Executive Summary

Q4 2024 revenue grew 2.1% YoY to $4.28M, driven by 11.8% SaaS growth; GAAP EPS was $(0.01) vs $0.02 a year ago as stepped-up sales/marketing spend weighed on profitability . Gross margin improved to 65.8% (+90 bps YoY) on mix and pricing .
Versus S&P Global consensus, INLX posted a small top-line beat and a significant EPS beat: Q4 revenue $4.28M vs $4.20M*; EPS $(0.01) vs $(0.08). FY24 revenue $18.02M vs $17.94M and EPS $(0.13) vs $(0.19)* (estimates from S&P Global).
Management introduced FY25 qualitative guidance: revenue growth expected, but EBITDA to be reduced by “more than half” vs FY24 as INLX accelerates investments to scale Payables Automation (IPAS) and sales capacity; cash generation funded $1.65M in 2024 debt prepayments, ending FY24 with ~$2.49M cash and just over $1.3M of debt principal outstanding .
Catalyst: Narrative centers on SaaS/IPAS traction (e.g., a large customer processing 11,000 invoices/month with zero touch) versus the near‑term EBITDA compression from growth investments; investors will weigh durable SaaS mix expansion and record cash generation against 2025 margin headwinds .

What Went Well and What Went Wrong

What Went Well
- SaaS momentum: Q4 SaaS revenue +11.8% YoY; management reiterated IPAS as the primary SaaS growth driver and cited strong customer ROI and expanding reference accounts .
- Margin enhancement: Q4 consolidated gross margin rose to 65.8% vs 64.9% last year on mix shift to SaaS and pricing, with SaaS margins in the mid‑80s expected to hold within a narrow range .
- Cash flow and deleveraging: FY24 operating cash flow was $3.86M; INLX prepaid $1.65M of debt in 2024 and ended FY with >$2.4M cash and just over $1.3M of debt .
What Went Wrong
- Profitability under pressure: Q4 adjusted EBITDA declined YoY to $600.8K (from $754.4K) and GAAP swung to a $53.7K net loss, reflecting higher sales/marketing and structural investments; full‑year adjusted EBITDA declined to $2.45M (from $2.74M) .
- 2025 margin headwinds: Management guided FY25 EBITDA to be “reduced by more than half” vs FY24 as it accelerates growth investments, implying near‑term earnings pressure despite expected revenue growth .
- Project timing and pro services: Professional services growth in Q4 was muted (0.3% YoY) due to projects shifting into 2025; storage/retrieval continues to trend down YoY .

Financial Results

Quarterly progression (2024)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($)	$4,641,593	$4,589,625	$4,280,071
GAAP Net Income (Loss) ($)	$75,050	$(392,850)	$(53,701)
GAAP Diluted EPS ($)	$0.02	$(0.09)	$(0.01)
Adjusted EBITDA ($)	$698,217	$479,537	$600,766
Gross Margin (%)	64.7%	61.1%	65.8%

Q4 year-over-year (YoY) comparison

Metric	Q4 2023	Q4 2024
Revenue ($)	$4,192,689	$4,280,071
GAAP Net Income (Loss) ($)	$61,638	$(53,701)
GAAP Diluted EPS ($)	$0.01	$(0.01)
Adjusted EBITDA ($)	$754,375	$600,766
Gross Margin (%)	64.9%	65.8%

FY 2024 summary vs FY 2023

Metric	FY 2023	FY 2024
Revenue ($)	$16,886,381	$18,018,373
GAAP Net Income (Loss) ($)	$519,266	$(546,215)
GAAP Diluted EPS ($)	$0.11	$(0.13)
Adjusted EBITDA ($)	$2,744,649	$2,451,882

Revenue mix detail (Q4)

Category	Q4 2023 ($)	Q4 2024 ($)
Software as a Service	$1,323,120	$1,479,250
Software Maintenance Services	$355,373	$346,372
Professional Services	$2,236,733	$2,242,762
Storage & Retrieval	$265,564	$212,787
Sale of Software	$11,899	$(1,100)
Total	$4,192,689	$4,280,071

KPIs and other indicators

KPI	Q3 2024	Q4 2024
Recurring Revenue ($)	$2,601,771	$2,649,893
Non‑Recurring Revenue ($)	$1,987,854	$1,630,178
Deferred Revenues (Period End, $)	$3,468,109	$3,411,852
Cash (Period End, $)	$2,501,729	$2,489,236
Debt Principal (Period End, $)	$1,339,500	Just over $1.3M
Operating Cash Flow (FY, $)	—	$3,858,160

Notes:

Management issued a correction on March 24, 2025, stating Q4 adjusted EBITDA was $600,766 (not $531,241) and FY24 adjusted EBITDA was $2,451,882 (not $2,382,357); the reconciliation table had already reflected the correct amounts .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	—	Grow YoY vs FY 2024	New
EBITDA	FY 2025	—	“Reduced by more than half” vs FY 2024	New (down)
Adjusted EBITDA	FY 2024	“Decline modestly vs 2023” (Q2/Q3 reiterated)	Actual $2.45M vs $2.74M in 2023	In line
Revenue	FY 2024	Grow YoY (reiterated)	Actual $18.02M (up 6.7%)	Achieved

No explicit guidance was given for OpEx, OI&E, tax rate, or dividends.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2–Q3 2024)	Current Period (Q4 2024)	Trend
IPAS commercialization & ROI	Q2: doubled live references to 4; strong ROI; plan to add 4 salespeople . Q3: IPAS star at Build Smarter; 11–12 customers expected live by early 2025; PO module due YE .	Large Constellation customer processing 11,000 invoices/month with zero touch; 2 recent go‑lives, 5 implementations in progress; PO release “end of this quarter” .	Strengthening
K‑12 expansion (SUI partnership)	Q2: launching K‑12 IPAS pilot . Q3: beta live; co‑marketing with SUI; faster implementations expected .	Q4: K‑12 pipeline growing quickly; two Iowa districts added; pilot success highlighted .	Expanding
SaaS margins	Q2: mix/pricing lifted consolidated GM to 64.7% . Q3: SaaS margin ~83.7% (down slightly YoY) .	Q4: consolidated GM 65.8%; SaaS mid‑80s margin range expected to persist .	Stable/high
Sales & marketing investment ramp	Q2/Q3: stepped‑up hiring; higher trade show spend; EBITDA to decline vs 2023 .	Q4: FY25 EBITDA to be >50% below FY24 as investments accelerate .	Increasing
Macro/housing exposure	Q3: cautious housing backdrop but ROI helps adoption; government BPO timing into new year .	Q4: some customers waiting for PO module; cautious budgets amid rates; ROI selling point in tighter times .	Mixed, manageable
Key risk disclosures	Q3: potential revenue reduction from largest pro services customer .	Q4 PR: risk of not renewing largest customer contract in competitive bid .	Persistent

Management Commentary

“One of our largest customers is processing over 11,000 invoices a month with zero touch.” — CEO Jim DeSocio, on IPAS ROI and adoption .
“We expect that we will grow revenues…for fiscal year 2025. We also expect its 2025 EBITDA to be reduced by more than half compared to fiscal year 2024, due to increased investments in sales and marketing…” — CFO Joe Spain .
“We prepaid $1.65 million of our debt, leaving just over $1.3 million. We stepped up our sales and marketing investments in 2024, and have continued to do so, adding a Vice President of Sales and Sales Engineer in 2025 already.” — CEO Jim DeSocio .
“The K‑12 customers can generally implement in less than half the time of the larger homebuilder entities… our K‑12 pipeline is growing quickly.” — CEO Jim DeSocio .

Q&A Highlights

Implementations/live customers: 2 customers went live in the last two weeks; 5 in implementation; a large Constellation customer is now live and expected to ramp toward 85–90% zero‑touch AP processing over time .
Product roadmap: Purchase Order module release “end of this quarter” to expand addressable volume and add revenue with existing AP customers .
K‑12 traction: After a successful pilot, two additional Iowa school districts added; intention to integrate more tightly with SUI and scale across 1,300 districts ecosystem .
SaaS margins: Management expects SaaS gross margins to remain in the “mid‑80s” with normal variability by customer/project .
Macro tone: Housing customers cautious amid higher rates; strong ROI helps sell‑through even in tighter environments; some deals waited for PO module .

Estimates Context

Q4 2024: Revenue $4.28M vs $4.20M estimate* (beat); GAAP EPS $(0.01) vs $(0.08) estimate* (beat) .
FY 2024: Revenue $18.02M vs $17.94M estimate* (beat); GAAP EPS $(0.13) vs $(0.19) estimate* (beat) .
FY 2025: Consensus models revenue $17.03M* and EPS $(0.50)* (one analyst), below FY24 revenue, reflecting expected EBITDA compression during the investment year (management guided FY25 revenue growth and >50% EBITDA decline vs FY24) .

Estimates marked with * retrieved from S&P Global.

Estimates table

Period	Revenue Estimate ($)	Revenue Actual ($)	EPS Estimate ($)	EPS Actual ($)
Q4 2024	4,200,000*	4,280,071	(0.08)*	(0.01)
FY 2024	17,938,000*	18,018,373	(0.19)*	(0.13)
FY 2025	17,033,000*	—	(0.50)*	—

Key Takeaways for Investors

INLX delivered modest Q4 revenue growth and a clear revenue/EPS beat vs a thin consensus, with improving gross margins and continued SaaS mix shift; near‑term profit was purposefully sacrificed to accelerate IPAS growth .
IPAS momentum is tangible (11,000 zero‑touch invoices/month at a marquee customer; multiple go‑lives in flight), with the imminent PO module potentially boosting ACV and utilization across existing AP customers .
K‑12 expansion via SUI adds a second scaled channel with faster implementation cycles and high‑margin SaaS contribution potential; pipeline appears to be building .
FY25 will likely be a “reset year” on EBITDA by design; management’s commitment to reinvest should support multi‑year SaaS growth and higher structural margins post‑2025 .
Strong FY24 cash generation funded accelerated deleveraging; balance sheet flexibility (cash >$2.4M; ~>$1.3M debt) helps underwrite the growth plan without external capital .
Watch two risks: (1) renewal/competitive bid for the largest customer contract, and (2) any revenue timing/mix shifts in professional services that can add quarterly noise .
Estimate revisions: Expect upward drift to near‑term revenue/EPS starting points post‑beat, but FY25 EBITDA/earnings likely to be revised down or held conservative given explicit guidance on >50% EBITDA decline .

Additional context and sources:

Q4 2024 8‑K (Item 2.02) and Exhibit 99.1 press release: revenue/EPS, mix, cash flow, balance sheet, 2025 outlook .
Corrected Q4/FY24 press release: adjusted EBITDA corrections; recurring revenue reconciliation .
Q4 2024 earnings call transcript: gross margin detail, SaaS margin commentary, IPAS adoption proof points, 2025 guidance .
Prior quarter releases/calls: Q3 and Q2 revenue/margin/EBITDA trends and guidance posture .

INTELLINETICS, INC. (INLX)·Q4 2024 Earnings Summary