Biometrics stocks wrap: Mitek reports record revenue as Thales, Aware, Qualcomm see long-term growth signs
Biometrics and digital identity technology providers continue to weather the historically challenging environment, with remote banking and other transactions giving Mitek its best quarter yet. Thales was able to mitigate the downturn’s effects somewhat, Aware believes it is well-positioned for a bounce-back, and Qualcomm sees its investments paying off soon, rather than not at all.
Increased demand for biometric identity verification and mobile deposit technology led to record revenues for Mitek in its fiscal third quarter, which ended June 30. Revenue was up 16 percent, year-over-year, to $25.4 million.
The company reports GAAP net income of $1.3 million, or $0.03 per diluted share. By non-GAAP, net income jumped by 43 percent to $6.8 million, or $0.16 per diluted share. Mitek says its cash flow from operations was $9 million, and it was left with $52.2 million in total cash and investments at the quarter’s end.
“Our record revenue and strong financial performance demonstrate the benefits of our technology solutions in this rapidly shifting digital economy,” states Mitek CEO Max Carnecchia. “We are committed to helping our customers and partners navigate the challenging environment as they accelerate their digital transformation.”
Thales hit by aviation slowdown
Thales Group has recorded first-half 2020 sales of €7.8 billion (US$9.2 billion), down 5.4 percent from the previous year, or 13.6 percent on an organic basis, as the pandemic struck the civil aeronautics market particularly hard. Consolidated net income was €65 million ($77 million), down 88 percent.
Chairman and CEO Patrice Caine says the decline in sales and profit was due to the pandemic, and that the global adaptation plan Thales launched reduced the negative impact. The plan is expected to save around €800 million ($947 million) during the full year.
“In the second half of the year, based on a stabilising economy and public health situation, we anticipate a significant increase in sales compared to the first half and a recurring operating margin back to a level close to the second half of 2019,” comments Caine.
“Thanks to its unique positioning focused on key societal issues of tomorrow’s world — sustainable mobility, technological autonomy, digital identity and security — Thales has what it takes to return to profitable growth once this crisis is over.”
Aware optimistic after decline
Aware revenue from biometrics software and services fell from $3 million in Q2 2019 to $1.9 million. The decline is attributed by Aware primarily to the lower license and service revenues associated with the COVID-19 pandemic.
The company reports an operating loss of $3.7 million, up from $1.2 million a year earlier, and net loss was $3.1 million, or $0.15 per diluted share, compared to a loss of $0.9 million or $0.04 per diluted share a year ago.
For the first six months of the year, revenue was $5.4 million, down from $6.7 million in 1H 2019, and Aware’s operating loss jumped from $1.2 million last year to $5 million during the first two quarters of 2020. Net loss was $4.2 million, or $0.20 per diluted share, down from $0.7 million or $0.03 per diluted share.
“Amidst a continually changing and challenging environment, I am encouraged by our customers’ acknowledgement of the value and support for Aware’s Knomi mobile biometric offering for digital onboarding and other remote touchless transactions, as they overcome disruptions caused by the pandemic,” states Bob Eckel, Aware’s chief executive officer. “Our subscription-based business continues to grow, even against the backdrop of delayed procurements and postponed government programs temporarily impacting our licensing and services offerings.”
“Aware’s future is bright and we continue to invest in the business and increase stockholder value. We have added significant engineering and sales resources to drive new growth, while simultaneously investing $0.5 million to reduce the number of outstanding shares as a commitment to improving value while growing the business,” Eckel adds.
He also expresses optimism with the company’s positioning, and says that while procurement delays are expected to continue, biometrics will play a key role in the next generation of solutions born from the pandemic’s challenges.
Qualcomm revenues chopped in half
Qualcomm reports revenues of $4.9 billion for its fiscal third quarter, a 49 percent drop from the same period a year earlier, for earnings per share of $0.74 on a GAAP basis and $0.86 on a non-GAAP basis. Net income was $845 million, compared to $2.15 billion in Q3 2019.
“As 5G continues to roll out, we are realizing the benefits of the investments we have made in building the most extensive licensing program in mobile and are turning the technical challenges of 5G into leadership opportunities and commercial wins,” says Steve Mollenkopf, CEO of Qualcomm Incorporated. “We delivered earnings above the high end of our range, continued to execute in our product and licensing businesses and entered into a new long-term patent license agreement with Huawei, all of which position us well for the balance of 2020 and beyond.”
The COVID-19 pandemic is expected to drive down Q4 2020 EPS by $0.25, based on an assumption of a 15 percent reduction in handset shipments, and the delay of a global 5G flagship smartphone launch.