INTRUSION INC Annual Report - How They Did This Year

I’ve put together this guide to help you understand Intrusion Inc.’s performance. My goal is to turn complex filings into plain English so you can decide if this company fits your investment goals.

1. What does this company do?

Intrusion Inc. is a cybersecurity firm based in Plano, Texas. They specialize in "threat intelligence," using a database of over 8.5 billion internet addresses to block malicious traffic. Their main products are:

• INTRUSION Shield: Their flagship commercial product acts like a "bouncer" for networks, blocking dangerous traffic in real-time. It is a subscription-based service designed for small-to-mid-sized businesses.
• TraceCop & Savant: These tools help government agencies investigate network attacks. While they provide steady, high-profit contracts, they are a shrinking part of the company’s future growth strategy.

2. Financial performance: A tough year

The company is struggling to turn a profit. Here is how the last two years compare:

• Revenue: They brought in $7.1 million in 2025, up from $5.8 million in 2024. This is a 22.4% increase. However, this growth does not cover their $16.2 million in operating expenses.
• Profit/Loss: They lost $9.1 million in 2025, compared to a $7.8 million loss in 2024. High research, development, and marketing costs for the Shield platform drive these losses.
• Cash Flow: They spent $6.8 million in cash to keep operations running in 2025. By the end of the year, they held only $1.2 million in cash.

The company stated there is "substantial doubt" about their ability to stay in business. In plain English: they risk running out of money within 12 months unless they secure more funding or see a massive surge in Shield sales.

3. Major wins and challenges

The biggest issue is customer concentration. In 2025, 94.6% of their revenue came from U.S. government customers. While these contracts are stable, relying on them this heavily is a risk. The company is struggling to pivot to the commercial sector, where competition is aggressive.

4. Financial health and "The Dilution Factor"

To stay afloat, the company sells more stock and takes on debt. In March 2024, they performed a 1-for-20 reverse stock split to stay on the Nasdaq after their share price fell below $1.00. For you, this means the company frequently issues new shares to fund operations. This reduces your ownership percentage and your claim on future earnings.

5. Key risks

• Survival Risk: The company may not have enough cash to continue without more funding. Accessing new capital is difficult given their poor financial performance.
• Government Dependency: Nearly 95% of revenue comes from the government. This makes them vulnerable to federal budget delays and spending changes.
• Competition: They face stiff competition from giants like CrowdStrike, Palo Alto Networks, and Fortinet. These companies have larger budgets and integrated products, making it hard for Intrusion Inc. to gain market share.

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Bottom Line for Investors: Intrusion Inc. is currently in a high-risk phase. Their primary challenge is bridging the gap between their current cash reserves and the revenue needed to sustain their operations. When looking at this company, ask yourself if you believe their "Shield" product can scale quickly enough to offset their heavy reliance on government contracts and their ongoing cash burn. If you are risk-averse, the "substantial doubt" regarding their ability to continue as a going concern is a significant red flag to consider.