The first quarter of the year shows encouraging signs of improvement, with topline growth of nearly 20% compared to the same period last year. This growth was driven by performance across all geographies and both of our licensing platforms - MultiSensing® and zForce®. Importantly, we have transitioned from development to production with our MultiSensing automotive OEM customer, enabling us to begin generating new licensing revenue.

Revenue decline stabilized during the quarter and was partially offset by new growth from MultiSensing. While we expect continued decline in our zForce legacy business - particularly within the printer and automotive infotainment segments due to subdued demand - we see continued potential for license growth in MultiSensing as our automotive customer scales production.

In summary, our priorities remain to execute on existing projects, expand strategic partnerships within the automotive sector, and explore new verticals where our technology can deliver significant customer value. A key area of focus is the retail segment, where we see opportunities in loss prevention, as well as customer analytics solutions.

2025 was a year of meaningful transformation, even as we continued to face significant top line pressure. This transformation laid the foundation for a refocused strategic direction as we move into 2026. As part of this shift, we transitioned the zForce platform into maintenance mode to intensify our focus on our MultiSensing technology platform and direct our efforts and investments toward computer vision and machine learning technology leadership.

We also realigned our go-to-market approach by unifying our sales and marketing organizations and appointing a new Executive Vice President for Sales & Marketing to our leadership team – now consisting of the CEO, CFO, EVP Product & Engineering, and EVP Sales & Marketing. We believe this unified and strengthened structure positions us to execute on our strategy with a strong commercial focus and alignment around our MultiSensing platform and target markets.

Within MultiSensing, we prioritized customer delivery throughout the year, which culminated with the start of production with our previously announced commercial vehicle OEM in December – an important validation of our solution maturity and commercial readiness. While our legacy zForce business continued its expected decline as part of the planned transition, we experienced growth with NEXTY Electronics as they moved their zForce-based next-generation amusement systems into production late in the year.

In 2026, our focus is squarely on driving growth for our MultiSensing business. This includes expanding license revenues from our first DMS production customer and advancing additional strategic partnerships across the automotive industry. Although automotive OEMs are navigating cost pressures, geopolitical uncertainty, and consolidation, the in-cabin sensing market remains on a long-term growth trajectory, driven by regulatory requirements, advancements in autonomy, and heightened expectations for enhanced cabin experiences.

Beyond automotive, we are also evaluating additional growth verticals where MultiSensing offers a strong product-market fit and we can shorten time to revenue for our investments into our technology platform.

We are at a pivotal moment in the company’s history. As legacy touch technologies continue to decline, our MultiSensing computer vision and AI technology is set to significantly advance in 2026.

The recruitment of Marec allows us to consolidate all commercial activities into a single, focused team. This will sharpen execution, and with Marec’s extensive experience in commercial leadership across technology, automotive, and high-growth environments, we now have the right setup to accelerate our growth journey.

The third quarter of this year continued to reflect a decline in revenues from our legacy business, as demand in the printer and automotive infotainment segments remained subdued. While we anticipate these headwinds will persist until new customers transition from deployment to full production, we are proactively broadening our business opportunities and advancing our product roadmap. These initiatives are designed to support long-term, sustainable growth and we believe they will offset the downward trend in our legacy business.

For MultiSensing®, we’re reinforcing our leadership in fully synthetic, data-driven HMI solutions, where our execution speed continues to differentiate us. We’re delivering on existing projects, expanding strategic partnerships in the automotive market, and exploring new verticals where our technology can address narrow-vision challenges and scale quickly.

In the third quarter, we made the strategic decision to transition the zForce® platform into maintenance mode, focusing on serving existing customers through the remainder of its product lifecycle. This decision was driven by market dynamics that have significantly narrowed the addressable market for the solution. Moving forward, we are aligning the company around future-proofing our MultiSensing AI computer vision platform for expanded deployment in the automotive sector and exploring additional application areas where MultiSensing can deliver meaningful value by solving real-world customer challenges.

In summary, revenues from our legacy business are declining faster than anticipated, and we continue to focus on securing new partnerships in our target market – automotive – to secure future growth and a pathway to long-term profitability.

The second quarter of this year continued to see a decline in revenues from our legacy business as demand for our solutions in the printer and automotive infotainment markets maintained their negative trend. Despite these challenges – that we expect to remain until new customers have moved from deployment phase to production phase – we are actively working to expand business opportunities and advance the product roadmap across our two core technology platforms: MultiSensing® and zForce®. This will drive the company's sustainable future growth and will in time offset the negative trend within the legacy business.

For MultiSensing, we continue to build on and invest in being the first mover in fully synthetic, data-driven HMI solutions – where our execution speed will continue to outperform the competition. While we continue to deliver on previously announced customer projects, we will also continue to build strategic partnerships within the automotive sector. In parallel, we are exploring new verticals where our unique value proposition, especially for addressing narrow-vision challenges, can be deployed more rapidly. With the zForce platform, we continue to serve our existing customer base while focusing on new project deliveries.

Our continued priority across both platforms is to deliver attractive solutions that address the challenges our customers face and that they see as worth investing in.

Our inclusion in the Russell 2000 Index is an encouraging milestone for Neonode as we position ourselves for future success. We welcome the enhanced visibility it gives us within the investor community and look forward to sharing our progress as we continue our journey toward innovation leadership and sustainable business growth.

The Russell indexes have continuously adapted to the evolving dynamic US economy, and it’s crucial to fully recalibrate the suite of Russell US Indexes, ensuring the indexes maintain an accurate representation of the market. The transition to a semi-annual reconstitution frequency from 2026 will ensure our indexes continue to represent the market and maintain the purpose of the index as a portfolio benchmark.

This quarter saw a continued decline in revenues from our legacy business as demand for our solutions in the printer market maintained its negative trend. Despite these challenges, we successfully continued to deliver on our existing customer projects, even though we did not secure any new contracts during this period. We are actively working to expand our business opportunities and advance our product roadmap across both core technology platforms: MultiSensing® and zForce®. This aims to offset the negative trend within the legacy business while driving sustainable future growth.

Having stepped into the role as President & CEO on March 31, 2025, I am gaining deeper insights into the company, its products, and its people. My optimism about Neonode’s future continues to grow. The zForce platform holds significant promise for both touch on displays and rugged applications. Moving forward, we must sharpen our focus on customer segments that are mature and positioned for sustained growth.

With MultiSensing, we have developed a compelling, end-to-end in-house solution that allows us to move quickly and maintain strong quality control. We are currently delivering to a previously announced commercial vehicle OEM, and we will continue to build strategic partnerships within the automotive sector. At the same time, we are exploring new verticals where our unique value proposition, especially for addressing narrow-vision challenges, can be deployed more rapidly.

Our overarching focus for both platforms remains clear: to solve real-world problems that customers care about and are willing to invest in.

I am very pleased to be joining the Board of Directors at Neonode. With a team of skilled professionals, a strong focus on technology and innovation, and a portfolio of advanced solutions, Neonode is well-positioned for future profitable growth. I am genuinely excited to contribute to its development and success.

Mr. Schreiber’s extensive experience in the automotive industry will be a significant asset to Neonode during this pivotal phase, and we look forward to a close and productive collaboration. We also want to thank Mrs. Edström for her dedicated and professional work as director from 2022 to 2025.

Neonode is at a very important stage of its journey toward reshaping its business and becoming a profitable company focused on licensing proprietary technologies to leading suppliers and OEMs, and we are very pleased to welcome Daniel Alexus as the new President and CEO of the company. Daniel has a proven track record of outstanding business leadership and high technical skills – experience that will be crucial to Neonode’s success moving forward.

I am excited to be joining Neonode and inspired to collaborate with the team and the Board of Directors to drive the company’s growth and development. I am particularly impressed by Neonode’s technology platforms and engineering expertise, which I believe hold significant potential. My focus will be on accelerating commercial success and driving sustainable growth. Together with the team, I look forward to creating value for our customers, employees, and shareholders.

Last year marked an important year of transition for Neonode as we discontinued Touch Sensor Module (“TSM”) manufacturing and positioned ourselves for a future fully focused on technology licensing. Our licensable technology platforms, MultiSensing® and zForce®, continued to generate customer interest in 2024 – resulting in non-recurring engineering (“NRE”) fees from customer projects, which we expect to generate license revenues once these projects enter the production phase.

While we are seeing a decline in revenues from our legacy business within printer and car touch applications, we are confident that we are now well-positioned to capitalize on opportunities in new applications within automotive safety and touch displays. As a testament to this, last year, we announced an award by a leading commercial vehicle original equipment manufacturer (“OEM”) to supply MultiSensing driver monitoring system (“DMS”) software.  Neonode’s zForce-based TSM technology was also selected by NEXTY Electronics for their next-generation amusement machines. We continue to develop our technology platforms and are working closely with customers and prospects to deliver innovative licensable solutions that enhance our market position and expand the applications addressable with our technology.

Our revenues from the continuing licensing business decreased in the third quarter of 2024 compared to the same quarter last year. However, non-recurring engineering revenues related to our new lines of business increased and were mainly attributable to the driver monitoring system (“DMS”) project with the original equipment manufacturer (“OEM”) of commercial vehicles customer that we announced at the end of last year. Licensing revenues from legacy customers within printer and passenger car touch applications decreased compared to the same quarter last year, mainly due to lower demand for their products. Cash used by operations decreased in the third quarter 2024 compared to the same quarter last year, as we discontinued component purchases after phasing out TSM manufacturing.

We remain positive toward the prospects of generating new projects and business with our driver and in-cabin monitoring solutions, which continue to generate positive attention from OEMs and suppliers to the automotive industry. Our flexible and scalable approach to driver and in-cabin monitoring presents manufacturers and their suppliers with a cost-effective and efficient platform for securing compliance and automotive innovation for years to come. We also see a growing market interest in licensing our cost-effective and proven touch interaction solutions.

I am very excited about joining Neonode’s Board of Directors. The company has a great history of innovation and developing pioneering technology and I look forward to supporting the team and contributing to the future development of the company.

We are pleased that Peter will join the Board of Directors and contribute both with his general management experience and also his deep knowledge of the automotive industry.

After extensive evaluation, we have found Neonode's SMT-based TSM to be a great fit for the Japanese amusement market, enhancing operational performance without compromising the beauty of the content displayed on the screen. We have worked closely and productively with Neonode for years and look forward to strengthening our partnership further with this license agreement.

We are excited to deepen our relationship with NEXTY Electronics, a trusted, value-added reseller of Neonode’s products, as we continue our transformation into a company that is fully focused on technology licensing. NEXTY Electronics is intimately familiar with our products from its time as a TSM reseller, and its decision to license and manufacture our TSM technology is a vote of confidence for our licensing-focused business strategy and innovative licensable technologies.

Our revenues increased in the second quarter of 2024 compared to the same quarter last year. Non-recurring engineering revenues increased and were mainly attributable to the ongoing Driver Monitoring System (“DMS”) project with the Original Equipment Manufacturer (“OEM”) of commercial vehicles customer that was announced at the end of last year. Product sales also increased in the second quarter compared to the same quarter last year, mainly as a result of last time buy orders from customers to secure supplies, following our decision to focus solely on licensing going forward and to phase out our products business. Licensing revenues decreased compared to the same quarter last year, mainly due to the demand for our legacy customers’ products being lower. Gross margin in the second quarter of 2024 compared to the same quarter last year declined and was the result of increased cost of revenue due to increased product sales and non-recurring revenues combined with decreased licensing revenues. Although our operating expenses decreased in the second quarter of 2024 compared to the same quarter last year, the decline in gross margin led to a higher net loss.

The award by a leading commercial vehicle Original Equipment Manufacturer to supply Driver Monitoring System software to their global range of commercial vehicles continues to generate increased interest in our driver and in-cabin monitoring solutions. This is encouraging, and we are confident that we have a competitive, scalable and flexible solution that is attractive to both commercial vehicle and passenger car manufacturers. We also see interesting licensing opportunities for our touch and touchless human-machine interaction offerings.

We are excited to see momentum for our TSM technology as we are transforming from a product business to a technology licensing business. Our license agreement with YesAR ensures that our TSM technology remains a cornerstone technology in the growing market of holographic interfaces and is a testament to our continuing commitment to technological leadership and innovation through licensing.

We have worked together with YesAR since 2020 and are encouraged by their steadfast belief in the market potential for Neonode TSM-based holographic solutions, now as a technology licensee. We look forward to further enhancing our close relationship with YesAR as they license our technology and look forward to seeing the innovative solutions that our technology platform will enable for YesAR and its customers.

Our revenues decreased in the first quarter of 2024 compared to the same quarter last year. Following the announcement of our change in strategy, with full focus on our licensing business and a phase-out of our products business, product sales have increased as a result of last time buy orders. Non-recurring engineering revenues also increased in the first quarter compared to the same quarter last year, mainly due to a new potential Touch Sensor Module license project. At the same time, licensing revenues decreased compared to the same quarter last year. This is mainly due to the demand for our legacy customers’ products being lower, resulting in high inventory levels at some customers and thus lower revenues for Neonode.

The award by a leading commercial vehicle Original Equipment Manufacturer to supply Driver Monitoring System software to their global range of commercial vehicles continues to generate increased interest in our driver and in-cabin monitoring solutions. This is encouraging, and we are confident that we have a competitive, scalable and flexible solution that is attractive to both commercial vehicle and passenger car manufacturers. We also see interesting licensing opportunities for our touch and touchless human-machine interaction offerings.

The Board would like to thank Dr. Forssell for his contribution to Neonode during the past four years. Urban has been instrumental in streamlining the business and building a solid platform for business expansion. As we enter a new phase in the business, with focus on growth through licensing and forming strategic partnerships, there is a need for new leadership to take us to the next level.

The decrease in our sales revenues 2023 was a disappointment. In particular, the negative development of our Touch Sensor Module (“TSM”) product business was unsatisfactory and led us to the decision to sharpen our strategy and focus on licensing going forward, as announced on December 12, 2023. We are currently phasing out our TSM product business and will close our production unit in Kungsbacka, Sweden, later this year. Existing customers and value-added resellers are offered to place last-time-buy orders for TSMs for delivery during Q1 and Q2. In parallel, we are offering customers to license the TSM technology to set up their own TSM production, which several customers have responded positively to.

Our licensing revenues were also lower in 2023 than in the previous year. This is mainly due to our legacy customers’ product sales slowing down in Q3 and Q4, combined with high inventory levels at some customers. The breakthrough driver monitoring software win with a leading commercial vehicle manufacturer, which we announced on December 6, 2023, was the result of several years’ dedicated work by our commercial and technical teams and is a stepping stone for us in our quest to revitalize and grow our licensing business.

We are pleased to see that our recent driver monitoring software win has boosted the interest in our driver and in-cabin monitoring solution among other vehicle manufacturers and tier 1 system suppliers. We are currently working hard to capitalize on this momentum. We also see interesting opportunities with our head-up display obstruction solution and with our touch and touchless human-machine interaction offerings. In summary, we are optimistic about the future growth potential for our business. We are also confident that our new, sharpened strategy with a full focus on licensing will help us increase our efficiency and reach a positive cash flow in shorter time than with our previous strategy that combined licensing with product sales.

We will now put full focus on our licensing business and allow customers to license our unique and advanced TSM technology to create bespoke products and solutions that bring value to end customers. Our product business did not reach our business goals, but feedback on the products and prototypes that we and our partners have developed using our TSMs has been very positive and shows that our technology is relevant and has a large intrinsic value. We therefore see great potential in licensing this technology to existing and new customers in the years to come,

Through the realignment of our strategy that we are now announcing we will concentrate our resources on licensing. We believe this will unleash the full potential of Neonode and increase the impact of our innovative solutions in line with our vision to transform the way humas and machines interact,

We are honored and proud to have been selected as a partner to this commercial vehicle OEM and look forward to cooperating with them in developing and launching safety-enhancing and value-adding driver and in-cabin monitoring systems for many years to come. This is a breakthrough win for Neonode and our MultiSensing technology for commercial vehicle applications, where reliability and quality standards are of utmost importance. We will build on this to expand our driver and in-cabin monitoring business in both the commercial vehicle segment and in the light vehicle and passenger car segment in the coming years,"

Our licensing revenues in Q2 were at the same level as in Q1 and 15% higher than in the same period last year, showing good stability. Our product sales revenues in Q2 were low and much below expectations, which we are addressing with different kinds of activities and changes in our strategies and tactics to ensure that we come back to a growth path for this business in the coming quarters

The changes we have started to implement include an increased focus on markets and sectors where we have good traction, supported by intensified marketing – both online and through participation in tradeshows and other types of events – to create beachheads from which we may continue to grow our licensing and products businesses. To help us drive these changes and become more effective in our marketing and sales efforts we have recruited experienced core competence to strengthen our sales and engineering teams in Stockholm. We remain optimistic about our ability to grow our business and return to profitability