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Intellicheck, Inc. (IDN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered a record quarter: revenue rose 15% year over year to $5.936M and SaaS revenue grew 17% to $5.913M; gross margin was 91.1% and GAAP diluted EPS was $0.03 .
  • Results materially beat Wall Street consensus: revenue $5.936M vs $5.033M*, EPS $0.03 vs $0.00*; strength came from higher-priced verticals (automotive, title) offsetting retail weakness. Bold beat: Revenue +$0.903M and EPS +$0.03 vs consensus* .
  • Management reiterated diversification momentum and cited signed/expanded deals (e.g., premier U.S. bank expected mid–seven-figure annual revenue, ~15% uplift for that customer) and ACV renewals exceeding $10M signed in Q1, underpinning 2025 growth focus .
  • Near-term outlook: Q1 2025 revenue expected roughly in line with sell-side consensus ($4.78M*) and gross margins ~90%; migration from Azure to AWS should finish mid-2025 and reduce hosting costs, aiding margins and EBITDA expansion .

Note: *Estimates from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Record Q4 revenue and SaaS revenue with 15% and 17% YoY growth; adjusted EBITDA of $0.86M, demonstrating operating leverage despite dual-cloud costs .
  • Strategic diversification into higher-priced verticals drove mix improvement; CEO: “We put a very strong focus on the automotive, title insurance, e-mail, social media and retail banking verticals…volume…grew 13%, 2,500%, 54% and 17%” (year), with title insurance now covering “approximately 45%” of the market via direct clients .
  • Expanded banking relationships and pipeline: a marquee bank expanded by ~15% to mid–seven-figure annual revenue; verbal agreement with a super-regional bank for a 3-year rollout; Q1 renewals with upsells/guarantees reached >$10M ACV .

What Went Wrong

  • Retail remains a headwind: management noted lower consumer confidence, inflation and bankruptcies; retail volume still ~75% of scans and declined YoY in Q4 for key retailers despite holiday seasonality .
  • Gross margin compression: Q4 gross margin fell to 91.1% from 94.9% YoY, partly due to parallel AWS/Azure run costs during migration and lower R&D capitalization .
  • Sequential volatility: Q4 strength expected to retrace in Q1 given weaker retail traffic; Q1 revenue guided to be roughly in line with $4.78M* consensus (vs Q4 $5.936M) .

Note: *Estimates from S&P Global.

Financial Results

Quarterly Trend (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Total Revenue ($USD)$4.672M $4.709M $5.936M
SaaS Revenue ($USD)$4.627M $4.661M $5.913M
Gross Margin (%)90.5% 91% 91.1%
Operating Expenses ($USD)$4.443M $5.195M $4.928M
Net Income ($USD)($0.127M) ($0.837M) $0.488M
Diluted EPS ($USD)($0.01) ($0.04) $0.03
Adjusted EBITDA ($USD)($0.070M) ($0.167M) $0.860M

Year-over-Year Quarterly Comparison (Q4 2023 → Q4 2024)

MetricQ4 2023Q4 2024
Total Revenue ($USD)$5.176M $5.936M
SaaS Revenue ($USD)$5.069M $5.913M
Gross Margin (%)94.9% 91.1%
Operating Expenses ($USD)$4.064M $4.928M
Net Income ($USD)$0.984M $0.488M
Diluted EPS ($USD)$0.05 $0.03
Adjusted EBITDA ($USD)$1.170M $0.860M

Versus Consensus (Q4 2024)

MetricConsensusActualBeat/(Miss)
Revenue ($USD)$5.033M*$5.936M +$0.903M*
EPS ($USD)$0.00*$0.03 +$0.03*
Revenue - # of Estimates3*——
Primary EPS - # of Estimates1*——

Note: *Estimates from S&P Global.

Segment/KPI Snapshot (Q4 2024)

KPIQ4 2024
SaaS Revenue ($USD)$5.913M (≈99.6% of total)
Equipment/Other Revenue ($USD)~$0.023M (residual difference)
Gross Margin (%)91.1%
Cash & Equivalents (YE 2024)$4.666M
Stockholders’ Equity (YE 2024)$17.747M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ1 2025None provided“Approximately in line with sell-side consensus” ~$4.78M* New qualitative guide
Gross MarginFY 2025~90–91% operational commentary ~90% expected while improving architecture/data intelligence Maintained
Adjusted EBITDAFY 2025Achieved +$0.52M in FY 2024 Expect positive and improved vs 2024 Maintained/Improving
Cash BalanceEnd Q1 2025None“Approximately $5M” expected New
Cloud Migration2025Dual-run period in 2024 AWS migration largely complete by mid-2025; expect hosting savings Improving cost profile

Note: *Estimates from S&P Global.

Earnings Call Themes & Trends

TopicQ2 2024 (Prior-2)Q3 2024 (Prior-1)Q4 2024 (Current)Trend
AI/Technology initiativesML/statistics, OCR improvements; document liveness; product “Capture”/mobile embedding Continued ML/AI; Hub release; R&D spend shifting; gross margins >90% despite dual-cloud Investing in GPUs for AI/ML; AWS migration nearing finish line Increasing investment/progress
Cloud hosting/costsDual-run (Azure+AWS) compressing margins; re-architecture; capitalization Capitalized software continues; contractors winding down by YE Savings expected; vendors bidding; mid-2025 completion Improving post-migration
Tariffs/macro/consumerRetail declines; bankruptcies/store closures; headwinds offset by diversification Retail double-digit declines; cautious outlook into Q4 Consumer cautious; retail 75% of scans; seasonality retrace in Q1 Persistent headwind
Product/vertical performanceTitle, automotive, email/social gaining; channel partners signed Banking/API shift boosting rates; title growth (Westcor/Doma); automotive up 28% Higher-priced verticals drove Q4; auto notably strong; title expansion continues Scaling mix shift
Regional trends—Canada online bank integration live —Expanding footprint
Regulatory/legal—Stadium alcohol service monitoring/over-service; identity management platform integration Age verification (states, porn websites) and bot deterrence use cases under discussion Growing use cases
R&D executionR&D declining % of OpEx; completion of re-architecture Capitalization continues, but winding down; expect higher non-cash amortization Capitalization minimal; amortization starting; cash R&D flat/modest growth Transition to run-rate
Sales/Account mgmtNew VP Customer Experience; pricing power rising Pipeline stronger; price per transaction up for new business; channel partners expanding 3 new sales hires; Q1 renewals >$10M ACV; bank expansion Building capacity & base

Management Commentary

  • “We utilize the barcode on the back of the license and confirm that the DMV planted hidden attributes exist…Nobody else does this…driven by our long-standing relationship with [AAMVA]” — CEO Bryan Lewis, highlighting product differentiation .
  • “SaaS revenues in Q4 grew 17%…We achieved our goal…finishing adjusted EBITDA positive…and believe that we are well positioned…to accelerate growth, particularly in the back half of the year.” .
  • “Cost of goods sold in Q4…higher…partly due to cloud computing costs as we ran both AWS and Azure in parallel…We expect to largely complete this…move to AWS around middle of 2025.” — CFO Adam Sragovicz .
  • “We made…progress…a prominent domestic bank…increased their contract value by approximately 15%, resulting in…mid–7-figure annual amount…one of our top 3 clients.” — CEO and press release .

Q&A Highlights

  • Back-half visibility tied to rollout schedules and POCs; bank IT middleware change delays near-term but should ease future expansion .
  • Macro/retail: retail weakness persists; IDN’s sales pitch resonates on speed/ease, with fraud loss reduction plus customer acquisition benefits .
  • AWS cost savings expected post-migration; vendors competing on rates; balance versus increased compute for AI/ML .
  • Social media customer update: fully integrated and tested; procurement finalization pending; expanded use cases (age verification, anti-bot) under consideration .
  • Commercial traction and base: Q1 renewals with upsells/guarantees >$10M ACV; a retailer added 3-year commitment with guaranteed volumes .

Estimates Context

  • Q4 2024 vs S&P Global consensus: Revenue $5.936M vs $5.033M*; EPS $0.03 vs $0.00* — significant beat on both lines, supported by higher-priced verticals offsetting retail volume softness .
  • Note: S&P Global “Primary EPS” actual prints at $0.0373*, while company-reported diluted GAAP EPS is $0.03; differences may reflect methodology/rounding. We anchor to company GAAP for reported EPS and use S&P for consensus comparisons .
  • Near-term: Management expects Q1 2025 revenue roughly in line with consensus (~$4.78M*), implying sequential normalization from holiday-driven Q4 and continued retail caution .

Note: *Estimates from S&P Global.

Key Takeaways for Investors

  • Bold beat on Q4 revenue/EPS vs consensus with mix shift to higher-value verticals; watch continued scaling in automotive/title to sustain margin/EBITDA even as retail remains pressured .
  • Margin trajectory should improve as dual-cloud overlap ends; AWS migration completion by mid-2025 and vendor rate competition are catalysts for gross margin expansion .
  • Banking expansion provides durable base: marquee bank uplift (~15%, mid–7 figures) and super-regional bank 3-year rollout support visibility; Q1 renewals >$10M ACV reduce near-term revenue risk .
  • Pipeline catalysts: social media deployment (fully integrated; procurement pending) and background/employment screening channel partners could add diversified, less cyclical volumes .
  • Near-term trading implication: potential consolidation after holiday-fueled Q4 strength as Q1 normalizes, but margin/cost-catalysts (AWS savings) and enterprise deal closures are positive skew for H2 2025 .
  • Medium-term thesis: high-90% SaaS revenue with ~90% GM, pricing power, and broader vertical adoption (title, auto, banking, stadiums, social media) supports sustained double-digit growth potential once macro retail headwinds abate .
  • Risk monitor: retail exposure (~75% of scans) and macro consumer softness; execution on AWS migration timeline and large-customer procurement cycles remain key watch items .