Intellinetics Reports 6.7% Revenue Growth to $18.02 Million, Faces Net Loss

Intellinetics, Inc. reported a revenue increase of 6.7% for the fiscal year ending December 31, 2024, totaling $18.02 million compared to $16.89 million in 2023. The growth was primarily driven by an increase in software as a service (SaaS) revenues, which rose by 10.8% to $5.69 million, and professional services revenues, which increased by 8.9% to $9.99 million. However, the company experienced a net loss of $546,215, or $0.13 per share, a decline from a net income of $519,266, or $0.13 per share, in the previous year. This shift in profitability was attributed to a significant rise in operating expenses, particularly in share-based compensation, which increased to $1.50 million from $663,000 in 2023.

In terms of operational changes, Intellinetics has focused on expanding its SaaS offerings and enhancing its document conversion services. The company has also made strategic investments in sales and marketing, resulting in a 23.7% increase in operating expenses, which totaled $11.70 million for 2024. The Document Management segment generated $7.52 million in revenue, while the Document Conversion segment contributed $10.49 million, reflecting a year-over-year increase of 16.5% in the latter. The company continues to rely heavily on government contracts, which accounted for approximately 80% of total revenues in both 2024 and 2023.

Intellinetics' workforce decreased to 154 employees as of December 31, 2024, down from 171 the previous year. The company has emphasized the importance of its employees in maintaining customer relationships and driving future growth. The reduction in headcount was part of a broader strategy to optimize operational efficiency in response to changing market conditions. The company also reported a significant cash flow from operations of $3.86 million, which allowed it to reduce its notes payable by $1.63 million during the year.

Looking ahead, Intellinetics anticipates continued growth in its SaaS and document conversion services, although it acknowledges potential challenges from economic conditions and government spending uncertainties. The company is currently engaged in a competitive bidding process for its largest customer, the State of Michigan, which accounted for 40% of total revenues in 2024. Management remains optimistic about the company's strategic initiatives and believes that its capital resources will be sufficient to meet operational needs over the next 12 months.