CreditRiskMonitor's Q3 Net Income Plunges 55% Despite Revenue Growth

TL;DR

**CRMZ's revenue growth is a mirage; net income is tanking, signaling deeper operational issues that investors should be wary of.**

AI Summary

CreditRiskMonitor.com, Inc. (CRMZ) reported a significant decline in net income for the three months ended September 30, 2025, falling to $244,868 from $551,582 in the prior year, a 55.6% decrease. For the nine-month period, net income also decreased by 21.6% to $633,457 from $808,175 in 2024. Operating revenues saw a modest increase, reaching $5,094,736 for the quarter, up from $5,009,370, and $15,025,690 for the nine months, compared to $14,751,845 in the previous year. Selling, general, and administrative expenses rose by 19.5% to $2,697,192 for the quarter, contributing to the reduced profitability. The company's cash and cash equivalents increased to $6,918,389 as of September 30, 2025, from $6,674,473 at December 31, 2024, while held-to-maturity securities also grew to $12,579,773 from $11,225,475. Accounts receivable, net, decreased to $2,976,665 from $3,631,018, indicating improved collections or lower sales. The company continues to operate as a single segment, focusing on SaaS subscription products for credit and supply chain risk management.

Why It Matters

This filing reveals a concerning trend for investors: while CreditRiskMonitor.com (CRMZ) is growing its top-line revenue, its profitability is eroding significantly, with net income down over 55% in Q3. This could signal increasing operational inefficiencies or competitive pressures in the SaaS credit risk management space, impacting investor returns. Employees might face pressure if cost-cutting measures are implemented to restore margins. Customers, however, may benefit from continued investment in the SaaS platform, as evidenced by the stable data and product costs. The broader market for B2B SaaS credit risk solutions remains competitive, and CRMZ's declining net income suggests it may be struggling to maintain its competitive edge.

Risk Assessment

Risk Level: medium — The company's net income decreased by 55.6% for the three months ended September 30, 2025, and 21.6% for the nine months, despite a slight increase in operating revenues. This significant decline in profitability, coupled with a 19.5% increase in selling, general, and administrative expenses for the quarter, indicates potential operational inefficiencies or increased competitive pressures that could impact future financial performance.

Analyst Insight

Investors should exercise caution and conduct further due diligence into CRMZ's expense structure and competitive landscape. The significant drop in net income, despite revenue growth, suggests a potential margin squeeze. Consider if the current valuation adequately reflects these profitability challenges before making investment decisions.

Financial Highlights

debt To Equity

0.00

revenue

$5,094,736

operating Margin

2.50%

total Assets

$25,866,836

total Debt

$0.00

net Income

$244,868

eps

$0.02

gross Margin

57.06%

cash Position

$6,918,389

revenue Growth

+1.7%

Revenue Breakdown

Key Numbers

• $244,868 — Net Income (Q3 2025) (55.6% decrease from $551,582 in Q3 2024)
• $633,457 — Net Income (9 Months 2025) (21.6% decrease from $808,175 in 9 Months 2024)
• $5,094,736 — Operating Revenues (Q3 2025) (1.7% increase from $5,009,370 in Q3 2024)
• $2,697,192 — Selling, General & Administrative Expenses (Q3 2025) (19.5% increase from $2,256,732 in Q3 2024)
• $6,918,389 — Cash and Cash Equivalents (Sept 30, 2025) (3.7% increase from $6,674,473 at Dec 31, 2024)
• $12,579,773 — Held-to-maturity securities (Sept 30, 2025) (12.1% increase from $11,225,475 at Dec 31, 2024)
• $2,976,665 — Accounts Receivable, net (Sept 30, 2025) (18.1% decrease from $3,631,018 at Dec 31, 2024)
• 10,767,501 — Common Shares Outstanding (Nov 10, 2025) (Increased from 10,722,401 at Dec 31, 2024 due to stock option exercises)

Key Players & Entities

• CreditRiskMonitor.com, Inc. (company) — registrant
• SEC (regulator) — Securities and Exchange Commission
• $244,868 (dollar_amount) — Net income for Q3 2025
• $551,582 (dollar_amount) — Net income for Q3 2024
• $633,457 (dollar_amount) — Net income for nine months ended Sept 30, 2025
• $808,175 (dollar_amount) — Net income for nine months ended Sept 30, 2024
• $5,094,736 (dollar_amount) — Operating revenues for Q3 2025
• $2,697,192 (dollar_amount) — Selling, general and administrative expenses for Q3 2025
• $6,918,389 (dollar_amount) — Cash and cash equivalents as of Sept 30, 2025
• Chief Executive Officer and President (person) — Company's CODM

FAQ

Risk Factors

• Economic Uncertainty Impacting Subscriber Spending [medium — market]: The worldwide financial system's uncertainty could negatively affect subscribers' discretionary spending on financial risk information. A weakened economy might also impact subscriber solvency, though the extent is unpredictable.
• Dependence on Future Financing for Acquisitions [low — financial]: While currently debt-free with sufficient cash, future acquisitions or licensing could necessitate raising additional capital. Such financing may not be available or may be on unfavorable terms, impacting liquidity.

Industry Context

CreditRiskMonitor.com operates in the financial risk management software sector, a space characterized by increasing demand for data analytics and predictive insights. The industry is competitive, with players offering solutions for credit, supply chain, and broader enterprise risk management. Trends include the adoption of AI and machine learning for enhanced risk assessment and the growing need for integrated risk platforms.

Regulatory Implications

As a provider of financial risk information, CRMZ is indirectly subject to regulations governing financial data and privacy. While not directly regulated like financial institutions, maintaining data integrity and compliance with data protection laws (e.g., GDPR, CCPA) is crucial to avoid reputational damage and potential penalties.

What Investors Should Do

1. Monitor SG&A Expense Growth
2. Analyze Revenue Drivers
3. Evaluate Investment Strategy

Key Dates

• 2025-09-30: End of Q3 2025 — Reporting period for the 10-Q, showing a significant net income decrease despite slight revenue growth.
• 2025-12-31: End of Fiscal Year 2024 — Prior period balance sheet comparison point, showing an increase in cash and held-to-maturity securities.

Glossary

Held-to-maturity securities

Investments in debt securities that the company has the intent and ability to hold until their maturity date. These are typically valued at amortized cost. (CRMZ has significantly increased its holdings in these securities, indicating a strategy to preserve capital and earn interest income.)

Unexpired subscription revenue

Revenue that has been received from customers for services that have not yet been delivered or recognized. It represents future revenue to be earned over the subscription period. (This is the largest component of current liabilities, representing deferred revenue for CRMZ's SaaS model, and is expected to convert to income over time with minimal future cash outlay.)

Accumulated deficit

The cumulative net losses of a company since its inception, offset by any net profits. A negative balance indicates the company has historically incurred more losses than profits. (CRMZ has a substantial accumulated deficit of $18,438,752, though it has decreased from the prior year, suggesting a move towards profitability.)

Operating lease right-of-use asset, net

An asset representing the right to use a leased asset for the lease term, recognized under new accounting standards. It's recognized on the balance sheet along with a corresponding lease liability. (The appearance of this asset and its corresponding liability indicates CRMZ has entered into new operating leases, likely for office space or equipment.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, CreditRiskMonitor.com, Inc. (CRMZ) experienced a substantial 55.6% decrease in net income, falling to $244,868 from $551,582, primarily due to a 19.5% surge in Selling, General, and Administrative (SG&A) expenses to $2,697,192. Despite this profitability decline, operating revenues saw a modest 1.7% increase to $5,094,736. The company's balance sheet shows a healthy increase in cash and cash equivalents and a significant rise in held-to-maturity securities, while accounts receivable decreased, suggesting improved collection efficiency or potentially slower sales growth.

Key Financial Figures

• $6.9 million — 30, 2025, the Company had approximately $6.9 million in cash and cash equivalents, an increa
• $244 thousand — uivalents, an increase of approximately $244 thousand from December 31, 2024. The Company had
• $12.6 million — 31, 2024. The Company had approximately $12.6 million in total held-to-maturity assets (curre
• $11.2 million — securities as compared to approximately $11.2 million as of December 31, 2024. The main comp
• $10.9 m — d subscription revenue of approximately $10.9 million, which should not require signifi
• $85 — rating revenues increased approximately $85 thousand, or 2%, for the

Filing Documents

• ef20054972_10q.htm (10-Q) — 593KB
• ef20054972_ex31-1.htm (EX-31.1) — 13KB
• ef20054972_ex31-2.htm (EX-31.2) — 13KB
• ef20054972_ex32-1.htm (EX-32.1) — 6KB
• ef20054972_ex32-2.htm (EX-32.2) — 7KB
• 0001140361-25-041342.txt ( ) — 2976KB
• crmz-20250930.xsd (EX-101.SCH) — 19KB
• crmz-20250930_def.xml (EX-101.DEF) — 93KB
• crmz-20250930_lab.xml (EX-101.LAB) — 209KB
• crmz-20250930_pre.xml (EX-101.PRE) — 117KB
• crmz-20250930_cal.xml (EX-101.CAL) — 36KB
• ef20054972_10q_htm.xml (XML) — 404KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Condensed Balance Sheets – September 30, 2025 (Unaudited) and December 31, 2024 3 Condensed Statements of Operations for the Three Months Ended September 30, 2025 and 2024 (Unaudited) 4 Condensed Statements of Operations for the Nine Months Ended September 30, 2025 and 2024 (Unaudited) 5 Condensed Statements of Stockholders' Equity for the Three Months Ended September 30, 2025 and 2024 (Unaudited) 6 Condensed Statements of Stockholders' Equity for the Nine Months Ended September 30, 2025 and 2024 (Unaudited) 7 Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (Unaudited) 8 Notes to Condensed Financial Statements (Unaudited) 9

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 14

Controls and Procedures

Item 4. Controls and Procedures 18

OTHER INFORMATION

PART II. OTHER INFORMATION

Other Information

Item 5. Other Information 19

Exhibits

Item 6. Exhibits 19

SIGNATURES

SIGNATURES 20 2 Index

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements CREDITRISKMONITOR.COM, INC. CONDENSED BALANCE SHEETS SEPTEMBER 30, 2025 AND DECEMBER 31, 2024 September 30, 2025 December 31, 2024 (Unaudited) (Note 1) ASSETS Current assets: Cash and cash equivalents $ 6,918,389 $ 6,674,473 Held-to-maturity securities 6,098,773 2,467,475 Accounts receivable, net of allowance for credit losses of $ 30,000 2,976,665 3,631,018 Other current assets 899,739 929,512 Total current assets 16,893,566 13,702,478 Held-to-maturity securities 6,481,000 8,758,000 Property and equipment, net 432,033 497,560 Operating lease right-of-use asset, net 105,777 - Goodwill 1,954,460 1,954,460 Total assets $ 25,866,836 $ 24,912,498 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Unexpired subscription revenue $ 10,894,478 $ 10,886,860 Accounts payable 191,625 319,717 Operating lease liability, current portion 30,024 - Accrued expenses 2,083,662 1,931,281 Total current liabilities 13,199,789 13,137,858 Deferred taxes on income, net 481,420 481,420 Unexpired subscription revenue, less current portion 164,508 151,474 Operating lease liability, less current portion 75,753 - Total liabilities 13,921,470 13,770,752 Stockholders' equity: Preferred stock, $ .01 par value; authorized 5,000,000 shares; none issued - - Common stock, $ .01 par value; authorized 32,500,000 shares; issued and outstanding 10,767,501 and 10,722,401 shares, respectively 107,675 107,224 Additional paid-in capital 30,276,443 30,106,731 Accumulated deficit ( 18,438,752 ) ( 19,072,209 ) Total stockholders' equity 11,945,366 11,141,746 Total liabilities and stockholders' equity $ 25,866,836 $ 24,912,498 See accompanying notes to condensed financial statements. 3 Index CREDITRISKMONITOR.COM, INC. CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (Unaudited) 2025 2024 Operating revenues

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

Management's Discussion and Analysis of Financial Condition and Results of Operations Business Environment The continuing uncertainty in the worldwide financial system has negatively impacted general business conditions. It is possible that a weakened economy could adversely affect our subscribers' discretionary spending for financial risk information, or even their solvency, but the Company cannot predict whether or to what extent this may occur. Our strategic priorities and plans for 2025 are to continue to build on the improvement initiatives underway to enhance our value proposition to subscribers while continuing to achieve sustainable, profitable growth. Financial Condition, Liquidity and Capital Resources The following table presents selected financial information and statistics as of September 30, 2025 and December 31, 2024 (dollars in thousands): September 30, 2025 December 31, 2024 Cash and cash equivalents $ 6,918 $ 6,674 Held-to-maturity securities, current $ 6,099 $ 2,467 Accounts receivable, net $ 2,977 $ 3,631 Working capital $ 3,694 $ 565 Cash ratio 0.52 0.51 Quick ratio 1.21 0.97 Current ratio 1.28 1.04 Held-to-maturity securities, non-current $ 6,481 $ 8,758 As of September 30, 2025, the Company had approximately $6.9 million in cash and cash equivalents, an increase of approximately $244 thousand from December 31, 2024. The Company had approximately $12.6 million in total held-to-maturity assets (current and non-current) comprised of U.S. Treasury securities as compared to approximately $11.2 million as of December 31, 2024. The main component of current liabilities as of September 30, 2025 was unexpired subscription revenue of approximately $10.9 million, which should not require significant future cash outlay as this is annual reoccurring revenue, other than the cost of preparation and delivery of the applicable commercial credit reports, which cost much less than the unexpired subscripti

View Full Filing

View this 10-Q filing on SEC EDGAR