CoreCard Corp (CCRD) 2024 Q2 法說會逐字稿

Good morning, everyone. With me on the call today is Leland Strange, Chairman and CEO of CoreCard Corporation. He will add some additional comments and answer questions at the conclusion of my prepared remarks.

大家早安。今天與我一起參加電話會議的是 CoreCard 公司董事長兼執行長 Leland Strange。他將在我準備好的演講結束時添加一些額外的評論並回答問題。

Before I start, I'd like to remind everyone that during the call, we will be making certain forward-looking statements to help you understand CoreCard Corporation and its business environment. These statements involve a number of risk factors, uncertainties and other factors that could cause actual results to differ materially from our expectations.

在開始之前，我想提醒大家，在電話會議中，我們將做出一些前瞻性陳述，以幫助您了解 CoreCard Corporation 及其業務環境。這些陳述涉及許多風險因素、不確定性和其他因素，可能導致實際結果與我們的預期有重大差異。

Factors that may affect future operations are included in our filings with the SEC, including our 2023 Form 10-K and subsequent filings. We'll also discuss certain non-GAAP financial measures, including adjusted diluted EPS and adjusted EBITDA, which is adjusted for certain items that affect the comparability of our underlying operational performance. These non-GAAP measures are detailed in reconciliation tables included with our earnings release.

可能影響未來營運的因素包含在我們向 SEC 提交的文件中，包括我們的 2023 年 10-K 表格和後續文件。我們還將討論某些非公認會計準則財務指標，包括調整後的稀釋每股收益和調整後的 EBITDA，這些指標針對影響我們基本營運績效可比性的某些項目進行了調整。這些非公認會計原則措施在我們的收益發布中包含的調節表中有詳細說明。

As we noted in our press release, our second quarter results were in line with our expectations. Total revenue for the second quarter of 2024 was $13.8 million, a 12% decrease year-over-year, driven by lower license revenue and lower professional services revenue, primarily from our largest customer, Goldman Sachs.

正如我們在新聞稿中指出的，我們第二季的業績符合我們的預期。2024 年第二季的總收入為 1,380 萬美元，年減 12%，這是由於許可證收入和專業服務收入下降（主要來自我們最大的客戶高盛）。

The components of our revenue for the second quarter consisted of professional services revenue of $7 million, a metric we guide to, and which came in ahead of our previously guided range. Processing and maintenance revenue of $5.7 million and third-party revenue of $1.1 million.

我們第二季收入的組成部分包括 700 萬美元的專業服務收入，這是我們指導的指標，並且超出了我們先前指導的範圍。處理和維護收入為 570 萬美元，第三方收入為 110 萬美元。

As expected, we did not have any license revenue for the quarter. As we continue to grow revenues outside of our largest customer, Goldman represented 63% of our revenues for the second quarter of 2024 compared to 70% for the second quarter of 2023.

正如預期的那樣，我們本季沒有任何許可收入。隨著我們在最大客戶之外的營收不斷成長，高盛占我們 2024 年第二季營收的 63%，而 2023 年第二季為 70%。

Revenue growth, excluding our largest customer is 7% in the second quarter on a year-over-year basis. Revenue growth excluding our largest customer, in addition to the impact from ParkMobile and the legacy Kabbage business as we've detailed in prior quarters, was 34% in the second quarter on a year-over-year basis and is expected to be 15% to 20% for the full year, which is above our previously guided range of 10% to 15%.

不包括我們最大的客戶，第二季的營收年增 7%。不包括我們最大的客戶，加上我們在前幾個季度詳述的 ParkMobile 和傳統 Kabbage 業務的影響，第二季度的收入同比增長 34%，預計為 15%全年增長20%，高於我們之前10% 至15% 的指導範圍。

We continue to onboard new customers, both directly and through various partnerships we have with program managers. As in previous quarters, we currently have multiple implementations of progress with new customers that we expect to go live in the coming months.

我們繼續直接或透過與專案經理建立的各種合作夥伴關係來吸引新客戶。與前幾季一樣，我們目前與新客戶進行了多項進展實施，預計將在未來幾個月內上線。

Processing and maintenance revenues were mostly flat in the second quarter of 2024 compared to the second quarter of 2023, primarily due to the revenue decline from the legacy Kabbage business that I mentioned previously.

與 2023 年第二季相比，2024 年第二季的加工和維護收入基本上持平，這主要是由於我之前提到的傳統 Kabbage 業務的收入下降。

Turning to some additional highlights on our income statement for the second quarter of 2024. Income from operations was $1.1 million for the second quarter of 2024 compared to income from operations of $2.7 million for the same time last year.

轉向 2024 年第二季損益表的一些其他亮點。2024 年第二季的營運收入為 110 萬美元，而去年同期的營運收入為 270 萬美元。

Our operating margin for the second quarter of 2024 was 8% compared to an operating margin of 17% for the same time last year. The decrease is primarily driven by lower license revenue, continued investments in our new platform and lower professional services revenue. The income statement impact of our new platform build was $0.7 million in the second quarter of 2024 compared to $0.4 million for the prior year period.

我們 2024 年第二季的營業利益率為 8%，而去年同期的營業利益率為 17%。下降的主要原因是許可證收入下降、對新平台的持續投資以及專業服務收入下降。新平台建設對 2024 年第二季損益表的影響為 70 萬美元，而去年同期為 40 萬美元。

We reduced our headcount slightly in India and expect related cost savings starting in the third quarter of 2024. We will continue to look for cost savings as needed to remain profitable given the lower revenues we are currently receiving from our largest customer.

我們略微減少了印度的員工人數，並預計從 2024 年第三季開始節省相關成本。鑑於我們目前從最大客戶那裡獲得的收入較低，我們將繼續根據需要尋求成本節約，以保持盈利。

Our second quarter 2024 tax rate was 24.4%, compared to 24.8% in the second quarter of 2023. Earnings per diluted share for the quarter was $0.11 compared to $0.22 for Q2 2023. Adjusted diluted EPS for the quarter, excluding stock compensation expense was $0.15 compared to $0.23 for Q2 '23.

我們 2024 年第二季的稅率為 24.4%，而 2023 年第二季的稅率為 24.8%。本季攤薄後每股收益為 0.11 美元，而 2023 年第二季為 0.22 美元。該季度調整後稀釋後每股收益（不包括股票補償費用）為 0.15 美元，而 2023 年第二季為 0.23 美元。

Adjusted EBITDA was $2.5 million compared to $4.8 million for the second quarter of 2023. We have over $22 million of cash on our balance sheet as of June 30, 2024, and we expect to continue generating operating cash flow in 2024. We plan to use this excess cash and cash generated from operations to continue our investments in our new platform and continue buying back shares.

調整後 EBITDA 為 250 萬美元，而 2023 年第二季為 480 萬美元。截至 2024 年 6 月 30 日，我們的資產負債表上有超過 2,200 萬美元的現金，我們預計在 2024 年繼續產生營運現金流。我們計劃利用多餘的現金和營運產生的現金繼續投資新平台並繼續回購股票。

We repurchased 134,650 shares in the first quarter of 2024 for $1.6 million and 147,040 shares in the second quarter for $2.1 million. For the full year 2024, we continue to expect services revenue to be approximately flat. We expect license revenue to be approximately $1.4 million in either the fourth quarter of 2024 or the first quarter of 2025.

我們在 2024 年第一季以 160 萬美元回購了 134,650 股股票，在第二季以 210 萬美元回購了 147,040 股股票。對於 2024 年全年，我們仍然預期服務收入將大致持平。我們預計 2024 年第四季或 2025 年第一季的授權收入約為 140 萬美元。

As mentioned earlier, we expect growth from customers excluding our largest customer, in addition to the impact of ParkMobile and legacy Kabbage business in the $0.5 million of accelerated revenue recognized in Q1 2024 to be between 15% and 20% for the full year, which is above our previously guided range of 10% to 15%.

如前所述，除了ParkMobile 和傳統Kabbage 業務對2024 年第一季確認的50 萬美元加速收入的影響外，我們預計除最大客戶之外的客戶的成長將在全年達到15% 至20% 之間，其中高於我們先前指導的 10% 至 15% 範圍。

Within services, we continue to expect strong growth in processing and maintenance as our customers continue to grow and as we continue to onboard new customers. We anticipate professional services revenue in the third quarter of 2024 to be likely in the range of $6.2 million to $6.5 million.

在服務方面，隨著我們的客戶不斷成長以及我們不斷吸引新客戶，我們繼續預期處理和維護方面將出現強勁成長。我們預計 2024 年第三季的專業服務收入可能在 620 萬美元至 650 萬美元之間。

And with that, I'll turn it over to Leland.

有了這個，我會把它交給利蘭。

Thanks, Matt. You didn't leave me much to say. I think you pretty comprehensively be covered the business and even where we're headed now. I guess I often say, just look at the numbers and don't pay attention to what anybody says.

謝謝，馬特。你沒有留給我太多話要說。我認為您已經相當全面地了解了業務，甚至我們現在的發展方向。我想我常說，只看數字，不要注意別人說什麼。

I think the numbers are about what we expected. We're happy with them. We're -- they're probably a little higher than what we expected from the standpoint of professional services, and I wouldn't expect that to stay up. But I've been surprised several times in the last few years on them and they may still stay up.

我認為這些數字與我們的預期相符。我們對他們很滿意。從專業服務的角度來看，它們可能比我們的預期要高一些，而且我不認為這種情況會持續下去。但在過去的幾年裡，我已經多次對它們感到驚訝，而且它們可能仍然熬夜。

Generally, our growth is good as far as the other side of the business, other than our largest customer is steady. Could it be a little faster and bigger? Would I like that? Yeah. But you can't handle a lot of -- you couldn't handle it if it was growing a whole lot faster. So we're pretty happy with the continued growth.

總的來說，除了我們最大的客戶穩定之外，就業務的另一方而言，我們的成長良好。能不能再快一點、更大一點？我願意嗎？是的。但你無法處理很多——如果它增長得更快，你就無法處理它。因此，我們對持續成長感到非常滿意。

The new -- what we call CoreFI or CoreFinity platform we're building is coming along fine also. I'll just remind everybody that's not expected to be finished until the end of the fourth quarters, we'll say, in 2025. But we're making good progress. And we're using parts of what we've done already in our current environment. So that's an investment. It's an investment we think is really good for the company and the shareholders over the long term.

我們正在建構的新平台——我們稱之為 CoreFI 或 CoreFinity 平台也進展順利。我只是提醒大家，預計要到第四季末才能完成，我們會說，2025 年。但我們正在取得良好進展。我們正在使用我們在當前環境中已經完成的部分內容。所以這是一項投資。我們認為，從長遠來看，這是一項對公司和股東真正有利的投資。

Other than that, there's not a lot to say. We've added -- I could name a lot of cards or things, but we don't tend to do that. I will mention that one of our customers has got Qatar. So if you fly to Qatar or to India through Qatar and want to earn bonus points, you will end up with the Qatar Airlines card, and that's being processed by CoreCard. We're still doing well in the Middle East.

除此之外，沒什麼好說的。我們添加了——我可以說出很多卡片或事物的名稱，但我們不傾向於這樣做。我要提到的是，我們的一位客戶擁有卡達。因此，如果您飛往卡達或經卡達飛往印度並希望賺取獎勵積分，您最終將獲得卡塔爾航空卡，並且該卡由 CoreCard 處理。我們在中東仍然表現良好。

Generally, business is just steady, steadily growing as far as the current business. Steadily growing as far as adding some new ones. And we are working on several other good sized potential business that would be -- that would come online in late 2025. That is just the nature of what we do.

整體來說，就目前的業務而言，業務只是穩定、穩定成長。穩定成長，不斷增加一些新的。我們正在開發其他幾項規模較大的潛在業務，這些業務將於 2025 年底上線。這就是我們所做工作的本質。

If you have to work on it a year advance, typically, we have two or three that we believe at least one of those will go live, maybe all of them in the third, fourth quarter of next year, first quarter of 2026. So generally, I would just have to say we're pleased with the numbers that we reported this quarter. We're pleased with the way business is going, and we're just going to continue to stay on the path we're on now.

如果你必須提前一年進行工作，通常我們有兩到三個，我們相信至少其中一個會上線，也許全部會在明年第三、第四季、2026 年第一季上線。總的來說，我只能說我們對本季報告的數字感到滿意。我們對業務的進展感到滿意，我們將繼續沿著現在的道路前進。

Operator, you can open it for questions. We'd be happy to take a few questions either for Matt or I.

接線員，您可以打開提問。我們很樂意回答馬特或我的一些問題。

(Operator Instructions) Hal Goetsch, B. Riley Securities.

（操作員指令）Hal Goetsch，B. Riley Securities。

Thank you. I'm sorry. I was on mute. The total business this time a year ago, we were in the midst of a little bit of a banking crisis for small banks and large banks as well. A year has gone by. And you mentioned the tone of business is steady. And it's just -- is the tone of like RFPs or inquiries, is that still steady? Or is that lifting from maybe a year ago or six months ago? Or what is the tone of --

謝謝。對不起。我當時處於靜音狀態。一年前的這個時候，我們正處於小型銀行和大型銀行的銀行業危機之中。一年過去了。您提到業務基調是穩定的。只是——RFP 或詢問的語氣是否仍然穩定？還是從一年前或六個月前開始的？或是什麼語氣--

Yeah. I would say there's been a change in the sense that less fintech activity, a little bit more from the smaller banks. It's still not big, but it has improved some from what we're getting from the smaller banks.

是的。我想說的是，從某種意義上說，金融科技活動減少，而小型銀行的活動增加。它仍然不大，但與我們從小型銀行獲得的情況相比已經有所改善。

Fintech has slowed some. Of course, we still get some, but I'm just trying to give you the sense of what I see in the landscape. A little better from the smaller banks and a little less from the fintech side of the business.

金融科技已經放緩了一些步伐。當然，我們仍然得到一些，但我只是想讓你了解我在風景中看到的東西。小型銀行的情況要好一些，而金融科技方面的情況則差一些。

Okay. And question for Matt. Was there any buyback activity in the quarter? I know you have been buying back stock.

好的。並向馬特提出問題。本季有回購活動嗎？我知道你一直在回購股票。

Yeah. We bought back around 147,000 shares at $2.1 million. So again (inaudible)

是的。我們以 210 萬美元回購了約 147,000 股股票。那麼再次（聽不清楚）

Okay. And final question, you mentioned, like two to three large -- at least one or all could hit maybe in the back half of 2025. Could you give us like a range or a feel for what large is for you guys, like in terms of --

好的。您提到的最後一個問題，例如兩到三個大型專案——至少一個或全部可能會在 2025 年下半年出現。您能否給我們一個範圍或感覺對你們來說什麼是大，例如--

Yeah, that's a good question, Hal. I'm going to place your large in [two] -- I'm going to give you a pretty wide range, $2 million to $8 million a year type revenue. So over $2 million is -- it's a small-large, but it's a medium and $8 million is a big-large for us. And I'm talking about annual revenue. So [$2 million, $3 million, $4 million, $5 million, $6 million, $8 million] type annual revenue maybe in combination -- well, no reason to do a combination. You either have it or you don't have it.

是的，這是個好問題，哈爾。我將把你的大額收入放在[二]中——我將給你一個相當廣泛的範圍，每年200萬美元到800萬美元的收入。所以超過 200 萬美元是——它是一個小型-大型，但它是一個中型，800 萬美元對我們來說是一個大型。我說的是年收入。因此，[200 萬美元、300 萬美元、400 萬美元、500 萬美元、600 萬美元、800 萬美元] 類型的年收入可能是組合起來的——好吧，沒有理由進行組合。你要么擁有它，要么沒有它。

But let me just add to that though. What's important in this business is that it tends to snowball a little bit. If you add a couple of more decent-sized financial institutions, that tends to lower the risk for the next guy to make the decision. So that helps you.

但讓我補充一下。這個行業最重要的是它會像滾雪球一樣越滾越大。如果你增加幾個規模更大的金融機構，往往會降低下一個做出決定的風險。所以這對你有幫助。

Now, we believe it's very little risk. We have got a lot of experience with conversions. We've never had a problem. We do not think that will be a problem, but it doesn't matter what we believe. What matters is what our Board of Directors or risk officer believes.

現在，我們認為風險很小。我們在轉換方面擁有豐富的經驗。我們從來沒有遇到過問題。我們認為這不會成為問題，但我們相信什麼並不重要。重要的是我們的董事會或風險官的信念。

And of course, we do all we can to show that it's not much risk, but the risk is taken away based on historical performance. So that's what -- that's kind of the way we're growing the business.

當然，我們會盡一切努力表明這沒有太大風險，但根據歷史表現消除了風險。這就是我們發展業務的方式。

All right. Appreciate that perspective. Thank you.

好的。欣賞這種觀點。謝謝。

Any other question?

還有其他問題嗎？

No, sir. There are no questions in the queue.

不，先生。隊列中沒有問題。

Yeah. We thank everyone for taking the time to listen to our call. And as always, if you have any individual questions, men are always available to talk. So thank you very much.

是的。我們感謝大家花時間聆聽我們的電話。一如既往，如果您有任何個人問題，男士隨時可以與您交談。非常感謝。