Rank One Computing Corporation (ROC) Earnings Call Transcript & Summary

Good day, and welcome to the IAccess Alpha Virtual Best Ideas Summer Investment Conference 2026. Our next presenting company is Rank One Computing Corporation. [Operator Instructions]. I'd now like to turn the floor over to today's host, Mr. Scott Swann, Chief Executive Officer at ROC. Sir, please go ahead.

Thank you, and thank you all for providing me with some of your time this morning. Every critical system from banks to borders, they need to answer three questions. First, who am I dealing with? What do I know about them and then can I trust them? These are exactly the kind of questions that ROC is trying to deliver answers and seconds instead of hours, which has been the de facto to date, identity, intelligence and trust, they're converging into what we believe is going to be one of the most important infrastructure layers of the next decade. It's important to note that today, much of that capability, especially when you talk about at scale, it's being built outside of the United States, and people are surprised when I often tell them this. When you think about the way that we screen people for coming in and out of this country, and I'm talking about the FBI, the Department of Homeland Security, The Department Defense various national security systems, there's actually 19,000 criminal justice systems. It's almost 100% powered by foreign artificial intelligence. But ROC is building those kind of algorithms here. And we're really determined to help put the U.S. as the dominant provider of those kind of technologies. We grew ROC organically. We didn't take any outside capital. We're now public since February, and we're scaling to take on these global incumbents and we plan to win. So let me show you today how we're doing that. We'll start here as the standard forward-looking statement and happy to address any questions and answers at the end of the session. ROC we're building a Vision AI platform, that's unifying video, biometrics and digital evidence into a single operational system. Historically, the state has been fragmented and that leads to delays, that can be very dangerous for the operators that rely upon this data. I want to start out by giving you an example of how this unified platform really translates into real-world impact, and this is really how ROC separates itself from our competition. So think about latent fingerprint identification. This is one of the most powerful tools in forensic science. This is essentially where you take an unknown print, where you collect that from a crime scene, and then you match that against a large set of known fingerprints similar to like a criminal history database. Currently, that market is dominated by a large European provider, but all of the vendors that participate in this space, they're expected to be benchmarked by government institution called the National Institute Standard of Technology. That sounds kind of technical, but it's important because it leads to acquisition decisions, and so that participation is quite imperative. And our very first submission to mist, ROC ranked among the most accurate systems in the world, but what really sets us apart was the speed. We're pioneering this fast speed search. What took the incumbent roughly an 1.5 hours to search against a database of 30 million people, we completed that same search in 15 seconds, in 15 seconds compared to 90 minutes. That's not just faster. That's how information gets used. It goes from something that you get after the fact. It's something that you can actually use in the moment. And that speed also equates to real money savings. Agencies like the FBI, they spend nearly $20 million of cloud compute per year to operate these kind of systems. ROC allows that to be orders of magnitude less in the hardware and it can drop millions of dollars of savings to our customers. So that combination of speed, accuracy, it really fundamentally changes how these systems can be used to support real-world policing, border patrol, Department of Defense and various other types of systems to include commercial security. And we're really the only system that's globally delivering that level of performance, especially within America. So this platform in action, really, the full breadth of our capabilities across biometrics, video, analytics and visual evidence. So think about face recognition, fingerprints, Iris, Tattoo, object detection, we need deep fake detection, vehicle recognition. This is all in one single system. And importantly, none of this is experimental. I mean these aren't just research algorithms. These are [indiscernible], production-grade top notch algorithm, and that's really what enables us to deliver this unified operational layer. Completely outside the tech is really our people. We've built this platform because many of us have lived the problem. And my team, we've been involved in essentially every terrific major events since to include September 11. We actually care about getting this right. We've felt the challenges of not having the right tool sets to meet these real-world problems. And we're going to change that with the kind of products that we built here at ROC. So we're operating across four major mission areas national security, public safety, digital identity and physical security. And while these are different markets, they all tend to have the same underlying problem, and we've built a single platform that helps them solve that. So as we move beyond providing components, this is how our platform shows up commercially. If you were a customer, this is what you'd see. ROC Watch is our solution for video intelligence. Cameras are ubiquitous, they're everywhere. But most are passive. They're just there and you look at them if something were to occur. We make those cameras intelligent with real-time analytics, the vision of this product actually came from the Boston Marathon bombing. Many of us here at ROC, we worked that case, and we would have loved to have a system like this at that time. ROC Evidence, this is our platform for digital investigations hired almost the entire team that built the FBI's digital evidence system. So it's designed from the ground up for how data is actually collected, preserved and analyzed and real-world investigations. ROC ABIS, this is our national scale biometric identification platform, and it's the product I get the most excited about. I spent most of my career working to set the standards and build these types of systems. There's a large contingency within the federal government. There's 19,000 criminal justice agencies in the United States alone and then some international market, and we have a strong opportunity to become the dominant provider in this particular segment. And then ROC Enroll. This is our identity on-boarding essentially turn to simple capture into a secure biometric identity. ROC Access is for intelligent access control. We recently won the International Security Conference Innovation Award for this particular product. But each of these products are built on the same underlying platform it allows us not only to sell a single product, it allows us to land and expand in other areas over time. And that land-expand model is really core to how ROC becomes the system of record for these customers. It's really important to note, we -- we're not a startup. This is already a revenue-generating business, and we're moving toward a true recurring model, and that shift is really what's driving a long-term scalability. As we look at '23, '24, '25, 4 years, the key takeaway here is that the evolution of the business model, government R&D contracts help us bootstrap the company and it helped us build a lot of that technology foundation. But the real story is the growth in our product revenue, which has nearly doubled over the last 2 years. We'll remain a [indiscernible] of the government for solving complex research problems, but those problems oftentimes, and we have clear examples of this, worked away into the operational systems where we turn those into our product capabilities. Turn our attention to Q1. We certainly felt the impact of the government shutdown and delayed budget passage, and we operated all of 2025 on a continuing resolution which really affected procurement cycles and timing. But despite those headwinds, product revenues remained relatively stable, while ROC Watch continued to gain traction with our customers. Our gross margins validate this model. We're operating software-level margins consistently in the 80% range, and at the same time, we've intentionally invested in our growth. We were operating at the wire prior to going IPO. And the product revenue continues to scale. That operating leverage will follow. So this is about where this goes. Large-scale investigations today mean massive, massive data, petabytes of data, video evidence, identities, spread across systems, and we're talking about global populations of case data with the need to move that fast, but you still have to get it right. We unify that into the single platform that operates in real time. We start with pilots, and that leads us to our initial deployments, and then we start this land-expand strategy. But as those systems prove themselves, they become something different they become something that customers rely on every day. And that's exactly how we turn these pilots into programs, the programs into system of records, and that's how we're going to build our durable recurring revenue here at ROC. So products and platforms fundamentally change our contracts. I kind of joke around to this point, ROC has got to decide that they are, through a compilation of baby contracts. But really, what matters here is the contract durability. Our largest systems, we expect those to run 5 to 10 years. That's very typical of government contracting. We operate on 3- to 5-year cycles with recurring usage and that creates a bedrock of this predictable recurring revenue as we move forward. As I mentioned in the opening, we grew this company organically. So we are very fiscally disciplined. That's been ingrained in us from our company inception. And we deploy our capital to scale what's already working for us. We're expanding our engineering teams and our customer success we're investing in what it's going to take to accelerate that time to our annual recurring revenue with increased investment into people and some of our AI infrastructure for our research team. But importantly, we're focused on long-term program growth and not any speculative initiatives. The objective here is simple, accelerate our ability to get ARR while maintaining the margin discipline that we need for a software company. So this is a very large market, over $100 billion with multiple segments, and we're positioned to participate, I'd say, uniquely positioned to participate across all of those segments. Earlier, I mentioned three critical questions. Who is this? What do I know about them? And can I trust them? Historically, those questions they could only be answered by going to different systems and things were just very fragmented. But we provide those answers by queuery into a single platform, and that's really what's creating a fundamentally new category of capabilities. To date, there's really no other company that's bringing those kind of capabilities together the way that ROC does. And when that data comes together, it's very, very powerful. So this is a team that's already solved a lot of these problems in real-world environments, several stories I could share here, but lots of history working with the FBI, the Department of Defense, the intelligence community, and that experience is really what allows us to execute at a level that just most companies can't. We've also built a board that reflects the full set of environments we operate in also. Got leadership across the intelligence, defense, public safety, including federal agencies and law enforcement. People who have operated essentially at the highest levels of national security, policing and government. This is a group that understands how these systems are deployed in real-world systems, mission critical environments. They've had some really prestigious responsibilities within their career. As a public company, we're well positioned to execute on this strategy. We currently have been growing consistently, and we have strong insider ownership, and that creates really tight alignment between our leadership, our shareholders as we scale the business. So let me bring this all together before we go into some questions and answers. What we're building is missing critical AI in environments where failure is not an option. We have a clear path to this durable recurring revenue through long-term programs. And we're operating with high-margin software-level economics, and we built this platform that compounds over time through this land-and-expand type of a model. We are building that infrastructure layer for identity, intelligence and trust. And we do intend to help make the United States the dominant provider in this field. It's an area of AI where the U.S. has fallen behind, but we see that we're able to compete today with these $1 billion foreign leaders in this space, and we're starting to win. So with that, I'll pause, and I'll open it up for questions.

Okay. I will start with this question. How large is the current pipeline for ROC ABIS opportunities? And what is the typical sales cycle for a national scale biometric deployment? Great question. So for the pipeline for ABIS specifically, as I mentioned, this is the area that I get the most excited about. It is in the hundreds of millions of dollars, we have a total pipeline, qualified pipeline of about $0.5 billion, and the ABIS makes up a large segment of that. Typically, these are 5-plus contract years. The reality is, though, you become very sticky as you win these contracts and the -- it's not uncommon to have these contracts for decades. That said, we'll provide this quick anecdote. When we were competing the FBI's next-generation identification, which I was a technology evaluation manager for that at the FBI, it led to the two largest acquisitions ever by a DoJ entity. And the -- I will say the FBI Security Division did not want to award that to a foreign technology provider. You fast forward, became CEO of the technology provider for that same system. And still, there was no U.S. capability to be able to displace before technologies. But today, there actually is. Next question. Can you discuss two Department of Defense program expansions that contributed to ROC Watch growth and whether similar opportunities that exist across other agencies? Yes, we operate in a space where we're not always able to talk in depth about some of our customer deployments. Certainly, Department of Defense has been our largest government customer, and ROC Watch was really the only product that we were able to go to market with in 2025. And we had sold components into the Department of Defense prior to that, we were able to move from components to our own product sales into the Department of Defense within 2025, and going into 2026, we're seeing that continue to expand for the Department of Defense. And that's a very similar approach that we're using across all government as well as commercial agencies, I talked a lot about government agencies. However, there are a range of commercial agencies that we've sold components to also in the past, where we work to try to move them into our overall platform strategy. How does ROC differentiated itself from larger biometric and visionary competitors when competing for federal and public safety contracts? We're not going to win only because we're American. It is -- in today's environment, that's very important, though, and we are -- we do kind of stand-alone in the biometric space as the only provider of all biometric modalities in the space that build the algorithms. However, it's really important that we also participate in these [ NIST ] evaluations, and we prove that we can provide the best algorithms in class. And we've done exactly that. This is public information. You can go to the NIST website. You can see Rock is now winning in many of these categories, if not parity in all these categories with the leaders in the world. And then lastly, with your cost is more of a concern than it has been in the past, and we are well positioned not just to compete specifically on license price, but the cost of deploying our algorithms, the investment that agencies need to spin on hardware for our algorithms as opposed to some of our competitors is fundamentally different. I'll go to the next question. You referenced multiyear contract opportunities ranging from 3 to 10 years. What percentage of your current pipeline fits that longer duration profile? I would say, currently, I don't want to give a particular metric, but a very, very high percentage of our pipeline is -- will come with multiyear annual recurring durable revenue. As we sell components, we did get a lot of point in time-type of contracts that didn't have very large maintenance tables. We will still sell components where it makes sense to. In certain applications, where it's complex integrations where you may work with an integrator that still makes a really good business sense for us. That actually does come with good option years. But by and large, as we've shifted our strategy to a platform and a product strategy, most of our pipeline now does have a multiyear approach. With $16.6 million in cash following the IPO, what are the highest priority areas for capital deployment over the next 12 to 24 months? Well, we did a lot of that deployment early. We need to get our research team some additional hardware so they could build their algorithms faster, build them deeper, better -- that investment has been completed. We'll start seeing the benefits from that investment later this year. We are also deploying a lot of capital toward the team. So mostly people resources, lots of engineers, lots of forward customer-facing engineers. We also expanded our sales staff. We have been very much an engineering-led company. We will remain that, but we did get several more business development leaders in our company as well. As investors look ahead to 2027 and beyond, what metrics best indicate that ROC is successfully becoming embedded infrastructure rather than simply a software vendor? Okay. That's a great question. As we talk about this land and expand model. We operate in a space where we're not always able to do press releases for all of our wins. And I wish we could. We obviously had ability to maybe make some additional announcements even this past quarter that we couldn't make just because of some of the sensitivity of the areas that we operate in. So certainly, I think we will do press releases where we can about our wins the numbers themselves. As you look at the product growth for our revenues, specifically, that will be -- really indicates that we have embedded ourselves within multiyear programs for our customers. And as we look forward to 2027, I anticipate usually, as you're proving out products, you're willing to -- you're looking for Cinderella partners, your beachhead customers, they get better deals. But as we scale this out I think you'll look at more repeatable-type of economics between customers that we sell these products to. How much visibility do you currently have in the federal procurement activity through the September fiscal year ending funding cycle? What I'd like to say about that is that when you think about the impact of the -- of operating all of 2025 on a continuing resolution, that essentially means that you can't have any new stock starts within the federal government makes it very difficult for federal contractors to grow in that space. We still were able to grow in 2025. But then the shutdown toward the end of last year going into the beginning of this year for 2 months. It put a lot of pressure. The government operates on a fiscal year that closes September 30, which means that they need to obligate their money by September 30. And while those did cut back on some workforce within the federal government. As you look at the budgets within the federal government, these are very, very healthy budgets. And in a lot of cases, I just heard a metric the other day that Department of Defense still doesn't have a very large percentage of their budget allocated out to the operational components. So they're going to be in a rush to get this money obligated before September 30. So I do anticipate a lot of that will slide into Q3. Those that do business with the federal government are likely to see a lot of that flowing through either to them, oftentimes, this money will also go to integrators, which gets the money obligated for the federal government and then those subsequent awards from integrators down to smaller companies. So I think Q3, Q4 will provide a lot of that, the kind of insights that we have, we certainly -- we have a lot of expertise watching federal government. We used to build them know a lot of the decision-makers within these. We watch their public information. We understand these budget cycles quite well. It's very core to the growth of ROC to understand these budgets. Can you discuss the significance of the DEA deployment for ROC Evidence and how that product fits into your long-term growth strategy? So I think digital forensics is going to be one of the largest growth sectors for ROC. I really separate digital forensics and ABIS into a category of their own with the amount of impact that will have to our growth. DEA was the very first one. And the -- it started out very small with some storage capabilities of the platform. And when we look to grow that to support what we build across our entire platform to include all the analysts that we deploy in that space. We will continue throughout the year to look to grow that particular account, but also to establish our beachhead customers in this particular space. for digital evidence. And really, across the board for ROC, as we looked at 2025, we really only had 1 of our 5 products to market, which was ROC Watch. We'll continue to grow ROC Watch throughout 2026, but we will monetize each of our products throughout 2026, and we'll continue to mature those products, too, with the new resources that we'll be able to bring on. So I don't have any more questions right now. I really would like to thank everyone for their time, for hearing the story about ROC. We look forward to discussing our progress more as the weeks and months to come.

Thank you. Ladies and gentlemen, that completes the ROC presentation, and you may now disconnect. Please consult the conference agenda for the next presenting company.