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GlobalWise Investments, Inc. (GWIV) Achieves Triple-Digit Sequential Revenue Growth And Substantial Increase In Gross Profit

|Includes: GlobalWise Investments, Inc. (INLX)

GlobalWise Investments and its wholly owned subsidiary Intellinetics, Inc., an enterprise content management ("ECM") software development, sales, and marketing company serving both public and private sector clients, just reported financial results for the second quarter ended June 30, 2012. Notably, total revenues were 146% greater than the previous quarter; they were up 52% compared to the same period in 2011. Even more impressive, gross profit improved to $597,123, a 959% increase over the first quarter of $56,381, and a 64% increase compared to $364,661 in the year-ago second quarter.

Other highlights include: (1) Gross profit margin increased to 67% compared to 16% in the first quarter and 63% in the year-ago second quarter; (2) Total operating expenses decreased by 69% to $680,062 compared to $1,148,905 in the first quarter, up from $421,636 in the year-ago second quarter; (3) Loss from operations decreased by 1,217% to ($82,939) compared to ($1,092,524) in the first quarter, up from ($56,975) in the year-ago second quarter; and (4) Net loss decreased by 639% to ($155,250) compared to ($1,147,873) in the first quarter; up from ($93,039) in the year-ago second quarter.

GlobalWise's operating expenses in the second quarter include additional costs associated with being a public company and strategic investments in human talent, technology, and process assets that are expected to help establish a strong platform for profitable geometric growth. Combined, these investments drive cost and cycle time out of the marketing, sales, and order fulfillment processes. Management is positioning the company to better harvest demand from captive markets with little additional operating cost and expects expenses to remain relatively stable at current levels as revenue continues to increase.

"GlobalWise's dynamic approach to the ECM software market is taking hold in 2012," commented William J. "BJ" Santiago, CEO of GlobalWise. "Two important changes have occurred in the past 18 months that are becoming the catalysts for our extraordinary growth. First, the advancement of our ECM software to a cloud-delivery model reduces our cost of service delivery and time to installation. Second, moving from a domestic direct-sales model to an international Channel Partner strategy has dramatically increased our ability to sell our software to a greater number of clients in a lower-cost manner. Our second-quarter revenue growth of 146% vs. the prior quarter and 52% growth year-over-year is a direct, tangible result of these developments. Simply put, we're now selling more software faster and have reduced our average sales cycle from a historic 18 - 24 months to 3 - 6 months."

Since the beginning of this year, the company has signed eight new Channel Partners with several potential new partners pending. In 2011, 14 new Channel Partners were signed. The increase in sales capacity is driving significant and consistent revenue growth, and the trend is expected to continue throughout 2012 and beyond.

Based upon its current sales funnel and recent Channel Partner activity, GlobalWise currently expects to surpass $3.3 million in annual revenue this year vs. $1.7 million for the year prior. Management anticipates exiting 2012 at an annualized revenue run rate for 2013 in excess of $5.0 million, as existing Channel Partners increase their sales and marketing efforts and new Channel Partners are added. GlobalWise expects to be increasingly well positioned for growth and profitability in future periods as projected revenues increase, operating expenses continue to decline as a percentage of revenue, and the cost of continuing as a public company normalizes.

"Our sales funnel is growing steadily with qualified clients through our Channel Partner eco-system," added Mr. Santiago. "The Channel Partners need a cloud-based ECM solution to complement their product strategy and increase the number of value added services provided to clients. We strategically choose partners who sell enterprise software, consulting services or office equipment focused around document management. We can quickly train them on our template based ECM software and/or how to integrate the software into their existing business application software or hardware products. This new sales strategy allows us to focus on what we do best - software engineering, support and cloud services delivery - and allows our partners to do what they do best - demand generation for industry leading business software solutions."

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