Neonode Reports Quarter Ended June 30, 2022 Financial Results

Rhea-AI Summary

Neonode Inc. (NASDAQ: NEON) reported a 26.3% decline in Q2 2022 revenue, totaling $1.3 million. Operating expenses decreased by 13.7% to $2.8 million, while net loss reduced to $1.5 million ($0.11 per share). For the first half, revenue was $2.6 million, down 23.6% year-over-year. Cash used in operations increased to $5.2 million. CEO Urban Forssell indicated challenges due to COVID-19 lockdowns and supply chain issues, but noted growth potential in Touch Sensor Modules from various markets.

Positive

• Operating expenses down 13.7% to $2.8 million in Q2 2022.
• Net loss decreased to $1.5 million in Q2 2022, better than $1.7 million in Q2 2021.
• Gross margin improved to 55.7% in Q2 2022, up from 38.7% in Q2 2021.

Negative

• Revenue decreased by 26.3% in Q2 2022 compared to the prior year.
• Cash used in operations increased to $5.2 million in the first half of 2022, up from $3.4 million in the prior year.
• License revenues fell 29.8% in Q2 2022, primarily due to component shortages.

STOCKHOLM, Aug. 11, 2022 /PRNewswire/ -- Neonode Inc. (NASDAQ: NEON), today reported financial results for the three and six months ended June 30, 2022.

FINANCIAL SUMMARY FOR THE THREE MONTHS ENDED JUNE 30, 2022:

• Revenue of $1.3 million, a decrease of 26.3% compared to the same period in the prior year.     

• Operating expenses of $2.8 million, a decrease of 13.7% compared to the same period in the prior year.     

• Net loss of $1.5 million, or $0.11 per share, compared to $1.7 million, or $0.14 per share, for the same period in the prior year.

• Cash used by operations of $2.9 million compared to $1.4 million for the same period in the prior year.     

• Cash and accounts receivable of $13.5 million as of June 30, 2022, compared to $18.7 million as of December 31, 2021.

FINANCIAL SUMMARY FOR THE SIX MONTHS ENDED JUNE 30, 2022:

• Revenue of $2.6 million, a decrease of 23.6% compared to the same period in the prior year.     

• Operating expenses of $5.5 million, a decrease of 13.0% compared to the same period in the prior year.     

• Net loss of $2.9 million, or $0.22 per share, compared to $3.2 million, or $0.28 per share, for the same period in the prior year.

• Cash used by operations of $5.2 million compared to $3.4 million for the same period in the prior year.     

THE CEO'S COMMENTS

"Our overall sales and results for the second quarter of 2022 were below expectations and were impacted by the fact that customers in several of our key markets, particularly Asia, are still being affected by lock-downs associated with the COVID-19 pandemic. Many of our customers are also having to navigate supply chain constraints due to a shortage of semiconductor components and other issues they are faced with in the current economic climate, slowing their product sales, and in some cases their development and launches of new products, which affects our business negatively," said Dr. Urban Forssell, Neonode's CEO.

"Our products business continues to develop and we are seeing a growing interest in our Touch Sensor Modules ("TSM") from elevator customers and interactive kiosk manufacturers in the transportation, retail, hospitality, and medical segments. To date we have had the best traction in Japan and South Korea, but other markets such as China, Western Europe, and North America are also showing potential. Together with our distributors and value-added resellers we continue to work to expand the TSM business and increase our sales volumes," continued Dr. Forssell.
 
"In our efforts to re-vitalize our licensing business we focus on automotive OEM and tier 1 customers, and we are encouraged by the interest we are seeing for our object detection, gesture sensing and driver and in-cabin monitoring solutions. Short- and medium-term the revenue potential is sales of non-recurring engineering services in application development projects linked to new vehicle platforms. These projects pave the way for increased license revenues in the medium- and long-term when vehicles based on the new platforms start being produced. We continue to execute on our strategy and remain optimistic about the potential to grow this business in the coming years," concluded Dr. Forssell.

FINANCIAL OVERVIEW FOR THE THREE MONTHS ENDED JUNE 30, 2022

Net revenues for the quarter ended June 30, 2022 were $1.3 million, a 26.3% decrease compared to the same period in 2021. For the 2022 period, license revenues were $1.0 million, a decrease of 29.8% compared to the same period in 2021. The decrease is primarily the result of component shortages within the printer and automotive markets related to the COVID-19 pandemic, which in turn impacted our license revenues for the second quarter of 2022.
 
Revenues from product sales during the second quarter were $0.2 million, a decrease of 39.3% compared to the same period in 2021. In the first half of 2021 several early adopters of our technology developed and launched retrofit solutions, which affected our TSM sales positively during this period. However, our product sales for the second quarter of 2022 continue to be negatively impacted by COVID-19 driven lock-downs in Asia and we are also affected by the comparatively long development and launch periods, often 12 to 18 months, or longer, for customer new equipment solutions, which slow down our sales growth.  

Gross margin related to products was 55.7% for the second quarter of 2022 compared to 38.7% for the same period in 2021. Our operating expenses decreased 13.7% for the second quarter of 2022 compared to the same period in 2021, primarily due to lower staff expenses and depreciation and amortization.
 
Net loss attributable to Neonode for the three months ended June 30, 2022 was $1.5 million, or $0.11 per share, compared to a net loss of $1.7 million, or $0.14 per share, for the same period in 2021. Cash used by operations was $2.9 million in the second quarter compared to $1.4 million for the same period in 2021. The increase is primarily the result of increased inventory to secure our future product deliveries.
 
Cash and accounts receivable totaled $13.5 million and working capital was $16.4 million as of June 30, 2022 compared to $18.7 million and $19.1 million as of December 31, 2021, respectively.

For more information, please contact:

Investor Relations
Fredrik Nihlén
E-mail: fredrik.nihlen@neonode.com 
Phone: +46 703 97 21 09

Chief Executive Officer
Urban Forssell
E-mail: urban.forssell@neonode.com
Phone: +46 734 10 03 59

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/neonode/r/neonode-reports-quarter-ended-june-30--2022-financial-results,c3612714

The following files are available for download:

https://mb.cision.com/Main/17297/3612714/1613645.pdf	Neonode Inc 2Q Earnings Release
https://news.cision.com/neonode/i/neonode-2q-earnings-august-2022,c3076605	Neonode 2Q Earnings August 2022

View original content:https://www.prnewswire.com/news-releases/neonode-reports-quarter-ended-june-30-2022-financial-results-301604342.html

SOURCE Neonode

FAQ

What were Neonode's earnings for the second quarter of 2022?

Neonode reported a net loss of $1.5 million, or $0.11 per share, in Q2 2022.

How did Neonode's revenue perform in Q2 2022?

Neonode's revenue in Q2 2022 was $1.3 million, a decrease of 26.3% year-over-year.

What challenges did Neonode face in Q2 2022?

Neonode faced challenges due to COVID-19 lockdowns and supply chain constraints affecting their key markets.

What is the future outlook for Neonode's Touch Sensor Modules?

Neonode expects growth potential in Touch Sensor Modules, particularly in Japan and South Korea, as demand increases.

What was Neonode's cash position as of June 30, 2022?

Neonode had cash and accounts receivable totaling $13.5 million as of June 30, 2022.