CoreCard(CCRD) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Financial Highlights This section provides a high-level overview of CoreCard Corporation's strong financial performance in Q2 2025 and key revenue drivers Q2 2025 Key Financial Metrics CoreCard Corporation reported substantial growth in total revenues, income from operations, net income, and both GAAP and Adjusted EPS and EBITDA for Q2 2025 compared to Q2 2024 Q2 2025 Key Financial Metrics | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :----------------------- | :--------------------- | :--------------------- | :----------- | | Total Revenues | $17,594 | $13,797 | +27.5% | | Income from operations | $2,663 | $1,149 | +131.8% | | Net income | $1,984 | $896 | +121.4% | | Diluted EPS | $0.24 | $0.11 | +118.2% | | Adjusted diluted EPS | $0.31 | $0.15 | +106.7% | | Adjusted EBITDA | $4,185 | $2,476 | +69.0% | Revenue Disaggregation by Type Professional services and processing & maintenance were the primary drivers of revenue growth in Q2 2025, with third-party revenue also showing significant year-over-year increase Revenue Disaggregation by Type | Revenue Type (in thousands) | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | License | $− | $− | N/A | | Professional services | $9,381 | $6,973 | +34.5% | | Processing and maintenance | $6,564 | $5,694 | +15.3% | | Third party | $1,649 | $1,130 | +46.0% | | Total | $17,594 | $13,797 | +27.5% | Pending Acquisition by Euronet Worldwide, Inc. This section details the proposed acquisition of CoreCard by Euronet Worldwide, Inc., including merger agreement specifics and shareholder information Merger Agreement Details CoreCard entered into a Merger Agreement with Euronet Worldwide, Inc. on July 30, 2025, under which CoreCard will become a wholly-owned subsidiary of Euronet, with closing anticipated in late 2025, subject to shareholder and regulatory approvals - CoreCard entered into an Agreement and Plan of Merger with Euronet Worldwide, Inc. on July 30, 2025, expecting to become a wholly-owned subsidiary of Euronet by late 2025, subject to CoreCard shareholder approval and customary closing conditions[5] - Due to the pending acquisition, CoreCard will not host a webcast or conference call to discuss Q2 2025 results, directing stakeholders to the Form 10-Q filing for further details[6] Shareholder Information and Solicitation Euronet plans to file a Form S-4 Registration Statement containing a proxy statement/prospectus, which will provide important information about the proposed transaction for shareholders, and identifies potential participants in proxy solicitation - Euronet plans to file a Form S-4 Registration Statement with the SEC, containing a proxy statement/prospectus, which will be delivered to CoreCard shareholders and contain important information about the proposed transaction[7] - The Company and Euronet, along with their respective directors and executive officers, may be deemed participants in the solicitation of proxies from CoreCard's shareholders regarding the transaction[8] No Offer or Solicitation Disclaimer This communication explicitly states it does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor a solicitation of any vote or approval related to the proposed transaction - This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, and no offering of securities shall be made except by means of a prospectus[9] Company Overview This section provides an overview of CoreCard Corporation's business, highlighting its role as a leading provider of credit technology solutions and processing services Company Profile CoreCard Corporation is a leading provider of innovative credit technology solutions and processing services, offering a 'gold standard' card issuing platform built for global transactions in an embedded digital world - CoreCard Corporation (NYSE: CCRD) provides a 'gold standard' card issuing platform for the future of global transactions, dedicated to technological innovation in the payments industry[10] - The company helps customers conceptualize, implement, and manage all aspects of their issuing card programs, focusing on steady, sustainable growth and providing real-time transactions via its proven platform[10] Forward-Looking Statements and Risk Factors This section outlines the inherent risks and uncertainties associated with forward-looking statements, particularly concerning the pending acquisition by Euronet Worldwide, Inc Forward-Looking Statements Disclosure This section clarifies that statements regarding the proposed Euronet transaction and future expectations are forward-looking and subject to significant risks and uncertainties that could cause actual results to differ materially - The release contains forward-looking statements regarding the proposed transaction between Euronet and CoreCard, including expected filings, timing of closing, and ability to complete the transaction[12] - These statements are based on current beliefs and expectations but are subject to significant risks and uncertainties that could cause actual results to differ materially from those expressed[12] Key Risks and Uncertainties Key risks associated with the proposed acquisition include the potential for non-completion, delays in obtaining necessary approvals, adverse impacts on personnel and customer relationships, and the diversion of management's attention - Risks include the proposed transaction not being completed timely or at all, which could adversely affect CoreCard's and Euronet's businesses and securities prices[13] - Potential failure to receive required approvals (shareholder, regulatory) or to satisfy other conditions to the consummation of the proposed transaction[13] - The announcement, pendency, or completion of the proposed transaction may affect the ability to attract, motivate, retain key personnel, maintain customer/supplier relationships, or impact operating results and business generally[13] Consolidated Financial Statements This section presents CoreCard Corporation's consolidated financial statements, including statements of operations and balance sheets, detailing financial performance and position Consolidated Statements of Operations CoreCard reported significant increases in total net revenue, income from operations, and net income for both the three and six months ended June 30, 2025, compared to the prior year periods, driven by service revenue growth Consolidated Statements of Operations | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total net revenue | $17,594 | $13,797 | $34,282 | $26,873 | | Total cost of revenue | $9,637 | $9,090 | $19,017 | $18,590 | | Income from operations| $2,663 | $1,149 | $5,470 | $1,676 | | Net income | $1,984 | $896 | $3,890 | $1,326 | | Diluted EPS | $0.24 | $0.11 | $0.48 | $0.16 | Consolidated Balance Sheets As of June 30, 2025, CoreCard's total assets increased to $70.9 million from $62.3 million at December 31, 2024, primarily due to higher cash balances and property and equipment, while total liabilities and stockholders' equity also grew Consolidated Balance Sheets - Assets | Asset (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Cash | $26,621 | $19,481 | | Marketable securities| $5,642 | $5,410 | | Accounts receivable, net | $6,767 | $10,235 | | Other current assets | $6,807 | $5,048 | | Total current assets | $45,837 | $40,174 | | Investments | $3,179 | $3,776 | | Property and equipment, net | $13,833 | $12,282 | | Other long-term assets | $8,079 | $6,106 | | Total assets | $70,928 | $62,338 | Consolidated Balance Sheets - Liabilities and Equity | Liability/Equity (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------ | :------------ | :---------------- | | Accounts payable | $1,710 | $823 | | Deferred revenue, current | $2,084 | $2,033 | | Accrued payroll | $4,192 | $2,856 | | Accrued expenses | $462 | $723 | | Other current liabilities | $2,227 | $2,017 | | Total current liabilities | $10,675 | $8,452 | | Total noncurrent liabilities | $3,937 | $2,189 | | Total stockholders' equity | $56,316 | $51,697 | | Total liabilities and stockholders' equity | $70,928 | $62,338 | Non-GAAP Financial Measures Reconciliation This section provides reconciliations of non-GAAP financial measures, including Adjusted EBITDA and Adjusted EPS, to their most directly comparable GAAP counterparts Information Regarding Non-GAAP Measures CoreCard utilizes Adjusted EBITDA and Adjusted EPS as supplemental non-GAAP measures to assess core operating performance, excluding specific non-recurring or non-cash items, and clarifies that these should not be considered alternatives to GAAP measures - CoreCard considers Adjusted EBITDA and Adjusted EPS as supplemental non-GAAP measures to evaluate and compare core operating results from period to period, not as alternatives to GAAP measures[23][26] - Adjusted EBITDA is defined as net income (loss) adjusted to exclude depreciation and amortization, share-based compensation, income tax, investment income/loss, and other income/expense[24] - Adjusted EPS is defined as diluted earnings per share adjusted to exclude the impact of share-based compensation expense[25] Adjusted EPS Reconciliation Adjusted EPS for Q2 2025 was $0.31, a significant increase from $0.15 in Q2 2024, reflecting adjustments for share-based compensation and related income tax benefits Adjusted EPS Reconciliation | Metric (in thousands, except EPS) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net income | $1,984 | $896 | $3,890 | $1,326 | | Share-based compensation | $672 | $425 | $1,145 | $585 | | Income tax benefit | $(168) | $(106) | $(286) | $(146) | | Adjusted net income | $2,488 | $1,215 | $4,749 | $1,765 | | Adjusted EPS | $0.31 | $0.15 | $0.59 | $0.22 | | Weighted-average shares | 8,117 | 8,143 | 8,107 | 8,207 | Adjusted EBITDA Reconciliation Adjusted EBITDA for Q2 2025 increased to $4.2 million from $2.5 million in Q2 2024, resulting in an improved Adjusted EBITDA Margin of 23.8% compared to 17.9% in the prior year quarter Adjusted EBITDA Reconciliation | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net income | $1,984 | $896 | $3,890 | $1,326 | | Depreciation and amortization | $850 | $902 | $1,595 | $1,927 | | Share-based compensation | $672 | $425 | $1,145 | $585 | | Investment loss | $145 | $199 | $580 | $438 | | Other income, net | $(169) | $(235) | $(306) | $(526) | | Income tax expense | $703 | $289 | $1,306 | $438 | | Adjusted EBITDA | $4,185 | $2,476 | $8,210 | $4,188 | | Total Revenue | $17,594 | $13,797 | $34,282 | $26,873 | | Adjusted EBITDA Margin | 23.8% | 17.9% | 23.9% | 15.6% |