CoreCard (CCRD) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $13.8 million, down 12% year-over-year, mainly due to lower license and professional services revenue from the largest customer, Goldman Sachs, and Kabbage.

• Revenue excluding the largest customer grew 7% year-over-year; excluding ParkMobile and legacy Kabbage, growth was 34%.

• Net income for Q2 2024 was $0.9 million, compared to $1.9 million in Q2 2023.

• Ongoing investments in the CoreFi/CoreFinity platform and processing capabilities are progressing, with completion expected by end of Q4 2025.

• Business remains steady, with growth from smaller banks improving and fintech activity slowing.

Financial highlights

• Income from operations was $1.1 million, down from $2.7 million in Q2 2023.

• Operating margin was 8%, compared to 17% in the prior year.

• Adjusted EBITDA was $2.5 million, down from $4.8 million in Q2 2023.

• Adjusted diluted EPS (excluding stock compensation) was $0.15, compared to $0.23 last year; GAAP EPS was $0.11, down from $0.22.

• Cash and marketable securities totaled $27.8 million as of June 30, 2024.

Outlook and guidance

• Full-year 2024 services revenue expected to be flat; license revenue of $1.4 million anticipated in Q4 2024 or Q1 2025.

• Growth from customers excluding the largest is expected at 15%-20% for the full year, above previous guidance.

• Professional services revenue for Q3 2024 projected at $6.2 million-$6.5 million.

• Processing services revenue expected to grow as new customers are onboarded, though timing may be delayed.

• Sufficient liquidity is expected to support operations and capital needs; excess cash may be used for business expansion or acquisitions.