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Neonode Inc. (NEON)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue from continuing operations was $0.51M, down 37.0% year over year, driven by weaker demand in legacy printer and passenger car touch applications; operating expenses fell 8.0% YoY, but loss from continuing operations was $1.80M (−$0.11 EPS) versus $1.72M (−$0.11 EPS) in Q1 2024 .
  • License fees were $0.50M (−35.7% YoY) and non‑recurring engineering (NRE) was $0.02M (−61.0% YoY), reflecting fewer projects and ongoing legacy demand headwinds; gross margin dollars were $0.50M .
  • Liquidity remained solid: cash and accounts receivable were $15.7M at March 31, 2025 (vs. $17.2M at Dec 31, 2024); cash used in operations improved to $1.36M from $1.92M in Q1 2024 amid TSM manufacturing phaseout effects .
  • Strategic focus reaffirmed under the new CEO (effective March 31, 2025): accelerate licensing-led growth across MultiSensing and zForce platforms, target automotive DMS and touch applications, and pursue new verticals; no formal financial guidance provided .

What Went Well and What Went Wrong

What Went Well

  • Operating discipline: operating expenses from continuing operations decreased 8.0% YoY to $2.47M, supporting lower cash burn versus Q1 2024 .
  • Platform focus and pipeline: management emphasized continued deliveries to existing projects and building strategic partnerships in automotive for MultiSensing DMS and expanding zForce opportunities in touch/rugged applications .
  • Liquidity resilience: cash and accounts receivable of $15.7M and working capital of $14.1M provide stability to execute the licensing strategy (vs. $17.2M and $16.1M at year‑end 2024) .

What Went Wrong

  • Top‑line pressure: revenue fell 37.0% YoY to $0.51M, with license fees down 35.7% and NRE down 61.0% due to fewer projects and weaker legacy demand (printers and car touch) .
  • Continued losses: loss from continuing operations widened modestly to $1.80M (−$0.11 EPS) from $1.72M (−$0.11 EPS), reflecting limited offset from other income despite lower OpEx .
  • New wins gap: CEO acknowledged no new contracts were secured in the quarter, underscoring near‑term revenue visibility challenges despite deliveries on existing projects .

Financial Results

Consolidated Performance vs Prior Periods and Prior Year

Metric ($USD)Q1 2024Q3 2024Q1 2025
Revenues (Millions)$0.81 $0.84 $0.51
License Fees (Millions)$0.77 $0.73 $0.50
NRE (Millions)$0.04 $0.11 $0.02
Gross Margin ($ Millions)$0.80 $0.82 $0.50
Operating Expenses (Millions)$2.68 $2.04 $2.47
Operating Income (Loss) (Millions)$(1.89) $(1.23) $(1.97)
Loss from Continuing Ops (Millions)$(1.72) $(1.04) $(1.80)
Diluted EPS – Continuing Ops$(0.11) $(0.07) $(0.11)

Note: A discrete Q4 2024 quarterly breakdown was not provided in the FY 2024 8‑K; Q3 2024 is the latest prior quarterly comparator .

Segment/Revenue Composition

Revenue Component ($USD Millions)Q1 2024Q3 2024Q1 2025
License Fees$0.77 $0.73 $0.50
Non‑Recurring Engineering (NRE)$0.04 $0.11 $0.02
Total Revenues$0.81 $0.84 $0.51

KPIs and Liquidity

KPI ($USD Millions unless noted)Q1 2024Q3 2024Q1 2025
Cash Used in Operations$1.92 $— (nine months: $4.43) $1.36
Cash and Accounts Receivable$—$18.60 $15.70
Working Capital (Continuing Ops)$—$17.70 $14.10
Weighted Avg Shares (Millions)15.36 15.98 16.78

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue, EPS, Margins, OpEx, Tax RateFY/Q1 2025None providedNone providedMaintained (no formal guidance)

Management did not issue formal quantitative guidance in the Q1 2025 press release .

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript was available; themes reflect press releases.

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4/FY 2024)Current Period (Q1 2025)Trend
Licensing focus; TSM phaseoutTransition to licensing; TSM discontinued; NRE rising via DMS project Year of transition; fully focused on licensing; TSM manufacturing discontinued Reinforced licensing focus across MultiSensing and zForce platforms Stable to improving strategic clarity
Automotive DMS opportunityPositive attention from OEMs; DMS projects driving NRE Award by leading commercial vehicle OEM for MultiSensing DMS Delivering to previously announced commercial vehicle OEM; building partnerships Improving pipeline execution
Legacy printer/car touch demandDecrease vs LY; legacy licensing down Decline in legacy revenues highlighted Continued decline; no new contracts in quarter Deteriorating legacy demand
Partnerships/verticalsAgreements with NEXTY and YesAR (TSM technology, holographic infotainment) NEXTY agreement, automotive/elevator initiatives Exploring new verticals and strategic partnerships (auto focus) Stable to expanding
Liquidity/cash burnCash & AR $18.6M; lower cash use due to TSM phaseout Cash & AR $17.2M; reduced cash use YoY Cash & AR $15.7M; cash used in ops improved YoY Mixed: strong liquidity, cash levels down sequentially
LeadershipInterim CEO/CFO leading transition Interim CEO/CFO status New CEO effective Mar 31, 2025; strategic focus articulated Leadership transition concluded

Management Commentary

  • “This quarter saw a continued decline in revenues from our legacy business… we successfully continued to deliver on our existing customer projects, even though we did not secure any new contracts during this period.” — Daniel Alexus, President & CEO .
  • “We are actively working to expand our business opportunities and advance our product roadmap across both core technology platforms: MultiSensing and zForce… to offset the negative trend within the legacy business while driving sustainable future growth.” .
  • “With MultiSensing, we have developed a compelling, end‑to‑end in‑house solution… currently delivering to a previously announced commercial vehicle OEM… exploring new verticals where our unique value proposition… can be deployed more rapidly.” .
  • FY 2024 context: “We discontinued TSM manufacturing and positioned ourselves for a future fully focused on technology licensing… NRE fees from customer projects… expected to generate license revenues once these projects enter the production phase.” — Fredrik Nihlén, Interim President & CEO and CFO .
  • Q3 2024 pipeline: “We remain positive toward the prospects of generating new projects and business with our driver and in‑cabin monitoring solutions… We also see a growing market interest in licensing our cost‑effective and proven touch interaction solutions.” — Fredrik Nihlén .

Q&A Highlights

No Q1 2025 earnings call transcript was found; therefore, Q&A highlights and any verbal guidance clarifications are unavailable for this quarter [List: earnings-call-transcript returned 0].

Estimates Context

  • Wall Street consensus (S&P Global) for Q1 2025 revenue and EPS was unavailable; thus beat/miss assessment versus estimates cannot be determined at this time. Values retrieved from S&P Global.*
  • Given the 37.0% YoY revenue decline and reduced license/NRE contributions, any future estimates may need to reflect ongoing legacy demand weakness and timing of new licensing wins, per management commentary .

Key Takeaways for Investors

  • Revenue compression continued (−37% YoY to $0.51M) with legacy end‑market demand as the main headwind; watch for new licensing wins to re‑accelerate growth .
  • Operating discipline improved (OpEx −8% YoY) and cash burn eased (operating cash use $1.36M vs $1.92M in Q1 2024), but losses persisted (−$0.11 EPS from continuing ops) .
  • Strategic pivot under the new CEO is clear: emphasize MultiSensing DMS and zForce touch/rugged applications, deepen automotive partnerships, and pursue faster‑to‑deploy verticals .
  • Liquidity remains adequate (cash + AR $15.7M; working capital $14.1M), supporting runway to execute the licensing strategy; monitor cash trajectory given sequential decline from year‑end .
  • Absence of formal guidance and no new contracts in Q1 highlight near‑term revenue visibility risk; catalysts hinge on converting pipeline into licenses/production .
  • For trading: narrative sensitivity around automotive DMS delivery milestones and any announced licensing wins could drive stock reaction; continued legacy declines without offset may pressure sentiment .
  • Medium‑term thesis: if the company can translate NRE into recurring license revenue in automotive and new verticals, the licensing model could scale with better operating leverage; execution on partnerships is key .

Appendix: Prior Quarter/Fiscal Context

  • Q3 2024: Revenue $0.84M; loss from continuing ops $1.04M (−$0.07 EPS); NRE growth tied to DMS project; liquidity $18.6M cash+AR .
  • FY 2024: Revenues $3.11M; loss from continuing ops $5.88M (−$0.37 EPS); strategic transition to licensing, TSM manufacturing discontinued .