Good morning, ladies and gentlemen. Thank you for standing by, and welcome to BIO-key International's First Quarter 2022 Conference Call. During management's prepared remarks, all participants will be in a listen-only mode. Afterwards, listeners will be invited to participate in a question and answer session. As a reminder, this conference is being recorded today, Monday, May 16, 2022. I would now like to turn the call over to Kimberly Biddings, BIO-key's Vice President of Product. Please proceed.
Thank you, and thank you for joining our call this morning. With me today are BIO-key's Chairman and CEO, Mike DePasquale, and our CFO, Cece Welch. I'll remind everyone that today's conference call and webcast contains forward-looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of these statements. Words such as estimate, project, expect, anticipate, believe, think, plan, may, will, or similar words typically identify and express forward-looking statements. Such forward-looking statements are made based on management's beliefs and assumptions using information currently available pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
For a complete description of these and other risk factors that may affect the future performance of BIO-key, please see risk factors in the company's annual report filed on Form 10-K with the Securities and Exchange Commission. Listeners are cautioned not to place undue reliance on forward-looking statements, which speak only as of today's date. The company undertakes no obligation to revise or disclose revisions to such forward-looking statements to reflect future events or circumstances that occur after today. With that, I will turn the call over to Mike DePasquale. Mike?
Thank you, Kim. Thanks, Kim. Good morning, and thank you for joining our call today. After my remarks this morning, I will turn the call back to Kim to review some of our marketing and sales initiatives. Ceci will provide financial highlights for the quarter, and then we'll open the call for your questions. BIO-key's license revenue rose 205% over Q1 2021 and 267% from Q4. Our performance reflected continued growth in our installed base of customers as well as an initial contribution from Swivel Secure, which we acquired in March 2022.
Our gross profit margin rose to 82.6% in the quarter, up from 59.4% in Q1 2021, reflecting the year-over-year increase in our annual recurring revenue or ARR from software licenses, which is a core focus and value driver for BIO-key. Beginning in Q2, our consolidated results will reflect the full quarterly benefit from the addition of Swivel Secure, which generated $3.1 million of revenue in calendar 2021. We are still working on the acquisition accounting entries for the balance sheet, so you will see a notice from us later today that we will file our 10-Q a little bit later this week. The acquisition will make an important contribution to our 2022 performance as it significantly expands our international team, our operations, our customer base, and our growth potential.
We are still in the early stages of integration process and will provide updates on this effort in future periods. We continue to advance our core identity and access management business, both through inside sales efforts as well as with our growing channel alliance program. CAP, as we call it, now accounts for approximately 50% of new sales. Our PortalGuard solution continues to gain momentum within county and municipal government agencies, higher education institutions, and businesses and enterprises as well. PortalGuard resonates as a high-value, easy-to-deploy solution that addresses the hybrid requirements of distributed network and cloud access caused by growing work and study from anywhere demands. Customers are increasingly recognizing PortalGuard's flexibility and differentiated authentication capabilities, including support for 16 different multi-factor authentication methods. Importantly, we are seeing growing appreciation and adoption of our solutions because of BIO-key's industry-leading identity-bound biometric capabilities.
Recent customer wins include local governments in Missouri, New Mexico, New York, South Dakota, and Texas that selected PortalGuard for secure and compliant access to their mission-critical systems. Although each situation is unique, generally speaking, counties and other local government entities are choosing PortalGuard to provide strong multi-factor authentication, access management, and compliance for their cybersecurity insurance needs. As interest in identity-bound biometrics grows, we are increasingly able to also provide our hardware solutions, such as our fingerprint readers, to enable the enhanced security and convenience of identity-bound biometrics. In higher education, we added North Central College in Illinois in the first quarter, building on our identity as a service or IDaaS footprint, which now serves 2.5 million users, including students, faculty, and staff across 12 states. Our most recent channel alliance program progress was the addition of a leading-edge value-added distributor, 3i Technologies, as a new partner.
This partnership will expose an even larger base of customer prospects to BIO-key solutions, with particular emphasis on their complementary strengths in financial services and with local governments seeking enhanced IAM security solutions. We're currently developing joint marketing programs in collaboration with 3i Technologies and plan to go live on these initiatives in the next several weeks. We're also building on our relationship with Intelisys, with whom we have a master agent referral relationships and their distributed network. PortalGuard is the first and only IAM platform that has been offered within their extensive network, and already we are seeing solid conversion of prospects in their network into PortalGuard users. We have a number of joint events and marketing programs underway and planned for 2022.
During Q1 2022, we began hardware deployments for our Nigerian National Identity Management Commission's national ID enrollment program in partnership with Sterling Bank Nigeria's Specta online lending program. The deployments are with BIO-key's Pocket10 device, which provides mobile biometric enrollment to support increased adoption and use of the national identity number in mobile banking and payments across the country. We expect to ramp shipments of our products as well as transactional software in the coming months. At BIO-key, we continue to invest in innovation and product development, including new products, enhancements, and updates. One example is the recent launch of important enhancements and updates to our MobileAuth solution. MobileAuth is currently the only multi-factor authentication mobile app that integrates the power of identity-bound biometrics with other authentication modalities, allowing customers to build a more complete MFA strategy.
These methods include palm scanning with our PalmPositive solution and facial recognition with our FacePositive solution, empowering mobile devices with biometric authentication methods integrated with our PortalGuard solution. MobileAuth also supports device-based biometric authentication methods, including Apple Face ID and Touch ID and Android biometrics, as well as support for push token authentication. These enhancements make MobileAuth more powerful and even easier for customers to deploy to meet their increasing authentication and security requirements. I also want to touch on the great work the BIO-key team has done to build visibility and credibility for our company and solutions.
Our team continued to build on our base of IT industry awards and recognition, including four recent 2022 Cybersecurity Excellence Awards, a Security Today Magazine 2022 Govies Government Security Awards, and our own Kim Biddings was named for the second year in a row to CRN Women of the Channel Power 100 list. These industry accolades are very important in building our reputation with prospective partners and customers on a global basis. Looking forward, we see an expanding worldwide opportunity to grow our software license revenue base driven by compelling security, scalability, ease of use and deployment, and the strong customer value proposition of our PortalGuard IAM platform, along with an expanding array of security solutions.
We continue to look for value-enhancing M&A opportunities as we have with PortalGuard and Swivel Secure Europe, in order to expand our solution set, customer base, and sales and marketing reach, always with an eye to creating greater value for our shareholders. There is a clear and growing global need for enterprises of all kinds to protect their data and systems with stronger cybersecurity solutions. BIO-key has built a strong base of products, services, and partnerships to address this substantial opportunity. Given the building momentum in our business, complemented with the additional Swivel Secure Europe and further progress advancing our opportunities in Africa, we are reiterating our full year 2022 revenue guidance of $10-$13 million, approximately 70% of which relates to contracted recurring software license revenue.
Our revenue guidance represents growth of approximately 100% or more over 2021, primarily from growth in software license and complemented by hardware and services revenue that are generally tied to specific projects. Our growth outlook is supported by our strong capital position, our talented global management group and product development teams, and our expanded global sales, marketing, and channel partner footprint. We believe BIO-key is positioned to reach break-even profitability and free cash flow at the lower end of the range, subject to our mix of software and hardware revenues. As we execute on our growth strategy, we believe the market will come to recognize and hopefully reward our progress. We are focused on building on our positive momentum for the balance of this year. With that, I'll turn the call back to Kim.
Great. Thank you, Mike. As Mike touched on, and to remind those who may be new to our company, our award-winning PortalGuard IAM solution provides secure and efficient identity and access management for applications on an enterprise-wide basis. Our cloud solution addresses significant IT security challenges, including those posed by remote work or study, while also supporting a broad range of authentication factors. Our new and improved MobileAuth is the only Multi-Factor Authentication mobile app that integrates strong Identity-Bound Biometrics or IBB with other authentication modalities. In terms of marketing, one area of focus today is on developing our messaging about the power of Identity-Bound Biometric solutions. First, we believe that security should be centered around people as the only universal constant in a world of unpredictable variability. Second, we deliver solutions that verify the person, which are also easy to use and trusted for secure access anywhere.
Third, we integrate these IBB capabilities into our large-scale Civil ID and IAM solutions, including PortalGuard and MobileAuth. In addition to IBB, we are developing messaging to guide our content creation and resonate with key target markets, including credit unions and banks. As far as other marketing initiatives, to touch on a few, we completed several media interviews in Q1, including with Mergermarket, Authority Magazine, CTO Sessions, and CyberNews. We've had recent content submissions in key industry publications including PaymentsJournal, SecurityWeek, CyberNews, IDG Connect, Dark Reading, Help Net Security, and Authority Magazine. In terms of marketing and lead generation, we recently hosted two webinars, including a case study on why one banking customer adopted biometrics to move away from passwords. The other highlighted the 2022 cybersecurity predictions from a panel of IT professionals.
Separately, to continue to strengthen our existing customer relationships, we launched a monthly master class webinar series and dedicated customer blog to share key topics and solutions updates, including why it is critical to move identities to the cloud and navigating cyber insurance requirements. We continue to attend and sponsor industry events such as the National Association of Counties or NACo Conference and Dinner, the New York State Association of Counties or NYSAC Conference, the Chief Information Systems Officers Association Technology Summit, and Fintech Meetup 2022, which is a virtual meeting platform connecting individuals and organizations from the payments, banking, and financial services community for partnership discussions, conversations, and collaboration. In April, we presented and exhibited at Educause Cybersecurity and Privacy Professionals 2022, a conference for higher education, and Intelisys AMP Boston, where we connected with potential partners to join our Channel Alliance Partner Program.
In June, we'll be at the Broward County Convention Center in Florida for MSP Expo 2022. We continue to expand our social media presence and grow our overall following, including growing our LinkedIn followers by 110% since Q4. Our social media content continues to engage our target audiences and drive higher quality traffic to our website, bio-key.com, which had over 32,000 new website visitors in Q1 alone. Regarding our Channel Alliance Partner or CAP program, we added 3i Technologies as a distributor in Q1, and our master agent referral partner program with Intelisys continues to expand. Channel partners now represent approximately 50% of new bookings and will be an integral part of our growth moving forward.
These and other marketing efforts that we've discussed on prior calls, along with ongoing efforts, will continue to expand our brand and position BIO-key for further growth in 2022. With that, I'll hand it over to Ceci Welch.
Thank you, Kim. BIO-key's Q1 2022 revenue increased to $1.94 million from $1.89 million in Q1 2021, driven by 205% increase in software license fees as well as an increase in services revenue, which more than offset the decline in the hardware revenue. Q1 2021 included $680,000 in hardware revenue related to the initial product shipment for the large-scale ID project in Africa. Gross profit grew to $1.6 million in Q1 2022 from $1.1 million in Q1 2021, due mainly to the increase in higher margin license fee revenue as a percentage of total revenue in the current year period.
Operating expenses increased to $2.6 million in Q1 2022 from $2 million in Q1 2021 due to a $400,000 increase in research, development, and engineering expense for upgraded MobileAuth and IDaaS solutions and a $300,000 increase in SG&A and other expenses associated with the Swivel Secure Europe purchase. The company reported a Q1 2022 operating loss of $1 million versus $800,000 in Q1 2021, as greater gross profit was more than offset by higher operating expenses incurred to support our growth. BIO-key reported a Q1 2022 net loss available to common shareholders of $1 million or $0.12 per share, as compared to a net loss of $900,000 or $0.11 per share in Q1 2021.
Total other income was $131 in Q1 2022 versus an expense of $15,400 in Q1 2021. BIO-key ended the quarter with $13.6 million of current assets, including $5.8 million of cash and cash equivalents, $2 million of accounts receivable, and $5 million in inventory. Net working capital was $10.1 million, and the book value of stockholders' equity was $15.3 million or $1.82 per share. In Q1 2022, we invested approximately $550,000 in net working capital to support our growth and $1.1 million of net acquired cash related to our Swivel Secure Europe. Thus far, we have managed our supply chain without any negative impact to our business, and we have invested as necessary in preparation for the increasing business volume.
Now, I believe we can turn the call back to the operator for investor questions.
We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw a question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Jack Vander Aarde with Maxim Group. Please go ahead.
Hey, guys, sorry, I was on mute there. Great, good morning, really appreciate the quarterly update. Great results. Thanks for taking my questions. I'll start with a few top-line questions. Cece, just an FYI, I will finish with a question on what stock compensation was for the quarter. I'll let you go, maybe see if you can collect that as we wait for the 10-Q to come out later this week or next week. Mike, let me start with the first question. Great to see revenue ticking up. It sounds like Swivel Secure is playing a strong part in that as well. That acquisition closed, and this is a positive, I believe, late in the quarter in early March.
If you have it on you, can you maybe talk about how much of that licensing revenue was organic? It seems like it would be quite a bit versus how much was from Swivel Secure in the first quarter.
Yeah. Good morning, Jack. I think I can. We closed the Swivel transaction late in the first, early second week of March. We were able to grab about 22 days of revenue from Swivel, and that represented about $360,000, give or take. Very strong organic growth in software license revenue and of course, a small, well, medium-sized contribution from Swivel.
Great. That's encouraging to hear and happy to hear the color there. We'll get, I guess, the second quarter, we'll get the first full impact of Swivel Secure under the helm, which would be a good another further uptick, I guess, just mechanically speaking. Then, you know, as if I just switch gears to Nigeria, your comments on Nigeria. You expect an increasing ramp of shipments of hardware and software, I believe, eventually in Nigeria in the coming months. Just a couple follow-ups there. Did anything get shipped in the first quarter 2022 or was it kinda closed down for that part?
Do you expect the shipments to begin ramping in the second quarter, or is this more of a second half of 2022 event?
Okay. Small contribution of hardware sales in Q1. Nothing significant. We do expect revenue in Q2. We've already generated some revenue in Q2, and we expect that again to ramp more significantly in the second half. That's where we're at this point.
Great. That's helpful. Okay. Over 50%, I heard, of new bookings are coming from the Channel Alliance Program. Can you just remind me how many Channel Alliance partners you have currently? Can you remind me of any growth targets for that channel program?
Well, you know, we expect that the company, given that Swivel Secure Europe generates nearly 100% of their business through partners, you can expect that the majority, if not all of our business, probably through the end of this year into the beginning of next year, will come through our channel partner program for sure. We're heading in that direction. It is a force multiplier. It's a way for us to become much more efficient and to get greater levels of visibility in the market and greater coverage across the board. We expect this to be a global phenomenon. That's number one. For sure, we're heading in that direction. In terms of the number of partners, that number continues to grow significantly because Intelisys alone has 8,000 vendor participants in their program.
You know, as we get more engaged with them. The number of partners that could potentially be representing our solutions is, you know, upwards of 5,000-10,000. Right now, today, I believe we have connected, touched and integrated some 200-400 partners, including MSPs that are representing our products across the country. Now again, if you add in Swivel across the globe.
That's fantastic, that's fantastic to hear. Great. Let's see. Maybe I remind myself to go back to Ceci. Ceci, any update on what total stock comp was in the first quarter?
Yes, thanks for the heads up, Jack. It's the share-based compensation was approximately $110,000 for the quarter.
That's for if we allocate that to both R&D and SG&A, that's the total, about $110,000?
That's the total, yeah.
Okay, excellent. Okay, guys. Well, that's it for me. Really happy to see these results. Congrats to you guys, and I'll hop back in the queue.
Thank you. Thank you, Jack.
Again, if you have a question, please press star, then one. As another reminder, if you have a question, please press star, then one. At this time, the Q&A session has ended. I would now like to turn the call back over to Mike DePasquale for any closing remarks.
Thank you. Well, I just wanna thank each and every one of you for joining today's call. We look forward to updating you on our Q1 call in May, which will come in August, which will come around pretty quickly. In the meantime, we will participate in two virtual investor conferences in May, the H.C. Wainwright Conference and the Inflection Partners Conference, both occurring after the week of May 25. As always, we will continue to provide regular news updates with press releases as developments occur with the business. Once again, thank you for your time today.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.