This article first appeared on GuruFocus .
Release Date: August 26, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Successfully completed the merger with FPC, doubling revenue and lowering costs, which strengthens the company's financial and market position.
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Received positive feedback from customers and partners regarding the merger, validating the strategic direction.
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Continued growth in the access and visitor management segment, showing resilience in a key business area.
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Ultrasonic market segment is on track, with a clear focus on this high-value area for future growth.
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Executed on over 30% of the estimated SEK45 million annual cost synergies, with a fast-paced integration process.
Negative Points
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Experienced a drop in revenue and volume during Q2, primarily due to increased hardware prices impacting the low-end market.
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Failed to bridge the decline in low-end sensor software sales with ultrasonic growth, missing expectations.
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The merger and integration process has incurred significant costs, requiring a SEK100 million rights issue to fund.
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FPC's financial results are not yet included in the Q2 report, delaying full visibility into combined performance.
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Integration work is ongoing and not expected to be fully complete until 2027, leaving execution risks in the interim.
Q & A Highlights
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Q: What are the key highlights and challenges from the second quarter? A: Joakim Nydemark, CEO, expressed pride in finalizing the merger with FPC and the subsequent rights issue, along with positive customer feedback and growth in access and visitor management. The main challenge was a drop in revenue and volume, particularly in the low-end, non-ultrasonic market, which was impacted by increased hardware prices. While the ultrasonic market is on track, it was not enough to fully offset the decline in other sensor software volumes.
Q: What actions are being taken to offset the drop in volume? A: The CEO highlighted the firm strategy centered on the merger, which allows the company to grow in the value chain by doubling revenue, lowering costs, and improving its financial and offering position. The focus remains on ultrasonic software, but the merger provides a broader offer. Continuous cost control and business optimization are also key actions being taken.
Q: How did FPC perform in Q2, and when will its numbers be included in reports? A: Since the merger closed after Q2, FPC's numbers were not included in this report. The first quarter with FPC figures will be the Q3 report in November, covering FPC's performance from the July 20 merger date. The CEO noted that FPC's Q2 performance was according to plan, and the focus is on maintaining traction in both businesses and integrating offerings.
Q: What does the merger mean for Precise Biometrics strategically and commercially? A: The CEO described the merger as "the start of a new beginning," providing a much larger market reach and a combined offering of hardware and software. This allows the company to target a broader audience and creates significant strategic and commercial advantages.
Q: What will the combined company's offerings look like, and what value do they provide? A: The combined company will offer a complete biometric system including sensors, secure elements, MCUs, algorithms, and anti-spoofing, all in one package. This can be applied to products like FIDO tokens and turnkey access and visitor management solutions. The key value proposition is addressing AI-driven cyber threats and identity theft by connecting user identity to authentication, enhancing security.
Q: How will the estimated SEK45 million in annual cost savings be achieved? A: The integration project is ongoing with 14 work streams, and over 30% of the cost synergies have already been executed. The company will continue executing on these synergies during the fall, with the goal of completing all integration and starting fresh in 2027 with everything in place.
Q: What will the company do with the SEK100 million raised from the rights issue? A: The funds will be used to cover merger-related costs, execute the integration, and realize forecasted synergies. Additionally, the company will invest in sales and marketing to capitalize on new opportunities and merge product offerings, aiming to achieve a "one plus one equals more than two" effect.
Q: What milestones should investors look for in the next 12 to 18 months? A: Within 12 to 18 months, the CEO expects the integration to be complete and cost synergies realized, enabling growth. Key milestones include cross-selling, upselling, and new customer opportunities from the combined offering, as well as exploring areas like national ID and FIDO tokens. Further consolidation and potential acquisitions are also part of the plan.
Q: What are the top three points of the updated investment case? A: The CEO highlighted three key points: 1) doubled revenue and lower costs, 2) growing in the value chain to provide higher value to customers and address a larger customer base, and 3) expanded market reach with greater geographical presence. Additionally, the overall security situation and AI development are driving demand for biometric security solutions.
Q: Is the timing of the merger driven by market demand? A: The CEO confirmed that the timing is a combination of the company's strategic actions and market opportunities. The merger aligns with the identified need for biometric security and identity solutions, driven by rising cyber threats and AI development.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
