Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Intrusion Inc (NASDAQ:INTZ) reported a second consecutive quarter of sequential revenue improvement, indicating positive momentum towards sustainable growth.
• The company signed seven new Shield logos in the third quarter, bringing the total new logo count to 18 for the year, showcasing strong customer acquisition.
• Intrusion Inc (NASDAQ:INTZ) experienced near-zero churn with Shield customers, highlighting customer satisfaction and retention.
• The company secured a significant contract with the US Department of Defense, contributing to a 49% sequential increase in Shield revenue.
• Intrusion Inc (NASDAQ:INTZ) maintained a healthy gross margin above 77%, essential for long-term financial goals.

Negative Points

• Intrusion Inc (NASDAQ:INTZ) is not in compliance with NASDAQ's $1 minimum bid price requirement, posing a risk to its stock listing.
• The company reported a net loss of $2.1 million for the third quarter, despite improvements from the previous year.
• Operating expenses increased by $0.1 million sequentially, driven by salary increases for non-executives.
• Consulting revenue decreased by $0.1 million sequentially, indicating a decline in task order-related services.
• The company faces uncertainty regarding federal government budgeting and potential impacts from political changes.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with INTZ.

Q: Can you remind us when the large Shield client started to exit, and how does this affect revenue growth optics in 2025? A: Tony Scott, CEO: The last revenue from the initial Shield client was in the first quarter of this past year. This should help the revenue growth optics as we anniversary that.

Q: Can you provide any details on the size and nature of the new Shield logos? A: Tony Scott, CEO: The new Shield logos vary widely. Our reputation in the Asia Pacific region is growing, leading to more significant opportunities. We are also looking to replicate our large Department of Defense contract in other regions, thanks to the enterprise features we've built into our product.

Q: Is there any potential impact from the recent election results on government business or federal budgeting? A: Tony Scott, CEO: We don't expect significant impact due to politics. The main concern is a prolonged continuing resolution that could affect budgeting. However, cybersecurity threats remain constant, regardless of political changes, sustaining demand for our solutions.

Q: Have you seen increased opportunities in the US for election integrity solutions following your success in the Philippines? A: Tony Scott, CEO: We've received inquiries but have no solid signed business yet. The concern for election integrity remains globally, and we believe our solutions can help defend against potential threats.

Q: With elections over, are chief information officers now focusing on 2025 capital spending plans? A: Tony Scott, CEO: It's too early to tell. I will be attending an exposition soon, which may provide more insights. Currently, it's premature to make specific comments on this.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.