BIO-key International Reports 11% Revenue Decline for Fiscal Year 2024

BIO-key International, Inc. reported a decrease in revenue for the fiscal year ending December 31, 2024, with total revenues of $6.93 million, down 11% from $7.75 million in 2023. The decline was primarily attributed to the company's exit from a distribution agreement with Swivel Secure Limited, which impacted service and hardware sales. Service revenues fell by 50% to approximately $1.11 million, while hardware sales decreased by 47% to $631,695. In contrast, license fees increased by 20% to $5.19 million, reflecting growth from existing customers expanding their deployments and new customer acquisitions.

The company's gross profit improved significantly to $5.64 million in 2024, compared to $1.43 million in the previous year. This increase was driven by a reduction in costs associated with lower-margin services and hardware, as well as the impact of a $3 million hardware reserve taken in 2023. Operating expenses rose by 5% to $9.65 million, primarily due to increased research and development costs aimed at supporting new product development. Despite the rise in operating expenses, the net loss narrowed to $4.30 million from $8.52 million in 2023, indicating improved operational efficiency.

Strategically, BIO-key has focused on expanding its identity and access management (IAM) solutions, particularly in the government and highly regulated sectors. The company has also pursued growth through acquisitions, including the purchase of Swivel Secure Europe in 2022, which has since been rebranded as BIO-key EMEA. This acquisition has allowed BIO-key to enhance its presence in the European, Middle Eastern, and African markets. Additionally, the company has initiated a collaboration with Fiber Food Systems, Inc. to explore IAM applications in the food industry, which may open new commercial opportunities.

Operationally, BIO-key reported having over 600 customers globally, with a significant presence in the education and government sectors. The company has emphasized the importance of its biometric technology, which allows for secure, passwordless access across various applications. As of December 31, 2024, the company employed 42 individuals, with a focus on engineering, customer support, and sales. The company anticipates continued growth in its customer base and product adoption, particularly as organizations increasingly seek robust security solutions in response to rising cybersecurity threats.

Looking ahead, BIO-key aims to capitalize on the growing demand for IAM solutions, particularly in light of the ongoing shift towards remote work and heightened security requirements. The company plans to enhance its marketing efforts, pursue large-scale identification projects, and expand its channel alliance program, which currently includes over 85 partners. However, the company also faces challenges, including the need for additional financing to support its operations and growth initiatives, as well as the potential impact of geopolitical and economic uncertainties on its business.