Executive Summary

Q3 revenue was $15.7M, up 17% YoY, with EPS of $0.27 and adjusted EPS of $0.30; operating margin expanded to 18% as license revenue arrived earlier than expected and professional services exceeded guidance .
Q4 guidance: revenue $13.3–$13.7M and EPS $0.07–$0.09; 2025 guidance introduced at revenue $60–$64M and EPS $0.88–$0.94, with 30–40% non‑Goldman growth, underpinned by higher managed services fees from Goldman beginning January 2025 .
Strategic visibility improved via amended Goldman agreements extended through December 31, 2030, with early termination rights starting January 2027; company emphasized service continuity and revenue certainty through 2026 .
Key stock reaction catalysts: upward trajectory in non‑Goldman growth, better‑than‑expected Q3 driven by earlier license revenue, and explicit 2025 guidance supported by Goldman fee increases .
Auditor will not stand for reappointment post FY2024 audit due to business model change; CoreCard will seek a new auditor .

What Went Well and What Went Wrong

What Went Well

“Professional services revenue of $7 million, which came in ahead of our previously guided range,” contributing to operating income of $2.8M and an 18% operating margin in Q3 .
License revenue of $1.4M arrived earlier than expected, boosting total revenue and margins in Q3 .
Non‑Goldman revenue growth was 7% YoY; excluding Goldman, ParkMobile, legacy Kabbage, and accelerated revenue, growth was 30% YoY in Q3, with full‑year expected at 25–30% (raised from prior 15–20%) .

What Went Wrong

Continued platform build expense ($0.7M Q3 vs $0.5M prior-year) and lumpy license revenue create volatility in period comparisons .
High customer concentration and uncertainty around Apple Card/GM program migrations; management expects GM to move to Barclays (minimal revenue impact given licensing model) and believes Apple could remain on CoreCard’s platform longer than contract guarantees (forward-looking) .
Auditor’s decision not to stand for reappointment after FY2024 audit adds near-term administrative risk while a replacement is sought .

Financial Results

Consolidated Performance vs Prior Periods and Prior Year

Metric	Q3 2023	Q2 2024	Q3 2024
Revenue ($USD Millions)	$13.399	$13.797	$15.703
Diluted EPS ($)	$(0.03)	$0.11	$0.27
Adjusted EPS ($)	$0.09	$0.15	$0.30
Operating Income ($USD Millions)	$0.413	$1.149	$2.785
Operating Margin (%)	3%	8%	18%
Adjusted EBITDA ($USD Millions)	$1.919	$2.476	$3.908

Notes: Operating margin figures cited from management commentary; adjusted EPS/EBITDA per non‑GAAP reconciliations.

Revenue Mix

Revenue Type ($USD Millions)	Q2 2024	Q3 2024
License	$0.000	$1.420
Professional Services	$6.973	$7.006
Processing & Maintenance	$5.694	$6.067
Third Party	$1.130	$1.210
Total	$13.797	$15.703

KPIs and Balance Sheet Highlights

KPI	Q1 2024	Q2 2024	Q3 2024
Tax Rate (%)	25.7%	24.4%	25%
Cash & Equivalents ($M)	$24.056	$22.589	$22.498
Marketable Securities ($M)	$5.305	$5.257	$5.511
Share Repurchases (Shares / $)	134,650 / $1.6M (Q1)	147,040 / $2.1M (Q2)	123,370 / $1.7M (Q3)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue	FY2024	“Approximately flat” services revenue; license ~$1.4M expected Q4’24/Q1’25	Total revenue “approximately flat”; license revenue recognized earlier in Q3’24 ($1.4M)	Maintained total; license timing pulled in
Professional Services	Q3 2024	$6.2–$6.5M (guide)	Actual $7.006M	Beat
Total Revenue	Q4 2024	N/A	$13.3–$13.7M	New
EPS (Diluted)	Q4 2024	N/A	$0.07–$0.09	New
Total Revenue	FY2025	N/A	$60–$64M	New
EPS (Diluted)	FY2025	N/A	$0.88–$0.94	New
Ex‑Goldman Revenue Growth	FY2024	15–20%	25–30%	Raised
Ex‑Goldman Revenue Growth	FY2025	N/A	30–40%	New
Tax Rate	Ongoing	25–27%	25% in Q3 reported	In range

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2024)	Previous Mentions (Q2 2024)	Current Period (Q3 2024)	Trend
Goldman/Apple program	High concentration; expects Apple could remain 2+ years; GM likely to move; no change in Goldman contract terms	Continued uncertainty; Middle East and strategic pipeline growing	Amended Goldman agreements through 2030; early termination rights 2027; increased managed services fees Jan 2025; CEO believes Apple on platform at least mid‑2027 (opinion)	Visibility up; concentration risk persists
Non‑Goldman growth	10–15% FY growth; onboarding Banc of California; strategic partners targeted	15–20% FY growth; 34% YoY ex-Goldman adj; pipeline of 2–3 “large” prospects	25–30% FY’24; 30–40% FY’25 ex-Goldman; processing & maintenance up 4% YoY	Accelerating
License revenue	None expected in Q1	~$1.4M expected Q4’24/Q1’25	$1.4M realized in Q3 earlier than expected	Lumpy; timing pulled forward
Platform (CoreFI)	In development; slated end of 2025	Continuing; incremental use	Nearly 4 years in; target EoY 2025 production; 2026 utilization	Execution progressing
Regulatory/Macro	Bank consent orders slowing fintech onboarding; CoreCard focuses on compliant partners	Steady inquiries; more small banks interest	CFPB fines on Goldman/Apple not involving CoreCard; growth can cause operational strain; CoreCard not part of investigations	Regulatory lens persistent
Capital allocation	Buybacks active; ~$13M authorization remaining	Continued buybacks; $2.1M in Q2	Buybacks continue; $1.7M in Q3; CEO views stock undervalued; potential M&A considered with discipline	Ongoing buybacks; selective M&A stance
Succession	Not discussed	Not discussed	Board discusses succession; potential action early next year	Governance planning advancing

Management Commentary

“Total revenue for the third quarter of 2024 was $15.7 million, a 17% increase year‑over‑year… license revenue of $1.4 million, professional services revenue of $7.0 million… processing and maintenance revenue of $6.1 million” .
“Operating margin for the third quarter of 2024 was 18%… driven by higher license revenue [and] higher professional services revenue, partially offset by continued investments in our new platform” .
“We recently renewed our agreements with Goldman… extending through December 31, 2030, with early termination rights starting in January 2027… increased managed services fees starting in January 2025… guidance for 2025 of total revenue between $60 million and $64 million and earnings per share between $0.88 and $0.94” .
CEO on Apple/GM: GM “definitely going to Barclays”… minimal revenue impact due to license nature; Apple “will be processed on the CoreCard platform for a longer period than what is guaranteed… believe… until at least mid‑2027” (opinion) .
On regulatory fines: “CoreCard was not part of the issue and was not part of any investigations… issues resulted from the success of the program” .
On succession and M&A: Board discusses succession at nearly every meeting; potential action early next year; buybacks continue; selective M&A given many targets have cash burn; CEO personally wouldn’t support offers below “north of $200 million” (personal view) .

Q&A Highlights

Non‑Goldman growth raised: From 15–20% to 25–30% for FY2024, driven by new programs and higher third‑party revenue anticipating future processing revenue .
License revenue outlook: Too soon to guide for 2025 given Q3’s earlier license and GM deconversion timing; “not counting on license revenue in 2025” .
Apple timing: Management reiterated no inside info and that timing remains uncertain; noted potential operational trade‑offs for an acquirer vs continuing on CoreCard’s platform .

Estimates Context

S&P Global consensus estimates were unavailable today; therefore, we cannot provide actual‑vs‑consensus comparisons for Q3 or Q4 guidance. We recommend re‑checking consensus to anchor revisions against CoreCard’s 2025 revenue ($60–$64M) and EPS ($0.88–$0.94) guidance .
Management characterized Q3 results as “better than expected,” driven by earlier license revenue and stronger professional services, implying potential upward revisions to near‑term models absent consensus data .

Key Takeaways for Investors

Beat/positive surprise: Q3 revenue and margins benefited from earlier license revenue and professional services outperformance; operating margin expanded to 18% and adjusted EPS reached $0.30 .
Visibility improved: Amended Goldman agreements deliver increased managed services fees starting Jan 2025 and revenue certainty through 2026; 2025 guidance introduced with 30–40% ex‑Goldman growth .
Mix shift underway: Non‑Goldman growth accelerating; processing/maintenance revenue up YoY despite headwinds from legacy businesses, supporting margin trajectory over time .
Risks to monitor: Customer concentration (Goldman/Apple), lumpy license revenue, platform investment drag near‑term, auditor transition post‑FY2024 .
Capital returns and valuation: Ongoing buybacks at current price levels; management views shares undervalued and is disciplined on M&A .
Execution milestones: CoreFI targeted for production readiness by end‑2025 and fuller utilization in 2026; pipeline includes strategic partners with potential multi‑million annual revenues .
Near‑term setup: Q4 guide ($13.3–$13.7M revenue; $0.07–$0.09 EPS) brackets lower sequential revenue post‑license, but 2025 guidance and Goldman fee increases are key narrative catalysts .

Appendix: Additional Quantitative Detail

Q3 2024 GAAP and Non‑GAAP Reconciliations

Metric	Q3 2023	Q3 2024
Net Income ($USD Thousands)	$(222)	$2,196
Adjusted Net Income ($USD Thousands)	$778	$2,402
Adjusted EBITDA ($USD Thousands)	$1,919	$3,908
Adjusted EBITDA Margin (%)	14.3%	24.9%

Balance Sheet Snapshots

Item ($USD Thousands)	Dec 31, 2023	Jun 30, 2024	Sep 30, 2024
Cash & Cash Equivalents	$26,918	$22,589	$22,498
Marketable Securities	$5,230	$5,257	$5,511
Total Assets	$63,826	$61,557	$62,808
Stockholders’ Equity	$52,704	$50,849	$51,687

Sources: Q3 press release and attached 8‑K exhibits ; Q2 press release/8‑K ; Q1 press release/8‑K ; Q3 call transcript ; Q2/Q1 call transcripts .

Estimates disclaimer: S&P Global consensus estimates were unavailable today; we could not retrieve EPS and revenue consensus for Q3/Q4.

CoreCard Corp (CCRD)·Q3 2024 Earnings Summary