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Biometrics stock notes: Unisys, Hikvision, RealNetworks and Ipsidy adapt

Biometrics stock notes: Unisys, Hikvision, RealNetworks and Ipsidy adapt

Financial results for publicly traded companies providing biometrics continue to show a mix of disruption and growth, but attributing meaning to the numbers can be risky given the unprecedented situation. Unisys reports it will weather the stormy market, Hikvision’s profits continue to rise. RealNetworks has announced a new executive appointment and incremental gains in its financial results, while Ipsidy’s new CEO sees positive developments despite a Q2 revenue drop.

Full-year expectations for Unisys remain unchanged from the first quarter update, or a ten percent revenue loss year-over-year, in second quarter reporting, and the company has a strong cash balance of $782 million, just down from $790 million a quarter ago.

The meaning of traditional metrics like gross revenue and operating profit margin is uncertain at best given present circumstances, but Unisys reports year-over-year GAAP revenue declined 22.9 percent, or 19.8 percent on a constant currency basis. EBITDA margin on a year-over-year basis was negative 4.1 percent, and diluted earnings per share were a loss of $1.21. Total revenue fell to $439 million from $569 million in the same period a year ago.

On the other hand, the total company pipeline is up 10.1 percent from the first quarter, and services total contract value increased by 1.4 percent year-over-year.

Unisys says it secured a multi-year contract for its Unisys Stealth software with a U.S.-based services organization. The company also recently upgraded the biometric identity management systems within the Stealth software suite to support authentication in both cloud and on-premise environments.

Hikvision overseas revenue buoys results

Hikvision reports revenue growth from its face biometric and surveillance camera technology of 1.45 percent for the first half of its fiscal 2020 to RMB 24.27 billion (roughly US$3.5 billion). Overseas, however, the company registered an 8.63 percent to RMB 7.54 billion ($1.09 billion) during the first half of the year.

The U.S. government has banned companies using Hikvision technology from participating in public contracts, less than a year after placing it and many other Chinese companies on the Entity List for alleged involvement in human rights violations. The restrictions appear to have impacted some of the companies financially, but not enough to threaten their operations or stop their growth.

Net profits attributable to shareholders were RMB 4.62 billion ($666 million), higher by 9.66 percent year-over-year.

The company says its operations were adapted to maintain steady development and make technological innovations to meet customer needs during unusual social and economic conditions.

RealNetworks appoints new President and COO

Safr facial recognition-maker RealNetworks has reported its second quarter earnings and announced Mike Ensing is taking over as president and chief operating officer from Max Pellegrini.

Ensing served as strategic advisor and the company’s interim CFO from early-January to early-May. He has also served as CFO of Savers/Value Village, and as COO and CFO at Knowledge Universe.

Pellegrini will stay on until September, with Ensing transitioning into the roles beginning in mid-August. The company thanked Pellegrini, who will return to his native Italy to pursue an executive opportunity there, for his service.

“I am thrilled at this opportunity to lead RealNetworks in this new operational and strategic role,” comments Ensing. “Real is renowned for its technological expertise, innovation, and industry leadership, which provides a strong foundation for future growth.”

“During the last seven years at Real, I have been working with amazing people and fantastic teams on new exciting products and groundbreaking technologies,” states Pellegrini. “I am proud of the work we have done to lay the foundation for future growth. These are exciting times, and I am looking forward to seeing the next phase of Real over the coming years.”

RealNetworks reports revenues of $40.4 million, and core revenue beyond its Napster business of $17.1 million, up 9 percent on a year-over-year basis. The company also reduced its adjusted EBITDA loss for the fourth consecutive quarter, compared with the same period from the previous year.

Net loss in the quarter was $5.1 million, or $0.13 per diluted share, while adjusted EBITDA was $2.2 million, down from $6.3 million in Q2 2019. In mobile software licenses, the business category SAFR facial recognition and the integrated RealTimes platform fall into, RealNetworks says it earned $972,000, up slightly from the same quarter in 2019.

The company picked up two Phase II Small Business Innovation Research (SBIR) contracts with the U.S. Air Force, totalling $1.9 million, among major developments for RealNetworks in the quarter.

“We were excited to introduce two new consumer products in commemoration of the 25th anniversary of the streaming industry,” says RealNetworks Founder, Chairman, and CEO Rob Glaser. “RealPlayer 20/20 and StarSearch by Real utilize the power of AI and our SAFR computer vision platform to make streaming in today’s world even better. In addition, we are continuing to enhance our world-class SAFR platform and service focused primarily on the traditional security and safety markets along with innovations focused on new needs at the intersection of public health and public safety. In particular, we were honored to be awarded two SBIR contracts by the U.S. Air Force.  These contracts both enable us to continue to enhance the SAFR platform and also support the important missions of our U.S. armed forces while enhancing their safety.”

The company is not providing guidance for the third quarter, due to the ongoing uncertainty in the global economy.

Ipsidy bottom line stable despite pandemic revenue hit

Ipsidy’s earnings declined to $0.3 million in the second quarter from $0.6 million last year due to the COVID-19 pandemic, but first half revenues were also only $0.3 million lower than in 2019, at $1.1 million.

Net loss before taxes for the quarter ($3.5 million) and half ($7.3 million) represented a larger decline, from $2.2 million and $4.4 million respectively in 2019. Charges related to financing, as well as the pandemic and executive changes affected those numbers, the company says. Basic and diluted net loss per share was $0.01 for both the past three and six months, compared to $0.00 and $0.01 last year.

Adjusted EBITDA loss was $1.4 and $2.7 million for Q2 and 1H 2020, respectively, which represents improvements of 7 and 12 percent from $1.5 million and $3.1 million in 2019.

Ipsidy also raised $3 million, half each from a convertible debt offering in February and common equity investment in June.

“The last three months have seen positive developments for Ipsidy,” says Phillip Kumnick, CEO and deputy chairman of Ipsidy, who took on the roles in May. “We strengthened the Ipsidy team, secured contracts with leading, global banking platforms and technology resellers that broaden our sales and market reach and delivered solution enhancements to provide security and trusted identity via a quick web browser session and to support the growing trends for remote onboarding of customers and ‘touchless’ commerce. Our relaunch in June and outreach to the industry have been well received and although there is much work to be done, we look forward to reporting on further progress in the coming months.”

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