Nexteq H1 2025: softer revenue, stronger orders, solid cash
Nexteq’s half-year numbers are a mixed bag. Revenue and margins are down year on year, but order intake is up, cash generation remains healthy, and management says full-year expectations are intact. The Group is leaning into diversification, new products and a tighter cost base while navigating a choppy gaming and industrial displays market.
Headline figures investors should know
| Metric | H1 2025 | H1 2024 | Change |
|---|---|---|---|
| Group revenue | $40.7 million | $48.2 million | -16% |
| Quixant revenue | $26.9 million | $30.9 million | -13% |
| Densitron revenue | $13.8 million | $17.3 million | -20% |
| Group gross margin | 33.1% | 37.3% | -420 bps |
| Adjusted EBITDA | $1.9 million | $5.8 million | -67% |
| Adjusted PBT | $0.9 million | $5.0 million | -82% |
| Statutory PBT | $0.8 million | $4.7 million | -84% |
| Adjusted diluted EPS | 1.17c | 6.07c | -81% |
| Net cash (period end) | $28.1 million | $29.1 million (31 Dec 2024) | -3% |
| Net cash from operations | $4.1 million | $9.9 million | -59% |
What drove the first-half performance
Quixant and Densitron: lower revenue, different reasons
Quixant’s revenue fell 13% to $26.9 million despite board volumes rising 7% to 21.9k units. The decline came from a less favourable product mix and refreshed pricing with key customers. Densitron was down 20% to $13.8 million, though its gross margin held at record levels according to the company.
There’s also a return to the traditional pattern of H2 weighting after an unusual H1-weighted 2024. In short: more of this year’s sales should land in the second half.
Margins and costs: pressure offset by savings
Group gross margin slipped 420 bps to 33.1%, driven by Quixant’s mix and customer volumes. On the flip side, adjusted operating expenses dropped to $13.0 million (from $13.7 million) thanks to OneNexteq restructuring in late 2024 that is delivering about $1.2 million annualised overhead savings.
Cash generation and balance sheet: still a strength
Operating cash flow of $4.1 million shows the model remains cash generative even in a softer profit period. Adjusted operating cash conversion was a hefty 445%, helped by working capital movements. Net cash ended the half at $28.1 million with minimal debt of $0.4 million – a comfortable base for investment and buybacks.
Orders, pipeline and customer mix: why this matters
Nexteq reports “strong order intake, significantly ahead” of last year, including multi-year purchase orders. Management expects to report a higher number of $1 million-per-year customers in 2025 than the 10 seen in 2024 – an important sign of diversification away from historical concentration.
Big gaming customers and the Apollo angle
Uncertainty remains around the Group’s historically largest customer, Everi, which has been acquired by Apollo Global Management alongside IGT. Nexteq’s volumes with Everi are currently “significantly down” as the customer prepares for its new future. Nexteq is in an Apollo-led RFP to contract manufacture IGT North America boards – the company says this would be material if won – while Everi’s North America volume is not part of that RFP and continues under prior arrangements.
Balancing that, Nexteq has “won a major new agreement” with a North American gaming customer on a newly developed hardware platform, and expects this customer to become the Group’s largest in 2025. That is a notable de-risking step if it scales as planned.
Brazil and new product/IP traction
There is early positioning in Brazil’s emerging Lottery market, with partnerships and agreements in place as state roll-outs approach and a federal gaming law vote due in September 2025. Timing is regulatory, but the groundwork is being laid.
New Nexteq IP generated over $1 million in H1, led by Gaming cabinet sales and the award-winning ProDeck. The roadmap includes a new gaming software solution now with the regulator, aiming for a soft launch with selected customers in October 2025 and a full launch in January 2026 at ICE Barcelona.
Densitron pipeline and Broadcast onboarding
Densitron added a new $1 million customer in H1 and saw a historical client grow back above $1 million. The Broadcast market remains a focus, with three Tactila wins moving through onboarding; management confirms revenue start dates for Q2 2026. That’s not helping today’s P&L, but it underpins medium-term visibility.
2025 outlook and guidance: covered orders, in-line expectations
The Group says order coverage is secured to deliver full-year 2025 revenue. It expects revenue and profit before tax for 2025 to be in line with expectations outlined in July. Current consensus cited in the RNS is $85.5 million revenue, $6.0 million adjusted EBITDA and $3.6 million adjusted profit before tax.
Supply chain headwinds – US tariffs and a memory component shortage – are being managed with “minimal” disruption to availability and pricing, helped by the Taiwan operation’s proximity to Asian suppliers.
Capital allocation: buybacks, dividends, and M&A
The 2024/early-2025 buyback authority was fully utilised, returning $7.5 million to shareholders ($0.6 million in H1 2025). On 2 September 2025, Nexteq announced plans for another buyback of up to 10% of issued shares (5,988,515 shares), with a maximum return of £6.0 million, subject to shareholder approval on 18 September 2025. The purpose is principally to provide some short-term liquidity in the shares.
The dividend remains “progressive” and $3.0 million of dividends were paid in H1. Management continues to explore acquisitions and is targeting one completed deal by the end of 2025, while keeping a strong balance sheet.
My take: balanced progress with clear watch-outs
- Positives: order intake is the standout, diversification is improving, and cash remains strong. New IP is gaining traction and the new gaming platforms were delivered to major customers at pace. Cost control is visible.
- Negatives: revenue and margins are under pressure, adjusted EBITDA dropped to $1.9 million, and H2 needs to do more of the heavy lifting. The Broadcast wins won’t contribute until Q2 2026, and the biggest swing factor is the Apollo/IGT RFP outcome.
- Key sensitivities: exposure to North America remains high (USA revenue was $27.0 million in H1). The product and customer mix shift hit gross margin; stabilising that mix will matter for 2026 earnings power. Execution on the new largest customer, Brazil timing, and the gaming software launch schedule are all pivotal.
Overall, “resilient” is fair. The first half isn’t pretty on earnings, but the forward indicators – orders, customer spread, product pipeline and cash – are moving the right way. If Nexteq converts the big commercial opportunities and maintains margin discipline, the setup into 2026 looks meaningfully stronger.
Quick jargon buster
- Adjusted EBITDA: earnings before interest, tax, depreciation and amortisation, excluding items the company deems non-recurring or non-cash (e.g., share-based payments, property revaluation).
- Order coverage: the value of secured orders that, if delivered, would meet the company’s revenue plans for the period.
- RFP: request for proposal – a competitive tender process run by a customer.
- H1/H2 weighting: when sales and profit skew to either the first half (H1) or second half (H2) of the year. Nexteq says 2025 is back to H2 weighted.
- IP revenue: income from Nexteq’s own intellectual property, such as ProDeck, Tactila and Gaming cabinet solutions.
Dates and next steps
- Investor presentation: 10 September 2025, 10.00am BST. Registration link: investormeetcompany.com/nexteq-plc/register-investor
- General Meeting for buyback authority: 18 September 2025.
