VerifyMe(VRME) - 2025 Q1 - Quarterly Results

Key Financial Highlights VerifyMe's Q1 2025 revenue declined to $4.5 million, gross profit to $1.5 million, and gross margin to 33% - CEO Adam Stedham highlighted ongoing technical improvements in the Precision Logistics Segment and enhanced sales efforts, noting the company's operating cash flow and strong balance sheet position it to create shareholder value[4] Q1 2025 vs Q1 2024 Key Financial Metrics | Metric | Q1 2025 (Millions USD) | Q1 2024 (Millions USD) | | :--- | :--- | :--- | | Revenue | 4.5 | 5.8 | | Gross Profit | 1.5 | 2.3 | | Gross Margin | 33% | 39% | | Net Loss | (0.6) | (0.6) | | Adjusted EBITDA | 0 | 0.1 | | Cash (as of quarter end) | 5.7 | N/A | Financial Performance Analysis Q1 2025 revenue decreased to $4.5 million due to contract changes, impacting gross margin, but operating loss remained stable - The $1.3 million revenue decrease was attributed to reduced demand from proactive customers, a customer's shift in cold chain strategy, a discontinued premium services contract, and the divestiture of the Trust Codes Global business in December 2024[7] - Gross margin percentage decreased from 39% to 33% year-over-year, mainly due to the discontinued higher-margin contract in the Precision Logistics segment, while Proactive services gross margin improved[8] - Operating loss remained flat at ($0.6) million for both Q1 2025 and Q1 2024, as the decrease in gross profit was fully offset by reduced operating expenses from cost-cutting measures and the Trust Codes divestiture[9] - As of March 31, 2025, the company had a cash balance of $5.7 million, working capital of $6.0 million, and 12,414,772 shares outstanding[11][12] Financial Statements This section presents VerifyMe's unaudited Q1 2025 consolidated financial statements and non-GAAP EBITDA reconciliation Consolidated Balance Sheets As of March 31, 2025, the balance sheet shows total assets of $17.1 million, total liabilities of $2.5 million, and cash at $5.7 million Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $5,707 | $2,823 | | Total Current Assets | $7,672 | $6,362 | | Total Assets | $17,095 | $16,067 | | Liabilities & Equity | | | | Total Current Liabilities | $1,648 | $4,239 | | Total Liabilities | $2,452 | $5,853 | | Stockholders' Equity | $14,643 | $10,214 | | Total Liabilities and Stockholders' Equity | $17,095 | $16,067 | Consolidated Statements of Operations Q1 2025 net revenue was $4.46 million, down from $5.76 million, with gross profit at $1.49 million, and net loss at ($571) thousand Consolidated Statement of Operations (in thousands, except per share data) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Revenue | $4,455 | $5,759 | | Gross Profit | $1,490 | $2,260 | | Total Operating Expenses | $2,083 | $2,907 | | Net Loss | $(571) | $(553) | | Loss Per Share (Basic & Diluted) | $(0.05) | $(0.05) | | Weighted Average Shares Outstanding (Basic) | 12,292,150 | 10,073,445 | Non-GAAP Reconciliation (EBITDA & Adjusted EBITDA) Q1 2025 GAAP Net Loss of ($571) thousand reconciled to $0 Adjusted EBITDA, compared to $114 thousand Adjusted EBITDA in Q1 2024 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Account | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net loss (GAAP) | $(571) | $(553) | | Interest (income) expense, net | (22) | 38 | | Amortization and depreciation | 286 | 299 | | Total EBITDA (Non-GAAP) | $(307) | $(216) | | Stock based compensation & services | 333 | 458 | | Severance expense | 57 | - | | Change in fair value of contingent consideration | - | (132) | | Gain on derecognized liability | (100) | - | | Other adjustments | 17 | 4 | | Total Adjusted EBITDA (Non-GAAP) | $0 | $114 | Supplementary Information This section includes earnings call details, company overview, forward-looking statements caution, and non-GAAP financial measures explanation - The company scheduled an earnings conference call and webcast for 11:00 a.m. ET on Tuesday, May 13, 2025, to discuss financial and operational results[13] - The report includes a detailed 'Cautionary Note Regarding Forward-Looking Statements' outlining numerous risks and uncertainties that could cause actual results to differ from projections, including economic conditions, competition, and reliance on key partners[17] - VerifyMe uses non-GAAP measures like EBITDA and Adjusted EBITDA for internal planning and to help investors evaluate core operating performance by excluding non-operational items, defining Adjusted EBITDA as net loss before interest, taxes, depreciation, and amortization, further adjusted for items like stock compensation, severance, and one-time acquisition/divestiture expenses[19][20]