BIO-key International, Inc. announced its financial results for the third quarter of 2026 on November 13, 2026. The company reported that its license fee revenue increased by 39% to $1.275 million, representing 86% of total revenue for the quarter. This growth marks the third consecutive quarter of double-digit software license growth for the company.
Total revenues for Q3 2026 were $1.48 million, a decrease from $1.55 million in the prior year's quarter. This decline was attributed to lower hardware and service revenues, which BIO-key noted are more variable due to project timing. Despite the slight dip in total revenue, the company achieved a significant improvement in gross margins, which expanded to 90% from 77% in the prior year. This improvement was driven by the higher mix of high-margin software license fees.
BIO-key’s operating loss narrowed to $820,213 in Q3 2026, compared to $892,190 in the prior year. However, including a non-cash deemed dividend related to a warrant inducement transaction, the net loss available to common stockholders was $5.388 million, or $4.01 per share. For the first nine months of 2026, total revenues increased by 14% to $5.55 million, and the net loss improved by 42% to $1.668 million.
On the balance sheet, working capital improved to $3.1 million at the close of Q3 2026, up from $1.4 million at the end of 2025. The company retired its remaining note payable during the quarter, leaving it effectively debt-free aside from a $12,000 bank obligation in Europe. Stockholders' equity improved to $6.54 million as of September 30, 2026.
BIO-key highlighted recent business progress, including the addition of three new government customers in the Middle East in October. The company also noted a partnership with Al Majlis Group to expand identity security across the Arabian Gulf and an integration of its IAM solutions into the cybersecurity portfolio of Cipher, a Prosegur company, starting in Portugal.
