Intellinetics(INLX) - 2025 Q1 - Quarterly Report

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]