Summary
Intellicheck reported record third quarter fiscal 2021 revenue of $4,831,229, up 79.0% from $2,698,975 in the prior-year quarter. Year-to-date revenue reached $12,490,911, up 63.1% from $7,656,442. Gross profit rose to $3,320,639 in the quarter, up 38.1% from $2,405,276. Year-to-date gross profit was $9,291,077, up 43.8% from $6,459,914. Gross margin fell to 68.7% in the quarter from 89.1% a year earlier. Year-to-date gross margin was 74.4%, down from 84.4%. The company tied the decline to a sales mix that included hardware sales, which carry lower margins than SaaS revenue. Management framed the mix shift as a sign of a broader client base rather than a change in the economics of the software business.
Profitability swung to a loss. Operating loss was $951,821 in the quarter, compared with operating income of $25,419 in the prior-year quarter. Year-to-date operating loss was $2,765,424, compared with a loss of $719,445 in the prior-year period, so the loss widened. Net loss was $952,233 in the quarter, compared with net income of $32,412 a year earlier. Year-to-date net loss was $2,750,084, compared with a loss of $701,259, again a widened loss. Diluted EPS was -$0.05 in the quarter, compared with $0.00 in the prior-year quarter. Year-to-date diluted EPS was -$0.15, compared with -$0.04, a widened loss. Operating margin was -19.7% in the quarter, down from 0.9%. Year-to-date operating margin was -22.1%, down from -9.4%. The swing came from higher operating expenses, including stock-based compensation, added headcount, accrued incentives, and expanded marketing. Adjusted EBITDA was a loss of $270,995 in the quarter, compared with a gain of $168,963 in the prior-year quarter. Year-to-date Adjusted EBITDA was a loss of $368,993, compared with a loss of $305,393.
Cash flow improved. Operating cash flow was $1,482,967 in the quarter, up from -$48,609 in the prior-year quarter. Year-to-date operating cash flow was $407,331, up from -$310,922. Capital expenditures were $157,000 in the quarter and $339,000 year to date. Deferred revenue, current portion, was $1,372,311, up 207.4% from $446,411. Remaining performance obligations were $1,382,048, up 202.5% from $456,933. Those backlog measures point to a larger base of contracted work than a year ago. The company said it expects available cash, expected cash from operations, and availability under its revolving credit agreement to be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months from the date of filing.
Operational highlights included expansion beyond North America, a new product platform, and new channel partnerships. The company completed 21 customer implementations for the nine months ended September 30, 2021. SaaS revenue grew 32% in the quarter, while total revenue growth was driven by higher commercial SaaS revenue and higher equipment sales. Management described a transformation from an ID validation company to a Digital Identity company, with clients in banking, call centers, gambling, cannabis, stadiums, and digital markets. No formal revenue or earnings guidance was issued for the next quarter or the full fiscal year. The only forward-looking financial statement was the liquidity outlook covering the next 12 months.
Risks remain. The company cited COVID-19 and variants such as Delta, the pace of vaccination and booster adoption, supply chain delays, long sales and implementation cycles, government audits and contract cancellations, security breaches, product failure, intellectual property enforcement, changes in laws, and continued access to government data. Goodwill impairment is another risk if the stock price or operations weaken, and the annual goodwill impairment test will be conducted in the fourth quarter. The release also noted that the reported results are preliminary and do not reflect any adjustments that may be required in connection with the completion of the company's review process.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2021 | Q2 FY2021 | QoQ | Q3 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $4.8M | $4.8M | +0.7% | $2.7M | +79.0% |
| Gross profit | $3.3M | $3.3M | -0.2% | $2.4M | +38.1% |
| Gross margin | 68.7% | 69.4% | -0.7 pp | 89.1% | -20.4 pp |
| Research & development | $1.4M | $1.4M | +4.7% | $907.8K | +56.0% |
| Sales & marketing | $2.9M | $2.7M | +5.2% | $1.5M | +94.1% |
| Total operating expenses | $4.3M | $4.1M | +5.1% | $2.4M | +79.5% |
| Operating income (loss) | -$951.8K | -$738.4K | -28.9% | $25.4K | -3844.5% |
| Operating margin | -19.7% | -15.4% | -4.3 pp | 0.9% | -20.6 pp |
| Net income (loss) | -$952.2K | -$737.8K | -29.1% | $32.4K | -3037.9% |
| Net margin | -19.7% | -15.4% | -4.3 pp | 1.2% | -20.9 pp |
| Diluted EPS | -$0.05 | — | — | $0.00 | -$0.05 |
Risks
The filing expands COVID-19 risk, noting the pandemic and variants such as Delta may disrupt customer spending, contract renewals, and sales events, and that the company cannot accurately predict the full impact on results of operations or financial condition.
Gross margin fell to 68.7% in FY2021 Q3 from 89.1% in FY2020 Q3, and to 74.4% year to date from 84.4%, primarily due to an increase in lower-margin hardware sales; excluding hardware, gross margin was 93.0% and 92.6% for the quarters.
Operating expenses increased 79.5% to $4,272,000 in FY2021 Q3 and 68% to $12,057,000 year to date, driven by higher stock-based compensation, increased headcount, accrued incentives, and expanded marketing; operating income swung to a loss of $0.95 million in the quarter from $0.03 million in the prior-year quarter.
The company carries $8,101,661 of goodwill as of September 30, 2021 and will conduct its 2021 annual impairment test in Q4; market capitalization is sensitive to stock price volatility, and any future impairment could materially affect long-term assets and operating expenses.
Although cash was $13,266,000 and working capital was $12,863,000 as of September 30, 2021, the company may raise additional funds for expansion, marketing, or competitive pressures and says there can be no assurance it can secure funds on satisfactory terms.
A full valuation allowance was recorded for net deferred tax assets as of September 30, 2021 due to uncertainty of ability to realize those assets.
SaaS KPIs
All quarters →Adjusted EBITDA
SaaS Revenue
Summary, forecast, risks and KPIs are extracted from Intellicheck, Inc.'s SEC filings for Q3 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.