10-Q · May 15, 2026
VerifyMe reported a significant revenue decline of 60% Year-over-Year in Q1 2026, posting revenues of $1.77 million compared to $4.5 million in Q1 2025. The company faced increased operating losses despite improved…
Earnings analysis · 10-Q
VRME earnings analysis
Filed August 14, 2026 · Our reading of the company's report
The latest report
VerifyMe reported a sharp deterioration in demand, with second-quarter revenue down 58% year over year to $1.908 million and diluted EPS worsening to negative $0.04 from negative $0.02. Gross margin improved to 54% from…
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VerifyMe reported a sharp deterioration in demand, with second-quarter revenue down 58% year over year to $1.908 million and diluted EPS worsening to negative $0.04 from negative $0.02. Gross margin improved to 54% from 35%, but the company remained unprofitable and generated negative operating cash flow of $1.002 million for the first six months. Liquidity was supported by collecting the $2.000 million ZenCredit note, but the August 25, 2026 $750 thousand convertible-debt maturity, Nasdaq compliance deadline, and merger execution conditions remain material risks.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.04
What stood out
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Gross margin expanded to 54%
Gross margin increased to 54% from 35% in the year-ago quarter, despite revenue declining 58% to $1.908 million from $4.520 million. Management attributed the improvement to the mix of ProActive and Premium services.
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Premium services grew 14%
Premium-services revenue increased 14% to $754 thousand from $664 thousand. The company began offering Premium and Direct Premium services to Preferred Shipping Partner customers in June 2026.
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Cash balance rose to $5.092 million
Cash and cash equivalents increased to $5.092 million from $4.353 million at December 31, 2025, primarily reflecting $2.000 million collected from the ZenCredit note receivable.
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No revolver borrowings
The company had no balance outstanding on its $1.000 million revolving line of credit as of June 30, 2026. Total current liabilities declined to $1.423 million from $2.025 million at December 31, 2025.
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Operating costs were reduced
Management and technology expense declined 34% to $607 thousand from $920 thousand, while sales and marketing expense declined 43% to $155 thousand from $272 thousand, reflecting lower amortization and reduced headcount.
What to watch
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Loss of carrier partner continues to hurt sales
Revenue fell 58% year over year to $1.908 million, primarily because the prior carrier-partner agreement for ProActive services ended on September 24, 2025. ProActive revenue declined 71% to $1.120 million.
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Losses deepened despite margin expansion
Net loss widened to $505 thousand from $291 thousand, and diluted loss per share increased to $0.04 from $0.02. Calculated operating margin was approximately negative 29.1% based on a $556 thousand loss before other income on $1.908 million of revenue.
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Cash burn remains significant
Operating cash flow was negative $1.002 million for the six months ended June 30, 2026, and calculated free cash flow was negative $1.234 million after $232 thousand of capitalized software costs. Cash generation remains dependent on financing and asset collections.
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Convertible debt maturity is imminent
The $750 thousand convertible debt balance, including $400 thousand held by related parties, matures on August 25, 2026 unless converted or repurchased. The notes bear interest at 8% annually.
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Merger remains subject to timing and dilution risk
The merger outside date was extended to October 31, 2026, and closing requires, among other conditions, at least $1.000 million of Closing Net Cash. The transaction would leave pre-closing VerifyMe stockholders with approximately 10% of the post-closing company.
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Nasdaq minimum-bid compliance risk
Nasdaq notified the company that it failed the $1.00 minimum bid-price requirement after 30 consecutive business days, with a compliance deadline of October 14, 2026. Open World's merger obligations are also conditioned on the common stock not being delisted.
Management's outlook
No quantitative revenue or EPS guidance was provided. Management stated that it anticipates historical seasonality trends will return in 2026 and believes cash and cash equivalents, together with warrant and loan proceeds, will fund operations for the next 12 months, including expected capital expenditures.
Earlier filings 4
10-K · March 31, 2026
VerifyMe describes a strategy focused on its Precision Logistics business (its proprietary PeriTrack® analytics/dashboard and service center) which the filing says “accounts for nearly all VerifyMe revenue.” The company…
10-Q · November 14, 2025
VerifyMe reported Q3 2025 revenue of $5.033M, down from $5.435M in Q3 2024, while gross profit increased to $2.073M (41.2% margin). The quarter included a $3.850M goodwill and intangible asset impairment, driving a net…
10-K · March 12, 2025
VerifyMe positions itself as a niche provider of precision logistics (PeriShip Global) and brand authentication technologies, with Precision Logistics accounting for nearly all company revenue. The company emphasizes…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.