Revenue for the quarter ended March 31, 2006 was in line with guidance at $11.1 million compared to $9.2 million for the quarter ended March 31, 2005, and $11.5 million for the previous quarter ended December 31, 2005.

Total gross margin for the three months ended March 31, 2006 was 59 percent compared to 13 percent for the quarter ended March 31, 2005 and 62 percent for the previous quarter ended December 31, 2005.

Total operating expenses for the three months ended March 31, 2006 were $15.6 million compared to $27.2 million for the quarter ended March 31, 2005 and $16.1 million for the previous quarter ended December 31, 2005. Sales and marketing, research and development and general and administrative expenses for the three months ended March 31, 2006 were $15.1 million compared to $14.4 million for the quarter ended March 31, 2005 and $15.3 million for the previous quarter ended December 31, 2005.

Cash used in operations for the three months ending March 31, 2006 was $6.0 million compared to $11.0 million for the quarter ended March 31, 2005 and $8.0 million for the previous quarter ending December 31, 2005.

Net loss for the quarter ended March 31, 2006, was $8.3 million, or $0.18 per basic and diluted share, compared to $25.4 million, or $0.58 per basic and diluted share, for the three months ended March 31, 2005. Net loss for the previous quarter ended December 31, 2005, was $8.6 million, or $0.19 per basic and diluted share.

Jason Hart, CEO of ActivIdentity, said, "The financial performance for this quarter is in line with our previously stated guidance and we continue to concentrate on improving these results. Management is focusing the business on achieving top line revenue growth, operational expense control, improved internal communication and simplification of the business".

"We remain focused on reducing operating costs commensurate with our revenue levels.

"Deferred revenue grew during the quarter and we are pleased with our global reseller announcement with Sun Microsystems Inc. and the selection of our solutions for its internal use.

"We expect to continue to improve our position in the overall market and to strengthen our qualified sales pipeline. We anticipate that our previous successes with our high-end government solutions will assist us in increasing our sales activity predominantly outside of the United States, as evident with our selection in multiple government to citizen identification pilot projects, which if successful, may result in large government-to-citizen deals in forward years. While we remain dissatisfied with the actual sales we achieved in the US Government and commercial markets (specifically the HSPD #12 initiative), the twelve month outlook for HSPD #12 remains promising. We continue to utilize our work and experience with the HSPD #12 initiatives in other sales opportunities." Hart said.

Second Quarter Financial Highlights

• Ended the quarter with $139.6 million in cash and short-term investments.
• Deferred revenue increased by $1.1 million to 10.4 million.

Second Quarter Business Highlights

• Jason Hart appointed CEO in February.
• Other senior management appointments included Mark Lustig as CFO and Thomas Jahn as COO. Yves Audebert continues as President.
• The reduction in the size of the Board to four external Directors and Mr. Hart as an internal Director.
• The stockholders at the Annual Shareholders Meeting formally approved the company name change from ActivCard Corp. to ActivIdentity Corporation.
• An agreement was achieved with Sun Microsystems to provide a joint solution that combines Sun's identity management system with ActivIdentity's Card Management System and Enterprise Single Sign-On.
• Novell launched an OEM version of ActivIdentity SecureLogin Single Sign-On Version 6.0.

Outlook

ActivIdentity anticipates that revenue for its third quarter of fiscal 2006 ending June 30, 2006 will range from $12.5 to $13.5 million, while sales and marketing, research and development, and general and administrative expenses are expected to range from $14.0 to $15.0 million excluding additional stock-based compensation, amortization and restructuring.Download the document now 38.9 kb (Adobe Acrobat Document)