Half Year 2026 Nexteq PLC Earnings Call

September 9, 2026

Speaker #2: Good morning, and welcome to the Nexteq PLC H1 2026 results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time using the Q&A tab situated in the right-hand corner of your screen.

Moderator: Good morning, and welcome to the Nexteq PLC H1 2026 results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged, and they can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. Before we begin, I would like to submit the following poll, and I would now like to hand you over to CEO Duncan Faithfull. Good morning.

Operator: Good morning, and welcome to the Nexteq PLC H1 2026 Results Investor Presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged, and they can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. Before we begin, I would like to submit the following poll, and I would now like to hand you over to CEO Duncan Faithfull. Good morning.

Speaker #2: Simply type in your questions and press send. Before we begin, I would like to submit the following poll, and I would now like to hand you over to CEO Duncan Faithful.

Speaker #2: Good morning.

Speaker #3: Hi there. Thanks very much for the introduction, and welcome to Nexteq's H1 2026 results. Through this presentation, we're going to be talking around a performance snapshot for H1, but also just to talk through the progress we've made through H1, but also the headwinds that we've faced that explain some of the numbers that will come onto through the presentation.

Duncan Faithfull: Hi there. Thanks very much for the introduction, and welcome to Nexteq's H1 2026 results. Through this presentation, we are going to be talking around a performance snapshot for H1, but also just to talk through the progress we have made through H1, but also the headwinds that we faced that explain some of the numbers that we will come onto through the presentation. We will be focusing on some of the strategic successes we have made through this period and also what we are planning on doing through the H2 of 2026 to ensure we position ourselves for the best growth through 2027, 2028, and 2029. I will start and go through the background of the business, and then we will hand over to Matt, who you can see on the slide here. He will talk through the numbers a little bit later on. As a reminder, who is Nexteq?

Speaker #3: We will be focusing on some of the strategic successes we've made through this period, and also what we're planning on doing through the second half of 2026 to ensure we position ourselves for the best growth through 2027, 2028, and 2029.

Speaker #3: So I will start and go through the background of the business, and then we'll hand over to Matt, who you can see on the slide here, who will talk through the numbers a little bit later on.

Speaker #3: So, as a reminder, who is Nexteq? We're basically a technology enabler, so we allow our customers to really focus on what they do for a living.

Duncan Faithfull: As a reminder, who is Nexteq? We are basically a technology enabler. We allow our customers to really focus on what they do for a living. And we operate across a huge number of verticals, which you can see some of them in the left-hand diagram there. And we trade in land-based gaming through to medical, through to defense, through to transport, and numerous others. We are a true multi-vertical business focused on technology outsourcing. And Nexteq as a group sits in that perfect intersection of what we are expert in, whether that is embedded computing or displays in HMI solutions or the software and the integration that goes behind all of those. Nexteq has a tremendous opportunity, and you can see our enviable list there of customers that we trade with, and that is just a small selection of those.

Duncan Faithfull: We are basically a technology enabler. We allow our customers to really focus on what they do for a living. And we operate across a huge number of verticals, which you can see some of them in the left-hand diagram there. And we trade in land-based gaming through to medical, through to defense, through to transport, and numerous others. We are a true multi-vertical business focused on technology outsourcing. And Nexteq as a group sits in that perfect intersection of what we are expert in, whether that is embedded computing or displays in HMI solutions or the software and the integration that goes behind all of those. Nexteq has a tremendous opportunity, and you can see our enviable list there of customers that we trade with, and that is just a small selection of those.

Speaker #3: And we operate across a huge number of verticals, which you can see—some of them—in the left-hand diagram there. And we trade in land-based gaming, through to medical, through to defense, through to transport, and numerous others.

Speaker #3: So, we are a true multi-vertical business focused on technology outsourcing. And Nexteq, as a group, sits at that perfect intersection of what we are expert in—whether that's embedded computing, displays and HMI solutions, or the software and integration that goes behind all of those.

Speaker #3: So, Nexteq has a tremendous opportunity. You can see our enviable list of customers that we trade with, and that's just a small selection of them.

Speaker #3: But the fact that Nexteq has all of these different areas of expertise means that we have sort of unlimited opportunity on our doorstep, really, with the people we currently trade with.

Duncan Faithfull: The fact that Nexteq has all of these different areas of expertise means that we have unlimited opportunity on our doorstep, really, with people we currently trade with. Over recent years, Matt and I have been focusing on looking at the One Nexteq principle that we have talked about before, where we combine all of our skills to deploy solutions across all of those customers, whether that is displays or computing. That will carry on being a focus of the business as we move forward. H1 2026, I think it is fair to say it has been a challenging period, and that is primarily because our largest historical market vertical that we trade in, the land-based gaming market, has had some real issues that it has been dealing with through the course of this period, and in fact, through 2025 before it. I will talk more about those headwinds shortly.

Speaker #3: So, over recent years, Matt and I have been focusing on looking at the one Nexteq principle that we've talked about before, where we combine all of our skills to deploy solutions across all of those customers, whether that's displays or computing.

Speaker #3: And that will continue to be a focus of the business as we move forward. So, H1 2026—I think it's fair to say it's been a challenging period.

Speaker #3: And that's primarily because our largest historical market vertical that we trade in—the land-based gaming market—has had some real issues that it's been dealing with through the course of this period, and in fact, through 2025 before it.

Speaker #3: I'll talk more about those headwinds shortly. But really, what we've been focusing on in H1 as a group has been what we can control.

Duncan Faithfull: I will talk more about those headwinds shortly. What we have been focusing on in H1 as a group has been what we can control. We have been continuing to provide superb customer service to the customers that we have. In Densitron, our displays business, making real progress on the strategic agenda of becoming more than a display. Again, we will talk about that a little bit later. From a strategic delivery perspective, as we outlined in our three-year plan at the beginning of 2025, really focusing on how we create new products and solutions that will deliver new growth and new sustainable growth as we go through the next three years. The summary of a difficult trading environment for our heritage business, but really focusing on what can drive a different outcome as we move forward through the next few years.

Duncan Faithfull: What we have been focusing on in H1 as a group has been what we can control. We have been continuing to provide superb customer service to the customers that we have. In Densitron, our displays business, making real progress on the strategic agenda of becoming more than a display. Again, we will talk about that a little bit later. From a strategic delivery perspective, as we outlined in our three-year plan at the beginning of 2025, really focusing on how we create new products and solutions that will deliver new growth and new sustainable growth as we go through the next three years. The summary of a difficult trading environment for our heritage business, but really focusing on what can drive a different outcome as we move forward through the next few years.

Speaker #3: And so, we have been continuing to provide superb customer service to the customers that we have. In Densitron, our displays business, we are making real progress on the strategic agenda of becoming more than a display company, and again, we'll talk about that a little bit later.

Speaker #3: And from a strategic delivery perspective, as we outlined in our three-year plan at the beginning of 2025, we're really focusing on how we create new products and solutions that will deliver new growth, and new sustainable growth, as we go through the next three years.

Speaker #3: So, the summary is a difficult trading environment for our heritage business, but we are really focusing on what can drive a different outcome as we move forward through the next few years.

Speaker #3: But what was that that we were looking to do in H1 2026? So, largely, as a reminder—and I know I've spoken to you all about this before—but that diversification agenda is critical to us.

Duncan Faithfull: What was that we were looking to do in H1 2026? Largely, as a reminder, and I know I have spoken to you all about this before, that diversification agenda is critical to us. It is critical because for too long the group has relied on land-based gaming for the majority of its revenue. Very large customers for a long period of time. As many of you will know, that changed quite dramatically in 2025 when our largest customer was acquired by someone who did not use Nexteq, and that has had a fairly significant impact on the business. How have we been driving that diversification agenda? Looking at a product called Launchpad and how we monetize our clear and obvious software capability in gaming, looking at how we become more than a display and using our HMI expertise in order to do so.

Duncan Faithfull: What was that we were looking to do in H1 2026? Largely, as a reminder, and I know I have spoken to you all about this before, that diversification agenda is critical to us. It is critical because for too long the group has relied on land-based gaming for the majority of its revenue [inaudible]. Very large customers for a long period of time. As many of you will know, that changed quite dramatically in 2025 when our largest customer was acquired by someone who did not use Nexteq, and that has had a fairly significant impact on the business. How have we been driving that diversification agenda? Looking at a product called Launchpad and how we monetize our clear and obvious software capability in gaming, looking at how we become more than a display and using our HMI expertise in order to do so.

Speaker #3: And it's critical because, for too long, the group has relied on land-based gaming for the majority of its revenue—very large customers for a long period of time.

Speaker #3: And, as many of you will know, that changed quite dramatically in 2025, when our largest customer was acquired by someone who didn't use Nexteq.

Speaker #3: And that's had a fairly significant impact on the business. So, how have we been driving that diversification agenda? Looking at a product called LaunchPad, and how we monetize our clear and obvious software capability in gaming.

Speaker #3: We're looking at how we become more than just a display company, and using our HMI expertise to do so. Both of these initiatives are part of a reinvigorated and re-energized product roadmap that we've developed, which really enables us to target new markets with new products. I'll touch on that again a little bit later on.

Duncan Faithfull: Both of those are part of a reinvigorated and re-energized product roadmap that we have developed that really enables us to target new markets with new products, and I will talk about that again a little bit later on. Finally, in the top row there, you can see the target operating model. Matt and I have been really focused on managing our costs and, through H1 2026, that carried on. At a wider level, we are looking at how we really are going to deploy our solutions into our markets in a new way. Again, I will touch on that again a little bit later. Just getting into some of those headwinds that we talked about. You can see on the bottom row of this chart in the orange color, from left to right, tariffs has had a huge impact on us.

Speaker #3: And finally, in the top row there, you can see the target operating model. Matt and I have been really focused on managing our costs, and through H1 2026, that carried on.

Speaker #3: But at a wider level, we're looking at how we really are going to deploy our solutions into our markets in a new way. And again, I'll touch on that a little bit later.

Speaker #3: But just getting into some of those headwinds that we talked about, you can see on the bottom row of this chart, in the orange color from left to right, tariffs have had a huge impact on us.

Speaker #3: Traditionally, two-thirds of our gaming business has been in North America. And whilst our computers that we provide to that market do not attract tariffs, the rest of the bill of material for our gaming customers, for their cabinets, they do.

Duncan Faithfull: Traditionally, two-thirds of our gaming business has been in North America, and whilst our computers that we provide to that market do not attract tariffs, the rest of the bill of material for our gaming customers for their cabinets, they do. The cost of those cabinets have therefore gone up considerably. As a result of that, casinos and other gaming venues across the world, but mainly in North America, have been buying less cabinets. That's really flowed through to our numbers because less cabinets are sold, less computers are required. Tariffs had a real impact on our trading volume. That coupled with what's been going on with the graphics chip providers, but also the memory providers, has meant that the cost of our products to our customers have also gone up.

Speaker #3: And the cost of those cabinets has therefore gone up considerably. As a result, casinos and other gaming venues across the world, but mainly in North America, have been buying fewer cabinets.

Speaker #3: And that's really flowed through to our numbers, because fewer cabinets are sold, fewer computers are required. So tariffs had a real impact on our trading volume.

Speaker #3: That, coupled with what's been going on with the graphics chip providers, but also the memory providers, has meant that the cost of our products to our customers has also gone up.

Speaker #3: And memory continues to be something that we have to watch as we go through 2026 and beyond, because the issue with memory has been driven by the AI companies and their development.

Duncan Faithfull: Memory continues to be something that we have to watch as we go through 2026 and beyond. Because the issue with memory has been driven by the AI companies and their development, and that doesn't look like that's slowing down. So more and more of our focus around how we manage our computer products going forward will be with memory in mind. As a result of those two issues, the North American gaming sector is very uncertain in terms of how it's investing. We're seeing that across both the large casinos you'd expect to see in Nevada, but across all of the other route markets that we see in North America. So sort of uncertainty at the current economic situation, plus what's going on with sort of geopolitical uncertainty in the world is just making people hold off on big capital investments.

Speaker #3: And that doesn't look like that's slowing down. So more and more of our focus, around how we manage our computer products going forward, will be with memory in mind.

Speaker #3: As a result of those two issues, the North American gaming sector is very uncertain in terms of how it's investing. We're seeing that not only across the large casinos you'd expect in Nevada, but also across all of the other route markets in North America.

Speaker #3: So, sort of uncertainty in the current economic situation, plus what's going on with geopolitical uncertainty in the world, is just making people hold off on big capital investments.

Speaker #3: And the final box on the bottom row of this chart really talks about that specific issue around IGT and Every. So, the trading position of Every has deteriorated quickly as IGT has integrated them into their business.

Duncan Faithfull: The final box on the bottom row of this chart really talks about that specific issue around IGT and Everi. The trading position of Everi has deteriorated quickly as IGT has integrated them into their business. The slowdown of our business, therefore with Everi, has been quicker than anticipated. There is some news that has come out around IGT that I will talk about towards the end of the presentation. But the headwinds really facing the gaming part of our business with Densitron, as I said earlier, trading to expectation levels. So, in terms of what have we delivered in H1, you can see the objectives along the top of this chart, but in the green boxes.

Speaker #3: And the slowdown of our business, therefore, with Everi has been quicker than anticipated. There is some news that has come out around IGT that I will talk about towards the end of the presentation.

Speaker #3: But the headwinds really facing the gaming part of our business with Densitron, as I said earlier, are trading to expectation levels. So, in terms of what we have delivered in H1, you can see the objectives along the top of this chart.

Speaker #3: But in the green boxes, so from the point of view of revenue diversification—as you will have seen in some of the market announcements—we've been winning significant pieces of new business with IDS control solutions, which is part of our Densitron business, as well as other significant advanced display wins.

Duncan Faithfull: From the point of view of revenue diversification, as you will have seen in some of the market announcements, we've been winning significant pieces of new business with IDS control solutions, which is part of our Densitron business, as well as other significant advanced display wins. Now, a lot of you who followed our business for a long time will know that the sales cycle and the integration cycle is reasonably long. The embodiment of the strategy about winning these customers is one thing, but there is then a life cycle then of integration that can typically take about 18 months. So we're making great progress on winning new diversified revenue, and we're in that process of integrating that.

Speaker #3: Now, a lot of you who have followed our business for a long time will know that the sales cycle and the integration cycle are reasonably long.

Speaker #3: So, the embodiment of the strategy about winning these customers is one thing, but there is then a life cycle of integration that can typically take about 18 months.

Speaker #3: So we're making great progress on winning new, diversified revenue, and we're in that process of integrating that. LaunchPad is a real focus for our business.

Duncan Faithfull: Launchpad is a real focus for our business, and I'm delighted to be able to say that we have three Launchpad customers who are in the integration cycle now and more lining up to be next in line. Launchpad really is striking a chord in the gaming sector. The great thing about the Launchpad opportunity is not only does it give us new recurring software revenue, but it also means that we win new hardware customers, which is the traditional revenue stream for the Quixant business. Tactila has been a massive focus for us in the HMI solution agenda, and we're really proud to be able to say we've won some new Tactila backed wins that again, are going through that integration cycle now. Again, the strategy around how we diversify revenue is really starting to make progress.

Speaker #3: And I'm delighted to be able to say that we have three LaunchPad customers who are in the integration cycle now, and more lining up to be next in line.

Speaker #3: So, LaunchPad really is striking a chord in the gaming sector. And the great thing about the LaunchPad opportunity is not only does it give us new recurring software revenue, but it also means that we win new hardware customers, which is the traditional revenue stream for the Crixen business.

Speaker #3: Tactila has been a massive focus for us in the HMI solution agenda, and we're really proud to be able to say we've won some new Tactila-backed wins that, again, are going through that integration cycle now.

Speaker #3: So again, the strategy around how we diversify revenue is really starting to make progress. But at the same time as that's been going on, we're having to watch those memory markets very carefully.

Duncan Faithfull: But at the same time that's been going on, we're having to watch those memory markets very carefully and our cost management. Again, through H1 of this year, we've removed just over USD 1 million worth of annualized cost, at the same time as investing in those critical supply components, particularly memory, that allow us to, A, buy at a sensible price, but also means that we can satisfy our customer demand as we go through H2 and into 2027. Brazil has been a big topic of conversation for us over the last couple of years, and there's been significant movement on that through H1. So much so that we believe that 2027 really will be finally the launch for the world of gaming, particularly in the lottery space in Brazil.

Speaker #3: And our cost management. And again, through H1 of this year, we've removed just over a million dollars' worth of annualized costs. At the same time as investing in those critical supply components, particularly memory, that allow us to, A, buy at a sensible price, but also means that we can satisfy our customer demand as we go through H2 and into 2027.

Speaker #3: Brazil has been a big topic of conversation for us over the last couple of years, and there's been significant movement on that through H1.

Speaker #3: So much so that we believe 2027 really will finally be the launch for the world of gaming, particularly in the lottery space in Brazil.

Speaker #3: And part of our product roadmap has been developing a specific product for Brazil that allows our partners to work in both regulated and unregulated markets in Brazil, but with the same computer.

Duncan Faithfull: Part of our product roadmap has been developing a specific product for Brazil that allows our partners to work in regulated and unregulated markets in Brazil, but with the same computer. So true innovation, which of course is at the heart of what Nexteq really delivers to its customers. But in summary, what are we really trying to be? We're about going up the value chain of technology solutions. Historically, we would have thought of ourselves as a component supplier, be that displays or computers, depending on which market vertical we were looking at. Over the last year, we've really targeted moving up that value chain to fully integrated advanced solutions, be that software and hardware in gaming or in the display verticals we trade in, a full system solution incorporating our computer skills and making really great headway on.

Speaker #3: So, true innovation is at the heart of what Nexteq really delivers to its customers. But in summary, what are we really trying to be?

Speaker #3: We're about going up the value chain of technology solutions. So, historically, we would have thought of ourselves as a component supplier, be that displays or computers, depending on which market vertical we were looking at.

Speaker #3: Over the last year, we've really targeted moving up that value chain to fully integrated, advanced solutions—be that software and hardware in gaming, or in the display verticals we trade in. A full system solution incorporating our computer skills, and making really great headway on.

Speaker #3: But it has been a tough time in H1. And to talk through some of the numbers, I'll just pass over to Matt now, who'll describe where we are.

Duncan Faithfull: But it has been a tough time in H1. To talk through some of the numbers, I'll just pass over to Matt now, who'll describe where we are.

Duncan Faithfull: To talk through some of the numbers, I'll just pass over to Matt now, who'll describe where we are.

Speaker #2: Thank you, Duncan. So, looking at the income statement performance for H1, we've delivered revenue of $26.7 million, which was a 34% decrease on the prior year.

Matt Staight: Thank you, Duncan. Looking at the income statement performance for H1, we delivered revenue of $26.7 million, which was a 34% decrease on the prior year. The main impact behind this was the demand from US gaming customers, which faced significant challenge from the headwinds which Duncan talked about previously. In terms of gross margin performance, gross margin was 30.3% across the group, which was down 280 basis points on the previous year. Big factor behind that number is the DDR4 pricing challenges and other component cost increases that we have seen through the first half. Really positive point on the gross margin is Densitron, which last year hit a record gross margin of 38%, and pleasingly, it has maintained that 38% gross margin performance in H1. In terms of adjusted operating expenses, we are down marginally on H1 last year.

Speaker #2: The main impact behind this was the demand from US gaming customers, which faced significant challenges with the headwinds Duncan talked about previously. In terms of gross margin performance, the gross margin was 30.3% across the group, which was down 280 basis points on the previous year.

Speaker #2: A big factor behind that number is the DDR4 pricing challenges and other component cost increases that we've seen through the first half. A really positive point on the gross margin is Densitron, which last year hit a record gross margin of 38%, and pleasingly, it has maintained that 38% gross margin performance in H1.

Speaker #2: In terms of adjusted operating expenses, we're down marginally on H1 last year. That's a result of savings that have been implemented, partially offset by the inflationary impact of cost increases elsewhere.

Matt Staight: That is a result of savings that have been implemented, partially offset by inflationary impact of cost increases elsewhere. We have just initiated a program over the last two months to implement further savings in H2 this year and roll into further savings going into 2027. Overall, P&L performance was adjusted loss before tax of $4 million in the first half. That reflects the lower revenue and gross margin performance that has resulted from those headwinds. We are certainly expecting the H2 performance to be much stronger than that with increased revenues and margins driving better performance in H2, which more ties in with the traditional second half weighting that we see in the Nexteq business. Looking at Quixant in more detail. Quixant business delivered $12.7 million of revenue in the first half, which is 53% down year on year.

Speaker #2: We've just initiated a program over the last two months to implement, per the savings in H2 this year, roll into further savings and going into 2027.

Speaker #2: So overall, P&L performance was an adjusted loss before tax of $4 million in the first half, and that reflects a lower revenue and gross margin performance that has resulted from those headwinds.

Speaker #2: And we are certainly expecting the H2 performance to be much stronger than that, with increased revenues and margins driving better performance in H2, which more closely ties in with the traditional second half weighting that we see in the Nexteq business.

Speaker #2: So, looking at Crixen in more detail, the Crixen business delivered $12.7 million of revenue in the first half, which is 53% down year on year.

Speaker #2: A huge impact of that was the demand for our gaming platforms. So, our PCs sold just under 9,700 platforms in H1, which is 56% down year on year.

Matt Staight: Huge impact of that was the demand for our gaming platforms. Our PCs sold just under 9,700 platforms in H1, which is 56% down year on year. You can see that from the chart on the right-hand side also, a significant reduction in high-end and mid-range units sold, which is typically the units that we sell to the US gaming customers. That, therefore, is also driving down the average selling price of our gaming platforms in the first half. In terms of Densitron, much better picture for Densitron. A slight increase, 1% higher than we delivered in H1 2025, so $13.9 million of revenue for Densitron. We had new wins coming through, making a very positive impact, but some of those wins were partially offset by delays with existing customers offsetting that ramping of new customers.

Speaker #2: And you can see that from the chart on the right-hand side—reduction in high-end and mid-range units sold, which is typically the units that we sell to the US gaming customers—and that therefore is also driving down that average selling price of our gaming platforms in the first half.

Speaker #2: In terms of Densitron, much better picture for Densitron. So, slight increase—1% higher than we delivered in H1 2025. So, $13.9 million of revenue for Densitron.

Speaker #2: We had new wins coming through, making a very positive impact, but some of those wins were partially offset by delays with existing customers, offsetting that ramping of new customers.

Speaker #2: Really pleasingly, as well, on the Densitron side was our sales pipeline performance in the first half. So, we converted $12.7 million of sales pipeline opportunities, which represents the lifetime value of those opportunities over five years.

Matt Staight: Really pleasing as well on the Densitron side was our sales pipeline performance in the first half. We converted $12.7 million of sales pipeline opportunities, which represents the lifetime value of those opportunities over five years. From that conversion, we are expecting to have $1.9 million of revenue in-year in 2026 from that new pipeline and also a new million-dollar customer is expected to come from those wins, albeit not in 2026, given the time for that customer to ramp, as Duncan was talking about earlier, the typically 18-month integration cycle. In terms of H2 sales pipeline outlook, we have already converted more pipeline opportunities in H2 than we did for the whole of H1. Certainly expecting second half to be really strong in sales pipeline performance for Densitron. Looking in detail at cash flow. We closed H1 2026 with $10.7 million of cash.

Speaker #2: And from that conversion, we're expecting to have 1.9 million dollars of revenue in year in 2026 from that new pipeline. And also a new million dollar customer is expected to come from those wins, albeit not in 2026, given the time for that customer to ramp as Duncan was talking about earlier, the typically 18 month integration cycle.

Speaker #2: And in terms of H2 sales pipeline outlook, we've already converted more pipeline opportunities in H2 than we did for the whole of H1. So certainly expecting the second half to be really strong in sales pipeline performance for Densitron.

Speaker #2: So, looking in detail at cash flow, we closed H1 2026 with $10.7 million of cash. That was down from $25.3 million at the end of December 2025.

Matt Staight: That was down from $25.3 million at the end of December 2025. There were a few key areas which drive that reduction in cash balance. We returned $8.5 million to shareholders through dividends and share buyback in H1. There is also the trading performance in H1 driving down the cash flow from operations, which in previous halves has been positive, but obviously negative in H1 2026. We made a strategic investment in stock to secure DDR4 components to help mitigate the price increasing challenges that we have seen in the market, but also availability to ensure that we have product on hand to be able to support customer demand. In the middle there, you will see two fairly big blobs in the bridge, which reflects the purchase of the Taiwan office in H1. We purchased a new office in Taiwan, which included mortgage financing.

Speaker #2: There are a few key areas which drive that reduction in cash balance. We returned $8.5 million to shareholders through dividends and share buybacks in H1.

Speaker #2: There's also the trading performance in H1 driving down the cash flow from operations, which in previous halves has been positive, but is obviously negative in H1 2026.

Speaker #2: We made a strategic investment in stock to secure DDR4 components to help mitigate the price-increasing challenges that we've seen in the market, but also to ensure availability so that we have product on hand to be able to support customer demand.

Speaker #2: And in the middle there, you'll see two fairly big blobs in the bridge, which reflects the purchase of the Taiwan office in H1.

Speaker #2: So we purchased a new office in Taiwan, which included mortgage financing, so a net cash outlay of $1.5 million to secure that property. We actually had an offer from a third party to sell that in August, and we've reached an agreement with them to conclude on that transaction, which we expect to close out in October.

Matt Staight: A net cash outlay of $1.5 million to secure that property. We actually had an offer from a third party to sell that in August, and we have reached an agreement with them to conclude on that transaction, which we expect to close out in October. In the second half of this year, we will see a positive cash inflow coming back in relating to that same Taiwan office. Those are really the key movements that has driven our cash flow and adjusted operating cash conversion of 50% in the first half. Moving on to the balance sheet. There are a few key movements to pick out here from where we were at the year-end. Property, plant, and equipment, the increase there reflects the acquisition of the Taiwan property.

Speaker #2: So, in the second half of this year, we'll see a positive cash inflow coming back in relating to that same Taiwan office. And those are really the key movements that have driven our cash flow and adjusted operating cash conversion of 50% in the first half.

Speaker #2: So, moving on to the balance sheet, there are a few key movements to pick out here from where we were at the year end. Property, plant, and equipment—the increase there reflects the acquisition of the Taiwan property.

Speaker #2: The inventories balance in current assets really reflects the investment in strategic stock, as well as the build of stock balance towards the end of H1 to support a stronger revenue number in H2.

Matt Staight: The inventories balance and current assets really reflect the investment in strategic stock as well as the build of stock balance towards the end of H1 to support a stronger revenue number in H2. The cash we talked about on the previous slide. In terms of liabilities, loans, and borrowings obviously increased by around $12 million for the new mortgage on the Taiwan office. As I said, we would expect both the mortgage and the PPE changes to reverse out by the end of the year through the sale of that property. In terms of outlook and priorities for H2, I am just going to kick off there with talking through our signposts of success, which we outlined back at the start of 2025. We had three key signposts, which we are very much monitoring and actively planning against, to support driving growth in the business.

Speaker #2: The cash we talked about on the previous slide, and then in terms of liabilities, loans, and borrowings, is obviously increased by around $12 million for the new mortgage on the Taiwan office.

Speaker #2: But as I said, we'd expect both the mortgage and the PPE changes to reverse out by the end of the year through the sale of that property.

Speaker #2: So, in terms of outlook and priorities for H2, I can kick off there by talking through our signpost success, which we outlined back at the start of 2025.

Speaker #2: And we had three key signposts which we're very much monitoring and actively planning against to support driving growth in the business. So the first of those was around pipeline growth, targeting to grow our sales opportunity pipeline to $630 million.

Matt Staight: The first of those is around pipeline growth, targeting to grow our sales opportunity pipeline to $630 million. That has grown to $505 million at the end of H1, which is a 5% increase on the pipeline since December 2025. That factors in as well us closing $27.3 million of wins from the pipeline through H1 across both the Quixant and Densitron brands. The second of the signposts of success was around driving new IP revenue growth. We have seen in the first half of this year pre-mass production revenue for Tactila and having won an additional customer for Tactila and going into full mass production. In the second half, we will see that numbers of Tactila revenue increasing for Densitron.

Speaker #2: And that's grown to $505 million at the end of H1, which is a 5% increase on the pipeline since December 2025. That factors in as well us closing $27.3 million of wins from the pipeline through H1 across both the Quix and Densitron brands.

Speaker #2: The second of the signposts of success was around driving new IP revenue growth. We've seen, in the first half of this year, pretty significant mass production revenue for Tactila, and having one additional customer for Tactila going into full mass production.

Speaker #2: In the second half, we'll see the numbers for Tactila revenue increasing for Densitron. Also, on the Densitron side, as we're driving the strategy behind more than just a display, we've seen new product wins incorporating our IP, particularly around button technology, driving IP revenue flows in the first half.

Matt Staight: On the Densitron side, as we are driving the strategy behind more than just a display, we have seen new product wins incorporating our IP, particularly around button technology, driving IP revenue flows in H1. We will also The integration of those first three customer wins, which Duncan talked about earlier. The final signpost was around million-dollar customers. We had a target to increase the number of million-dollar customers to 20 by the end of 2027. In 2026, we are trending towards having 10 one-million-dollar customers, which is down from 14 that we had in 2025. The biggest driver here which is changing that number of million-dollar customers year-on-year is the demand from the US gaming customers and also gaming cabinet sales, both of which were reduced year-on-year.

Speaker #2: And we'll also see the integration of those first customers—the first three customer wins, which Duncan talked about earlier. The final signpost was around million-dollar customers.

Speaker #2: So, we had a target to increase the number of million-dollar customers to 20 by the end of 2027. In 2026, we're trending towards having 10 million-dollar customers, which is down from the 14 that we had in 2025.

Speaker #2: The biggest driver here, which is changing that number of million-dollar customers year on year, is the demand from US gaming customers and also gaming cabinet sales, both of which were reduced year on year.

Matt Staight: The biggest driver here which is changing that number of million-dollar customers year-on-year is the demand from the US gaming customers and also gaming cabinet sales, both of which were reduced year-on-year. We have seen from the pipeline conversion that we had in H1, there are three million-dollar customers that we expect from those customer wins, albeit those will ramp into future years. We are not seeing those as million-dollar customers in 2026.

Speaker #2: But we've seen from the pipeline conversion that we had in the first half, there's $3 million customers that we expect from those customer wins, albeit those will ramp into future years.

Matt Staight: We have seen from the pipeline conversion that we had in H1, there are three million-dollar customers that we expect from those customer wins, albeit those will ramp into future years. We are not seeing those as million-dollar customers in 2026. I will hand back to Duncan, who will talk through the H2 priorities.

Speaker #2: So we're not seeing those as million-dollar customers in 2026. So I'll hand back to Duncan, who will talk through the H2 priorities.

Matt Staight: I will hand back to Duncan, who will talk through the H2 priorities.

Speaker #1: Thank you, Matt. And just to finish on that point about $1 million customers: of course, as I said earlier, the reduction in revenue in North America is not through lost customers.

Duncan Faithfull: Thank you, Matt. Just to finish on that point about one million-dollar customers, of course, as I said earlier, the reduction in revenue in North America is not through lost customers. We are expecting some customers over the next few years to come back to being in that one million category. Obviously, it is hard to predict some of those headwinds in gaming in North America. You will have seen this chart last time we spoke. This is really talking about the actions we are taking to diversify our revenue and build a different business to the one of a few years ago. Starting on the left-hand side, which is the orange for Quixant, just going through some of the elements of this plan.

Speaker #1: So we're expecting some customers over the next few years to come back to being in that $1 million category. Obviously, it's hard to predict some of those headwinds in gaming in North America.

Speaker #1: But you will have seen this chart last time we spoke, so this is really talking about the actions we're taking to diversify our revenue and build a different business.

Speaker #1: It's sort of one from a few years ago. And starting on the left-hand side, which is the orange for quicksands, just going through some of these elements of this plan.

Speaker #1: We have—to the bottom point there—about DDR and SSD, which is really, really important, because we have to continue to manage those markets in the face of the competition we have against the AI companies for those components that are critical to gaming computers.

Duncan Faithfull: The bottom point there about DDR and SSD is really, really important because we have to continue to manage those markets in the face of the competition we have against the AI companies for those components that are critical to gaming computers. That is going to be an ongoing story for us. Launchpad, you have already heard that we are making great progress. We have got three on the books already, and Launchpad again will be presented to the customer base in North America for the first time actually at G2E in October. Really, really pleased with Launchpad's development, and again, it is important to remember that is recurring software revenue. It is the first time we have ever monetized our expertise in gaming software. Really pleased to announce that we are launching our monitor range at G2E, which is again, October.

Speaker #1: So that's going to be an ongoing story for us. Launchpad, you've already heard that we're making great progress. We've got three on the books already.

Speaker #1: And Launchpad, again, will be presented to the customer base in North America for the first time, actually, at G2E in October. So, really, really pleased with Launchpad's development.

Speaker #1: And again, it's important to remember that's recurring software revenue. So it's the first time we've ever monetized our expertise in gaming software. Really pleased to announce that we are launching our monitor range at G2E, which is, again—sorry—in October.

Speaker #1: So within the timeframe, thereabouts, that we said we would at the start of the year. And this really is a chance to take advantage of the relationships we have through our computers to grow organically with those by offering more products for their cabinets.

Duncan Faithfull: Within the timeframe or thereabout that we said we would at the start of the year. This really is a chance to take advantage of the relationships we have through our computers to grow organically with those by offering more products for their cabinets. We have some excellent products. They are really high-quality solutions. IGT, just to touch on that for a second. IGT, again, last time we spoke, we were talking around the RFP they were going to issue for the main platform, the main computer for the IGT Everi combined estate. We literally received that at the beginning of this week, and we are responding to it now.

Speaker #1: And we have some excellent products. They're really high-quality solutions. Now, IGT—just to touch on that for a second. So, IGT, again, last time we spoke, we were talking around the RFP.

Speaker #1: They were going to issue for the main platform—the main computer—for the IGT Every combined estate. We literally received that at the beginning of this week.

Speaker #1: And we are responding to it now. The plan is we have to respond to that by the 16th of September, and it's a significant piece of business.

Duncan Faithfull: The plan is we have to respond to that by 16 September, and it is a significant piece of business, but it is different to our normal business model in that IGT really are looking for a manufacturing partner as opposed to a design partner. We see ourselves as absolutely in the innovation and design space. We will see where that RFP goes, but really pleased to say we have been included in that tender and many of our competitors have not. It is a good step one to getting back to talking to IGT. New cabinet solution, we are launching that through H2 this year and already have a really good pipeline developing for new cabinets, and we have already talked about some of the cabinet business that we have won before. The top two on the left-hand side of this chart are really important.

Speaker #1: But it is different to our normal business model in that an IGT really are looking for a manufacturing partner, as opposed to a design partner.

Speaker #1: And we see ourselves as absolutely in the innovation and design space. So we'll see where that RFP goes, but really pleased to say we've been included in that tender.

Speaker #1: And many of our competitors haven't. So it's a good step one to getting back to talking to IGT. New cabinet solution—we are launching that through H2 this year.

Speaker #1: And already have a really good pipeline developing for new cabinets. And we've already talked about some of the cabinet business that we've won before.

Speaker #1: The top two on the left-hand side of this chart are really important. So, integrating Snapdragon as part of our gaming solution base is really important, as AMD and Intel—who are our traditional graphics chip solutions providers—as they move into a much more AI-focused space, it's very important that we create solutions that are market appropriate and price appropriate for some of the markets that we sell into.

Duncan Faithfull: Integrating Snapdragon as part of our gaming solution base is really important as AMD and Intel, who are our traditional graphics chip solutions providers, as they move into a much more AI-focused space, it is very important that we create solutions that are market appropriate and price appropriate for some of the markets that we sell into. Snapdragon through Qualcomm gives us a real opportunity to diversify those traditional revenue streams and open up new opportunities in gaming. At the top there, you can see a new computer for tier 3 companies. That includes Brazil, that includes some of the route markets in North America and in Spain, and it really is a true piece of innovation that will enable our customers to build a modular solution for where they are operating in different regulatory environments.

Speaker #1: So, Snapdragon through Qualcomm gives us a real opportunity to diversify those traditional revenue streams and open up new opportunities in gaming. And at the top there, you can see a new computer for tier-three companies.

Speaker #1: Now, so that includes Brazil, that includes some of the root markets in North America and in Spain. And it really is a true piece of innovation that will enable our customers to build a modular solution for where they're operating in different regulatory environments.

Speaker #1: So again, those real core strengths of Quicksand are about real in-depth knowledge of the market and the regulations, and bringing out unique solutions that cater for those.

Duncan Faithfull: Again, those real core strengths of Quixant about real in-depth knowledge of the market and the regulations and bringing out unique solutions that cater for those. Focusing very much on delivery and execution of what we have talked about, and we have made really good progress across all of the elements of that plan. On the right-hand side, you can see some of that innovation agenda around Densitron and being more than a display. Again, we talked a little bit about some of the successes we have seen early on in the provision and execution of this strategy. But we are making real progress, and actually this is something we are going to really double down on as we look at all of the different verticals that we can apply this outsourcing to as we supply everything from the computer through to the housing of a display.

Speaker #1: So, focusing very much on delivery and execution of what we've talked about. And we've made really good progress across all of the elements of that plan.

Speaker #1: On the right-hand side, you can see some of that innovation agenda around Densitron and being more than a display. So again, we've talked a little bit about some of the successes we've seen early on in the provision and execution of this strategy.

Speaker #1: But we're making real progress. And actually, this is something we are going to really double down on as we look at all of the different verticals that we can apply this outsourcing to, as we supply everything from the computer through to the housing of a display.

Speaker #1: And as we speak again, at the end of this year, we'll be able to tell you more about some of the exciting wins we've made.

Duncan Faithfull: As we speak again at the end of this year, we will be able to tell you more about some of the exciting wins we have made. To put it into some sort of context and reality, because that really helps. On this slide, you can see some of the solutions we have created and have won business with. Top left, that is a broadcast solution that is really unique in how that works and operates for one of our customers. Bottom left, that is a smart home control solution that has been launched very recently actually, and we have secured a multi-year PO for that solution. On the right-hand side, you can see the full system solutions for, at the top, a testing mechanism in medical, and at the bottom, a specific solution for the defense market.

Speaker #1: But to put it into some sort of context and reality, because that really helps, on this slide you can see some of the solutions we've created and have won business with.

Speaker #1: Top left, that's a broadcast solution. That's really unique in how that works and operates for one of our customers. Bottom left, that's a smart home control solution.

Speaker #1: That has been launched very recently, actually, and we've secured a multi-year PO for that solution. On the right-hand side, you can see the full system solutions: at the top, a testing mechanism in medical, and at the bottom, a specific solution for the defense market.

Speaker #1: So, the strategy around becoming more than a display is multi-vertical applicable, and that's what's really key for us as we look at how we diversify our business going forward.

Duncan Faithfull: The strategy around becoming more than a display is multi-vertical applicable, and that is what is really key for us as we look about how we diversify our business going forward. Page 2, what are we expecting to happen as we go through towards the year end? As Matt has already talked about, as traditional with Nexteq, H2 will be a stronger year in terms of revenue. We have already got really good order book coverage across the group, so we are confident in the number that we talked around in July and in May about what we thought 2026 would look like. New client wins, really important, and the sales team are hungry looking to convert that. Those really good ideas, but executing them really well, particularly around IDS, the control system for broadcast, for Launchpad, we have talked about in gaming, and then Tactila as a HMI solution.

Speaker #1: So, H2—what are we expecting to happen as we go through towards the year end? As Matt's already talked about, as is traditional with Nexteq, H2 will be a stronger half in terms of revenue.

Speaker #1: And we've already got really good order book coverage across the group. So we're confident in the number that we talked about in July and in May regarding what we thought 2026 would look like.

Speaker #1: New client wins are really, really important. And the sales team are hungry, looking to convert that. Those are really good ideas, but executing them really well is key.

Speaker #1: Particularly around IDS, the control system, the broadcast, the launch pad. We've talked about it in gaming, and then Tactila as an HMI solution. And Brazil will be something that we have to watch as we go through the early part of 2027.

Duncan Faithfull: Brazil will be something that we have to watch as we go through the early part of 2027, because these opportunities are significant and currently unforecasted in terms of our longer-term numbers. Really, focused on cost management as you would expect. As Matt has already talked about, we will be looking through H2 about how we continue that process of making sure our overheads are in line with our business. Really, the next half of 2026 and through 2027 is really focused on the flawless execution of the plans we have already talked to you about, and whether that is advanced displays. When I am talking about flawless execution, that is everything from how we market to our target verticals, through to how we actually make and distribute these really advanced display solutions. As a part of that, HMI and especially Tactila, really important.

Speaker #1: Because these opportunities are significant, and currently unforecast in terms of our longer-term numbers. We're really, really focused on cost management, as you'd expect. And, as Matt's already talked about, we'll be looking through H2 at how we continue that process, making sure our overheads are in line with our business.

Speaker #1: So really, the second half of 2026 and through 2027 is focused on the flawless execution of the plans we've already talked to you about.

Speaker #1: And whether that's advanced displays—and when I'm talking about flawless execution, that's everything from how we market to our target verticals through to how we actually make and distribute these really advanced display solutions.

Speaker #1: And as a part of that, HMI—and especially tactile—are really, really important. But in our computer business, as you know, we've been focused on land-based gaming since Quicksand was founded 21 years ago.

Duncan Faithfull: In our computer business, as you know, we have been focused on land-based gaming since Quixant was founded 21 years ago. Really now it is time that we take those skills that we have, utilizing edge AI technology into new verticals. As we tell the story, as we go through 2027, 2028, and 2029, you will see a real focus on how we take those core skills into new markets. Not forgetting where we have come from. The gaming market, whilst it is under some pressure at the moment through those headwinds that we have discussed, there are real opportunities if we have the right products and solutions. That new product I have talked about for the tier 3 market plus Launchpad as a combination is really powerful, and our sales team is absolutely focused on ensuring new customer wins.

Speaker #1: Sorry. But really, now it's time that we take those skills that we have—utilizing sort of edge AI technology—into new verticals. And as we tell the story, as we go through 2027, 2028, and 2029, you'll see a real focus on how we take those core skills into new markets.

Speaker #1: But not forgetting where we've come from. The gaming market, while it is under some pressure at the moment through those headwinds that we've discussed, presents real opportunities if we have the right products and solutions.

Speaker #1: So that new product I've talked about for the tier-three market, plus Launch Pad as a combination, is really powerful. And our sales team is absolutely focused on ensuring new customer wins. At the same time, as markets normalize, customer service to current customers will always be critical and important to us.

Duncan Faithfull: And at the same time, as markets normalize, customer service to the current customers will always be critical and important to us. The final bullet point on this slide is a really important piece of work that Matt and I are starting, which is looking at how we actually create and make the solutions that we provide to our markets. Currently, everything is very much focused on what we do internally. We will be looking at how we partner with different people to create a more effective and more efficient operating model so we can maximize speed to market and the profitability of the new wins that we are seeing. So that is a summary. That is a very quick fly through H1. I appreciate that for Nexteq. As ever, we look forward to your questions, so look forward to seeing those, and I will hand back now to the image.

Speaker #1: The final bullet point on this slide is a really important piece of work that Matt and I are starting, which is looking at how we actually create and make the solutions that we provide to our markets.

Speaker #1: Currently, everything is very much focused on what we do internally. We'll be looking at how we partner with different people to create a more effective and more efficient operating model.

Speaker #1: So we can maximize speed to market and the profitability of the new wins that we're seeing. So that's a summary. That’s a very quick fly-through of H1.

Speaker #1: I appreciate that for Nexteq. As ever, we look forward to your questions, so we look forward to seeing those. I'll hand back now to the moderator later.

Duncan Faithfull: As ever, we look forward to your questions, so look forward to seeing those, and I will hand back now to the image. So thank you very much.

Speaker #1: So thank you very much.

Duncan Faithfull: So thank you very much.

Speaker #2: That's great, Duncan. Matt, thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab situated at the top right corner of your screen.

Moderator: That is great, Duncan, Matt. Thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via our investor dashboard. Duncan, at this point, if I may now hand back to you and kindly ask you to read out the questions where appropriate to do so, and I will pick up from you at the end. Thank you.

Operator: That is great, Duncan, Matt. Thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via our investor dashboard. Duncan, at this point, if I may now hand back to you and kindly ask you to read out the questions where appropriate to do so, and I will pick up from you at the end. Thank you.

Speaker #2: While the company takes a few moments to review the questions submitted today, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via our investor dashboard.

Speaker #2: Duncan, at this point, if I may, I’d now like to hand back to you and kindly ask you to read out the questions where appropriate. I’ll pick up from you at the end.

Speaker #2: Thank you.

Speaker #1: Brilliant. Thank you, Alex. Thanks for the introduction. And we have a number of questions that we're going to try and group together so it may not I may not put it in the language that's exactly answering each individual question, but I think we'll answer all of the topics.

Duncan Faithfull: Brilliant. Thank you, Alex. Thanks for the introduction. We have a number of questions that we are going to try and group together. So I may not put it in the language that is exactly answering each individual question, but I think we will answer all of the topics as we go. And it looks like I said, well, I have got a couple of things to cover, and then I will hand to Matt who will talk about some of the more finance-focused stuff. So first question really is around gaming and what is happening in land-based gaming and why it is not sort of as successful as it used to be. There is a number of reasons for that. First of all, we have seen the full loss really of the Everi position, so that has reduced significantly. But the question that was asked was around why are not we winning in gaming anymore? And actually, we are.

Speaker #1: As we go, it looks like I’ve got a couple of things to cover, and then I’ll hand over to Matt, who will talk about some of the more finance-focused stuff.

Speaker #1: So, first question is really around gaming and what's happening in land-based gaming, and why it's not sort of as successful as it used to be.

Speaker #1: There are a number of reasons for that. First of all, we've seen the full loss, really, of every position, so that's reduced significantly. But the question that was asked was around why aren't we winning in gaming anymore.

Speaker #1: And actually, we are. In the first half of 2026, we’ve won four new customers with the new ICON product that has recently been launched.

Duncan Faithfull: In the H1 of 2026, we have won four new customers with the new IQON product that has recently been launched. Of course, we have won three Launchpad customers that are also software and hardware customers. I think we are winning, we are just winning in a different way. The issue around gaming is really that the large traditional customers we had in that space just have got significantly lower volumes. What is driving that is the combination of the impact of tariffs on the full bill of material that goes into that gaming cabinet. The casino venues have got a finite budget to buy new cabinets with. At a general level, each gaming cabinet is approximately 25% more expensive than it was prior to the tariff issue.

Speaker #1: And of course, we've won three Launch Pad customers that are also software and hardware customers. So I think we're winning. We're just winning in a different way.

Speaker #1: And the issue around gaming is really that the large traditional customers we've had in that space just have got significantly lower volumes. And what's driving that?

Speaker #1: It is the combination of the impact of tariffs on the full bill of materials that goes into that gaming cabinet. And the casino venues have got a finite budget to buy new cabinets with.

Speaker #1: And at a general level, each gaming cabinet is approximately 25% more expensive than it was prior to the tariff issue. So it's a volume issue from our largest gaming customers that's really driving the reduction in the expectation around quicksand.

Duncan Faithfull: It is a volume issue from our largest gaming customers that is really driving the reduction in the expectation around Quixant. The tariff plus components. There has been a question around component pricing, whether that is really impacting things, and it really is. Memory as a component of computers really has accelerated in its cost, largely driven by the requirement of the AI companies for the same memory that we use. That combined with tariffs is really impacting the volume requirement from our customers. The key thing really is what we do about that. That is why the new IQON product is important because we are utilizing a different memory solution in that product. Also Launchpad, because it is a software based solution that is not focused on utilizing components.

Speaker #1: The tariffs plus components. So there's been a question around component pricing and whether that's really impacting things. And it really is.

Speaker #1: So, memory as a component of computers really has accelerated in its cost, largely driven by the requirements of the AI companies for the same memory that we use.

Speaker #1: So, that combined with tariffs is really impacting the volume requirement from our customers. But the key thing, really, is what we do about that.

Speaker #1: So that's why ICON, the new ICON product, is important, because we're utilizing a different memory solution in that product. And also Launch Pad, because it's a software-based solution that isn't focused on utilizing components.

Speaker #1: What I would like to say just about the component costs here is that we have been passing those costs through to our customers, but maybe not applying the full margin that we would across the rest of our computing bill of materials.

Duncan Faithfull: What I would like to say just about the component cost here is that we have been passing those costs through to our customers, but maybe not applying the full margin that we would across the rest of our computer bill of materials. So we are handling the component cost increases, but in a way that is not passing the full burden on, but not impacting us at a dollar margin perspective. Second thing really was around confidence in year end. As we said through the presentation, we are awaiting two orders to finish off this year. One of them is from one of our traditional gaming customers. The important part of that is we have already invested in the componentry to fulfill that order when it comes, and we are expecting that to be at the G2E conference, which is at the end of September.

Speaker #1: So we're handling the component cost increases, but in a way that isn't passing the full burden on, while also not impacting us from a dollar margin perspective.

Speaker #1: The second thing really was around confidence in year-end. And as we said throughout the presentation, we're awaiting two orders to finish off this year.

Speaker #1: One of them is from one of our traditional gaming customers, and the important part of that is we've already invested in the componentry to fulfill that order when it comes.

Speaker #1: And we're expecting that to be at the G2E conference, which is at the end of September. So we hope to be able to come back with news on that around that time.

Duncan Faithfull: We hope to be able to come back with news on that around that time. The second one is specific to memory, and part of our strategy this year is to make sure that we have covered ourselves with memory availability. Because that is the second part of the memory challenge, is it is not just the price customers about how we forward buy memory, and that is the second part of the orders we are expecting. That, again, should be over the next three weeks. I would expect that by the beginning of October we will know exactly where we are with that. But we are really confident that they will come, which is why we have said that we reiterate the position we made a couple of months ago in terms of confidence in year end, and we have kept that position the same.

Speaker #1: The second one is specific to memory. And part of our strategy this year is to make sure that we've covered ourselves with memory availability.

Speaker #1: Because that's the second part of the memory challenges. It's not just the price. Customers are asking about how we move forward by memory, and that's the second part of the orders we're expecting.

Speaker #1: And that, again, should be over the next three weeks. So I would expect that by the beginning of October, we'll know exactly where we are with that.

Speaker #1: But we're really confident that they will come, which is why we've said that we reiterate the position we made a couple of months ago in terms of confidence in year-end.

Speaker #1: And we've kept that position the same. So I hope that's answered those two questions. I'll pass to Matt now. We'll answer some of the finance-related ones.

Duncan Faithfull: I hope that's answered those two questions, and I'll pass to Matt now who will answer some of the finance related ones.

Speaker #3: Thank you. So I had some questions around the PAD and also IP-led product development. It's quite clear that the focus of those strategies was certainly to increase customer lifetime value that we got from the customers in those spaces.

Matt Staight: Thank you. Some questions around the economics of our new software product, Launchpad, and also IP-led product development. It's quite clear that the focus of those strategies was certainly to increase customer lifetime value that we got from customers in those spaces. Picking up on IP-led design which was very much the focus on the Densitron side of the business, what we're seeing is this giving us much better integration into our customers' product portfolio where we're becoming an extension of their customers' engineering team. This gives us a greater share of manufacturing work done for the customer.

Speaker #3: So, picking up on IP-led design, which is very much the focus and the density on one side of the business, what we're seeing is this giving us much better integration into our customers' product portfolio.

Speaker #3: We're becoming an extension of our customers' engineering teams, which gives us a greater share of the manufacturing work done for the customer. We're taking work that was previously done by other third-party design and manufacturing businesses, and therefore we're increasing both the dollar value of revenue and the dollar value of margin that we're getting for those full IP-led system integrations.

Matt Staight: Taking work that was done by other third party design and manufacturing businesses, and therefore we're increasing the dollar value of revenue and also dollar value of margin that we're getting for those full IP-led system integrations, and therefore average selling price of a product to those customers is increasing very nicely. On the Launchpad side, our focus here has been by adding the software in with the PC sale. As a minimum, we were looking to double the gross margin that we got from that sale. The PC would still sit at its traditional margin of selling an IQON 3 PC, for example. Then the Launchpad software element would effectively double the gross margin that we get from that sale. We see the Launchpad software as having 80% gross margin on that recurring software element.

Speaker #3: And therefore, the average selling price of a product to those customers is increasing very nicely. On the Launch Pad side, our focus here has been, by adding the software in with the PC sale, as a minimum we were looking to double the gross margin that we got from that sale.

Speaker #3: So the PC would still sit at its traditional margin of selling an ICON 3 PC, for example. And then the software, the LaunchPad software element, would effectively double the gross margin that we get from that sale.

Speaker #3: And we see the LaunchPad software as having an 80% gross margin on that recurring software element. So each year, we pick up a software license fee for that software.

Matt Staight: Each year we pick up a software license fee for that software, and that license revenue scales and grows over time as the number of Launchpad customers grows and the number of PCs deployed in the market operating on Launchpad software increases over time as well. I think a key element around the economics behind Launchpad as well is the fact that the three customers we sold this to in 2026 have all been brand new customers that we haven't traded with before. It's really a route for us to bring in a new customer base similar to the first question which Duncan answered before around the changes in the gaming market. You also had another question around our office footprint. What does that look like once the Taiwan property is sold? We've already done some consolidation of Nexteq's property portfolio

Speaker #3: And that license revenue scales and grows over time, as the number of Launch Pad customers grows and the number of PCs deployed in the market operating on Launch Pad software increases over time as well.

Speaker #3: I think a key element around the economics behind Launch Pad as well is the fact that the three customers we've sold this to in 2026 have all been brand new customers that we haven't traded with before.

Speaker #3: So it's really a route for us to bring in a new customer base, similar to the first question that was answered by Duncan before, around the changes in the gaming market.

Speaker #3: We also had another question around our office footprint. So, what does that look like following once the Taiwan property is sold? We've really done some consolidation of Nexteq's property portfolio for next steps.

Matt Staight: What does that look like once the Taiwan property is sold? We've already done some consolidation of Nexteq's property portfolio. In the US, we have had two properties historically, which we have operated out of. Already this year, we have consolidated that down into one. One of the leases that we have in Taiwan, we have moved out of that and consolidated the multiple office leases that we have in Taiwan down into a reduced number. We still have a lease in the UK, which we operate from and are in the process of concluding the sale of the Alsham office, which was an owned property in the UK.

Speaker #3: So, in the US we've had two properties historically, which we've operated out of. Already this year, we've consolidated that down into one. One of the leases that we have in Taiwan—we've moved out of that and consolidated the multiple office leases that we have in Taiwan down into a reduced number.

Duncan Faithfull: In the US, we have had two properties historically, which we have operated out of. Already this year, we have consolidated that down into one. One of the leases that we have in Taiwan, we have moved out of that and consolidated the multiple office leases that we have in Taiwan down into a reduced number. We still have a lease in the UK, which we operate from and are in the process of concluding the sale of the Alsham office, which was an owned property in the UK.

Speaker #3: And then we still have a lease in the UK, which we operate from, and are in the process of concluding the sale of the Bolsheun office, which was an owned property in the UK.

Speaker #2: That's great, Matt. Duncan, if I may just jump back in there—as you have addressed all those questions for investors today. So, thank you very much indeed.

Moderator: That is great. Matt, Duncan, if I may just jump back in there, as you have addressed all those questions from investors today, so thank you very much indeed. Duncan, before I redirect investors to provide you with their feedback, which I know is particularly important to yourself and the company, could I please just ask you for a few closing comments?

Operator: That is great. Matt, Duncan, if I may just jump back in there, as you have addressed all those questions from investors today, so thank you very much indeed. Duncan, before I redirect investors to provide you with their feedback, which I know is particularly important to yourself and the company, could I please just ask you for a few closing comments?

Speaker #2: But Duncan, before we direct investors to provide you with their feedback, we should ask what is particularly important to yourself and the company. Could I please just ask you for a few closing comments?

Speaker #1: Yeah, of course. Thank you. So look, H1 2026 has been challenging. It would be crazy for me to say otherwise. It's been really difficult in land-based gaming, driven by what we've just talked about around volume loss.

Duncan Faithfull: Yeah, of course. Thank you. H1 2026 has been challenging. It would be crazy for me to say otherwise. It has been really difficult in land-based gaming, driven by what we have just talked around volume loss, mainly from the Everi contract that you are all familiar with. Really what we are doing internally is focusing on what we can control. So really driving the new product development strategy that we talked about around making more of our software, creating new hardware that allows our customers to do different things, and really, really driving more than the display solutions. Over the coming months, you will see more and more notifications about wins that we are seeing. Of course, I would ask you to remember that we are winning these customers, but because of the onboarding cycle for Nexteq, these will start showing their face in terms of revenue as we go through 2027.

Speaker #1: Mainly from the evergreen contracts that you're all familiar with. So, really, what we're doing in turn is focusing on what we can control—really driving the new product development strategy that we talked about, around making more of our software, creating new hardware that allows our customers to do different things.

Speaker #1: And really, really driving more than display solutions. And over the coming months, you'll see more and more notifications about wins that we're seeing.

Speaker #1: And of course, I'd ask you to remember that we're winning these customers, but because of the onboarding cycle for Nexteq, these will start showing their face in terms of revenue as we go through 2027.

Speaker #1: So, we're making great progress in the things that we could control, but also focusing on the brilliant customer service we've always given to our gaming customers.

Duncan Faithfull: We are making great progress in the things that we can control, but also focusing on the brilliant customer service we have always given to our gaming customers. As that market returns, we shall enjoy the volume coming back into that market. Matt and I are really excited about what the next 3 years will bring. As we show our product development roadmap developing, we look forward to sharing more of that with you the next time we speak. Thank you very much for your continuing interest in Nexteq, and we look forward to seeing you again soon. Thank you.

Speaker #1: So, as that market returns, we shall enjoy the volume coming back into that market. So, Matt and I are really excited about what the next three years will bring.

Speaker #1: And as we show our product development roadmap developing, we look forward to sharing more of that with you the next time we speak. So, thank you very much for your continuing interest in Nexteq.

Speaker #1: And we look forward to seeing you again soon. Thank you.

Speaker #2: Fantastic. Thank you both once again for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback, which helped the company better understand your views and expectations.

Moderator: Fantastic. Thank you both once again for updating investors today. Could I please ask investors not to close this session, as you will now be automatically redirected to provide your feedback which help the company better understand your views and expectations. On behalf of the management team, we would like to thank you

Operator: Fantastic. Thank you both once again for updating investors today. Could I please ask investors not to close this session, as you will now be automatically redirected to provide your feedback which help the company better understand your views and expectations. On behalf of the management team, we would like to thank you

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Half Year 2026 Nexteq PLC Earnings Call

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