Intellinetics (INLX) Q1 2025 Earnings Call May 13, 2025 04:30 PM ET Company Participants Roger Grabner - Director of MarketingJim DeSocio - President & CEOJoe Spain - CFO & COO Conference Call Participants Howard Halpern - Principal Equity Analyst Operator As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Roger Grabner, Director of Marketing. Thank you. You may begin. Roger Grabner Thank you, and good afternoon, everyone. I'm pleased to welcome you to Inteleneti ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 decreased by 5.8% to $4.2 million compared to $4.5 million in the same period last year [11] - SaaS revenue grew by 9.8% to $1.5 million, driven by early successes in payables automation [11] - Professional services revenue decreased by 13.2% to $2.2 million, accounting for 51% of total revenue compared to 55% last year [12] - Net loss for Q1 was $728,000, compared to a net loss of $175,000 for the same period last year [13] - Adjusted EBITDA for the quarter was $77,000, down from $673,000 in Q1 2024 [14] Business Line Data and Key Metrics Changes - SaaS revenue increased due to payables automation, while professional services revenue declined due to timing issues [11][12] - The gross margin percentage increased to 67.6%, driven by a better revenue mix and improved SaaS margins [12][13] Market Data and Key Metrics Changes - The company experienced a record-breaking week with over $2.4 million in new project contracts, indicating strong demand from state agencies and commercial clients [9] - Recent political events have created uncertainty, but management is optimistic about future demand for their products and services [10] Company Strategy and Development Direction - The company is focusing on transforming into a predominantly SaaS-driven business with a diverse suite of solutions [5] - Investments are being made in sales and marketing, as well as IT infrastructure, to enhance customer trust and cybersecurity [7] - The company plans to continue scaling its business and expects to see returns on these investments in late 2025 and beyond [7][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges headwinds in the building industry due to high interest rates and tariffs but remains optimistic about future growth [23] - The company expects to grow revenues year-over-year for fiscal 2025, particularly in SaaS revenues, while maintaining positive adjusted EBITDA [16] Other Important Information - The company has temporarily paused aggressive debt prepayments to focus on sales and marketing initiatives [15] - A shelf registration has been filed to strengthen the balance sheet and act quickly on market opportunities [15] Q&A Session Summary Question: How many implementations will you have and what would those mean in terms of annual recurring revenue? - The company will have about 22 to 23 customers using the SaaS product for payables automation [19] Question: How is the implementation of purchase orders progressing? - The first release of payables order was launched in April, with positive initial feedback [20][21] Question: Are there any customer hesitations regarding implementation timing? - Hesitation is more related to market conditions rather than the company's product [23] Question: Are the new orders in professional services stable in terms of margin opportunities? - Yes, the company has a strong backlog with over $3 million of work queued [27] Question: Does the company still serve over 600 K-12 customers? - Yes, the company has launched new products in the K-12 market and is seeing good growth [28][29]

Exhibit 99.1 Intellinetics Reports First Quarter Results COLUMBUS, OH – May 13, 2025 – Intellinetics, Inc. (NYSE American: INLX), a digital transformation solutions provider, announced financial results for the three months ended March 31, 2025, the first quarter of 2025. 2025 First Quarter Highlights | | For the Quarter ended March 31, | | | | | --- | --- | --- | --- | --- | | | | 2025 | 2024 | | | Revenues: | | | | | | Software as a service | $ $ | 1,542,169 | | 1,405,153 | | Software maintenance services ...

Revenue Performance - Total revenues for Q1 2025 were $4,247,345, a decrease of 5.8% year over year from $4,507,084 in Q1 2024[92] - SaaS revenue increased to $1,542,169, reflecting a growth of 9.8% year over year[92] - Professional services revenue decreased by 13.2% to $2,158,315, primarily due to reduced project work[96] - Document Management segment revenue was $1,961,312, while Document Conversion segment revenue was $2,286,033[93] Profitability Metrics - Gross profit percentage improved to 67.6%, up from 64.3% in Q1 2024[92] - Total gross profit for Q1 2025 was $2,869,200, a slight decrease from $2,899,644 in Q1 2024, with a gross profit percentage increase to 67.6% from 64.3%[100][1] - Gross profit from Software as a Service (SaaS) increased to $1,327,040 in Q1 2025, up from $1,189,161 in Q1 2024, with a gross margin of 86.1% compared to 84.6%[1][101] - Cost of Professional Services decreased by $249,122, or 19.3%, in Q1 2025, leading to an increase in gross margin to 51.8% from 48.1% in Q1 2024[102] Operating Expenses - Operating expenses rose by 21.1% to $3,553,759, driven by increased sales and marketing initiatives[92] - Operating expenses rose to $3,553,759 in Q1 2025, up from $2,934,124 in Q1 2024, with General and Administrative expenses increasing by 14.3%[103][104] - Sales and marketing expenses surged by $272,419, or 50.3%, in Q1 2025, driven by the expansion of the sales team[105] Losses and Financial Position - Loss from operations was $684,559, compared to a loss of $34,480 in Q1 2024[92] - Net loss for Q1 2025 was $727,565, with a net loss per share of $0.17, compared to a net loss of $174,714 and $0.04 per share in Q1 2024[92] - Cash and cash equivalents stood at $2.1 million as of March 31, 2025, with a working capital deficit of $1.3 million[110] - Net cash used in operating activities was $110,353 in Q1 2025, compared to net cash provided of $611,766 in Q1 2024[115] Capital Expenditures and Financing - Capital expenditures totaled $223,934, including $102,854 in capitalized software costs, compared to $127,932 in Q1 2024[92] - Interest expense decreased by $97,228, or 69.3%, to $43,006 in Q1 2025, due to early principal repayments of the 2022 Notes[107] - The company plans to seek additional debt or equity financing on acceptable terms to meet future capital needs[112] Customer Contracts - The company secured a renewal contract with its largest customer effective from October 1, 2023, with an estimated net rate increase of approximately 21%[109]

Intellinetics, Inc. (INLX) shares rallied 11% in the last trading session to close at $14.47. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 1.4% loss over the past four weeks.Intellinetics is benefiting from strong growth in its Payables Automation Solution, expanding into new markets like K-12, and investing in sales and marketing to drive future revenue growth.This company is expected to post quarterly lo ...

Intellinetics, Inc. (INLX) shares rallied 14.5% in the last trading session to close at $14.21. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 5.5% gain over the past four weeks.Intellinetics is benefiting from the strong performance and customer acceptance of its Payables Automation Solution, driving growth in SaaS revenue and expanding its market reach.This company is expected to post quarterly loss of $0. ...

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 increased by 2.1% to $4.3 million compared to $4.2 million in Q4 2023 [19] - SaaS revenue, including hosting, increased by 11.8% to $1.5 million for the quarter, driven by early payables automation successes [20] - Consolidated gross margin increased by 88 basis points to 65.8% for Q4 2024 compared to 64.9% in Q4 2023 [22] - Net loss for Q4 was $54,000, compared to net income of $62,000 for the same period last year [24] - Full year total revenue for 2024 increased by 6.7% to $18 million compared to $16.9 million in 2023 [25] - Full year adjusted EBITDA was $2.5 million, compared to $2.7 million for 2023 [28] Business Line Data and Key Metrics Changes - Professional services revenue was flat at $2.2 million for Q4 2024, accounting for 52% of total revenue, down from 53% last year [21] - SaaS revenue increased by 10.8% for the full year, while professional services revenue increased by 8.9% [25] Market Data and Key Metrics Changes - The K-12 market is growing quickly, with two additional Iowa school districts engaged after a pilot program [12] - The company is focusing on expanding into niche ERP providers and underserved markets, including county and local governments [46] Company Strategy and Development Direction - The company is transforming into a predominantly SaaS-driven business with a focus on digital transformation solutions [7] - Investments are being made in sales and marketing to accelerate growth, with a significant increase in sales and marketing expenses by 37% in Q4 2024 [23] - The company plans to enhance development capabilities and bring features to market more quickly [59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Payables Automation Solution as a key growth driver, with high customer acceptance and significant ROI [8][9] - The company expects revenue growth for fiscal 2025, but anticipates EBITDA to be reduced by more than half due to increased investments [31][32] Other Important Information - Cash provided by operating activities was $3.9 million, allowing the company to prepay $1.6 million of its debt [30] - Total assets were $18.6 million, with total liabilities of $7.9 million as of December 31, 2024 [29] Q&A Session Summary Question: How many customers are live and how many are expected to go live in the second half of the year? - Majority of customers are in the process of implementation, with two going live recently and five more in progress [38] Question: Does the live customer count include the large customer mentioned in the last call? - Yes, that customer is included, and they are processing a significant number of invoices with minimal human intervention [40] Question: Are there any hesitations from customers regarding budget deployment? - Customers are cautious due to market conditions, but the company believes it is well-positioned to demonstrate ROI [48][49] Question: Will SaaS line margins maintain above 85%? - Margins are expected to fluctuate but should remain within the mid-80s range [50][52] Question: What verticals is the company looking to expand into? - The company is exploring opportunities in county and local governments, as well as other ERP players [46]

Intellinetics, Inc. (NYSE:INLX) Q4 2024 Earnings Conference Call March 24, 2025 4:30 PM ET Company Participants Joe Spain - CFO Jim DeSocio - President and CEO Conference Call Participants Howard Halpern - Taglich Brothers Operator Greetings, and welcome to Intellinetics Fourth Quarter and Full Year 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being re ...

Revenue Performance - Total revenue for 2024 was $18,018,373, representing a 6.7% increase compared to $16,886,381 in 2023[9] - SaaS revenue grew by 11.8% year-over-year, reaching $5,688,936 in 2024[5] - Professional services revenue increased by 0.3% to $9,985,028 in 2024[4] - Total revenues for the twelve months ended December 31, 2024, increased to $18,018,373, up from $16,886,381 in 2023, representing a growth of approximately 6.7%[25] - Software as a Service (SaaS) revenues reached $5,688,936 for the twelve months ended December 31, 2024, compared to $5,133,215 in 2023, reflecting an increase of about 10.8%[25] - Total recurring revenues for the three months ended December 31, 2024, were $2,649,893, slightly up from $2,646,580 in the same period of 2023[21] Net Income and Loss - The company reported a net loss of $546,215, or ($0.13) per share, compared to a net income of $519,266, or $0.13 per share in 2023[9] - The company reported a net loss of $546,215 for the twelve months ended December 31, 2024, compared to a net income of $519,266 in 2023[25] Operating Expenses - Operating expenses increased by 23.7% to $11,698,431, driven by structural investments and share-based compensation[9] - Total operating expenses for Q4 2024 were $2,829,369, an increase of 11.4% compared to $2,540,565 in Q4 2023[7] - Operating expenses for the twelve months ended December 31, 2024, totaled $11,698,431, up from $9,456,486 in 2023, representing an increase of approximately 23.5%[25] Cash and Assets - Cash and cash equivalents at the end of the period increased to $2,489,236 from $1,215,248 in 2023, marking a significant increase of approximately 104.5%[27] - The company’s total assets decreased to $18,574,956 as of December 31, 2024, down from $19,026,260 in 2023, a decline of about 2.4%[23] Liabilities - The company’s total liabilities decreased to $7,943,201 as of December 31, 2024, down from $9,275,539 in 2023, a reduction of approximately 14.4%[23] Future Outlook - Management expects revenue growth for fiscal year 2025, but anticipates EBITDA to be reduced by more than half due to increased sales and marketing investments[10] - The Payables Automation SaaS solutions are expected to be the primary drivers of future SaaS growth, with live reference accounts increasing by 50% in the last quarter[5][11] Debt Management - The company made $1,625,000 in debt prepayments in 2024, leaving just over $1.3 million in debt[4] Share Information - The weighted average number of common shares outstanding for basic calculations was 4,201,401 for the twelve months ended December 31, 2024, compared to 4,074,194 in 2023[25] Deferred Revenues - Deferred revenues rose to $3,411,852 as of December 31, 2024, compared to $2,927,808 in 2023, indicating an increase of about 16.5%[23]

Revenue Recognition and Stability - The company recognizes revenue from subscription agreements ratably over typically one-year terms, leading to potential delays in reflecting downturns in operating results [87]. - A significant portion of the company's revenue is derived from government contracts, which are subject to early termination and audits, posing risks to revenue stability [88]. - The company does not expect to pay any dividends on its common stock for the foreseeable future, as it plans to retain earnings to maintain and expand operations [109]. Compliance and Legal Risks - Compliance with federal securities laws results in higher expenses compared to privately held companies, impacting resource allocation for growth initiatives [90]. - The company may incur substantial expenditures due to indemnification obligations for directors and officers, which could discourage legal actions against them [91]. - The company faces risks from potential litigation related to intellectual property claims, which could increase costs and harm future revenue generation [97]. Market and Stock Performance - The issuance of additional securities may dilute existing shareholders' ownership and affect the market value of common stock [98]. - The market price of the company's common stock may fluctuate significantly, leading to potential losses for shareholders [106]. - FINRA sales practice requirements may limit the ability of shareholders to buy and sell the company's stock, adversely affecting market conditions [107]. - The company must comply with NYSE American listing requirements, and failure to do so could result in delisting and reduced trading activity [102]. Operational Risks - Security breaches could lead to loss of confidential information and significant liabilities, adversely affecting the company's reputation and business [92]. - The company faces risks from potential disruptions at third-party data centers, which could harm business operations and customer satisfaction [112]. - Global economic uncertainty, including inflation and higher interest rates, may adversely impact the company's operating results and financing [110]. - The company’s IntelliCloud Payables Automation Solution is targeted at industries like home-building and construction, which may be negatively affected by new tariffs [110]. Human Resources and Competition - The company relies heavily on attracting and retaining top employees, with competition for skilled personnel being intense [115]. - The company is dependent on its ability to protect proprietary technology, with software piracy posing a persistent threat to revenue [116].