Intellicheck, Inc. Q3 FY2025 earnings call

Key Points

• Revenues grew 28% to $6 million in Q3 2025, with a gross margin of 91%, net income of $290,000, and adjusted EBITDA of $631,000 (a third quarter record).
• Significant clients include a regional bank with a 3-year high 7-figure contract, a leading lease-to-own company (+700% growth in Q3), a largest bank/credit card issuer (+60% growth), a top bank renewal, and new agreements with a title insurance company and a top 20 bank.
• Product innovations: New OCR product, hub customer console, updated portal, new desktop application, mobile SDK, and migration of last large bank to AWS.
• Marketing efforts: Presentations at ACAMS, FinnovateFall, Money20/20, and MoneyLIVE, highlighting leadership in ID verification.
• Vertical growth: Progress in background check market, automotive retail, stadium concessions, cargo freight fraud, and a food manufacturer rollout.

Banking and lending grew approximately 80% and represented approximately 50% of quarterly revenue. Retail declined approximately 5% and represented approximately 30% of quarterly revenue. Age-related grew approximately 15% and represented approximately 8% of quarterly revenue. Title grew approximately 120% and represented just over 2% of quarterly revenue.

• Anticipate net income to be slightly positive for the year.
• Anticipate adjusted EBITDA to be positive for the year.
• Peak cash in Q3 2025, may see same or higher cash balances at year-end due to upfront customer payments.

• Economic headwinds affecting retail.
• Volatility in segment mix.
• Slow progress in integrating with POS system providers for stadium concessions.
• Evolving fraud tactics like synthetic identity theft (+311% year-over-year) and deep fakes (+1,100% year-over-year).

Q: Congrats on 28% year-over-year growth. Bryan, are the retail headwinds pretty much gone? What about pricing?

A: Bryan mentioned retail has softened, but diversification helps. On pricing, renewals see price increases, and new clients have significant price hikes.

Q: Just on the SaaS revenue sequential pickup this quarter, any onetime or seasonal factors?

A: Bryan said no onetime factors, with some professional services fees, and the regional bank being a full quarter impact.

Q: As the business branched into new verticals, any new fraud tricks or blind spots?

A: Bryan noted evolving fraud like synthetic identity theft and deep fakes, but Intellicheck's technology stops these.

Q: How are you prioritizing cash? Inorganic opportunities?

A: Bryan said they're focused on executing the current plan, reinvesting in R&D, marketing, and sales, with no immediate plans for large inorganic deals.