Nexteq (LSE:NXQ), the UK-based technology solutions provider, reported full-year revenue of $90.2 million, representing a 4% increase from the previous year, supported primarily by stronger performance in its gaming segment.
Despite the revenue growth, profitability weakened during the period. Adjusted earnings per share declined 29% to $0.04, while gross margin narrowed to 32.8% due to higher component costs. The company recorded adjusted pretax profit of $3.6 million and statutory pretax profit of $3.2 million.
Sales of the company’s Quixant gaming hardware platform increased overall, with new customer wins and expanded product offerings helping to offset lower volumes from its historically largest customer.
Margin pressure during the year was driven largely by rising memory component prices and changes in the customer and product mix. The company noted that demand linked to artificial intelligence applications tightened supply for DDR4 and DDR5 memory components, pushing costs higher.
Nexteq also experienced the impact of customer concentration risk after its largest customer was acquired. The transaction led to a 70% decline in orders from that customer, forcing the company to replace the lost sales with new business that currently carries lower margins.
During the year, Nexteq completed a share buyback programme and purchased a new office in Taipei, with the property acquisition partly financed through a mortgage.
Looking ahead, the company expects Quixant revenue to decline in 2026 following the acquisition of its largest customer. Management also warned that supply chain disruptions, tariffs and broader geopolitical risks are creating uncertainty for customers in the near term.
Over the longer term, Nexteq is targeting revenue of $108 million by the end of 2028, with gross margins of 35–38% and an EBITDA margin of between 10% and 15%.
Leave a Reply