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    INLX
    Earnings call· Jun 2026(Q2 FY26)

    INTELLINETICS Q2 FY26 earnings call INLX

    Aug 12, 2026 Source

    Executive summary

    Intellinetics Q2 FY26 — Operational Foundation and SaaS Growth Focus

    Intellinetics is actively reshaping its business, focusing on building a stronger operating foundation in the first half of FY26 and emphasizing execution for double-digit SaaS growth in the second half and beyond. Despite a net loss and negative adjusted EBITDA in Q2, driven by lower professional services revenue and increased G&A, the company highlights solid software margins and refilled document services backlog, aiming for improved profitability and a larger recurring revenue base.

    Highlights

    3

    • SaaS revenue grew 4.2% year-over-year to $1.6 million, driven by new payables automation customers.

    • Software margins in both SaaS and maintenance remained solid.

    • Orders were taken to refill the backlog in the document services segment.

    Concerns

    5

    • Net loss for Q2 was $1.1 million compared to a net loss of $600,000 in Q2 FY25.

    • Loss per share was $0.24 compared to $0.13 last year.

    • Adjusted EBITDA was a loss of $331,000 compared to a profit of $28,000 in Q2 FY25.

    • Professional services revenue decreased 5.8% to $1.8 million.

    • Consolidated gross margin decreased 162 basis points to 66.4%.

    Guidance & targets

    1
    CategoryTargetConfidence
    SaaS growth
    double-digit year-over-year SaaS growth
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    SaaS
    Driven primarily by new payables automation customers. Software margins remained solid.
    		$1.6M4.2%—solid
    Software Maintenance Services
    Decreased by $39,000 from 2025, as expected, from support agreements with long-time customers on legacy premise solutions. Software margins remained solid.
    		—-11.7%—solid
    Professional Services
    Decreased from $1.9 million last year. As a percentage of total revenue, professional services revenue was 45% for the quarter compared to 47% last year. The decline reflects reduced scanning project activity in the document services segment, driven by timing of customer projects and lower backlog, which has since been refilled.
    		$1.8M-5.8%——

    Operational metrics

    24
    Adjusted EBITDA
    -$331,000vs profit of $28,000 in Q2 FY25
    Q2 FY26

    Reflecting approximately $108,000 of lower gross profit driven by the document services segment, together with higher cash operating expenses.

    Adjusted EBITDA
    -$659,000vs positive adjusted EBITDA of $104,000 in H1 FY25
    H1 FY26

    The decline reflects approximately $453,000 of lower gross profit on reduced professional services volume and margin, together with higher cash operating expenses.

    Consolidated gross margin
    66.4%decreased 162 bps vs 68.0% in Q2 FY25
    Q2 FY26

    The decrease was driven by professional services reflecting a product mix shift in document scanning and conversion projects.

    Consolidated gross margin
    64.9%vs 67.3% in H1 FY25
    H1 FY26

    The decline was driven by the professional services mix, partially offset by stronger storage and retrieval margins.

    Operating expenses
    $3.7Mincreased 14.7% vs $3.2M in Q2 FY25
    Q2 FY26

    Primarily driven by a 24.4% increase in general and administrative expenses.

    General and administrative expenses
    24.4%
    Q2 FY26

    Increase from higher variable compensation expense and increased engineering development personnel, as well as share-based compensation expense.

    Share-based compensation expense
    $229,000increased approximately YoY
    Q2 FY26

    Contributed to the increase in general and administrative expenses.

    Net loss
    $1.1Mvs $600,000 in Q2 FY25
    Q2 FY26

    Primary drivers were lower gross profit on reduced professional services revenue and higher G&A expenses.

    Loss per share
    $0.24vs $0.13 last year
    Q2 FY26

    Basic and diluted.

    Total revenue
    $7.9Mdecreased 4.9% vs $8.3M in H1 FY25
    H1 FY26

    Total revenue for the first six months.

    SaaS revenue
    $3.2Mincreased 2.2%
    H1 FY26

    Led by new payables automation customers.

    Professional services revenue
    $3.6Mdecreased 10.3% vs $4.1M in H1 FY25
    H1 FY26

    On lower scanning project volume in the document services segment.

    Operating expenses
    $7.4Mincreased 9.3% vs $6.7M in H1 FY25
    H1 FY26

    Driven by general and administrative expenses, partially offset by decreases in sales and marketing and D&A.

    General and administrative expenses
    16.4%
    H1 FY26

    Contributed to the increase in operating expenses.

    Sales and marketing expense
    -13.8%
    H1 FY26

    Partially offset the increase in operating expenses.

    Depreciation and amortization
    -5.1%
    H1 FY26

    Partially offset the increase in operating expenses.

    Net loss
    $2.2Mvs $1.3M in H1 FY25
    H1 FY26

    For the first six months.

    Loss per share
    $0.51vs $0.31 in H1 FY25
    H1 FY26

    Basic and diluted.

    Cash and investments balance
    $1.7M
    as of June 30, 2026

    Cash balance at quarter end.

    Accounts receivable net
    $700,000
    as of June 30, 2026

    Net accounts receivable at quarter end.

    Total assets
    $15.6M
    as of June 30, 2026

    Total assets at quarter end.

    Intangible assets and goodwill
    $8.5M
    as of June 30, 2026

    As part of acquisitions made since 2020.

    Total liabilities
    $5.8M
    as of June 30, 2026

    Total liabilities at quarter end.

    Debt
    no debt
    as of June 30, 2026

    No debt or borrowings to date.

    Industry KPIs

    2
    MetricValueDetails
    Revenue growth$7.9MUSD
    Rpo current rpo$2.9MUSD

    Orderbook & backlog

    1
    Deferred revenues$2.9MJune 30, 2026

    Reflecting signed SaaS and maintenance contracts.

    Risks & headwinds

    4
    Lower gross profit from document services segmentQ2 FY26 and H1 FY26

    $108,000 impact on adjusted EBITDA in Q2 FY26; $453,000 impact on adjusted EBITDA in H1 FY26

    Mitigation: Orders have been taken to refill the backlog in the document services segment.

    Increased operating expensesQ2 FY26 and H1 FY26

    14.7% increase in Q2 FY26 to $3.7 million; 9.3% increase in H1 FY26 to $7.4 million

    Mitigation: Focus on operating leverage and improving execution discipline to reduce expenses as recurring revenue grows.

    Higher general and administrative expensesQ2 FY26 and H1 FY26

    24.4% increase in Q2 FY26; 16.4% increase in H1 FY26

    Mitigation: Partially offset by decreases in sales and marketing and D&A expenses in H1 FY26. Includes non-recurring CEO transition costs in Q1.

    Increased share-based compensation expenseQ2 FY26

    Approximately $229,000 increase year-over-year in Q2 FY26

    What to watch in Q3 FY26

    4

    SaaS growth rate

    H2 FY26
    Current4.2% YoY (Q2 FY26)
    Targetdouble-digit YoY growth

    Why it matters

    Management has committed to achieving double-digit SaaS growth for the full fiscal year, making the H2 performance critical to this target.

    We continue to expect double-digit SaaS growth for fiscal 2026, and we are focused on converting software opportunities [indiscernible] discipline, better partner motions, and more consistent management of opportunities from pipeline to close.

    2 min read5 chapters

    Detailed Narrative

    01

    Q2 Performance Overview

    Intellinetics reported Q2 FY26 results reflecting a mix of solid software performance and challenges in professional services. SaaS revenue grew 4.2% year-over-year to $1.6 million, primarily driven by new payables automation customers, with software margins remaining solid. However, professional services revenue decreased 5.8% to $1.8 million due to reduced scanning project activity and lower backlog, which has since been refilled.

    02

    Financial Results and Profitability

    The company experienced a net loss of $1.1 million in Q2 FY26, compared to a $600,000 net loss in the prior year, resulting in a loss per share of $0.24. Adjusted EBITDA was a loss of $331,000, a decline from a $28,000 profit in Q2 FY25. This was primarily attributed to lower gross profit from the document services segment and a 14.7% increase in operating expenses, driven by higher variable compensation and engineering personnel costs, as well as increased share-based compensation.

    03

    First Half FY26 Performance

    For the first six months of FY26, total revenue decreased 4.9% to $7.9 million. SaaS revenue increased 2.2% to $3.2 million, while professional services revenue decreased 10.3% to $3.6 million. Consolidated gross margin for the six-month period was 64.9%, down from 67.3% last year. Operating expenses increased 9.3% to $7.4 million, including $430,000 of non-recurring📎 CEO transition costs in Q1, partially offset by decreases in sales and marketing and D&A expenses.

    04

    Balance Sheet Highlights

    As of June 30, 2026, Intellinetics reported cash of $1.7 million and accounts receivable of $700,000. Total assets stood at $15.6 million, with $8.5 million attributed to intangible assets and goodwill from acquisitions. Total liabilities were $5.8 million, including $2.9 million in deferred revenues from signed SaaS and maintenance contracts. The company reported no debt or borrowings as of the quarter end.

    05

    Strategic Focus and Outlook

    Management is actively reshaping Intellinetics to capitalize on future opportunities, focusing on converting software opportunities, strengthening commercial performance, and improving product and technology decisions. The company built a stronger operating foundation in H1 FY26 with improved forecasting, sales pipeline management, and project oversight. The second half of FY26 is centered on execution, with a reiterated expectation for double-digit year-over-year SaaS growth for the full fiscal year.

    AI-generated summary of the company’s earnings call. Not investment advice.