Executive Summary
ReposiTrak, formerly Park City Group, reported Q4 2023 revenue of $5.18 million, with gross margin of 83.7% and operating margin of 25.5%. The quarter delivered GAAP net income of $1.58 million and basic earnings per share of $0.07, supported by a strong mix of recurring revenue (93%+ of total revenue in the year’s Q4 and 99.5% in the quarter). For the full year, total revenue rose 6% to $19.1 million, recurring revenue grew 7% to $19.0 million, and operating income expanded to $5.1 million (up 15%). Net income rose 40% to $5.6 million, supported by robust cash flow from operations of $8.9 million (a 45% year-over-year increase). The balance sheet remains exceptionally healthy: approximately $24 million in cash, zero bank debt, a current ratio of about 6.5, and ongoing capital allocation that includes quarterly dividends, share buybacks, and a plan to redeem preferred stock over three years. Management emphasizes operating leverage, automation, and a scalable RTN (traceability) initiative that could drive $3–$4 million of additional annual recurring revenue (ARR) once deployed, with ARR exiting around $20.3 million as of mid-2023. They acknowledge the revenue ramp from RTN will be laddered over 12 months and remain focused on high-margin, recurring revenue while rationalizing non-core revenue.$0.80–$0.85 of every incremental recurring dollar over the fixed cost base (~$12 million/year) will drop to the bottom line, highlighting an improving profitability trajectory as RTN scales. The company also signals favorable near-term regulatory timing risks (FSMA 204 enforcement) could modestly ease implementation pressure, though execution risk remains in onboarding large, multi-location customers. Overall, TRAK presents a liquidity-rich, debt-free platform with a clear capital-allocation framework and a sizable growth runway from RTN given regulatory tailwinds and a history of durable profitability.
Key Performance Indicators
Key Insights
Key Q4 2023 metrics: Revenue $5.18m, Gross Margin 83.7%, Operating Margin 25.5%, EBITDA $1.99m (margin ~38.4%), Net Income $1.58m (net margin 30.5%), EPS $0.07 (diluted $0.077). Full-year FY2023: Revenue $19.10m (+6%), Recurring Revenue $19.00m (+7%), Operating Income $5.10m (+15%), Net Income $5.60m (+40%), EPS $0.27, Cash from Operations $8.9m (+45%), Cash position ~$24m, No debt. ARR exit rate at year-end 2023: $20.3m. Q4 2023 recurring revenue accounted for 99.5% of quarterly revenue. Q4 cap...
Financial Highlights
Key Q4 2023 metrics: Revenue $5.18m, Gross Margin 83.7%, Operating Margin 25.5%, EBITDA $1.99m (margin ~38.4%), Net Income $1.58m (net margin 30.5%), EPS $0.07 (diluted $0.077). Full-year FY2023: Revenue $19.10m (+6%), Recurring Revenue $19.00m (+7%), Operating Income $5.10m (+15%), Net Income $5.60m (+40%), EPS $0.27, Cash from Operations $8.9m (+45%), Cash position ~$24m, No debt. ARR exit rate at year-end 2023: $20.3m. Q4 2023 recurring revenue accounted for 99.5% of quarterly revenue. Q4 capex was modest; depreciation and amortization rose 55% reflecting RTN investments. Balance sheet highlights: current ratio 6.45, debt-to-equity near 0, and cash per share around $1.38. Management emphasizes that about $12m is the fixed cash cost base to run the business, with incremental recurring revenue largely contributing to profit.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
Key Financial Ratios
operatingProfitMargin
25.5%
operatingCashFlowPerShare
$0.11
freeCashFlowPerShare
$0.11
dividendPayoutRatio
27.6%
Management Commentary
Themes and management commentary from the earnings call and transcript include: (1) RTN as the next major growth driver: management projects $3–$4 million of additional ARR once RTN deployments are fully implemented; ARR exit rate of $20.3 million demonstrates meaningful recurring revenue anchored by existing signed customers. (2) Operating leverage and capital allocation: they cite 6% revenue growth and 46% bottom-line growth in 2023 driven by recurring revenue expansion and automation; emphasis on returning capital to shareholders (dividends, buybacks) while funding RTN and pursuing selective M&A. (3) Regulatory timing risk and market adoption: discussions around FSMA Rule 204 enforcement timelines and the potential benefit of a regulatory delay; ongoing pipeline for large retailers, wholesalers, and restaurants continues to scale, with onboarding expected to accelerate in calendar 2024 and 2025. (4) Competitive positioning and interoperability: the RTN is described as an interoperable layer that works with any labeling/barcoding system and is not a zero-sum game, creating efficiency for suppliers and traceability for retailers. (5) Management philosophy on automation vs. headcount: emphasis on automation and AI-based tooling to scale without material increases in cost, maintaining high gross margins while expanding services. Representative quotes include: “we built a consistent cash generation machine with six consecutive years of real GAAP profitability,” and “the customers we have signed so far for our traceability initiative should generate additional dollars of recurring revenue once fully deployed,” plus Randys comment on RTN’s interoperability and the strategic focus on traceability as a growth driver.
We built a consistent cash generation machine with six consecutive years of real GAAP profitability.
— Randy Fields
Our strategy remains very simple. Take care of the customer, grow recurring revenue, rationalizing costs with the opportunity of future revenues, control costs, increase net income, accelerate EPS, buy back shares, which now includes the preferred shares and drive cash.
— Randy Fields
Forward Guidance
Forward guidance centers on RTN growth potential and the path to higher profitability. Management projects an incremental $3–$4 million in annual recurring revenue from RTN as currently contracted suppliers scale, laddered over the next 12 months, with meaningful revenue realization anticipated in calendar 2024 and acceleration into 2025. They acknowledge the need for roughly $12 million in annual cash to run the business, with incremental recurring revenue contributing approximately $0.80–$0.85 of incremental profit per dollar once fixed costs are covered. The FDA FSMA 204 rule enforcement timing remains a key risk; a potential delay could ease near-term implementation pressures and accelerate onboarding. Key factors for investors to monitor include: (i) pace of RTN onboarding and customer deployments across wholesalers, distributors, and retailers; (ii) actual ARR ramp and gross margin stability as RTN scales; (iii) ongoing capital allocation decisions (dividend, buybacks, and preferred redemption); (iv) regulatory developments affecting timing and scope of traceability requirements; (v) any M&A opportunities that align with the strategic plan and financial flexibility given a debt-free balance sheet.