What caused BKYI's surprising EPS surge in Q3 2024?

BIO-key International Inc. (BKYI) experienced a significant negative EPS of $0.39 in Q3 2024, which is quite contrasting to the typical expectations of a weaker quarter. The company's diluted EPS in Q3 2024 was -$0.39, with a net income of -$738,959 reported as of September 30, 2024. 1. **Revenue Growth**: BIO-key reported an 18% increase in revenues for Q3 2024, driven by higher software license fees and hardware revenue. The company secured a significant $500,000 follow-on order from a leading international defense ministry, indicating strong customer retention and expansion. 2. **Market Expansion**: The company's biometric solutions are being adopted by large-scale enterprises and government customers, enhancing security and reducing transaction times. BIO-key is expanding its presence on the AWS marketplace, increasing visibility and potential customer base. The expansion of biometric services in British Columbia with the government's orders to add 10,000 users to their existing deployment is another indicator of market expansion. 3. **Cost Management**: The company has been focusing on cost management, which has led to an improvement in gross profit margin and a reduction in operating expenses. Despite the revenue growth, the company exited a low-margin civil Secure Services agreement in Europe, which may present short-term revenue headwinds. In conclusion, BIO-key's Q3 2024 EPS surge can be attributed to a combination of factors including revenue growth, market expansion, and cost management. These factors have collectively contributed to the company's financial improvements and strategic initiatives aimed at expanding market presence.