Intrusion Inc. Reports 50% Revenue Decline and Increased Operating Loss in Q1 2026

Intrusion Inc. reported a significant decline in financial performance for the first quarter of 2026, with revenues totaling $888,000, a decrease of 50% from $1.8 million in the same period of 2025. The company's gross profit also fell to $659,000, down from $1.3 million, reflecting a gross margin of 74.2% compared to 75.7% a year earlier. The decline in revenue was attributed primarily to delays in contract extensions with the U.S. Department of War, which impacted both consulting and product revenues, particularly from the INTRUSION Shield cybersecurity solution.

Operating expenses increased to $4.2 million, up from $3.4 million in the prior year, driven by higher investments in sales and marketing as well as research and development. The company reported an operating loss of $3.6 million, worsening from a loss of $2.1 million in the first quarter of 2025. The net loss for the quarter was $3.6 million, or $0.18 per share, compared to a net loss of $2.1 million, or $0.11 per share, in the previous year. The increase in net loss was primarily due to the substantial drop in revenues.

Intrusion's customer base remains heavily concentrated, with U.S. government entities accounting for 87.8% of total revenues in the first quarter of 2026, down from 91.6% in the same period of 2025. The company had three primary customers contributing to 50.8%, 36.5%, and 5.4% of total revenues, respectively. The company continues to focus on expanding its product offerings and brand awareness, particularly through its INTRUSION Shield product, which is designed to enhance cybersecurity for businesses.

As of March 31, 2026, Intrusion reported cash and cash equivalents of $1.4 million, a decrease from $3.6 million at the end of 2025. The company’s net working capital was negative at ($0.9 million), compared to positive working capital of $2.4 million at the end of the previous fiscal year. The company has indicated that it plans to finance operations through additional equity or debt financing, although it faces uncertainty regarding its ability to secure such funding on favorable terms.

Looking ahead, Intrusion is actively monitoring its financial position and exploring options to improve liquidity. The company has entered into a Note Purchase Agreement with Streeterville Capital, LLC, which will provide $3.0 million in cash proceeds. Additionally, the company has secured a subcontractor agreement to provide cybersecurity services for a state government agency, valued at approximately $3.9 million, which will contribute to future revenues as performance obligations are met. However, the company acknowledges the risks associated with its reliance on government contracts and the potential impact of funding delays on its operations.