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Introduction & Market Context
NEXT Biometrics Group ASA (OB:NEXT) presented its Q1 2025 financial results on May 14, 2025, revealing a challenging quarter with significantly lower revenue compared to the previous year, but highlighting several strategic developments that could drive substantial growth in the second half of 2025 and beyond.
The biometrics technology provider, which specializes in fingerprint recognition solutions, reported continued challenges in key markets including China and India, though the company emphasized that recent contract wins and market developments are expected to improve its financial position in coming quarters.
As shown in the company’s presentation, NEXT Biometrics’ leadership team, including CEO Ulf Ritsvall and CFO Eirik Underthun, outlined the company’s performance and strategic direction:
Quarterly Performance Highlights
NEXT Biometrics reported Q1 2025 revenue of NOK 6.9 million, representing a 46% decrease compared to NOK 12.8 million in Q1 2024. The company’s adjusted gross margin declined to 52% from 56% in the same period last year, while adjusted EBITDA deteriorated to negative NOK 13.7 million compared to negative NOK 9.1 million in Q1 2024.
The financial results reflect ongoing challenges in key markets, with the company specifically noting that "slowness in the China market and the market pause in India" continued to impact quarterly revenues. Operating expenses increased slightly to NOK 17.3 million from NOK 16.3 million in Q1 2024.
The following slide highlights the key financial metrics for the quarter:
Cash and cash equivalents stood at NOK 39.9 million at the end of Q1 2025, down from NOK 62.9 million at the end of Q4 2024. The company reported negative operational cash flow due to low revenues and operating losses, though it noted increased traction on accounts receivable collection during the quarter, with further improvements expected in Q2 and Q3.
Despite the challenging quarter, NEXT Biometrics highlighted several positive developments, including six new design wins (with the first design-win for the Touchpad segment) and a signed multi-year MoU valued at NOK 30 million.
The company’s quarterly highlights are summarized in the following slide:
Strategic Initiatives
The most significant development announced by NEXT Biometrics was a major order from ACPL valued between NOK 55-107 million, with shipments starting in Q2 2025. This order, which came immediately after the Q1 close, involves the company’s FAP20 sensors being used as part of a certification solution in a tablet model for one of India’s largest public banks.
The company emphasized that this order significantly increases confidence in its revenue outlook for the second half of 2025 and into 2026. The agreement extends NEXT’s collaboration with ACPL and reflects increased demand and market share in multiple regions including India, Mexico, Morocco, and South Africa.
As illustrated in the following slide, this order represents a key milestone for the company:
NEXT Biometrics also highlighted its progress with the FAP30 product, which leverages the company’s patented NEXT Active Thermal® technology. The FAP30 is positioned to address market segments with higher security requirements, particularly in Government ID and Healthcare sectors.
The company noted strong partner interest in the FAP30, driven by competitive pricing that enables high gross margins in a large addressable market. Importantly, FAP30 customers are primarily based in Western markets, which the company views as enhancing its geographic diversification strategy.
The following slide details the company’s FAP30 strategy:
In terms of market developments, NEXT Biometrics reported that the Aadhaar program activity in India resumed in March with successful recertification of the company’s FAP20 sensor. The company anticipates increased market share in India, supported by strong demand for biometric upgrades.
The company also outlined its focus on improving cash flow, noting enhanced credit terms now in place to support its growth strategy. Management highlighted that the FAP30’s positioning for sales to Western customers means more standard and reliable payment terms.
Forward-Looking Statements
Looking ahead, NEXT Biometrics provided revenue guidance of NOK 130-160 million for 2025, with the majority expected to be realized in the second half of the year. The company specifically forecasts Q2 and Q3 combined revenue of NOK 60-70 million, indicating a slow ramp-up.
Management expressed even higher upside potential for 2026, with the FAP30 product expected to drive revenue growth by targeting security market segments with the most stringent requirements. The company continues to focus on strong FAP20 sales, which it describes as a unique product offering that drives competitive advantage.
The following slide summarizes the company’s outlook:
While NEXT Biometrics faces ongoing challenges in its core markets, the significant order from ACPL and strategic focus on the FAP30 product line suggest potential for improved performance in the coming quarters. However, investors should note that the company continues to operate at a loss, with substantial revenue growth needed to achieve profitability.
The company’s ability to execute on its projected second-half recovery will be crucial for its financial performance in 2025, particularly as it manages its declining cash position while investing in new product development and market expansion.
Full presentation:
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