Executive Summary
Park City Group Inc (PCYG) delivered a solid QQ3 2024 quarter, underscoring the durability of its software-as-a-service business model in the supply-chain technology arena. Revenue of $5.9137 million rose 16.3% year-over-year and 7.7% sequentially, supported by an exceptionally high gross margin of 84.58% and an EBITDA margin of 36.05%. Net income totaled $1.9658 million, translating to earnings per share (EPS) of $0.10, up 28.53% year over year and 25.00% quarter over quarter. These fundamentals point to meaningful operating leverage as the company scales, within a SaaS-like environment that benefits from recurring revenue, relatively low cost of goods sold, and a lean operating structure.
Liquidity remains exceptionally strong. Park City Group ended the period with $24.45 million in cash and cash equivalents and a net debt position of negative $23.96 million, reflecting excess cash over total debt (short-term debt $340,725 and long-term debt $431,352). Free cash flow (FCF) was $2.4518 million, supporting ongoing product development, potential reinvestment in growth initiatives, and shareholder-friendly actions such as modest capital returns. The balance sheet shows robust liquidity and a conservative leverage profile, complemented by a healthy current ratio (about 6.03x) and sizeable cash containment against modest liabilities.
Management commentary on its medium-term outlook is not accompanied by formal forward-looking guidance in the QQ3 filing. Nonetheless, the results imply a business with stable margins, potential for ARR expansion, and opportunities to monetize its food-supply chain software ecosystem (ReposiTrak, MarketPlace, and related compliance offerings). Investors should monitor ARR growth, customer retention, and the pace of new product monetization as the company scales outside its smallest customer base. Overall, the combination of high gross margins, solid profitability, and substantial liquidity supports a cautiously favorable long-term investment thesis, albeit with the caveat of the company’s relatively small scale and the need for continued execution to sustain growth.
Key Performance Indicators
Key Insights
Revenue: $5,913,732 (+16.3% YoY; +7.7% QoQ). Gross profit: $5,002,039 (Gross margin: 84.58%). Operating income: $1,808,853 (Operating margin: 30.59%). EBITDA: $2,131,763 (EBITDA margin: 36.05%). Net income: $1,965,788 (Net margin: 33.24%). EPS: $0.10 (Diluted: $0.10).
Key margin and efficiency metrics show sustained profitability with strong margin discipline: Gross margin 0.846, Operating margin 0.306, Pretax margin 0.358, Net margin 0.332. Interest expense negative ($12,817) and depreciation ...
Financial Highlights
Revenue: $5,913,732 (+16.3% YoY; +7.7% QoQ). Gross profit: $5,002,039 (Gross margin: 84.58%). Operating income: $1,808,853 (Operating margin: 30.59%). EBITDA: $2,131,763 (EBITDA margin: 36.05%). Net income: $1,965,788 (Net margin: 33.24%). EPS: $0.10 (Diluted: $0.10).
Key margin and efficiency metrics show sustained profitability with strong margin discipline: Gross margin 0.846, Operating margin 0.306, Pretax margin 0.358, Net margin 0.332. Interest expense negative ($12,817) and depreciation & amortization ($328,723) reflect a light asset base with software-centric spend. Cash flow highlights: net cash from operating activities $2,458,794; free cash flow $2,451,785; net change in cash $1,199,609; cash at period-end $24,452,680. Cash-to-debt position remains robust with total debt $493,675 and net debt of −$23,959,005.
Liquidity and capital structure indicators: Current ratio 6.03, Quick ratio 6.03, Cash ratio 5.18; payout ratio 26.0%. Shares outstanding (weighted average) 18.254 million (diluted 19.143 million).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
5.91M |
16.30% |
7.70% |
| Gross Profit |
5.00M |
26.17% |
11.44% |
| Operating Income |
1.81M |
43.29% |
33.79% |
| Net Income |
1.97M |
26.79% |
26.74% |
| EPS |
0.10 |
28.53% |
25.00% |
Key Financial Ratios
operatingProfitMargin
30.6%
operatingCashFlowPerShare
$0.08
freeCashFlowPerShare
$0.08
Management Commentary
Note: No earnings call transcript data were provided in the supplied materials. Consequently, no management quotes or thematic highlights from an earnings call can be cited here. The analysis relies on the QQ3 2024 10-Q data for Park City Group.
Forward Guidance
Park City Group did not publish formal forward guidance for QQ4 2024 or the medium term in the QQ3 2024 filing. Nevertheless, the revenue growth pace (YoY +16.3%, QoQ +7.7%) and the high gross margin profile suggest potential for continued profitability expansion as the company scales its software offerings (ReposiTrak, MarketPlace, and related compliance/Supply Chain modules). Risks to achievability include the company’s relatively small scale and limited headline ARR, potential customer concentration effects, and competitive dynamics in B2B supply chain software. Key factors to monitor: (1) ARR growth and net retention in ReposiTrak/MarketPlace ecosystems, (2) expansion of cross-sell into retailers and distributors, (3) any changes in regulatory or compliance requirements affecting adoption of supply-chain software, and (4) potential impairment risk on goodwill and intangible assets given the current balance-sheet composition.