Intellicheck CEO Sees Demand for Banking ID Verification as Fraudsters Grow Bolder

Investors sent Intellicheck shares lower by 12% Thursday morning (Nov. 14) on a slight revenue miss.

However, management pointed to potential in the company’s identity verification offerings, particularly in the areas of real estate and banking (and where retail remains a core focus, although that sector has been pressured).

By the Numbers

Third-quarter revenue was $4.7 million, roughly flat compared to a year ago and about 3% lower than consensus. Software as a service revenue gained 1%, representing most of the top line.

Pricing power remained strong, CEO Bryan Lewis said on a conference call with analysts Wednesday (Nov. 13), and new business pricing per transaction gained 25% year on year and 8% sequentially.

With the addition of Sandra Bower as vice president of customer success and account management, there’s a “deep dive” on the product pipeline that Lewis said will drive additional revenues from existing customers.

Banking and Multiyear Deals

“While we continue to diversify and see substantial growth in our newer vertical markets, retail remains a large and important part of our mix,” Lewis said during the call.

As for banking, one of the firm’s large regional banks has signed a new multiyear agreement, “and they are now fully rolled out live in 1,200 bank branches with plans to expand to a digital use case in the near future. We anticipate this being a mid-6-figure revenue-producing agreement annually over time,” he told analysts.

Another southern regional bank with more than 2,700 branches that has been an Intellicheck partner is finalizing a multiyear deal for an in-branch location rollout using Intellicheck’s offerings at teller workstations.

“We anticipate that the revenue generated from this bank will have a material increase as we enter 2025,” he said, with the potential to become a seven-figure deal.

‘Solid’ Real Estate Growth

Real estate is also seeing “solid” growth, said Lewis, who noted that title companies and homeowners have been victimized by seller impersonation schemes, leading to billions of dollars of losses.

“Sophisticated fraudsters often use the property owner’s fraudulently obtained Social Security and driver’s license information in the transaction,” he said during the call. “In many cases, fraudsters use email and text messages to communicate with the title agent, allowing them to mask their true identities and commit crime from a remote location.”

In a nod to the August announcement that Doma Title Insurance title agents are using Intellicheck’s ID verification tool, Lewis said that last year, 30% of claims paid by Doma involved fraud and forgery.

Separately, Westcor Land Title Insurance Company is using Intellicheck’s ID verification technology to power its advanced ID verification efforts (Val-ID), verifying state-issued IDs and passports.

Growth in Intellicheck’s automobile segment stood at 28% year on year, and employment verification for cargo firms remains a key growth area (to help battle freight theft), Lewis said.

During the conference call with analysts, management detailed that the roughly flat revenue profile came despite pressures in the retail segment that have been in place since the middle of last year (three clients went bankrupt, according to call commentary). Consumer pullbacks on spending and credit use have pressured volumes in the sector.

“I’m hoping that as we see inflation dropping and other things happening that it comes back,” Lewis said during the call, adding he sees it as a headwind that could become a tailwind.

“But what I’m happy to say is we look at the other verticals we’re going into, and even some of the customers in those verticals haven’t fully implemented [our solutions], and we know what they’re going to do. I’m happy that well over a year ago, we decided to make sure that we were looking at other places that need to know that you are who you say you are.”