Intellicheck Announces Second Quarter 2024 Financial Results

Continued Operating Expense and Net Income  Improvements

Intellicheck, Inc. (NASDAQ:IDN), an industry-leading identity company delivering on-demand digital and physical identity validation solutions, today announced its financial results for the second quarter ended June 30, 2024. Total revenue for the second quarter ended June 30, 2024 declined 0.9% to $4,672,000 compared to $4,716,000 in the same period of 2023. SaaS revenue declined 0.8% and totaled $4,627,000 compared to $4,663,000 in the same period of 2023.

"Our focus on innovation and market expansion has set the stage for future financial growth. We believe our market diversification strategy is already showing its value in the face of economic variability in key markets such as retail. Going forward, we expect those headwinds will become tailwinds that will contribute to our growth and profitability," said Intellicheck CEO Bryan Lewis.

Gross profit as a percentage of revenues was 90.5%, in line with expectations, for the three months ended June 30, 2024 compared to 92.5% in the same period in 2023.

Operating expenses for the three months ended June 30, 2024, which consist of selling, general and administrative expenses and research and development expenses, decreased 14.8% to $4,443,000 for the second quarter of 2024 compared to $5,213,000 for the same period of 2023. Included within operating expenses for the second quarters of 2024 and 2023 were $72,000 and $323,000, respectively, of non-cash equity compensation expense.

Net loss for the three months ended June 30, 2024 improved by $726,000 to ($127,000) or ($0.01) per diluted share compared to net loss of ($853,000) or ($0.04) per diluted share for the same period in 2023.

Adjusted EBITDA (earnings before interest and other income, provision for income taxes, sales tax accruals, depreciation, amortization, stock-based compensation expense and certain non-recurring charges) decreased by $106,000 to (70,000) for the second quarter of 2024 as compared to a gain of $36,000 for the same period of 2023. A reconciliation of adjusted EBITDA to net loss is provided in this release.

As of June 30, 2024, the Company had cash and cash equivalents that totaled $7.3 million and stockholders' equity totaled $17.3 million.

The unaudited financial results reported today do not consider any adjustments that may be required in connection with the completion of the Company's review process and should be considered preliminary until Intellicheck files its Form 10-Q for the three months ended June 30, 2024.

Conference Call Information

The Company will hold an earnings conference call on August 8 at 4:30 p.m. ET/1:30 p.m. PT to discuss operating results. To listen to the earnings conference call, please dial 877-407-8037. For callers outside the U.S., please dial 201-689-8037.

A replay of the conference call will be available shortly after completion of the live event. To listen to the replay, please dial 877-660-6853 and use conference identification number 13745588. For callers outside the U.S., please dial 201-612-7415 and use conference identification number 13745588. The replay will be available beginning approximately three hours after the completion of the live event and will remain available until August 15, 2024.

Adjusted EBITDA

We use Adjusted EBITDA as a non-GAAP financial performance measurement. Adjusted EBITDA is calculated by adjusting net loss for certain reductions such as interest and other income and certain addbacks such as income taxes, sales tax accruals, depreciation, amortization, and stock-based compensation expense. Adjusted EBITDA is provided to investors to supplement the results of operations reported in accordance with GAAP. Management believes that Adjusted EBITDA provides an additional tool for investors to use in comparing our financial results with other companies that also use Adjusted EBITDA in their communications to investors. By excluding non-cash charges such as sales tax accruals, amortization, depreciation, and stock-based compensation, as well as non-operating charges for interest and income taxes, investors can evaluate our operations and can compare the results on a more consistent basis to the results of other companies. In addition, Adjusted EBITDA is one of the primary measures management uses to monitor and evaluate financial and operating results.

We consider Adjusted EBITDA to be an important indicator of our operational strength and performance of our business and a useful measure of our historical operating trends. However, there are significant limitations to the use of Adjusted EBITDA since it excludes, interest and other income, stock-based compensation expense, all of which impact our profitability, as well as depreciation and amortization related to the use of long-term assets which benefit multiple periods. We believe that these limitations are compensated by providing Adjusted EBITDA only with GAAP net loss and clearly identifying the difference between the two measures. Consequently, Adjusted EBITDA should not be considered in isolation or as a substitute for net loss presented in accordance with GAAP. Adjusted EBITDA as defined by us may not be comparable with similarly named measures provided by other companies.

The reconciliation of GAAP net loss to Non-GAAP Adjusted EBITDA is as follows:

About Intellicheck

Intellicheck (NASDAQ:IDN) is an identity company that delivers on-demand digital and physical identity validation solutions for KYC, AML, fraud, and age verification needs. Intellicheck validates identities for financial services, fintech companies, BNPL providers, e-commerce, and retail commerce businesses, law enforcement and government agencies across North America. Intellicheck can be used through a mobile device, a browser, or a retail point-of-sale scanner. For more information on Intellicheck, visit us on the web and follow us on LinkedIn, X, Facebook, and YouTube.

Safe Harbor Statement

Statements in this news release about Intellicheck's future expectations, including: the advantages of our products, future demand for Intellicheck's existing and future products, whether revenue and other financial metrics will improve in future periods, whether Intellicheck will be able to execute its turn-around plan or whether successful execution of the plan will result in increased revenues, whether sales of our products will continue at historic levels or increase, whether brand value and market awareness will grow, whether the Company can leverage existing partnerships or enter into new ones, whether there will be any impact on sales and revenues due to an epidemic, pandemic or other public health issue and all other statements in this release, other than historical facts, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). These statements, which express management's current views concerning future events, trends, contingencies or results, appear at various places in this release and use words like "anticipate," "assume," "believe," "continue," "estimate," "expect," "forecast," "future," "intend," "plan," "potential," "predict," "project," "sense", "strategy," "target" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would" are forward-looking statements within the meaning of the PSLRA. This statement is included for the express purpose of availing Intellicheck, Inc. of the protections of the safe harbor provisions of the PSLRA. It is important to note that actual results and ultimate corporate actions could differ materially from those in such forward-looking statements based on such factors as: market acceptance of our products and the presently anticipated growth in the commercial adoption of our products and services; our ability to successfully transition pilot programs into formal commercial scale programs; continued adoption of our SaaS product offerings; changing levels of demand for our current and future products; our ability to reduce or maintain expenses while increasing sales; our ability to successfully expand the sales of our products and services into new areas including health care and auto dealerships; customer results achieved using our products in both the short and long term; success of future research and development activities; the impact of inflation on our business and customer's businesses and any effect this has on economic activity with our customer's businesses; our ability to successfully market and sell our products, any delays or difficulties in our supply chain coupled with the typically long sales and implementation cycle for our products; our ability to enforce our intellectual property rights; changes in laws and regulations applicable to the our products; our continued ability to access government-provided data; the risks inherent in doing business with the government including audits and contract cancellations; liability resulting from any security breaches or product failure, together with other risks detailed from time to time in our reports filed with the SEC. We do not assume any obligation to update the forward-looking information.

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