Yahoo Finance CoreCard Corp (CCRD) Q1 2024 Earnings Call Transcript Highlights: Navigating Challenges and ...
Total Revenue: $13.1 million, a decrease of 11% year-over-year.
Professional Services Revenue: $5.8 million.
Processing and Maintenance Revenue: $6.2 million, up 13% year-over-year.
Third Party Revenue: $1.1 million.
Operating Income: $0.5 million, down from $1.8 million year-over-year.
Operating Margin: 4%, decreased from 12% year-over-year.
Net Income: Earnings per diluted share $0.05, down from $0.15 in Q1 2023.
Adjusted Diluted EPS: $0.07, excluding stock compensation expense.
Adjusted EBITDA: $1.7 million, down from $3.5 million in Q1 2023.
Cash on Balance Sheet: Over $24 million as of March 31, 2024.
Share Repurchases: 134,650 shares for $1.6 billion in Q1 2024.
Tax Rate: 25.7%, compared to 24.7% in Q1 2023.
Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
CoreCard Corp (NYSE:CCRD) reported a 13% year-over-year growth in processing and maintenance revenue, indicating strong performance in this segment.
Revenue growth excluding the largest customer and specific one-time impacts was 41% for Q1 2024, showcasing strong underlying business growth.
CoreCard Corp (NYSE:CCRD) has a robust cash position with over $24 million on the balance sheet as of March 31, 2024, providing financial stability.
The company is actively engaging in share repurchases, with 134,650 shares bought back in Q1 2024, reflecting confidence in the stock's value.
CoreCard Corp (NYSE:CCRD) is onboarding new customers and has multiple implementations in progress, expected to go live in the coming months, which could drive future revenue growth.
Negative Points
Total revenue for Q1 2024 decreased by 11% year-over-year, primarily due to lower professional services revenue from the largest customer, Goldman Sachs.
The operating margin declined significantly to 4% in Q1 2024 from 12% in the same period last year, impacted by investments in new platforms and reduced professional services revenue.
Earnings per diluted share decreased to $0.05 in Q1 2024 from $0.15 in Q1 2023, indicating lower profitability.
The dependency on Goldman Sachs, which represented 59% of Q1 2024 revenues, poses a risk, especially as they are exiting certain business areas.
There are uncertainties regarding the future processing of the General Motors card and the Apple Card, with potential impacts on revenue and client relationships.
Q & A Highlights
Q: Good morning, guys. I wanted to ask you about what you mentioned towards the end of this call and that is the potential for one to three strategics and you mentioned one or both might have significant revenue. Does that mean they would they would bring a cards that they already have on your platform and that would be the new processing platform for our existing portfolio? Or could you help us understand a little better? Thanks. A: Yes, that will require conversion. We're very good at conversions. We've got a good history of that. That's obviously one of the issues with folks, but we have a really good history. And as we have no hesitation in taking on the project of converting a portfolio. So yes, that again that makes us lumpy. If we get one of those now something I didn't say and I should mention here, two of them do not have contracts that they had with their current processor until as a one in June of next year, one in October of next year. But they'll make their decision by June to October of this year, but the -- and we will start working probably 12 months before that contract ends. But the revenue would come in until the pure a so is 2025 revenue.
Q: Okay. And then on the a moving on the fintech issues with on the compliance side is a how are the fintechs you're working with? You mentioned Deserve, Vervent and Cardless, are they in that camp taking the path when they have theira A: No. Go ahead. None of our [Technical Difficulty] there are customers that currently exist have that problem but none of our customers have a problem. But as I think about it they are dealing with some of the banks that have gotten consent orders. But all that means for the bank they can't take on but they're just [Technical Difficulty] until they get their sites. So it's not impacting to my knowledge any of our current customers.
Q: Just want to make sure I understand kind of the [Technical Difficulty] one time cancellations. A: Right park mobile.
Q: In park Mobile. You expect your processing revenues to be up 10% to 15%. Is that right? Ora. A: Everything. All revenue.
Q: Hi. Thanks for taking my question. I hopped on a little late. Did you mention anything about expectations of license revenues this year? A: $1.4 million likely in the fourth quarter.
Q: Okay. And then and then two other quick questions. So do you generate any one-timer aexcess revenuesa as the General Motors card leads? A: No.
Q: Is there any special work you have to put it in? A: I mean there might be a little bit of work you know in terms of the conversion off of the platform. We haven't assumed anything at this point. The timing is still pretty uncertain as to when that might happen.
Q: Got it. And then within that General Motors, it doesn't -- does it change your contract with Goldman? Or are they still going to pay you what -- based on that contracted rate? A: It doesn't change our contract with Goldman.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
