities to be 68.7 MEUR at the end of December (06/30/23: 78.0 MEUR) and thus cash consumption in the second half of the calendar year to be 9.3 MEUR. The company’s financial position will remain strong. Nightingale uses its cash assets to build its growth and profitability is in line with this strategy.

The progress of key cooperation projects determines the growth pace in the near future

After last year's strategy update, Nightingale focuses on private and public sector customers. In the private sector, the company launched the Terveystalo cooperation at the turn of the year, where its technology is used in occupational medical check-ups. In the cooperation with Pathology Asia, the company’s technology is offered to a diagnostics group that operates extensively in Southeast Asia and, in this context, the company recently received regulatory approval to provide its services for healthcare in Singapore. In Japan, the company’s partner Welltus invested in marketing a service that utilizes Nightingale’s technology after building the distribution network. We feel further information on all of these projects is the most important contribution of the report and key to the company’s business growth outlook for the next 18 months. We also expect updated comments on the progress of the company’s sales efforts in the public sector. We see significant business potential for the company in this sector if a functional service and commercial model can be built for the sector.