BIO-key Q3 Software License Fees Grew 39%, Its Third Consecutive Quarter of Double-Digit Growth, Driven Primarily by Momentum in the Middle East and Europe; Hosts Call Today at 10am ET
Key Highlights
- ➤Q3 license fee revenue rose 39% to $1.3M
- ➤Q3 gross margin improved to 90% from 77%
- ➤9M revenue grew 14% to $5.5M
- ➤9M net loss narrowed 42% to $(1.7M)
- ➤BIO-key retired its remaining note, leaving it effectively debt free
Expert Statements
Mike DePasquale, CEO of BIO-key International
“Our Q3’26 results reflect the building strength of our core software business.”
Mike DePasquale, CEO of BIO-key International
“Software license fee revenue grew 39% in Q3’26, offsetting variability in our more episodic hardware and services revenue and lifting gross margin to 90% from 77% a year ago.”
Mike DePasquale, CEO of BIO-key International
“Supported largely by growth in high-margin software licenses, BIO-key’s gross margin has improved each quarter since Q2’25.”
Mike DePasquale, CEO of BIO-key International
“Despite modestly lower Q3’26 revenue, we successfully narrowed our net loss in the quarter, and for the first nine months of 2026.”
Mike DePasquale, CEO of BIO-key International
“Year to date we have grown revenue by 14%, reduced our net loss by 42% and we retired our remaining note outstanding leaving us effectively debt free.”
Mike DePasquale, CEO of BIO-key International
“The real story, however, is the customers who are choosing BIO-key, such as the Central Bank of Jordan which has selected us to help them launch a national biometric authentication initiative to modernize financial sector access to digital services.”
Mike DePasquale, CEO of BIO-key International
“Separately, a Portuguese national security agency chose our identity platform to protect some of its most sensitive systems.”
Mike DePasquale, CEO of BIO-key International
“Additionally, we recently added three more Middle East government customers, including a security agency that went from first meeting to agreement in less than two months, bringing us to eight new Middle East region customers in recent months.”
Mike DePasquale, CEO of BIO-key International
“Governments and banks set the highest bar for identity security, and their decision to trust BIO-key to their most sensitive environments is the strongest possible validation of our company and our solutions.”
Mike DePasquale, CEO of BIO-key International
“Our momentum across Europe, the Middle East and Africa reflects the investment we have made in developing regional teams and a strong network of channel partners who know these markets and customers.”
Mike DePasquale, CEO of BIO-key International
“Our partner network is increasingly bringing opportunities to us, shortening our sales cycles and extending our reach into new countries and sectors.”
Mike DePasquale, CEO of BIO-key International
“That momentum is showing up in our results: third quarter revenue from our Europe, Middle East and South America region grew 39%, as license fees from the region more than doubled.”
Mike DePasquale, CEO of BIO-key International
“We believe the answer has to be a verified human, not a password nor a device.”
Mike DePasquale, CEO of BIO-key International
“With FIDO certification of Passkey:YOU, our Identity-Bound Biometrics can tie the approval of sensitive AI-driven actions to the actual person accountable for them, which we see as a meaningful new market opportunity alongside our core workforce and customer authentication business.”
Mike DePasquale, CEO of BIO-key International
“Our recent wins and a growing pipeline of government and banking opportunities across EMEA position us for a strong finish to 2026.”
Mike DePasquale, CEO of BIO-key International
“More importantly, we believe the foundation we are building today, with marquee government and financial customers, growing high-margin software revenue, a streamlined cost structure and a cleaner balance sheet, sets the stage for an exciting 2027.”
HOLMDEL, N.J., Nov. 13, 2026 (GLOBE NEWSWIRE) -- BIO-key(®) International, Inc. (Nasdaq: BKYI), a global leader in Identity and Access Management (IAM) and biometric authentication technologies, today announced its third quarter (Q3’26) and nine-month (9M’26) results for the period ended September 30, 2026. BIO-key will host an investor call today at 10:00am ET (details below).
Financial Highlights * Q3’26 license fee revenue rose 39% to $1.3M, reflecting continued growth in its base of annual recurring software revenue. BIO-key has delivered meaningful year-over-year software license fee growth in each of the last three quarters. * Q3’26 total revenues were $1.48M vs. $1.55M in Q3’25, as license fee growth largely offset lower hardware and service revenues, which have greater variability due to the timing of projects. * Q3’26 gross margin improved to 90% vs. 77% in Q3’25, reflecting the increase in high-margin license fees as a percentage of total revenue. BIO-key’s blended gross margin has increased for five consecutive quarters, from 73% in Q2’25 to 90% in Q3’26, reflecting both new customer deployments and its expanding base of annual recurring software license fees. * Q3’26 net loss narrowed 8% to $(886K) vs. $(965K) in Q3’25. * 9M’26 revenues grew 14% to $5.5M, gross margin improved to 86% from 77%, and net loss improved 42% to $(1.7M) vs. $(2.9M) in 9M’25. * Working capital improved to $3.1M at the close of Q3’26, from $1.4M at year-end 2025. * BIO-key retired its remaining note in Q3’26. Business Outlook * BIO-key anticipates a solid finish to 2026 and a strong start to 2027, supported by recent Middle East government wins, a growing pipeline of government and financial sector opportunities, expanding deployments with existing customers, and anticipated annual license renewals. Recent Progress * Middle East: BIO-key added three new government customers in October, bringing to eight the number of new Middle East region customers in the past seven months: * Middle East government security agency customer * Middle East government contract for passwordless, biometric IAM solutions * New customer within a Middle East government’s national security ecosystem * Partnership with Al Majlis Group to expand identity security across the Arabian Gulf
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