T Stamp Inc. Reports Significant Revenue Decline, Net Income Turnaround in Q3 2024

T Stamp Inc. reported significant financial changes in its 10-Q filing for the quarter ending September 30, 2024. The company experienced a substantial decline in net revenue, which fell to $511,081 for the three months ended September 30, 2024, down 83.33% from $3,065,804 in the same period of 2023. For the nine months, revenue decreased by 60.22% to $1,585,153 from $3,985,242. This decline was primarily attributed to the termination of a Master Services Agreement with Interactive Global Solutions (IGS), which had previously contributed $2.51 million in non-refundable license revenue advances in Q3 2023.

Despite the revenue drop, T Stamp reported a net income of $683,524 for the third quarter of 2024, a turnaround from a net loss of $35,162 in Q3 2023. However, the net loss attributable to T Stamp Inc. for the nine months ended September 30, 2024, was $4,593,406, slightly improved from a loss of $4,752,980 in the same period of the previous year. The basic and diluted net loss per share for the third quarter was $(0.07), while for the nine months, it was $(0.49), compared to $(0.71) in 2023.

Operating expenses for the third quarter increased to $3,187,777 from $3,087,688 year-over-year, leading to an operating loss of $(2,676,696), a significant increase from $(21,884) in Q3 2023. The increase in operating loss was largely due to the revenue decline and higher SG&A expenses, which rose by 6.25% due to increased salaries and stock-based compensation.

On the strategic front, T Stamp has taken steps to reduce overhead by cutting non-production-focused executive roles and releasing underperforming sales staff. The company has also focused on negotiating asset sales to raise capital and refocusing its go-to-market strategies on joint ventures with established partners. Notably, T Stamp entered into a license agreement with Boumarang Inc. for a non-exclusive license valued at $5 million, which contributed to other income for the quarter.

As of September 30, 2024, T Stamp's total assets increased to $10,559,627 from $7,893,314 at the end of 2023, while total liabilities rose to $4,990,886 from $3,978,434. The company reported cash and cash equivalents of $598,031, a significant decrease from $3,140,747 at the end of 2023, indicating ongoing liquidity challenges. The accumulated deficit stood at $55,446,691, reflecting the company's ongoing financial struggles and the need for capital raising efforts to sustain operations.