Fingerprint Cards (FING) Q3 2024 earnings summary

Executive summary

• Revenue declined sharply year-over-year due to strategic exits from the mobile and PC segments as part of a transformation plan, reallocating resources to high-margin Access and Payment areas.

• Gross margin improved significantly, reaching 18.3% in Q3 2024 (38.7% adjusted, excluding R&D depreciation), reflecting a focus on higher-value markets.

• The company is now debt-free after completing a rights issue and repaying all convertible bonds, enhancing financial flexibility.

• Headcount reduced by over 40% since year-end, with further cost optimization underway to support the new commercial reality.

• Strategic M&A, new CTO appointment, and partnerships are targeted to expand into the identity market and cloud platform.

Financial highlights

• Q3 2024 revenue was SEK 102.8M, down 44% year-over-year; Access segment revenue grew sequentially to SEK 18.2M.

• Gross margin rose to 18.3% in Q3 (38.7% adjusted), up from 12.8% in Q3 2023.

• Adjusted EBITDA for Q3 was SEK -22.8M; free cash flow was SEK -27.4M, both improved year-over-year.

• Cash and cash equivalents stood at SEK 49.0M at quarter-end, down from SEK 197.9M in Q3 2023, mainly due to debt repayment and rights issue costs.

• Significant write-downs in Q3: SEK 34.3M (R&D) and SEK 183.6M (goodwill from Delta ID acquisition) impacted operating profit.

Outlook and guidance

• Mobile and PC product groups to be fully wound down by end of 2024, with further cost reductions and OPEX targeted below SEK 70M by mid-2025.

• Focus on high-margin Access and Payment product groups, digital identity, and secure authentication for future growth.

• No explicit forecasts for cash flow positivity, but aggressive cost reductions are ongoing.

• Continued financial volatility expected as transformation advances.

• Payment market growth anticipated but remains slow; focus is on moving deals through the pipeline.