Strong Revenue Growth and Cash Position at BIO-key International

BIO-key International Announces Significant Increase in Q3 Revenue

HOLMDEL, N.J. – BIO-key International, Inc. (Nasdaq: BKYI), a leading provider of innovative workforce and customer Identity and Access Management (IAM) solutions, has revealed promising financial results for its third quarter. With a notable 18% increase in revenue compared to the previous year, BIO-key has positioned itself strongly in a competitive market.

Financial Performance Highlights

During the third quarter, BIO-key reported revenues of $2.1 million, up from $1.8 million in the same quarter last year. This growth was primarily driven by a $0.5 million surge in license revenue attributed to expanded software deployments by long-term customers.

The company demonstrated an impressive gross profit of $1.7 million with a gross margin of 78.3%, a significant improvement from the prior year’s gross profit of $0.3 million at an 18.7% margin. This enhancement is largely due to the increased high-margin license revenue and reduced costs for supporting deployments.

Cost Management and Net Loss Reduction

BIO-key successfully decreased its operating expenses by $46,000 from the previous year, demonstrating effective cost management. This reduction stemmed from proactive measures in administration and sales personnel costs, offset slightly by an increase in professional services expenses.

The company reported a smaller net loss of $0.7 million, improving dramatically from a net loss of $1.8 million in the previous year. This positive shift reflects both enhanced revenue and stable operating expenses, as well as the absence of a hardware reserve that impacted profits last year.

Growing Cash Position and Activities

Cash utilized in operating activities for the first nine months of 2024 was $2.4 million, slightly higher than the $2.3 million used in the same timeframe last year. Notably, BIO-key raised $1.9 million in gross proceeds through a warrant inducement agreement, strengthening its cash position to $1.8 million by the end of Q3 2024, a substantial increase compared to the $0.5 million reported at year-end 2023.

Engagement with Investors

BIO-key is set to host an investor call to discuss these results and future strategies. Stakeholders are encouraged to join in to gain insights into the company’s progress and forthcoming objectives.

Recent Business Developments

In recent months, BIO-key has secured multiple major contracts, including a notable $910k order from a long-term financial services client aimed at enhancing their biometric customer identification technology.

Additionally, the company has seen a significant follow-on order worth $500k awarded by a leading international defense ministry for its biometric user authentication solutions.

Future Expectations and Strategic Direction

BIO-key’s CEO, Mike DePasquale, expressed optimism regarding the future, stating, “We anticipate that our performance may vary from quarter to quarter, but we are committed to building high-margin, recurring revenue streams. Our goals for the 2024 fiscal year include meeting or exceeding last year's revenue of $7.75 million.”

The company plans to explore strategic opportunities that leverage its core strengths while actively pursuing operational efficiencies to achieve profitability.

Financial Outlook

As BIO-key enters the fourth quarter, it remains focused on achieving growth through the expansion of its software licensing and ongoing research and development initiatives. The company anticipates further advancements in its Identity and Access Management solutions, catering to the evolving needs of its customers.

Frequently Asked Questions

What were the key financial highlights for BIO-key in Q3 2024?

BIO-key reported an 18% increase in revenue to $2.1 million and reduced its net loss to $0.7 million.

What factors contributed to BIO-key's revenue growth?

The growth was primarily due to expanded software deployments by long-term customers, resulting in a rise in license revenue.

How has BIO-key managed its operating expenses?

The company successfully reduced operating expenses by $46,000 through strategic cost management measures.

What improvement was seen in BIO-key's cash position?

BIO-key's cash position improved significantly, reaching $1.8 million at the end of Q3 2024, compared to $0.5 million at year-end 2023.

What are BIO-key's future expectations?

The company aims to meet or exceed its 2023 revenue target of $7.75 million and focus on building high-margin, recurring revenue streams.

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