VerifyMe(VRME) - 2025 Q2 - Quarterly Results

Executive Summary and Key Highlights VerifyMe's Q2 2025 revenue declined to $4.5 million, but adjusted EBITDA improved, net loss narrowed, and strategic acquisitions are planned for 2026 growth - CEO Adam Stedham highlighted positive year-to-date adjusted EBITDA growth, positive cash generation in Q2 2025, and a new partnership with a major US parcel carrier, while actively seeking strategic acquisitions and preparing for organic revenue growth and margin expansion in 2026[4] Q2 2025 Key Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $4.5 million | $5.4 million | -16.7% | | Gross Profit | $1.6 million | $2.1 million | -23.8% | | Gross Margin | 35% | 39% | -4 p.p. | | Net Loss | ($0.29) million | ($0.34) million | Improved | | Adjusted EBITDA | $0.3 million | $0.2 million | +50.0% | | Cash from Operations | $0.7 million | $0.4 million | +75.0% | | Cash Balance (as of June 30) | $6.1 million | N/A | N/A | Detailed Financial Performance Analysis Q2 2025 revenue declined $0.9 million from contract losses, gross margin fell to 35%, but operating loss improved to ($0.3) million, narrowing net loss per share to ($0.02) - Revenue decreased by $0.9 million, primarily from a $0.6 million loss in Premium services and a $0.5 million decrease in Proactive services, partially offset by Precision Logistics growth[7] - Gross margin decreased from 39% to 35% year-over-year, mainly due to the loss of a higher-margin Premium services contract, though Proactive services' gross margin percentage improved[8] - Operating loss narrowed to ($0.3) million from ($0.5) million in Q2 2024, driven by reduced operating expenses, cost-cutting in Precision Logistics, and Trust Codes divestiture[9] - Net loss improved to ($0.29) million, or ($0.02) per share, in Q2 2025, from ($0.34) million, or ($0.03) per share, in Q2 2024[10] Financial Statements This section presents unaudited consolidated financial statements for June 30, 2025, including Balance Sheets, Statements of Operations, and non-GAAP reconciliations Consolidated Balance Sheets VerifyMe's balance sheet strengthened by June 30, 2025, with cash doubling to $6.1 million, liabilities halving to $2.7 million, and equity rising to $14.4 million Selected Balance Sheet Data (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $6,067 | $2,823 | | Total Current Assets | $7,867 | $6,362 | | Total Assets | $17,166 | $16,067 | | Total Current Liabilities | $1,937 | $4,239 | | Total Liabilities | $2,730 | $5,853 | | Stockholders' Equity | $14,436 | $10,214 | Consolidated Statements of Operations Q2 2025 net revenue was $4.5 million, with a net loss of ($0.29) million, improving from Q2 2024 due to reduced operating expenses from $2.6 million to $1.9 million Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $4,520 | $5,352 | $8,975 | $11,111 | | Gross Profit | $1,591 | $2,090 | $3,081 | $4,350 | | Total Operating Expenses | $1,913 | $2,626 | $3,996 | $5,533 | | Net Loss | $(291) | $(346) | $(862) | $(899) | | Loss Per Share (Basic & Diluted) | $(0.02) | $(0.03) | $(0.07) | $(0.09) | Non-GAAP Reconciliation: EBITDA & Adjusted EBITDA Q2 2025 GAAP Net Loss of ($0.29) million reconciled to non-GAAP Adjusted EBITDA of $0.27 million, an increase from Q2 2024, with six-month Adjusted EBITDA flat Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Loss (GAAP) | $(291) | $(346) | $(862) | $(899) | | EBITDA (Non-GAAP) | $(37) | $(4) | $(344) | $(220) | | Total Adjustments | $307 | $157 | $614 | $487 | | Adjusted EBITDA (Non-GAAP) | $270 | $153 | $270 | $267 | Supplementary Information This section provides administrative and legal information, including earnings call details, company overview, forward-looking statements, and non-GAAP financial measure definitions Earnings Call Information VerifyMe will host an earnings conference call and webcast on August 13, 2025, at 11:00 a.m. ET to discuss financial results, with replay available - An earnings conference call is scheduled for 11:00 a.m. ET on Wednesday, August 13, 2025, accessible via webcast or telephone[14] Forward-Looking Statements and Non-GAAP Measures The report contains forward-looking statements subject to SEC filing risks, and explains non-GAAP measures like EBITDA and Adjusted EBITDA for core operating performance evaluation - The release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially, as described in SEC filings[17] - The company uses non-GAAP measures like EBITDA and Adjusted EBITDA to aid in planning, forecasting, and analyzing core operating performance by excluding specific non-operational expenses[19][20]