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BIO-key International Inc (BKYI)
NASDAQ:BKYI
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BIO-key International (BKYI) AI Stock Analysis

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BKYI

BIO-key International

(NASDAQ:BKYI)

Rating:47Neutral
Price Target:
$1.00
▲(33.33% Upside)
BIO-key International's overall stock score is primarily impacted by its challenging financial performance and unattractive valuation. While there are positive signs from recent earnings and corporate events, the company's ongoing profitability issues and bearish technical indicators weigh heavily on the score.
Positive Factors
Financial Performance
BKYI reported better-than-expected 1Q25 results with revenue of $1.6M, above the estimate of $1.3M.
Market Expansion
BKYI is building a military- and intelligence-focused global sales team targeting the growing EU defense opportunity.
Product Innovation
BKYI recently entered the passkey authentication market with the launch of 'Passkey:YOU', a unique password-less authentication solution.
Negative Factors
Revenue Decline
2024 total revenue was down 11% year-over-year, as strong growth in license revenue was offset by declines in hardware sales and services revenue.
Strategic Shift
Results were below expectations due to an intentional shift away from its Swivel Secure brand to focus on core Bio-Key branded solutions, resulting in lower 2024 results.

BIO-key International (BKYI) vs. SPDR S&P 500 ETF (SPY)

BIO-key International Business Overview & Revenue Model

Company DescriptionBIO-key International (BKYI) is a technology company specializing in biometric identification and authentication solutions. Operating primarily within the cybersecurity sector, BIO-key provides a range of products and services designed to enhance security through fingerprint recognition, facial recognition, and other biometric technologies. The company's offerings cater to various industries, including government, healthcare, and financial services, focusing on providing secure access to systems and data while ensuring compliance with regulatory standards.
How the Company Makes MoneyBIO-key generates revenue through multiple streams, primarily by selling biometric hardware and software solutions to businesses and government entities. Their revenue model includes direct product sales, software licensing fees, and subscription services for their identity management platforms. Additionally, the company may enter into strategic partnerships that enhance its product offerings or expand its market reach, contributing to revenue growth. Ongoing maintenance and support services for their installed systems also provide a recurring revenue stream, while consulting services related to biometric implementations further bolster their earnings.

BIO-key International Earnings Call Summary

Earnings Call Date:Aug 13, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 13, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a strong positive trajectory with significant revenue growth and strategic expansions, particularly in the defense sector. However, there are challenges in maintaining margins and a reported loss in the quarter. The potential of undisclosed contracts and expanding market opportunities present a promising outlook.
Q2-2025 Updates
Positive Updates
Significant Revenue Growth
BIO-key's Q2 2025 revenue increased by 49% to $1.7 million compared to $1.1 million in Q2 2024, with improvements in each segment.
Expense Reduction Achievements
SG&A expenses were trimmed by 13.5% versus last year, more than offsetting increased investments in R&D.
International Defense Contracts
Secured major contracts including a deployment with the National Bank of Mozambique and a 3-year PortalGuard deployment with a Middle East police force.
Expanded Market Opportunities
Improved traction in EMEA regions with a focus on BIO-key branded solutions, leading to positive year-over-year revenue comparisons.
Strong Gross Margins
Despite a decline, gross profit increased by 40% to $1.2 million due to increased total revenue, maintaining a strong gross margin of 73% in Q2 2025.
Negative Updates
Decline in Gross Margin
Gross margin decreased from 77% in Q2 2024 to 73% in Q2 2025, attributed to a large increase in hardware revenue, which carries a lower margin.
Challenges in Announcing Contracts
Inability to disclose details of certain significant defense contracts due to confidentiality, which may affect investor perception.
Loss in Q2 2025
The company reported a loss of $1 million in the quarter, indicating a need for continued revenue growth to reach breakeven.
Company Guidance
In the second quarter of 2025, BIO-key International reported a strong performance with a 49% increase in revenue to $1.7 million compared to the previous year. This growth was driven by significant increases in hardware revenue, notably through additional deployments of finger biometric scanners. The company successfully reduced SG&A expenses by 13.5%, partially offsetting increased investments in R&D, which were aimed at enhancing their solutions. Gross profit rose by 40% to $1.2 million, despite a slight decline in gross margin from 77% to 73%, due to a higher proportion of hardware sales. BIO-key also reduced its note payable significantly from $1.5 million at the end of 2024 to $447,000. The company sees promising growth opportunities in the EMEA region and has secured major contracts in the defense sector, including a significant deployment with the National Bank of Mozambique. BIO-key continues to focus on improving margins and reducing costs to support its path to profitability.

BIO-key International Financial Statement Overview

Summary
BIO-key International faces significant financial challenges, with negative profitability and cash flow metrics. Despite improvements in gross profit margin and managed debt levels, the company struggles with consistent revenue growth and cash generation, indicating potential risks.
Income Statement
30
Negative
The company's income statement reveals a challenging financial position with persistent negative net income and EBIT. The gross profit margin has improved significantly from earlier years, indicating better cost control, yet the negative EBIT and net profit margins suggest ongoing operational inefficiencies. Revenue growth has been erratic, with notable increases in some years but an overall lack of consistent upward trajectory.
Balance Sheet
45
Neutral
The balance sheet reflects a mixed situation. The debt-to-equity ratio is relatively low, suggesting manageable debt levels compared to equity. However, the equity ratio shows a moderate reliance on liabilities to finance assets. Return on equity remains negative due to continuous losses, highlighting profitability issues. Overall, the balance sheet shows some stability but is weakened by ongoing profitability concerns.
Cash Flow
35
Negative
The cash flow statement shows significant negative operating cash flow, which overshadows the company's financial flexibility. Free cash flow has consistently been negative, indicating challenges in generating sufficient cash from operations. The high operating cash flow to net income ratio suggests potential cash flow generation issues. Despite some positive financing cash flow, the cash flow position remains concerning.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue6.91M6.93M7.75M7.02M5.11M2.84M
Gross Profit5.44M5.64M1.43M4.58M3.44M2.04M
EBITDA-3.37M-3.55M-7.85M-11.37M-4.53M-4.90M
Net Income-4.21M-4.30M-8.52M-11.91M-5.07M-9.67M
Balance Sheet
Total Assets10.52M8.62M4.52M11.91M17.77M22.52M
Cash, Cash Equivalents and Short-Term Investments2.28M437.60K511.40K2.64M7.75M17.51M
Total Debt61.62K1.78M365.35K3.24M264.16K730.47K
Total Liabilities3.66M4.84M3.45M4.85M2.19M2.19M
Stockholders Equity6.85M3.77M1.06M5.30M15.58M20.34M
Cash Flow
Free Cash Flow-3.52M-2.93M-3.79M-6.31M-9.02M-4.99M
Operating Cash Flow-3.51M-2.91M-3.79M-6.23M-8.98M-4.95M
Investing Cash Flow-17.23K-13.05K-1.00K-696.62K-42.02K-2.23M
Financing Cash Flow4.41M2.83M1.43M1.90M-218.60K24.09M

BIO-key International Technical Analysis

Technical Analysis Sentiment
Negative
Last Price0.75
Price Trends
50DMA
0.80
Negative
100DMA
0.79
Negative
200DMA
0.98
Negative
Market Momentum
MACD
-0.01
Negative
RSI
44.83
Neutral
STOCH
25.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BKYI, the sentiment is Negative. The current price of 0.75 is below the 20-day moving average (MA) of 0.76, below the 50-day MA of 0.80, and below the 200-day MA of 0.98, indicating a bearish trend. The MACD of -0.01 indicates Negative momentum. The RSI at 44.83 is Neutral, neither overbought nor oversold. The STOCH value of 25.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BKYI.

BIO-key International Risk Analysis

BIO-key International disclosed 35 risk factors in its most recent earnings report. BIO-key International reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
Scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks. Q4, 2024
2.
Our business could be adversely affected by trade tariffs or other trade barriers. Q4, 2024

BIO-key International Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
64
Neutral
$10.95B16.378.81%1.96%2.68%-15.33%
60
Neutral
$39.55M26.079.92%
53
Neutral
$11.63M-28.37%-13.20%-89.43%
47
Neutral
$5.15M-145.28%13.96%85.22%
46
Neutral
$3.14M-191.47%-20.52%83.27%
$4.69M-126.65%
43
Neutral
$59.67M-236.56%-6.61%40.20%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BKYI
BIO-key International
0.75
-0.52
-40.94%
DGLY
Digital Ally
1.88
-2,198.12
-99.91%
SPCB
SuperCom
9.12
6.19
211.26%
IVDA
Iveda Solutions
1.63
1.21
288.10%
VRME
VerifyMe
0.91
-0.36
-28.35%
KSCP
Knightscope Inc Class A
6.16
-5.96
-49.17%

BIO-key International Corporate Events

Shareholder Meetings
BIO-key International Approves Stock Plan Amendments
Positive
Aug 20, 2025

On August 8, 2025, BIO-key International, Inc. held its Annual Meeting of Stockholders, where amendments to two stock plans were approved. The amendments increased the number of shares available for issuance under both the 2023 Stock Incentive Plan and the 2021 Employee Stock Purchase Plan by 700,000 shares each, potentially enhancing employee engagement and investment opportunities.

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
BIO-key International Approves Key Proposals at Annual Meeting
Positive
Aug 13, 2025

On August 8, 2025, BIO-key International, Inc. held its Annual Meeting of Stockholders, where several key proposals were approved. These included the election of board members, ratification of the company’s accounting firm, approval of executive compensation, and amendments to stock incentive and employee stock purchase plans. These decisions are expected to impact the company’s governance and operational strategies positively.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 21, 2025