Revenue Performance - Revenues for Q2 2024 were $4,641,593, representing a year-over-year growth of 9.0%[81] - Revenues for the six-month period 2024 totaled $9,148,677, reflecting an 8.3% increase compared to the same period in 2023[83] - Revenues increased by $383,163, or 9.0%, in Q2 2024 and by $703,414, or 8.3%, in the six-month period 2024, driven by software as a service and professional services[92] - Software as a Service revenues rose by $122,673, or 9.6%, in Q2 2024 and by $289,394, or 11.5%, in the six-month period 2024, primarily due to new cloud-based solution sales[93] - Professional services revenues increased by $364,042, or 15.8%, in Q2 2024 and by $544,431, or 11.8%, in the six-month period 2024, with a strong pipeline in Document Conversion[94] Operating Expenses - Operating expenses (excluding cost of revenues) for the six-month period 2024 were $5,764,997, an increase of 23.8% year over year[83] - Operating expenses totaled $2,830,873 in Q2 2024, an increase from $2,294,045 in Q2 2023, with general and administrative expenses rising by $463,857[106] - General and administrative expenses increased by $463,857, or 29.7%, in Q2 2024 compared to Q2 2023, and by $1,037,739, or 33.3%, in the six-month period 2024 compared to 2023[107] - Sales and marketing expenses rose by $38,136, or 7.7%, in Q2 2024 compared to Q2 2023, and increased by $246, or 0.0%, in the six-month period 2024 over 2023[108] - Depreciation and amortization increased by $34,835, or 14.5%, in Q2 2024 compared to Q2 2023, and by $71,127, or 15.2%, in the six-month period 2024 compared to 2023[109] Profitability - Net loss for the six-month period 2024 was $99,664, compared to a net income of $248,297 for the same period in 2023[85] - Gross profit margin improved to 64.7% in Q2 2024 from 60.8% in Q2 2023 and to 64.5% in the six-month period 2024 from 62.0% in the six-month period 2023[102] - Professional services gross margins increased to 49.5% in Q2 2024 from 43.1% in Q2 2023, reflecting stabilization of wages and price increases[104] Cash Flow and Financing - Operating cash generated in Q2 2024 was $1,107,089, compared to cash used of $125,274 in Q2 2023[82] - Net cash provided by operating activities was $1,718,855 in the six-month period 2024, compared to a net cash used of $299,631 in the same period of 2023[118] - Net cash used in investing activities was $398,766 in the six-month period 2024, compared to $291,101 in the same period of 2023[119] - Net cash used by financing activities was $825,000 in repayment of notes payable during the six-month period 2024, compared to $700,000 in earnout liability payments in the same period of 2023[120] - As of June 30, 2024, the company had approximately $1.7 million in cash and cash equivalents and a net working capital of $0.5 million[112] Employee and Market Outlook - As of June 30, 2024, the company employed 189 individuals, an increase from 170 employees a year prior[85] - The company anticipates continued growth driven by the demand for SaaS solutions amid economic recovery[86] - The inflationary environment has led to increased labor costs, which the company has mitigated through customer renewal rate adjustments[86] - The company anticipates potential pricing renegotiations with its largest customer, which may adversely impact future professional services revenues[94] - The company secured a renewal contract with its largest customer, with an estimated net rate increase of approximately 21% effective from October 1, 2023[113] Debt and Indebtedness - Outstanding long-term indebtedness as of June 30, 2024, consisted of the 2022 Notes with an aggregate outstanding principal balance of $2,139,500[116]
Intellinetics(INLX) - 2024 Q2 - Quarterly Report