Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CoreCard Corp (CCRD, Financial) reported revenue growth of 34% year-over-year, excluding its largest customer, Goldman Sachs.
- The company is successfully onboarding new customers through direct channels and partnerships, indicating a positive growth trajectory.
- CoreCard Corp (CCRD) has over $22 million in cash, providing a strong financial position to support ongoing investments and share buybacks.
- The company repurchased 147,040 shares in the second quarter, demonstrating a commitment to returning value to shareholders.
- The new CoreFI or CoreFinity platform is progressing well, expected to be completed by the end of 2025, which is anticipated to benefit long-term growth.
Negative Points
- Total revenue for the second quarter of 2024 decreased by 12% year-over-year, primarily due to lower license and professional services revenue.
- Income from operations dropped significantly to $1.1 million from $2.7 million in the same quarter last year.
- Operating margin decreased to 8% from 17% year-over-year, impacted by lower revenues and continued investments.
- Earnings per diluted share fell to $0.11 from $0.22 in Q2 2023, reflecting a decline in profitability.
- The company experienced a decline in fintech activity, which could impact future growth opportunities in that sector.
Q & A Highlights
Q: How has the tone of business inquiries, such as RFPs, changed compared to a year ago during the banking crisis?
A: James Strange, Chairman and CEO, noted a shift with less activity from fintechs and a slight increase in interest from smaller banks. The overall tone remains steady, with some improvement from smaller banks.
Q: Was there any stock buyback activity during the quarter?
A: Matthew White, CFO, confirmed that CoreCard repurchased approximately 147,000 shares for $2.1 million during the quarter.
Q: Can you provide a range for what constitutes a "large" customer in terms of annual revenue?
A: James Strange explained that a "large" customer could generate between $2 million to $8 million in annual revenue. He emphasized that acquiring more financial institutions can reduce perceived risk for future clients.
Q: What is the progress on the new CoreFI or CoreFinity platform?
A: James Strange stated that the platform is progressing well and is expected to be completed by the end of 2025. Parts of the platform are already being used in the current environment, and it represents a significant long-term investment for the company.
Q: How is CoreCard's business performing in the Middle East?
A: James Strange mentioned that CoreCard is doing well in the Middle East, highlighting a customer relationship with Qatar Airlines for processing their card transactions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
