Strong Q1 2026 Revenue Guidance
Management expects Q1 2026 revenue of approximately $2.2 million, representing a ~37% increase versus Q1 2025 and a larger sequential improvement versus Q4 2025; company expects substantial improvement in Q1 2026 bottom-line performance versus all FY2025 quarters.
Hardware and Services Growth in 2025
Hardware revenue more than doubled (over 100% increase) to $1.3 million in 2025; Service revenue increased 6% to $1.2 million, reflecting expanding customer base and deployments.
Improved License Gross Margin and High Blended Margins
License fee gross margin improved to ~91% in 2025 (from ~88% in 2024); blended gross margins remain robust (company cites high‑70s to low‑80s range overall and expects ~80%+ on strong Q1 mix).
Cost Reduction and Operating Expense Control
SG&A reduced by almost $800,000 (approximately 11% year-over-year) and total operating expenses decreased ~7% in 2025 due to reorganizations, lower marketing/show expenses and other cost controls.
Stronger Cash Position and Balance Sheet Improvements
Year-end cash increased to $2.7 million (up more than $2 million vs end of 2024 when cash was $438k); current assets $4.6 million and book value rose to $7.6 million from $3.8 million at year-end 2024 (roughly doubled).
Product and Market Initiatives
Launched FBI FAP 20 Certified EcoID III fingerprint scanner and preparing PortalGuard Identity Platform Version 7.0 (undergoing third‑party security testing, planned release in Q2); introduced Passkey:YOU FIDO2 passkey solution and Defense & Intelligence Cybersecurity Initiative—positioning for regulated verticals (defense, financial services, healthcare).
Channel Partnerships and International Strategy
Expanded partner-centric model (roughly 50% of new U.S. business and nearly 100% of international business via partners) and announced strategic reseller relationships including TD Synnex and Amazon to act as force multipliers for public sector and international expansion.
Recurring Revenue Profile and ARR Commentary
Business described as predominantly subscription-based; management indicated ARR runs in the $6M–$7M range and emphasized focus on multiyear and subscription deals (including on-prem and cloud-flex deployments).