Financial Data and Key Metrics Changes - For the full fiscal year ending June 30, 2025, total revenue increased 11% from $20.5 million to $22.6 million [5] - Recurring revenue increased 10% to $22.3 million [5] - GAAP net income was $7 million, up 17% from $6 million last year [7] - Earnings per share for fiscal year 2025 was $0.36 basic and $0.35 diluted, resulting in a year-over-year EPS growth of 21% [8] - Cash from operations increased 21% from $7 million to $8.4 million [8] - Total cash increased 14% from $25.2 million to $28.6 million, with zero bank debt [8][10] Business Line Data and Key Metrics Changes - Setup fees increased from $95,000 in fiscal 2024 to over $300,000 in fiscal 2025 due to an increased number of suppliers onboarded [5] - Annual recurring revenue continues to represent between 98% and 99% of total revenue [8] - Deferred revenue increased 30% from $2.4 million to $3.2 million, indicating future revenue growth [5][12] Market Data and Key Metrics Changes - The company is experiencing growth in all lines of business, including compliance and supply chain, not just traceability [11] - The traceability network is becoming increasingly significant, with a growing number of referrals from suppliers and manufacturers [22][25] Company Strategy and Development Direction - The company aims to grow annual recurring revenue between 10% to 20% and grow profitability even faster [4] - A focus on automation and efficiency is key to expanding the addressable market, particularly targeting smaller accounts [18][19] - The company is positioning itself as a go-to source for traceability solutions, leveraging a common technology platform for cross-selling opportunities [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth and profitability, aiming to double the size of the company over the next several years [10] - The FDA's change in timeline for compliance has provided breathing room for effective rollout of services [26] - The company plans to maintain a strong balance sheet with no debt while returning capital to shareholders through dividends and stock buybacks [15][17] Other Important Information - The company has paid out over $5 million in cash dividends to shareholders and has increased the common stock dividend three times by 10% each since December 2023 [17] - The capital allocation strategy includes redeeming preferred shares and buying back common stock, with $8 million remaining for future buybacks [16] Q&A Session Summary Question: Did you change your pricing or billing strategy? - The company has not changed its pricing strategy but can now effectively serve smaller accounts due to automation, expanding its market reach [30][31] Question: How have tariffs impacted your business? - Currently, tariffs have not significantly impacted the business, but there is potential for future effects on the food supply chain [32][33] Question: What are your thoughts on strategic M&A? - The company is open to M&A opportunities that are accretive and would provide new customers or enter adjacent industries [35][36] Question: Would you consider paying a one-time dividend? - Management prefers to focus on increasing regular dividends rather than one-time payouts, emphasizing a consistent return strategy [38][39] Question: Do you have any crypto treasury plans? - The company has no plans to invest in crypto, viewing it as too risky and preferring to focus on its capital allocation strategy [43][44]

Financial Data and Key Metrics Changes - For the fiscal year ending June 30, 2025, total revenue increased by 11% from $20.5 million to $22.6 million [5] - Recurring revenue rose by 10% to $22.3 million, with setup fees increasing from $95,000 in fiscal 2024 to over $300,000 in fiscal 2025 [5] - Total operating expenses increased by 6%, primarily due to investments in RTN and other development costs [5] - GAAP net income increased by 17% from $6 million to $7 million, with earnings per share growing by 21% [6][7] - Cash from operations rose by 21% from $7 million to $8.4 million, and total cash increased by 14% from $25.2 million to $28.6 million [7][10] Business Line Data and Key Metrics Changes - Annual recurring revenue continues to represent between 98% and 99% of total revenue, indicating strong stability in revenue streams [8] - The company experienced growth across all lines of business, not just traceability, with significant momentum in compliance and supply chain solutions [11][12] Market Data and Key Metrics Changes - Deferred revenue increased by 30% from $2.4 million to $3.2 million, indicating strong future revenue potential [12] - The company is positioned as a leading solution provider for traceability requirements, with a growing network effect enhancing customer acquisition [25] Company Strategy and Development Direction - The company aims to grow annual recurring revenue between 10% to 20% while increasing profitability at a faster rate [4] - A focus on automation and efficiency is central to the company's strategy, allowing it to serve smaller accounts effectively [18][19] - The company is exploring a middle-out approach to market expansion, targeting both upstream and downstream customers [21][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth and profitability, projecting the potential to double the company's size in the coming years [10] - The company remains cautious about external factors such as tariffs but has not seen significant impacts thus far [32][33] - Management emphasized the importance of maintaining a strong balance sheet with zero bank debt while returning capital to shareholders [15][17] Other Important Information - The company has terminated its $12 million credit facility and has redeemed a significant portion of preferred shares [16] - A commitment to return 50% of annual cash from operations to shareholders while maintaining cash reserves is highlighted [17] Q&A Session Summary Question: Did you change your pricing or billing strategy? - The company clarified that it has not fundamentally changed its pricing strategy but can now effectively serve smaller accounts due to automation [29][30] Question: How have tariffs impacted your business? - Management indicated that tariffs have not significantly impacted the business yet, but there could be future implications for parts of the food supply chain [32][33] Question: What are your thoughts on strategic M&A? - The company is open to exploring M&A opportunities that are accretive and provide access to new customers or adjacent industries [34][36] Question: Would you consider paying a one-time dividend? - Management expressed a preference for increasing regular dividends rather than issuing a one-time dividend, emphasizing long-term growth [39][40] Question: Do you have any crypto treasury plans? - The company has no plans to invest in cryptocurrency, citing a preference for stability and risk management [42]

Group 1 - ReposiTrak (NYSE: TRAK) is a technology leader in the food industry, aiding retailers and suppliers in brand protection and compliance with industry standards [1] - The company offers a unique SaaS solution that differentiates it from typical commodity software, focusing on the specific needs of the food sector [1] Group 2 - The investor specializes in the consumer products sector, emphasizing the identification of companies with strong brand recognition, solid financials, and growth potential [1] - There is a strong emphasis on understanding consumer trends and the industry, which aids in identifying profitable investment opportunities [1]

Core Insights - ReposiTrak, the largest food traceability and regulatory compliance network, has announced the addition of 21 suppliers to its Traceability Network, focusing on sauces, condiments, and snacks [1] Company Developments - The new suppliers will facilitate the exchange of FDA-required Key Data Elements (KDEs) for each Critical Tracking Event, enhancing the efficiency of food traceability [1]

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) ReposiTrak achieved strong FQ3 2025 results with double-digit revenue and net income growth, driven by cross-selling and an accelerating network effect - Growth was delivered across all business lines: traceability, compliance, and supply chain, driven by accelerated cross-selling[4](index=4&type=chunk) - The onboarding of traceability customers has shifted from primarily retailers to mostly suppliers, expanding the **Total Addressable Market (TAM)**[4](index=4&type=chunk) - Over **70%** of new traceability suppliers are now joining the ReposiTrak Traceability Network (RTN) using an automated wizard with little or no human intervention[4](index=4&type=chunk) - The 'network effect' is accelerating as larger suppliers bring smaller ingredient providers into the network, driving increased cross-selling opportunities[4](index=4&type=chunk) [Financial Results](index=1&type=section&id=Financial%20Results) This section details ReposiTrak's double-digit revenue growth and increased profitability for FQ3 and the first nine months of fiscal 2025 [Third Fiscal Quarter 2025 Results](index=1&type=section&id=Third%20Fiscal%20Quarter%202025%20Results) ReposiTrak reported FQ3 2025 total revenue of **$5.9 million**, a **16.3%** increase, with GAAP net income up **26.8%** to **$2.0 million** and diluted EPS of **$0.10** FQ3 2025 vs FQ3 2024 Financial Performance | Metric | FQ3 2025 | FQ3 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $5.9M | $5.1M | +16.3% | | Operating Income | $1.8M | $1.3M | +43% | | GAAP Net Income | $2.0M | $1.6M | +26.8% | | Net Income to Common Shareholders | $1.9M | $1.4M | +32.8% | | Diluted EPS | $0.10 | $0.08 | +25% | - **98%** of the revenue in the quarter was recurring[6](index=6&type=chunk) - The company finished the quarter with over **$28.1 million** in cash and no bank debt[6](index=6&type=chunk)[10](index=10&type=chunk) [Year-to-Date Fiscal 2025 Results](index=2&type=section&id=Year-to-Date%20Fiscal%202025%20Results) For the nine months ended March 31, 2025, total revenue grew **10.3%** to **$16.9 million**, with GAAP net income increasing **18.3%** to **$5.2 million** YTD FY2025 vs YTD FY2024 Financial Performance | Metric | Nine Months Ended 3/31/2025 | Nine Months Ended 3/31/2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $16.9M | $15.3M | +10.3% | | GAAP Net Income | $5.2M | $4.4M | +18.3% | | Net Income to Common Shareholders | $4.9M | $4.0M | +23.8% | | Diluted EPS | $0.26 | $0.21 | +23.8% | [Capital Management & Balance Sheet](index=2&type=section&id=Capital%20Management%20%26%20Balance%20Sheet) ReposiTrak continues to return capital to shareholders through preferred share redemptions and common stock dividends, maintaining a strong balance sheet with **$28.1 million** in cash - In FQ3 2025, the company redeemed **70,093** preferred shares for **$749,995**, anticipating full redemption within three years[8](index=8&type=chunk) - A quarterly dividend of **$0.01815** per share was declared on March 21, 2025[9](index=9&type=chunk) - Approximately **$7.9 million** remains under the common share buyback authorization, with no shares repurchased during the quarter[8](index=8&type=chunk) - The company's cash and cash equivalents increased by **11.9%** to **$28.1 million** at March 31, 2025, from **$25.2 million** at June 30, 2024[10](index=10&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents the unaudited consolidated financial statements for periods ended March 31, 2025, including Balance Sheets, Statements of Operations, and Cash Flows [Consolidated Condensed Balance Sheets](index=4&type=section&id=REPOSITRAK%2C%20INC.%20Consolidated%20Condensed%20Balance%20Sheets%20%28Unaudited%29) As of March 31, 2025, ReposiTrak reported total assets of **$54.8 million** and total liabilities of **$5.9 million**, with cash increasing to **$28.1 million** Key Balance Sheet Items | Account | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash | $28,134,321 | $25,153,862 | | Total Assets | $54,834,436 | $51,596,732 | | Total Liabilities | $5,913,370 | $4,742,114 | | Total Stockholders' Equity | $48,921,066 | $46,854,618 | [Consolidated Condensed Statements of Operations](index=5&type=section&id=REPOSITRAK%2C%20INC.%20Consolidated%20Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Unaudited%29) For the three months ended March 31, 2025, revenue was **$5.9 million** with net income of **$2.0 million**, while the nine-month period saw **$16.8 million** revenue and **$5.2 million** net income Quarterly Statement of Operations (Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $5,913,732 | $5,084,866 | | Income from operations | $1,808,853 | $1,262,343 | | Net income | $1,965,788 | $1,550,427 | | Diluted income per share | $0.10 | $0.08 | Year-to-Date Statement of Operations (Nine Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $16,845,782 | $15,270,729 | | Income from operations | $4,640,965 | $3,703,203 | | Net income | $5,182,023 | $4,380,124 | | Diluted income per share | $0.26 | $0.21 | [Consolidated Condensed Statements of Cash Flows](index=6&type=section&id=REPOSITRAK%2C%20INC.%20Consolidated%20Condensed%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) For the nine months ended March 31, 2025, net cash from operating activities was **$6.8 million**, with a **$3.0 million** increase in the cash balance Key Cash Flow Items (Nine Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,763,371 | $4,910,741 | | Net cash used in financing activities | $(3,789,227) | $(4,400,402) | | Net increase in cash | $2,980,459 | $461,801 | | Cash at end of period | $28,134,321 | $24,452,680 | [Other Information](index=2&type=section&id=Other%20Information) This section includes details for the investor conference call, a forward-looking statement disclaimer, and investor relations contact information - The company will host a conference call on Thursday, May 15, 2025, at **4:15 p.m. ET** to discuss the results[11](index=11&type=chunk)[12](index=12&type=chunk) - The report contains forward-looking statements subject to risks and uncertainties, cautioning readers against undue reliance[13](index=13&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for the third quarter of fiscal 2025 increased by 16% to $5.9 million compared to $5.1 million in the prior year [14] - GAAP net income rose from $1.6 million to $2 million, reflecting a 27% increase [16] - Earnings per share increased to $0.10 from $0.08, marking a 25% rise [17] - For the fiscal year to date, total revenue increased by 10.3% to $16.8 million [18] Business Line Data and Key Metrics Changes - Recurring revenue increased by 15% to $5.8 million, although the percentage of recurring revenue to total revenue declined from 99% to 98% due to accelerated customer onboarding [15] - Income from operations increased by 43% from $1.3 million to $1.8 million [16] - The company is experiencing growth across all lines of business, including traceability, compliance, and supply chain [11][28] Market Data and Key Metrics Changes - The FDA extended the enforcement deadline for compliance by 30 months, allowing more time for smaller distributors and producers to meet requirements [21] - Major retailers are prioritizing food safety and investing in food traceability, which is driving market adoption [23] Company Strategy and Development Direction - The company aims to grow annual revenue at a double-digit pace of 10% to 20% while increasing profitability even faster [6][28] - The strategy includes exceptional customer care, flawless execution, and balancing costs with opportunities [13][20] - The company is focused on cross-selling initiatives, leveraging a single technology platform to enhance operational efficiencies [25][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued revenue growth and cash generation, with expectations to return about 50% of annual cash from operations to shareholders [30] - The company is optimistic about its ability to grow revenue and earnings, with a focus on maintaining customer service quality [29][31] Other Important Information - The company has over $28 million in cash as of March 31, 2025, after returning more than $25 million to shareholders through dividends and stock buybacks [17][20] - The company plans to continue its capital allocation strategy, focusing on returning capital to shareholders while building cash reserves [20][59] Q&A Session Summary Question: Impact of tariffs on the business - Management indicated that tariffs introduce uncertainty but have not significantly impacted business operations [33][34] Question: Changes in cost structure and profitability - Management stated that while they will continue to invest in awareness and automation, the cost structure is not expected to change significantly [35][36] Question: Contribution margin on incremental revenue - Current contribution margin is approximately 50%, with a goal to increase it to 70-80% as onboarding costs flatten [40] Question: Growth of other initiatives and cross-selling - Management highlighted that cross-selling is becoming more effective, with growth across various business lines [41][49] Question: Capital allocation plans and M&A strategy - The company prefers building applications in-house rather than acquiring technologies, focusing on domain knowledge and customer acquisition [51][52]

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for ReposiTrak, Inc. as of March 31, 2025, show an increase in total assets to $54.8 million from $51.6 million at June 30, 2024, driven by a rise in cash [Consolidated Condensed Balance Sheets](index=3&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) As of March 31, 2025, total assets were $54.8 million, an increase from $51.6 million on June 30, 2024, primarily driven by an increase in cash to $28.1 million, while total liabilities rose to $5.9 million and total stockholders' equity increased to $48.9 million Consolidated Condensed Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $28,134,321 | $25,153,862 | | Total Current Assets | $32,752,375 | $29,300,167 | | Goodwill | $20,883,886 | $20,883,886 | | **Total Assets** | **$54,834,436** | **$51,596,732** | | **Liabilities & Equity** | | | | Total current liabilities | $5,434,176 | $4,543,142 | | Total liabilities | $5,913,370 | $4,742,114 | | **Total stockholders' equity** | **$48,921,066** | **$46,854,618** | [Consolidated Condensed Statements of Operations and Comprehensive Income](index=5&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Income) For the three months ended March 31, 2025, revenue increased 16.3% year-over-year to $5.9 million, and net income rose to $2.0 million, while for the nine-month period, revenue grew 10.3% to $16.8 million, with net income increasing to $5.2 million and diluted EPS reaching $0.26 Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Nine Months Ended Mar 31, 2025 | Nine Months Ended Mar 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $5,913,732 | $5,084,866 | $16,845,782 | $15,270,729 | | Income from operations | $1,808,853 | $1,262,343 | $4,640,965 | $3,703,203 | | Net income | $1,965,788 | $1,550,427 | $5,182,023 | $4,380,124 | | Diluted income per share | $0.10 | $0.08 | $0.26 | $0.21 | [Consolidated Condensed Statements of Cash Flows](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) For the nine months ended March 31, 2025, net cash provided by operating activities was $6.8 million, a 38% increase from the prior year, while net cash used in financing activities decreased to $3.8 million, resulting in a $3.0 million increase in cash and cash equivalents to $28.1 million Cash Flow Highlights (Unaudited, Nine Months Ended March 31) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,763,371 | $4,910,741 | | Net cash provided by (used in) investing activities | $6,315 | ($48,538) | | Net cash used in financing activities | ($3,789,227) | ($4,400,402) | | **Net increase in cash** | **$2,980,459** | **$461,801** | | **Cash at end of period** | **$28,134,321** | **$24,452,680** | [Notes to Consolidated Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) The notes detail the company's SaaS business model, key accounting policies including revenue recognition, equity section specifics like the share repurchase program and preferred stock redemption plan, and related party transactions - The company operates a B2B SaaS platform with three main service suites: Compliance Management, Traceability Network (RTN), and Supply Chain Solutions, primarily serving food retailers, wholesalers, and their suppliers in a hub-and-spoke model[18](index=18&type=chunk)[21](index=21&type=chunk)[24](index=24&type=chunk) - On December 21, 2023, the company changed its corporate name from Park City Group, Inc. to ReposiTrak, Inc[22](index=22&type=chunk) Disaggregation of Revenue (Nine Months Ended March 31) | Revenue Type | 2025 | 2024 | | :--- | :--- | :--- | | Recurring revenue – subscription and support | $16,547,879 | $15,250,302 | | Non-recurring revenue – setup and training | $297,903 | $20,427 | | **Total revenue** | **$16,845,782** | **$15,270,729** | - The company is executing a three-year plan to redeem all Series B and B-1 Preferred Stock, which began in August 2023, with **$4.3 million** remaining available for future redemptions as of March 31, 2025[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - The Board has authorized a total of **$21.0 million** for the Share Repurchase Program, with **$7.9 million** remaining available for repurchases as of March 31, 2025[62](index=62&type=chunk)[63](index=63&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes revenue growth to increased demand for its compliance, supply chain, and traceability solutions, driven by regulatory requirements like FSMA 204, maintaining a strong liquidity position with $28.1 million in cash and no bank debt as of March 31, 2025 [Recent Developments](index=22&type=section&id=Recent%20Developments) The company declared a quarterly cash dividend in March 2025, while the FDA's FSMA 204, despite an extended compliance deadline to July 2028, is driving significant demand for the ReposiTrak Traceability Network due to accelerated retailer requirements - On March 21, 2025, the Board declared a quarterly cash dividend of **$0.01815 per share**[77](index=77&type=chunk) - The compliance deadline for FSMA 204 was extended to **July 20, 2028**, but major retailers are accelerating timelines, with some requiring compliance by **June 30, 2025**, for all foods, not just those on the FDA's Food Traceability List (FTL)[81](index=81&type=chunk)[83](index=83&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) For the three months ended March 31, 2025, revenue increased 16% year-over-year to $5.9 million, driven by recurring subscription growth, with operating expenses rising modestly, while for the nine-month period, revenue grew 10% to $16.8 million, reflecting operational leverage Comparison of Three Months Ended March 31, 2025 to 2024 | Item | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $5,913,732 | $5,084,866 | $828,866 | 16% | | Cost of services | $911,693 | $831,912 | $79,781 | 10% | | Sales and marketing | $1,408,861 | $1,349,838 | $59,023 | 4% | | General and administrative | $1,455,602 | $1,352,197 | $103,405 | 8% | Comparison of Nine Months Ended March 31, 2025 to 2024 | Item | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $16,845,782 | $15,270,729 | $1,575,053 | 10% | | Cost of services | $2,773,468 | $2,571,533 | $201,935 | 8% | | Sales and marketing | $4,392,997 | $4,119,716 | $273,281 | 7% | | General and administrative | $4,124,706 | $3,978,798 | $145,908 | 4% | [Financial Position, Liquidity and Capital Resources](index=28&type=section&id=Financial%20Position,%20Liquidity%20and%20Capital%20Resources) The company's liquidity remains strong, with cash and equivalents increasing by 12% to $28.1 million at March 31, 2025, working capital improving to $27.3 million, and cash from operations growing 38% to $6.8 million, leading to the termination of its revolving credit facility and zero bank debt - Cash and cash equivalents increased by **12%** to **$28,134,321** as of March 31, 2025, from **$25,153,862** at June 30, 2024[103](index=103&type=chunk)[104](index=104&type=chunk) - Net cash provided by operating activities for the nine months ended March 31, 2025, increased **38%** to **$6,763,371**, primarily due to higher deferred revenue and collections from traceability customers[105](index=105&type=chunk) - Working capital increased by **$2.6 million** to **$27,318,199** at March 31, 2025, from **$24,757,025** at June 30, 2024[109](index=109&type=chunk) - On March 15, 2024, the company chose not to renew its **$10.0 million** Revolving Credit Agreement due to its strong financial position and had **zero bank debt** at March 31, 2025[114](index=114&type=chunk)[111](index=111&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk is primarily related to interest rate changes affecting its short-term investments, with no foreign currency exchange risk as business is conducted principally in the U.S., and management does not expect material effects on net income from interest rate changes - The company's financial results are not affected by foreign currency exchange rates as business is conducted principally in the United States[131](index=131&type=chunk) - Interest rate risk is related to investments in short-term financial instruments, with cash totaling **$28.1 million** at a weighted average interest rate of **4.84%** as of March 31, 2025[132](index=132&type=chunk)[134](index=134&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2025, concluding they are effective, with no material changes to internal control over financial reporting identified during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[135](index=135&type=chunk) - No material changes to the company's internal control over financial reporting were identified during the quarter[135](index=135&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any pending or threatened material legal proceedings that would have a material adverse effect on its business or financial condition - There are no pending or threatened material legal proceedings against the company[137](index=137&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) There have been no new risk factors identified beyond those disclosed in the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2024 - No additional risk factors have been identified since the last Annual Report on Form 10-K[138](index=138&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - None[139](index=139&type=chunk) [Exhibits](index=34&type=section&id=Item%206.%20Exhibits) The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act of 2002, along with Inline XBRL data files - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents[142](index=142&type=chunk)

Financial Data and Key Metrics Changes - Revenue grew 16% in the third fiscal quarter to $5,900,000 compared to $5,100,000 in the prior year [12] - GAAP net income increased from $1,600,000 to $2,000,000, up 27% [14] - Earnings per share basic and diluted was $0.10 per share, compared to $0.08 last year [15] - Total revenue for the fiscal year to date increased 10.3% to $16,800,000 versus $15,300,000 [16] Business Line Data and Key Metrics Changes - Recurring revenue increased 15% to $5,800,000, although the percentage of recurring to total revenue declined from 99% to 98% due to accelerated customer onboarding [13] - Income from operations increased 43% from $1,300,000 to $1,800,000 [14] - The company is experiencing growth across all lines of business, including traceability, compliance, and supply chain [9] Market Data and Key Metrics Changes - The FDA extended the enforcement deadline for compliance by thirty months, allowing more time for smaller distributors and producers to meet requirements [20] - Leading retailers are prioritizing food safety and investing in food traceability, which is driving market adoption [21] Company Strategy and Development Direction - The company aims to grow annual revenue at a double-digit pace between 10% to 20% and profitability even faster [5] - The strategy includes exceptional customer care, flawless execution, and increasing recurring revenue while balancing costs with opportunities [12] - The company is focused on cross-selling initiatives, leveraging a single technology platform to enhance operational efficiencies [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued revenue growth and the ability to convert revenue into cash effectively [28] - The company anticipates returning about 50% of annual cash generation to shareholders through dividends and stock repurchases [28] - Management acknowledged the need for ongoing work to balance opportunities with customer service [28] Other Important Information - The company has over $28,000,000 in cash as of March 31, 2025, net of capital returned to shareholders [15] - The company has redeemed $4,600,000 in preferred stock with approximately $4,200,000 remaining [18] Q&A Session Questions and Answers Question: What is the impact of tariffs on the business? - Management indicated that tariffs introduce uncertainty but have not significantly impacted business operations [32][33] Question: How should changes in the cost structure be viewed? - Management stated that while they will continue to invest in awareness and automation, they do not foresee significant changes in the cost structure [34][36] Question: Can you elaborate on the ability to cross-sell products? - Management highlighted that the single platform allows for significant operating leverage and improved cross-selling capabilities, leading to growth across various business lines [47][48] Question: What are the capital allocation plans regarding stock buybacks and M&A? - Management expressed a preference for building applications in-house rather than acquiring technologies, focusing on domain knowledge and customer acquisition [49][51]

[Earnings Release Overview](index=1&type=section&id=Earnings%20Release%20Overview) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) ReposiTrak reported strong Q2 2025 results with $5.5 million revenue and $0.08 EPS, driven by a 70% increase in deferred revenue FQ2 2025 Key Financial Metrics | Metric | FQ2 2025 | FQ2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $5.5 million | $5.1 million | +7% | | Operating Income | $1.4 million | $1.2 million | +9% | | GAAP Net Income | $1.6 million | $1.5 million | +7% | | Net Income to Common Shareholders | $1.5 million | $1.3 million | +12% | | Diluted EPS | $0.08 | $0.07 | +14.3% | | Cash Balance (End of Quarter) | $28.0 million | N/A | - | - Deferred revenue increased by **70%**, reflecting substantial growth in contracted and onboarded customers, suggesting strong incremental revenue recognition over the next twelve months[2](index=2&type=chunk)[4](index=4&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Randall K. Fields highlighted accelerating RTN supplier onboarding due to FSMA 204, expanding market demand, and efficient revenue conversion into profitability and record cash - The pace of supplier onboarding is accelerating ahead of the January 2026 FSMA 204 deadline, driving demand for the ReposiTrak Traceability Network (RTN)[4](index=4&type=chunk) - Retailers are pushing for traceability on all food items, significantly exceeding the scope of FDA mandates, which expands the company's addressable market[4](index=4&type=chunk) - The company is confident in its ability to generate **double-digit top-line growth** for the remainder of the fiscal year and into fiscal 2026, supported by a strong deferred revenue base[4](index=4&type=chunk) - ReposiTrak is effectively converting revenue growth into higher profitability and cash generation, achieving record cash balances[4](index=4&type=chunk) [Financial Performance Analysis](index=1&type=section&id=Financial%20Performance%20Analysis) [Second Fiscal Quarter Financial Results](index=1&type=section&id=Second%20Fiscal%20Quarter%20Financial%20Results) ReposiTrak reported Q2 2025 revenue up 7.1% to $5.5 million and net income up 11.6% to $1.5 million ($0.08 EPS), despite increased sales and marketing FQ2 2025 vs FQ2 2024 Performance (Three Months Ended Dec 31) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $5,490,908 | $5,125,751 | +7.1% | | Total Operating Expense | $4,138,857 | $3,884,900 | +6.5% | | Income from Operations | $1,352,051 | $1,240,851 | +9.0% | | Net Income | $1,551,080 | $1,451,149 | +6.9% | | Diluted EPS | $0.08 | $0.07 | +14.3% | - Sales and marketing expenses increased by **15.1%** year-over-year, attributed to strategic investments in the Traceability solution[5](index=5&type=chunk) [Year-to-Date Financial Results](index=2&type=section&id=Year-to-Date%20Financial%20Results) Year-to-date revenue increased 7.3% to $10.9 million, with GAAP net income rising 13.7% to $3.2 million and diluted EPS reaching $0.16 YTD 2025 vs YTD 2024 Performance (Six Months Ended Dec 31) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $10,932,050 | $10,185,863 | +7.3% | | Total Operating Expense | $8,099,938 | $7,745,003 | +4.6% | | GAAP Net Income | $3,216,235 | $2,829,697 | +13.7% | | Diluted EPS | $0.16 | $0.13 | +23.1% | [Capital Management and Financial Position](index=2&type=section&id=Capital%20Management%20and%20Financial%20Position) [Return of Capital](index=2&type=section&id=Return%20of%20Capital) The company continued its capital return program in FQ2 2025, redeeming $750k preferred shares and repurchasing $100k common stock, with $7.9 million remaining for buybacks - In FQ2 2025, the company redeemed **70,093 preferred shares** for a total of **$749,995**[8](index=8&type=chunk) - The company repurchased **4,074 shares of common stock** for a total of **$100,017**[8](index=8&type=chunk) - There is approximately **$7.9 million** remaining under the **$21 million** total common share buyback authorization[8](index=8&type=chunk) [Dividends](index=2&type=section&id=Dividends) The Board declared a quarterly cash dividend of $0.01815 per share, annualizing to $0.0726, payable around February 13, 2025 - A quarterly cash dividend of **$0.01815 per share** was declared[9](index=9&type=chunk) [Balance Sheet and Liquidity](index=2&type=section&id=Balance%20Sheet%20and%20Liquidity) ReposiTrak maintained a strong balance sheet with over $28.0 million in cash as of December 31, 2024, an 11.1% increase, and no bank debt - Cash and cash equivalents increased by **11.1%** to **$28.0 million** at December 31, 2024, from **$25.2 million** at June 30, 2024[10](index=10&type=chunk) - The company has no bank debt[10](index=10&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) [Consolidated Condensed Balance Sheets](index=4&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) Total assets grew to $54.7 million as of December 31, 2024, with liabilities rising to $6.8 million due to a 70.4% increase in deferred revenue, and equity at $47.9 million Balance Sheet Summary (Unaudited) | Account | Dec 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $28,041,398 | $25,153,862 | | Total Current Assets | $32,394,539 | $29,300,167 | | Total Assets | $54,736,809 | $51,596,732 | | **Liabilities & Equity** | | | | Contract liability – deferred revenue | $4,160,207 | $2,441,234 | | Total Liabilities | $6,802,055 | $4,742,114 | | Total Stockholders' Equity | $47,934,754 | $46,854,618 | | Total Liabilities and Equity | $54,736,809 | $51,596,732 | [Consolidated Condensed Statements of Operations](index=5&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) The statement of operations shows quarterly revenue up 7.1% and six-month revenue up 7.3%, with net income at $1.55 million and $3.22 million respectively Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2024 | | :--- | :--- | :--- | | Revenue | $5,490,908 | $10,932,050 | | Income from Operations | $1,352,051 | $2,832,112 | | Net Income | $1,551,080 | $3,216,235 | | Net Income to Common Shareholders | $1,455,464 | $3,012,737 | | Diluted Income per Share | $0.08 | $0.16 | [Consolidated Condensed Statements of Cash Flows](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Net cash from operations more than doubled to $5.3 million for the six months ended December 31, 2024, driven by deferred revenue, resulting in a $2.9 million cash increase Cash Flow Summary (Unaudited, Six Months Ended Dec 31) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $5,328,630 | $2,451,947 | | Net cash provided by (used in) investing activities | $18,869 | $(16,427) | | Net cash used in financing activities | $(2,459,963) | $(3,173,328) | | **Net increase (decrease) in cash** | **$2,887,536** | **$(737,808)** | | Cash at end of period | $28,041,398 | $23,253,071 | [Additional Information](index=2&type=section&id=Additional%20Information) [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) A conference call and webcast to discuss financial results will be held on February 12, 2025, at 4:15 p.m. ET, with replay information available - Conference Call Date: **Wednesday, February 12, 2025**[12](index=12&type=chunk) - Conference Call Time: **4:15 p.m. ET (1:15 p.m. PT)**[12](index=12&type=chunk) - A replay will be available until **March 12, 2025**[12](index=12&type=chunk) [About ReposiTrak & Forward-Looking Statements](index=3&type=section&id=About%20ReposiTrak%20%26%20Forward-Looking%20Statements) ReposiTrak offers cloud-based solutions for food traceability, compliance, and supply chain management, with the report including a standard forward-looking statement disclaimer - ReposiTrak's business consists of three product families: **food traceability, compliance and risk management, and supply chain solutions**[13](index=13&type=chunk) - The document includes forward-looking statements, and readers are cautioned not to place undue reliance on them as actual results could differ materially[14](index=14&type=chunk)

Financial Data and Key Metrics Changes - For Q2 fiscal 2025, total revenue increased by 7% to $5.5 million compared to $5.1 million in the previous year [19] - Recurring revenue rose by 5% to $5.4 million [19] - GAAP net income increased from $1.5 million to $1.6 million, a 7% rise [22] - Earnings per share increased by 14% from $0.07 to $0.08 [23] - Cash on the balance sheet reached $28 million, a 12% increase from June 30, 2024 [26] Business Line Data and Key Metrics Changes - All business lines, including traceability, compliance, and supply chain, are experiencing growth [10] - Deferred revenue grew by 70% from $2.4 million to $4.2 million since June 2024, indicating strong future revenue recognition [12] - Contribution margin is currently at 64%, with a goal to reach 80% [15] Market Data and Key Metrics Changes - The grocery industry is increasingly adopting end-to-end traceability, driven by both FDA mandates and competitive market forces [28] - Major retailers like Kroger, Albertsons, Walmart, and Target are implementing traceability ahead of FDA deadlines [29][37] Company Strategy and Development Direction - The company aims to grow recurring revenue, increase profitability, and return capital to shareholders through dividends and stock buybacks [9] - Focus on providing superior solutions to customers while maintaining a simple operational philosophy [18] - Anticipates double-digit revenue growth in the second half of the fiscal year, targeting a full-year growth of 10% to 20% [33] Management's Comments on Operating Environment and Future Outlook - Management is confident about the future, expecting a smooth onboarding process for customers due to potential delays in FDA enforcement [31][43] - The company is positioned as a leading solution provider for traceability, with a growing base of recurring and deferred revenue [32] - Management believes that the focus on food safety will benefit the company, as it aligns with their core business [79] Other Important Information - The company has no bank debt and has redeemed $1.5 million in preferred shares while increasing dividends [26][81] - The company’s five-year CAGR for net income is 30% and for earnings per share is 43% [51] Q&A Session Summary Question: Update on customer onboarding speed - Management noted significant progress with the onboarding process through their automation platform, the Wizard, expecting a higher percentage of users to onboard without assistance in the future [55] Question: Fixed vs. variable costs - Fixed costs are approximately $12 million, with minimal incremental costs associated with additional revenue [59][60] Question: Contribution margin of business lines - All three business lines (supply chain, compliance, traceability) generate similar contribution margins, with no rapid rise in expenses expected as revenue increases [62][63] Question: Managing current egg shortages - Management indicated that the egg shortage is driven by uncontrollable factors like bird flu, and there is little they can do to assist retailers in this situation [71][72] Question: Implications of potential tariffs - The company can help retailers navigate tariffs by improving supply chain forecasting and ordering processes [75] Question: Thoughts on RFK Junior's focus on food safety - Management believes that increased attention to food safety will be beneficial for the company, as it aligns with their core mission [79] Question: Capital allocation strategy - The company continues to focus on a balanced capital allocation strategy, including dividends, stock buybacks, and maintaining cash reserves [82] Question: AI-related implications for the company - Management stated that AI has been part of their operations for years and will continue to be integrated without significantly impacting capital expenditures [85] Question: Working with restaurants - Management is close to onboarding food distributors for the restaurant sector but remains less optimistic about this segment compared to grocery [88]