Intrusion outlines AWS marketplace launch and targets critical infrastructure growth as sequential revenue climbs 6%

Earnings Call Insights: Intrusion Inc. (INTZ) Q2 2025

MANAGEMENT VIEW

* Anthony E. Scott, President and CEO, reported that "the second quarter of 2025 marked another positive step forward for Intrusion as we continue to make progress toward our goal of achieving sustainable growth and profitability." He highlighted the company's fifth consecutive quarter of sequential revenue growth, near zero customer churn, and the operational deployment of Intrusion Shield for critical infrastructure monitoring and protection.
* Scott emphasized, "We completed development work for our release of Intrusion Shield technology into the AWS marketplace," citing this as a significant expansion of the company’s go-to-market strategy. He also noted positive early results from social media and awareness campaigns, and a favorable reception for the MyFlare Alert partnership with PortNexus for safety in schools and public institutions.
* Scott described a $3.0 million extension and expansion of the Department of Defense contract as a milestone generating incremental revenue, while stating, "We continue to see critical infrastructure protection of operational technology environments as a highly promising market opportunity for Intrusion."
* The CEO stated the Shield Cloud product is on track for general availability on AWS later in the month, with Microsoft Azure marketplace launch planned for later in the year. Scott indicated, "We do believe that offering our products through these 2 marketplaces will help drive long-term growth and incremental revenue for our business."
* Kimberly Pinson, Chief Financial Officer, stated, "In the second quarter of 2025, revenues were $1.9 million, an increase of 6% sequentially and 28% when compared to the prior year period."
* Pinson added, "Consulting revenues in the second quarter totaled $1.4 million, which is flat when compared to the prior quarter and an increase of $0.2 million on a year-over-year basis. Shield revenues in the second quarter were $0.5 million, an increase of $0.1 million sequentially and up $0.2 million when compared to the prior year period."

OUTLOOK

* Management plans to launch Shield Cloud on AWS marketplace later in the month and expand to the Microsoft Azure marketplace later in the year. Anthony E. Scott said, "While it will take some time for meaningful customer traction to be seen in our financial results, we do believe that offering our products through these 2 marketplaces will help drive long-term growth and incremental revenue for our business."
* The company intends to continue investing in product development and sales and marketing to accelerate customer base growth, with operating expenses expected to rise accordingly, while maintaining spending discipline. No explicit forward-looking revenue or EPS targets were provided.
* Strategic focus remains on critical infrastructure, government, and commercial sector penetration, with expectations for increased government contract opportunities following the July 4 federal spending bill.

FINANCIAL RESULTS

* Total revenues for Q2 2025 were $1.9 million, a 6% increase sequentially and 28% year-over-year. Gross profit margin was 76%, consistent with the prior year.
* Operating expenses for the quarter were $3.5 million, up $0.1 million sequentially and $0.4 million year-over-year, primarily due to increased R&D spending and higher share-based compensation.
* Net loss for Q2 2025 was $2 million or $0.10 per share. The company reported cash and cash equivalents of $4.7 million and short-term investments in U.S. treasuries of $3.7 million at quarter-end.
* Management stated they have sufficient capital to fund operations through the remainder of 2025 and into early 2026.

Q&A

* Scott Christian Buck, H.C. Wainwright: Asked if the $3 million DoD contract is an expansion or extension. Anthony E. Scott replied it is both, "a renewal of an existing contract, but it's a dollar value increase on top of what we had been running."
* Buck: Inquired about broader DoD opportunities and the impact of the federal spending bill. Scott responded, "The opportunity domestically is perhaps even larger than the international opportunity... we're going to pursue that with vigor."
* Buck: Asked about driving visibility for Intrusion Shield in marketplaces. Scott explained, "We have a playbook that we're going to follow those best practices... we're fully committed, and we're going to spend some money, but we expect to have commensurate results."
* Buck: Sought more color on reseller partners. Scott said, "We're continuing to refine our reseller space... we've added some new ones... we're still focused primarily on MSPs and MSSPs."
* Edward Moon Woo, Ascendiant Capital: Questioned the balance between federal and enterprise opportunities. Scott said, "In the corporate and enterprise sector, we're a new entrant... but we think our best entry... is through managed service providers and managed service security providers."
* Woo: Asked about shifts in budgets or sales cycles. Scott replied, "They're under a lot of pressure to validate and justify cybersecurity spend... but the OT environment... seems to be a space that's not quite as crowded and a place that we can, I think, play well."
* Howard Brous, Wellington Shields: Queried about revenue visibility in schools and critical infrastructure. Scott indicated trade shows yielded quick sales cycles in schools but longer ones for utilities. On breakeven timing, he stated, "I'm not going to give a date projection, but it's absolutely our goal."
* Unidentified Analyst: Asked about sustainable cash flow improvement. Scott responded, "A couple of good contracts get us there or a bunch of smaller ones... I'm more encouraged than ever that it's achievable."
* The same analyst asked about competitors. Scott said, "When you get down to the details and understand what they actually do, there aren't really any competitors... we're very unique in our space."

SENTIMENT ANALYSIS

* Analysts focused on contract expansion, government and enterprise demand, and path to profitability, with a tone that was mostly neutral and occasionally slightly positive when congratulating management on growth but seeking more specifics on future acceleration.
* Management maintained a confident tone in both prepared remarks and Q&A, using phrases such as "we do believe," "we're going to pursue that with vigor," and "I'm more encouraged than ever that it's achievable," while being cautious not to offer specific forecasts.
* Compared to last quarter, management's tone showed slightly more confidence regarding capital sufficiency and market opportunities, while analysts maintained a constructive but pressing tone on growth and profitability milestones.

QUARTER-OVER-QUARTER COMPARISON

* Guidance language shifted to emphasize imminent AWS marketplace launch and Azure rollout later in the year, compared to the previous quarter’s focus on pipeline and marketing.
* Strategic focus narrowed further on critical infrastructure and operational technology, with increased government contract activity highlighted this quarter.
* Analysts continued to press for more clarity on breakeven timing and catalysts for accelerated growth, similar to the previous quarter.
* Key metric changes included a sequential revenue increase from $1.8 million to $1.9 million, operating expense growth, and continued improvement in net loss from ($2.1 million) to ($2 million).
* Management’s confidence increased regarding product-market fit and capital resources, while analysts’ tone remained consistent, driven by interest in tangible growth inflection points.

RISKS AND CONCERNS

* Management cited longer sales cycles for large utilities and critical infrastructure projects as a challenge but expressed optimism about school sector opportunities due to shorter cycles.
* Increased R&D and marketing investment could elevate operating expenses, but management emphasized disciplined spending to maintain liquidity.
* Analysts questioned the timing for reaching breakeven and sustainable cash flow, with management reiterating confidence but declining to provide explicit targets or projections.
* Competitive differentiation efforts and increased marketing spend were cited as new initiatives to address perceived overlap with larger cybersecurity firms.

FINAL TAKEAWAY

Intrusion Inc. advanced its strategic initiatives in Q2 2025 by launching Shield Cloud in the AWS marketplace and preparing for Azure integration, while expanding its Department of Defense contract and targeting critical infrastructure as a growth area. With sequential revenue growth, stable gross margins, and a focus on maintaining strong liquidity, management expressed confidence in the company's direction, though the timing of profitability remains linked to contract wins and further channel traction. Investors are watching for acceleration in revenue and evidence of meaningful impact from recent marketplace launches and government opportunities.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/intz/earnings/transcripts]

MORE ON INTRUSION

* Intrusion Inc. (INTZ) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4812880-intrusion-inc-intz-q2-2025-earnings-call-transcript]
* Seeking Alpha’s Quant Rating on Intrusion [https://seekingalpha.com/symbol/INTZ/ratings/quant-ratings]
* Historical earnings data for Intrusion [https://seekingalpha.com/symbol/INTZ/earnings]
* Financial information for Intrusion [https://seekingalpha.com/symbol/INTZ/income-statement]