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David Brunton | IR |
Urban Forssell | CEO |
Maria Ek | CFO |
Viktor Westman | Redeye |
Hello, everyone. Thank you for standing by, and welcome to Neonode’s Third Quarter 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session with the company’s covering analysts. [Operator Instructions] At this time for opening remarks and introduction, I would like to turn the call over to David Brunton, Neonode’s Head of Corporate Investor Relations. and conference. ahead go please start the David
Welcome call, quarter we you for XXXX On today’s joining us. update. will corporate results provide and and thank financial a review our third
interest. customer will update developments items include of Our activities, details and technology other of
ahead. risk are reports by operating other from the call update results on results intent quarterly over which and by to but other may in include XX-Q, XX-K that the concerning directed. expected CEO, qualifications Urban differ used Neonode my which other the performance Before call Urban, disclaims turn statements to this will, forward-looking position financial to At and go CFO, statements. not call Forssell; statements statements. is make identify SEC to other targets, is actual pleasure to reports estimate, and or would Therefore, do factors expect, may projects, believe, annual other forward-looking these guide, to facts and factors forward-looking what forward-looking this may on expressly anticipate, your or conference statements that confidence, similar I statements. affect or materially to All the Neonode implied words these statements. Ek, contained and like over are than expressions These to outcomes Neonode’s the and subject is our future any obligation time, filed typically turning are uncertainties Dr. be Maria to business and Neonode’s following forward-looking historical report not with please the attention involve the remarks limited guarantee it risks, Urban. forward-looking in tend, other
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can the that military, solutions actually at we and of will look these be companies XX% some And are for based the type you segments, we reuse two avionics largest So Typically, the in largest both companies segments. the large the the of U.S. companies. in customer the same if industrial estimate
and XX% strong large course, the in are found have of as U.S. But market them outside to very we are focus that's In can and increasing But geographically U.S. Asia. forward. there large located and and industry, focus the why both the on be a in on look many presence countries going the in have are market that we Europe, U.S. our as it's companies. companies at you our U.S. the well customers U.S. So of strong the
with technology Neonode HMI to standardized our infrared that's of deliver in on module Sweden. distributors and touch over our still [indiscernible] products. contactless, our subsidiary human is Pronode here, machine our But customers. that And for produced is offering This gesture being based to like and sensing. and again, rest in for working indirectly or HMI Turning touch, the means interaction that sensor HMI is via directly stands we
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food your out smaller more Looking actually make at the ATM, an basically Africa, machines, the in a machines, McDonald's small. they is which in beverage, check-out, of South of portion, you all on. ATMs kiosk you ATMs, America, had single There's coffee and interesting self decline largest these, developing markets, in where the or your countries those the pretty and so we if would terminals, order the fast Western on and vending except on because growth is at up portion North but food similar are closely and increasing other hand is America, it's restaurant check-in flat. Europe in
why that's for there's combination a in ATMs. So the market means flat size that
in multiple to space. course Some the They of of this we talking segments. these OEMs, of sub are cover
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at helps same and feel they aerospace grow partners significantly they expand are technology. hard that Japan Happy us to And our time these pushing using So, penetrate and Hour, can respective quite the actually markets. because this they
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think in approach success. this combined to very, all, our partner is future very approach all that we sales and growth the direct and So important
interface they do and business with machine work we these areas of have when similar technology? Yes, mutually why are both sort supporting. separate they they are two human but So
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grow and So we feel for year. the areas separate, continue And supporting very but strong in definitely in is improve We mutually them we think we two so on encouraged and them in the and of each a each think work in progress made it's we've I the to to far will business like year this want points these right one way us to going and we forward. XXXX going of optimize want forward. one of combination
business, year. we we us focus full years, sensing launched and it’s a industry. as Tier for about this newest words our and that software we And remote software at X business the a The new research supplier to Tier where OEMs automotive a X focused becoming the in some driver on we for area, developing, that Finally, officially system be on we'll in right and next solutions at may applications aim this may driver are of in-cabin now change in-cabin AI types monitoring. that also software but is monitoring. of type and so look XXX% Long-term far other suppliers
input lower this demand. camera, And we platform, features. virtually scalable software we sensor has main and cabin high is can by having resolution driver there. that monitoring AI a can achieve we is are which that here limited supports requirements types for even using. technology And very platform our processor any out that the footprints, it of can hardware on So with it's a a run solve agnostic, it performance system the different low It's scalable means
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with I strategy Ek, bring values turn this we Maria business this area. Maria? our word business, different to our our overview to in customers of So CFO. will And and the
release earnings for and quarter investors third available for of download our find XX-Q section available the can neonode.com. from you our And website at Urban. Thanks
with sales start quarters. XX the I'd flat is driven summary Revenues were by up years. $X.X quarter to So for million to licensed sensor XXXX. a are same almost modules the of This like compared by
quarter quarter, million are for XXXX. expense in higher same plan operating $X.X to the $X.X the compared million Our
performance was was the quarter million a $X.X Due expenses removing XXXX. on basis, same equal our our operating However, compared XXXX. third costs, to cost above loss the quarter up operating onetime for XXXX the by to
Revenues compared revenues XXXX well were of license have the net of business from during from fees almost XXXX year, XX.X% which million year. quarter to exclusively We XXXX. $X.X quarter $X.X the the last consists quarter this and million as the increase solutions for as second third quarter our our third almost a is an competitive double and of
from lower to million, However, to due from in $X.X to We have to related license consumer see increased pandemic. automotive decrease to general global the million the while $X.X electronics revenues related sales revenues slower million $X.X revenues on million. markets COVID-XX $X.X
XXXX quarter that customers license increase a $X.XX It's is the X.X production in to-date average ago more of shift customer technology into field an development. years to XX sold. In technology million third XXXX, five has in be couple years. Neonode with a automotive was with least production devices and devices So to our and positive to project completed of total that million in relates the at of went is life been than our expected
business client HMI our to Moving area.
we And backlog has next September as our China. Most the the seen a shipment three million sheet had of U.S. a same within an the been third of last $X.X of $X.X partners the number period to planned increase with the million have quarters. sales compared year. $X.X of end quarter We the in through products in the of with revenues sold and product in million
sentiment order XX% continue new manufacturing increased rough to joins purchase margin for for our for activities We’re meet increased shipments, sales demands. also to have to third the compared XX% A new XXXX orders quarter the period to see between like XXXX. XXXX. gross in margin to a higher XX% decrease is and The compared XXXX gross we product in XX% at to the weeks ranging sales XXX% margins of in due same
is We costs and Operating by compared module lower increase sales partially onetime costs to revenues. expect our the $X.X third by these percentage for offset expenses of less trends which due to continue payable total traveling. increased XXXX, XX% quarter a as to million sensor as to XXXX our
the expenses million, third the Excluding loss quarter, per by the $X.XX share XXXX decreased net share to third onetime per Finance or for for quarter of cost, have compared $X.XX was would operating XXXX. $X.X $X.X our X%. notes million or
quarter by onetime share. is operating or increased compared quarter The the million cost, activities during million period used to loss. in customer capture for end $XX.X position accounts hand We had $X.X main net Excluding XXXX $X.X our the for the been which of Urban the to receivables capital per increase of Net cash in we would like loss believe growing $X.XX at across would with the units. have And cash third same all business to year. our to the reason million and last third sufficient net is the remarks. September, over company that, back closing to demand I
Maria. Thank love this highlight I And few you a presentation, to would in here. points closing
by for to to COVID-XX. improvement patent solve have on developing zForce Ideally technology, shifts has contactless in and and that very us enabling demand been our that our on that technology. for try First contactless and Neonode to protected from which brought to surge companies we solutions comparison the now mid-XXXX positioned other In is it's technology. ready existing all well exploit of solutions, given touch actually by lifestyle
up our production. ramping are We
you market at. enormous see both the are new that equipment. seeing for in there's You're that, still in increase We opportunity believe an seeing and retrofit this we demand that
We large on and are the two focusing segments, elevators. very kiosks interactive
customers reach Europe And both have Asia. and and we'll to global and in We years. coming quarters continue are do a America, talking North we to so the
continue also see same and avionics industry orders in us our for build customers and these system, that is industries pleased the respectively. zForce have this So, a automotive products. time, are industrial a we for from very significant sensing and to exciting to and multiple interest At we we automotive for control technologies time the system
we in good sum, in So, good play have a all business and areas. three we future that think a
August months becoming is to XX resources We And adequate also accelerate. grow for by execution. the to XX completed private focus have cash or the we on placements, so and in us now clearly and
and into moderators. questions On the are this, for our the growing top improved line and have presentation the by By be bottom from and for end stage And in will you Thank dumped open or up of you. I also to our we come to ask to we analysts. this will you coming improve we now Dave calls able and present line earnings. expecting growing
Okay.
So, for to you Christy open it questions. want up
question a [Operator from have Westman Redeye. Instructions] of Viktor You
see? the what just take think this long you transformation how effects organization around wanted the I before been it from of And see You've rebuild a doing changes quite them. first some we time will we here, ask to and are effects will and the
Yes, we Neonode outside inside in out. and are actually rebuilding from
So are But step course sensible a it in and by we tried doing way step. of do do quite to overhaul. massive it we
what expand Waern our they own here. that and mentioned. and present network strong They second really the an they during Johan make and are HMI and our respectively. on represented solutions business the made, our additions to our I also have So And and Mr. impact two to business HMI pattern to team sales Jonas and starting Swartz force I products head Mr. quarter, strategy up units, working our
our and clear impact here But the business I stronger a So examples Ishii Jonas of have rest we to together Mr. a expect Engineering. us present and he stronger joined as our more impact clear of see and make with will here strong on It's week, Yes, more our for that and here other strategy. and on new obviously. Atsushi early a of he and already. what Johan the him team too results VP
sales of segments. is XX the elevator working them more management and actually years than that very ours. and more U.S. senior on quite two hired military are Europe, we focused excited about industrial in focused one new relevant I markets, Both will the one can, have that these sales So sales on mentioned, and a avionics very, industries in I we positions and we Recently, in in for of additions. the also, persons and competitors
strengthening team by step regaling a is are and So gradually step team. the this the and
to we before we think have do are continue. I some will I I my say personal agenda, that done. things So more want On I
hand, done. never like are other this, the On in you companies
demand we not see plans development here adjust. So as a COVID-XX are And organization example responded increase change pandemic prepared and adjusted is well it in way. would will the team one And is that agile I hard, that and contactless for the recruitment our and approach last in to always see forward. in so this that how of will January, this resources will we take and try our to a could and discussed go going we we be continuous with be we think February, and was what regarding agile, use we the that week hit I us good more And very have but we we touch, our forward.
then, And really, there. mentioned really you the market military is moving And compared it market seems military, to automotive. military fast
say speed you is, something sales process in slow, segment? other quicker mean words this to say up possible it's I you the So in can really substantial about can after arrived
years. is And up try automotive and we on have we I platforms also customers. that to technology we a, achieve and scalable shorten touch clear the for will from we use are help we years e-readers, how to medical gesture industries with have instance. military good And that shorter And That's in are of is this to about also try sales actually open long, for right we to to trying customer, and now that market. in a our sensing are year. have typically, quite of long. time, also lot customers Neonode cycles -- this target work And valuing can a actually cycles these reuse work we’re automotive take speed our our our where offering working other time things to have normal their beginning maybe couple the to the and some thanks transformation And is work this we been customers this, this time printers, and developments. quite our a also -- customers from applications this XX know development. think the and platforms still It's But that compared course, say designs also we to think to development of
And in rugged what dirty spot military avionics the and some you But do you here? give sales? segments? I in very mean, but to examples what the think Is the Can sweet you on refer quite clear. industrial the that is you
there in something spots, terms but have sort I factory in where could and rugged industrial are moisture Yes, both be in think you have -- have environments, be production hall can the applications actually these that it or water two if sweet in could in oil but these of, of air. actually you you
You could have dust. a
outdoor also have that in can and similar. You applications work cold should wintertime, the and and hot
speaking HMI mind HMI what our is this in about between have place. in first rugged synergies solutions. is But we the products, So
are will solutions. Neonode. more to they such we elevators, think are that in larger adapted products. we will a to we large try And is also HMI And what us larger and capitalize specific kiosks opportunities bespoke to think still as and well and in their on solutions to customers for see degree, ask definitely here that will, segments, I OEM those in I especially
So there are, these if say you up. two mix spots, sweet would
quite a plan. for manufacturer. with update an service the kiosk say I pilot about had And can short rollout something retailers the you give that? on recall, us fixed a big self the can you If They aggressive
Yes or no.
leading this in the customer a it case, is kiosk in interactive player Our market.
point. don't approval of they a they a customers. it's some are with worldwide know parts retail positive this ahead own aggressive few it North can chain right and have and still substantial solutions in at share passed But America We pushing organization. plans. operating our still, resonance large committed in I I They different seems very are in They are a promising internal and different quite news that their from have South with We have -- still working chains big quite now, are looking stages Asia-Pacific. more that reach But have America. any at very a
the out. be one very And play this or I anyway are And So step how expect. by decision. their that I like, about will with. will they But will many customer optimistic personally, we say big is we quite it a think that this, one can growth come are by I of are company dealing own but will course make each step they customers,
they like quarters. come I customization will and have come programs going an feedback are X new very over a explosion this will in still And December, with So for XX also it's don't we good fly we one instance, it by encouraging optimistic forward. way that looking this customers, but will of of the from next one our think expect good. that But
if I may. question Last is
typical competition You On to lot in radar alternative on elevators used technologies the and see time or be are -- a flight the the sensors market. of there? kiosks. technologies of for the competing What
So it's something else.
boost you where pick-up that be controls. infrared interfere mobile that voice display simple or being competing out. like to and can straightforward apps, intuitive. also control, and underlying more more regard then will power we it they competitor this radars everything it camera-based of our solution, few a we is a is Overall, and solutions. be, much there gesture from up there is actually there at gesture XD And it's millimeters I strong better. would plus if some keypad. way cameras, capacitive companies an this work Actually, phone directly in applications use whole doesn't and more sensors look alternative a kiosks very say I of are solution personally sensing, But alternative so react with in will some or one fragmented is kiosk But compared that think terms will also for capacitive doing But actually offer sure there's and voice a we I'm those to a an mobile have ATMs. as solving with personally a portion phone And think market I technology serious sensing. problem. apps compelling in so if are market, used,
I They also like can and OEMs product. solution. phone new own nicely very use. mobile a a In elevators. for have you we by perfectly promoting app. OTIS have in are be of stylish, building, control And And actually retrofits to elevator they North works and works OTIS, happen elevator if that integrated to they elevators. the is if as solution magnificent. more nice you pull it that buttons the and with phone, going easy know we look into it very apps. I apartment or their download it, to instance, building, how panels it think up the look excellent. very it this touch developed But perfectly in work in and And some intuitive So for that office other building mobile my I'm have very work That's a America. an traditional of companies type FineTech with much straightforward They have some annoying, and
so to easy as our use as strong and So apps advanced there. other and are a they're have solutions, a in not phone elevators intuitive so mobile we they offering very
Okay, sir. thank thank joining. you, And everyone you for
deck, presentation. to charts during market on appendix used this the publish slide we later mention slide in some And and here will website reference that have presentation the pie today I this closing the deck neonode.com. diagrams with the also from we We that our build in on have that data to showed we an up will
if again see for next beginning us join today, call from you neonode.com this presentation. And interested, you Thank fourth that and at look our can slide deck later you. much. very you're So quarter year. Thank
conclude Thank does today's you. This conference call.
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