Earnings call transcript: Desert Control’s H1 2026 update leans on runway, trials

Desert Control's first half of 2026 was characterized by restructuring efforts, financing work, and an expanding portfolio of field trials, while maintaining a full-year revenue forecast of NOK 2 million. The Norwegian firm concluded that H1 2026 primarily represented operational modifications rather than a significant financial turning point.

The company relocated research and development activities from Norway to California and Arizona, consolidated its U.S. operations, and added personnel to sales, operations, and scientific teams. This shift aimed to make the business more concentrated and efficient, focusing on the water-scarce U.S. Southwest, particularly California and Arizona, where the value of water-saving technologies is more apparent.

Desert Control highlighted an increased field trial pipeline, with agriculture pilots and technical trials accelerating in Q2 and Q3, with more expected in Q4. Management emphasized the company's progression through a commercial process, starting with pilots and expanding to larger deployments once customers observe results on their properties.

The primary financial message conveyed by management was the retention of revenue guidance at NOK 2 million for 2026, implying that the company did not perceive substantial changes in near-term business conditions to adjust its outlook. This lack of a clear earnings surprise suggests that stock movements are more likely driven by balance-sheet factors, such as cash runway and commercial conversion pace, than by headline profit figures.

The stock closed at $0.31, marking a 5.43% decrease from the previous close of $0.32, and near the lower end of its 52-week range ($0.30-$4.44). Despite a 83% decline over the past year, the stock is trading near its 52-week low, with InvestingPro's Fair Value analysis indicating potential undervaluation. Investors remain cautious, emphasizing the importance of financing, pilot conversions, and proof of commercial scale over traditional earnings metrics during Desert Control's current phase.

Management reiterated its confidence in the technology's consistency and potential, while Board Chair Lars Eismark cautioned about the stock's valuation and market sentiment. The company's next six weeks, particularly September, are considered critical, with Harvest data from spring applications anticipated between October and December, and leafy green results expected in May 2027.

Strategic priorities include improving core technology consistency, securing grants for carrot and leafy greens work, and ongoing collaborations with Syngenta in the U.S. and the Middle East.