Fingerprint Cards Ab (($SE:FING.B)) has held its Q4 earnings call. Read on for the main highlights of the call.
The latest earnings call from Fingerprint Cards AB paints a picture of a company on a positive trajectory, marked by significant improvements in gross margins and core business growth. These developments are bolstered by strategic partnerships and effective cost reductions. However, the company continues to face challenges, including negative cash flow and the transition away from low-profit segments, which require careful management.
Significant Improvement in Gross Margin
The earnings call highlighted a remarkable improvement in Fingerprint Cards’ gross margin, which soared from 17.9% a year ago to 49.8%. This dramatic increase is attributed to the company’s transformation plan and its strategic focus on higher-margin markets, showcasing the effectiveness of its recent initiatives.
Core Business Growth
Fingerprint Cards reported a robust growth in its core business, with revenue excluding the mobile and PC segments increasing by 12% year-on-year and 53% quarter-on-quarter. This growth underscores the company’s successful pivot towards more profitable areas, reinforcing its strategic direction.
Successful Cost Reduction
A significant reduction in headcount by 62% year-on-year, from 185 to 71 employees, has contributed to lower operating expenses and enhanced fiscal discipline. This cost reduction is a key component of the company’s strategy to streamline operations and improve financial health.
Debt-Free Status Achieved
In a major financial milestone, Fingerprint Cards achieved a debt-free status by raising SEK115 million through a rights issue in February 2025. This move has strengthened the company’s balance sheet, providing a solid foundation for future growth.
Promising Strategic Partnerships
The company has forged notable partnerships with Anonybit for cloud solutions and Smart Eye for automotive biometrics. These alliances are expected to expand Fingerprint Cards’ market reach and enhance its technological capabilities, supporting its transformation and growth strategies.
Negative Adjusted EBITDA and Free Cash Flow
Despite the positive developments, Fingerprint Cards reported negative adjusted EBITDA and free cash flow. These financial challenges are primarily due to ongoing costs associated with the company’s transformation plan, highlighting areas that require ongoing attention.
Decline in Total Revenue
The company’s total revenue has decreased as a result of its strategic exit from the unprofitable mobile and PC markets. This decline is a temporary setback as Fingerprint Cards transitions towards more lucrative segments, necessitating careful management of existing commitments.
Challenges in Transitioning Away from Mobile and PC
The transition away from the mobile and PC segments has led to a temporary decrease in overall revenue. This shift requires careful management to ensure that existing commitments are met while the company focuses on its new strategic direction.
Forward-Looking Guidance
Looking ahead, Fingerprint Cards is optimistic about its future, with significant improvements in gross margin and core business growth expected to continue. The company is set to benefit from strategic partnerships and a debt-free status, which will support its transformation and growth strategies. However, it remains vigilant in managing the challenges associated with its transition from low-profit segments.
In conclusion, Fingerprint Cards AB’s earnings call reflects a company in transition, with a positive outlook driven by improved margins, strategic partnerships, and cost reductions. While challenges remain, particularly in managing cash flow and transitioning away from certain segments, the company’s strategic initiatives position it well for future growth.