Intellinetics, Inc.

And welcome to the Intellinetics Third Quarter 2023 Earnings Call. Our host for today's call is Tom Bauman with FNK IR. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. I would now like to turn the call over to your host. Mr. Bauman, the floor is yours.

Thank you. Good afternoon, everyone. I am pleased to welcome you to Intellinetics 2023 Third Quarter Conference Call. Before we begin, I would like to remind listeners that during this conference call, comments made by management may include forward-looking statements regarding Intellinetics, Inc. that are not historical facts. These forward-looking statements are based on the current expectations and beliefs of management, and they are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. Intellinetics, Inc. undertakes no duty to update any forward-looking statements. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release issued today, as well as risks and uncertainties included in the section under the caption, Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations in Intellinetics Quarterly Report, on Form 10Q filed earlier today. Also, please note on the call today, management will discuss non-GAAP financial measures such as adjusted EBITDA, recurring revenue, and total contract value. Non-GAAP financial measures are not intended to be considered in isolation or in a substitute for results prepared in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. A reconciliation between GAAP and non-GAAP measures can be found in the press release issued today, and a total contract value will be described on today's call. With all that said, I would now like to turn the call over to Jim DiSocio, Intellinetics President and CEO. Jim, the call is yours.

Thank you, Tom. Our third quarter revenue was similar to our record-breaking second quarter, and up 10% year over year. And we improved our profitability on a sequential basis, demonstrating the value of our business model. We grew our revenue by 10% year over year and our SaaS revenue by 7%, leading to sequential improvements in our profitability. Our core business is solid, growing, and systematically profitable. We have a stable base for growth. In the near term, that growth will come from continued K-12 SaaS success paired with our new in TeleCloud Payables Automation Solution, or IPaaS. As a reminder, IPaaS is a new enterprise-class software payables automation solution for financial platforms with very complex cost accounting. To further explain where this solution fits, as organizations look to modernize manual accounts payable processes to free up time for higher-value activities, scale their business, and to reduce audit and compliance risk exposure, building a digital-first modern finance department becomes a top priority for CFOs. By pairing our IntelliCloud document management and our AI-driven payables automation system with an organization's existing line of business applications, the benefits became immediately apparent. The paper and error-prone tasks are eliminated, while real-time dashboard views provide transparency into important financial data. We are collaborating with Constellation Home Builder Systems, part of the $5 billion Constellation software family, to broaden awareness for IPaaS starting in the home builder market. Two Constellation customers have gone live. Based on the success of these two customers, we have now signed contracts with seven additional customers that will go live over the next two to three months. In aggregate, these customers represent a combined annual recurring revenue of $465,000. We see iPass as a growth catalyst for our business going forward. We have also recently introduced iPass to our K-12 customer base and plan on cross-selling iPass to our customers to contribute meaningfully to our growth in 2024. Importantly, these are SAS agreements, expanding our recurring revenue well aligned with our overall strategy. Overall, we continue to see accelerating customer demand, suggesting an improving macroeconomic environment, and we remain on track to deliver a full year of improved growth and profitability. This sets us up well for the future. When we anticipate accelerated growth as I-PASS becomes a catalyst on top of our existing SaaS business and our other services. Our SaaS maintenance and business process outsourcing professional services all grew in the quarter. We remain focused on growing recurring revenue, giving us significant visibility into our future results. Quarter-to-quarter fluctuations in non-recurring revenue to be expected, to be expected. our base of recurring revenue has reached a point where it exceeds our operating expenses. In other words, we generated $2.5 million in recurring revenue with $2 million in SG&A costs, down from $2.3 million in the second quarter, resulting in systematic profitability for our business. Our business is now sustainably profitable, irrespective of the quarter-to-quarter volatility in non-recurring revenues. We continue to expand our market share as demand for our solutions is robust and we deliver a tangible ROI for customers. We're also expanding our addressable market, specifically in payables automation solutions. Finally, our cross-selling initiatives are yielding results as we grow our wallet share with customers. On a sequential basis, we significantly grew our net income and adjusted EBITDA on similar revenue levels. We are on the right track. In Q3 2023, we closed 108 contracts with an estimated total contract value of $2.1 million. As a reminder, the total contract value of these orders are generally recognizable in revenue over one year or less. Since the April 2022 acquisition of Yellow Folder, the Yellow Folder team sold new contracts worth $467,000 in SAS, and $271,000 in software-related professional service total contract value. These amounts exclude our success in cross-selling digital transformation. Our K-12 operations now have 584 K-12 districts generating significant SAS revenue, which more than doubles our presence in this vertical market from before we acquired Yellow Folder. Importantly, each of these districts is a target for additional and telenetics services. Since the Yellow Folder acquisition in April 2022, we have successfully sold 13 K-12 deals worth $634,000 in TCV. This reinforces our strategic acquisition of Yellow Folder and our ability to our digital transformation professional services into our K-12 customers. I am optimistic about our future performance. Recently enacted price increases for select engagements, plus an increased contribution from IPAS and other organic growth, to drive revenue acceleration, and our business model results in systematic profitability. At this time, I would like to turn the call over to our Chief Financial Officer, Joe Spain, to talk about our financials. Thanks, Jim.