INLX - Earnings call transcript Q4 2023

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Operator

Greetings. Welcome to Intellinetics Fourth Quarter and Full Year 2023 Earnings Call. [Operator Instructions] Please note that this conference is being recorded. I'll now turn the conference over to Tom Baumann with Investor Relations. Tom, you may now begin your presentation.

Thomas Baumann

you. Thank everyone. afternoon, Good to XXXX to Conference pleased and Fourth Full Year Call. welcome am Intellinetics you Quarter I

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

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

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

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

James DeSocio

in or cross-selling grew another recurring profitability effectively solution cash We strong of to year our revenue SaaS invest our next expand Automation integrated IPAS. was scale. our our with baseline. as profitability revenue This we IPAS prior Intellinetics in XXXX enabling stable for Tom. and Solution established and accelerating Payable a expect as XXXX, Intellinetics generation, you, call we With growth, drive what phase stream and a efforts momentum we entered strong our and consistent to acquisitions, we Thank

we prudent share For the year with enabled share, by XX% ended more expense earnings combined than nearly XX, $X.XX increased $X.XX revenue This up management, XX%. December per growth, fully per per and last SaaS just of grew from share diluted year. revenue XXXX,

income Net in to compared was $XXX,XXX XXXX. $XX,XXX

for such items our depreciation noncash a includes adjusted to amortization, XX% only performance solution. This our as grew IPAS contribution nearly small Excluding million EBITDA new we the and a record by year. $X.X from

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

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

aggregate, revenue Constellation an with the customers more the now X additional annual this go XXXX. and scheduled Constellation an double -- and customers than represent these next the count combined business In to expect of have in to customer over during live live we quarters. $XXX,XXX, customers few we gone contracts additional X date, estimated recurring have with To with first signed IPAS, the X of half

IPAS homebuilder Importantly, are we target markets as this for wide our range pursuing in partner growth for opportunities the one And business a the is significant Clearly, market catalyst of verticals relationship market. ideal channel we Constellation just a many Constellation XXXX. IPAS. is our while vertical, outside of and homebuilder in the for beyond view

to a meaningful marketing have believe opportunity there K-XX market, cross-sell Beyond and and IPAS base, existing the homebuilder customer Yellow we Folder to IPAS customers. is to other our we K-XX begun

In our business, continued see demand. we core customer

so expanding to accelerate in XXXX investing year our represents to K-XX marketing our we top as expect the of revenue. approach on IPAS our XXXX. step stairstep We capabilities growing growing business, and in in a SaaS revenue IPAS of next IPAS addition the growth that for sales view our and With our

of a On core profitable. is this, IPAS sustainably represents business potentially our for significant reiterate, To top us. growth catalyst

We through and contributor revenue a as this year. as to anticipate move expect our top XXXX, our revenue to be recurring we we exit from to IPAS line we the meaningful increase

This Our includes team, specialist our budget spend expanding towards accelerating an project development $XXX,XXX of as XXXX incremental management. an additional and count, and expanding will enhancing industry as sales go towards well IPAS. delivery spend head including

professional services fourth the maintenance For our SaaS all quarter, BPO and grew.

scanning is our results growth, revenue giving on the visibility from significant and recurring future and project-based us Our focus into business. primary storage variability our minimizing quarter-to-quarter

revenue recurring exceeds has it is revenue our consistent of than profitability. faster expenses, base and point the enabling operating operating our where reached Our growing our SaaS expenses,

delivered million quarter, recurring were $X.X net million revenue, costs our And enabling the fourth $XX,XXX $XXX,XXX revenue. million, total in in and $X.X $X.X including we In in EBITDA. income adjusted SG&A

systematically now profitable. are We

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

orders less. over generally or in are year As revenue contract a these of total recognizable X the reminder, value

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

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

said, momentum, and I'm As significant excited growth. have for year of we the I next

Officer, I'd turn to this like Joe the At Spain. time, call our to Financial over Chief

Joseph Spain

the financial of Thanks, quarter our results will fourth Jim. I XXXX. now review for

year. of $X quarter million compared to increased period the to presented are of X.X% income. following revenue Total statements our our revenue last million in same the the as The for for $X.X components

last grew revenue, to software SaaS, including last quarter Professional same X.X% million $X.X million services flat growing the year. history for $X.XX more to revenue which million hosting were are comprised maintenance our from for maintenance is And as software, services Subscription services quarter XXXX. for SaaS same and million the increased and X.X%. with $X.XX year. the from revenue slowly expected, software for increased consistent to of the period $X.X and period

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

flat to growth XX.X% revenue year from increased year. mix, but The points increases. driven by basis revenue last this towards the services and price impact QX recurring to gross weighted retrievable XX.X% for revenue year-over-year relatively and margin $XXX,XXX. compared more Storage both better quarter was positive XX a was Consolidated increase for at

expenses to million The Operating compared due $X.X for is in and equity QX compensation in the scale. largely to $X.X XXXX. of as timing as to increased increase structure XXXX million investments XX% expenses well

is Sales XX% expenses a period decreased during matter. the and XXXX, same marketing quarter to for largely compared timing the which

sales. We invest and in continue to marketing

IPAS sales also noted, activity Jim our acceleration. K-XX our expanding trade is our XXXX, As which force. increasing in both we're important and to show We're

period I referenced in for And to operating year-over-year, as was Net there's last year. to income expenses compared of $XX,XXX for same equity QX $XXX,XXX moment of that the ago, net increase a change. contributing compensation income the $XXX,XXX

compared $X.XX per and and to last $X.XX, $X.XX per was $X.XX Earnings share for diluted respectively, year per share shares. share

EBITDA Our adjusted in the an EBITDA to same $XXX,XXX for 'XX. the adjusted period of quarter for $XXX,XXX was compared

to increased Turning SaaS to $X.X full expenses $X.X share million million net Operating year was was year income compared and 'XX increased gross share professional compared per revenue to to EBITDA services revenues increased million XX.X%, XX.X% year. was to million XXXX. year. Consolidated per to of the compared million million XX.X%. $XX.X Full $X.XX for last increased results. year. of XX.X% income compared XX.X% adjusted year. to last Full to XX% compared revenue 'XX. $X.X in last net for to 'XX Total $XX as compared $X.XX adjusted for last EBITDA, $XXX,XXX $X.X Earnings $XX,XXX year margin

accounts net Quickly cash company the now, receivable of $X.X million Intellinetics balance had of December sheet. and review million. At a of XX, 'XX, $X.X

part Our acquisitions were million of million, as in made $X.X goodwill since XXXX. total assets assets $XX and including intangible

were maintenance XX. million revenues contracts. liabilities signed in including $X.X of were as and Total Deferred million, principal $X.X almost SaaS reflecting million, $X debt December

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

over our our position than make growth our and Jim's plan with opportunity almost adoption years. next as more an an drive. opportunity rapid in X our transformative as noted we offering our provides return for company organic press quote release customers double revenue today, an a to to offers instant IPAS for SaaS positive and can As to IPAS to product the we We X the as investments view company, in

for adjusted is to the wholesale X early and the investments, select EBITDA capabilities a next as grow we happy, expected set to XXXX its with basis years. making stage these X on in ERP over the adoption on round IPAS out year-over-year adopters Even all focus ecosystems of

of and As debt we expect cash. a clarity, final long-term meaning prepaying end XXXX; our will debt to $XXX,XXX at of debt less be shortly have no for net note, the

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

Operator

Instructions] Howard first the line Halpern Taglich is question Our [Operator from of Brothers. with

Howard Halpern

and good great hopefully, start quarter, XXXX. Congratulations. Great to year,

James DeSocio

Thanks, Howard.

Howard Halpern

Yes.

In can size terms offerings? of to you IPAS' talk about deals, your compared base deal

James DeSocio

offering Yes, already probably $XX,XXX to sale [ is $X,XXX offering, The average The the we annual $X,XXX deals in K-XX offering revenue. could the factory closed recurring management from of ] that. we've and anywhere do and size. is K-XX IPAS north

higher bigger product, about processing, add and the functionality will up average bring XX. bit the as more -- that we ones, little is price the there's there's product enhance PO and the well. So i.e., to But a as

Howard Halpern

you you're that going be customers? making be of able down part implementation to IPAS, as And going the to you Okay. time with are investments drive to implement more as the

James DeSocio

Howard. a Yes. good question, That's

software brand-new was So business our my this I've and career, for a in new release. was been It implementation people. the entire

us have first are confident. implementing new now was So But X fix find the it. implementations then it, product, X you a -- It you bug, took a the very first very, little implementations we longer. to a

As as part well. implementation new tools development we've process, that built of some

go of them tools the a for and our new rather themselves. these implementation actually in will implementation do than to facilitate their the good part the people So having customer, and work doing

in are next those out the tools So to come -- scheduled imminently.

we're there. So shape good in

gets, asking. easier what you it's the going for the looking And know, that more the us. learn And we they're yes, as for, it get customer is you assume you more implement, much to the easier what

Howard Halpern

are are And within going to you migrating Or or to different to... you verticals? into companies Constellation implement IPAS other

James DeSocio

Yes.

both. plan is the do to So

part We a partners. have and new the responsibility of rep sales hired is

other and we're verticals are go X,XXX So we at we product now companies. are that ] can we confident [ Constellation into, got there, have solid also we looking that -- really a out that

a that start could So calling we number we've on. companies identified of

we installed it happy, out take new a Constellation. of is that verticals it The again, release, very are is happy, confident and customers and this can within So very and very we're now. new to very,

Howard Halpern

do quarter to XX Is still a XX online the the what you to you're seeing? a back circling anticipate pace? K-XX districts in of And offerings, coming districts new type that

James DeSocio

Yes. Yes.

Howard Halpern

you talked first or Is that is question front-loaded half throughout the be last of to about the in our the out $XXX,XXX the And year? Okay. spend. going year spread

James DeSocio

sales We've third end cycle, It's I more fourth but the back depending actually would X some of spread hire on so say out back to end. already year. more we're planning and rep, implementation development people towards and then it's the hired quarter. yes, to

Howard Halpern

keep work. forward seeing guys, quarter-by-quarter looking Well, I'm great to up Okay. progress. the the

Operator

[Operator Instructions]

Jim time, questions. no remarks. additional the there I'll closing DeSocio for this are At to hand floor back

James DeSocio

like Thank in I'd you, a is for This well row well. to say positioned done the we've Intellinetics year continued is Rob. very fourth success.

momentum, diverse and ample strong opportunities. markets a of significant in solutions competitive cross-selling a have growing position with We set

revenue business recurring around is Our working. structured model

new delivering attract the to continued by of results. and long-time well financial as We shareholders support appreciate investors aim strong our consistent and

again joining our conference for today, you call. you. to speaking we on and Thank look forward Thank next us

Operator

conclude will conference. today's This

time. may You disconnect participation. this lines for you Thank your at your

Intellinetics (INLX) 28 Mar 242023 Q4 Earnings call transcript