CoreCard Corp (CCRD)·Q1 2025 Earnings Summary

Executive Summary

• CCRD delivered a stronger-than-expected quarter: revenue $16.69M (+28% YoY) and adjusted diluted EPS $0.28, driven by higher professional services rates for Goldman Sachs and continued growth across other customers .
• Material beats vs Street: Revenue beat consensus by ~$2.09M (+14%) and Primary EPS (S&P definition; aligns with adjusted diluted EPS) beat by $0.14; management raised FY 2025 guidance to $65–$69M revenue and $1.10–$1.18 EPS, from $60–$64M and $0.88–$0.94 prior * * . Values retrieved from S&P Global.
• Operating performance improved: income from operations $2.81M (vs $0.53M prior year), adjusted EBITDA $4.03M (margin 24.1% vs 13.1% prior year), with operating margin of 16.8% vs 4% prior year .
• Key narrative for the stock: visible estimate beats, explicit FY guide raise, and confirmation of ex-Goldman growth trajectory (30–35% for 2025) offsetting headwinds from Deserve’s sale to Intuit; execution and margin trajectory likely near-term catalysts .

What Went Well and What Went Wrong

What Went Well

• Professional services strength (Goldman + repriced managed services): $8.70M in Q1; CFO highlighted higher managed services rates since October contract amendment and continued development activity .
• Margin expansion: operating margin 16.8% (vs 4% prior year), adjusted EBITDA margin 24.1% (vs 13.1% prior year), reflecting mix shift toward higher-margin services and cost discipline .
• Guidance raised: FY 2025 revenue to $65–$69M and EPS to $1.10–$1.18; ex-Goldman growth expected at 30–35% for the year, consistent with prior narrative .

Management quote:

• “Overall revenue of $16.7 million in the first quarter exceeded our expectations...” — Leland Strange, CEO .
• “We now expect revenues to be between $65 million and $69 million and earnings per share between $1.10 and $1.18.” — Matt White, CFO .

What Went Wrong

• Customer headwind: Deserve sale to Intuit expected to roll off; management is not in discussions with Intuit and reduced forecast for that customer due to uncertainty .
• License revenue absence: No license revenue in Q1 and none expected for the year, removing a potential quarterly upside lever seen in 2024 .
• Elevated investment items: new platform build impacted the income statement by ~$0.8M in Q1 (vs ~$0.7M prior year), maintaining a near-term drag while enabling future scale .

Financial Results

Core financials vs prior periods and estimates

Values retrieved from S&P Global for consensus estimates.

Revenue disaggregation by type

KPIs and balance sheet snapshot

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO tone: “Our quarter was good. We expect the rest of the year to be equally as good or better...” and acknowledged ongoing board-level discussions on succession/acquisition while operating as if independent; nothing new to report regarding the largest customer beyond prior disclosures .
• CFO detail: Revenue beat driven by Goldman managed services rate increases and steady hourly work; processing/maintenance +3% YoY, but +16% ex one-time CABG/accelerated revenue; raised FY 2025 guide; Q2 2025 guide provided; ongoing tax rate 24–27%; platform build ~$0.8M impact; headcount steady .

Notable quotes:

• “Higher-than-expected professional services revenue, primarily from our largest customer, Goldman Sachs.” — CFO .
• “We now expect revenues to be between $65 million and $69 million and earnings per share between $1.10 and $1.18.” — CFO .

Q&A Highlights

• Industry consolidation (GPN/FIS card issuing): CEO expects limited disruption and modest opportunity; business as usual .
• Ex-Goldman growth clarity: CFO reiterated 30–35% ex-Goldman revenue growth for FY 2025, consistent with prior commentary .
• Deserve→Intuit: Business expected to roll off; no discussions with Intuit; forecast reduced for that customer due to uncertainty .
• Goldman revenue drivers: Increase vs Q1 last year largely due to higher managed services rates; hours consistent vs Q4; expected run-rate through 2025 .
• Employee retention plan: Designed to mitigate poaching by larger firms; retention equity structured with consideration for potential acquisition by >$1B companies .

Estimates Context

• Q1 2025 vs Street: Revenue $16.69M vs consensus $14.60M; Primary EPS $0.28 vs consensus $0.14; both significant beats*. Values retrieved from S&P Global.
• Forward context: Q2 2025 management guides revenue $16.2–$16.9M and EPS $0.23–$0.28, bracketing current Street expectations; FY 2025 guide raised to $65–$69M revenue and $1.10–$1.18 EPS, implying upward estimate revisions .

Actual vs consensus detail

Values retrieved from S&P Global.

Key Takeaways for Investors

• Clear top- and bottom-line beat with a guidance raise points to positive estimate revisions and potential multiple support near term * .
• Professional services pricing tailwinds at Goldman are durable through 2025, with consistent hourly activity supporting revenue visibility .
• Ex-Goldman growth accelerating (30–35% for FY 2025) underpins diversification and reduces concentration risk over time .
• Adjusted EBITDA margin improved to 24.1% (from 13.1%) on revenue scale and mix, suggesting operating leverage as implementations mature .
• Watch the Deserve→Intuit roll-off; management has already tempered forecasts, limiting downside risk to ~2% of 2025 revenues .
• License revenue is not a lever in 2025; execution depends on services and processing volume growth and onboarding pace .
• Near-term trading: beat-and-raise dynamic with Q2 guide in line to modestly above Street, plus margin trajectory, is supportive; medium-term thesis hinges on scaling new customers/partnerships (Vervent/Cardless) and maintaining Goldman stability .

Notes:
* Values retrieved from S&P Global.