Release Date: April 29, 2025

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

Positive Points

• Intrusion Inc (NASDAQ:INTZ) reported its fourth consecutive quarter of sequential revenue growth, highlighting a positive trend in financial performance.
• The company is experiencing strong demand for its products both domestically and in the Asia-Pacific region, driven by a growing positive reputation.
• Intrusion Inc (NASDAQ:INTZ) has made significant progress in making its Shield Cloud product available on the AWS marketplace, which is expected to contribute positively to revenue in the second half of 2025.
• The company has strengthened its balance sheet, eliminating outstanding debt and securing a strong cash position to fund operations through 2025 and beyond.
• Intrusion Inc (NASDAQ:INTZ) announced a new partnership with Port Nexus, integrating its technology into Port Nexus solutions, which could open new revenue streams.

Negative Points

• Despite revenue growth, Intrusion Inc (NASDAQ:INTZ) is not yet satisfied with the level of growth and is working on initiatives to drive further expansion.
• The company has experienced significant deals slipping into the next quarter, impacting the timing of revenue and resource allocation.
• Operating expenses increased slightly due to professional fees and a one-time settlement, which could affect profitability.
• Net loss for the first quarter of 2025 was $2.1 million, an increase from the previous year's net loss of $1.7 million.
• The company is still waiting for clarity on the federal budget, which poses a risk to its government contracts and could impact future revenues.

Q & A Highlights

• Warning! GuruFocus has detected 2 Warning Signs with INTZ.

Q: Tony, you mentioned potential changes to pricing. Could you provide more details on what you are considering? A: Tony Scott, CEO: We are reviewing our pricing strategy to ensure competitiveness, especially as we expand our Shield family of products. This includes adjusting pricing terms to align with managed service providers' (MSPs) monthly billing cycles, although we will still receive payments quarterly or annually. We are not planning to reduce prices but are making adjustments to better cater to MSPs and MSSPs. Additionally, as we enter the AWS marketplace, we will develop pricing schemes that fit customer expectations for bundled purchases.

Q: How will you support your entrance into the AWS marketplace through marketing, and is Amazon assisting in this effort? A: Tony Scott, CEO: Once we are on the AWS marketplace, we plan to utilize a tiered set of capabilities to create product awareness, including digital marketing and strategic placement in various categories. We intend to follow best practices that have proven successful for others in this space.

Q: Is there an opportunity to expand the relationship with the Department of Defense (DOD) over time? A: Tony Scott, CEO: Yes, we believe there is potential for expansion. We are in ongoing discussions and have recently engaged with new quarters within the DOD. We are optimistic about broadening our relationship with government customers.

Q: What are you hearing about CIOs' budgets for cybersecurity products this year, especially at the RSA conference? A: Tony Scott, CEO: I haven't noticed any significant changes in spending. The RSA conference is bustling, indicating robust interest and energy in cybersecurity. AI is a major topic, and we incorporate it into our products. The demand for cybersecurity solutions remains strong, driven by persistent threats.

Q: Regarding the Port Nexus partnership, what is the revenue potential, and when do you expect to start earning revenue from it? A: Tony Scott, CEO: It's too early to project revenue, but both companies have ambitious expectations. Port Nexus has experience deploying solutions in schools and public institutions, and with our endpoint protection, there is potential for expansion. We expect to see initial revenue towards the end of Q2 and beyond.

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