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- **Gross Margin Triumph**: 41% gross margin in Q3 2025, up from 35% YoY, driven by supplier rate improvements.
- **Transition Turbulence**: Q3 revenue down 7% YoY due to shipping partner transition; Q4/Q1 2026 revenue expected to decline YoY but long-term growth poised.
- **Financial Resilience**: $4.0 million cash on hand, $1 million credit line, and $0.8 million adjusted EBITDA despite $3.9 million impairment charge.
- **Strategic Ambition**: Actively pursuing M&A, targeting accretive deals while navigating dynamic customer transition.

**【CEO Summary Section】**
- **Revenue Performance**: Q3 2025 revenue was $5.0 million, down 7% YoY, due to contract losses and transition from previous shipping partner. Gross margin improved to 41% (vs. 35% in Q3 2024) due to supplier rate improvements.
- **Transition Progress**: Transition to new shipping partner is ongoing, with 7-10 days of Q3 revenue impact. Management expects Q4 2025 and Q1 2026 revenue to decline YoY but anticipates long-term growth benefits.
- **Financial Health**: Strong balance sheet with $4.0 million cash and $1 million available line of credit. Received first interest payment from $2.0 million ZenCredit note.
- **Strategic Moves**: Actively pursuing M&A, focusing on immediately accretive bolt-on acquisitions or transformative deals. No 2026 guidance yet, to be provided in next call.

**【CFO Financial Commentary】**
- **Impairment Charge**: Recognized $3.9 million noncash impairment of PeriShip goodwill/intangibles, driven by transition challenges.
- **Cost Management**: Operating expenses decreased 32% YoY to $1.7 million, driven by Trust Codes divestiture and cost-cutting. Adjusted EBITDA improved to $0.8 million (vs. $0.2 million YoY).
- **Cash Flow**: Generated $0.2 million cash from operations in Q3, expecting cash flow positive for 2025 despite near-term revenue headwinds.

**【Q&A Key Highlights】**
- **Revenue Transition Impact**: 7-10 days of Q3 revenue impacted by transition; Q4/Q1 2026 revenue expected to decline YoY. Customer transition dynamics are fluid, with some customers delaying until post-peak season.
- **M&A Strategy**: Actively engaged in discussions, prioritizing accretive bolt-ons or transformative deals. Elevated legal costs reflect active due diligence.
- **OpEx Breakdown**: $500,000 of Q3 2024 OpEx reduction tied to Trust Codes divestiture; remaining $300,000 from general cost efficiency.

VerifyMe, Inc.(VRME)-20251117-2025 Q3 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

VRME

VRME fundamentals

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