INTZ — Intrusion Inc.

Summary of Intrusion Inc. (INTZ) Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Fourth Quarter Revenue: $1.5 million, a decrease of 25% sequentially and 12% year-over-year, primarily due to delayed funding from a U.S. government contract.
• Full Year Revenue: $7.1 million, up 23% year-over-year, driven by contract expansions with the U.S. Department of War.
• Net Loss: Fourth quarter net loss of $2.8 million ($0.14 per share), compared to a net loss of $2 million in Q4 2024. Full year net loss was $9.1 million ($0.46 per share), an increase of $1.3 million from the prior year.
• Gross Profit Margin: Fourth quarter margin at 74%, down from the prior year; full year margin at 76%, a decline of approximately 93 basis points.
• Operating Expenses: Q4 operating expenses totaled $4 million, up $0.3 million sequentially and $0.8 million year-over-year, reflecting increased sales and marketing investments.

2. Strategic Updates and Business Highlights

• Debt Elimination: Successfully eliminated outstanding debt and Series A preferred stock at the beginning of the fiscal year.
• Product Launches: Expanded Shield Cloud solutions on AWS and Microsoft Azure marketplaces, enhancing customer access.
• Partnerships: Collaborated with PortNexus to integrate Shield technology into their MyFlare safety solution for schools and launched the P.O.S.S.E program for law enforcement.
• Sales Team Expansion: Hired new leadership for public sector sales and channel partnerships to strengthen business development efforts.

3. Forward Guidance and Outlook

• Revenue Recognition: Anticipates recognizing delayed revenue from the government contract in the first half of 2026 as procurement normalizes.
• Growth Expectations: Confident in the potential for significant growth in 2026, particularly from critical infrastructure solutions and the P.O.S.S.E program.
• Breakeven Operations: Aiming for breakeven operations by Q3 2026, contingent on securing new contracts and overcoming current delays.

4. Bad News, Challenges, or Points of Concern

• Contract Delays: The delay in funding from the Department of War contract negatively impacted Q4 revenue and reflects broader challenges in the government contracting space due to operational constraints and the U.S. government shutdown.
• Increased Operating Losses: Despite revenue growth for the year, the net loss increased, raising concerns about the sustainability of current spending levels.
• Market Risks: The evolving cybersecurity landscape, including the rise of AI-driven threats, presents both challenges and opportunities, necessitating continuous adaptation and investment in technology.

5. Notable Q&A Insights

• P.O.S.S.E Program Economics: Average contract values for sheriff's departments vary based on network needs, with pilot programs showing high adoption rates.
• Sales and Marketing Investment: The current high level of sales and marketing expenses is expected to continue, with potential offsets from cost efficiencies in other areas.
• Future Sales Cycles: No significant delays reported in commercial sales cycles, though there is an increasing urgency for rapid response to cybersecurity threats.
• Critical Infrastructure Customer Satisfaction: Positive feedback from critical infrastructure clients, indicating potential for expansion in various regions.

Overall, while Intrusion Inc. faced challenges in Q4 2025, particularly with contract delays impacting revenue, the company remains optimistic about future growth driven by strategic partnerships and product expansions.