CoreCard预计2025年收入为6000万美元至6400万美元，非高盛业务增长30%至40%

Earnings Call Insights: CoreCard Corporation (NYSE:CCRD) Q4 2024

Management View

• CEO Leland Strange emphasized that CoreCard's Q4 2024 results exceeded expectations due to unexpected license revenue, with total revenue for the quarter reaching $14.8 million, a 22% increase year-over-year. Processing and maintenance revenue grew 11% in the quarter, and the company continues to onboard new customers and expand through partnerships with program managers like Deserve, Vervent, and Cardless.
• The managed services contract with Goldman Sachs was extended through 2030, with guaranteed higher monthly rates starting in 2025. Revenue growth excluding Goldman and the impact from ParkMobile and legacy Kabbage business was 29% in Q4 and 33% for the full year.
• CFO Matt White highlighted the improvements in operating margin, which rose to 14% in Q4 2024 compared to 3% in Q4 2023. He stated, "Income from operations was $2.1 million for the fourth quarter of 2024 compared to income from operations of $0.4 million for the fourth quarter of 2023."
• Strange also discussed the company's strategic exploration of either pursuing an acquisition deal or appointing a new president to drive CoreCard's future, with potential decisions expected in the coming months.

Outlook

• For 2025, CoreCard expects total revenue to range between $60 million and $64 million, with earnings per share projected at $0.88 to $0.94. Revenue growth excluding Goldman is anticipated at 30% to 40%.
• Q1 2025 revenue is expected to range from $14.4 million to $15 million, with EPS guidance between $0.15 and $0.19. Professional services revenue for Q1 2025 is projected at $6.8 million to $7.2 million.
• Management clarified that no license revenue is expected for 2025, with new customer growth focused on processing services rather than licensing agreements.

Financial Results

• Q4 2024 revenue totaled $14.8 million, a 22% year-over-year increase, driven by license revenue of $1.4 million, professional services revenue of $6.2 million, processing and maintenance revenue of $6.1 million, and third-party revenue of $1.1 million.
• Earnings per diluted share for Q4 2024 were $0.24, compared to $0.06 in Q4 2023. Adjusted diluted EPS for the quarter, excluding stock-based compensation expense, was $0.28 versus $0.06 in Q4 2023.
• Full-year 2024 operating cash flow reached $5.8 million, with $7.6 million used for share repurchases during the year, including $2.2 million in Q4 2024.
• Income from operations in Q4 2024 was $2.1 million, compared to $0.4 million in Q4 2023, with the operating margin improving to 14% from 3%.

Q&A

• Harold Goetsch, B. Riley Securities: Asked for clarification on the lack of planned license fees in 2025. CFO Matt White responded, "We expect new customers to be on the processing side rather than on the license side. If something big did come in, we would still bring on a license customer, but that's not our focus at the moment."
• Goetsch also inquired about cost trends for 2025. White explained that "we do expect some increases in costs in 2025, but we don't need to add a lot of personnel or equipment to support the growth. Primarily the increase will be due to normal cost-of-living adjustments."
• Goetsch confirmed the scale of CoreCard's operations, noting 15 million active revolving credit cards on its platform. CEO Leland Strange emphasized CoreCard's superior ability to scale compared to competitors, saying, "Nobody else has even 0.5 million revolving credit cards, and we have around 15 million."

Sentiment Analysis

• Analysts maintained a neutral tone during the Q&A, seeking clarification on revenue expectations and customer growth rather than expressing strong skepticism or optimism.
• Management's sentiment was confident during prepared remarks, with Strange asserting, "We believe we will grow 30% to 40%, excluding our largest customer," and "CoreCard is the only modern processor that can legitimately compete with legacy processors today."
• Compared to the previous quarter, management exhibited greater confidence in the company's long-term growth trajectory, emphasizing new customer onboarding and the potential for strategic partnerships or acquisitions.

Quarter-over-Quarter Comparison

• Revenue growth accelerated in Q4 2024 compared to Q3 2024, with total revenue up 22% year-over-year versus 17% in Q3. Processing and maintenance revenue growth also improved from 4% in Q3 to 11% in Q4.
• Adjusted diluted EPS rose from $0.30 in Q3 to $0.28 in Q4, reflecting consistent profitability.
• Guidance language shifted from emphasizing uncertainties in Q3 to highlighting strong revenue growth projections for 2025 in Q4.
• Management's tone remained consistent, with both quarters addressing strategic initiatives and the Goldman Sachs relationship, though Q4 included more forward-looking commentary on potential acquisitions or leadership changes.

Risks and Concerns

• Uncertainty around the Goldman Sachs relationship persists, with management acknowledging potential risks if Goldman exits the issuing business. Strange stated, "I have no information that would provide any certainty that whatever new bank is chosen would keep the program with CoreCard."
• Competition from legacy processors remains a challenge, particularly as CoreCard seeks to expand its market share in the revolving credit space.
• Management highlighted the potential complexity of transitioning programs like Apple Card if new banks take over, emphasizing the difficulty of reconciling credit balances and regulatory compliance.

Final Takeaway

CoreCard Corporation delivered strong Q4 2024 results, driven by unexpected license revenue and consistent growth in processing and maintenance revenues. The company projects significant revenue growth for 2025, supported by new customer onboarding and higher fixed revenues from its extended Goldman Sachs contract. Management's confidence in scaling operations and exploring strategic opportunities, including potential acquisitions or leadership changes, underscores CoreCard's focus on long-term shareholder value. However, uncertainties around the Goldman Sachs relationship and competition from legacy processors remain critical risks.

Read the full Earnings Call Transcript