BIO-key(US:BKYI) Globenewswire·2025-05-15 20:15Core Insights - BIO-key International, Inc. reported a sequential revenue increase of approximately 10% in Q1'25 compared to Q4'24, but a year-over-year revenue decline of 25% due to a significant contract from a financial services customer in Q1'24 that did not recur at the same level in Q1'25 [2][11] - The company maintains a healthy gross margin of 83% in Q1'25 and has significantly reduced its selling, general, and administrative expenses by 23% year-over-year [3][14] - The cash position improved to $3.1 million as of March 31, 2025, reflecting proceeds from warrant exercises [3][16] Financial Performance - Total revenues decreased to $1,607,159 in Q1'25 from $2,181,203 in Q1'24, primarily due to the impact of the previous year's contract [11] - License fee revenue fell to $1,098,758 in Q1'25 from $1,950,434 in Q1'24, while service revenues increased to $272,598 from $213,122 [11][12] - Hardware sales saw a significant increase to $235,803 in Q1'25 from $17,647 in Q1'24, attributed to higher purchases of biometric scanners [13] Operational Highlights - The company is experiencing growing traction for its identity-bound biometric solutions in defense and financial services sectors, emphasizing the importance of secure authentication [4][5] - BIO-key has established a solid presence in the state, local, and educational (SLED) markets, serving over 100 institutions with over 4 million end users [6] - A strategic partnership with California's Education Technology Joint Powers Authority was executed, allowing BIO-key's solutions to be used in 195 K-12 schools, benefiting over 2.6 million students [7] Market Strategy - The company is refocusing efforts on selling high-margin BIO-key branded products in the EMEA region, expecting to return to growth and enhanced margins in 2025 [8][9] - There is increasing interest in passwordless, phoneless, and tokenless authentication solutions, which address significant security and usability challenges [5][10] - BIO-key aims to leverage endorsements from national and international defense organizations to enhance business development efforts [4] Balance Sheet and Cash Flow - As of March 31, 2025, total current assets improved to $4.6 million, with cash and cash equivalents at $3.1 million [16][24] - The company reduced its operating expenses to $1,968,299 in Q1'25 from $2,390,494 in Q1'24, contributing to a net loss of $736,545, which is an increase from a net loss of $510,285 in Q1'24 [15][14] - The cash flow from financing activities showed a net increase of $3,529,227, primarily due to proceeds from warrant exercises [26]