INTRUSION INC Q2 FY2025 earnings call

• Second quarter marked fifth consecutive quarter of sequential revenue growth with near 0 customer churn.
• Operational deployment of Shield critical infrastructure monitoring and protection capability, including release into AWS marketplace.
• $3.0 million extension and expansion of DoD contract generating incremental revenue.
• Plans to make Shield Cloud generally available on AWS marketplace later this month and on Azure marketplace later this year.
• Partnership with PortNexus to sell Shield endpoint with their solutions, including MyFlare Alert for schools, etc.
• Continued investment in product and sales/marketing despite increased operating expenses.
• Positive impact of federal spending bill on opening doors for government contract expansion.

Total revenues for the second quarter of 2025 were $1.9 million, representing a 6% increase compared to the previous quarter and a 28% increase year-over-year. Consulting revenues in the second quarter totaled $1.4 million, flat compared to the prior quarter and up $0.2 million year-over-year. Shield revenues were $0.5 million, up $0.1 million sequentially and $0.2 million year-over-year. Gross profit margin was 76% for the second quarter of 2025, flat year-over-year. Operating expenses in the second quarter of 2025 totaled $3.5 million, an increase of $0.1 million sequentially and $0.4 million year-over-year. Net loss for the second quarter of 2025 was $2 million or $0.10 per share, better than the net loss of $2.1 million for the second quarter of 2024.

• Anticipate Shield Cloud launch on AWS marketplace later this month with marketing support.
• Plan to make Shield Cloud available on Azure marketplace later this year.
• Goal to achieve cash flow breakeven or positive EBITDA with multiple initiatives like infrastructure, OT product, AWS and Azure marketplaces, and endpoint product.

• Dependence on government contracts and potential changes in government spending.
• Competition in cybersecurity space where perceived competitors may overlap but actual differentiation exists.
• Longer sales cycles for certain critical infrastructure opportunities requiring thorough vetting.

Q: Scott Christian Buck asks if the $3 million DoD contract is an expansion of services or just an extension.

A: Yes, it's both, a renewal of existing contract with increased scope.

Q: Scott Christian Buck asks about broader DoD opportunity and spending bill catalyst.

A: Excited about domestic critical infrastructure opportunities aligned with administration focus, not yet landed but a focus.

Q: Scott Christian Buck asks about sales and marketing for Shield in marketplaces.

A: Using best practices from successful marketplaces, will spend money with expected results.

Q: Scott Christian Buck asks about reseller partners.

A: Refining reseller space, focusing on MSPs/MSSPs, attending trade shows.

Q: Edward Moon Woo asks about enterprise opportunities and budget/sales cycle shifts.

A: New entrant in enterprise, focus on MSPs, long sales cycles for enterprise, interest in OT protection.

Q: Howard Brous asks about timing for revenue and win in schools with PortNexus.

A: Quick sales cycle in schools, longer for critical infrastructure institutions.

Q: Unidentified Analyst asks about timing for breakeven.

A: Goal, near term with good contracts, multiple avenues.

Q: Unidentified Analyst asks about cash flow sustainability.

A: Near term achievable with multiple initiatives.

Q: Unidentified Analyst asks about major competitors.

A: Perceived competitors, unique in space, plan to market differentiation.