Neonode(NEON) - 2025 Q2 - Quarterly Results

Executive Summary of Financial Results Neonode experienced revenue declines and increased losses from continuing operations in Q2 and H1 2025, alongside a decrease in cash and working capital Financial Summary for Three Months Ended June 30, 2025 Neonode reported a 25.2% revenue decline to $0.6 million for Q2 2025, with operating expenses up 5.3% and loss from continuing operations increasing to $2.0 million ($0.12 per share) Q2 2025 Financial Highlights (Continuing Operations) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------------- | :-------- | :-------- | :--------- | | Revenues | $0.6M | $0.8M | -25.2% | | Operating Expenses | $2.7M | $2.566M | +5.3% | | Loss from Continuing Operations | $2.0M | $1.7M | +17.6% | | Loss per Share (Continuing Ops) | $0.12 | $0.11 | +9.1% | | Cash used by Operations | $1.7M | $1.2M | +41.7% | | Cash & Accounts Receivable (as of June 30, 2025) | $13.6M | $17.2M (Dec 31, 2024) | -20.9% | - Revenues from continuing operations decreased by 25.2% to $0.6 million compared to the prior year[4] - Loss from continuing operations increased to $2.0 million, or $0.12 per share, compared to $1.7 million, or $0.11 per share, in the prior year[4] Financial Summary for Six Months Ended June 30, 2025 H1 2025 revenues from continuing operations decreased 31.1% to $1.1 million, with operating expenses down 1.5% and loss widening to $3.8 million ($0.23 per share) H1 2025 Financial Highlights (Continuing Operations) | Metric | H1 2025 | H1 2024 | Change (%) | | :-------------------------------- | :-------- | :-------- | :--------- | | Revenues | $1.1M | $1.615M | -31.1% | | Operating Expenses | $5.2M | $5.249M | -1.5% | | Loss from Continuing Operations | $3.8M | $3.4M | +11.8% | | Loss per Share (Continuing Ops) | $0.23 | $0.22 | +4.5% | | Cash used by Operations | $3.1M | $3.1M | 0% | - Revenues from continuing operations for the six months decreased by 31.1% to $1.1 million compared to the same period in the prior year[4] - Loss from continuing operations for the six months was $3.8 million, or $0.23 per share, compared to $3.4 million, or $0.22 per share, for the same period in the prior year[4] CEO's Commentary and Business Outlook The CEO addresses declining legacy business revenues, emphasizing strategic focus on MultiSensing® and zForce® technology platforms for future growth and new market opportunities Overview of Q2 Performance and Challenges The CEO noted continued revenue decline from legacy business in printer and automotive infotainment, a trend expected until new customer projects reach production - The second quarter saw a decline in revenues from the legacy business due to negative trends in the printer and automotive infotainment markets[5] - These challenges are expected to remain until new customers move from the deployment phase to the production phase[5] Strategic Focus and Technology Advancement Neonode expands business and advances MultiSensing® and zForce® platforms, investing in data-driven HMI solutions, strategic automotive partnerships, and new verticals to drive future growth - Neonode is actively working to expand business opportunities and advance the product roadmap across its MultiSensing® and zForce® core technology platforms[5] - For MultiSensing, the company continues to build on and invest in being the first mover in fully synthetic, data-driven HMI solutions, building strategic partnerships in the automotive sector, and exploring new verticals[6] - With the zForce platform, Neonode continues to serve its existing customer base while focusing on new project deliveries[6] Detailed Financial Overview for Q2 2025 This section provides a detailed analysis of Neonode's Q2 2025 financial performance, covering revenue, operating expenses, profitability, cash position, and working capital Revenue Analysis Q2 2025 total revenues from continuing operations decreased 25.2% to $0.6 million, driven by a 34.2% fall in license revenues, partially offset by a 4.3% increase in NRE revenues Q2 2025 Revenue Breakdown (Continuing Operations) | Revenue Type | Q2 2025 | Q2 2024 | Change (%) | | :------------------------ | :-------- | :-------- | :--------- | | Total Revenues | $0.6M | $0.8M | -25.2% | | License Revenues | $0.4M | $0.614M | -34.2% | | Non-recurring Engineering | $0.2M | $0.187M | +4.3% | - The decrease in license revenues was mainly due to lower demand for legacy customers' products within printer and passenger car touch applications[7] - Revenues from new licensing customers partially offset the decline in license revenues[7] Operating Expenses and Profitability Q2 2025 operating expenses from continuing operations rose 5.3% to $2.7 million, resulting in a $2.0 million loss ($0.12 per share) and increased cash used by operations Q2 2025 Operating Expenses and Loss (Continuing Operations) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------------- | :-------- | :-------- | :--------- | | Operating Expenses | $2.7M | $2.566M | +5.3% | | Loss from Continuing Operations | $2.0M | $1.7M | +17.6% | | Loss per Share (Continuing Ops) | $0.12 | $0.11 | +9.1% | - Cash used by operations increased to $1.7 million in the second quarter of 2025 compared to $1.2 million for the same period in 2024[9] - The increase in cash used by operations was primarily due to a lower net loss and fewer component purchases following the phaseout of TSM manufacturing[9] Cash Position and Working Capital Cash and accounts receivable decreased to $13.6 million by June 30, 2025, with working capital also declining, though the company deems its liquidity sufficient for strategy execution Cash and Working Capital (Continuing Operations) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :-------------------------- | :-------------- | :------------- | :------- | | Cash and Accounts Receivable | $13.6M | $17.2M | -$3.6M | | Working Capital | $12.1M | $16.1M | -$4.0M | - The company's financial position and liquidity provide stability and enable it to execute its strategy to secure more licensing opportunities[10] Company Information and Legal Disclosures This section provides essential company contact information, an overview of Neonode's business, and a safe harbor statement regarding forward-looking statements and associated risks Contact Information Contact details for Neonode's President & CEO Daniel Alexus and CFO Fredrik Nihlén are provided for inquiries - Contact information for President and CEO Daniel Alexus and Chief Financial Officer Fredrik Nihlén is provided[11] About Neonode Neonode Inc. (NASDAQ:NEON), a publicly traded company founded in 2001, specializes in advanced optical sensing solutions for various applications, holding over 100 patents globally - Neonode Inc. (NASDAQ:NEON) is a publicly traded company, headquartered in Stockholm, Sweden, established in 2001[11] - The Company provides advanced optical sensing solutions for contactless touch, touch, gesture control, and in-cabin monitoring[11] - Neonode's technology is deployed in more than 90 million products, and the Company holds more than 100 patents worldwide, serving Fortune 500 companies[11] Safe Harbor Statement This press release includes forward-looking statements on growth and performance, subject to risks like customer reliance and product development cycles, with no duty to update - The press release contains forward-looking statements relating to expectations for growth and future performance[13] - These statements are subject to known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different[13] - Risks include reliance on customers' ability to design, manufacture, and sell products with Neonode's technology, the length of customer product development cycles, and dependence on suppliers[14] Consolidated Financial Statements This section presents Neonode's consolidated balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows for the reported periods Consolidated Balance Sheets Total assets decreased to $15.058 million by June 30, 2025, driven by lower cash, while total liabilities increased and stockholders' equity declined to $12.652 million Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :-------------------------- | :-------------- | :------------- | :------- | | Total Assets | $15,058 | $18,381 | -$3,323 | | Cash and cash equivalents | $13,238 | $16,427 | -$3,189 | | Total Liabilities | $2,406 | $1,939 | +$467 | | Total Stockholders' Equity | $12,652 | $16,442 | -$3,790 | - Current assets decreased from $17,685 thousand at December 31, 2024, to $14,405 thousand at June 30, 2025[16] - Current liabilities increased from $1,620 thousand at December 31, 2024, to $2,215 thousand at June 30, 2025[16] Consolidated Statements of Operations Q2 2025 total revenues were $0.599 million, with operating loss widening to $(2.110) million and net loss at $(1.868) million; H1 revenues were $1.112 million with a net loss of $(3.601) million Consolidated Statements of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :-------- | :-------- | :-------- | :-------- | | Total Revenues | $599 | $801 | $1,112 | $1,615 | | Gross Margin | $593 | $777 | $1,097 | $1,574 | | Total Operating Expenses | $2,703 | $2,566 | $5,172 | $5,249 | | Operating Loss | $(2,110) | $(1,789) | $(4,075) | $(3,675) | | Loss from Continuing Operations | $(1,984) | $(1,677) | $(3,784) | $(3,393) | | Net Loss | $(1,868) | $(1,695) | $(3,601) | $(3,779) | | Basic & Diluted Loss per Share (Continuing Ops) | $(0.12) | $(0.11) | $(0.23) | $(0.22) | | Basic & Diluted Loss per Share | $(0.11) | $(0.11) | $(0.21) | $(0.25) | - Research and development expenses increased to $1,074 thousand in Q2 2025 from $975 thousand in Q2 2024[18] - Sales and marketing expenses increased to $596 thousand in Q2 2025 from $544 thousand in Q2 2024[18] Consolidated Statements of Comprehensive Loss Q2 2025 comprehensive loss was $(1.923) million, while H1 comprehensive loss was $(3.790) million, with foreign currency translation adjustments impacting both periods Consolidated Statements of Comprehensive Loss Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | | Net Loss | $(1,868) | $(1,695) | $(3,601) | $(3,779) | | Foreign currency translation adjustments | $(55) | $(32) | $(189) | $(66) | | Comprehensive Loss | $(1,923) | $(1,727) | $(3,790) | $(3,845) | - Foreign currency translation adjustments resulted in an other comprehensive loss of $(55) thousand for Q2 2025 and $(189) thousand for H1 2025[20] Consolidated Statements of Stockholders' Equity Total stockholders' equity decreased to $12.652 million by June 30, 2025, primarily due to net losses and foreign currency translation adjustments Consolidated Stockholders' Equity Highlights (in thousands) | Metric | Dec 31, 2024 | June 30, 2025 | Change | | :-------------------------- | :------------- | :-------------- | :------- | | Total Stockholders' Equity | $16,442 | $12,652 | -$3,790 | | Accumulated Deficit | $(224,080) | $(227,681) | -$3,601 | | Accumulated Other Comprehensive Loss | $(450) | $(639) | -$189 | - Net loss for the six months ended June 30, 2025, was $(3,601) thousand, contributing to the decrease in equity[22] - Foreign currency translation adjustments also contributed to the decrease in equity by $(189) thousand for the six months ended June 30, 2025[22] Consolidated Statements of Cash Flows H1 2025 net cash used in operating activities was $(3.110) million, with a net decrease in cash and cash equivalents of $(3.189) million, ending at $13.238 million Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | H1 2025 | H1 2024 | Change | | :-------------------------------- | :-------- | :-------- | :------- | | Net Cash Used in Operating Activities | $(3,110) | $(3,135) | +$25 | | Net Cash Provided by (Used in) Investing Activities | $(15) | $153 | -$168 | | Net Cash Used in Financing Activities | $(5) | $(13) | +$8 | | Net Change in Cash and Cash Equivalents | $(3,189) | $(3,048) | -$141 | | Cash and Cash Equivalents at End of Period | $13,238 | $13,107 | +$131 | - Adjustments to reconcile net loss to net cash used in operating activities included depreciation and amortization, amortization of operating lease right-of-use assets, and changes in accounts receivable and other operating assets/liabilities[24] - Cash paid for income taxes was $10 thousand in H1 2025, down from $21 thousand in H1 2024[24]