Executive Summary

Revenue increased to $3.85M (+8.0% year over year), with sequential growth from Q1, and Q2 net income of $0.03M versus a loss in Q1 and the prior year period, reflecting resilient subscription demand and lower marketing spend amid COVID-19 disruptions .
Operating margin remained negative at -2.89% (vs. -7.73% in Q1; -1.59% in Q2 2019), while net margin improved to approximately 0.75% on modest net income despite higher SG&A from commissions, sales trainee class, and headcount .
Cash rose to $9.96M (+$1.68M YTD), supported by a $1.56M PPP loan (current $0.91M, long-term $0.65M), providing flexibility as many subscribers implement cost cutting measures; management remains “cautiously optimistic” for the rest of 2020 .
No formal guidance or earnings call was provided; Wall Street consensus via S&P Global appears unavailable for this OTC microcap, limiting estimated vs. actual comparisons .

What Went Well and What Went Wrong

What Went Well

Revenue grew +8% YoY to $3.85M, driven by increased sales to new and existing subscribers; sequential revenue growth from Q1 also strengthened the trend .
Net income turned positive ($28,921) versus losses in Q1 and Q2 2019, aided by lower marketing expenditures due to COVID-related trade show cancellations and travel restrictions and tax benefit recognition .
Balance sheet strengthened: cash rose to $9.96M and working capital to ~$1.216M; PPP funding increased liquidity to support operations and avoid layoffs .

Management quote: “Management remains cautiously optimistic about the rest of the year, due to the fact that many of our subscribers continue to struggle through the COVID-19 economic downturn and are implementing cost cutting measures.”

What Went Wrong

Operating margin remained negative (-2.89%), reflecting higher SG&A (+11% YoY) from commissions, sales trainees, and headcount; data/product costs also rose (+6%) on salary/benefits and third-party content inflation .
Other income fell versus last year due to lower money market returns; Q1 similarly showed deterioration in other income .
Macro uncertainty constrains visibility: COVID-19 impacts on subscriber renewals, spend levels, and sales timing remain unpredictable, pressuring forecasting reliability and limiting formal guidance .

Financial Results

Metric	Q2 2019	Q1 2020	Q2 2020
Revenue ($USD)	$3,567,531	$3,708,751	$3,852,003
Net Income ($USD)	$(11,530)	$(198,348)	$28,921
EPS (Basic & Diluted) ($USD)	$0.00	$(0.02)	$0.00
Operating Income ($USD)	$(56,744)	$(286,947)	$(111,425)
Operating Margin (%)	-1.59%	-7.73%	-2.89%
Net Margin (%)	-0.32%	-5.35%	0.75% (28,921 ÷ 3,852,003)
Consensus Revenue (S&P Global)	Unavailable	Unavailable	Unavailable
Consensus EPS (S&P Global)	Unavailable	Unavailable	Unavailable

Note: S&P Global consensus estimates were unavailable for CRMZ during Q2 2020, limiting comparisons to Street expectations .

Cost Structure and Mix (% of revenue):

Metric	Q2 2019	Q1 2020	Q2 2020
Data & Product Costs (% Rev)	39.99%	41.15%	39.34%
SG&A (% Rev)	60.20%	65.12%	62.16%
Depreciation & Amortization (% Rev)	1.40%	1.46%	1.39%

Key Balance Sheet & Subscription KPIs:

KPI	Dec 31, 2019	Mar 31, 2020	Jun 30, 2020
Cash & Cash Equivalents ($USD)	$8,275,836	$8,298,301	$9,955,650
Unexpired Subscription Revenue – Current ($USD)	$8,651,843	$9,186,434	$9,381,309
Accounts Receivable, Net ($USD)	$2,287,921	$2,195,081	$2,270,026
Working Capital ($USD ‘000s)	$832	$664	$1,216
PPP Loan – Total ($USD)	$0	$0	$1,561,500 (current $907,079; LT $654,421)

Segment Breakdown:

Segment	Q2 2020 Revenue ($USD)	Notes
N/A (company does not report segments)	N/A	Subscription-based revenues only; no segment disclosure

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2020	None provided	None provided	Maintained: No formal guidance
Operating Margin	FY 2020	None provided	None provided	Maintained: No formal guidance
SG&A	FY 2020	None provided	Expected to increase in dollars and possibly as % of revenue with ongoing expansion (subject to liquidity)	Directional commentary only
Product Development	FY 2020	None provided	Expected to increase in dollars and possibly as % of revenue with expanded development personnel (subject to liquidity)	Directional commentary only
Tax Rate	FY 2020	None provided	None provided	Maintained: No formal guidance
Dividends	FY 2020	None provided	None provided	Maintained: No formal guidance

Earnings Call Themes & Trends

No Q2 2020 earnings call or transcript was available for CRMZ [List: earnings-call-transcript returned none].

Topic	Previous Mentions (Q4 2019 and Q1 2020)	Current Period (Q2 2020)	Trend
Macro/COVID-19	Caution on pandemic’s impact on corporate decision-making; remote operations functioning; PPP loan pursued to avoid layoffs	“Cautiously optimistic,” noting subscriber cost cutting; operations continue remotely; visibility limited	Persistent caution; operational continuity maintained
Subscription Growth	FY 2019 revenue +4% YoY; Q1 2020 revenue +6% YoY driven by sales to new/existing subscribers	Q2 2020 revenue +8% YoY; sales to new/existing subscribers cited	Strengthening YoY growth
Sales & Marketing	Lower marketing spend in Q1 due to reduced activity; trade shows impacted	Lower marketing expenditures continued (COVID cancellations/travel restrictions)	Ongoing cost restraint in marketing
Cost Structure	SG&A up on commissions, trainee class, headcount (Q1)	SG&A up +11% YoY on similar drivers; data costs up +6% YoY	Elevated opex headwinds
Technology/Infrastructure	New accounting system capitalized, starting depreciation in Q4 2019; continuing into Q1	Continued depreciation impact (+7% YoY)	Incremental D&A tailwind fading over time
Liquidity/Capital	Strong cash; no long-term debt in Q1; PPP obtained	Cash up to $9.96M; PPP outstanding $1.56M (forgivable subject to criteria)	Liquidity improved

Management Commentary

“Management remains cautiously optimistic about the rest of the year, due to the fact that many of our subscribers continue to struggle through the COVID-19 economic downturn and are implementing cost cutting measures.” – Exhibit 99.1, Preliminary Q2 Revenue Press Release .
“Our net loss increased despite growing sales as the Company continues to invest in an enhanced infrastructure and additional content, which is in addition to strengthening our customer service staff… our balance sheet provides us the flexibility to manage our company for long-term shareholder value.” – Jerry Flum, CEO, Q1 Results Press Release .
Company MD&A reiterated remote operations, uncertainty in forecasting, and expected increases in sales/marketing and product development spend, subject to liquidity and cash flow projections .

Q&A Highlights

No Q2 2020 earnings call or Q&A was held or available for CRMZ [List: earnings-call-transcript returned none].

Estimates Context

S&P Global Wall Street consensus estimates (Revenue and EPS) were unavailable for Q2 2020, likely reflecting limited coverage of this OTC microcap; therefore, no comparisons to consensus can be provided .

Key Takeaways for Investors

Revenue resilience: Q2 revenue rose to $3.85M (+8% YoY) and sequentially improved vs. Q1, underscoring durable subscription demand despite macro headwinds .
Margin trajectory improving: Operating margin narrowed to -2.89% (from -7.73% in Q1), and net margin turned positive (~0.75%), aided by lower marketing spend and tax benefits; watch SG&A inflation from sales investments .
Liquidity buffer: Cash increased to $9.96M; PPP loan ($1.56M) enhances near-term flexibility as subscribers cut costs; potential forgiveness could further strengthen equity and cash .
Deferred revenue base: Unexpired subscription revenue rose to $9.38M, supporting near-term revenue recognition despite sales cycle uncertainties .
No guidance/coverage: Absence of formal guidance and Street estimates reduces near-term catalysts from “beats/misses”; focus on sequential trends and renewal metrics from filings .
Cost discipline vs. growth: Continued investment in sales force and product development may weigh on margins near term; monitor execution and ROI as marketing normalizes post-COVID .
Risk factors: COVID-driven delays in corporate decision-making and subscriber renewals remain key risks to sales predictability and margin outcomes .

CREDITRISKMONITOR COM INC (CRMZ)·Q2 2020 Earnings Summary