Precise Biometrics AB (publ)

It's Friday the 15th of August and today Precise Biometrics has released its Q2 report. And with me is the CEO Joakim Nydemark. How are you doing?

A bit cold and a bit sore throat, so I have to apologize. But overall it's very good. Yes, lovely.

And have you here. We'll throw ourselves directly into the report I think. How do you want to sum up the quarter?

Jag skulle vilja säga att vi på det hela taget gör ett bra kartal. Vi har mycket i pipen, vi har tecknat nya kundavtal, vi har ingått nya projekt tillsammans med partners och vi visar på en stabilitet i vår affär. Then we, like many other companies, are affected by the general turbulence around the world. Debt, it's the dollar exchange rate for us. And that creates a caution among our customers and on the market. And that makes some things take a little longer, but I think we show progress all the time. If you look at the figures, if you take into account the effects of the currency and compare it with the corresponding quarter last year, we show growth and we show positive GDPR. And then I think we are on the right side, so to speak. Then we can more and we will more and it will come.

I looked at the report here and EBITDA came in at minus en halv miljon men rensat då för valutakurseffekter och intäktsfördelningen över året så hade det varit plus. Är det så man ska förstå det?

Yes, that is correct. If you look at the value of the currency, it is 900,000 SEK, and that takes us over to the positive. If you look at the million, or in the half-year, the two million, which is the effect of a negotiated agreement, and they come in the other half-year, these money, so they are not lost, but if you compare the quarter against each other, Then we show plus 1.4 in EBITDA compared to plus 0.1 last year. So again on the right side.

When we were here in connection with the Q1 report, you talked about a hack in the curve. Is that still the case? And on the whole of 2025, are you still positive?

I still feel confident that 2025 will be a good year. We have a good demand for our products. We sign the new contracts that we had earlier. We also have these frame rates that are kicking in here in the next half of the year and forward, which we have recorded in Digital Identity. And then we have our ultraviolet sensors that also continue. The forecasts there look promising. So I still think there is a lot that speaks for a positive 2025.

And if you follow your news feed, then there is something that I have caught up with that I think sounds really exciting. It's all about the softwares for national ID programs that you support. Can you tell us a little more? Have you made any business-related progress on that front during this period?

Precis som du säger så är detta spännande. Vi annonserade ju det tidigare år att vi har blivit godkända då som certifierade leverantör till det här indiska ID-programmet som heter Adhaar. Och det var ju på något sätt första steget att kvalificera sig in. Nu har vi tecknat kommersiella avtal med flera partners som i sin tur ligger i kommersiella projekt med slutkunder. So what we see here is that we should be able to start reaching the market with this probably at the beginning of next year. Generally speaking, the Indian market is absolutely huge and there is a lot left to do. But it also exists in many other parts of the world. which is an additional aspect of something that we address here now with Kraft. So it's exciting.

And for those who are watching this who are not so involved in IT security and security softwares, can you just explain a little more simply what this is about? It's with the help of fingers or biometrics that you can identify people in India, for example, who do not have, ID card and that they in that way should be able to vote and go to the bank and so on.

No, but that's exactly it. And it's actually not just for those who don't have ID, but this is for everyone, for security and convenience, so to speak. But for a large part of the population there, it is a necessity that you have this in lack of another ID transaction. That's exactly what you're saying. Then you use biometrics for everything within the public sector, whether it's the police, the hospital, voting, or whatever it is, where you have a need to legitimize yourself in the bank. So this is something that is used. And then it's typically some form of biometrics, often fingerprints.

Men är det främst i utvecklingsländer, alltså i Asien och Afrika och Sydamerika, eller är det här någonting som du ser även i västvärlden som ett framtidsområde för Precise?

Well, I can say that it would have been extremely easy for us. Then it has become so that it has started to roll out in developing countries. And it has sprung out of this, in a sense, lack of IT handling. But that you use this with voting, for example, could very well be a reality.

Interesting. We will get back to that later and hear more about how it has gone in India and so on. If we go further, here under Q2 you have also worked with the best offer in your business area, Digital Identity. Would you like to tell us a little more about that?

Yes, we can raise our arms even higher and run even faster. We have done, as you indicated, a large number of changes and optimizations over the past six months. It includes product packaging, increased product supply, more sales power, more sellers, but also expansion to more geographical areas outside of Sweden and the Nordic countries. jobar ständigt med att kunna exponera de här produkterna. Lanseringen av den nya web-sajten ytterligare är ett exempel som ger oss ett skyltfönster som är mycket mer trimmat för den här typen av digital försäljning som vi eftersöker, som vi vill se här nu i fortsättningen. Vi har som sagt en säljkar som jobbar på det, men för att detta här ska kunna säljas utanför We are not satisfied with the growth we have. At the same time, I can confirm that all the changes we have made, they have started to have an effect and will continue to have an effect. But such changes do not happen overnight, there is a certain delay in this, but it will come.

And if you look at the key word recurring interest ARR, I have understood that it was also affected during the quarter of a competition, a final.

Yes, and it's sad when that happens. This was also one of the slightly larger installations we have, and it gets a direct effect on the ARR in this quarter. That happens. Now we had the opposite in this quarter. I still think that if we look forward, a lot of positive things are happening, so we are on our way back.

If we look at your other business area, biometric technologies, ultrasonic sensors, have you talked about them earlier as an area of growth? What has happened there? Has there been any change in your approach to that?

It continues. We still see a great potential in that area. It also sees the mobile world. It happens a lot. The forecasts and what we see in market reports, what we get from our customers, our network, when it comes to volumes, it looks positive. We see that it will go from the more advanced, more expensive phones to the so-called mid-end segment, which creates larger volumes. In parallel, our partners continue to develop additional ultra-wide sensors that are more specialized for certain types of models or certain types of usage areas. Där har vi också möjlighet att komma in naturligtvis. Det händer mycket på det området, vilket borgar för att vi är med här i den tillväxten.

Spännande. Jag var i Almedalen under Almedalsveckan här tidigare i somras och där pratade du förstås väldigt mycket om IT-säkerhet, cybersäkerhet med tanke på den skakiga omvärld som vi lever i. Right now, there's also a lot of talk about the rapid AI development and how that affects security and deepfakes and all this. How do these trends affect Precise Biometrics and do you have a lot of customers who are interested in talking about AI and how you can increase your cybersecurity in these times?

Vi kan konstatera att AI är på allas läppar. Vi har på utvecklingssidan jobbat med AI i snart 10 år. Så det här är ju någonting som är en del av DNAet i Precite. Sen har det ju nästan exponentiellt ökat här de sista två åren kanske. Och är definitivt en viktig del av vår affär. If you look at it from a security perspective, then it is absolutely true that AI is very good in many ways, but it also gives tools to the criminals, or those who want to hack these systems.

Yes, and also to foreign states.

Yes, what it can be now. And it is all the time... Sad, but at the same time good for our business, because it's kind of the sweet spot that we are with our BioLive solution. And that's kind of the question we also see on National ID, which we talked about earlier, that it is this spoofing that drives the need for that type of software. Yes, we create conditions to create cheating faces and expressions and what can now be. Our anti-spoof and our bio-live solution ensures that you do not succeed with it. And there we have a solution that we know holds a very, very high level. Much driven by the fact that we have a en egen utveckling av de här algoritmerna, men framförallt hela datainsamlingen och vi har egen spoktillverkning och så vidare. Så det är mycket på det området här som borgar för att vi håller en hög nivå.

Super interesting and really right in time to talk about that type of solutions, I understand. Yes, it's about time for the end of this interview. If we look a little forward and look at the second half of this year, 2025, how do you see the outlook?

Jag tycker att vi gör väldigt mycket rätt. Vi är bra positionerade, vi har en efterfråga på våra erbjudanden, såväl inom Biometric Technologies som inom Digital Identity, alltså våra olika erbjudandeben. Det i kombination med de nya produkter som vi ser, men framför allt kanske allt som händer nu i vår omvärld kring säkerhet och det vi precis berörde med behovet av antispoplösningar, gör att det skapas ständigt nya möjligheter. Och här jobbar vi aktivt med att fånga de möjligheterna. Det är mycket inom biometri kopplat till säkerhet också, cybersäkerhet inte minst, som skapar möjligheter. Och vi gör vårt yttersta för att hitta nya möjligheter där. Och det pågår mycket internt nu, alltså just inom cybersäkerhet, som jag hoppas kunna återkomma till, som är väldigt spännande. Så att jag är... Very positive for the future, both in the short term this year, but also in the long term.

It sounds like there is a lot of excitement going on, especially in the area of cyber security, with regard to the environment. Thank you very much Joakim, and I would also like to pay attention to those who are watching this live on Rapportdagen, that you are holding a live question time with you Joakim and the company's Thank you very much Joakim.