Intellinetics Grows 2024 First Quarter Revenues 7.7%, Grows SaaS Revenue 13.5%
2024 First Quarter Financial Highlights
- Total Revenue increased 7.7% over the same period in 2023; the growth in the first quarter was fully organic.
-
Software as a Service revenue increased 13.5% over the same period in 2023.
- “IPAS” (IntelliCloud Payables Automation System) continued its commercialization; live reference accounts doubled to 4 in the quarter and they are running smoothly. An additional 5 are scheduled to go live in Q2 2024.
- Professional services revenue increased 7.9% over the same period in 2023.
-
The Company expensed a
$397,901 charge in the quarter related to restricted stock awards. UnderU.S. GAAP, this charge is reflected in G&A expenses, of which$328,376 is non-cash. -
Inclusive of the
$397,901 charge for restricted stock, net loss was$174,714 , or$0.04 net loss per basic and fully diluted share, compared to net income of$112,563 , or$0.03 per basic and fully diluted share, for the same period in 2023. -
Adjusted EBITDA increased 6.9% to
$673,362 , compared to$629,879 from the same period in 2023. -
Ended the quarter with
$1,279,556 dollars in debt principal, net of cash, down from$1.7 million atDecember 31, 2023 after paying down an additional$500,000 in the quarter as a pre-payment.
|
|
For the Quarter ended
|
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
|
|
|
|
|
||
Revenues: |
|
|
|
|
|
|
|
|
Sale of software |
|
$ |
5,779 |
|
|
$ |
15,293 |
|
Software as a service |
|
|
1,405,153 |
|
|
|
1,238,432 |
|
Software maintenance services |
|
|
357,983 |
|
|
|
349,542 |
|
Professional services |
|
|
2,479,678 |
|
|
|
2,299,289 |
|
Storage and retrieval services |
|
|
258,491 |
|
|
|
284,277 |
|
Total revenues |
|
$ |
4,507,084 |
|
|
$ |
4,186,833 |
|
“The professional services and storage and retrieval services business continues to generate positive contribution margin,” continued DeSocio. “However, we anticipate a long-standing customer, our largest, will take steps to shift certain tasks performed by our document conversion business from one office location to another location in a way that could reduce annual revenue of our document conversion segment, starting in Q4 2024. Our management team believes the total value proposition which we provide our customer is substantial, that the customer understands that the timely and accurate execution of the tasks we perform are extremely important to it, and hence the company intends to educate and negotiate in good faith with the customer to pursue a mutually agreeable outcome.”
“We plan to maintain the storage and retrieval and document conversion (or scanning) business streams, while focusing the majority of our growth-oriented investments in sales, marketing, and research and development into SaaS solutions to accelerate our organic growth in recurring revenue,” added DeSocio. “This is expected to accelerate the trends we have demonstrated for several quarters, with recurring revenue growth outpacing consolidated revenue growth and a more pronounced shift to a SaaS-centric company.”
“As noted in our fourth quarter conference call in March, we prepaid
“Lastly, there was a substantial,
Summary – 2024 First Quarter Results
Revenues for the three months ended
Total operating expenses increased 24.2% to
2024 Outlook
Based on management's current plans and assumptions, the Company reiterated expectations that it will grow revenues on a year-over-year basis for the fiscal year 2024. Regarding Adjusted EBITDA, the Company is revising its guidance in expectation that Adjusted EBITDA for 2024 will be at or slightly less than 2023 levels.
Conference Call
About
Cautionary Statement
Statements in this press release which are not purely historical, including statements regarding future business and growth, future revenues, including fourth quarter and full year results; organic revenue growth from both new and existing customers; market share, growth of our markets, and better results due to price increases; sustainable profitability; the rollout and success of new products, including
Non-GAAP Financial Measures
Adjusted EBITDA: Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to net income, operating income, or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities or a measure of our liquidity.
We believe that Adjusted EBITDA is a useful performance measure and is used by us to facilitate a comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under GAAP can provide alone. We define “Adjusted EBITDA” as earnings before interest expense, any income taxes, depreciation and amortization expense, stock-based compensation, note conversion and note or equity offer warrant or stock expense, gain or loss on debt extinguishment, change in fair value of contingent consideration, and transaction costs.
Reconciliation of Net Income to Adjusted EBITDA
|
|
For the Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Net (loss) income - GAAP |
|
$ |
(174,714 |
) |
|
$ |
112,563 |
|
Interest expense, net |
|
|
140,234 |
|
|
|
171,436 |
|
Depreciation and amortization |
|
|
264,010 |
|
|
|
227,718 |
|
Stock-based compensation |
|
|
443,832 |
118,162 |
||||
Adjusted EBITDA |
|
$ |
673,362 |
|
$ |
629,879 |
Recurring Revenue: Recognized revenue for any applicable period that we characterize as being recurring in nature, without regard to contract start or end dates or renewal rates. It includes the following revenue types: SaaS subscription agreements, maintenance contracts related to perpetual software licenses, storage and retrieval services, and professional services revenues in the nature of business process outsourcing. It excludes revenues of a type that are not expected to recur, primarily perpetual licenses, most document conversion services, and other professional services that are project based. Recurring revenue is not determined by reference to deferred revenue, unbilled revenue, or any other GAAP financial measure over any period, so the Company has not reconciled the Recurring Revenues to any GAAP measure. Recurring revenue should not be extrapolated into a precise prediction of future revenues, because it does not take into account our contract start and end dates and our renewal rates. Management believes that reviewing this metric, in addition to GAAP results, helps investors and financial analysts understand the value of Intellinetics’ recurring revenue streams versus prior periods.
Reconciliation of revenues to recurring revenues:
For the Three Months Ended |
|||||
2024 |
2023 |
||||
Revenues as reported: |
|||||
Sale of software |
$ |
5,779 |
$ |
15,293 |
|
Software as a service |
|
1,405,153 |
|
1,238,432 |
|
Software maintenance services |
|
357,983 |
|
349,542 |
|
Professional services |
|
2,479,678 |
|
2,299,289 |
|
Storage and retrieval |
|
258,491 |
|
284,277 |
|
$ |
4,507,084 |
$ |
4,186,833 |
||
Revenues - recurring only: |
|||||
Sale of software - recurring |
$ |
- |
|
$ |
- |
Software as a service - recurring |
|
1,335,444 |
|
|
1,177,333 |
Software maintenance services - recurring |
|
357,983 |
|
|
349,542 |
Professional services - recurring |
|
812,066 |
|
|
669,685 |
Storage and retrieval - recurring |
|
222,690 |
|
|
235,001 |
$ |
2,728,183 |
|
$ |
2,431,561 |
|
Revenues - non-recurring only: |
|
||||
Sale of software - non-recurring |
$ |
5,779 |
|
$ |
15,293 |
Software as a service - non-recurring |
|
69,709 |
|
|
61,099 |
Software maintenance services - non-recurring |
|
- |
|
|
- |
Professional services - non-recurring |
|
1,667,612 |
|
|
1,629,604 |
Storage and retrieval - non-recurring |
|
35,801 |
|
|
49,276 |
$ |
1,778,901 |
|
$ |
1,755,272 |
|
Total recurring and non-recurring revenues |
$ |
4,507,084 |
$ |
4,186,833 |
Note 1 – Software as a service non-recurring revenue is comprised of professional services setup fees which are recognized ratably over the initial contract period. They do not renew, and are therefore non-recurring. Under ASC 606, they are deemed essential to the functionality of the subscription Software as a service, and are therefore recognized together with the subscription Software as a service revenue.
Total Contract Value: Estimated total future revenues from contracts signed during the period. This refers to contracts or projects that have been awarded by our customers, and it presumes the provision of all software, subscription services, and/or professional services, with no termination of any awarded contracts. There can be no guarantee that all work will be completed during any fiscal period, or that the contracts will not be terminated before all the estimated future revenues are earned, received, and/or recognized. Total Contract Value is a performance measure that the Company believes provides useful information to its management and investors as it allows the Company to better track the Company’s current sales performance, without any adjustment to exclude revenues that will not be earned, received, or recognized until future periods. Total Contract Value includes new sales in all our revenue categories, including SaaS, perpetual software licenses, maintenance, storage and retrieval, and professional services, to new or existing customers. It excludes renewals (and price increases on renewals if any). Total Contract Value is not a substitute for total revenue. There is no GAAP measure that is comparable to Total Contract Value, so the Company has not reconciled the Total Contract Value to any GAAP measure.
|
||||||||
Condensed Consolidated Statements of Operations |
||||||||
(unaudited) |
||||||||
|
|
For the Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
|
|
|
|
|
||
Revenues: |
|
|
|
|
|
|
|
|
Sale of software |
|
$ |
5,779 |
|
|
$ |
15,293 |
|
Software as a service |
|
|
1,405,153 |
|
|
|
1,238,432 |
|
Software maintenance services |
|
|
357,983 |
|
|
|
349,542 |
|
Professional services |
|
|
2,479,678 |
|
|
|
2,299,289 |
|
Storage and retrieval services |
|
|
258,491 |
|
|
|
284,277 |
|
Total revenues |
|
|
4,507,084 |
|
|
|
4,186,833 |
|
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
Sale of software |
|
|
5,065 |
|
|
|
8,181 |
|
Software as a service |
|
|
215,992 |
|
|
|
220,640 |
|
Software maintenance services |
|
|
15,710 |
|
|
|
16,716 |
|
Professional services |
|
|
1,284,063 |
|
|
|
1,187,116 |
|
Storage and retrieval services |
|
|
86,610 |
|
|
|
108,341 |
|
Total cost of revenues |
|
|
1,607,440 |
|
|
|
1,540,994 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
2,899,644 |
|
|
|
2,645,839 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
General and administrative |
|
|
2,128,493 |
|
|
|
1,554,611 |
|
Sales and marketing |
|
|
541,621 |
|
|
|
579,511 |
|
Depreciation and amortization |
|
|
264,010 |
|
|
|
227,718 |
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
2,934,124 |
|
|
|
2,361,840 |
|
|
|
|
|
|
|
|
|
|
(Loss) income from operations |
|
|
(34,480 |
) |
|
|
283,999 |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(140,234 |
) |
|
|
(171,436 |
) |
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(174,714 |
) |
|
$ |
112,563 |
|
|
|
|
|
|
|
|
|
|
Basic net (loss) income per share: |
|
$ |
(0.04 |
) |
|
$ |
0.03 |
|
Diluted net (loss) income per share: |
|
$ |
(0.04 |
) |
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic |
|
|
4,113,621 |
|
|
|
4,073,757 |
|
Weighted average number of common shares outstanding - diluted |
|
|
4,113,621 |
|
|
|
4,392,459 |
|
|
||||||||
Condensed Consolidated Balance Sheets |
||||||||
|
|
(unaudited) |
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
2024 |
|
|
2023 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
1,184,944 |
|
|
$ |
1,215,248 |
|
Accounts receivable, net |
|
|
1,931,342 |
|
|
|
1,850,375 |
|
Accounts receivable, unbilled |
|
|
1,286,457 |
|
|
|
1,320,837 |
|
Parts and supplies, net |
|
|
93,090 |
|
|
|
110,272 |
|
Contract assets |
|
|
130,829 |
|
|
|
140,165 |
|
Prepaid expenses and other current assets |
|
|
402,444 |
|
|
|
367,478 |
|
Total current assets |
|
|
5,029,106 |
|
|
|
5,004,375 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
880,740 |
|
|
|
924,257 |
|
Right of use assets, operating |
|
|
2,461,680 |
|
|
|
2,532,928 |
|
Right of use assets, finance |
|
|
292,298 |
|
|
|
219,777 |
|
Intangible assets, net |
|
|
3,781,761 |
|
|
|
3,909,338 |
|
|
|
|
5,789,821 |
|
|
|
5,789,821 |
|
Other assets |
|
|
680,780 |
|
|
|
645,764 |
|
Total assets |
|
$ |
18,916,186 |
|
|
$ |
19,026,260 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
278,486 |
|
|
$ |
194,454 |
|
Accrued compensation |
|
|
558,191 |
|
|
|
337,884 |
|
Accrued expenses |
|
|
262,050 |
|
|
|
164,103 |
|
Lease liabilities, operating - current |
|
|
779,741 |
|
|
|
712,607 |
|
Lease liabilities, finance - current |
|
|
64,429 |
|
|
|
49,926 |
|
Deferred revenues |
|
|
2,583,207 |
|
|
|
2,927,808 |
|
Notes payable - current |
|
|
325,000 |
|
|
|
- |
|
Total current liabilities |
|
|
4,851,104 |
|
|
|
4,386,782 |
|
|
|
|
|
|
|
|
|
|
Long-term liabilities: |
|
|
|
|
|
|
|
|
Notes payable - net of current portion |
|
|
1,438,032 |
|
|
|
2,209,242 |
|
Notes payable - related party |
|
|
567,407 |
|
|
|
560,602 |
|
Notes payable |
567,407 |
560,602 |
||||||
Lease liabilities, operating - net of current portion |
|
|
1,803,213 |
|
|
|
1,942,970 |
|
Lease liabilities, finance - net of current portion |
|
|
236,591 |
|
|
|
175,943 |
|
Total long-term liabilities |
|
|
4,045,243 |
|
|
|
4,888,757 |
|
Total liabilities |
|
|
8,896,347 |
|
|
|
9,275,539 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock, |
|
|
4,114 |
|
|
|
4,114 |
|
Additional paid-in capital |
|
|
31,285,462 |
|
|
|
30,841,630 |
|
Accumulated deficit |
|
|
(21,269,737 |
) |
|
|
(21,095,023 |
) |
Total stockholders’ equity |
|
|
10,019,839 |
|
|
|
9,750,721 |
|
Total liabilities and stockholders’ equity |
|
$ |
18,916,186 |
|
|
$ |
19,026,260 |
|
|
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(unaudited) |
||||||||
|
|
For the Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
|
|
|
|
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(174,714 |
) |
|
$ |
112,563 |
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
264,010 |
|
|
|
227,718 |
|
Bad debt (recovery) expense |
|
|
(14,588 |
) |
|
|
20,102 |
|
Amortization of deferred financing costs |
|
|
60,595 |
|
|
|
49,997 |
|
Amortization of debt discount |
|
|
- |
|
|
|
11,378 |
|
Amortization of right of use assets, financing |
|
|
16,768 |
|
|
|
6,709 |
|
Share based compensation |
|
|
443,832 |
|
|
|
118,162 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(66,379 |
) |
|
|
(81,542 |
) |
Accounts receivable, unbilled |
|
|
34,380 |
|
|
|
(291,332 |
) |
Parts and supplies |
|
|
17,182 |
|
|
|
(8,234 |
) |
Prepaid expenses and other current assets |
|
|
(25,630 |
) |
|
|
(1,931 |
) |
Accounts payable and accrued expenses |
|
|
402,286 |
|
|
|
229,849 |
|
Operating lease assets and liabilities, net |
|
|
(1,375 |
) |
|
|
3,992 |
|
Deferred revenues |
|
|
(344,601 |
) |
|
|
(571,788 |
) |
Total adjustments |
|
|
786,480 |
|
|
|
(286,920 |
) |
Net cash provided by (used in) operating activities |
|
|
611,766 |
|
|
|
(174,357 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Capitalization of internal use software |
|
|
(109,621 |
) |
|
|
(112,208 |
) |
Purchases of property and equipment |
|
|
(18,311 |
) |
|
|
(22,361 |
) |
Net cash used in investing activities |
|
|
(127,932 |
) |
|
|
(134,569 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Payment of earnout liabilities |
|
|
- |
|
|
|
(700,000 |
) |
Principal payments on financing lease liability |
|
|
(14,138 |
) |
|
|
(5,467 |
) |
Repayment of notes payable |
|
|
(500,000 |
) |
|
|
(262,950 |
) |
Net cash used in financing activities |
|
|
(514,138 |
) |
|
|
(968,417 |
) |
|
|
|
|
|
|
|
|
|
Net decrease in cash |
|
|
(30,304 |
) |
|
|
(1,277,343 |
) |
Cash - beginning of period |
|
|
1,215,248 |
|
|
|
2,696,481 |
|
Cash - end of period |
|
$ |
1,184,944 |
|
|
$ |
1,419,138 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid during the period for interest |
|
$ |
88,935 |
|
|
$ |
116,110 |
|
Cash paid during the period for income taxes |
|
$ |
956 |
|
|
$ |
2,499 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash financing activities: |
|
|
|
|
|
|
|
|
Right-of-use asset obtained in exchange for finance lease liability |
|
$ |
89,289 |
|
|
$ |
- |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240514502737/en/
FNK IR
646.349.6641 / 646.809.4048
INLX@fnkir.com
614.921.8170 investors@intellinetics.com
Source: