May 12th, 2026

The call presented a mixed but constructive picture: material year-over-year declines in ARR and revenue (driven by two lost contracts and lumpy service work) are offset by strong sequential ARR growth, substantial margin expansion, meaningful operating cost reductions, early commercial traction for Secure Gift Cards (first commercial order and rollout plans with major retailers), multiple upsells across product lines, and strategic progress in Digital Trust & Integrity. Near-term timing risks (scanner firmware delays) and continued cash use temper the outlook, but execution metrics and improved non-GAAP profitability indicate momentum toward scaled commercial adoption.

Company Guidance

The company reiterated it still expects to deliver "significant" ARR growth in 2026 but said the composition has changed due to scanner firmware delays that mean Secure Gift Cards will no longer be the largest contributor to near‑term growth; Q1 metrics cited include ending ARR of $15.0M (vs. $20.0M a year ago, but excluding two lost contracts ARR grew $1.8M YoY and included $500k from gift cards), sequential ARR growth of 9%, a first commercial gift‑card order of >$500k ARR, total revenue of $7.6M (subscription $4.4M, 58% of revenue; services $3.2M), subscription gross margin 90% (+400 bps YoY), service margin 57%, platform costs down $300k YoY, operating expenses $11.7M (‑36% YoY), non‑GAAP opex $8.1M (‑51% YoY), net loss per diluted share $0.32 (non‑GAAP net loss per diluted share $0.07), non‑GAAP net loss of $1.6M (improved $6.9M, 81% YoY), cash & short‑term investments $10M with no debt, free cash flow used just under $2M (free cash flow usage up $3.7M YoY) and a $900k stock buyback (169k shares); management also expects to implement a new corporate structure (CUSIP change) around mid‑May and is advancing rollout plans with 15 North American retailers, including 8 of the top 20 by sales (up from 8 retailers and 4 top‑20 two months ago), while one near‑600‑store launch was pushed to January 2027.