Bio-key International 2025 Q1 Earnings Mixed Performance with Net Loss Widening

Bio-key International (BKYI) reported its fiscal 2025 Q1 earnings on May 15th, 2025. The company experienced a significant revenue decline of 26.3% compared to the same quarter in the previous year, falling short of expectations in both revenue and net income. Despite narrowing losses per share, the net loss widened, indicating ongoing challenges. BIO-key has adjusted its guidance, forecasting improved financial performance in 2025 due to increased interest in biometric solutions and a robust margin profile. The company remains optimistic about future opportunities, particularly in EMEA markets.

Revenue
The total revenue of Bio-key International decreased by 26.3% to $1.61 million in 2025 Q1, down from $2.18 million in 2024 Q1.

Earnings/Net Income
Bio-key International narrowed losses to $0.16 per share in 2025 Q1 from a loss of $0.32 per share in 2024 Q1 (50.0% improvement). Meanwhile, the company's net loss widened to $-736545 in 2025 Q1, representing a 44.3% increase from the $-510285 loss recorded in 2024 Q1. The company has sustained losses for 11 years over the corresponding fiscal quarter, highlighting ongoing financial headwinds. The improved earnings per share are a positive indicator amidst financial challenges.

Post-Earnings Price Action Review
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CEO Commentary
BIO-key CEO Mike DePasquale highlighted a 10% sequential revenue increase in Q1'25, driven by a shift towards high-margin BIO-key branded products in EMEA, although year-over-year revenue fell 25% due to a previous large contract. DePasquale expressed confidence in significant future revenue growth from a key financial services customer as they expand their biometric capabilities. He noted a healthy gross margin of 83% and a 23% reduction in selling, general, and administrative expenses year-over-year. The improved cash position of $3.1M positions BIO-key well for growth opportunities and reflects ongoing efforts to reduce outstanding debt.

Guidance
DePasquale indicated that BIO-key anticipates improved financial performance in 2025, driven by increased interest in biometric solutions and a strong margin profile. He acknowledged potential quarter-to-quarter fluctuations due to the timing of customer orders but remained optimistic about returning EMEA operations to growth. The company aims to lower costs and its breakeven level to achieve positive cash flow and profitability, positioning itself favorably with its passwordless, phoneless, and tokenless IAM solutions.

Additional News
BIO-key International has been active in forming strategic partnerships to strengthen its market presence. Recently, the company partnered with Arrow ECS Iberia to expand its Identity and Access Management solutions across Spain and Portugal. This strategic move aims to boost BIO-key's market access in the Iberian region. Additionally, BIO-key announced compliance with Nasdaq listing requirements after resolving a non-compliance issue related to the delayed filing of its annual report. This swift resolution ensures continued trading and listing on the Nasdaq Capital Market. Furthermore, BIO-key has partnered with California's Education Technology Joint Powers Authority, providing its PortalGuard platform to 195 K-12 schools, aligning with California's Phone-Free Schools Act.