Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Intrusion Inc (INTZ, Financial) announced significant customer wins, including a major contract in the Philippines for secure electronic transmission services, valued at approximately $25 million.
- The company has successfully added new logos across various sectors, indicating strong bookings momentum and diversification in its customer base.
- Intrusion Inc (INTZ) has made strategic investments in AI technology through a minority stake acquisition in Klever AI, enhancing its product offerings and market penetration.
- The company reported a gross profit margin increase to 80% in Q1 2024 from 76% in Q1 2023, reflecting a favorable product mix.
- Intrusion Inc (INTZ) regained compliance with NASDAQ's minimum bid price and equity requirements, stabilizing its market position.
Negative Points
- Total revenue for Q1 2024 was $1.1 million, marking a decrease of $0.2 million both sequentially and year-over-year, primarily due to a drop in consulting revenue.
- The company experienced a delay in federal contract awards due to the late approval of the federal budget, impacting revenue timing.
- A significant customer did not renew their contract, which is expected to impact revenues starting from Q2 2024.
- Intrusion Inc (INTZ) reported a net loss of $1.7 million in Q1 2024, although it was an improvement from previous quarters.
- The company continues to rely on various financing measures to fund operations, indicating potential liquidity concerns.
Q & A Highlights
Q: Good afternoon, guys. Thanks for taking my questions. Tony, I was hoping you could help clear something up for me from the iOne resources agreement in the Philippines gets described as being potentially a million of ARR beginning in the second half of this year, but it's forcing your election rights? So, what carries into 2025 that that makes it annual recurring revenue?
A: Yes, 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 threats continue to evolve over time. So during that downtime, we'll be preparing and getting ready for the next set of elections, and 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 and in different waves over the period of time. So, that's kind of the reason it looks to us like ARR it'll be our revenue will be smoothed over the life of the contract.
Q: No, that makes sense. And that's great to hear. And second, I wanted 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?
A: And could you give us any kind of indication of what the average and either both duration, I guess of the contracts are and what the size is in terms of potential revenue? And there's no average at this point that makes any sense. So and there's a couple of reasons for Scott. The probably the biggest reason is that by their very structure. Many of these start small and dumb might be a know and $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 and deals like that. And I mentioned in the call, this is a pattern we're starting to see with some of the larger customers.
Q: Got 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.
A: Every deal is different at this point from 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 one. But some, I think all of those other cases that I can think of it's a and a discussion that we have with the customer about what makes sense and 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.
Q: Congratulations on the Philippine iOne resource a deal. My question is, should we expect more opportunities in Asia or just international in general with that Philippines deal?
A: And I think you can anticipate more in Asia Pac as I think everybody realizes we've sort of underperformed in the US 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 proportionately, I think we expect to have a little more balanced, some set of wins over time. But in the short run, Asia-Pac is a great opportunity for us and one that we expect will be really good for the for the company.
Q: Yes, 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 and federal and if you have any thoughts about that and then I have a follow-up.
A: Yes. So we are we have, as I think Kim mentioned, some already booked some contracts in federal that we expect will make up further for the gap that we had from a lost contract from last year. 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 and down. I would expect and hope that we get some additional on top of what we've already, but we've already landed.
Q: Okay, helpful. One last question on the clever AI announcement. Have you guys discussed any sort of roadmap on the endpoint and cloud products yet?
A: And yes, we have a multiyear road map actually for those. And I expect that clever will play a pretty important role in our continuing advancement of those products.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
