MESSAGE FROM THE CEO

Strategic realignment delivering strong results

In 2024, Fingerprints took a significant step forward in its transformation, focusing on enhancing profitability, improving financial stability, and prioritizing high-growth markets.

Positive Results from Transformation Plan 

2024 was a year of significant transformation for Fingerprints. We executed our ambitious plan to drive long-term profitability, strengthen our financial position, and refocus on high-growth markets. Our Transformation Plan, initiated in late 2023, was built on six key pillars: Strategy, Strengthening the Balance Sheet, Refreshing Our Portfolio, Optimizing Costs, Enhancing Talent and Organization, and Improving Governance and Incentives. By staying committed to these objectives, we are reshaping our business and positioning Fingerprints for future success.

“A structurally improved revenue mix, driving a significant increase in gross margin.”

While we are still executing our Transformation Plan, the positive momentum shows encouraging progress. Our financial performance in 2024 reflects the necessary strategic shift in our business. The realignment has resulted in a structurally improved revenue mix, driving a significant increase in our gross margin. Excluding planned non-cash depreciation of previous R&D investments, the margin rose to 31.5%, up from 20.8% in 2023. By the fourth quarter of 2024, it had reached 49.8%.

Revenue decreased to SEK 403 million from SEK 705 million, which was an expected and strategic consequence of our exit from commoditized, low-margin product lines. This realignment has already strengthened gross margins and simplified operations, positioning us for higher-quality, recurring revenue growth.

These developments are clear indicators that our transformation is delivering results, positioning us for future profitability as we focus on high-growth markets where we have a strong competitive edge.

Achieving financial resilience

Our focus on strengthening the balance sheet and optimizing costs has enhanced our financial resilience, ensuring a solid foundation for sustained growth and operational efficiency.

We took decisive actions during the year to strengthen our balance sheet, including a successful rights issue and the early repayment of convertible bonds, leaving Fingerprints debt-free.

Cost optimization has been a major focus throughout the year, with significant reductions in operational expenses and headcount. Headcount decreased from 185 at the start of the year to 71 core roles by year-end, and we are continuing to streamline operations to enhance financial flexibility and resilience. But our cost optimization efforts are not just about cutting expenses—they are about strategic investments that position us for sustainable growth.

Strategy: Leading in Secure Digital Identity

Throughout the year, we refined our strategic focus, shifting from commoditized, low-margin markets to high-value biometric and identity solutions. The rapid advancement of AI and increasing cybersecurity threats have heightened the need for strong authentication solutions. As a result, we have placed significant emphasis on developing biometric authentication technologies that align with the Zero Trust security framework, while replacing outdated password-based security models. Our vision, "You are the key to everything," underscores our commitment to seamless, secure digital authentication.

A critical enabler of our transformation has been building a high-performing team aligned with our strategic direction, not least by strengthening our leadership with the appointment of a new Chief Strategy & Technology Officer to drive innovation in Digital Identity and enterprise security.

Recent milestones demonstrating progress in executing our strategy include new strategic partnerships and product innovations that reinforce our expansion into secure digital identity and authentication:

• Anonybit Partnership: We are advancing enterprise authentication by integrating Fingerprints' biometric technology with Anonybit's decentralized identity platform. This partnership enables passwordless authentication, prevents account takeovers, and strengthens Zero Trust security frameworks.

• Smart Eye Collaboration: Our licensing agreement with Smart Eye expands our biometric portfolio to include facial recognition, eye tracking, and AI.

• 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.

Looking Ahead: A Strong Foundation for Growth

As we move into 2025, Fingerprints is well-positioned for long-term profitable growth. Our strategic realignment, strengthened financial position, and focused portfolio create a strong foundation for capturing new opportunities in biometric authentication and Digital Identity.

With a debt-free balance sheet, a lean cost structure, and a clear vision for the future, we are committed to delivering value to our shareholders while continuing to lead in secure digital authentication. While the transformation is ongoing, our achievements in 2024 demonstrate that we are on the right path to sustained profitability and growth.

I would like to extend my gratitude to our employees, customers, partners, and shareholders for their support throughout this journey. Together, we are building a stronger, more innovative, and more resilient Fingerprints.

Adam Philpott

President and CEO