Desert Control (DSRT) Q3 2024 earnings summary

Executive summary

• Achieved first binding full-scale golf course contract in the US, introducing an outcome-based recurring revenue model with potential NOK >6 million over five years.

• Recorded first licensing royalties and secured a $1.8 million contract in the Middle East, signaling growing momentum with local partners.

• Expanded US pilot portfolio to 42 active projects, with strong year-over-year growth in LNC volume and revenue, and pilots in California and Arizona showing >25% irrigation savings and nearly double yield.

• Next-generation production system to deliver >120,000 liters/hour by 2025, enabling large-scale deployments and upgrade kits to boost CAPEX value.

• Strengthened leadership and R&D teams, including new Executive Chair, and deepened partnerships with Syngenta and Siemens.

Financial highlights

• LNC revenue for the first nine months reached NOK 1.88 million, up from NOK 0.85 million year-over-year; Q3 2024 revenue was NOK 0.18 million, up from NOK 0.01 million in Q3 2023.

• EBITDA improved to NOK -44.95 million for the first nine months (from NOK -60.81 million); Q3 EBITDA at NOK -14.16 million (vs. NOK -17.9 million in Q3 2023).

• Net income for the first nine months was NOK -45.43 million, an improvement from NOK -56.86 million year-over-year.

• Cash balance at quarter-end was NOK 74.8 million, with no interest-bearing debt; equity ratio 95.4%.

• Gross margin for the first nine months was NOK 1.70 million, up from NOK 1.32 million year-over-year.

Outlook and guidance

• Next-gen production system and upgrade kits to drive hardware revenue from 2025, with commercial readiness targeted for H1 2025.

• Anticipates several full-scale golf and landscape deployments in California in 2025, driven by high water costs and faster validation cycles.

• Expects multiple stage 2 conversions for permanent crops in 2025, building a large-scale deployment pipeline for 2026+.

• Middle East licensing royalties and contracts expected to grow steadily, with significant upside from large-scale opportunities.

• Financial runway extends to Q4 2025, even excluding revenue.