Intellinetics(US:INLX)2025-11-12 21:01Financial Performance - Revenues for Q3 2025 were $4,001,445, a decrease of 12.8% year-over-year, while revenues for the nine-month period were $12,259,603, down 10.8% year-over-year[95]. - SaaS revenues increased to $1,608,253 in Q3 2025, reflecting a growth of 14.6% year-over-year, and for the nine-month period, SaaS revenues reached $4,727,526, up 12.3% year-over-year[95][101]. - The Document Management segment generated $2,017,087 in Q3 2025, compared to $1,913,116 in Q3 2024, while the Document Conversion segment saw revenues drop to $1,984,358 from $2,676,509 in the same period[100]. - The net loss for Q3 2025 was $369,765, with a basic and diluted net loss per share of $0.08, compared to a net loss of $392,850 and a loss per share of $0.09 in Q3 2024[95]. - The company experienced a loss from operations of $1,572,261 for the nine-month period 2025, compared to a loss of $160,585 for the same period in 2024[99]. Operating Expenses - Operating expenses (excluding cost of revenues) for Q3 2025 were $2,947,128, a decrease of 3.2% year-over-year[95]. - Total operating expenses for Q3 2025 were $2,947,128, a decrease from $3,044,312 in Q3 2024, while total operating expenses for the nine-month period 2025 were $9,645,063, an increase from $8,756,898 in the nine-month period 2024[110]. - General and administrative expenses decreased by $38,376, or 1.9%, in Q3 2025 compared to Q3 2024, but increased by $473,142, or 7.7%, in the nine-month period 2025 compared to the nine-month period 2024[111]. - Sales and marketing expenses decreased by $86,531, or 12.3%, in Q3 2025 compared to Q3 2024, but increased by $310,821, or 17.5%, in the nine-month period 2025 compared to 2024[114]. - Depreciation and amortization increased by $27,723, or 9.6%, in Q3 2025 over Q3 2024, and by $104,202, or 12.6%, in the nine-month period 2025 compared to 2024[115]. Revenue Costs - Cost of revenues for Q3 2025 was $1,433,541, a decrease of 22.2% year-over-year, while for the nine-month period, it was $4,186,801, down 18.6% year-over-year[95]. - Total cost of revenues decreased by $409,983, or 22.2%, in Q3 2025 compared to Q3 2024, and decreased by $955,188, or 18.6%, in the nine-month period 2025 compared to the nine-month period 2024[105]. - The Document Conversion segment's cost of revenues decreased by $413,798, or 26.3%, in Q3 2025 compared to Q3 2024, and decreased by $1,002,019, or 22.9%, in the nine-month period 2025 compared to the nine-month period 2024[105]. - Cost of software as a service (SaaS) increased by $13,486, or 5.9%, in Q3 2025 compared to Q3 2024, and increased by $42,088, or 6.4%, in the nine-month period 2025 compared to the nine-month period 2024[107]. - Cost of professional services decreased by $372,876, or 25.0%, in Q3 2025 compared to Q3 2024, and decreased by $964,768, or 23.1%, in the nine-month period 2025 compared to the nine-month period 2024[108]. Cash Flow and Liquidity - As of September 30, 2025, the company had $3.2 million in cash and cash equivalents and a working capital deficit of $0.1 million, with the largest liability being $3.6 million in deferred revenues[119]. - Net cash provided by operating activities during the nine-month period 2025 was $1,463,711, a decrease from $3,721,943 in the same period of 2024[123]. - Net cash used in investing activities in the nine-month period 2025 was $677,868, compared to $695,359 in 2024[124]. - Net cash used by financing activities during the nine-month period 2025 amounted to $52,900, including $1,797,106 in gross proceeds from the issuance of common stock[125]. - The company has engaged in actions to improve liquidity, including securing a renewal contract with its largest customer effective June 1, 2025[118]. Market Conditions - Economic conditions, including wage inflation and interest rates, are expected to continue impacting the company's performance and growth plans[96][97]. - The company anticipates production in the Document Conversion segment to resume at more historical levels following a temporary reduction in volume prior to a contract renewal[94]. Employee Count - As of September 30, 2025, the company had 162 employees, down from 199 employees as of September 30, 2024[99]. Shareholder Information - Share-based compensation expense amounted to $1,131,891 in the nine-month period 2025, compared to $1,254,856 in the nine-month period 2024[112]. - The company raised a net total of approximately $23.1 million in cash through equity securities and $5.0 million through debt securities since 2012, all of which have been repaid as of June 18, 2025[117]. - The company has an effective registration statement covering up to $12.9 million of common stock, with approximately $8.2 million remaining available under the ATM Program as of the filing date[120].