Precise Biometrics AB (publ)

Hello, and welcome to this VD-interview in connection with Precise Biometrics releasing their book, Slutskommuniqué. And with me is VD Joakim Nydemar. How are you?

I'm good, thanks.

How are you? It's great here too. I think we'll jump right into it. You write in the report that 2025 was not really the year you had expected. Do you want to develop that a bit?

We came into 2025 with wind in the sails. We came from a good year in 2024. We have good products, we are well positioned and we had good customer inquiries. Then came the challenge, we got a lot of uncertainty on the market. We got a doubt and a caution from our customers that shaped our business. Also, the dollar started to drop in value. All of that together has had a big effect on the whole business. With that said, I think we will get through it. We deliver a positive EBITDA, we deliver a positive cash flow in the business. And we have done a lot of things during the year. We have delivered new products, we have won new big, nice customers. We have also taken new projects. I will sum it up like this, we are now in 2025 behind us and I think that 2026 has a great start and I look very much forward to 2026.

Super exciting, and we will come back and talk more about the future, of course, but I just wanted to backtrack a bit since this final statement, what is new here is Q4, and when we were here in connection with the Q3 report, you were very optimistic about the fourth quarter, but when you read the report, it did not turn out as positively as you had hoped. What factors were behind that? What changed the situation?

A few different things. First of all, there were new geopolitical events that created caution. We had a dollar exchange rate that continued to fall. If we just look at the dollar exchange rate, we have a very large share of our income in dollars. We have a very large share of our costs in Swedish kronor. With a dollar exchange rate that drops about 17% in value during the year, it will naturally have consequences. But the single biggest reason is that one of our biggest mobile customers launched a delivery of their sensors for 2026. And that gets an effect on our royalty revenues during Q4. And this is something that I have talked about in previous interviews as well, that there is this variation in the quarter, where it can hit quite a lot depending on how our customers choose to act. But the important thing here, I think, is to point out that this is not about a lost business or a lost customer, but this is about a transfer of revenues.

And despite the fact that this year it was shot down to 2026, you still deliver a positive result. Would you like to talk a little more about why you think this is so important to highlight in the report?

It is a positive EBITDA and together with the cash flow for the ongoing business, it is important to measure the numbers that we need to relate to. I also think we show that we have a great cost control and discipline in how we use the money. We are extremely careful with spending money on things that create value, that create growth. And if you look at it, we have an unchanged cost mass in the middle of the year as well. It was not really what was in our budget, but we have handled new developments, we have delivered new products, and despite that there is still an unchanged cost mass. So all of that combined is what we are going to take with us here. And it creates the conditions for this year, 2026 and forward, to create the growth we want.

So now we put 2025 to the books and look forward. How do you assess the market situation right now and what is happening on the market that is particularly positive for your business in the future?

It happens a lot. We have the general safety situation that drives the need for biometric solutions. That is good. We have national ID that we have been working with since earlier, but that market is also super interesting. There are many billions of users already today, but what is happening now is that, given that user base, you start looking at other areas of use for for that platform, not just in contact with authorities, but other areas of use such as payment, which is super interesting. We have our ultrasonic sensors that continue to deliver and show growth and we see that this year and forward they will bubble down in what we call the mid-end segment of mobile phones, which then drives volume. And then we have the connection between physical and logical access, which we see is exciting, where companies are becoming more and more interested in the physical access. The logical access is the login and so on. taken a lot of measures in recent years to keep track of cyber attacks and other things. But also the physical access, that is, if you get an intrusion from someone who comes into the building, you become much more vulnerable. That's why you look much more on waste protection and waste safety, which then benefits us. So there is a lot going on. Yes, we also have mobile payments, I would mention. or mobile payment with payment in a different way than a card, as it traditionally has been, or cash, for that matter. And it's like this physical payment. And we know that companies like Mastercard are now looking at a next-generation payment system where they are looking quite intensely at just biometrics. And it's also incredibly exciting to see where that takes you, of course.

Right. So you mention several exciting market trends here that benefit your industry. But how do you make it possible for Precise Biometrics to take advantage of these trends and ensure that this makes your business grow?

So if you look at the national ID part, we work quite hard with our positioning. We have partners and we are constantly looking for new ones and have new ones in progress. We have commercial projects in progress, but we also position ourselves with, for example, MOSIP, which is an organization that somehow sets the platform for national ID. And we are actually down in Morocco this week and are showing our product together with partners. So we are well on the go. On the ultraviolet sensor side, we have released a new product quite recently that meets the requirements for the new generation of sensors, which then goes into the mid-end segment and drive volume there. We have the physical access, there we have our precise access, which we are proud of, so to speak, which solves the biometric access with everything it means. So there is a lot of activity in line with the trends we see.

Yes, it sounds like that. And if we jump in and talk about your products, you mentioned some here. You have previously talked a lot about the launch of the fifth generation Biomatch Viso. What is that and why is this launch so strategically important for Precise Biometrics?

Biomart V is our matching algorithm and it is the one you use when you authenticate a fingerprint. It can also be used with other biometrics, but it is primarily for fingerprints. What we are doing now is that we are setting up a completely new AI-based platform for the matcher who definitely position us as world leaders within biometric algorithms. We are raising the level of performance significantly and we are also creating the conditions now to get into the new generation of ultraviolet sensors, which, as I mentioned, will drive volume here in the intermediate segment of upcoming models of mobile phones. Therefore, it is strategically important and also commercially important for us.

You talk about strategically important initiatives for Precise Biometrics, and one of those mentioned in the report is these strategic national ID programs that are being rolled out all over the world. Would you like to tell us a little more about what this means for Precise Biometrics and your business?

Absolutely. If you look at what is happening in the national IT, there are a few billion users on that type of platform. We are in India now for Aadhaar. But we see that a lot is happening in South East Asia, Africa and South America. And as I said, we are down this week in Africa to position ourselves. So we see that a lot of exciting things are happening. There is a great need for the type of technology that we deliver, which is connected to anti-spoof and liveness solutions. which means that we see that we will be able to take a good position. And then we have the connection to other segments that are not only connected to identity and when individuals visit authorities and hospitals, but also in other types of services that we find very exciting. So all in all, we see it as very interesting.

Yes, it sounds like a very big market potential for biometrics. You also write in the reports that the interest in biometrically physical access is increasing. Would you like to explain what this is about? It's about getting into offices and gyms and the like, if I understand it correctly. What drives this development?

It is the general security situation, but also the connection between logical and physical access that has been updated even more. We are now seeing an upturn in inquiries about this type of solution. And we also have this connection to our Visto Management solution that drives inquiries. So there is a lot going on in that segment. High-security properties are a more specific area that is in demand for these solutions. And there we have products today that that meet those requirements. So we see that there is a bit of isolation in that area.

Sounds promising, and you have previously talked about PALM, hand recognition, as an area that is growing for physical access. What is the status of your offer in that area?

We have a partner in the USA, which is the production of the hand scanner, which was an important part of the product. There we now have a whole solution that we can deliver. There are a lot of questions that have come in in the last few months, which feels incredibly exciting. We now have a number of partnerships, this with HandID as an example, but there are more partners that have integrated and are integrating our softwares into their Scanner products. We have a connection to both physical access and payment solutions. So there's a lot bubbling in that area right now, and I think it looks very promising for this year.

Very promising, you say, and there's a lot to talk about here. You've brought up some of the things, and if we're going to boil this down to something, what are you most looking forward to during 2026?

I must say that I am incredibly optimistic and really look forward to 2026. We have a product suite that I think meets the market requirements in the segments we work with. We work with segments that, according to All forecasts show a good annual growth in the coming year. I also think that we have a team that is well-coordinated and ready to deliver on this. And maybe last but not least, we have an incredible revenge in the team from what has happened during 2025. I think that 2026 has started for us and I look forward to the continuation of 2026.

Great! That sounds very promising. Thank you very much Joakim. And for those of you who are watching this live, we also want to remind you that Joakim Nydemark and CFO Maria Wester have a live Q&A in the afternoon 13.00. And the link there is on the Precise Biometrics homepage or in the press release. that you can find on Avanza or Nordnet or your network bank. Thank you so much for watching and we'll see you next time!