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II

INTRUSION INC (INTZ)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 revenue of $1.873M grew 28% year over year and 6% sequentially, driven by DoD contract expansion and Shield product deployments; gross margin held at 76% .
  • Revenue modestly beat Wall Street consensus by ~$0.08M (~4%), while EPS of -$0.10 slightly missed the -$0.09 consensus; 2 estimates for each metric. Bolded miss on EPS, modest revenue beat* [GetEstimates - S&P Global].
  • Operating expenses rose to $3.5M (+$0.1M q/q; +$0.4M y/y) as management invested in R&D and go-to-market; net loss improved y/y to $2.042M (-$0.10 per share) .
  • Near-term catalysts: AWS Marketplace launch later in August, Azure Marketplace later this year, and incremental DoD funding of $3.0M, with management highlighting growing critical infrastructure opportunities .

What Went Well and What Went Wrong

What Went Well

  • Fifth consecutive quarter of sequential revenue growth, supported by DoD expansion and Shield deployments; CEO: “another positive step forward…toward sustainable growth and long-term profitability” .
  • Strong gross margin (76%) sustained despite mix shifts, reflecting product strength and disciplined delivery .
  • Liquidity remained solid with $4.7M cash and $3.7M short-term U.S. Treasuries at quarter-end, supporting operations into early 2026 per management commentary .

What Went Wrong

  • EPS missed consensus by $0.01 as operating expenses rose with R&D and sales investments; OpEx increased to $3.5M (+$0.1M q/q; +$0.4M y/y) * [GetEstimates - S&P Global].
  • Revenue base still small; growth relies on government contracts and early-stage marketplace initiatives, with management noting elongated cycles in larger critical infrastructure deals .
  • No formal revenue/EPS guidance provided; reliance on execution of AWS/Azure marketplace and reseller/channel strategy, with CEO acknowledging past reseller pruning and the need to follow marketplace best practices .

Financial Results

Core P&L vs prior year, prior quarter, and estimates

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$1.460 $1.775 $1.873
Gross Profit ($USD Millions)$1.110 $1.343 $1.431
Gross Margin %76% 76% 76%
Total Operating Expenses ($USD Millions)$3.143 $3.436 $3.517
Operating Loss ($USD Millions)$(2.033) $(2.093) $(2.086)
Net Loss ($USD Millions)$(2.067) $(2.098) $(2.042)
Diluted EPS ($USD)$(0.53) $(0.11) $(0.10)

Actuals vs Wall Street Consensus (S&P Global)

MetricQ2 2025 ConsensusQ2 2025 ActualSurprise
Revenue ($USD)$1,797,500*$1,873,000 +$75,500 (+4%)*
Primary EPS ($USD)$(0.09)*$(0.10) -$0.01*

Values marked with * retrieved from S&P Global.

Revenue Mix (Consulting vs Shield)

MetricQ2 2024Q1 2025Q2 2025
Consulting Revenue ($USD Millions)~$1.2 (derived from +$0.2M y/y to $1.4M) $1.4 $1.4
Shield Revenue ($USD Millions)~$0.3 (derived from +$0.2M y/y to $0.5M) $0.4 $0.5

Note: Q2 2024 mix derived from CFO’s year-over-year deltas stated on the Q2 2025 call .

KPIs and Balance Sheet

KPIQ1 2025Q2 2025
Cash & Equivalents ($USD Millions)$10.744 $4.689
Short-term Investments ($USD Millions)—$3.749
Deferred Revenue ($USD Millions)$0.918 $1.975
Weighted Avg. Diluted Shares (Millions)19.216 19.895

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
AWS Marketplace Launch (Shield Cloud)Q3 2025 (Aug-2025)“Available during Q2” (Q1 call) Launch later this month; active beta, marketing plan Clarified timeline; execution focus
Azure Marketplace Availability2025Not previously specifiedLater this year New timeline disclosed
Liquidity runway2025–early 2026Fund operations into 2026 (Q1 PR) Sufficient capital through remainder of 2025 into early 2026 (Q2 call) Maintained
Revenue/EPS GuidanceQ3/Q4 2025NoneNone providedMaintained (no formal guidance)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AWS/Azure MarketplaceAWS planned; high-growth engine; pricing/bundles and best practices; increased digital marketing AWS launch later Aug; active beta; Azure later this year; committed marketing spend Improving execution
Critical Infrastructure & DoDPiloted OT/critical infra product; DoD award in 2H24; pipeline expanding $3.0M additional DoD funding; operational deployment in critical infrastructure; incremental revenue Strengthening
Government budget backdropFluid but cyber protected; steady contracts; potential elongated cycles New federal budget passage seen as tailwind for new contracts Tailwind emerging
Channel/Reseller strategyRevamp channel program; refine pricing/messaging; hire channel leader Pruning underperforming resellers; focus on MSPs/MSSPs; trade show engagement Refinement progressing
Product & R&DCommand Hub (AI insights); Shield Sentinel; continued R&D Increased R&D spend for critical infra monitoring; Shield endpoint with partners Investment up
Balance sheet & capitalCash improved; debt eliminated; baby shelf constraint removed Cash + short-term USTs; no near-term capital raise anticipated Stable/liquid

Management Commentary

  • CEO on growth trajectory: “another positive step forward… deliver consistent sequential revenue growth and make meaningful progress toward… sustainable growth and long-term profitability” .
  • Strategic focus: “on track… make our Shield Cloud product generally available on the AWS Marketplace… anticipate product launch later this month,” and “plan to make ShieldCloud available on the Microsoft Azure Marketplace later this year” .
  • DoD expansion catalyst: “$3,000,000 extension and expansion of our contract with the Department of Defense… already generating incremental revenue” .
  • Channel discipline: “refine our reseller space… dropped [underperformers] and added some new ones… focused primarily on MSPs and MSSPs” .
  • Liquidity outlook: “sufficient capital to fund our operations through the remainder of calendar twenty twenty five and into early twenty twenty six” .

Q&A Highlights

  • DoD contract scope: “It’s both… renewal … and a dollar value increase… increase in scope,” with domestic critical infrastructure opportunity “perhaps even larger than the international” .
  • Marketplace marketing: adopting best-practice playbooks and committing spend to drive commensurate results .
  • Reseller strategy: pruning low performers; better qualification; MSP/MSSP focus; trade show cadence .
  • Enterprise vs federal: best near-term entry via MSPs/MSSPs; enterprise not the core focus for now .
  • Break-even/cash flow: management targets nearer-term breakeven contingent on landing larger contracts; no near-term capital raise needed .

Estimates Context

  • Q2 comparison: Revenue beat (~4%), EPS missed by $0.01; 2 estimates for both metrics*.
  • Implications: Modest top-line beat supports sequential growth narrative; EPS miss reflects incremental OpEx investment in R&D and go-to-market that management frames as necessary to accelerate traction * [GetEstimates - S&P Global].
  • Revisions watch: Potential upward adjustments to H2 revenue expectations contingent on AWS/Azure marketplace adoption and critical infrastructure deployments; lack of formal guidance keeps estimate risk tied to execution milestones .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue momentum intact (5th straight sequential increase); growth increasingly supported by DoD and critical infrastructure deployments, with Shield revenue up q/q and y/y .
  • Near-term catalysts: AWS Marketplace launch (Aug), Azure later in 2025; successful marketplace marketing execution is central to broadening commercial adoption .
  • Mix and margin: 76% gross margin sustained; continued mix variability likely as Shield scales and consulting remains material .
  • Investment for growth: OpEx up modestly q/q and y/y as R&D and sales/marketing investments increase; watch for operating leverage as revenues scale .
  • Liquidity: $4.7M cash plus $3.7M USTs; deferred revenue up sharply q/q; management does not expect a near-term capital raise .
  • Execution priorities: Marketplace best practices, MSP/MSSP channel refinement, and landing larger deals are key to accelerating beyond mid-single-digit sequential growth .
  • Trading lens: Near-term upside tied to evidence of marketplace traction (logos, bookings, Shield mix) and further government/critical infrastructure awards; downside risk if marketplace adoption lags or budget cycles elongate .