Intrusion Inc. (NASDAQ:INTZ) Q4 2022 Earnings Call Transcript

Kimberly Pinson: Well, as I mentioned in the script, it was an early Shield customer, and the Shield appliance was never fully deployed and we’re not utilizing the shield appliance. And so we have taken steps actively monitor the utilization of the appliances that are out there and be in contact with the customers to make sure that, they’re seeing the full value of the Shield product. So we do not anticipate to continue to see this recurring in the future.

Tony Scott: And this is Tony. Let me add just a couple of things there. Things like making sure they’re on a current release that, they’re getting updates that, the reports are being looked at are all different ways we can sort of monitor, how customers are either using or not using the product as the case maybe. So I’m feeling a lot better in terms of where we’re at on that front than I was six months or so, I’ll say.

Zach Cummins: Got it. Got it. That’s helpful. And just another final question for me is just really around the traction that you’re seeing with partners right now. It’s great to hear that, your qualified pipeline is up 5x versus even what you’re seeing in Q4. Can you just talk about maybe what it’s going to take to really start to get momentum building there in terms of closing some of these customer deals across that partner channel here in the coming quarters?

Tony Scott: Well, my view is, it’s a contact sport. So €“ you got to get out there, rub shoulders create awareness and get the conversation going. And as you might guess, it takes a little while to get partners spun up. They’ve got to understand the product. They got to get trained. They got to go out and talk to customers and see if there’s a fit, if there’s a compelling moment for them to introduce us into that cycle. And all of that takes a few turns of the crank. But the good news is when we get our foot in the door, we’ve not left in most cases. So our opportunity is to go stick our foot in the door in a lot more places with these partners. And we’re starting to see that happen. So

Zach Cummins: Got it. Thanks for taking my questions. And best of luck with the remainder of the quarter.

Kimberly Pinson: Thank you.

Operator: Your next question comes from the line of Ed Woo with Ascendiant Capital. Your line is now open.

Ed Woo: Yes. Thanks for taking my question. My question is, have you noticed any change in the competitive environment, especially at the macro environment gets worse? Have you seen competition on pricing?

Tony Scott: I think the biggest thing that I’ve noticed, and I get this from lots of friends or CIOs across the country is they’re under pressure for two things. One is supplier consolidation. What I think everyone is realizing is that the more suppliers you have in a given area, the more administrative overhead there is, the more contract administration there is, the more you have to pay attention to renewal dates and deadlines and all of that sort of stuff. So I definitely see a call for given a set of products. To that end, I think you’ll see an announcement coming out from us this afternoon around an agreement we’ve reached with Netgate, who is the creator of a open source-based firewall called pfSense, that’s super popular.

I think it’s been downloaded 7 million times or something like that. It is the benchmark that all firewalls compare themselves to. And Netgate’s created a pfSense Plus product, now that takes the open-source and tunes it to specific hardware platforms and so on. And our agreement with Netgate, I think, will play well into that trend of, hey, I want fewer vendors and I want more capability out of the platforms that I use. And so we view this arrangement with Netgate as playing into where the customers are and what customers want, which is timely in the marketplace right now.