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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