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Biometrics earnings reports: better margins for Fingerprint Cards

Surging revenue for Mitek, Totm, NASDAQ listing for Knightscope
Biometrics earnings reports: better margins for Fingerprint Cards

Biometric firms from sensor developer to autonomous surveillance robot manufacturers have been releasing financial updates. Fingerprint Cards (FPC) sees healthier margins as it splits into separate business units. Singapore’s Totm Technologies sees 3.6 times growth in the first half of its 2022 and Mitek announces a record first quarter, while Zwipe insiders continue buying up company stock.

Fingerprint Cards: better margins, bonds and fresh deals as company enters Zug/Shanghai split

Fingerprint Cards AB reports its gross margin improved by 8 percentage points in Q4 2021 compared to the same period the year before, and up by 3 percentage points on the preceding quarter. The margin stands at 32 percent but with a negative cash flow as the company split into two wholly owned subsidiaries to address different areas of the biometrics market as of 1 January 2022: Payments & Access operations are now run by the Fingerprint Cards Switzerland AG subsidiary, based in Zug, Switzerland, and Mobile and PC operations by the Fingerprint Technology Company (FPC) subsidiary in Shanghai.

“This change enables an even sharper focus on our two individual business operations, which have industry conditions that differ in terms of structure, geography, customers, partners and regulations,” comments Christian Fredrikson, president and CEO of Fingerprint Cards.

“Our new organization also gives us better possibilities to explore distinct and separate financing options and avenues of development for the different subsidiaries in our Group.”

Q4 2021 revenue at SEK 356.6 million (US$37.7 million) was within FPC’s target for the quarter although down on SEK 369.4 million in 2020. Cash flow from operating activities was negative SEK 16.8 million (negative $1.78 million) for the quarter compared to positive SEK 46.9 million in Q4 2020.

“The negative cash flow from operating activities in the fourth quarter is due to an increase in receivables and inventory, a consequence of our growth initiatives. We are seeing a continued positive trend in the underlying market for our products and Fingerprints has ambitious growth plans,” says Fredrikson.

“This increases the need for working capital and R&D investments, and I am therefore very pleased that, in December 2021, we were able to successfully issue SEK 300 million ($31.75 million) in senior secured bonds to further accelerate the company’s growth.”

Looking at 2021 overall, there was a sales increase of 16 percent in constant currency terms and revenues were up to SEK 1.36 billion ($143.4 million) from SEK 1.26 billion in 2020.

“We were able to deliver this growth despite an insufficient access to production capacity throughout the year due to the prevailing semiconductor shortage in the world. I believe that this demonstrates the strength and stability of our business, which also began to expand into new areas during the year at a significantly higher pace than previously,” comments Fredrikson.

PC and access control sectors contributed to the gross margin improvement for Q4 as well as the year and PCs look set to become the firm’s second largest area, pushing ahead of access. A new order from Honor (former Huawei sub-division, now state-owned) for Fingerprint Cards’ new biometric PC solution alongside deals with Dell, Huawei and Xiaomi mean the firm expects its PC biometrics division to overtake access within 12-18 months.

The Q4 2022 launch of biometric payment cards using Fingerprint Cards’ sensors by Poland’s Bank Pocztowy is expected to be the first of many such launches. The three major providers of secure elements for payment cards already use FPC’s technology for their reference designs and in Q4 the firm received an order for its latest T-Shape sensor module (T2) from one of the three largest card manufacturers.

The T2 has just achieved compliance with Mastercard’s newest security requirements for fingerprint sensors.

Fingerprint Cards maintains a revenue forecast of SEK 1.6 billion to 2 billion ($169 million to 211 million) in 2022.

Totm Technologies: biometrics and ID management now 80 percent of surging revenue

Singapore’s Totm Technologies Group announces a 263 percent jump in half year revenues (1H2022 ended 30 November 2021) at S$10.1 million ($7.45 million) compared to S$2.8 million ($2.07 million) for 1H2021.

Totm’s identity management and biometrics business contributed S$8.0 million ($5.9 million) to the Group’s overall topline. “I am glad that our Identity Management and Biometrics business has started the new financial year on a positive footing,” comments Pierre Prunier, CEO and executive director of Totm Technologies.

“The identity verification industry is seeing rapid growth which can be attributed to technological advancement, an increased awareness among the masses regarding the use of biometric systems for security purposes, and end user convenience in identity and access management.”

The firm was included in the MSCI Singapore Micro Cap Index on 1 December 2021, as the company seeks backers for its digital ID expansion.

In December Totm also announced an MOU with Abu Dhabi-based Presight AI to develop their combined proprietary technologies to deliver biometric and artificial intelligence capabilities to partners and clients in Southeast Asia, the Middle East and Africa.

Mitek: Q1 2022 25 percent y-o-y growth generates record quarter

Digital fraud prevention firm Mitek announces that total revenue rose 25 percent year-on-year to a first quarter record (ending 31 December 2022) of $32.5 million, down from Q4 2021’s $33.3 million. GAAP net income was up 44 percent (non-GAAP by 65 percent) to $3.1million and cash flow from operations was $2.3 million.

“Biometrics are transforming the way we deliver authentication solutions. Our team will continue to innovate to build trust and keep people safe online,” comments CEO Max Carnecchia.

At the end of its Q4 2021 the firm announced revenues from transactional identity verification with the company’s selfie biometrics grew at a rate of 33 percent year-on-year.

Meanwhile, a potential class action lawsuit was filed against Mitek alleging the company failed to meet the informed consent requirements of Illinois’ Biometric Information Privacy Act when authenticating users of the HyreCar app with selfie biometrics.

Knightscope: $22M NASDAQ listing, new Fortune 500 client

Autonomous biometric surveillance robot producer Knightscope Inc raised $22.37 million through the sale of 2,236,619 shares of Class A Common Stock priced at $10.00 per share as of 26 January 2022. Its shares began trading on NASDAQ under the ticker KSCP on 27 January. Since trading began yesterday it has reached a high of $15.48 and a low of $5.91 and is trading at around $11.00 as of mid-day trading Friday.

The firm had previously raised $75 million to date in investment, reports InvestorPlace.

Knightscope has just announced a new Fortune 500 client. Securitas has added a Knightscope K5 robot to the security program of one of the largest finance companies in the U.S. The Autonomous Security Robot will patrol a new car park to help deter thieves, loitering and trespassing.

The firm has 80-90 robots in operation around the U.S. according to an interview with co-founder William Santana Li with TechCrunch. Devices are operating in colleges and shopping centers.

Zwipe: CEO exercises 384,000 stock options

Zwipe AS CEO André Løvestam exercised 384,000 stock options on 20 January 2022, allocated to him via the company’s stock option incentive program. Each gave him the right to acquire one share in the company at a strike price of NOK 10.00 ($1.12).

André Løvestam will now own, privately and through Energetic AS, 1.3 million shares and hold 306,000 options, each giving the right to acquire one share.

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