News ReleaseTrust Stamp (NASDAQ: IDAI) Reports Q3 Results: Net Revenues Up, Net Loss Narrowed To $35,000
Benzinga
By Faith Ashmore, Benzinga As the digital landscape continues to evolve, there is an increased interest from consumers and agencies alike on how to maintain privacy and data protection so that users’ personal information is safeguarded at all times. AI has become a powerful tool that has the potential to increase security when used wisely and increase opportunities for hackers when used poorly. Among companies leveraging AI, Trust Stamp (NASDAQ: IDAI) is one that seems to stand out in its field as the company looks to revolutionize digital security. Trust Stamp is a global provider of AI-powered, privacy-first trust and identity services used across multiple sectors – such as banking and finance, real estate, communications, regulatory compliance and government. Trust Stamp offers a range of innovative services. The company reports that its biometric capture and analysis technology enables secure and convenient identity verification, allowing businesses to streamline onboarding processes. By integrating advanced document verification, Trust Stamp helps verify the authenticity of important documents, reducing the risk of fraud. Trust Stamp recently released its Q3 financial performance overview. The company reported growth in its net revenue during the third quarter of 2023 – net revenue increased to $3.07 million, marking growth of 127.35% compared to the net revenue of $1.35 million for the same period in 2022. The $3.07 million in net revenue for Q3 2023 was derived from various sources. The majority of this increase was due to the termination of the Master Services Agreement with IGS ("IGS Contract") on September 15, 2022. This termination not only resulted in $2.51 million in net revenue for Q3 2023 but also relieved the company from future contractual obligations for maintenance and upgrades. In addition, Trust Stamp generated $243,000 in net revenue from Mastercard, $186,000 from an S&P 500 bank, and $127,000 from other customers during the same period. Perhaps most notably, Trust Stamp's Orchestration Layer, a platform that enables seamless integration of Trust Stamp services, seems to have been successful in attracting new customers. During Q3 2023, the platform generated $139,000 in total revenue, including new revenue from seven new enterprise customers who were onboarded through FIS. The Orchestration Layer represents Trust Stamp's strategic shift from being solely a provider of custom solutions to offering a scalable SaaS model with low-code implementation. The growth in net revenue during Q3 2023 was offset to an extent by the termination of the U.S. Immigration and Customs Enforcement contract ("ICE Contract") on September 23, 2021. This contract contributed $844,000 in net revenue during Q3 2022 but was subsequently terminated during the 2022 fiscal year. Trust Stamp reported improvements in multiple metrics, particularly in its cost management and operating loss reduction. Trust Stamp effectively reduced its Cost of Services ("COS") by $290,000 or 54.76% in Q3 2023 compared to Q3 2022. Despite onboarding 29 new enterprise customers in 2023, Trust Stamp managed to lower its COS by $21 thousand, thanks to the inherent lower costs of Software-as-a-Service (SaaS) platforms like the Orchestration Layer. Research and Development expenses decreased by $173,000 or 22.19% in Q3 2023 compared to Q3 2022. Selling, General, and Administrative Expenses decreased by $1.23 million or 37.42% in Q3 2023 compared to Q3 2022. Trust Stamp also narrowed its operating loss, which decreased by $3.42 million or 99.36% in Q3 2023 compared to Q3 2022. The increase in net revenue by $1.72 million or 127.35% was mainly attributed to the recognition of nonrefundable license revenue from IGS. This is largely due to Trust Stamp's implementation of cost-cutting measures resulting in a $1.70 million reduction in operating expenses. These cost reductions exceeded the decrease in net revenue, leading to improved margins and greater operational efficiency for the company. Trust Stamp reported progress in improving its financial performance, including a reduction in net loss and an increase in liquidity. Trust Stamp's net loss decreased by $3.40 million to just $35 thousand in Q3 2023, compared to a net loss of $3.44 million in Q3 2022. This improvement reflects the company's efforts to streamline operations and cut costs. As of September 30, 2023, Trust Stamp had approximately $3.18 million in cash, a significant increase from $1.25 million as of December 31, 2022. This improvement was largely due to successful fundraising initiatives. Trust Stamp reported that its outlook for growth in the government sector seems positive, and the company is actively exploring potential partnerships and opportunities in this area. For example, the company has launched its new identity technology called Privtech™, with a strong focus on government applications. The Privtech solution recently received registered trademark status from the U.S. Patent and Trademark Office. Privtech™ offers government agencies a privacy-first approach to identity verification and fraud prevention. It provides four levels of customizable privacy protection through the existing Privtech Certified® framework. This technology allows government entities to verify individuals' identities and safeguard against fraud while minimizing the amount of data collected. Trust Stamp's Privtech™ also ensures transparency in how the collected data is utilized. Trust Stamp is seemingly positioning itself as a crucial ally in the ongoing battle against fraud and identity-related issues, supporting a safer and more secure digital environment for all stakeholders. This post contains sponsored content. This content is for informational purposes only and not intended to be investing advice. Contact Details Benzinga +1 877-440-9464 info@benzinga.com Company Website http://www.benzinga.com
November 21, 2023 09:25 AM Eastern Standard Time
