VerifyMe 2025 Q1 Earnings Misses Targets as Net Income Worsens 3.3%

Verifyme(VRME) reported its fiscal 2025 Q1 earnings on May 13th, 2025. VerifyMe's fiscal Q1 2025 results showed a revenue decline and a widened net loss, missing expectations. The company faced challenges due to strategic shifts and customer changes, impacting its financial performance. Guidance remains cautious, with no specific revenue outlook provided, but hopes for improved comparisons in the latter half of the year. VerifyMe remains focused on cost control and strategic priorities to navigate ongoing macroeconomic pressures.

Revenue

VerifyMe's total revenue decreased by 22.6% to $4.46 million in Q1 2025, compared to $5.76 million in Q1 2024. This reduction was primarily driven by the discontinuation of Trust Codes operations and customers shifting to in-sourcing, significantly affecting premium services, which fell by 47%.

Earnings/Net Income

VerifyMe maintained stable EPS at $-0.05 in Q1 2025 versus Q1 2024. However, the net loss widened to $571,000, increasing by 3.3% from the previous year. The consistent negative EPS suggests ongoing struggles in improving profitability.

Price Action

The stock price of VerifyMe declined by 13.73% on the latest trading day, fell 1.36% over the past week, and surged 18.58% month-to-date.

Post-Earnings Price Action Review

Investors adopting a strategy of acquiring VerifyMe shares post-earnings report saw significant losses, as the company’s financial performance did not inspire confidence. The initial drop in revenue on the release date sparked concerns about future profitability, prompting a sharp decline in stock price. Despite efforts to hold shares for 30 days, no meaningful recovery occurred, indicating persistent negative sentiment. This skepticism likely stems from doubts over VerifyMe's ability to reverse its revenue decline swiftly. Historical evidence suggests buying shares after such downturns has not been profitable over the past five years, as the market continues to react unfavorably to the company's strategic challenges and performance.

CEO Commentary

Adam Stedham, CEO, noted VerifyMe's 23% year-over-year revenue decline, primarily from Trust Codes' discontinuation and customer in-sourcing. He emphasized the company's positive cash flow and strong cash position of $5.7 million, with no bank debt. Strategic priorities include enhancing direct customer marketing, forming relationships with additional freight carriers, and integrating with e-commerce platforms for organic growth. Stedham remains optimistic about creating shareholder value despite macroeconomic challenges.

Guidance

VerifyMe is not providing specific revenue guidance for the year, acknowledging challenging comparisons in Q2 due to prior customer changes. Although revenue comparisons may improve in the second half of 2025, the company does not anticipate positive organic revenue growth during that period. Operating expenses are expected to remain stable following recent reductions, with a focus on scaling costs effectively as revenues recover.

Additional News

VerifyMe has not announced any mergers or acquisitions recently. However, the company has remained active in adjusting its strategic approach to cope with macroeconomic challenges. There have been no significant changes in the executive leadership team, with Adam Stedham continuing as CEO. VerifyMe has not declared any dividends or buyback plans at this time. The company is focused on enhancing its logistics segment and expanding e-commerce integrations to drive future growth. VerifyMe’s efforts to strengthen its brand protection services remain a priority as it navigates a competitive landscape.