Financial Performance - The Company reported a net loss from continuing operations of $1,226,000 for the three months ended September 30, 2024, compared to a net loss of $1,219,000 for the same period in 2023[199]. - EBITDA from continuing operations was $3,085,000 for the three months ended September 30, 2024, an increase from $1,823,000 in the same period of 2023[199]. - Adjusted EBITDA from continuing operations reached $4,846,000 for the three months ended September 30, 2024, compared to $2,244,000 for the same period in 2023[199]. - For the three months ended September 30, 2024, the company's net revenue decreased by $2.1 million, or 5.6%, to $35.4 million compared to $37.5 million for the same period in 2023[213]. - The net loss from continuing operations for the three months ended September 30, 2024, was $1.2 million, compared to a net loss of $1.2 million for the same period in 2023[212]. - For the nine months ended September 30, 2024, net revenue decreased by $9.4 million, or 8.1%, to $107.0 million compared to $116.4 million for the same period in 2023[232]. - Bills & Payments segment net revenue was $75.9 million for the nine months ended September 30, 2024, a decline of $7.0 million or 8.4% from $82.9 million in the same period of 2023[233]. - Technology segment net revenue decreased by $2.4 million or 7.2% to $31.1 million for the nine months ended September 30, 2024, down from $33.5 million in 2023[236]. Revenue Sources - The primary source of revenue is from transactions processed in the Bills & Payments segment, which includes automation of accounts payable and receivable processes[185]. - The Bills & Payments segment contributed 69.4% of total net revenue, while the Technology segment contributed 30.6% for the three months ended September 30, 2024[214]. - The Technology segment focuses on sales of recurring and perpetual software licenses, contributing to the Company's diversified revenue streams[192]. Operational Metrics - The Company serves over 2,000 clients across multiple industries and geographies, contributing to its revenue growth[181]. - As of September 30, 2024, the Company employed approximately 1,500 employees across 16 countries, enhancing its operational capabilities[186]. - The cost of revenue decreased by $4.4 million, or 15.6%, to $23.8 million for the three months ended September 30, 2024, compared to $28.2 million for the same period in 2023[216]. - Total cost of revenue decreased by $6.8 million or 7.9% for the nine months ended September 30, 2024, compared to the same period in 2023[237]. - Selling, general and administrative expenses slightly decreased by $28 thousand, or 0.4%, to $6.8 million for the three months ended September 30, 2024[220]. - Selling, General and Administrative (SG&A) expenses decreased by $1.6 million or 7.8% to $19.8 million for the nine months ended September 30, 2024[241]. Debt and Financing - As of September 30, 2024, total debt increased by $14.8 million primarily due to borrowings under the 2024 Senior Credit Facilities[250]. - Interest expense increased to $1.8 million for the three months ended September 30, 2024, compared to $1.2 million for the same period in 2023, primarily due to higher pension interest costs[225]. - Interest expense increased to $4.7 million for the nine months ended September 30, 2024, compared to $3.6 million in the same period of 2023[244]. - The Company incurred $1.6 million in debt issuance costs related to the 2024 Facilities Agreement[280]. - The Company has drawn £12.0 million under the 2024 Revolving Credit Facility, with an outstanding balance of $15.8 million as of September 30, 2024[288]. Strategic Initiatives - The Company anticipates future growth opportunities driven by digital transformation initiatives and expanding its service offerings[181]. - The Business Combination completed on November 30, 2023, has positioned the Company for enhanced market presence and operational efficiency[187]. - The Company approved a restructuring plan in Q4 2023 to realign its business and strategic priorities, which includes rightsizing its workforce[291]. - The Company may explore strategic transactions, including joint ventures and acquisitions, which may require additional financing[294]. Market and Risk Assessment - The Company maintained a full valuation allowance on net deferred tax assets for its U.S. federal taxes, indicating uncertainty regarding the utilization of deferred assets[211]. - The Company reported foreign exchange losses of $0.7 million for the three months ended September 30, 2024, compared to foreign exchange gains of $0.5 million for the same period in 2023[227]. - Foreign exchange losses were $2.0 million for the nine months ended September 30, 2024, compared to $0.4 million in the same period in 2023[246]. - There have been no material changes to the Company's market risk during the nine months ended September 30, 2024[298]. - The Company believes that the current assumptions, judgments, and estimates used in its financial statements are appropriate, although actual results may differ under different conditions[295]. Compliance and Regulations - The Company is classified as an "emerging growth company" and has opted for the extended transition period for new or revised financial accounting standards[297]. - The UK Subsidiary was in compliance with all affirmative and negative covenants under the 2019 Credit Agreement as of December 31, 2023[275]. - The 2024 Facilities Agreement requires maintaining a consolidated total leverage ratio of not greater than 2.50 to 1.00, with step-downs to 2.25 to 1.00 starting January 1, 2025[281].
CF ACQUISITION(CFFE) - 2024 Q3 - Quarterly Report