Financial Data and Key Metrics Changes - The company reported revenue of $189.7 million for Q1 2025, representing a 15% year-over-year increase and a 4% sequential increase [6][13] - Adjusted EBITDA reached $40.7 million, accounting for 21.5% of revenue, which is a 61% increase from $25.2 million in the prior year [6][18] - Free cash flow was $37.8 million, exceeding typical seasonal patterns due to favorable timing with larger customer invoicing [6][18] Business Line Data and Key Metrics Changes - Subscription-based revenues grew by 18% year-over-year and 5% sequentially, making up 81% of total revenue [14] - Services and other revenues declined by 7% year-over-year, primarily due to a reduction in professional service revenues [14] - Total annualized recurring revenue (ARR) increased to $847 million, up 11% year-over-year, driven by strength in subscription ARR, which grew to $720 million, up 14% year-over-year [15][16] Market Data and Key Metrics Changes - The company signed a Tier one relationship pricing deal with a bank to enhance commercial relationship profitability across lending and deposit products [7] - Expansion activity within the existing customer base was significant, with a top 50 U.S. bank signing an expansion deal for risk and fraud solutions [8][10] - The company continues to see strong renewal activity, signing renewals with three of its top 10 largest customers [10][11] Company Strategy and Development Direction - The company emphasizes the importance of fraud management as a growing priority for financial institutions, which is expected to drive future bookings [22] - The focus on deposit gathering remains critical, especially in the current macroeconomic environment, which has been a tailwind for sales efforts [12] - The company aims to maintain operational efficiency while investing in innovation to meet evolving customer needs [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's durability due to the mission-critical nature of its products and a strong, diverse customer base [11][20] - The company anticipates a solid pipeline for the remainder of the year, with strong renewal and expansion opportunities [12][20] - Despite macroeconomic uncertainties, management believes the company is well-positioned to navigate potential challenges while prioritizing long-term customer success [20] Other Important Information - Gross margins improved to 57.9%, up from 54.9% in the prior year, driven by a higher mix of subscription-based revenues [17] - Total operating expenses were $77 million, or 40.7% of revenue, showing improvement from 44% in the prior year [18] - The company raised its full-year revenue guidance to a range of $776 million to $783 million, representing year-over-year growth of 11% to 12% [19] Q&A Session Summary Question: Insights on fraud management traction - Management noted that fraud management is a differentiator in both new deals and expansions, with significant opportunities for growth in this area [26][28] Question: Confidence in renewal opportunities for 2025 and 2026 - Management confirmed that the confidence is based on the number of logos up for renewal, indicating a similar opportunity set compared to previous years [29][30] Question: Macro assumptions in raised outlook - Management stated that the raised outlook did not incorporate different macro assumptions, maintaining confidence in the 2025 numbers [35] Question: Credit union market focus - Management highlighted strong performance in the credit union sector, with a focus on diversifying their offerings to include more commercial customers [38] Question: Cash flow performance and future expectations - Management indicated that the strong cash flow in Q1 was partly due to a large customer switching to annual payments, which may not be repeated in Q2 [72][74] Question: Subscription growth versus ARR growth - Management explained that subscription ARR is a leading indicator for subscription revenue, with expected patterns reflecting previous years [104][106]

Financial Data and Key Metrics Changes - The company generated net income of $4,200,000 or $0.43 per diluted share in the quarter, representing substantial increases from the prior quarter [9] - Tangible book value per share increased by 1.6% this quarter [9] - Gross revenue increased by 3.4% from the prior quarter, driven by increases in both net interest income and noninterest income [14] Business Line Data and Key Metrics Changes - New loan production was $71,000,000 in the first quarter, offset by $72,000,000 in loan payoffs, resulting in a slight decrease in total loans [11] - The average rate on new loan production was 6.89%, higher than the average rate on loan payoffs, contributing positively to the loan portfolio yield [11] - Total deposits were up slightly from the end of the prior quarter, with inflows of noninterest bearing deposits from existing clients and new relationships [12] Market Data and Key Metrics Changes - The company saw a $144,000,000 decrease in assets under management in the first quarter, primarily due to net withdrawals in fixed fee accounts [13] - The company maintained a conservative approach to new loan production, focusing on disciplined underwriting and pricing criteria [6] Company Strategy and Development Direction - The company aims to grow its Trust Investment Management business, having added a new Head of Wealth Planning from Goldman Sachs [21] - The management is focused on improving profitability and operational efficiency, with expectations for continued positive trends in asset quality and net interest margin [20] Management Comments on Operating Environment and Future Outlook - Management expressed that while profitability is improving, they are not satisfied with the current performance level and are focused on further enhancements [20] - There is uncertainty regarding the macroeconomic outlook, which could impact loan demand later in the year [20] Other Important Information - The company successfully resolved its two largest OREO properties, resulting in a net gain [9] - Noninterest expense decreased by $1,000,000 from the prior quarter, primarily due to a write-down recorded in the previous quarter [17] Q&A Session Summary Question: Can you isolate any interest recoveries on a dollar basis? - Management noted that there was a $200,000 increase in amortized loan fees that contributed to the uptick in loan yields [26][27] Question: What is the spot rate on deposits and average margin in March? - The spot cost of deposits was 2.98%, and the cost of funds was approximately 3.05% [29] Question: What is the outlook for nonperforming loans? - Management expects to sell one remaining OREO property this year and anticipates collecting on a substantial nonperforming loan through collateral sale [31][32] Question: Will there be a significant increase in expenses due to new hires? - Management indicated that while expenses are expected to remain flat, new hires may take time to become accretive to the bottom line [73] Question: What is the target for return on assets (ROA)? - The target is to return to a 1% ROA, with expectations for improved profitability as the company grows [42][43]