Earnings Call: Q3 2020

Nov 13, 2020

Quarterly report

And good morning and warm welcome to Precisei's Q3 2020 presentation. I will together with our CFO, Ulrik Nielsen, present the Q3 financial result and also give you some highlights and how we see the next coming quarters and also more details about the potential in the unique access market. Next slide, please. So I'm happy to present another quarter with a positive EBITDA. The sales is in line with our earlier communication, and we generated SEK 23,100,000 in this Q3. We have a very good cost control. We have been able to continue our investment in the Unique with clear focus in the access area. We can also report that the sales for the total period increased with more than 30% up to close to SEK 70,000,000. The acceleration in the unique area continue, and we have now been able to get the 1st cooperation in place with excess platform suppliers such as RCU and Telkred. This is a key area for us in the go to market strategy to be able to accelerate the rollout of the unique Excess product. We can also see that our strategy in the mobile area continued to generate a positive EBIT. We are now supplying software for optical sensors to all major Android OEM together with the partners such as Editec. Even if the industry have been hit by the corona situation, we have been able to continue to deliver our software to our partners, and we have today a very stable way of working with strong teams in Asia, Europe and U. S. So we don't foresee any major changes in our sales for Q4. We have a stronger financial situation today compared to 1 year ago. Next slide, please. Vision. We continue to drive our daily operations in line with our strategy addition. No matter of who you are and where you are and what you do, you always have access to your digital identity, owned and controlled by you in a safe way. And we have now started to communicate even more about the benefit of that vision. You are the key. Next slide, please. Digital identity. The trend is clear. We use more and more digital products and services that need identification and verification of the users. We can also see that it is complicated to remember all passwords, codes, etcetera, and we don't want to carry around with cards, tags, etcetera. We are clearly moving towards the situation where the technology should help and make life easy and safe. We have the solution. You are the key. It's also very clear that due to the pandemic situation, people are reluctant to touch public devices, and therefore, we strongly believe that touchless interaction in public areas will increase. That means our unique access solution we face is perfect in public areas. Fingerprint sensors are perfect with private devices such as mobile phone, tablets and private computers. Superfates in public areas and fingerprint sensors in private areas is the way forward. Our unique solution is a fantastic combination of ease of use and high security. We can see a huge potential in the access area, which is the focus area for us right now. Even if we have had some customers and trials outside Nordics, our main market focus now is Sweden. The addressable market for biometric solution for apartment blocks, commercial building, constructions, tombs, industrial and public areas, Josten, Sweden is around SEK 1,000,000,000. The trend is very clear. There is a need of secure and convenient access solutions. Ulrik will later give you more information about the addressable market in Sweden. Our go to market activities are divided into 3 areas: home sales resources, key account, where we drive sales via a larger account and create an interest in the market affiliate program, where we select the people gives us information about opportunities and then finally, the major part where we have integrated with key platforms players such as cooperation with RCO. We have also, after the quarter, communicated the integration done with Telfred, where we also combined a solution with Axis Communication System. We have today more than 4 installations up and running and more than 1,000 people registered for UNIQUE. We started this year to roll out the product and we continue to accelerate the rollout with more partnership and more users. Acceleration is key. The market is there. We have now business set up where we have direct contact with the end consumer and the contract is based on number of users. A normal contract is over 3 years, which means we have been able to move the company closer to the end users and with long term contracts. Ulrik will now give you more details in terms of the addressable market potential in our focus area. Please, Orest. Thank you, Stefan. Please turn to Page 5. So I will guide you through how we have worked with identifying the addressable potential in the asset market. We have, as Stefan earlier said, identified 6 verticals: apartment blocks, Commercial Buildings, Construction, Gyms, Industrial and Public. For these verticals, we have gathered the facts using databases like Statist Discastensolbund, giving us a base in number of buildings and how this base historically has developed. Please turn to Page 6. From the days described, we have calculated the development and estimate the number of buildings in the 6 verticals to be approximately 450,000 properties. Based on interviews and desktop research, we have identified the current split between mechanical locks and electromechanical locks to be 35% for Portland Blocks, Commercial Buildings, Industrial and Public and 80% for construction and gyms. Our focus is on properties using electromechanical locks. Properties using mechanical locks deciding to switch is obviously an upside, which we have not included in the calculation. We have not included any assumptions of that the adoption of electromechanical locks in new properties will increase. We believe it's likely, but we have not used that number in the calculation. The average number of installations per building is assumed to be 1, a number that obviously could be higher when a property contains multiple tenants. The annual revenue per installation from fees were set to approximately SEK 35,000 per year. We've assumed an adoption rate of 15% by 2025. This adoption rate is split as that apartment blocks will have an adoption rate of 10%, commercial buildings 20%, construction 20%, gyms 30%, industrials 20% and public 10%. Please turn to Page 7. Adding this together, there is a market potential of more than SEK 7,000,000,000 in Sweden. Looking closer to this, for each vertical, we can see that the apartment blocks, there is a market potential of SEK 1,400,000,000. We believe that the adoption rate is 10% here in 2025. For the commercial buildings, we see that the market potential is SEK 1,200,000,000. The adoption rate we foresee is 20%. On construction, we estimate the market potential to be SEK 1,000,000,000 and the adoption to be 20%. Gyms, SEK 116,000,000 and a 30% adoption rate. For Industrials, SEK 1,400,000,000 with an adoption rate of 20% public, SEK 1,500,000,000 with an adoption rate of 10%. We also see that there are customers requesting us to deliver on hardware and installations, not being a core of what we do, but we believe that there is a SEK 500,000,000 potential market, and we estimate 9% of this to be addressable. So in total, we look at SEK 7,200,000,000 and an average adoption rate of 15% would bring the addressable market to more than SEK 1,000,000,000. Please turn to Page 8. Converting these adoption rates, then we see that this is giving us a market for apartment blocks, which we can address of SEK 144,000,000 Commercial buildings, SEK 247,000,000 Construction, SEK 192,000,000 Gyms, SEK 35,000,000 Industrial, 283 and the public, 148. Adding this together gives us the market potential in Sweden standalone in excess of SEK 1,000,000,000. Currently, the market for this solution is untapped. Market potential is likely to increase when awareness of the technology arise. Our ambition is to remain market leader and we continue to invest in this great opportunity. In 2025, we foresee Digital Identity to be the largest business area within PRECISE. With that, I conclude and hand over the word to you, Stefan. Thank you, Ulrik, and please page to next slide, the mobile. We continue to deliver very stable results despite the pandemic situation in the world. Our global setup enabled a very efficient support towards all our customer, and we continue to win projects with our partners at leading OEMs, such as Samsung, for instance. We have also during the last month continued to develop our main platform and presented to our key customer a new software product with a very good pre processing quality. The plan is to launch this version to OEM later this year and beginning of next year. Our ambition is to deliver a similar result for Q4, which means we have much more stable situation in the company now compared to some years ago. The trend is clear that in parallel with more activities and applications are handled via mobile phone and tablets, the need for higher security level is needed. We will, together with our partners, drive the requirements for security. We have today an extremely good quality, and we continue to develop it further with our partners. Next slide, please. The activities in the smart card area has increased due to the pandemic situation. The need of contactless payment is actually more relevant than ever. Tests and pilots are running, and we work closely with our partner, NXP, to launch a product as soon as possible. Due to a very complex value chain of several companies' involvement and needed of approval, it takes a long time, longer than most of us have hoped for. We are ready to launch, but the volume is not there, and there is no indication of huge volume for 2021 either. We don't need volumes in the smartphone area for future success. And if it will happen and when it will happen, it will be a bonus for the company. It's very clear that touchless is the future for devices in public area and there are unique solution with Face Match Perfect and then we have private devices such as mobile and computers and cards, but fingerprint is a perfect solution. We can also see that payment with mobile or direct with biometrics such as taste is gaining attraction. So there will be different payment methods going forward, sometimes with NOV1, sometimes with your card and sometimes with your face. So palm and other biometrics will be used when you do payment in the future. You are the key for future payment, which means our digital end to end solution is perfect in this physical distancing world we are right now into. Independent, if it is in the digital area, identity area or mobile or smart car, we always need this type of payment methods in the future. By that, I hand over once again to our CFO, Ulrik. Thank you. Turning to the financial development, and please turn to Page 12. 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. Precise Unique has received a very good reception in the market, and we already have more than 40 installations throughout Sweden, and we expect to continue to accelerate the pace in which we add new customers. Net sales in the quarter totaled $23,200,000 versus $27,500,000 previous year. The net sales were split between royalty revenues, $11,300,000 versus $8,200,000 previous year, license fees of $9,000,000 versus 15,900,000 dollars previous year, support and maintenance of $1,200,000 versus $2,000,000 previous year and other of $1,600,000 versus $1,500,000 previous year. The increase in royalty was primarily attributable to the customer, Aegis Technology. The fall in license fees is a result of previously communicated strategy in which we focus on deeper collaboration with fewer customers. The gross margin in the quarter totaled 79.8% versus 89.2% previous year. Change is primarily related to the change in product mix. Amortization and write downs of capitalized development expenses was SEK 2,500,000 versus SEK 2,600,000 previous year. The amortization required in tangible assets totaled SEK 200,000, dollars which is the same amount as last year. Please turn to Page 13. As said previously, our mobile business continues to deliver healthy profit. We continue executing our strategy, working in deeper collaboration with key customers, which is allowing us to have full leverage on scalability. The digital identity potential has further confirmed our strategy on investing in future growth. Continued investments, primarily in the area of digital identity, accounted for the biggest cost increase. We continue to invest in digital identity, which is primarily reflected in the increase of spend in R and D before capitalization. We continue to improve our ways of working, driving both efficiency and effectiveness. The overall operating expenses for the quarter decreased by 600,000 and totaled 20,700,000 versus 21,300,000 dollars previous year. The operating profit loss for the quarter totaled minus €2,200,000 versus €3,300,000 previous year. The decrease in operating profit loss is explained primarily by lower net sales and the lower gross margin. The earnings for the period totaled minus $2,200,000 versus $3,200,000 previous year. Total depreciation and amortization totaled $3,300,000 which is on the same level as previous year. The EBITDA is positive for the 5th consecutive quarter and totaled SEK 1,100,000 versus SEK 6,600,000 previous year. Please turn to Page 14. Cash flow and investments. The cash flow for the quarter from operating activities was strengthened in total to SEK500,000 versus minus SEK3.4 million previous year. The working capital is stable versus previous quarter. Investment in the quarter totaled SEK5.4 million, which is primarily coming from development expenses. The development expenses totaled SEK4 $500,000 versus $1,000,000 previous year. Looking at the financial position and the liquidity, cash and cash equivalents increased year over year by $10,400,000 and at the end of the period, it totaled 71,300,000 versus 60,900,000 previous year. The strong and healthy cash flow from our mobile business fund the investments in PRECICE Unique, and we're building a foundation for continued growth. Back to you, Stefan. Thank you, Ulrik. And then please turn to Slide number 15, the summary. We are now 5 quarter in a row where we delivered positive EBITDA generated from a stable and healthy mobile business. We continue to invest in unique product, especially now in the go to market with our affiliated program, internal key account sales and cooperation with key platform companies such as RCU. Also, our end to end digital solution with cloud, we have now launched and our first product with Telted and an access solution. We see an addressable market is in excess that is huge, and we're driving the market and building it with an ambition to remain as market driver for this segment. We have launched a new market communication strategy, focusing on the end users benefit and very clearly communicate you are the key, no matter who you are, where you are and what you do. And finally, we have a very stable and healthy mobile setup despite the COVID situation with operations in Asia, U. S. And Europe. Please then turn to next slide. And now we are open up for questions. We have received a lot of questions via mail, but we start to open up for telephone questions. Thank We have a question from Jesper Bjornsson from ABG. Please go ahead. Your line is open. Good morning, Stefan and Ulrik, and congrats on the strong reports. A couple of questions from me. Starting off, you mentioned that you've signed several new clients within Precise Unique. And I was wondering how many buildings would you estimate that these deals will add to your base with Emphasize Unique? Sorry, it was a little bit tricky to hear the question. It's something about how many buildings Sorry, yes. How many buildings do you estimate that these new agreements would add to your base with Impella Signific? Yes. So as Ulrich presented earlier, the potential market here, the addressable market is approximately SEK 1,000,000,000 and the average revenue is for us, we have been calculated with 35,000 a year and installation. So that will differ a little bit. But what we said is that there will be one installation per facility that we think can have this type of installation as such. Today, we have 40 installations in Sweden, which you remember that we started here in the beginning of the year with Xero. So during this year now, we have built the foundation. We have built the platform. We have integrated with other platform supplies like RCU and also with Telkad. We have also integrated with X2, which is a huge platform in U. S. And we have more platform in Sweden ongoing. So it will, of course, increase over time the number of installations. But of course, we can see a huge interest in the market and there will be more installations coming month and next year. Okay. So the annual price of SEK 35,000 per building is representative of the new agreements which you entered during the quarter as well? Yes. So the 35,000 is an average we have calculated going forward. Then, of course, it depends on which type of installation it is. Sometimes it's a very high security, very, very few people using it, and sometimes there is a lot of user. For instance, we have a gym change, we have pre season set is another type of installation that we have another cost structure, but the volume is there, of course. But the average have been calculated of SEK 35,000 per installation a year. Okay. And just a question on your addressable market here, which you calculated SEK 1,000,000,000 in 2025. I was wondering where does it stand today? And what kind of growth rate are you seeing between, let's say, 2021 2025 on an annual basis? It's a very good question and it's a win. When looking at it, we are, as I said earlier, looking at markets that is untapped. But there is today not a solution that really compares with what we're doing. We are providing remote onboarding, remote off boarding, touchless entry. So the market is untapped and we are developing the market. You could say that the market today, we have the market leading position given that we are first on the market and we provide what we see as the best solution. We are where we are today and we are building a market. We're seeing that in 2025, we will have reached an adoption rate of 15% out of the SEK 7,000,000,000. Got you. And you actually touched upon my next question, but I was wondering just what kind of competitors do you see trying to enter this market as well besides your solution? But you kind of touched on it already, but do you see any clear competitor? And how are they doing anything different from you, your solution? So as we think today, there is not we haven't found anyone that's actually doing the solution as we're doing, end to end, digital, on boarding remotely and touchless also, which is extremely strong selling point now in the COVID situation. There are, of course, other solutions like mobile phones and all that, but then you still need devices. With our solution, you only need your own bodies, I would say. We have seen that in U. S. And in Asia, there are similar solution, but then there is it's a very clear link to a specific hardware. We are a hardware agnostic, which means that we can work with all different camera solution and all different computer solutions, which is absolutely unique. So right now, there are no competitors out there with a similar solution. Of course, that will change. Of course, this is a very interesting market for several players out there, but our ambition is to remain in the leading edge and continue to develop our product going forward. Got you. And just a final question for me on the gross margin, which was obviously a little bit lower than we've been used to, perhaps driven by mixed product mix. But I was just wondering how should we interpret this going forward because royalty revenues were up, licensing royalties were down. Should we expect a lower gross margin going forward since you are focusing on royalty revenues? I think that answering that question is not one liner. Looking at the where we're selling the license fee and as well with the royalty fees, we do see that our business is really having an impact from scalability. So when we can manage scalability, having higher revenue that impacts the gross margin immediately in the business for mobile and smart cars. We are now entering a new market with digital identity, and we see that we're developing the market and we have a lower margin in the digital identity area. Got you. That's all for me. Thank you for taking my questions. Thank you. We have a question from Karlsson, Private Investor. Please go ahead. Your line is open. Hello, Stefan. Thank you. First, I have some questions regarding the payment card. And I know that Precise Biometrics has an old corporation with a sensor company called Edex. Is that corporation still alive? And can you confirm if Edex use precise biometric software in any of the payment card solutions Eidex is involved in now? So thanks for the question. So that's correct We have had a cooperation with Elex in the past, but we don't have any cooperation as we speak right now with Elex. Okay. Thanks. And also, we know that Precise Biometrics has a cooperation with NXP. How is the progress there? Do you have any cooperations with other secure element companies or fingerprint sensors companies? And sub question to that, can Precision Biometrics be and I have 2 let's sell 2 software licenses for a payment card, 1 to the secure element, for example, NXP and one for the sensor company? So yes, we have ongoing discussions and collaboration with other companies outside NXP also. Of course, there is no exclusivity between us and NXP. Of course, NXP is our most important customer right now. We have been working with these with them for a very long time, and we really support them to be able to get out in the market. So that's our main focus. But yes, we have ongoing discussion with other platform and sensors suppliers also, of course. Yes, there is as we said, there is 2 different way to handle the matching in Secure Element or outside of Secure Element. And yes, we have 2 different products. So it's possible to have either or. We, of course, pushing the market towards the secure element because that's the wallet ID with this payment card to make sure that it's a very, very safe transaction. But you're right, there are 2 different solutions in the market. Okay. Maybe that explains next question. I'm not really sure about the technical part here, but there have been rumors after Fingerprints development of the T2 sensor that precise biometric software is no longer needed. And we know about the cooperation between NXP, Fingerprint and Linksense. So can you tell us something about that? Does the T2 sensor handle all the stuff? And can they handle all the stuff that precise biometric software did before? So to clarify your question a little bit, T2 sensor is the sensor from FPC, and we have a cooperation with FPC. There are different ways forward when it comes to FPC, and they have been very clear in that communication. Also, they have their own software and sensor and are using R also. And it's a little bit the matter of how the customer want to utilize either our solution or their solution. The important part to remember is that we hardware agnostic. So for instance, when we are working with some other customer, they are really, really interesting in to have a solution where they are not directly linked only and fixed to one hardware solution. They want to have the opportunity to change hardware because they know there will be price erosion, the price drop going forward. And by that, they don't want to just rely on 1 hardware supplier. So our main focus from day 1 in this area have been to have a software that is hardware agnostic, and that's our way forward. Yes. Okay. Thank you. And in the Q2 report, you talked about precise biometrics plan about extending your share of the value chain in terms of software for fingerprint sensors. How has that progressed? Any luck there? As I said earlier in the presentation, yes, so we have presented it for our partners. We have integrated together with some partners. And going forward here in Q4 and Q1, we will continue the dialogue with some of our customers to do the integration in their solutions also. We are a strong believer that with this solution, we will together have a much better solutions for our customers and their OEMs like Samsung, etcetera. So that's our ambition. In the end, we don't decide upon it, but all the test results so far shows very good progress in this area. And that means, of course, that we take a bigger part of the Turku Valley chain in the software. In terms of revenues, is it much more than today if you compare to what your software do today? So that's, of course, nothing we know anything about. What we said in presentation is our ambition is that the Q4 should be on a similar level as Q3. What will happen next year, we don't know. Of course, there is a huge price pressure in this area in general. And we can also see that companies that have not been able to enter this market have huge problem to enter here. So our ambition is to, of course, to keep the level for the coming year, but it's too early to do any forecast prediction for 2021. Okay. Thanks. I also have a question about yes, I'm not sure if you remember it, but 19th October, you posted on Twitter payment with verification done by precise biometric software, touchless, no limit, no pin. I'm curious about what kind of solution that is. Is that Samsung Pay or is it something else? That's correct. So we utilize social media to communicate interesting things that happen in the market that is relevant for us and also to give our shareholders a little bit more information on what's happening out there. So that's correct. It's something paid. And it's the payment is done via an A71 phone from Samsung, which utilizing our fingerprint sensor. And that is a fantastic solution where you do the verification on your own device with your own fingerprint. You don't need to touch any payment devices, and there is no limitation. And it's very secure because there's no PIN involved. So that's correct. Okay. And now about something completely else, and that is very interesting. Can you please tell us a little bit about the progress with Infinity Optics? We know that there are ongoing pilots there, but how does it progress? So we continue to do proof of concept with Infinity Optics. And the interesting part is, of course, in our overall strategy to have the possibility to do enrollment in one place and then do the verification and access in a different place. That's ongoing. It's, of course, a research program, and we don't know today if it will happen and when it will happen. But the idea is actually supporting our vision to be able to distribute the access possibilities for all users. So you are the key. We don't know today if we will be successful. And so this is part of a bigger research program we are running right now. Okay. So yes, are you closer than the last Q report, the Q2 report? You're always getting closer to end result. Okay. Here, we need to bear in mind that this is a research program, and there are a lot of IDs in this area how to do that. And we don't know when it will happen, but for sure, we'll continue to invest in this area because that's important for us. Yes. Thanks. I also have a question regarding the cooperation with Calvert Security. I read in their news mail about their involvement in government ID implementations in Africa. It's Kenya and Ghana and also European banking platform. Can you tell us if precise biometrics are involved in annual covers business here? So as earlier communicated, we have cooperation with Cover, yes. What we saw here in the beginning of the year when the Cover when the COVID situation hit the market, then especially in the financial and bank area, everything gets much, much, much slower. And that was the reason why we focused on the access area. What we have together with Cabrio is that they have their own solution. We have our own solution. And together, it is a very strong solution. But they are able to sell their own solution without us, and we are able to sell our solutions without them. Right now, we are not part of any program in Africa. Our focus right now is actually Sweden and Nordics for the access. And then, of course, the mobile is in a little bit in U. S, but in Asia. So but the corporation is still up there. And we are selling in their solution when it's relevant, and they are selling in our solution. And when we will have the 1st customer there, then, of course, we will communicate that. Okay. Then we have I'm not sure if you will tell anything about this, but there is a cooperation between the sensor company Better Life where Precise Biometrics has a cooperation. And yes, the cooperation between Better Life and China Semiconductor Industry Alliance, do you know if they have any products yet or any services where Precise Biometrics software is used? No. I mean, we as you said, we have a cooperation with Better Life. But other than that, I will not answer any question in this area. It's too early. So of course, we're monitoring what's happening there. But right now, it's nothing that have any impact on our financial situation. Okay. Also, I'm interested in Edgys. Edgys has filed a patent lawsuit against Goodix. And yes, Eddy is seeking for around $13,000,000 in damages. If that lawsuit is successful, do you see that Precise Biometrics can have a share of that money because of lost income that Goodrich has taken? No, no. We are not at all involved in that. That is something between Goodrichs and Eddyss. It's we are only supporting EDGIS, our partner, with information and technology and all that. And of course, we are happy if they are successful because then we are successful. But we are not at all involved in that patent lawsuit. Okay. We also heard that when you extended the license agreement with EDGIS, you expected and the prospect metrics expected around SEK 60,000,000 for as an income for 2020. Do you have any new estimates for 2021? No. So it's, Stuahl, as I said earlier, we are focusing now on the unique assets. And we will be in a similar level for Q4 is our forecast. But what's happening in 2021 is too early to have any comments on. Okay. Last question. I'm a little bit curious about we have seen so many northeast biometric companies such as Fingerprint, Edex and yes, I wonder, they are thinking that the payment card market will go boom, It sounds like tomorrow, but you're a little bit more cautious about and you say that if there will be any revenues on from payment cards next year, 2021, That is a bonus. How can there be such a difference between what they think and what Precise by Metro thinks? I never comment any other I never comment any other companies' forecast and all that. We are utilizing our source in the industry when we're talking with our partners and all that. And that we then have as an input for our estimation. So what other companies estimate and their forecast is there a responsibility, I can't and I will not comment their forecast. So far, you have been correct. So it's quite funny to see how they think that, yes, it will happen so soon. But yes, thank you very much, Stefan. Thank you very much. A lot of good questions. Any other questions on telephone or? No. There are no further audio questions registered. So then I have we still have some questions via mail. So I will try most of them are we have answered, I think. But there have been a question regarding our pilots at the hospitals and the status there. It's ongoing. We have actually more hospitals now that are interesting in this solution, which you remember that this environment take very long time before any decisions, but we can see there is a huge interest from the people involved. And hopefully, we will get something here during next year. But as I said earlier, it's a huge potential, of course, as Ulrik said earlier, in what we call the public vertical. But it will take some time before we get into that. When it comes to overall, when it comes to the verticals that are short term, very interesting is, of course, the commercial building, construction and industrial as of June. Public is a long term that we need time to invest more into. Yes. Then I think we have asked more or less all questions. Or do we have anything else, Salvator? We have a question also, Sab, about the sales to Aegis Technology in the quarter. And as we have communicated, we are working very closely with Aegis Technology. And looking at the year to date figures together with Edges, not exactly released in the report, but when we look at the sales to Taiwan for the period, we have BRL 45,000,000 in sales versus previous year's EUR 2023. So we're working together with EDGIS very closely and we are seeing a stability that we have not seen in the previous years. So we believe that the increase that we're seeing from EUR 23,000,000 to EUR 45,000,000 year to date is very nice, obviously. We see also that the dollar rate as such is working negative to us given that the Swedish krona has been strengthened against the U. S. Dollar. But to answer the question regarding sales to Taiwan, for the period year to date, we see dramatically higher sales. Okay. I think that's all. Do you have one more or we'll see here? We have 2 more. We also do have a follow-up question on the phone from Jurgen Karsten. Yes. Yes. Please go ahead, Jurgen. Your line is open. Thank you. Sorry, I have a couple of more questions if there are time. So I take the opportunity here. I'm a little bit curious about if Precise Biometrics knows if your software is only used by EDGIE's optical sensors or if they also use your software to their capacitive sensors? So a good question. And the answer is that our software is used for their optical sensors. The capacitive sensors, they are using their own software. Okay. Is there any ongoing plans of the do you try to come into the capacitive sensor market more? There is always an ongoing discussion about that, of course, because we have some good software for the capacitive sensors also. But we should remember is that the margin is extremely low in the capacitive sensors, extremely low. And therefore, the opportunity for us to align it there is very, very limited. We need to have huge volume to enter that area. We have, of course, ongoing discussion with EdTech and other of our customers in this area. But it's very, very tricky to earn money in that segment right now. Okay. Thank you. And I'm also a little bit curious about is it possible to update hardware, a phone with precise biometric software via OTA over there, you send over the software. And the use case here I'm thinking of is, for example, the phone fingerprint sensor has software from, for example, Supreme. And then it's updated with the software from Precise Biometrics. And has it ever happened? So the answer there is, yes, it's absolutely possible to do that. Of course, it's a little bit troublesome for the end users because they need to do a new enrollment. If you change the software algorithm in the mobile phone, you need to do the registration again with your fingerprint. And if it had happened in the past, yes, it happened several times in the past, and I'm sure it will happen in the future also. So it's absolutely possible, but it's a little bit troublesome for the end users. Okay. And also, I'm a little bit curious about if you can tell us anything about the difference between, yes, I call it the norm and unique access solution and the solution where precise identification software is integrated in an open cloud based platform for access control. What is the difference between these two solutions? And will this speed up the sales of Unique Access? It's a very good question. So I'll try to answer that as easy as possible. It's like this that our solution is both cloud based and what we call on prem because you need to have, in most cases, on prem solution if the cloud connection goes down. That's a requirement for many of the access system. The difference here is that some of the system are only cloud based, and we support that. But if you go into the platform that are available right now, then you integrated into the platform instead, which means that they utilize the system on prem. We are working with what we call open API, which means that we are open for different system to integrate towards us. When we started this year and here beginning of the year, we just realized that we were a very small player, and we had to integrate towards the available system out there. And that have been the most challenging part to get access to this and to be able to do it. We have been very successful with our CO. Telkred was very easy, and S2 was very easy, and we have more coming around the corner here the next period. So that's the difference that our solution is a cloud based solution, but it's also possible to integrate it on trend because we have an open API system available for our partners. Thank you. I also have a follow-up question. I think Jesper asked about what's the difference between Precise Biometrics Access Solution and yes, from competitors. For example, you buy your one other solution from Innovatrix? And why don't they do the same thing as you do? What does precise biometrics add on to the solution? So the matrix is a pure face algorithm developer, more or less the same as we are a fingerprint software algorithm developer in the mobile phone area. What we have done is that we have been able to take their software. We have a very deep collaboration within WavePress, of course, that we are supporting each other when it comes to road map planning and all that. And then we are integrating that into our cloud solution, and we also integrated with another liner solution because it's extremely important that you a high security level in this type of solution. So what we have done is that we have been able to integrate their solutions into a cloud based solution and also integrated towards the platform supplies out there. So they are one component in the total picture. Another thing that is also important that we have added on this is the digital end to end solution, which means that we have a remote onboarding possibility and remote offboarding possibilities. So they are a face Android provider, and we are the solution provider in this system. Thank you very much for good answers. Thank you. Any other questions or There are no further audio questions registered. We have one last question here from Viamael, and that is when are you planning to launch and expand the unique access outside Sweden? So right now, for sure, next year, the focus is Sweden, and it will be the market potential is huge. We have some activities in U. S. Because of our presence in New York State and that we have integrated with S2. We take that step by step, but the focus now is Sweden and excess market. Okay. Thanks a lot, and thanks for all the good questions. Have a wonderful Friday weekend, and talk to you soon again.