CEO's comments
Solid growth in our core business
I am pleased to report that we doubled our revenue in Q1 2025, compared to the corresponding quarter last year. This was driven by robust growth in demand for our biometric authentication solutions across our portfolio. In addition to this revenue increase, 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, which we announced in January. 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.
“Our healthy 57% gross margin highlights the quality of the core business we're now focused on.”
Discontinued operations
As we complete our exit from low-margin product segments to focus on driving growth in high-value biometric and identity markets, we are introducing an important change to our financial reporting this quarter in order to enhance transparency: as part of our strategic exit from Mobile and PC, the associated results are now classified as discontinued operations in our financial statements, also for comparative periods last year.
The reason we are making this change is to provide a more accurate and transparent view of our ongoing business performance by isolating the operations we are exiting. So, when you look at the income statement in this report, it reflects our core business performance.
Strong margins
Our strong gross margin of 57 percent is significantly higher than in the segments we are exiting. The fact that we are reporting a lower gross margin compared to last year reflects the fact that revenue in 2024 included a higher proportion of software sales, mainly for iris recognition. Because sales of iris recognition software – at 100 percent gross margin – are often project-based and therefore uneven, this can lead to fluctuations in our gross margin from quarter to quarter. Excluding the impact of software in the revenue mix, we improved our gross margin compared to Q1 2024 by a couple of percentage points.
We also continued streamlining our operations to reduce OPEX and strengthen our financial flexibility. As at the end of March 2025, our headcount stood at 52 core roles, representing a decrease of 27% since year-end 2024 and 70% year-on-year.
Executing to accelerate growth
As we enter the second phase of our transformation, our focus is on accelerating revenue growth while maintaining high gross margins. In Q1 and into the beginning of Q2, we made tangible progress on this front through strategic partnerships, product innovation, and IP monetization. Key highlights include:
- First major partnership milestone with Anonybit achieved through a new integration with Ping Identity’s PingOne DaVinci™, advancing privacy-first biometric authentication for the enterprise.
- Monetized our iris recognition technology through a licensing agreement with Smart Eye, opening new opportunities in automotive. The deal also grants FPC access to Smart Eye’s facial recognition and eye-tracking technology, broadening our biometric modality portfolio.
- Accelerated IP monetization strategy through a strategic partnership with a leading IP advisory firm to capitalize on FPC’s strong patent portfolio, enabling us to pursue multiple IP commercialization opportunities in parallel.
- Progressed our biometric system offerings with jNet through the development of a turnkey biometric System-in-Package (SiP) module. This all-in-one solution supports enterprise authentication, secure ID, and crypto wallets, with mass production expected to begin in Q4 2025.
- Strengthened our position in biometric payments as Infineon’s SECORA™ Pay Bio solution, using FPC’s biometric technology, received full Visa certification.
- Strengthened presence in India by signing a new distribution agreement with SMET, a well-established biometric and semiconductor distributor. This partnership expands our channel reach for both fingerprint and iris technologies across key verticals such as finance, healthcare, and government.
- Advanced our wearables strategy through integration of our biometric technology in the Nymi Band 4. This rugged, water-resistant authentication band is designed for secure, passwordless access in compliance-heavy industries like pharmaceuticals, manufacturing, and healthcare.
As we move forward, FPC 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. We will continue to drive core revenue growth by deepening customer relationships and expanding market share in key segments. At the same time, we're actively pursuing asset monetization opportunities to generate incremental returns. We’re also investing in new revenue streams, not least by continuing to expand our digital identity solutions, reinforcing our leadership in secure authentication. 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. Finally, business modernization underpins our execution, driving the strategic transformation of our operations, technology, and processes to enhance agility, boost efficiency, and elevate customer engagement. Together, these priorities form a cohesive strategy to accelerate sustainable, long-term growth.
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. Our vision, "You are the key to everything", underpins our long-term strategy to replace passwords with biometric-based authentication, improving security and user experience while reducing fraud risks.
Adam Philpott
President and CEO