Financial Data and Key Metrics Changes - Total revenue for Q1 2024 increased by 7.7% to $4.5 million compared to $4.2 million in Q1 2023 [51] - Operating expenses rose by 24.2% to $2.9 million for Q1 2024, primarily due to investments in structure and timing of equity compensation expenses [10] - Loss per share was $0.04, compared to earnings per share of $0.03 last year, while adjusted EBITDA for the quarter was $673,000, slightly up from $630,000 in the same period last year [11][34] - SaaS revenue as a percentage of consolidated revenue increased to 31% in Q1 2024, up from approximately 29% in Q1 2023 [47] Business Line Data and Key Metrics Changes - Subscription software revenue, which includes SaaS and software maintenance services, increased to $1.76 million for the quarter, with SaaS growing by 13.5% [51] - Professional services revenue increased by 7.8% to $2.5 million for the quarter, maintaining 55% of total revenue [33] - The document conversion segment continues to generate positive contribution margin, although its non-recurring revenue is becoming less relevant [6][30] Market Data and Key Metrics Changes - The company signed nine new customers for its IPAS solution, with an expected combined annual revenue of $500,000, and anticipates doubling the customer count in the coming quarters [8][31] - The K-12 market has seen significant growth, with 597 districts generating substantial SaaS revenue, more than doubling the presence since the Yellow Folder acquisition [50] Company Strategy and Development Direction - The company is accelerating investment in marketing its SaaS offerings, focusing on maximizing promotional activities around SaaS rather than non-recurring revenue streams [5][7] - The management aims to evolve into a fully SaaS-centric company, with a goal of making recurring revenue the majority of total revenue [49] - The company plans to prepay additional debt, aiming for no net debt by the end of 2024, which reflects a focus on financial health [12] Management Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the strong response to the IPAS solution and the growing pipeline of opportunities [28] - The company anticipates that the organic growth opportunities may become less consistent over time, particularly in the document conversion business [30][36] - Management reiterated expectations for revenue growth year-over-year for fiscal year 2024, despite potential revenue reductions from a major customer [54] Other Important Information - Total liabilities were reported at $8.8 million, including $2.6 million in deferred revenues and $2.46 million in debt principal as of March 31 [35] - The company is increasing its sales and marketing efforts, including hiring additional sales representatives and enhancing tradeshow activities [52] Q&A Session Summary Question: What is the total number of sales reps and their structure? - The company added one sales rep, and they are structured to support both the IPAS team and K-12 operations [57][58] Question: Is the incremental spend on support or implementation staff? - Yes, the company is investing in support staff to ensure effective implementation and customer satisfaction [65][66]
Intellinetics(INLX) - 2024 Q1 - Earnings Call Transcript