Table Trac's Q3 Net Income Plummets 80% Amid Revenue Decline

TL;DR

**TBTC's Q3 earnings are a red flag, with an 80% net income drop and over $1M in uncollectible system revenue, signaling deeper issues than just a revenue dip.**

AI Summary

TABLE TRAC INC reported a significant decline in net income for the three months ended September 30, 2025, falling to $58,352 from $292,379 in the prior year, a decrease of 80.0%. This was primarily driven by a 16.2% drop in total revenues to $2,135,636 from $2,547,600, and a 5.9% increase in selling, general and administrative expenses to $1,622,118. For the nine months ended September 30, 2025, net income also decreased by 11.3% to $985,374 from $1,110,610, despite total revenues remaining relatively flat at $8,010,415 compared to $8,024,590. System revenue saw a substantial decline of 34.8% for the nine-month period, dropping to $1,924,415 from $2,954,963, while maintenance revenue increased by 14.4% to $4,562,917. Cash and cash equivalents significantly increased to $6,111,653 as of September 30, 2025, from $2,257,696 at December 31, 2024, largely due to proceeds from short-term investments totaling $2,570,085. The company also noted that approximately $1,005,224 in system revenue from installed contracts has not been recognized due to collectability concerns.

Why It Matters

This filing reveals a concerning trend for TABLE TRAC INC, with a sharp decline in quarterly net income and system sales, indicating potential challenges in securing new contracts or converting existing ones. For investors, the significant increase in cash is positive, but the unrecorded $1,005,224 in system revenue due to collectability issues signals underlying operational risks that could impact future earnings. Employees might face uncertainty if revenue declines persist, potentially affecting growth opportunities. Customers, particularly those with long-term contracts, could be impacted if the company's financial health deteriorates, though the increase in maintenance revenue suggests ongoing support. In a competitive casino management system market, these financial headwinds could weaken Table Trac's position against larger, more stable rivals.

Risk Assessment

Risk Level: high — The risk level is high due to the 80.0% decrease in net income for the three months ended September 30, 2025, and the company's disclosure of approximately $1,005,224 in system revenue from installed contracts not being recognized due to collectability concerns. This indicates significant operational and financial challenges, including potential credit risk with customers and a substantial drop in profitability.

Analyst Insight

Investors should exercise caution and conduct further due diligence on TABLE TRAC INC's customer base and collectability practices. Consider reducing exposure or holding off on new investments until there's clear evidence of improved system sales and a resolution to the significant uncollected revenue, as the current trends suggest potential long-term profitability issues.

Financial Highlights

debt To Equity

0.11

revenue

$2,135,636

operating Margin

-2.2%

total Assets

$13,635,363

total Debt

$1,386,066

net Income

$58,352

eps

N/A

gross Margin

73.7%

cash Position

$6,111,653

revenue Growth

-16.2%

Revenue Breakdown

Key Numbers

• $58,352 — Net income for Q3 2025 (Decreased 80.0% from $292,379 in Q3 2024)
• $2,135,636 — Total revenues for Q3 2025 (Decreased 16.2% from $2,547,600 in Q3 2024)
• $1,622,118 — Selling, general and administrative expenses for Q3 2025 (Increased 5.9% from $1,531,810 in Q3 2024)
• $985,374 — Net income for nine months ended Sept 30, 2025 (Decreased 11.3% from $1,110,610 in 2024)
• $1,924,415 — System revenue for nine months ended Sept 30, 2025 (Decreased 34.8% from $2,954,963 in 2024)
• $4,562,917 — Maintenance revenue for nine months ended Sept 30, 2025 (Increased 14.4% from $3,990,141 in 2024)
• $6,111,653 — Cash and cash equivalents as of Sept 30, 2025 (Increased from $2,257,696 at Dec 31, 2024)
• $1,005,224 — Unrecognized system revenue (Due to collectability concerns as of Sept 30, 2025)
• 4,641,523 — Shares of common stock outstanding (As of November 14, 2025)
• $2,570,085 — Proceeds from short-term investments (For the nine months ended Sept 30, 2025)

Key Players & Entities

• TABLE TRAC INC (company) — Registrant
• TBTC (company) — Ticker symbol
• Nevada (regulator) — State of incorporation
• Minnetonka, Minnesota (company) — Company office location
• Las Vegas, Nevada (company) — Company office location
• Oklahoma City, Oklahoma (company) — Company office location
• Federal Deposit Insurance Corporation (regulator) — Insures cash balances
• IntraFi Network DepositsSM (company) — Program for FDIC insurance
• $250,000 (dollar_amount) — FDIC insurance limit per institution
• SEC (regulator) — Securities and Exchange Commission

FAQ

Risk Factors

• Unrecognized System Revenue [high — financial]: Approximately $1,005,224 in system revenue from installed contracts has not been recognized due to collectability concerns as of September 30, 2025. This indicates potential issues with customer payment reliability for a significant portion of the company's system contracts.
• Declining System Revenue [medium — operational]: System revenue for the nine months ended September 30, 2025, decreased by 34.8% to $1,924,415 from $2,954,963 in the prior year. This substantial drop suggests potential challenges in new system sales or installations.
• SG&A Expense Increase [medium — financial]: Selling, general and administrative expenses increased by 5.9% to $1,622,118 for the three months ended September 30, 2025, compared to $1,531,810 in the prior year. This increase in operating costs, coupled with declining revenue, negatively impacted profitability.

Industry Context

The industry for TABLE TRAC INC likely involves specialized equipment or software solutions, where system sales are often complemented by recurring maintenance revenue. Companies in this sector face challenges related to technological obsolescence, competitive pricing, and the ability to secure long-term customer commitments. The trend towards increasing maintenance revenue while system revenue declines could indicate a shift in business model or market demand.

Regulatory Implications

The primary regulatory concern for TABLE TRAC INC appears to be related to revenue recognition and accounting standards, particularly concerning the collectability of system revenue. Ensuring compliance with GAAP for recognizing revenue only when collection is reasonably assured is critical to avoid misstatements and potential scrutiny from regulatory bodies like the SEC.

What Investors Should Do

1. Monitor the collectability of system revenue: The $1,005,224 in unrecognized revenue due to collectability concerns is a significant red flag that requires close observation. Investors should look for improvements in collection rates or a clear strategy to address these issues.
2. Analyze SG&A efficiency: The 5.9% increase in SG&A expenses, while revenue declined, warrants a deeper dive into cost management. Investors should assess whether these expenses are driving future growth or are simply increasing overhead.
3. Evaluate the sustainability of maintenance revenue growth: While maintenance revenue is growing, it's crucial to understand if this growth is sufficient to offset the sharp decline in system revenue and if it's driven by a healthy installed base.
4. Assess the impact of short-term investments: The significant increase in cash was partly due to proceeds from short-term investments. Investors should understand the strategy behind liquidating these investments and whether it impacts future income generation.

Key Dates

• 2025-09-30: Quarterly Financial Reporting — Indicates a significant drop in net income and revenue for Q3 2025, with substantial unrecognized system revenue due to collectability concerns.
• 2025-12-31: Previous Year End Financial Position — Provides a baseline for comparison, showing a substantial increase in cash and cash equivalents by September 30, 2025.

Glossary

System Revenue

Revenue generated from the sale or installation of the company's core systems. (A key revenue stream that has seen a significant decline, impacting overall financial performance.)

Maintenance Revenue

Revenue generated from ongoing support and maintenance services for installed systems. (This segment has shown growth, partially offsetting declines in other areas.)

Selling, general and administrative expenses (SG&A)

Costs incurred in the normal course of business operations, excluding cost of goods sold and research and development. (An increase in SG&A expenses contributed to the decline in net income.)

Net investment in sales type leases

The net amount expected to be realized by the lessor from a sales-type lease, including the residual value, less any unearned finance income. (Represents revenue from leasing arrangements, with current and long-term components.)

Customer deposits

Funds received from customers in advance of goods or services being delivered. (A significant decrease in customer deposits from $870,602 to $113,751 suggests a potential slowdown in new orders or contract signings.)

Year-Over-Year Comparison

Compared to the prior year, TABLE TRAC INC has experienced a significant downturn in profitability, with net income for Q3 2025 plummeting by 80.0% to $58,352. Total revenues also declined by 16.2% to $2,135,636 in the quarter. While total revenues for the nine-month period remained flat, a substantial 34.8% drop in system revenue was partially offset by a 14.4% increase in maintenance revenue. Selling, general, and administrative expenses have risen by 5.9% in the quarter, further pressuring margins. A key concern is the $1,005,224 in unrecognized system revenue due to collectability issues, a risk not explicitly detailed in the prior period's summary.

Key Financial Figures

• $250,000 — ments below the FDIC insurance limit of $250,000 per institution, per ownership category

Filing Documents

• tbltrc20250930_10q.htm (10-Q) — 891KB
• ex_857338.htm (EX-31.1) — 12KB
• ex_857339.htm (EX-31.2) — 12KB
• ex_857340.htm (EX-32) — 6KB
• tabletraclogo2.jpg (GRAPHIC) — 5KB
• 0001437749-25-035017.txt ( ) — 5036KB
• tbtc-20250930.xsd (EX-101.SCH) — 40KB
• tbtc-20250930_cal.xml (EX-101.CAL) — 39KB
• tbtc-20250930_def.xml (EX-101.DEF) — 286KB
• tbtc-20250930_lab.xml (EX-101.LAB) — 280KB
• tbtc-20250930_pre.xml (EX-101.PRE) — 315KB
• tbltrc20250930_10q_htm.xml (XML) — 808KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements 1

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 15

Controls and Procedures

Item 4. Controls and Procedures 15

OTHER INFORMATION

PART II. OTHER INFORMATION

Risk Factors

Item 1A. Risk Factors 16

Other Information

Item 5. Other Information

Exhibits

Item 6. Exhibits 17

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements TABLE TRAC, INC. CONTENTS Page CONDENSED FINANCIAL STATEMENTS (Unaudited) Condensed Balance Sheets 2 Condensed Statements of Operations 3 Condensed Statements of Stockholders' Equity 4 Condensed Statements of Cash Flows 5 Notes to Condensed Financial Statements 6 1 TABLE TRAC, INC. CONDENSED BALANCE SHEETS (Unaudited) September 30, December 31, 2025 2024 ASSETS CURRENT ASSETS Cash and cash equivalents $ 6,111,653 $ 2,257,696 Short-term investments 2,144,728 4,627,744 Accounts receivable, net 1,783,148 2,343,062 Inventory, net 1,883,361 1,935,679 Prepaid expenses 393,432 534,767 Net investment in sales type leases - current 59,765 75,858 Income tax receivable 0 50,156 TOTAL CURRENT ASSETS 12,376,087 11,824,962 LONG-TERM ASSETS Accounts receivable - long-term 633,629 1,011,355 Property and equipment, net 121,472 149,669 Net investment in sales type leases - long term 62,431 46,924 Software development costs, net 10,853 13,355 Operating lease right-of-use assets 430,891 474,157 TOTAL LONG-TERM ASSETS 1,259,276 1,695,460 TOTAL ASSETS $ 13,635,363 $ 13,520,422 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 265,944 $ 216,944 Customer deposits 113,751 870,602 Current portion of operating lease liabilities 113,762 80,999 Income tax payable 27,936 0 TOTAL CURRENT LIABILITIES 521,393 1,168,545 LONG-TERM LIABILITIES Operating lease liabilities 385,673 435,796 Deferred tax liability 479,000 454,000 TOTAL LIABILITIES 1,386,066 2,058,341 STOCKHOLDERS' EQUITY Common stock, $ 0.001 par value; 25,000,000 shares authorized: 4,756,734 shares issued; and 4,641,523 and 4,635,568 shares outstanding at September 30, 2025 and December 31, 2024, respectively. 4,642 4,636 Additional paid-in capital 2,545,003 2,470,850 Retained earnings 9,915,995 9,209,030 12,465,640 11,684,516 Treasury s

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View this 10-Q filing on SEC EDGAR