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Intellinetics(INLX) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q1 2022 increased by 3% to 2.7millioncomparedto2.7 million compared to 2.6 million in Q1 2021 [11] - Adjusted EBITDA for Q1 2022 was 421,000,up18421,000, up 18% from 356,000 in Q1 2021, marking the ninth consecutive positive quarter [9][18] - Net loss for Q1 2022 was 20,000,asignificantimprovementfromanetincomeof20,000, a significant improvement from a net income of 843,000 in the same period last year [17] Business Line Data and Key Metrics Changes - SaaS revenue grew by 33% year-over-year, contributing to a total of 29% of total revenues after the acquisition of Yellow Folder [4][7] - Recurring revenue, including SaaS, increased by 16% to 768,000,whileprofessionalservicesrevenuedecreasedby4768,000, while professional services revenue decreased by 4% to 1.6 million [12][13] - Software revenue increased by 572% to 64,000,reflectingtheindustrysshifttowardscloudsolutions[11]MarketDataandKeyMetricsChangesThecompanyclosed154contractsyeartodatein2022,an1864,000, reflecting the industry's shift towards cloud solutions [11] Market Data and Key Metrics Changes - The company closed 154 contracts year-to-date in 2022, an 18% increase from 131 contracts in the same period last year, with an estimated total contract value of 3.9 million, up 150% [5] - The acquisition of Yellow Folder added 240 K-12 customers, increasing the total customer base in this market to 500 [6] Company Strategy and Development Direction - The company is focused on expanding its marketing efforts and sales team, which has resulted in increased leads and a stronger sales pipeline [4][10] - The integration of Yellow Folder is seen as a positive move, with expectations for cross-selling opportunities and enhanced EBITDA from high-margin business [7][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that Q1 2022 would be the low point for the year, with signs of improvement in the operating environment [22] - The company remains bullish on future growth, citing strong sales activity and lead generation as indicators of positive momentum [10][27] Other Important Information - Operating expenses increased to $1.54 million, primarily due to transaction costs related to the acquisition of Yellow Folder [15] - The company has maintained control over salary pressures for new hires despite a tight labor market [24] Q&A Session Summary Question: Are there signs that the headwinds from Michigan are starting to abate? - Management confirmed that the first quarter is expected to be the lowest point for the year and noted improvements in the operating environment [22] Question: How is the integration of Yellow Folder going? - Management reported no surprises in the integration process and highlighted the start of building a joint pipeline and campaigns into the Yellow Folder customer base [23] Question: Are there salary pressures for new hires? - Management indicated that they have been able to keep salary pressures under control, although hiring has been slower [24]