On February 14th, 2024, it was time for both NEXT's Q4 2023 report as well as our Capital Markets Day. The Capital Markets Day was arranged at Hotel Continental in Oslo, but it was also possible to view the event through our online live stream. Couldn't make it? No worries, below we have summarized the key takeaways of the day for you.

Please note that the summary below focuses on the Capital Markets Day. If you're looking for the details of the Q4 2023 report and presentation material, you can find it here.

Participants and Speakers of the Day

  • Ulf Ritsvall, Chief Executive Officer
  • Eirik Underthun, Chief Financial Officer
  • Marcus Lauren, Chief Product Officer
  • Joshua Chiu, Senior Vice President, Head of Sales South-East Asia
  • Digvijay Singh Kanwar, Senior Vice President, Head of Sales IUEA

Introduction and Brief Recap of NEXT's History

Founded in 2000, since the beginning, protecting data, information and people has been a core focus for NEXT. Today, the Norwegian company has grown into a global biometrics' leader with local presence close to its customers all over the world. As the company has undergone radical changes during the past few years, CEO Ulf Ritsvall kicked off the program by taking us on a background tour through a few of the most significant phases of NEXT´s history. Getting a technology company up and running takes time and Ulf exemplified this by sharing how the years between 2010-2019 still focused on ideas and products. Important product development and prototypes, which placed NEXT on the technology map, were made. An American large technology partner was an early customer of NEXT and contributed to NEXT's mass production capabilities. This resulted in NEXT being able to bring fingerprint sensors in annual multi-million production volumes to key OEMs and smart card prototypes to pilot customers.

2020-2023: Reshaping Financials - Structured for Growth

Things were looking bright.

And then came 2019.

As CFO Eirik Underthun joined Ulf on the stage in Oslo, he continued to summarize the key developments during the last three years, which NEXT today refer to as "the turnaround phase". In 2019, the American technology partner announced its decision to reduce its spendings on NEXT's sensors, news which hit the company hard. Meanwhile, developing the company at a rapid pace for roughly 10 years had also left its marks with operational expenses running at an unsustainable rate. Eirik started his journey at NEXT in December 2019 with a heavy financial cleanup: the smart card R&D emphasis was discontinued, employee headcount was brought down, and all other sorts of costs were also curtailed. Roughly a year later, in December 2020, the turnaround efforts started to show in the P&L statement. NEXT now moved towards a more customer-focused way of working and started to gain design-wins again. The company also has a clearer focus: focusing on high-end fingerprint sensors, not doing low margin, low revenue products.

Eirik illustrated the financial turnaround with a few examples:

  • Gross margin historically too low with an average slightly above 20 percent. Today: it is 45 percent.
  • Operating expenses have been brought down and these are under control today.
  • EBITDA: during 2018-2020, there was a high OPEX spending. There has been a substantial improvement in EBITDA now as OPEX has been reduced. But we are also starting to see the effects of the improved gross margin percentage resulting from increased share of FAP20 in the product mix, and the effect of this will be seen when revenues increase further.

On the Capital Markets Day, Eirik and Ulf provided the following key takeaways:

NEXT's Financial Outlook 2024

  • NEXT expects 20 % increase in revenues in Q1 2024 (Q4 2023 to Q1 2024).
  • NEXT is expecting EBITDA to break-even in 2024.
  • Expecting at least 50 % gross margin in 2024 and run-rate OPEX cost of NOK ~65 million per year. (The development of NEXT's prospective FAP30 sensor is included in the estimated OPEX for 2024).

(The progress of NEXT's different geographical markets and market segments are described in each separate market's update, which follows in the sections below).

Technology and Product Innovation Roadmap

Although new at NEXT, Chief Product Officer Marcus Lauren is no newbie to biometrics. Equipped with sensor samples and technology gadgets, he shared updates on the product innovation roadmap. Starting with a recap, he explained the differences between the three most common sensor technologies today: optical, capacitive and NEXT's very own Active Thermal™ sensors. He further discussed production costs, costs related to size and explained the technology standards relating to sensor sizes such as FAP20, FAP30 and FAP50. Marcus highlighted the importance of certifications and why they are the number one entry barrier on the biometric markets, exemplifying how without a certification, nobody will even talk to you.

But if the Active Thermal™ technology is so good then - how come only NEXT provides it today? The key reason is the demanding level of expertise required to manufacture products based on this technology in a way that works well. The semiconductor material on the sensor is fragile, almost brittle. Hence the coating on it needs to be thin and transfer heat according to specification. And this delicate operation, among others, is one of the reasons NEXT has made a name for itself as a trusted security partner. NEXT's team in Seattle has managed to create just the perfect mixture for the coating. NEXT has a relevant patent portfolio in place, but keeps on developing and furthering the patent portfolio.

On the Capital Markets Day, Marcus provided the following key takeaways:

NEXT's Product Innovation Outlook

  • NEXT's prospective FAP30 product has gathered strong interest from partners.
  • NEXT can offer the FAP30 sensor at a competitive price.

NEXT's Product Targets for 2024

  • FAP30 product ready during 2024.
  • Certified for the relevant markets.

NEXT's Product Strategy

  • Further product development based on the successful, flagship sensor FAP20, including innovative technical coating, and further improved Anti-Spoofing capabilities.

Market Update - China

With the recent announcement of NEXT receiving its much-awaited China ID certification through one of its Chinese partners, many were looking forward to meeting Joshua Chiu, Senior Vice President, and Head of Sales South-East Asia. Joshua has a solid background in the biometric industry and shared his expertise on the rapid development of biometrics in China. With 1.4 billion citizens and a high penetration rate of modern technology, China is the place to be, and the local NEXT team has a clear plan which it keeps on executing. China is currently the global leader in biometrics and Joshua stressed how every Chinese company has a global agenda.

NEXT's focus on this dynamic market has been on identifying the right market segment for NEXT. Both fingerprint authentication and the large sensors that NEXT provides are needed. The company has been prioritizing product development to make sure its products remain competitive for the China ID customers. Receiving its China ID certificate was a very crucial milestone for NEXT, as without it, the doors to the top tier segments such as the financial markets and healthcare, would be closed. NEXT's flagship sensor FAP20 has now proved to be compliant with the highly demanding security requirements for the China ID certificate, currently one of the toughest achievements one can reach in the biometric Industry. The certificate serves very much as an entry ticket to the most attractive market segments and several large contracts with OEMs have been signed.

From a strategic perspective, NEXT has kept on moving forward with new market tactics such as working with the key OEMs in selected market segments. This is an approach allowing NEXT to move closer and build long term relationships as a preferred partner. Advantages also includes getting closer to ongoing projects and entering them at an earlier stage, which allows for better control of the business, as well as building more partnerships throughout the supply-chain.

On the Capital Markets Day, Joshua shared the following key takeaways:

Market Outlook

  • Short-term: NEXT will provide a solution to China ID customers and improve its position in the value-chain. NEXT will also expand its footprint to the medical insurance and healthcare market as well as the Access/Border control market.
  • Mid/Long-term: NEXT aim to be qualified by the top tier banks and form long-term partnerships with the OEMs.

NEXT's Targets in China

  • Customers in the Medical Care and Healthcare segments.
  • Customers in the Access Control and Border Control segments.
  • Customers in the Point of Sales/Fintech segments.

NEXT's Strategy in China

  • Identify the correct market segments for NEXT.
  • Enter high-end market with partners, focusing on top distributors and direct sales to market niche players.
  • Improve NEXT's position in the value-chain of the industry - transforming from sensor vendor to solutions provider.

Market Update - India

Heading up the sales operations in India, US, Europe, and Africa, NEXT's Digvijay Singh Kanwar gave us an update on the Indian market. While China currently is the largest and most advanced market, India is still the most mature biometric market in the world. Wits national biometric ID program Aadhaar, it is also a role model for governmental projects all over the world. The Indian government is working and developing this program actively. Digvijay notes there was a temporary slowdown during 2020, mainly due to covid, but things move at a rapid pace again now and as one of few non-Indian companies: NEXT has managed to get in pole position in India. Currently, the fintech sector's demand for security products is a strong market driver.

Entering the Indian market as a non-Indian company is very rough today as the country has announced its ambitions to develop, drive and support its own companies. Digvijay testified how a changed approach to the India-Aadhaar has contributed to the company's success: by not entering as a competing OEM, but rather as a fingerprint sensor company, many of the important key partners and collaborators in the ecosystems took a different, more collaborative approach to NEXT. The company has now positioned itself as one of the leading players and a trusted high-security sensor company.

Investing in the most secure technology is crucial, and especially of interest among the players in the banking and fintech sectors, stressed DJ. As NEXT's Active Thermal™ technology has proven its ability to prevent a number of fake finger materials from registering a fingerprint, it has also caught the market's attention. In combination with NEXT's software-based anti-spoofing algorithms, it's a much sought-after and holistic solution which provides a wider spectrum of attack detection.

Another tactical move has been to properly go through and identify the key partners, distributors and integrators for each of the different segments NEXT is working with and towards. NEXT has received its first L1 certification and is expecting three OEMs to be L1 certified by the end of 2024.

On the Capital Markets Day, Digvijay shared the following key takeaways:

Market Outlook

  • NEXT in pole position, currently strong demand for liveness detection. Strong pull from the Fintech segment.

NEXT's Targets in India

  • At least 30 percent market share.
  • 3 additional OEMs L1 certified (for Aadhaar) by the end of 2024.


  • Entering high-end market segments with partners that are conducting direct sales in key markets.

Scalable Growth

Wrapping up a thorough review of NEXT's history, technology and markets, Ulf Ritsvall finished the Capital Markets Day by emphasizing the company's current scale-up phase. It has taken time, but the Indian and Chinese markets are taking off now, with lots of activities going on. Adding more customers and receiving final purchase orders with shipping dates for the company's contracts in place is a high priority the team is working on.

As NEXT targets to sign agreements with the top five OEMs on both the Indian and Chinese markets, as well as to launch the initial healthcare device with its Chinese partners in 2024, the company has secured volume contracts and partnerships that will lift revenues significantly in 2024.

NEXT does not give guidance for 2025 but expects the already secured contracts and partnerships to bring a strong momentum to secure further revenue growth in 2025 compared to 2024.


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NEXT Biometrics Group ASA published this content on 08 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 March 2024 12:31:04 UTC.