VerifyMe(VRME 11.41%) reported its second quarter 2025 results on August 13, 2025, delivering $4.5 million in revenue, a net loss of $290,000 (GAAP), and positive adjusted EBITDA of $300,000. Key developments included a strategic cash deployment initiative, a confirmed multi-carrier integration, and sustained cost discipline, all of which position the company for future growth. The following summary analyzes critical insights shaping the long-term investment outlook.
Cost discipline drives margin stabilization at VerifyMe
Operating expenses declined 27% year-over-year (YoY) to $1.9 million, compared to $2.6 million in Q2 2024, aided by the divestiture of TrustCodes and targeted cuts in the Precision Logistics segment. Gross margin was 35% versus 39% in Q2 2024, primarily reflecting the loss of a high-margin premium customer, partially offset by efficiency gains in proactive services.
"We're managing our cost in alignment with revenues, and we're maximizing the gross margin of our proactive services within our Precision Logistics segment. Our positive adjusted EBITDA in Q2 2025 is an improvement over Q2 2024. So we're taking the steps that are required to ensure we have sufficient resources to invest in our strategies for both organic and strategic growth."
-- Adam Stedham, CEO & President
Continued operational streamlining is enhancing VerifyMe's ability to self-fund growth initiatives and weather revenue fluctuations, which is crucial given revenue declines tied to past customer losses.
VerifyMe expands addressable market with second carrier integration
The company finalized technology integrations for e-commerce platforms and began onboarding a second major U.S. freight carrier, which collectively handles most non-U.S. Postal Service parcel shipments, addressing earlier single-carrier limitations. Near-term revenue impact is deferred, as integration and market adoption are expected to extend into 2026 due to typical shipping industry seasonality.
"We're pleased to announce that we now have a relationship with the two freight carriers that handle the overwhelming majority of the non-US Postal Service Partial Shipments in the United States. Historically, our single carrier strategy created an environment in which PeriShip did not have the ability to service meaningful portions of the potential target market for our services. The process of integrating our technology and services with our additional freight carrier will take a couple of months. But the addition of a second carrier further reinforces the confidence we have in organic revenue growth in 2026."
-- Adam Stedham, CEO & President
This expanded strategic access to the national shipping ecosystem may unlock substantial new volume opportunities beginning in 2026, potentially accelerating organic growth and reducing dependence on individual large customers.
Cash management strategy boosts VerifyMe yield flexibility for future M&A
Available cash increased by $3.3 million since year-end 2024 to $6.1 million as of June 30, 2025, with no outstanding borrowings and $1 million in unused credit capacity. In August 2025, VerifyMe executed a $2 million short-term loan agreement, raising expected annualized interest income from approximately 4% to more than 8%.
"we've adopted a treasury strategy that will allow the company to realize better interest income and cash generation from our strong balance sheet. This strategy involves loaning a portion of our available cash to Zen Credit Ventures in exchange for a nine-month promissory note at a more favorable interest rate than our current high-yield savings account. We anticipate this strategy should improve our annualized interest income from approximately 4% of total available cash to greater than 8%. We don't believe this strategy will have any impact on our ability to pursue strategic options for the company."
-- Adam Stedham, CEO & President
Enhancing passive interest income demonstrates prudent capital stewardship, supporting VerifyMe's ability to pursue acquisitions or organic investments without sacrificing liquidity or flexibility.
Looking Ahead
Management projects ongoing positive cash flow from operations for full-year 2025 and expects gross margin (GAAP) to improve year-over-year, driven by seasonal factors. Integration with the second freight carrier is expected to begin delivering notable revenue contribution starting in 2026, with no short-term impact due to lengthy integration and a typical industry freeze during peak holiday shipping. No explicit annual revenue or earnings guidance was provided, and management confirmed it remains disciplined, awaiting value-accretive M&A opportunities before deploying significant capital.
