Good day. Good afternoon, wherever you are. Welcome to this Q4 presentation from NEXT Biometrics. Today, we'll present our Q4 numbers. We'll go through the results as well as guide you into our business a bit. Today's speakers are, as usual, Eirik Underthun, CFO of NEXT Biometrics, and myself, Ulf, CEO of NEXT Biometrics. Let's look at today's agenda. We start with the highlights of Q4 2025, and we also discuss and talk about what's happening up to date, up to today. We continue with the Q4 financials with Eirik, and I will continue in going through the business, market, and product updates for you, and finishing off with an outlook of what we see in the pipeline. Please note that there's a Q&A session in the end.
You can ask questions through emails or in the chat in this Teams chat. You can take the next slide. Positively, we see an increased business momentum in our main market, India. Finally, I would say. We have received two new orders from India the last few months, and an additional order for a Malaysia project. This totals approximately NOK 7 million that they will be shipped out very soon. At the same time, during Q4, we have secured four new design wins, and that brings us to a total number of 85 design wins. It's up from 64 in 2024. In 2025, we had a record year in a number of design wins.
Why are we measuring design wins? We are measuring design wins because when you are in a customer design, the hardware itself, it's very hard for the customer to change a biometric sensor because they have done the integration in software and in hardware in that specific design. That's why it's so important to measure design wins for us. During the quarter, we also received the first Oyster III biometric reader for a government ID use case in Malaysia, shipped out as well. We also, as you may have seen, we have during the initial January to this year, we have secured a display partner.
Both in December and January, we have secured two U.S. patents, and they were granted for our anywhere-on-display authentication product, which I will talk a bit more about later. Now I will hand over to Eirik to go through a very important slide. Please go ahead, Eirik. You can change the slide.
Thank you, Ulf. On the financing, we completed a private placement, raising NOK 20 million at 4.25 per share in October 2025. We also announced a shareholder loan amounting to NOK 9 million in January 2026. This morning we sent out a press release highlighting a contemplated rights issue of up to NOK 50 million. I would advise you to have a look at that stock exchange press release. Next slide, please. The next. I will now run you through the Q4 financial highlights. The revenues were NOK 2.5 million, compared to NOK 2.9 million in the restated quarter for 2024. The revenues were still impacted by slow markets in India and China and as well, Bangladesh.
The adjusted gross margin was 69%, compared to 40% in Q4 2024, and this is mainly due to the product mix in this quarter that we have these variations. On operating expenses, we ended up with adjusted OpEx of NOK 16.9 million, compared to NOK 19.9 million in restated Q4 2024. During this quarter, we had non-recurring cost of NOK 7.2 million in net inventory write-downs and other adjustments. We also had NOK 4.6 million relating to China partner investigation and litigation costs and NOK 0.8 million in share-based remuneration.
The adjusted EBITDA was negative NOK 15.2 million, compared to negative NOK 18.6 million in the restated Q4 2024. We ended the quarter with a cash position of NOK 8.3 million compared to NOK 7.4 million at the end of quarter three, 2024. During the quarter, we completed the private placement that we mentioned earlier, and this provided a positive cash flow from financing NOK 18.8 million. Operational cash flow was negative NOK 17.3 million, mainly due to low revenues. With this, I will turn over to Ulf again.
Thank you, Eirik. You can change to the next slide. I will now go through the business, market, and product updates. I will try to guide you through where we are in the ecosystem and understanding where the market we are operating in. As I said in the beginning, market activity and in the MOSIP countries, which we are mainly targeting, are slowly recovering, I would say. I will have some more details on the next slide, actually, why I say it's recovering, because we have seen a temporary pause as we have been communicated previously. We expect the market, India and the MOSIP countries to normalize in Q3 2026. We also see activities and positive signs in Bangladesh.
They, after a long year, I think, or more than that, they are now having a new government since February 2026, and they are expected to restart the stalled programs, the biometric programs. We anticipate to see acceleration during second half of 2026 for Bangladesh. As I earlier mentioned, we have additional volume potential of these 85 accumulated design wins. As I said, a very important measurement for us is the design wins, as they are indications that the customer have selected us, and that's key to serve on this market. We also during the quarter, or early this year, we actually received a very important certification and for our FAP 30 sensor, and that's the FBI certification, which opening up new geographies for us.
It's including the Americas, both South and North America, as well as parts of Africa, I would say. Combined, these developments strengthen our pipeline for biometric deployments across the different high-growth digital ID markets that exist in the market. You can change to the next slide, please. As you remember, last quarter, we reported that as well, markets were 2025 very much down. It's not only NEXT Biometrics that has been affected, it's actually the market itself. In 2024, a competing fingerprint sensor device was compromised with a spoofing and hacking incident in India. This, to safeguard the complete program, the complete Aadhaar ecosystem with 1.3 billion people enrolled, the Aadhaar ecosystem temporarily halted the new device certification as well as new device approvals.
This of course means that no more products. This happened in November 2024. As we communicated during 2025, these were reopening during 2025. How did they reopen? Yes, they implemented a few new requirements, fake finger detection, that you need to pass to be able to access the Aadhaar services in the ecosystem. All device vendors were required to redesign, upgrade the software and possibly hardware, and recertify their already certified products. This of course affected the complete market. The good part here is that NEXT Biometrics' high security sensors, which are anti-spoofing capable already, as we are measuring a fingerprint sensor based on Active Thermal.
We actually have the key to actually have a fingerprint sensor fingerprint from our devices is that you need to have a live finger. So for NEXT Biometrics to complete this testing, we're kinda easy in that sense. However, there was only one authorized testing agency. It's a standardization testing and quality certification. It's under STQC. So with the limited testing capability, it created a backlog for all vendors. This of course led to cascading delays in the Aadhaar project rollout. This is where we are now. If you can change to the next slide. We actually as NEXT Biometrics see that the ecosystem and certification bottlenecks are largely resolved. We received additional one certification from our second OEM back in Q3 2025.
We see that this is enabling re-acceleration of the deployment across this Aadhaar platform and ecosystem. We as well, as I told you in the beginning, we have received two additional orders for the Aadhaar system. We see that multiple government agencies they have received procurement. It's a growing pipeline with tenders for biometric authentication devices. We see that the demand and momentum is building up through Q2 2026, thus the orders. The delayed projects and programs move now into deployment instead of wait-and-see mode. We believe that the market is anticipated to normalize during 2026. With this will create a bit more predictable and scalable demand for NEXT Biometrics since this is our main business today.
It's very important that this is happening. If you look at the next step of the Indian Aadhaar program, they actually are moving into new high volume use cases which will benefit the biometric fingerprint sensor providers. They are now investigating and proposing to get into hotel and hospitality registration, where you actually use the biometric to check in and so on. They are also looking at hospital and patient onboarding, which is already possible in some countries. What's new here is that they will actually use the Aadhaar system for this, meaning that basically the complete population will be able to have this patient onboarding in a hospital sort of.
They are also anticipating and planning for fingerprint-based e-signing for this and as well as enabling payments and financial services which these third-party applications will actually grow significantly over the coming years in India, meaning that there will be new hardware, new features, new devices out in the Indian market, which then significantly expand our addressable market in India with these biometric authentication solutions, which is fantastic for NEXT Biometrics. You can take the next slide, sir, please. If you look at what also happened during 2025, when India were halted and paused, there's 29 countries evaluating or have adopted a similar type of architecture as Aadhaar. It's called Modular Open Source Identity Platform. We call it MOSIP.
It's national ID programs, and they are across Africa, Southeast Asia and Latin America. These are significant market opportunity for us. We are already in some of these programs. As the program MOSIP itself is looking at India during 2025 as India was paused, you can understand that the MOSIP countries were nervous. They actually took a half step back and said, "Okay, let's wait and see." Now when India is moving, we see that the MOSIP countries will follow. The reason for doing this is of course for people to have a digital identity. It strengthens the confidence in for us in similar deployments in these MOSIP countries.
Today, the status today you can also find it on MOSIP website that several governments are processing pilot phases and national rollouts. The national rollouts will typically be where the major large scale biometric sensor volumes are increasing because then you will have the services around the authentication infrastructure. Basically the security review in Aadhaar ecosystem had a knock-on effect on most projects. As we see the MOSIP the Aadhaar system is resuming we anticipate all 29 countries to actually also restart in this. You can take the next slide, please. We have 85 design wins, and here's three of them that are very well tied and linked to the MOSIP.
We secured, as I said in the beginning, a biometric reader. It's an Oyster III reader for a government ID use case in Malaysia. Expecting more orders to come from Malaysia 'cause they are in the second stage in their MOSIP enrollment. We are also entering. Previously we announced in Vietnam we have secured the first mass production order for a device within payment and authentication and KYC. It's a sort of a kiosk that you do all the KYC for in a bank, sort of. We have also deployed a self-service kiosk in Sri Lanka, which is also three out of 85 examples where you have why we are measuring designs. These all three will be repeating orders.
We see them as key for us in NEXT Biometrics. Earlier on, you can take the next slide. We have communicated about a adjacent feature to what we have previously. It's anywhere on display. As our fingerprint sensors, the FAP 20, FAP 30 are based out of a TFT display type of device. There's a interest in actually update this and make it larger in anywhere on the display. Especially in the segment of smartphones, this would be appreciated where you can authenticate yourself anywhere on the display instead of in a small area or on a side button or similar.
Today, 100% of the smartphones sold, 1.2 billion smartphones are equipped with some type of biometrics. It could be facial recognition, it could be a fingerprint sensor. Fingerprint sensor are the dominant one of the deployed 1.2 billion. This is, of course, targeting the high-end smartphone models from the beginning. We have strong momentum in this development. We have, as we have communicated previously, theoretical design is done in January this year. We actually selected a Taiwanese display partner. We are now working towards the prototype that we have communicated that will be showcased in Mobile World Congress in 2027 in Barcelona.
Very important here is IP protection as we have communicated two different patents granted in this. As we have seen, the Giantplus, we have industry validation. We have also NDA with a leading smartphone manufacturer, which is following us. We believe it's a clear potential to drive transformative change in the biometric and display market. We remain high confidence of moving forward this innovation. I'll share more updates when we have when we see. You can take the next slide, please, with the outlook. As we have communicated, we have three revenue streams driving our growth in this.
We have recurring quarterly revenues. It's better predictability and scalable. That's basically the markets that has been closed, India, Bangladesh, and so on. On top of that, we have revenue stream two. It's like a design win revenue. It's less regular. It's an expanding customer base. As I said, we landed four new customers in design wins in Q4. We have. It's a medium to small size design wins, so we will deploy them as they go. The more we have, the more customers, the more revenue we'll get. We have what we are working on, the third stream. It's large tender one-time revenue. It's something that can flip this revenue in a quarter around.
It's a one-time revenue for between NOK 1 million and NOK 100 million. It's within the government ID sector. It could be a tender in Brazil, it could be a tender in Nigeria, it could be a tender in somewhere else. This is, of course, something we are following, and we are working with our partners, close partners with these large tenders, specifically. Market readiness and focus area. Of course, we have full operational momentum expected in 2026 as communicated, and we see the increased market momentum gives solid ground for optimism in this market. We, of course, focus on converting the inventory. It's a value of NOK 25 million, which corresponds about NOK 50 million to NOK 70 million in revenue.
Assuming the similar gross margin. We are, of course, focusing on lowering the inventory and get that into cash. At the same time, we are cutting costs. The initiative is already implemented, and we are preserving cash and liquidity. As you can see in our report, we will go down to NOK 60 million-NOK 65 million annual OpEx during the year. With that, I would like to change the slide, and we can take a Q&A session if there's any questions online.
We have one question. Why is the revenue still low in this quarter four?
Very good question. Thank you for the question. In Q4, we see the effects still in the ripple effects of a closed Indian market. That's the main driver. As I try to explain, the MOSIP market also followed the Aadhaar system. We look positively on the Indian market, Aadhaar market, and MOSIP market and would see increased revenue during the coming quarters in both India as well as other countries. Thank you.
Then there is one more question. We don't have many questions now, so please add your question if you have any question. We will shortly end this Q&A session. The question is, what is the status of the transaction that you just announced? I believe you refer to the rights issue that we announced this morning. We can say that it's in the final stages of completing the legal documentation, and that's the status we can provide right now. I don't see any additional questions here. I turn it to you, Ulf.
Okay. Thank you, Eirik. If there's no other questions, we end this session. You're always welcome to email me or Eirik on the questions. That's IR at nextbiometrics.com, or just give me a ping. Thank you everyone for your attention. Thanks for listening, and keep you updated very soon, and see you in the next quarterly report. Thank you. Bye-bye.