Intellicheck, Inc. Q2 FY2026 earnings

Intellicheck reported second quarter revenue of $5.94 million, up 16% from the prior-year quarter and a Q2 record for the company. Year-to-date revenue was $11.46 million, up 14.5% from the first six months of 2025. SaaS revenue comprised substantially all of total revenue, and management tied the increase to higher transaction volumes. Banking and lending accounted for roughly 48% of second quarter revenue and retail about 29%.

Sequentially, revenue rose 7%. Management has been pushing a diversification effort, and it now counts about 500 customers across 14 segments, a much broader base than two years ago when the initiative began. Emerging verticals include cargo and freight, foreign auto manufacturers and their supplier networks, stadium and venue concessions, and age-related and background-check work.

Profitability swung hard in the right direction. Operating income was $0.57 million in the quarter against an operating loss of $0.30 million a year earlier. Net income was $0.66 million versus a net loss of $0.25 million, and diluted EPS was $0.03 versus -$0.01. For the six months, operating income was $1.12 million compared with a loss of $0.65 million, net income was $1.30 million compared with a loss of $0.57 million, and diluted EPS was $0.06 compared with a loss of $0.03. Gross margin rose to 91.3% from 89.8% in the quarter, and operating margin was 9.6%, up from -5.8%.

Cash generation moved the other way. Operating cash flow was $1.80 million in the quarter, down 42.7% from $3.13 million a year earlier, and $2.24 million for the six months, down 42.3% from $3.88 million. Capital expenditures were $26 thousand in the quarter and $59 thousand year to date. Deferred revenue, current portion only, fell 60.7% to $1.20 million from $3.04 million, and remaining performance obligations were also $1.20 million. Management credited lower headcount for the year-to-date decline in operating expenses. The company ended the quarter with $11.8 million in cash and no debt.

The dominant risk is customer concentration. One customer represented approximately 29% of first-half 2026 revenue, about 30% of second quarter revenue and roughly 31% of revenue for the year ended December 31, 2025. That customer is moving from a sole-source to a multi-source vendor architecture, with an alternative vendor expected to become primary for certain identity verification use cases. Its plan contemplates a substantial reduction in transaction volumes with Intellicheck during the second half of 2026, phased through the third quarter. As of August 13, 2026, volumes had declined from prior-year levels but by less than the plan called for. The customer recently signed another purchase order and has indicated an intention to move to Intellicheck's newest API.

Guidance covers the full fiscal year 2026. Assuming the customer implements its plan substantially as communicated and no volumes are added above those levels, Intellicheck expects total revenue for the year ending December 31, 2026 to decline compared with 2025. It still expects to remain profitable on a net income basis and to generate positive Adjusted EBITDA for the full year, and it expects positive Adjusted EBITDA in the second half. Adjusted EBITDA was $1.1 million in the quarter, up $1.0 million from $0.1 million a year earlier, the fifth consecutive positive quarter. Management said that excluding the transitioning customer, revenue from the remaining base grew approximately 19% in the first half of 2026.