Earnings call transcript Q1 2023

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Operator

Good day, ladies and gentlemen, and welcome to the Intellinetics’ First Quarter 2023 Earnings Call. At this time all participants are in a listen-only mode and the floor will be opened for questions and comments following the presentation. [Operator Instructions] As a reminder, this conference is being recorded.

At this time, it is my pleasure to turn the call over to Tom Baumann, FNK IR. Sir, the floor is yours.

Tom Baumann

Karen. you, Thank good and Thank afternoon, you, everyone. pleased XXXX Intellinetics’ am you to quarter conference welcome first call. I to

Before and we may begin, during I are would like to These facts. call, regarding from results. that based such Inc. could on forward-looking management, made not statements and statements actual historical to or this subject to beliefs expectations remind comments are by are risks materially forward-looking management includes Intellinetics that conference listeners that future cause events statements of differ current they and uncertainties

update And Intellinetics, duty no Inc. undertakes any to forward-looking statements.

section factors Results For well the more as XX-Q the of and Factors information and results may and caption about refer filed Form release today. forward-looking press that as from risks differ of Risk statements, to under please Financial Discussion to Condition the Management’s Operations materially and today actual Analysis Intellinetics uncertainties issued in cause in included

today’s as financial or are accordance and GAAP and be issued companies. to non-GAAP that by from with A substitute financial the call. be total management measures measures and found today be considered such not today, note non-GAAP on prepared results for financial presented contract a Non-GAAP total isolation in measures, on call please reconciliation will be measures Also, may GAAP in described the value. different discuss the release between and can other adjusted press as intended value will in contract non-GAAP EBITDA

the call yours. Intellinetics’ and the President to is like DeSocio, turn CEO. now call over would Jim to I Jim,

Jim DeSocio

to start Thank Intellinetics. a you, Tom. great was for This XXXX

working. model business is Our

too, nearly fifths us This it faster. revenue, our profitability. revenue Recurring of levels investments growing among and for revenue reducing are growing other things, quarter-to-quarter revenue consistent now plan easier enable spending even represents three and We volatility. to makes total recurring

our demand robust, a deliver expand for We ROI customers. as continue share market solutions tangible to for is our we and

wallet-share share. earnings yielding and with grow are delivering and our results customers. We as EBITDA, initiatives grew our per operating income we significantly income adjusted cross-selling our Finally, net positive

We are right the track. on

increased quarterly XXX%. XX%, increased revenue revenue SaaS Our while our

$XXX,XXX technology continued As a result, in tools we in April increased $XXX,XXX, our $XX,XXX and to invested to Folder XX%, income the our This Yellow EBITDA as large marketing which even net performance we in acquisition, is tremendous enable and of adjusted to XXXX. of growth. from part success closed due the negative increased

to base. We broader are leveraging Yellow cross-sell success our the Folder working services of customer to the and our

solutions. School we for to for agreed As $XXX,XXX. system historical annual The an Barrington, SaaS same the an sold physical student example, transform special digitally to District $X,XXX. School education committed recently setup we’ve Intellinetics multiple agreement time, District Illinois and At of records $X,XXX

further new are enable initiatives, to as marketing bolster in We our cross-selling us capabilities existing investing well which markets. as sales to our and penetrate

particular, we’ve execution. the sales of CRM expanded is our our In use improving system, which

are investing improve our also website effectiveness. marketing to We to our website, improve help

in of pipeline professional this services XX Since SaaS As and plus [ph] worth our XXXX and new acquisition March team the XXX new Folder, Yellow to XX total $XXX,XXX in a continued of demand, April continue setup fees contracts year, of investments strong bookings our other and deals grow. through $XX,XXX these contract the sold value. worth result $XXX,XXX

since Folder. our significant operations K-XX market more SaaS we now Yellow acquired revenue, generating districts doubles over vertical presence in XXX this K-XX Our which have than

districts Intellinetics these for is of additional each Importantly, target and a services.

to our addressable we broaden markets. our products Simultaneously, of portfolio and continue

Payables or this our of is IPAS. IntelliCloud example As Automation an Solution,

IPAS market. with very is cost part HomeBuilder complex reminder, with financial That are Software Systems, is billion of As accounting which actively a collaborating market homebuilder of serve is a power enterprise-class or for to very the approach $X and industry very bring and so the is this agnostic, payables to requirements. next Constellation family said, new to that path driving platforms our is Constellation automation exciting. we IPAS in IPAS the software evaluating solution IPAS pursue, tax customers scalable, their markets

the I’d At Spain, to Officer, over to financials. time, about Joe like call this to our Financial turn you talk Chief our to

Joe Spain

XXX% to financial Yellow I SaaS, same was period to the Jim. as for now the Without results $X.X for revenue. $XXX,XXX same for increased of million are the quarter growth Thanks, million will the first XX%. of contributed increased the quarter compared last hosting revenue $XXX,XXX The review the following XXXX. $X.X including components our from last quarter Yellow Folder, for the for Folder Total million to XX% SaaS year. of our increase. period revenue, year. $X.X

maintenance grew revenue offsetting the certain price a solution services of also attrition small from expansion and software shifts our to and cloud our revenues. amount was with in Folder X% Yellow growth on-premise our SaaS. this for combined our maintenance Software The migrating SaaS customers QX. from XX% increases revenue solution, to revenue maintenance case and quarter overall which higher year-over-year Every without migration resulted

$X.X period revenue increased year. $X.X the million last XX% to quarter for million from Professional for services the same

the SaaS. was of to revenue, Yellow to Despite the service performance in compared same strong period of decrease transformation business professional a As revenue quarter total of still overall the digital XX% to XX% primarily there total decreased XXXX, for revenue of revenue revenue very percentage last in Folder contribute percentage of a total our for year. due

retrieval $XXX,XXX was for compared relatively the first flat Storage of the XXXX at $XXX,XXX for quarter first to revenue of XXXX. quarter and services

our offerings. decline SaaS Software other comprised to is revenue, revenue as which streams revenue, to of to license perpetual continued transition we relative

part focus on our of on-premise minor SaaS. to be software solutions revenue a expect of as sales these we We

Folder as for previously The well Yellow million of $X.X increase XX.X% for this as $X.X increased SaaS. Jim The by to Operating million higher-margin is QX, QX the expenses year. towards the points solutions to compared to was margin shift compared increased to XXX to investments last in due mix Gross a basis XX.X% year driven XXXX addition XX% increase primarily largely QX, mentioned. XXXX.

Sales Folder other Yellow and and as reflects in compared for This to in income the as marketing increased quarter XXXX. period XX% marketing addition sales. QX the well expenses of for and was increase compared Net $X.XX same for the same per the Earnings a $XXX,XXX share to net per a diluted year. to last for last year. fully of compared share quarter diluted period per were share loss investments $XX,XXX loss $X.XX

EBITDA the diluted per or for EBITDA per $XXX,XXX for basic adjusted basic $XXX,XXX an per XXXX. period $X.XX and of share the $X.XX diluted Our quarter compared or $X.XX was share adjusted in to share and same

total which private April XX%. of our of offering in we million increased added shares by number outstanding reminder, our a XXXX, X.X placement outstanding As shares,

million. of Next, XX, review cash million I’ll to had At balance net a March of receivable $X.X turn sheet. of company $X.X Intellinetics XXXX, accounts and the

$XX.X debt contracts. March $X.X Our million, Also, total revenues principal in intangible our of million $XX million, assets deferred Total goodwill assets million $X.X as from including and acquisitions in signed since were XX, including were $XX liabilities were XXXX. XXXX. SaaS reflecting million,

with to expect revenues financial want subject on our uncertainties on assumptions wrap we a I Based filings grow adjusted and in this continue and current brief outlook. EBITDA call, basis. to up and our to plans a to and we and described year-over-year risks

to all call you like thank that, open Q&A. at would up Karen? time, With to listening. for this the I we And

Operator

Brothers. [Operator go Please from Instructions] first question our ahead, And from Howard. we’ll take Howard Taglich Halpern

Howard Halpern

Congratulations. Great quarter, guys.

Jim DeSocio

Howard. Thanks,

Howard Halpern

quicker? increase engagement even a wise and the And turned that bit sales of able with going to are in business, cycle? seeing on increase what’s you’re you growth size? terms execute of size has in little Or rising is In an engagement the an into just

Jim DeSocio

us little depending quicker let’s better record implementing specifics does. than a the advantage to more things system Well, what or quickly track the deal, historical we business say, talking the better on forecast on before and document of different they pipeline the move CRM the CRM pipeline and moving move and how K-XX a prosecutor’s how and the – But adding were get allows selling understanding unit $XXX,XXX and to had based of about to County moves better diligence management deals little are deal things the our pipeline. then that’s taking a package Wayne through we a or is of a division which product, deal quicker

is the long forward close. very seen And those we well. a increasing value, have to the how extension which of to taking thing revenue – us really allows going that other a we are large increase as contract on But deals really total contribute deals tremendous are haven’t the in is to size, So backlog phenomenal. good which

the of deals selling So The recognizing services then the as and those total contracts. to two we revenue fulfill perform contract different value things.

Howard Halpern

I in, thing. need you on reaching good the little could additional put in you’ve been I capacity And to it. you team your bit that add which a you guess, about, little might know now. more cycle bit productivity a I is are where salespeople, place Where sales they investing a Okay. and talk guess,

Jim DeSocio

Right.

salespeople. currently sales looking are did doing on have one staff We that additional but right well. on performer go, for now very site, six we people let are We

in and for So do another are executing highest experienced the head sales right that now. we are another open that looking have have reps delivering us. quarter two we sales for place are and team the count good sales level at very for we actively And

Howard Halpern

initially? moving Okay. you’ve And And actually industry many targeted the you just in operational? terms how one beyond IPAS, are of the are that

Jim DeSocio

of last a fairly is IPAS we year. – new Yes. of product a brand that fall release the released new

five have great. customers are up very our users sophisticated and product, We They now. which live running is of

$XX,XXX, there, a for handful products but it’s the $XX,XXX, the at cost compared $XX,XXX this products. the $XX,XXX – well the software only range we sale of to in range as So point, have deals average of K-XX

So those customers live. we have do

into a looking that organizations. take Howard. them. it different with across excellent getting different well right product And from at we expanding could product, because vertical feedback as is is that And an exciting we agnostic are very areas product this now We’re

Howard Halpern

up work and Okay. Well keep thanks guys. the great

Jim DeSocio

Thank you, Howard.

Operator

questions And DeSocio to be the Jim appear there this Instructions] no turn for I’ll time. further remarks. at to closing floor [Operator

Jim DeSocio

up Thank strong was you, year, on this strong XXXX. Karen. the a to a finishing start summary, In

revenue growth, enabling SaaS especially and recurring robust delivering are profitability. revenue, We sustainable

broadening markets. focused on effectively We and are cross-selling addressable our

Intellinetics about opportunities. excited and are our where future We is

continued investors and our attract And well we by as shareholders support to the and longtime strong new appreciate financial of consistent results. aim delivering

year excited us today. you, XXXX fiscal Very, where thank joining Intellinetics XXXX, the fiscal is exciting as opportunity year everybody, and So of well. very very today for we are about for

and have a we you our joining appreciate evening, everybody, great call. So

Operator

Ladies this participation. and for you. We thank does gentlemen, teleconference. conclude you your today’s Thank

disconnect have a You time, at and great lines your may day. this

Intellinetics (INLX) 15 May 232023 Q1 Earnings call transcript