Desert Control (DSRT) Q1 2025 earnings summary

Executive summary

• James Thomas was appointed CEO in April 2025, bringing over 30 years of leadership experience and becoming the largest shareholder via Woods End Interests LLC (9.8%).

• LNC technology reached a commercialization inflection point, with major US deployments, strong Middle East traction, and selection for the UN WFP Innovation Accelerator.

• Major US projects included the largest-ever LNC deployment at Oasis Dates (over 9,000 trees, 160+ acres) and multi-year contracts with golf courses.

• California water utility incentives now cover up to 50% of installed costs, validating LNC's performance and ROI.

• Adoption of the pay-as-you-save (PAYS) model is generating recurring revenue and accelerating large-scale deployments.

Financial highlights

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

• EBITDA loss for Q1 2025 was NOK -15.05 million; net loss widened to NOK -22.02 million due to higher operating and finance costs.

• Cash balance at quarter-end was NOK 43.3 million, down from NOK 105.13 million a year earlier; no interest-bearing debt.

• Equity ratio stood at 89.4% of total assets as of March 31, 2025.

• Gross margin for Q1 2025 was NOK 0.98 million, down from NOK 1.11 million in Q1 2024.

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 and new revenue streams.

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

• Financial runway expected to extend into late Q3/Q4 2025; additional capital may be required for growth beyond this period.

• Strategic focus remains on US and Middle East markets, with plans to expand after consolidating current successes.