Executive Summary

Q2 revenue rose 66% year over year to $3.09M, with gross margin expanding to 80% on a higher mix of subscription SaaS; however, net loss widened to $10.90M and diluted EPS was -$1.10, reflecting one-time stock-based compensation and non-cash charges .
Operating expenses spiked on a one-time $4.78M stock-based compensation award tied to the 2023 Nasdaq listing/merger; other P&L pressure included a $2.46M non-cash loss from the forward purchase agreement mark and elevated financing costs .
Liquidity remains the key risk: cash was $0.25M at quarter-end with an $11.5M working capital deficit; management executed note exchanges extending maturities into 2027 with conversion mechanics to preserve cash runway .
Strategic progress continued: subscription mix rose, AI pilots began (support, coding, insurance verification), and channel/association relationships expanded; management expects SaaS/MSaaS to outgrow services, supporting mix-driven margin gains .
No formal guidance or earnings call transcript found for Q2; S&P Global consensus estimates for ICCT were unavailable, so no vs-estimates comparison is provided (consensus unavailable) .

What Went Well and What Went Wrong

What Went Well

Strong topline and mix: revenue +66% YoY to $3.09M; subscription software and services +73% YoY to $2.82M (91% of Q2 revenue), lifting gross margin to 80% from 74% .
Product and channel momentum: new AI use cases (support, ICD-10 coding, insurance verification) and broader association/channel relationships underpin demand and cross-sell opportunities .
Management’s mix thesis intact: “We expect the growth rate of our SaaS and MSaaS subscription offerings to grow faster than Professional Services … [benefiting] gross margin rate going forward.” (MD&A) .

What Went Wrong

Profitability deterioration: Q2 operating loss of $7.49M and net loss of $10.90M, driven by one-time $4.78M stock-based comp and non-cash forward purchase agreement mark-to-market (-$2.46M) .
Liquidity and going concern: cash of $247K, current maturities of debt high, and a working capital deficit of $11.50M; management disclosed substantial doubt about going concern absent additional financing .
Listing risk: received a Nasdaq minimum bid price deficiency notice on July 8, 2024, creating potential delisting risk if compliance is not regained within the allowed period .

Financial Results

Metric	Q2 2023	Q1 2024	Q2 2024
Revenue ($USD)	$1,856,148	$2,723,363	$3,087,900
Gross Margin %	74%	81%	80%
SG&A ($USD)	$3,189,103	$4,519,898	$9,187,200
Operating Loss ($USD)	$(2,108,588)	$(3,042,185)	$(7,487,807)
Net Loss ($USD)	$(2,707,595)	$(4,722,970)	$(10,895,414)
Diluted EPS ($)	$(0.41)	$(0.51)	$(1.10)

Segment/mix (revenue):

Revenue Type ($USD)	Q2 2023	Q1 2024	Q2 2024
Subscription software and services	$1,629,999 (88%)	$2,595,050 (95%)	$2,820,863 (91%)
Professional services and other	$226,149 (12%)	$128,313 (5%)	$267,037 (9%)
Total Revenue	$1,856,148	$2,723,363	$3,087,900

KPIs and balance sheet indicators:

KPI / Balance Sheet	Q1 2024	Q2 2024
Cash and cash equivalents ($USD)	$138,031	$247,194
Working capital deficit ($USD)	$(10,906,674)	$(11,496,812)
Deferred revenue ($USD)	$180,712	$142,528
Recurring revenue mix	95% (Q1)	93% (6M)

Notes: No Wall Street consensus available from S&P Global for Q2 2024; vs-estimates comparisons are omitted (consensus unavailable) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue / EPS / Margins	FY or Q3/FY	—	No formal numerical guidance provided	—

Management included forward-looking statements but did not provide numeric guidance ranges in Q2 materials .

Earnings Call Themes & Trends

(No Q2 2024 earnings call transcript located; themes below derive from the press release and 10-Q.)

Topic	Previous Mentions (Q3 2023, Q1 2024)	Current Period (Q2 2024)	Trend
AI/technology	Emphasis on SaaS innovation; expanding product capabilities	Implemented AI in support; testing AI in ICD-10 coding and insurance verification	Increasing deployment
Fintech iCorePay	Launch; “eagerly adopted,” expected strong margins	Noted demand; included among products with customers waiting for installation	Scaling adoption
Channel/associations	Added endorsements; enterprise agreements with Carestream and Patterson	Expanded relationships with mConsent, Arthur/Marshall, HIPAA consultants, and dental associations (CA/TN)	Broadening reach
Mix & margins	Subscription growth and margin expansion targets	Gross margin 80% on subscription mix (91% of Q2 revenue)	Positive mix shift
Liquidity/capital structure	Cancelled equity line caused financing fees; increased debt use	Debt restructuring extends maturities to 2027; conversion features to preserve cash	Extending runway
Listing/compliance	—	Nasdaq minimum bid price deficiency (July 8, 2024)	Heightened risk

Management Commentary

“We have implemented artificial intelligence (AI) in our support division and are testing AI across various solutions… significant potential in leveraging AI for our ICD-10 coding and insurance verification software.” (Press release) .
“We expect the growth rate of our SaaS and MSaaS subscription offerings to grow faster than our Professional Services and other revenue over time… [supporting] gross margin rate going forward.” (MD&A) .
“The Company executed two enterprise agreements” (Carestream, Patterson) and “the launch of our Fintech solution iCorePay has been eagerly adopted by our customers.” (Q1 release) .
“Successfully reached restructuring agreements with certain convertible noteholders… extending maturities to Aug 1, 2027… optional conversion at $0.80; mandatory conversion above $1.04 with volume conditions.” (Press release/Q2 10-Q) .

Q&A Highlights

No Q2 2024 earnings call transcript was identified; therefore, there are no Q&A highlights to report from this period .

Estimates Context

S&P Global consensus estimates for ICCT were unavailable for Q2 2024; as a result, we cannot provide vs-estimate comparisons or estimate-based surprise analysis for revenue or EPS (consensus unavailable) .

Key Takeaways for Investors

Momentum on the topline and mix: +66% YoY revenue to $3.09M and 80% gross margin show the strategy of leaning into recurring SaaS is working .
Profitability is pressured by one-offs and financing noise: a $4.78M stock-based compensation charge and a $2.46M FPA mark weighed heavily on Q2 results; absent these, run-rate loss would be lower, but still significant .
Liquidity is the primary near-term risk: $247K cash and an $11.5M working capital deficit underscore the need for continued capital raises or accelerated cash generation .
Debt restructuring is a near-term stabilizer: extended maturities and equity-linked optionality reduce immediate cash outflows, buying time for execution, but also introduce dilution risk if conversions occur .
Execution watch items: iCorePay monetization ramp, AI-enabled product enhancements, and conversion of pipeline/association endorsements into subscribers should drive ARR and margins if successful .
Compliance overhang: the Nasdaq bid-price deficiency notice adds headline risk; any concrete remediation (e.g., corporate actions, catalysts boosting price) could be a stock driver .
Near-term trading setup hinges on liquidity headlines and capital structure developments (debt exchanges, equity raises), while medium-term thesis depends on sustaining subscription growth/mix expansion to approach profitability .

Additional Detail and Cross-References

Revenue drivers: Organic SaaS growth plus contributions from acquired assets; subscription revenue share rose, aiding margin expansion (MD&A, segment disclosure) .
Expense drivers: One-time stock-based compensation tied to business combination; higher payroll to support acquisitions; financing cost impacts from cancelled equity line and additional convertible debt .
Non-cash items: Forward purchase agreement fair value changes increased other expense in Q2 .
No formal numerical guidance or Q2 call transcript; investor materials centered on the 8-K press release and 10-Q filing .

Sources: Q2 2024 10-Q (filed Aug 16, 2024); Q2 2024 8-K/press release (Aug 16, 2024); Q1 2024 10-Q and 8-K/press release; Q3 2023 8-K/press release .

iCoreConnect Inc. (ICCT)·Q2 2024 Earnings Summary