Neonode Reports $1.7 Million Net Loss in Q1 2025, Revenue Declines 37%

Neonode Inc. reported a net loss of $1.7 million for the first quarter of 2025, a slight improvement from the $2.1 million loss recorded in the same period of 2024. Total revenues for the quarter were $0.5 million, down 37% from $0.8 million year-over-year. The decline in revenue was primarily attributed to a 35.7% decrease in license fees, which amounted to $0.5 million, and a 61% drop in non-recurring engineering revenues, which totaled $16,000. The company’s gross margin remained high at 98.2%, compared to 97.9% in the previous year.

In terms of operational metrics, Neonode's total assets decreased to $16.97 million as of March 31, 2025, down from $18.38 million at the end of 2024. Current liabilities increased to $2.12 million from $1.62 million, while stockholders' equity fell to $14.58 million from $16.44 million. The company’s cash and cash equivalents also decreased to $15.0 million from $16.4 million, indicating a tightening liquidity position. The accumulated deficit grew to approximately $225.8 million, reflecting ongoing challenges in achieving profitability.

Strategically, Neonode continues to focus on its licensing business, with 37 valid technology license agreements in place as of March 31, 2025. The company has shifted its operational focus away from its product business, which has been classified as discontinued operations. This transition is expected to streamline operations and concentrate resources on its core technology offerings. The company anticipates that existing customers will continue to ship products incorporating its technology, and it aims to expand its customer base further.

Neonode's operational performance indicators show that it is heavily reliant on a small number of customers, with four clients accounting for approximately 94% of its accounts receivable as of March 31, 2025. The company’s customer base includes major players such as Seiko Epson, Alps Alpine, and Hewlett-Packard, which together represented a significant portion of its revenue. The company is also navigating challenges posed by global economic conditions, including supply chain disruptions and geopolitical tensions, which may impact future operations.

Looking ahead, Neonode's management believes that the current cash position is sufficient to meet obligations for the next twelve months. However, the company acknowledges the need for additional capital to support its operations and growth strategy. The outlook remains cautious, with management emphasizing the importance of achieving cash flow positivity and exploring potential equity or debt financing options to bolster liquidity.