Core Viewpoint - Intellicheck Mobilisa, Inc. (IDN) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on an upward trend in earnings estimates [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based on changes in a company's earnings picture, tracking EPS estimates from sell-side analysts through a consensus measure [2]. - The recent upgrade reflects a significant increase in earnings estimates, with the Zacks Consensus Estimate for Intellicheck Mobilisa rising by 33.3% over the past three months [9]. Impact of Earnings Estimates on Stock Prices - There is a strong correlation between changes in earnings estimates and near-term stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [5][6]. - The Zacks Rank system effectively utilizes earnings estimate revisions to classify stocks, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. Company Performance Outlook - The expected earnings for Intellicheck Mobilisa for the fiscal year ending December 2025 is -$0.03 per share, indicating no year-over-year change [9]. - The upgrade to Zacks Rank 1 positions Intellicheck Mobilisa in the top 5% of Zacks-covered stocks, suggesting potential for higher stock movement in the near term [11].

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Intellicheck Mobilisa, Inc. (IDN) came out with a quarterly loss of $0.02 per share versus the Zacks Consensus Estimate of a loss of $0.03. This compares to loss of $0.02 per share a year ago. These figures are adjusted ...

Financial Data and Key Metrics Changes - The company's first quarter revenues increased by 5% year-over-year, reaching a record of $4,894,000 compared to $4,680,000 in the same period of 2024 [25] - Adjusted EBITDA improved by $100,000 year-over-year, resulting in a small loss of $17,000 for the quarter [25] - SaaS revenue grew by 6% to $4,868,000, representing over 99% of total revenue for the quarter [25] - Gross profit margin was 89.7%, with an adjusted gross margin of 91.8%, up from 91.2% in Q1 2024 [26][27] Business Line Data and Key Metrics Changes - Revenue from title insurance increased by approximately 350% in Q1 2025, indicating strong growth in this vertical [35] - Retail banking revenue rose by about 50% compared to Q1 2024, showcasing significant expansion in this area [36] - Retail revenue declined by 26% year-over-year, reflecting challenges in the retail sector [40] Market Data and Key Metrics Changes - The company has diversified its client base beyond retail credit cards, now seeing growth in sectors such as retail banking, title insurance, and logistics [9][22] - The logistics and shipping market is identified as a significant opportunity due to high levels of theft and fraud [9][62] Company Strategy and Development Direction - The company is focused on diversifying its market presence and reducing reliance on retail, which has been a drag on growth [22][41] - A strategic initiative includes migrating clients from Azure to AWS, expected to enhance operational efficiency and reduce costs [8][28] - The appointment of a new senior vice president of sales is anticipated to drive revenue growth and improve client relationships [11][105] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer confidence is down nearly 8% year-over-year, impacting retail purchases [22] - The company expects to continue seeing positive cash flow and growth in revenue throughout 2025 [30] - Management expressed optimism about the future, highlighting the importance of new partnerships and marketing efforts [105] Other Important Information - The company has a $2,000,000 revolving credit line with Citibank, which was not utilized during 2025 [30] - Marketing changes have led to increased engagement, with LinkedIn followers up 16% and website visitors up 34% [18] Q&A Session Summary Question: What is the company's penetration in the title market? - Management indicated that they have exposure to about 40% of the title market, with revenue from title insurance up 350% in Q1 [34][35] Question: What are the next largest verticals after retail? - The next largest verticals are banking and auto, with retail banking revenue up 50% year-over-year [36] Question: What percentage of revenue does retail represent now? - Retail revenue is down 26% year-over-year, and it is now roughly equal to retail banking in terms of revenue contribution [40][50] Question: What drove the increase in deferred revenue and SaaS RPOs? - The increase was attributed to moving customers to a pricing model that encourages upfront payments [52][53] Question: Any updates on the large social media customer and regional bank? - Management confirmed ongoing discussions with both, with procurement processes underway for the regional bank [56][57] Question: How is the company addressing the shipping and logistics market? - The company is addressing fraud in logistics by verifying truckers' identities, which is a significant concern in the industry [62] Question: What is the status of the reseller strategy? - The reseller strategy is still developing, with ongoing efforts to engage more resellers, particularly in banking [66][68] Question: What is the current state of accounts receivable? - The increase in accounts receivable is primarily due to changes in the pricing model, moving away from billing in arrears [69] Question: What are the leading indicators for future growth? - Management highlighted a robust pipeline of committed customers and contracts as indicators of future growth [74][75]

Financial Data and Key Metrics Changes - The company's first quarter revenues increased by 5% year-over-year, reaching a record of $4,894,000 compared to $4,680,000 in the same period of 2024 [22] - SaaS revenue grew by 6% to $4,868,000, representing over 99% of total revenue for the quarter [22] - Adjusted EBITDA improved by $100,000, resulting in a small loss of $17,000 for the quarter, indicating a near breakeven performance [22] - Gross profit margin was 89.7%, slightly down from 90.7% in the previous year, while adjusted gross margin improved to 91.8% from 91.2% [23][24] - Operating expenses decreased by 1% to $4,740,000, with a notable reduction in selling, general, and administrative expenses [25] Business Line Data and Key Metrics Changes - The company has diversified its client base beyond retail credit cards, now seeing significant growth in retail banking, title insurance, auto, email account security, and background checks [6][7] - Revenue from title insurance increased by approximately 350% in Q1, indicating strong market penetration [32] - Retail banking revenue grew by 50% year-over-year, showcasing the effectiveness of the company's diversification strategy [33] Market Data and Key Metrics Changes - The company reported a 26% decline in revenue from retail, reflecting challenges in the retail sector [36] - Despite the retail decline, the overall revenue growth was driven by gains in other sectors, demonstrating the success of the diversification strategy [39] Company Strategy and Development Direction - The company is focused on a diversification strategy, moving away from a retail-first emphasis to capture opportunities in various sectors [20] - The migration from Azure to AWS is expected to yield cloud savings and improve client onboarding processes [6][15] - The appointment of a new senior vice president of sales is anticipated to drive revenue growth and enhance client relationships [10][90] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer confidence is down nearly 8% from the previous year, impacting retail purchases [20] - The company remains optimistic about future growth, driven by strategic initiatives and a revitalized sales team [90] - Management emphasized the importance of adapting to market changes and economic conditions as they evolve [21] Other Important Information - The company had cash and cash equivalents of $5,100,000 at the end of Q1, exceeding consensus estimates [26] - The company has a $2,000,000 revolving credit line with Citibank, which was not utilized during 2025 [28] Q&A Session Summary Question: What is the company's penetration in the title insurance market? - The company estimates it has exposure to about 40% of the title insurance market, with revenue from title insurance up 350% in Q1 [31][32] Question: What are the next largest verticals after credit cards? - The next largest verticals are banking and auto, with retail banking revenue up 50% year-over-year [33] Question: What percentage of revenue does retail represent now? - Retail revenue was down 26% year-over-year, indicating a declining percentage of total revenue [36] Question: What drove the increase in deferred revenue and SaaS RPOs? - The increase was largely due to moving customers to a pricing model that encourages upfront payments [45] Question: Any updates on the large social media customer and regional bank? - The social media customer is progressing well, while the regional bank is in procurement discussions [48][49] Question: How is the company addressing the shipping and logistics market? - The company is addressing fraud in shipping and logistics, with significant losses reported per truck due to organized crime [52][53] Question: What is the status of the reseller strategy? - The company sees plenty of room for improvement in its reseller strategy and is actively engaging with potential partners [55] Question: What is the current state of accounts receivable? - The increase in accounts receivable is primarily due to changes in the pricing model, moving towards prepayment [58]

PART I – FINANCIAL INFORMATION [Item 1. Unaudited Condensed Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Condensed%20Financial%20Statements) The company reported increased revenues and assets in Q1 2025, with a reduced net loss and sufficient liquidity for the next 12 months [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) Total assets increased to **$24.6 million** by March 31, 2025, driven by higher receivables and deferred revenue, while liabilities also rose Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $5,148 | $4,666 | | Accounts receivable, net | $7,506 | $4,675 | | Total current assets | $13,527 | $9,912 | | Total assets | $24,561 | $20,933 | | Deferred revenue | $4,518 | $1,001 | | Total current liabilities | $6,953 | $3,186 | | Total stockholders' equity | $17,608 | $17,747 | [Unaudited Condensed Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Statements%20of%20Operations) Q1 2025 revenues increased by **4.6%** to **$4.9 million**, leading to a reduced net loss of **$318 thousand** compared to the prior year Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $4,894 | $4,680 | | Gross Profit | $4,392 | $4,245 | | Total Operating Expenses | $4,740 | $4,768 | | Loss from Operations | ($348) | ($523) | | Net Loss | ($318) | ($442) | | Loss per Share (Basic/Diluted) | ($0.02) | ($0.02) | [Unaudited Condensed Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Statements%20of%20Cash%20Flows) Net cash from operations was **$750 thousand** in Q1 2025, with cash and equivalents ending at **$5.1 million**, impacted by investing activities Cash Flow Summary (in thousands) | Cash Flow Activity | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $750 | $869 | | Net cash (used in) provided by investing activities | ($173) | $4,390 | | Net cash (used in) financing activities | ($95) | $0 | | **Net increase in cash** | **$482** | **$5,259** | | **Cash, end of period** | **$5,148** | **$9,239** | [Notes to Unaudited Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) Notes detail the company's identity verification business, liquidity, revenue recognition, customer concentration, and legal matters - The company develops and markets identity verification solutions for fraud prevention, primarily in commercial retail and banking[18](index=18&type=chunk) - Management expects existing cash and future revenues to satisfy working capital requirements for at least the next 12 months from the filing date[19](index=19&type=chunk) Revenue Disaggregation by Type (in thousands) | Product/Service | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | SaaS | $4,868 | $4,609 | | Equipment | $6 | $55 | | Other | $20 | $16 | | **Total** | **$4,894** | **$4,680** | - In Q1 2025, three customers accounted for **56%** of total revenues (**28%**, **19%**, and **9%** respectively) and **81%** of total accounts receivable[62](index=62&type=chunk) - A class action complaint filed in March 2024 alleging violations of the Illinois Biometric Information Privacy Act was dismissed in April 2025, and no liability has been recognized[94](index=94&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A highlights **5%** revenue growth, improved net loss, sufficient liquidity, and better non-GAAP Adjusted EBITDA in Q1 2025 [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Q1 2025 revenues increased **5%** to **$4.9 million**, primarily from SaaS, leading to a reduced net loss despite a slight gross margin decrease - Revenues increased **5%** to **$4,894 thousand** in Q1 2025 from **$4,680 thousand** in Q1 2024[109](index=109&type=chunk) - The increase in revenue was primarily driven by a **6%** increase in SaaS revenue, which rose to **$4,867 thousand**[109](index=109&type=chunk) - Gross profit as a percentage of revenue was **90%** for Q1 2025, compared to **91%** for Q1 2024[110](index=110&type=chunk) - Net loss improved to **$(318) thousand** in Q1 2025 from a net loss of **$(442) thousand** in Q1 2024[111](index=111&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains **$5.1 million** in cash and **$6.6 million** in working capital, with a **$2 million** unused credit facility, ensuring liquidity for 12 months - As of March 31, 2025, the company had cash and cash equivalents of **$5,148 thousand** and working capital of **$6,574 thousand**[112](index=112&type=chunk) - The company has an available **$2,000 thousand** revolving line of credit with no outstanding balance as of March 31, 2025[75](index=75&type=chunk)[114](index=114&type=chunk) - Management believes current resources are sufficient to meet anticipated working capital and capital expenditure requirements for at least the next 12 months[114](index=114&type=chunk) [Use of Non-GAAP Measures](index=28&type=section&id=Use%20of%20Non-GAAP%20Measures) Non-GAAP measures show improved Adjusted Gross Profit of **$4.5 million** and a narrowed Adjusted EBITDA loss of **$17 thousand** in Q1 2025 Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(318) | $(442) | | Other income and expense, net | $(30) | $(83) | | Depreciation and amortization | $154 | $72 | | Stock-based compensation | $177 | $334 | | **Adjusted EBITDA** | **$(17)** | **$(117)** | Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross Profit | $4,392 | $4,245 | | Add: Amortization allocable to cost of revenues | $103 | $24 | | **Adjusted Gross Profit** | **$4,495** | **$4,269** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the company qualifies as a smaller reporting company - Disclosure is not applicable as the company is a smaller reporting company[126](index=126&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Management concluded that the Company's internal control over financial reporting was effective as of March 31, 2025[127](index=127&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal controls[129](index=129&type=chunk) Part II – OTHER INFORMATION [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in material legal proceedings, with a previously disclosed class action lawsuit dismissed in April 2025 - The company is not currently involved in any material legal proceedings, and management does not expect pending matters to have a material adverse effect[131](index=131&type=chunk) - A class action complaint served in March 2024 was dismissed in April 2025[94](index=94&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors described in the company's 2024 Annual Report on Form 10-K[133](index=133&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - None[134](index=134&type=chunk) [Item 5. Other Information](index=30&type=section&id=Item%205.%20Other%20Information) No directors or officers reported changes to Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - During the quarter, no directors or officers reported the adoption, modification, or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement"[135](index=135&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists key exhibits filed with the Form 10-Q, including the 2025 Omnibus Incentive Plan and required certifications - Key exhibits filed with the report include: - Intellicheck, Inc. 2025 Omnibus Incentive Plan - Rule 13a-14(a) Certifications of CEO and CFO - Section 1350 Certifications - XBRL Instance Document and related files[137](index=137&type=chunk)

[First Quarter 2025 Financial Results](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results) Intellicheck's Q1 2025 results show revenue growth, reduced net loss, and strategic client diversification [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) Intellicheck reported record Q1 2025 revenue of **$4.9 million**, a **5% increase**, with a **90% gross margin** and **reduced net loss**, while diversifying its client base Financial and Operational Summary | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $4,894,000 | $4,680,000 | +5% | | SaaS Revenue | $4,868,000 | $4,609,000 | +6% | | Gross Profit Margin | 90% | 91% | -1 ppt | | Operating Expenses | $4,740,000 | $4,768,000 | -1% | | Net Loss | ($318,000) | ($442,000) | +28% Improvement | | Diluted EPS | ($0.02) | ($0.02) | No Change | | Adjusted EBITDA | ($17,000) | ($117,000) | +85% Improvement | - The company is making significant progress in diversifying its client base, with rapid growth in sectors such as retail banking, title insurance, auto, email account security, background checks, logistics, and shipping[2](index=2&type=chunk) - As of March 31, 2025, the company held **$5.1 million** in cash and cash equivalents and had stockholders' equity of **$17.6 million**[6](index=6&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) The unaudited financial statements for Q1 2025 detail increased total assets to **$24.6 million**, revenue growth, reduced net loss, and positive cash flow from operations [Unaudited Condensed Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Balance%20Sheets) Total assets increased to **$24.6 million** as of March 31, 2025, driven by accounts receivable and deferred revenue, while stockholders' equity slightly decreased Balance Sheet Summary (in thousands) | Balance Sheet Item (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $5,148 | $4,666 | | Total current assets | $13,527 | $9,912 | | Total assets | $24,561 | $20,933 | | Total current liabilities | $6,953 | $3,186 | | Total liabilities | $6,953 | $3,186 | | Total stockholders' equity | $17,608 | $17,747 | [Unaudited Condensed Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Statements%20of%20Operations) Q1 2025 revenue grew to **$4.9 million**, with gross profit increasing to **$4.4 million**, leading to a narrowed loss from operations and a reduced net loss Income Statement Summary (in thousands) | Income Statement Item (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $4,894 | $4,680 | | Gross profit | $4,392 | $4,245 | | Total operating expenses | $4,740 | $4,768 | | Loss from operations | ($348) | ($523) | | Net loss | ($318) | ($442) | | Loss per common share (Basic/Diluted) | ($0.02) | ($0.02) | [Unaudited Condensed Statements of Stockholders' Equity](index=8&type=section&id=Unaudited%20Condensed%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity decreased to **$17.61 million** by March 31, 2025, primarily due to the net loss, partially offset by stock-based compensation - For the three months ended March 31, 2025, stockholders' equity decreased by **$139,000**, resulting from a net loss of **$318,000** and stock-based compensation of **$179,000**[11](index=11&type=chunk) [Unaudited Condensed Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Statements%20of%20Cash%20Flows) Net cash from operating activities was **$750,000** in Q1 2025, with a net increase in cash of **$482,000**, bringing the quarter-end cash balance to **$5.1 million** Cash Flow Summary (in thousands) | Cash Flow Item (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $750 | $869 | | Net cash (used in) provided by investing activities | ($173) | $4,390 | | Net cash (used in) financing activities | ($95) | $0 | | Net increase in cash | $482 | $5,259 | | Cash, end of period | $5,148 | $9,239 | [Non-GAAP Financial Measures](index=12&type=section&id=Non-GAAP%20Financial%20Measures) The company presents Adjusted EBITDA and Adjusted Gross Profit to provide a clearer view of operating performance by excluding non-cash and non-operating charges - Management uses Adjusted EBITDA and Adjusted Gross Profit to monitor and evaluate financial and operating results, believing they provide a more consistent basis for comparison by excluding items like amortization, depreciation, and stock-based compensation[13](index=13&type=chunk)[16](index=16&type=chunk) [Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Non-GAAP%20Adjusted%20EBITDA) Adjusted EBITDA loss significantly improved to **$17,000** in Q1 2025, reflecting adjustments for depreciation, amortization, and stock-based compensation from GAAP net loss Adjusted EBITDA Reconciliation (in thousands) | Reconciliation Item (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | ($318) | ($442) | | Depreciation and amortization | $154 | $72 | | Stock-based compensation | $177 | $334 | | Other adjustments | ($30) | ($81) | | **Adjusted EBITDA** | **($17)** | **($117)** | [Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit](index=12&type=section&id=Reconciliation%20of%20GAAP%20Gross%20Profit%20to%20Non-GAAP%20Adjusted%20Gross%20Profit) Adjusted Gross Profit reached **$4.5 million**, or **91.8% of revenue**, in Q1 2025, after adding back amortization expense allocable to cost of revenues Adjusted Gross Profit Reconciliation (in thousands) | Metric (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross Profit | $4,392 | $4,245 | | Add: Amortization | $103 | $24 | | **Adjusted Gross Profit** | **$4,495** | **$4,269** | | Gross profit as a % of revenues | 89.7% | 90.7% | | Adjusted Gross Profit as a % of revenues | 91.8% | 91.2% | [Other Information](index=2&type=section&id=Other%20Information) This section provides details on the earnings conference call, an overview of Intellicheck's identity verification services, and the Safe Harbor Statement for forward-looking statements [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) An earnings conference call was held on May 13, 2025, to discuss quarterly results, with replay information available for interested parties - An earnings conference call was scheduled for May 13, 2025, at 4:30 p.m. ET, with replay information available for those who missed the live event[7](index=7&type=chunk)[8](index=8&type=chunk) [About Intellicheck](index=15&type=section&id=About%20Intellicheck) Intellicheck is a leading SaaS provider of real-time identity verification solutions, utilizing DMV-issued IDs to combat identity-based fraud across North America - Intellicheck is a SaaS company specializing in real-time identity verification by analyzing government-issued IDs to combat identity-based fraud[20](index=20&type=chunk) [Safe Harbor Statement](index=15&type=section&id=Safe%20Harbor%20Statement) The press release contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially, with no obligation to update - This release includes forward-looking statements concerning future business performance, which are protected under the Private Securities Litigation Reform Act of 1995, involving risks and not guaranteeing future results[21](index=21&type=chunk)

Fraud & Identity Theft Problem - In 2024, U S fraud impacted 18 million people, costing $27 billion[9] - Account takeover fraud increased by 22%, reaching $16 billion[9] - New account creation accounted for 29% of identity misuse in 2024[9] - 79% of auto dealerships experienced identity fraud-related losses in the past year[9] Intellicheck Overview & Technology - Intellicheck authenticates close to 100 million documents annually in North America[16] - The company's SaaS solutions are used across various industries, both in-person and digitally[15] - Intellicheck works with 28 state-level law enforcement agencies for ID validation[16] - The company's technology validates IDs in less than one second[26] Financial Performance & Outlook - Q1 2025 saw 100% renewal rates with an ACV exceeding $10 million[21] - The company consistently maintains gross margins of 90%+[21] - Intellicheck anticipates positive Adjusted EBITDA for 2025[22] - Q4 2024 total revenue was $5,936,000, with SaaS revenue at $5,913,000[39] - Q4 2024 net income was $488,000 and Adjusted EBITDA was $860,000[39]

Group 1: Company Performance - Intellicheck Mobilisa, Inc. (IDN) has returned approximately 2.9% year-to-date, outperforming the average return of -6.6% for the Industrial Products sector [4] - The Zacks Consensus Estimate for IDN's full-year earnings has increased by 33.3% over the past 90 days, indicating improving analyst sentiment and a positive earnings outlook [3] - IDN belongs to the Security and Safety Services industry, which has seen an average loss of 5.6% this year, further highlighting IDN's strong performance within its industry [5] Group 2: Industry Context - The Industrial Products sector consists of 199 individual stocks and is currently ranked 11 in the Zacks Sector Rank [2] - The Security and Safety Services industry, which includes IDN, is ranked 59 in the Zacks Industry Rank [5] - Another outperforming stock in the Industrial Products sector is Kone Oyj Unsponsored ADR (KNYJY), which has returned 14.3% year-to-date [4][6]

Revenue and Profitability - Revenues for the year ended December 31, 2024 increased by $1,091 or 6% to $19,997 compared to $18,906 for the year ended December 31, 2023, primarily driven by higher SaaS revenue[137] - SaaS revenues increased by $1,215 or 7% to $19,810 for the year ended December 31, 2024, compared to $18,595 for the year ended December 31, 2023[137] - Gross profit for the year ended December 31, 2024 was $18,166, representing a 4% increase from $17,531 in 2023, with gross profit margin decreasing to 90.8% from 92.7%[138] - Net loss for the year ended December 31, 2024 was $(918) or $(0.05) per share, an improvement from a net loss of $(1,980) or $(0.10) per share in 2023[141] - Adjusted EBITDA for the year ended December 31, 2024 was $520, compared to $377 in 2023, reflecting operational improvements[150] Operating Expenses and Cash Flow - Operating expenses decreased by $473 or 2.4% to $19,334 for the year ended December 31, 2024, with research and development expenses decreasing by $823 or 18%[139] - Cash used in operating activities was $(2,694) for the year ended December 31, 2024, compared to $(647) in 2023, while cash provided by investing activities was $2,895[143] Financial Position - Cash and cash equivalents as of December 31, 2024 were $4,666, with total assets of $20,933 and stockholders' equity of $17,747[142] - As of December 31, 2024, the company had cash and cash equivalents of $4,666[157] - The company has approximately $28,500 in net operating loss carryforwards as of December 31, 2024, with $10,900 expiring between 2035 and 2037[151] - The company anticipates that available cash and expected cash from operations will be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months[146] Investment Activities - The primary objectives of the company's investment activities are capital preservation, liquidity fulfillment, and fiduciary control of cash and investments[157] - The company does not expect a hypothetical 100 basis point change in interest rates to materially affect the fair market value of its investment portfolio[157] - The company has never entered into off-balance sheet financing arrangements or established special purpose entities[156] Regulatory and Accounting Updates - The FASB issued ASU 2024-03, requiring disaggregated disclosures for certain expenses, effective for annual reporting periods beginning after December 15, 2026[155]

Financial Data and Key Metrics Changes - Fourth quarter revenues increased by 15% year-over-year, reaching a record $5.936 million compared to $5.176 million in Q4 2023 [48][50] - SaaS revenues for Q4 grew 17% quarter-over-quarter, totaling $5.913 million, while full-year SaaS revenues increased by 7% to $19.8 million [13][55] - Adjusted EBITDA for the full year 2024 was positive at $520,000, an improvement from a loss of $377,000 in 2023 [49][59] - Gross profit margin for Q4 was 91%, down from 95% in the same period of 2023, primarily due to increased R&D costs [50][55] Business Line Data and Key Metrics Changes - The company focused on vertical channel diversification, with significant growth in new verticals such as automotive (13%), title insurance (2,500%), email (54%), social media (17%), and retail banking [14][17] - SaaS revenue for the full year was $19.8 million, just shy of the $20 million mark, indicating strong performance in the SaaS segment [13][55] Market Data and Key Metrics Changes - Retail still represents approximately 75% of the company's scan volume, but transaction volumes from major retailers were down 45% year-over-year in Q1 2025 [44][82] - The company anticipates that lower mortgage rates will drive significant refinancing and improved home purchasing activity, particularly benefiting the title insurance vertical [17] Company Strategy and Development Direction - The company is investing in IT initiatives and enhancing customer experience through new leadership in the customer success team [9][31] - A strategic focus on longer contracts with minimums and guarantees is expected to yield positive results [42] - The transition from Azure to AWS is anticipated to improve efficiency and reduce costs, while also enhancing AI capabilities [30][76] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the first quarter of 2025, expecting revenues to align with sell-side consensus estimates of $4.78 million [45] - The company is aware of macroeconomic challenges affecting consumer confidence and spending, which could impact retail volumes [43][71] - Management believes that the diversification strategy is working, with a focus on higher-value transactions in new verticals [42][84] Other Important Information - The company reported a net loss of $918,000 for the full year 2024, an improvement from a loss of $1.98 million in 2023 [58] - The company has a $2 million revolving credit facility with Citibank, which was not utilized during 2024 [60] Q&A Session Summary Question: Visibility on stronger back half of the year - Management indicated that visibility is based on rollout schedules and proof of concepts, with expectations for growth in the back half of the year [65][68] Question: Disruption in sales conversations due to macro conditions - Management reported no disruption in sales conversations, as fraud remains a consistent issue across industries [70][72] Question: Potential operating expense savings from switching to AWS - Management expects significant savings from the transition to AWS, while balancing the need for extensive computing power for AI and machine learning [75][76] Question: Clarification on Q4 revenue strength and Q1 outlook - Management noted that Q4 strength was driven by non-retail improvements, with a significant drop in retail transaction volumes expected in Q1 [81][84] Question: Update on large social media customer - Management is finalizing procurement discussions and expects updates soon, with testing already completed [87][89] Question: Sales team composition and focus - The company has added three new sales associates, focusing on a consultative selling approach across various verticals [92][94] Question: Top priorities for 2025 - Management emphasized that sales growth is the top priority, alongside improving customer success and marketing strategies [98][100]