Intellinetics (INLX) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue declined 13.6% year-over-year to $4.01 million, mainly due to a temporary reduction in professional services and document conversion volumes tied to contract timing.

• SaaS revenue grew 12.6% year-over-year, driven by Payables Automation commercialization, but management cited headwinds in construction and K-12 education verticals.

• Gross margins improved to 68.0% from 64.7% last year, reflecting a favorable shift toward higher-margin SaaS offerings.

• Net loss was $567,590, or $0.13 per share, versus net income of $75,050, or $0.02 per share, in Q2 2024, due to increased investments in sales, marketing, and infrastructure.

• Backlog rebuilt post-contract renewal, with production and professional services revenue expected to return to historical levels by end of Q3.

Financial highlights

• Q2 2025 revenue: $4.01 million, down from $4.64 million in Q2 2024; six-month revenue: $8.26 million, down 9.7% year-over-year.

• SaaS revenue: $1.58 million in Q2 2025, up 12.6% year-over-year; professional services revenue: $1.90 million, down 29%.

• Consolidated gross margin increased to 68% from 64.7% last year; gross profit for Q2 2025 was $2.73 million.

• Operating expenses rose 14.3% to $3.24 million, reflecting higher share-based compensation and investments in scaling operations.

• Adjusted EBITDA was $27,573, down from $698,217 in Q2 2024.

Outlook and guidance

• 2025 revenues expected to be lower than 2024 due to first-half professional services weakness, but SaaS revenues are projected to grow.

• Adjusted EBITDA for 2025 expected to be less than half of 2024, reflecting increased investment in growth initiatives.

• Management anticipates professional services and document conversion revenue to return to historical levels by end of Q3, with margins expected to improve due to embedded price increases in renewed contracts.