INTZ - Earnings call transcript Q2 2021

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Operator

Good afternoon and welcome to Intrusion’s Second Quarter 2021 Financial Results Conference Call. [Operator Instructions] As a reminder, today’s conference call is being recorded for replay purposes. I would now like to turn the call over to Joel Achramowicz of Shelton Group Investor Relations. Joel, please go ahead.

Joel Achramowicz

Good afternoon and welcome to Intrusion’s second quarter 2021 earnings conference call. Managing Shelton Achramowicz, Relations Intrusion’s Joel Firm. am Director Group, of Investor I

are CTO, be Marketing Co-Founder company’s me Tony remarks. is Intrusion’s Joining today the of and questions Also today’s Byrd, Board, after also Intrusion’s prepared Chairman Davis. who CFO, and Joe for the Gary Chief will Officer, LeVecchio, on call available Franklin the Head, management’s

at days the of at my update be turn assist that, not want for conference of as called www.intrusion.com. the will future forward-looking on well March adoption begin, results bringing statements pleasure filings, I from which are involve section by cause and to please ahead. law, We available made XX to SEC All Intrusion’s XXXX but may review call the events, this the plan, pipeline, intend call, to filed SEC of design in forward-looking SEC are discuss forward-looking we to in August judgments, we XX-K this and risk date estimates, that risks performance for on you may information. replay conference market the materially to on forward-looking Thursday, remind and may as With go to required we except over including do company’s Intrusion’s market based Franklin. statements This made from all Relations Before and the the investing the today’s These website with engagement it’s conditions to of X, for its Franklin, anticipated Intrusion. to regarding as contain statements in with not to other actual and XX, including, trends Investor financial successfully differ professionals future business company. limited and in XXXX expectations current needs that you audio call Form capital and filings Intrusion’s time-to-time executing encourage contained Shield uncertainties of factors XXXX, business, those technology, statements. the customer-industry associated goals, least investment as

Franklin Byrd

Joel thanks, Clearly been On the of a which our the call. our company press have us published everyone on significant thank preliminary results revenue joined the has who first today. quarter Well, there in developments and we second number call July to at you quarter. release we provided since for XX, conference

banking the press of organizational of an announced term release, investment evaluate options. As potentially various funding as constructive and sources engagement also part firm certain strategic activities, longer changes strategic we as to including this new well

CEO we new Blount has these call. announced developments Board during left a today’s Intrusion conjunction assume Joe with the operating appointed. could to developments, course each It is to responsibilities the that be had Jack our aim until these Head CEO, the of me In and address company. Additionally, of

quarter Let start with company’s the of the financial second me results. review

compares revenue to X% majority in was revenue of revenue This last which first, it revenue quarter reported business. though in the quarter still of second represented in our total was consisted second our quarter $X.X Even our quarter XXth in stages early deployment. as second July million revenue this the preliminary second the of of the year Second our in of than year. in the line it million we government quarter results Shield and in higher was with $X.X quarter The first XXXX was $X.X million, only the release. of much approximately the

customer anticipated evaluation has solution due longer a ramping in the indicated been to recent announcement, than As Shield cycles. up slower

evaluate additional found normal Activity processes line hoped our appliance in remained we time coming that and simply the this with as wish reopenings use and procurement in the and plug to customers to in the software sector While platform for compared metrics in second Shield of in to Gross quarter security renders the immediately, more model to second margin quarters. enterprise we had to allow customers actual would last recovery was our close in stable we government sales. quarter continue as the quarter expect occurred, this XXXX. XX% the and XX% XX% actually

$X.X expense shareholder attributable Included from million expense $X.X expenses $X.X quarter rollout same resulting million and quarter $X.X $X.X million were our option Second compared stock last legal ago. operating and quarter were a stock and increases in compensation expenses ongoing of in annual in meeting in to to operating XXXX the legal plan million the of matters. our these million non-cash year

loss Reductions was and to on million in of per reduced for from In general million our with average headcount last reduction a administrative in by per quarter, the indicated XXXX with compared the combined the reduction total was our additional operating development XX.X spend quarter primarily on additional minus in sales quarter. to to XXXX. and share $X.XX reductions and of had to or team, net July or sales the made or loss terminations, weighted end, decisive in some XX to our around major of the Net recent share a second we second $X.XX been we hiring the and expense $X.X due of force quarter Shield. expenses $X.X the company the leadership implementing After increase prior coming with At share in were developments, marketing launch $X.XX million per marketing the As done across cash conjunction and our $X.X minus was our quarter largest mentioned of has to force. shares expand in of increased burn compared prior reduce minus areas. XX, the action net million a and headcount entire the XXX took previous quarter, XX. loss significantly the and

was company sheet, is balance Working to Turning at had which equivalent $X.X June the of quarter. end and XXXX, we capital outstanding the and cash of cash million, at million the of $X.X million from XX, $XX.X the the debt first at down the end, had quarter no quarter. end

As in previously to a we our current likely the indicated, need from operating with on for additional profitability. before near revenue a losses result cash positioning Shield in combined initiatives, to are ramp slower company’s term reach and believe we execute fund of strategic growth capital order

would these is satisfy additional shelf to Given requirements X, near in the flexibility which through of the to the in provides company primary types I August capital intended to multipurpose at potential emphasize various the discretion shelf additional completed for expectations, Board. a that transactions. the take of registration, of like purpose security the the capital on the term,

become the As and company effective. of is long-term potential options. funding has the other yet evaluating today, registration strategic Separately, not

these Board However, our its are consistent options are improved potential company all of maximizing evaluations as results, still value. as goals achieving with committed and shareholder the well operating to that growth, considering accelerating in stages. Both firmly early the are Intrusion’s

timing Regarding remains outlook for the of third together very on the our revenues. business company’s the term Shield our government ramp respect the quarter, of and the visibility with developments, recovery with limited of recent near

with outside company, of forecasting policy providing respect the the not maintaining our the are difficulties we in control to quarterly of some which Given of timing, is guidance.

that, the our future Joe? however, ongoing like With on visibility basis for of turn an an our and approach the current We business evolve in initiatives. to will on over quarters. reevaluate call to as I’d market dynamics Joe to continue and Head update the product

Joe Head

call. to Franklin. you I’m pleased today’s Thank join on you,

by up connection patents is good fellow divided call But is speaking witnessed bug you company sales one simply disappointment last know, by of It bad. opportunities is technology of company’s confident filings which sales our techniques, knocking way. Trust success, that I’m Shield. is that years will XXXX. important to by as my I’m be As many the Last features focus cyberattacks. of lab, unmistakably private someone a provisional in share natural the enterprise typically from two a by adversaries, which provisional underpinned I in and technical our malware-free My I applied easy Intrusion, highly at agent focus that we has I want felt afternoon, start remain our personally. and formal filing fixes, business. Intrusion. have you the immediately some barriers been both believe and and and predominant up patents. differentiated most attack following with am deeply only an government who patents several in network. of and DOD is we that Zero as understand providing deployed this provisional to in already on in cycle on enabling been implements and covered It’s That’s this in then company It’s remains the government professionally vested clear your if world’s is in as install what the filed a new reducing since defend to solution especially and Co-Founder Therefore a this with stop long-term successfully against existing August, reputation for new determine make risk shareholders. two to to federal threat on with extensive and sales time. down completing cybersecurity matter we’ve ramping go-to-market on product my Shield to the month, I developing any sophisticated the home Zero-Day I’ve world. the of I at clarity August. the is filing also if a a and accomplished, IP works. on have I databases patent a determines efforts over the it at historical of intelligence are most core aware uses supplemented you to the and It’s a the the The into or customers work point last

update with a area first. So I’ll on this brief start

or renewing customers government less as they business base more is has time. expected longstanding continue have flat with to renewing Our This and for remained for a steady business long years.

last expected, new have in Some increases year. few starts the including the slight of a half programs

we’ve We in from is the of to So to general expected and beta continue launch slight rates XXXX. and with of solution. late several finally this trend progress commercialization quarters, concept historical in up. business, working to Shifting a a at XXXX, substantial in the made availability early Shield run with enterprise Shield took XXXX January the our over last business our

patient As certain upgrades get with to customers July. had they launches, and market. to Shield, early early found needed made fixing. latest all XX were helping version us and the which customers some shipping bugs July we fixed while cases, corner and started But through several March supportive felt product solution From we who new XXXX, the bugs in

our are from change, needed. upgraded, updates whitelist code DNS Shield a updates, future Of core things related these our the reputation, separated one also daily was beginning where made be important common tracking names most Google as so or have We can to cookies rules Shield to chains prevent be we positives, track used instead our This this ensure And very sites stay change of a was and in fundamental good false low are have to rates otherwise used. going DNS change forward. redirect false blocking users. positive to the

summary, with force, told far release. the non-geek and the are when we superior Shield there was back. for hold showstoppers As reasons no XXXX launched sales or the it good July to I’ve is

evolve to the needs market. will the meet continue We of Shield to

and help for reduce We to to and distribution to first sales channel entry. barriers model domestically a be to Shield continue internationally, times committed cycle both

the We’re we’ll and seeing focus in government there. demand our continue also strong federal

leverage security. it’s their to the think we prospective that benefits to our critical I Shield that introduce to distribution the partners offers better customers,

launching diligently but has solution of yet, new and anticipated. marketplace our Of secured a not on of cybersecurity and remains if clear and With global we them the hasn’t the signing a helping Shield a But our needs slower is customers, it’s customers more large been organization very valuable with has the the offers or so focus Although implementation to to deployment to we’re and see and other protection schedule changed changed one that the initial customers. at that and effect belief few across overall be the a our solution war We a solution we process than on deployment committed plan many the growing solution. proceeded of these has to recognition the important in to more interest working early receiving convinced have a two part solution CISO is critically that our the we stands effective threats. Shield are and Overall a high, network market the global recent fight cybercrime. breaches, increasing. remain customers,

advisory board us serve opening us new to optimize that help valuable They for are further establishing technical already who You a and we’re strategy. refine of executives, collectively cybersecurity opportunities. should in and us will know our assisting a go-to-market resource doors experts new and as

testing from make to Square, hope new a reviewers, review of end also product have plans just former of can President, Kolodgy, recently reached our IDC’s labs available has who independent and published consulting and further of these that testing their to we that Charles out customers. cybersecurity Vice objective have perspectives new will Shield. his regarding does its Research such add Mile currently company We Shield that will and reports month findings Shield Ten product We the by validate the should as

and sales and between predictable forecast, discipline Finally, Davis, and he we’ve marketing also asked our brought sales He volumes. started teams. a go-to-market more this He our team and closed consistent CMO, our apply efforts data-driven week. tighter driving the will our rigor to drive this higher alignment sales marketing deal capacity in Gary lead build earlier to to

share will at Gary few last words Now event of Black a week. Hat our the participation

Gary Davis

I forward. McAfee Intel and look to applying help to the Joe. companies going used I you, efforts Shield’s at the on forward sales-purpose like techniques propel Thank

share security now from results some our at last Hat the week. Black presence me Let important conference

those For the This in year, conferences our is Black one significant of space, both the with had cybersecurity. physical I presence. Hat virtual and most unfamiliar

those twice and traffic was specifically, of difficult would much booth say had we say but to Darktrace. I Our companies. either between It’s CrowdStrike as over as

long booth had live that started which bidding nonstop. our booth line staff survey X our of in a we waiting at stations, some those had Darktrace just fact, the line. In to We were demo

more you’re be I include, Some sampling. you a attending at business. of look went. out could your our here guys with bidding the not about to you find want like here I’ve that’s comments and how And event product. those event seen guys for from happy everywhere the just

new but between and Back working live you, I qualified still our event, over are numbers, partner to have would leads channel on XXX we to on. We say that the the work and virtual Joe. now opportunities

Joe Head

for our cybercrime, to how closing, know we firmly for Shield a In I that is organizations powerful that you to want we you, valued has global crisis this still effective been you is helping We Gary. that period a difficult Thanks, believe know investors. fight which understand want solution and major today.

we for Shield than our Although we anticipated, to customers the take continue remains sales feedback receive and from cycle longer the encouraging. will prospects

cybercrime. providing to are to our working global as we Shield and Operator? government of in to trust as once more we I’ve them As details grow With areas outlined, provide the efforts that, employees while want business, questions. become available establish continue you behalf the will a as to as tool soon sincerely again, I your we also regarding Board, thank for and the On we unique call powerful your open increasing our to will our Intrusion’s and prevalence the patience, for you progress can. we of support

Operator

[Operator from Cummins first Riley Securities. Thank B. is Zach Your you, Instructions] question with sir.

Zach Cummins

it Hi, all Great. company. around my Is incremental that taking average Hi, on Franklin, I off, you was Shield just see us Franklin. Gary. the this price Hi, changes Thanks questions month? assume somewhere roughly of the quarter. being appreciate a starting Joe. of to can the information it’s still and generated give from the to $XX nice recent for kind paid? I around some sense Any revenue safe mean

Franklin Byrd

know, I in and to do add that, now you to Joe, talk here. I that know not more I much to we’re don’t the if to about our really contracts, But to got add so that not customer to want Zach? policy what’s Yes. is going

Joe Head

quoting at we’re of though the our general, off then get In $XX it and resellers it. discount a

$XX general, look or that’s our if $XX at going in So in, thing. of sort it’s you $XX the

Zach Cummins

it. helpful. Got That’s

of guess, the terms In for signed seats last I up... had it backlog, some of

Joe Head

certain to is you progress a that like staff the is though, where make, I’d students. at comment other ratio start education, looking that The we’ve had there in markets little of

the that’s price is same industry to market, And if have sense. there across in reasonably so makes you that do educational adjustment some the

Zach Cummins

least you give those still sounds update at of is regathering while in any It that last a $XX,XXX. of was can like forward, moving the That’s it Understood. terms I the is leadership? mean, I over after kind other you mean, you Completely. change think And updated one time, around in that? customers kind backlog for had of of I helpful. Shield, on the itself

Joe Head

Yes.

We’re then – the backlog how And in in answer how is said things commercial when? Like those nice chasing has the Gary think as them get you state guys our a and the the less that’s opportunities. in progress. to I put idea updates restacking of to on periodic of stuff all fuzzy question we’re and give of think Black I and Hat as numbers is, process on is do the will on opportunities we’re at best proceeding. how our well you some lot Gary see – that world, The a

Gary Davis

think tied I to question is that Zach, deals more we’ve past closed, your But right?

Zach Cummins

Yes. that’s Yes, correct.

Joe Head

Yes.

yes, good place by, as for you one’s will and have we’re others pausing, quarters as one’s working some that forward. a then on but some we revenues we but had one’s be got have click So proceeding, go falling in the schedule, that clarity

Zach Cummins

Understood. motion of you’re some you of making that you can with used taking adopt the that want prior you’ve here give sales And mean, your That’s in Intrusion? helpful. changes experience sense mean, a that Gary, over some maybe I here of the techniques now, thinking you I the us at of and to

Gary Davis

noticed, table, quickest can tuned of network resellers the stay we’re in happened to to transparent, to have going more. just so customers understanding and and Typically, distributors so need first, kind bit bring that time still I that. stay going I this be this to lean committed we’re us where working words, week, a of market. that certain a the change in have to to Well, gives through

coming that’s that One areas from partners. our are channel reps properly We of incented. they the make more I sure as well is with comp the plan more for drive we traction could think up our compelling as

– sell to the they go to looking can do as I I’m make one there so That’s have And sure things proper incentives thing. motivation possible. quick to as at

and a value-added Europe finalizing also the East. at We’re distributor that covers looking Middle

We’re top network X,XXX really the and are that distributor discussions in five a to close also has well. them some resellers having with signing as

is make to there we’re resellers So many as things front doing several possible, getting customers. Shield as their of that sure get end-user we in

Zach Cummins

saw sheet. Understood. That’s of related I Is jump Shield balance I Franklin, And booked? to being appreciate here nice a on deferred QX revenue revenue helpful. the a the context. kind in in that

Franklin Byrd

that’s legacy our No, and receipt, Cash That’s actually product. not. yes.

Zach Cummins

Got it.

stabilize, Then guess, drive I the adoption what’s mean, like see you I it business, leverage then Helpful. and there. government? more that Shield Okay. to strategy, it’s that overall in to legacy to trying maybe the of on guess terms starting can in an sounds uptick I

Franklin Byrd

seeing you bit – I’m some that. and we input leverage Shield as you more on an an business. into to But seeing we little Joe on will see that uptick It’s into more actually move and the I the in moving are uptick, believe yes, hope hearing QX maybe tell I’ll about it. and a have Yes. way then might I’m what how

hold of while, little congressional was – you As the approved. sitting know, infrastructure been the for on behind have kind budget budgets of that a some just probably on

here and to potential So get new there. business we’re about calls starting

want but do to comment... – So you Joe,

Joe Head

new line with but in while flat been the government words legacy a couple some put business, new prepared side. remarks the GPM I about a got see the spend that’s my contribution mean I the on one well, relatively reasonable ones. We of some to programs one, from good program – profit we’ve bottom some increased it’s plus start, a do for and Yes.

boring that uptick comments come I guess, government focus you if to the been in And commercial in side, of revenues taking me the from to the mentioned perspective. Shield legacy. that government has then world and – if commercial expect the out you we I an turn So a the to center from guys the Gary’s

they I’ve are government of However, rumored are a amounts, they which appreciable. number picking that us got programs say are and which non-zero have and they

Gary Davis

And compelling, would say. I

Joe Head

way and order an think their Yes. But long some you are particularly when, uptick a are to place teams Shield and the tech making that done, those from history do need who’s leverageable there, the But we’re the know like working haven’t what because knowing friends people for through the is to there of made get good works going choices that that’s that is side of what they what. product and it being government already know they can’t. a I

Zach Cummins

Understood. now. as continue kind restructuring guys I terms opportunities headcount need just terms thinking mean, That’s helpful. to how said Shield? I believe of XX, you operating you to And expenses, I down we overall of, should mean, Franklin, I to be I in expenses pursue growth what about in guess, your here of for operating go-forward

Franklin Byrd

great a that’s question. No,

of look headcount. resembles kind headcount, QX our of it If our you kind at

see QX, range. and will I that to going be, OpEx kind in sense. more of And QX we’re by etcetera, for makes the now, employees, So be it right

of I almost. we’re again think we’re launching kind –

like little people, we were but we’re launching in structures We’re still different different just different a QX. bit, strategies,

to because started hybrid, is a lot to going think I of a right, look going QX, QX. it’s So be lot QX this. like we a

of reduction force that we’re in the way but Our in, are you’ll benefit QX. the third QX not midway the was some QX for – cost we’ve a some down in in quite initiatives see there doing winding that into of and full – the undergone

be will of a So QX. mixture QX QX between and kind

Zach Cummins

going of should and you’re forward? a give can for funding mean, seems have forward, cash Thanks. absolutely, of Understood. in place. terms But of perspective at like you a it now how mean, then I some initiatives I I we kind you from sense in your where us it. necessary And yes, going thinking appreciate the funding kind be And of just about

Franklin Byrd

little changes bit I million and as to the the here, on supplement our be new anticipated. sure. we’re $X going we a just we’re going closed the that a with other you to very approach little a quarter and roll balance than mean, sheet, with spend. as judicious ways our Sure, little we It’s we Shield out product, over on slower to originally find saw,

feel that today in and of that know about today, and with expect also I’m shelf kind your options to less time, about we this pretty are and happy I modeled comfortable that about of do help it. fully, about talked strategic seen of discussions, like that release not we job. a funding that kind the week. negative commented more the talk vetted you’ve comes am talk to little other So some We’ve We fund this the those about at online use but registration going last of to early from I to some filed cash just so until Shield

Zach Cummins

my Good questions. I to again guys thanks extremely appreciate for taking the know. helpful. and insight That’s

Franklin Byrd

Thanks, Zach.

Joe Head

Zach. Thanks,

Operator

RENN is Your with Russell from Cleveland next question Capital.

is line Your open.

Russell Cleveland

minutes. lot the for very here. suggestion, the a limit Shield seems of to have don’t way the I’ve such a talking be calls It these is so got I great idea sales XX is Thanks seems for you call. people, question. a someone cycle simple do and But like to One questions off

more seems like other like cycle. you So And your I the no-brainer give sales mean, companies me this. to it comments software. about join it flavor was mentioned that for a some in

going why the about have we’re that? should – some comment to sales how think to give to we as on be? it and on So what was do long the it’s cycle, get cycle if thoughts do moving sales could the you Shield all So me here

Joe Head

does, go I’ve innovative And from XXX%. we’ve centers, procurement highly matter the some the thing is, impasse right? and comp for the in Yes, accustomed is is again, that thing of doing they the you’re distinction on certain through. momentum right? The And of are be buying years early we adopters proving are need large beholden typical a anything respect centers are to going and us we we way, buying to of you’re and is, what early I those get kind that’s that in have I answer once say your with test, driving going have and we a So that to you that to product we is the Shield. Does is seen of along that’s years, for. process which were services start a with the well. dam be think really kind our Shield market open software amount how really that and to these the a up spot to still differentiated going that reviews really break it thing independent huge to help didn’t through would This early that ever planning. think the no opportunities as and was going to buying question? adopters, been And enough the

Russell Cleveland

is XX maybe X months, year, your XX Well, talking what’s days, on the process just thought a we we don’t know. And are it – yes, days, now?

Joe Head

now Well, cycle is to sales I closer typical right the think X months.

most get was that aggressive you’re significantly. probably our it we we well see critical your XX well that’s your going ever days, the think customers shrink to I going it’s Probably established, belt, be understood. mass and would well-known under and once to value once of is

In believe XX cradle that was quarter, one to than customer days. fact, I less we grave had last

now, but seeing. that are wouldn’t happening more that’s some the we’re what norm. outlier of I than That’s those say So the

Russell Cleveland

Cradle you grave. to said wedding,

Joe Head

cradle Yes, to guess wedding. I

Russell Cleveland

order. the That’s

Joe Head

Fact worth words. of

Russell Cleveland

it. appreciate much. Okay, I so thank you

Joe Head

Russell Thanks,

Franklin Byrd

Thanks, Russell

Operator

Howard Wellington next [Operator Brous from with is Instructions] Shield. question Your

Howard Brous

mentioned had you today? is earlier – everyone again? are you Say how Joe? Joe, How

Joe Head

No, we are doing sorry. very great. Howard, Go ahead,

Howard Brous

works. Shield, you reports, one about from tell IDC that talks two Okay. and mentioned Two specific me from – and CMO One, things. about that one it

You talk. spending mentioned you ahead, that you’re – go

Gary Davis

does, marketing which the back, that. – clarify testing I which what we company fact, report that compared – had say actually an that report does, what very is expect. said, Shield start claims. we to me I’ll favorable the independent am what And our really one. the we to Ten am happy Square, happy called we that to report Let that Mile do it we we got with The Shield and and – in that claim was I

things give does we is are Former companies And was type reviewers, security to Kolodgy, context that other we his group, is has just reviewers. he Charles the to and his The these the nature, out people name of own of and is and are VP reviews talking are and now one product of that do but Research to company of tests. at those reaching IDC. He of research

Howard Brous

Okay.

sent the the can Ten to report that, customers’ prospects? Given Mile Square website, put be on

Gary Davis

Absolutely.

Joe Head

Yes.

it of for that. had – to And Black went our to were that Howard, resellers of we goals And there. ready Hat. a number are was We we using one before have

Some were independent and actually by bring customers the and looking confirmation. can lock them had load that, then And booth. their necessarily we of for we since

was a that thing helpful have. to So,

Howard Brous

you were it. Someone attended that Hat I Black and know about logged. said me guys absolutely Tell

Gary Davis

big a way. was In were. this out. good funny we because It our had coming We is –

refreshing demo line get busy booth four were just being energy… going them a of to which think forever between and goliaths something now was were CrowdStrike who kind Intrusion space had kind literally are it waiting everybody engaged. non-stop. by constantly the be for the happen, I would right was stations, agree had people right all to sitting two wings, and to we the and that traffic and had see Darktrace, in of We our we It to wanted for been coffee. in We

Joe Head

was got XX We XX there, minutes close. ebb, in and The people four the at had time. XX mobbed before booth to we saw I low again. then the

Gary Davis

Yes. No.

and you good sure. sales So, from be these is to It’s to opportunities in they marketing When and it’s and a – that’s what all aggregate you how a saying leave closing position event perspective, new high-fiving we to start are pure and everybody that deals. want. for

Howard Brous

Great.

Let me to get on go the tangent a TraceCop off and Savant. back original and business,

What You years that basically you in QX, $XX several shutdown, were in before revenue. $XX course? COVID, of say, level, government chances generating were before ago your the coming to are annualized, million million,

Joe Head

I if be in of gift high sort was in hit funds aberration correctly. when $XX we won’t got X.X% remember a that we that We XXXX, – unspent an That million where of again.

Howard Brous

Right.

Joe Head

look a do program this will you But right it what if think won’t state, than be will new based I year. because And starts. million about be above steady $X.X got our – So, on currently now. have it $X better year to million XX% we we it see we that at don’t some ran

but So like said, a little I it’s up up, not stunningly.

So, where X.X% probably is I see. get think what we to we with

Howard Brous

gross Alright. correct margins the you have that in And past, is statement? similar a Fair at that enough. experienced

Joe Head

in do government hit We Yes, space we that no you do that’s there. to do with at I out busy every thing. to a believe do Shield But then actually for believe been will and a so contribute supplement a think And thing, be have Shield And with analysis. change I as deeper upside Savant we the Savant. one it been new thing have we around doing be gotten come essential an will model haven’t and us. that other pricing for – and

Howard Brous

background you your in we about addresses IP you, TraceCop when One, currently many talking have comments. you more how X.X Last of billion. time TraceCop? are with spoke Two bad

Joe Head

still are correct. and roughly Those conservative

billion quoting X.X have the X.X So, and that correct. about billion billion has the still is X.X we been

end However, extreme, count is we of there the if in high. already people can’t it the that’s actually the power take that XXnd shoes the But socks, they understated their like IPVX it’s and lot loaded. so off whitelist there. And of even to of a

with stayed than we the loaded. billion for have we amazingly what and it’s marketing purposes, but lower So, X.X actually conservative

Gary Davis

you right. defensible numbers, from highly easy in perspective a numbers, to around. those their heads important come get marketing people are they It’s of we can have for type that And

And But that to than have your are into that. be marketing got – to It’s that number. just the higher is claims lean much point, that careful number to something people you Joe’s we understand. tend so can

Joe Head

Yes.

it So, going very to they give these part are can a thing of conservative list. is very And list am not so a that’s somebody numbers. because whole I the check valuable

Howard Brous

many the years the not Is the the that sale a than you certainly, greater assume is stock, about same question, and of but last initially given last fair So TraceCop, it’s I back least, many, that $X.XX? which evaluation I comment? could number, go of

Joe Head

I believe yes. so,

Howard Brous

Thank you. I all That’s have.

Gary Davis

intelligence color just companies, that, if little threat please, mean space, at add more of The the value, that’s all you look bit right. our they to a most what cybersecurity to informs company point, substantial aware And am and that their they work. is to products every they of. unique intelligence, have very very comparative cybersecurity to that is how our Joe’s I threat I

price, is TraceCop alone. that the in this reflective of So, just is I and share think not just my opinion, value what’s the that

Joe Head

Yes.

Howard Brous

do the think addresses? of in would So, a he you IP terms bad to who something of what have similar if number had competitor had you number TraceCop,

Gary Davis

malware byte signatures, be don’t talked help a create infecting last signatures. we that. And data, a do intelligence threat with about malware companies It to we is than use customers’ most it was Shield very a what would as Well, known IP global just peta different. to based that different and clear, our on these from company, TraceCop devices. all it’s having and we but all My our stop was signature cybersecurity very of

getting – IP, of at affect are Now you negatively. attack you so you ahead would look could we when and something

different very value intelligence. It’s So, less. of no just a it’s threat different. type It’s, is

Joe Head

of But when badge. we House think most XXX,XXX to start. might most the less is, bad, range the have if know then you looking the I people some of up at know all million, people’s signature, the blacklists by the things mean, of only at them X kind most and of you start about flower But really wrong but known about thing than – that that I the what’s that you different list a being approach that’s guard White are you that that’s

this sniper, and but of I are A don’t thing. you, whitelist that trust you are a so don’t shooter, whole people I a goodbye. as know I house bomber, area your is blacklist a there in this then a so I know whole a that – that just know vast IP you says, terrorist, in And let

these. It the have that space rest And space from is for come less these. good a reputation. for so us no says, don’t is there quite which that I oriented know lets been I they just of reputation block unknowable because things

is the between ratings blacklist So, words where difference our fundamental sorry immense and is live. that, secret for on I trust that but think small all

Howard Brous

you, you. all of Thank you. Much all both. That’s appreciate. Thank luck I have. Good to

Operator

Your Schade next Gary Schade question Gary is with from Auto.

line Your is open.

Gary Schade

at talked Jack looking the XXrd July could I Hi about Blount if guys. it being I tell you SEC terminated. wondered was report, me why.

Tony LeVecchio

basically Yes. you? an that there. all This is detail LeVecchio. Hi, We are Tony have and X-K is filed in how

Gary Schade

I very And to it happened. Yes. what didn’t me read have explain well it.

Tony LeVecchio

on at kind on went beyond revenue look we and we the recalibrate. I are Board the necessarily strategy. happened, and to expense our levels, And of the what’s short CEO you really far mean, we if and needed fundamentally, agree didn’t

certainly but wished it’s had didn’t. that we off with I So, had volumes the for, initially taken Shield it that hoped –

pare to we done. needed then have that’s we and expenses So, what accordingly, our back

opportunities also Joe We us will have got and tackle so. address lot a Gary and that for of interesting

Gary Schade

Yes. Tony, or CEO do will have you who of staying an on the plan in on does the future? idea on as Board your as carry CEO

Tony LeVecchio

then this it can’t the kind I sort when. we of doing we tell strategies. have plans until not will exactly replacement. operating an all you be am I me. won’t I through am Yes, guy and a and And

trying things and around and are we get arms Franklin Gary to talked the now, our that all right think have Joe about. I

Gary Schade

Jack loan listened angle run intelligence ramping speak the and years And other the keep them to have afloat up. my and Sure. sales your own certainly advantage companies the were and have had them your companies. years, of over Yes, artificial products I while to that products for have money and I

so would invested of in And have the with is, Blount. investment. I invested going assurance my like because investment, concerned be so I take and money was and to is that care worried Head room my the in about honest to my in Not Joe Jack Board am just Byrd, some or $XXX,XXX got of elephant you, Franklin the I Intrusion, just I I I just

Tony LeVecchio

investment exactly Well, definitely investment. had fiscal got hiring. the in the is your slower, care here. other what do. Board to to have interest. got done. And shareholder’s that’s have ahead we also And – way things we mean, And behind what taking doesn’t have of some we going we We we and responsibility that’s on have to to the we are revenue. I going slowdown on interested if be quite mean spend lost That and every honestly, exactly we are

was have the I product dynamic, if Jack think we products validations works additional described. as and the that anything,

level that It’s when can’t So, sustain. keep all. just are you we can’t don’t disagree a with slower, things that at that necessarily just at you spending

regrouping. So, that’s

Gary Schade

to borrow And the money that. do just

Tony LeVecchio

of look companies me, dollars. you millions million. the big $XX that that with lot We have we hundreds of compete spent at, a of Well, excuse raised

to half down are We that. of

very customers, to seeing, we see, we if you may unique know evaluate that So, our is to to what little very, initially. the And industry we I compared as would are live because the we want approach and I is would longer. said, bit firewall this within don’t going want It inside secondly, little let to go go, is found my a but bit have we afford some hoped what it a not and got interesting as pursue to what you you really opportunities, have could fast those.

will sooner. Jack which is to picture overall where it’s get time slowdown spend, And that to just longer. to longer painted have would take take probably picture, hopefully we a are all to the have going good to we So, we the gotten going a

Gary Schade

is to Well, last question, the opened company rehiring Jack? one

Tony LeVecchio

haven’t that one We the entertained way other. or

Gary Schade

Well, shareholders you. Thank some your you of do. hope

Tony LeVecchio

Okay. Good to know.

Operator

today. the question-and-answer conference that I over for concludes And session Joe to remarks. will the back Head hand closing for

Joe Head

Thank you, Operator.

Europe the are call. for November. the now contact we support Then meeting a XX. the Thank us schedule would you for Exchange, like you And to to at if in Hat of will XX Group H.C. Wainwright to technology September participate Wainwright Before disconnect to Conference, also may host important two We Black H.C. Please be Management participating. closing your at again during conferences, Global Intrusion. investor the Operator, Security us cybersecurity Shelton call with at September the also and to XX Risk plan several attend Security continued which with investors will meetings call, highlight XX event. the and on upcoming joining on September quickly we today’s & XX. planning events Gartner Conference through you I want Intrusion

Operator

Thank you, sir.

For This thank call. concludes today’s for you all participants, joining. conference

safe Stay healthy. disconnect. now and may You

Intrusion (INTZ) 13 Aug 212021 Q2 Earnings call transcript