Desert Control (DSRT) Q1 2025 earnings summary

Executive summary

• Achieved positive Q1 2025 momentum with new contracts, major customer wins, and PAYS model adoption in the US and Middle East, supported by incentive approvals and strong customer feedback.

• CEO transition completed, appointing James Thomas, who brings 30+ years of leadership and investment experience and is the largest shareholder via Woods End Interests LLC (9.8%).

• LNC technology reached an inflection point for scalable commercialization, validated in large-scale US deployments and selected for the UN WFP Innovation Accelerator.

• Largest-ever LNC application delivered at Oasis Dates (160+ acres, 9,000+ trees), with first full golf course deployment and multi-year contracts in the US.

• Confirmed eligibility for major water conservation incentive programs in California, covering up to 50% of installed costs and expanding market opportunities.

Financial highlights

• Q1 2025 revenue increased to NOK 1.59 million from NOK 1.26 million in Q1 2024, driven by higher LNC deployments and new licensing royalty streams.

• EBITDA loss was NOK -15.05 million; net loss widened to NOK -22.02 million due to higher depreciation, operating, and finance costs.

• Cash balance at Q1 end was NOK 43.31 million, down from NOK 105.13 million in Q1 2024; equity at NOK 58.6 million (89.4% of total assets).

• Financial runway expected to extend into late Q3/Q4 2025, with no interest-bearing debt.

• Gross margin for Q1 2025 was NOK 0.98 million.

Outlook and guidance

• Expects more than tenfold growth in contracted revenues and LNC deployment volumes in 2025, led by US and Middle East projects.

• Next-gen production system to be manufacturing-ready in Q2 2025, unlocking efficiencies, cost-effective delivery, and new revenue streams.

• Recurring revenue from PAYS model and licensing anticipated to drive a balanced revenue mix.

• Additional capital may be required to support operations and growth beyond Q3/Q4 2025; Board is evaluating funding alternatives.

• Strategic focus on US and Middle East markets, leveraging proven deployments and partnerships.