Financial Performance - The Company reported a net loss from continuing operations of $3,446,000 for the three months ended June 30, 2025, compared to a loss of $3,552,000 for the same period in 2024[201]. - Adjusted EBITDA from continuing operations was $3,280,000 for the three months ended June 30, 2025, an increase from $1,198,000 in the same period of 2024[201]. - For the three months ended June 30, 2025, the company's net revenue increased by $6.0 million, or 17.9%, to $39.6 million compared to $33.6 million for the same period in 2024[213]. - The Bills & Payments segment generated $28.8 million in revenue, a 15.9% increase from $24.8 million in the prior year, primarily due to newly won business[214]. - The Technology segment's revenue rose by $2.0 million, or 23.2%, to $10.9 million, driven by higher project activity[215]. - For the six months ended June 30, 2025, net revenue increased by $5.6 million, or 7.8%, to $77.3 million compared to $71.7 million for the same period in 2024[232]. - The Bills & Payments segment generated $55.1 million in revenue, a $3.6 million increase or 7.1%, while the Technology segment revenue rose by $1.9 million or 9.5% to $22.2 million[234][235]. - Total cost of revenue increased by $0.8 million, or 2.9%, to $27.8 million, while on a constant currency basis, it decreased by $0.8 million, or 2.9%[217]. - Total cost of revenue decreased by $1.0 million, or 1.8%, to $54.1 million for the six months ended June 30, 2025, with a notable decrease in the Bills & Payments segment costs by $2.1 million, or 4.5%[236][237]. - Selling, general and administrative expenses rose by $4.4 million, or 73.5%, to $10.4 million, attributed to bonus provisions and legal expenses related to acquisitions[221]. - Selling, general and administrative expenses increased by $8.4 million, or 64.7%, to $21.4 million, rising as a percentage of revenue to 27.6% from 18.1%[240]. - Interest expense was $2.0 million for the three months ended June 30, 2025, up from $1.5 million in the prior year, due to higher borrowing costs[224]. - Interest expense increased to $3.7 million for the six months ended June 30, 2025, compared to $2.9 million in the same period in 2024, due to higher borrowing costs[243]. - Foreign exchange gains were $0.3 million for the three months ended June 30, 2025, compared to losses of $0.6 million in the same period of 2024[227]. - The cost of revenue as a percentage of revenue decreased to 70.1% for the three months ended June 30, 2025, from 80.3% in the same period of 2024[220]. Operational Highlights - The Company serves over 2,000 clients across multiple industries and geographies, focusing on digital transformation and improving market-wide liquidity[179]. - The primary source of revenue is from transactions processed, particularly in the Bills & Payments segment, which includes automation of accounts payable and receivable processes[182]. - The Company had approximately 1,500 employees as of June 30, 2025, with operations in 16 countries[183]. - The Company has two reportable segments: Bills & Payments and Technology, which align products and services with client industries[191]. - The Company has rolled out a suite of Work From Anywhere applications to support remote work, a response to the COVID-19 pandemic[182]. Strategic Developments - The acquisition of BPA was completed on July 29, 2025, for a consideration of $1.00, following BPA's emergence from Chapter 11 bankruptcy[185][189]. - The Company approved a restructuring plan in Q4 2023 to realign its business and strategic priorities, which includes rightsizing its workforce in certain regions[275]. - The Company may explore strategic transactions, including joint ventures and acquisitions, which may require additional funds[276]. Cash Flow and Debt Management - Net cash used in operating activities improved to $4.0 million for the six months ended June 30, 2025, from $5.5 million in the prior year, reflecting better cash inflows[255]. - The company expects to spend approximately $2.0 to $3.0 million on capital expenditures and capitalizable contracts over the next twelve months[250]. - Total debt increased by $3.4 million as of June 30, 2025, primarily due to foreign currency fluctuations[250]. - Cash and cash equivalents totaled $6.1 million as of June 30, 2025, down from $12.1 million at the end of 2024[249]. - As of June 30, 2025, the Company's outstanding factored accounts receivable amounted to approximately $7.5 million, with a loss on sale of accounts receivables totaling approximately $0.1 million and $0.3 million for the three and six months ended June 30, 2025, respectively[261]. - In June 2024, the Company entered into a £15.0 million and €10.5 million Secured Credit Facility, which includes a £3.0 million Term Loan A and a €10.5 million Term Loan B, maturing on June 26, 2028, and June 26, 2027, respectively[262]. - The Company incurred $1.5 million in debt issuance costs related to the 2024 Facilities Agreement[264]. - As of June 30, 2025, the outstanding balance of the Term Loan A Facility, Term Loan B Facility, and Revolving Credit Facility was approximately $3.5 million, $10.5 million, and $16.7 million, respectively[269]. - 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, and 2.00 to 1.00 starting January 1, 2026[265]. - The Company was in compliance with all affirmative and negative covenants under the 2024 Facilities Agreement as of June 30, 2025[273]. - The Company believes it will remain in compliance with all covenants for the next 12 months based on expected future performance[274].
CF ACQUISITION(CFFE) - 2025 Q2 - Quarterly Report