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CoreCard(CCRD) - 2024 Q4 - Earnings Call Transcript
CCRDCoreCard(CCRD)2025-02-21 04:45

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was 14.8million,representinga2214.8 million, representing a 22% year-over-year increase [6] - Services revenue, excluding license revenue, increased by 10% year-over-year in Q4, with full-year growth of 1% [6] - Income from operations for Q4 2024 was 2.1 million, compared to 0.4millioninQ42023,resultinginanoperatingmarginof140.4 million in Q4 2023, resulting in an operating margin of 14% versus 3% in the same period last year [9] - Earnings per diluted share for Q4 2024 was 0.24, up from 0.06inQ42023,withfullyeardilutedEPSat0.06 in Q4 2023, with full-year diluted EPS at 0.67 compared to 0.40in2023[11]BusinessLineDataandKeyMetricsChangesLicenserevenueforQ42024was0.40 in 2023 [11] Business Line Data and Key Metrics Changes - License revenue for Q4 2024 was 1.4 million, while Professional services revenue was 6.2millionandProcessingandMaintenancerevenuewas6.2 million and Processing and Maintenance revenue was 6.1 million [6] - Processing and Maintenance revenues grew by 11% year-over-year in Q4, with full-year growth of 7% [6] - Revenue growth, excluding the largest customer and the impact from ParkMobile and the legacy Kabbage business, was 29% in Q4 and 33% for the full year [8] Market Data and Key Metrics Changes - The company has around 15 million revolving credit cards on its platform, significantly ahead of other modern processors [48][50] - The company expects to onboard new customers primarily in the processing side rather than the licensing side, indicating a shift in focus [39] Company Strategy and Development Direction - The company plans to continue investing in its new platform, CoreFinity, which incorporates advanced technologies and is architected for the cloud [26] - The management is exploring potential acquisition interest while also preparing for the possibility of remaining independent [27][29] - The company aims for revenue growth of 30% to 40% excluding its largest customer for 2025 [19] Management's Comments on Operating Environment and Future Outlook - Management noted that revenue and profits exceeded expectations due to unexpected license revenue, but they do not anticipate further surprises in this area for 2025 [17] - The company expects total revenues for 2025 to be between 60millionand60 million and 64 million, with no planned license fees [13][35] - Management expressed confidence in maintaining the processing relationship with Goldman Sachs, despite potential changes in the issuing business [30] Other Important Information - The company generated operating cash flows of $5.8 million in 2024 and plans to use excess cash for investments [12] - The tax rate for fiscal 2024 was 21.1%, with expectations for an ongoing rate between 24% and 26% [10] Q&A Session Summary Question: Is there a planned license fee expected in 2025? - Management confirmed that there are no planned license fees for 2025 [35][36] Question: What are the expected costs to run the business in 2025? - Management indicated that while some increases in costs are expected, they do not anticipate significant increases in operating expenses year-over-year [46] Question: How many cards are currently on the platform? - Management confirmed that there are around 15 million revolving credit cards on the platform, which is significantly higher than other modern processors [48][50]