INLX - Earnings call transcript Q2 2022

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Joe Spain

Thank you and good afternoon everyone. My name is Joe Spain and I am the Chief Financial Officer for Intellinetics, Inc. I am pleased to welcome you to our 2022 Second Quarter Conference Call.

Before we begin, I would like to remind listeners that during this conference call, comments that we make may include forward-looking statements regarding Intellinetics, Inc. that are not historical facts. to based they current and are could such are of and uncertainties statements actual cause and from management subject statements forward-looking on or expectations the beliefs that future These events materially results. differ to risks duty no forward-looking any update statements. to undertake We

caption from on EBITDA, release when and discussing For XX, information value, of the we and Form annual earnings of describe adjusted EBITDA Discussion discussed XXXX measures filed section as as our filed risks in materially XX-K issued included in non-GAAP Management’s release. may other please in refer our value under March we results financial to on financials cause report Results today, financial Factors company’s reconciliation in about uncertainties statements actual total risks provide to will our uncertainties and the discuss call Condition contract total factors Form the and Financial today, GAAP our differ note contract adjusted today. We of that and forward-looking performance. and that Risk the the press XX-Q well Also, in to Operations Analysis please and a

in more with XXXX. XXX% revenue labor I this QX of of joining Joe QX Omicron CEO. headwinds on and including Jim measure XXXX on. release, DeSocio, call DeSocio today. faced the of to the second now tight to revenue you, achieved over Our will us XXXX market. earnings like QX lingering turn We the in from pleased President we the growth at reconciliation our later Thank our We add is non-GAAP of especially intellinetics.com/company-news. available website to would our Jim quarter everybody appreciate despite I details over from our am SaaS goal Joe. improved numbers to a

sales to we contracts in and pipeline team has marketing in time year-to-date, approximately As increase on million. the invested an of total had value in our grow. At expanding last call with This added we’ve mentioned XXX $X.X this have contracts contract closed our continues I to won. call, our efforts resulted our large estimated of XXXX year, our last a XX-day

this we contracts, total in recognizable over an million, contract have For year year-to-date, generally XXXX XX% are up one year, with XXX of These up closed and value orders estimated less. XX%. $X.X revenue

For contract taken have increase this pipeline the year June $X.X we our with total XXX the to $X.X million. a ended, of of have value out quarter million. continued $X.X and we and/or worth just number closed count XXth, Impressively, contracts, XXX closed of million of current opportunities

team growth of Folder Folder, services X, total X, contract Since our the recent value XXXX well in Yellow Yellow contracts and and the in worth $XX,XXX meeting to new as Our in SaaS occurred contributed April acquisition April which expectations. pipeline $XXX,XXX is sold QX. professional

Intellinetics. in vertical unit Our K-XX excellent over has acquisition in market. XXX million has doubles than This been business for presence our districts over revenue, SaaS $X.X which generating this K-XX more an now

for Folder. Yellow few call. XX% the forma a consolidated revenues total than the which I of SaaS revenues, more Folder’s of revenues XX% to SaaS, an the without unaudited to pro getting bear nearly people bringing XXXX Additionally, basis are XX% compared on SaaS am with Yellow our doubles more Please into

Okay. provides with EBITDA enhances revenue, and but Not us business revenue high via cross-selling our more opportunities. also does SaaS this for margin more bring only opportunity acquisition

had people. new I In fact, sorry, -

XX% $XXX,XXX But right which operations our quarter my In of and a details review previously conversion consolidated our adjusted quarter XXXX. of synergies. exceeding adjusted the next. $XXX,XXX. our eighth to stability XXXX. from digital fulfilled of consecutive discuss transformation reported document the April, in cross-selling I this of comments positive since second to measure team our acquisition will the This we integration we EBITDA customer XXXX, continues division, quarter In Yellow $XX,XXX than EBITDA. more This deliver have our now, past helping about orders QX am underscores Yellow Folder statement fact, first the consecutive early the – successful marks Operationally, where outsourced. are marks of to Folder already the acquisitions we up tenth consecutive of Joe on going for XXXX non-GAAP with

and with flow results, and positive I we sales satisfied adjusted EBITDA to well talk Joe, This sales Officer our our Our bode horse disciplined Financial on our future. strong conditions financials. cash this M&A generated. pleased the am me in integration to Chief confidence I I’d and QX provide and and call gives and Joe? focus momentum. the marketing, the that very revenue very future. with The the to given are our activity for all you generation approach we and for the At continued investments our like am to opportunities, lead our turn faced over cross-selling we right about the bullish on time,

Joe Spain

XX, year. I Thanks, $X.X compared financial as to the for now review increased will am I now. results back for $X.X Total XX% of for the last to quarter period ended quarter our the million Yes, Jim. revenue XXXX XXXX. million same June second yes.

presented are our in the Following of on of components order various revenue operations. the statements

this rapidly increasingly perpetual industry which the including services million very revenue, component Software and revenue last from hosting ended revenue significantly quarter. the well. in services at $XX,XXX revenue, our Folder, Yellow was last organic shift period we comprised than is the make as Without same this lieu for noted increased swing on-premise for $XXX,XXX toward period revenue X% of software from in cloud quarter, increase. same as quarter resulted growth attributed year, can revenue Recurring overall which more towards to cloud ongoing to this Folder migration solutions. XXX% solutions maintenance to maintenance as is inconsistent Yellow versus which quarter $XXX,XXX maintenance comparisons higher from clouds continued is every the the for migrating $X.X of The $X,XXX strong, comprised case from contributed and solutions the software revenue SaaS, the growing solution XX% expected, given is on-premise last year. shift year. small, of increased of our our also and overall customers XX% license small SaaS, solution, to of in revenues. makes the The differential partly shifts to for SaaS

Also most stream a with than view this this generally to stickier and as SaaS cannibalization, don’t As period us higher $X.X SaaS increased million having feedback view million year. is as enterprise more we quarter mind Professional the because same services callout, retention been rates revenue investors the that maintenance. is revenue for that last migration good $X.X customer has for from value. XX% to

solution last in up quickly revenue our transaction after to increased to to million XXXX. compared have As We the QX the up increase quarter for revenue of professional quarter $X.X increased the compared a total Operating $XX,XXX of period the SaaS QX the challenges Graphic services revenue staff the In from drivers X% revenue subsidiary the overall. line. is million segment a to our The or couldn’t margin am XXXX, transactions services to shift and Folder. second to driven The XX% and at decrease $X.X to prior nearly most the Omicron $XXX,XXX were for as Yellow partially backlog, of and the $XXX,XXX by of XX% significant sorry, our capacity winter. $X.X due maintenance of $X.X for of the retrieval reduction second by over is XXXX. percentage of we the reductions total Storage $XXX,XXX XXXX, towards $XXX,XXX in a statement and quarter higher lower document our expenses of to compared a in projects within XXXX. professional further for of Cost quarter of increase a services Yellow to $XXX,XXX past. margin decrease of for a production decreased to the growing to QX, lagging and storage for professional period compared we in decreased with incurred compared lower significant to as offset XX% for rates The mortgage separate volume transaction revenue increased a for XX% million The was Folder, by cost had same of show interest to year, on as get but services to total the ramping the was Sciences customer increased strong total million and $XXX,XXX addition continue driving of of lower year. to same of margin industry of compared – boxes operations, the Gross up. XX% driven in I total driving part mix revenue, acquisition of for reduced last margin year. due XX% weekly cost to a a retrieval the and at pick X.X up converting

both change out and we $XX,XXX cost, Note were of than one-time outs. expense earn in for of to value the transaction in earn value last in fair exclude deemed the the greater calculation also which later, carve EBITDA the our which discuss was that for cost We fair outs, change year. QX adjusted be

of share the an per basic I’d earn to per million XXXX. EBITDA include $X.XX and non-GAAP adjustment point the To is same a $X.XX as sales All XX%, $X.XX per which just the April per offering expense has $X.X outstanding additions from million of EBITDA offering diluted period adjusted quarter Jim’s increase of out which year. April forward, April affecting diluted well in our expected share increased XXXX, private compared in mentioned. loss as Interest period adjusted expenses, from factors transaction addition interest earlier. cost or quarter-over-quarter are $XX,XXX EBITDA, reflects $XXX,XXX XXXX, debt. we XXXX preview measure. XX%. fair our those amortization for the share, expense the in an in value increase basic adjusted plus $XXX,XXX $XXX,XXX XXXX or QX and was $XXX,XXX, same $X.XX and and like added compared on reiterate our Key of This which Excluding the X I our in $XX,XXX, not incremental in $XX,XXX comparison Folder which last X, in period to $XXX,XXX for shares, investments $XXX,XXX and other earlier, was Jim Yellow intangibles compared the acquired. year. Net the XXXX. expense same term team and of as Sales marketing $X factors the increased for placement given X, private Folder by to last including and to net The for income operating mentioned expenses marketing the XX% expenses $XXX,XXX in quarter represents grown in Yellow the for accounted in placement interest added the out that increase was for these

to of cash At Next, net XXXX, I'd Intellinetics review of of accounts like balance turn had to in $X.X $XXX,XXX. million company June the receivable sheet. XX,

million, their and $X.X Yellow an were XX, as as million. including I part as from our added $X million debt We the Also in $XXX,XXX. XXXX June $X increase offering Folder, contracts in we revenues, million other private assets $XX stemming acquired April plans can XXXX. expected up yourself all continue million debt $X.X closed of XXXX. grow in in you interface XXXX and Q&A. total total with of time, Folder call Total to of this $XX.X goodwill raise uncertainties on risk All intangible due $X.X And like principal deferred it current want where in pound on acquisition. you the about to added it from the listening. our subject Our liabilities we thank X, and on do open our we Yellow were by we With a EBITDA to including assumed. assets that, of adjusted unmute outlook. we and $XXX,XXX million SaaS rest part a million assets totaled Based the to assumptions, financial if or phone brief I you to our do for to call, to on X. we filings of think with we for clicking wrap described revenues this on and at I are believe up would can you of our

Howard Halpern

existing gaining for in of Congratulations. great about guys. was you’d EVA you little Howard Brothers. the the A release, from potential type are hoping more offer? taking? Taglich you a your Solution quarter. new press that Hi are or at sales expand you bit to path customers first, iPass I customers Are and about the going what talked from

Jim DeSocio

Thank It’s Hi, question. you. Howard. a great

of the company top key company a customers this who on one Newstar by of is called a software started Newstar our from called owned world where uses very Constellation. software we So, with large project

XXX about financial software has software Newstar do customers homebuilders. for procurement and and they

us them came they on sold work project and deals, this to four So and three already three to we deals. with we’ve or

deals. three implementing sold are We’ve We four. actually

we believe size and great launched already have They four this deals. size nice to We’ve we are we’ve opportunity. product So, very four a March in customer. usually of our average just closed the times three

So, workflow order comparing accounts and et and it’s invoicing payable. so to around purchase all about procurement and cetera, the it

a as take very So, we well. on believe we our bullish it part could across this are we base, customer and good of

Howard Halpern

little a XXs and together Yellow you Okay. bit marketing activities guess, bit talk forward? Folder sales your I the the how going of on, focus And in a little ramping could and about, your

Jim DeSocio

Yes.

great when software we We school financial had then the has very Imaging about is as districts XXX school acquired already customers for had Folder, Unlimited, – XXX partner districts we good we which about sells So, well. sold when about XXX we already, Yellow XXXX our good and the us, bought Software school news CEO in which districts acquired to news.

is, doing are we what business So, divisions. around the reorganizing company

are up and the roll into and of there. take K-XX development units all So we business one it division efforts focus business going our to

focus our selling on there, our digital also we And have digital so are our business, Our part exclusively the sales we’ll Graphic business efforts Sciences they there, transformation unit can that. of an business. and with same transformation our consolidating in marketing token business iPass then, efforts Columbus into

to where areas, efforts to those team on development to the areas our really going as our in have need focus we So dollars been they focus trying marketing – spec specific expertise, sales put are of we specifically and well. the

going transformation right through are bullish K-XX. the now. very this we So on Very,

space of have that We well as management and have beneficial. dominant amount a XXX. out area, into that has area. revenue for ability in that are in We finally the position to we been have a The – K-XX SaaS we of driving area cross-sell very document the

ago. sold a As CEO we of We to this when customers. couple did of digital you one with school into $XXX,XXX school we their Imaging, remember, sold transformation business one a of a district district their years of

out was So deal deal. do Folder that with $XX,XXX we’ve Yellow already started first to box and of an the

we we are trying are what So, excited accomplish very to here. about

Howard Halpern

And having now terms the Sciences, are of in Graphic finding you backlog. a personnel to – are you

executing the how personnel So begin that pack the are you all boxes? to finding on

Jim DeSocio

It Yes. us took longer.

think – et to people I reading cetera. entire getting the work everything back is is everybody

it on in it it board. past took has So thought usually we people the than longer than would to get us

are We about full just complement.

be I full think two people need to we complement. more

shape up, at So now, we good very are are this ramping in we right point when yes.

Howard Halpern

Okay. keep great the work. Well, guys, up

Jim DeSocio

you, Howard. Thank

Joe Spain

you. Thank

Jim DeSocio

Good.

Joe Spain

the are a Zoom on the unmute to in away X. I it’s want it’s think click you’d computer, if pound again are and think questions, other phone, yourself on I if you a the Any you

Jim DeSocio

me then. Okay. up Well, wrap let

this had a and Let division, doing together We some in recently division with our that all for mostly services me in extremely professional been senses. until has few deduction challenges well. hiring pull

QX, we be up addressed are for our levels in in beyond. and and are However QX those to challenges staffing ramping looking

fact the delivering don’t sight good shape in very are this We expected. of that to lose want we as is acquisition at point. We the

today to sales, very and and investors, as we attract We the our well shareholders of do support to by with long orders shareholder business and in our to delivering well on goal time builds continued you We appreciate turn our again our new Thank continue about closing look future. excited joining continue we call. speaking building is are the you. forward for which next It aim value. Thank a model, to conference us results.

Joe Spain

Thank you.

Intellinetics (INLX) 15 Aug 222022 Q2 Earnings call transcript