BIO-key(US:BKYI)2024-11-15 13:15Revenue Growth - Q3'24 revenues increased 18% to $2.1M from $1.8M in Q3'23, driven by a $0.5M rise in license revenue due to expanded software deployments [2]. - License revenue rose by 52% to $1.4M in Q3'24, while hardware sales increased by 56% to $436,000, as long-term customers expanded their deployments [8]. - Total revenues for the three months ended September 30, 2024, were $2,144,804, a 18% increase from $1,817,108 in the same period last year [17]. - License fees revenue increased significantly to $1,441,011, up 52% from $950,015 year-over-year [17]. - Hardware revenue rose to $436,422, representing a 56% increase compared to $279,200 in the prior year [17]. Profitability and Loss - Gross profit improved to $1.7M with a gross margin of 78.3% in Q3'24, compared to $0.3M and 18.7% in Q3'23, attributed to higher-margin license revenue and lower deployment costs [2][9]. - Q3'24 net loss narrowed to $0.7M, or $0.39 per share, from a net loss of $1.8M, or $3.22 per share, in Q3'23, reflecting improved revenue and stable operating expenses [11]. - Operating loss improved to $(580,405) from $(1,965,558) year-over-year, indicating a reduction in losses [17]. - Net loss for the three months was $(738,959), compared to $(1,837,824) in the same period last year, reflecting a 60% improvement [17]. - Net loss for the nine months ended September 30, 2024, was $2,916,195, compared to a net loss of $6,149,024 for the same period in 2023, indicating a significant improvement [20]. Operating Expenses and Cash Flow - Operating expenses were reduced by $46,000 in Q3'24 compared to Q3'23, despite an increase in research and development expenses due to new product development [10]. - Cash position improved to $1.8M at the end of Q3'24, up from $0.5M at year-end 2023, following a $1.9M capital raise through warrant inducement [8][13]. - Cash used in operating activities for the nine months ended September 30, 2024, was $2,399,508, compared to $2,261,922 in the prior year, reflecting an increase in cash outflow [20]. - Total cash and cash equivalents at the end of the period increased to $1,801,137 from $307,086 at the end of the previous period, showing a net increase of $1,289,737 [20]. - The company experienced a decrease in accounts payable, which was $248,640 compared to $488,417 in the prior year, indicating improved cash management [20]. Future Outlook and Developments - The company expects full-year 2024 revenues to meet or exceed $7.75M achieved in 2023, while pursuing opportunities to lower overhead costs [7]. - BIO-key secured a $910k order to upgrade a financial services customer to its enhanced biometric technology after Q3'24 [3]. - British Columbia added 10,000 users to its BIO-key biometric solution deployment for sign-on and physical access control [3]. - The company plans to publish a detailed whitepaper on a large-scale biometric technology deployment, highlighting its unique benefits for enterprises [6]. Balance Sheet and Financial Position - Total assets grew to $6,399,703, up from $4,517,035 at the end of the previous year [19]. - Total liabilities increased to $6,266,661 from $3,453,470, primarily due to an increase in accounts payable and note payable [19]. - Deferred revenue increased significantly to $517,246 from $128,253, indicating growth in future revenue recognition [20]. - Proceeds from Note Payable amounted to $2,000,000, contributing positively to financing activities [20]. - Capital expenditures for the nine months ended September 30, 2024, were $23,047, with no capital expenditures reported in the same period of the previous year [20]. - The company reported a reserve for inventory of $(98,875), a notable change from a reserve of $2,500,000 in the prior year [20]. - Share and warrant-based compensation for employees and consultants was $162,614, slightly down from $163,584 in the previous year [20]. - The effect of exchange rate changes resulted in an increase of $51,878 in cash and cash equivalents [20].