Intellicheck, Inc. Q1 FY2025 earnings call

Bryan Lewis mentioned that since joining, the company's recurring revenue has grown from under $2 million per year to almost $20 million last year, with $10 million in annual contract value renewed in Q1 2025. The company retooled its tech stack leveraging AI and data science, and is making progress on the AWS migration, having migrated three large clients in April and scheduling 11 more large clients to move. Sales updates include a provider of revolving credit products going live in Q1 with the full release expected in Q2, a client using the company for email password resets rolling out to Canada, and a large title company going live and integrating with the API. Marketing metrics improved with LinkedIn followers up 16%, YouTube video views up 141%, website visitors up 34%, and visitors staying 10% longer. The company attended investor conferences like iAccess Virtual and Planet MicroCap, with investor interest strengthened by its market differentiator in ID validations, high gross margins, and diversification strategy.

First quarter revenues for Intellicheck were 5% higher than the prior year, reaching a first quarter record of $4,894,000 compared to $4,680,000 in the same period of 2024. SaaS revenue for the first quarter of 2025 grew 6% to $4,868,000, representing over 99% of the first quarter revenue. Gross profit as a percentage of revenues was 89.7% for the quarter, while adjusted gross margin improved to 91.8% in Q1 2025. Revenue from title insurance saw growth, with the company working with title insurance companies handling approximately 40% of all title insurance volume. Retail banking revenue was up about 50% versus Q1 of the prior year, and retail revenue was down 26% from Q1 2024.

The company expects the cash number to be even higher for the second quarter and to end the 2025 year at a level higher than Q1. This reflects discipline on the operating expense side as well as continuing revenue growth, with positive cash flow anticipated for the 2025 year.

Forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. The company has no obligation to update or alter forward-looking statements. Market changes and economic conditions can impact the implementation of strategic initiatives.

Q: How much of the 40% title market exposure is penetration and where does it go?

A: Bryan Lewis stated that 40% is market share, with large companies not fully integrated yet and resellers handling smaller ones, and revenue from title up 350% in Q1.

Q: Outside credit cards, what are the next three largest verticals?

A: Banking, Auto, and age restricted, with retail banking revenue up 50% versus Q1 of the prior year.

Q: Retail down 26% year-over-year in Q1, what's percentage of revenue retail was in Q1?

A: Bryan Lewis said retail and retail banking were about equal in revenue, with age-restricted and auto each around 8%.

Q: Deferred revenue and SaaS RPOs up $3.5 million quarter-over-quarter, what drove it?

A: Bryan Lewis said it's due to moving to a pricing model where customers pay upfront with a slight discount for year-ahead payment.

Q: Update on large social media customer and large regional bank?

A: The large social media customer is satisfied but patient, and the large regional bank's terms are done, going through procurement.

Q: Shipping and logistics, how helping and size?

A: Bryan Lewis said it's used to check CDL validity for truckers, with large losses per truck, starting with one company and now in two others.

Q: Resellers, matured go-to-market strategy?

A: Bryan Lewis said there's plenty of room to improve, with someone hired to light up resellers, especially in banking with small community banks.

Q: Accounts receivable balance climbing, changes to payment terms?

A: Bryan Lewis said it's due to changes in the pricing model to prepay for committed transactions.

Q: Leading indicators, pipeline value?

A: Bryan Lewis said looking at committed or near-committed customers/contracts as leading indicators.

Q: Hiring Tim Poulin, what stood out?

A: Bryan Lewis said like-mindedness in management style and confirmation by outside sources.

Q: Resellers ARR in pipe, direct vs reseller?

A: Bryan Lewis said almost 50-50 in some markets, like automotive and title.

Q: Digital data point, percent of revenue?

A: Bryan Lewis said digital is a growing portion, but the exact number wasn't available.

Q: Background checks vertical, sizing and wins?

A: Bryan Lewis said talking to a couple, with the goal to get big players direct, resellers in the background check space, and a win in December with Accio Data.