BIO-key Posts 39% Rise in License Revenue Despite Quarterly Revenue Decline
Key Facts
BIO-key said revenue for the third quarter ended September 30, 2026, was $1,482,781, down from $1,549,706 in the same period of 2025. By contrast, software license fee revenue rose 39% year over year to $1,275,249, according to the company's results statement. Those fees accounted for 86% of total revenue during the quarter, compared with 59% in the third quarter of the prior year. The company said net loss available to common shareholders was $5,388,087, or $4.01 per share. It attributed this to a distribution deemed non-cash, valued at $4,502,004, related to the warrant inducement in August.
A comparison of revenue items shows a divergence between total revenue and license fees: total revenue fell from $1,549,706 in the third quarter of 2025 to $1,482,781 in the corresponding quarter of 2026, while license fees rose from $917,951 to $1,275,249. BIO-key said license revenue grew 39%, and its share of revenue increased to 86% from 59% a year earlier. This reflects a greater weight for software fees in quarterly revenue alongside a year-over-year decline in total revenue. The statement, in the information available here, did not provide a numerical explanation for the remaining revenue components. The company also reported $4.01 per share in the context of calculating the loss available to common shareholders, after including the non-cash distribution related to the August transaction.
The non-cash distribution related to the warrant inducement amounted to $4,502,004, and the company said its inclusion brought net loss available to common shareholders to $5,388,087 in the third quarter. Basic and diluted loss per share was $4.01, according to the results statement. BIO-key described the distribution as non-cash and linked it to the warrant inducement in August. This item forms the basis for calculating the reported loss per share in the company's statement, alongside quarterly revenue and license fee figures. The evidence available here did not provide verifiable analyst estimates for comparison with the per-share result, nor a documented year-over-year comparison of the loss.
Against the backdrop of its business, BIO-key said its identity and access management and biometric authentication solutions secure access for more than 40 million users. The company also said it added 3 government customers in the Middle East during October 2026, bringing the number of new customers in the region over the seven months preceding its November statement to 8. The company tied its year-end and early-year outlook to these recent government contracts in the region, as well as new opportunities and expected annual license renewals. These facts provide context for the growth in license fees the company recorded during the quarter and its focus on Middle East and European markets, as stated in the results release headline. The customer and revenue figures in the statement cover different periods: fee growth relates to the third quarter, while the new customers relate to October and the seven months preceding the November statement.
The company announced on November 6 that Chairman and Chief Executive Mike DePasquale and Chief Financial Officer Cecilia Welch would lead the investor call and question-and-answer session scheduled for November 13 at 10 a.m. Eastern time. BIO-key said the call would be devoted to presenting and discussing third-quarter results with investors. As for the stock's movement, EL7 data showed BKYI closed at $2.58 on November 12, 2026. That price was recorded in the session before the announced call and does not, by itself, establish a causal relationship between the stock's movement and the quarterly results. The company also said it expects a strong finish to 2026 and a strong start to 2027, citing recent government contracts in the Middle East, new opportunities and expected annual license renewals.