Neonode Reverses Revenue Decline as Licensing Ramps

The Tip Desk · November 12, 2026 · 3 min read

Third-quarter revenue from continuing operations was $0.5 million, up 24.4% from a year earlier, after a 20.4% year-over-year drop in the second quarter.

Neonode Inc. (NEON), the Stockholm-based artificial intelligence and computer vision company, reported third-quarter revenue from continuing operations of $0.5 million, a 24.4% increase from the same period a year earlier, reversing a 20.4% year-over-year decline in the June quarter.

President and Chief Executive Officer Daniel Alexus said the increase was supported by the ramp-up of an automotive license agreement and increased engineering project deliveries. MultiSensing licensing revenue more than quadrupled in the third quarter of 2026 compared with the third quarter of 2025, after growing more than fivefold in the second quarter versus the same period a year earlier.

License revenues were $0.4 million, up 9.4% from a year earlier, which the company said was mainly due to new license agreements. Non-recurring engineering revenue was $91,000, up 279.2% from a year earlier, after an 81.5% year-over-year decline in the prior quarter. The company attributed the engineering increase to increased project deliveries.

Operating expenses from continuing operations were $1.8 million, down 13.2% from a year earlier, after a 3.2% year-over-year increase in the June quarter. The company said the decrease was mainly related to lower payroll and related costs and lower professional fees. Research and development expense was $669,000, sales and marketing $469,000, and general and administrative $704,000. Gross margin was $530,000 on $535,000 of revenue.

Loss from continuing operations was $1.1 million, or $0.07 a share, compared with a $2.1 million loss, or $0.13 a share, in the prior quarter. A year earlier the company reported income of $13.9 million, or $0.83 a share, which included a net gain from a patent assignment of $15.5 million. Alexus said that one-time contribution was not repeated and that the year-over-year earnings difference should not be interpreted as a corresponding deterioration in the underlying business.

Cash used by operations was $1.6 million in the third quarter, compared with $1.5 million a year earlier. The company said the increase was primarily due to a decrease in accounts payable, accrued payroll and employee benefits. Cash and accounts receivable were $20.2 million as of September 30, 2026, compared with $25.8 million as of December 31, 2025. Working capital for continuing operations was $19.2 million.

For the nine months ended September 30, 2026, revenue from continuing operations was $1.6 million, up 5.4% from a year earlier. Operating expenses were $7.3 million. Loss from continuing operations was $5.1 million, or $0.31 a share, compared with income of $10.2 million, or $0.60 a share, a year earlier, which included the same $15.5 million patent-assignment gain. Cash used by operations was $5.6 million for the nine months.

Alexus said that in the first nine months revenue and licensing income grew, including 13% growth in licensing, while operating expenses remained broadly stable, and that MultiSensing licensing revenue nearly quadrupled in January–September 2026 compared with the same period in 2025. He said the revenue base is not yet sufficient to achieve profitability and that operations continued to reduce the cash balance during the quarter.

The company said its priorities remain to deliver on existing customer programs, convert evaluations and partner engagements into commercial agreements, and build the licensing business with financial discipline. Alexus said liquidity provides a foundation to pursue those priorities.