BIO-key International Reports 49% Revenue Growth in Q2 2025, Net Loss Improves

BIO-key International, Inc. reported its financial results for the second quarter of 2025, revealing a total revenue of $1.70 million, a 49% increase from $1.14 million in the same period last year. The growth was driven by significant increases in hardware sales, which surged 581% to $568,824, and a 14% rise in service revenues to $321,996. However, license fees saw a modest increase of 4%, totaling $806,087, reflecting a shift in sales strategy as the company ramps up its focus on its proprietary products through its EMEA operations.

In terms of profitability, BIO-key recorded a net loss of $1.17 million for the quarter, an improvement from a loss of $1.67 million in the prior year. The operating loss also decreased to $1.08 million from $1.65 million, indicating a reduction in operational expenses. Total operating expenses fell by 9% to $2.32 million, primarily due to a 13% decrease in selling, general, and administrative expenses, which were reduced to $1.68 million. This decline was attributed to lower costs in administration and sales personnel.

The company’s balance sheet showed a significant improvement in liquidity, with cash and cash equivalents rising to $2.28 million from $437,604 at the end of 2024. Total assets increased to $10.52 million, up from $8.62 million, while total liabilities decreased to $3.66 million from $4.84 million. This reduction in liabilities was largely due to a decrease in the note payable, which fell to $447,153 from $1.53 million. The company’s stockholders' equity also saw a substantial increase, reaching $6.85 million compared to $3.77 million at the end of 2024.

Operationally, BIO-key has been focusing on expanding its market presence, particularly in North America and Africa, where it generated $615,255 and $63,482 in revenues, respectively, during the quarter. The company has also been actively pursuing strategic partnerships and acquisitions to enhance its product offerings and market reach. Notably, the company is exploring opportunities to sell or return inventory purchased for delayed projects in Nigeria, which has been a significant factor in its cash flow management.

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 $812,000 per month to sustain its activities, a target it has struggled to meet through revenue generation alone. As such, management is focused on increasing marketing efforts, pursuing large-scale identification projects, and expanding its channel alliance program to drive future growth. The company’s ability to secure additional financing will be critical to its long-term viability and growth in the competitive identity access management market.