VerifyMe (VRME) Q1 2026 earnings summary

Executive summary

• Revenue for Q1 2026 declined 60% year-over-year to $1.77 million, primarily due to the loss of a major carrier partner in September 2025, impacting ProActive and Premium service lines.

• Gross profit margin improved to 54% from 33% in Q1 2025, driven by a favorable mix of services and process improvements.

• Net loss increased to $679 thousand ($0.05 per share) from $571 thousand ($0.05 per share) year-over-year, reflecting lower revenues despite cost reductions.

• Integration with a new strategic shipping partner is nearing completion, with Premium and Direct Premium services expected to launch in Q2 2026.

• A merger agreement with Open World Ltd. was signed in February 2026, with closing expected by August 31, 2026, subject to customary conditions.

Financial highlights

• Net revenue: $1.77 million for Q1 2026, down from $4.46 million in Q1 2025.

• Gross profit: $960 thousand (54% margin) vs. $1.49 million (33% margin) year-over-year.

• Operating expenses decreased to $1.73 million from $2.08 million, mainly due to lower amortization and reduced headcount.

• Net loss: $679 thousand ($0.05 per share), compared to $571 thousand ($0.05 per share) in Q1 2025.

• Cash and cash equivalents at March 31, 2026: $3.52 million.

Outlook and guidance

• Management expects to begin broadly offering Premium and Direct Premium services to customers of the new strategic partner in Q2 2026.

• Anticipates a return to historical seasonality trends in 2026, with higher revenues in Q4.

• The company believes current cash and equivalents will fund operations for the next 12 months.

• Strategy includes transitioning legacy customers and acquiring new customers to drive revenue growth.