Intellicheck Mobilisa (NASDAQ:IDN) reported higher first-quarter revenue and profitability, with management saying growth in banking and lending helped offset weaker transaction volumes in retail, automotive and title insurance amid a challenging macroeconomic backdrop.
President and CEO Bryan Lewis said the first quarter of 2026 was affected by economic pressure tied to the conflict in Iran, higher oil and gasoline prices, rising mortgage rates, weaker consumer confidence and renewed inflation pressure. He said those conditions weighed on several customer segments that depend on consumer activity and transaction volumes.
Revenue Rises 13% as Profitability Improves
Chief Financial Officer Adam Sragovicz said total revenue for the first quarter increased $630,000, or 13%, to $5.524 million, compared with $4.894 million in the same quarter of 2025. SaaS revenue rose 13% to $5.514 million from $4.868 million a year earlier.
Gross profit as a percentage of revenue improved to 91% from 89.7% in the prior-year quarter. On an adjusted basis, excluding non-cash amortization of capitalized software costs, adjusted gross margin was 93.4%, compared with 91.8% a year earlier.
Operating expenses declined 5% to $4.483 million from $4.740 million in the first quarter of 2025. Sragovicz said SG&A expenses fell 6% to $3.242 million, while research and development expenses declined 4% to $1.241 million.
The company reported operating income of $542,000, compared with an operating loss of $348,000 in the prior-year period. Net income was $636,000, or $0.03 per diluted share, compared with a net loss of $318,000, or $0.02 per diluted share, in the first quarter of 2025. Sragovicz said the quarter marked Intellicheck’s third consecutive quarter of positive net income.
Adjusted EBITDA was $935,000, compared with an adjusted EBITDA loss of $17,000 a year earlier. Lewis said the result represented an adjusted EBITDA margin of about 17% and marked the company’s fourth consecutive quarter of positive adjusted EBITDA.
Banking and Lending Remain Core Growth Drivers
Lewis said banking and lending represented more than half of quarterly revenue and remained the company’s primary growth engine. He said a large regional banking client, operating under a three-year contract valued in the “very high seven figures,” is now fully implemented across its branches and is discussing additional use cases and departments.
Lewis said fraud prevention remains a mission-critical expense for banks and credit unions, noting that account takeover losses average approximately $2,300 per incident and that some clients have reported monthly fraud losses above $40,000 before implementing Intellicheck.
The company also highlighted progress with its desktop delivery method, which Lewis said requires no integration with a bank’s core platform and can be implemented immediately. He said the product is helping Intellicheck reach smaller banks and credit unions that historically faced long technology integration queues. The company has signed three new clients using the desktop technology, with several others under review.
Lewis also pointed to an emerging partnership with Alloy, which he described as a leading identity and fraud prevention platform in banking and fintech. He said being embedded in Alloy’s platform could reduce buying friction for institutions already operating within that ecosystem.
Retail, Auto and Title Insurance Face Volume Pressure
Retail represented about 30% of 2025 revenue, according to Lewis, and was challenging during the first quarter. He said scanning volumes declined year over year, consistent with consumer confidence and macroeconomic pressures. In response to an analyst question, Lewis said retail volume typically falls from the fourth quarter to the first quarter because of seasonality, but the company saw an additional 5% to 10% drop that he attributed to economic factors.
In automotive, Lewis said U.S. auto sales were estimated to have fallen 5% to 6% year over year in the first quarter, pressuring scanning volumes at some auto dealer clients. In title insurance, he said rising rates and geopolitical uncertainty slowed mortgage origination activity.
Despite the near-term slowdown in title insurance, Lewis said First American Title launched its digital e-commerce identity verification capability during the quarter, calling it a meaningful expansion of Intellicheck’s role in that platform. In response to another analyst question, he said Intellicheck’s direct title insurance clients represent about 43% of the title market, based on the company’s most recent review.
Other Verticals and Product Expansion
Lewis said Intellicheck continues to see growth in age-related and background check verticals. He also said a nationwide rollout with a food manufacturer client addressing cargo freight fraud is progressing and is now running in the low six-figure annual contract value range. Foreign auto manufacturer clients and supplier networks also continue to expand, he said.
The company added a few stadium concessions clients, though Lewis said those accounts are starting at very low volumes and remain a longer-term opportunity.
Lewis emphasized Intellicheck’s product differentiation, saying the company can verify the authenticity of a government-issued ID in less than a second with 99% decisioning by checking barcode specifications embedded by state DMVs at issuance. He said competitors generally rely on visual template checks and do not have access to the same specifications.
Balance Sheet and Outlook Commentary
Intellicheck ended the quarter with $10.062 million in cash and cash equivalents, up from $9.650 million at Dec. 31, 2025, and no outstanding debt. Sragovicz said the company generated $444,000 of operating cash flow in the first quarter, which he characterized as strong given typical seasonal cash usage.
Accounts receivable increased to $5.740 million at March 31 from $3.365 million at year-end, which Sragovicz said was largely due to the timing of first-quarter billings for annual contract renewals. Capital expenditures were $33,000 in the quarter.
Management did not provide formal guidance. Sragovicz said the company expects GAAP gross margins to remain in the 90% to 91% range, with adjusted gross margins in the 92% to 93% range. He said Intellicheck remains committed to growing operating expenses at a rate below revenue growth.
Lewis said the company expects EBITDA margins to remain positive and sees potential acceleration in the second half of the year. He also said Intellicheck believes it is well positioned to deliver positive net income for full-year 2026.
During the question-and-answer session, Lewis said most first-quarter revenue growth came from expansion of existing clients. He said the company signed the customers it expected in the quarter except for one that signed shortly after quarter-end due to legal timing. He also said the pipeline includes larger potential customers, though those opportunities can take longer, while smaller desktop-based deals may be implemented more quickly.
About Intellicheck Mobilisa (NASDAQ:IDN)
Intellicheck Mobilisa, Inc is a provider of mobile identity verification and authentication solutions designed to help organizations verify credentials and combat fraud. The company’s technology leverages optical character recognition, machine learning, and biometric facial recognition to validate government‐issued IDs, passports, and other identity documents in real time. These solutions are deployed via on‐premises hardware or cloud‐based platforms, enabling clients to integrate identity checks directly into digital workflows and point‐of‐sale systems.
The firm’s flagship offerings include mobile credential scanning applications and software development kits (SDKs) that support Know Your Customer (KYC), Anti–Money Laundering (AML), age verification, and regulatory compliance across multiple industries.
