MARKET AND STRATEGY

Reinforcing our leadership in secure authentication

The biometric solutions industry is poised for strong growth, driven by increasing demand for secure and seamless authentication. With a robust portfolio of biometric solutions, Fingerprints is positioned for long-term profitable growth and market leadership.

Technological advances and growing cyberthreats boost biometric relevance

The global biometrics market is valued at over USD 40 billion and is poised for strong, sustained growth, driven by a set of transformative technology trends that are increasing its relevance across various sectors. The rise of AI is improving biometric accuracy and speed, enabling systems to identify individuals more precisely than ever before. However, AI also poses new security threats, such as deepfakes and synthetic identities, which biometric systems are increasingly designed to detect and counteract. The convergence of physical and digital spaces—through IoT, smart cities, and connected devices—positions biometrics as essential for secure, streamlined access across environments.

In response to the rise in cyberthreats, Zero Trust security has become a foundational approach to authentication, operating under the assumption that all users, devices, and applications could be compromised. This model requires continuous, per-user and per-device verification, strengthening security across networks and pushing for more resilient identity management solutions.

At the same time, user and device authentication remain overly dependent on passwords, despite their long-standing reputation as one of the weakest links in IT security. Biometrics can play an important role in the solution, either independently or as an integrated part of multi-factor authentication, providing a robust layer of protection against unauthorized access.

You are the key to everything

The phrase “You are the key to everything” perfectly captures the essence of biometrics and has inspired Fingerprints’ biometric solutions since the company’s inception. In recent years, the bulk of the company’s revenue has come from sales of fingerprint sensor modules and related algorithms and software, primarily to mobile phone and PC manufacturers, as well as to providers of access control solutions.

Over the past several years, the fingerprint sensor market for mobile phones has become increasingly commoditized, resulting in heightened price pressure and narrowing margins. In 2024, we saw the same trend emerge in PCs, where growing price pressures began to impact profitability. In response to these shifts, Fingerprints has decided to exit both segments to focus on areas with stronger growth potential, greater differentiation and higher margins.

Around 80 percent of the revenue in biometric devices and sensors is currently generated outside consumer electronics, in the government & security, enterprise & industrial, healthcare, and financial sectors, as well as in the biometric lock industry. Furthermore, it is in these markets that we expect to see most of the market growth in the coming years. Fingerprint recognition stands as the dominant biometric modality in terms of revenue, and we expect it to increase further in importance. At the same time, we foresee continued growth in both iris- and face recognition as contactless biometrics are seeing widespread adoption due to heightened hygiene concerns and the demand for convenience.

Our fingerprint and iris recognition technology are world-class, and we will continue to develop solutions based on these biometric modalities. A recent example is our fourth-generation iris recognition software, launched towards the end of 2024. This "just glance" technology offers secure, touchless authentication with exceptional versatility, performing reliably even with accessories like glasses and masks. It supports privacy-sensitive sectors, including automotive and access control, and is well-suited for Zero Trust security frameworks, where it mitigates deepfake risks and enhances system-level security.

Strategic focus on high-growth markets: Digital Identity and Cybersecurity

Our transformation enables us to focus on markets with stronger growth dynamics and higher margins — including secure enterprise access and digital identity platforms. We are reallocating resources to these segments to deliver long-term shareholder value and scalable growth. Our investment plans include partnerships and technological advancements that strengthen our identity solutions, with a particular focus on sectors requiring advanced authentication, such as enterprise security, both in edge modalities and in the cloud.

Strategic partnerships

Anonybit partnership

A recent example of our implementation of this strategy is our partnership with Anonybit to deliver the next generation of enterprise authentication solutions. The strategic partnership, entered into in December 2024, aims at introducing a first-of-its-kind end-to-end multimodal biometric identity offering to the enterprise market. The joint solution, to be introduced in 2025, will be designed to ensure that only authorized individuals can access sensitive corporate data, shared systems or networks, enhancing security and compliance while improving the user experience.

Smart Eye agreement

At the beginning of 2025, we entered into an agreement to license our iris recognition technology to the Swedish company Smart Eye for a total consideration of up to SEK 50 million. Smart Eye is the automotive market leader in camera-based sensing for in-vehicle applications, with more design wins and OEM customers than any other supplier. Starting in 2026, every new car in Europe must be equipped with a Driver Monitoring System (DMS) to detect driver distraction, accelerating the technology globally. Biometric authentication is an important emerging capability in automotive, with camera-based methods the most secure and intuitive solution. We see an increasing interest from the automotive industry to include authentication for in-car payment system transactions and enabling other advanced features, such as driver personalization.

As part of the agreement, Smart Eye will license back to Fingerprints a multimodal asset including Facial Recognition and Eye Tracking, significantly expanding our portfolio of biometric modalities. This will enable Fingerprints to sell into new and existing customer opportunities, enabling enterprise clients to improve security and user experience by replacing passwords with highly secure, user-friendly biometrics. The combined expertise of Fingerprints and Smart Eye is expected to result in a solution that leverages the inherent security of biometrics to provide strong protection against deepfake attacks.

Other partnerships

Recent partnerships with Infineon and Future Electronics also demonstrate progress in executing our strategy:

• Infineon Partnership: Infineon's SECORA™ Pay Bio, featuring Fingerprints' biometric technology, achieved full Visa certification, and Infineon has placed a volume order for our sensors.
• Future Electronics Agreement: Expanding our global reach and accelerating the adoption of FPC AllKey, our next-generation authentication solution designed to eliminate outdated PINs and passwords.

We may consider acquiring capabilities in additional modalities, such as voice and behavioral biometrics. Looking ahead, we are committed to building a robust digital identity platform to help our customers address the myriad cyber-risks and poor user experience arising from passwords. As we complete the phase-out of our Mobile and PC segments, we are strategically reallocating capital toward high-margin, high-growth segments in digital identity.