What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-13 compared with 2026-05-12 · 59 added, 23 removed, 111 unchanged (42% of the section changed)

6 unchanged sentences

References made in this Quarterly Report on Form 10-Q to “we,” “our,” “us,” “Intellicheck,” or the “Company,” refer to Intellicheck, Inc.

The following discussion and analysis of our financial condition and results of operations constitutes management’s review of the factors that affected our financial and operating performance for the three months ended March 31, 2026.

This discussion should be read in conjunction with the financial statements and notes thereto contained elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2025.

1 unchanged sentence

Our products include solutions for preventing identity fraud across any industry delivered via smartphone, tablet, POS integration or other electronic devices.

Recent Developments — Customer’s Multi-Vendor Transition.

Our customer, representing 29% of total revenue for the first six months of 2026, has recently informed us that, as part of a vendor-resilience initiative, it is adopting a primary/secondary vendor architecture under which an alternative vendor is expected to become the primary provider for certain identity verification use cases.

We will remain the primary provider for certain other use cases and will retain secondary or failover roles for certain of the transitioned use cases.

In communicating its plans, the customer cited objectives that included improving vendor resilience, supplier rationalization in connection with its previously announced merger, cost considerations and, for a separate portion of the transition, workflow automation.

This customer accounted for approximately 30% of our total revenue for the three months ended June 30, 2026 and approximately 31% for the year ended December 31, 2025.

The customer’s communicated plans contemplate a reduction of approximately 70–75% in its transaction volumes with us during the second half of 2026 relative to the baseline reflected in those plans, with implementation scheduled to proceed on a phased basis through the third quarter of 2026.

As of August 13, 2026, the implementation was underway and our transaction volumes with this customer had declined from prior-year levels;

however, the reductions observed through that date were less than the pace and magnitude contemplated by the customer’s current plan.

The timing and extent of future reductions remain uncertain, and we believe may be affected by a number of factors, including the performance of the alternative vendor, the customer’s evolving operational requirements and any adjustments the customer may make to its current plans.

Accordingly, actual transaction volumes may be higher or lower than the levels indicated by the customer’s current plans.

Assuming the customer implements its current plan substantially as communicated and no volumes are added above the levels reflected in that plan, we currently expect total revenue for the year ending December 31, 2026 to decline compared to 2025.

These expectations are based on the customer’s current communicated plan and its indicated implementation schedule and are subject to change based on actual transaction volumes and other developments.

The volume reductions observed to date have been smaller than the customer’s plan contemplates and we remain engaged with the customer in ongoing discussions regarding current services and potential future business opportunities.

We expect to continue to be an important vendor to the customer.

Notwithstanding the anticipated decline, we currently expect to remain profitable on a net income basis, and to generate positive Adjusted EBITDA, for the year ending December 31, 2026.

These expectations are forward-looking statements subject to the risks described in Part II, Item 1A, including the risks that the customer’s transition proceeds faster, extends further or results in greater volume reductions than its current plans indicate;

that use cases for which we remain the primary provider are subsequently transitioned;

that any retained or

restored volumes are at lower levels or pricing than anticipated;

that certain transitioned use cases do not retain us in a secondary or failover role or generate little or no transaction volume.

Critical Accounting Policies and the Use of Estimates

4 unchanged sentences

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets." This standard allows entities to apply a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers .

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

This standard allows entities to apply a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers .

The standard is effective for all the entities for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years.

1 unchanged sentence

We adopted ASU 2025-05 in the first quarter of 2026.

The adoption did not have a material impact on our consolidated financial statements and related disclosures.

The adoption did not have a material impact on our condensed financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) :

16 unchanged sentences

Customers typically receive the benefit of the Company’s services as they are performed.

The Company's performance obligations are satisfied over time, and as a result, we may follow the right to invoice practical expedient meaning we recognize revenue monthly as invoiced based on our contract terms.

The Company's performance obligations are satisfied over time, and as a result, the Company may follow the right to invoice practical expedient meaning we recognize revenue monthly as invoiced based on our contract terms.

Reference Note 2, “Significant Accounting Policies,” in the Notes to Unaudited Condensed Financial Statements for additional details on the Company’s recognized and deferred revenue.

5 unchanged sentences

Our long-lived assets include property and equipment, goodwill, and intangible assets.

As of March 31, 2026, the balances of property and equipment, goodwill and intangible assets, all net of accumulated depreciation and amortization, were $374, $8,102 and $1,937, respectively.

As of June 30, 2026, the balances of property and equipment, goodwill and intangible assets, all net of accumulated depreciation and amortization, were $351, $8,102 and $1,798, respectively.

As of December 31, 2025, the balances of property and equipment, goodwill and intangible assets, all net of accumulated depreciation and amortization, were $394, $8,102 and 2,077, respectively.

1 unchanged sentence

Note 4, “Property and Equipment, Net”;

and Note 5, “Goodwill and Intangible Assets” in the Notes to Financial Statements of the December 31, 2025 audited financial statements for details on the Company’s valuations of our long-lived assets.

and Note 5, “Intangible Assets, net” in the Notes to Financial Statements of the December 31, 2025 audited financial statements for details on the Company’s valuations of our long-lived assets.

Internal Use Capitalized Software

11 unchanged sentences

(All dollar amounts are rounded to thousands, except share and per share data)

COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2026

TO THE THREE MONTHS ENDED MARCH 31, 2025

Revenues for the three months ended March 31, 2026 increased $630, or 13%, to approximately $5,524 compared to $4,894 for the same period of 2025.

COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2026

TO THE THREE MONTHS ENDED JUNE 30, 2025

Revenues for the three months ended June 30, 2026 increased $818, or 16%, to approximately $5,941 compared to $5,123 for the same period of 2025.

The increase in revenues is primarily the result of higher SaaS revenue for the current period.

SaaS revenue, which consists of software licensed on a subscription basis, increased $646 or 13% to $5,514 for the three months ended March 31, 2026 compared to $4,868 for the same period of 2025.

Gross profit increased $633, or 14%, to $5,025 for three months ended March 31, 2026 from $4,392 for the same period of 2025.

Our gross profit, as a percentage of revenues, was 91% and 90% for the three months ended March 31, 2026 and 2025, respectively.

Operating expenses, which consist of selling, general and administrative and research and development expenses, decreased $257, or 5%, to $4,483 for the three months ended March 31, 2026 compared to $4,740 for the same period of 2025.

The decrease in operating expenses is primarily the result of a lower headcount in the three-month period ended March 31, 2026.

As a result of the factors noted above, the Company had a net income of $636 for the three months ended March 31, 2026 as compared to a net loss of $(318) for the three months ended March 31, 2025.

SaaS revenue, which consists of software licensed as a service on a subscription basis, increased $841 or 17% to $5,921 for the three months ended June 30, 2026 compared to $5,080 for the same period of 2025.

Gross profit increased $824, or 18%, to $5,424 for three months ended June 30, 2026 from $4,600 for the same period of 2025.

Our gross profit, as a percentage of revenues, was 91% and 90% for the three months ended June 30, 2026 and 2025, respectively.

Operating expenses, which consist of selling, general and administrative and research and development expenses, decreased $47, or 1%, to $4,851 for the three months ended June 30, 2026 compared to $4,898 for the same period of 2025.

The decrease in operating expenses is primarily the result of a lower headcount in the three-month period ended June 30, 2026.

As a result of the factors noted above, the Company had a net income of $663 for the three months ended June 30, 2026 as compared to a net loss of $(251) for the three months ended June 30, 2025.

COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2026

TO THE SIX MONTHS ENDED JUNE 30, 2025

Revenues for the six months ended June 30, 2026 increased $1,448, or 14%, to approximately $11,465 compared to $10,017 for the same period of 2025.

The increase in revenues is primarily the result of higher transaction volumes for SaaS for the current period.

SaaS revenue, which consists of software licensed as a service on a subscription basis, increased $1,487 or 15% to $11,435 for the six months ended June 30, 2026 compared to $9,948 for the same period of 2025.

Gross profit increased $1,457, or 16%, to $10,449 for six months ended June 30, 2026 from $8,992 for the same period of 2025.

Our gross profit, as a percentage of revenues, was 91% and 90% for the six months ended June 30, 2026 and 2025, respectively.

Operating expenses, which consist of selling, general and administrative and research and development expenses, decreased $304, or 3%, to $9,334 for the six months ended June 30, 2026 compared to $9,638 for the same period of 2025.

The decrease in operating expenses is primarily the result of a lower headcount in the six-month period ended June 30, 2026.

As a result of the factors noted above, the Company had a net income of $1,299 for the six months ended June 30, 2026 as compared to a net loss of $(569) for the six months ended June 30, 2025.

Liquidity and Capital Resources

As of March 31, 2026, we had cash and cash equivalents of $10,062, working capital (defined as current assets minus current liabilities) of $11,119, total assets of $27,109 and stockholders’ equity of $21,533.

During the three months ended March 31, 2026, we generated cash of $445 in operating activities as compared to net cash of $750 generated from operating activities in the three months ended March 31, 2025.

Cash used in investing activities was $(33) for the three months ended March 31, 2026 compared to cash used in investing activities of $(173) for the three months ended March 31, 2025.

Cash provided by financing activities was $0 for the three months ended March 31, 2026 compared to net cash of $(95) used in financing activities for the three months ended March 31, 2025.

As of June 30, 2026, we had cash and cash equivalents of $11,837, working capital (defined as current assets minus current liabilities) of $12,237, total assets of $25,565 and stockholders’ equity of $22,489.

During the six months ended June 30, 2026, we generated cash of $2,242 in operating activities as compared to net cash of $3,884 generated from operating activities in the six months ended June 30, 2025.

Cash used in investing activities was $(59) for the six months ended June 30, 2026 compared to cash used in investing activities of $(232) for the six months ended June 30, 2025.

Cash provided by financing activities was $4 for the six months ended June 30, 2026 compared to net cash of $255 provided by financing activities for the six months ended June 30, 2025.

We currently anticipate that our available cash and expected cash from operations will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months from the date of this report.

16 unchanged sentences

The reconciliation of GAAP gross profit to Non-GAAP Adjusted Gross Profit is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

$ 5,941 $ 5,123 $ 11,465 $ 10,017

Cost of revenues, exclusive of amortization

380 402 742 800

Amortization allocable to cost of revenues 137 121 274 225

5,424 4,600 10,449 8,992

Amortization allocable to cost of revenues 137 121 274 225

Adjusted gross profit

5,561 4,721 10,723 9,217

Gross profit as a percentage of revenues 91.3 % 89.8 % 91.1 % 89.8 %

9 unchanged sentences

We consider Adjusted EBITDA to be an important indicator of our operational strength and performance of our business and a useful measure of our historical operating trends.

However, there are significant limitations to the use of Adjusted EBITDA since it excludes restructuring severance expenses, interest and other income, provisions for income taxes, stock-based compensation expense, all of which impact our profitability, as well as depreciation and amortization

related to the use of long-term assets which benefit multiple periods.

We believe that these limitations are compensated by providing Adjusted EBITDA only with GAAP net income (loss) and clearly identifying the difference between the two measures.

2 unchanged sentences

The reconciliation of GAAP net income (loss) to Non-GAAP Adjusted EBITDA is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Net income (loss) $ 663 $ (251) $ 1,299 $ (569)

1 unchanged sentence

Other income, net

(90) (47) (184) (77)

Depreciation and amortization 188 171 381 325

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis