"Next Vision set to Maintain Profitability Without Raising Prices"

Next Vision has been one of the hottest stocks on the exchange in recent years. It got a significant boost from the onset of the Russia-Ukraine war, and the war in Israel provided another tailwind. Today, it leads the market for stabilized cameras for military drones—a sector experiencing rapid growth. Warfare is increasingly being conducted remotely—not yet with robotic soldiers, but with autonomous and remotely controlled systems, with drones among the most popular.

They are agile, relatively easy to operate, have an almost negligible radar signature, can collect intelligence discreetly, and exit the battlefield quickly. For all these functions, high-quality cameras with superior stabilization capabilities are essential—and that’s exactly what Next Vision provides.

The surge in demand and improving financial results have sent the stock soaring—up nearly 11x since the start of 2023. In 2024, revenues grew by 121%, following a 133% increase in 2023. Profits in 2024 jumped 63.6% to $18 million, on top of a 150% surge in 2023.

For 2025, the company expects revenue to reach $160 million, reflecting "only" 39% growth—a slowdown compared to recent years, but a natural outcome of the law of large numbers: the bigger you get, the harder it is to maintain the same pace of growth. Next Vision is now a company valued at 6.7 billion shekels (nearly $2 billion)—no longer a small player.

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However, the company released this forecast three months ago, before Trump took office and began making statements about reducing U.S. support for Europe—comments that prompted European governments to expand their defense budgets. This suggests that Next Vision’s projection
may actually be conservative given the geopolitical shifts since its publication. When asked about this, Chairman Chen Golan noted that the company has yet to see the impact on the ground, but the trend is clear.

How do you view 2024?

"The 2024 results reflect the hard work of our dedicated team, who invest tremendous effort to ensure our success. We're a development-focused company that continuously introduces new products and has been growing for four years. The challenge is to keep up the momentum. Our goal is ambitious, but I’m confident we’ll achieve it if we keep pushing. We continue investing in product development and understanding
our customers' needs to remain their first choice. We’ll keep innovating and plan to launch 2-3 new products in 2025."

Is the projected 39% growth in 2025 conservative? Could European trends push your results beyond this forecast?

"As of now, we are working towards that target. If circumstances change, we’ll update our guidance. We’re not there yet—it takes time for European policymakers' declarations to materialize on the ground. These things take time to trickle down, but the direction is clear. The EU has stated that it will allocate between 1.5%-2.5% of its GDP to defense, while the U.S. has committed to 5%—these are massive sums, in the hundreds of billions of dollars. Additionally, all parties have indicated they will expand across all defense sectors, including drones."

How much of these investments do you expect will flow into the drone sector?

"It’s hard to quantify our market because there aren’t many players—some small firms and a few larger ones with drone-related divisions. That said, forecasts indicate significant growth in this field in the coming years, so I assume a portion of the European and U.S. investments will find their way here."

Your gross margin exceeds 70%, and your net margin is over 50%. Can you maintain this level of profitability?

"Next Vision hasn’t raised prices for customers in five years. We’ve focused on internal efficiencies to maintain both prices and
margins. Our products are considered relatively affordable compared to the competition. Since we’ve been around for a while, our margins are already quite stable, and I don’t foresee significant changes there."

How will you maintain your competitive edge as new players enter the market?

"There are many ways to do this. Our approach is to continue developing and accelerating both new and existing products. We are focused on creating solutions that customers need. When you develop good, cost-effective products, you can capture market share. We see ourselves as an R&D-driven company, and that’s where we invest our resources."

You have $74 million in cash and generate $68.4 million in free cash flow. What about acquisitions?

"We’ve been evaluating this for a long time. I see it as a critical move, but acquiring a company just for the sake of it isn’t smart. We need to find the right company with strong synergies so that 1+1 equals more than 2. The price has to be right, too. We’re working on it and hope to announce
at least one acquisition this year."

Are you focusing on acquisitions within your field, or would you consider expanding into new areas?

"I believe in focusing our energy. Diversification introduces different challenges. We’ll expand, but in a controlled and gradual manner."

When will we see a Nasdaq IPO? Is it up to you, or more dependent on the U.S. market?

"It’s our decision. I know of companies with lower valuations than ours that have gone public in the U.S., but we’ll do what’s best for
Next Vision. I’m not sure being a small-cap company on Nasdaq is the right move for us. We’ll build value, and when the time is right, we’ll proceed with an IPO."

If you list on Nasdaq, will you remain listed in Tel Aviv as well?

"I don’t know. There are both good and bad examples of dual listings. We’ll cross that bridge when we get there."

What’s next for Next Vision in terms of products? Will you expand beyond imaging?

"We’ll broaden our scope a bit—there’s no choice. But whatever we do will have strong synergy with our existing operations."

How many employees does the company have today, and do you plan to hire more this year?

"We currently have 102 employees. I expect that by the end of 2025, we’ll have at least 115. We also recently moved to a larger facility in Ra’anana, which gives us more room to grow in every sense."