• Annual Revenue: Decreased by 4% compared to 2023.
• Fourth Quarter Revenue: $7.7 million, down from $8.7 million in Q4 2023.
• Gross Profit (Q4 2024): $2.4 million, down from $2.9 million in Q4 2023.
• Gross Margin (Q4 2024): 32%, compared to 33% in Q4 2023.
• Full Year Gross Margin (2024): 36%, up from 32% in 2023.
• Operating Expenses (Q4 2024): $2.8 million, unchanged from Q4 2023.
• Net Loss (Q4 2024): $0.5 million or $0.05 per diluted share, compared to net income of less than $0.1 million in Q4 2023.
• Adjusted EBITDA (2024): $1 million, up from $0.4 million in 2023.
• Cash (December 31, 2024): $2.8 million, down from $3.1 million on December 31, 2023.
• Convertible Debt: Reduced from $1.1 million to $800,000.
• Warrant Inducement Capital Raise: $4.7 million completed in January 2025.

• Warning! GuruFocus has detected 3 Warning Signs with VRME.

Release Date: March 06, 2025

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

Positive Points

• VerifyMe Inc (NASDAQ:VRME) experienced year-over-year improvements in gross profit, gross margin, and adjusted EBITDA despite a decrease in annual revenue.
• The company successfully completed a $4.7 million warrant inducement capital raise and retired its bank debt, strengthening its financial position.
• VerifyMe Inc (NASDAQ:VRME) reduced its convertible debt from $1.1 million to $800,000, with remaining holders being affiliates and board members.
• The precision logistics segment, particularly the PeriShip business, remains a positive cash-generating operation.
• The company has filed a $15.8 million at-the-market sales offering, providing flexibility to generate additional capital and liquidity.

Negative Points

• Annual revenue for 2024 was 4% below 2023, primarily due to underperforming investments in the authentication segment.
• The loss of a significant customer in the premium services segment negatively impacted revenue, contributing to a $1 million decrease in Q4 revenue compared to the previous year.
• Gross profit decreased by $0.5 million in Q4 2024 compared to Q4 2023, with gross margin slightly declining from 33% to 32%.
• The authentication segment, including the divested Trust Codes Global, did not achieve expected growth, resulting in an operating loss of $1.2 million in 2024.
• The company has not provided guidance for 2025, citing unpredictable market conditions and the impact of the lost customer on future performance.

Q & A Highlights

Q: Could you provide the expected share count for Q1? A: Nancy Meyers, CFO: The expected share count for Q1 will be about 12.5 million.

Q: Can you comment on the logistics trends and any company-specific insights? A: Adam Stedham, CEO: The loss of a major customer will continue to impact comparisons in Q1 and Q2. While there is growth in our direct premium business, it is not enough to offset the loss. The proactive business remains stable, but overall market conditions are slightly down. We are adding more customers to balance the reduction in shipments from existing customers.

Q: Is there any guidance for 2025, and can you provide any insights? A: Adam Stedham, CEO: We have not provided guidance for 2025 and do not plan to. The business is stable, except for the loss of one customer. We have aligned costs with revenue changes and are optimizing sales strategies. Market conditions are unpredictable, and we are focused on identifying options for shareholder returns with minimal risk.

Q: Given the softer-than-expected Q4, is it reasonable to model a low double-digit decline on the top line for the first half of the year? A: Adam Stedham, CEO: Yes, that is a reasonable modeling assumption given the current factors and unpredictable market conditions.

Q: Any closing remarks on the company's transition and future outlook? A: Adam Stedham, CEO: 2024 was a transition year, and we have successfully navigated it. The company has set a strong foundation for growth, and we look forward to communicating with you throughout 2025.

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