Intellicheck, Inc. Q3 FY2025 earnings

Intellicheck reported third-quarter revenue of $6.01 million, up 27.7% from the prior-year quarter. Gross profit rose 27.0% to $5.44 million. Gross margin was 90.5%, down 0.5 percentage points. The company swung to operating income of $238,000 from an operating loss in the prior-year quarter. Net income was $290,000, or $0.01 per diluted share, also a swing to profit from a net loss in the same period last year. For the nine months, revenue was $16.03 million, up 14.0%, and gross profit was $14.44 million, up 13.2%. The nine-month operating loss was $408,000, and the nine-month net loss was $279,000. Nine-month diluted EPS was negative $0.01. CEO Bryan Lewis said the quarter reflected market diversification and progress in advancing existing customer usage of the company's technology.

Operating expenses were relatively flat, and the company said the slight increase came mostly from less capitalization of research and development costs related to software development. Operating margin was 4.0%, up 23.3 percentage points, and the nine-month operating margin was negative 2.5%, up 9.1 percentage points. The nine-month gross margin was 90.0%, down 0.7 percentage points. Adjusted EBITDA, a non-GAAP measure, improved by $798,000 to $631,000 from a loss of $167,000 in the prior-year quarter. Adjusted gross profit, also non-GAAP, was $5.58 million, and adjusted gross margin was 92.8%. Those figures exclude amortization allocable to cost of revenues. Adjusted EBITDA for the nine months was $688,000, compared with a loss of $341,000.

Cash flow was mixed. Current-quarter operating cash flow was negative $1.74 million, down 63.7% from the prior-year quarter. For the nine months, operating cash flow was positive $2.15 million, up 256.4%. Capital expenditures were $22,000 in the quarter, down 21.4%. Deferred revenue was $4.19 million, up 219.5%, and remaining performance obligations were also $4.19 million, up 219.5%. Management said the move from usage-based contracts to access-based contracts will cause accounts receivable and deferred revenue to fluctuate and may influence revenue trends such as seasonality.

The release did not include formal revenue or earnings guidance for the fourth quarter or the full fiscal year. The company's safe harbor language lists risks around market acceptance of its SaaS offerings, converting pilot programs into commercial scale, demand for current and future products, expense control, expansion into health care and auto dealerships, inflation, supply chain delays, long sales and implementation cycles, government data access, security breaches, product failure, and government audits or contract cancellations. Management also states that available cash, expected cash from operations, and a revolving line of credit should cover working capital and capital expenditure needs for at least the next 12 months. It keeps open the option to raise additional funds and notes no assurance that such funds can be secured on satisfactory terms.