Earnings call transcript: Intellicheck’s Q1 2025 revenue rises, stock fluctuates

Intellicheck Mobilisa Inc. reported mixed results for the first quarter of 2025, with revenue surpassing expectations but earnings per share (EPS) falling short. The company posted a revenue of $4.89 million, slightly above the forecast of $4.78 million. However, the EPS came in at a loss of $0.02, compared to the anticipated loss of $0.01. Following the earnings announcement, Intellicheck’s stock experienced volatility, closing the regular session up 7.91% at $2.78 but declining 1.67% in after-hours trading to $2.95. According to InvestingPro data, the company maintains impressive gross profit margins of 90.84% and holds more cash than debt on its balance sheet, suggesting strong operational efficiency despite the earnings miss.

Key Takeaways

• Intellicheck’s Q1 2025 revenue exceeded forecasts, driven by a 6% year-over-year growth in SaaS revenue.
• The company reported a marginal loss in adjusted EBITDA, indicating near breakeven operations.
• Stock showed significant movement post-earnings, with a notable rise during regular trading hours but a drop in after-market trading.
• Intellicheck is expanding into new verticals, including banking and logistics, amid challenges in the retail sector.

Company Performance

Intellicheck demonstrated resilience in Q1 2025, achieving a 5% year-over-year increase in total revenue, primarily fueled by its SaaS segment. Despite the positive revenue growth, the company faced challenges in maintaining profitability, as evidenced by a slight adjusted EBITDA loss. The strategic focus on diversifying into high-fraud-risk markets and enhancing digital authentication platforms positions Intellicheck for potential growth, even as consumer confidence wanes. InvestingPro analysis reveals a strong current ratio of 3.11, indicating the company’s liquid assets comfortably exceed short-term obligations. Subscribers to InvestingPro can access 8 additional key insights and a comprehensive Pro Research Report, offering deeper analysis of Intellicheck’s financial health and growth prospects.

Financial Highlights

• Revenue: $4.89 million, up 5% year-over-year
• SaaS Revenue: $4.87 million, up 6% year-over-year
• Adjusted EBITDA: $17,000 loss, indicating near breakeven
• Gross Profit Margin: 89.7%
• Cash and Cash Equivalents: $5.1 million
• Working Capital: $6.6 million

Earnings vs. Forecast

Intellicheck’s revenue of $4.89 million surpassed the forecasted $4.78 million, reflecting a positive surprise. However, the company’s EPS of -$0.02 fell short of the expected -$0.01, marking a slight miss. This mixed performance highlights the ongoing challenges in achieving profitability while expanding revenue streams.

Market Reaction

Intellicheck’s stock closed the regular trading session at $2.78, a 7.91% increase, reflecting investor optimism following the revenue beat. However, in after-hours trading, the stock declined by 1.67% to $2.95, suggesting tempered enthusiasm possibly due to the EPS miss. This volatility underscores the market’s cautious stance amid broader sector challenges.

Outlook & Guidance

Looking ahead, Intellicheck anticipates increased cash flow in 2025 as it continues migrating clients to AWS and expands its reseller strategies. The company projects growth in the background check and enterprise markets, with expectations of positive EPS in future quarters. InvestingPro data shows analysts expect the company to turn profitable this year, with an EPS forecast of $0.01 for FY2025. The company’s five-year revenue CAGR stands at 21%, demonstrating consistent long-term growth. For detailed analysis of Intellicheck’s growth trajectory and peer comparison, investors can access the exclusive Pro Research Report, available to InvestingPro subscribers.

Executive Commentary

CEO Brian Lewis emphasized the company’s strategic shift, stating, "We’ve grown our recurring revenue stream from under $2 million per year to almost $20 million last year." He highlighted the ongoing threat of fraud, noting, "Fraud isn’t going away. It is escalating." Lewis encouraged stakeholders to "watch this space and the runway for Intellicheck to grow," signaling confidence in the company’s growth trajectory.

Risks and Challenges

• Decline in consumer confidence, down 8% year-over-year, may impact spending.
• Retail revenue decreased by 26% year-over-year, reflecting sector-specific challenges.
• Expanding into new verticals involves execution risks and potential integration challenges.
• Competitive pressures in the ID validation space could affect market share.
• Economic uncertainties and potential regulatory changes pose additional risks.

Q&A

During the earnings call, analysts inquired about the company’s expansion into the title insurance market, where Intellicheck now covers approximately 40%. Questions also focused on the potential of shipping/logistics fraud prevention as an emerging opportunity and the company’s strategy to balance revenue between banking and retail banking segments.

Full transcript - Intellicheck Mobilisa Inc (IDN) Q1 2025:

Conference Operator: 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.

Brian Lewis, Chief Executive Officer, Intellicheck: Thank you, operator. Good afternoon, and thank you for joining us today for the Intellicheck first Quarter twenty twenty five 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.

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 statement 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, 05/13/2025. Management will use the financial term adjusted EBITDA and adjusted gross margin in 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, Intellitech’s Chief Executive Officer and then Adam Shrugatis, the Chief Financial Officer, who will discuss the first quarter 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. Thanks, Gar, and good afternoon, everyone, and thank you for joining us for our first quarter twenty twenty five earnings call.

Although it’s been less than two months since we last spoke, a lot of things have happened over that span of time. Before I get started with the discussion about our recent achievements, I would like to put some things into perspective. We’ve heard from a number

: of people that said, yeah. I’ve looked

Brian Lewis, Chief Executive Officer, Intellicheck: at this company, and there’s nothing to see. I usually quickly respond by saying, you looked at the old Intellicheck. Right? Since I joined the company, we’ve grown our recurring revenue stream from under 2,000,000 per year to almost 20,000,000 last year. So quite a difference.

In fact, already in q one of this year, including upsells and price increases, we renewed $10,000,000 in annual contract value, demonstrating how sticky we are with our customers. On the technology front, we completely retooled our tech stack over the course of the past couple of years, taking advantage of AI and data science analysis because we see information on about a hundred million people in North America every year. We are also making terrific progress on our platform migration program. We are well underway with migrating our clients from Azure platform to AWS, which will result in cloud savings. Just as important, it will allow for quicker and easier onboarding of new clients and gives us improved data feeds for additional analytics.

As we move forward with the implementation of our strategic initiatives, we continue to diversify our client base. As you know, we used to be very tied to retail credit cards. Now we’re growing very quickly in retail banking, title insurance, auto, email account security, and background checks, which I am very, very excited about. We are also making progress in the logistics and shipping market vertical. The amount of theft and fraud that happens there is shockingly large.

I just wanna preface our discussion of q one with that background because we believe our progress in achieving diverse market adoption lies in the fact that we’re different and relevant. We leverage the the proprietary barcode on a driver’s license, the back of the license versus all of our competition that templates the front of the license. Gartner, in their last report, said that we are unique in what we do, and we’re the only ones with what they call privileged access to information to accurately identify a fake or fraudulent ID based on the proprietary nature of these barcodes. So that brings you up to speed about some of our growth opportunities that we believe people don’t fully recognize. Before I continue talking about recent deals and achievements, this is the appropriate time to share some more exciting news, the appointment of Tim Poulin to the role of senior vice president of sales.

Tim brings extensive experience in sales leadership, staff development, and business development to his demonstrated ability to drive revenue and foster long term client relationships. He has a solid track record of building high performing teams that consistently exceed targets. Most recently, he contributed to Ping Identity’s nearly tenfold growth from 85,000,000 to over 800,000,000 as senior director sales strategic accounts. Like the other new members of our senior leadership team, Tim has hit the ground running. Tim has already added three additional sales associates bringing the total to 18 members under his leadership who are focused on new logos.

Ken started his career as a sales engineer and quickly rose to become a top performing sales professional, earning number one worldwide sales representative accolades at three different, primarily early stage companies. Transitioning into leadership, he has hired, scaled, and coached execution focus focused teams that have delivered significant results and forged deep client and team loyalty. Here’s Tim’s career highlights include being part of three successful IPOs. So he’s familiar with rapid growth, and we are very excited to have him join the team. Now for some sales updates.

A provider of a variety of revolving credit products originated through banks as well as private label and their own brand new credit cards went live in q one. This is an initial smaller re release to work out any kinks in their system. They are now satisfied that all is working as planned, and we anticipate that they will be rolling out the full release in the second quarter. The client that uses us for password resets on email accounts, which started using us in The US and then moved to Europe, is now rolling us out to Canada. I will remind you that they looked at us and our competitors.

They were seeking proven, robust technology because they understood what can happen when a crook gains control of an email account linked to your banking, investment, and credit card account. They knew they needed the most accurate solution, which I believe is Intellicheck. Also, one of the largest title companies we spoke about on our last call has gone live using our no integration portal delivery method. They are now using our technology in all three of their divisions, and they will be doing a full integration into their systems with our direct API. In addition, they will be adding passports to the documents we authenticate for them.

Title insurance continues to be a strong area of interest for us. We estimate that we are now working with the title insurance companies that handle approximately 40% of all the title insurance volumes in the country. This is another important area where we quickly and effectively stop fraud, and in this case, on a very high dollar transaction. As we continue to build on our efforts to advance our market penetration in this vertical, I can share with you that we are working with another one of the top title insurance companies on finalizing an agreement. Currently, we have a proof of concept underway with them so that they can have a firsthand experience with our cutting edge technology.

We believe this will ultimately lead to adoption of our technology on a national scale. Now for an upgrade on our AWS migration. In April, we migrated three large clients, including one of our top three from Azure to AWS, all with great success. This quarter, we have scheduled 11 additional large clients, including another of our top three to move. By the end of the quarter, we expect all of our no integration portal clients will be moved over as well.

The changes to marketing are also having an impact. Here are a couple of examples. Since we’ve made the changes to our marketing team and focus, LinkedIn followers are up 16%. YouTube video views, which have become an important part of selling, are up a 41% versus q four. Website visitor visitors are up 34%.

And more importantly, visitors are staying 10% longer versus q four. I attribute this to better outreach, content, and execution. On the IR front, we continue to remain active. In March, we presented at and attended the iAccess virtual conference. There, we had a full day of one on one meetings with potential investors.

That was followed by the Planet Microcap Conference late last month. I did an interview with the Planet Microcap podcast host and a featured presentation. Take a look at the investor relations page on the Intellicheck website to access the link to the presentation and the investor deck. There, we also had two full days of meetings with interested investors. These forums also provided us with the opportunity to network with other potential business prospects.

What we saw at these conferences tells us investors’ interest is certainly there, and it is being strengthened by key data points. We are the market differentiator in digital and physical ID validations. Our product and process are different and more effective than our competitors. Our gross margins are around 90% and are very scalable, and the value proposition we offer speaks to the reality. Fraud isn’t going away.

It is escalating. These developments are outgrowth of the implication of our strategic plan and its emphasis on a diversification strategy. Economic data underscores just how important our move away from a retail retail first emphasis has proven. The latest WalletHub Economic Index released less than a month ago shows consumer confidence is down nearly 8% from the same time last year. This represents the fourth lowest point for consumer sentiment in the past five years.

Consumers are putting off retail purchases in the face of economic disruption and uncertainty. As we move forward, we will continue to make adjustments to the implementation of our strategic initiatives where we believe they are needed as market changes and economic conditions evolve. I will now turn the call over to Adam for further discussion of our Q1 results. Thank you, Brian. We are pleased to give you more information about the numbers of our first quarter of twenty twenty five in more detail.

Our first quarter revenues were 5% higher versus the prior year even in this challenging macro environment. We also saw pricing firmer across the board, up 9% for new business versus the fourth quarter of twenty twenty four, which partly reflects pricing power and is partly due to pursuing verticals such as auto and title insurance that typically carry higher cost per scan. Adjusted EBITDA also improved by $100,000 versus 2024, putting us at roughly breakeven with only a very small $17,000 loss for the quarter. Revenue for the first quarter of twenty twenty five increased 5% to a first quarter record of $4,894,000 compared to $4,680,000 in the same period of 2024. Our SaaS revenue for the first quarter of twenty twenty five grew 6% to $4,868,000 from $4,609,000 during the same period of 2024 and represented over 99% of our first quarter revenue.

Gross profit as a percentage of revenues was 89.7% for the quarter, which included two ten basis points of amortization expense related to the software development projects previously discussed. This compares to 90.7 that includes 50 basis points of amortization expense in the first quarter of twenty twenty four. And now we will be introducing a new metric for evaluating our business performance, our adjusted gross margin that excludes the software amortization expense. Our adjusted gross margin improved to 91.8 in q one of twenty twenty five compared to 91.2% in q one of twenty twenty four. This is the first time in our conversation with you today and in our press release and financials filed just before this call with the SEC, we are reporting this new metric.

We believe that this is a useful way to view our business since GAAP gross margin shows a lower number for Q1 of twenty twenty five only because of the noncash amortization of software development costs. When removing this noncash item as many software companies do, we see continued strong margins even as revenue grows. We did capitalize $166,000 this quarter and expect to do roughly the same in the second quarter of twenty twenty five. These capitalization costs are related to the customer migration to AWS, which as you heard is well underway, and we expect to complete around the middle of twenty twenty five. We should not see more capitalization of costs related to this migration after it is complete.

Operating expenses, consist of selling, general and administrative, marketing and research and development expenses, decreased $28,000 or 1% to $4,740,000 for the first quarter of twenty twenty five compared to $4,768,000 for the same period of 2024. You can see the reduction specifically in SG and A of about $500,000 compared to the first quarter of last year, notably due to more efficient marketing spend. On an accounting basis, R and D expenses are $468,000 higher in Q1 of twenty twenty five, driven largely by the fact that we have put many of our projects into production and are now capitalizing very few of our ongoing engineering expense. The weighted average diluted common shares was 19,800,000.0 for the first quarter of twenty twenty five compared to 19,400,000.0 for the same period of 2024. As to the company’s liquidity and capital resources at 03/31/2025, the company had cash and cash equivalents of $5,100,000 As a practice, we don’t provide guidance, but we do try to read all of the reports written about it and couldn’t help but note the consensus for Q1 twenty twenty five cash was $3,400,000 This is a full $1,700,000 lower than where we ended up.

We expect the cash number to be even higher for the second quarter and to end the 2025 year at a level higher than Q1 as well. This reflects discipline on the operating expense side as well as revenue that continues to grow. This is a byproduct of the positive cash flow that we expect to show for the twenty twenty five year. At quarter end, there was working capital, which is defined as current assets minus current liability of $6,600,000 total assets of $24,500,000 and stockholders’ equity of 17,600,000.0 One final liquidity note, the company has a $2,000,000 revolving credit line with Citibank. That line may be secured by accounts receivable.

There are no amounts outstanding under this facility, and the facility was not utilized during 2025. On past earnings call, we’ve shared our progress in marketing and customer satisfaction as well as our systems migration and development. Today, you heard about a very important piece of the puzzle coming together on the sales side, which should pave the way for even greater growth, especially through the development of channel and partner opportunities. We look forward to sharing our Q2 results with you in August. I’ll now turn the call over to the operator, who will take your questions.

Conference Operator: Thank you. We will now be conducting a question and answer session. You may press 2 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 key. One moment to use while we poll for questions.

Our first question comes from Mike Grondahl with Northland Securities. Please proceed with your question.

Brian Lewis, Chief Executive Officer, Intellicheck: Hey, guys. Thanks. How much the 40% of the title market that you have exposure to, roughly, what’s your penetration of that market? And where do you think it goes? So, yeah, I look at the market, Mike, it’s sort of two things.

You know, that 40% is if you look at the market share, you know, there’s plenty of people that do studies on this Google who are the top guys, and they list what percent that they have. Now, you know, I look at the one we talked about today, you know, that very, very large one. I always think that when we’re not integrated into their systems, we’re not seeing all the business, but that’s why they’re doing an integration to our API. And then the other half of it is all those small guys. And what I’d say is, you know and those are the resellers that we’re dealing with.

And, you know, what I really like is I was looking at the numbers, and if I look at the transaction volumes actually, I’m sorry, the revenue volume, you know, in q one of this year, the revenue from title is up about 350%. And it’s almost equally split between us going direct to the large folks, you know, the revenue in in q one, us going direct to the large folks and the resellers, you know, the partners that we picked to hit all the small folks. So I think it’s it’s paying off. People are certainly talking about us. You know, we have a ton of inbound leads, but they tend to be the smaller guys, which we then just turn over to our partners.

Got it. And then, you know, outside credit cards Mhmm. What would you say your next three largest verticals are?

Adam Shrugatis, Chief Financial Officer, Intellicheck: Banking

Brian Lewis, Chief Executive Officer, Intellicheck: and auto, and then, you know, quite honestly, age restricted. If I just look at the numbers with banking, you know, you know, kind of dwarfing that. Again, just to talk about numbers and things, the revenue from retail banking is up about 50% versus q one of last year. So, you know, we’re growing in that scale. Branch side.

Okay. On the retail branches and digital. Right? Because it it it either the bank starts in the digital world and then moves us into the the bank branches. Oftentimes, they do that because it’s easier to start you know, stop at least part of the fraud because they don’t have to build anything.

They’re using our tools, capture delivery method while they figure out how to get us in the branches, or they go the other way around. But by and large, the you know, every bank that we have, we are, you know, in like, one of the banks that we’ve been dealing with for a while just moved us into their call center and their help desk. Right? So they figure out, oh, we can use it everywhere. So everything digital and then everything in bank branch.

Got it. And and last one, you know, historically, your exposure to retail has been about and not retail branch banking, but just, you know, retail shopping has been up Credit card. 7070% roughly. Where what would you describe that exposure as today? And is that still acting as a small drag?

And kind of what was that drag if it was a drag in 1Q? And how do you see it playing out the rest of the year? Yeah. If I look at the same type of thing, you know, between the companies that went out of business, you know, so our customers’ customers that went out of business and then just regular retail malaise. Revenue from retail was down 26% from q one twenty twenty four.

So, you know, as a percentage, it’s certainly dropping. Now, you know, we’ve and and we’ve got customers who are adding retailers right still. But it’s just right now, I think people are kinda maxed out on their cards and other things. So it’s not, you know, it’s not one of our growth drivers at the moment. It’s certainly the way that I put it.

You know? Again, I think should the economy turn around, it becomes a really nice tailwind. But I just think it also points to the fact that getting into other markets has been really good for us. And, again, I always stress that we, you know, we focus on the markets where it really hurts if you’re not right. You know?

And I look at a lot of things in terms of age restricted products and other stuff like that. People look at us as a revenue limiter versus, you know, any other problem because they’ll just go buy insurance instead of cutting their sales. So we target where it really hurts if you’re not sure that you know who you’re dealing with. Great. Well and I just say that 6% SaaS year over year growth.

You had to grow through that down 26 in retail. So Yeah. Yeah. I mean, and that’s one That’s great. Yep.

I I’m glad you picked up on that because it seems like a lot don’t. You know, even last year, you know, we didn’t grow a lot in revenue, but, you know, it it that was overcoming a giant drop in retail revenue. You know, if you look at the amount of retailers that closed down stores or completely went bankrupt, you know, we I think the diversification strategy has really worked. Cool. Hey.

Thanks a lot, guys. Thanks, Mike.

Conference Operator: Our next question comes from Rudy Kessinger with D. A. Davidson.

Brian Lewis, Chief Executive Officer, Intellicheck: I guess, following up on retail, down 26% year over year in q one. Can you show what percentage of revenue retail was in q one just so maybe we can try to back into what the rest of the business is growing ex retail? Because, obviously, it’s got to be growing pretty nicely. Yeah. If I look at you know, and it’s either, you know, kind of back of the envelope.

So you really gotta you know, because, you know, sometimes data isn’t as clean as I like. But I’d say that at this point in time, retail and banking were about equal. Let me just pull up that spreadsheet. Yeah. I mean, retail and and retail banking, I’m gonna consider about equal in terms of revenue.

So it shows you again how the growth has sort of offset it. You know, age restricted is gonna be, you know, say, 8% of revenue, auto around the same. Okay. Got it. And then I saw your deferred revenue and SaaS RPOs were up 3 and a half million quarter over quarter.

Both are the highest they’ve ever been. Was that from the the renewal signed last quarter with that large Mid Atlantic bank? Or what drove the the big increase? Is there any new deals in there that drove that? Yeah.

A lot of it is we’ve begun moving a lot of our customers to a pricing model where they either pay us you know, they’ll sign a contract. Like, let’s take some of our big banks. They sign a contract for three years, and they’ll either pay us a year upfront or at least a quarter upfront. So we’re moving very much off of that billing in arrears to you know what you’re gonna do. You’re gonna pay us for it.

And, you know, we give a slight discount if you pay a year ahead than if you pay a quarter ahead. You know? Because it sort of makes it a lot easier for us to do our billing and all that kind of stuff. Okay. Got it.

And then any update on the large social media customer and and their anticipated rollout as well as the large regional bank that I believe last quarter you said you’re in pricing discussions with for a multiyear 7 figure deal with the q three expected rollout. Just any update on those stuff.

Adam Shrugatis, Chief Financial Officer, Intellicheck: Yeah. So we just had

Brian Lewis, Chief Executive Officer, Intellicheck: a great conversation with the social media, and they’re like, yeah. No. You’re doing everything we want you to do. You just gotta be patient with us because we’re kind of strange, and volumes go where we’re really worried and interested in things. And she’s you know, they’re like, it could be this, and then it could be massive next month.

And then we say we don’t care about that anymore. The large regional bank, you know, all the terms and everything, you know, the are are done. We’re now going through procurement, you know, so everything’s been agreed to, but now it’s got to do what banks do with procurement, and anybody’s ever dealt with that knows that it can take a bit. But we are, you know, actively developing to the new middleware that they built. You know, they continue to use us and pay for everything in the digital world because that’s where they started.

So, you know, everything looks good. And as soon as we get everything finalized and the paperwork signed, we certainly will be putting out an announcement. Great. Thanks, guys. Thank you.

Conference Operator: Our next question comes from Scott Buck with H. C. Wainwright. Please proceed with your question.

Brian Lewis, Chief Executive Officer, Intellicheck: Hi. Good afternoon, guys. Thanks for taking my my questions. Brian, you brought up shipping and logistics. Can you give us a little color on how you guys are helping out there and and maybe how you size that opportunity?

It yeah. I’ve been I think it’s gonna be larger than I initially thought. There’s actually conference being held of shipping and logistics people to talk about fraud. The main way that we’re used in this space is many truckers are hired remotely, you know, long haul truckers. You know, they don’t work for, you know, say, the company whose stuff they’re moving.

And it is organized crime, and they show up with a fake license. They back up. They hook up to that tractor trailer full of everything from coffee to chocolate to electronics, and they never see that truck again. So you’re talking, you know, upwards of, you know, quarter million to, you know, a million dollars in loss per truck. So it is a big concern.

So they wanna know, you know, a couple of things. One, the person actually does have a TDL. The license is real. This person does exist. So that’s where we’re playing in the space.

We started off with one company. The the thing I like about this space is they all talk, and that’s how we’re now in two others. You know, our first customer was a reference without you us even asking and called up Finbuddy to two other companies and said, you gotta put this in place. Great. That’s that’s helpful.

And then I wanted to check-in and see where you are with with resellers. Have you kind of matured that that go to market strategy, or is there a lot more room there to to improve? I I think there’s plenty of room to improve. One of the people that Tim hired is somebody to come in and sort of, I’d say, light up the the resellers after we get them because, you know, I think that you need to be making sure the sales you know, the reseller salespeople know about us, know, you know, how to present us, you know, all those types of things. And there’s certainly a lot of other resellers that, you know, we’re in, you know, now I’d say deep talks and particularly in banking where there are a lot of small community banks and credit unions who wanna use this but don’t build their own back end.

You know, they outsource that. So getting into that outsource stack is really important to us. But, excuse me, it’s very interesting. It’s sort of like every time I kinda look around and I’m doing some research, I’m like, oh, there’s an there’s another interesting space we should get to through a reseller. Because, again, anytime I see a large market made up of small companies, I’d rather get to that through a reseller.

And, again, I like them because since their volume each is lower, you know, the price per transaction is higher, and that makes it much more interesting to us and the reseller. Yep. No. That makes sense. And then last one, it looks like the accounts receivable balance has has been climbing the last few quarters.

Have you made changes to your payment terms, or is there something else mechanical going on there or just do you have them slow with the business? No. That’s mostly changes to our pricing model and how we’re working it so that, you know, now instead of always billing in arrears, you know, we’re making people commit to a number of transactions, and then they prepay that either quarterly. So they’ll commit to an annual number of transactions, and they either prepay it annually or quarterly as opposed to us saying, okay. We’ll see what you did every month and then go bill you.

Yep. Okay. That makes sense. I appreciate the time, guys. Thank you very much.

Conference Operator: Cool. Thanks. Our next question comes from Jeff Van Rhee with Craig Hallum. Please proceed with your question.

Tim Poulin, Senior Vice President of Sales, Intellicheck: Great. Thanks for taking the questions. I’ve got a few. So first, on the metrics front, anything you can share that’s a leading indicator here that you you might be able to quantify for us, whether it’s pipeline value, maybe pending ARR. You’ve got a lot of lead time on these things.

So visibility into the dollar value of ARR that is to go live. I know you’re not giving annual revenue guidance, but something to broadly frame a trajectory.

Brian Lewis, Chief Executive Officer, Intellicheck: Look, I think we’ve got you know, I I look at the sort of the value of the ARR, what we know that we’ve got, you know, committed, if you will. And, again, you know, some of these ARR, you know, one customer would put them into, you know, a top three, you know, top three or four of our customers who all are, you know, very large customers. So, you know, that’s how I’m looking at it. That’s how, you know, Adam can say that he expects us to be generating, you know, more cash each quarter. You know, pipeline, it’s always just that’s the reason I got Tim around.

I wanna make sure that we do have a real and true pipeline, but I’m looking at more what we have in committed or near committed customers or contracts, and that’s all looking very good and very robust for us. Mhmm. Okay.

Tim Poulin, Senior Vice President of Sales, Intellicheck: And on the congrats on the addition of Tim. And and curious in the interview process, what was it specifically? He’s got a, obviously, very accomplished history. But what stood out to you as most applicable? What gets you excited about hiring him?

Brian Lewis, Chief Executive Officer, Intellicheck: One is, you know, if you remember, I started off in sales and, you know, and ran sales teams and went in and grew, you know, the productivity and all that kind of stuff. And in speaking with him, I realized that we were very much of the same mindset in how we manage people, how how much rope do we give them before we say there’s, you know, not gonna make it, you know, a a couple of things like that. And then, you know, I had, honestly, a couple of psychologists who do this for a living for companies, you know, give him some assessments and things, and they’re like, this guy’s perfect for for your company and the way that you need to grow out your sales team. So between, I would say, the the professional like mindedness and then having that being confirmed by, you know, outside sources worked out very well. I’ve been doing a search for a bit, and what I liked about Tim also was came through from a reference from somebody that I highly respect.

Nice. And and you I

Tim Poulin, Senior Vice President of Sales, Intellicheck: think you referenced in the script that Tim brought three sales reps already. I think if I recall, you had said you hired three in last quarter as well. But I’m particularly interested in these three. I think you said the prior three were more, I took it to be junior, more telesales historically, but wanted their own names on some accounts. Curious what the make and model of the three folks you just brought in.

Brian Lewis, Chief Executive Officer, Intellicheck: Much more senior. You know, guys who have been doing enterprise sales and understand, you know, the long term cycle of it. You know? So I think we’ve got the right getting the right blend of a team of young hungry kids who are not afraid to work the phone and learn how to do everything that needs to be done to close enterprise sales. And then folks that have significant enterprise sales experience.

And, honestly, you know, looked at what it is we have to sell and sort of said, you know, the same thing that I’ve heard And it’s like, isn’t everybody buying this? I could sell this to anyone. I’m like, you’re the type of people that I need on board.

Tim Poulin, Senior Vice President of Sales, Intellicheck: Mhmm. Great. And two two last numbers questions. Resellers, just in terms of, I don’t know if you want to take it like ARR that’s in the pipe. What percent of that ARR in the pipe has come through resellers versus direct?

And then just the last one, a numbers question, the digital data point. I don’t know we’ve heard that in a while. You used to break it out. I think you’re trying to grow digital as a percent of revenue just where that is now.

Brian Lewis, Chief Executive Officer, Intellicheck: But I can’t I I that one, I don’t have right in front of me, but digital is a much larger and certainly growing portion of our business. Because if you think about so much of what we’re doing in title and automotive and other things is really digital because most of it is a lot of it’s remote. You know, that people buy cars remotely, you know, or, you know, close on your house remotely. You know? And then also the retail banking is again, we’ve got, you know, almost every bank but one is we’re in the call center or we’re in their website or we’re part of their mobile app.

So digital certainly has grown, and it’s almost to the point that, you know, it’s I don’t even think about it because it’s just one of the many ways that we sell our product. It’s just one of the tools that’s out there. Oh, you want digital? Okay. Here’s our capture.

Right? And we go. But I’ll I’ll certainly make sure we have that number for, know, the next time or, you know, that we we speak. In terms of the resellers, in almost every market where I’m comfortable with what we have in terms of the resellers, I’m I’m just looking at some numbers on my remarkable here. It’s almost fifty fifty.

Right? So, again, if I look at automotive, you know, the big folks come direct to us, but everybody else, we’re doing it through resellers. Same thing with title. But, again, you know, I think that there are some other markets where it’s gonna be almost all resellers. You know, like like, the whole background check space, which I’m very excited about.

You know, I don’t wanna go hit. You know? Certainly, there’s, like, two big guys. We’ll go get them, but everybody else wanna be down to a reseller, which is why, you know, we brought in this person to work under Tim to really write these these accounts up. Okay.

Great. Thanks, Mike. Appreciate it. Thank you.

Conference Operator: Okay. There are no further questions at this time. I would now like to turn the floor back over to Brian Lewis for closing comments. Oh, so I think everybody oh. Sorry.

We do have one more question. My apologies. We have Neil Catelli with the Blueprint Capital Management. Please proceed with your question.

Brian Lewis, Chief Executive Officer, Intellicheck: Hey, Brian. Great job on the call today. Lots of information to to digest here. You you mentioned background check a couple times and and you said you’re really excited about that vertical. No one asked about it.

I was wondering if you could help us, you know, how can we think about it, how to size it, you know, where are they where are they doing these background checks? And I I know you’ve announced a a win in that space. Is is it just that one? Are there others? Maybe maybe help us map that out a little bit.

Yeah. Sure. So we’re talking to a couple. You know, my goal is, you know, again, there’s two big guys that wanna get them direct. And then, you know, there are you know, I think we use two background check companies.

They’re small. I I never wanna go sell to them directly. And, you know, the folks that we are dealing with for resellers are looking at and their existing customers are a lot of the big box stores, you know, where, you know, they’re hiring people all the time. And, you know, so that’s why I see it being a, you know, a large you know, a potentially very large market. It it just look at the number of people.

I mean, that’s how I decided. I thought this is something that we should go after, and I wish I had it in front of me, but I don’t. I went in and looked at what are the number of background checks done every year, and they’re all divided up into either firearms or firing. Both were very large numbers. And that’s why I figured, let’s go find the right partner to get to them.

So, you know, that’s the thing that I like. For the most part, you know, there’s always people getting jobs. There’s always people moving around. It doesn’t just have to be big box stores. You know, we need to you know, our customers require it that we run background checks on everybody, you know, for everything from, you know, criminal history to are they lying about their degree.

And, you know, it does happen a lot. So, like, it even happened to our CTO’s niece who is a nurse. Somebody stole her identity to pretend to be a nurse. Right? That’s kinda scary.

You know, that if you think about you know, certainly, there’s damage done if somebody’s identity is stolen and you get a credit card. But somebody practicing medicine, that’s even scarier to me. So it seems to be you know, that’s why I’m excited about the market. You know? And, you know, we’re still new to it.

We’re playing with these folks. They’re very excited. We’re looking forward to doing a big joint announcement when we get or, you know, I should say they get their first customer, and and we’re a part of that. Okay. And that’s the the the announcement that you had in December of last year with don’t know if I’m saying it right, but Atio Data.

Is that right? Yep. Yep. And then it just took down a bit to, you know, get, you know, get integrated. You know?

And that’s that’s the funny thing. It’s like, you know, retail was like, we’re not touching our point of sale systems in in q four, but everything else kinda slows down too because everybody takes, you know, holiday vacations and all that kind of stuff. So anything you sign in in q four, you know, isn’t gonna get anywhere near live, it seems, until into q one. So they’ve got it live. They got it selling.

I think we’ve got a bunch of other really interesting re you know, reseller opportunities too, by the way, in everything from folks who sell hardware to banks that we can be incorporated in to, again, this background space. So that’s why reselling is a big portion of our strategy going forward.

Conference Operator: Okay. Thanks a lot. Cool.

Brian Lewis, Chief Executive Officer, Intellicheck: Alright. There

Conference Operator: are no further questions

Brian Lewis, Chief Executive Officer, Intellicheck: at the Yeah. I’m sorry, Maria.

Conference Operator: No. It’s okay. I was just gonna pass it over to you, Graham, for closing comments.

Brian Lewis, Chief Executive Officer, Intellicheck: Okay. Alright. So so thanks everybody for being on the call. I also wanna share another conference opportunity note with you all. I’m gonna be presenting at the Ladenburg Thalmann Technology twenty five in New York City on Wednesday, May 21.

Adam’s gonna be on hand as well if you want a one on one meeting. I think we still have a few dances left in our dance card. You can go to their website at latenberg.com. So just in including concluding our call today, my message is this, watch this space and the runway for Intellicheck to grow. We believe that our anticipated growth will be driven by our new senior vice president of sales and a newly revitalized team, you know, partnered with real progress in our customer relations program driven by our, you know, relatively new VP of customer success.

I have reinvigorated marketing. You know, the numbers, I think, speak for themselves, you know, and this new marketing firm that we’re working with. You know, we’re finally seeing the finish line in sight with our AWS migration. And then the new partnerships, you know, that have we’ve been speaking about reselling and new opportunities. So we have very high expectations for ourselves and what’s to come, and we look forward to updating you on Intellicheck2.0 in our new our next call in August.

So thanks again for joining us today, and everyone have a great evening.

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

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