Biometrics stocks this week: VASCO, Precise Biometrics, Fingerprint Cards
A name new to this column is VASCO Data Security International. Don’t bother committing it to memory. The name changes next week. Monday, June 4th, the company once known as VASCO will begin trading on the Nasdaq exchange as OneSpan. Shares in the company will trade under the symbol “OSPN”. The re-branding comes as the company unveils a new biometrics-heavy identity management business that is expected to be the future of the organization.
According to a press release the recent acquisition of a company called DealFlo will allow OneSpan to provide one-stop-shopping for financial services firms looking to update their system security.
The newest bit of digital kit is an intelligent adaptive authentication product. The program reviews user behavior data from devices, mobile applications and real-time transactions. The AI can be configured with rule sets to analyze and score that data. The result is a constant, real-time monitoring of the account, a more “precise” level of security according to the press release.
Speaking on the company’s last conference call the CEO of OneSpan warned analysts big news was coming. “I want to start by noting that we’re on the eve of the most significant product introduction since VASCO’s original authentication solution,” said Scott Clements, CEO, OneSpan, on the call. “Later this month, we will announce the details of our initial trusted identity platform offerings… a much needed and profoundly innovative approach to address the tens and billions of dollars that banks are losing to fraud annually.”
“The nature and sophistication of attacks against banks, especially in online and mobile channels, have reached new heights and require a new approach,” said Clement at the time.
The news arrived this week. The OneSpan Trusted Identity (TID) platform will leverage artificial intelligence with machine learning to reduce fraud for onboarding, online and mobile transactions, real-time detection, fraud analytics and multifactor authentication. “The TID platform represents the next evolution of OneSpan’s two decades of leadership in preventing fraud and hacking attacks against the world’s leading financial institutions,” according to the release.
So no wonder the rebrand. With the revamped product line it was time to freshen up the image.
OneSpan acquired privately-held Dealflo for a reported USD $54.5 million. Dealflo is a provider of identity verification and “end-to-end financial agreement automation solutions.” The system automates the key processes in financial institutions, the application process, identity verification, tailored contract generation, eSignature capture and secure vaulting. A tech trade publication noted the symmetry between the two companies. Dealflo is headquartered in London with its development center in Montreal, which is where OneSpan’s largest development center is. The products produced by the two companies are integrrated with each other. Half of Dealflo’s customers are also clients with OneSpan.
As a result of the transaction, OneSpan has revised its guidance for the full-year 2018 as follows: Revenue is expected to be in the range of $201 million to $211 million; adjusted earnings are expected to be in the range of $15 million to $19 million. Clements added, “While our revised guidance reflects the near-term financial impact of acquiring an early-stage technology platform, we see tremendous opportunity to leverage this strategic addition and deliver significant long-term revenue and [earnings] growth in the years to come.”
The company is doing well. Results in the first quarter were good. Revenue grew 8% to $45 million, driven by the doubling of revenues from mobile security software. The company also enjoyed 50% growth in its eSignature solutions. The growth was partially offsets by an expected decline in hardware. The cash balance at the end of the quarter was $166 million. “We’re focused on utilizing our cash to drive shareholder value by actively pursuing strategic acquisitions and by investing in our next generation trusted identity platform based solutions, such as adaptive authentication,” said Clement. “We remain pleased with our progress and the performance of our business. Our growing pipeline of opportunities gives us confidence that 2018 will be a year of solid growth.”
Investment analysts at Imperial Capital boosted their second quarter estimates for VASCO Data Security International in a report from May 10th. The analyst anticipates the technology company will earn $0.09 per share for the quarter, up from their previous estimate of $0.08.
Shares in what was end of day trading May 31st, VASCO, gained about two dollars in the wake of the announcement to trade around USD $21.72. Don’t forget: In the week ahead the stock begins to trade as OSPN.
Precise Biometrics secured a new spot in the race to bring contactless biometric-based smartcards to market. The company announced this week that it launched its Precise BioMatch Card as a stand-alone product. The card supports fingerprint sensors with an area down to 30 mm2 according to the release. The card has been deployed in several trials. “Smart cards is the next growth area for fingerprint technology. In payment cards alone, there are over three billion cards issued globally every year. As a frontrunner in the development of biometric payment cards, it´s important for us to provide Precise BioMatch Card that specifically addresses this market,” said Torgny Hellström, executive chairman of the board, Precise Biometrics. The news sent shares in Precise up from SEK 1.53 to SEK 1.68 over the past couple days.
The shake-up at Fingerprint Cards (FPC) continues. The company announced more changes in the executive management roster this week. FPC announced that Pernilla Lindén will, “… not be taking on the role of the company’s chief financial officer as expected, and has initiated the recruitment process for a new CFO.” This is an interesting, intriguing bit of news. Previous communication from FPC was that Lindén would start as CFO June 7. Apparently he has declined the role due to personal reasons (according to the release from FPC). Instead, Fingerprint Cards group accounting manager Ylva Blomén, will become Acting CFO. According to a press release Blomén has held her current position since March 2016. Previous positions held include CFO of Serneke and Group Financial Controller at Hexpol. The latest departure is one in string of recent executive departures. Last month, Hassan Tabrizi, CFO, and Jan Johannesson, vice president strategy and corporate development, also announced they would be leaving the company.
Shares in the company were trading as high as SEK 6.79 earlier this week before settling back to SEK 6.35.
Another mention of Fingerprint Cards is found in an announcement from the board of Norwegian biometrics technology company Zwipe who announced it had elected a former FPC CEO to chair.
According to the press release former Fingerprint Cards CEO Jörgen Lantto was elected as the new chairman of Zwipe’s board at the recent AGM. He replaces Clas Thelin. Lantto has been a member of the board since November 2016 and was described as a “key strategic advisor working closely with the company’s management to shape the path Zwipe takes moving forward.”
Lantto participated in an equity capital round last February that saw the company raise new share capital. At the time it was reported that Zwipe is, “… pursuing a growth strategy, strengthening its organization, board, partnerships and market presence in preparation for a commercial launch of its technology for payment solutions, and moving toward a larger scale product roll out.”
Also elected to the board was Dorian Barak, who will replace Dr. Lui Ruopeng as board representative for the company’s largest shareholder, Kuang-Chi.
According to Wikipedia Kuang-Chi Group is a “Chinese company that develops and invests in metamaterial, telecommunication, aerospace, smart-city, AI and digital health technologies.” Founded by five Chinese PhD scholars, it is headquartered in Shenzhen, China. The Wikipedia page goes on to note that, “While Kuang-Chi is not a state-owned enterprise, the Chinese government has supported the company’s research. In 2012, Kuang-Chi was the first company Xi Jinping, current General Secretary of the Communist Party of China visited as party leader. In 2017, Kuang-Chi joined other leading Chinese technology companies such as Baidu, Alibaba and Tencent in investing nearly US$12 billion into the state-owned telecommunications company China Unicom, the start of a government initiative to introduce private-sector expertise and innovation into China’s state owned enterprises.”
Dorian Barak is said to be a “seasoned private equity investor and fund manager.” The CEO of Indigo Global, a capital advisory firm, he serves on the boards of directors of companies active in the technology, natural resources and aviation sectors. He is an executive director of Kuang-Chi Science Limited and chairs its international activities, which include investments in technology companies in North America, Europe and Israel.
biometrics | Fingerprint Cards | OneSpan | Precise Biometrics | stocks