- Q2 2024 highlights a disciplined transition to a Traceability-led growth trajectory while maintaining a highly recurring revenue model. Total revenue of $5.49 million rose 7.1% year over year, with recurring revenue accounting for 99% of revenue and increasing 8% year over year. The company generated EBITDA of $2.04 million and GAAP net income of $1.55 million (EPS $0.08), underscoring a high-margin, cash-generative core business even as Traceability investments weigh on short-term margin expansion.
- Management articulated a clear strategic pivot toward end-to-end Traceability, driven by market dynamics (retailers’ demand, Kroger’s traceability framework adoption, and FDA Rule 204 context). The Traceability backlog implies meaningful revenue acceleration: the current queue represents approximately $3.6 million in additional annual recurring revenue (ARR) to be booked in the next 12 months, with the potential to double ARR over the next 2–3 years. Exit ARR rose to $21.4 million as of December 31, 2023, signaling durable ARR expansion anchored by recurring relationships.
- The company maintains a fortress balance sheet with over $23 million of cash and no net debt (net debt of approximately -$22.7 million after cash with 0.6 million in short-term debt). Management reiterates a capital allocation framework that prioritizes dividends, common and preferred stock buybacks, and selective investment in Traceability and potential M&A opportunities. The near-term operating plan emphasizes accelerating onboarding automation and scale, with a stated objective of potentially 10x onboarding speed within a year, and an expectation that top-line growth could reach roughly $40 million in 2–3 years from current levels.