Intrusion Inc.

Welcome to Intrusion, Inc.' 's fourth quarter 2024 earnings conference call and webcast. At this time, all participant lines are in a listen-only mode. For those of you participating in the conference call, there will be an opportunity for your questions at the end of today's prepared comments. Please note this conference call is being recorded. An audio replay of the conference call will be available on the company's website within a few hours after this call. I would now like to turn the call over to Josh Carl with Investor Relations.

Thank you and welcome. Joining me today are Tony Scott, Chief Executive Officer, and Kimberly Pinson, Chief Financial Officer. This call is being webcast and will be archived on the investor relations section of our website. Before I turn the call over to Tony, I'd like to remind everyone that the statements made during this conference call relate to the company's expected future performance, future business prospects, future events, or plans may include four looking statements as defined under the Private Securities Litigation Reform Act of 1995. Please refer to our SEC filings for more information on the specific risk factors that could cause our actual results to differ materially from the projections described in today's conference call. Any forward-looking statements that we make on this call are based upon information that we believe as of today, and we undertake no obligation to update these statements as a result of new information or future events. In addition to U.S. GAAP reporting, we report certain financial measures that do not conform to generally accepted accounting principles. During the call, we may use non-GAAP measures if we believe it is useful to investors or if we believe it will help investors better understand our performance or business trends. With that, let me now turn the call over to Tony for a few opening remarks.

Thank you, Josh, and good afternoon, and thank you all for joining us today. We closed out 2024 with another quarter of sequential growth, marking our third consecutive quarter of revenue improvement as our recent efforts to position our business for sustainable growth and profitability continue to come to fruition. During the year, we signed a total of 20 new Shield logos, and we have continued to experience near-zero churn with our Shield customers. Furthermore, our pipeline has continued to expand with high-quality opportunities driven by increasing demand for our products in the U.S. and in the broader Asia Pacific region. I'm delighted to report that as a result of a series of events late in December 2024 and early January 2025, we're in the best financial position the company has been in since I joined. As we've previously disclosed in a recent 8 filing, we are virtually debt-free, have eliminated the Series A preferred stock, and have enough cash in the bank to fund our operations. through fiscal year 2025 and beyond. Now, this is a significant achievement for intrusion for a few reasons. First, and probably most importantly, it eliminates any need for us to further raise capital in 2025. And we have no intention of doing so absent some compelling inorganic opportunity. I understand that many shareholders, including myself, have been concerned about continued dilution, but I'm happy to say that with the elimination of the preferred Series A and our improved cast position, this concern should be eliminated. Second, the recent activities have eliminated the prior baby shelf limitations on capital raises. And should a compelling inorganic opportunity become available, we will have increased flexibility to engage in such an activity. Now again, currently there is no specific transaction being considered, but we now have options that frankly weren't available to us before. Third, our cash position has eliminated the going concern opinion that has been an issue with our 10K for the last two years. And while it may seem a small thing, potential customers do look at such things when considering doing business with us. With this sales barrier now gone, we've been having different and better conversations with potential customers. And finally, as many of you know, our management team for the last three years has, out of necessity, been consumed with raising capital, controlling costs, adding needed capability to our products, and managing various legal issues. And while we will continue to manage our costs diligently, we are pleased that many of these prior hurdles are now behind us, and we can now shift our focus entirely towards our main priorities. of growing our business, which is a welcome opportunity for all of us. While we've continued to make progress on the sales front, I'm not satisfied with the rate of increase we are currently making, and we are taking some additional measures to help accelerate our growth. We are in the process of making our Shield Cloud product available in the AWS marketplace, which is a high-growth engine for many companies like ours. We are increasing our digital marketing to include better visibility and engagement on relevant social media platforms. Additionally, we've also started revamping of our channel program to refine our messaging, pricing, go-to-market processes, and various other aspects where we've identified some gaps that have inhibited our growth. I'm confident that the changes we are making will help us accelerate our growth and will provide for better engagement with our partners, as well as improved discipline in our sales and marketing processes. And while not always under our control, every quarter we've had significant deals slip into the next quarter, or we've experienced meaningful delays in onboarding, which impacts the timing of revenue and makes it hard to allocate resources properly. These changes should help accelerate our time to revenue and provide a more reliable and consistent set of bookings and revenue forecasts. To ensure that we can continue to attract new customers and meet the needs of our growing customer base, we've continued to invest in R&D at a relatively constant level to improve our portfolio, all with the goal of helping organizations address the constantly changing cybersecurity challenges that they face. One of the 2024 improvements to our portfolio was the launch of the Intrusion Shield Command Hub. which is a centralized hub that gives MSPs and network administrators a way to view, manage, and report on an entire fleet of Shield products, including endpoint, on-prem, and cloud. The latest features of the command hub is the addition of an AI-driven insights engine that analyzes vast quantities of network activity and improves administrators' security posture by providing them with a prioritized list of actionable items based on its analysis. In addition to the Command Hub, we also recently announced the introduction of Intrusion Shield Sentinel, a high-performance 100-gigabit monitoring appliance built for large enterprises and telecom providers, allowing for comprehensive visibility across the largest and most complex of network environments. Shield Sentinel delivers a scalable, data-rich monitoring appliance for our customers that will help simplify threat hunting, streamline compliance, and enhance overall security. Early customer feedback has been promising, and we are shipping additional units in the first quarter for our initial paying customer. We're also pleased to announce that we've developed and have piloted with a paying customer a new product offering to support the cybersecurity and resilience posture of critical infrastructure assets. And this work, while in its early stages of deployment, has great promise and ultimately will be available to critical infrastructure providers, which are high-value targets for both nation-state and criminal enterprises. More work is needed before we broadly market this new product but I wanted to share it as it will be an important addition to our portfolio of products. Now, briefly onto our financials. Total revenues for the fourth quarter were 1.7 million, representing an 11% increase on a sequential basis. For fiscal 2024, revenues were 5.8 million, a 3% increase compared to fiscal year 2023. As for our operating expenses, we've continued to maintain disciplined cost controls to help keep our expenses low, which have remained relatively flat on a sequential basis and are down approximately 21% for 2024 compared to the previous year. Before I turn the call over to Kim, I would like to provide an update on our current share price. As many of you are aware, we received a written notice from the NASDAQ stock market back in October indicating that Intrusion was not in compliance with the $1 minimum bid price requirement for continued listing. However, as a result of the recent improvement in our share price over the past couple of months, we were informed by the listing qualification staff of NASDAQ that Intrusion had successfully regained compliance. While we are pleased with this outcome, we are not satisfied with the current share price, and our focus will continue to remain on increasing revenue and achieving profitability, which in turn we hope will drive our stock price higher in a sustainable fashion. With that, I would now like to turn the call over to Kim for a more detailed review of our fourth quarter financials. Kim?