Precise Biometrics, a Sweden-based biometric solutions provider founded in 1997. The company went public on October 3rd, 2000, with its shares listed on the Nasdaq OMX Stockholm. In this research note, we examine the financial performance and business developments achieved by Precise Biometrics over the past year based on their year-end report and ABGSC Investor Day presentation.
Precise reported a 17% increase in total revenue, amounting to SEK 98.7 million ($9.4 million) for 2022, up from SEK 84.3 million ($8 million) in 2021, and net sales grew by SEK 7.7 million ($730,000) to SEK 91 million ($8.67 million) for the full-year. This growth occurred despite a 30% decrease in revenues in the last quarter of 2022 vs the same quarter the previous year.
The company’s year-end report also achieved an increase in profitability, with an operating profit of SEK 10.8 million ($1 million) compared to SEK 2.2 million ($208,021) in 2021. Revenue growth can be largely attributed to the company's continued expansion in the biometrics market, while profitability is due, in part, to the successful implementation of cost-control measures and a focus on high-margin business segments.
Precise Biometrics divides its business into two areas; Digital Identity for identification within access control, digital services, and visitor management, and Algo for fingerprint applications. Revenues for Digital Identity increased to SEK 5.9 million ($558,597), driven by new visitor management solutions. While, revenues for Algo actually decreased to SEK 13.4 million ($1.3 million), mainly due to low customer demand in the mobile market in 2022, which reduced the royalties for its embedded fingerprint technology by 70%.
A key strategic development for Precise Biometrics in 2022 was an expansion of its product portfolio with the launch of Precise YOUNiQ. The technology combines facial recognition technology with liveness detection to provide secure and convenient access control solutions for various types of facilities. Precise also expanded its BioMatch Mobile product range with new offerings designed for secure payments and user authentication in smartphones, wearables, and IoT devices.
While no new acquisitions were made during 2022, the year has been used to settle payments and restructuring for their acquisition of EastCoast Solutions AB on November 29th 2021. Exactly one year after the deal, on November 29th 2022, Precise announced the merging of its sales, customer service, and R&D functions for EastCoast's visitor management solutions with the corresponding functions for YOUNiQ, biometric access solutions to strengthen the sales channels for both services while optimizing the organization.
"The merge of the functions represents an important strategic step in continuing to grow Digital Identity. By combining the sales channels and the competencies in sales and R&D, we are expanding the sales force that can sell our two service areas. This will give us better cross-selling opportunities and a strengthened product development within the business area", says Patrick Höijer, CEO of Precise Biometrics.
Much of the growth in 2022 has come from the company’s geographic expansion, including the Asia-Pacific region, where it established a local sales and support office in Taiwan. The company also expanded its presence in the United States by setting up a new subsidiary to better serve its growing customer base in the region. These expansion efforts have resulted in a 30% increase in sales in the Asia-Pacific market and a 25% growth in the US market compared to the previous year.
Precise Biometrics Partnerships
In February 2023, Precise also joined the Genetec Technology Partner Program to further strengthen the presence of YOUNiQ Access in the US market. “The US market is a large and mature market when it comes to adoption of biometric solutions and is therefore an interesting market for Precise. We have therefore been focusing on establishing new sales channels through technological and commercial partnerships,” said Höijer.
Looking ahead, Precise “aims to become a global leader in the biometric identification and authentication market” and to achieve that goal, the company has committed to further investment in R&D to “enhance its existing product portfolio and explore new technological innovations in the biometric space.” The company will also continue to strengthen its distribution channels, targeting new industries, and exploring opportunities in emerging markets.
Despite a slow fourth quarter, overall 2022 figures showcase the company's strong financial performance and continued expansion in the global biometrics market. Presenting a history of innovation and a clear strategic vision, Precise is well-positioned to capitalize on the growing demand for secure and convenient identity solutions in buildings, and in mobile devices. Their ongoing commitment to R&D and partnerships will also continue to contribute to the evolution of the biometric industry as a whole.