MESSAGE FROM THE CEO
A year of transformation – and the foundation for what comes next
Having rebuilt FPC into a focused, operationally lean systems company approaching run-rate profitability, the combination with Precise Biometrics is the natural next step. On 23 March 2026, we jointly announced a proposed merger to create a global leader in biometrics and identity. Together, we can offer physical-to-digital biometric security from a single provider, spanning fingerprint, iris, face, and palm modalities across enterprise, government, and consumer segments.
In 2025 FPC delivered 30 percent revenue growth, a SEK 163 million improvement in EBITDA, and a fundamental redesign of the operating model, simplifying processes and augmenting our workforce with pragmatic AI tools and agents – while accelerating the shift from sensors to systems. By the fourth quarter, the company reached positive operating cash flow for the first time since the transformation began. These results reflect the rigorous execution of our bold transformation plan.
Revenue increased to SEK 78.2 million (60.2), up 40 percent in constant currency. Gross margin held steady at 60.7 percent on the full year and reached 65.8 percent in the fourth quarter. Full-year EBITDA improved to negative SEK 19.1 million from negative SEK 181.8 million, and Q4 EBITDA was positive at SEK 0.4 million. We ended the year with SEK 27.1 million in cash.
We rebuilt the organisation around fewer, higher-impact roles. Headcount decreased 30 percent year on year, from 71 to 50 at the end of 2025, while revenue grew 30 percent – a step change in productivity that reflects how we have redesigned the company, not simply reduced it. This leaner structure is the platform from which we intend to scale.
Funding the transition
A core element of our strategy has been unlocking value from legacy assets and engineering capabilities to fund our product transition. During the year, we executed three IP monetisation and licensing transactions in the space of eleven months, generating ongoing partnerships and royalty streams alongside upfront consideration. These are deliberate, value-accretive transactions that keep the business capital-light while funding our move up the value chain.
AllKey: from sensors to systems
Our strategic move up the value chain accelerated in 2025. AllKey, our integrated biometric system-in-package, commands an approximate 3x uplift in average selling price compared with standalone sensors, while reducing integration complexity for customers. We are targeting a sustained 50–60 percent gross margin as these products move toward mass production in the second half of 2026 and scale through 2027 and 2028.
The pipeline signals are encouraging. Over half of our existing customers are on an upgrade path from sensors to AllKey systems, securing our volume business while moving value toward higher-margin systems. At the same time, approximately half of the AllKey pipeline comprises new customers – validating the systems value proposition in high-assurance segments beyond our historical base. We expect the pipeline mix to shift materially toward systems, growing from around 30 percent in 2026 to approximately 80 percent by 2028. Pipeline is not the same as revenue, but it is a directional indicator of where demand is building and where we are investing.
During the year, we expanded the platform with AllKey Ultra, a Secure Element variant for higher-security use cases, and AllKey Ultra FIDO - a turnkey platform for biometric FIDO tokens. Commercial traction continued to build: Mettlesemi selected AllKey Pro for its next-generation FIDO2 authenticators; Fuse Identities launched a new biometric physical access card featuring the FPC 1323 T-Shape sensor; and M-Tech Innovations became the first company in India to receive VISA certification for a locally manufactured biometric payment card using FPC technology.
A market that demands scale
The biometrics and identity market is seeing rising demand as increasingly sophisticated cyber threats drive the need for secure, seamless authentication. The market is shifting from point products to integrated solutions – customers want one provider for hardware, software, and identity management. AllKey is our answer to this shift.
But in this market, scale is ultimately about the ability to invest. As a smaller company with profitability still below target, our standalone capacity to invest at the pace the market requires is constrained. And the market is moving fast: if you cannot invest, you do not stand still — you fall behind. Subscale independence is therefore an existential risk. The proposed merger with Precise Biometrics is designed to address this by creating a broader platform and stronger commercial reach, enabling the combined company to invest more consistently in product development, go-to-market, and long-term competitiveness.
The merger with Precise Biometrics
Having rebuilt FPC into a focused, operationally lean systems company approaching run-rate profitability, the combination with Precise Biometrics is the natural next step. On 23 March 2026, we jointly announced a proposed merger to create a global leader in biometrics and identity.
There are clear synergies. FPC brings sensors and hardware embedded in nearly two billion devices worldwide. Precise brings algorithms, software, and enterprise solutions – including access control and visitor management platforms processing over 100,000 biometric verifications every second. Together, we can offer physical-to-digital biometric security from a single provider, spanning fingerprint, iris, face, and palm modalities across enterprise, government, and consumer segments.
The combination is expected to generate annual cost synergies of at least SEK 45 million – nearly a third of combined pro forma revenue – with a payback period of under seven months. Today, we pay for two Nasdaq listings, two sets of auditors, two IT systems. After the merger, we pay for one. Beyond cost, the commercial upside is immediate: FPC’s hardware customers do not buy software today; Precise’s software customers do not buy sensors. That changes on day one. Customer reactions have been positive – the logic is intuitive.
Under the merger plan, FPC shareholders will receive nine new ordinary shares in Precise Biometrics for each FPC share, representing approximately 47 percent of the combined company. Both boards unanimously recommend approval, supported by an independent fairness opinion. Following completion, the combined company intends to raise approximately SEK 110 million through a rights issue to fund growth, synergy capture, and continued global expansion. The merger is also the first step in a broader consolidation journey in a market that remains highly fragmented.
Looking ahead
Two years ago, FPC was a sensor company dependent on commoditised consumer electronics. Today, we are a leaner, more focused business with a systems platform gaining commercial traction, a diversified revenue model, and a clear path to sustainable profitability. The merger with Precise Biometrics is the culmination of this transformation – and the beginning of the next chapter.
Our near-term priorities are clear: convert the AllKey pipeline into production revenue, realise the identified synergies, and execute the integration. We know the market expects delivery, not projections. Our focus is measurable progress, quarter by quarter.
Looking ahead, we expect continued consolidation in the biometrics and digital identity space, where scale, software capabilities and integrated offerings will be key to long-term competitiveness. Following our transformation, FPC is well positioned to play an active role in this development.
I would like to thank our shareholders, employees, customers, and partners for their continued support through this transformation.
Adam Philpott
President and CEO