Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $1.5 million, representing a sequential increase of 29% [10][11] - Consulting revenue totaled $1.2 million, an increase of $0.5 million sequentially and $0.1 million year-over-year [13] - Shield revenue for Q2 2024 was $0.3 million, down $0.1 million sequentially and year-over-year [14] - Gross profit margin was 76% for Q2 2024, compared to 80% in Q1 2024 and 78% in Q2 2023 [15] - Operating expenses totaled $3.1 million, a decrease of $0.2 million sequentially and $0.9 million year-over-year [16] - Net loss from operating activities was $2 million, an 18% improvement over Q1 2024 and a 30% improvement year-over-year [17] - Cash and cash equivalents were $1.5 million as of June 30, 2024 [18] Business Line Data and Key Metrics Changes - The company signed five new logos in Q2 2024, bringing the total to 14 year-to-date [5] - The recent government contracts contributed positively to both Shield and consulting revenue [6][11] - Consulting revenue growth was driven by the approval of the federal budget, allowing new contract awards [13] Market Data and Key Metrics Changes - Strong momentum was observed in the Philippines, with multiple contracts signed, including for national election cybersecurity [7] - The company opened a wholly-owned subsidiary in the Philippines to better serve its expanding customer base [7] Company Strategy and Development Direction - The company is focusing on positioning itself for growth after overcoming previous challenges [4] - The go-to-market strategy includes selling products through managed service providers and traditional reseller channels, with positive growth reported [8] - The company is investing in product development to enhance capabilities and address emerging cybersecurity challenges [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the early stages of growth and the potential for improved financial results in the coming quarters [4][20] - The company is confident in its pipeline for new logos and current contract expansions, anticipating a ramp in revenue [20] Other Important Information - The company successfully closed a private offering in April, resulting in net proceeds of $2.6 million [12] - A Standby Equity Purchase Agreement (SEPA) was entered into with Streeterville Capital to sell $10 million of common stock, pending shareholder approval [13][19] Q&A Session Summary Question: Where is the strength in the pipeline and any low-hanging fruit for Shield? - Management noted ongoing investments in new capabilities and identified new opportunities in both government and other sectors [22][23] Question: Date for the annual meeting and capital utilization from the potential Streeterville capital raise? - The annual meeting is scheduled for August 27, and proceeds will be used for general corporate purposes and product development [24][25] Question: Comfort level with operating expenses and potential for better operating leverage? - Management expressed comfort with current operating expenses and the potential for leveraging them as revenue grows [26] Question: How many of the new logos are in the Philippines? - Approximately half of the new logos are in the Philippines, with three contracts announced in the region [28] Question: Revenue ramp from contracts in the Philippines? - Revenue from the election contract is expected to begin in Q3 [29] Question: Metrics for significant government contracts? - Management indicated that recurring revenue is the key metric for Shield, with consulting contracts acting similarly to recurring revenue [31] Question: Lengthening of sales cycles? - Sales cycles have lengthened due to the complexity of the cybersecurity space, not necessarily due to competition or the economy [34][35]
Intrusion(INTZ) - 2024 Q2 - Earnings Call Transcript