BIO-key has issued its Q3 update for 2019, with CEO Mike DePasquale detailing why the company is on solid footing for long-term success despite a dip in revenues.
The company’s Q3 2019 revenue came in at $452,714, compared to revenues of $739,750 in the third quarter of 2018. The company attributed the drop to a few main factors, one of which was that “a number of opportunities were pushed forward into Q4,” according to BIO-key’s update. But perhaps more significantly, DePasquale explained that the company has been transitioning from a business model based on software license agreements, to a “software subscription model,” which collects much lower fees from customers but “creates more predictable, recurring revenue streams with the potential to be much larger over a period of several years than what we would have otherwise generated from a conventional software license.”
Another factor impacting BIO-key’s results is one that has persisted throughout the year. A major customer based in China has not been delivering monthly payments for a deal established in Q4 of 2018. This prevented BIO-key from receiving $1.1 million in revenue in Q1, and DePasquale attributes the difficulty in large part to “ongoing U.S. and China trade uncertainty”.
Nevertheless, BIO-key has delivered an improved net result in the first nine months of 2019, reporting a net loss of just over $5 million, compared to a net loss of a little over $7 million in the corresponding period of 2018. And the company’s CEO is bullish on its prospects going forward. “BIO-key’s outlook for the balance of 2019 and next year is far more favorable, particularly as we are engaged in several large, active customer procurement discussions which we anticipate will close before year-end in order to meet annual IT security and objectives,” he said.
BIO-key’s corporate update comes soon after the company announced that federal workers on Capitol Hill had started leveraging its fingerprint authentication solutions for enterprise security, and after the Technology Transfer Institute of Africa was added to its Channel Alliance Partner program.
November 15, 2019 – by Alex Perala