NEXT Biometrics Group (NEXT) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues increased 150% year-over-year to NOK 18.3 million, driven by strong distributor performance and new product launches in China and India.

• Record high adjusted gross margin of 57% in Q2 2024, up from 17% in Q2 2023, attributed to favorable product mix and high-margin China ID sensors.

• Five new design wins in the quarter, bringing the total to 55 paying customers, with growing momentum in new markets including Bangladesh and Pakistan.

• Strategic joint venture formed in China with Wiser to access Tier 1 tenders in banking, healthcare, and government sectors.

• Entered Bangladesh with a NOK 95 million, five-year contract and Pakistan with first volume order for NADRA.

Financial highlights

• Revenues reached NOK 18.3 million in Q2 2024, up from NOK 7.3 million in Q2 2023.

• Adjusted gross margin rose to 57% from 17% year-over-year.

• Adjusted EBITDA improved to negative NOK 6.7 million from negative NOK 13.1 million year-over-year.

• Operating expenses (excluding options) were NOK 17 million, up from NOK 14.4 million in Q2 2023.

• Cash balance at quarter-end was NOK 40.9 million, down from NOK 54.6 million at Q1 2024; operational cash flow was negative NOK 14 million.

Outlook and guidance

• Revenue pipeline exceeds NOK 500 million over the next 12–18 months, with strong growth expected in H2 2024.

• Targeting profitability in the second half of 2024, maintaining gross margin above 50%.

• China expected to become the largest revenue contributor in 2025, overtaking India.

• Revenue growth guidance of at least 250% versus 2023 remains intact.

• Annual OPEX run-rate targeted at NOK 65 million in H2 2024.