Usio 2025 Q1 Earnings Misses Targets, Net Loss Narrows 6.1%

Usio (USIO) reported its fiscal 2025 Q1 earnings on May 14th, 2025. The company experienced a revenue increase of 5% to $22.01 million compared to the prior year. However, Usio missed the Zacks Consensus Estimate with an EPS of $-0.01. Despite this, Usio narrowed its net loss to $234,970, a 6.1% improvement from a year earlier. The company reaffirmed its guidance for revenue growth between 14% and 16% for the fiscal year, emphasizing expected accelerated growth in the latter half driven by a strong sales pipeline.

Revenue

Usio recorded a total revenue of $22.01 million in Q1 2025, reflecting a 5% increase from the previous year. The ACH and complementary services segment achieved $5.04 million, marking a significant contribution. Credit card revenues followed with $7.88 million, while prepaid card services generated $2.91 million. Output Solutions added $5.73 million. Interest revenues were distributed among segments, with ACH and complementary services bringing in $224,129, prepaid card services $182,661, and Output Solutions $38,731.

Earnings/Net Income

Usio maintained an EPS of $-0.01 in Q1 2025, consistent with the previous year. The company reduced its net loss by 6.1% to $234,970 compared to $250,188 in Q1 2024. The stable EPS suggests mixed results in performance.

Post-Earnings Price Action Review

The strategy of buying Usio stock following revenue misses and holding for 30 days is not likely to yield consistent profits over time. Recent performance indicators reveal an earnings loss of $0.01 per share, which falls short of the Zacks Consensus Estimate of $0.04, producing a negative surprise of -125%. This significant miss has resulted in adverse market reactions, with stock prices tending to decline after such misses. Historical trends underscore the challenges of maintaining profitability with this strategy, as market conditions and investor sentiment can be volatile. Additionally, this approach carries the risk of missed opportunities in other stocks during the holding period. While there may be short-term potential for recovery, the inherent volatility and opportunity cost make this strategy risky and unlikely to deliver long-term gains. Alternative strategies, such as selling immediately after earnings misses, may offer better prospects.

CEO Commentary

Louis Hoch, Chairman and CEO, highlighted Usio's shift towards solution-oriented approaches, emphasizing strong ACH performance with revenues up 33% and transaction volumes rising 36%. He expressed optimism about the Usio ONE initiative and the company's resilience against macroeconomic challenges, reinforcing confidence in its growth potential.

Guidance

Usio reaffirmed its revenue growth expectation of 14% to 16% for the fiscal year. The company anticipates accelerated growth in the second half, driven by a robust sales pipeline and the Usio ONE initiative's implementation, with numerous deals in progress expected to contribute significantly in the upcoming quarters.

Additional News

In recent weeks, Usio has been active with share repurchase activities. The company utilized $350,000 in the first quarter of 2025 for treasury stock buybacks, demonstrating a commitment to enhancing shareholder value through strategic capital allocation. Additionally, Usio's management has reinforced their focus on expanding the company's market presence and strengthening its financial position. With a growing portfolio of recurring revenues and signed contracts poised to add incremental revenue, Usio is well-positioned to capitalize on future growth opportunities. The company continues to manage its costs effectively while maintaining strong operational performance, ensuring it remains prepared for anticipated increases in business activity and volume growth.