Usio(US:USIO)2025-05-14 20:01Revenue Growth - In Q1 2025, revenues increased by 5% to $22.0 million compared to $21.0 million in Q1 2024, driven by strong growth in ACH and complementary services [119]. - Total revenue for the quarter ended March 31, 2025, increased by 5% to $22.0 million, compared to $21.0 million for the same period in 2024, driven primarily by a 30% growth in ACH and complementary services [155]. - The company reported revenues of $22,009,050 for Q1 2025, compared to $20,970,386 in Q1 2024 [151]. Transaction Growth - Credit card transactions processed increased by 65% in Q1 2025 compared to Q1 2024, with credit card dollar volume up by 17% [126]. - ACH transaction counts rose by 36% in Q1 2025 compared to Q1 2024, with electronic check dollars processed increasing by 42% [127]. - ACH and complementary services revenue growth was attributed to a 42% increase in ACH check dollar volume, a 36% increase in transactions, and a 24% increase in returned check transactions [155]. Financial Performance - Adjusted EBITDA for Q1 2025 was $0.7 million, down from $0.8 million in the same period last year, with Adjusted EBITDA margins at 3.0% compared to 3.8% [149]. - Gross profit decreased by 1% to $4.8 million for the quarter ended March 31, 2025, with a gross profit percentage of revenue at 21.9%, down from 23.1% in the prior year [159]. - Net loss for the quarter ended March 31, 2025, was $0.2 million, an improvement from a net loss of $0.3 million for the same period in the prior year [166]. Cash Flow - Cash provided by operations was $1.4 million for the three months ended March 31, 2025, compared to $0.1 million for the same period in 2024, reflecting improved net income and reduced depreciation expense [176]. - Cash used in investing activities increased to $0.3 million for the three months ended March 31, 2025, primarily due to capital expenditures associated with software development and other investments [177]. - Cash provided by financing activities was $3.6 million for the three months ended March 31, 2025, compared to cash used of $6.8 million in the same period in 2024, driven by an increase in assets held for customers [178]. Expenses Management - The company has a focus on managing selling, general, and administrative expenses, maintaining them at $4.1 million, flat compared to the prior year [120]. - Cost of services increased by 7% to $17.2 million for the quarter ended March 31, 2025, due to increased revenues driving similar increases in processing and transactional expenses [157]. - Stock-based compensation expenses decreased to $0.4 million for the quarter ended March 31, 2025, down from $0.5 million in the prior year [160]. Strategic Initiatives - The company adopted a "One Usio" strategy to unify brand and sales approach, enhancing client onboarding and customer management [106]. - The company aims to assimilate current and future acquisitions to enhance its suite of payment technologies, with past acquisitions contributing significantly to current revenues [123]. - The company continues to invest in technology for faster payment methods, including expansion into Real Time Payments (RTP) in 2023 [105]. Market Position and Risks - The company holds NACHA certification for Third-Party Senders, being one of only nine companies to do so, enhancing its credibility in the market [108]. - Concerns about a potential recession increased during Q1 2025 due to geopolitical risks and changes in international trade policies [132]. - The Federal Reserve's interest rate cuts in late 2024 have led to lower interest earnings on cash accounts, impacting future income [131]. Prepaid Card Performance - The company’s prepaid card offerings include customizable options for expense management and disbursements, supporting various payment methods [113]. - Prepaid card load volumes decreased by 15% in Q1 2025 compared to Q1 2024, while transaction counts increased by 5% [128]. Processing Losses - The reserve for processing losses was $541,521 as of March 31, 2025, down from $897,116 at December 31, 2024 [138]. - Interest earnings from cash balances amounted to $0.5 million in Q1 2025, with $0.4 million recognized as revenue [131].