Intrusion (INTZ) Q3 2024 earnings summary

Executive summary

• Achieved second consecutive quarter of sequential revenue growth, with Q3 2024 revenue at $1.5 million, up 3% sequentially and 2% year-over-year, signaling progress toward sustainable growth and profitability.

• Intrusion Shield revenue rose 49% sequentially in Q3 2024, driven by seven new customer wins, a $2 million Department of Defense contract, and zero customer churn, totaling 18 new logos year-to-date.

• Net loss for Q3 2024 was $2.1 million, or $(0.35) per share, improving by 36% year-over-year, with operating expenses down 17% and cost controls in place.

• Cash and cash equivalents stood at $1.1 million as of September 30, 2024, with a working capital deficit of $1.0 million.

• Leadership transition with the retirement of a long-serving board member and search for a replacement underway.

Financial highlights

• Q3 2024 revenue was $1.5 million, up 3% sequentially and 2% year-over-year, with gross margin at 77% for Q3 and 77.5% for the nine months ended September 30, 2024.

• Intrusion Shield revenue increased by 49% sequentially, offsetting the loss of a large early customer.

• Consulting revenue was $1.1 million, down $0.1 million sequentially and flat year-over-year, with declines due to delayed federal budget approval.

• Government customers accounted for 86% of Q3 revenue, up from 43% in Q3 2023.

• Interest expense fell to $12,000 in Q3 2024 from $211,000 in Q3 2023, mainly due to debt-for-equity exchanges.

Outlook and guidance

• Management anticipates continued financial improvement in Q4 2024 and into 2025, supported by strong Shield technology momentum, new customer wins, and recent contract awards.

• Expects additions and expansions to the Department of Defense contract in coming quarters.

• Continued reliance on equity financings and ATM program to fund operations; inability to raise funds may threaten ongoing operations.