Intellinetics, Inc. reported a decline in financial performance for the second quarter and first half of 2025, as detailed in its latest 10-Q filing. For the three months ending June 30, 2025, the company generated total revenues of $4.01 million, a decrease of 13.6% compared to $4.64 million in the same period of 2024. The six-month revenue figures also reflected a decline, totaling $8.26 million, down 9.7% from $9.15 million year-over-year. The company experienced a net loss of $567,590 for the second quarter, translating to a loss per share of $0.13, compared to a net income of $75,050 and earnings per share of $0.02 in the prior year.
The decline in revenue was primarily attributed to a significant drop in professional services within the Document Conversion segment, which was impacted by a temporary reduction in volume prior to a contract renewal with the State of Michigan, the company's largest customer. This segment's revenues fell to $2.01 million in the second quarter, down from $2.78 million in the same quarter of 2024. Conversely, the Document Management segment saw an increase in revenues, with Software as a Service (SaaS) revenues rising by 12.6% year-over-year to $1.58 million, indicating a shift towards more stable, recurring revenue streams.
Operationally, Intellinetics reported a decrease in total operating expenses, which rose to $3.24 million in the second quarter, up 14.3% from the previous year. This increase was largely driven by higher share-based compensation expenses. The company also noted a reduction in its employee headcount, with 164 employees as of June 30, 2025, down from 189 a year earlier. Despite the challenges, the company maintained a stable gross profit margin of 68.0% for the second quarter, up from 64.7% in the prior year, reflecting a favorable revenue mix.
Looking ahead, Intellinetics expressed cautious optimism regarding its operational outlook. The company anticipates that the renewal of its contract with the State of Michigan will help restore production levels to historical norms. Additionally, the ongoing shift towards SaaS solutions is expected to bolster revenue growth in the long term. However, the company remains vigilant about external economic conditions, including inflation and market uncertainties, which could impact customer spending and overall business performance. The management believes that its strategic initiatives and market position will support future growth, despite the current challenges.
About INTELLINETICS, INC.
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