• Revenue: Increased by 100% from SEK 9.1 million in Q1 2024 to SEK 18.2 million in Q1 2025.
• Gross Margin: Healthy at 56.6%.
• EBITDA: Positive SEK 10.7 million, supported by the Smart I deal.
• Free Cash Flow: Negative SEK 22 million due to discontinued operations.
• Cash Position: SEK 52.6 million post rights issue.
• Headcount Reduction: Down 70% year-on-year.

• Warning! GuruFocus has detected 6 Warning Signs with FRA:FPQ1.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Fingerprint Cards AB (FRA:FPQ1) reported a 100% increase in core business revenue, reaching 18.2 million SEK in Q1 2025.
• The company achieved strong gross margins, indicating successful entry into more profitable markets.
• The strategic transformation plan is showing positive results, with significant progress in stabilizing the business and moving towards growth.
• The company has successfully reduced headcount by 70% year-on-year, aligning its cost structure with core revenue.
• Fingerprint Cards AB has entered into promising partnerships, such as with Anonymits, to expand into new markets like decentralized biometric authentication.

Negative Points

• Despite improvements, the company's EBITDA remains negative, indicating ongoing financial challenges.
• Free cash flow was negative at 22 million SEK, primarily due to discontinued operations, highlighting cash flow management issues.
• The company is still in the process of winding down its mobile and PC operations, which continues to impact financials.
• The economic environment remains unpredictable, with potential impacts from US tariffs, requiring careful monitoring and agility.
• The transformation process is ongoing, and while progress is evident, the company acknowledges that it is not yet complete.

Q & A Highlights

Q: Can you provide an update on the cards part of the business? A: Adam Philpott, CEO: We are seeing a convergence in the hardware stack for biometrics, particularly on the payment side. Payments are becoming a feature of a multi-function product rather than a standalone product. We saw some business in Q1 across different areas, and we are responding to market trends accordingly.

Q: How should we view the revenue from the licensing deal with technology on the mobile side? Is it part of the core or discontinued operations? A: Fredrik Hedlund, CFO: The licensing deal is part of discontinued operations. It was a one-time payment, and future revenue will depend on how well the licensee executes. We are focused on asset monetization deals in our core space.

Q: Will the 70 million Krona cost base include R&D depreciation, and will it be phased out? A: Fredrik Hedlund, CFO: The 70 million does not include R&D depreciation. Depreciation is non-cash, and we are running the business on a cash basis until cash flow becomes positive. R&D depreciation will be broken out in our financials for clarity.

Q: When do you expect the negative cash flow from discontinued operations to be phased out? A: Fredrik Hedlund, CFO: The bulk of the negative cash flow from discontinued operations should be phased out by the end of the first quarter. There may be minor costs related to winding down legal entities, but significant impacts are not expected in the future.

Q: Can you comment on the potential for FPC in automotive design wins and other aspects of the Smart ID agreement? A: Adam Philpott, CEO: While design wins in automotive are positive, they do not immediately translate to revenue. The process involves production readiness and customer orders. We are seeing demand for our capabilities, and the Smart ID agreement is bidirectional, allowing us to explore new opportunities beyond automotive.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.