Summary
IDN closed fiscal 2025 with a sharp fourth-quarter acceleration. Revenue for the quarter ended December 31, 2025 was $6.64 million, up 11.8% from $5.94 million in the prior-year quarter. Gross profit rose 12.1% to $6.06 million from $5.41 million. Gross margin was 91.4%, up 0.3 percentage points from 91.1%. Operating income jumped 220.6% to $1.49 million from $0.47 million. Net income was $1.55 million, up 218.0% from $0.49 million. Operating margin expanded to 22.5% from 7.8%, a 14.7 percentage point improvement. The quarter also produced $2.39 million of operating cash flow, compared with negative $1.32 million a year earlier. Deferred revenue ended the quarter at $1.66 million, up 65.9% from $1.00 million.
For the full fiscal year, revenue reached $22.67 million, up 13.3% from $20.00 million. Gross profit increased 12.8% to $20.50 million from $18.17 million. Full-year gross margin slipped to 90.4% from 90.8%, a decline of 0.4 percentage points. The company swung to an operating profit of $1.09 million from an operating loss of $1.17 million. Net income was $1.27 million versus a net loss of $0.92 million. Diluted earnings per share were $0.06, compared with a loss of $0.05. Operating margin for the year was 4.8%, up 10.6 percentage points from negative 5.8%. Operating cash flow was $4.54 million, compared with negative $2.69 million. Capital expenditures were $0.05 million, down 8.8% from $0.06 million.
On a non-GAAP basis, adjusted gross profit was $20.999 million for the year, compared with $18.347 million. Adjusted gross profit as a percentage of revenue was 92.6%, compared with 91.7%. Adjusted EBITDA was $2.566 million, compared with $520 thousand. The revenue increase came primarily from higher SaaS revenue. SaaS fees and service revenues come from fixed-price and per-scan contracts, and the company also uses a transaction-based model with breakage revenue. Selling, general and administrative expenses fell, while research and development expenses rose because of less capitalization of software development costs and higher personnel and stock-compensation costs. Deferred revenue grew, which points to stronger bookings and future revenue visibility.
Management's forward-looking commentary focuses on liquidity. The company expects available cash and expected cash from operations to be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months. In August 2025, IDN filed an S-3 shelf registration that would allow it to sell shares if the need arises. Management also keeps the option open to raise additional funds for faster expansion, more marketing, new markets, infrastructure improvements, competitive pressures, or acquisitions. There is no assurance that additional funds will be available on satisfactory terms. The balance sheet ended the year with positive working capital and stockholders' equity.
The main risk is the tax position. IDN maintains a full valuation allowance against its net deferred tax assets. Its three-year cumulative result through December 31, 2025 remained in a loss position, which is significant negative evidence under ASC 740. The company generated pre-tax income for the year, but it has not yet established a sustained pattern of profitability sufficient to overcome that negative evidence. A future release of the valuation allowance would be a non-cash deferred income tax benefit and could be material. Other risks include the need to fund growth, competitive pressures, and the possibility of raising equity under the shelf registration. The company also carries substantial net operating loss carryforwards and research and development credits. It has no off-balance sheet financing arrangements.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $6.6M | $6.0M | +10.3% | $5.9M | +11.8% |
| Gross profit | $6.1M | $5.4M | +11.4% | $5.4M | +12.1% |
| Gross margin | 91.4% | 90.5% | +0.9 pp | 91.1% | +0.3 pp |
| Research & development | $1.3M | $1.4M | -8.5% | $1.0M | +23.8% |
| Sales & marketing | $3.3M | $3.8M | -13.5% | $3.9M | -15.8% |
| Total operating expenses | $4.6M | $5.2M | -12.2% | $4.9M | -7.5% |
| Operating income (loss) | $1.5M | $238.0K | +527.7% | $466.0K | +220.6% |
| Operating margin | 22.5% | 4.0% | +18.6 pp | 7.8% | +14.7 pp |
| Net income (loss) | $1.6M | $290.0K | +435.2% | $488.0K | +218.0% |
| Net margin | 23.4% | 4.8% | +18.6 pp | 8.2% | +15.2 pp |
| Diluted EPS | $0.08 | $0.01 | +$0.07 | $0.03 | +$0.05 |
Risks
Although net income was $1,273 for FY2025 compared to a net loss of $(918) for FY2024, the company had an accumulated deficit of $(133,210) as of December 31, 2025 and expects significant operating expenses for AI and fraud detection and sales expansion. These investments may increase costs faster than revenue grows, so profitability may not be maintained.
The proprietary software relies on reference data from government and quasi-government agencies, including sample identification cards from every U.S. state, ten Canadian provinces, and the District of Columbia. If these jurisdictions stop providing reference data, the utility of the software would be diminished in those jurisdictions.
Top ten customers accounted for approximately 77% of total revenues for FY2025 and 71% for FY2024. The loss of any one significant customer or reduced spending could materially adversely affect results, and these customers may have leverage to pressure pricing or margins.
Rapid advances in generative AI and deepfake technology could render identity verification solutions less effective, as bad actors create synthetic identities and deepfakes to spoof facial recognition or use camera injection attacks. Failure to develop countermeasures faster than fraudsters could lead to increased liability, customer churn, and material adverse effects.
A significant portion of revenue depends on software running on third-party mobile devices (iOS and Android) and POS hardware. Apple, Google, or POS manufacturers could restrict access to camera feeds or NFC chips, or introduce competing native identity verification features in digital wallets that disintermediate third-party applications.
The SaaS delivery model depends on third-party cloud infrastructure, data centers, and software vendors, including for facial biometric matching and global document validation. A supply chain attack, breach, ransomware, or service outage at these providers could expose sensitive personal information, render the platform unavailable, and lead to fines, legal claims, and contract terminations.
Biometric data such as facial recognition patterns cannot be changed if compromised, and evolving privacy laws impose new compliance burdens. Regulators are also scrutinizing AI models for algorithmic bias, and differential performance across demographic groups could lead to fines, reputational harm, and required technology changes.
Disruptions at federal agencies due to workforce reductions, inadequate funding, prolonged shutdowns, or budget constraints could prevent agencies from issuing and updating identification standards and sharing reference data. This could materially adversely affect the business.
Target customers in commercial fraud protection, financial services, retail, access control, and age verification, including banks, credit card issuers, large retailers, and government agencies, typically require long sales and implementation cycles. Budgetary constraints, economic slowdowns, or inflationary pressures may continue to delay purchasing decisions.
As of December 31, 2025, gross deferred tax assets of approximately $7,145 were fully offset by a valuation allowance because the company was in a three-year cumulative loss position. Federal NOL carryforwards of approximately $30,520 include $10,892 expiring between 2035 and 2037 and $19,628 subject to an 80% utilization limit, and an ownership change under Section 382 could materially limit their use.
The company had cash and cash equivalents of $9,650 and working capital of $10,123 as of December 31, 2025, and may need additional capital for expansion, marketing, new markets, or competitive pressures. It filed an S-3 shelf registration in August 2025, and equity or convertible debt issuance could dilute existing stockholders.
The intra-day trading price of common stock varied from a high of $7.48 to a low of $1.65 per share from January 1, 2024 to March 19, 2026. Short selling, market manipulation, and broad technology stock fluctuations could harm the market price and lead to de-listing.
The company maintains domestic cash deposits in FDIC insured banks in amounts exceeding FDIC insurance limits. A bank failure or broader financial institution liquidity crisis could disrupt access to deposits and materially adversely affect liquidity and financial performance.
The company depends on executive officers and key management, technical, finance, and sales personnel, and does not carry key man life insurance. Failure to attract, integrate, motivate, or retain personnel could disrupt operations and cause the stock price to decline.
Research and development expenses increased $1,457, or 38%, to $5,314 for FY2025 compared to $3,857 for FY2024, primarily due to less capitalization of software development expenses and higher personnel and stock-compensation costs. This expense growth may pressure profitability if revenue does not grow correspondingly.
SaaS KPIs
All quarters →Summary, forecast, risks and KPIs are extracted from Intellicheck, Inc.'s SEC filings for Q4 FY2025 (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 2, 2026.