BIO-key(BKYI) - 2025 Q2 - Quarterly Results

Business & Strategic Highlights BIO-key's Q2 2025 revenue grew 49% YoY, driven by broad segment growth and a new CyberDefense Initiative targeting defense markets - Q2 revenue improved both sequentially and year-over-year, with a strategic focus on BIO-key branded solutions in Europe, the Middle East, Africa (EMEA), and domestic markets[2] - Launched the "BIO-key CyberDefense Initiative" to target the global defense market, leveraging a significant increase in European defense spending commitments, and assembling a specialized team to engage with prime defense contractors[3][4] - A follow-on order exceeding $600K from a foreign Defense Ministry[5] - First major IAM deployment with a national bank in Mozambique[5] - New partnerships to expand into the Middle East, Spain, and Portugal[5] - Completed initial phase of biometric deployment for a new international defense agency[5] - The company is advancing a significant platform modernization for PortalGuard IDaaS, with a targeted release in Q4 2025, marking the first major upgrade since 2018[7] Financial Performance Analysis BIO-key's Q2 2025 revenue grew 49% to $1.7 million, with improved net loss and strengthened balance sheet Q2 2025 Financial Results | Metric | Q2 2025 ($) | Q2 2024 ($) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 1,696,907 | 1,141,286 | +49% | | Gross Profit | 1,232,727 | 879,014 | +40% | | Gross Margin | 73% | 77% | -4 p.p. | | Total Operating Expenses | 2,316,577 | 2,533,100 | -8.5% | | Net Loss | (1,167,396) | (1,666,950) | Improved | | EPS (basic & diluted) | (0.20) | (1.00) | Improved | | Revenue Stream | Q2 2025 ($) | Q2 2024 ($) | Change | | :--- | :--- | :--- | :--- | | Software License Fees | 806,087 | 774,225 | +4% | | Services | 321,996 | 283,569 | +14% | | Hardware | 568,824 | 83,492 | +581% | - The decline in gross margin to 73% from 77% YoY was primarily due to the significant increase in lower-margin hardware revenues[11] - Operating expenses decreased by 8.5% YoY, driven by a 13.5% reduction in SG&A expenses, while R&D expenses increased by 7.6% for platform modernization[12] Balance Sheet Highlights - As of June 30, 2025, cash and cash equivalents stood at $2.3 million, a substantial increase from $0.4 million at December 31, 2024[14] - The company reduced its note payable by $0.4 million during Q2'25, leaving a remaining balance of $0.3 million on the original $2.3 million note[15] Financial Statements This section presents BIO-key's unaudited condensed consolidated financial statements, including Operations, Balance Sheets, and Cash Flows Condensed Consolidated Statements of Operations and Comprehensive Loss | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | 2025 ($) | 2024 ($) | 2025 ($) | 2024 ($) | | Total revenues | 1,696,907 | 1,141,286 | 3,304,066 | 3,322,489 | | Gross profit | 1,232,727 | 879,014 | 2,560,388 | 2,760,574 | | Operating loss | (1,083,850) | (1,654,086) | (1,724,488) | (2,163,020) | | Net loss | (1,167,396) | (1,666,950) | (1,903,941) | (2,177,236) | | Basic and diluted loss per common share | (0.20) | (1.00) | (0.36) | (1.33) | | Weighted average common shares outstanding (shares) | 5,821,133 | 1,663,042 | 5,267,109 | 1,639,183 | Condensed Consolidated Balance Sheets | | June 30, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | 2,275,344 | 437,604 | | Total current assets | 4,035,230 | 1,886,958 | | TOTAL ASSETS | 10,516,551 | 8,615,560 | | LIABILITIES & EQUITY | | | | Total current liabilities | 3,531,910 | 4,553,536 | | TOTAL LIABILITIES | 3,664,374 | 4,843,529 | | TOTAL STOCKHOLDERS' EQUITY | 6,852,177 | 3,772,031 | Condensed Consolidated Statements of Cash Flows | (For the Six Months Ended June 30,) | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (1,715,324) | (1,123,533) | | Net cash used in investing activities | (6,048) | (1,869) | | Net cash provided in financing activities | 3,493,505 | 1,912,408 | | Net increase in cash and cash equivalents | 1,837,741 | 748,951 | | Cash and cash equivalents, end of period | 2,275,345 | 1,260,351 | Other Information This section provides supplementary details, including a corporate overview and the Safe Harbor Statement on forward-looking statements About BIO-key International, Inc. - BIO-key specializes in biometric-centric, multi-factor identity and access management (IAM) software, offering customers flexible authentication factors including phoneless, tokenless, and passwordless biometric options through its PortalGuard IAM solution[17] Safe Harbor Statement - The report contains forward-looking statements that are not guarantees of future performance, subject to risks and uncertainties including a history of losses, ability to raise capital, market acceptance of products, competition, and other factors detailed in SEC filings[18]