Executive Summary

Q3 2025 delivered solid execution: net recognized revenue rose 71% year over year to $0.87M, while Total Operating Expenses fell 17% YoY to $2.64M, narrowing losses despite revenue undershooting original projections due to delays in a QID customer implementation .
The S&P 500 bank contract amendment extended the term to May 31, 2031 and set minimum gross revenue exceeding $12.7M, materially improving revenue visibility; most of Q3’s increase was attributable to this customer .
Operational KPIs strengthened: FIS onboarded institutions reached 97 (from 92 in Q2) and total customers implemented/implementing the Orchestration Layer rose to 110; transaction starts for FIS institutions increased 247% over the nine months and completion rates improved >30% .
Near-term catalysts: age-verification product launch positioning into regulatory tailwinds , U.S. patent allowance on attack-detection methods , APAC expansion via K-Startup Grand Challenge , and digital-asset wallet initiative targeted for early 2026 .
Estimate context: Revenue was a slight miss vs consensus in Q3 ($0.87M vs $0.884M*), and EPS missed (−$0.72 vs −$0.56*), with delays in the QID implementation cited as the primary driver . Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

Material long-term revenue visibility from S&P 500 bank amendment (term to May 31, 2031; minimum gross revenue >$12.7M) driving Q3 revenue growth and contract depth .
Cost discipline: Total Operating Expenses fell 17% YoY to $2.64M in Q3; this extended the multi-quarter trend from Q2 (−20% YoY) .
KPI strength: “Transaction starts for FIS-related institutions increased 247%” and completion rates “increased by over 30%” over the nine months ended September 30, 2025, evidencing improving adoption and funnel conversion .

What Went Wrong

Revenue undershot projections due to delays in customer implementation for the QID contract; resources were redirected to product development and onboarding, but near-term revenue was constrained .
EPS missed consensus in Q3 as the revenue shortfall and still-elevated operating expenses kept losses high; basic and diluted net loss per share were −$0.72 vs −$0.56 consensus* . Values retrieved from S&P Global.
QID recognition delays: $0.23M of fully earned QID revenue in Q3 remained deferred under ASC 606, increasing received-but-deferred revenue to $0.33M at quarter-end, delaying reported revenue recognition .

Financial Results

Revenue, EPS, Operating Expenses, Cash

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD)	$545,000	$812,000	$872,000
Diluted EPS ($USD)	−$0.886*	−$0.69	−$0.72
Total Operating Expenses ($USD)	$2,708,457*	$2,500,000	$2,640,000
Cash and Cash Equivalents ($USD)	$1,137,652*	$292,054*	$5,372,021

Values with asterisks retrieved from S&P Global.

YoY revenue growth: Q3 +71% YoY (from $0.51M) ; Q2 +62% YoY (from $0.50M) ; Q1 decreased from $0.574M .
Q3 revenue undershot original projections due to QID implementation delays .
Q3 basic/diluted net loss per share improved YoY to −$0.72 from −$1.06 .

Margins (S&P Global)

Metric	Q1 2025	Q2 2025	Q3 2025
Gross Profit Margin %	44.87%*	55.36%*	58.42%*
EBITDA Margin %	N/A*	−202.34%*	−146.93%*
EBIT Margin %	N/A*	−207.05%*	−202.96%*
Net Income Margin %	N/A*	−210.66%*	−219.14%*

Values retrieved from S&P Global.

Estimates vs Actuals (S&P Global for consensus; company for actuals)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue Consensus ($USD)	$700,000*	$741,000*	$884,000*
Revenue Actual ($USD)	$545,471*	$812,667	$872,491
EPS Consensus ($USD)	−$0.61*	−$0.36*	−$0.56*
EPS Actual ($USD)	−$0.886*	−$0.69	−$0.72
Result	Miss (Rev & EPS)*	Beat Rev / Miss EPS*	Miss Rev & EPS*

Values retrieved from S&P Global unless otherwise cited.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue from existing contracted customers	FY 2025	“Believed to exceed $5.0M” (Q1)	No updated quantitative guidance provided in Q2/Q3	Maintained qualitatively; commentary noted revenue undershot projections due to QID delays
Expense reductions	FY 2025	New savings of ~$0.18M per month vs 2024 (Q1)	No update provided in Q2/Q3	Maintained
Cash burn	FY 2025	Estimated ~$0.24M per month for remaining nine months (Q1)	No update provided in Q2/Q3	Maintained
ATM equity distribution capacity	Ongoing	$6.1M unused (Feb 25 announcement referenced in Q1)	Not updated in Q2/Q3	Maintained
S&P 500 bank contract amendment	Through May 31, 2031	N/A	Minimum gross revenue exceeding $12.7M; fee structure changes; new features/platform updates	New disclosure; enhances long-term revenue visibility

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was found in the document catalog for IDAI during the relevant period.

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3 2025)	Trend
Orchestration Layer adoption	Q1: OL institutions 94; Q2: 105 customers, 92 FIS institutions	Q3: 110 customers; 97 FIS institutions; 247% transaction-start growth; >30% completion-rate improvement	Strengthening adoption and conversion
QID implementation	Q1: QID revenue earned but deferred ($197k)	Q3: $0.23M fully earned but deferred; revenue undershot projections due to implementation delays	Implementation delays persisting, recognition timing lag
AI/technology initiatives	Ongoing AI-powered identity roadmap	Patent allowance for attack-detection methods (USPTO notice) ; TSI Wallet initiative with biometric Stable Key, ZKP protocols	Intensifying IP and productization into digital assets
Regulatory/legal (Age verification)	N/A in Q1/Q2 releases	“TrustedAge” product positioned to fix systemic failure in age-verification laws amid UK Online Safety Act challenges; ZKP + biometric binding approach	Regulatory tailwinds; product-market fit crystallizing
Regional expansion	N/A in Q1; Q2: focus on onboarding momentum	APAC: Selected for K-Startup Grand Challenge in Korea ; Africa: Exclusive MoU with Ghana NIA for identity tokenization	Geographic expansion initiatives accelerating

Management Commentary

“The majority of the increase ($313 thousand) was attributable to the Company's S&P 500 bank customer… contract amendment and extension… with minimum gross revenue exceeding $12.7 million” .
On regulatory dynamics: “We are witnessing a systemic failure… verification without biometric binding is merely security theater… TrustedAge™ is a biometric key, permanently locked to one user” — Andrew Gowasack, President .
On technology/IP: “We can now incorporate anonymized data derived from historic attacks into algorithms that flag future attacks. The growth… is fueled by Generative AI…” — Gareth N. Genner, CEO .
On digital assets: “Our zero-knowledge-proof solution [TSI Wallet]… private keys secured and derived from the user’s live biometric samples… empowering users to securely yet conveniently access their wallets from any enrolled device.” — Dr. Norman Poh, CSO .
Strategic vision: “We believe that the TSI Wallet… will play a significant role in our business growth and start to meaningfully contribute to revenue by Q4 of 2026.” — Gareth N. Genner, CEO .

Q&A Highlights

No Q3 2025 earnings call transcript was available; therefore, analyst Q&A highlights and any guidance clarifications from a call are unavailable this quarter.

Estimates Context

Q3 revenue: $0.872M vs consensus $0.884M* (slight miss); EPS: −$0.72 vs consensus −$0.56* (miss). Management cited QID implementation delays as the primary reason revenue undershot projections .
Q2 revenue beat ($0.813M vs $0.741M*), but EPS missed (−$0.69 vs −$0.36*), reflecting improving top-line with still-burdensome OpEx .
Q1 missed on both revenue ($0.545M vs $0.700M*) and EPS (−$0.886 vs −$0.61*), consistent with earlier phase of implementation and higher cost structure .