Hello, and welcome to Precise Biometrics AB Q1 2021 report. Throughout the call, all participants will be in the listen only mode, and afterwards there will be a question and answer session. Just to remind you, this conference call is being recorded. Today I'm pleased to present Stefan Persson, CEO, and Ulrik Nilsson, CFO. Please go ahead with your meeting.
Thank you, a warm welcome and good morning to Precise Q1 2021 presentation. I will, together with our CFO, Ulrik Nilsson, present the financial results and also give you some highlights on how we see the next coming quarters. Turn to page number two, please. Despite the situation due to COVID, once again, I'm happy to present another quarter with a positive EBITDA, and that we had sales of SEK 20.3 million . That shows some stability despite the [audio distortion] situation out in the world. We have also very good cost control, and we have been able to continue our investment in the future for YOUNiQ and with a clear focus in the access area. We continue to roll out more installation of YOUNiQ, and we focus on building the platform and ecosystem around the product offering with different collaborations and integrations.
Our new SaaS model, software as a service, will be the major revenue contribution over time going forward, but it will take some time before we get large volume in this area. A new interesting mega trend is the sustainability area. We have now a dialogue with customers that want our intelligent camera system to handle energy, air, and water optimization also. As we talked about in the last meeting, we have now introduced our next generation Algo to some of our partners, and now launched the first mobile with a sensor from Qualcomm, implemented in Meizu 18. This is the world's fastest and highest secured Algo implementation in the world. Now we have the possibility to win more contracts within this setup together with Qualcomm.
In general, the mobile area is a very competitive environment with a lot of players involved, and with the COVID situation and component shortage, it's tricky to estimate and forecast the 2021 revenue. Even if the industry has been hit by corona, we have been able to continue to deliver our software to our partners, and today we have a very strong team in Asia, Europe, and U.S., that can continue to support our customers and maximize the opportunity to win new projects. Now turn to page number three. The vision. We continue to communicate our strategy and visions in all forums like Twitter, LinkedIn, webinars, social media, Q reports, and webpage. Please continue to follow us in this type of media communication. It's about no matter who you are and where you are and what you do, you should always have access to your digital identity.
It's owned and controlled by you in a safe way. We continue to communicate even more about the benefit of that you are the key. You are the key for all applications and resources. It's owned and controlled by you. You are the key. Next slide, please. The digital identity. We can see that the market is demanding solutions with ability to verify a person's identity in a convenient and secure way. We continue to focus on the Swedish market, where the accessible market size just in Sweden is identified to be more than SEK 1 billion 2025. We continue to install more now with Algeco, previously Temporary Space Nordics, and now also later here with Science Village in Lund, Sweden. We also have had the first installation in U.S. and recently also in Norway.
The very interesting is the open platform for integration with other applications such as access solutions to reduce the CO2 emissions. This is of course a sustainability mega trend for more energy-efficient buildings. YOUNiQ also eliminates the need for plastic cards, key tags, and traveling due to the end-to-end digital solution. We continue to focus on larger accounts in YOUNiQ area in the six main verticals we addressed, construction, apartment blocks, commercial buildings, gym, industrial buildings, and public. There is a huge interest, but some longer processes now due to COVID, and it takes a little bit longer time to decide about investment. This will change when corona situation will get better.
We entered the market last year 2020, and it will take some time to get up large volume, but market is there, and we have just started a very interesting journey for Precise with the new product and the SaaS model. Now please turn to page number five. Algo. The new Algo product area, a combination of former product area mobile and smart cards, will lead to a more efficient use of resources between our development and sales organization. Now we can combine the platform development and can utilize the resources in an optimal way. The development of the new Algo based on AI will continue to support our customers.
We also announced the first mobile based on the new generation of Algo, the BioMatch Mobile, integrated in the latest ultrasonic sensor from Qualcomm, implemented now in Meizu 18, which resulted in the world's fastest fingerprint matcher with extreme high security level. Our vision is to continue the cooperation with Qualcomm and win even more projects the coming quarter. We will further integrate the fingerprint software in a series of mobile devices during the year in collaboration with our partners. Despite the COVID-19 effect on semiconductors availability, we still have big hope for this year. Forecast for the full year is very tricky and unfortunately not possible. Still the same situation in the smart card area, no major volumes for 2021. We received together with KONA I, the Mastercard letter of approval for their biometric payment card, here we're utilizing Precise BioMatch Card.
We have seen an increased interest in other smart card applications such as, for instance, the access area, but smart card as it is right now is just a bonus market for Precise. In general, we are strong believer in fingerprint algo for our own devices, owned by yourself, but for public devices, we will see an increase in the face biometric area. By that, I hand over to our CFO, Ulrik.
Thank you, Stefan. Please turn to page seven. The execution of our strategy continue. Our mobile business is healthy and profitable, and we work towards expanding our role with taking responsibility for larger parts of the delivery. The Meizu 18 is just one example of a successfully won project with Qualcomm, now delivering the world's fastest fingerprint matcher. The component shortage among our customers resulted in lower production volumes and consequently resulted in lower royalties. We see then increased client activity and promising growth in digital identity, so we continue adding the customers as well as expanding business with existing customers. The net sales during the quarter totaled SEK 20.3 million versus SEK 23.1 million previous year.
Net sales were split between royalty revenues of SEK 10.9 million versus SEK 13 million last year, license fee, including support and maintenance of SEK 8.8 million versus SEK 8.5 million last year, and other of SEK 0.7 million versus SEK 1.6 million previous year. The increase in license fee is a result of Precise strategy of focusing on deeper collaboration with our customers. The fall in other is attributable to reduced sales of development licenses. The net sales for digital identity totals SEK 0.5 million versus zero in Q1 2020, and this is reported under other. The gross margin during the quarter totaled 77.4% versus 87.7% previous year. Change is primarily due to increased amortization of capitalized development expenses, as well as changes in the product mix.
Total amortization on the capitalized development expenses was SEK 3.0 million versus SEK 2.2 million previous year. The increase in amortization write-downs of development expenses related primarily to digital identity. Please turn to page eight. Our mobile business delivers healthy profits. We continue executing our strategy, working in deeper collaboration with the key customers, and this is allowing for full leverage on scalability. Continued investments primarily in the area of digital identity, we see that in the sales organization where we continue to invest.
In the digital identity area as well, on the capitalization, we've seen increase. The operating expenses for the quarter, they fell by SEK 0.5 million and totaled SEK 19.5 million. The cost reductions, they come primarily from the reduced research and development costs. Here we have an increased portion of expenditures for development work, which is being capitalized. The reinforcement of the sales organization will continue with that during the period, and this is resulting in increased selling expenses. Operating profit loss for the quarter totaled -SEK 3.8 million versus SEK 0.1 million previous year.
The reduction in operating profit is explained primarily by lower net sales and then the lower gross margin. Please turn to page nine. The cash flow for the quarter from current operations totaled -SEK 0.7 million, out of which SEK 1.0 million is attributable to increased capital tied up. The group invested SEK 0.3 million versus SEK 0.6 million in PP&E during the quarter. We invest in digital identity. Capitalization and amortization of development work. The development expenses, we capitalized SEK 4.6 million versus SEK 1.7 million previous year. The amortization of capitalized development expenses totaled SEK 3.0 versus SEK 2.2 million during the previous year. The financial position, cash and cash equivalent, a total SEK 70.4 million versus SEK 78.4 million previous year, which is giving us a healthy cash balance. Back to you, Stefan.
Thank you, Ulrik. Turning to page number 10, the summary. We can see a clear increased client activity and promising growth in the digital identity. Still, of course, a lot of things to be done, but we are absolutely on the right track here. YOUNiQ as the sustainable access solution is actually a new area, which means new opportunity together with our customers, where we will help them to reach their environmental targets together. Algo, a new product area launched to prepare for the next phase of growth. We integrated our BioMatch Mobile into the next generation sensor for Qualcomm, and it's implemented now and launched with Meizu 18. Extremely good feedback and very interesting opportunity down the road together with Qualcomm here with this new setup with their sensors and our Algo.
We can see an increased volatility due to the COVID-19 effect on semiconductor availability, but after all, a very stable first quarter, and it will continue to be a very interesting 2021. By that, I'm now turning to page number 11, and we will open up for questions.
Thank you. If you do wish to ask a question, please press zero, one on your telephone keypad now. If you wish to withdraw your question, you may do so by pressing zero, two to cancel. I remind you that if you want to ask a question, you will have to press zero, one on your telephone keypad now. We have no question at this time. Please go ahead, speakers.
Okay. Thank you. We have received some questions before the meeting. One is in the area of physical biometric door locks, what's happening in that area? We have our embedded solution in that area. It's very disruptive market and a lot of low-cost player involved. We can also see now that due to COVID effect, fewer are interested to have door locks in public area with fingerprints that are more interesting to the face. We are addressing the market, but not actively. We see not a huge potential in that market as it is right now. We also got questions regarding YOUNiQ access. Are there competitors? Right now we are focusing on our own solution. There are no real competitor in this area right now with this digital entrance solution. That will, of course, come. It's a huge market, and we love competition.
There are players in Korea that have similar solution, but it's on-prem registration, and we can see this popping up in U.S. also. As it is right now, we are the only one in the world who can provide this solution. Of course, there will be, as I said earlier, several players in this area because it's a very interesting area for the future, and this will gain traction over time, but the market is big enough for all of us. That's all from us. If there are no other further questions online.
No other questions.
I say thank you all for listening in, and I hope to talk with you soon again. Thanks a lot. Bye-bye.