Intellicheck Announces Second Quarter 2024 Financial Results

Rhea-AI Summary

Intellicheck (Nasdaq: IDN), a leader in identity validation solutions, reported its Q2 2024 financial results. Total revenue decreased by 0.9% to $4.672 million compared to the same period in 2023. SaaS revenue also declined by 0.8% to $4.627 million. Although gross profit percentage remained high at 90.5%, it fell slightly from 92.5% in Q2 2023. Operating expenses dropped by 14.8% to $4.443 million. The net loss improved to $127,000 or $0.01 per diluted share, compared to a $853,000 loss in Q2 2023. Adjusted EBITDA decreased by $106,000 to -$70,000. As of June 30, 2024, Intellicheck had $7.3 million in cash and cash equivalents and stockholders' equity of $17.3 million. The company will discuss these results in an earnings conference call on August 8, 2024.

Positive

• Operating expenses decreased by 14.8% to $4.443 million.
• Net loss improved to $127,000, a better result compared to $853,000 in Q2 2023.

Negative

• Total revenue decreased by 0.9% to $4.672 million.
• SaaS revenue declined by 0.8% to $4.627 million.
• Gross profit percentage fell slightly to 90.5% from 92.5% in Q2 2023.
• Adjusted EBITDA decreased by $106,000 to -$70,000.

Insights

Financial Analyst

Intellicheck's Q2 2024 results show a mixed performance. While revenue slightly declined by 0.9% to $4.67 million, there are positive signs in cost management and bottom-line improvement. The net loss narrowed significantly to $127,000 from $853,000 year-over-year, primarily due to a 14.8% reduction in operating expenses.

The company's focus on market diversification appears to be a strategic move to mitigate economic variability in key markets like retail. However, the slight decline in SaaS revenue (0.8%) warrants attention. The improved cash position of $7.3 million provides a solid financial buffer for future growth initiatives.

Investors should monitor the company's ability to translate its innovation focus into revenue growth in the coming quarters, as current results show cost optimization outpacing top-line expansion.

Market Research Analyst

Intellicheck's Q2 results reflect the broader economic challenges facing the identity verification market, particularly in retail. The company's strategy to diversify into new markets is prudent, given the current headwinds in core sectors. However, the flat revenue growth suggests that this diversification has not yet translated into significant new revenue streams.

The high gross profit margin of 90.5% is impressive and indicates strong pricing power and efficient service delivery. This positions Intellicheck well for profitability once revenue growth resumes. The reduction in operating expenses, while improving the bottom line, should be monitored to ensure it doesn't come at the cost of future growth capabilities.

Investors should watch for signs of traction in new markets and any rebound in the retail sector, which could serve as catalysts for renewed growth.

Continued Operating Expense and Net Income  Improvements

MELVILLE, N.Y.--(BUSINESS WIRE)-- Intellicheck, Inc. (Nasdaq: IDN), an industry-leading identity company delivering on-demand digital and physical identity validation solutions, today announced its financial results for the second quarter ended June 30, 2024. Total revenue for the second quarter ended June 30, 2024 declined 0.9% to $4,672,000 compared to $4,716,000 in the same period of 2023. SaaS revenue declined 0.8% and totaled $4,627,000 compared to $4,663,000 in the same period of 2023.

“Our focus on innovation and market expansion has set the stage for future financial growth. We believe our market diversification strategy is already showing its value in the face of economic variability in key markets such as retail. Going forward, we expect those headwinds will become tailwinds that will contribute to our growth and profitability,” said Intellicheck CEO Bryan Lewis.

Gross profit as a percentage of revenues was 90.5%, in line with expectations, for the three months ended June 30, 2024 compared to 92.5% in the same period in 2023.

Operating expenses for the three months ended June 30, 2024, which consist of selling, general and administrative expenses and research and development expenses, decreased 14.8% to $4,443,000 for the second quarter of 2024 compared to $5,213,000 for the same period of 2023. Included within operating expenses for the second quarters of 2024 and 2023 were $72,000 and $323,000, respectively, of non-cash equity compensation expense.

Net loss for the three months ended June 30, 2024 improved by $726,000 to ($127,000) or ($0.01) per diluted share compared to net loss of ($853,000) or ($0.04) per diluted share for the same period in 2023.

Adjusted EBITDA (earnings before interest and other income, provision for income taxes, sales tax accruals, depreciation, amortization, stock-based compensation expense and certain non-recurring charges) decreased by $106,000 to (70,000) for the second quarter of 2024 as compared to a gain of $36,000 for the same period of 2023. A reconciliation of adjusted EBITDA to net loss is provided in this release.

As of June 30, 2024, the Company had cash and cash equivalents that totaled $7.3 million and stockholders’ equity totaled $17.3 million.

The unaudited financial results reported today do not consider any adjustments that may be required in connection with the completion of the Company’s review process and should be considered preliminary until Intellicheck files its Form 10-Q for the three months ended June 30, 2024.

Conference Call Information

The Company will hold an earnings conference call on August 8 at 4:30 p.m. ET/1:30 p.m. PT to discuss operating results. To listen to the earnings conference call, please dial 877-407-8037. For callers outside the U.S., please dial 201-689-8037.

A replay of the conference call will be available shortly after completion of the live event. To listen to the replay, please dial 877-660-6853 and use conference identification number 13745588. For callers outside the U.S., please dial 201-612-7415 and use conference identification number 13745588. The replay will be available beginning approximately three hours after the completion of the live event and will remain available until August 15, 2024.

INTELLICHECK, INC.
UNAUDITED CONDENSED BALANCE SHEETS JUNE 30, 2024 and DECEMBER 31, 2023 (in thousands, except share and per share amounts)
	June 30, 2024				December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	7,260			$	3,980
Short-term investments		—				5,000
Accounts receivable, net of allowance of $85 and $69 at March 31, 2024 and December 31, 2023, respectively		3,315				4,703
Other current assets		645				692
Total current assets		11,220				14,375
PROPERTY AND EQUIPMENT, NET		592				666
GOODWILL		8,102				8,102
INTANGIBLE ASSETS, NET		1,912				575
OTHER ASSETS		90				90
Total assets	$	21,916			$	23,808
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	909			$	884
Accrued expenses		1,902				3,245
Equity awards liability		—				4
Liability for shares withheld		—				190
Deferred revenue		1,798				2,209
Total current liabilities		4,609				6,532
OTHER LIABILITIES:
Deferred revenue, long-term portion		—				—
Total liabilities		4,609				6,532
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Preferred stock - $0.01 par value; 30,000 shares authorized; Series A convertible preferred stock, zero shares issued and outstanding at June 30, 2024 and December 31, 2023 respectively		—				—
Common stock - $0.001 par value; 40,000,000 shares authorized; 19,492,702 and 19,354,335 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		19				19
Additional paid-in capital		151,422				150,822
Accumulated deficit		(134,134	)			(133,565	)
Total stockholders’ equity		17,307				17,276
Total liabilities and stockholders’ equity	$	21,916			$	23,808

INTELLICHECK, INC.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 (in thousands, except share and per share amounts)
	Three months ended June 30,								Six months ended June 30,
	2024				2023				2024				2023
REVENUES	$	4,672			$	4,716			$	9,352			$	8,970
COST OF REVENUES		(444	)			(352	)			(879	)			(684	)
Gross profit		4,228				4,364				8,473				8,286
OPERATING EXPENSES
Selling, general and administrative		3,608				3,937				7,544				7,931
Research and development		835				1,276				1,653				2,584
Total operating expenses		4,443				5,213				9,197				10,515
Loss from operations		(215	)			(849	)			(724	)			(2,229	)
OTHER INCOME
Interest and other income		88				—				157				1
Total other income		88				—				157				1
Net loss before provision for income taxes		(127	)			(849	)			(567	)			(2,228	)
Provision for income taxes		—				4				2				12
Net loss	$	(127	)		$	(853	)		$	(569	)		$	(2,240	)
PER SHARE INFORMATION
Loss per common share -
Basic/Diluted	$	(0.01	)		$	(0.04	)		$	(0.03	)		$	(0.12	)
Weighted average common shares used in computing per share amounts -
Basic/Diluted		19,467,162				19,120,327				19,492,702				19,168,534

INTELLICHECK, INC.
UNAUDITED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 (in thousands, except share amounts)
	Three months ended June 30, 2024
	Common Stock						Additional Paid-in Capital				Accumulated Deficit				Total Stockholders’ Equity
	Shares			Amount
BALANCE, March 31, 2024	19,404,561			$	19		$	151,166			$	(134,007	)		$	17,178
Stock-based compensation	–				–			256				–				256
Stock option exercises, net of cashless exercises	4,875				–			–				–				—
Issuance of shares for vested restricted stock grants	83,266				–			–				–				–
Net loss	–				–			–				(127	)			(127	)
BALANCE, June 30, 2024	19,492,702			$	19		$	151,422			$	(134,134	)		$	17,307

	Three months ended June 30, 2023
	Common Stock						Additional Paid-in Capital				Accumulated Deficit				Total Stockholders’ Equity
	Shares			Amount
BALANCE, March 31, 2023	19,215,863			$	19		$	149,875			$	(132,972	)		$	16,922
Stock-based compensation	–				–			338				–				338
Issuance of shares for vested restricted stock grants	60,777				–			–				–				–
Shares forfeited in exchange for withholding taxes	(24,720	)			–			(54	)			—				(54	)
Net loss	–				–			–				(853	)			(853	)
BALANCE, June 30, 2023	19,251,920			$	19		$	150,159			$	(133,825	)		$	16,353

INTELLICHECK, INC.
UNAUDITED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 (in thousands, except share amounts)
	Six months ended June 30, 2024
	Common Stock							Additional Paid-in Capital			Accumulated Deficit				Total Stockholders’ Equity
	Shares			Amount
BALANCE, December 31, 2023	19,354,335			$	19			$	150,822		$	(133,565	)		$	17,276
Stock-based compensation	–				–				600			–				600
Stock option exercises, net of cashless exercises	4,875				–				–			–				—
Issuance of common stock for vested restricted stock units and earned performance stock units	133,492				–				–			–				–
Shares forfeited in exchange for withholding taxes	–				–				–			–				–
Net loss	–				–				–			(569	)			(569	)
BALANCE, June 30, 2024	19,492,702			$	19			$	151,422		$	(134,134	)		$	17,307

	Six months ended June 30, 2023
	Common Stock						Additional Paid-in Capital				Accumulated Deficit				Total Stockholders’ Equity
	Shares			Amount
BALANCE, December 31, 2022	18,957,366			$	19		$	149,233			$	(131,585	)		$	17,667
Stock-based compensation	–				–			980				–				980
Issuance of common stock for vested restricted stock units and earned performance stock units	319,274				–			–				–				–
Shares forfeited in exchange for withholding taxes	(24,720	)			–			(54	)			–				(54	)
Net loss	–				–			–				(2,240	)			(2,240	)
BALANCE, June 30, 2023	19,251,920			$	19		$	150,159			$	(133,825	)		$	16,353

INTELLICHECK, INC.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023
	Six months ended June 30,
	(In thousands)
	2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(569	)		$	(2,240	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		145				139
Stock-based compensation		405				1,005
Allowance for credit losses		18				16
Change in accrued interest and accretion of discount on short-term investments		—				(2	)
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable		1,371				(133	)
Decrease (Increase) in other current assets and long-term assets		47				(178	)
(Decrease) Increase in accounts payable and accrued expenses		(1,318	)			125
(Decrease) Increase in deferred revenue		(411	)			412
Net cash used in operating activities		(312	)			(856	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(19	)			(31	)
Proceeds from maturity of short-term investments		5,000				—
Software development costs		(1,389	)			—
Net cash provided by (used in) investing activities		3,592				(31	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of insurance financing arrangement		—				49
Withholding taxes paid on RSU vesting		—				(54	)
Repayment of insurance financing arrangements		—				(119	)
Net cash used in financing activities		—				(124	)
Net increase (decrease) in cash		3,280				(1,011	)
CASH, beginning of period		3,980				5,196
CASH, end of period	$	7,260			$	4,185
Supplemental disclosures of cash flow information:
Cash paid for interest	$	—			$	2
Cash paid for income taxes	$	—			$	87

Adjusted EBITDA

We use Adjusted EBITDA as a non-GAAP financial performance measurement. Adjusted EBITDA is calculated by adjusting net loss for certain reductions such as interest and other income and certain addbacks such as income taxes, sales tax accruals, depreciation, amortization, and stock-based compensation expense. Adjusted EBITDA is provided to investors to supplement the results of operations reported in accordance with GAAP. Management believes that Adjusted EBITDA provides an additional tool for investors to use in comparing our financial results with other companies that also use Adjusted EBITDA in their communications to investors. By excluding non-cash charges such as sales tax accruals, amortization, depreciation, and stock-based compensation, as well as non-operating charges for interest and income taxes, investors can evaluate our operations and can compare the results on a more consistent basis to the results of other companies. In addition, Adjusted EBITDA is one of the primary measures management uses to monitor and evaluate financial and operating results.

We consider Adjusted EBITDA to be an important indicator of our operational strength and performance of our business and a useful measure of our historical operating trends. However, there are significant limitations to the use of Adjusted EBITDA since it excludes, interest and other income, stock-based compensation expense, all of which impact our profitability, as well as depreciation and amortization related to the use of long-term assets which benefit multiple periods. We believe that these limitations are compensated by providing Adjusted EBITDA only with GAAP net loss and clearly identifying the difference between the two measures. Consequently, Adjusted EBITDA should not be considered in isolation or as a substitute for net loss presented in accordance with GAAP. Adjusted EBITDA as defined by us may not be comparable with similarly named measures provided by other companies.

The reconciliation of GAAP net loss to Non-GAAP Adjusted EBITDA is as follows:

	Three Months Ended June 30								Six Months Ended June 30
	2024				2023				2024				2023
Net loss	$	(127	)		$	(853	)		$	(569	)		$	2,240
Reconciling items:
Non-restructuring severance expenses		—				417				—				417
Provision for income taxes		—				4				3				12
Interest and other income		(88	)			—				(157	)			(1	)
Sales tax accrual		—				76				—				147
Depreciation and amortization		73				69				145				139
Stock-based compensation including liability classified awards		72				323				405				1,005
Adjusted EBITDA	$	(70	)		$	36			$	(173	)		$	(521	)

About Intellicheck

Intellicheck (Nasdaq: IDN) is an identity company that delivers on-demand digital and physical identity validation solutions for KYC, AML, fraud, and age verification needs. Intellicheck validates identities for financial services, fintech companies, BNPL providers, e-commerce, and retail commerce businesses, law enforcement and government agencies across North America. Intellicheck can be used through a mobile device, a browser, or a retail point-of-sale scanner. For more information on Intellicheck, visit us on the web and follow us on LinkedIn, X, Facebook, and YouTube.

Safe Harbor Statement

Statements in this news release about Intellicheck’s future expectations, including: the advantages of our products, future demand for Intellicheck’s existing and future products, whether revenue and other financial metrics will improve in future periods, whether Intellicheck will be able to execute its turn-around plan or whether successful execution of the plan will result in increased revenues, whether sales of our products will continue at historic levels or increase, whether brand value and market awareness will grow, whether the Company can leverage existing partnerships or enter into new ones, whether there will be any impact on sales and revenues due to an epidemic, pandemic or other public health issue and all other statements in this release, other than historical facts, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). These statements, which express management’s current views concerning future events, trends, contingencies or results, appear at various places in this release and use words like “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “potential,” “predict,” “project,” “sense”, “strategy,” “target” and similar terms, and future or conditional tense verbs like “could,” “may,” “might,” “should,” “will” and “would” are forward-looking statements within the meaning of the PSLRA. This statement is included for the express purpose of availing Intellicheck, Inc. of the protections of the safe harbor provisions of the PSLRA. It is important to note that actual results and ultimate corporate actions could differ materially from those in such forward-looking statements based on such factors as: market acceptance of our products and the presently anticipated growth in the commercial adoption of our products and services; our ability to successfully transition pilot programs into formal commercial scale programs; continued adoption of our SaaS product offerings; changing levels of demand for our current and future products; our ability to reduce or maintain expenses while increasing sales; our ability to successfully expand the sales of our products and services into new areas including health care and auto dealerships; customer results achieved using our products in both the short and long term; success of future research and development activities; the impact of inflation on our business and customer’s businesses and any effect this has on economic activity with our customer’s businesses; our ability to successfully market and sell our products, any delays or difficulties in our supply chain coupled with the typically long sales and implementation cycle for our products; our ability to enforce our intellectual property rights; changes in laws and regulations applicable to the our products; our continued ability to access government-provided data; the risks inherent in doing business with the government including audits and contract cancellations; liability resulting from any security breaches or product failure, together with other risks detailed from time to time in our reports filed with the SEC. We do not assume any obligation to update the forward-looking information.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240808901864/en/

Investor Relations: Gar Jackson (949) 873-2789 / gjackson@intellicheck.com

Media and Public Relations: Sharon Schultz (302) 539-3747 / sschultz@intellicheck.com

Source: Intellicheck, Inc.

FAQ

What were Intellicheck's Q2 2024 total revenues?

Intellicheck's total revenues for Q2 2024 were $4.672 million, a 0.9% decrease compared to the same period in 2023.

How did Intellicheck's SaaS revenue perform in Q2 2024?

Intellicheck's SaaS revenue declined by 0.8% to $4.627 million in Q2 2024.

What was Intellicheck's net loss for Q2 2024?

Intellicheck reported a net loss of $127,000 or $0.01 per diluted share for Q2 2024.

How much cash did Intellicheck have as of June 30, 2024?

As of June 30, 2024, Intellicheck had $7.3 million in cash and cash equivalents.

What was Intellicheck's gross profit percentage in Q2 2024?

Intellicheck's gross profit percentage was 90.5% in Q2 2024, slightly down from 92.5% in Q2 2023.

When will Intellicheck hold its earnings conference call?

Intellicheck will hold its earnings conference call on August 8, 2024, at 4:30 p.m. ET.