Fingerprint Cards issues optimistic interim report as transition continues

Fingerprint Cards has recorded sequential revenue growth, strong cash flow and positive net results in Q3 2018, although year-to-date revenue totals are down 53 percent from the previous year to SEK 1,110.8 million (roughly US$121 million), according to an interim report on the company’s first three quarters of the year, from January through September.

During the quarter the company received its first volume order for its FPC1511 fourth-generation capacitive sensor, which was announced, along with the three market segments it will pursue as strategic priorities at Mobile World Congress in August. The FPC1511 is a cost-optimized sensor for mobile devices, one of the three target areas. The other two strategic target areas are contactless smart cards and biometric applications enabled by 5G, such as automotive and IoT integrations.

“The positive sales trend that we experienced in the second quarter continued in this quarter, which was reflected in sequential revenue growth of 11 percent, a positive net result of SEK 2.9 M and positive cash flow of SEK 202.5 M,” says Fingerprint Cards CEO Christian Fredrikson. “We are maintaining our focus on reducing our costs and increasing our products’ cost effectiveness to meet the price pressure within capacitive sensors. The cost reduction program launched in June is proceeding to plan. As previously communicated, during the summer we launched a fingerprint sensor with a lower production cost relative to the present generation of sensors, but whose biometric performance remains high. This sensor – FPC1511 – has now undergone all tests with highly favorable results and it has been well received by several major OEM customers. We have already received the first volume orders and we expect the first commercial mobile phones using FPC1511 to be launched at the end of this year or at the start of 2019.”

Frederikson also says the price decline for capacitive sensors will exceed 30 percent in 2018, with the trend continuing into 2019. The company is conducting development projects for in-display fingerprint sensors, which it believes will make market progress next year. Fingerprint Cards intends to capture a position in that market with its optical sensor technology in 2019.

Frederikson said in the report that major payment card brands will likely certify contactless biometric cards in the first half of 2019. While the company’s volumes in that market are expected to be modest next year, it expects a broader commercial launch in 2020. The company’s T-Shape module is integrated in biometric dual-interface cards being launched for banks and loyalty programs in China by Zwipe and Silone CardTech, Frederikson says.

After announcing a partnership early this year with Gentex to provide iris authentication for automotive applications, the company launched a fingerprint sensor for the market in September.

A busy recent slate of activity for FPC has also included the appointment of a new CFO, filing a patent infringement suit against Goodix, and since the close of its third quarter, signing a distribution deal for India to address the country’s smartphone market.

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