INTELLINETICS, INC. Q1 FY2026 earnings call

• CEO Transition Update

  • New CEO Allison Forsythe has been in the role for 90 days as of the call, and her initial assessment confirms pre-hire due diligence conclusions: the company has a differentiated technology platform, long-standing customer relationships, and significant untapped opportunities to expand SaaS and software business in targeted vertical markets.
  • One-time Q1 2026 costs related to the CEO transition totaled $430,000, including share-based compensation, which drove the wider net loss for the quarter.

• Core Strategic Priorities

  • Align organizational resources around the highest-priority SaaS growth opportunities.
  • Accelerate double-digit year-over-year SaaS growth for full fiscal 2026.
  • Improve execution consistency, operational predictability, and overall go-to-market effectiveness across the business, which management identified as a clear area for improvement.
  • Strengthen operational discipline to position the company for scalable, long-term growth.

• Financial Performance Context

  • Consolidated gross margin decreased 307 basis points to 63.5% YoY, driven by lower professional services volume and project mix; software margins remained solid.
  • Operating expenses increased 4.4% YoY to $3.7 million, with the one-time transition cost offset by lower administrative, sales, and marketing expenses.
  • Net loss for Q1 2026 was $1.2 million ($0.27 loss per share), compared to a $0.7 million net loss ($0.17 loss per share) in Q1 2025. Adjusted EBITDA posted a loss of $288,000, compared to a $77,000 profit in the year-ago quarter.
  • The company held $2.1 million in cash, had zero debt, and $2.9 million in deferred revenue from signed SaaS and maintenance contracts as of March 31, 2026.

Total company revenue for Q1 2026 decreased 8% year-over-year to $3.9 million, down from $4.2 million in Q1 2025.

• DAS segment: Revenue remained stable year-over-year at approximately $1.5 million, representing ~38.5% of total Q1 2026 revenue.
• Software (including legacy on-premise maintenance): Maintenance revenue decreased by $39,000 (11.6% YoY) as expected, consistent with the legacy solution wind-down. Software margins for both SaaS and maintenance remained solid through the quarter.
• Professional Services: Revenue decreased 14.3% YoY to $1.9 million, down from $2.2 million in Q1 2025. This segment contributed 47% of total Q1 2026 revenue, down from 51% in the year-ago quarter. Revenue has not yet recovered to expected levels following the June 2025 renewal of the company's largest customer contract, pulling down overall margins.

• Management reaffirms its expectation of double-digit year-over-year SaaS revenue growth for full fiscal 2026, compared to 2025 results.
• No explicit upward or downward revision to prior full-year SaaS growth guidance was provided; the outlook reflects the new CEO's assessment after 90 days in the role and aligns with the stated core strategic priority of accelerating SaaS growth.

• Forward-looking statements (including the 2026 SaaS growth outlook) are subject to inherent risks and uncertainties that could cause actual results to differ materially from management expectations. Key risks are detailed in the company's recently filed Form 10-Q and annual Form 10-K.
• Variability in professional services revenue and margins creates near-term pressure on overall consolidated profitability, as revenue for the segment has not recovered to expected levels following the renewal of the company's largest customer contract.
• Current operational execution, consistency, and go-to-market effectiveness across the organization are below desired levels, which could impact growth targets if improvement efforts do not deliver expected results.

No questions were asked by analysts or investors during this earnings call, so there is no Q&A content to summarize.