INLX - Earnings call transcript Q1 2024

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Operator

Greetings, and welcome to the Intellinetics First Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tom Baumann with FNK Investor Relations. Thank you, sir.

You may begin.

Thomas Baumann

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

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

and of For that will report report statements, Jim, well the and financial uncertainties the over the be CEO. more or results in forward-looking now please not actual as recurring can measures presented results Form as refer Analysis non-GAAP under XX-K cause by included other in press Financial adjusted and financial to as EBITDA issued measures risks Intellinetics' discuss turn the different release GAAP A filed isolation financial non-GAAP between with I be factors caption from Management's in intended measures information Discussion revenue. yours. as DeSocio, please to of XX-Q GAAP and in measures Condition that accordance a section annual is Intellinetics' President today, to and Risk such Operations that call considered the Factors found may would are prepared be for management on Non-GAAP or today. With substitute release today and the call from like to and call Form to today. Also, differ quarterly in the materially Jim reconciliation and the all may said, non-GAAP companies. Results on on press about note issued

James DeSocio

a Intellinetics SaaS-centric company Thank The to of transition Tom. you, continues.

SaaS our our than as SaaS newest has grow recurring opportunities comes Demand offering to an of continues our IntelliCloud Payables is revenue well a positioned all to our of increased of solution consolidated support to all is overall but are been This is XX% faster offerings. revenue SaaS our our just up SaaS Automation portion of of as the even revenue recurring percentage contributing year. IPAS last for the not Our business. revenue K-XX revenue to SaaS part growing pipeline to progress and our important our very or for our XX% the has and IPAS Accordingly, strong, also growing. System Yellow our first consolidated Folder first is rapidly. our results. Response IPAS quarter, for in in in just investment started IPAS increasingly SaaS support Intellinetics And SaaS solutions. accelerating marketing we offerings, approximately across the quarter from

to systematically is much for earnings revenue shareholders, to recurring will make with cost we platform profitable us the our sustainable, appropriately revenue our easy majority Our of volatility a profitable, revenue goal model, This possible. size scalable will also contracted that to cash make durable, very growth. fixed creating so reduce benefit as and enable are business total as

and the contribution continues document story. generate margin. process relevant become our and retrieval revenue outsourcing business, our to to to business digital software less and positive including continues nonrecurring Our portion less Meanwhile, transformation conversion storage of document

to cash Graphic SaaS this XXXX. significantly may expanded As business offerings. provided recall, create since of additional the business flow And you then, acquire and in this acquisition we with Sciences

over consistent. the will However, organic less time, opportunities growth become this business in

difficult. makes and business more budgeting Additionally, the nonrecurring nature of this modeling

to business as plans divest generate have to cash. this no it We continues

goal of activities nonrecurring revenue growth. However, streams promotional rather offerings our SaaS we our the around plan to with than SaaS maximize accelerating

-- the not have nonrevision few SaaS who been a lines our is is emphasizing increasingly years, Yellow have over that recognize revision our is we business strategy. past a since of that followed strategy response shareholders. acceleration This we total have acquisition. prior even X Intellinetics Those a This years so of Folder the success into the strategy a to We on strongly over based IPAS. and the believe we to had transformation, a past evolving path will the an company, SaaS see nearly early benefit more which

has given said, the XX% X over significant lower I has momentum. solution IPAS pipeline end of past us months. our The increased As our by

and for tangible expect these users. revenue provides count double few In X of We combined until an aggregate, we customers next the uncommon where quarters. for IPAS the the customers have represent is customers the business over have is to our and IPAS validating customer delay the in to which complete. and data the support X point this than customer of X solution, demonstrating fully estimated optimism signed annual reinforces payment value deployment more in typically full, deployments, $XXX,XXX, regarding SaaS X already This paid this

As we a revenue. we becoming anticipate move IPAS and our contributor larger XXXX, consolidated to through larger

said, This before revenue, more marketing than includes Folder since well doubles in as as dollars districts incremental market sales Yellow towards in $XXX,XXX growing our acquired XXXX. includes now have our XXX presence which our K-XX an generating our vertical significant spend XXXX operations April staff. this and As I previously K-XX development of budget we SaaS accelerating Simultaneously, IPAS.

Officer, target about Chief opportunity. At financials. is summer launching IPAS. IPAS like to anticipate each Importantly, to this to to K-XX a turn Joe of pilot including time, you I this call We Spain, our for address a these Intellinetics would the to this additional talk our services, Financial districts over

Joseph Spain

which from Total software, Subscription is as same of financial first material increased The period the hosting the 'XX for million I of revenue on for including March Jim. ended million following services are for XXXX. our $X.XX quarter year. comprised the growing $X.X period from the year. results quarter million revenue, expected to XX, the our our same quarter period quarter revenue increased revenue consistent for year. SaaS review are for same revenue more maintenance last statements maintenance the last software to $X.X now components slowly with as to million the of X.X% SaaS, $X.XX for XX.X% $X.X the and of for X.X% increased Professional X.X% at will over Thanks, last history our grew million and to $X.X presented and XXXX. services software compared million operations. service

same expense $X.X XXXX. due towards professional $XXX,XXX to year. equity by to expensed note, compensation expenses. largely compared to revenue to of The revenue restricted from recurring to percent basis quarter XX% which of QX Of in last increase same to million $X.X in XX.X% investments structure for increase quarter, this and increased largely increases. Operating a matter. as charge positive a to timing in X.X% quarter, awards as the gross of XX.X% revenue, scale the The margin year period Consolidated the year. which better we driven and both for compared and well expenses in QX stock is increased for as timing employees for the As Sales points last 'XX, the $XXX,XXX noncash. impact 'XX decreased marketing was is a XX.X% XXX was million services QX price total for revenue more mix, weighting compared was

quarter. We rep sales, hired invest marketing in and continue for we example, an to last additional sales

acceleration. important Loss called is referenced expense $XXX,XXX to per to moment was both equity compensation $XXX,XXX to trade also for loss also last increasing was share per per that including our earnings activity release, our The which year. was $X.XX K-XX for $X.XX is XXXX, $XXX,XXX a period income I primary of the in onetime. which share are out Net driver share and $XXX,XXX show same it ago, of net IPAS We QX was the earnings the compared last here in year. compared of

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

Intellinetics' At had I'll to and million. of March a balance we of Next, brief $X.X net XX, accounts million $X.X sheet. overview of receivable cash turn

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

call less leaves outlook. principal grow X, described year-over-year million $X.X Based on wrap with want of long-term net for December risks to have and revenues our filings March, our subject prepay assumptions plans meaning debt, XXX,XXX we XXXX. to we year uncertainties month, expectations an basis fourth we are As earnings debt a financial to reiterating our additional cash no at $XXX,XXX current and which call, fiscal our this our in we in in and debt to debt of our intend end our XXXX. and up the to this in noted on XXXX. I we debt, prepaid expect Further, of the quarter of principal remaining due

adjusted expectation EBITDA, adjusted XXXX than revising EBITDA will be Regarding levels. less we at or that XXXX slightly and guidance are our for

revised have our long-standing document tasks in to for in shift location revenue by performed our reduce that XXXX. from take our largest, one our customer, QX conversion due another segment conversion expectation document certain guidance We a office annual starting our a to step could to will location way business that

perform which agreeable and timely And that Our we substantial, management are execution a want Jim mutually it. in negotiate of good our and customer total add? to the hence, to team you educate to we important believes the accurate understands proposition with provide have we that outcome. tasks value the do is customer to intend the customers extremely faith the

James DeSocio

master contracts in are contracts same for reminder, done Thanks with work a document Joe. multiple for business the Yes, as beneath years. or different These overall conversion many signed contract. and so have has customer different the locations at the similar our prices

price advantages. many us short is on contract May subsidiary, linked, our performing customer quite XXXX. Further, If renegotiation, since and work you has which good and been of we specific without locations is for could this have period these picked for that economically save a Sciences, a it, Graphic cherry are incumbent XXXX understanding time at strictly contracts until

and from willing every X which a for made Perhaps about rarely images in level single have to processed incur. would every processing, change error-free accept error new fines provider million Aside say very is for just costs, we to service happy I'm same-day years, be high to which agreements X annually. financial once

no guarantees but are of these solution expect we mutually in sorts this can negotiations. We out customer, work acceptable a there with

adjusted duty we listening. open situation. reductions like potential in to our doing still I'd said, time, anticipate from delivering at thank we're customer the as developing can up to that business all Q&A. for XXXX. With a to this largest I'm you and you XXXX our on range this advise proud So that And for withstand similar EBITDA revenue this call

Operator

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

Howard Halpern

guys. Congratulations results, on QX

X. added way you In many have? developing of said structured Or How terms operations? total reps, number an in of sales they where the a K-XX integrated are do are the they you're team? you you And with IPAS

James DeSocio

direct also X our reps who Howard. product will finding -- reps, sales come Right, reselling IPAS carry of resell yes, sales IPAS new so the into have partners being reps, base management one from, IPAS we -- team, the through hired our our and that, team other to X that quotas. our our has customer we where where success of our are rep too, And partners. to in-charge sales our sales And and handle to new and we our K-XX existing that's are executive one selling great the

Howard Halpern

for for the is Okay. constellation And is simpler than K-XX process the be larger customers? it implementation to the going customer

James DeSocio

of We not K-XX as are is product, complex base. situations be so. that straightforward. inked believe to a bit And businesses more different multistate, little going with customer as using commercial commercial our multi-tax, out bit the K-XX first our our some We data to little site product, with it's certainly customer just our start, of a multi-country

will it be we think So simpler.

years, is this better means of that business darn have The doing over are you et pay, last and they product or which I've you've And much new is it, or this. implementation. for and release. couple product And for a at all a been how to pretty so, has And track fairly much news year I've good got go a customers more money our and when say our never paid, we've we've live gotten is people a -- till say metric really people gotten and you the this of you seen SaaS cetera. us a going doing. before. your is they implementing other better. product Usually, They've got great good holding bug, the all great got a pretty the how that matured is

Howard Halpern

is And type why people implementation also? spend support is that guess, on, some of of that you have incremental or the I

James DeSocio

support product don't like. running little a have get we quickly Exactly, staff as that exactly. We're and it we the and to oversell up concerned as the

support investing the we're So in staff as well.

Howard Halpern

you if from were all new you you get could X the up or anticipate do up side, you contracts, commercial running the sign X them do end and think And before think the -- year? and to you of --

James DeSocio

to us. have down. We their into a If we to have need couple It them. weeks, the so sign not we conservatively definitely. and depends XX-day implementation on We're it work next integration slows probably available -- their ready. usually when that It's of to get systems most they at they them have usually sign to with looking us a developer -- system, a it's in do

things been to up consistently control, out successful in our days. signed XX once there's of -- of very getting a there people couple we've XX So but are pretty

Howard Halpern

one from [ in million you out level And see ] We the expense? G&A last take if compensation one. that Okay. increases incremental should onetime $X.X stock expense

James DeSocio

Yes. Joe, on to that? you elaborate do want

Joseph Spain

Yes. Yes. Yes.

James DeSocio

I gave, yes. what That's

Howard Halpern

Okay.

Okay. up And the work. keep great

James DeSocio

Thank you, Howard.

you free please have. that have myself forward, contact answer any directly, and IR FNK and Tom might or Baumann feel we'd be questions at additional us contact to to and can Going questions, happy any conversation you a Joe

I'd for to well-positioned like So up. with that, Intellinetics continued wrap is success.

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

next is Thank and working. to of speaking all. to continued us by you results. Thank appreciate today, financial our attract delivering investors strong structured around aim the support shareholders new Our look business you long-term well model our and consistent conference we as for revenue recurring joining We and call. again forward on

Operator

concludes This today's teleconference.

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

Intellinetics (INLX) 14 May 242024 Q1 Earnings call transcript