Q1 2025 CoreCard Corp Earnings Call
Leland Strange chairman and CEO of <unk> Corporation.
He will add some additional comments and answer questions at the conclusion of my prepared remarks.
Speaker Change: Before I start I'd like to remind everyone that during the call we will be making certain forward looking statements to help you understand scorecard Corporation and its business environment.
Speaker Change: These statements involve a number of risk factors uncertainties and other factors that could cause actual results to differ materially from our expectations factors.
Speaker Change: Factors that may affect future operations are included in our filings with the SEC, including our 2020 for 2024 Form 10-K and subsequent filings.
Speaker Change: We'll also discuss certain non-GAAP financial measures, including adjusted diluted EPS and adjusted EBITDA, which is adjusted for certain items that affect the comparability of our underlying operational performance fees.
Speaker Change: These non-GAAP measures are detailed in reconciliation tables included within our earnings release.
Speaker Change: As we noted in our press release, our first quarter results exceeded our expectations.
Speaker Change: Higher than expected professional services revenue Pri.
Speaker Change: Primarily from our largest customer Goldman Sachs.
Speaker Change: Our revenue growth, excluding Goldman was in line with our expectations.
Speaker Change: Total revenue for the first quarter was $16 $7 million or 28% increase year over year, driven by higher professional services revenue as I mentioned previously.
Speaker Change: The components of our revenue for the first quarter consisted of professional services revenue of $8 7 million processing and maintenance revenue of $6 $3 million in third party revenue of $1 6 million.
Speaker Change: As expected we did not have any license revenue for the quarter not expect any license revenue for the year.
Speaker Change: The higher professional services from Goldman were a function of higher managed services rates from a contract Amendment, we signed last October and continued high levels of development professional services from Goldman.
Speaker Change: Processing and maintenance revenue grew 3% year over year.
Speaker Change: One of our customers was acquired a couple of years ago and.
Speaker Change: And subsequently terminated their contract, resulting in approximately <unk> $5 million of accelerated revenue in the first quarter of 2024.
Speaker Change: Excluding this one time item and the impact of Q1, 2024 legacy Cabot's revenues processing and maintenance growth was 16%.
Speaker Change: Revenue growth, excluding our largest customer was 8% in the first quarter on a year over year over year basis.
Speaker Change: Revenue growth, excluding our largest customer and the impact from the legacy <unk> business.
Speaker Change: Okay.
Speaker Change: And we have a $1 billion of accelerated revenue in the first quarter of 2024 that I previously mentioned.
Speaker Change: Only 3% in the first quarter on a year over year basis is expected to be 30% to 35% for the full year.
This is in line with our expectations for the first quarter as we expect revenue growth X the colon.
Speaker Change: To accelerate as we move through 2025.
Speaker Change: Customers increase the number of accounts on file.
Speaker Change: A lot.
Speaker Change: We do have a potential headwind from the sale of one of our customers deserve to intuit.
Speaker Change: Represented less than 3% of our total revenues in 2024, and we expect just over 2% for 2025 with a lot of that already.
Speaker Change: <unk> already recognized in the first quarter for which payment was received in May 2020.
We continue to onboard new customers, both directly and through various partnerships, we have with other program managers, such as <unk> and cordless.
Speaker Change: As in previous quarters.
Speaker Change: We currently have multiple implementations in progress and new customers, we expect to go live in the coming months.
Speaker Change: Turning to some additional highlights on our income statement for the first quarter of 2025.
Speaker Change: Income from operations was $2 8 million.
Speaker Change: For the same period last year.
Speaker Change: Our operating margin was eight 8% compared to an operating margin of 4% for the same period last year.
Speaker Change: The year over year increase in our operating margin was primarily driven by higher professional services revenue.
Speaker Change: The income statement impact of our new platform build.
Speaker Change: Zero point $8 million in the first quarter of 2025 compared to zero point $7 million from the prior year period.
Speaker Change: Okay.
Speaker Change: Count steady and expect to continue growing our revenues without significant increases in costs.
Speaker Change: Our Q1 2025 tax rate was 20% compared to 25, 7% in Q1 2024.
Speaker Change: We expect our ongoing tax rate to be between 24 and 27%.
Speaker Change: Earnings per diluted share for the quarter was 24 cents compared to <unk> <unk> for Q1 2024 <unk>.
Speaker Change: Adjusted diluted EPS for the quarter, excluding stock compensation expense was 28.
Speaker Change: Compared to <unk> for Q1 2024.
Speaker Change: Adjusted EBITDA was $4 million compared to $1 7 million for the first quarter of 2024.
Speaker Change: For the full year 2025, we now expect revenues to be between $65 million and $69 million and earnings per share between $1 10, and $1 18.
Speaker Change: As mentioned earlier, we expect growth from customers, excluding our largest customer.
Speaker Change: And the impact of the legacy <unk> business and the zero point $5 million of accelerated revenue in the first quarter of 2024 to be between 30% and 35% for the full year.
Speaker Change: For the second quarter of 2025, we expect total revenues between $16 2 million and $16 9 million.
Speaker Change: And earnings per share between 'twenty, three and 'twenty eight.
Speaker Change: We expect professional services revenue to be between $8 4 million and $8 $8 million for the second quarter of 2025.
Speaker Change: And with that I'll turn it over to Leland, who has warned me that his comments, we'll be pretty short this quarter.
Leland: Yes, Thanks, Matt.
Leland: For those of you that read my letter that went out with the shareholder.
Leland: It was a proxy I should I was tempted to start in 2025 litter is.
Leland: Just more of the same.
Leland: Did that.
Leland: While this warning a whole month, a transcript of our last earnings call.
Leland: And as a really good opportunity to say.
Leland: For this call just more of the same.
Leland: You can only just say the same thing so many ways.
Leland: <unk> was good.
Leland: We expect the rest of the year to be equally as good or better.
Leland: And that really summarize the business.
Leland: The two questions that we get most often.
Leland: Or about succession, or a company acquisition and about our largest customer.
Leland: I'll repeat what I said in the last call in the shareholders letter.
Leland: First about succession in an acquisition.
Leland: We get up and go to work every day and run the company.
Leland: Would it be independent forever.
Leland: We make every decision under that light.
Leland: But we do work for shareholders and we'll always try to do what we feel is in their best interest.
Leland: As a part of that equation, we may not be independent forever.
Leland: Partially evaluating opportunities.
Leland: The board of directors is active in those discussions as well as thinking about loss exposure, if we should choose to stay independent which.
Leland: Frankly, both options are good and they are actually on the tables.
Leland: And onto the risk with our largest customer I really have nothing new to report.
Leland: Ah speculated in the past and continue and can continue to speculating.
Leland: And frankly by head information that would premium thank.
Leland: Speculation.
Leland: It'd be unable to talk about it.
Leland: Our references decision in my shareholder letter and nothing has changed.
Leland: Of course, if there was a material event, we would reported as required under FCC rules. So today for what we know nothing to report.
Leland: We would hope to continue being a part of the most exposed from Newport propylene history very locked at.
Leland: That really concludes by more of the same tomorrow.
Leland: <unk> had a good quarter, which baked to continue that result, the rest of the year.
Leland: And I can share, which are partially own more stock.
Leland: With that we're happy to take any questions you might have.
Speaker Change: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before.
Leland: <unk> is one.
One moment, please while we poll for questions.
Leland: Hi.
Speaker Change: Our first question comes from how those shots with B Riley. Please proceed with your question.
Leland: Yeah.
Leland: Hey.
Leland: Thank you guys.
Leland: At quarter end pretty cool progress.
Leland: I wanted to get your thoughts on.
Leland: The card issuing an industry with them.
Leland: The global payments spin off of their current issues.
Business.
Leland: Yes.
Matthew White: With me on the call today is Leland Strange, Chairman and CEO of CoreCard Corporation. He will add some additional comments and answer questions at the conclusion of my prepared remarks.
Leland: Yes.
And I did that.
Leland: To close next year.
Well this morning, I'll pull up the transcript of our last earnings call.
Speaker Change: It looks at the XT series consolidation I was wondering if you could give us your thoughts on.
And after reading it I'm tempted to say even for this call just more of the same.
Leland: The disruption that might cause maybe new issuers.
Matthew White: Before I start, I'd like to remind everyone that during the call, we will be making certain forward-looking statements to help you understand CoreCard Corporation and its business environment. These statements involve a number of risk factors, uncertainties, and other factors that could cause actual results to differ materially from our expectations. Factors that may affect future operations are included in our filings of the SEC, including our 2024 Form 10-K and subsequent filings.
Leland: Uh huh.
Leland: Work with them or what that might how that might benefit you. If you could share what your thoughts on that that'd be great. Thanks.
You can only say the same thing so many ways.
Our quarter was good.
We expect the rest of the year to be equally as good or better.
Leland: I'd be happy to help.
And that really summarize the business.
Leland: I think it is probably a good move on the portable storage.
Speaker Change: The two questions that we get most often are about succession or a company acquisition and about our largest customer.
Leland: This is a natural holes.
Leland: In terms of disruption.
Leland: Not to be major.
Speaker Change: I'll repeat what I said in our last call and in the shareholders letter.
Leland: I do expect a little bit, but I don't expect major disruptions.
Matthew White: We'll also discuss certain non-GAAP financial measures, including adjusted diluted EPS and adjusted EBITDA, which is adjusted for certain items that affect the profitability of our underlying operational performance. These non-GAAP measures are detailed in reconciliation tables included within our earnings release. As we noted in our press release, our first quarter results exceeded our expectations with higher than expected professional services revenue, primarily from our largest customer, Goldman Sachs. Our revenue growth excluding Goldman was in line with our expectations. Total revenue for the first quarter was $16.7 million, a 28% increase year-over-year, driven by higher professional services revenue, as I mentioned previously.
Speaker Change: Burst about succession and acquisition.
Leland: Doug.
Speaker Change: We get up and go to work every day and run the company as if it's going to be independent forever.
Doug: I think it's pretty much business as usual.
Speaker Change: We make every decision under that light.
Leland: Okay.
Leland: Yeah.
Speaker Change: But we do work for shareholders and we'll always try to do what we feel is in their best interest.
Leland: So again I think it's a good move I expect us to find a little opportunity there, but I wouldn't overplay, it and expect to have a whole lot of opportunity.
Speaker Change: As a part of that equation, we may not be independent forever, and we're constantly evaluating opportunities.
Leland: Okay terrific alright.
Speaker Change: The board of directors is active in those discussions as well just thinking about my successor, or if we should choose to stay independent which.
Leland: Uh huh.
Leland: Matt can you just.
Leland: The conference call Gobbled online could you could you just share with us that make sure I got the number right.
Speaker Change: Frankly, both options are good and they're actually be on the table.
Matt: The expected growth ex Goldman this year.
Speaker Change: And onto the risk with our largest customer I really have nothing new to report.
Leland: I just wanted to make sure I heard 30% to 35%.
Matt: 35%.
Matthew White: The components of our revenue for the first quarter consisted of professional services revenue of $8.7 million, processing and maintenance revenue of $6.3 million, and third-party revenue of $1.6 million. As expected, we do not have any license revenue for the quarter, not expect any license revenue for the year. The higher professional services from Goldman were a function of higher managed services rates from the contract amendment we signed last October and continued high levels of development professional services from Goldman. Processing and maintenance revenue grew 3% year over year. One of our customers was acquired a couple years ago and subsequently terminated their contract, resulting in approximately $0.5 million of accelerated revenue in the first quarter of 2024.
Speaker Change: I speculated in the past and continue and can continue speculating.
Matt: Consistent with our previous guidance.
Matt: Okay Alright. Thank you. Thank you very much guys.
Speaker Change: And frankly by head information that would preempt my speculation I'd be unable to talk about it.
Matt: Okay.
Matt: Okay.
Matt: Yeah.
Speaker Change: I referenced this in my shareholder letter and nothing has changed.
Speaker Change: Thank you. Our next question comes from the line of Avi Fisher with long cast advisors. Please proceed with your question.
Speaker Change: Of course, if there was a material event, we would reported as required under FCC rules. So today for what we know nothing to report.
Avi Fisher: Hi, good morning, Thanks for taking my question.
Avi Fisher: I Wonder if you could elaborate a little bit on on the intuit purchase it deserved.
Speaker Change: We would hope to continue being a part of the most success from Newport propylene history for a very long time.
Avi Fisher: The press release that Intuit put out was a little bit opaque.
Speaker Change: That really keeps fluids by more of the same remarks, we had a good quarter. We expect to continue that resolved the rest of the year.
Avi Fisher: Everything that I described about what they were buying seem to describe what you've offered to deserve so.
Avi Fisher: That's kind of where do you have any color on are you going to be worth doing any work for intuit anymore or are you is your relationship with deserve kind of over just elaborate a little bit on that.
Speaker Change: I can say I wish I personally own more stock.
Speaker Change: With that we're happy to take any questions you might have.
Speaker Change: Thank you we will now be conducting a question and answer session. If he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is another question you May press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before.
Avi Fisher: Sure we have no more information than what you describe is opaque press release, which we also we would also agree with that.
Matthew White: Excluding this one-time item and the impact of Q1 2024 legacy cabbage revenues, processing and maintenance growth was 16%. Revenue growth excluding our largest customer was 8% in the first quarter on a year-over-year basis. revenue growth excluding our largest customer and the impact from the legacy cabbage business. and the half a million dollars of accelerated revenue in the first quarter of 2024 that I previously mentioned was 23 percent in the first quarter on a year-over-year basis and is expected to be 30 to 35 percent in the full year. This is in line with our expectations in the first quarter as we expect revenue growth X golden to accelerate as we move through 2025 as existing customers increase the number of accounts on file and new customers go live.
Avi Fisher: Description.
Avi Fisher: Bank debt.
Avi Fisher: Jay our business for sure will really roll over a period of time, we are not in any discussions with intuit, we don't expect to have any relationship with intuit.
Speaker Change: And when it starts to you.
Speaker Change: One moment, please while we poll for questions.
Avi Fisher: Okay, Okay and this is already incorporated into your guidance.
Avi Fisher: For the rest of the year as it is.
Avi Fisher: Yes, that's right, we kind of describe that as a potential headwind. So it's a little bit of an unknown at this point.
Avi Fisher: Given the lack of clarity as to how that relationship will will look going forward.
Speaker Change: <unk>.
B Riley: Our first question comes from how those shots with B Riley. Please proceed with your question.
Avi Fisher: So were being a little cautious potentially but we.
Avi Fisher: We did bring down our forecast for that customer in particular.
Speaker Change: Hey.
Speaker Change: Thank you guys.
Avi Fisher: Given the uncertainty.
Speaker Change: Solid quarter and pretty cool progress.
Matthew White: We do have a potential headwind from the sale of one of our customers, Deserve, to Intuit. deserve less than 3% of our total revenues in 2024 and we expect just over 2% for 2025 with a lot of that already recognized in the first quarter for which payment was received in May 2025. We continue to onboard new customers, both directly and through various partnerships we have with other program managers, such as Vervant and Cardless. As in previous work, we currently have multiple implementations in progress, and new customers we expect to go live in the coming months.
Speaker Change: Okay got it and just two other quick questions I was little surprised that the strength of Goldman.
Speaker Change: I wanted to get your thoughts on.
Speaker Change: The card issuing industry with them.
Avi Fisher: Revenues.
Speaker Change: The global payments spinoff on their card issuing business.
Avi Fisher: Like how much of that is there a reprice contract and how much of that is they are using more hours than they had in the past.
Speaker Change: F I S.
Avi Fisher: Well some of the some of it is the comparison of the first quarter of last year out of the first quarter of this year. So if you compare to Q4 of last year, it's pretty consistent in terms of the amount of hours.
Speaker Change: Yes.
Speaker Change: Many close next year.
Speaker Change: It looks to me like some serious consolidation I was wondering if you'd give us your thoughts on <unk>.
Speaker Change: The disruption that might cause maybe new issuers to huh.
Speaker Change: Work with them or what that might how that might benefit you. If you. If you could share what you thought that that that'd be great. Thanks.
Avi Fisher: The revenues, where theyre paying us by the hour.
Avi Fisher: So a lot of the increase.
Speaker Change: I'd be happy to help.
Avi Fisher: Just the Q1 last year versus Q1 this year and then the rest of it is.
Speaker Change: I think there's probably a good move on the portable porridge.
Matthew White: Turning to some additional highlights on our income statement for the first quarter of 2025, income from operations was $2.8 million compared to $0.4 million for the same period last year. Our operating margin was 15.8% compared to an operating margin of 4% for the same period last year. The year-over-year increase in our operating margin was primarily to provide higher professional services revenue. The income statement impact of our new platform build was $0.8 million in the first quarter of 2025 compared to $0.7 million for the prior year. We have kept our headcount steady and expect to continue growing our revenues without significant increases in cost.
Avi Fisher: The higher managed services rates. So it's a combination I was just looking for Q4 last year versus Q1. This year, it's all managed services rates.
Speaker Change: As a takeout macro homes.
Speaker Change: In terms of disruption I expected not to be major.
Speaker Change: I do expect a little bit about our knowledge base for these major disruptions. Thanks Ed.
Avi Fisher: So is it like is this the run rate expected going forward sort of.
Avi Fisher: This is what we expect for the rest of 2025.
Speaker Change: Uh huh.
Speaker Change: I think it's pretty much business as usual.
Avi Fisher: Okay.
Avi Fisher: And then finally there.
Avi Fisher: It was a little new note in the quarter about employee retention.
Speaker Change: Okay.
Speaker Change: Job. So again I think it's a good a good boom I expect us to find a little opportunity there, but I wouldn't overplay, it and expect to have a whole lot of opportunity.
Avi Fisher: Okay.
Avi Fisher: Particularly call out.
Avi Fisher: There have been acquisitions for 2028.
Avi Fisher: A company with a billion dollar market cap it seemed oddly specific.
Speaker Change: Okay terrific alright.
Avi Fisher: Okay.
Speaker Change: Sure.
Avi Fisher: I Wonder if there's any if you could offer just any color around that.
Matthew White: Our Q1 2025 tax rate was 20% compared to 25.7% in Q1 2024. We expect our ongoing tax rate to be between 24% and 27%. Earnings for the diluted share for the quarter was $0.24 compared to $0.05 for Q1 2024. Adjusted diluted EPS for the quarter, excluding stock compensation expense, was $0.28 compared to $0.07 for Q1 2024. Adjusted EBITDA was $4 million compared to $1.7 million for the first quarter of 2024.
Speaker Change: Matt can you just.
Speaker Change: For some reason the conference call.
Avi Fisher: Yes.
Speaker Change: Garbled online could you could you just share with us the mixing up the number right.
Avi Fisher: Around that.
Avi Fisher: So obviously, we wanted to keep our employees. So we put a retention plan and then what are the concerns of employees is just our size. We're a small company and we've hedged some of the larger companies coach our employees and each of those companies or larger than $1 billion.
The expected growth ex Goldman this year.
Speaker Change: I just wanted to make sure I heard 30% to 35%.
35, okay.
Speaker Change: Consistent with our previous guidance.
Speaker Change: Okay. Good alright. Thank you. Thank you very much guys.
Speaker Change: Okay.
Speaker Change: Okay.
Avi Fisher: And so we ended up saying, hey, guys you you'll be pretty shape. If we were to be bookable, but one of the companies that were losing employees too.
Speaker Change: Thank you. Our next question comes from the line of Avi Fisher with long cast advisors. Please proceed with your question.
Matthew White: For the full year 2025, we now expect revenues to be between $65 million and $69 million, and earnings per share between $1.10 and $1.80. As mentioned earlier, we expect growth from customers excluding our largest customer. and the impact of the legacy cabbage business and the $0.5 million of accelerated revenue in the first quarter of 2024 to be between 30% and 35% for the full year.
Avi Fisher: Hi, good morning, Thanks for taking my question.
Avi Fisher: But we're gonna give you start to try to keep you, but we don't think its statutory to continue to do that.
Avi Fisher: I Wonder if you could elaborate a little bit on on the intuit purchase it deserved.
Avi Fisher: For Bulbar Dodge company so.
Avi Fisher: The press release that Intuit put out was a little bit opaque.
Avi Fisher: That's all that's all it was.
Avi Fisher: Everything that I described about what they were buying seem to describe what you've offered to deserve so.
Chris: Alright, Thanks, Chris.
Chris: Appreciate the color I look forward to seeing you at the annual meeting thank you.
Avi Fisher: That's kind of where do you have any color on when are you going to be worth doing any work for intuit anymore or are you is your relationship with deserve kind of over just elaborate a little bit on that.
Chris: Okay got it thank you.
Chris: Thank you we have no further questions at this time. This does conclude today's teleconference. Thank you for your participation and have a wonderful day.
Matthew White: For the second quarter of 2025, we expect total revenues between $16.2 million and $16.9 million and earnings per share between 23 cents and 28 cents. We expect professional services revenue to be between $8.4 million and $8.8 million for the second quarter of 2025.
Avi Fisher: Sure we have no more information than what you describe as well page press release, which we also we would also agree with that.
Avi Fisher: Description ash.
Speaker Change: I suspect that.
Speaker Change: That our business will deserve will will really roll over a period of time, we're not in discussions with Intuit, we don't expect to have any relationship with intuit.
Leland Strange: And with that, I'll turn it over to Leland, who's warned me that his comments will be pretty short this quarter. You know, thanks, Matt. For those of you that read my letter that went out with the shareholder or with the proxy, I said I was tempted to start the 2025 letter as just more of the same, and then I did that. Well, this morning I pulled up the transcript of our last earnings call and after reading it, I'm tempted to say, even for this call, just more of the same. You can only say the same thing so many ways.
Speaker Change: Okay, Okay, and it's and this is already incorporated into your guidance.
Speaker Change: For the rest of the year it is.
Speaker Change: Yes. It is yes, that's right, we kind of describe that as a potential headwind. So it's a little bit of an unknown at this point given.
Speaker Change: Given the lack of clarity as to how that relationship will will look going forward.
Speaker Change: So were being a little cautious potentially but.
Speaker Change: Yeah, we did bring down our forecast for that customer in particular.
Speaker Change: Given the uncertainty.
Speaker Change: Okay got it.
Leland Strange: Our quarter was good. We expect the rest of the year to be equally as good or better. And that really summarizes the business.
Speaker Change: Just two other quick questions I was little surprised that the strength of Goldman.
Speaker Change: Revenues.
Speaker Change: Like how much of that is there a reprice contract and how much of that is they are using more hours than they had in the past.
Leland Strange: The two questions that we get most often are about succession or company acquisition and about our largest customer. I'll repeat what I said in the last call and in the shareholder's letter. First, about succession and acquisition. get up and go to work every day and run the company as if it's going to be independent forever. We make every decision under that light. We do work for shareholders. We'll always try to do what we feel is in their best interest. As a part of that equation, we may not be independent forever, and we're constantly evaluating opportunities.
Speaker Change: But some of the some of it is the comparison of the first quarter of last year out of the first quarter of this year. So if you compare to Q4 of last year, it's pretty consistent in terms of the the amount of hours that are on the the revenues where theyre paying us by the hour.
Speaker Change: So a lot of the increase.
Speaker Change: The Q1 last year versus Q1 this year and then the rest of it is.
Speaker Change: The higher managed services rates. So it's a combination I was just looking for Q4 last year versus Q1. This year, it's all managed services rates.
Leland Strange: The Board of Directors is active in those discussions, as well as things about my successor, if we should choose to stay independent. Frankly, both options are good, and they're actually on the table.
Speaker Change: So is it like is this the run rate expected going forward sort of.
Speaker Change: This is what we expect for the rest of 2025.
Speaker Change: Okay.
Leland Strange: and on to the wrist for the largest customer, I really have nothing new to report. I've speculated in the past and can continue speculating. Frankly, if I had information that would preempt my speculation, I'd be unable to talk about it. I referenced this in my shareholder letter and nothing has changed. And of course, if there was a material event, we would report it as required under SEC rules. So today, for what we know, nothing to report. We would hope to continue being a part of the most successful new card program in history for a very long time.
Speaker Change: And then finally, yes.
Speaker Change: It was a little new note in the quarter about employee retention.
Speaker Change: Okay.
Speaker Change: Particularly call out and about.
Speaker Change: Marathon acquisition for 2028.
Speaker Change: Company with a billion dollar market cap it seemed oddly specific.
Speaker Change: Okay.
Speaker Change: I Wonder if there's any if you could offer just any color around that.
Speaker Change: Yes.
Speaker Change: Around that.
Speaker Change: So I mean, obviously, we wanted to keep our employees. So we put a retention plan. Here then what are the concerns of employees. It's just our size, we're a small company and we've hedged some of the larger companies poach, our employees and each of those companies or a roger that $1 billion.
Leland Strange: That really concludes my more of the same memoirs. We had a good quarter. We expect to continue that result the rest of the year. and I can say I wish I personally had on more stock.
Speaker Change: And so we ended up saying, hey, guys you you'll be pretty shape. If we were to be bookmark, but one of the whose companies that were losing employees to show, but we're going to give you a shot to try to keep you, but we don't think it's necessary to continue to do that.
Leland Strange: With that, we're happy to take any questions you might have. Thank you.
Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.
Speaker Change: For Bubba shortly Dodge company so.
Speaker Change: That's all it was.
Speaker Change: Alright, Thanks, Chris.
Speaker Change: I appreciate the color I look forward to seeing you at the annual meeting thank you.
Speaker Change: Thank you.
Speaker Change: Thank you we have no further questions at this time. This does conclude today's teleconference. Thank you for your participation and have a wonderful day.
Speaker Change: Okay.
Hal Boschatz: Our first question comes from Hal Boschatz with B. Reilly. Please proceed with your question. Hey, thank you guys. Solid quarter and pretty cool progress. I want to get your thoughts on... the card issuing industry with them. You know, the global payment spinoff of their card issuing business, FIS, and that deal will maybe close next year, but it looks to be like some serious consolidation. I was wondering if you'd give us your thoughts on the disruption that might cause maybe new issuers to pay attention to that.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Okay.
Leland Strange: Sure. Thank you. work with them or how that might benefit you. If you could share your thoughts about that, that'd be great. Thanks. be happy to help. I think it's probably a good move on the part of both parties, they found a natural home. In terms of disruption, I expect it not to be major. I do expect a little bit, but I don't expect it to be major disruptions. I don't know. You know, I think it's pretty much business as usual. So I'm so again, I think it's a good, good move. I expect us to find a little opportunity there, but I wouldn't overplay it and expect to have a whole lot of Okay, terrific.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
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Speaker Change: Mhm.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Operator: All right.
Avi Fisher: Matt, for some reason the conference call garbled on my end. Could you could you just share with us, make sure I got the number right, the expected growth x Goldman this year? I just want to make sure I heard it. 30 to 35 percent. Okay, 35 percent. are pretty insistent with our previous guidance. Okay, good. All right. Thank you. Thank you very much, guys. Thank you.
Avi Fisher: Our next question comes from the line of Avi Fisher with Longcaste Advisors. Please proceed with your question. Hi, good morning. Thanks for taking my question. Um, I wondered if you could elaborate a little bit on on the Intuit purchase of Deserve. The press release that Intuit put out was a little bit opaque, but everything they described about what they were buying seemed to describe what you've offered to Deserve. So, um, I'm wondering if you could elaborate a little bit on that. Just kind of, do you have any color on, you know, are you going to be doing any work for Intuit anymore?
Leland Strange: Is your relationship with Deserve kind of over? Just elaborate a little bit on that.
Leland Strange: Sure. We have no more information than what you describe as an opaque pressure release, which we also, we would also agree with that description. I suspect that. that our business will deserve will really roll off over a period of time. We're not in discussions with Intuit. We don't expect to have any relationship with Intuit. Okay.
Leland Strange: And this is already incorporated into your guidance? for the rest of the year. Yes, it is. That's right. We kind of described that as a potential headwind. So it's a little bit of an unknown at this point, given the lack of clarity as to how that relationship will look going forward. So we're being a little cautious potentially, but. You know, we did bring down our forecast for that customer in particular, given the uncertainty.
Avi Fisher: Just two other quick questions. I was a little surprised at the strength of Goldman Revenues. How much of that is the repriced contract and how much of that is they're using more hours than they had in the past? Well, some of the some of it is the comparison of the first quarter of last year to the first quarter of this of this year. So, you know, if you compare it to Q4 of last year, it's pretty consistent in terms of the the amount of hours or the revenues where they're paying us by the hour. So a lot of the increase, you know, it's just the Q1 last year versus Q1 this year, and then the rest of it is the higher managed services rates.
Leland Strange: So it's a combination, but for Q4 last year versus Q1 this year, it's all managed services. So is it like, is this the run rate expected going forward, sort of? This is what we expect for the rest of 2025.
Avi Fisher: And then finally, there was a little new note in the quarter about employee retention. A with a particular call out about, you know, there's an acquisition before 2028 of a company with a billion dollar market cap. It seems oddly specific.
Leland Strange: I wonder if there's any, if you could offer just any color around that. Yeah, it should be correct there, you'll see. Well, I mean, obviously, we wanted to keep our employees. So we put a retention plan in. And one of the concerns of employees, it's just our size. You know, we're a small company, and we've had some of the larger companies coach our employees, and each of those companies are larger than a billion dollars, and so we ended up saying, Hey, guys, you'll be pretty safe if we were to be bought by one of those companies that we're losing employees to.
Leland Strange: But we're going to give you stock to try to keep you, but we don't think it's necessary to continue to do that if we're bought by a certain size company. So that's all it was.
Avi Fisher: Muach. All right. Peace. Appreciate the color, look forward to seeing you at the annual meeting. Thank you.
Operator: We have no further questions at this time.
Operator: This does conclude today's teleconference. Thank you for your participation and have a wonderful day.