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    INTZ
    Earnings call· Jun 2026(Q2 FY26)

    INTRUSION Q2 FY26 earnings call INTZ

    Aug 11, 2026 Source

    Executive summary

    Intrusion Inc. Q2 FY26 — VigilAigent Acquisition Accelerates Recurring Revenue and AI Strategy

    Intrusion Inc. experienced a pivotal Q2 FY26, marked by a significant sequential revenue rebound and the strategic acquisition of VigilAigent, which immediately boosted recurring revenue and enhanced AI capabilities. While facing ongoing delays with a key government contract and increased net losses, the company is focused on disciplined execution to integrate the acquisition, expand into commercial markets, and achieve profitability in 2027.

    Highlights

    5

    • Revenue increased 64% sequentially to $1.5 million, restoring prior run rate.

    • Acquisition of VigilAigent immediately adds $3.5 million in annual recurring revenue (ARR).

    • Secured a $4 million annual contract with the State of Texas, with revenue recognition starting in Q2.

    • Identified over $350,000 in annualized new business and customer renewals post-VigilAigent acquisition.

    • Identified more than $3 million in annualized cost synergies from VigilAigent integration.

    Concerns

    4

    • Net loss increased to $2.6 million ($0.13 per share) from $2 million ($0.10 per share) year-over-year.

    • Gross profit margin decreased to 66% from 76% year-over-year due to revenue and product mix changes.

    • Cash and cash equivalents were $0.2 million as of June 30, 2026, requiring $3.3 million in financing from notes payable.

    • Continued delay in Department of War contract funding impacted revenue and increased net loss.

    Guidance & targets

    2
    CategoryTargetConfidence
    Profitability
    Cash flow positive
    high materiality
    Medium
    Cash flow positive
    Q1 FY27
    high materiality
    Medium

    Operational metrics

    8
    Gross profit margin
    66%down from 76% in Q2 FY25
    Q2 FY26

    Decrease primarily attributable to changes in revenue and product mix.

    Operating expenses
    $3.4 milliondecrease of $0.8 million sequentially; increase of $0.1 million year-over-year
    Q2 FY26

    Sequential decrease relates primarily to timing of audit fees, increased allocation of costs to cost of sales for State of Texas contract, and increased software development costs. Year-over-year increase reflects stepped-up investment in sales and sales support personnel, trade shows, and marketing initiatives.

    Net loss
    $2.6 millioncompared to $2 million in Q2 FY25
    Q2 FY26

    Increased net loss driven by a decline in revenues, primarily due to the delay in incremental funding under the DOW contract.

    EPS
    $0.13compared to $0.10 in Q2 FY25
    Q2 FY26

    Increased net loss driven by a decline in revenues, primarily due to the delay in incremental funding under the DOW contract.

    Cash and cash equivalents balance
    $0.2 million
    Q2 FY26

    From a liquidity perspective.

    Notes payable financing
    $3.3 million
    Q2 FY26

    Cash proceeds from two separate note purchase agreements with Streeterville to support ongoing operations and address short-term liquidity needs.

    VigilAigent new business and renewals
    $350,000since acquisition
    Annualized

    Secured in annualized new business and customer renewals post-acquisition.

    Annualized cost synergies
    $3 million
    Annualized

    Identified through integration and operational efficiencies from VigilAigent acquisition.

    Industry KPIs

    2
    MetricValueDetails
    Revenue growth$1.5 millionUSD
    Arr net new arr$3.5 millionUSD

    Orderbook & backlog

    2
    VigilAigent Annual Recurring Revenue$3.5 millionpost-acquisition

    immediately adds

    Supported by a diversified base of multiyear customer contracts.

    State of Texas Annual Contract$4 millionQ2 FY26

    Revenue recognition started in Q2 FY26 and will continue through remainder of FY26 and into FY27.

    Deals & partnerships

    3
    VigilAigentAcquisition of a Managed Security Service Provider (MSSP) to create an AI-native cybersecurity platform.

    Brings complementary technologies, experienced cybersecurity professionals, proprietary threat intelligence, and managed detection and response capabilities. Proposal 3 for NASDAQ threshold approval related to stock issuance.

    PortNexusPartnership for the POSSE Program, targeting the public safety market with the MyFlare Alert and Intrusion solution.

    Jointly presented solutions at trade shows. Recently announced partnership and integration work with a computer-aided dispatch solution installed in hundreds of law enforcement agencies in the Midwest.

    State of TexasContract to deliver cyber threat intelligence and critical infrastructure protection product.$4 millionthrough remainder of FY26 and into FY27

    This contract win was a direct result of enhanced federal, state, and local sales efforts. Additional opportunities for technology and consulting services have been identified.

    Risks & headwinds

    4
    Continued delay in Department of War contract fundingOngoing, subject to unpredictable federal funding and geopolitical situation.

    Impacted Q2 FY26 revenue (down 22% YoY) and increased net loss.

    Mitigation: Continued support of deployed infrastructure; optimism for future revenue recognition; engaging with local agencies for support/maintenance agreements.

    Short-term liquidity needsCurrent.

    Cash and cash equivalents of $0.2 million as of June 30, 2026; required $3.3 million in cash proceeds from notes payable.

    Mitigation: Pursuing additional capital through public or private financings, including ATM program.

    Limited cybersecurity talentOngoing.

    Unquantified, but mentioned as a market challenge.

    Mitigation: Acquisition of VigilAigent brings experienced professionals.

    Increasingly sophisticated AI-driven threatsForeseeable future.

    Unquantified.

    Mitigation: VigilAigent acquisition creates an AI-native cybersecurity platform, developing new capabilities to detect/remediate AI-associated threats.

    What to watch in Q3 FY26

    5

    Department of War contract extension

    Future periods, once geopolitical situation normalizes.
    CurrentDelayed, revenue recognition paused.
    TargetMeaningful portion of associated revenue recognized.

    Why it matters

    Resolution of this delay is critical for significant revenue opportunity and removal of a major headwind.

    We remain optimistic that a meaningful portion of the associated revenue will be recognized in future periods, subject to final award timing and funding approvals.

    Q&A highlights

    7

    Is the VigilAigent team fully integrated, and how will the combined offerings be marketed?

    Integration is ongoing, with teams already collaborating on combined offerings. VigilAigent will serve as the commercial front-end, while Intrusion's sales force will handle federal and large institutional clients, creating a segmented go-to-market approach.

    “So you should think of it as sort of commercial and then on the other hand, the customized, highly tailored larger contract kinds of modes.”

    asked by Edward Woo · answered by Anthony Scott

    2 min read6 chapters

    Detailed Narrative

    01

    Department of War Contract Update

    The Department of War contract extension continues to be delayed due to unpredictable federal funding and procurement processes, compounded by the geopolitical situation with Iran. While this impacted Q2 revenue, the company views it as a timing shift rather than a diminished opportunity, expecting meaningful revenue recognition in future periods. Intrusion continues to support deployed technology and has entered into support and maintenance agreements with local agencies to cover ongoing costs.

    02

    VigilAigent Acquisition & Strategy

    The acquisition of VigilAigent is a significant step in Intrusion's growth strategy, creating an AI-native cybersecurity platform. This acquisition immediately adds $3.5 million in annual recurring revenue and brings complementary technologies, experienced cybersecurity professionals, proprietary threat intelligence, and managed detection and response capabilities. The combined entity aims to detect, manage, and remediate AI-associated threats from insiders and malevolent actors.

    03

    Go-to-Market Segmentation

    Post-acquisition, Intrusion will segment its go-to-market strategy. Intrusion will continue to serve the U.S. federal government and large institutional partners with customized technology and consulting services. VigilAigent will operate as a dedicated business unit, focusing on the commercial market space. This segmentation is expected to accelerate growth and enable more effective sales and marketing efforts across both segments.

    04

    State of Texas Contract Success

    Intrusion secured a $4 million annual contract with the State of Texas to provide cyber threat intelligence and critical infrastructure protection. Revenue from this contract began to be recognized in Q2 FY26 and will continue into FY27. This win is a direct result of enhanced sales efforts and is being leveraged as a framework to secure additional contracts with other U.S. states and territories.

    05

    PortNexus Partnership & POSSE Program

    The POSSE Program, delivered through the partnership with PortNexus, gained significant exposure in Q2, particularly in the public safety market. A recent integration with a computer-aided dispatch solution, installed in hundreds of law enforcement agencies in the Midwest, is expected to accelerate deployment and widen opportunities. Meaningful revenue contribution from this high-margin channel is anticipated in FY27.

    06

    Liquidity and Financing

    As of June 30, 2026, cash and cash equivalents stood at $0.2 million. To address short-term liquidity needs and support ongoing operations, the company entered into two note purchase agreements with Streeterville, selling $3.7 million in principal for $3.3 million in cash proceeds. Intrusion plans to pursue additional capital through public or private financings, including its at-the-market (ATM) program.

    AI-generated summary of the company’s earnings call. Not investment advice.