INLX - Earnings call 3 2023 | Intellinetics, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Intellinetics' Third Quarter 2023 Earnings Call.

Our host for today's call is Tom Baumann with FNK IR. [Operator Instructions] I would now like to turn the call over to your host. Mr. Baumann, the floor is yours.

Thomas Baumann

afternoon, good and you, everyone. Thank to I Third to XXXX you Conference am Call. pleased Quarter Intellinetics' welcome

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

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

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

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

James DeSocio

Thank you, Tom.

value and SaaS XX% Our third our the X%, to profitability revenue XX% sequential year-over-year leading We to revenue on and similar a was in record-breaking and our sequential basis, up our demonstrating our grew quarter our of business by improvements improved quarter we year-over-year, our model. second revenue by profitability.

and systematically core is Our profitable. growing solid, business

stable We SaaS term, base paired IntelliCloud will automation near have growth. K-XX new with continued payables come IPAS. our for solution the success In or growth a that from

enterprise platforms payable important top into for compliance a our transparency prone became a and building automation a benefits payables a up very tasks data. processes this new dashboard free complex risk The IPAS with with is for reduce To higher-value further where their payables digital financial software a priority cost business of exposure, and becomes business solution paper are to provide and class real-time modernize pairing solution to organizations activities, scale audit apparent. as IntelliCloud As immediately CFOs. accounts manual accounting. document existing By reminder, and time our first for explain AI-driven look views to an the management modern applications, while department finance system organization's line eliminated, ever automation financial fits,

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

of these success X going growth customers, see aggregate, a these In customers combined revenue annual signed go months. with additional catalyst a the have We Two contracts $XXX,XXX. business X recurring over X the as to for Constellation will IPAS customers X have wide. gone live customers next forward. we on represent Based now of that our

on our our and XXXX. our have to customer IPAS K-XX IPAS meaningfully plan to cross-selling customers base growth to introduced We recently also in to contribute

our aligned recurring revenue expanding overall Importantly, well SaaS with these our strategy. agreements, are

on track as and to our year deliver future. anticipate top we and well we environment, growth us a for existing of to remain see sets Overall, accelerating macroeconomic growth This full the demand, services. catalyst improved customer SaaS our accelerated and we suggesting up continue When an other of profitability. improving a business IPAS on becomes

maintenance process in growing in recurring We focused professional quarter. visibility nonrecurring the revenue, be on business giving Quarter-to-quarter future remain expected. revenue Our all and into to grew services fluctuations our outsourcing results. SaaS us significant

of where it has point exceeds revenue reached base our Our a expenses. recurring operating

words, other $X we million down profitability business. $X.X costs, In resulting the from in million million SG&A revenue generated for $X.X our recurring in quarter, systematic in second with in

now in volatility the sustainably Our quarter-to-quarter business is revenue. profitable, of nonrecurring irrespective

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

expanding also are payables in addressable market, specifically our automation We solutions.

initiatives adjusted our we sequential grew basis, Finally, are on million. our a the XXXX, closed estimated income we with On revenue value yielding we XXX results are contracts as our QX similar total right with cross-selling $X.X on and of EBITDA net customers. significantly track. we an grow contract wallet levels, share In

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

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

have services. Since we TCV. Importantly, worth deals April Folder Yellow sold in target of districts K-XX additional these is the each for a successfully XX in acquisition $XXX,XXX XXXX, Intellinetics

Officer, this strategic our K-XX future call would Folder performance. for future in increases transformation to acquisition caused IPAS digital systematic ability enacted to Recently and organic our other At our turn am from contribution of an about and over financials. Chief acceleration about I talk and Joe our our customers. revenue This our select about engagements -- to into to growth the model Financial price Spain, drive reinforces I our services optimistic like increased professional to business Yellow our time, results profitability. our

Joseph Spain

X.X% including $X.X last our both following maintenance revenue as the on for to review revenue from Thanks, our growing Jim. less $X.XX Total for million last hosting software period for the Professional $X.X the The software, up results to million services of SaaS, million increased last million quarter components same our services for operations: third comprised $X.X quarter XX.X% same the to more software now of our period expected, slowly, of as $X.XX the compared XXXX. maintenance period X%. the than and And presented revenue for financial XX.X% are services quarter for from quarter is are I statements year, $X same will the the to Subscription consistent. million increased year. for increased million which revenue, revenue year. of

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

first Year-to-date, digital a of may quarter was perform finding retrievable $XXX,XXX over XXXX third customer-backed tremendous third the work scanning when, business, on transformation flat for our primarily Storage file we business. growing the revenue you relatively in XXXX, had to our the at as XXXX. recall, had the challenges staff $XXX,XXX and year, backlog last in half to compared of images of of quarter improvement

to and which revenue, a down total of of was Software to we quarter comprised as is revenue percentage perpetual offerings. continues SaaS transition revenue for as decline license the

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

second I to XX.X% and increased a million $X.XX track we're the is a expenses improvement. revenue to expect to as we million improved QX which professional XX.X% document price same in slightly basis slightly XXXX, marketing 'XX. coming earnings would on I'm our that which we expenses with compared points gross driven pleased is in during into to drive conversion year. due compared for further our noted margin and Sales structure in XXXX release Also, decreased to shift largely margin NetSuite the investments have compared to compared Consolidated share deployment. gross mix toward sequentially, for Jim's to matter. XX scale. year, this The note services. by timing period for QX our last increases quarter. to XX.X% Operating in The our increase quarter effect margin QX increased segment, the largely to that was and decrease reference, $X.XX

and in invest to continue sales. We marketing

Earnings QX income of for Net both for share was period to per same for net share $X.XX last income periods. per $XXX,XXX $XXX,XXX year. compared the was

the record-setting for $XXX,XXX 'XX, period EBITDA an in was adjusted for same of quarter quarter compared $XXX,XXX for a us, EBITDA adjusted comparison. Our to making which the was tough a

at grow to year up With XXXX. expect we basis listening. open the in revenues thank all for uncertainties this to call, we'd adjusted want wrap call and fiscal this I has for Q&A. year-over-year a XXXX. outlook. up Based to in quarterly filings to and Our financial grown risks our current our assumptions and sequentially plans and a to we time, to described we brief on you with EBITDA EBITDA that, like on the subject And and continue

Operator

Brothers. Your Halpern [Operator first comes Howard question Taglich Instructions] from with

Howard Halpern

another great quarter. guys, Congratulations,

the terms you is of on to product, an exciting within which latest their based Constellation In IPAS, with clients? announcements, software go and you of larger are integrating the active are that --

James DeSocio

Thanks, Howard. question. appreciate I the

They release doing So development it as was we so the with first us. team product well great that of iteration team, very we're first tight That's to the news. with which management why worked started Constellation, worked was a of a in closely it. with well. We there. integration product And

about commitment in completely doesn't stand-alone the to customers thing that got product that system. that to their to also recently the also is their release of upgrading now to. which product anybody need new a But because they're product, to that we've Constellation's this integrate to we tightly not necessarily of integrated is, One we sell great a financial a could developed integrate asked we'll new future, because be

open markets forward new this. of well. So that's last with as as that as up week us will go we And news for additional

that of area. happening lot So great a in things

Howard Halpern

And base? does K-XX established selling customer cross-selling that -- in to help your

James DeSocio

we integration sell because to actually that without definitely partners, we although now Software -- financial them our Unlimited, have customers, done. getting financial the has can -- we Most K-XX X,XXX it

talking we as early and hear to already more have with, future couple the a in of that you'll adopters and working we're well. about that So

other really, before, systems. point product up it our opens ability So ERP again, financial my that that that's sell to to back-end

Howard Halpern

business you vertical? forward, enough IPAS the reference maybe established looking upcoming the have focus X be to -- with or into another homebuilders your this broaden K-XX your X are So the you base? for year base, and to current... looking for in homeowner cross-selling will is Or customers And homebuilders, there customer primary

James DeSocio

Never enough Howard. business,

the Our We next partner also ERP a started have is individual. goal is to we off sell vendor news We're kicking homebuilders they $X their under the to the a just California. them billion show We're around has umbrella. campaign. technology X,XXX relation with. manage product. great good really We work And homebuilders annual find that now marketing with partner. the can this can Constellation really actually we introducing with We're next But week hammering in Constellation. to really and this us at start companies to

Howard Halpern

Okay. for talk for terms opportunities only but of conversion. the you -- data your about And in cross-selling not IPAS

just In districts addition able the K-XX that if to library. local that, an the school your to was to wondering that opportunity do? broaden I there's into local Is government, established like beyond the school districts you're in something

James DeSocio

know, Most it, municipalities Savannah, you as a you we districts lot definitely. but you the most an governments and the we started into, for business Usually, in this opportunity a are offices. as but municipal at it of then well. point, lot example, county us through Board know, go an School government to is get you a as different. a can. can have Department, to the Savannah little certainly, as And of of approval, do did go -- And you got forward. you've you relationships, got as have Police We into definitely Savannah

Howard Halpern

right I it's of the crazy talk anything quiet I Right. side Is on the acquisition mean, landscape? is And there. on it know out about there Or environment a to sort now?

James DeSocio

to you always for always by, We're looking. stand we're acquisitions. I and need think looking

Joseph Spain

Several which Yellow 'XX, we're but of things. bought it's not Folder, Howard, actively pressed busy, you've centered stopped. button differences last April when whether mean year seen dearth But since So in doesn't that of we've on We've the around been constantly we've largely of perspective. clearly a not the a eventuated pause that we're our busy, have side. we plus engaged number activity, in valuation

James DeSocio

price. We've just acquisitions side, we've right X successful done the in done very at --

the looking on and that we So cross-selling diligent very companies make all we have time, are look we're diligent but pay -- that very to we we're the for. and sure price the synergies we at

Howard Halpern

just one last Okay. sheet. the question on And balance

down You of cadence down continuing the paid coming and pay going in a there consideration. debt debt to the quarter Is year? the in continual to be constant

Joseph Spain

on really Howard, depend, to the going M&A that's answer. So

So us, certain if like have we critical of equity and/or that we're right going like do find debt a to go to on relative small, depending the what very -- right you size, something company we price, to to cash. would obviously, like out at the mass to looks we'd have

would that keeping got we've -- ahead, So Obviously, forward. on far little of eye that our bit look but not we're kind that XX%, we as out. a

makes we've on probably of eye but kind immediately. what to trigger sense, see the to going So we're got not all our pull options most the

Operator

[Operator Instructions] appears no remarks. call management the At like this there time, to questions. I'd turn it further further are for back any to

James DeSocio

Thank am our very, very I results. Thank you. In with you. summary, encouraged

revenue working. business recurring clearly Our model structured is around

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

Operator

day. This today's for you and Earnings Quarter of wonderful your Intellinetics concludes Third have attending, Call. Thank a rest XXXX

Intellinetics (INLX) 14 Nov 232023 Q3 Earnings call transcript