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VerifyMe Inc. reported its second-quarter earnings for 2025, showing a stronger-than-expected performance with an earnings per share (EPS) of -$0.02, surpassing the forecasted -$0.07. The company’s revenue, however, fell short of expectations at $4.5 million compared to the anticipated $4.81 million. Despite this revenue miss, the stock saw a significant pre-market increase of 12.89%, reflecting investor optimism. According to InvestingPro analysis, the company is currently undervalued, with a market capitalization of just $11.68 million and trading at a modest price-to-book ratio of 0.71.
Key Takeaways
- VerifyMe’s EPS beat expectations, coming in at -$0.02 versus a forecast of -$0.07.
- Revenue decreased year-over-year, from $5.4 million in 2024 to $4.5 million.
- The stock price surged by 12.89% pre-market after the earnings announcement.
- Operational efficiencies led to a 27% reduction in operating expenses.
- The company is focusing on expanding its Periship segment and carrier relationships.
Company Performance
VerifyMe’s overall performance in Q2 2025 indicates a mixed bag. While the company managed to reduce its net loss per share, it faced a decline in revenue compared to the same period last year. The strategic focus on cost-cutting measures and operational efficiencies has started to pay off, with a notable reduction in operating expenses and an improved adjusted EBITDA.
Financial Highlights
- Revenue: $4.5 million, down from $5.4 million in 2024.
- EPS: -$0.02, compared to the forecast of -$0.07.
- Gross Margin: 35%, down from 39% in 2024.
- Cash Balance: $6.1 million, an increase from $3.3 million at the end of 2024.
- Adjusted EBITDA: Improved to $300,000 from $200,000 in 2024.
Earnings vs. Forecast
VerifyMe’s EPS of -$0.02 was a significant beat against the forecasted -$0.07, marking a surprise percentage of 71.43%. This performance contrasts with the company’s historical trend of missing earnings expectations, signaling potential improvements in financial management. However, the revenue shortfall of 6.44% against forecasts suggests challenges in market demand or competitive pressures.
Market Reaction
Following the earnings report, VerifyMe’s stock experienced a notable 12.89% increase in pre-market trading, reaching a price of $0.951. This surge is indicative of positive investor sentiment, possibly driven by the EPS beat and operational improvements. The stock’s movement stands out against its 52-week low of $0.547, suggesting renewed investor confidence. InvestingPro analysis shows the stock has demonstrated high price volatility, with a beta of 0.57 and a strong return over the last three months, though it remains 81% below its 52-week high of $5.00.
For deeper insights into VerifyMe’s valuation and growth potential, investors can access comprehensive analysis through InvestingPro’s detailed research reports, available for over 1,400 US stocks.
Outlook & Guidance
VerifyMe is optimistic about organic revenue growth in 2026, driven by its strategic focus on expanding carrier relationships and integrating new technologies. The company anticipates minimal impact from these initiatives during the upcoming peak shipping season, with significant benefits expected in the following year.
Executive Commentary
CEO Adam Steadow highlighted the company’s strategic direction, stating, "We’re advancing our strategy for developing directly contracted periship customers." He also emphasized the disciplined approach to managing costs and margins, reinforcing the company’s commitment to strategic value creation.
Risks and Challenges
- Market Softening: Decreased Periship revenue and loss of significant customers in 2024 could pose challenges.
- Integration Delays: The new carrier integration may not show material impact until 2026.
- Competitive Pressures: Expanding carrier relationships is crucial to maintaining market position.
- Economic Uncertainty: Macro-economic factors could affect future revenue growth.
- Strategic Acquisitions: Evaluating acquisitions could divert focus from core operations.
Q&A
During the earnings call, analysts inquired about the impact of new carrier integrations and the growth potential of the Periship segment. The management addressed these concerns, indicating that while immediate impacts are minimal, long-term growth prospects remain strong.
Full transcript - VerifyMe Inc (VRME) Q2 2025:
Conference Moderator: Good day, and welcome to the Verify Me Second Quarter twenty twenty five Financial Results Conference Call. All participants will be in a listen only mode. After today’s presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Jennifer Coralla, Chief Financial Officer.
Please go ahead, ma’am.
Jennifer Coralla, Chief Financial Officer, VerifyMe: Good morning, everyone, and thank you for joining us today for our second quarter twenty twenty five earnings call presentation. On the call today, I am joined by Adam Steadow, CEO and President, who will give an operations and strategic update. Following our management presentation, we will have a Q and A session. I would like to bring your attention to the note on forward looking statements on Slide three. Today’s presentation and the answer to questions includes forward looking statements.
It should be understood that actual results could differ materially from those projected due to a number of factors, including those described under the forward looking statements caption and on the risk factors of the company’s annual report on Form 10 ks and quarterly reports on Form 10 Q. I will now turn the call over to Adam Steadow to discuss the company’s strategy.
Adam Steadow, CEO and President, VerifyMe: Thank you, Ted. So I’m very pleased with the progress we’ve made in 2025. Our primary organic focus is on periship. And I realized that during the 2025, Perryship revenue decreased approximately 14% versus the second quarter last year. With that said, the major contributing factor was the previously announced large customers’ losses back in 2024.
Outside of those historical customers, new customer sales and expanded revenues with specific existing customers have offset some overall softening of the partial shipment market. I’d also like to point out that VerifyMe has reduced our operating expenses by approximately 27% versus 2024. We’re managing our costs in alignment with revenues and we’re maximizing the gross margin of our proactive services within our Precision Logistics segment. Our positive adjusted EBITDA in Q2 twenty twenty five is an improvement over Q2 twenty twenty four. So we’re taking the steps that are required to ensure we have sufficient resources to invest in our strategies for both organic and strategic growth.
So during our previous call, I discussed our organic growth initiatives for creating value for our shareholders. Our primary focus is expanding revenues with directly contracted peryship customers. These efforts are delivering very positive results. We’re pleased with the new customers we’re adding in 2025. Our marketing efforts continue to generate increased inbound lead activity, and we believe our business development and marketing approach will be a significant component to meaningful organic revenue growth in 2026.
Now the second element of the organic growth strategy we discussed was developing relationships with additional freight carriers and third party logistics companies. We’re pleased to announce that we now have a relationship with the two freight carriers that handle the overwhelming majority of the non U. S. Postal Service partial shipments in The United States. Historically, our single carrier strategy created an environment in which peri ship did not have the ability to service meaningful portions of the potential target market for our services.
The process of integrating our technology and services with our additional freight carrier will take a couple of months, but the addition of a second carrier further reinforces the confidence we had in organic revenue growth in 2026. And we had also previously announced that we were integrating with technology platforms related to e commerce shopping carts and shipping management software applications. So we’ve completed those projects and those integrations that we discussed on our last call, and our technology team is now shifting their focus to technology integrations and upgrades with our shipping carrier relationships. So at this point, I’d like to shift the conversation from organic growth efforts to our strategic growth efforts. As I mentioned earlier, the company had $6,100,000 of cash at the end of Q2 twenty twenty five, and we do not require cash to support annual operating or public company expenses.
We continue to evaluate transformative and tuck in acquisitions. However, it’s difficult to predict the timing or probability of these activities. Therefore, while we’re diligently evaluating these strategic options, we want to realize more benefits from the strength of our balance sheet. Therefore, we’ve adopted a treasury strategy that will allow the company to realize better interest income and cash generation from our strong balance sheet. This strategy involves loaning a portion of our available cash to Zen Credit Ventures in exchange for a nine month promissory note at a more favorable interest rate than our current high yield savings account.
We anticipate this strategy should improve our annualized interest income from approximately 4% of total available cash to greater than 8%. We don’t believe this strategy will have any impact on our ability to pursue strategic options for the company. We continue to have availability under our line of credit with our bank and a good relationship with our bankers, and we feel we have plenty of access to capital to pursue any strategic options we desire. So at this point, I’d like to turn the call back over to Jennifer Cola, and she’ll review the financial details of the quarter.
Jennifer Coralla, Chief Financial Officer, VerifyMe: Thank you, Adam. The second quarter revenue was $4,500,000 versus the prior year of $5,400,000 a decrease of $900,000 This decrease is primarily due to a previously disclosed discontinued contract in our premium services, discontinued services with two customers in our proactive services, partially offset by increased revenues from new and existing customers in our Precision Logistics segment. Gross profit decreased by $500,000 to $1,600,000 in Q2 twenty twenty five compared to $2,100,000 in Q2 twenty twenty four. As a percentage of revenue, gross margin was 35% in Q2 twenty twenty five versus 39% in Q2 twenty twenty four. While the quarter resulted in a decrease in year over year gross profit percentage, the loss of the one customer in our higher margin premium services was partially offset by margin improvements in our proactive services.
We expect the gross profit percentage to increase compared to Q3 and 2024, factoring in the seasonal variation in our Precision Logistics segment. Operating expenses were $1,900,000 in Q2 twenty twenty five compared to $2,600,000 in Q2 twenty twenty four. In addition to a reduction in operating costs resulting from the divestiture of trust codes in December 2024, the company also implemented cost cutting measures in the Precision Logistics segment. Our net loss for the quarter was $290,000 or a loss of $02 per diluted share in Q2 twenty twenty five compared to a net loss of $350,000 or $03 per diluted share in Q2 twenty twenty four. We purchased 201,000 shares of company stock during Q2 twenty twenty five at a cost of $153,000 and have $330,000 remaining under the share repurchase program.
Our adjusted EBITDA improved to $300,000 in Q2 twenty twenty five compared to $200,000 in Q2 twenty twenty four as a result of our continued efforts to reduce costs and develop operational efficiencies. On the last slide is our balance sheet as of 06/30/2025. Our cash balance as of 06/30/2025 was $6,100,000 an increase of $3,300,000 from a balance of $2,800,000 on 12/31/2024. During Q2 twenty twenty five, we generated $700,000 cash from operations compared to $400,000 in Q2 twenty twenty four. We expect to have continued positive cash flow from operations in the 2025.
On 08/08/2025, to improve our rate of return on our available cash balance, we entered into a $2,000,000 short term loan agreement and promissory note in exchange for regular quarterly interest payments at an annual interest rate of 16%. We also continue to have $1,000,000 available under our line of credit and have no borrowings outstanding. With that, I’d like to turn the call back to Adam.
Adam Steadow, CEO and President, VerifyMe: Thank you, Jen. As we started the call, I’m pleased with the progress in 2025. We’re advancing our strategy for developing directly contracted peryship customers. I believe this strategy presents the company with the best opportunity for sustainable organic growth. In addition, we continue to have a disciplined approach to managing our costs, margins and evaluating strategic opportunities.
The combination of the strength of our balance sheet, anticipated annual cash flow and our executive team’s experience with creating value through acquisitions positions the company to provide meaningful shareholder returns for our current share price. So at this point, I think we’ll turn the call over for questions and answers.
Conference Moderator: Thank you. We will now begin the question and answer session. And your first question today will come from Mike Petusky with Barrington Research. Please go ahead.
Mike Petusky, Analyst, Barrington Research: Hey, good morning. A couple of quick ones for Jennifer and then I have one or two you as well, Adam. Jennifer, do you have the authentication revenue in the quarter?
Jennifer Coralla, Chief Financial Officer, VerifyMe: Yes. It was $27,000
Mike Petusky, Analyst, Barrington Research: Okay. And then do you have the growth ex the impact of the lost business on periship? Like if you excluded the impact of the business that was lost in 2024, do you have sort of a number in terms of just growth rate for that business?
Adam Steadow, CEO and President, VerifyMe: It’s hard to answer that, in that way because if you looked at we had the customer that was in sourced by our shipping partner. We had the customer we discussed that, had outsourced their cold chain strategy. So between the two, I think for one, could mathematically answer it, but I think it would give an unclear answer. But I think the puts and takes, we’ve single digit percentage one way or the other, after those puts and takes.
Mike Petusky, Analyst, Barrington Research: Okay. And then in terms of the other carrier, you seem to suggest that impact would be at least a couple of months out before that would start to show up. I mean, you expect that relationship to be material over the next few quarters? Or is that going be a slow build?
Adam Steadow, CEO and President, VerifyMe: I wouldn’t expect it to happen in the next, I wouldn’t expect it to have anything to happen soon because, as I said, it’s going to take a couple of months to integrate with their technology. In addition to that, historically speaking, shippers are very reluctant to make changes during peak season. The overall shipping marketplace becomes strained between Thanksgiving and Christmas. And so companies, e commerce companies or companies who do a lot of shipping, they’re aware of this. So they don’t make a lot of changes.
So that would also create an environment where you wouldn’t get a lot of changes there. So it will be the build will be pushed further back, start to materialize more, noticeably in 2026. The thing I would point out to you though is that if you look at the overall marketplace, the new carrier handles a much larger has a much larger percentage of the marketplace than our existing partner does for the specific types of parcel shipments that we service, and that’s why we’re pretty excited about it. Okay. And then, I
Mike Petusky, Analyst, Barrington Research: guess just last question, Adam, and I’ll let others get on here. Obviously, good quarter in terms of sort of expense management, the cash generation, the cash build, all of it’s great. You’ve got this cash balance, which is the healthiest it’s been that I can remember, at least in recent memory. And so I’m just curious in terms of your capital allocation priorities, I mean is it would number one be internal investment in Pariship? Would it be adding on some other business via M and A?
Like how are you thinking about that utilizing that balance sheet to create shareholder value over the next few years? Thanks.
Adam Steadow, CEO and President, VerifyMe: Great question. Great question. So the focus of 2025 really has been on transforming Perry’s ship and getting it to where it has a highly efficient, highly scalable model that can grow from there. We made that pivot as we pivoted out with the divestiture that we had at the 2024. So that’s where we’re focusing this year.
Through that, we have generated cash through the warrant inducement earlier in the year. We continue to generate cash flow from operations. So that money, the capital that we’re making available, we’re really not thinking that back into the operating business. We’re looking to deploy that in other ways to create value. Now we’ve evaluated potential acquisitions that are in the same space, and we’ve looked at other, strategic alternatives to put the capital at work.
To be quite frank, we’re just we’re very we’re trying to be very, very diligent and make sure that whatever we do, we get it right, and it provides a very meaningful return to the shareholders. So without a doubt, we plan on deploying the capital in a way that would provide strategic advantage to our shareholders. But it’s not burning a hole the money is not burning a hole in our pocket either, and we want to make sure we get it done right. Did that answer the question? I feel like I may not have directly answered it, but I wanted to give you the color of what we’re trying to do.
Mike Petusky, Analyst, Barrington Research: No. I mean, my takeaway from your answer is essentially you’d like to find an asset or assets externally if you can find something you think has a good ROI.
Adam Steadow, CEO and President, VerifyMe: Absolutely. Would very much as we said from the beginning when I first came on board, the plan has been to create shareholder value through a combination of organic and strategic growth. And I continue to be diligently focused on strategic growth. The right opportunity just hasn’t materialized yet.
Mike Petusky, Analyst, Barrington Research: All right. Fair enough. Thanks. Appreciate it.
Conference Moderator: This will conclude our question and answer session. I would like to turn the conference back over to management for any closing remarks.
Adam Steadow, CEO and President, VerifyMe: Thank you. Well, I appreciate everybody joining the call today. I look forward to our next call and keeping everybody updated on the progress with provide with our additional freight carrier. And thanks again. Bye.
Conference Moderator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
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