Neonode Reports Quarter Ended September 30, 2024 Financial Results

Rhea-AI Summary

Neonode (NASDAQ: NEON) reported Q3 2024 financial results, focusing on its continuing licensing business after discontinuing its products division in Q4 2023. Q3 revenues were $0.8 million, slightly down 0.2% year-over-year, with a net loss of $1.0 million ($0.07 per share). For the nine months ended September 30, revenue decreased 21% to $2.5 million, with a net loss of $4.4 million. The company highlighted new TSM technology agreements with NEXTY Electronics and YesAR, while noting decreased licensing revenues from legacy customers in printer and passenger car applications. Cash and accounts receivable stood at $18.6 million as of September 30, 2024.

Positive

• New TSM technology agreements secured with NEXTY Electronics and YesAR
• Non-recurring engineering revenues increased 2,575% in Q3 2024
• Operating expenses decreased by 2.7% in Q3 2024
• Cash used by operations improved from $1.8M to $1.3M year-over-year
• Strong liquidity position with $18.6M in cash and accounts receivable

Negative

• Q3 2024 revenues decreased 0.2% year-over-year
• Nine-month revenues declined 21% compared to prior year
• License revenues decreased 12.6% in Q3 2024
• Net loss increased to $4.4M for nine months vs $3.5M prior year
• Lower demand from legacy customers in printer and passenger car applications

Insights

Financial Analyst

The Q3 2024 results paint a concerning picture for Neonode's financial health. $0.8 million in quarterly revenue with a $1.0 million net loss shows continued operational challenges. The 21.0% revenue decline over nine months signals significant headwinds in their licensing business. While cash position remains stable at $18.6 million, the burn rate of $4.4 million over nine months is substantial relative to revenue.

The pivot to focus solely on licensing hasn't yet shown positive results, with legacy customer revenues declining. The bright spot is the 2,575% increase in non-recurring engineering revenue, though from a small base. The company's strategy to target driver monitoring systems shows promise but needs to translate into meaningful revenue growth to offset the cash burn.

STOCKHOLM, Nov. 6, 2024 /PRNewswire/ -- Neonode Inc. (NASDAQ: NEON) ("Neonode" or the "Company") today reported financial results for the three and nine months ended September 30, 2024. The financial results relate to continuing operations, which means Neonode's licensing business as the products business has been reclassified to discontinued operations, following the decision in Q4 2023 to focus solely on the Company's licensing business.

FINANCIAL SUMMARY FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024

• Revenues from continuing operations of $0.8 million, a decrease of 0.2% compared to the same period in the prior year.        
• Operating expenses from continuing operations of $2.0 million, a decrease of 2.7% compared to the same period in the prior year.     
• Net loss from continuing operations of $1.0 million, or $0.07 per share, compared to $1.1 million, or $0.07 per share, for the same period in the prior year.    
• Cash used by operations of $1.3 million compared to $1.8 million for the same period in the prior year.       
• Cash and accounts receivable of $18.6 million as of September 30, 2024 compared to $17.1 million as of December 31, 2023.

FINANCIAL SUMMARY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

• Revenue from continuing operations of $2.5 million, a decrease of 21.0% compared to the same period in the prior year.        
• Operating expenses from continuing operations of $7.2 million, an increase of 2.9% compared to the same period in the prior year.           
• Net loss from continuing operations of $4.4 million, or $0.28 per share, compared to $3.5 million, or $0.22 per share, for the same period in the prior year.          
• Cash used by operations of $4.4 million compared to $4.1 million for the same period in the prior year.

BUSINESS HIGHLIGHTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

• Several ongoing discussions with potential customers regarding Touch Sensor Module ("TSM") technology and the MultiSensing® platform.
• TSM technology agreement with NEXTY Electronics, an electronics-trading company within the Toyota Tsusho Group, for sensor development and manufacturing of the next-generation amusement machines for a leading manufacturer in Japan's amusement market.
• TSM technology agreement with YesAR to develop and build holographic infotainment solutions for its customers in the automotive and elevator segments, as well as other market segments.

"Our revenues from the continuing licensing business decreased in the third quarter of 2024 compared to the same quarter last year. However, non-recurring engineering revenues related to our new lines of business increased and were mainly attributable to the driver monitoring system ("DMS") project with the original equipment manufacturer ("OEM") of commercial vehicles customer that we announced at the end of last year. Licensing revenues from legacy customers within printer and passenger car touch applications decreased compared to the same quarter last year, mainly due to lower demand for their products. Cash used by operations decreased in the third quarter 2024 compared to the same quarter last year, as we discontinued component purchases after phasing out TSM manufacturing," said Fredrik Nihlén, Neonode's interim President and CEO and CFO.

"We remain positive toward the prospects of generating new projects and business with our driver and in-cabin monitoring solutions, which continue to generate positive attention from OEMs and suppliers to the automotive industry. Our flexible and scalable approach to driver and in-cabin monitoring presents manufacturers and their suppliers with a cost-effective and efficient platform for securing compliance and automotive innovation for years to come. We also see a growing market interest in licensing our cost-effective and proven touch interaction solutions," concluded Mr. Nihlén.

FINANCIAL OVERVIEW FOR THE QUARTER ENDED SEPTEMBER 30, 2024

Revenues from continuing operations for the quarter ended September 30, 2024 were $0.8 million, a 0.2% decrease compared to the same period in 2023. License revenues were $0.7 million, a decrease of 12.6% compared to the same period in 2023. The decrease was mainly due to lower demand for our legacy customers products within printer and passenger car touch applications offset by revenues from our new licensing customers.

Revenues from non-recurring engineering for the third quarter of 2024 were $0.1 million, a 2,575.0% increase compared to the same period in 2023, mainly attributable to the DMS project with the commercial vehicle OEM customer that was announced at the end of 2023.

Our operating expenses from continuing operations decreased by 2.7% for the third quarter of 2024 compared to the same period in 2023, primarily due to lower payroll and related costs offset by higher professional fees and advertising costs.

Net loss from continuing operations for the third quarter of 2024 was $1.0 million, or $0.07 per share, compared to a net loss of $1.1 million, or $0.07 per share for the same period in 2023.

Cash used by operations was $1.3 million in the third quarter of 2024 compared to $1.8 million for the same period in 2023. The decrease was primarily due to the absence of component purchases following the phaseout of TSM manufacturing.

Cash and accounts receivable totaled $18.6 million and working capital for continuing operations was $17.7 million as of September 30, 2024, compared to $16.1 million and $16.8 million as of December 31, 2023, respectively. Our financial position and liquidity provide stability and enable us to execute our strategy to secure more licensing opportunities for our innovative technologies.

CONTACT:

Interim President and Chief Executive Officer and Chief Financial Officer
Fredrik Nihlén
E-mail: fredrik.nihlen@neonode.com
Phone: +46 703 97 21 09

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

https://news.cision.com/neonode/r/neonode-reports-quarter-ended-september-30--2024-financial-results,c4062016

The following files are available for download:

https://mb.cision.com/Main/17297/4062016/3096862.pdf	Neonode - 3Q 2024 Earnings Release
https://news.cision.com/neonode/i/neonode-3q-earnings-november-2024,c3349266	Neonode 3Q Earnings November 2024

 

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SOURCE Neonode

FAQ

What was Neonode's (NEON) revenue in Q3 2024?

Neonode reported revenues of $0.8 million in Q3 2024, representing a slight decrease of 0.2% compared to the same period in 2023.

What was NEON's net loss per share in Q3 2024?

Neonode reported a net loss of $0.07 per share in Q3 2024, unchanged from Q3 2023.

How much cash does Neonode (NEON) have as of September 30, 2024?

Neonode had cash and accounts receivable totaling $18.6 million as of September 30, 2024.

What new partnerships did NEON announce in 2024?

Neonode announced TSM technology agreements with NEXTY Electronics for amusement machines and with YesAR for holographic infotainment solutions.