CoreCard Corp (CCRD, Financial) released its 8-K filing on October 31, 2024, reporting impressive financial results for the third quarter ended September 30, 2024. The company, a leader in providing technology solutions and processing services to the financial technology and services market, reported a 17% year-over-year increase in total revenue, reaching $15.7 million, surpassing the analyst estimate of $13.00 million. Earnings per share (EPS) also exceeded expectations, coming in at $0.27 compared to the estimated $0.17.
Company Overview
CoreCard Corp is renowned for its comprehensive suite of software solutions designed for program managers, financial institutions, and retailers, among others. Its offerings include CoreENGINE, CoreISSUE, CoreFRAUD, and other modules that support credit and debit card management, prepaid cards, and various financial programs. The company's primary revenue is derived from the U.S., with a presence in the European Union and the Middle East.
Performance and Challenges
The third quarter results highlight CoreCard Corp's robust performance, driven by earlier-than-expected license revenue and growth in processing and maintenance services. This performance is crucial as it underscores the company's ability to capitalize on the increasing demand for advanced card management platforms. However, the company faces challenges such as maintaining this growth trajectory and managing operational costs, which could impact future profitability.
Financial Achievements
CoreCard Corp's financial achievements are significant, particularly in the software industry, where innovation and scalability are key. The company's ability to increase its revenue by 17% year-over-year and achieve a net income of $2.2 million, compared to a net loss of $0.2 million in the previous year, demonstrates its operational efficiency and market relevance.
Key Financial Metrics
CoreCard Corp reported an income from operations of $2.8 million, a substantial increase from $0.4 million in the prior year. The adjusted EBITDA for the quarter was $3.9 million, up from $1.9 million, reflecting improved operational performance. These metrics are vital as they provide insights into the company's profitability and cash flow generation capabilities.
| Three Months Ended | September 30, 2024 | September 30, 2023 |
|---|---|---|
| License Revenue | $1,420 | - |
| Professional Services | $7,006 | $6,432 |
| Processing and Maintenance | $6,067 | $5,814 |
| Third Party | $1,210 | $1,153 |
| Total Revenue | $15,703 | $13,399 |
Analysis and Outlook
CoreCard Corp's strong third-quarter performance positions it well for future growth, particularly as it continues to invest in its platform and processing capabilities. The company's outlook for the fourth quarter and fiscal year 2025 suggests continued revenue growth, with expectations of $60 million to $64 million in total revenue for 2025. This growth, excluding its largest customer, is projected to be between 30-40%, indicating a positive trajectory.
Overall revenue of $15.7 million in the third quarter, an increase of 17% compared to last year, exceeded our expectations, reflecting license revenue earlier than expected, continued growth in processing and maintenance revenue and higher professional services revenue," said Leland Strange, CEO of CoreCard Corporation.
CoreCard Corp's strategic focus on enhancing its technology offerings and expanding its market reach will be critical in sustaining its competitive edge in the dynamic financial technology landscape.
Explore the complete 8-K earnings release (here) from CoreCard Corp for further details.
