Trust Stamp Provides a Business Report and Financial Results for the Year Ended December 31, 2023
- Trust Stamp (IDAI) reported strong financial and business results for the year ended December 31, 2023.
- The company highlighted a fivefold increase in its financial institution customer base, reaching 43 integrated institutions.
- Trust Stamp anticipates recurring revenue from new customer integrations starting in 2024.
- The market for age estimation products is expanding rapidly due to legislative changes, with Trust Stamp launching an AI-powered age-estimation product.
- The company entered into joint ventures to expand its product market into new sectors and secured a teaming agreement with a major government contractor.
- Trust Stamp reduced its net revenue but offset it by significantly reducing selling, general, and administrative expenses, leading to a reduced operating loss compared to the previous year.
- The company raised $10.32 million in net proceeds through various securities purchase agreements in 2023.
- Trust Stamp has a strong patent portfolio with 20 patents issued and additional patents provisional or pending, enhancing its innovative product offerings.
- The company experienced a reduction in net revenue from $5.39 million in 2022 to $4.56 million in 2023.
- Trust Stamp's operating loss for 2023 was $7.64 million, indicating a financial challenge despite cost reduction efforts.
- The basic and net loss per share increased from $1.07 in 2023 to $2.55 in 2022, signaling a decline in shareholder value.
- Despite the reduction in net revenue, the company's expenses, including cost of sales, were also reduced, impacting overall financial performance.
Insights
Examining Trust Stamp's financial results reveals a strategic shift towards Software as a Service (SaaS) sales, which is a common pivot for technology companies seeking scalable and predictable revenue streams. The reported decrease in net revenue from $5.39 million to $4.56 million, while notable, is cushioned by a substantial decrease in selling, general and administrative expenses. This cost-cutting measure, particularly the 48.79% reduction in cost of sales, suggests aggressive efficiency improvements. However, investors should consider the sustainability of such reductions and whether they may impact the company's growth potential.
The increase in sales resources and continued investment in research and development, resulting in a growing patent portfolio, indicates a commitment to innovation. Patents are indeed valuable assets, but their true worth is realized through successful product commercialization. The market response to the newly launched AI-powered age-estimation product and the expansion into new sectors through joint ventures will be critical to watch. These initiatives could either significantly boost the company's market position or lead to further cash burn if not executed effectively.
Lastly, the multiple rounds of equity investments and the net proceeds raised suggest investor confidence but also highlight a reliance on external funding to fuel operations. The balance between capital inflows and the path to profitability is a delicate one and any future dilution of shares could be a concern for current shareholders.
The integration with 43 financial institutions, a fivefold increase since the start of 2023, signals strong market penetration and potential for recurring revenue streams. Trust Stamp's emphasis on long-term customer relationships and the move into the community banking sector through the ThinkTech program demonstrates a strategic targeting of niche markets. This diversification could reduce risk and provide stability in revenue.
Furthermore, the alignment with legislative trends in age verification underscores the company's agility in responding to market needs. However, the success of this product line hinges on the company's ability to outpace competitors and capture significant market share. The market for identity verification and privacy-first solutions is rapidly evolving and Trust Stamp's ability to maintain a competitive edge with its AI-powered technology stack will be a determining factor in its long-term success.
Investors should also note the company's entry into new sectors via joint ventures and a government contracting agreement. These moves could open up substantial new revenue channels but also carry risks associated with entering unproven markets. The effectiveness of these ventures in contributing to the bottom line will be a key area to monitor.
Trust Stamp's engagement in sectors that are heavily influenced by legislation, such as age estimation products, requires a nuanced understanding of the legal landscape. The legal compliance of their products can be a significant driver of adoption, especially as national and state laws evolve. The company's proactive approach in this regard could be a differentiator in the market.
Moreover, the company's substantial patent portfolio can serve as both a shield and a sword in the competitive landscape. It protects the company's intellectual property while potentially providing leverage against competitors through licensing or enforcement actions. However, the real value of patents is often realized through their defensibility and the company's ability to fend off infringement claims. The legal robustness of these patents and the company's strategy around them will be important to follow.
Trust Stamp provides a report on its business and financial results for year ended December 31, 2023 and announces that its Form 10-K for year ended December 31, 2023 will be filed with the Securities and Exchange Commission on April 1, 2024
Atlanta, GA, March 27, 2024 (GLOBE NEWSWIRE) -- Trust Stamp (Nasdaq: IDAI), the Privacy-First Identity Company ™ providing AI-powered trust and identity services used globally across multiple sectors, announced financial results and provided a business update for year ended December 31, 2023.
Trust Stamp Chief Executive Officer, Gareth N. Genner commented, “I am pleased to report our progress for the year ended December 31, 2023.
The relationship with our long-term customers remains very strong and we anticipate continued long-term growth in the revenue derived from those relationships.
In respect of new customers, a significant number of additional financial institutions integrated with our Orchestration Layer both via our channel partnership and directly, bringing the total number of integrated institutions as at the date of our 10-K filing to 43 financial institutions representing a fivefold increase in our financial institution customer base since the start of 2023. We had forecast nominal revenue from those new customers in 2023 as the financial institutions integrate and roll-out both internally and eventually with their end-users, and we continue to anticipate recurring revenue from those integrations starting in 2024. We believe that the lengthy lead period from first engagement to significant revenue for integrating financial institutions will be rewarded by the consistency and longevity of the resulting revenue streams.
Our 2023 focus on US-based banks via our channel partnership with FIS has now been augmented by our participation in the acclaimed ThinkTech program operated by The Independent Community Bankers of America. This engagement has already resulted in tailoring some of our product offerings for the community banking sector and we anticipate sales from this sector starting as soon as Q2 of this year.
The market for age estimation products is growing exponentially fuelled by national and state legislation in the United States and overseas. For many potential customers this is a new and time sensitive requirement and there is no legacy vendor to be displaced. As a result of research and development that started in 2023 and extended into 2024, we have recently announced the launch of our AI-powered age-estimation product and are negotiating our first engagement. We believe that this sector will be an important complement to our mainstream identity products.
One of the benefits of our microservice architecture and Orchestration Layer infrastructure is the ability for our technology to be utilized in multiple sectors without significant development work on our part. As a consequence, in late 2023 we entered into two joint ventures to expand the market for our products into completely new sectors, as well as a teaming agreement with a major government contractor focused on their using our technology for substantial Federal contracting opportunities.
Our pre-signalled reduction in net revenue from
Our operating loss for year ended December 31, 2023 was
Over the year, our balance sheet was strengthened by equity investments and
Mr. Genner went on to comment, “While significantly reducing our SG&A expenses and increasing our sales resources, we have continued to invest in research and development resulting in a cutting-edge patent portfolio and an AI-powered technology stack. As of today we have 20 patents issued, and an additional 15 patents provisional or pending, and we believe that our patent portfolio is a significant asset that will power and differentiate our current and future generations of innovative products.”
Financial Performance Overview
A copy of the Company’s report on Form 10-K for the years ended December 31, 2023 and 2022, will be filed with the Securities and Exchange Commission and posted on the Company’s website at https://investors.truststamp.ai/sec-filings/ on April 1st 2024.
Enquiries
Investors: shareholders@truststamp.ai
About Trust Stamp
Trust Stamp the Privacy-First Identity CompanyTM, is a global provider of AI-powered identity services for use in multiple sectors, including banking and finance, regulatory compliance, government, real estate, communications, and humanitarian services. Its technology empowers organizations with advanced biometric identity solutions that reduce fraud, protect personal data privacy, increase operational efficiency, and reach a broader base of users worldwide through its unique data transformation and comparison capabilities.
Located across North America, Europe, Asia, and Africa, Trust Stamp trades on the Nasdaq Capital Market (Nasdaq: IDAI).
Safe Harbor Statement: Caution Concerning Forward-Looking Remarks
All statements in this release that are not based on historical fact are “forward-looking statements” including within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The information in this announcement may contain forward-looking statements and information related to, among other things, the company, its business plan and strategy, and its industry. These statements reflect management’s current views with respect to future events-based information currently available and are subject to risks and uncertainties that could cause the company’s actual results to differ materially from those contained in the forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company does not undertake any obligation to revise or update these forward-looking statements to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events.
FAQ
What were Trust Stamp's (IDAI) financial and business results for the year ended December 31, 2023?
How many financial institutions were integrated with Trust Stamp's Orchestration Layer by the end of 2023?
What new product did Trust Stamp launch in response to the growing market for age estimation products?
How did Trust Stamp strengthen its balance sheet in 2023?
What is the status of Trust Stamp's patent portfolio?
