Financial Performance - Total revenue decreased by $616,000, or 8%, to $6,953,000 for the three months ended September 30, 2024, compared to $7,569,000 for the same period in 2023[109] - Communications revenue decreased by $597,000, or 10%, to $5,481,000 for the three months ended September 30, 2024, compared to $6,078,000 for the same period in 2023[110] - Compliance revenue decreased by $19,000, or 1%, and $2,541,000, or 35%, during the three and nine months ended September 30, 2024, respectively[111] - Operating income was $156,000 for the three months ended September 30, 2024, compared to $593,000 for the same period in 2023[105] - Net income (loss) was $(466,000) for the three months ended September 30, 2024, compared to $273,000 for the same period in 2023[105] - For the three months ended September 30, 2024, the company reported a net loss of $466,000, or $(0.12) per diluted share, compared to a net income of $273,000, or $0.07 per diluted share for the same period in 2023[136] - For the nine months ended September 30, 2024, the company reported a net loss of $598,000, or $(0.16) per diluted share, compared to a net income of $1,492,000, or $0.39 per diluted share for the same period in 2023[136] - Non-GAAP net income for the nine months ended September 30, 2024, was $1,809,000, or $0.47 per diluted share, compared to $4,314,000, or $1.13 per diluted share for the same period in 2023[136] Expenses and Margins - Gross margin percentage decreased to 74% and 75% for the three and nine months ended September 30, 2024, respectively, compared to 76% and 77% during the same periods in 2023[113] - General and administrative expenses were $2,008,000 during the three months ended September 30, 2024, a decrease of $25,000, or 1%, compared to the same period in 2023[116] - Sales and marketing expenses were $1,618,000 for the three months ended September 30, 2024, a decrease of $220,000, or 12%, compared to the same period in 2023[118] - Total cost of revenue decreased by $16,000, or 1%, and $496,000, or 8%, during the three and nine months ended September 30, 2024, respectively[113] - Product development expenses increased by $90,000 (15%) to $671,000 for the three months ended September 30, 2024, and by $157,000 (8%) to $2,044,000 for the nine months ended September 30, 2024, compared to the same periods in 2023[120] - As a percentage of revenue, product development expenses were 10% and 9% for the three and nine months ended September 30, 2024, respectively, up from 8% in the same periods of 2023[121] - Interest expense decreased to $280,000 for the three months and $903,000 for the nine months ended September 30, 2024, compared to $368,000 and $1,080,000 in the same periods of 2023[122] Cash Flow and Financial Position - As of September 30, 2024, the company had $4,086,000 in cash and cash equivalents, with current liabilities totaling $12,593,000, resulting in a current liabilities exceeding current assets by $2,560,000[125] - Free cash flow for the three months ended September 30, 2024, was $1,358,000, compared to $110,000 in the same period of 2023[132] - Adjusted free cash flow for the nine months ended September 30, 2024, was $1,860,000, down from $2,638,000 in the same period of 2023[132] - Adjusted EBITDA for the three months ended September 30, 2024, was $1,369,000, compared to $1,756,000 in the same period of 2023[134] - Adjusted EBITDA for the nine months ended September 30, 2024, was $3,585,000, down from $6,663,000 in the same period of 2023[135] Strategic Initiatives - The company aims to increase the Communications portion of its business relative to Compliance, indicating a strategic shift in focus[79] - The company plans to continue focusing on expanding its Communications products and aligning sales and marketing teams to enhance its offerings[141] - The company aims to invest in technology advancements and evaluate acquisitions as part of its strategic initiatives for sustainable growth[141] - The company believes that the transition to a platform subscription model is key for long-term sustainable growth[141] Market and Economic Factors - Market factors such as global inflation and geopolitical conflicts have contributed to economic uncertainty, but the company believes demand for its platforms remains stable[139] - The company acknowledges potential risks related to goodwill and intangible asset write-downs if stock prices decline or demand for its services does not stabilize[140] Product and Service Developments - Issuer Direct Corporation reported significant growth in its Communications segment, with revenues increasing year-over-year, driven by enhancements in the ACCESSWIRE platform[82] - The company acquired Newswire on November 1, 2022, and fully integrated its distribution network into ACCESSWIRE by early 2023, expanding its service offerings[83] - The Media Suite subscription add-on was launched, providing communication professionals with tools for media pitching, monitoring, and database access, enhancing customer engagement[86] - The webcasting platform allows for live and on-demand streaming of events, with an estimated 5,000 companies in North America conducting earnings events each quarter[94] - Significant upgrades to the investor relations website were released in 2023, including ADA and AODA compliance, which require a recurring annual subscription[97] - The Compliance segment includes a disclosure software module designed for companies to manage SEC filings, generating revenue from both software and services[99] - The whistleblower hotline, a supported product of NYSE offerings, is being upgraded to enhance incident response and management processes[100] - The stock transfer module provides real-time information about shareholders and stock ledgers, focusing on subscription sales to improve efficiency[101] - Partnerships with stock exchanges are expected to enhance brand exposure and revenue potential in targeted customer segments[81] Other Financial Information - As of September 30, 2024, the deferred revenue balance was $5,308,000, a decrease of 2% from $5,412,000 as of December 31, 2023[112] - The company experienced a loss of $343,000 related to the change in fair value of its interest rate swap for the three months ended September 30, 2024[137] - The company has no off-balance sheet arrangements that could materially affect its financial condition[143]
Issuer Direct (ISDR) - 2024 Q3 - Quarterly Report