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CoreCard Corp (CCRD)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $14.8M (+22% YoY) and diluted EPS $0.24, both above internal expectations due to unexpected license revenue; services revenue tracked in line, with processing and maintenance up 11% YoY .
  • Management reaffirmed FY 2025 guidance: revenue $60–$64M and EPS $0.88–$0.94; Q1 2025 guided to revenue $14.4–$15.0M and EPS $0.15–$0.19; no license revenue expected in 2025; professional services guided to $6.8–$7.2M in Q1 .
  • Operating leverage improved: operating income $2.1M (14% margin) vs $0.4M (3%) in Q4 2023; adjusted EBITDA $3.3M (22.4% margin) vs $1.6M (13.5%) YoY .
  • Strategic update: contract with Goldman Sachs extended through 2030 (guaranteed through 2026 at higher managed services rates starting 2025); management is exploring strategic alternatives (potential transaction or succession), which could be a stock catalyst alongside non‑Goldman growth of 30–40% targeted in 2025 .

What Went Well and What Went Wrong

  • What Went Well

    • Unexpected license revenue drove a clean headline beat; “overall revenue of $14.8 million in the fourth quarter was above our expectations due to unexpected license revenue” .
    • Processing and maintenance revenue grew 11% YoY in Q4 and 7% for FY 2024, evidencing durable platform momentum .
    • Operating efficiency: operating margin expanded to 14% in Q4 (from 3% YoY) and adjusted EBITDA margin to 22.4% (from 13.5%) .
    • Quote: “CoreCard is a best‑in‑class platform…well positioned to capture the growing demand for next‑generation card management platforms by large and complex modern card issuers.” — CEO Leland Strange .

  • What Went Wrong

    • Services revenue mix remains concentrated in Goldman Sachs; management expects no license revenue in 2025, increasing reliance on services growth and GS managed services rates .
    • Full‑year growth modest (+2% total) with declines in professional services FY‑over‑FY due to Kabbage and ParkMobile impacts; multi‑customer ramp continues to be gradual .
    • Transcript discrepancy: CFO initially cited “$2.2 billion” of Q4 buybacks in one transcript; corrected in parallel transcript to $2.2M (we anchor on $2.2M) .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$13.80 $15.70 $14.82
Diluted EPS ($USD)$0.11 $0.27 $0.24
Operating Income ($USD Millions)$1.15 $2.79 $2.08
Operating Margin (%)8% 18% 14%
Adjusted EPS ($USD)$0.15 $0.30 $0.28
Adjusted EBITDA ($USD Millions)$2.48 $3.91 $3.32
Adjusted EBITDA Margin (%)N/A24.9% 22.4%

YoY Q4 vs Q4 2023:

MetricQ4 2023Q4 2024
Revenue ($USD Millions)$12.16 $14.82
Diluted EPS ($USD)$0.06 $0.24
Operating Income ($USD Millions)$0.40 $2.08
Adjusted EPS ($USD)$0.06 $0.28
Adjusted EBITDA ($USD Millions)$1.64 $3.32

Segment revenue breakdown:

Revenue Type ($USD Millions)Q2 2024Q3 2024Q4 2024
License$0.00 $1.42 $1.42
Professional Services$6.97 $7.01 $6.21
Processing & Maintenance$5.69 $6.07 $6.12
Third‑Party$1.13 $1.21 $1.07
Total$13.80 $15.70 $14.82

KPIs and balance sheet highlights:

KPIQ2 2024Q3 2024Q4 2024
Processing & Maintenance YoY Growth (%)Flat vs Q2’23 +4% YoY +11% YoY
Operating Cash Flow ($USD Millions, FY)——$5.8 (FY 2024)
Share Repurchases ($USD Millions)$2.1 (Q2) $1.7 (Q3) $2.2 (Q4, corrected)
Cash & Cash Equivalents ($USD Millions)$22.59 $22.50 $19.48
Marketable Securities ($USD Millions)$5.26 $5.51 $5.41
Tax Rate (%)24.4% (Q2) 25% (Q3) Ongoing 24–26% (guide)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ4 2024$13.3–$13.7M Actual $14.82M Beat (above range due to license)
Diluted EPSQ4 2024$0.07–$0.09 Actual $0.24 Beat (above range; non‑GAAP Adj EPS $0.28)
RevenueQ1 2025—$14.4–$15.0M New
Diluted EPSQ1 2025—$0.15–$0.19 New
Professional Services RevenueQ1 2025—$6.8–$7.2M New
RevenueFY 2025$60–$64M (introduced Q3) $60–$64M (reaffirmed) Maintained
Diluted EPSFY 2025$0.88–$0.94 (introduced Q3) $0.88–$0.94 (reaffirmed) Maintained
License RevenueFY 2025—No license expected Explicitly guided none
Non‑Goldman Revenue GrowthFY 202530–40% (introduced Q3) 30–40% (reaffirmed) Maintained
Tax RateOngoing—24–26% New parameter

Earnings Call Themes & Trends

TopicQ2 2024 (Q‑2)Q3 2024 (Q‑1)Q4 2024 (Current)Trend
Platform/Technology (CoreFinity/CoreFI)Build progressing; parts used in production; target end‑2025 Timeline reiterated: ready end‑2025; cloud‑native, active‑active ambitions Cloud architecture and “time travel” testing to speed unique programs Execution progressing; detail increasing
Goldman Sachs relationshipGS 63% of Q2 revenue; fixed monthly fee ~$1M in 2024 Agreements extended to 2030; early termination rights from 2027; higher managed services rates from Jan‑2025 Expectation Apple program likely to move banks; GS contract guaranteed through 2026 at higher rates Visibility improved; transition risk monitored
License revenue outlookExpected ~$1.4M in Q4’24 or Q1’25 License came earlier than expected in Q3 Q4 license $1.42M; no license expected in 2025 Lumpy; de‑emphasized
Non‑Goldman growth+34% YoY ex GS/ParkMobile/Kabbage +30% YoY ex GS/ParkMobile/Kabbage; raised full‑year ex‑GS growth to 25–30% +29% Q4 YoY; +33% FY ex GS/ParkMobile/Kabbage Strong multi‑customer momentum
Capital allocation (buybacks)Q2 buyback ~$2.1M FY to date buybacks detailed; continued intent Q4 buyback $2.2M; FY $7.6M Ongoing
Succession/strategic alternatives—Board discussing succession; value commentary; buybacks; acquisition interest Informal but comprehensive process to explore transaction or appoint new President in coming months Potential corporate event risk/opportunity
Tax rate24.4% ~25% Ongoing 24–26% Stable range communicated

Management Commentary

  • “Overall revenue of $14.8 million in the fourth quarter was above our expectations due to unexpected license revenue…processing and maintenance revenue [grew] 11%.” — CEO Leland Strange .
  • “For fiscal year 2025, we reaffirm…total revenue between $60 million and $64 million and earnings per share between $0.88 and $0.94…We expect full‑year 2025 revenue growth, excluding our largest customer, to be 30–40%.” — CFO Matt White .
  • “Our operating margin for the fourth quarter of 2024 was 14%…The income statement impact of our new platform build was $0.7 million in the fourth quarter of 2024 and $2.7 million for the full year.” — CFO Matt White .
  • “I believe CoreCard is the only modern processor that can legitimately compete with a legacy processor today…CoreCard has around 15 million [revolving credit cards] on their platform.” — CEO Leland Strange .

Q&A Highlights

  • License outlook: Management does not expect any license revenue in 2025; focus is on processing customers going forward .
  • Cost base: 2025 OpEx increases should be modest (normal COLA), with no need for substantial personnel/equipment additions to support planned growth .
  • Scale: Platform supports ~15M revolving cards; management believes no other modern processor has even 0.5M revolving cards .
  • Professional services cadence: Q1 2025 professional services revenue expected at $6.8–$7.2M .
  • Onboarding mechanics: New customers initially show in professional services/third‑party with processing revenue ramping after go‑live .

Estimates Context

  • S&P Global consensus for Q4 2024 EPS and revenue was unavailable at time of retrieval due to an API limit; we cannot quantify a formal beat/miss versus Wall Street consensus at this time. We will refresh once access is restored. In lieu of consensus, results were significantly above company’s own Q4 guidance ranges due to unexpected license revenue .

Key Takeaways for Investors

  • Q4 print demonstrated operating leverage and clean headline beats on revenue/EPS driven by license revenue; underlying services growth (processing/maintenance +11% YoY) remains intact .
  • FY 2025 outlook is visible (GS managed services uplift, no license expected), with non‑Goldman growth targeted at 30–40%; monitor Q1 professional services delivery ($6.8–$7.2M) for confirmation .
  • Strategic optionality: discussions underway regarding potential transaction or leadership succession; any definitive update could be a material stock catalyst .
  • Goldman/Apple transition risk is real but mitigated near‑term by contract guarantees through 2026 and management’s belief the Apple program may remain on CoreCard platform for an extended period during any bank transition .
  • Capital deployment remains shareholder‑friendly (FY 2024 buybacks $7.6M); balance sheet liquidity provides flexibility to fund platform investments and repurchases .
  • Watch for continued multi‑customer momentum: management cited three new customers signed in early 2025 and steady implementations via program managers (Deserve, Verve, Cardless) .
  • Risks: services concentration, lumpy license revenue (and none planned in 2025), and macro/partner transitions (e.g., Apple) as key variables; track tax rate within 24–26% and CoreFinity execution milestones through 2025 .
Note on non‑GAAP: Adjusted EPS excludes stock‑based compensation and non‑operating investment gains/losses; Adjusted EBITDA excludes D&A, stock‑based comp, taxes, investment and other income/expense. See press release reconciliations for detail **[320340_0001171843-25-000952_exh_991.htm:3]** **[320340_f790565428a34c79adb7bacf71ba1ab1_5]** **[320340_f790565428a34c79adb7bacf71ba1ab1_6]**.