VerifyMe, Inc. Q1 FY2025 earnings call

• Revenue decline was due to discontinuing Trust Codes operations, customer in-sourcing in 2024, and soft customer shipments. Premium services were down 47% compared to the comparable quarter.
• Operating expenses reduced by approximately 28% vs Q1 2024, managed in alignment with revenue. Improved gross margin in Precision Logistics' proactive services.
• Initiatives for shareholder value: optimizing direct customer marketing and sales approach with increased inbound lead activity, developing relationships with additional freight carriers and third-party logistics companies, and integrating with e-commerce technology platforms.
• Strategic growth efforts: evaluating transformative and tuck-in acquisitions with a strong balance sheet. Nancy Meyers retiring, Jennifer Cola to become CFO after transition.

In the first quarter of 2025, VerifyMe's revenue decreased approximately 23% compared to the first quarter of the previous year, totaling $4.5 million versus $5.8 million prior year. The decline was most pronounced in premium services, which were down 47%. Gross profit decreased to $1.5 million in Q1 2025 from $2.3 million in Q1 2024. Operating expenses were $2.1 million in Q1 2025, a decrease from $2.9 million in Q1 2024. The cash balance at the end of the first quarter was $5.7 million. The Precision Logistics segment's proactive services saw improved gross margin. Revenue contribution from premium services was significantly lower due to customer in-sourcing and soft shipments, while proactive services within Precision Logistics showed potential for growth.

• No specific revenue guidance provided. Q2 2025 will have challenging comparisons due to prior customer in-sourcing, but comps are expected to ease after Q2. OpEx is a solid baseline with process improvements to scale with revenue as it ramps up.

• Macroeconomic environment impacting revenue and customer shipments. Uncertainty around the success and timing of acquisitions. Dependence on specific customer relationships and freight partners which could affect revenue and growth.

Q: About revenue generation for the authentication business in the quarter A: Nancy Meyers responded it was $26,000 Q: Regarding capital allocation priorities, organic growth focus, and revenue comps A: Adam Stedham discussed organic growth focusing on e-commerce integration, strategic growth considering acquisitions in and outside logistics, and noted Q2 2025 has challenging revenue comps due to prior customer in-sourcing Q: About new customers added, ramp-up of last year's customers A: Adam Stedham said new customer adds in Q1 slowed from last year, new customers added last year are seeing softening from projections as e-commerce softness affects installed customer base Q: Update on ink business and overall comfort with opportunity A: Adam Stedham mentioned having conversations with a company in the ink world related to strategic discussions, and feels comfortable with downside risk due to strong balance sheet, optimistic about upside potential with market changes creating receptive environment for their logistics approach