0001140361-26-010895
SEC filingVirnetX Holding Corp (VHC) reported a net loss of $18.2 million for FY 2025, nearly identical to the $18.2 million loss in FY 2024, driven by minimal revenue of $162K compared to $5K prior year. Revenue growth stemmed from providing subject matter expertise as a subcontractor under a U.S. Department of Defense contract with the Air Force Research Laboratory. Operating expenses decreased to $19.6M from $20.4M, with R&D at $5.7M (down from $6.0M) and SG&A at $13.4M (down from $14.4M), offset by a $500K impairment loss on an investment in OP Media Inc. Interest income fell to $1.2M from $2.2M due to lower investments. Balance sheet shows total assets of $31.1M, down from $49.6M, with cash and equivalents at $15.5M (from $23.3M) and equity at $22.5M. Operating cash use was $15.6M, similar to prior year. The company maintains liquidity for current operations but eyes future revenue from cybersecurity product integrations, licensing, and government contracts amid ongoing net losses and 21 employees focused on R&D.
VirnetX Holding Corp recorded revenue of $162K in FY 2025, up significantly from $5K in 2024, primarily from a DoD subcontract with AFRL. Despite this, the company posted a net loss of $18.2M, matching the prior year's $18.2M loss. Operating loss improved slightly to $19.4M from $20.4M due to lower R&D ($5.7M vs $6.0M) and SG&A ($13.4M vs $14.4M), though a $500K investment impairment was recorded. EPS was -$5.00 basic and diluted, versus -$5.05 prior year, on 3.647M weighted average shares. Total assets declined to $31.1M from $49.6M, reflecting investment sales and cash burn.
Revenue increased to $162K from $5K YoY, driven by professional services as a subcontractor on a U.S. Department of Defense contract supporting AFRL activities. No segment breakdown is provided; operations are viewed as one reportable segment. The company derives revenue from professional services, licensing, and royalties, with FY 2025 growth representing an early foothold in national security. No geographic mix disclosed.
No gross profit or COGS reported, as expenses dominate low revenue. Operating margin remains deeply negative at approximately -11970% on $162K revenue and $19.6M expenses. Cost reductions in compensation, legal services, and engineering contributed to lower expenses. Stock-based compensation was $2.0M. Valuation allowance on deferred tax assets persists due to operating losses, resulting in minimal tax provision of -$2K.
Net cash used in operations was $15.6M, driven by $18.2M net loss adjusted for $2.0M stock comp, $0.5M impairment, and working capital changes. Investing provided $8.8M from $25.0M investment maturities net of $16.2M purchases and minor capex. Financing used $0.9M for tax withholding on RSUs. Cash ended at $15.5M, down $7.7M YoY. Total liabilities $8.6M, equity $22.5M with accumulated deficit -$222.9M. Liquidity sufficient for current operations per MD&A.
Management expects future revenue from cybersecurity product integrations (VirnetX One, Matrix, War Room), patent licensing, and government sales via MAS and certifications. Strategic focus on DoD Digital Engineering, CRADA with AFRL through 2030, and investments like OmniTeq. Risks include long sales cycles, competition from Zscaler/Palo Alto, export controls, and need for additional capital. No quantitative guidance; emphasis on transitioning to enterprise/government customers.