Next Biometrics Group ASA
OSE:NEXT
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Next Biometrics Group ASA
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Good morning, everyone, and welcome to NEXT Biometrics Quarter 4 and Business Update Conference Call. I'm Peter Heuman, I'm the CEO of NEXT Biometrics. And with me today on the call during this session, we also have our CFO, Eirik Underthun. During this presentation, you can find the material at nextbiometrics.com under Investor Relations. And at the end of the call, we have reserved time for Q&A since we have already received several questions, and you are still able to also continue to send us questions during this presentation and it would be great if you can do that to the addressed event at nextbiometrics.com. In that way, we will try to cater for them at the end of the session. But with that, and if you have the presentation in front of you, we will start today's session and I will try to guide you also on what slides we are using. So right now, we are on Slide #3. And that sets the agenda for the meeting. And while you are potentially looking at the agenda, I would like to say that there are 2 main messages that I want to convey during this session today. One is, of course, the summary of the financial statement of quarter 4 and the closing of 2020. This was really, as I stated in the quarterly report, a year of transition. But of course, we're going to highlight that for you. But I think even more importantly, we would like me and Eirik to provide you some background to last week's capital raise and why we, at NEXT, believe we have set now during 2020 and this year of transition the foundation to build a great company going forward. And I think that's where we're going to spend most of the time during this session. This is also where we have received most of the questions relating to what do we see going forward. So with that, we will go to next slide, so it's Slide #4 and the header is recent developments. As you can see here, the first point, NEXT transformation program is ongoing. And it's also starting to see a strong effect of its actions taken. I think you can -- if we make the link into the quarterly report, you can see that our costs are down. That has been a main important topic for us, where we have lowered our OpEx with 73% if you compare quarter-to-quarter -- quarter-over-quarter, same quarter last year. Another important topic is that we have started to change the culture of the company. I think now we have a great mix of new and existing passionate staff and we run in a very much more market-focused, customer-focused culture in the company. But most importantly, our growth agenda that you might have heard me talk about later starts to demonstrate initial signs of success with an increased number of design wins and orders booked. And I think this in all -- and during this transformational year, the last important topic that we have not communicated too well potentially, you have heard us talk about the key product for success and we believe that is our FAP20 and we have -- with these design wins and the increased orders, I think I feel, at least as a CEO, more and more comfortable that we have a great product. So we're going to spend some time on that during today as well. But like I said, a number of design wins have actually grown with almost 15x since quarter 4 when we started the transition in quarter 4 of 2019. And this is the initial signs of that, I believe we are doing the right things. We have a FAP20 sensor that I believe is very well equipped to disrupt an existing $1.5 billion market. We have started to provide inroads and get confirmation that we are right on price, that we are right in terms of large-area sensor with high security with our inroads within payment and fintech, something we're going to touch about. And we have, slightly at least, rejuvenated our PC business that I think many might have believed were far gone in NEXT Biometrics, but that is not the case. So these are some of the main recent developments. And I think before I go to the next slide, this kind of summarize in a fairly good way why we managed to raise additional capital and explain for these investors why we look with quite bullish eyes towards the future. So let's go to the next slide and that's Slide #5 in the deck and the header is design wins multiplied. So when I say that 2020 has been a year of transition for NEXT Biometrics, I think you might remember and have heard me say before that when I started during quarter 4 2019, there was mainly 1 device in the world -- or 1 customer that had integrated NEXT Biometrics sensor. Today, where we are sitting, we have more than 15 devices that have designed in NEXT Biometrics sensors. And we do believe that for a long-term successful company in the fingerprint sensor business, we need to be in many devices and in high-volume devices in the right segments where our products have a great fit. So this is establishing the foundation for a long-term recurring revenue. And as you can probably understand, I mean, if you want to be very short-term focused and look at the recent quarters, it is quite difficult to squeeze out revenue when you are starting with 1 device that is your 1 customer. But as we start to grow the number of devices where we have design wins, you're going to see a long-term effect. We can argue that there are -- if I should put some color on this, and as you can see here, there is a time delay from the day that we win the design win until we have the order and the initial order and we can recognize the revenue. So there's, of course, a little bit of a downside here when you say that this looks like fairly long sales cycles. And I would say, yes, that's one of the cons maybe with the industry we are in. But there's also some really good aspects of being in this industry because the more design wins we have and the stickiness that these design manufacturers create for us, because the average life cycle for a device where we design in a NEXT Biometrics sensor is most probably somewhere between 4 and 8 years, and this is what will provide us with a long-term recurring revenue potential. If we can then do that with our key product, the FAP20, which has a possibility to provide great gross margins, yes, then with the stickiness and the recurring revenue and the more devices we have, there, you have more or less in a nutshell how we see and how we try to scale up NEXT Biometrics. So I think this is a very good acceleration of design wins. And I think you should, and like we write and like I say in the quarterly report, you should expect more design wins to come. And with that, I think we will go to the next slide. So that is Slide #6 and with a header, NEXT's FAP20 positioned to disrupt. So if the previous slide was more me explaining for how we are trying in a structured way to scale up NEXT Biometrics, then now I have 2 slides for you where we explain a little bit with what solution do we do it. And as you have heard us talk about before, it's really with a FAP20 large-area sensor. That's what we believe is a key to success for NEXT Biometrics. And why do we say that? We think that this large-area sensor is very well positioned in the market. It's a large market. We can disrupt -- our technology enables us to disrupt that market in 2 main ways: one, we can produce this sensor to a very low cost, which is a great advantage in any business if you can produce your product to a lower cost compared to your competitors. So that's one. Number two, if you look at the largest part of the installed base of large-area sensors today, they are provided by the optical technologies, the optical fingerprint technologies. I have nothing bad to say about optical technologies. They actually provide a great quality fingerprint images, et cetera. But historically, at least, and still if you look out in the market, if you -- they are rather bulky compared to NEXT Biometrics because we can provide an ultra-slim form factor for a large-area sensor. And this becomes more and more importantly as more and more devices in the world becomes more and more connected and more and more portable, that means that you want to put something which is -- has a slim form factor in your device. I think one of our most recent announcement, Credence ID, there, we have won a design win in a new next-generation device that they are going to launch. And the main things that trigger them and appeal for them with NEXT Biometrics were exactly the slim form factor and the price that we could offer them compared to competition. Now if those are the 2 main things, there are other great aspects that our team has put together when we offer this solution. The sensor is a large-area sensor, secure sensor, certified by FBI, for example, but also by other government authorities and actually now also of the kind of commercial industry with, for example, within the payment industry. It's available in both rigid and flexible format, has a low-power consumption and I do believe that we can with this sensor and that, for example, what we have done with the customer Credence ID, they were before historically using an even larger sensor, a FAP30 sensor, but that is even more expensive for the customer and can sometimes also be very bulky. So I think this is why we believe we have a great technology that has the potential to help us to disrupt the market. But how big is then the FAP20 market? So then we will go to the next slide, that's Slide #7 with the header, sizable and untapped market. So you might be aware that from NEXT Biometrics, we offer several different fingerprint solutions and sensors. But as we have communicated and we'll continue to communicate, we do believe that the FAP20 is the key to the success. And if you look at the FAP20 market globally, it is estimated to be around a USD 1.5 billion market and it's a growing market. And if you recall what I said on the previous slide, it's a high-margin product with untapped potential for NEXT Biometrics. Why do I say that? Yes. Then if you look at the next point in this slide, it says that the current market price is approximately $20, and I could say, $20 to $35, $40 per sensor. That is, if you want to buy a FAP20 FBI-certified sensor today on the market, you are most probably going to buy that to the -- priced somewhere between $20 and $35, $40 per sensor. If you imagine that we can -- with our technology, and that's what I said, one of the ways to disrupt is on price if we can produce this sensor to the same price as we do when we deliver sensors to the PC industry. So for us, just because the sensor is larger and more secure, it's not more expensive for us to produce it. So this is where we believe we have a sweet spot product. We will have customers where we can compete in a great way on price. At the same time, we will not jeopardize, and we will for NEXT Biometrics, provide much higher margins compared to what the company historically have been able to do. And that's why we believe that the FAP20 market, as such, is big enough for us and where we are starting off now after this transition, and we do believe that we are equipped with a great disruptive technology to do it. And that's why we believe that you should see more design wins coming. And this is what we have as a main belief in the company and that we are pushing very hard out in the market right now. And we have started to see our first larger POs coming in also on this sensor. So the latest one, approximately 2 weeks back, you saw Credence ID, I just touched upon that. But there, we competed with a FAP30 sensor. The customer is currently very happy with the price that we offered. We get better margins than we have ever had in NEXT. And at the same time, it's a sizable order and the beauty with this device is that Credence ID have not officially even launched their product, but they have placed an initial order with us. We are now just eager to see when they are launching the product, utilizing their distribution channels. And I do hope and believe with the history of Credence that we will see that they, for example, will start to do 100,000, maybe 200,000. I cannot commit that to any of you as shareholders right now because we are very early in these design wins. I will give you an example. With Fujitsu, our largest existing customer, we have a very good relationship. We have a very good forecast from Fujitsu. So we have a very good line of sight, more or less exactly how many sensors Fujitsu will order from NEXT Biometrics during 2021. I can, for example, already from this week's forecast update see that they are actually going to pull a little bit increased volume compared to what they forecasted to us earlier this year in January and now already I see for the first half year that they're going to order a little bit more. That line of sight, we don't have with many -- since we have done the transition during 2020, I don't have that line of sight with all the design wins of the more recent ones. But I think as we, in a systematic way, start to grow these design wins, so we get more and more of them, we also get more and more insight into these customers. And then we are also going to be much better to predict what are the quarterly revenue is going to be, what are the recurring part of that and that's something that we will try to be transparent with you as shareholders. But Credence ID is a good new customer on this FAP20 product. You have also heard about Newland, the point-of-sale terminal maker who are starting to pick recurring orders with us on this product and where we start to have a little bit better insight into their forecast for 2021. But it's a great product, disruptive product and it's a large enough market. So I think these are maybe the 3 most important slides that I want to convey. It is how we, in a structured way, now are trying to scale up NEXT Biometrics and then it's with what and the key product is FAP20. But that's not everything. There are more aspects to NEXT Biometrics and we can go to Slide #8 because you have also seen announcements of recent developments that our team have done within the PC space or notebook PC space. And what we have done is that we have teamed up with a U.S. technology company called Broadcom, and we have brought together part of their solution and part of NEXT Biometrics fingerprint sensor technology, our softwares and firmwares and then we have secured that we together -- and we have also had Fujitsu with us in this project, we have secured that this new solution, a sensor including also technology from Broadcom. And then we are securing that we are compliant with the Microsoft Secure BIO requirements and protocols. This provides then Fujitsu the possibility to buy the solution from NEXT Biometrics that now is compliant and follows all the requirements and protocols from Microsoft because Microsoft will put a standard in place on the PC and notebook manufacturers. So we have supported Fujitsu here in bringing them the right technology that follows those requirements and protocols. We think this is enabling our customer and is a good way of NEXT Biometrics providing solutions to our existing customers. And also now we are then ready with, you can call it, a product solution that is compliant with the new standards arriving from Microsoft, which means that we can go to other OEMs and PC manufacturers and also try to win design wins with others. So I think it's a great technology -- technological development done by our team. It's really good that they have done this together with our customer. And this -- if all in all, from that technology perspective, I think it's really good done by the team. And the good thing for us is to now a little bit anticipate when Microsoft is going to put this standard onto the PC manufacturers. But we already see Fujitsu starting to pull orders from us. And the good thing with this solution is, of course, as we communicated earlier, we will get for this solution a little bit higher revenue per sensor, a little bit improved gross margin. So all in all, it's good technological development and it's also good for our P&L. Okay. Then I have one more slide and that's Slide #9, and it talks about traction in payment and fintech. So before I let Eirik run through the Q4 statement, I just want to end with -- and maybe linking back a little bit to how we, in a structured way, now try to make sure we get design wins and increase our orders booked in a structured way for long-term recurring revenues and then with what we do that with the FAP20 sensor, which provides us a possibility to make higher gross margins which is very good for you as shareholders. And here are some examples. And we basically just picked some of the more recent ones who are part of these 15 design wins. I think we talked about Newland before, it's the second largest payment terminal maker in the world. In our graph, I think we have Newland -- or I think -- I know that we have Newland as one of these 15, but you should be aware that actually Newland have 2 devices where they have integrated a NEXT sensor technology. We do hope that Newland will become one of our larger customers. There's a lot of activity going on for Newland in different countries, in different parts of the world where they are trying to win business with their point of sales terminals, including our biometric sensors. We -- as you saw, a while back, we did announce that, together with Newland, we were one of the first payment terminal makers and biometric sensor companies who got certified in Nigeria, where there is currently a lot of activity going on that has to do with biometrics. But I think the other good part with Newland was also that I do believe that has also had an influence that we can provide sensors in the payment and fintech industry. So after that, we have also won design wins with, for example, the most recent, another point-of-sales terminal maker in India, a company called Pagaria, and they were fairly quick from signing an LOI with us placing their first order, then coming back and replacing even further orders because they started to get traction on their product. And this is what we believe is the great way of, in a systematic way, growing the number of design wins. Not all devices will fly and become huge and successful, but hopefully, some of them. And here is another example of some positive underlying activities going on with a point-of-sales terminal in India. And the last one and not least is more of a start-up company and they make a cryptocurrency wallet where they link that to other blockchain technologies for cryptocurrencies. The company is called NGRAVE. And they want, together with their partner, to make sure they had a secure biometric sensor on this cryptocurrency wallet. And I do believe there's probably more activities that will happen in the link between blockchain technology and biometric technologies. But I think, if not -- all in all, I believe that where we start to feel more and more confident is that when you have companies like Newland, like Pagaria, like NGRAVE, they are all in the financial sector, they are in payments, they are in fintech. It's known to be very strict on security, on stability. And I do believe the more inroads we make into certain segments that fits our technology, the more structured design wins we're going to win. And here are some examples from our payment and fintech industry, which I think confirms that our technology can stand up for large-area secure sensor, certified. And I think that's a very good aspect to carry forward. So I think there, I will sum up and hand over. The next slide will be from Eirik and our quarter 4. Eirik, please?
Thank you, Peter. Thank you, Peter. Can you hear me?
Yes.
Very good. This is Eirik Underthun. I will provide the summary of the Q4 financials. You can find all the details about our financials in our quarterly report. I now refer to Slide 10 in the presentation. Our revenues were NOK 8.8 million in the quarter. This is lower than the Q3 mainly due to seasonal reduction in notebook sensor shipments. The gross margin was 16% in the quarter. The increased gross margin relative to earlier quarter is mainly due to improved product mix with relatively high -- more high-margin products in the quarter. The operating expense in quarter 4 was NOK 10.6 million compared to NOK 44.3 million in quarter 4 2019. We completed the cost reduction program in quarter 3, 1 quarter ahead of our plan. We are mindful and we do not spend money on operating outlays unless there is a good reason to do so, and you will continue to see this in the future. There should always be a good reason for spending money on operating expenses. We reduced adjusted operating expense cost by 73% from quarter 4 2019 to quarter 4 2020. And in the adjustments, I would like to point out that we booked NOK 3.9 million in Skattefunn grant, which is a reduction of the cost in the quarter. And we also had options costs of NOK 1.1 million, which leaves us with an adjusted operating expense of NOK 13.3 million for the quarter. The EBITDA ex options cost was negative NOK 8 million, which is the NOK 35 million improvement relative to quarter 4 2019. The net income for the quarter was negative NOK 8.8 million, which is a NOK 42.9 million improvement relative to quarter 4 2019. As Peter mentioned, we have had good traction in quarter 1 2021 with multiple new orders. We would like to highlight the NOK 7 million purchase orders from Credence ID for FAP20 sensors, of which half is to be delivered in quarter 1 2021. And we also had a set of orders for our new high-value PC sensors. We also got new purchase orders from Pagaria and Pagaria also increased the 2021 shipment forecast. And as a summary, we would like to highlight that we already had NOK 13 million in signed purchase orders for shipment in quarter 1 2021, and we're working to get more quarter 1 2021 orders during the remaining part of February and March. With this, I'll leave it to Peter to discuss the outlook for NEXT Biometrics.
Thank you, Eirik. Very good. Then we will jump to the last slide for today that's called outlook, so it's Slide #11. And yes, I think to summarize, more or less, what we have said and both myself and Eirik here. Our design wins have accelerated. We have recently announced multiple deals. We'll start to have traction of design wins in all 3 main product areas. More than 15 design wins since quarter 4 2019. We now have a little bit more legs to help us run than we had when we started. So that starts to head in a very positive direction. I do believe that we, during the transition year of 2020, have vetted our technology and we start to get more and more confirmation that we have a great solution in our FAP20 and that there is a big, sizable enough market for us to go to grab. We have started to see good inroads in, for example, new areas like payment and fintech that are actually placing orders and that are betting on NEXT Biometrics. And I think that's another great proof point. And to guide you a little bit and make sure that everyone has the same information. The 3 last points is more of the financial character. So revenues are expected to pick up after this COVID delays that has been around, differs between countries. We are still aiming for an annualized run rate target of NOK 150 million to NOK 200 million by end of quarter 4 or perhaps into quarter 1 2022. Remember, when I say annualized, you should divide this by 4. And if I try to link back to what Eirik said, he told -- he just told us that we have already roughly NOK 13 million in quarter 1 with improved gross margins. And if you divide NOK 150 million, NOK 200 million with 4, you can see what you -- where we need to be to reach our break-even levels and that is around the NOK 40 million per quarter. So by looking at what we are now seeing in quarter 1 and with the low OpEx run rates, we do start to see that there is a great possibility with the FAP20 and with that market to actually go and get it. And that's what the whole team at NEXT Biometrics is working very, very hard to get. We do believe and I've guided before, and we stay with that, that we should be able to provide at least 35% to 40% gross margin. As we gradually pick up and more and more of the shipments are done with the FAP20 sensors, that's when you're going to start to see that our gross margins are also arriving into the financial statements. This will be a gradual pickup, but we are saying that we are aiming to get into these levels towards the end of 2021. And you should feel comfortable, to Eirik's point, that now we are even below in quarter 4 our targeted OpEx level of NOK 15 million per quarter. And we see no reason to go anywhere above that in the short term. So I think these are the slides that we have. If I should end with something, I think I would say and lean to a little bit what I stated in the quarterly report. So with the successful capital raise from last week, I think we are now in a strong financial position. We expect -- and you should expect from us that we will continue to report on design wins and purchase orders as we go forward. This is the one dimension left. The costs are taken care of. The culture is there. Now it's the growth agenda we talked about. And you can see that we start to demonstrate the first accelerating steps in that direction. So you should expect more from us there going forward. We have a strong belief in the success of our FBI-certified FAP20 sensor and I do believe this will enable us to disrupt a $1.5 billion market. So with that, I say thank you and me and Eirik are -- have completed the investor call. But like we promised, now it's time for a Q&A. And I think, Eirik, I see that we have received even more questions. So maybe you can help me and guide me to some of these questions.
Absolutely, absolutely. So can you hear me, Peter?
Yes.
Very good. So I have one question about customers and markets. Which customer groups are most interesting and what products are expected to sell the most in 2021 and 2022?
Yes. I guess, everyone would be surprised if I say something else than FAP20. FAP20 is our key to success. 60% of our design wins right now are with FAP20. I expect that to go even higher because that is the tool we have in our toolbox to turn NEXT Biometrics around and make it successful, at least in the short run. So that is the key product. I wouldn't be surprised if we also start to see some increased volumes from India with all the activities going on in India right now and with the change to new certification level in India. But FAP20 is the key to success. If you look at -- the second part of the question, Eirik, I think, had to do with what market segments, et cetera. So the PC industry is, of course, our, let's say, bread and butter. We need to be very loyal to our current largest revenue-generating customer while we structurally make more and more design wins on the FAP20. So the PC notebook is an important area and provides a fantastic stickiness for the long run of recurring revenues. But for the FAP20, the key product, I would say there are 3 main areas. We talk about public security, so we talk voting, identification, grants and these kinds of things. So everything that has to do with public security. Then we can call another area that we now have started to call it payments, fintech. You can almost call it financial inclusion. There is still 1.5 billion, 1.7 billion people in the world who does not have access to a regular financial system. One of the biggest hurdles for that is the whole identification and verification of know your customer. And there, I see great inroads and we have started these inroads. And that's also key where a large-area certified FAP20 sensor can come in play. And then it's in the more regular access control area. So I think public security, payments, financial inclusion and access control are the markets where the FAP20 is key.
Very good. There is another question, maybe even more -- a little bit more difficult. Which product area do you think is going to be the largest in 3 to 5 years in terms of revenue: smart card, PC sensors, FAP20 or India?
No, but -- yes. I normally, as you know, Eirik, when we talk internally in the company, we try to put everything in perspective of short term, midterm and long term. Long term right now with the transition we are in, that's 3 to 4 years ahead. We are fighting nail and toe with balancing what's important and what is urgent in the kind of short-term area. And I would say that I do believe that FAP20 will be the largest area for NEXT Biometrics, at least in the next 12 to 18, 24 months. I do believe that India will be the one following. So I think those are the 2 most critical areas for us with what we know today and see today than what we have in front of us. Can this change in 3 to 4 years? Absolutely. If we succeed with this, are there possibilities for us? Why don't we make, for example, an even larger sensor where the market prices are even higher? We can disrupt that as well. But where we're standing right now, I think we should stay very focused on the FAP20.
I have another question here about the new PC sensor product. Are you targeting the broad PC market? Or are you targeting a smaller share of the market, let's say, 5%?
That's a good question. But then we need to set the baseline straight here. As NEXT Biometrics, we are not targeting the consumer part, so the broadest and the largest part of the PC market. Most people will realize that what they have on their laptops or PCs is a very small and in many -- most cases, I would give the capacitive technology sensor providers the benefit of having a fit-for-market solution for that. NEXT Biometrics is more targeting the PC OEMs and the notebook providers for their B2B lines, those segments where the OEMs have all kinds of different lineups of computers that are more for the B2B market, which require a higher standard of security and where a larger-sized sensor is better fit and where it's also a little bit better average sales price per sensor, et cetera. So that's where the market fit is with NEXT Biometrics. So yes. I think that's my explanation there, Eirik.
Very good. I have 2 people who sent questions about smart cards and payment cards, I'll just combine those 2 questions. Do you see a future market within payment cards for NEXT? And also, can you talk about smart card opportunities? Are there signs of life?
Okay. So the payment card question is very interesting. But I think like we have said, and I think I have stated this before, I do not believe for NEXT Biometrics that payment card will be something huge. I know there is a lot of activity out there in the market related to payment cards and biometrics. This might happen. If it happens, since that is mainly the large quantity, the really big volumes are in consumer-related products. So you are most probably going to meet razor low pricing, razor low margins and probably you should have a razor small sensor on the card. How that will play with security levels, I'm not sure. So I think for us, we are in a larger-area sensor. And I think that smart cards provide a much better possibility. And I think here, you can argue what is a smart card and that can be everything from a smart identity card to a smart access card. And I do believe and we see more and more -- and I do believe more and more with development will happen here. There are many corporate organizations still walking around with an access card without any link to a corporate environment more than that the card can enter a building. That doesn't say who is entering the building. That could be a potential smarter card where our larger-area sensor and smart cards and those use cases also provide a better possibility to a higher average sales price per sensor, higher margins and requires a higher degree of security. So I think smart card is absolutely something that we are ready for, we have solutions for it. But like we have stated before, we are not doing more R&D around it if we don't see opportunities linked to customers and where we do joint activities with customers. We are currently in dialogues with at least 2 or 3 potential smart card projects. I don't want to give any false expectations or something, but early stage dialogues and we have solutions for it. So this can come in play. But like you heard me said earlier, I do believe FAP20 devices, this is where we start to scale NEXT. That's the first step.
Right. I also have a question about design wins. Are you releasing news about design wins straightaway? Or are you waiting to announce the design wins until you get an order?
Yes. And here, I have to excuse how we potentially do this and not in a very structured way. We try to do our best, me and Eirik, in terms of depending on what kind of device we are talking to and what it's relating to, we might actually announce just a design win. We do announce design wins when we have confirmation from the customer that they have choose to design in our sensor. Sometimes we might not even tell you guys that we are designed-in because we actually have more than these 15 that we have announced, but we have no visibility or we don't feel comfortable at all whether this is going to do any impact-able, from a positive perspective, sizable numbers. So then we do wait until we get more and more insight into this. So you will continue to see us most probably announce if we believe we get a design win with a very good potential, we're going to try to explain that immediately and as quick as possible when we have the confirmation of just the design win. And then you, as shareholders, have to be aware and we're going to try to guide when we believe due to our customers' test and life cycle, R&D, components, et cetera, buying and then mass production when we believe that we're going to start to see the first orders. So I think it's going to be a mix of sometimes you're going to see design wins, including an initial order. Sometimes you're going to hear us talk purely about the design win. But we're going to try to be transparent and accurate in how we guide on that.
Excellent. There's a question about the OpEx guiding. What is your OpEx guiding for the next 12 months? Do you plan to increase investments and/or raise the OpEx? I will try to answer that. So as you see, we had NOK 13.6 million adjusted OpEx in this quarter, which is below NOK 15 million. We are targeting a NOK 15 million per quarter OpEx level in 2021. And as you know, we are sensitive to exchange rates and changes in the volume of the business that we are doing. But still, I think we are guiding on NOK 15 million and we will stay below that number on a quarterly basis. We have no current plan to increase the investments. But this is something we will update in future quarters.
Yes. That's good. No, it's a good answer, Eirik. All shareholders should feel comfortable that we will stay within this level. Like you saw now, we were even a little bit lower. We have -- so to say, we have trimmed down this horse. But if we want to be a winning racehorse, we're going to have to add some additional costs. But you don't need to worry, as shareholders, that we're going to go above any levels that we have communicated. So hopefully, where we're going to end up is that we start to demonstrate that the revenues are increasing, our gross margins are increasing. Then we, of course, if we can accelerate even further, that's an active decision from our side and then we will communicate that very clearly on why and when you, as shareholders, can expect something there. Yes.
Yes, Peter. That was the end of the questions.
Okay. Then I think the call, we have come to an end. If there are no further questions coming in, Eirik, then I think we should say thank you, everyone, for joining this call. And feel free to reach out to me and Eirik, if you would have any further questions and we will try to come back to you. All right. Thank you.