Tue, May 13, 8:03 PM (40 days ago)
**Intellinetics, Inc. (INLX) Q1 2025 Financial Summary** Intellinetics, Inc. (INLX) reported a mixed Q1 2025 performance, with revenue declining but improved profit margins. Here are the key points: **Financial Health:** - **Revenue:** Total revenue decreased by 5.8% YoY to $4.25 million, driven by a shortfall in professional services due to timing of large scanning projects. - **Profit Margins:** Gross profit margin improved to 67.6% from 64.3% YoY, due to a higher mix of software as a service (SaaS) revenue and margin improvements in both segments. - **Net Loss:** Net loss widened to $727,565 from $174,714 YoY, primarily due to increased operating expenses. - **Cash Flow:** Net cash used in operating activities was $110,353, a significant decrease from the $611,766 provided by operations in Q1 2024. **Performance Metrics:** - **SaaS Revenue:** SaaS revenue grew by 9.8% YoY to $1.54 million, reflecting market demand for these solutions. - **Operating Expenses:** Operating expenses increased by 21.1% YoY to $3.55 million, driven by sales and marketing initiatives. - **Cash Position:** As of March 31, 2025, Intellinetics had $2.14 million in cash and cash equivalents, with a working capital deficit of $1.3 million. **Trends and Uncertainties:** - **Economic Conditions:** Intellinetics' performance depends on economic conditions, with potential risks from wage inflation, slowing global growth, and industry-specific downturns. - **Customer Concentration:** A significant portion of revenues comes from a limited number of customers, with the State of Michigan accounting for 42% of revenues in Q1 2025. - **Future Operations:** Intellinetics expects to secure a renewal of its contract with its largest customer, which would be effective from June 1, 2025, through May 31, 2030. **Future Impact:** - **Capital Resources:** Intellinetics believes its capital resources, including cash and cash equivalents, along with funds expected to be generated from operations and potential financing options, will be sufficient to meet its anticipated cash flow needs for at least the next 12 months. - **Capital Expenditures:** There were no material commitments for capital expenditures at March 31, 2025. **Conclusion:** Intellinetics' Q1 2025 results reflect a challenging quarter with revenue declines but improved profit margins. The company faces uncertainties related to economic conditions and customer concentration but remains optimistic about its future operations and capital resources.