NASDAQ:INTZ Intrusion Q1 2024 Earnings Report $1.30 -0.05 (-3.70%) Closing price 05/30/2025 04:00 PM EasternExtended Trading$1.32 +0.02 (+1.92%) As of 05/30/2025 07:31 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Intrusion EPS ResultsActual EPS-$0.94Consensus EPS -$1.39Beat/MissBeat by +$0.45One Year Ago EPS-$4.40Intrusion Revenue ResultsActual Revenue$1.13 millionExpected Revenue$1.25 millionBeat/MissMissed by -$120.00 thousandYoY Revenue GrowthN/AIntrusion Announcement DetailsQuarterQ1 2024Date5/14/2024TimeAfter Market ClosesConference Call DateTuesday, May 14, 2024Conference Call Time5:00PM ETUpcoming EarningsIntrusion's Q2 2025 earnings is scheduled for Tuesday, August 12, 2025, with a conference call scheduled at 5:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Intrusion Q1 2024 Earnings Call TranscriptProvided by QuartrMay 14, 2024 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Welcome to Intrusion Inc. 1st Quarter 2024 Earnings Conference Call and Webcast. At this time, all participants are in a listen only mode. For those of you participating in the conference call, there will be an opportunity for your Please note this conference is being recorded. An audio replay of this conference call will be available on the company's website within a few hours after this call. Operator00:00:27I would now like to turn the call over to Josh Carroll with Investor Relations. Speaker 100:00:34Thank you, and welcome. Joining me today are Tony Scott, Chief Executive Officer and Kimberly Pinson, Chief Financial Officer. This call is being webcast and will be archived on the Investor Relations section of our website. Before I turn the call over to Tony, I'd like to remind everyone that statements made during this conference call related to the company's expected future performance, future business prospects, future events or plans may include forward looking statements as defined under the Private Securities Litigation Reform Act of 1995. Please refer to our SEC filings for more information on the specific risk factors that could cause our actual results to differ materially from the projections described in today's conference call. Speaker 100:01:19Any forward looking statements that we make on this call are based upon information that we believe as of today, and we undertake no obligation to update these statements as a result of new information or future events. In addition to U. S. GAAP reporting, we report certain financial measures that do not conform to generally accepted accounting principles. During the call, we may use non GAAP measures if we believe it is useful to investors or if we believe it will help investors better understand our performance or business trends. Speaker 100:01:51With that, let me now turn the call over to Tony for a few opening remarks. Speaker 200:01:57Thank you, Josh, and good afternoon and thank you all for joining us today. As I think many of you know, the Q1 and the 1st few weeks of the second quarter have been filled with multiple milestones as we work through the many challenges presented to us. I'll cover many of the specifics in greater detail shortly, but I'd like to first begin by discussing our current stock price and market cap, which I believe are grossly undervalued and are not reflective of the true comparative value of our company and our technology. This issue remains top of mind for me and I'm sure for all of you. Multiple members of our executive team, including myself and many of our existing long term shareholders have continued to increase their investments in Intrusion stock for which I am grateful. Speaker 200:02:56You've heard from me on multiple occasions about my optimism for the future of Intrusion based on our unique core technology and based on our continued investment in and development of our unparalleled technology to ensure that we can address the most challenging cybersecurity issues of our time. And we've recently announced some important customer wins, which validate that optimism. And I want you to know that my optimism for our future is only increasing. Turning now to our sales activity. During the last call, we discussed the addition of 7 new logos, and we continue to build off this strong bookings momentum with the addition of 5 new logos. Speaker 200:03:46These new customers operate in a variety of different sectors, including natural gas exploration and development, water utilities and the government sector. The deployment of our technology and the revenue associated with these deployments will ramp up over the next few quarters. This is a pattern we expect to see more of with respect to the larger enterprises that we're engaged with. Now for an update on some of our recent partnership activity. As you may recall from our Q4 earnings call, we were notified that through our partner iOne Resources in the Philippines, our technology had been down selected to be a part of an award that would help protect the cybersecurity and integrity of the national elections in the Philippines. Speaker 200:04:41We're happy to announce that we've received confirmation a few weeks ago that our partner, iOne Resources, was awarded the final contract to supply secure electronic transmission services for the 2025 midterm elections in the Philippines. This is an important contract for both I-one and Intrusion and has a total bid price of approximately $25,000,000 The secure electronic transmission services are scheduled to be fully operational by November 2024 and will begin contributing to our earnings in the second half of this year. We are working with all the relevant parties to determine the optimal deployment architecture for this solution and we will know much more about the specific quantities and deployment timeline for our solutions shortly. We anticipate the revenue from this one contract will be a minimum of $1,000,000 ARR with the likelihood that it will become greater over time. We are continuing to see additional momentum from some of our other partnerships as well, which is evident by our announcement last week with our partner, Total Information Management, with whom we announced an agreement to enhance the supply chain security for their customer, Orca Cold Chain Solutions. Speaker 200:06:13Under the terms of the agreement, Tim will provide Intrusion's advanced threat data and prevent disruption to the cold chain, ensuring the integrity and safety of perishable goods. This new agreement comes after a successful pilot program with Orca Cold Chain Solutions and resulted in the company deciding to purchase Intrusion's Applied Threat Intelligence for 3 years. This agreement is already in effect and we will begin to see the revenue benefits of this agreement begin in our Q2. We've also been awarded a new order for intrusion sealed from our traditional government customer base. We began servicing this in Q2 and the revenue from this new order is expected to more than offset the lost shield revenue we discussed in last quarter's call. Speaker 200:07:17But it also marks a milestone in terms of government adoption of Shield Technology above and beyond the traditional consulting business we've long enjoyed. To wrap up on the partnership front, we also announced back in April that we'd agreed to acquire a minority stake in Clever AI, a Houston, Texas based artificial intelligence company in an all stock transaction. Clever AI is a cutting edge technology company at the forefront of the artificial intelligence revolution and has been helping organizations thrive in the digital age by developing innovative and practical AI and machine learning solutions that assist in transforming businesses generally. Cleverai currently operates in a wide range of industries such as healthcare, security, finance and IoT. Over the past 2 years, Clever AI has been both a partner and a customer of Intrusion, assisting with both the design and development of Shield endpoint and cloud solutions as well as incorporating Shield technology as a part of its customer solutions. Speaker 200:08:38We are excited to make this investment in Clever AI, which will not only continue to help improve our shield technology in our evolving marketplace, but will also help broaden our customer penetration into multiple industries. Last week at the RSA conference, every supplier of cybersecurity technology in attendance was touting its AI capabilities and we will not be left behind in this important area. With respect to our product development efforts, we're continuing to invest in our Shield technology overall and specifically in our efforts to strengthen the multi instance management aspects of Shield as well as additional capabilities in our endpoint and cloud solutions, including continuing to enhance our AI and machine learning capabilities. All of this development is driven by customer input and market demands and as I've said before, gives me confidence that we can be relevant for a long time in the future. Now briefly on to our financials. Speaker 200:09:54As you'll hear from Kim later in greater detail, total revenue for the Q1 was 1,100,000 representing a $200,000 decrease on a sequential basis. The decline in revenue during the Q1 of 2024 was driven by a decrease in consulting revenue that was primarily the result of the continuing resolution with the federal budget not being approved until the last week of Q1. That hindered the timing of task awards on existing contracts and the issuance of new contract awards. With the recent awards I've mentioned, we expect that we will see meaningful growth in the second half of twenty twenty four. And finally, before I turn the call over to Kim to cover our financial results in greater detail, I would first like to spend a few minutes discussing the recent steps that we've taken to regain compliance with NASDAQ for continued listing on the NASDAQ Capital Markets as it relates to the minimum bid price of $1 and the equity standard. Speaker 200:11:05On April 22, we announced that we had closed on a private offering pursuant to which we sold an aggregate of 1,300,000 shares of our common stock, each of which is coupled with a warrant to purchase 2 shares of common stock at an aggregate offering price of $1.95 per share. The private offering resulted in net proceeds to Intrusion of $2,600,000 and we intend to use the net proceeds from the private offering for working capital and general corporate purposes. This offering was the final step in our plan to achieve compliance with the NASDAQ minimum equity standard. And as a result of this private offering, our recently effectuated 1 for-twenty reverse stock split and our exchange agreement of debt to preferred stock with Streeterville Capital, we received notice from NASDAQ on May 1st notifying us that we had regained compliance with the minimum bid price and the equity requirements for continued listing on the NASDAQ Capital Markets. I would like to thank our staff, our partners and our long term shareholders for helping us execute our plan to regain compliance. Speaker 200:12:33With that, I'd like to turn the call over to Kim for a more detailed review of our Q1 financials. Kim? Speaker 300:12:42Thanks, Tony. Revenues for the Q1 of 2024 were $1,100,000 a decrease of $200,000 on both a sequential and year over year basis. Consulting revenue in the Q1 totaled $700,000 a decrease of $200,000 sequentially and $300,000 year over year. Shield revenue for the Q1 was $400,000 which was flat sequentially and up $100,000 on a year over year basis. On our last earnings call, we announced that a large Shield customer had decided not to renew their contract that would impact revenues beginning in Q2. Speaker 300:13:26As a result of the recent government order, we expect Shield revenues to remain flat or increase in Q2. We anticipate that the recent closed deals and new awards inclusive of the iOne Resources Award to supply the secure electronic transmission services for the 2025 midterm elections in the Philippines will help drive Shield revenue growth in 2024. Gross profit was 80% for the Q1 of 2024 compared to 76% in the first quarter of 2023. The increase in gross profit margin in the current quarter is a result of product mix with shield revenues representing a higher percentage of revenues. Shield revenues now represent 39% of revenues in Q1. Speaker 300:14:17Operating expenses in the Q1 of 2024 totaled $3,400,000 a decrease of $100,000 sequentially from the Q4 of 2023. As a result of the cost reduction measures that we implemented in March of last year and the savings initiatives that we continued to implement throughout 2023, we have now seen over $7,000,000 in cost savings over the past 12 months. As we have noted on previous calls, as we grow our customer base and increase revenues, we may choose to accelerate our product development in future periods or marketing spend to increase brand awareness, which will result in increased spending. We will, however, continue to evaluate each spending decision while also making prudent investments in our long term profitable growth. The net loss for the Q1 of 2024 was $1,700,000 an improvement of $1,100,000 from our loss of $2,800,000 for the Q4 of 2023. Speaker 300:15:23The improved net loss in Q1 is a result of interest savings. During the quarter, we converted $9,500,000 in Streeterville debt to $9,300,000 of newly created Series A preferred stock and $200,000 to common stock. As a result of this conversion, we reversed the interest accretion associated with the ability to stock settle principal reductions. When comparing the net loss to the same period in 2023, net loss improved by $3,000,000 from a loss of $4,700,000 for the 2023 quarter. Turning to the balance sheet. Speaker 300:16:00On March 31, we had cash and cash equivalents of $100,000 Our principal source for funding operations in the March 2024 quarter was through the issuance of 2 notes payable to Tony Scott totaling $1,300,000 and the issuance of common stock using our at the market program of $500,000 dollars Subsequent to March 31, as Tony mentioned earlier, we closed on a private offering, which provided net proceeds of $2,600,000 We also generated approximately $600,000 in proceeds through the sale of common stock using a warrant inducement program, which temporarily lowered the warrant exercise price and included a reload warrant. In addition, we have and will continue to utilize our ATM facility to fund our operations in the near term. All of these steps have improved our liquidity, providing the necessary funding to execute our growth plan and strengthened our balance sheet. I'd like to now turn the call back over to Tony for a few closing comments. Tony? Speaker 200:17:09Thanks, Kim. We've made tremendous progress over the past few months overcoming many of the challenges that we've faced during the past year, which have now positioned us to focus solely on our vision of driving growth through our compelling products and innovative strategies that provide our customers with the tools they need to better identify, deflect and eliminate any cyber threats they may encounter. I look forward to sharing the next steps in our journey with all of you, and I want to personally thank all of our investors and financial partners for their continued patience and support as we execute our strategy. Now this concludes our prepared remarks, and I'll now turn the call over to the operator for Q and A. Operator00:18:03Thank you. At this time, we will be conducting a question and answer session. Your first question for today is from Scott Buck with H. C. Wainwright. Speaker 400:18:44Hi, good afternoon guys. Thanks for taking my questions. Tony, I was hoping you could help clear something up for me. The I1 Resources agreement in the Philippines gets described as being potentially $1,000,000 of ARR beginning in the second half of this year. But it's for a singular election, right? Speaker 400:19:03So what carries into 2025 that makes it annual reoccurring revenue? Speaker 200:19:10Yes. So the structure of the program and the bid that we were a part of has us stand up the equipment and have it all fully tested and ready to go by October. The elections don't actually occur until the spring of the following year. And then following that, everything stands down, but a bunch of reconfiguration and testing and additional capabilities will get deployed because as you know, threats continue to evolve over time. So during that downtime, we'll be preparing and getting ready for the next set of elections. Speaker 200:19:57And then we'll stand up the gear again. So from an operations perspective, it has ebb and flow, but the work that we'll be doing with them will continue in different waves over the period of time. So that's kind of the reason it looks to us like ARR. It will be our revenue will be smoothed over the life of the contract. Speaker 400:20:28No, that makes sense and that's great to hear. 2nd, I want to ask about the new logos this quarter and really the new logos last quarter. Is there a particular size that you're seeing the most traction in? And could you give us any kind of indication of what the average, either both duration, I guess, of the contracts are and what the size is in terms of potential revenue? Speaker 200:20:56There's no average at this point that makes any sense. So and there's a couple of reasons for it, Scott. Probably the biggest reason is that by their very structure, many of these start small and might be $100,000 or $200,000 or whatever, but then expand over some period of time. And so it's hard to create an average on deals like that. And I mentioned in the call, this is a pattern we're starting to see with some of the larger customers. Speaker 200:21:47So you'll see us announce these deals from time to time that might be pretty small initially, but then 6 months later are double, triple, quadruple the initial contract. And then the second thing I'd say is, we continue to win some deals that are relatively small in nature, meaning under $100,000 let's just say, for example, but are in industries that we want to be present in and serve as sort of pivot points for us to demonstrate our value in those industries. So we're not turning any customers away at this particular point. But just as an example, one of the managed service providers that we signed last year now has expanded our presence into 2 more customers. And that's not trivial for us. Speaker 200:22:57It's a proof point that, that customer, meaning the managed service provider and their customers, are excited about our technology. Speaker 400:23:11Got it. That's helpful. And then last one for me, Tony. Just the mechanics of new customer onboarding, you guys are reliant on them in terms of timing or are they reliant on you in terms of timing? Speaker 200:23:27Every deal is kind of different at this point. The commission on elections one has a fixed deadline. We've got to be up and running and we're working with those teams on the actual stand up plan. Some of the others that we have don't have a fixed date in time like the Commission on Elections won. But in I think all of those other cases that I can think of, it's a discussion that we have with the customer about what makes sense. Speaker 200:24:07And I think as we've mentioned before, in some cases, we have to do site surveys with the customer, which involves potentially a few weeks of work before we actually install. And the other thing that we're seeing in some cases is depending on the age and the nature of the network equipment that a customer might have in their environment, we may need to do some additional work with those customers to either reconfigure their network slightly or in some cases install our equipment in a different way than we initially anticipated. So we've seen all those cases and we're fully prepared to deal with those as new customers come along. Speaker 400:25:05Great. I appreciate the time guys. Thank you very much. Speaker 200:25:08Thank you. Operator00:25:11Your next question is from Ed Woo with Ascendiant Capital. Speaker 100:25:16Yes, congratulations on the Philippine i1 resource deal. My question is, should we expect more opportunities in Asia or just international in general with the Philippines deal? Speaker 200:25:34I think you can anticipate more in Asia Pac. As I think everybody realizes, we've sort of underperformed in the U. S. Over the last year or so, but we now see some signs where we think we're going to correct that with some of the more recent wins and so on. So proportionally, I think we expect to have a little more balanced set of wins over time. Speaker 200:26:12But in the short run, Asia Pac is a great opportunity for us and one that we expect will be really good for the company. One of the interesting things there is, it's a little easier for us to get attention in that region because the cybersecurity isn't being so over marketed in that region as it is here. So it's a little easier for us to get attention and word-of-mouth goes really well there. In the U. S, there's just a cacophony of cybersecurity companies. Speaker 200:26:54I was at RSA this last week and the noise level was just deafening. It was like the ticadas coming out of the ground that you're probably reading about in the newspaper. It's a deafening bunch of noise coming from our industry. So we'll take advantage of it wherever we can. Speaker 100:27:21Great. Well, congratulations again, and I wish you guys good luck. Thank you. Speaker 200:27:27Thanks, Ed. Operator00:27:30Your next question for today is from Paul Rodriguez with Westpark Capital. Speaker 500:27:37Yes. Thanks for your time. I had a question. I wanted to ask you about your comments on federal. I wanted to see what you've seen in terms of visibility improvements for the June quarter in federal, if you have any thoughts about that. Speaker 500:27:55And then I have a follow-up. Speaker 200:27:58Yes. So we have, as I think Kim mentioned, already booked some contracts in federal that we expect will make up for the GAAP that we had from the lost contract from last year. And then we're in process on some additional work that we haven't secured yet. But I would say overall, the opportunity looks pretty good for us for the rest of the year. We're not giving up. Speaker 200:28:38And I would expect and hope that we get some additional on top of what we've already landed. In an election year, as you can imagine, everybody's quite sensitive to problems that can be created by both criminals and political adversaries and all those kinds of things, nation states. And our solutions are well suited to help address some of those kinds of challenges. So we expect to do really well for the rest of the year. And we hope there's not another long continuing resolution at the beginning of the fiscal year this next year. Speaker 500:29:29Okay, helpful. One last question on the Clever AI announcement. Have you guys discussed any sort of roadmap on the endpoint and cloud products yet? Speaker 200:29:43Yes, we have a multi year roadmap actually for those. And I expect that Clever will play a pretty important role in our continuing advancement of those products. Speaker 500:29:58Okay, great. Thanks for the update. Appreciate it. Thank you. Speaker 200:30:03Thanks, Paul. Operator00:30:08At this time, there are no other questions in queue. I'll turn the call back over to our host, Mr. Tony Scott. Speaker 200:30:17Well, thank you, everyone. Again, as I said earlier, I really appreciate the patience. But I do want you to know that my enthusiasm for our future is, as I said earlier, greater than ever. We've put a lot of hard work in over the last couple of years. I and the rest of the management team have had our fair share of issues to deal with in addition to just running the company. Speaker 200:30:53And we have a lot of that, I'll call it, non productive work behind us now. And we're fully focused now on just growing our business, increasing sales and we don't have the distraction of lawsuits and investigations and all of those other things to deal with. And nor do I want any of those things back ever again. So we're fully focused. We know what we've got to do. Speaker 200:31:26We've got clear vision of our future and we see some great signs that customers are ready to adopt our solutions. So one of the things I've said to a number of people is that in addition to sales with some of these big contracts like the Commission on Elections and some of these other ones, some of our challenges are going to be now on the execution side, supply chain issues, making sure we can fully avail ourselves of these deals that we won. I'm a pilot, I think, as many of you know. And one of the truisms that I learned a long time ago is almost anybody can learn very quickly to take a plane off, but landing the plane is the hard part. And I've used this analogy before, but we've got a lot of plane landings to do in the next 6 months, and I really look forward to it. Speaker 200:32:34It's a good problem to have, and I think our team is ready to take on the challenge. So I just want to say thanks to everyone. Look forward to next quarter's call with lots of enthusiasm. Thanks so much. Operator00:32:52Thank you. This concludes today's conference call. YouRead morePowered by Key Takeaways The company secured a $25 million bid via its iOne Resources partnership to provide secure electronic transmission services for the 2025 Philippine midterm elections, expected to contribute at least $1 million in ARR starting H2 2024. Intrusion added five new logos in Q1 across natural gas, water utilities and government sectors, with deployments and associated revenue set to ramp over the next few quarters. The firm acquired a minority stake in Clever AI to bolster its AI and machine learning capabilities and expand Shield technology penetration into healthcare, security, finance and IoT markets. Q1 revenue was $1.1 million, down $200 K sequentially due to delayed federal consulting awards, while Shield product revenue remained flat at $400 K and gross margin improved to 80%; growth is expected in H2 2024. Through a private stock offering, 1-for-20 reverse split and debt-to-equity exchange, Intrusion regained compliance with NASDAQ’s minimum bid price and equity requirements for continued listing. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallIntrusion Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Intrusion Earnings HeadlinesIntrusion (NASDAQ:INTZ) Price Target Raised to $11.00 at Ascendiant Capital MarketsJune 1 at 2:59 AM | americanbankingnews.comIntrusion (NASDAQ:INTZ) Shares Down 6.2% - What's Next?May 29 at 2:53 AM | americanbankingnews.comHow I make 💰 trading from 135 countries I’ve traveled to 135 countries… In a new time zone almost every week… (Often 8… 12… 16 hours AHEAD of the United States) And yet I’ve made $7.9 million career profits… trading in the US markets?June 1, 2025 | Timothy Sykes (Ad)Intrusion Inc. (NASDAQ:INTZ) Q1 2025 Earnings Call TranscriptMay 2, 2025 | insidermonkey.comIntrusion Inc (INTZ) Q1 2025 Earnings Call Highlights: Strong Revenue Growth and Strategic ...April 30, 2025 | finance.yahoo.comIntrusion Inc. outlines AWS marketplace integration and critical infrastructure expansion in Q2 2025April 30, 2025 | msn.comSee More Intrusion Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Intrusion? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Intrusion and other key companies, straight to your email. Email Address About IntrusionIntrusion (NASDAQ:INTZ), a cybersecurity company in the United States. The company offers its customers access to threat intelligence database, which contains the historical data, known associations, and reputational behavior of Internet Protocol addresses. It offers INTRUSION Shield, a zero trust reputation-based Software as a Service solution that inspects and kills dangerous network connections. The company also provides INTRUSION TraceCop, a big data tool that contains an inventory of network selectors and enrichments to support forensic investigations; and INTRUSION Savant, a network monitoring solution that uses the data available in TraceCop to identify suspicious traffic in real-time. In addition, it engages in the provision of pre-and post-sales support services, such as network security design, system installation, and technical consulting services. The company serves US federal government entities, state and local government entities, and companies ranging from mid-market to large enterprises through a direct sales force and value-added resellers. The company was formerly known as Intrusion.com, Inc. and changed its name to Intrusion Inc. in November 2001. 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There are 6 speakers on the call. Operator00:00:00Welcome to Intrusion Inc. 1st Quarter 2024 Earnings Conference Call and Webcast. At this time, all participants are in a listen only mode. For those of you participating in the conference call, there will be an opportunity for your Please note this conference is being recorded. An audio replay of this conference call will be available on the company's website within a few hours after this call. Operator00:00:27I would now like to turn the call over to Josh Carroll with Investor Relations. Speaker 100:00:34Thank you, and welcome. Joining me today are Tony Scott, Chief Executive Officer and Kimberly Pinson, Chief Financial Officer. This call is being webcast and will be archived on the Investor Relations section of our website. Before I turn the call over to Tony, I'd like to remind everyone that statements made during this conference call related to the company's expected future performance, future business prospects, future events or plans may include forward looking statements as defined under the Private Securities Litigation Reform Act of 1995. Please refer to our SEC filings for more information on the specific risk factors that could cause our actual results to differ materially from the projections described in today's conference call. Speaker 100:01:19Any forward looking statements that we make on this call are based upon information that we believe as of today, and we undertake no obligation to update these statements as a result of new information or future events. In addition to U. S. GAAP reporting, we report certain financial measures that do not conform to generally accepted accounting principles. During the call, we may use non GAAP measures if we believe it is useful to investors or if we believe it will help investors better understand our performance or business trends. Speaker 100:01:51With that, let me now turn the call over to Tony for a few opening remarks. Speaker 200:01:57Thank you, Josh, and good afternoon and thank you all for joining us today. As I think many of you know, the Q1 and the 1st few weeks of the second quarter have been filled with multiple milestones as we work through the many challenges presented to us. I'll cover many of the specifics in greater detail shortly, but I'd like to first begin by discussing our current stock price and market cap, which I believe are grossly undervalued and are not reflective of the true comparative value of our company and our technology. This issue remains top of mind for me and I'm sure for all of you. Multiple members of our executive team, including myself and many of our existing long term shareholders have continued to increase their investments in Intrusion stock for which I am grateful. Speaker 200:02:56You've heard from me on multiple occasions about my optimism for the future of Intrusion based on our unique core technology and based on our continued investment in and development of our unparalleled technology to ensure that we can address the most challenging cybersecurity issues of our time. And we've recently announced some important customer wins, which validate that optimism. And I want you to know that my optimism for our future is only increasing. Turning now to our sales activity. During the last call, we discussed the addition of 7 new logos, and we continue to build off this strong bookings momentum with the addition of 5 new logos. Speaker 200:03:46These new customers operate in a variety of different sectors, including natural gas exploration and development, water utilities and the government sector. The deployment of our technology and the revenue associated with these deployments will ramp up over the next few quarters. This is a pattern we expect to see more of with respect to the larger enterprises that we're engaged with. Now for an update on some of our recent partnership activity. As you may recall from our Q4 earnings call, we were notified that through our partner iOne Resources in the Philippines, our technology had been down selected to be a part of an award that would help protect the cybersecurity and integrity of the national elections in the Philippines. Speaker 200:04:41We're happy to announce that we've received confirmation a few weeks ago that our partner, iOne Resources, was awarded the final contract to supply secure electronic transmission services for the 2025 midterm elections in the Philippines. This is an important contract for both I-one and Intrusion and has a total bid price of approximately $25,000,000 The secure electronic transmission services are scheduled to be fully operational by November 2024 and will begin contributing to our earnings in the second half of this year. We are working with all the relevant parties to determine the optimal deployment architecture for this solution and we will know much more about the specific quantities and deployment timeline for our solutions shortly. We anticipate the revenue from this one contract will be a minimum of $1,000,000 ARR with the likelihood that it will become greater over time. We are continuing to see additional momentum from some of our other partnerships as well, which is evident by our announcement last week with our partner, Total Information Management, with whom we announced an agreement to enhance the supply chain security for their customer, Orca Cold Chain Solutions. Speaker 200:06:13Under the terms of the agreement, Tim will provide Intrusion's advanced threat data and prevent disruption to the cold chain, ensuring the integrity and safety of perishable goods. This new agreement comes after a successful pilot program with Orca Cold Chain Solutions and resulted in the company deciding to purchase Intrusion's Applied Threat Intelligence for 3 years. This agreement is already in effect and we will begin to see the revenue benefits of this agreement begin in our Q2. We've also been awarded a new order for intrusion sealed from our traditional government customer base. We began servicing this in Q2 and the revenue from this new order is expected to more than offset the lost shield revenue we discussed in last quarter's call. Speaker 200:07:17But it also marks a milestone in terms of government adoption of Shield Technology above and beyond the traditional consulting business we've long enjoyed. To wrap up on the partnership front, we also announced back in April that we'd agreed to acquire a minority stake in Clever AI, a Houston, Texas based artificial intelligence company in an all stock transaction. Clever AI is a cutting edge technology company at the forefront of the artificial intelligence revolution and has been helping organizations thrive in the digital age by developing innovative and practical AI and machine learning solutions that assist in transforming businesses generally. Cleverai currently operates in a wide range of industries such as healthcare, security, finance and IoT. Over the past 2 years, Clever AI has been both a partner and a customer of Intrusion, assisting with both the design and development of Shield endpoint and cloud solutions as well as incorporating Shield technology as a part of its customer solutions. Speaker 200:08:38We are excited to make this investment in Clever AI, which will not only continue to help improve our shield technology in our evolving marketplace, but will also help broaden our customer penetration into multiple industries. Last week at the RSA conference, every supplier of cybersecurity technology in attendance was touting its AI capabilities and we will not be left behind in this important area. With respect to our product development efforts, we're continuing to invest in our Shield technology overall and specifically in our efforts to strengthen the multi instance management aspects of Shield as well as additional capabilities in our endpoint and cloud solutions, including continuing to enhance our AI and machine learning capabilities. All of this development is driven by customer input and market demands and as I've said before, gives me confidence that we can be relevant for a long time in the future. Now briefly on to our financials. Speaker 200:09:54As you'll hear from Kim later in greater detail, total revenue for the Q1 was 1,100,000 representing a $200,000 decrease on a sequential basis. The decline in revenue during the Q1 of 2024 was driven by a decrease in consulting revenue that was primarily the result of the continuing resolution with the federal budget not being approved until the last week of Q1. That hindered the timing of task awards on existing contracts and the issuance of new contract awards. With the recent awards I've mentioned, we expect that we will see meaningful growth in the second half of twenty twenty four. And finally, before I turn the call over to Kim to cover our financial results in greater detail, I would first like to spend a few minutes discussing the recent steps that we've taken to regain compliance with NASDAQ for continued listing on the NASDAQ Capital Markets as it relates to the minimum bid price of $1 and the equity standard. Speaker 200:11:05On April 22, we announced that we had closed on a private offering pursuant to which we sold an aggregate of 1,300,000 shares of our common stock, each of which is coupled with a warrant to purchase 2 shares of common stock at an aggregate offering price of $1.95 per share. The private offering resulted in net proceeds to Intrusion of $2,600,000 and we intend to use the net proceeds from the private offering for working capital and general corporate purposes. This offering was the final step in our plan to achieve compliance with the NASDAQ minimum equity standard. And as a result of this private offering, our recently effectuated 1 for-twenty reverse stock split and our exchange agreement of debt to preferred stock with Streeterville Capital, we received notice from NASDAQ on May 1st notifying us that we had regained compliance with the minimum bid price and the equity requirements for continued listing on the NASDAQ Capital Markets. I would like to thank our staff, our partners and our long term shareholders for helping us execute our plan to regain compliance. Speaker 200:12:33With that, I'd like to turn the call over to Kim for a more detailed review of our Q1 financials. Kim? Speaker 300:12:42Thanks, Tony. Revenues for the Q1 of 2024 were $1,100,000 a decrease of $200,000 on both a sequential and year over year basis. Consulting revenue in the Q1 totaled $700,000 a decrease of $200,000 sequentially and $300,000 year over year. Shield revenue for the Q1 was $400,000 which was flat sequentially and up $100,000 on a year over year basis. On our last earnings call, we announced that a large Shield customer had decided not to renew their contract that would impact revenues beginning in Q2. Speaker 300:13:26As a result of the recent government order, we expect Shield revenues to remain flat or increase in Q2. We anticipate that the recent closed deals and new awards inclusive of the iOne Resources Award to supply the secure electronic transmission services for the 2025 midterm elections in the Philippines will help drive Shield revenue growth in 2024. Gross profit was 80% for the Q1 of 2024 compared to 76% in the first quarter of 2023. The increase in gross profit margin in the current quarter is a result of product mix with shield revenues representing a higher percentage of revenues. Shield revenues now represent 39% of revenues in Q1. Speaker 300:14:17Operating expenses in the Q1 of 2024 totaled $3,400,000 a decrease of $100,000 sequentially from the Q4 of 2023. As a result of the cost reduction measures that we implemented in March of last year and the savings initiatives that we continued to implement throughout 2023, we have now seen over $7,000,000 in cost savings over the past 12 months. As we have noted on previous calls, as we grow our customer base and increase revenues, we may choose to accelerate our product development in future periods or marketing spend to increase brand awareness, which will result in increased spending. We will, however, continue to evaluate each spending decision while also making prudent investments in our long term profitable growth. The net loss for the Q1 of 2024 was $1,700,000 an improvement of $1,100,000 from our loss of $2,800,000 for the Q4 of 2023. Speaker 300:15:23The improved net loss in Q1 is a result of interest savings. During the quarter, we converted $9,500,000 in Streeterville debt to $9,300,000 of newly created Series A preferred stock and $200,000 to common stock. As a result of this conversion, we reversed the interest accretion associated with the ability to stock settle principal reductions. When comparing the net loss to the same period in 2023, net loss improved by $3,000,000 from a loss of $4,700,000 for the 2023 quarter. Turning to the balance sheet. Speaker 300:16:00On March 31, we had cash and cash equivalents of $100,000 Our principal source for funding operations in the March 2024 quarter was through the issuance of 2 notes payable to Tony Scott totaling $1,300,000 and the issuance of common stock using our at the market program of $500,000 dollars Subsequent to March 31, as Tony mentioned earlier, we closed on a private offering, which provided net proceeds of $2,600,000 We also generated approximately $600,000 in proceeds through the sale of common stock using a warrant inducement program, which temporarily lowered the warrant exercise price and included a reload warrant. In addition, we have and will continue to utilize our ATM facility to fund our operations in the near term. All of these steps have improved our liquidity, providing the necessary funding to execute our growth plan and strengthened our balance sheet. I'd like to now turn the call back over to Tony for a few closing comments. Tony? Speaker 200:17:09Thanks, Kim. We've made tremendous progress over the past few months overcoming many of the challenges that we've faced during the past year, which have now positioned us to focus solely on our vision of driving growth through our compelling products and innovative strategies that provide our customers with the tools they need to better identify, deflect and eliminate any cyber threats they may encounter. I look forward to sharing the next steps in our journey with all of you, and I want to personally thank all of our investors and financial partners for their continued patience and support as we execute our strategy. Now this concludes our prepared remarks, and I'll now turn the call over to the operator for Q and A. Operator00:18:03Thank you. At this time, we will be conducting a question and answer session. Your first question for today is from Scott Buck with H. C. Wainwright. Speaker 400:18:44Hi, good afternoon guys. Thanks for taking my questions. Tony, I was hoping you could help clear something up for me. The I1 Resources agreement in the Philippines gets described as being potentially $1,000,000 of ARR beginning in the second half of this year. But it's for a singular election, right? Speaker 400:19:03So what carries into 2025 that makes it annual reoccurring revenue? Speaker 200:19:10Yes. So the structure of the program and the bid that we were a part of has us stand up the equipment and have it all fully tested and ready to go by October. The elections don't actually occur until the spring of the following year. And then following that, everything stands down, but a bunch of reconfiguration and testing and additional capabilities will get deployed because as you know, threats continue to evolve over time. So during that downtime, we'll be preparing and getting ready for the next set of elections. Speaker 200:19:57And then we'll stand up the gear again. So from an operations perspective, it has ebb and flow, but the work that we'll be doing with them will continue in different waves over the period of time. So that's kind of the reason it looks to us like ARR. It will be our revenue will be smoothed over the life of the contract. Speaker 400:20:28No, that makes sense and that's great to hear. 2nd, I want to ask about the new logos this quarter and really the new logos last quarter. Is there a particular size that you're seeing the most traction in? And could you give us any kind of indication of what the average, either both duration, I guess, of the contracts are and what the size is in terms of potential revenue? Speaker 200:20:56There's no average at this point that makes any sense. So and there's a couple of reasons for it, Scott. Probably the biggest reason is that by their very structure, many of these start small and might be $100,000 or $200,000 or whatever, but then expand over some period of time. And so it's hard to create an average on deals like that. And I mentioned in the call, this is a pattern we're starting to see with some of the larger customers. Speaker 200:21:47So you'll see us announce these deals from time to time that might be pretty small initially, but then 6 months later are double, triple, quadruple the initial contract. And then the second thing I'd say is, we continue to win some deals that are relatively small in nature, meaning under $100,000 let's just say, for example, but are in industries that we want to be present in and serve as sort of pivot points for us to demonstrate our value in those industries. So we're not turning any customers away at this particular point. But just as an example, one of the managed service providers that we signed last year now has expanded our presence into 2 more customers. And that's not trivial for us. Speaker 200:22:57It's a proof point that, that customer, meaning the managed service provider and their customers, are excited about our technology. Speaker 400:23:11Got it. That's helpful. And then last one for me, Tony. Just the mechanics of new customer onboarding, you guys are reliant on them in terms of timing or are they reliant on you in terms of timing? Speaker 200:23:27Every deal is kind of different at this point. The commission on elections one has a fixed deadline. We've got to be up and running and we're working with those teams on the actual stand up plan. Some of the others that we have don't have a fixed date in time like the Commission on Elections won. But in I think all of those other cases that I can think of, it's a discussion that we have with the customer about what makes sense. Speaker 200:24:07And I think as we've mentioned before, in some cases, we have to do site surveys with the customer, which involves potentially a few weeks of work before we actually install. And the other thing that we're seeing in some cases is depending on the age and the nature of the network equipment that a customer might have in their environment, we may need to do some additional work with those customers to either reconfigure their network slightly or in some cases install our equipment in a different way than we initially anticipated. So we've seen all those cases and we're fully prepared to deal with those as new customers come along. Speaker 400:25:05Great. I appreciate the time guys. Thank you very much. Speaker 200:25:08Thank you. Operator00:25:11Your next question is from Ed Woo with Ascendiant Capital. Speaker 100:25:16Yes, congratulations on the Philippine i1 resource deal. My question is, should we expect more opportunities in Asia or just international in general with the Philippines deal? Speaker 200:25:34I think you can anticipate more in Asia Pac. As I think everybody realizes, we've sort of underperformed in the U. S. Over the last year or so, but we now see some signs where we think we're going to correct that with some of the more recent wins and so on. So proportionally, I think we expect to have a little more balanced set of wins over time. Speaker 200:26:12But in the short run, Asia Pac is a great opportunity for us and one that we expect will be really good for the company. One of the interesting things there is, it's a little easier for us to get attention in that region because the cybersecurity isn't being so over marketed in that region as it is here. So it's a little easier for us to get attention and word-of-mouth goes really well there. In the U. S, there's just a cacophony of cybersecurity companies. Speaker 200:26:54I was at RSA this last week and the noise level was just deafening. It was like the ticadas coming out of the ground that you're probably reading about in the newspaper. It's a deafening bunch of noise coming from our industry. So we'll take advantage of it wherever we can. Speaker 100:27:21Great. Well, congratulations again, and I wish you guys good luck. Thank you. Speaker 200:27:27Thanks, Ed. Operator00:27:30Your next question for today is from Paul Rodriguez with Westpark Capital. Speaker 500:27:37Yes. Thanks for your time. I had a question. I wanted to ask you about your comments on federal. I wanted to see what you've seen in terms of visibility improvements for the June quarter in federal, if you have any thoughts about that. Speaker 500:27:55And then I have a follow-up. Speaker 200:27:58Yes. So we have, as I think Kim mentioned, already booked some contracts in federal that we expect will make up for the GAAP that we had from the lost contract from last year. And then we're in process on some additional work that we haven't secured yet. But I would say overall, the opportunity looks pretty good for us for the rest of the year. We're not giving up. Speaker 200:28:38And I would expect and hope that we get some additional on top of what we've already landed. In an election year, as you can imagine, everybody's quite sensitive to problems that can be created by both criminals and political adversaries and all those kinds of things, nation states. And our solutions are well suited to help address some of those kinds of challenges. So we expect to do really well for the rest of the year. And we hope there's not another long continuing resolution at the beginning of the fiscal year this next year. Speaker 500:29:29Okay, helpful. One last question on the Clever AI announcement. Have you guys discussed any sort of roadmap on the endpoint and cloud products yet? Speaker 200:29:43Yes, we have a multi year roadmap actually for those. And I expect that Clever will play a pretty important role in our continuing advancement of those products. Speaker 500:29:58Okay, great. Thanks for the update. Appreciate it. Thank you. Speaker 200:30:03Thanks, Paul. Operator00:30:08At this time, there are no other questions in queue. I'll turn the call back over to our host, Mr. Tony Scott. Speaker 200:30:17Well, thank you, everyone. Again, as I said earlier, I really appreciate the patience. But I do want you to know that my enthusiasm for our future is, as I said earlier, greater than ever. We've put a lot of hard work in over the last couple of years. I and the rest of the management team have had our fair share of issues to deal with in addition to just running the company. Speaker 200:30:53And we have a lot of that, I'll call it, non productive work behind us now. And we're fully focused now on just growing our business, increasing sales and we don't have the distraction of lawsuits and investigations and all of those other things to deal with. And nor do I want any of those things back ever again. So we're fully focused. We know what we've got to do. Speaker 200:31:26We've got clear vision of our future and we see some great signs that customers are ready to adopt our solutions. So one of the things I've said to a number of people is that in addition to sales with some of these big contracts like the Commission on Elections and some of these other ones, some of our challenges are going to be now on the execution side, supply chain issues, making sure we can fully avail ourselves of these deals that we won. I'm a pilot, I think, as many of you know. And one of the truisms that I learned a long time ago is almost anybody can learn very quickly to take a plane off, but landing the plane is the hard part. And I've used this analogy before, but we've got a lot of plane landings to do in the next 6 months, and I really look forward to it. Speaker 200:32:34It's a good problem to have, and I think our team is ready to take on the challenge. So I just want to say thanks to everyone. Look forward to next quarter's call with lots of enthusiasm. Thanks so much. Operator00:32:52Thank you. This concludes today's conference call. YouRead morePowered by