CoreCard Corporation Reports Fourth Quarter and Full Year 2023 Results
- CoreCard Corporation reported revenue of $12.2 million in Q4 2023 and $56 million for the full year 2023.
- The company experienced a decrease in revenue compared to the previous year.
- Income from operations and net income declined for both Q4 and the full year 2023.
- Adjusted earnings per diluted share also decreased in Q4 and for the full year 2023.
- CoreCard continues to invest in its platform and processing capabilities.
- CEO Leland Strange highlighted the growth in processing and maintenance revenue despite challenges in professional services revenue.
- Revenue for Q4 and full year 2023 decreased compared to the previous year.
- Income from operations and net income saw a decline in Q4 and full year 2023.
- Adjusted earnings per diluted share were down in Q4 and for the full year 2023.
Insights
The reported decrease in total revenue and net income for CoreCard Corporation highlights a significant downturn in the company's financial performance. A 23% drop in quarterly revenue and a 20% decrease in annual revenue, coupled with an income from operations that has declined by nearly 74% year-over-year, suggests that the company may be facing operational challenges or a contraction in its market. This could raise concerns among investors regarding the company's future profitability and cash flows.
The decrease in professional services revenue, attributed to the performance with their largest customer, implies a potential over-reliance on a limited number of clients, which increases business risk. The growth in processing and maintenance revenue, however, indicates resilience in the company's core offerings. This mixed financial picture may lead to a reevaluation of the company's valuation, affecting investor sentiment and stock performance.
Furthermore, the significant drop in earnings per share (EPS) from $1.61 to $0.40 suggests that shareholders are experiencing diminished returns, which could potentially impact the stock's attractiveness. The adjustments made to EPS, resulting in a full year adjusted EPS of $0.52, can be indicative of non-recurring expenses or accounting adjustments that investors should be aware of to fully understand the company's normalized earnings potential.
The financial results indicate a shifting landscape in the financial technology and services market. CoreCard's mention of continued investment in their platform in the face of declining revenues could be interpreted as a strategic move to capture more of the growing demand for next-generation card management solutions. This suggests a long-term vision that may prioritize market positioning and technological advancement over immediate financial gains.
Given the company's focus on large and complex card issuers, the competitive dynamics within this niche market should be examined. The company's ability to secure and maintain large clients will be crucial to its success. The reported decline in revenue from professional services, however, may signal competitive pressures or a shift in customer preferences that could affect market share.
Analysts should also consider industry trends, such as the adoption of digital payments and the increasing importance of cybersecurity, which could either pose challenges or create opportunities for CoreCard. The company's future performance will likely hinge on its ability to innovate and adapt to these evolving market conditions.
The reported financial performance of CoreCard Corporation must be contextualized within the broader economic environment. If the downturn in revenue is reflective of a sector-wide trend, it may suggest cyclical or structural challenges within the fintech industry. However, if this performance is company-specific, it could imply operational inefficiencies or strategic missteps.
The decline in professional services revenue could be symptomatic of broader economic headwinds, such as reduced business spending in anticipation of a recession or as a result of increased market saturation. Conversely, the growth in processing and maintenance revenue could indicate a stable demand for certain fintech services, even in a challenging economic climate.
The financial results may also reflect the impact of regulatory changes, shifts in consumer behavior, or technological disruptions. An economist would assess the potential for CoreCard to navigate these issues, considering factors such as interest rate fluctuations, which could affect consumer credit usage and subsequently the demand for card management platforms.
NORCROSS, Ga., Feb. 14, 2024 (GLOBE NEWSWIRE) -- CoreCard Corporation (NYSE: CCRD) (“CoreCard” or “the Company”), the leading provider of innovative credit technology solutions and processing services to the financial technology and services market, announced today its financial results for the quarter and full year ended December 31, 2023.
“Overall revenue of
Financial Highlights for the three and twelve months ended December 31, 2023
Total revenue in the three-month period ended December 31, 2023, was
In the following table, revenue is disaggregated by type of revenue for the three and twelve months ended December 31, 2023 and 2022:
| Three Months Ended | Twelve Months Ended | ||||||||
| December 31, | December 31, | ||||||||
| (in thousands) | 2023 | 2022 | 2023 | 2022 | |||||
| License | $ | -- | $ | 1,794 | $ | 1,794 | $ | 16,077 | |
| Professional services | 6,111 | 7,655 | 28,237 | 29,599 | |||||
| Processing and maintenance | 5,506 | 5,116 | 22,439 | 18,953 | |||||
| Third party | 540 | 1,260 | 3,534 | 5,136 | |||||
| Total | $ | 12,157 | $ | 15,825 | $ | 56,004 | $ | 69,765 | |
Income from operations was
Net income was
Earnings per diluted share was
Adjusted earnings per diluted share was
Investor Conference Call
The company is holding an investor conference call today, February 14, 2024, at 11 A.M. Eastern Time. Interested investors are invited to attend the conference call by accessing the webcast at https://www.webcast-eqs.com/register/corecard02142024/en or by dialing 1-877-407-0890. As part of the conference call CoreCard will be conducting a question-and-answer session where participants are invited to email their questions to questions@corecard.com prior to the call. A transcript of the call will be posted on the company’s website at investors.corecard.com as soon as available after the call.
The company will file its Form 10-K for the period ended December 31, 2023, with the Securities and Exchange Commission in early March. For additional information about reported results, investors will be able to access the Form 10-K on the company’s website at investors.corecard.com or on the SEC website, www.sec.gov.
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section below titled "Information Regarding Non-GAAP Financial Measures".
About CoreCard Corporation
CoreCard Corporation (NYSE: CCRD) provides the gold standard card issuing platform built for the future of global transactions in an embedded digital world. Dedicated to continual technological innovation in the ever-evolving payments industry backed by decades of deep expertise in credit card offerings, CoreCard helps customers conceptualize, implement, and manage all aspects of their issuing card programs. Keenly focused on steady, sustainable growth, CoreCard has earned the trust of some of the largest companies and financial institutions in the world, providing truly real-time transactions via their proven, reliable platform operating on private on-premise and leading cloud technology infrastructure.
Forward-Looking Statements
The forward-looking statements in this press release are made under the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The Company’s actual results could differ materially from those indicated by the forward-looking statements because of various risks and uncertainties including those listed in Item 1A of the Company’s Annual Report on Form 10-K and in the Company’s other filings and reports with the Securities and Exchange Commission. All of the risks and uncertainties are beyond the ability of the Company to control, and in many cases, the Company cannot predict the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. When used in this press release, the words “believes,” “plans,” “expects,” “will,” “intends,” “continue,” “outlook,” “progressing,” and “anticipates” and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements. Except as required by law, the Company is not obligated to publicly release any revisions to these forward-looking statements to reflect the events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.
| CoreCard Corporation CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except share and per share amounts) | |||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||
| Revenue | |||||||||||||
| Services | |||||||||||||
| Products | -- | 1,794 | 1,794 | 16,077 | |||||||||
| Total net revenue | 12,157 | 15,825 | 56,004 | 69,765 | |||||||||
| Cost of revenue | |||||||||||||
| Services | 8,191 | 8,838 | 36,571 | 32,664 | |||||||||
| Products | -- | -- | -- | -- | |||||||||
| Total cost of revenue | 8,191 | 8,838 | 36,571 | 32,664 | |||||||||
| Expenses | |||||||||||||
| Marketing | 73 | 105 | 310 | 336 | |||||||||
| General and administrative | 1,114 | 1,064 | 5,334 | 5,112 | |||||||||
| Development | 2,384 | 2,787 | 8,478 | 11,700 | |||||||||
| Income from operations | 395 | 3,031 | 5,311 | 19,953 | |||||||||
| Investment loss | (38) | (1,340) | (1,579) | (1,144) | |||||||||
| Other income | 272 | 100 | 765 | 226 | |||||||||
| Income before income taxes | 629 | 1,791 | 4,497 | 19,035 | |||||||||
| Income taxes | 143 | 795 | 1,102 | 5,154 | |||||||||
| Net income | $ | 486 | $ | 996 | $ | 3,395 | $ | 13,881 | |||||
| Earnings per share: | |||||||||||||
| Basic | |||||||||||||
| Diluted | |||||||||||||
| Basic weighted average common shares outstanding | 8,374,606 | 8,506.113 | 8,457,714 | 8,574,019 | |||||||||
| Diluted weighted average common shares outstanding | 8,388,927 | 8,530,000 | 8,474,123 | 8,598,546 | |||||||||
| CoreCard Corporation CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) | ||
| As of December 31, | 2023 | 2022 |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | ||
| Marketable securities | 5,230 | 4,973 |
| Accounts receivable, net | 7,536 | 13,220 |
| Other current assets | 4,805 | 3,729 |
| Total current assets | 44,489 | 42,321 |
| Investments | 4,062 | 5,180 |
| Property and equipment, at cost less accumulated depreciation | 11,319 | 12,006 |
| Other long-term assets | 3,956 | 3,725 |
| Total assets | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| Current liabilities: | ||
| Accounts payable | ||
| Deferred revenue, current portion | 2,310 | 1,094 |
| Accrued payroll | 2,172 | 1,888 |
| Accrued expenses | 971 | 525 |
| Other current liabilities | 2,530 | 2,025 |
| Total current liabilities | 9,540 | 7,543 |
| Deferred revenue, net of current portion | 265 | 473 |
| Deferred tax liability | 196 | 472 |
| Long-term lease obligation | 1,121 | 1,981 |
| Total noncurrent liabilities | 1,582 | 2,926 |
| Stockholders’ equity: | ||
| Common stock, | ||
| Issued shares – 9,016,140 and 9,010,119 at December 31, 2023 and 2022, respectively; | ||
| Outstanding shares – 8,295,408 and 8,502,735 at December 31, 2023 and 2022, respectively | 90 | 90 |
| Additional paid-in capital | 16,621 | 16,471 |
| Treasury stock, 720,732 and 507,384 shares as of December 31, 2023 and 2022, respectively, at cost | (20,359) | (16,662) |
| Accumulated other comprehensive income (loss) | 32 | (61) |
| Accumulated income | 56,320 | 52,925 |
| Total stockholders’ equity | 52,704 | 52,763 |
| Total liabilities and stockholders’ equity | ||
For further information, call
Matt White, 770-564-5504 or
email to matt@corecard.com
Reconciliation of GAAP to NON-GAAP Measures
Information Regarding Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), this press release contains certain non-GAAP financial measures. CoreCard considers Adjusted earnings per diluted share (“Adjusted EPS”) as a supplemental measure of the company’s performance that is not required by, nor presented in accordance with GAAP.
We define Adjusted EPS as diluted earnings per share adjusted to exclude the impact of non-operating investment gains or losses. We believe that Adjusted EPS is an important measure of operating performance because it allows management and our board of directors to evaluate and compare our core operating results from period to period.
Adjusted EPS should not be considered in isolation, or construed as an alternative to net income, or any other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities or as a measure of the company's liquidity. In addition, other companies may calculate Adjusted EPS differently than CoreCard, which limits its usefulness in comparing CoreCard’s financial results with those of other companies.
The following table shows CoreCard’s GAAP results reconciled to non-GAAP results included in this release:
| Three Months Ended | Twelve Months Ended | ||||||||
| December 31, | December 31, | ||||||||
| (in thousands) | 2023 | 2022 | 2023 | 2022 | |||||
| GAAP net income | $ | 486 | $ | 996 | $ | 3,395 | $ | 13,881 | |
| Investment loss | -- | 1,450 | 1,000 | 1,450 | |||||
| Income tax benefit | -- | (363) | -- | (363) | |||||
| Adjusted net income | $ | 486 | $ | 2,083 | $ | 4,395 | $ | 14,968 | |
| Adjusted Diluted EPS | $ | 0.06 | $ | 0.24 | $ | 0.52 | 1.74 | ||
| Weighted-average shares | 8,389 | 8,530 | 8,474 | 8,599 | |||||
FAQ
What was CoreCard Corporation's revenue for Q4 2023?
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