Intellinetics(INLX) - 2025 Q1 - Quarterly Results

Financial & Operational Highlights 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] - 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][7] Management Commentary 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] - Recent hires include a Sales Engineer, Senior Solutions Consultant, and a new VP of Sales to develop and direct the growing sales team[4] - Professional services revenue is expected to rebound, with a significant increase in the order backlog indicating a return to historical scanning levels[5] - The core long-term strategy is to grow the SaaS business by penetrating the customer bases of strategic ERP partners[6] Financial Performance Analysis 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] 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 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] - 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] Non-GAAP Financial Measures 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] Condensed Consolidated Financial Statements 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 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 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 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 |