Biometrics stocks this week: BIO-key, NXT-ID
Weird times. Hawks are in the White House. Trade wars are brewing up. This is not what markets want to hear. No wonder stock markets continue to frighten investors.
Last week’s single-day, 700-point slide was scary. It could get worse yet. Strangling global trade through tariffs and duties would have a huge negative effect on global growth. A trade war between the U.S. and China would see businesses put off decisions on spending. Managers will take a wait-and-see attitude toward investment. All-in, the Dow Jones average is trading around the 24,000 range on Friday, down from the record high of about 26,600 in the January.
Within the biometrics sector there was some good news from BIO-key. The company released its latest earnings and was happy to announce that performance doubled in many areas. Revenue from licenses was up an impressive 167%, rising from USD $1.2 million to $3.2 million. Total revenue advanced smartly, rising 110%, from $3 million to $6.3 million. Gross profit also moved up, hitting $3 million, an advance from $2.2 million the year previous. Plans are beginning to pay off. “As multi-factor biometric solutions gain increasing traction in mainstream use, we believe these core initiatives position BIO-key for significant growth in 2018 and beyond,” said Mike DePasquale, CEO. In terms of 2018 guidance, BIO-key expects $8 million to $12 million for the full year 2018. This would be a tipping point for the company. According to management, “Within this revenue range, management expects that BIO-key can generate positive cash flow from operations in 2018.”
BIO-key did register a net loss on the year. But it was smaller than the year previous. The other story line is that the business is moving in the right direction, and that’s the important part. In 2017 the net loss also included $531,000 in fees and costs to uplisting BIO-key shares to the Nasdaq Capital Market. Previously BIO-key traded on a junior market. The uplisting cost is one-time, so that’s good. Commenting on the year DePasquale said, “Our 2017 growth was the result of solid sales execution across the business, supported by the increasing realization by enterprise customers that passwords alone are inadequate to protect networks, data and transactions. Growing recognition of how biometric solutions can solve both external and internal enterprise security vulnerabilities is accelerating the pace of biometric adoption, a trend we believe will continue in 2018.”
BIO-key stock has had a great week. The company’s shares were trading as low as USD $1.90 earlier in the week. By the end of the week they were trading at USD $2.10, up almost ten percent on Friday alone.
An interesting use for a biometric function showed up in a recent filing with the U.S. Patent and Trademark Office by Amazon. The company has registered a patent for a delivery drone that can “respond to human gestures,” according to a report. This is an interesting and exciting idea.
A current trend in the automated vehicle (AV) world is to develop small unmanned AVs that can be used to deliver packages right to a client’s door. These new vehicles devices will rely on biometric sensors to know who to release goods to.
A device being developed by a company called Nuro is considered a “local teleportation service.” The company’s delivery pod weighs about 1,500 pounds. It’s the length and height of a conventional SUV, but only 3.5 feet wide. The vehicle can carry 250 pounds and travel along a sidewalk. Grocers could order one with refrigeration. A dry-cleaner might buy one with hanging racks. Biometric security features will be key to ensuring products are made available only to those who did the ordering.
A food delivery startup, DoorDash, recently received a huge investment of $535 million through a round of funding from Japan’s SoftBank and major Silicon Valley VC firm, Sequoia Capital. The San Francisco-based based company wants to be an order fulfillment service that does deliveries beyond food. The company’s CEO has been quoted as saying, “Our vision for DoorDash is to build the last-mile logistics layer to empower every business to thrive in the digital and convenience economy.” So there is an interesting new market coming together here. Biometrics are going to be key.
Amazon has already filed a patent application for a detailed plan for an autonomous ground vehicle (AGV) that can roll out from someone’s home, pick up a package from a delivery truck and bring it to the right place. One idea being discussed is the idea that drones will be integrated into vehicle designs to deal with the “last few feet” of deliveries. The AGVs may “service a group of users in a given area (e.g. in an apartment building, neighborhood, etc.),” according to a report of the Amazon filing.
The latest Amazon patent filing takes all of this stuff to a new level. The patent is for a drone that responds to a person’s gestures. When someone is waiting for a delivery drone they’ll be able to wave it in to their home. The drone will react to hand signals, will ID the person. According to a report of the filing, “The human recipient and/or the other humans can communicate with the vehicle using human gestures to aid the vehicle along its path to the delivery location.” According to the report, the drone’s communication system would include an, “… array of sensors, including a depth sensor and cameras to detect visible, infrared and ultraviolet light. The drones would be able to recognize hand and body gestures, human voices and movement, such as a person walking closer to the drone or away from it.” The new market here for biometrics-based sensors is huge.
Amazon shares have been hit in the recent sell off as well. Investors are worried a new round of regulations could rein in the company’s growth. Trump this week threatened to “go after” Amazon. Shares have dipped six percent of late, but were up slightly on the day Friday at USD $1,447.34.
Another couple of bits of news worth noting this week:
– NXT-ID has been added to an index of small cap companies, the LD Micro Index. The index is comprised of approximately 1,014 stocks in the U.S. and Canada with market capitalizations between $50 million and $300 million. It was added to the index February 1st, 2018. According to Gino Pereira, president and CEO of NXT-ID said, “This is an exciting time to be added to the LD Micro Index and join our other successful peers in the microcap space.” LD Micro was founded in 2006 to cover stocks in North America with market capitalizations between USD $50 to $300 million.
– Privately held firm BioCatch recently announced that it closed a $30 million round of financing. BioCatch is an Israeli company involved in behavioral biometrics. The company’s head office is in Tel Aviv. The company was founded in 2011 and offers Cyber Catch, an online account protection solution that enables continuous transparent authentication for online accounts, such as online banking, small business banking and online trading. The company also offers MobiCatch, a mobile application protection solution that provides behavioral biometrics authentication for mobile banking, mobile wallets, mobile payment applications, and other mobile application based accounts. The offering was bought up by a series of private equity firms, including Maverick Ventures along American Express Ventures, NexStar Partners, Kreos Capital, CreditEase, OurCrowd, JANVEST Capital and others were involved in the financing. The funds raised will be used to advance the company’s growth plan according to the company’s CEO.