Intrusion Inc.

Welcome to Intrusion Inc.'s second quarter 2026 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 Carroll with Investor Relations.

Thank you and welcome. Joining me today are Tony Scott, President and 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 relating to the company's expected future performance, future business prospects, future events, or plans may include forward-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.

Well, thank you, Josh, and good afternoon, and thank you all for joining us today. You know, the second quarter was a pivotal period for intrusion. Our revenue increased 64% sequentially, restoring the quarterly revenue run rate that we achieved prior to the ongoing delay associated with the Department of War contract extension, which we've previously discussed on our earnings call for the first quarter. And I'll cover that in more detail in a few moments. Behind that headline, we took the single most significant step in our growth strategy to date, the acquisition of Vigil Agent. And we're already seeing that decision translate into tangible progress. But before I dive into this progress and what it means for our future, I'd first like to provide a brief update on the Department of War matter that I just mentioned. The timing of this contract extension remains subject to the currently unpredictable federal funding and procurement process of the federal government, which has impacted us and many other companies providing services and capabilities to the Department of War. As previously discussed, the situation is compounded by the ongoing geopolitical situation related to the conflict with Iran. and throughout this period we've continued to support the critical infrastructure technology that we've already deployed and we remain optimistic that a meaningful portion of the associated revenue will be recognized in future periods, subject to final award timing and funding approvals. And we also continue to see room to expand our solution across additional locations within the Department of War's jurisdiction. So given that the situation in the Middle East continues to remain fluid, we believe the timing of this opportunity has shifted rather than diminished, and we expect activity to resume once the situation begins to normalize. In the meantime, we've entered into contractual agreements with the local agencies that were the beneficiaries of our solution to provide ongoing support and maintenance. These agreements cover our ongoing costs for support, do not include additional expansion or added capabilities. In addition, as you've no doubt read in the news, water and other local utility systems across the continental U.S. have been attacked and compromised by nation-state adversaries. And our solution is specifically and ideally suited to protect these facilities from compromise. We are actively engaging with the appropriate agencies and authorities to raise awareness for our solution and demonstrate how we can help address their needs. Now turning to a more recent win that shows that our growth strategy is working, As we discussed on our last earnings call, we were able to secure a $4 million annual contract to deliver our cyber threat intelligence and critical infrastructure protection product to the state of Texas. This contract win was a direct result of our efforts to enhance our federal, state, and local sales efforts and our broader go-to-market strategy. Revenue from this contract started to be recognized during the second quarter and will continue through the remainder of this fiscal year and into fiscal year 2027. Through our initial work with the state of Texas, we've identified additional opportunities for intrusion technology and consulting services that we expect will generate additional revenue beyond the current contract levels. and based on our success in Texas, we are using the framework from this engagement to secure additional contracts across other US states and territories. Our Posse program delivered through our partnership with Port Nexus also continued to gain some well-received exposure during the quarter. I personally attended one law enforcement trade show here in Texas where we jointly presented the Miflare alert and intrusion solution and I personally saw the enthusiasm in the attendees' responses. We jointly presented this solution at many other events over the quarter and we saw similar levels of enthusiasm. We view this program as an important high margin channel into the public safety market and while there wasn't significant revenue in Q2, we expect its contribution to build over the coming quarters. And just yesterday, Port Nexus announced its partnership and integration work with a computer-aided dispatch solution that is already installed in hundreds of law enforcement agencies in the Midwest, furthering our opportunities to serve this community and the schools within their jurisdiction. and while it's a complex sales process, I still see strong potential for this solution in the long run. Now finally, I'd like to address our recent acquisition of Vigil Agent. But first, let me provide some context. Cybersecurity is undergoing one of the most significant transformations in its history. AI is dramatically reshaping both offense and defense and poses significant internal risks for most organizations related to the protection of sensitive data, privacy and trade secrets. Organizations today face increasingly sophisticated AI-driven threats while simultaneously confronting growing complexity, limited cybersecurity talent and rising demands to protect critical data and operations. As a result, customers are looking beyond standalone security products towards integrated platforms that combine artificial intelligence, leading-edge threat intelligence, managed services, and trusted long-term partners capable of delivering measurable security outcomes. It's our belief that these industry trends are reshaping the cybersecurity market and they've also shaped the strategic decisions we've made at Intrusion. Our objective is not simply to participate in this changing market, but to build a stronger company positioned to compete and create long-term value as the industry evolves. With that objective in mind, we announced the acquisition of Vigil Agent, a managed security service provider to create an AI native cybersecurity platform. The acquisition of Vigil Agent is a significant step forward for intrusion and a natural evolution of our growth strategy. The addition of Vigil Agent adds significant shareholder value as the business immediately adds approximately $3.5 million of annual recurring revenue that is supported by a diversified base of multi-year customer contracts. Building recurring revenue has been a strategic priority for Intrusion over the past year, and this acquisition immediately accelerates our strategy and gives us access to an expanded ecosystem of customers and channel partners that we previously did not have access to. The acquisition also brings together complementary technologies, experienced cybersecurity professionals, proprietary threat intelligence, and managed detection and response capabilities. Most importantly, the Vigil agent and intrusion technical teams are working together and have created some exciting Brand new capabilities to detect, manage, and remediate threats associated with the use of AI by insiders as well as malevolent actors. This is the new battle space, and it is the most important area of focus in the foreseeable future. And we intend to be on the leading edge of that fight. Now, as we noted on our M&A call a few weeks ago, we plan to market and sell the Intrusion Shield platform through Vigil Agents' commercially oriented organization. As a result, you'll see some changes in how we bring Shield and our other technologies to market. Intrusion will continue to serve the U.S. federal government and large institutional partners, including public, federal, state, and local institutions, and provide those customers with its customized and highly tailored technology and consulting services. While Vigil Agent will operate as a dedicated business unit within the Intrusion organization. Vigil Agent's focus will be on the commercial market space. We think this segmentation will accelerate our growth and allow for more effective sales and marketing efforts in these businesses. In fact, we've already begun to see the acquisition yield positive results since being acquired a few short weeks ago. This progress includes securing over $350,000 in annualized new business and customer renewals, signing several new strategic MSP partners, each with the potential to generate more than $1 million in annual recurring revenue as deployments ramp. We've identified more than $3 million in annualized cross synergies through integration and operational efficiencies. We've expanded our strategic foundation with enhanced AI capabilities. manage security expertise, and a much broader commercial platform. These accomplishments are only the beginning. Our objective is not simply to integrate two organizations. It's to build a platform that can innovate faster, serve customers more effectively, and create durable value over the long term, and achieve our goal of transitioning intrusion to profitability in 2027. We're extremely excited about this acquisition, but we recognize that transformations require disciplined execution, accountability, and sustained performance. And these principles will continue to guide every single decision we make. Now, before I turn the call over to Kim, I'd like to remind our shareholders of our upcoming annual meeting on August 27th. This year's meeting matters more than most, as it includes several important matters, including Proposal 3, which asks shareholders to approve the potential issuance of intrusion common stock above NASDAQ's 19.9% threshold, pursuant to the membership interest purchase agreement involving Vigil Agent. I encourage you all to please review the definitive proxy statement vote every eligible account that you own and submit your voting instructions as early as possible. The board of directors unanimously recommends that shareholders vote for each director nominee and for proposals two, three, and four. We thank you for your support and your participation. And with that, I would now like to turn it over to Kim for a more detailed review of our second quarter financial results. Kim?