Summary
Intellicheck reported record second quarter revenue of $4.8 million, up 160.4% from $1.8 million in the prior-year quarter. Gross profit rose 103.9% to $3.3 million. Gross margin fell to 69.4% from 88.6%, a decline of 19.2 percentage points. The margin drop came from a sales mix that included approximately $1.4 million of hardware sales, which carry lower margins than SaaS revenue. SaaS revenue rose 93% to $3.2 million, and it made up 67% of total sales. The company said the hardware mix explains the difference.
The bottom line showed a smaller loss. Net loss for the quarter was $0.74 million, or $0.04 per diluted share, compared with a net loss of $0.76 million in the prior-year quarter. Operating loss was $0.74 million, also a narrower loss than the prior-year quarter's $0.77 million. Operating margin improved to negative 15.4% from negative 41.8%. But the six-month picture was weaker. Net loss widened to $1.80 million from $0.73 million. Operating loss widened to $1.81 million from $0.74 million. Operating expenses rose 69% to $4.1 million in the quarter, driven by higher stock-based compensation, headcount, and research and development. Stock-based compensation was $651,000. Adjusted EBITDA loss was $46,000, much smaller than the $619,000 loss a year earlier.
Cash flow turned negative. Operating cash flow was negative $0.60 million for the quarter, down from positive $0.20 million in the prior-year quarter. For the six months, operating cash flow was negative $1.08 million, down from negative $0.26 million. Capital expenditures were $0.13 million in the quarter and $0.18 million year to date. Deferred revenue was $0.54 million, up 2.3% from $0.53 million. Remaining performance obligations were $0.55 million, up 1.5% from $0.54 million. Cash on June 30, 2021 was $11.9 million, and stockholders' equity was $22.1 million. Working capital was $13.3 million. The company has a $2.0 million revolving credit facility with no amounts outstanding and full availability. Management expects available cash, expected cash from operations, and credit availability to meet working capital and capital expenditure needs for at least the next 12 months.
Operationally, Intellicheck completed 18 customer implementations in the six months ended June 30, 2021. It holds 19 issued patents and four pending patents. The company continues to target financial services and retail verticals. Risks include the COVID-19 pandemic and variants such as Delta, uncertainty around vaccination rollout, supply chain delays, long sales and implementation cycles, reliance on government-provided data, government audits and contract cancellations, security breaches, product failure, and changes in laws and regulations. It has a $25 million shelf registration statement that gives flexibility to raise capital. Management says it may raise additional funds for rapid expansion, marketing, new markets, infrastructure, or acquisitions, but there is no assurance it can do so on satisfactory terms. Management said it continues to execute its strategic plan for growth and expansion in current and new market verticals. The quarter showed strong top-line growth but also margin pressure from hardware mix and continued operating losses.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2021 | Q1 FY2021 | QoQ | Q2 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $4.8M | $2.9M | +67.6% | $1.8M | +160.4% |
| Gross profit | $3.3M | $2.6M | +26.0% | $1.6M | +103.9% |
| Gross margin | 69.4% | 92.3% | -22.9 pp | 88.6% | -19.2 pp |
| Research & development | $1.4M | $1.3M | +1.2% | $986.3K | +37.1% |
| Sales & marketing | $2.7M | $2.4M | +14.0% | $1.4M | +91.8% |
| Total operating expenses | $4.1M | $3.7M | +9.4% | $2.4M | +69.3% |
| Operating income (loss) | -$738.4K | -$1.1M | +31.3% | -$769.4K | +4.0% |
| Operating margin | -15.4% | -37.6% | +22.2 pp | -41.8% | +26.4 pp |
| Net income (loss) | -$737.8K | -$1.1M | +30.4% | -$760.3K | +3.0% |
| Net margin | -15.4% | -37.0% | +21.6 pp | -41.3% | +25.9 pp |
Risks
The ongoing COVID-19 pandemic, including more contagious variants such as the Delta variant, may continue to disrupt customer demand, operations and financial markets. MD&A states the company cannot predict the pandemic's impact on its financial position, results of operations and cash flows.
Government restrictions and remote work have canceled industry events and shifted sales, implementation and support activities remote, which may delay or reduce sales and reduce opportunities to meet existing and potential customers.
Pandemic-related market disruption could reduce access to capital and affect liquidity. Operating cash flow for the six months ended June 30, 2021 was -$1.08M, down $0.81M or 310.1% versus the prior-year period, according to the reported figures.
Higher hardware sales, which carry lower than usual margins, contributed to gross margin for the quarter ended June 30, 2021 declining to 69.4%, down 19.2 percentage points versus the prior-year quarter.
MD&A identifies goodwill impairment as a critical accounting estimate, noting annual testing occurs in Q4 and that stock price volatility or changes in assumptions could lead to an impairment charge that materially affects long-term assets and operating expenses.
SaaS KPIs
All quarters →Adjusted EBITDA
Summary, forecast, risks and KPIs are extracted from Intellicheck, Inc.'s SEC filings for Q2 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.