Precise Biometrics reports 2018 earnings and introduces new digital identity product

Feb 12, 2019, 8:15 pm EST | Stephen Mayhew

Precise Biometrics reports 2018 earnings and introduces new digital identity product

Precise Biometrics has reported net sales of SEK 13.9 million (approximately US$1.5 million) for Q4 2018, and 67.6 million ($7.3 million) for the full year, a slight decline from the quarter a year earlier but up 10.8% on the full year as the company starts to develop solutions to secure digital identity.

The net sales represent a decline of 1.6 percent for the quarter from Q4 2017 and 10.8 percent for the year. Precise Biometrics’ gross margin in Q4 fell to 80.5 percent from 91.7 percent in the same quarter a year ago, and had an operating loss of SEK 14.3 million ($1.5 million). For the full year, the company had an operating loss of SEK 19.96 million ($2.2 million). Net sales for 2018 were SEK 67.7 million ($7.3 million).

The past quarter saw Precise Biometrics unveil its revised strategy which will see the company pivot from a focus on fingerprint technologies for mobile devices to develop solutions for uniting various biometric modalities. The new strategy involves working with collaborative partners to build technologies applicable to the finance, gaming, medical, and security sectors, supplying continuous user identification to ensure a convenient and secure experience.

The Swedish biometrics firm also continued its planned reorganization to improve customer service and enable growth in new areas by closing of its Karlstad office and opening an office in Shanghai.

In the year-end report CEO Stefan K. Persson discussed the journey towards moving Precise Biometrics closer to the end customer and the progress the company has seen in developing its new product, Precise YOUNiQ, which secures digital identity by combining different kinds of biometrics, such as face, fingerprint, iris and voice together with geodata. According to the CEO’s statement, the product simplifies people’s everyday lives by means of simple onboarding, smooth and secure authentication and unique personalization of digital services.

Precise Biometrics’ three main business areas are digital identity, biometric cards and mobile devices.

During the first half of 2019, the company expects to undergo digital identity pilots that involve conducting tests together with customers, before moving into a commercial phase during the H2 2019. Precise does not expect this to generate any significant revenue this year, as this year’s focus will be on preparing the product ahead of next year. The company also noted they have a number of strong partnerships in the biometric cards arena and are expecting modest initial volumes during the second half of 2019, with volumes increasing during 2020 and 2021. The mobile devices business area is expected to account for the biggest proportion of revenue in 2019 as the company continues to have strong collaboration within the mobile area with actors such as Qualcomm and a number of sensor partners in China and Korea. The new office in Shanghai will also play an important role for the mobile business area.

During the quarter a subsidiary of Xiaomi in China released an electronic door lock for domestic use that integrated Precise Biometrics algorithm solution. The launch had a big impact in the media in China, indicating the interest in new biometric solutions for consumers.

“The journey to move Precise Biometrics to a higher level in the value chain will be our primary focus during 2019,” commented Persson. “We are convinced that the reorganization of the business, which will soon be completed, will make a positive contribution to our development and financial results. With continued high volatility in the mobile market, 2019 may be a challenging year from a financial perspective. Precise Biometrics does, however, have a secure financial position, which makes the initiatives we have undertaken possible and which we are convinced will contribute to an improved financial result in future years.”