Development during the period

Revenues and operating result, first quarter 2025

Revenues

Group revenues for the first quarter of 2025 amounted to SEK 18.2 M (9.1), corresponding to an increase of 100 percent compared with the first quarter of 2024 (increase of 94 percent in constant currency terms). The revenue increase reflects an increased demand for biometric authentication across our portfolio.

We also reported SEK 29.5 M in other operating income attributable to the licensing of our iris recognition technology to the Swedish company Smart Eye. SEK 12 M of this amount is non-cash for Q1 2025, as we are recognizing the guaranteed portion of the total remaining consideration under the agreement with Smart Eye as revenue in Q1 2025.

Trend in operating profit

Gross profit for the first quarter was SEK 10.3 M (6.0) and the gross margin was 56.6 percent (65.8). 

Development costs amounted to SEK 14.0 M (30.2). We have changed the accounting principle regarding the reporting of development costs. Depreciation of capitalized development expenses has previously been recognized in cost of goods sold, thereby affecting gross margin. As of January 1, 2025, depreciation of previously capitalized development costs is instead recognized within the development costs function in the income statement. The comparative figures for previous periods have been recalculated. Reporting all R&D-related costs, including depreciation of previously capitalized costs within the R&D function on one and the same line in the income statement, has been deemed to lead to financial statements that give a more accurate view of the company's gross margins and also increase comparability with other companies in the industry.

The operating result for the first quarter was a negative SEK 0.3 M (neg: 67.3). Operating expenses amounted to SEK 41.5 M (74.3), including depreciation of capitalized development expenses amounting to SEK 9.1 M (9.5). Other operating income amounted to a positive SEK 30.9 M (pos: 1.0), attributable to the licensing of our iris recognition technology to the Swedish company Smart Eye, which was announced in January 2025. 

Revenue breakdown

Revenue is reported by geography: EMEA, Americas and APAC. 

Effects of the wind-down of the Mobile and PC product groups

FPC has completed the wind-down of its loss-making operations in the Mobile and PC product groups in order to safeguard the company's financial health and future viability. During the January 2024 - March 2025 period, the wind-down process had the following financial effects: 

Mobile

• Inventory write-downs amounting to SEK 61.3 M and a SEK 7.1 M impairment of capitalized R&D.
• As a result of the exclusive partnership agreement with Egis Technology in the Mobile area, FPC has thus far recognized SEK 40 M in revenue.
• SEK 28.6 M in costs related to restructuring measures.
• Revenue positively impacted by a reversal of accrued marketing incentives to customers in the Mobile area, amounting to SEK 24.7 M.

PC

• A SEK 32.3 M write-down of capitalized R&D projects in the PC area.
• An inventory write-down amounting to SEK 10.2 M.

Financial income and expenses

Financial income amounted to SEK 0.0 M (0.9). This item pertains to interest income on bank balances. Financial expenses amounted to SEK 5.4 M (7.0). Expenses for the quarter pertained primarily to interest and other finance expenses on the bridge loan, previous year coming from interest on Bond loan. 

Earnings and earnings per share for the reporting period

The result for the first quarter of 2025 was a negative SEK 16.8 M (neg: 85.9). Earnings per share for the first quarter were a negative SEK 0.00 (neg: 0.05). As the subscription price in the rights issue, completed in Q3 2024, was below the market price, a fund element has been identified, which means that the comparison figures have been recalculated.

Cash flow and balance sheet, first quarter of 2025

Cash flow

Cash flow from operating activities for the first quarter was negative SEK 36.4 M (neg: 60.1), including a negative SEK 22 M attributable to discontinued operations. Adjustments for non-cash items, amounting to SEK 24.0 M, mainly pertain to depreciation. Cash flow from operating activities also includes SEK 17.5 million from the initial fixed license fee received from Smart Eye as part of the licensing agreement entered into in January 2025. This fee was payable in Smart Eye shares, and FPC realized SEK 17.5 M from the sale of those shares, which was completed during the first quarter 2025. 

Cash flow from investing activities for the first quarter amounted to SEK 0.0 M (neg: 5.4). There were no capitalized development expenses in the quarter (see “Trend in operating profit” above).

Cash flow from financing activities was SEK 77.9 M (neg: 1.5). Cash payments related to transaction costs for the rights issue, amounting to SEK 21.9 M in the first quarter, affected cash flow from financing activities negatively, while the receipt of a partial tranche and subsequent repayment of the bridge loan had a SEK 14 M negative effect. Leasing fees on leased premises amounted to a negative SEK 1.3 M (neg: 1.5). 

Exchange-rate fluctuations had SEK negative 1.0 M (pos: 2.8) impact on cash and cash equivalents during the quarter.

Inventory amounted to SEK 22.9 M at the end of the first quarter, compared to SEK 141.3 M at the end of the first quarter 2024 and SEK 48.0 M at the end of the fourth quarter 2024. 

Liquidity and shareholders’ equity

As at March 31, 2025, the Group’s disposable cash and cash equivalents totaled SEK 52.6 M compared with SEK 12.1 M at December 31, 2024, and the Group’s net cash amounted to SEK 47.2 M on March 31, 2025, compared with a net debt amounting to SEK 8.3 M as at December 31, 2024. Lease liabilities pertaining to office premises amounted to SEK 5.4 M on March 31, 2025, compared with SEK 6.8 M as at December 31, 2024, recognized in accordance with IFRS 16. 

At period-end, consolidated shareholders’ equity amounted to SEK 330.5 M, compared to SEK 276.6 M as at December 31, 2024 and the equity/assets ratio for the Group to 85.8 percent (65.1 as at December 31, 2024). 

Total comprehensive income in the first quarter amounted to a negative SEK 39.3 M (neg: 48.8) and included the remeasurement of shareholders’ equity in foreign currencies.

Investments, fixed assets and depreciation/amortization

Investments in intangible fixed assets during the quarter amounted to an expense of SEK 0.0 M (expense: 5.4). Investments in tangible fixed assets for the quarter amounted to an expense of SEK 0.0 M (expense: 0.0). Depreciation/amortization according to plan for the quarter totaled SEK 10.9M (24.4). 

Financial fixed assets pertain to deferred tax of SEK 54.8 M, compared to 56.0 as at December 31, 2024. 

Significant events during the first quarter of 2025

As disclosed in the January-December year-end report on page 9, Caroline Krüger will leave Fingerprints as there will no longer be a separate lead for Human Resources. This change is in line with our commitment to keeping costs under control. To further enhance operational alignment, Fredrik Ramberg, our Chief Product Officer, will report to our Chief Strategy and Technology Officer, David Eastaugh.

In February 2025, Fingerprints carried out a partially guaranteed issue of units consisting of new B-shares and warrants entitling for subscription of B-shares with preferential rights for existing shareholders (the “Rights Issue”). The subscription price was set to SEK 0.48 per Unit and shareholders in Fingerprints received one (1) unit right per each existing share (irrespective of class) held on the record date, of which eleven (11) such unit rights entitled to subscribe for one (1) Unit in the Rights Issue. Each Unit consists of forty-eight (48) B-shares and eight (8) Warrants, each of which entitles to subscription of one (1) new B-share in the Company. 199,824,120 Units, corresponding to approximately 60.0 percent of the Units offered in the Rights Issue, were subscribed for with support of unit rights. In addition, applications to subscribe for 39,908,976 Units without the support of unit rights were received, corresponding to approximately 12.0 percent of the Units offered in the Rights Issue. A total of 239,733,096 Units were thus subscribed for in the Rights Issue, which corresponds to approximately 72.0 percent of the Units offered in the Rights Issue and total issue proceeds of approximately SEK 115.1 million before deduction for transaction costs, entailing that no guarantee commitments will be utilized. In total 239,733,096 Units were issued in the Rights Issue. This entails that 11,507,188,608 new B-shares and 1,917,864,768 Warrants entitling to subscribe for a corresponding number of B-shares were issued. 

The Rights Issue has resulted in changes in the number of B-shares and votes in Fingerprints as follows. Prior to the Rights Issue, the total number of shares in the Company amounted to 3,668,187,158 (of which 7,875,000 A-shares and 3,660,312,158 B-shares). The total number of votes in the Company amounted to 3,739,062,158 (of which 78,750,000 pertained to the A-shares and 3,660,312,158 pertained to the B-shares). In connection with the Rights Issue, the number of B-shares in the Company increased by 11,507,188,608 and the number of votes by 11,507,188,608. Following the Rights Issue, and as of 28 February 2025, the total number of shares in the Company amounts to 15,175,375,766 (of which 7,875,000 A-shares and 15,167,500,766 B-shares). The total number of votes in the Company amounts to 15,246,250,766 (of which 78,750,000 pertain to the A-shares and 15,167,500,766 pertain to the B-shares).

On January 17, 2025, Fingerprints published the bulletin from the extraordinary general meeting held on January 17, 2025. The EGM resolved on, among other things, subsequent approval of the Board of Directors’ decision on an issue of units with preferential rights for existing shareholders (the “Rights Issue”) and certain technical measures to facilitate the Rights Issue.

On January 15, 2025, Fingerprints announced certain preliminary financial information as of 31 December 2024. The reason for this announcement was that the Company planned to publish a prospectus on 23 January 2025 in which Fingerprints intended to include certain preliminary figures related to the fourth quarter 2024.

On January 6, 2025, Fingerprints announced that it has entered into an agreement to license its iris recognition technology to the Swedish company Smart Eye, listed on Nasdaq First North, for a total consideration of up to SEK 50 million, entering a strategic partnership to enhance security and user experience in Automotive and Enterprise.

Other events during the first quarter of 2025

Business Development

FPC announced a new distribution partnership with SM Electronic Technologies (SMET) in India. Building on FPC’s success in India, where their fingerprint and iris technologies have been adopted by leading access and security providers, this strategic collaboration seeks to further strengthen FPC’s market presence and extend its reach within the rapidly expanding Indian market.

FPC partnered with Nymi on their latest Nymi Band 4, a water-resistant biometric wristband designed for secure, passwordless authentication in hands-on work environments like pharmaceutical manufacturing, cleanrooms, and industrial facilities. This collaboration marks a significant milestone in biometric authentication solutions by providing a user-friendly Multi-Factor Authentication option for non-office workers who are often sharing terminals or wearing PP in compliance-driven workflows.

CardLab Aps, a leading innovator in smart card technology, announced the launch of its latest biometric smart card product, called “Access”, which is equipped with FPC’s state-of-the-art T-Shape fingerprint sensor.

FPC announced a strategic partnership with a leading IP advisory firm to expand its IP commercialization and to defend its technology rights. This collaboration aims to capitalize on FPC’s strong patent portfolio and will support multiple IP commercialization opportunities concurrently.

FPC announced a collaboration with security software provider jNet Secure to develop a turnkey biometric all-in-one System-in-Package (SiP) module. The cutting-edge solution being developed will address security vulnerabilities, such as compromised passwords or ID theft. The joint venture aims to simplify the adoption of robust digital authentication for logical access control applications in sectors such as enterprise authentication, financial services, and government ID.

Infineon Technologies AG, a global payment market leader and FPC announced that SECORA™ Pay Bio has received certification by Visa. Infineon’s SECORA™ Pay Bio payment card solution, integrating the FPC1323 sensor, is now fully certified for use in Visa and Mastercard payment cards, marking a significant milestone in the companies’ missions to provide secured and seamless payments.

Significant events after the end of the period

As disclosed in this interim report, Rebecca Stein, Chief Legal Officer, has decided to leave FPC. As part of the company’s broader focus on cost optimization and operational efficiency across all levels of the organization, including executive management, the position will not be replaced at the Group Management level.

Organization and Personnel

The number of employees as at March 31, 2025, was 40 (145). In addition to employees, consultants were also engaged during the first quarter, corresponding to 12 people (27), mainly in technology development and sales. Accordingly, including employees and consultants, the company employed a total of 52 (172) people on March 31, 2025. 

Rebecca Stein, Chief Legal Officer, has decided to leave FPC. As part of the company’s broader focus on cost optimization and operational efficiency across all levels of the organization, including executive management, the position will not be replaced at the Group Management level.

Share capital trend

As at 31 March 2025, the total number of shares in the Company amounted to 15,175,375,766 (of which 7,875,000 A-shares and 15,167,500,766 B-shares). The total number of votes in the Company amounted to 15,246,250,766 (of which 78,750,000 pertained to the A-shares and 15,167,500,766 pertained to the B-shares).

The company had 3,800,000 B shares in treasury at the end of the period. The share capital amounted to SEK 162,023,052.

Accounting policies

These condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). The interim report for the Parent Company was prepared in accordance with the Annual Accounts Act, Chapter 9, Interim reports. The application of these accounting policies complies with what is presented in the Annual Report for the fiscal year ending December 31, 2023, except as stated below, and must be read together with the Annual Report. In addition to the financial statements and the associated notes, disclosures according to IAS 34.16A are also presented in other parts of the interim report. 

As of 1 January 2025, the Group reports discontinued operations in accordance with IFRS 5. The discontinued operations consist of the Mobile, PC and Access China operations that were discontinued as of March 31, 2025. This means that the profit from the discontinued operations has been broken out of the income statement and is reported separately as profit after tax from discontinued operations. The comparative figures in the income statement with associated key figures and notes have also been restated.  

The Group has also changed its principle regarding the reporting of R&D costs. Depreciation of capitalized development expenses has previously been recognized in cost of goods sold, thereby affecting gross margin. As of January 1, 2025, depreciation of previously capitalized development costs is instead recognized within the development costs function in the income statement. The comparative figures for previous periods have been recalculated. Reporting all R&D-related costs, including depreciation of previously capitalized costs within the R&D function on one and the same line in the income statement, has been deemed to lead to financial statements that give a more accurate view of the company's gross margins and also increase comparability with other companies in the industry.

Revenue is reported by geography: EMEA, Americas and APAC. 

No new or revised IFRSs that have become effective in 2025 have had any significant impact on the Group. The Group’s reporting currency is SEK and the report is prepared in SEK M.

Critical estimates and judgments

With its Audit Committee, management has discussed the progress, selection and disclosure of the Group’s critical accounting policies and estimates, as well as the application of these principles and estimates. Pursuant to IAS 1, the company should disclose the assumptions and other important sources of uncertainty in estimates, which if actual outcomes differ, can have a material impact on the financial statements. In cases where this occurs, estimates and judgments have been moved to the relevant note. A summary of the areas that management considers to contain material estimates and judgments follow:

• Deferred tax
• Capitalization of development costs
• Impairment testing of goodwill and other intangible assets
• Inventory valuation 

Related-party transactions

In connection with the rights issue carried out during the period, certain members of the Board of Directors and executive management subscribed for Units on the same terms as other shareholders. Each Unit consisted of 48 new class B shares and 8 warrants, where each Warrant entitles to subscription of one (1) new B-share in the Company. A total of 5,749,072 Units were subscribed for by members of the Board of Directors and management, corresponding to 275,955,456 Class B shares and 45,992,576 Warrants. The transaction was carried out on market terms and has therefore not impacted on the company’s result. As the Board and management are considered related parties under the applicable accounting standards, this disclosure is provided in accordance with relevant regulations.

Parent Company

The Parent Company’s revenues for first quarter of 2025 amounted to SEK 0.9 M (neg: 0.3). After financial items, a loss of SEK 50.2 M (neg: 28.3) was reported for the period. 
The net result for the period was a loss of SEK 50.2 M (loss: 28.3). The Parent Company’s disposable cash and cash equivalents at period-end totaled SEK 41.1 M (11.0).

Significant risks and uncertainties – Group and Parent Company

To anticipate risks and minimize their impact, FPC has processes for continuously identifying and managing risks that could impact the operations. This includes probability and consequence assessments of operational risks, market risks, financial risks and legal and other risks.

The described risks and uncertainties are not ranked in any order of significance; nor are they claimed to be the only risks or uncertainties to which the company is exposed. Additional risks and uncertainties that the company is currently unaware of or that are currently not adjudged to be material could develop into factors that might in the future have a material impact on the company’s operations, earnings, financial position or future outlook. The following description does not claim to be complete or exact, since risks and their degree of impact vary over time.

Operational risks

• Risks associated with the implementation of the company's transformation plan.
• Delivery capacity of contracted suppliers.
• Risks related to outsourcing.
• Reduced technological leadership.
• Risks related to the general perception of biometric sensors.
• The company is dependent on its key employees.
• Leaks and infringements regarding business secrets.
• IT and cybersecurity risks, as well as risks related to system failures, downtime and other interruptions
• Internal scalability.

Market risks

• Geopolitical instability.
• Supplier costs.
• Economic fluctuations.
• Currency risk.
• Loss of customers and price pressure due to increased competition.

Finance risks

• Credit risk.
• Financing.

Legal risks

• Competitor IP.
• Value of Patent IP.
• Products defects and product liability.
• Risks related to the processing of personal data.
• FPC’s operations are subject to a number of regulatory compliance risks.
• Risks related to judicial and administrative proceedings.

FPC’s current assessment is that the company is not materially impacted directly by the war between Russia and Ukraine, nor by any other ongoing armed conflicts. We closely monitor developments related to increased trade tensions and maintain readiness to take appropriate action to mitigate potential negative effects.  At this stage, the company does not view this as a material risk to its operations.

Further information

This is the type of information that Fingerprint Cards AB is obligated to disclose pursuant to the EU’s Market Abuse Regulation. The information was submitted for publication, through the agency of the contact specified below, at 7:00 a.m. CEST on April 29, 2025.

Welcome to FPC’s presentation of the interim report for the first quarter of 2025 on April 29, 2025, at 09:00 a.m. CEST. The presentation will be webcast, and participants can register via the link below: https://edge.media-server.com/mmc/p/66vf6eqz 

For media and analysts: Register for the teleconference via this link: https://register-conf.media-server.com/register/BI6b86c9c318be476fa7b92fcfbeb7f0ee

For further information, please contact: Stefan Pettersson, Head of Investor Relations
Tel: +46 (0) 101 720 010
Investrel@fingerprints.com

www.fpc.com

Issuance, publication or distribution of this press release in certain jurisdictions could be subject to restrictions. The recipient of this press release is responsible for using this press release and the constituent information in accordance with the rules and regulations prevailing in the particular jurisdiction. This press release does not constitute an offer, or invitation to acquire or subscribe for new securities in Fingerprint Cards AB in any jurisdiction.
 

Certification

The Board of Directors and the CEO certify that this report provides a fair and accurate review of the operations, financial position and earnings of the Parent Company and the Group and that it describes the significant risks and uncertainties facing the Parent Company and the companies included in the Group.

Stockholm, April 28, 2025

Review Report

This interim report has not been examined by the company’s auditors.