Nexteq Revenue Up 4% Due to Gaming Business Growth, Profit Down 29%

Investing.com - UK technology solutions provider Nexteq announced full-year revenue of $90.2 million, up 4% year-over-year, mainly driven by growth in its gaming business segment.

Adjusted earnings per share fell 29% to $0.04, with gross margin decreasing to 32.8% due to rising component prices. The company reported an adjusted pre-tax profit of $3.6 million, and a pre-tax profit of $3.2 million.

During the period, sales of Quixant gaming hardware platforms increased, with new customer acquisitions and product line expansion offsetting the decline in sales from its largest historical customer.

The decline in gross margin was attributed to rising memory component prices and changes in customer and product mix, especially driven by AI demand causing shortages of DDR4 and DDR5 supplies.

Revenue concentration risk became a reality after the largest customer was acquired, leading to a 70% drop in orders. This prompted Nexteq to diversify its operations and replace lost sales with lower-margin products.

The company completed a share buyback and acquired a new office in Taipei, partly financed through a mortgage.

Nexteq expects that after its largest customer was acquired, Quixant’s revenue will decrease in 2026. The company stated that component shortages, tariffs, and geopolitical risks are creating uncertainty for customers in 2026.

Currently, the company’s goal is to reach $108 million in revenue, with a gross margin of 35-38% and an EBITDA margin of 10-15% by the end of 2028.

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