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, with six-month revenue at $26.9 million, down from $30.4 million last year.

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

• Largest customer represented 61%-63% of revenue, down from 70% a year ago.

• Ongoing investments in new platform and processing capabilities, with continued onboarding of new customers and multiple implementations in progress.

• Management expressed satisfaction with results and steady business growth, especially outside the largest customer.

Financial highlights

• Professional services revenue: $7 million; processing and maintenance: $5.7 million; third-party: $1.1 million.

• No license revenue recognized in Q2 2024; license revenue for Q2 2024 was $1.8 million, down from $6.97 million in Q2 2023.

• Net income for Q2 2024 was $0.9 million, down from $1.9 million in Q2 2023.

• Income from operations: $1.1 million, down from $2.7 million year-over-year.

• Adjusted EBITDA: $2.5 million, down from $4.8 million; EPS: $0.11, down from $0.22; adjusted diluted EPS: $0.15, down from $0.23.

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.

• Revenue growth excluding the largest customer, ParkMobile, and Kabbage expected at 15%-20% for 2024, above prior guidance.

• Professional services revenue for Q3 2024 guided to $6.2-$6.5 million.

• Processing services revenue expected to grow as customer base increases, but timing of new implementations may be delayed.