Neonode — Q3 2026 Earnings Summary

Financial Performance:

• Revenue from continuing operations for the three months ended September 30, 2026, was $0.5 million, a 24.4% increase year-over-year (YoY).
• Revenue from continuing operations for the nine months ended September 30, 2026, was $1.6 million, a 5.4% increase YoY.
• Operating expenses for the three months ended September 30, 2026, were $1.8 million, a 13.2% decrease YoY.
• Operating expenses for the nine months ended September 30, 2026, were $7.3 million, a 0.2% increase YoY.
• Loss from continuing operations for the three months ended September 30, 2026, was $1.1 million ($0.07 per share), compared to income of $13.9 million ($0.83 per share) in the prior year period, which included a $15.5 million net gain from patent assignment.
• Loss from continuing operations for the nine months ended September 30, 2026, was $5.1 million ($0.31 per share), compared to income of $10.2 million ($0.60 per share) in the prior year period, which included a $15.5 million net gain from patent assignment.
• Cash used by operations for the three months ended September 30, 2026, was $1.6 million, compared to $1.5 million in the prior year period.
• Cash used by operations for the nine months ended September 30, 2026, was $5.6 million, compared to $4.6 million in the prior year period.
• Cash and accounts receivable totaled $20.2 million as of September 30, 2026, down from $25.8 million as of December 31, 2025.
• Working capital for continuing operations was $19.2 million as of September 30, 2026, down from $24.1 million as of December 31, 2025.
• Total stockholders' equity was $19.6 million as of September 30, 2026, down from $24.7 million as of December 31, 2025.
• Accumulated deficit increased to $220.7 million as of September 30, 2026, from $215.6 million as of December 31, 2025.

Business Segments and Product Lines:

• License revenues were $0.4 million for the three months ended September 30, 2026, a 9.4% increase YoY, driven by new license agreements.
• Revenues from non-recurring engineering were $91,000 for the three months ended September 30, 2026, a 279.2% increase YoY, resulting from increased project deliveries.
• MultiSensing® licensing revenue more than quadrupled in the third quarter of 2026 compared to the third quarter of 2025.
• MultiSensing licensing revenue nearly quadrupled in the January–September 2026 period compared to the same period in 2025.
• Licensing revenue grew 13% for the nine-month period ended September 30, 2026.
• The company continues its transformation toward a more scalable software licensing business.

Management Commentary and Tone:

• CEO Daniel Alexus stated that revenue growth was supported by the ramp-up of an automotive license agreement and increased engineering project deliveries.
• Management noted that while revenue and licensing income grew, the revenue base is not yet sufficient to achieve profitability.
• The CEO emphasized that the substantial year-over-year earnings difference primarily reflects the one-time patent assignment gain recognized in Q3 2025, which was not repeated in 2026.
• Management highlighted maintaining cost discipline, with operating expenses lower in Q3 2026 compared to the prior year.
• Priorities identified include delivering on existing customer programs, converting evaluations and partner engagements into commercial agreements, and building the licensing business with financial discipline.
• Management expressed confidence that current liquidity provides a foundation to pursue these priorities and turn technology into sustainable revenue growth.

Other Key Points:

• The prior year's income included a $15.5 million net gain from patent assignment, which was not present in the current year results.
• The company has deployed its technologies in more than 100 million products and vehicles worldwide.
• No dividends, stock buybacks, or M&A deals were announced in this release.
• The company operates in the artificial intelligence and computer vision sector with a focus on automotive and retail applications.