The following is a summary of the Intellinetics, Inc. (INLX) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Q2 2024 total revenue increased to $4.6 million, up 9% year-over-year.

• Subscription-based SaaS revenue grew by 9.6%, while software maintenance services revenue grew slower at 1.4%.

• Consolidated gross margin improved to 64.7%, attributed to favorable revenue mix and price increases.

• Net income was $75,000 with an earnings per share of $0.02, down from $136,000 and $0.03 EPS the previous year.

• Adjusted EBITDA was $698,000, compared to $651,000 in the same period last year.

Business Progress:

• Intellinetics continues to expand its SaaS offerings, notably the IntelliCloud Payables Automation System (IPAS) and the YellowFolder solutions, with positive market reception and accelerating deployments.

• The company is aggressively expanding their sales and marketing efforts to support these offerings, planning to add more sales personnel and increase trade show activity.

• The K-12 market is being targeted with new pilot programs for IPAS to tap into additional service opportunities within 619 K-12 districts.

• Document conversion services recorded a record revenue quarter, supporting the overall positive financial performance.

Opportunities:

• Plans to make recurring revenue the majority of total revenue, leveraging contracted SaaS growth to reduce earnings volatility and enhance shareholder value.

Risks:

• Short-term EBITDA might be impacted modestly due to increased investments in sales and marketing for SaaS offerings, although these are expected to be accretive by 2025.

• Potential future reduction in revenue from the largest professional services customer due to planned relocations, with ongoing negotiations to mitigate impact not yet finalized.

More details: Intellinetics IR

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