THIRD QUARTER

• Net sales totaled SEK 17.7 (18.8) million. 
• EBITDA totaled SEK -1.1 (-1.8) million. 
• The operating profit/loss totaled SEK -7.3 (-7.3) million. 
• Earnings for the period totaled SEK -7.7 (-7.4) million.
• Earnings per share totaled SEK -0.1 (-0.2). 
• Cash flow from operating activities totaled SEK -7.5 (-7.0) million. 
• Cash and cash equivalents totaled SEK 64.4 (41.3) million. 
• ARR (Annual Recurring Revenue) at the end of the period SEK 17.8 million (comparative figure from the end of 2022: SEK 16.2 million). 

INTERIM PERIOD 

• Net sales totaled SEK 54.8 (71.7) million. 
• EBITDA totaled SEK -2.3 (3.1) million. 
• The operating profit/loss totaled SEK 21.0 (-12.3) million. 
• Earnings for the period totaled SEK -21.4 (-12.9) million.
• Earnings per share totaled SEK -0.3 (-0.3). 
• Cash flow from operating activities totaled SEK -8.0 (3.7) million. 
• Cash and cash equivalents totaled SEK 64.4 (41.3) million 
• ARR (Annual Recurring Revenue) at the end of the period SEK 17.8 million (comparative figure from the end of 2022: SEK 16.2 million). 

SIGNIFICANT EVENTS DURING THE QUARTER 

• Precise Biometrics signed a 12-month evaluation license agreement with CanvasBio, a Korean manufacturer of fingerprint sensors. The aim of the agreement is to jointly develop a fingerprint module for use in mobile phones. 
   
• Precise Biometrics (Precise) entered into a 12-month development license agreement with RECO Biotek Co., Ltd. (RECO), a Taiwan-based provider of bio-sensing system integration solutions. Under the terms of the agreements, Precise will provide its groundbreaking sensor algorithm solution BioMatch® for integration into RECO’s fingerprint systems. 
   
• The Board of Directors of Precise Biometrics appointed Joakim Nydemark, former EVP and CCO of Algo, as CEO, after former CEO Patrick Höijer left the role at his own request. Joakim Nydemark has extensive industry experience in tech, software and telecoms, with previous senior positions in companies such as Crunchfish, Anoto, TAT and Teleca/Obigo. 

SIGNIFICANT EVENTS AFTER THE QUARTER 

• Precise Biometrics recruited Henrik Winberg to the role of CCO for the Algo business area. Henrik will also be part of the group executive for Precise Biometrics. Henrik arrives from the tech company Dlaboratory Sweden AB (dLAB), where he held roles as COO and Head of Sales. Henrik Winberg will take up his new role at Precise Biometrics no later than January 17, 2024.
   
• Precise Biometrics appointed Fredrik André as Chief Marketing Officer (CMO). Fredrik will also be part of the group executive for Precise Biometrics. He arrives from the role of CMO at Avensia, an expertise company in the field of modern commerce. Fredrik André will take up his new role at Precise Biometrics on November 20, 2023. 
   
• Precise Biometrics recruited Sarandis Kalogeropoulos as Chief Commercial Officer (CCO) for the Digital Identity business area. Sarandis has been involved in the company as a consultant since 2019, and has over 20 years’ experience of working with business development and sales in tech companies. He will also be part of the group executive for Precise Biometrics. 
  

INTERACTIVE PRESENTATION OF INTERIM REPORT AND INVITATION TO Q&A 

Precise Biometrics has published a video in connection with today’s interim report, which includes interviews with CEO Joakim Nydemark and CFO Annika Freij, and is available on the Investor Relations page here: https://precisebiometrics.com/investors/
 
The material in the video is designed to complement the report and provide additional depth and better understanding of the stock market for the company’s business operations. 
 
The company also invites you to a live Q&A that starts at 10:00 AM (CET) on November 10th, 2023. 
 
To take part in the Q&A session, access it via the interactive video player on the Investor Relations page here: 
https://precisebiometrics.com/investors/
  
Questions can be asked directly in the chat function in the interactive player or submitted in advance to investor@precisebiometrics.com. 
 
Participating on behalf of Precise: 
Joakim Nydemark, CEO
Annika Freij, CFO 

CEO COMMENTS

"Full speed ahead.” That’s what I said when I took over as CEO a few months ago. Looking back on the last quarter, a lot of time has been spent on important customer projects that will generate revenues in the future, but of course also on targeting new customers and intensive development work within both Algo – Biometric Technologies and Digital Identity. We have also signed a large number of new agreements for YOUNiQ Visit, formerly EastCoast Visit, and YOUNiQ Access, which has a positive effect on our annual recurring revenue (ARR). Recruitment work has also been under way, resulting in us being able to bring in three new key people to the group executive since the end of the period.  
 
I took over as CEO at the turn of the month August/September and succeeded Patrick Höijer, who over the past year has done an excellent job of boosting the company’s finances and creating the conditions for growth. For me, the last quarter has therefore been very much about accelerating the commercialization strategy that was completed in late summer. I believe in physical presence and meetings, which is why my first months have seen me spending just about as much time with employees in the Lund office as with customers in the US, EU and Asia. Precise Biometrics has outstanding engineers and world-leading technology, and the challenge therefore lies in making the right choices in our market strategy by investing in the right applications of our technologies and addressing our geographical markets in the right way. We also need to ensure that our solutions scale optimally, and that we are efficient in the areas of technical development, sales, delivery, installation, and support, so that we achieve real economies of scale as we grow.
 
I am also pleased, a month or so into my role as CEO, to have succeeded in recruiting three really experienced people to the new group executive, which is now starting to take shape with clear areas of responsibility. Henrik Winberg will take on the role of CCO of Algo – Biometric Technologies and Fredrik André will replace Anna Leo as CMO, as Anna had previously decided to leave the company. Sarandis Kalogeropoulos, who has been with the company since 2019 and is highly experienced both technically and commercially, will also take on a bigger role as CCO of Digital Identity. We will also strengthen sales locally in the USA and in Sweden, in order to address the Nordic and European market with our YOUNiQ Access and YOUNiQ Visit offerings. 
  
The challenging situation in the consumer electronics market continued during the third quarter and, as previously communicated, this has also affected Precise Biometrics, as well as most subcontractors. The impact has primarily been due to lower volumes within Algo – Biometric Technologies, which has a direct effect on our royalty revenues. Looking ahead to 2024, there are many indications that a turnaround is approaching in the mobile market, with good potential for growth in the mobile segment. I also see good opportunities for future growth in the product verticals of vehicles, smart locks and laptops. We have also worked hard on costs earlier in the year, and we are now seeing the effects of this. The recruitments mentioned above are largely replacement recruitments or a redistribution of resources to customers and markets and will therefore not have any significant impact on the cost situation. 
 
There are a lot of exciting things happening in the automotive industry. During the quarter, we further strengthened our collaboration with one of the leading semiconductor companies, Infineon Technologies, when we had the opportunity to train their design and integration partners in fingerprint recognition and our software. We also started work on a joint marketing initiative, the first step being to train Infineon’s account executives in the automotive industry. This will be followed by several joint activities, such as exhibitions at trade fairs, with the Consumer Electronic Show (CES) in the USA at the beginning of 2024 being one example of such a joint marketing activity. Biometrics in the automotive industry is expected to grow by more than 20% annually, which we must take advantage of. 
  
In our Digital Identity business area, where we offer system solutions based on biometric algorithms, we saw something of a positive change in opinion during the quarter regarding acceptance of the use of cameras in society. With an increasing need for CCTV surveillance and facial recognition to increase security in society, both in Sweden and the rest of Europe, we are also seeing a change in the way people view cameras and other sensors for biometric authentication. Safety and security are becoming increasingly important, driving demand for biometric access systems such as YOUNiQ in workplaces, public buildings and homes. We are also seeing safer, more efficient visitor systems contributing to increased security, which we feel has increased demand for YOUNiQ Visit. During the quarter, we continued to develop the market in the USA through our partners Genetec and Flowscape Technologies. In parallel with the initiative in the USA, we will intensify sales efforts in Europe for both YOUNiQ Access and YOUNiQ Visit. The ARR (Annual Recurring Revenue) at the end of Q3 was SEK 17.8 million (16.2 million at the end of 2022), which reflects growth, but we want to increase the rate significantly in the future. 
 
Over the past 20 years, I have worked in technology companies that have had customer companies in the fields of mobile telephony, consumer electronics, vehicles and wearables. After traveling around Asia and the US during the past quarter and meeting a large number of new and existing customers and partners, I feel even more confident about the great growth potential that Precise Biometrics possesses. Safety and security are important values that we as a company deliver when we, through our world-leading biometric technology, make the individual the key to unlock doors, mobile phones, computers, and cars, and to create secure authentication when making a payment. The economy in our business areas is starting to point in the right direction, creating demand and momentum. We will benefit from this through increased market presence, sharper product packaging, and more efficient sales and delivery processes. I look forward with confidence to creating growth, profitability, and shareholder value. 

Joakim Nydemark 
CEO