Summary of WidePoint Corporation Conference Call (October 20, 2025) Company Overview - **Company Name**: WidePoint Corporation (NYSEAM: WYY) - **Founded**: 1997 - **Business Model**: Mobility as a Service (MaaS) with a focus on cybersecurity solutions delivered via a SaaS model - **Management**: Current management team in place since 2017, stabilizing the company for growth and profitability [5][6] Financial Performance - **Top Line Revenue**: Closed 2024 with $142 million, a 35% increase compared to 2023 [7][32] - **Market Capitalization**: Approximately $56 million [7] - **Recurring Revenue**: 95% recurring revenues with a contract backlog of $265 million [6] - **Cash Position**: $6.8 million in cash at the end of Q2 2025 [6][32] - **EBITDA**: Positive for 32 consecutive quarters; free cash flow positive for 7 consecutive quarters [7][32] - **Growth Strategy**: Focus on enhancing competitive advantage through investments in solution sets and pursuing higher-margin contracts [24][25] Market Opportunity - **Addressable Market Size**: Approximately $36 billion, including federal, state, and local governments, as well as large enterprises [6][8] - **Cybersecurity Demand**: Increased due to rising cybersecurity threats and the need for secure remote work solutions [8][9] Key Solutions and Differentiators - **Core Offerings**: - Identity Management - Managed Mobility - Data Analytics - IT as a Service [9][12] - **Unique Selling Proposition**: - Most secure multi-factor authentication solution, quantum computing resistant, and has never been hacked [10][11][17] - FedRAMP authorized, allowing the company to store, process, and transmit federal government data in the cloud [14][31] - **Device as a Service (DaaS)**: New business model offering bundled hardware, software, and services for predictable pricing [20] Contract Wins and Government Relationships - **Significant Contracts**: - $500 million DHS CWMS 2.0 contract with an additional $250 million ceiling increase [22][30] - Pursuing NASA SEWP contracts and recompeting for CWMS 3.0 with a ceiling of $3 billion [23][31] - **Long-term Relationships**: Established presence with the Department of Homeland Security, having worked on contracts for approximately 20 years [22][30] Competitive Landscape - **FedRAMP Authorization**: A significant differentiator that few competitors possess, providing a competitive edge in securing government contracts [14][31] - **Market Position**: Positioned as a vendor of choice for mobility and cybersecurity solutions due to certifications and accreditations [26][27] Future Outlook - **Growth Projections**: Continued focus on organic and inorganic growth strategies, with expectations for improved profitability in 2025 and beyond [34] - **Financial Targets**: Aiming for 50% gross margins by 2026, excluding carrier services revenue [39][40] Additional Insights - **Customer Base**: Includes large, stable enterprises requiring extensive mobile workforces [29] - **Cost Savings**: Demonstrated ability to save clients 15-40% on telecom costs, enhancing value proposition [30] This summary encapsulates the key points discussed during the WidePoint Corporation conference call, highlighting the company's financial performance, market opportunities, unique solutions, significant contracts, competitive advantages, and future growth strategies.

Group 1 - WidePoint Corporation has been awarded a new Cellular Wireless Managed Services (CWMS) 2.0 Task Order to provide managed mobility services for 30,000 cellular lines for U.S. Customs & Border Protection (CBP) [1] - The task order includes a performance period of one base year and an option period extending through December 2026 [1]

Summary of WidePoint (WYY) Conference Call Company Overview - WidePoint Corporation (WYY) is a managed solutions provider focused on securing the mobile workforce and enterprise landscape [1][2] - Founded in 1997, the company has been growing through both organic and inorganic means for nearly thirty years [6] - The company operates with a SaaS business model, providing solutions to secure, manage, and monitor mobile technology assets [6] Financial Performance - The company reported $142,600,000 in top-line revenue for 2024, a 35% increase from $106,000,000 in 2023 [7] - WidePoint has 95% recurring revenues and a contract backlog of $265,000,000 [7] - The company has been free cash flow positive for seven consecutive quarters [7] - As of Q2 2025, WidePoint had $6,800,000 in cash and zero bank debt [7] Market Opportunity - The addressable market for WidePoint is approximately $36,000,000,000, encompassing federal, state, local governments, and commercial enterprises [8] - The market is growing due to increasing cybersecurity threats and the shift towards remote and hybrid work environments [9] Core Solutions and Differentiators - WidePoint's solutions include: - **Identity Management**: The most secure multifactor authentication solution, implemented across federal agencies, resistant to quantum computing and AI threats [11] - **Managed Mobility**: A comprehensive management platform for mobile technology assets, now FedRAMP authorized [12] - **Data Analytics**: Provides visibility into customers' mobile technology assets [12] - **IT as a Service**: Full lifecycle support for IT infrastructure [13] - Achieved FedRAMP authorized status, allowing the company to store, process, and transmit federal government data in the cloud [15] Recent Contracts and Opportunities - WidePoint has secured significant contracts, including: - A $500,000,000 DHS cellular wireless management solutions contract [25] - A $2,700,000,000 Navy Spiral Four contract [25] - A $3,000,000,000 CWMS 3.0 contract, which is a ten-year single award contract [26] - The company is pursuing additional contracts with NASA and other federal agencies [26] Growth Strategy - WidePoint's growth strategy includes: - Investing in solution sets and achieving certifications like FedRAMP and Microsoft ISV [29] - Expanding into higher-margin SaaS and DaaS contracts [29] - Developing new offerings and partnerships to capture opportunities [30] - The company aims to leverage its unique FedRAMP authorized status to gain a competitive edge in federal contracts [31] Investment Considerations - WidePoint is positioned for growth with a solid financial foundation, including zero long-term debt and a growing market opportunity [38] - The management team has a proven track record of operational success and profitability [38] - The company has a robust customer base in both public and private sectors [39] Conclusion - WidePoint is a stable company with a strong growth trajectory, poised to capitalize on significant market opportunities in cybersecurity and mobile solutions [39]

Company Overview - WidePoint Corporation (NYSE American: WYY) is a leader in enterprise cybersecurity and mobile technology, focusing on securing the mobile workforce and enterprise landscape [3] - The company offers innovative technology solutions including Identity & Access Management (IAM), Mobility Managed Services (MMS), Telecom Management, Information Technology as a Service, Cloud Security, and Analytics & Billing as a Service (ABaaS) [3] Upcoming Event - WidePoint is scheduled to present at the 2025 Annual Gateway Conference on September 3 at 11:00 a.m. Pacific Time [2] - The presentation will be webcast live and available for replay, with executives available for one-on-one meetings throughout the conference [2] Conference Details - The Gateway Conference provides a platform for public and private companies to connect with investors, analysts, and partners [4] - Attendees will have access to presentations and one-on-one meetings with senior executives from over 75 companies across various sectors including technology, cleantech, consumer, industrials, financial services, and healthcare [5]

[FORM 8-K General Information](index=1&type=section&id=FORM%208-K%20General%20Information) This section details the registrant's identity, contact information, and registered securities [Registrant Information](index=1&type=section&id=Registrant%20Information) This section details WidePoint Corporation as the registrant, including its incorporation state, principal executive office address, contact number, and confirms it is not an emerging growth company - Company Name: **WidePoint Corporation**[1](index=1&type=chunk) - State of Incorporation: **Delaware**[2](index=2&type=chunk) - Principal Executive Office: **11250 Waples Mill Road, South Tower 210, Fairfax, Virginia 22030**[2](index=2&type=chunk) - Registrant's telephone number: **(703) 349-2577**[2](index=2&type=chunk) - Emerging growth company: **No**[3](index=3&type=chunk) [Securities Registration](index=1&type=section&id=Securities%20Registration) This outlines the company's registered securities, specifically Common Stock, and its trading details on the NYSE American Securities Registered | Title of Each Class | Trading Symbol | Name of Exchange on Which Registered | | :------------------ | :------------- | :----------------------------------- | | Common Stock, $0.001 par value per share | WYY | NYSE American | [Item 2.02 Results of Operations and Financial Condition](index=1&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) This item details the disclosure of financial results and clarifies the information's filing status [Financial Results Disclosure](index=1&type=section&id=Financial%20Results%20Disclosure) WidePoint Corporation announced its financial results for the quarter and six-month period ended June 30, 2025, via a conference call and press release on August 14, 2025 - Date of financial results announcement: **August 14, 2025**[5](index=5&type=chunk) - Period covered: **Quarter and six-month period ended June 30, 2025**[5](index=5&type=chunk) - Disclosure methods: **Conference call and press release** (furnished as Exhibit 99.1 and 99.2)[5](index=5&type=chunk)[6](index=6&type=chunk) [Information Filing Status](index=2&type=section&id=Information%20Filing%20Status) The information in this item is explicitly stated not to be considered 'filed' for Section 18 of the Securities Exchange Act of 1934, nor is it automatically incorporated by reference into other company filings unless specifically referenced - Information in this item is not deemed **'filed'** for purposes of Section 18 of the Securities Exchange Act of 1934[7](index=7&type=chunk) - Information is not deemed incorporated by reference in any of the Company's filings under the Securities Act of 1933 or the Exchange Act, except if expressly set forth by specific reference[7](index=7&type=chunk) [Item 9.01(d) Financial Statements and Exhibits](index=2&type=section&id=Item%209.01(d)%20Financial%20Statements%20and%20Exhibits) This item lists all financial statements and exhibits accompanying the Form 8-K filing [Exhibits List](index=2&type=section&id=Exhibits%20List) This section provides a list of exhibits accompanying the Form 8-K, including the transcript of the earnings call, the earnings press release, and an interactive data file List of Exhibits | Exhibit | Description | | :-------- | :------------------------------------------ | | 99.1 | Transcript of Earnings Call | | 99.2 | Earnings Press Release | | 104 | 104 Page Interactive Data File (embedded within the Inline XBRL) | [SIGNATURES](index=2&type=section&id=SIGNATURES) This section contains the authorized signature confirming the filing of the report [Authorized Signature](index=2&type=section&id=Authorized%20Signature) The report is formally signed by Jin Kang, Chief Executive Officer of WidePoint Corporation, on August 20, 2025, confirming due authorization - Report signed by **Jin Kang, Chief Executive Officer**[12](index=12&type=chunk) - Date of signature: **August 20, 2025**[12](index=12&type=chunk)

Summary of WidePoint (WYY) Conference Call - August 19, 2025 Company Overview - **Company**: WidePoint Corporation (Ticker: WYY) - **Industry**: Managed service provider, focusing on mobility management, cybersecurity, and data analytics for the US federal government and commercial customers [1][3] Core Services - **Mobility as a Service (MaaS)**: A SaaS model providing integrated services including: - **Identity Management**: Secure multifactor authentication, certified for federal zero trust architecture [5][6] - **Managed Mobility Solutions**: Comprehensive support for mobile technology assets throughout their lifecycle [6] - **Data Analytics**: Visibility into asset usage, location, and costs [6] - **IT as a Service**: Outsourced management of IT infrastructure, including cybersecurity [7] Key Business Opportunities - **CWMS 3.0 Contract**: - Represents approximately **60% of revenues** and is the largest contract for WidePoint [10] - The company has a strong position due to facility security clearance and FedRAMP authorization, which competitors lack [11][12] - The final RFP is expected soon, with contract award anticipated by September [14][15] - Current CWMS 2.0 contract expires in November 2025, with task orders extending to November 2026 [15] - **Mobile Anchor Product**: - Enhances identity and access management by placing digital certificates on mobile devices [18][20] - Recent contract wins include the Department of Energy and a Fortune 100 defense contractor [21][22] - **Navy Spiral 4 Contract**: - Total contract value is **$2.7 billion**, with WidePoint positioned as a non-carrier provider [28][30] - Revenue from this contract is expected to ramp up in Q3 2025 [29] - **Device as a Service (DaaS)**: - Significant opportunities in the commercial sector, with a focus on Fortune 100 companies [34][37] - The company is exploring large SaaS deals and partnerships, including with CDW for the LA Olympics [38][39] Financial Insights - **Contract Backlog**: Approximately **$260 million**, expected to decrease as CWMS 2.0 concludes, but will build again with CWMS 3.0 [44] - **Revenue Growth**: - Current CWMS 2.0 contract is valued at **$750 million**; CWMS 3.0 is projected at **$3 billion** over ten years [46] - Gross margins for non-carrier revenue are around **33-34%**, with a goal to reach **50%** by 2027 [63] Operational Efficiency - **Staffing and Operating Leverage**: - New contracts will not require proportional staffing increases, allowing for improved operating leverage [78] - The company has sufficient cash reserves (approximately **$7 million** as of June) and no debt, with a projected cash balance of over **$10 million** by year-end [80][82] M&A Strategy - **Acquisition Criteria**: - Focus on established companies in mobility, cybersecurity, and data analytics that are EBITDA positive [90][92] - The company is not actively seeking acquisitions but remains open to opportunities that align with its operations [89] Conclusion - WidePoint is well-positioned for growth with significant contracts in the pipeline, a strong service offering in mobility management, and a focus on operational efficiency and strategic partnerships. The company aims to enhance its market position while maintaining a healthy financial outlook.

Summary of WidePoint Fireside Chat Company Overview - **Company Name**: WidePoint - **Ticker Symbol**: WYY (NYSE American) - **Business Focus**: WidePoint specializes in securing, managing, and providing visibility into mobility technology assets, particularly in a post-pandemic environment where remote work is prevalent [4][6][29]. Core Product Offerings - **Integrated Solutions**: WidePoint's offerings include: 1. **Identity Management**: Provides secure multifactor authentication, certified by the US federal government, and quantum computing resistant [9]. 2. **Managed Mobility Solution**: Offers full lifecycle support for mobile technology assets, including cost savings through invoice auditing [11]. 3. **Data Analytics**: Delivers visibility into asset usage, location, costs, and contracts [12]. 4. **IT as a Service**: Outsources IT infrastructure management, including cybersecurity [12]. Business Model - **Revenue Generation**: Primarily through a Software as a Service (SaaS) model, with a new initiative called Device as a Service (DaaS) allowing customers to pay a fixed monthly fee for mobile management needs [15][14]. - **Contract Structure**: Federal contracts typically span five years with options for renewal, while commercial contracts are usually three years [17]. Key Contracts and Opportunities - **Department of Homeland Security (DHS) Contract**: A flagship contract worth $500 million, recently modified to increase the cap by $254 million. The new contract (CWMS 3.0) is expected to be worth $3 billion over ten years [20][21]. - **Spiral Four Contract**: A $2.7 billion ten-year contract with ongoing task orders [24]. - **Potential Partnerships**: Engaging with a major cellular carrier to manage up to 2.5 million devices [26]. Financial Performance - **EBITDA**: Positive for 32 consecutive quarters, with seven consecutive quarters of adjusted EBITDA positivity [6][40]. - **Cash Flow**: Positive free cash flow, zero bank debt, and a cash balance of $6.8 million at the end of Q2, expected to rise to $11-12 million [41][42]. - **Growth Rate**: 15% compound annual growth rate (CAGR) over the last four to five years [42]. Market Position and Competitive Advantage - **Unique Selling Proposition**: WidePoint's integrated solutions meet federal cybersecurity standards (FedRAMP authorized), giving it a competitive edge over vendors with stovepiped solutions [32][33]. - **Market Trends**: The shift towards a hybrid workforce increases demand for secure mobility management solutions [29]. Future Vision - **Growth Trajectory**: Plans to continue growing and becoming a premier player in mobile technology management for both public and private sectors [50][51]. - **Legacy Goals**: Aims to leave behind a profitable company with a trusted set of solutions and a growing list of satisfied customers [51][52]. Additional Insights - **Operational Highlights**: Successful management of logistics for the 2020 Census, with plans for involvement in the 2030 Census [48]. - **Product Innovations**: Introduction of new solutions like the M365 Analyzer and Mobile Anchor, enhancing security and access management [45][46]. This summary encapsulates the key points discussed during the WidePoint fireside chat, highlighting the company's strategic direction, financial health, and market opportunities.

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $38 million, an increase from $36 million in the same period last year [35] - Total revenue for the six months ended June 30, 2025, was $72.1 million, up from $70.2 million in the same period last year [35] - Net loss for Q2 2025 was $618,000, or a loss of $0.06 per share, compared to a net loss of $500,000, or a loss of $0.05 per share for the same period last year [42] - Adjusted EBITDA for Q2 2025 was $183,000, marking the thirty-second consecutive quarter of adjusted EBITDA [42] Business Line Data and Key Metrics Changes - Carrier services revenue for Q2 2025 was $22.2 million, an increase of $1.8 million compared to the same period in 2024 [36] - Managed services fees for Q2 2025 were $9.2 million, consistent with the same period in 2024 [36] - Billable services fees for Q2 2025 were $1.3 million, also consistent with the same period in 2024 [36] - Reselling and other services for Q2 2025 were $5.1 million, a slight increase compared to the same period last year [37] Market Data and Key Metrics Changes - The federal backlog stood at $265 million as of June 30, 2025 [35] - The CWMS 3.0 contract ceiling increased to $3 billion from the previous $500 million, indicating growing demand from DHS [8] - The Spiral 4 contract has a total value of $2.6 billion, with WidePoint winning four task orders to date [54] Company Strategy and Development Direction - The company is focused on securing the CWMS 3.0 recompete, leveraging its status as a two-time incumbent and FedRAMP authorized status [10][45] - Investments are being made in high-impact initiatives, including the CWMS 3.0 preparation and the Device as a Service (DAS) program [22][45] - The company aims to diversify its revenue streams by expanding into large commercial DAS deals and deepening partnerships with firms like CDW [24][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the CWMS 3.0 opportunity, viewing it as a critical pillar for long-term growth [11][21] - The company anticipates that the final RFQ for CWMS 3.0 could be released soon, with contract awards expected by September 2025 [10] - Management acknowledged that while some opportunities have shifted in timing, the underlying strength of the business remains intact [21][22] Other Important Information - The company has achieved FedRAMP authorized status, enhancing its competitive advantage in securing government contracts [16][17] - The investment in DAS infrastructure is seen as foundational for long-term growth, despite delays in closing some key deals [13][14] Q&A Session Summary Question: What is the timeframe for the $3 billion DHS contract? - The CWMS 3.0 contract will extend from a five-year to a ten-year contract [49] Question: How do the requirements for the contract differ from five years ago? - FedRAMP authorization is now a requirement, which was not the case previously [51][52] Question: Update on Spiral 4 contract awards? - WidePoint has won four contracts under the Spiral 4 contract, which has a total value of $2.6 billion [54][55] Question: What is the current backlog and its components? - The backlog is $265 million, with $47 million expected to be received in the rest of the year [67][69]

PART I. FINANCIAL INFORMATION This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements for WidePoint Corporation, including statements of operations, comprehensive loss, balance sheets, cash flows, and changes in stockholders' equity, along with detailed notes explaining accounting policies, significant accounts, and other financial disclosures for the periods ended June 30, 2025 and 2024 [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, gross profit, operating loss, and net loss for the reported periods | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $37.88 million | $36.04 million | $72.10 million | $70.25 million | | Gross Profit | $5.12 million | $4.89 million | $9.90 million | $9.56 million | | Loss from Operations | $-0.71 million | $-0.46 million | $-1.52 million | $-1.11 million | | Net Loss | $-0.62 million | $-0.50 million | $-1.34 million | $-1.15 million | | EPS, Basic and Diluted | $-0.06 | $-0.05 | $-0.14 | $-0.13 | [Condensed Consolidated Statements of Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents the net loss and other comprehensive income/loss components for the reported periods | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Loss | $-0.62 million | $-0.50 million | $-1.34 million | $-1.15 million | | Foreign currency translation adjustments, net of tax | $0.06 million | $-0.01 million | $0.09 million | $-0.03 million | | Comprehensive Loss | $-0.55 million | $-0.51 million | $-1.25 million | $-1.18 million | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific dates | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :---------------------------------------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $6.82 million | $6.78 million | | Restricted cash | $0.40 million | $1.04 million | | Accounts receivable, net | $16.75 million | $11.93 million | | Unbilled accounts receivable | $29.12 million | $31.80 million | | Total current assets | $61.20 million | $55.32 million | | Total assets | $76.58 million | $71.58 million | | Accounts payable | $20.48 million | $16.52 million | | Accrued expenses | $29.08 million | $30.85 million | | Current portion of deferred revenue | $8.74 million | $4.77 million | | Total current liabilities | $59.16 million | $52.88 million | | Total liabilities | $64.01 million | $58.00 million | | Total stockholders' equity | $12.56 million | $13.58 million | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $-0.06 million | $-2.64 million | | Net cash used in investing activities | $-0.12 million | $0.24 million | | Net cash used in financing activities | $-0.38 million | $-0.54 million | | Net effect of exchange rate on cash | $-0.04 million | $0.01 million | | Net decrease in cash, cash equivalents, and restricted cash | $-0.60 million | $-2.92 million | | Cash, cash equivalents, and restricted cash, end of period | $7.22 million | $4.00 million | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This section details changes in common stock, additional paid-in capital, and accumulated deficit over the period | Metric | Balance, January 1, 2025 ($) | Balance, June 30, 2025 ($) | | :-------------------------------- | :----------------------- | :--------------------- | | Common Stock Issued | 9,485,508 | 9,655,173 | | Common Stock Amount | $9,487.00 | $9,656.00 | | Additional Paid-In Capital | $103.10 million | $103.34 million | | Accumulated Other Comprehensive Loss | $-0.45 million | $-0.36 million | | Accumulated Deficit | $-89.08 million | $-90.42 million | | Total Stockholders' Equity | $13.58 million | $12.56 million | - During the six months ended June 30, 2025, 197,933 shares of restricted common stock vested, with 28,268 shares withheld for tax liability, resulting in a cash outflow of approximately **$0.13 million**[61](index=61&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of accounting policies, significant accounts, and other financial disclosures [1. Organization and Nature of Operations](index=9&type=section&id=1.%20Organization%20and%20Nature%20of%20Operations) This note describes the company's corporate structure, global operations, and core business as a TMaaS provider - WidePoint Corporation, incorporated in Delaware in 1997, operates through wholly-owned subsidiaries across the U.S., Ireland, the Netherlands, and the UK, with its headquarters in Fairfax, Virginia[24](index=24&type=chunk) - The Company is a leading provider of Technology Management as a Service (TMaaS), offering solutions through its federally compliant Intelligent Technology Management System (ITMS™) platform, which is SSAE 18 compliant and has FedRAMP Authorized status[25](index=25&type=chunk) [2. Basis of Presentation and Accounting Policies](index=9&type=section&id=2.%20Basis%20of%20Presentation%20and%20Accounting%20Policies) This note outlines the financial statement preparation basis, accounting standards adopted, and significant adjustments - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and SEC regulations, with certain information condensed or omitted[27](index=27&type=chunk) - The Company adopted ASU 2023-07 (Segment Reporting) retrospectively for fiscal year 2024, with no impact on financial position, results of operations, or EPS[32](index=32&type=chunk) - An out-of-period adjustment in Q1 2025 decreased revenues by **$2.70 million** and cost of revenues by **$2.46 million**, deemed immaterial to prior periods and not expected to be material for the full year 2025[35](index=35&type=chunk) [3. Accounts Receivable and Significant Concentrations](index=10&type=section&id=3.%20Accounts%20Receivable%20and%20Significant%20Concentrations) This note details the composition of accounts receivable and highlights significant customer concentrations and credit risks | Customer Type | June 30, 2025 (Unaudited) ($) | December 31, 2024 ($) | | :---------------------------------- | :-------------------------- | :------------------ | | U.S. Federal, State, and Local Government | $14.61 million | $9.68 million | | Commercial | $2.20 million | $2.29 million | | Gross accounts receivable | $16.81 million | $11.98 million | | Less: allowances for credit losses | $0.06 million | $0.05 million | | Accounts receivable, net | $16.75 million | $11.93 million | | Customer Type | June 30, 2025 (% of Receivables) | December 31, 2024 (% of Receivables) | | :---------------------- | :------------------------------- | :--------------------------------- | | U.S. Federal Government | **87%** | **81%** | | Customer Type | Q2 2025 (% of Revenue) | Q2 2024 (% of Revenue) | H1 2025 (% of Revenue) | H1 2024 (% of Revenue) | | :---------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | U.S. Federal Government | **81%** | **83%** | **83%** | **82%** | - The Company had deposits in excess of FDIC limits of approximately **$6.90 million** and foreign bank deposits in excess of insured limits of approximately **€0.04 million** as of June 30, 2025, exposing it to credit risk[41](index=41&type=chunk) [4. Unbilled Accounts Receivable](index=11&type=section&id=4.%20Unbilled%20Accounts%20Receivable) This note explains unbilled accounts receivable, representing earned but uninvoiced revenues, primarily from government contracts - Unbilled accounts receivable, primarily from carrier services and hardware/software products, represent earned but uninvoiced revenues due to timing or fixed contractual billing schedules[42](index=42&type=chunk) | Customer Type | June 30, 2025 (% of Unbilled Receivables) | December 31, 2024 (% of Unbilled Receivables) | | :---------------------- | :---------------------------------------- | :------------------------------------------ | | U.S. Federal Government | **98%** | **99%** | [5. Other Current Assets and Accrued Expenses](index=11&type=section&id=5.%20Other%20Current%20Assets%20and%20Accrued%20Expenses) This note provides a breakdown of other current assets and accrued expenses, including inventories and carrier service costs | Other Current Assets | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------------- | :------------ | :---------------- | | Inventories | $0.56 million | $0.31 million | | Prepaid project costs | $0.45 million | $0.57 million | | Deferred contract costs | $5.53 million | $2.13 million | | Prepaid expenses and other assets | $1.57 million | $0.76 million | | Total other current assets | $8.12 million | $3.77 million | | Accrued Expenses | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------------------- | :------------ | :---------------- | | Carrier service costs | $24.00 million | $25.12 million | | Salaries and payroll taxes | $2.07 million | $2.21 million | | Inventory purchases, consultants and other costs | $3.00 million | $3.50 million | | Other | $0.01 million | $0.03 million | | Total accrued expenses | $29.08 million | $30.85 million | [6. Property and Equipment](index=12&type=section&id=6.%20Property%20and%20Equipment) This note details the company's property and equipment, including gross cost, accumulated depreciation, and related expenses | Property and Equipment | June 30, 2025 ($) | December 31, 2024 ($) | | :----------------------------- | :------------ | :---------------- | | Gross property and equipment | $3.16 million | $3.72 million | | Less: accumulated depreciation and amortization | $2.66 million | $3.18 million | | Property and equipment, net | $0.50 million | $0.54 million | - Property and equipment depreciation expense was approximately **$0.09 million** for Q2 2025 and **$0.18 million** for H1 2025[46](index=46&type=chunk) - The Company disposed of property and equipment with a historical cost of **$0.78 million** and recognized a loss of **$0.01 million** during the six months ended June 30, 2025[47](index=47&type=chunk) [7. Goodwill and Intangible Assets](index=12&type=section&id=7.%20Goodwill%20and%20Intangible%20Assets) This note presents the carrying values of goodwill and various intangible assets, along with their amortization expenses - Goodwill **remained constant** at **$5.81 million** as of June 30, 2025, with no changes during the reporting periods[49](index=49&type=chunk) | Intangible Assets (Net Book Value) | June 30, 2025 ($) | December 31, 2024 ($) | | :--------------------------------- | :------------ | :---------------- | | Customer Relationships | $1.50 million | $1.61 million | | Channel Relationships | $0.67 million | $0.76 million | | Internally Developed Software | $1.08 million | $1.79 million | | Trade Name and Trademarks | $0.85 million | $0.90 million | | Total | $4.10 million | $5.06 million | - Aggregate amortization expense for intangible assets was approximately **$0.49 million** for Q2 2025 and **$0.97 million** for H1 2025[51](index=51&type=chunk) [8. Credit Agreements](index=13&type=section&id=8.%20Credit%20Agreements) This note describes the company's credit facilities, including a revolving line of credit and terminated purchase agreements - The Accounts Receivable Purchase Agreement with Republic Capital Access, LLC **terminated** in April 2024 and was not renewed[53](index=53&type=chunk) - The Company entered into a **$4.00 million** revolving line of credit facility with Old Dominion National Bank on February 29, 2024, maturing on February 28, 2026, with **no outstanding balance** as of June 30, 2025[54](index=54&type=chunk)[55](index=55&type=chunk) [9. Leases](index=13&type=section&id=9.%20Leases) This note outlines the company's lease agreements, including new office leases and associated right-of-use assets and liabilities - Effective March 1, 2025, the Company entered a new 76-month office lease in Hampton, Virginia, resulting in a **$0.54 million** leased right-of-use asset and associated liability[56](index=56&type=chunk) [10. Income Taxes](index=13&type=section&id=10.%20Income%20Taxes) This note details the company's effective tax rates and explains the primary factors influencing tax expense or benefit | Period | Effective Tax Rate | | :------------------------------- | :----------------- | | Three Months Ended June 30, 2025 | **7.8%** | | Six Months Ended June 30, 2025 | **9.8%** | | Three Months Ended June 30, 2024 | **(3.3%)** | | Six Months Ended June 30, 2024 | **2.2%** | - The difference in effective tax rate from the U.S. federal statutory rate is primarily due to a full valuation allowance against deferred tax assets and state minimum taxes[57](index=57&type=chunk) [11. Stockholders' Equity](index=14&type=section&id=11.%20Stockholders%27%20Equity) This note provides information on common stock, additional paid-in capital, and changes in stockholders' equity - As of June 30, 2025, the Company had 9,655,173 shares of common stock issued and outstanding[59](index=59&type=chunk) - During the six months ended June 30, 2025, 197,933 restricted common stock shares vested, with 28,268 shares withheld for tax liabilities, totaling approximately **$0.13 million**[61](index=61&type=chunk) [12. Share-based Compensation](index=14&type=section&id=12.%20Share-based%20Compensation) This note details the share-based compensation expense recognized for restricted stock and non-qualified options | Share-based Compensation Expense | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Restricted share-based compensation expense | $0.14 million | $0.34 million | $0.31 million | $0.73 million | | Non-qualified option share-based compensation expense | $0.03 million | $0.03 million | $0.06 million | $0.06 million | | Total share-based compensation before taxes | $0.17 million | $0.37 million | $0.36 million | $0.78 million | - As of June 30, 2025, the Company had approximately **$0.50 million** of unrecognized share-based compensation expense, to be recognized over a weighted average remaining period of 1.2 years[67](index=67&type=chunk) [13. Earnings (Loss) Per Common Share (EPS)](index=15&type=section&id=13.%20Earnings%20%28Loss%29%20Per%20Common%20Share%20%28EPS%29) This note presents the calculation of basic and diluted earnings per share, considering net loss and weighted average shares | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $-0.62 million | $-0.50 million | $-1.34 million | $-1.15 million | | Weighted average number of common shares | 9,586,166 | 9,390,154 | 9,569,660 | 9,151,265 | | Basic and Diluted Loss Per Share | $-0.06 | $-0.05 | $-0.14 | $-0.13 | - Unexercised stock options, RSAs, and warrants were anti-dilutive for both the three and six-month periods ended June 30, 2025 and 2024[70](index=70&type=chunk)[71](index=71&type=chunk) [14. Revenue from Contracts with Customers](index=16&type=section&id=14.%20Revenue%20from%20Contracts%20with%20Customers) This note disaggregates revenue by service type, customer type, and geographic region for the reported periods | Revenue Type | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Carrier Services | $22.22 million | $20.40 million | $44.62 million | $39.79 million | | Managed Services | $15.66 million | $15.64 million | $27.47 million | $30.46 million | | Total Revenues | $37.88 million | $36.04 million | $72.10 million | $70.25 million | | Customer Type | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | U.S. Federal Government | $30.64 million | $29.88 million | $59.73 million | $57.95 million | | U.S. State and Local Governments | $0.12 million | $0.11 million | $0.22 million | $0.21 million | | Foreign Governments | $0.02 million | $0.02 million | $0.04 million | $0.03 million | | Commercial Enterprises | $7.10 million | $6.02 million | $12.11 million | $12.05 million | | Total Revenues | $37.88 million | $36.04 million | $72.10 million | $70.25 million | | Geographic Region | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $36.80 million | $34.99 million | $70.02 million | $68.24 million | | Europe | $1.08 million | $1.05 million | $2.08 million | $2.01 million | | Total Revenues | $37.88 million | $36.04 million | $72.10 million | $70.25 million | [15. Segment Information](index=17&type=section&id=15.%20Segment%20Information) This note clarifies that the company operates as a single reportable segment, focusing on TMaaS solutions - The Company operates as a **single reportable segment**, WidePoint, providing managed services for government and commercial clients including Identity Management (IdM), secure Mobility Managed Services (MMS), Telecom Lifecycle Management, Digital Billing & Analytics, and IT as a Service (ITaaS)[75](index=75&type=chunk) - The Chief Operating Decision Maker (CODM) assesses performance and allocates resources based on consolidated revenue, gross profit, net income (loss), and other key financial indicators[76](index=76&type=chunk) [16. Commitments and Contingencies](index=17&type=section&id=16.%20Commitments%20and%20Contingencies) This note discloses the company's commitments and potential liabilities from employment agreements and legal proceedings - The Company has employment agreements with certain executives and is involved in various legal proceedings, none of which are expected to have a **no material adverse effect** on its financial position, results of operations, or cash flow[79](index=79&type=chunk)[80](index=80&type=chunk) [17. Subsequent Events](index=17&type=section&id=17.%20Subsequent%20Events) This note confirms the evaluation of events occurring after the balance sheet date, with no material adjustments required - The Company evaluated subsequent events up to the financial statement issuance date and identified no events requiring adjustment or disclosure[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on WidePoint's financial performance, strategic focus, and liquidity, detailing revenue and expense trends, cash flows, and capital resources [Cautionary Note Regarding Forward-Looking Statements](index=17&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This note warns about forward-looking statements, highlighting risks and uncertainties that could affect future results - The report contains forward-looking statements subject to risks and uncertainties, including the ability to retain the DHS CWMS 2.0 ID/IQ Contract, market competitiveness, technological changes (especially in AI), inflationary pressures, limited financial resources, fixed operating costs, potential future net losses, loss of significant federal contracts, and key personnel[82](index=82&type=chunk)[84](index=84&type=chunk) [Business Overview](index=18&type=section&id=Business%20Overview) This section describes the company's core business as a leading provider of Technology Management as a Service (TMaaS) solutions - WidePoint is a leading provider of Technology Management as a Service (TMaaS), offering federally certified communications management, identity management, interactive bill presentment and analytics, and Information Technology as a Service solutions[87](index=87&type=chunk) - TMaaS solutions are delivered through a flexible managed services model, hosted on a secure federal government certified proprietary portal, enabling customers to manage, analyze, and protect communication assets and deploy identity management solutions[88](index=88&type=chunk) [Strategic Focus and Notable Events](index=19&type=section&id=Strategic%20Focus%20and%20Notable%20Events) This section outlines the company's long-term strategic goals, including market expansion, technology investments, and growth initiatives - The Company's longer-term strategic focus is to expand critical mass to fund technology investments, introduce new sales and marketing initiatives, and increase market share for sustainability and growth[92](index=92&type=chunk) - Winning the DHS CWHS 3.0 re-compete[93](index=93&type=chunk) - Finding additional avenues for capturing new sales opportunities[93](index=93&type=chunk) - Leveraging FedRAMP Authorized status as a differentiator[93](index=93&type=chunk) - Growing recurring managed services revenues[93](index=93&type=chunk) - Adding incremental capabilities to Technology Management solutions and developing/acquiring new high-margin business lines[93](index=93&type=chunk) - Leveraging software platforms to grow SaaS revenues and capitalize on remote working opportunities[93](index=93&type=chunk) - Expanding commercial customer base organically[93](index=93&type=chunk) - Exploring integration of artificial intelligence into solutions for better information security, improved service delivery, and reduced costs[93](index=93&type=chunk) - Pursuing accretive and strategic acquisitions[93](index=93&type=chunk) - Transitioning data center and support infrastructure to a cost-effective, federally approved cloud environment[97](index=97&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, gross profit, and net loss trends [Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=19&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202024) This section compares the company's financial results for the three months ended June 30, 2025, against the prior year | Revenue Type | Q2 2025 ($) | Q2 2024 ($) | Dollar Variance ($) | | :-------------------- | :---------- | :---------- | :-------------- | | Carrier Services | $22.22 million | $20.40 million | $1.82 million | | Managed Service Fees | $9.23 million | $9.18 million | $0.05 million | | Billable Service Fees | $1.29 million | $1.24 million | $0.05 million | | Reselling and Other Services | $5.14 million | $5.22 million | $-0.08 million | | Total Managed Services | $15.66 million | $15.64 million | $0.02 million | | Total Revenues | $37.88 million | $36.04 million | $1.84 million | - Gross profit increased by **$0.20 million** to **$5.10 million** (**15%** of revenues) in Q2 2025, up from **$4.90 million** (**14%** of revenues) in Q2 2024[99](index=99&type=chunk) - Net loss increased by **$0.12 million** to **$0.62 million** in Q2 2025, compared to **$0.50 million** in Q2 2024[106](index=106&type=chunk) [Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024](index=21&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202024) This section compares the company's financial results for the six months ended June 30, 2025, against the prior year | Revenue Type | H1 2025 ($) | H1 2024 ($) | Dollar Change ($) | | :-------------------- | :---------- | :---------- | :------------ | | Carrier Services | $44.62 million | $39.79 million | $4.84 million | | Managed Service Fees | $18.48 million | $17.86 million | $0.62 million | | Billable Service Fees | $3.07 million | $2.43 million | $0.64 million | | Reselling and Other Services | $5.93 million | $10.17 million | $-4.25 million | | Total Managed Services | $27.47 million | $30.46 million | $-2.99 million | | Total Revenues | $72.10 million | $70.25 million | $1.85 million | - Gross profit increased by **$0.30 million** to **$9.90 million** (**14%** of revenues) in H1 2025, compared to **$9.60 million** (**14%** of revenues) in H1 2024[110](index=110&type=chunk) - Net loss increased by **$0.10 million** to **$1.30 million** in H1 2025, compared to **$1.20 million** in H1 2024[119](index=119&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's working capital, cash flows from operations, investing, and financing activities - Net working capital, excluding restricted cash, was approximately **$1.60 million** at June 30, 2025, up from **$1.40 million** at December 31, 2024[122](index=122&type=chunk) - Net cash used in operating activities was approximately **$0.10 million** for H1 2025, a **significant improvement** from **$2.60 million** used in H1 2024, primarily due to delayed billing and collections of accounts receivables with a federal government customer[123](index=123&type=chunk) - Cash used in investing activities was approximately **$0.10 million** for H1 2025, consisting of property and equipment purchases, compared to **$0.20 million** provided by investing activities in H1 2024[126](index=126&type=chunk) - Cash used in financing activities was approximately **$0.40 million** for H1 2025, reflecting line of credit advances and repayments, finance lease principal repayments, and withholding taxes paid on restricted stock awards[127](index=127&type=chunk) [Off-Balance Sheet Arrangements](index=23&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of off-balance sheet arrangements as defined by SEC regulations - The Company has **no existing off-balance sheet arrangements** as defined under SEC regulations[131](index=131&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not required for smaller reporting companies, and thus no disclosures regarding quantitative and qualitative market risk were provided - This item is **not required** for smaller reporting companies[132](index=132&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses in internal control over financial reporting related to revenue recognition for government contracts - Disclosure controls and procedures were **not effective** as of June 30, 2025, due to **material weaknesses** in internal control over financial reporting[133](index=133&type=chunk) - Deficiencies were identified in the revenue recognition process for government contracts, specifically in estimating unbilled amounts and monitoring evolving circumstances for revenue accruals[134](index=134&type=chunk) - Management is executing a remediation plan, including designing and implementing review processes for new contracts and carrier services revenue/cost accruals, with full remediation expected by year-end[135](index=135&type=chunk) PART II. OTHER INFORMATION This part covers legal proceedings, risk factors, equity sales, and other disclosures [Item 1. Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not currently involved in any material legal proceedings - The Company is **not currently involved in any material legal proceeding**[137](index=137&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) The Company's risk factors have not materially changed from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - Risk factors have **not materially changed** from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[138](index=138&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the repurchase of common stock shares withheld from vesting stock-based compensation awards to cover employee income tax withholding for the periods indicated | Period | Total Number of Shares Purchased | Average Price Paid Per Share ($) | | :------------- | :----------------------------- | :--------------------------- | | January 2025 | 21,613 | $4.84 | | March 2025 | 3,004 | $3.53 | | May 2025 | 3,681 | $4.22 | | Total | 28,298 | $4.62 | [Item 3. Default Upon Senior Securities](index=25&type=section&id=Item%203.%20Default%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities during the period - There were **no defaults** upon senior securities[140](index=140&type=chunk) [Item 4. Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The Company reported no mine safety disclosures - There were **no mine safety disclosures**[140](index=140&type=chunk) [Item 5. Other Information](index=25&type=section&id=Item%205.%20Other%20Information) During the three months ended June 30, 2025, there were no modifications, adoptions, or terminations by directors or officers to any Rule 10b5-1(c) trading plans or agreements - **No modifications, adoptions, or terminations** by directors or officers to any Rule 10b5-1(c) trading plans or agreements occurred during the three months ended June 30, 2025[140](index=140&type=chunk) [Item 6. Exhibits](index=25&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications, interactive data files (XBRL), and the cover page interactive data file - Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Exhibit 31.1)[142](index=142&type=chunk) - Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Exhibit 31.2)[142](index=142&type=chunk) - Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Exhibit 32)[142](index=142&type=chunk) - Interactive Data Files (XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, Presentation Linkbase - Exhibit 101)[142](index=142&type=chunk) - Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101 - Exhibit 104)[142](index=142&type=chunk) SIGNATURES The report is duly signed on behalf of WidePoint Corporation by its President and Chief Executive Officer, Jin H. Kang, and Chief Financial Officer, Robert J. George, on August 14, 2025 - The report was signed by Jin H. Kang, President and Chief Executive Officer, and Robert J. George, Chief Financial Officer, on August 14, 2025[145](index=145&type=chunk)

Core Insights - WidePoint Corporation (WYY) and CSG Systems International, Inc. (CSGS) are both benefiting from digital transformation trends impacting enterprise and government IT priorities [1] - WidePoint focuses on federal IT contracts and cybersecurity, while CSG Systems is transitioning to a diversified SaaS platform with a presence in fintech and healthcare [2][8] Group 1: WidePoint Corporation - WidePoint is a government IT solutions provider specializing in mobile telecom lifecycle management and secure identity management, serving critical federal agencies [4] - The company achieved FedRAMP authorization for its Intelligent Technology Management System (ITMS), enhancing visibility among federal agencies [5] - WidePoint has secured three task orders under Spiral 4 and anticipates increased awards as Spiral 3 concludes, while investing in a Device-as-a-Service (DaaS) model and smart city initiatives [6] - Revenue growth for WidePoint is inconsistent due to the nature of government contracts and procurement delays, with recent accounting adjustments raising concerns [7][24] Group 2: CSG Systems International, Inc. - CSG Systems has evolved from a telecom billing provider to a diversified SaaS operator, generating over one-third of its revenue from fast-growing sectors like financial services and healthcare [8] - The company is focused on a capital-light model, reducing working capital needs and pursuing high-margin acquisitions to enhance its SaaS platform [9] - CSG Systems aims for a long-term operating margin of 18-20%, supported by a growing base of recurring, high-margin SaaS revenues [9] - CSG Systems returned $32 million to shareholders in Q1 2025 and plans to return over $100 million in 2025, showcasing strong cash generation and shareholder-friendly practices [11] Group 3: Financial Performance and Valuation - The Zacks Consensus Estimate for WidePoint suggests a 10.5% increase in sales and a 33.3% increase in EPS for 2025, with earnings estimates remaining unchanged [13] - CSG Systems is projected to see a 6% increase in sales and a 1.1% increase in EPS for 2025, with earnings estimates rising by 1.7% in the past 60 days [17] - WidePoint's stock has declined 5.7% over the past year, underperforming the industry and S&P 500, while CSG Systems shares have gained 55.5% [20] - WidePoint trades at a forward P/S ratio of 0.20X, significantly below the industry average of 1.77X, while CSG Systems has a forward P/S ratio of 1.56X [22] Group 4: Investment Outlook - WidePoint's niche in federal IT services and FedRAMP certification provide growth opportunities, but its smaller scale and revenue volatility may deter investors [24] - CSG Systems offers a more diversified SaaS model with disciplined capital allocation and high-margin recurring revenue, positioning it as a stronger investment choice [25][26]