Fingerprint Cards AB (publ) publishes interim report for January – March 2024

Highlights

Q1 2024

• Positive momentum in PC continued, with an 80-percent year-on-year growth
• Slight increase in gross margin compared to the previous quarter, as profitability in non-Mobile areas continues to be strong
• Continued execution of cost optimization program, with a nine-percent reduction in the number of employees since the end of 2023
  
  

Post-Q1 2024

• By winding down the loss-making operations in Mobile, we will have a focused and profitable growth business
• Announced partially guaranteed rights issue of up to approximately SEK 310 million, strengthening balance sheet by reducing debt and increasing equity through an early repayment of outstanding convertible bonds

First quarter of 2024

• Revenues amounted to SEK 146.4 M (117.0)
• The gross margin was 11.1 percent (17.3)
• EBITDA amounted to negative SEK 50.5 M (neg: 60.2)
• Adjusted EBITDA amounted to negative SEK 50.5 M (neg: 60.2)
• The operating result was negative SEK 74.9 M (neg: 75.7)
• Earnings per share before and after dilution amounted to a negative SEK 0.14 (neg: 0.17)
• Cash flow from operating activities was negative SEK 60.1 M (neg: 42.3)
  
  

CEO’s comments

Our PC Product Group, along with mobile, has driven a 25% increase in overall revenue compared to last year, a significant performance that underscores our positive revenue momentum. A highlight of this is an 80% surge in the higher-margin PC Product Group, in a quarter in which we announced the launch of the Asus Expertbook B5 laptop featuring our Match-on-Chip biometric solution. With our technology now adopted by four of the top five Windows PC manufacturers globally, we expect sustained growth in PC adoption with fingerprint sensors, reinforcing our strategic direction. Additionally, despite challenges in the Chinese residential real estate market affecting biometric door lock sales, the rising demand for FIDO-related logical access solutions in North America and Europe signals our successful pivot towards higher-margin markets and system-level expansions.

Gross Margin Performance

This quarter, we observed a slight improvement in our gross margin from the previous quarter, primarily due to robust profitability in our non-Mobile Product Groups. However, year-on-year comparison reveals a six-percentage point decline in our gross margin. This reduction is mainly due to challenging market conditions within our Mobile Product Group, which remains our most significant revenue contributor. Despite inventories stabilizing at more typical levels, substantial price pressures in the Mobile sector continue to challenge us, and we expect these pressures to persist in the upcoming quarters.