Intellinetics, Inc.

What they do

Intellinetics provides document management software and document conversion services through two segments: Software and Document Services. Its flagship platforms include IntelliCloud Payables Automation, IntelliCloud content management, and YellowFolder for K-12 education. Software is sold on-premise or as SaaS, hosted on Amazon Web Services and other U.S. data centers. Document Services converts paper to digital, including micrographics and long-term storage, with concentrated sales to the State of Michigan.

Revenue drivers

• Software as a Service (SaaS) — Recurring cloud-based software subscriptions; Q2 2026 revenue $1.6M, up 4.2% year over year.
• Professional Services — Part of Document Services; revenue decreased 5.8% year over year in Q2 2026, driving total revenue decline.
• Software Maintenance Services — Maintenance and support on software; Q2 2026 revenue decreased 11.7% year over year.
• Storage and Retrieval Services — Includes long-term document storage and retrieval; Q2 2026 revenue grew 8.8% year over year.

Recent performance

In Q2 2026, total revenue was $3.9M, down 1.6% year over year, with net loss of $1.1M ($0.24 per share) versus a $0.6M loss in Q2 2025. SaaS revenue grew 4.2%, but professional services revenue fell 5.8% and software maintenance services fell 11.7%. Gross margin decreased 162 basis points due to project mix. Cash was approximately $1.7M at quarter end.

Strategy

Management is focusing on accelerating SaaS growth and expanding recurring revenue, while using Document Services as an entry point into software relationships. They are improving go-to-market execution, sales pipeline management, and product/technology investments. Operating discipline includes better forecasting, a new website, and structured accountability. CEO Alison Forsythe cites a two-to-four year transformation to build a more predictable business.

Risks

• Customer concentration — Two largest clients account for ~39% and 4% of revenues (FY2025); government contracts, including K-12, represent ~78% of net revenues (FY2025).
• Reduction in Document Services volume — Continued project volume challenges and unfavorable mix in Document Services are driving revenue declines.
• Education funding uncertainty — Uncertainty around Department of Education activities may chill K-12 client spending.
• Transition costs and operating losses — Non-recurring CEO transition costs of ~$430K in H1 2026 contributed to net losses; Adjusted EBITDA was negative in H1 2026.

Outlook

Management expects double-digit year-over-year SaaS growth for fiscal 2026, with revenue from improved bookings recognized in H2 2026 and beyond. They believe H1 2026 results are not representative of the execution profile for the second half. Priorities include accelerating SaaS growth, improving go-to-market, and reducing operating variability.