BIO-key International, Inc. reported its financial results for the third quarter of 2025, revealing a total revenue of $1.55 million, a decrease of 28% from $2.14 million in the same period last year. The decline was primarily driven by a significant drop in license fees, which fell by 36% to $918,000, down from $1.44 million. Hardware sales also decreased by 17% to $364,000, while service revenues remained relatively stable at $268,000. The company's gross profit for the quarter was $1.19 million, compared to $1.68 million in the prior year, reflecting a gross margin of 77%.
In terms of operational performance, BIO-key's total operating expenses for the quarter were $2.08 million, down from $2.26 million in the previous year. This reduction was attributed to a 13% decrease in selling, general, and administrative expenses, which amounted to $1.40 million. However, the company still reported an operating loss of $892,000, compared to a loss of $580,000 in the same quarter of 2024. The net loss for the quarter was $965,000, resulting in a basic and diluted loss per share of $0.15.
The company has made strategic moves to enhance its market position, including the issuance of common stock for debt repayment and the exercise of warrants, which generated approximately $3.81 million in proceeds. As of September 30, 2025, BIO-key's cash and cash equivalents stood at $2.04 million, a significant increase from $438,000 at the end of 2024. The company also reported a working capital of approximately $782,000, indicating improved liquidity.
Operationally, BIO-key has focused on expanding its customer base and product offerings. The company has seen an increase in recurring service revenue, which rose by 23% due to the timing of service agreement renewals. However, the overall customer engagement metrics have been mixed, with a notable decline in hardware sales linked to inventory management and project delays in international markets, particularly in Nigeria. The company continues to explore new markets and opportunities to sell its products, aiming to generate additional cash flow.
Looking ahead, BIO-key remains cautious about its financial outlook, emphasizing the need for additional financing to support operations. The company has indicated that it requires approximately $830,000 per month to sustain its operations, a target it has struggled to meet consistently through revenue generation. Management has acknowledged the importance of successfully commercializing its technologies and obtaining adequate financing to ensure long-term viability and growth.
About BIO KEY INTERNATIONAL INC
BIO-key International, Inc. provides identity and access management (IAM) solutions featuring biometric multi-factor authentication (MFA) for enterprises, government, and education sectors. Its core products include PortalGuard IAM platform, WEB-key biometric infrastructure, MobileAuth app, and fingerprint scanners. BIO-key’s technology enables secure, passwordless access without tokens or phones, supporting workforce, customer, and large-scale ID management through cloud and on-premise deployments, emphasizing security, scalability, and user convenience.
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