NEXT Biometrics cash on hand falls but earnings and margins rise in Q3
NEXT Biometrics has announced growth in earnings, gross margin, and accumulated sensor shipments, but a reduced cash balance for Q3 2018, as expected revenues from the Indian market and smartcard maker Tactilis were delayed.
The company’s revenues grew to NOK 30.2 million (US$3.55) in Q3 2018, up from NOK 25.6 million ($3.01 million) in the previous quarter and NOK 25.4 million ($2.99 million) in Q3 2017, and NEXT’s cash balance fell by 36 percent, or NOK 41 million ($4.84 million) in the quarter to NOK 71 million ($8.35 million). Gross margins increased to 30 percent from 26 percent in the previous quarter, and negative 4 percent in the same quarter of 2017.
“Short term the cash is likely to be affected by uncertainty in India and slower-than-expected ramp-up at Tactilis (a Next Biometrics customer) in Singapore,” Chief Financial Officer Knut Staalen said while presenting the company’s results, according to Reuters.
The company says the long-term revenue potential of the Indian market remains significant, but with reduced near-term potential based on the recent Supreme Court ruling which curtails the commercial use of Aadhaar biometrics. Tactilis, meanwhile, may have been slower to ramp up its order in part due to the circumstances related to its acquisition by Global Invacom Group in October. Tactilis is still expected to begin a pilot project in Asia for biometric smartcards beginning in Q1 2019, the first of three pilots it has signed a letter of intent for.
NEXT shipped an all-time high number of fingerprint sensors for notebooks in the quarter.
Shares in NEXT fell from just over NOK 58 at the end of trading on Monday to NOK 46.30 at the end of trading on Wednesday.