VerifyMe Reports Third Quarter 2024 Financial Results
VerifyMe (NASDAQ: VRME) reported Q3 2024 financial results with revenue of $5.4 million, down from $5.6 million in Q3 2023. Gross profit decreased to $1.9 million (35%) from $2.0 million (37%) year-over-year. The company recorded a net loss of ($2.4 million), including $1.8M of one-time adjustments, compared to ($0.9 million) loss in Q3 2023. Adjusted EBITDA remained stable at $0.2 million. The company announced plans to discontinue its Authentication Segment's code portion, including Amazon Transparency initiatives, redirecting investments toward Precision Logistics and other strategic growth options.
VerifyMe (NASDAQ: VRME) ha riportato i risultati finanziari del terzo trimestre 2024, con un fatturato di 5,4 milioni di dollari, in calo rispetto ai 5,6 milioni di dollari del terzo trimestre 2023. Il profitto lordo è diminuito a 1,9 milioni di dollari (35%) rispetto ai 2,0 milioni di dollari (37%) dell'anno precedente. L'azienda ha registrato una perdita netta di (2,4 milioni di dollari), inclusi 1,8 milioni di dollari di aggiustamenti una tantum, rispetto a una perdita di (0,9 milioni di dollari) nel terzo trimestre 2023. L'EBITDA rettificato è rimasto stabile a 0,2 milioni di dollari. L'azienda ha annunciato piani per interrompere la parte di codice nel suo segmento di autenticazione, comprese le iniziative di Amazon Transparency, reindirizzando gli investimenti verso la logistica di precisione e altre opzioni strategiche di crescita.
VerifyMe (NASDAQ: VRME) informó los resultados financieros del tercer trimestre de 2024, con ingresos de 5.4 millones de dólares, en comparación con 5.6 millones de dólares en el tercer trimestre de 2023. El beneficio bruto disminuyó a 1.9 millones de dólares (35%) desde 2.0 millones de dólares (37%) interanual. La compañía registró una pérdida neta de (2.4 millones de dólares), incluidos 1.8 millones de dólares de ajustes extraordinarios, en comparación con la pérdida de (0.9 millones de dólares) en el tercer trimestre de 2023. El EBITDA ajustado se mantuvo estable en 0.2 millones de dólares. La empresa anunció planes para descontinuar la parte de código de su segmento de autenticación, incluidas las iniciativas de Amazon Transparency, redirigiendo inversiones hacia la logística de precisión y otras opciones estratégicas de crecimiento.
VerifyMe (NASDAQ: VRME)는 2024년 3분기 재무 실적을 발표했으며, 수익은 540만 달러로 2023년 3분기의 560만 달러에서 감소했습니다. 총 이익은 전년 대비 190만 달러 (35%)로 줄어들었습니다. 회사는 일회성 조정비용 180만 달러를 포함하여 (240만 달러)의 순손실을 기록했으며, 2023년 3분기의 (90만 달러) 손실과 비교됩니다. 조정된 EBITDA는 20만 달러로 안정적이었습니다. 회사는 인증 부문의 코드 부분 및 Amazon Transparency 이니셔티브를 중단하고, 정밀 물류 및 기타 전략적 성장 옵션으로 투자를 전환할 계획을 발표했습니다.
VerifyMe (NASDAQ: VRME) a annoncé ses résultats financiers pour le troisième trimestre 2024, avec des revenus de 5,4 millions de dollars, en baisse par rapport à 5,6 millions de dollars au troisième trimestre 2023. Le bénéfice brut a diminué à 1,9 million de dollars (35%) contre 2,0 millions de dollars (37%) d'une année sur l'autre. L'entreprise a enregistré une perte nette de (2,4 millions de dollars), y compris 1,8 million de dollars d'ajustements exceptionnels, par rapport à une perte de (0,9 million de dollars) au troisième trimestre 2023. L'EBITDA ajusté est resté stable à 0,2 million de dollars. L'entreprise a annoncé des plans pour interrompre la partie code de son segment d'authentification, y compris les initiatives Amazon Transparency, en redirigeant les investissements vers la logistique de précision et d'autres options stratégiques de croissance.
VerifyMe (NASDAQ: VRME) gab die finanziellen Ergebnisse für das dritte Quartal 2024 bekannt, mit einem Umsatz von 5,4 Millionen Dollar, der im Vergleich zu 5,6 Millionen Dollar im dritten Quartal 2023 zurückgegangen ist. Der Bruttogewinn sank auf 1,9 Millionen Dollar (35%) von 2,0 Millionen Dollar (37%) im Vorjahr. Das Unternehmen verzeichnete einen Nettoverlust von (2,4 Millionen Dollar), einschließlich 1,8 Millionen Dollar an einmaligen Anpassungen, im Vergleich zum Verlust von (0,9 Millionen Dollar) im dritten Quartal 2023. Das bereinigte EBITDA blieb mit 0,2 Millionen Dollar stabil. Das Unternehmen kündigte Pläne an, den Code-Bereich seines Authentifizierungssegments einzustellen, einschließlich der Amazon Transparency-Initiativen, und die Investitionen in die Präzisionslogistik und andere strategische Wachstumsoptionen umzuleiten.
- Maintained positive Adjusted EBITDA of $0.2 million for fifth consecutive quarter
- Organic growth and profit improvement in Proactive services within Precision Logistics segment
- Projects positive adjusted EBITDA for full year 2024
- Revenue declined 3.6% YoY to $5.4 million
- Gross profit margin decreased from 37% to 35% YoY
- Net loss increased to $2.4 million from $0.9 million YoY
- Discontinuing Authentication Segment's code portion due to lack of success
Insights
The Q3 2024 results reveal concerning trends for VerifyMe. Revenue declined
The strategic pivot away from the Authentication Segment's code business, including abandoning the Amazon Transparency opportunity, signals a major restructuring. While this may reduce cash burn, it represents a significant shift from the company's original value proposition. The focus on Precision Logistics' Proactive services shows promise but needs to demonstrate meaningful growth to offset the abandoned business lines.
With a market cap of just
- Quarterly revenue of
$5.4 million $5.6 million - Gross Profit of
$1.9 million 35% in Q3 2024, compared to$2.0 million 37% in Q3 2023 - Net loss of
( in Q3 2024, including$2.4) million $1.8M ( in Q3 2023$0.9) million - Adjusted EBITDA1 of
$0.2 million $0.2 million
Adam Stedham, VerifyMe's CEO and President stated, "The Company reported third quarter positive adjusted EBITDA and continues to project a positive adjusted EBITDA for the full year of 2024.2 This quarter represents our fifth quarter of positive adjusted EBITDA, and we are committed to continuing this path. As previously stated, we believe the Proactive services within Precision Logistics represent a significant opportunity for organic growth and cashflow creation. We dedicated additional sales investment within this segment, and I am pleased with the organic growth and profit improvement of our Proactive services. However, the lack of success across initiatives within the code portion of our Authentication Segment has continued into Q3. We believe the best path for creating shareholder value is to discontinue the codes portion of the Authentication Segment, including no longer pursuing the opportunity with Amazon Transparency, due to the significant investment required. We will redirect that investment into Precision Logistics, ink or other strategic growth options. We believe that maximizing our investment in this area creates the best opportunity to enable meaningful value for our shareholders."
(1) | Adjusted EBITDA is a non-GAAP financial measure. See "Use of Non-GAAP Financial Measures" below for information about this non-GAAP measure. A reconciliation to the most directly comparable GAAP measure, net loss, is included as a schedule to this release. |
(2) | Projections are based on Company estimates as of November 12, 2024, and are provided solely for illustrative purposes. Actual results may vary. The Company undertakes no obligation to update this information. For forward-looking Adjusted EBITDA, a reconciliation to its nearest GAAP measure, net income (loss) is unavailable on a forward -looking basis without unreasonable effort due to the components of the GAAP-measure that are indeterminable as of the date of this press release. |
Key Financial Highlights for Q3 2024:
- Quarterly consolidated revenue of
$5.4 million $5.6 million - Gross profit of
$1.9 million 35% in Q3 2024, compared to$2.0 million 37% in Q3 2023 - Net loss of
( or ($2.4) million $0.23 $1.8M ( or ($0.9) million $0.09 - Adjusted EBITDA(1) of
$0.2 million $0.2 million - Cash of
$2.6 million
Financial Results for the Three Months Ended September 30, 2024:
Revenue in Q3 2024 was
Gross profit in Q3 2024 was
Operating loss in Q3 2024 was
Our net loss in Q3 2024 was
Adjusted EBITDA in Q3 2024 and Q3 2023 was
Adam Stedham, VerifyMe's CEO and President stated, "The Company reported a year-to-date Adjusted EBITDA at the end of the third quarter 2024 that exceeds our whole year 2023 Adjusted EBITDA. We are pleased with the meaningful growth in Adjusted EBITDA and believe we have a path for Adjusted EBITDA growth in 2025 compared to 2024. Our decision to discontinue pursuing the codes element of our Authentication Segment is a surprising change of strategy, but after careful consideration, I believe it will contribute to further growth in Adjusted EBITDA and importantly shareholder value. We have engaged with bankers and advisors regarding strategic growth opportunities, and we are encouraged by the opportunities we see so far."
At September 30, 2024, VerifyMe had a
At September 30, 2024, VerifyMe had 10,715,065 shares issued and 10,444,698 shares outstanding.
Earnings Call
The Company has scheduled an earnings conference call and webcast for 11:00 a.m. ET on Tuesday November 12, 2024. Prepared remarks regarding the company's financial and operational results will be followed by a question and answer period with VerifyMe's executive team. The conference call may be accessed via webcast at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=Bf7qeSnH or by calling +1 (844) 282-4569 within the US, or +1 (412) 317-5614 internationally, and requesting the "VerifyMe Call." The presentation slides broadcast via the webcast will also be available on the Investors section of the VerifyMe website the morning of the call. Participants must be logged in via telephone to submit a question to management during the call. Participants may optionally pre-register for the conference call and webcast at: https://dpregister.com/sreg/10193901/fdcff0b732.
The webcast and presentation will be archived on the Investors section of VerifyMe's website and will remain available for 90 days.
About VerifyMe, Inc.
VerifyMe, Inc. (NASDAQ: VRME), together with its subsidiaries, PeriShip Global and Trust Codes Global, is a traceability and customer support services provider using specialized software and process technology. The company operates a Precision Logistics Segment and an Authentication Segment to provide specialized logistics for time-and-temperature sensitive products, as well as item level traceability, anti-diversion and anti-counterfeit protection, brand protection and enhancement technology solutions. VerifyMe serves customers worldwide. To learn more, visit https://www.verifyme.com.
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "continues," "project," "will," and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include our engagement in future acquisitions or strategic partnerships that increase our capital requirements or cause us to incur debt or assume contingent liabilities, our reliance on one key strategic partner for shipping services in our Precision Logistics segment, competition including by our key strategic partner, seasonal trends in our business, severe climate conditions, the highly competitive nature of the industry in which we operate, our brand image and corporate reputation, impairments related to our goodwill and other intangible assets, economic and other factors such as recessions, downturns in the economy, inflation, global uncertainty and instability, the effects of pandemics, changes in
Use of Non-GAAP Financial Measures
This press release includes both financial measures in accordance with
VerifyMe's management uses and relies on EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. The Company believes that both management and shareholders benefit from referring to EBITDA and Adjusted EBITDA in planning, forecasting and analyzing future periods. Additionally, the Company believes Adjusted EBITDA is useful to investors to evaluate its results because it excludes certain items that are not directly related to the Company's core operating performance. In particular, with regard to our comparison of Adjusted EBITDA for the three and nine months ended September 30, 2024, to the three and nine months ended September 30, 2023, we believe is useful to investors in understanding the results of operations. The Company's management uses these non-GAAP financial measures in evaluating its financial and operational decision making and as a means to evaluate period-to-period comparison. The Company's management recognizes that EBITDA and Adjusted EBITDA, as non-GAAP financial measures, have inherent limitations because of the described excluded items.
The Company defines EBITDA as net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization. Adjusted EBITDA represents EBITDA plus non-cash stock compensation expense, severance expense, unrealized (gain) loss on equity investment, impairments, change in fair value of contingent consideration and one-time professional expenses for acquisitions. VerifyMe believes EBITDA and Adjusted EBITDA are important measures of VerifyMe's operating performance because they allow management, investors and analysts to evaluate and assess VerifyMe's core operating results from period-to-period after removing the impact of items of a non-operational nature that affect comparability.
A reconciliation of EBITDA and Adjusted EBITDA to the most comparable financial measure, net loss, calculated in accordance with GAAP is included in a schedule to this press release. The Company believes that providing the non-GAAP financial measure, together with the reconciliation to GAAP, helps investors make comparisons between VerifyMe and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable SEC rules as the presentation here may not be comparable to other similarly titled measures of other companies.
VerifyMe, Inc. | ||||||||
As of | ||||||||
September 30, 2024 | December 31, 2023 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents including restricted cash | $ | 2,610 | $ | 3,095 | ||||
Accounts receivable, net of allowance for credit loss reserve, | 1,200 | 3,017 | ||||||
Unbilled revenue | 786 | 1,282 | ||||||
Prepaid expenses and other current assets | 205 | 254 | ||||||
Inventory | 19 | 38 | ||||||
TOTAL CURRENT ASSETS | 4,820 | 7,686 | ||||||
PROPERTY AND EQUIPMENT, NET | $ | 159 | $ | 240 | ||||
RIGHT OF USE ASSET | 339 | 468 | ||||||
INTANGIBLE ASSETS, NET | 5,523 | 6,927 | ||||||
GOODWILL | 3,988 | 5,384 | ||||||
TOTAL ASSETS | $ | 14,829 | $ | 20,705 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Term note, current | $ | 500 | $ | 500 | ||||
Accounts payable | 1,622 | 3,310 | ||||||
Other accrued expense | 455 | 988 | ||||||
Lease liability- current | 166 | 170 | ||||||
Contingent liability- current | 22 | 173 | ||||||
TOTAL CURRENT LIABILITIES | 2,765 | 5,141 | ||||||
LONG-TERM LIABILITIES | ||||||||
Contingent liability, non-current | $ | - | $ | 751 | ||||
Long-term lease liability | 184 | 307 | ||||||
Term note | 500 | 875 | ||||||
Convertible Note – related party | 450 | 475 | ||||||
Convertible Note | 650 | 625 | ||||||
TOTAL LIABILITIES | $ | 4,549 | $ | 8,174 | ||||
STOCKHOLDERS' EQUITY | ||||||||
Series A Convertible Preferred Stock, | - | - | ||||||
Series B Convertible Preferred Stock, | - | - | ||||||
Common stock, | 11 | 10 | ||||||
Additional paid in capital | 95,991 | 95,031 | ||||||
Treasury stock at cost; 270,367 and 329,351 shares at September 30, 2024 and December | (464) | (659) | ||||||
Accumulated deficit | (85,172) | (81,849) | ||||||
Accumulated other comprehensive loss | (86) | (2) | ||||||
STOCKHOLDERS' EQUITY | 10,280 | 12,531 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 14,829 | $ | 20,705 | ||||
VerifyMe, Inc. | |||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||
September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||||||||||||||||||||||
NET REVENUE | $ | 5,435 | $ | 5,604 | $ | 16,546 | $ | 16,600 | |||||||||||||||||||||||||||||||||
COST OF REVENUE(a) | 3,540 | 3,558 | 10,301 | 11,447 | |||||||||||||||||||||||||||||||||||||
GROSS PROFIT | 1,895 | 2,046 | 6,245 | 5,153 | |||||||||||||||||||||||||||||||||||||
OPERATING EXPENSES | |||||||||||||||||||||||||||||||||||||||||
Segment management and Technology(a) | 1,329 | 1,341 | 4,189 | 3,697 | |||||||||||||||||||||||||||||||||||||
General and administrative (a) | 778 | 1,178 | 2,780 | 3,393 | |||||||||||||||||||||||||||||||||||||
Research and development | 5 | 5 | 65 | 23 | |||||||||||||||||||||||||||||||||||||
Sales and marketing (a) | 401 | 377 | 999 | 1,403 | |||||||||||||||||||||||||||||||||||||
Goodwill and Intangible asset impairment | 2,252 | - | 2,265 | 34 | |||||||||||||||||||||||||||||||||||||
Total Operating expenses | 4,765 | 2,901 | 10,298 | 8,550 | |||||||||||||||||||||||||||||||||||||
LOSS BEFORE OTHER INCOME (EXPENSE) | (2,870) | (855) | (4,053) | (3,397) | |||||||||||||||||||||||||||||||||||||
OTHER (EXPENSE) INCOME | |||||||||||||||||||||||||||||||||||||||||
Interest expenses, net | (29) | (39) | (109) | (127) | |||||||||||||||||||||||||||||||||||||
Unrealized loss on equity investment | - | - | - | (2) | |||||||||||||||||||||||||||||||||||||
Change in fair value of contingent consideration | 475 | (36) | 839 | 136 | |||||||||||||||||||||||||||||||||||||
Other expense, net | - | - | - | (2) | |||||||||||||||||||||||||||||||||||||
TOTAL OTHER INCOME (EXPENSE), NET | 446 | (75) | 730 | 5 | |||||||||||||||||||||||||||||||||||||
NET LOSS | |||||||||||||||||||||||||||||||||||||||||
$ | (2,424) | $ | (930) | $ | (3,323) | $ | (3,392) | ||||||||||||||||||||||||||||||||||
LOSS PER SHARE | |||||||||||||||||||||||||||||||||||||||||
BASIC | (0.23) | (0.09) | (0.32) | (0.35) | |||||||||||||||||||||||||||||||||||||
DILUTED | (0.23) | (0.09) | (0.32) | (0.35) | |||||||||||||||||||||||||||||||||||||
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING | |||||||||||||||||||||||||||||||||||||||||
BASIC | 10,603,747 | 9,879,202 | 10,306,392 | 9,732,619 | |||||||||||||||||||||||||||||||||||||
DILUTED | 10,603,747 | 9,879,202 | 10,306,392 | 9,732,619 | |||||||||||||||||||||||||||||||||||||
(a) | Includes share-based compensation of |
VerifyMe, Inc.
| |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net Loss (GAAP) | $ | (2,424) | $ | (930) | $ | (3,323) | $ | (3,392) | |||||||
Interest expense, net | 29 | 39 | 109 | 127 | |||||||||||
Amortization and depreciation | 306 | 295 | 905 | 835 | |||||||||||
Total EBITDA (Non-GAAP) | (2,089) | (596) | (2,309) | (2,430) | |||||||||||
Adjustments: | |||||||||||||||
Stock based compensation | 85 | 5 | 174 | 46 | |||||||||||
Fair value of restricted stock and restricted stock units issued in exchange for services | 401 | 484 | 1,009 | 932 | |||||||||||
Severance | - | 247 | 141 | 579 | |||||||||||
Unrealized loss on equity investment | - | - | - | 2 | |||||||||||
Change in fair value of contingent consideration | (475) | 36 | (839) | (136) | |||||||||||
Impairments | 2,252 | - | 2,265 | 34 | |||||||||||
One-time professional expenses for acquisitions | - | - | - | 278 | |||||||||||
Total Adjusted EBITDA (Non-GAAP) | $ | 174 | $ | 176 | $ | 441 | $ | (695) | |||||||
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SOURCE VerifyMe, Inc.
FAQ
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