Fingerprint Cards Ab: Earnings Call Highlights Progress and Challenges

Fingerprint Cards Ab (($SE:FING.B)) has held its Q1 earnings call. Read on for the main highlights of the call.

In the recent earnings call, Fingerprint Cards Ab showcased a mixed sentiment with notable achievements in revenue and margin improvements, alongside strategic partnerships and operational efficiency. However, the company also faces challenges, particularly with negative cash flow and ongoing turnaround efforts. A strategic shift towards focusing solely on the core business was highlighted as a positive move.

Doubling of Core Business Revenue

The company reported a remarkable doubling of its core business revenue, which increased from SEK 9.1 million in Q1 2024 to SEK 18.2 million in Q1 2025. This 100% growth reflects the company’s successful efforts in enhancing its core operations.

Strong Gross Margin

Fingerprint Cards Ab maintained a robust gross margin of 56.6%, indicating its successful entry into more profitable markets. This strong margin underscores the company’s strategic shift towards focusing on high-margin sectors.

Positive EBITDA with Smart Eye Deal

The company achieved a positive EBITDA of SEK 10.7 million, significantly supported by a SEK 30 million deal with Smart Eye. This deal highlights the company’s ability to secure lucrative partnerships that bolster financial performance.

Significant Headcount Reduction

A significant reduction in headcount by 70% year-over-year was reported, aligning with the company’s efforts to streamline its cost structure and enhance operational efficiency.

Launch of Decentralized Biometric Authentication

Fingerprint Cards Ab announced a partnership with Anonybit to launch a decentralized biometric authentication platform integrated with PingOne. This initiative marks a strategic expansion into innovative technology solutions.

Transition to Core Focus

The company has classified Mobile and PC as discontinued operations, allowing it to concentrate more effectively on core business growth. This transition is expected to provide a clearer focus and drive future growth.

Negative Free Cash Flow

Despite the positive developments, the company reported a negative free cash flow of SEK 36.4 million, with SEK 22 million attributed to discontinued operations. This highlights ongoing financial challenges that need addressing.

Underlying Negative EBITDA

While the Smart Eye deal contributed positively, the underlying EBITDA remained negative, emphasizing the ongoing challenges in the company’s turnaround efforts.

Discontinued Operations Impact

Discontinued operations, including Mobile and PC, continued to impact the company’s financials, contributing to the negative cash flow and highlighting the need for further strategic adjustments.

Forward-Looking Guidance

Looking ahead, Fingerprint Cards Ab anticipates continued revenue growth, with a focus on maintaining strong gross margins and securing strategic partnerships. The company is committed to achieving positive cash flow and refining its core business operations by classifying Mobile and PC as discontinued operations, thereby offering a clearer view of its performance.

In conclusion, Fingerprint Cards Ab’s earnings call painted a picture of progress and challenges. While significant strides have been made in revenue and strategic partnerships, the company must address negative cash flow and underlying EBITDA issues. The strategic focus on core business operations is a promising direction for future growth.