In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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CoreCard Corp (NYSE:CCRD) reported a 28% year-over-year increase in total revenue for Q1 2025, reaching $16.7 million.
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Professional services revenue was notably strong, driven by higher managed services rates from a contract amendment with Goldman Sachs.
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Operating income increased significantly to $2.8 million from $0.5 million in the same period last year, with an operating margin improvement from 4% to 15.8%.
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Adjusted EBITDA for the quarter rose to $4 million, compared to $1.7 million in Q1 2024.
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The company expects revenue growth excluding its largest customer to be between 30% and 35% for the full year 2025.
Negative Points
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CoreCard Corp (NYSE:CCRD) did not generate any license revenue for the quarter and does not expect any for the year.
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The termination of a contract by a customer acquired a few years ago resulted in a one-time accelerated revenue of $0.5 million in Q1 2024, impacting year-over-year comparisons.
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The sale of a customer to Intuit, which represented less than 3% of total revenues in 2024, poses a potential headwind with uncertainty about future business.
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The company's relationship with Deserve is expected to roll off, and there are no ongoing discussions with Intuit.
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Employee retention is a concern, with larger companies poaching employees, prompting the implementation of a retention plan.
Q & A Highlights
Q: Can you share your thoughts on the potential disruption in the card issuing industry due to the global payments spinoff and FIS consolidation? A: (CEO) I believe it's a good move for both parties involved, and while there might be some minor disruptions, I don't expect anything major. It's largely business as usual, though we might find some opportunities arising from this situation.
Q: Could you confirm the expected growth rate excluding Goldman Sachs for this year? A: (CFO) Yes, we expect growth excluding Goldman Sachs to be consistent with our previous guidance, around 30-35%.
Q: Can you elaborate on the Intuit acquisition of Deserve and its impact on your business? A: (CEO) We have limited information beyond the opaque press release. We expect our business with Deserve to gradually roll off and do not anticipate any ongoing relationship with Intuit. This has been factored into our guidance for the year.
Q: What contributed to the strong revenue from Goldman Sachs, and is this the expected run rate going forward? A: (CFO) The increase is due to higher managed services rates and a comparison to last year's first quarter. The run rate is expected to remain consistent for the rest of 2025.