MIND CTI Reports Fourth Quarter and Full Year 2024 Results

Rhea-AI Summary

MIND CTI (NASDAQ: MNDO) reported its Q4 and full-year 2024 results, showing a slight decline in performance. Q4 revenues reached $5.2 million (down from $5.6M in Q4 2023), with operating income at $1.3M. Full-year 2024 revenues were $21.4M compared to $21.6M in 2023, while net income decreased to $4.6M ($0.23 per share) from $5.2M ($0.26 per share).

The company faced significant challenges in 2024, including industry consolidation, new competitors, and reduced telecom investment due to 5G infrastructure priorities. Notable metrics include: cash position of $15.8M, operating income margin of 20%, and maintenance services accounting for 97% of total revenues. The Board declared a dividend of $0.22 per share, payable April 10, 2025.

Management expects unfavorable impact on revenues and profitability in 2025, citing inability to recruit new customers in 2024 and ongoing market pressures.

Positive

• Maintained strong operating margin at 20% of revenue
• Healthy cash position of $15.8M
• Consistent dividend payment policy since 2003
• Multiple follow-on orders from existing customers

Negative

• Revenue declined to $21.4M from $21.6M YoY
• Net income dropped to $4.6M from $5.2M YoY
• Failed to recruit any new customers in 2024
• Management expects unfavorable impact on revenue and profit in 2025
• Operating income decreased to $4.4M from $4.7M YoY

Insights

Financial Analyst

MIND CTI's Q4 and full-year 2024 results reveal concerning trends for investors. The company reported Q4 revenues of $5.2 million (down from $5.6 million in Q4 2023) and full-year revenues of $21.4 million (slightly below $21.6 million in 2023). While Q4 operating margin improved to 25% (from 21%), the full-year margin declined to 20% (from 22% in 2023).

Particularly alarming is the CEO's explicit warning that the company was unable to recruit any new customers in 2024 and expects "unfavorable impact on revenues and profitability in 2025" due to market conditions. With licenses representing just 3% of total revenues and maintenance/services accounting for 97%, the company is highly dependent on its existing customer base, which the CEO notes is shrinking due to industry consolidation.

The declared dividend of $0.22 per share represents nearly the entire annual EPS of $0.23, raising questions about sustainability if earnings continue to decline. The $15.8 million cash position (approximately 38% of market cap) provides a cushion, though the company appears to be pivoting toward an acquisition strategy to offset organic decline, as evidenced by the January 2025 Aurenz GmbH acquisition.

Revenue concentration is notable with Europe representing 53% of revenues and the messaging segment (37% of revenues) described by management as "difficult to predict" with expected "volatility in revenues, margins, and cash flows."

* Board Declares Cash Dividend
* MIND CTI to Host Annual Meeting of Shareholders

YOQNEAM, Israel, March 04, 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 fourth quarter of 2024 and its full year ended December 31, 2024.

The following will summarize our business in the fourth quarter of 2024 and provide a more detailed review of the financial results for the quarter and for the full year. Full 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 of Q4 2024

• Revenues of $5.2 million, compared with $5.6 million in the fourth quarter of 2023.
• Operating income of $ 1.3 million, or 25% of total revenue, compared with $1.2 million, or 21% of revenue in the fourth quarter of 2023.
• Net income of $1.2 million, or $0.06 per share, compared with $1.4 million, or $0.07 per share in the fourth quarter of 2023.
• Cash flow from operating activities of $0.3 million, compared with $0.7 million in the fourth quarter of 2023.

Financial Highlights of Full Year 2024

• Revenues of $21.4 million, compared with $21.6 million in 2023.
• Operating income of $4.4 million, or 20% of total revenue, compared with $4.7 million, or 22% of total revenue in 2023.
• Net income of $4.6 million, or $0.23 per share, compared with $5.2 million, or $0.26 per share in 2023.
• Cash flow from operating activities of $4.1 million, same as in 2023.
• Cash position of approximately $15.8 million as of December 31, 2024.
  

Ariel Glassner, MIND CTI’s Chief Executive Officer, commented: “The impact of global economic conditions, industry consolidation, emergence of new competitors and commoditization of telecom services, continue to have a material adverse effect on our existing and potential customers. These conditions have caused the capital spending levels of many communications companies to decline and in addition, telcos have reduced investment in billing platforms to prioritize the significant infrastructure costs required for 5G deployment. The telco billing market decrease, the pricing pressures, and increased competition have been acute in recent years, and we were unable to recruit any new customers in 2024.

Consolidation and intense competition in the telecom space resulted in a few long-term customers closing or selling their business. While our focus is on expanding to new markets, this effort will not materialize in 2025 due to long sale cycles. We expect all these factors to have an unfavorable impact on our revenues and profitability in 2025. As previously mentioned, the messaging segment’s business results are difficult to predict, and we expect our business results to present volatility in revenues, margins, and cash flows. We continue to invest in new technologies to enhance our offering, to support 5G technologies, and to add AI capabilities to our platforms.”

Revenue Distribution for Q4 2024
Revenues in Europe represented 46% (including the messaging segment revenues in Germany that represented 34%), the Americas represented 43%, and the rest of the world represented 11% of our total revenues.

Revenues from our customer care and billing software were $3.0 million, or 58% of total revenues, enterprise messaging and payment solutions were $1.8 million, or 34% of our total revenues, and enterprise call accounting software were $0.4 million, or 8% of total revenues.

Revenues from maintenance and additional services were $4.8 million, or 92% of our total revenues, while licenses were $0.4 million, or 8% of our total revenues.

Revenue Distribution for Full Year 2024
Revenues in Europe represented 53% (including the messaging segment revenues in Germany that represented 37%), the Americas represented 40%, and the rest of the world represented 7% of our total revenues.

Revenues from our customer care and billing software were $11.8 million, or 55% of total revenues, enterprise messaging and payment solutions were $7.8 million, or 37% of our total revenues, and enterprise call accounting software were $1.9 million, or 8% of our total revenues.

Revenues from maintenance and additional services were $20.7 million, or 97% of our total revenues, while licenses were $0.7 million, or 3% of our total revenues.

Follow-on Orders in 2024
Throughout 2024, we had multiple follow-on orders.

The follow-on orders from long-time existing customers mainly included license upgrades, based on number of subscribers, enhancements of scope with additional functionality, and implementations of our online store / e-commerce module that we developed.

Dividend Distribution
We first adopted a dividend policy in 2003, and we continue to believe that our annual dividends enhance shareholder value.

Taking into consideration our dividend policy and the remaining cash after the distribution, on March 4, 2025, our Board of Directors declared a gross dividend of $0.22 per share. The record date for the dividend will be March 25, 2025, and the payment date will be April 10, 2025. Tax will be withheld at a rate of 20%.

Update on Acquisitions
As previously announced, in January 2025 we acquired Aurenz GmbH (aurenz), a leading provider of UC analytics and call accounting solutions in Germany.

We continue to explore potential acquisition targets at reasonable valuations that satisfy the criteria we defined: proven revenues, complementary technology or geography and expected accretion to earnings within two to three quarters.

AGM
MIND also announced today that its 2025 Annual General Meeting of Shareholders will be held on May 6, 2025, at 3:00 P.M. (Israel time), at the offices of the Company, 2 HaCarmel Street, Yoqneam 2066724, Israel.

Shareholders of record at the close of business on April 1, 2025 are entitled to vote at the Meeting. All shareholders are cordially invited to attend the Meeting in person. Proxy statements and proxy cards for use by shareholders that cannot attend the meeting in person will be sent by mail.

The agenda of the Meeting is as follows:

(i)	to re-appoint Fahn Kanne & Co. Grant Thornton Israel as the Company’s independent auditor until the close of the following Annual General Meeting and to authorize the Board of Directors of the Company to determine its remuneration or to delegate the Audit Committee thereof to do so;
(ii)	to re-elect Ms. Monica Iancu as a Class I director of the Company until the close of 2028 Annual General Meeting of Shareholders of the Company;
(iii)	to ratify the compensation of our Chief Executive Officer;
(iv)	to approve the purchase of a D&O insurance policy from time to time;
(v)	to re-approve the existing Compensation Policy; and
(vi)	to discuss the Company’s audited financial statements for the year ended December 31, 2024.

Shareholders are entitled to propose an agenda item for the Meeting if they notify the Company within 14 days of this notice, subject to applicable law.

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 is MIND CTI's dividend payment for 2024 and when is it payable?

MIND CTI declared a dividend of $0.22 per share, with record date March 25, 2025, and payment date April 10, 2025. A 20% tax will be withheld.

How did MIND CTI's Q4 2024 revenue compare to Q4 2023?

Q4 2024 revenue was $5.2 million, down from $5.6 million in Q4 2023, showing a decrease in performance.

What is MIND CTI's revenue distribution by segment in 2024?

Customer care and billing software: 55%, enterprise messaging and payment solutions: 37%, enterprise call accounting software: 8%.

What are the main challenges MNDO faced in 2024?

Industry consolidation, new competitors, reduced telecom investment due to 5G priorities, and inability to recruit new customers.

What is MNDO's cash position as of December 31, 2024?

Cash position was approximately $15.8 million as of December 31, 2024.