Earnings call transcript Q2 2023

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Operator

Greetings, and welcome to Intellinetics Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Tom Baumann, FNK IR. sir. ahead, go Please

Tom Baumann

good XXXX I'm second and you to to Intellinetics quarter afternoon, you, pleased everyone. welcome Thank conference call.

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

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

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

the is over to like now and yours. would turn Jim CEO. I call President said, the that all With DeSocio, Intellinetics call Jim, to

James DeSocio

revenue sales leading demonstrating to was profitability. were and and top quarter XX% The for by strong revenue grow our our our results. line you, improvements Tom. our double-digit another We while revenue quarter expenses to double-digit second reinforced of SaaS reducing backlog growth, strong grew operating business. our rates Thank XX%, growth ability This even significant and bottom our consistently delivering growing in our Intellinetics

seen have the begun an in demand to quarter, already the customer concerns We as acceleration have abate. recessionary in third

We by in and results. our all business working. our revenue the services meaningful business performance SaaS, mix were our any maintenance representing services with we model to year Growth full revenue lost have process non-recurring remain professional opportunities, outsourcing eclipsed surpass XX%. recurring the revenue comprising period, Clearly, in our shifting tremendous track is of temporarily on not XX% our of and total nonrecurring and professional

base it gives reached expenses. investments million plan recurring we our has $X.X ensures levels in SG&A costs. makes us point importantly, words, to easier of consistent profitability. visibility significant This revenue for said, base a us in it where $X.X staffing revenue and That operating with In exceeds most recurring and million generated our other

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

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

QX million. XXXX, contract In XX estimated an contracts we total value of closed with $X.X

the value. or and orders digital total acquisition SaaS exclude sold $XXX,XXX success contract in software-related come the to amounts less. recognizable professional which moment. in transformation, services these revenue These reminder, a of total in new one a Folder over the our contracts worth Yellow are $XXX,XXX team in Folder, Yellow cross-selling generally value I'll of in As contract XXXX year April Since

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

district we recently transformation in target job examples Illinois, education of large Importantly, a school $XXX,XXX. Folder digital our purchased a services. Intellinetics first, additional is of opportunities for worth Yellow a each these cross-selling solution Two a special districts and sold,

student have in strategic of in a Yellow next purchased K-XX months. school April of into cross-sold to recognized XX sell Mexico in will record solution Folder New over XXXX, and our K-XX $X.X total digital and professional contract Folder value transformation Yellow our $XXX,XXX district we the successfully This value. worth digital customers. XX a reinforces $XXX,XXX. contract be acquisition Since transformation deals second, ability the total And our our The project services combined million acquisition worth our

employees. continue in our new new to been K-XX K-XX districts. selling We K-XX form portfolio days we customers addressable broaden solution payables also solution and Simultaneously, we our process new very of that products onboarding in teachers early successful are automation markets. at our the employee hiring our for have Further, public the testing expediates of X

As this, of we drive adoption part Automation to Solution, core IntelliCloud of Payables continue or IPAS. our

is new IPAS complex platforms reminder, enterprise class solution accounting. cost a a automation As with very for software payables financial

software Constellation especially Constellation to with broaden for the part the in of collaborating family market. $X systems, homebuilder homebuilder We are IPAS, billion awareness

Intellinetics. integration back, customers. Stepping focus I have about am while the since confident with in us instrumental levels, been on These working. of our excited new three acquisitions integrated very XXXX, am March solutions performance we've future delivering achieving acquisitions pleased extremely recipe I is and maintaining at our how to I'm for our

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

Joseph Spain

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

services comprised increased same is million the million software the revenue hosting to year. revenue $X.X last for for maintenance including from quarter and $X.X SaaS, of X.X% period which software, Subscription

consistent services than at as with are Our software is maintenance history growing slowly and SaaS expected. X%, which more

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

same total of revenue the for period compared year. XX% As was last XX% to of the a of revenue revenues, total revenue for professional percentage quarter services total

primarily staff work the a transformation when, and backfile the was quarter had on you images the for services backlog had our $XXX,XXX over XXXX flat second growing business, as Storage perform Our challenges $XXX,XXX scanning to for may 'XX. quarter second to retrievable improvement customer of revenue relatively XXXX we business. recall, tremendous compared digital at finding

Software revenue, remains is which comprised of quarter small total of but revenue a revenue. license perpetual up the for portion was

revenue our sales expect XXX for The margin focus on-premise Consolidated of QX We basis as of decrease compared continue services. this decreased XX.X% a we shift year. towards professional driven was points SaaS. a to part to to gross year this be to last software minor on revenue mix XX.X% by

to investments American, to decreased QuickBooks and 'XX The including, acquisition for from increase project Folder to due our $X.XX other our decrease QX NetSuite for to in structure ledgers investor of a X.X% multiple offsetting scale, NYSE $X.XX relations expenses and million absence spend largely than to in Operating QX more to million Yellow among things, costs in 'XX related is compared the uplifting convert of QX the to instance. single 'XX.

currently same parallel. quarter a marketing that largely two in is Regarding NetSuite, the decreased share final and for period in on fully matter. timing ledgers X% to legacy I'm the pleased Sales to the track compared with XXXX, converted running during expenses which we're

We sales. invest marketing in and continue to

same compared Net were quarter share per compared share last share for year. loss income $XXX,XXX the $X.XX was a for the fully year. period of loss last diluted per to diluted to Earnings QX per $XXX,XXX net $X.XX for

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

our balance XXXX, receivable net Next, XX, I'll the of of turn and $X.X sheet. review million of million. At brief had to cash company $X.X a June accounts

June assets goodwill since including as XXXX. $X.X were part and revenues in were $X.X million million liabilities XXXX. deferred million, XX, signed in Also, intangible million, debt assets including maintenance nearly and Total contracts. made of Our $XX as reflecting total principal $X.X SaaS were $XX.X million, acquisitions of

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

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

Operator

Thank you.

be now comes session. from question-and-answer Halpern Instructions] [Operator first Taglich a question with The will Brothers. Howard conducting We

How that you see to are IPAS in occurred? Do deployed? process being offering many the continued of have many How gain deployments traction.

James DeSocio

We're is implementing sold This probably have another We're probably Jim. very live. X. We've IPAS with -- We starting going. October project, how our Yes. doing not happy are four. -- that solution start customers -- two we'll that two is one another people we're actually implementations

our Constellation relationship well. development Software, healthy and we We product have pipeline that next our phase with the of have agreed very with we've to partner, which a a cycle as great also

are very proven out high starting We that It's very with reach product it to the for is come. business it current we've IPAS are reach unit a additional the some partners we years to also now forward relationships starting our works getting marks going growing viable well. and customers; from we create to out to big plans to very have that now in and

Operator

still from is question Next Howard.

on could gross growth, positive impact margins? a see IPS for we or base customer operating a As

James DeSocio

raise think $XX,XXX, We into believe conservative of deal is per it's I it our will very deal, to average revenue. which (ph) going because well $XX,XXX size SaaS

our the more product those selling size to of as IPAS deals to forward looking other IntelliCloud are products. we So of the compared of because

it quite So does the fuel price a bit. average raise

Operator

like? holder Third to question the acquisition from landscape be there Howard. type any Are deals What does had? look

James DeSocio

two a It's phase. Yeah.

We are to continuing look.

from those acquisitions done results very our and of very, to seen acquisitions back base. for integrating cross-sell into we've heard our few good very acquisitions job finding good a you a the of done call price our right from the into and and strategic last ability company a have those As years, customer our today over job

that the are announce look right we'll when find and everybody know at And we be deal. to the right able the right acquisition one, So price. for we've to it, closed will continuing we the

Operator

follow-up Halpern seeing what uneven IPAS even your the economy, terms demand offered? you professional is, for SaaS, Howard of question are in with service

James DeSocio

you to as heard, believe continue I Well, we sell.

We is grow. best second in on first had our that's million a to $X.X million the quarter. ever and second $X.X continuing top Our sales in quarter quarter backlog of

contract what products on forward. going value as value. total the total build continue we backlog to you talking next was and we usually continue And about services contract to the -- our and recognized our that XX -- next sell So is know, that's I'm over months that,

the So ability sell continue very revenue to our recognize go forward. to we as bullish and on

Operator

over are comments. I There back Jim would CEO to Instructions] turn to [Operator DeSocio, floor the no like further for questions. closing

James DeSocio

very I'm our you summary, with encouraged much. Thank results. In

definitely net income. revenue our we improved grew is business We significantly in Our significantly model working. and quarter the

new certainly appreciate on us excited and continued our investors about financial by We are conference and attract delivering markets. to future next our support to for speaking cross-selling all We of focused the joining aim We're and you effectively our addressable forward opportunities. much. you today shareholders Intellinetics as our long-term and on call. well very Thank look consistent strong, results. Thank again we broadening

Operator

teleconference. This concludes today’s

and you may Thank time. your great lines for this your disconnect You at participation a day. have

Intellinetics (INLX) 14 Aug 232023 Q2 Earnings call transcript