Intrusion (NASDAQ:INTZ) reported fourth-quarter and full-year 2025 results while highlighting a late-year delay in an expected contract extension tied to its critical infrastructure work with the U.S. Department of War. Management said the delay weighed on fourth-quarter revenue, but it expects to recognize a substantial portion of the delayed revenue in future periods, potentially during the first half of 2026 as procurement activity normalizes.
Contract delay weighed on fourth-quarter results
President and CEO Tony Scott said Intrusion’s fourth-quarter revenue declined due to the delayed timing of incremental funding tied to the critical infrastructure contract extension. CFO Kimberly Pinson added that the timing of the award was affected by funding and procurement constraints associated with the U.S. government shutdown and continuing resolution, which limited agencies’ ability to approve and initiate contract actions during the period.
During Q&A, Scott confirmed that without the delay the company would have reported sequential revenue growth from the third quarter and indicated the contract delay cost the company at least $0.5 million in the quarter.
Full-year revenue rose 23% as government work expanded
For 2025, Intrusion reported total revenue of $7.1 million, up 23% year-over-year, which Scott said was largely driven by expansion of the U.S. Department of War contract.
In the fourth quarter, revenue totaled $1.5 million. Pinson said this represented a 25% decline versus the prior quarter and a 12% decline versus the year-ago period, driven by the delayed incremental funding of the government contract.
- Consulting revenue: $1.1 million in Q4, compared with $1.5 million in Q3 and $1.3 million in the prior-year quarter
- Shield revenue: $0.4 million in Q4, compared with $0.5 million in Q3 and $0.3 million in the prior-year quarter
Pinson said fourth-quarter gross margin was 74%, slightly down from the prior-year period. Full-year gross margin was 76%, down about 93 basis points from 2024.
Expenses increased as company invested in sales and marketing
Pinson reported fourth-quarter operating expenses of $4.0 million, up $0.3 million sequentially and $0.8 million year-over-year. She attributed the increase primarily to higher sales and marketing costs tied to greater participation in trade shows and expanded brand awareness and product marketing programs.
For the full year, operating expenses were $14.5 million, up $1.7 million from 2024. Pinson said the increase reflected higher sales and marketing expense, the impact of one-time savings realized in 2024 from renegotiated or canceled contracts (about $0.5 million in savings in 2024), higher share-based compensation (up $0.8 million from equity grants made in the first quarter of 2025), and cost-of-living and merit increases (about $0.3 million).
Net loss for the fourth quarter was $2.8 million, or $0.14 per share, compared with a net loss of $2.0 million in the fourth quarter of 2024. For the full year, net loss was $9.1 million, or $0.46 per share, which Pinson said was a $1.3 million increase from the prior year.
Scott and Pinson noted that the costs of providing services for the critical infrastructure solution have been included in operating expenses even though related revenue has not yet been recognized. In Q&A, management said that when the delayed revenue is recognized, it will carry “pretty nearly” 100% margin because the associated expenses have already been recorded.
Product updates: cloud distribution expansion and new offerings
Scott described 2025 as a year of several product milestones. He said the company improved its balance sheet early in the year by eliminating outstanding debt in Series A preferred stock. Mid-year, the company rolled out production of its critical infrastructure solution to safeguard assets such as water, power, and telecom facilities.
In the third and fourth quarters, Intrusion expanded access to its Shield Cloud solution by making two variations available on the AWS Marketplace. Scott also said Shield Cloud is now live on Microsoft’s Azure platform, which he said expands the company’s sales reach.
Scott highlighted the launch of Shield Stratus, described as a cloud-native packet filtering solution designed to inspect every connection and block known threats immediately. He said Shield Stratus integrates with AWS Gateway Load Balancer and is intended to complement the broader Shield ecosystem.
PortNexus partnership and POSSE pilot adoption
Intrusion also discussed its partnership with PortNexus related to the MyFlare Alert school safety technology, which Scott said is being deployed at schools in several states. In February 2026, the companies launched the POSSE program, which uses Intrusion’s Shield on-premise technology to help protect law enforcement public safety networks.
Management said the initial pilot showed a high adoption rate and that Intrusion Shield identified and stopped dozens of active threats during the pilot. Scott said the program is scaling across Texas, Missouri, Oklahoma, and Iowa, and that the partnership provides distribution access to hundreds of sheriff’s departments, schools, and government facilities.
In response to an analyst question about POSSE economics, Scott said device selection depends on network bandwidth needs and can range from a few thousand dollars to tens of thousands of dollars. For pilot programs, he said the company used lower-end appliances priced at a few thousand dollars. He described a process in which Intrusion loans a unit for a week to 10 days, produces a report on observed traffic that would have been blocked, and then uses that information to support adoption.
Liquidity and financing plans
As of Dec. 31, 2025, Intrusion reported cash and cash equivalents of $3.6 million. Pinson said the company plans to seek a “small debt financing” in the near term to support growth initiatives and has begun initial discussions, with an update planned for the first-quarter earnings call.
Outlook: sales buildout and break-even goal
Scott said the company has taken steps to enhance sales efforts and go-to-market strategy to expand its customer base across private sector and federal, state, and local government markets. He cited the hiring of Valencia Reaves as Public Sector Vice President of Sales and Patrick Duggan as Director of Channel Sales and Partnerships.
On profitability, Scott said management believes Intrusion is on track to break even operationally, but he noted timing depends on new contracts. In Q&A, he said he would be “extremely disappointed” if the company were not break-even by the third quarter of 2026, adding that he was disappointed it was not already break-even and that 2026 is viewed internally as a key year.
About Intrusion (NASDAQ:INTZ)
Intrusion Inc, a cybersecurity company in the United States. The company offers its customers access to threat intelligence database, which contains the historical data, known associations, and reputational behavior of Internet Protocol addresses. It offers INTRUSION Shield, a zero trust reputation-based Software as a Service solution that inspects and kills dangerous network connections. The company also provides INTRUSION TraceCop, a big data tool that contains an inventory of network selectors and enrichments to support forensic investigations; and INTRUSION Savant, a network monitoring solution that uses the data available in TraceCop to identify suspicious traffic in real-time.
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