Usio(US:USIO)2025-11-12 21:01Revenue Performance - In Q3 2025, the company's revenues declined by 1% to $21.2 million compared to $21.3 million in Q3 2024, primarily due to decreases in prepaid card services and Output Solutions[124]. - For the nine months ended September 30, 2025, revenues increased by 1% to $63.2 million, up from $62.4 million for the same period in 2024, driven mainly by growth in ACH and complementary services[125]. - Total revenue for the quarter ended September 30, 2025, was $21.2 million, a decrease of 1% compared to $21.3 million for the same period in 2024, primarily due to a 30% decline in prepaid card services[162]. - Total revenue for the nine months ended September 30, 2025, increased by 1% to $63.2 million compared to $62.4 million for the same period in 2024, driven by a 33% growth in ACH and complementary services[163]. Expenses and Profitability - Selling, general, and administrative (SG&A) expenses rose to $4.5 million in Q3 2025, compared to $4.1 million in the prior year quarter, attributed to higher salaries and increased operational costs[126]. - Adjusted EBITDA for Q3 2025 was $0.4 million, down from $0.8 million in Q3 2024, with Adjusted EBITDA margins decreasing to 1.7% from 3.6%[155]. - Gross profit for the quarter ended September 30, 2025, decreased by 1% to $4.87 million, maintaining a gross profit percentage of 23.0%[168]. - Net loss for the quarter ended September 30, 2025, was $0.4 million, a significant decrease from net income of $2.9 million in the prior year, attributed to increased SG&A and absence of prior year tax benefits[180]. - The company reported a net loss of ($1.0) million for the nine months ended September 30, 2025, compared to a net income of $2.7 million for the same period in the prior year[181]. Cash Flow and Financial Position - Cash and cash equivalents stood at $7.7 million as of September 30, 2025, with cash provided by operations amounting to $1.4 million for the nine months ended September 30, 2025[183]. - Net cash provided by operating activities decreased to $1.4 million for the nine months ended September 30, 2025, down from $1.9 million in the same period of 2024[190]. - Net cash used in investing activities increased to $1.1 million for the nine months ended September 30, 2025, compared to $0.7 million for the same period in 2024[191]. - Net cash used in financing activities was $6.5 million for the nine months ended September 30, 2025, compared to net cash provided of $4.7 million in the same period of 2024[192]. - The company has working capital of $10.0 million as of September 30, 2025, slightly down from $10.2 million at December 31, 2024[184]. Business Strategy and Developments - The company has adopted a "One Usio" strategy to unify its brand and enhance client onboarding, customer management, and reporting capabilities[113]. - The company is focusing on expanding its ACH merchants and electronic bill presentment services while optimizing its infrastructure for growth without significantly increasing operating costs[123]. - The company has entered the Real Time Payments (RTP) market in 2023, expanding its payment technology offerings[109]. - The company completed the development of a new Electronic Bill Presentment and Payment (EBPP) system in the first half of 2025, allowing merchants to create and distribute bills online[110]. - The assimilation of acquisitions such as Akimbo Financial, Singular Payments, and IMS has been crucial for enhancing the company's payment technology offerings and revenue streams[130]. Transaction Metrics - Processing volume and transaction counts are key metrics for assessing the addition of new customers and growth from existing clients, directly correlating to revenue performance[131]. - The number of credit card transactions processed increased by 75% in Q3 2025 compared to Q3 2024, while the volume of credit card dollars processed rose by 12%[132]. - ACH (eCheck) transaction counts increased by 26%, and returned check transactions rose by 35% in Q3 2025 compared to Q3 2024[133]. - Prepaid card load volumes decreased by 46%, and transaction counts decreased by 33% in Q3 2025 compared to Q3 2024, primarily due to processing reductions from a key client[134]. - Total dollar volumes processed across all business lines reached $2.18 billion in Q3 2025, an 8% increase from $2.02 billion in Q3 2024[136]. Other Financial Metrics - Interest earnings amounted to $1.5 million for the nine months ended September 30, 2025, with $1.1 million recognized as revenue[138]. - The company's reserve for processing losses was $751,937 as of September 30, 2025, down from $897,116 at December 31, 2024[144]. - Stock-based compensation expenses for the quarter ended September 30, 2025, were $0.4 million, down from $0.6 million in the prior year due to completed amortization of previous awards[170]. - Cost of services for the quarter ended September 30, 2025, decreased by 1% to $16.3 million, reflecting increased revenue from higher margin business lines[165]. - Depreciation and amortization expense for the nine months ended September 30, 2025, totaled $1.4 million, down from $1.7 million in the prior year, due to completed amortization of intangible assets[176]. Market and Economic Conditions - The company continues to face uncertainties due to inflation, geopolitical concerns, and potential changes in international trade policies, which may impact future financial results[139]. - The ongoing transition to electronic document delivery has reduced the price per unit processed, impacting revenue despite strong processing activity[135]. - The company continues to invest in infrastructure, including employee retention and marketing efforts, to achieve scale across all business lines[190]. - The company entered into a debt arrangement on September 19, 2025, to finance $1,017,954 for the purchase of an Output Solutions printer[186]. - The company has an unsecured revolving line of credit with a maximum borrowing capacity of $475,000, which remains undrawn as of September 30, 2025[187].