MIND CTI Reports First Quarter 2025 Results

Rhea-AI Summary

MIND CTI (NASDAQ: MNDO) reported its Q1 2025 financial results, showing a decline in performance. Revenues decreased to $5.0 million from $5.8 million in Q1 2024, while operating income fell to $0.4 million (7% of revenues) from $1.2 million (22%) year-over-year. Net income dropped to $0.5 million ($0.02 per share) from $1.3 million ($0.07 per share).

The company's revenue distribution showed 61% from Europe (including 35% from messaging in Germany), 33% from Americas, and 6% from other regions. By segment, customer care and billing software contributed 50%, enterprise messaging 35%, and call accounting software 15%. The company declared a dividend of $0.22 per share, totaling approximately $4.5 million.

Management warned of expected significant negative impact on 2025 revenues and income due to multiple challenges in their customer care and billing software segment.

Positive

• Strong cash position of $14.9 million as of March 31, 2025
• Maintained positive operating cash flow of $0.7 million
• Completed Aurenz acquisition to strengthen enterprise call accounting segment
• High recurring revenue with 96% from maintenance and additional services

Negative

• Revenue declined 13.8% year-over-year to $5.0 million
• Operating income dropped 66.7% to $0.4 million
• Net income decreased 61.5% to $0.5 million
• Management expects significant negative impact on 2025 revenues and income
• Recorded allowance for credit loss from a specific customer

Insights

Financial Analyst

MIND CTI reports troubling Q1 results with revenue down 14%, margins collapsing, and management explicitly warning of significant negative 2025 impact.

MIND CTI's Q1 2025 results reveal substantial deterioration across all key financial metrics compared to the previous year. Revenue declined to $5.0 million from $5.8 million, representing a 13.8% year-over-year decrease. More concerning is the dramatic compression in profitability, with operating income plunging 66.7% to $0.4 million from $1.2 million, shrinking operating margins from 22% to just 7%.

Net income similarly collapsed by 61.5% to $0.5 million ($0.02 per share), down from $1.3 million ($0.07 per share) in Q1 2024. Cash flow from operations also weakened to $0.7 million from $0.9 million a year earlier.

Management attributed the revenue decline to two factors: a decrease in the messaging segment following temporary high-volume customer campaigns in Q1 2024, and weakening performance in their core customer care and billing segment. The drop in operating income stems from an allowance for credit loss from a specific customer and costs related to the recently completed Aurenz acquisition.

What's particularly alarming is management's explicit warning that multiple factors will continue to negatively impact revenue and income from their customer care and billing software—effects they've "already started to experience in Q1 2025." Combined with ongoing investments in growth initiatives that won't generate returns this year, management expects a "significant negative impact" on 2025 revenues, net income, and dividend distributions.

The revenue mix reveals concerning structural issues: only 4% of revenue came from new licenses, while 96% derived from maintenance and additional services—suggesting minimal new business acquisition. Geographically, Europe represents 61% of revenue (including 35% from messaging in Germany), with the Americas at 33%.

Despite these challenges, MIND CTI maintains a $14.9 million cash position (pre-dividend) and distributed a previously declared dividend of $0.22 per share ($4.5 million total) in April 2025. However, given management's warning about future dividend impacts, this level may not be sustainable.

YOQNEAM, Israel, May 06, 2025 (GLOBE NEWSWIRE) -- MIND C.T.I. LTD. – (NasdaqGM: MNDO), a leading provider of convergent end-to-end prepaid/postpaid billing and customer care product based solutions for service providers, unified communications (UC) analytics and call accounting solutions for enterprises as well as enterprise messaging solutions, today announced results for its first quarter ended March 31, 2025.

The following will summarize our major achievements in the first quarter of 2025, as well as our business. The financial results can be found in the Company News section of our website at http://www.mindcti.com/company/news/ and in our Form 6-K.

Financial Highlights

• Revenues were $5.0 million, compared with $5.8 million in the first quarter of 2024.
• Operating income was $0.4 million, or 7% of total revenues, compared with $1.2 million, or 22% of total revenues in the first quarter of 2024.
• Net income was $0.5 million, or $0.02 per share, compared with $1.3 million, or $0.07 per share in the first quarter of 2024.
• Cash flow from operating activities was $0.7 million, compared with $0.9 million in the first quarter of 2024.
• Cash position was $14.9 million as of March 31, 2025 (before the dividend distribution of $4.5 million in April 2025).
  

Ariel Glassner, MIND CTI’s Chief Executive Officer, commented: “The year-over-year revenue decrease was due to our messaging segment, which enjoyed a temporary positive impact of large customer campaigns in Q1 2024, and a decrease in our customer care and billing segment. The decline in operating income is mainly attributed to an allowance for credit loss of a specific customer and to costs related to the Aurenz acquisition, which was completed this quarter.

“As previously announced, multiple factors are expected to negatively impact our revenue and income from our customer care and billing software, which we already started to experience in Q1 2025. In addition, we plan to continue to invest in potential growth initiatives, which are not expected to bear fruit this year. Accordingly, we expect a significant negative impact on our 2025 revenues, net income and dividend distribution.

“We have a strong cash position and ongoing positive cash flow. We believe that our initiatives are the right steps to take in seeking to preserve our current business and grow in the future.”

Revenue Distribution
Revenues in Europe represented 61% (including the messaging segment revenues in Germany, which represented 35%), the Americas represented 33%, and the rest of the world represented 6% of total revenues.

Revenues from our customer care and billing software were $2.5 million, or 50% of total revenues, enterprise messaging and payment solutions were $1.7 million, or 35%, and enterprise call accounting software were $0.8 million (including the full quarter revenues of Aurenz), or 15% of total revenues.

Revenues from maintenance and additional services were $4.8 million, or 96% of total revenues, while licenses were $0.2 million, or 4% of total revenues.  

Dividend Distribution
As previously announced, the Board declared on March 4, 2025 a gross dividend of $0.22 per share, with tax being withheld at a rate of 20%.

The dividend of approximately $4.5 million is presented in our balance sheet as of March 31, 2025, among other current liabilities. The distribution and the impact on our cash position occurred in Q2 2025.

AGM and Board of Directors Update
The Company held its Annual General Meeting of Shareholders on May 6, 2025, and all the proposed resolutions were approved.

About MIND
MIND CTI Ltd. is a leading provider of convergent end-to-end billing and customer care product-based solutions for service providers, unified communications analytics and call accounting solutions for enterprises as well as enterprise messaging solutions. MIND provides a complete range of billing applications for any business model (license, SaaS, managed service or complete outsourced billing service) for Wireless, Wireline, Cable, IP Services and Quad-play carriers. A global company, with over twenty-five years of experience in providing solutions to carriers and enterprises, MIND operates from offices in Israel, Romania, Germany and the United States.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995: All statements other than historical facts included in the foregoing press release regarding the Company's business strategy are "forward-looking statements", expectations of the results of the Company’s business optimization initiative, integration of the company’s acquisitions and its projected outlook and results of operations. These statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements are not guarantees of future performance, and actual results may materially differ. The forward-looking statements involve risks, uncertainties, and assumptions, including, but not limited to, economic conditions in our key markets, as well as the risks discussed in the Company's annual report and other filings with the United States Securities Exchange Commission. The Company does not undertake to update any forward-looking information.

For more information please contact:
Andrea Dray
MIND C.T.I. Ltd.
Tel: +972-4-993-6666
investor@mindcti.com

FAQ

What were MIND CTI's (MNDO) key financial results for Q1 2025?

MIND CTI reported Q1 2025 revenues of $5.0 million, operating income of $0.4 million, and net income of $0.5 million ($0.02 per share). Cash flow from operations was $0.7 million with a cash position of $14.9 million.

How much dividend did MIND CTI (MNDO) declare in Q1 2025?

MIND CTI declared a dividend of $0.22 per share, totaling approximately $4.5 million, with tax being withheld at a rate of 20%.

What caused MIND CTI's (MNDO) revenue decline in Q1 2025?

The revenue decline was due to decreased performance in the messaging segment, which had benefited from large customer campaigns in Q1 2024, and a decrease in the customer care and billing segment.

What is MIND CTI's (MNDO) revenue distribution by segment in Q1 2025?

Customer care and billing software represented 50% of revenues, enterprise messaging and payment solutions 35%, and enterprise call accounting software 15%.

What is MIND CTI's (MNDO) outlook for 2025?

Management expects a significant negative impact on 2025 revenues, net income, and dividend distribution due to challenges in the customer care and billing software segment.