Earnings call transcript: Intellicheck Q3 2025 beats revenue forecast, shares rise

Intellicheck Mobilisa Inc. (NASDAQ:IDN) reported better-than-expected financial results for the third quarter of 2025, with revenue surpassing forecasts and earnings per share (EPS) showing a significant improvement. The company’s stock responded positively in aftermarket trading, rising by 2%. Intellicheck’s revenue reached $6.01 million, exceeding the anticipated $5.25 million, while EPS came in at $0.01, outperforming the forecasted loss of $0.02 per share. This positive quarter aligns with InvestingPro data showing analysts expect the company to be profitable this year, with EPS forecast at $0.04 for fiscal 2025.

Key Takeaways

• Revenue increased by 28% year-over-year, reaching $6 million.
• EPS improved to $0.01 from a loss in the previous year.
• Stock price increased by 2% in aftermarket trading.
• New product launches and innovations highlighted.
• Positive outlook with expectations of continued profitability.

Company Performance

Intellicheck demonstrated strong performance in Q3 2025, with significant revenue growth driven by its SaaS offerings, which increased by 26% to $5.9 million. The company’s gross profit margin remained robust at 90.5%, and adjusted EBITDA improved to $631,000 from a loss of $160,000 in the same quarter last year. Net income also turned positive at $290,000, compared to a loss of $0.04 per share a year ago.

Financial Highlights

• Revenue: $6 million, up 28% year-over-year
• EPS: $0.01, compared to a loss last year
• Gross profit margin: 90.5%
• Adjusted EBITDA: $631,000
• Net income: $290,000

Earnings vs. Forecast

Intellicheck’s actual EPS of $0.01 exceeded the forecasted loss of $0.02, marking a 150% positive surprise. Revenue also surpassed expectations by 14.48%, coming in at $6.01 million compared to the forecast of $5.25 million. This performance is a significant turnaround from previous quarters, indicating strong operational execution.

Market Reaction

Following the earnings announcement, Intellicheck’s stock rose by 2% in aftermarket trading, reaching $4.59. This movement reflects investor confidence in the company’s ability to deliver better-than-expected results. The stock remains within its 52-week range, with a high of $6.49 and a low of $2.17, indicating room for further growth.

Outlook & Guidance

Looking ahead, Intellicheck expects to maintain positive net income and adjusted EBITDA for the year. The company is focused on diversifying its revenue streams and enhancing its marketing efforts, particularly in AI-driven improvements. Future guidance suggests continued growth with projected revenue increases in upcoming quarters.

Executive Commentary

CEO Brian Lewis emphasized the company’s proactive approach to fraud prevention, stating, "We stop fraud before it starts with that critical first step." He also highlighted the company’s efficient operations, noting, "We do not need legions of people to run the company." These comments reflect Intellicheck’s strategic focus on innovation and operational efficiency.

Risks and Challenges

• Potential market saturation in core sectors.
• Increasing competition in identity verification.
• Macroeconomic pressures affecting client budgets.
• Technological advancements by competitors.
• Regulatory changes impacting operations.

Q&A

During the earnings call, analysts inquired about the decline in the retail segment, which saw a 5% drop. The company remains optimistic about its overall business strength and highlighted new business pricing improvements of 14%. Questions also focused on the development phase of a social media customer, with management expressing cautious optimism about future growth opportunities.

Full transcript - Intellicheck Mobilisa Inc (IDN) Q3 2025:

Operator: Greetings and welcome to the Intellicheck third quarter 2025 earnings call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press Star 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Gar Jackson, Investor Relations. Thank you, sir. You may begin.

Gar Jackson, Investor Relations, Intellicheck: Thank you, Operator. Good afternoon and thank you for joining us today for the Intellicheck third quarter 2025 earnings call. Before we get started, I will take a few minutes to read the Forward Looking Statement. Certain statements in this conference call constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. When used in this conference call, words such as will, believe, expect, anticipate, encourage and similar expressions as they relate to the Company or its management as well as assumptions made by and information currently available to the Company’s management identify forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Throughout this call, we may reference certain financial metrics that have been rounded for ease of discussion. These forward looking statements are based on management’s current expectations and beliefs about future events.

As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances and the Company undertakes no obligation to and expressly disclaims any obligation to update or alter its forward looking statements, whether resulting from such changes, new information, subsequent events or otherwise. Additional information concerning forward looking statements is contained under the headings of Safe Harbor and Risk Factors listed from time to time in the Company’s filings with the Securities and Exchange Commission. Statements made on today’s call are as of today, November 12, 2025. Management will use the financial terms Adjusted EBITDA and Adjusted Gross Margin. On today’s call, please refer to the Company’s press release issued this afternoon for further definition, reconciliation and context for the use of these terms.

We will begin today’s call with Brian Lewis, Intellicheck’s Chief Executive Officer, then Adam Sragovicz, Intellicheck’s Chief Financial Officer, who will discuss the Q3 2025 financial results. Following their prepared remarks, we will take questions from our analysts and institutional investors. Today’s call will be limited to one hour and I will now turn the call over to Brian.

Brian Lewis, Chief Executive Officer, Intellicheck: Thanks Gar, and good afternoon to all. We appreciate you joining us today. I’m extremely excited by our performance in Q3. With revenues that grew 28% or $1.3 million or to $6 million with a gross margin that was 91% driven by leveraging operating expenses that were relatively flat year over year. We had a positive net income of $290,000, earnings per share of $0.01 and adjusted EBITDA that was a third quarter record of $631,000. A significant driver of the revenue growth was the regional bank that began using Intellicheck in its bank branches. As we have previously stated, this client has a three year total contract value in the very high seven digits with the first 12 months being low seven digits and accelerating in years two and their rollout is going very well and they are already speaking with us about additional use cases.

We also showed significant growth with a leading lease to own company that grew over 700% and has produced a low six figure revenue number in Q3. Of note is our largest bank and credit card issuer that grew over 60% in Q3 versus the prior year and bought an additional bucket of transactions for a low mid seven figure amount that we anticipate will get them through spring of 2026. This is further testament that our product is stopping fraud both with new account applications, account lookup and in branch and online customer validations. On top of that another one of our top three banks signed a three year renewal with an annual contract value also in the low mid seven figure amount.

We also entered into two-year agreements with our top title insurance company and expanded our relationship with the top 20 bank with a two-year agreement that when combined are now anticipated to generate six-digit annual recurring revenue streams. An important event in the third quarter came when Intellicheck was named a Leader in the IDC MarketScape Worldwide Identity Verification and Financial Services 2025 Vendor Assessment. As I said in our press release, bad actors continually change and sophisticate their tactics, which is why organizations need a partner that is proactive with state-of-the-art technology and expertise to arm them with proven solutions. We believe that our recognition underscores our role as a leader with the technology solutions that secure trust while preserving a seamless customer experience.

We believe that this will significantly raise the visibility of Intellicheck and these third party endorsements have become a very important aspect of our visibility and associated marketing efforts in today’s tech environment. We continue to make progress with the global social media company that continues to be in the build out phase. Our team is working with their team on the image capture front, although this has taken longer than anticipated. They are paying us for the scanning volume. During Q3 that revenue generated from this client was a mid 5 figure number and for Q4 we anticipate a low 6 figure number based on the volumes we’ve already seen. As their build out continues, we continue to believe that there is a significant potential for this client to drive more volume and revenue in the future. We just don’t have any definitive answers on the timing.

As a reminder, this isn’t the only social media company that we work with. The other social media company we work with for email password resets grew over 60% versus last year and produced a low six-figure revenue amount in the third quarter. During the third quarter, First American Title, a leading provider of title insurance and settlement services and the largest subsidiary of First American Financial Corporation, announced an expansion of its fraud prevention services included with every First American transaction. Their Agent Net platform now features advanced identity verification technology powered by Intellicheck. By confirming the identities of real estate transaction participants early in the process, the new service delivers greater protection and adheres to the latest industry best practices, reducing fraud risk for First American Title agents and their customers.

This quarter also saw an expansion of use cases for our technology with this client as they added passport verification and also document liveness and selfie capture. They plan to launch digital e-commerce identity verification in Q1 of 2026. I’m also pleased to update you on the progress we’ve made in the background check market. As I’ve been saying, we believe that there is significant opportunity in this area. When people typically think about background checks, employment screening, apartments, auto rentals, et cetera come to mind. We are approaching this vertical from an additional angle: supplier and vendor screening. During the quarter we saw additional traction from a foreign auto manufacturer building cars in the South.

Not only are they using us on site to make sure that people are who they say they are, they’re so happy with our experience with our technology that they are encouraging their suppliers to adopt our technology. We’ve had one of their suppliers sign up this quarter. This remains a market of interest and we will continue to look at future opportunities to expand our market penetration. Automotive retail was another growth driver during the quarter as auto retailers, particularly with high end cars, continue to see the value of our product offering to stop fraud. Although not material to volumes during the quarter, these two categories drove an increase in our year over year new business average price per scan by approximately 14%. Additionally, we are getting some traction on the stadium concessions front.

While this is a slow process and lower average cost per scan due to the anticipated high volumes, we believe this remains an opportunity for growth, particularly if we can integrate with significant POS system providers, which is a long process. During the quarter we added one stadium and one concessions provider. We are also exploring additional opportunities in the area of cargo freight fraud. We are continuing to move forward with a food manufacturer that was dealing with fraud from drivers. They are continuing their nationwide rollout of our technology and this account is now running in the low six-figure ACV. As far as our vertical breakdown by business segment goes, keeping in mind that there is a fair amount of volatility in the mix.

As I spoke of last quarter, this is how we stand. Banking and lending grew approximately 80% and represented approximately 50% of our quarterly revenue. Retail declined approximately 5% and represented approximately 30% of our quarterly revenue. Age related grew approximately 15% and represented approximately 8% of our quarterly revenue. Title grew approximately 120% and represented just over 2% of our quarterly revenue. As I’ve spoken of in the past, we continue to focus on signing multi year commitments with straight line revenue recognition that reduces the seasonality of the business. As we look at fiscal year 2025, we anticipate approximately 24% of our total revenue will be accounted for that way.

Now on the IT front, the development efforts our IT team has been focused on for quite some time has resulted in a number of important advancements, and we are very excited about the product innovations and milestones that we have achieved this quarter. We have introduced a new and enhanced Optical Character Recognition or OCR product. This is a machine learning model used to read the printed text on the front of IDs to match the data in the barcode. We made this strategic decision to move this development in house instead of continuing through a third party provider to eventually reduce costs. We believe that OCR is a beneficial additional signal to the ID verification process for those clients who want to add it to their workflow to stop fraud.

Our new Hub Customer Console is an advanced, streamlined web application that now provides a simple interface for our customers to view their transactions that they have submitted for processing from all of our access methods, whether it be Portal, direct capture, mobile or desktop. This unified approach gives our customers a sleek, efficient method to review their transactions, view stats and download reports on their transaction data. We updated our Portal product which is our web application used by any client to validate people remotely without integration such as auto dealers and call centers. Portal is used to perform ID verification with a link to a web app sent via text message for the user to use their mobile device to take pictures of their ID and a selfie.

The new portal further enhances the application and now also supports sending the link to run the ID verification process via WhatsApp, which is used extensively internationally. We also now have an all new desktop application. It features a new user interface and leverages our improved ID verification signals that ties to our Hub reporting tool. This desktop application is installed on Windows computers with a locally connected ID scanner, the same ones the banks generally have already installed. We believe the significance of this product is twofold. First is that it requires no integration but still provides centralized reporting and a simpler customer experience. The second is the smaller banks and credit unions are often tied to and at the whim of the banking technology providers and their schedules to install our services.

As we have discussed on calls in the past, even though we are assigning these service providers as resellers, their development queues can be quite long. This product allows us to immediately enter the market. Our new mobile SDK provides mobile application developers with the screens and logic necessary to integrate the ID verification process into an existing native mobile application running on iOS or Android with minimal code. The mobile SDK provides image capture and barcode reading required to perform ID verification, eliminating the need for developers to perform complex image processing. Like the new desktop, the transaction information is centrally stored in the cloud via Hub for searching and reporting. We will be launching new marketing initiatives around these updated features shortly. Another significant development came when we achieved an important milestone with the migration of our last large bank onto the AWS platform.

This project is now basically complete and I’m giving big credit to our team for getting us over the finish line. Our marketing team is continuing to make great progress. We believe that a key component of our recent growth has been driven by our marketing efforts and these efforts continue to gain momentum. The podcast the marketing team introduced are generating interest with their informative look at key issues from call center fraud and hiring and employment fraud to first person stories on identity theft. The same is true of our blogs. They have successfully created a great platform for thought leadership as we dive into a range of issues from the importance of the customer experience to the rise of ghost student fraud.

Another area of strategic importance continues to be our attendance at selected industry trade shows as we leverage opportunities to grow brand awareness and recognition as thought leaders. We recently attended four important industry trade shows at ACAMS, the Association of Certified Anti-Money Laundering Specialists. Our visibility was important because it is the world’s largest annual conference dedicated to anti-financial crime. This is a premier global gathering for professionals fighting financial crime with thousands of compliance officers, regulators, law enforcement officials, and industry leaders gathering to explore the latest strategies and technologies shaping the future of anti-financial crime. I was pleased to present an innovation session. My topic was the innovation, why identity starts with real verification. I detailed why every system is only as strong as its entry point.

I explained why the most important part of the battle to protect against fraud should start with real time ID verification as the very first step. I also discussed the latest fraud trends, highlighting how rapidly evolving threats such as synthetic identity fraud and deepfake driven schemes are undermining traditional identity verification methods. The significance of these threats can be seen in the impact during the first quarter of 2025 alone, synthetic identity fraud skyrocketed by an enormous 311% while deepfake driven fraud soared by a whopping 1,100%. At the prominent Finovate Fall 2025 conference, I was pleased to be a keynote speaker. My presentation on the hidden threat and identity verification why the First Step Is Everything reinforced one of our key messages which distinguishes Intellicheck’s industry leading technology solution from the many templated solutions that are not up to the task.

We stop fraud before it starts with that critical first step. Just last month we were at Money20/20, a show that is considered the premier industry event with over 11,500 attendees from 3,000 plus companies. It is a concentrated, high powered event that is packed with activities, leading it to often be described as similar to speed dating, networking on steroids. Having a product that does not require hardware and can render a decisioning result 99.9% of the time in less than a second with industry leading accuracy generated a lot of interest. We also had a team at Money Live North America. This event brings together key stakeholders from across consumer banking and payment. Our Vice President of Account Management and Customer Experience Sandra Bauer and Chief Technology Officer Jonathan Robertson networked with a number of industry representatives there.

Jonathan was a presenter at the conference delivering a focused look at the needed vital first step in verification which is Intellicheck. I will now turn the call over to Adam who will provide additional details about our financial results. Thank you, Brian.

Adam Sragovicz, Chief Financial Officer, Intellicheck: In addition to Gar’s forward-looking statements, please note we use rounding for convenience during this call. For more detailed and authoritative financial information, please refer to our press release and to our quarterly report filed at the close of the market today on Form 10-Q. We are excited to tell you more about our record third quarter of 2025. As Brian mentioned, revenues were 28% higher versus the same period in the prior year. We also saw strong pricing up 14% for new business versus the third quarter of 2024. You can see the strategy paying off of upselling existing clients and pursuing verticals such as title insurance companies, auto dealers, and background check firms that generate higher revenues per scan.

Total revenue for the third quarter of 2025 increased by 28% or by $1.3 million to a third quarter record of $6 million, compared to $4.7 million in the same period of 2024. Our SaaS revenue for the third quarter of 2025 was up 26% to $5.9 million from $4.7 million during the same period of 2024 and represented about 98% of our third quarter revenue. Gross profit as a percentage of revenues was 90.5% for the third quarter, which included $137,000 of amortization expense related to the software development projects we have talked with you about in the past. This gross profit compared to 91% that included only $24,000 of amortization expense in the third quarter of 2024.

Our adjusted gross margin, which you may remember as a new metric we introduced in the first quarter of 2025, improved to 92.8% in Q3 of 2025 compared to 91.5% in Q3 of 2024. Our margin is also gradually improving as we migrate customers away from Microsoft Azure and we use that service less and less. We held to our estimates made earlier in the year and had no capitalization of software development expenses this quarter and do not expect to see any additional capitalization this year. Q3 of 2024 saw $443,000 of capitalization expenses that was driven by the software that we developed for deployment onto AWS that is now fully in production.

Operating expenses, which consist of selling, general and administrative, marketing, and research and development expenses, were essentially flat year over year and increased only $10,000 to $5.21 million for the third quarter of 2025 compared to $5.2 million for the same period of 2024. On an accounting basis, R&D expenses were $214,000 higher in Q3 of 2025, but as I mentioned, we capitalized $443,000 of R&D expenses in Q3 of 2024. Since we had no capitalization of software development this quarter, we saw R&D costs hit the P&L in their entirety, driven by our 28% revenue growth and operating expenses that remained relatively flat. Our net income improved by $1.1 million to gain $290,000 for the quarter. On a GAAP basis, we currently expect net income to be slightly positive for the year.

Our earnings improved from a loss of $0.04 per share last year to a gain of 1% this year. Adjusted EBITDA also improved nicely by $798,000 to a positive $631,000 for the third quarter versus negative $160,000 in the third quarter of 2024. We currently expect adjusted EBITDA to be positive for the year as well. The weighted average diluted common shares were 20.8 million for the third quarter of 2025 compared to 19.5 million for the same period of 2024. As to the company’s liquidity and capital resources, at September 30 of 2025 the company had cash and cash equivalents of $7.2 million. We had expected the peak in 2025 cash to be in Q3 of 2025, but we may see the same or even slightly higher cash balances at the end of 2025.

We see this dynamic due to those customers paying us upfront in bucket type arrangements where the cash effect is immediate but the revenue effect will be spread out over time. At quarter end there was working capital, which is defined as current assets minus current liabilities, of $8.2 million, total assets of $25.3 million, and stockholders’ equity of $18.9 million. We have mentioned a $2 million credit facility with Citibank in the past, which had no activity or balances during the quarter. We are gradually winding that commercial banking relationship, most likely exiting it entirely by the end of 2025. When we reflect on 2025 so far from the financial point of view, we see the strategies of upselling to current clients and diversification into new industries bearing fruit as CSM and sales efforts encourage clients and prospective new clients to subscribe to our offerings and annual buckets.

We are especially pleased with our strong cash position in the current environment. We look forward to sharing our 2025 full year results with you on our call in March of 2026, and I’ll now turn the call over to the operator who will take your questions.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Our first question comes from Mike Grundahl with Northland Securities. Please proceed with your question.

Mike Grundahl, Analyst, Northland Securities: Hey, thanks guys. Congrats on 28% year over year growth. Brian, are the retail headwinds pretty much gone? I mean, retail shrank or declined 5% year over year for revenues. Can you give us an update on kind of what you’re seeing there, what you expect going forward?

Brian Lewis, Chief Executive Officer, Intellicheck: Yeah, I’m going to say two things. One, I’m glad that we keep diversifying from retail because I think that’s where a lot of our growth is coming from. What I’d say certainly, certainly throughout the year we’ve seen softening in retail. I’m looking at numbers sort of every day. I don’t know whether it’s people not spending money because they were the shutdown or other things like that, but Christmas hasn’t come yet is the way I’ll see it. Sometimes it doesn’t come this early in the quarter. Who knows, it’s still early in the quarter. I will say that the overall slowness in retail throughout the year might mean that some of our customers who would normally, you know, are on these, you know, bucket things might have to pay us some breakage, some overage at the end of the quarter.

You know, we’re watching that carefully. Yeah, if you look at a lot of retail, you know, I think even, you know, I was watching the news the other day, I think Bank of America said they expect retail to be down 5%. I think it varies from, still it’s always like industry to industry. You know, it’s not 100%. That’s what I’d say. That’s why we’ve made sure that we’re getting out of retail being our main revenue generator.

Mike Grundahl, Analyst, Northland Securities: You know, the last three to four years it’s been a real headwind and that now it’s only down to a 30% mix and it’s only a 5% headwind. So you’ve kind of gotten around it. That’s great.

Brian Lewis, Chief Executive Officer, Intellicheck: Yeah.

Mike Grundahl, Analyst, Northland Securities: You said that pricing on new business was up 14%. How much of your $6 million in revenue qualifies as new business? A follow up to that, just any guess at what overall pricing is doing directionally?

Brian Lewis, Chief Executive Officer, Intellicheck: Honestly, I would be making a wild guess to say what percentage of it. If I think about, you know, some of the drivers of it. It’s, it’s, I don’t know, Adam, if you’ve got a guess on it, you know, it’s not 10, it’s not more than 10% probably would be my guess because, you know, it’s in title, it’s in auto. You know, we could probably back into it, right? Title being about 2%. Automotive, I think was like 5%. And then some of our new banking customers coming in there. You know, probably make that 7- because most of that’s new business. Make that, you know, 7-10% might be part of that new business. And then the second question was. I’m sorry, I forgot it.

Mike Grundahl, Analyst, Northland Securities: Like, just if you had to look at overall pricing, total pricing year over year, what kind of tailwind is that?

Brian Lewis, Chief Executive Officer, Intellicheck: I say overall pricing. You know, when we go into renewals, we’re raising prices still, so that really hasn’t been an issue. You know, the more significant increases, obviously, are with new clients because, you know, it’s sort of like we knew what we’re. We know what we’re worth now. You know, when I first started, we were like, you know, we needed the business, so we were going to make deals. Now we know that we don’t have to do that anymore.

Mike Grundahl, Analyst, Northland Securities: Got it. Great. Hey, thanks, guys.

Brian Lewis, Chief Executive Officer, Intellicheck: All right, talk to you later.

Daniel Hipschman, Analyst, Craig-Hallum Capital Group: Thank you.

Operator: Our next question comes from Jeff Van Re with Craig-Hallum Capital Group. Please proceed with your question.

Daniel Hipschman, Analyst, Craig-Hallum Capital Group: Hey, this is Daniel Hipschman on for Jeff Van Re. Thanks for taking my questions, Brian. Adam, just on the SaaS revenue sequential pickup this quarter. Real strong like you said, you know, the regional bank being a significant driver there. Is there anything, you know, one time or seasonal as well to call out about the number for this quarter on SaaS, or is that a pretty good baseline to think about?

Brian Lewis, Chief Executive Officer, Intellicheck: That’s, you know, it was. There’s nothing. One time, you know, I think we had, you know, in, yeah, overall revenues, I think we had about $140,000-$150,000 worth of professional services fees, which we’re going to start doing going forward because otherwise implementations can drag on. Nothing that I would say is sort of out of the ordinary other than just, you know, some sequential, smaller new customers. You know, this bank really starting to come on. Adam, anything else you might add?

Adam Sragovicz, Chief Financial Officer, Intellicheck: No, I think, I think it’s a great point that the, I suppose that’s non-SaaS revenue, right, of the, of the implementation from professional services, that that kind of serves two purposes, like Brian said, to accelerate the implementation, but also it’s really a selling point, sort of a competitive differentiator for Intellicheck, and we expect to see more and more of that non-SaaS revenue with sort of larger financial institution implementations.

Daniel Hipschman, Analyst, Craig-Hallum Capital Group: Okay, and then on the uplift side from the regional bank, is that a full quarter of impact we’re getting here or how should we think about that?

Brian Lewis, Chief Executive Officer, Intellicheck: Yeah, that was a full quarter of impact.

Andres Miranda, Analyst, DA Davidson: Okay.

Daniel Hipschman, Analyst, Craig-Hallum Capital Group: Just last for me is on a social media customer, just a little bit of clarification on sort of where they stand with ramping into volumes. Five figure this quarter, expecting maybe you get to six figure dollar value in terms of the volume. You know, my understanding from last quarter was there was that coding change that needed to be made on their side to make the data processable. So just clarify sort of where that’s at. If they’re ramping volumes, you know, is that them paying for developmental work or you’re saying they’re actually running operational volume through that? That’s ramping. It’s gonna be ramping into Q4.

Brian Lewis, Chief Executive Officer, Intellicheck: They are not running full operational volume. You know, what they do is they’ve been, it’s almost like they tweak works, they put more in. Right. The main thing was so much of what they were sending us was just, you could not process it in, the images were that bad. You know, we’ve met with them in person. They know that it is something, you know, it’s still a major priority to get identity. Right. They know that there’s, you know, three areas on the platform where fraud is taking place. They want to, they need and want to attack that. It’s just, you know, dealing with massive organizations is very fulfilling once you’re done, but it takes a lot to get fulfilled and, you know, priorities move, priorities change.

They have said that they’re doing their Dev priorities for Q1, and you know, they’ve told us that this is a very, very high priority. Fingers crossed they actually get to it. We’re working with them and we’re also in a way on our side. You know, it’s one of the things that our AI teams are doing is, you know, how do we augment their images so that we can do it better? That’s part of even sort of what we just did with the OCR. You know, how can we take a, you know, a blurry, poor quality image and make it look better, which might also help. Right. We’re sort of working hand in hand with them to figure out how do we solve this problem the best way. All right, great.

Daniel Hipschman, Analyst, Craig-Hallum Capital Group: Thanks, Brian. Thanks, Adam. Congrats on the growth this quarter.

Brian Lewis, Chief Executive Officer, Intellicheck: Great, thank you. Bye.

Operator: Our next question comes from Rudy Kirstner with DA Davidson. Please proceed with your question.

Andres Miranda, Analyst, DA Davidson: Hi, this is Andres Miranda for Rudy. I just have a couple of questions and congrats on a great quarter. So if our map is right, incremental EBITDA margins were 62% on a year over year basis. That’s a huge and fantastic number. Could you maybe just talk about the dynamics driving it and how should we think about margins moving forward? Is it like a new baseline, a new normal, having 10% EBITDA margins, or how should we think about it? Thank you.

Brian Lewis, Chief Executive Officer, Intellicheck: Gonna throw that over to Adam. Thanks. I think, I mean, I think.

Adam Sragovicz, Chief Financial Officer, Intellicheck: There’s a few moving parts to that question.

Gar Jackson, Investor Relations, Intellicheck: Right.

Adam Sragovicz, Chief Financial Officer, Intellicheck: The first part of that question is, you know, the sort of what we call adjusted gross profit or gross margin. I think that number is, we’re comfortable with that number being sort of in the very low 90%. As revenue grows, you know, we think that will, we’ll be able to maintain that even at a higher level of revenue. I mean, as far as adjusted EBITDA is concerned, you know, I think our operating costs have been remarkably stable as we’ve been able to grow. I mean, to be honest, I think in 2024, you saw this quarter still had negative EBITDA and now we’ve delivered EBITDA positive this quarter as well as the previous quarter.

I do think that you have certain fixed costs in the business that as the revenue grows, you’re just going to see more and more contribution. I think the question becomes, which is a big strategic question that I could not answer, that’s more for Brian. How does the company grow forward in terms of investments in marketing and how does it reinvest in its own growth? I do not know exactly what that looks like for the future, but I feel pretty good that margins are going to stay where they are. They are going to be solid where they are in that the company does not have plans currently to really expand its operating expenses. I think as God willing, we are able to grow revenue, you know, you will continue to see improvement on those fronts.

Brian Lewis, Chief Executive Officer, Intellicheck: Yeah. The only thing I’d add to that, you know, I’ve said forever that we do not need legions of people to run the company. You know, we could, we do not need a ton more development staff or anything like that. You know, if we added a bunch more customers I probably need to add one or two customer success people, you know, somebody on the support desk, you know, those types of things. You know, what we’re going to do is we’ve always been rather prudent, is make sure that we’re not spending money stupidly. Certainly we can tell there is a massive ROI to marketing. We will certainly divert some of the money that we’re bringing into marketing. You know, my goal is to make sure we’re also making sure we put cash in the bank.

Andres Miranda, Analyst, DA Davidson: Sounds good. Maybe following up with, you know, marketing and sales productivity. Tim Paul joined maybe a couple quarters ago. Could you talk a little bit about how is that progress going with the sales organization and, you know, what, you know, what new initiatives are driving, you know, new business.

Brian Lewis, Chief Executive Officer, Intellicheck: You know, I’d say that, you know, a couple things are driving new business. Certainly marketing, you know, outbound sales reach is bringing in some, you know, what I would consider some very good, interesting partners. The thing is, the larger the client, the longer it takes to land it. You know, so far, you know, the combination of sales, marketing, sales and customer success has done a lot to bring in the revenue that we’re seeing.

Andres Miranda, Analyst, DA Davidson: Sounds good. Thank you. That’s all for me.

Operator: Our next question comes from Scott Buck with HC Wainwright. Please proceed with your question.

Brian Lewis, Chief Executive Officer, Intellicheck: Hi, good afternoon, guys. Just one for me today.

Mike Grundahl, Analyst, Northland Securities: Brian, I’m curious, as the business has.

Brian Lewis, Chief Executive Officer, Intellicheck: Branched out into these new verticals, are.

Mike Grundahl, Analyst, Northland Securities: You coming across any new tricks the fraudsters are using or anything that might?

Brian Lewis, Chief Executive Officer, Intellicheck: Identify a blind spot in the current product offering you have? I wouldn’t say new tricks other than things that I’ve learned. And honestly, I learned this from the social media company. They’re trying to drive people to do things more mobile versus a laptop because they’re finding that it’s easier for people to commit fraud through a laptop. You know, thankfully we’ve got really good, you know, a laptop can kick off our tools which pushes somebody onto their mobile device. You know, no new tricks. You know, certainly, you know, the big tricks that they’re doing, you know, where we’re seeing massive increases in attempts are deepfakes. Again, we stop a deepfake because it doesn’t matter how fake your, how good your deepfake is, you can’t fake the license.

Where they’re looking like sort of the new vectors of fraud that we’re seeing on this are synthetic. Identity theft seems to be growing. You know, I think that was up like 311% and deepfakes were up like, I think, 1,100% sort of year over year. You know, so they’re trying, you know, and in my opinion, they can get past the people who can’t detect a fake license as well as we can. Go ahead, keep doing all that stuff, bad guys, we’ll catch you. Because your license won’t get past us. Right, that. All right, that, that’s helpful, I guess.

Mike Grundahl, Analyst, Northland Securities: I’ll sneak one more in on cash. How are you, how are you kind of prioritizing what?

Brian Lewis, Chief Executive Officer, Intellicheck: You’re doing with the cash balance? As you start to stack more, you know, what makes the most sense here? Is it just continuing to reinvest in R&D and in the business or are there some, you know, inorganic opportunities that might make some sense where if inorganic, you know, if somebody showed us something that made the most sense to like, oh, you got to go buy that, obviously we would think about it. Where we’re looking right now is, you know, continuing to execute on a plan that is working, you know, by the numbers.

That means making sure that we’re doing the right things in marketing, I think doing the right things in the tools that, you know, we’re doing a lot with, you know, machine, you know, large language models, AI, that type of stuff to make our customer experience, you know, our customers’ customer experience much, much better. Then making sure we’re giving the sales and the team what they need to bring in more revenue. That’s how we’re looking at it. Again, it’s not going to be like mass headcount or any of those types of things. With the right marketing people, you can do a lot without having to spend huge amounts of dollars. Yep, that makes sense. Congrats on all the progress, guys. That’s it for me.

Andres Miranda, Analyst, DA Davidson: Great.

Brian Lewis, Chief Executive Officer, Intellicheck: Thank you. Thanks.

Operator: We’ve reached the end of our question and answer session. I would now like to turn the floor back over to Brian Lewis for closing comments.

Brian Lewis, Chief Executive Officer, Intellicheck: Thank you, operator. You know, last quarter I closed the call with the commitment to continue our efforts to expand, you know, our market penetration in both new and existing markets and with existing customers. I believe this quarter demonstrates that we’ve done just that. I’m particularly pleased that we’ve done this in light of some economic headwinds and developments that normally would have really hurt us, but I think the diversification has helped. We will continue to execute on this plan. You know, we’re going to build on this success, manage our business resources, you know, smartly, but remain aggressive to continue to grow with both existing and new clients. I thank you all for joining and have a great evening.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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