MIND CTI Reports Second Quarter 2024 Results

Rhea-AI Summary

MIND CTI (NASDAQ: MNDO) reported Q2 2024 results with revenues of $5.3 million, matching Q2 2023. Operating income was $1.0 million (20% of revenues), slightly down from $1.1 million in Q2 2023. Net income remained stable at $1.1 million ($0.06 per share). For the first six months of 2024, revenues increased to $11.0 million from $10.7 million in the same period of 2023.

CEO Monica Iancu announced her transition to Chairperson, with Ariel Glassner appointed as the new CEO. The company's cash position was $14.6 million as of June 30, 2024. A cash dividend of $0.24 per share was distributed in April 2024. Revenue distribution showed Europe representing 53% of total revenues, with the Americas at 42%.

Positive

• Stable quarterly revenue of $5.3 million, matching Q2 2023
• Six-month revenue increased to $11.0 million from $10.7 million year-over-year
• Strong cash position of $14.6 million as of June 30, 2024
• Cash dividend of $0.24 per share distributed in April 2024

Negative

• Slight decrease in quarterly operating income from $1.1 million to $1.0 million
• Six-month operating income margin decreased from 22% to 20.9% year-over-year
• License revenues represented only 2% of total revenues in Q2 2024

Insights

Financial Analyst

MIND CTI's Q2 2024 results show stability amidst challenges. Revenues remained flat at $5.3 million, with operating income slightly decreasing to $1.0 million. The operating margin held steady at 20%, demonstrating resilient cost management. The company's cash position of $14.6 million provides a solid financial buffer.

The revenue mix shows heavy reliance on maintenance and services (98%), indicating a stable but potentially stagnant customer base. The low license revenue (2%) suggests challenges in acquiring new customers. The geographical revenue distribution highlights dependency on Europe (53%) and the Americas (42%), which may pose risks if economic conditions in these regions deteriorate.

Tech Industry Analyst

MIND CTI's focus on convergent billing solutions and enterprise messaging positions it well in the evolving telecom landscape. However, the flat revenue growth and minimal license sales indicate potential market saturation or increased competition. The company's strength in customer care and billing software (56% of revenue) provides a stable base, but the growing enterprise messaging segment (36%) offers potential for diversification and growth.

The upcoming CEO transition from Monica Iancu to Ariel Glassner is significant. Glassner's background in Telco solutions and startup leadership could bring fresh perspectives to drive innovation and market expansion. However, this transition also presents execution risks that investors should monitor closely.

Monica Iancu to Transition from CEO to Chair before Year End
Board Appoints Ariel Glassner as Successor

YOQNEAM, Israel, Aug. 06, 2024 (GLOBE NEWSWIRE) -- MIND C.T.I. LTD. – (NasdaqGM:MNDO), a leading provider of convergent end-to-end prepaid/postpaid billing and customer care product-based solutions for service providers, unified communications analytics and call accounting solutions for enterprises as well as enterprise messaging solutions, today announced results for its second quarter ended June 30, 2024.

The following will summarize our major developments in the second quarter of 2024 as well as our business. The financial results can be found in the Company News section of our website at http://www.mindcti.com/company/news/ and in our Form 6-K.

Financial Highlights

• Revenues of $5.3 million, same as the second quarter of 2023, and compared to $5.8 in the first quarter of 2024, where the messaging segment was favorably impacted by larger than usual customer campaigns.
• Operating income of $1.0 million, or 20% of total revenues, compared with $1.1 million, or 20% of total revenues in the second quarter of 2023.
• Net income was $1.1 million, or $0.06 per share, compared with $1.1 million, or $0.06 per share in the second quarter of 2023.
• Cash flow from operating activities was $2.0 million, compared with $1.9 million in the second quarter of 2023.

Six Month Financial Highlights

• Revenues of $11.0 million, compared with $10.7 million in the first six months of 2023.
• Operating income of $2.3 million, or 20.9% of total revenues, compared with $2.4 million or 22% of total revenues in the first six months of 2023.
• Net income of $2.5 million, or $0.12 per share, same as the first six months of 2023.
• Cash flow from operating activities in the first six months of 2024 was $2.9 million, compared with $2.4 million in the first six months of 2023.

Monica Iancu, MIND CTI’s CEO, commented: “In August 2024, MIND celebrates 24 years as a public company. We have delivered some years of growth and encountered some difficult periods, including the present year, with multiple challenges to overcome. We have an incredibly strong billing platform, highly scalable analytic enterprise solutions, a flexible messaging platform and a strong team with proven successful execution. It is the right time for me to retire as CEO and to transition into the role of Chairperson of the Board, and I intend to continue to hold my shareholder position for the foreseeable future. After we completed a selection process, the Board of Directors has nominated Mr. Ariel Glassner for the CEO position. Mr. Glassner brings over 25 years of leadership experience and his career includes CEO roles at startup companies during the last five years. Mr. Glassner shaped his expertise in Telco solutions during his 15-year tenure at Amdocs, leading the implementation of complex solutions for major telecommunication operators. He played a pivotal role in driving revenues and overseeing transactions, and is also a graduate of the Amdocs Excellent Leaders program.

“We built MIND around a culture of integrity and innovation that will continue to serve our employees and customers for years to come. We own great technology, and have a team that is ready to deliver a bright and secure future for our customers. I am confident that Ariel will preserve the same values and believe he is the right leader to take MIND to new heights.”

Cash Position
Our cash position, including short-term deposits and marketable securities, was $14.6 million as of June 30, 2024, compared with $15 million as of June 30, 2023.

As previously announced, the Board declared on March 8, 2024, a cash dividend of $0.24 per share before withholding tax. The dividend sum of approximately $4.9 million was distributed in April 2024.

Revenue Distribution for Q2 2024
Europe represented 53% (including the messaging segment revenues in Germany that represented 36%), the Americas represented 42%, and the rest of the world represented 5% of total revenues.

Customer care and billing software totaled $2.9 million, or 56% of total revenues, enterprise messaging and payment solutions were $1.9 million, or 36% of total revenues and enterprise call accounting software totaled $0.5 million, or 8% of total revenues.

Maintenance and additional services totaled $5.2 million, or 98% of total revenues, while licenses were $0.1 million, or 2% of total revenues.

Revenue Distribution for the First Six Months of 2024
Europe represented 56% (including the messaging segment revenues in Germany that represented 38%), the Americas represented 38%, and the rest of the world represented 6% of total revenues.

Customer care and billing software totaled $5.9 million, or 53% of total revenues, enterprise messaging and payment solutions were $4.2 million, or 38% of total revenues and enterprise call accounting software totaled $0.9 million, or 9% of total revenues.

Maintenance and additional services totaled $10.9 million, or 99% of total revenues, while licenses were $0.1 million, or 1% of total revenues.

About MIND
MIND CTI Ltd. is a leading provider of convergent end-to-end billing and customer care product-based solutions for service providers, unified communications analytics and call accounting solutions for enterprises as well as enterprise messaging solutions. MIND provides a complete range of billing applications for any business model (license, SaaS, managed service or complete outsourced billing service) for Wireless, Wireline, Cable, IP Services and Quad-play carriers. A global company, with over twenty-five years of experience in providing solutions to carriers and enterprises, MIND operates from offices in Israel, Romania, Germany and the United States.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995: All statements other than historical facts included in the foregoing press release regarding the Company's business strategy are "forward-looking statements", including estimations relating to the impact of the political situation in Ukraine, expectations of the results of the Company’s business optimization initiative, integration of the company’s acquisitions and its projected outlook and results of operations. These statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements are not guarantees of future performance, and actual results may materially differ. The forward-looking statements involve risks, uncertainties, and assumptions, including, but not limited to, economic conditions in our key markets, as well as the risks discussed in the Company's annual report and other filings with the United States Securities Exchange Commission. The Company does not undertake to update any forward-looking information.

For more information please contact:
Andrea Dray
MIND C.T.I. Ltd.
Tel: +972-4-993-6666
investor@mindcti.com

FAQ

What were MIND CTI's (MNDO) Q2 2024 financial results?

MIND CTI reported Q2 2024 revenues of $5.3 million, operating income of $1.0 million, and net income of $1.1 million ($0.06 per share).

Who is the new CEO of MIND CTI (MNDO)?

Ariel Glassner has been appointed as the new CEO of MIND CTI, succeeding Monica Iancu who is transitioning to the role of Chairperson.

What was MIND CTI's (MNDO) revenue distribution in Q2 2024?

In Q2 2024, Europe represented 53% of MIND CTI's total revenues, the Americas 42%, and the rest of the world 5%.

Did MIND CTI (MNDO) pay a dividend in 2024?

Yes, MIND CTI distributed a cash dividend of $0.24 per share in April 2024, totaling approximately $4.9 million.