NEXT Biometrics Group (NEXT) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 revenue of NOK 27.6 million, up 360% year-over-year, driven by strong shipments to India, China, and Bangladesh.

• Adjusted gross margin improved to 52% from 37% in Q3 2023, reflecting a favorable product mix.

• Four new design wins in Q3 brought the total to 59 accumulated customers, with notable contract wins in China, India, Bangladesh, Pakistan, and a first order in Malaysia.

• Expanded PC portfolio and developed new government ID products targeting Asia and Africa, including a new product for India (Aadhaar/MOSIP) launching in 2025.

• Strengthened presence in China and India, with additional shipments and new government ID projects in Bangladesh, Malaysia, and Pakistan.

Financial highlights

• Q3 2024 revenues were NOK 27.6 million, up from NOK 6 million in Q3 2023.

• Adjusted EBITDA improved to -NOK 1.5 million from -NOK 10.5 million in Q3 2023; reported EBITDA at -NOK 0.3 million.

• Ended Q3 with NOK 45.5 million in cash, up from NOK 40.9 million at the end of Q2 2024.

• Operating expenses (excluding options) increased to NOK 15.7 million, reflecting higher sales and R&D efforts.

• Over 90% of Q3 sales booked in September, impacting operational cash flow.

Outlook and guidance

• Anticipates continued strong revenue growth in 2025, supported by a revenue pipeline exceeding NOK 550 million.

• Targets gross margin above 50% in Q4 2024 and aims for profitability in Q4 2024.

• Sequential revenue growth expected in Q4 2024, with positive adjusted EBITDA targeted.

• 2025 revenue target set at NOK 180–200 million, with gross margin expected to remain above 50% due to high FAP20 share and new high-margin products.

• Ongoing R&D and patenting efforts expected to drive future innovation and growth.