Intellinetics, Inc.

Q2 total revenue decreased 1.6% year over year to $3.9 million from $4.0 million. SaaS revenue increased 4.2% to $1.6 million, while professional services revenue decreased 5.8% to $1.8 million and software maintenance services were down 39% to 11.7% from 2025. Consolidated gross margin was 66.4% versus 68.0% a year ago, operating expenses rose 14.7% to $3.7 million, net loss was $1.1 million versus a $600 thousand net loss last year, and adjusted EBITDA was $331 thousand versus $28 thousand in the prior-year quarter. For the first six months, revenue was down 4.9% to $7.9 million, gross margin was 64.9% versus 67.3%, net loss was $2.2 million versus $1.3 million, and adjusted EBITDA was a loss of $659 thousand versus positive $104 thousand. Management said guidance is unchanged and still expects double-digit year-over-year SaaS growth for fiscal 26.

CEO Alison Forsythe said this was her first full quarter and framed it as a period of building a stronger operating foundation. She pointed to improved forecasting visibility, better pipeline management, a new website, and more disciplined project oversight, while stressing that the company is shifting toward higher-quality recurring revenue. Her tone was confident but realistic: she said the transformation will not happen in one quarter, but that the path is clear over the next 2 to 4 years.

CFO Joseph D. Spain highlighted the key financial drivers behind the quarter: $3.9 million of revenue, $1.6 million of SaaS revenue, and a 66.4% gross margin, with the margin decline tied to professional services mix in document scanning and conversion. He noted operating expenses of $3.7 million were higher mainly because of G&A, including increased variable compensation, engineering hires, and about $229 thousand of higher stock-based compensation; first-half G&A also included about $430 thousand of non-recurring CEO transition costs. The balance sheet showed $1.7 million of cash, $700 thousand of net accounts receivable, $15.6 million of total assets, $5.8 million of total liabilities, no debt, and $2.9 million of deferred revenue tied to signed SaaS and maintenance contracts.

There were no analyst questions in the call, so there was no Q&A discussion of specific concerns or follow-up issues. Management did, however, address the main investor questions proactively by explaining that the revenue pressure came from lower scanning project activity and timing in Document Services, and that backlog has since been refilled. They also reiterated that the company remains focused on accelerating SaaS growth and improving execution discipline.