Intellinetics, Inc. (INLX) came out with a quarterly loss of $0.13 per share versus the Zacks Consensus Estimate of a loss of $0.16. This compares to earnings of $0.02 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +18.75%. A quarter ago, it was expected that this company would post a loss of $0.09 per share when it actually produced a loss of $0.17, delivering a surprise of -88.89%.Over the last four quarters, the company ha ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 decreased by 13.6% to $4 million compared to $4.6 million in Q2 2024 [13] - SaaS revenue grew by 12.6% to $1.6 million from $1.4 million year-over-year, driven by early payables automation successes [13] - Professional services revenue decreased by 29% to $1.9 million from $2.7 million in the same period last year [14] - Net loss for Q2 was $568,000 compared to net income of $75,000 in Q2 2024, with loss per share at $0.13 [16] - Adjusted EBITDA was $28,000 compared to $698,000 for the same period in 2024 [17] Business Line Data and Key Metrics Changes - SaaS revenue, including hosting, showed growth of 12.6% [13] - Software maintenance services revenue decreased by 6.6% [14] - Professional services revenue constituted 49% of total revenue for the quarter, down from 56% last year [14] - Consolidated gross margin increased by 328 basis points to 68% [15] Market Data and Key Metrics Changes - Key vertical markets such as construction and homebuilding faced challenges due to higher interest rates and tariffs, leading to longer sales cycles [8] - K-12 education sector is experiencing concerns due to cuts in public education, affecting sales timelines [8] Company Strategy and Development Direction - The company aims to expand sales through various channels and has rebuilt its backlog of orders to historical levels [6] - Investments in sales and marketing are prioritized to enhance customer lifecycle management [9] - The company is committed to leveraging AI across three core pillars: new features, marketing and customer support, and internal development efficiencies [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about renewed customer activity and expects a strong fourth quarter [9] - The company anticipates SaaS revenue growth and positive adjusted EBITDA despite a projected decline in overall revenue for 2025 compared to 2024 [18] - Management believes in the strength of their competitive position and plans to reinvest cash flow into sales and development [39] Other Important Information - The company has successfully paid off $7.6 million in debt and earn-outs, positioning itself for growth investments [12] - The June 1 contract renewal with the largest customer includes price increases, which may improve margins [24] Q&A Session Summary Question: Should margins for professional services return to historic levels? - Management indicated that margins are expected to be a little better than historical levels due to the June 1 contract renewal [22][24] Question: How many customers in the homebuilder sector are live or paused? - Management reported that a high percentage of customers are live and moving aggressively towards go-live dates, with no dissatisfaction reported [26][27] Question: Expectations for SaaS growth moving forward? - Management acknowledged the 12.6% growth but expressed confidence in achieving better results, citing a strong pipeline and new product launches [28][29] Question: Progress in entering new verticals? - Management confirmed ongoing efforts to engage new partners and expand into new verticals, although progress has been slower than desired [34]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________to _________________________ Commission file number: 001-41495 INTELLINETICS, INC. (Exact name of registrant as specified in its charter) Nev ...

James F. DeSocio, President & CEO of Intellinetics, stated, "Our company suffered from a temporary reduction in our professional services revenue in our document conversion segment which was deeper and longer than we anticipated. This was caused by the timing of our June 1, 2025 renewal of our contract with our largest customer, which we announced June 2. The revenue shortfall in the quarter and first half of the year is significant, but I am happy to share that the recovery is underway now and that during ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 decreased by 5.8% to $4.2 million compared to $4.5 million in the same period last year [11] - SaaS revenue grew by 9.8% to $1.5 million, driven by early successes in payables automation [11] - Professional services revenue decreased by 13.2% to $2.2 million, accounting for 51% of total revenue compared to 55% last year [12] - Consolidated gross margin increased by 322 basis points to 67.6% due to a better revenue mix and improved SaaS margins [12] - Net loss for Q1 was $728,000 compared to a net loss of $175,000 in the same period last year [13] - Adjusted EBITDA for the quarter was $77,000, down from $673,000 in Q1 2024 [14] Business Line Data and Key Metrics Changes - SaaS revenue, including hosting, showed growth while professional services experienced a decline [11][12] - The company closed multiple orders with partners, indicating a strong pipeline for SaaS products [5][9] Market Data and Key Metrics Changes - The company noted a significant order intake week with over $2.4 million in new project contracts, expected to be recognized over the next six to seven months [9] - Recent political events and economic conditions, such as high interest rates in the building industry, have created some uncertainty but are expected to improve [10][25] Company Strategy and Development Direction - The company is focusing on transforming into a predominantly SaaS-driven business with a diverse suite of solutions [6] - Investments in sales and marketing, as well as IT infrastructure, are aimed at accelerating growth and enhancing customer trust [8] - The company plans to continue scaling its business and enhancing development capabilities to bring new features to market more quickly [6][8] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting a strong competitive position and growth opportunities in the market [35] - The company expects to grow revenues year-over-year for fiscal 2025, particularly in SaaS, while maintaining positive adjusted EBITDA [17] Other Important Information - The company has paused aggressive debt prepayments to focus on sales and marketing initiatives [15] - A shelf registration was filed to strengthen the balance sheet and enable quick capital actions [16] Q&A Session Summary Question: How many implementations will you have and what would those mean in terms of annual recurring revenue? - The company expects to have about 22 to 23 customers using the SaaS product [20] Question: How is the implementation of purchase orders progressing? - The first release of payables order was launched in April, with positive initial feedback [21][22] Question: Are there any customer hesitations regarding implementation timing? - Hesitations are more related to market conditions rather than the company's products [24][25] Question: Are the new orders in professional services stable in terms of margin opportunities? - The company has a strong backlog with over $3 million of work queued, which should help restore historical performance levels [27] Question: Is the company still serving over 600 K-12 customers? - Yes, the company has launched new products in the K-12 market and is seeing positive growth [28][30]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 decreased by 5.8% to $4.2 million compared to $4.5 million in the same period last year [11] - SaaS revenue grew by 9.8% to $1.5 million, driven by early successes in payables automation [11] - Professional services revenue decreased by 13.2% to $2.2 million, accounting for 51% of total revenue compared to 55% last year [12] - Net loss for Q1 was $728,000, compared to a net loss of $175,000 for the same period last year [13] - Adjusted EBITDA for the quarter was $77,000, down from $673,000 in Q1 2024 [14] Business Line Data and Key Metrics Changes - SaaS revenue increased due to payables automation, while professional services revenue declined due to timing issues [11][12] - The gross margin percentage increased to 67.6%, driven by a better revenue mix and improved SaaS margins [12][13] Market Data and Key Metrics Changes - The company experienced a record-breaking week with over $2.4 million in new project contracts, indicating strong demand from state agencies and commercial clients [9] - Recent political events have created uncertainty, but management is optimistic about future demand for their products and services [10] Company Strategy and Development Direction - The company is focusing on transforming into a predominantly SaaS-driven business with a diverse suite of solutions [5] - Investments are being made in sales and marketing, as well as IT infrastructure, to enhance customer trust and cybersecurity [7] - The company plans to continue scaling its business and expects to see returns on these investments in late 2025 and beyond [7][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges headwinds in the building industry due to high interest rates and tariffs but remains optimistic about future growth [23] - The company expects to grow revenues year-over-year for fiscal 2025, particularly in SaaS revenues, while maintaining positive adjusted EBITDA [16] Other Important Information - The company has temporarily paused aggressive debt prepayments to focus on sales and marketing initiatives [15] - A shelf registration has been filed to strengthen the balance sheet and act quickly on market opportunities [15] Q&A Session Summary Question: How many implementations will you have and what would those mean in terms of annual recurring revenue? - The company will have about 22 to 23 customers using the SaaS product for payables automation [19] Question: How is the implementation of purchase orders progressing? - The first release of payables order was launched in April, with positive initial feedback [20][21] Question: Are there any customer hesitations regarding implementation timing? - Hesitation is more related to market conditions rather than the company's product [23] Question: Are the new orders in professional services stable in terms of margin opportunities? - Yes, the company has a strong backlog with over $3 million of work queued [27] Question: Does the company still serve over 600 K-12 customers? - Yes, the company has launched new products in the K-12 market and is seeing good growth [28][29]

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Intellinetics' Q1 2025 revenue fell 5.8% to $4.25 million, leading to increased net loss and reduced Adjusted EBITDA amid strategic investments Q1 2025 vs Q1 2024 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $4,247,345 | $4,507,084 | -5.8% | | SaaS Revenue | $1,542,169 | $1,405,153 | +9.8% | | Professional Services Revenue | $2,158,315 | $2,485,457 | -13.2% | | Net Loss | ($727,565) | ($174,714) | Increased Loss | | Adjusted EBITDA | $76,589 | $673,362 | -88.6% | - The company is strategically investing in sales, marketing, and IT infrastructure to scale the business and accelerate its transformation into a predominantly SaaS-driven company[4](index=4&type=chunk) - Key operational achievements include the launch of an initial Purchase Order feature set for its Payables Automation partner and a **50% quarterly increase** in live reference accounts for the IntelliCloud Payables Automation solution[4](index=4&type=chunk)[7](index=7&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO DeSocio emphasized strategic investments in sales and marketing to scale SaaS, anticipating professional services rebound and long-term SaaS growth via ERP partnerships - The company is investing to scale its business and transition to a SaaS-driven model, supported by the launch of a new purchase order feature for its key Payables Automation partner[4](index=4&type=chunk) - Recent hires include a Sales Engineer, Senior Solutions Consultant, and a new VP of Sales to develop and direct the growing sales team[4](index=4&type=chunk) - Professional services revenue is expected to rebound, with a significant increase in the order backlog indicating a return to historical scanning levels[5](index=5&type=chunk) - The core long-term strategy is to grow the SaaS business by penetrating the customer bases of strategic ERP partners[6](index=6&type=chunk) [Financial Performance Analysis](index=3&type=section&id=Summary%20%E2%80%93%202025%20First%20Quarter%20Results) Q1 2025 revenues fell 5.8% to $4.25 million, driven by professional services decline, while operating expenses rose 21.1% from investments, leading to a wider net loss Q1 2025 vs Q1 2024 Revenue Performance | Revenue Stream | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | SaaS Revenue | $1,542,169 | $1,405,153 | +9.8% | | Professional Services | $2,158,315 | $2,485,457 | -13.2% | | **Total Revenues** | **$4,247,345** | **$4,507,084** | **-5.8%** | - Total operating expenses increased **21.1%** to **$3.55 million**, driven by initiatives in sales, marketing, and enhancements to the IT and control environment (SOC2)[9](index=9&type=chunk) Q1 2025 vs Q1 2024 Profitability | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Loss from Operations | ($684,559) | ($34,480) | | Net Loss | ($727,565) | ($174,714) | | Net Loss Per Share | ($0.17) | ($0.04) | [2025 Outlook](index=3&type=section&id=2025%20Outlook) Management expects FY2025 revenue growth, primarily from SaaS, with positive Adjusted EBITDA, though reduced by over half due to heavy sales and marketing investments - The company expects to grow revenues on a year-over-year basis for fiscal year 2025, with a particular focus on growing SaaS revenues[11](index=11&type=chunk) - Adjusted EBITDA is expected to remain positive for 2025 but will be reduced by **more than half** compared to fiscal 2024 due to increased investments in sales and marketing[11](index=11&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA, a non-GAAP measure, is used to compare core operating performance, calculated by adjusting net income for interest, taxes, depreciation, amortization, and share-based compensation Reconciliation of Net Loss to Adjusted EBITDA | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net (loss) income - GAAP | $(727,565) | $(174,714) | | Interest expense, net | $43,006 | $140,234 | | Depreciation and amortization | $307,685 | $264,010 | | Share-based compensation | $453,463 | $443,832 | | **Adjusted EBITDA** | **$76,589** | **$673,362** | - Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization, share-based compensation, and other specific transaction-related costs[18](index=18&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements for Q1 2025, including the Statement of Operations, Balance Sheet, and Statement of Cash Flows [Statement of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 total revenues were $4.25 million, with gross profit flat, but a 50% rise in sales and marketing costs led to a $684,559 operating loss and a $727,565 net loss Condensed Consolidated Statement of Operations (unaudited) | For the Three Months Ended March 31, | 2025 | 2024 | | :--- | :--- | :--- | | Total revenues | $4,247,345 | $4,507,084 | | Gross profit | $2,869,200 | $2,899,644 | | Total operating expenses | $3,553,759 | $2,934,124 | | Loss from operations | $(684,559) | $(34,480) | | Net loss | $(727,565) | $(174,714) | | Basic and Diluted net loss per share | $(0.17) | $(0.04) | [Balance Sheet](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $17.96 million, cash $2.14 million, total liabilities $7.61 million, and total stockholders' equity $10.36 million Key Balance Sheet Items | As of | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $2,138,243 | $2,489,236 | | Total current assets | $5,124,278 | $5,474,556 | | Total assets | $17,964,014 | $18,574,956 | | Total current liabilities | $6,458,701 | $6,597,773 | | Total liabilities | $7,606,373 | $7,943,201 | | Total stockholders' equity | $10,357,641 | $10,631,755 | [Statement of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 experienced a net cash outflow from operating activities of $110,353, a shift from prior year's inflow due to higher net loss, decreasing cash by $350,993 Key Cash Flow Items | For the Three Months Ended March 31, | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(110,353) | $611,766 | | Net cash used in investing activities | $(223,934) | $(127,932) | | Net cash used in financing activities | $(16,706) | $(514,138) | | **Net decrease in cash** | **$(350,993)** | **$(30,304)** | | **Cash - end of period** | **$2,138,243** | **$1,184,944** |

Revenue Performance - Total revenues for Q1 2025 were $4,247,345, a decrease of 5.8% year over year from $4,507,084 in Q1 2024[92] - SaaS revenue increased to $1,542,169, reflecting a growth of 9.8% year over year[92] - Professional services revenue decreased by 13.2% to $2,158,315, primarily due to reduced project work[96] - Document Management segment revenue was $1,961,312, while Document Conversion segment revenue was $2,286,033[93] Profitability Metrics - Gross profit percentage improved to 67.6%, up from 64.3% in Q1 2024[92] - Total gross profit for Q1 2025 was $2,869,200, a slight decrease from $2,899,644 in Q1 2024, with a gross profit percentage increase to 67.6% from 64.3%[100][1] - Gross profit from Software as a Service (SaaS) increased to $1,327,040 in Q1 2025, up from $1,189,161 in Q1 2024, with a gross margin of 86.1% compared to 84.6%[1][101] - Cost of Professional Services decreased by $249,122, or 19.3%, in Q1 2025, leading to an increase in gross margin to 51.8% from 48.1% in Q1 2024[102] Operating Expenses - Operating expenses rose by 21.1% to $3,553,759, driven by increased sales and marketing initiatives[92] - Operating expenses rose to $3,553,759 in Q1 2025, up from $2,934,124 in Q1 2024, with General and Administrative expenses increasing by 14.3%[103][104] - Sales and marketing expenses surged by $272,419, or 50.3%, in Q1 2025, driven by the expansion of the sales team[105] Losses and Financial Position - Loss from operations was $684,559, compared to a loss of $34,480 in Q1 2024[92] - Net loss for Q1 2025 was $727,565, with a net loss per share of $0.17, compared to a net loss of $174,714 and $0.04 per share in Q1 2024[92] - Cash and cash equivalents stood at $2.1 million as of March 31, 2025, with a working capital deficit of $1.3 million[110] - Net cash used in operating activities was $110,353 in Q1 2025, compared to net cash provided of $611,766 in Q1 2024[115] Capital Expenditures and Financing - Capital expenditures totaled $223,934, including $102,854 in capitalized software costs, compared to $127,932 in Q1 2024[92] - Interest expense decreased by $97,228, or 69.3%, to $43,006 in Q1 2025, due to early principal repayments of the 2022 Notes[107] - The company plans to seek additional debt or equity financing on acceptable terms to meet future capital needs[112] Customer Contracts - The company secured a renewal contract with its largest customer effective from October 1, 2023, with an estimated net rate increase of approximately 21%[109]

Company Overview - Intellinetics, Inc. (INLX) shares increased by 11% to close at $14.47, with notable trading volume compared to typical sessions, contrasting with a 1.4% loss over the past four weeks [1] - The company is experiencing strong growth in its Payables Automation Solution and is expanding into new markets such as K-12, while also investing in sales and marketing for future revenue growth [1] Financial Performance - Intellinetics is expected to report a quarterly loss of $0.07 per share, reflecting a year-over-year decline of 75%, with revenues projected at $4.6 million, a 2% increase from the previous year [2] - The consensus EPS estimate for Intellinetics has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] Industry Context - Intellinetics operates within the Zacks Internet - Content industry, where Perion Network (PERI) is another player, having closed at $9.22 with a 0.1% decrease in the last trading session and a 30.4% return over the past month [3] - Perion Network's consensus EPS estimate has also remained unchanged at $0.09, representing a 79.6% decline from the previous year, and it holds a Zacks Rank of 3 (Hold) [4]

Intellinetics, Inc. (INLX) shares rallied 14.5% in the last trading session to close at $14.21. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 5.5% gain over the past four weeks.Intellinetics is benefiting from the strong performance and customer acceptance of its Payables Automation Solution, driving growth in SaaS revenue and expanding its market reach.This company is expected to post quarterly loss of $0. ...