Trust Stamp (Nasdaq: IDAI, Euronext Growth: AIID ID), the
Privacy-First Identity CompanyTM providing AI-powered trust and
identity services used globally across multiple sectors, provides a
business update and commentary on reported financial results for
the three months ended March 31, 2022 (“Q1 2022”).
First Quarter 2022 Financial Highlights:
- Net Revenue was $2.82M in Q1 2022 compared to
$0.53M in Q1 2021, a 430.0% increase year-over-year
- Gross Profit was $2.13M in Q1 2022 compared to
$0.27M in Q1 2021, a 673.8% increase year-over-year
- Gross Profit Margin for Q1 2022 was 75.4%
compared to 51.6% for Q1 2021
- Operating Loss decreased to $1.64M in Q1 2022
compared to $1.94M in Q1 2021
- Net Profit Margin increased to -60.0% in Q1
2022 from -381.7% in Q1 2021
- Net Loss was $1.69M in Q1 2022 compared to
$2.03M in Q1 2021, a 16.7% decrease year-over-year
- Cash and Cash Equivalents were $5.84M in Q1
2022 compared with $3.48M as of December 31, 2021
Gareth Genner, Chief Executive
Officer, comments: “We achieved record revenue of $2.82
million and gross profit of $2.13 million during Q1 2022,
representing year-over-year increases of 430% and 674%,
respectively. Trust Stamp has reported several significant
developments over the past quarter as we delivered growth across
the business, from our targeted suite of solutions and intellectual
property portfolio to our earnings and client base.
This strong financial and operational
performance reflects Trust Stamp’s ability to capture diversified
market opportunities and grow existing commercial relationships to
generate long-term revenue streams. Notably, we expanded upon an
existing customer relationship within the government sector while
increasing our scope of work with multiple Fortune 500 commercial
clients in the financial services sector. Our technology has
garnered interest across multiple government use cases in the
United States and internationally, addressing pressing concerns
around the privacy and security of legacy biometric
implementations. Towards this end, Trust Stamp has made a
significant investment in expanding our government-facing business
development team and are in active discussions with several
overseas governments.
We continue to innovate through investment in
research and development to expand and productize our portfolio of
solutions, which has led to five patent issuances and nine new
patent application filings in Q1. Trust Stamp’s core technology
delivers unparalleled security, utility, and privacy, at a fraction
of the cost of traditional biometric solutions, driving commercial
growth as we address cross-industry needs for fraud prevention,
operational efficiency, and accessibility in digital services.
We are notably pleased with the launch and
commercial adoption of our next-generation Biometric Multi-Factor
Authentication (Biometric MFATM) offering and Identity
Orchestration Platform, which transforms secure digital operations
across the identity lifecycle with seamless rapid deployment of
custom workflows built on our range of innovative AI-powered
solutions. The low-code identity package addresses key industry and
consumer requirements, including know-your-customer (KYC) and
anti-money laundering (AML) regulations, multi-factor
authentication, account recovery, fraud prevention, data
protection, and more.
Following the launch of our end-to-end Identity
Orchestration Platform, FIS, a leading financial services
technology provider with over 20,000 clients, announced a
partnership to leverage Trust Stamp’s biometric verification and
tokenization capabilities in their global KYC solution. We continue
to onboard new clients and partners, including VIVA Finance, which
is integrating our biometric verification, document validation, and
data protection technology to power and protect robust, accessible,
and equitable financial services. Beyond internal sales
initiatives, Trust Stamp is also focused on engaging channel
partners with substantial distribution networks, which we believe
will enable us to rapidly and cost-effectively scale the
business.
Trust Stamp’s commitment to innovating secure,
privacy-first identity and trust verification solutions, investment
in scalable infrastructure, and strengthened presence across a
range of market opportunities position us to drive continued
positive performance as we execute on our long-term growth strategy
with a strong balance sheet, including cash on hand of $5.86
million.
Building upon our work to drive market
differentiation and shareholder value with a resilient and
diversified business over previous years, Trust Stamp has made
significant progress on executing key strategic goals in the first
quarter of 2022, including uplisting to the Nasdaq Capital Market
on January 31, 2022. On behalf of the Trust Stamp team, I want to
thank our shareholders for your continued support as we execute our
mission to accelerate secure global financial and societal
inclusion.”
Financial Performance Overview
Revenue
Net revenue increased by $2.29 million or
430.0%, to $2.82 million for Q1 2022, compared to $532 thousand for
Q1 2021. This increase was primarily due to revenue contracts
executed by newly acquired and existing customers.
Gross Profit
Gross profit increased by a notable $1.86
million or 673.9% year-over-year in the first quarter, while gross
profit margin improved to 75.4% in Q1 2022, compared to 51.6% for
Q1 2021. The improvement was due in part to the Company’s prior
investment in research and development, which enabled the
utilization of existing technologies with relatively nominal
implementation costs for new deployments.
Research and Development
Research and development (R&D) costs
decreased by $261 thousand or 34.6% year-over-year in the first
quarter. The decrease in R&D expenses in the comparison periods
was driven by the Company’s continued efforts to transition
software development resources towards expanding internal
capabilities and away from external third-party software
development.
Selling, General, and Administrative Expenses
Selling, general, and administrative (SG&A)
expense increased to $3.12 million for Q1 2022, compared to $1.33
million for Q1 2021. The increase in SG&A expense during the
period ended March 31, 2022 was driven by legal and professional
services fees, other fees related to the listing of the Company’s
common stock on the Nasdaq Capital Market, and internal sales
commissions.
Operating Loss
Operating loss decreased by $295 thousand to
$1.64 million for Q1 2022, compared to $1.94 million for Q1 2021.
The primary reason for the decrease in operating loss was the
growth in net revenue, which outpaced the growth in operating costs
by a factor of 5.3. Adjusting for additional non-cash and
non-recurring activities results in an even more significant
improvement to the operating margin.
Net Loss
Net loss decreased 16.7% or $0.07 per basic and
diluted share for Q1 2022 to $1.69M from $2.03 million or $0.11 per
basic and diluted share for the same period last year.
Liquidity and Capital Resources
As of March 31, 2022, and December 31, 2021, the
Company had approximately $5.84 million and $3.48 million of cash,
respectively. The increase in cash during the comparative periods
was a result of the net positive cash inflow from the combination
of financing and operating activities. In Q1 2022, the Company
received $1.95 million related to a government contract and $3.32
million from a warrant exercise, as well as $365 thousand in units
sold and warrants exercised in connection to the Company's 2022
fundraising efforts in preparation for its Nasdaq listing.
Total working capital as of March 31, 2022 was
$5.63 million, compared to $3.36 million as of December 31, 2021.
As of March 31, 2022 and December 31, 2021, the Company had no
long-term debt. Total stockholders’ equity was $7.42 million as of
March 31, 2022, compared to $5.03 million as of December 31,
2021.
Enquiries
Trust Stamp
Email: Shareholders@truststamp.ai
Gareth Genner, Chief Executive Officer
Josh Allen, Executive VP for Corporate Finance
Nisha Naik, Executive VP of Communications
Davy (Euronext Growth
Advisor)
Tel: +353 1 679 6363
Barry Murphy
Investor
Relations
Tel: +1 212-671-1021
Crescendo
Communications
Email: idai@crescendo-ir.com
About Trust Stamp
Trust Stamp, the Privacy-First Identity CompanyTM, is a global
provider of AI-powered identity services for use in multiple
sectors including banking and finance, regulatory compliance,
government, real estate, communications, and humanitarian services.
Its technology empowers organizations with advanced biometric
identity solutions that reduce fraud, protect personal data
privacy, increase operational efficiency, and reach a broader base
of users worldwide through its unique data transformation and
comparison capabilities.
Located in seven countries across North America, Europe, Asia,
and Africa, Trust Stamp trades on the Nasdaq Capital Market
(Nasdaq: IDAI) and Euronext Growth in Dublin (Euronext Growth: AIID
ID). Founded in 2016 by Gareth Genner and Andrew Gowasack, the
company now employs over 100 people.
Safe Harbor Statement: Caution Concerning
Forward-Looking Remarks
All statements in this release that are not based on historical
fact are “forward-looking statements” including within the meaning
of the Private Securities Litigation Reform Act of 1995 and the
provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The information in this announcement may contain
forward-looking statements and information related to, among other
things, the company, its business plan and strategy, and its
industry. These statements reflect management’s current views with
respect to future events based on information currently available
and are subject to risks and uncertainties that could cause the
company’s actual results to differ materially from those contained
in the forward-looking statements. Investors are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date on which they are made. The company does
not undertake any obligation to revise or update these
forward-looking statements to reflect events or circumstances after
such date or to reflect the occurrence of unanticipated events.
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