Biometrics stocks news: Hytera sale drama, Zwipe share price gains, Idex Biometrics and FPC first half results
A flurry of biometrics companies have reported financial results, including several for the first half of 2020, amid an unprecedented mix of market turbulence and optimism. Various entities related to Hytera are mixed up in a bankruptcy auction complicated by legal damages that are yet to be paid, while Zwipe, Idex Biometrics, Fingerprint Cards, Ping Identity, Synaptics, and Intellicheck provided revenue updates.
A new subsidiary of China-based Hytera Communications has increased an offer to purchase the company’s U.S. assets Hytera America and Hytera Communications America, also known as Hytera East and Hytera West, respectively, Urgent Comms reports. Motorola Solutions, which was awarded $764.6 million in damages from the U.S. divisions in a U.S. federal court judgement in March, is attempting to block the deal.
The bid in a U.S. Bankruptcy Court has been increased by $1.6 million to $9.5 million in total. Hytera’s U.S. divisions became “debtors” in bankruptcy court after the court judgement in favor of Motorola’s claim that they used trade secrets and copyrighted software in digital mobile radio (DMR) products. Without that judgement, the subsidiaries would be viable businesses, and the damages are currently attributable to Hytera Communications, but a sale to the new ‘Hytera US’ would shield the U.S. divisions from the direct impact of the judgement.
Parent Hytera Communications has announced an intention to appeal the judgement against its American subsidiaries. Motorola is seeking an injunction to prevent the sale of Hytera’s DMR products.
Zwipe share price nearly 700 percent since March
Shares of Zwipe have surged by 690 percent since March, from a low of NOK 2.34 (US$0.26) to NOK 18.5 ($2.08) at the close of trading on August 7, according to Norwegian outlet E24. The share price gives Zwipe an estimated valuation of NOK 481 million ($54.14 million) on the Merkur Market.
On the Stockholm Stock Exchange, trading volumes during July were on average eight times higher for Zwipe, often at higher prices than on Merkur.
CEO André Løvestam notes that listing in Stockholm has helped the company, as it represents a much larger market, and Swedish investors are relatively knowledgeable about biometrics.
Løvestam says the company’s goal is turnover of NOK one billion ($110 million) in the medium term with good margins. That translates to a market share of around 30 percent and shipments of between 25 and 40 million units per year.
Following more pilots this year, Zwipe expects volume production will begin in 2021, and be followed by sustained exponential growth. Beyond payment cards, Zwipe will target access cards, driver’s licenses and other ID cards in the longer term.
An analyst with Swedish brokerage Redeye has raised its target price for Zwipe stock to NOK 35 per share, based on what it calls an optimistic but realistic scenario with a market of 900 million cards in 2030, with Zwipe’s market share declining from 17 percent to 8 percent.
The price per biometric payment card will fall to $10 in 2021, Løvestam predicts, compared to costs of between $1.50 and $4 for a legacy card.
Idex Biometrics begins ramp-up
Idex Biometrics is up to more than $1 million worth of product order to date in 2020, and the company is beginning its commercial ramp-up, according to a first half earnings announcement.
“In the second half of 2020, the company expects additional design wins and continued commercial order growth for biometric payment cards leading to a projected revenue ramp-up in 2021,” says Idex Biometrics CEO Vince Graziani.
The company took several major steps towards biometric fingerprint payment card commercialization so far this year, including approval by UnionPay and a major U.S.-based payment network, which Idex says makes it the only company to have been certified for two global payment networks. Idex also launched and began shipping its TrustedBio, and was selected as a technology partner by Idemia and Zwipe for their payment card products.
Revenues for Idex Biometrics increased to $149,000 in Q2 2020 from $43,000 a year earlier, and gross margin on product sales improved from 55 percent in the second quarter of 2019 to 74 percent, though at small volumes which may not be reflective of larger ones. Operating expenses were also down, from $7 million in Q2 2019 to $5.8 million.
Idex Biometrics’ Board of Directors has resolved to issue 1,993,100 incentive subscription rights to employees, with an exercise price of NOK 1.71 per share. The subscription rights vest by 25 percent over four years to expire on May 15, 2025.
Fingerprint Cards revenue falls
Fingerprint Cards has also reported on an anticipated challenging first half of the year, noting revenues of SEK 282.3 million ($32.51 million), a sharp decline from SEK 381.8 million ($44 million) in the same period a year ago, due to trouble sourcing semiconductor manufacturing capacity.
Gross margin was roughly flat at 21 percent, but EBITDA fell from SEK 44 million ($5.1 million) to SEK 6.7 million ($770,000). FPC’s operating result was negative SEK 16.7 million ($1.9 million), after posting a gain of SEK 6.2 million ($710,000) in last year’s first half. EPS before dilution was an SEK 0.08 loss, after a break-even 1H 2019.
The company was also impacted by lower smartphone sales, with volumes expected to shrink by 10 to 20 percent for full-year 2020.
FPC CEO and President Christian Fredrikson says the company is strengthening its position in the biometric payment cards market.
“The pandemic has also led to a strong increase in remote working, which can often involve increased IT security risks,” he comments. “By combining security, flexibility and convenience, biometric solutions can facilitate secure access to devices and data, regardless of where an employee is located. The growth opportunities are positive throughout the Access area and we continued to expand our portfolio for biometric access control during the quarter.”
Subscription growth boosts Ping results
Ping Identity’s annual run rate increased by 19 percent in its Q2 2020, compared to a year earlier, with 92 percent of the company’s $59 million in total revenue coming from subscriptions.
The company also announced a dollar-based net retention rate of 111 percent. Adjusted EBITDA margin was 13 percent.
“The hybrid nature of our platform continues to differentiate Ping in the market as large enterprise customers seek flexibility, customization, and control of their identity infrastructure,” comments Ping Identity CFO Raj Dani. “As we start to normalize operations in this new environment, we look forward to leaning into investments that will expand our platform and address our massive market opportunity.”
For the third quarter, Ping expects total revenue between $54 million and $57 million, though the company declined to provide guidance for the full year.
Synaptics hits updated guidance
Synaptics has announced revenues of $277.6 million in the fourth quarter of its fiscal 2020 year, with GAAP gross margin on 43.9 percent and GAAP diluted earnings per share of $2.55. Net revenue for the year was $1.33 billion, right in line with recently-updated guidance from the company.
GAAP net income for the year was $118.8 million, or $3.41 per diluted share, and the company says 2020 was a record year for it in terms of both GAAP and non-GAAP earnings per diluted share.
“Synaptics delivered a strong finish to our fiscal year with fourth quarter revenues exceeding the mid-point of our guidance, gross margins at the high-end of our guidance, and continued improvement in our operational efficiency,” says Michael Hurlston, Synaptics’ president and CEO. “As we look into fiscal 2021, I am excited by the traction we have in our organic business as well as with the new opportunities that our recently closed acquisitions present.”
The company has cash and equivalents of $763.4 million at the end of the quarter.
Intellicheck revenues up 18 percent
Intellicheck announced second quarter revenues of just over $1.8 million, up 18 percent from the same quarter last year, as increasing fraud in digital channels boosts the understanding the company’s potential customers have of the importance of tools for card-not-present authentication.
SaaS revenue made up the vast majority of the company’s business, and drove an increase in gross profit from 85.9 percent in Q2 2019 to 88.6 percent. Net loss was $760,000, or $0.05 per diluted share, an improvement from a net loss of $874,000 or $0.06 in the equivalent period a year ago.
“What differentiates us from the growing field of competitors in facial recognition is the continuing value of our technology solutions,” comments Intellicheck CEO Bryan Lewis. “Many of our competitors also talk about facial recognition, but as our clients are realizing, facial recognition only has value when it includes the critical first step – determining if the government identification document is real. Without knowing with near certainty that it is authentic, facial recognition is useless. We believe that our solutions provide that near certainty. This reflects how we as a company continue to meet real-time needs with industry leading technology solutions that protect businesses and the customers they serve.”
The Canaccord Genuity 40th Annual Growth Conference was held this week, with Intellicheck and Patriot One representing the identity authentication and biometric security industries respectively. Each made presentations for institutional investors and analysts.