Mdf Commerce Inc.

Q3 fiscal 2024 total revenue was $30.2 million, down $1.5 million or 4.6% versus Q3 2023. Excluding InterTrade and related transition services, revenue was down $200,000 or 0.6%. Eprocurement revenue was $20.7 million, up 4.5% year over year, and recurring revenue there was 88% of total revenues. Adjusted EBITDA was $2.5 million, up $1.6 million from $900,000 in Q3 2023; adjusted net loss was $4.2 million versus a $7.8 million loss a year ago. Net cash from operating activities was $6.4 million versus a $2.8 million use last year. The company ended Q3 with over $5 million of cash and $1.5 million drawn on its revolver, for a positive net cash position of $3.5 million. Management did not provide quantitative Q4 or full-year guidance, but said cash flow should remain positive and EBITDA should continue to improve over time.

Luc Filiatreault said the quarter showed the benefit of cost reductions and new customer growth, especially in eprocurement and the TRX model. He emphasized that the business has shifted toward larger agency contracts, with annual recurring revenue moving from tens of thousands of dollars to hundreds of thousands or millions for larger customers. His tone was upbeat, highlighting a pipeline that he said is now 4x to 5x larger than a year ago and saying the company is excited about the future.

Deborah Dumoulin focused on profitability, cash, and the timing of revenue recognition. She highlighted $2.5 million of adjusted EBITDA, positive operating cash flow of $6.4 million, and a net cash position of $3.5 million at quarter-end after $1.5 million of revolver borrowings, versus a $3.4 million net debt position at the start of the year. She also noted that TRX contracts and new customers are driving favorable working capital, while implementation timing means some wins are not yet fully reflected in revenue.

Analysts focused on the mechanics of cash flow, deferred revenue, and when recent contract wins would show up in revenue. Management said large agency and mid-market customers typically pay in advance on SaaS deals, creating deferred revenue, while TRX deals are billed based on state spend and show up as unbilled receivables rather than deferred revenue. They also said Q3 eprocurement growth was held back by migration-related churn in legacy supplier platforms and by the normal lag between signing government contracts and implementation.