{"url_path":"/sec/crmz/10-q/2026/item-2","section_key":"item-2","section_title":"Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations.","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-12","source_url":"https://www.sec.gov/Archives/edgar/data/315958/0001140361-26-020775-index.html","accession_number":"0001140361-26-020775","cik":"0000315958","ticker":"CRMZ","issuer_name":"CREDITRISKMONITOR COM INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/315958/0001140361-26-020775-index.html","primary_entity_key":"0000315958","primary_entity_name":"CREDITRISKMONITOR COM INC"},"word_count":2043,"has_tables":true,"body_markdown":"Item 2.\n\nManagement’s Discussion and Analysis of Financial Condition and Results of Operations.\n\n \n\nBusiness Environment\n\n \n\nOur strategic priorities and plans for 2026 are to continue building on the improvement initiatives underway to enhance our value proposition to subscribers while continuing to achieve sustainable, profitable growth.\n\n \n\nThe 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 will occur. The potential impact of Artificial Intelligence (“AI”) technology on the SaaS industry and the ability of our Company to adapt to advancements in AI are additional uncertainties that may affect our business.\n\n \n\nFinancial Condition, Liquidity and Capital Resources\n\n \n\nThe table below presents selected financial information and statistics as of March 31, 2026 and December 31, 2025 (dollars in thousands):\n\n \n\n \n \n\nMarch 31,\n\n2026\n \n \n\nDecember 31,\n\n2025\n \n\n \n    \n    \n\nCash and cash equivalents\n\n$5,715 \n$6,248 \n\nHeld-to-maturity securities, current\n\n $11,680 \n  10,619 \n\nHeld-to-maturity securities, non-current\n\n $971 \n  1,997 \n\nAccounts receivable, net\n\n $3,210 \n  3,787 \n\nWorking capital\n\n $9,596 \n  8,492 \n\nCash ratio\n\n  0.47 \n  0.47 \n\nQuick ratio\n\n  1.70 \n  1.55 \n\nCurrent ratio\n\n  1.79 \n  1.64 \n\n \n\nAs of March 31, 2026, the Company had approximately $5.7 million in cash and cash equivalents, a decrease of approximately $533 thousand from December 31, 2025. The Company had approximately $12.7 million in total held-to-maturity assets (current and non-current) comprised of U.S. Treasury securities as compared to approximately $12.6 million as of December 31, 2025.\n\n \n\nThe main component of current liabilities as of March 31, 2026 was unexpired subscription revenue of approximately $10.8 million, which should not require significant future cash outlay, as this is annual recurring revenue, other than the cost of preparation and delivery of the applicable commercial credit reports, which cost much less than the unexpired subscription revenue shown. Unexpired subscription revenue is recognized as income over the subscription term, which approximates 12 months. The unexpired subscription revenue balance does not include the total contract value of multi-year, noncancellable contracts that are billed annually.\n\n \n\nThe Company has no debt. The Company has no bank lines of credit or other currently available credit sources.\n\n \n\nFurther, the Company believes that its existing balances of cash and cash equivalents and cash generated from operations will be sufficient to satisfy its anticipated cash requirements through at least the next 12 months and the foreseeable future. However, the Company’s liquidity could be negatively affected if it were to make an acquisition or license products or technologies, which may require the need to raise additional capital through future debt or equity financing. Additional financing may not be available or on terms favorable to the Company.\n\n \n\nOff-Balance Sheet Arrangements\n\n \n\nThe Company is not a party to any off-balance sheet arrangements.\n\n \n\n11\n\n[Index](#INDEX)\n\nResults of Operations\n\n \n\n                 \n\n \n \n\n3 Months Ended March 31,\n     \n\n \n\n \n    \n    \n    \n    \n\n \n \n\n2026\n\n \n  2025   \n \n\n \n \n\nAmount\n \n \n\n% of Total\n\nOperating\n\nRevenues\n \n \n\nAmount\n \n \n\n% of Total\n\nOperating\n\nRevenues\n \n\n \n    \n    \n    \n    \n\nOperating revenues\n\n $4,986,878 \n  100%\n $4,871,412 \n  100%\n\n \n    \n    \n    \n    \n\nOperating expenses:\n\n    \n    \n    \n    \n\nData and product costs\n\n  2,520,905 \n  51%\n  2,283,374 \n  47%\n\nSelling, general and administrative expenses\n\n  2,505,880 \n  50%\n  2,476,951 \n  51%\n\nDepreciation and amortization\n\n  53,820 \n  1%\n  85,720 \n  1%\n\nTotal operating expenses\n\n  5,080,605 \n  102%\n  4,846,045 \n  99%\n\n \n    \n    \n    \n    \n\n(Loss) income from operations\n\n  (93,727) \n  (2)%\n  25,367 \n  1%\n\nOther income, net\n\n  169,803 \n  3%\n  180,833 \n  3%\n\n \n    \n    \n    \n    \n\nIncome before income taxes\n\n  76,076 \n  1%\n  206,200 \n  4%\n\nProvision for income taxes\n\n  (17,764) \n   −  \n  (47,138) \n  (1)%\n\n \n    \n    \n    \n    \n\nNet income\n\n $58,312 \n  1%\n  $159,062 \n  3%\n\n \n\nOperating revenues increased approximately $115 thousand, or 2%, for the first quarter of fiscal 2026 compared to the same period of fiscal 2025. This overall revenue growth resulted from an increase in SaaS subscription product revenue, attributable to increased sales to new and existing subscribers, as well as related price increases for subscriptions.\n\n \n\nData and product costs increased approximately $238 thousand, or 10%, for the first quarter of fiscal 2026 compared to the same period of fiscal 2025. The increase was driven by the (i) addition of senior technology leadership, (ii) shifts in reporting structure to better align departmental accountability and facilitate more efficient delivery of technology products, and (iii) higher hosted facility costs driven by increased production demands and the expiration of the leased office space on July 31, 2025.\n\n \n\nSelling, general and administrative expenses increased approximately $29 thousand, or 1%, for the first quarter of fiscal 2026 compared to the same period of fiscal 2025. The increase is driven by an increase in professional fees, which the Company believes will be temporary.\n\n \n\nOther income decreased approximately $11 thousand, or 6%, for the first quarter of fiscal 2026 compared to the same period of fiscal 2025. Short-term interest rate levels on institutional U.S. Government money market funds were lower in fiscal 2026 relative to fiscal 2025.\n\n \n\nFuture Operations\n\n \n\nThe Company over time intends to expand its operations by expanding the breadth and depth of its product and service offerings and by introducing new and complementary products. Gross margins attributable to new business areas may be lower than those associated with the Company’s existing business activities.\n\n \n\nThe Company’s current and future expense levels are based largely on its investment plans and estimates of future revenues. To a large extent, these costs do not vary with revenue. Sales and operating results generally depend on the Company’s ability to attract and retain subscribers as well as the volume and timing of the subscriptions for the Company’s products, which are difficult to forecast. The Company may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall in revenues in relation to the Company’s planned expenditures would have an immediate adverse effect on the Company’s business, prospects, financial condition and results of operations. Further, as a strategic response to changes in the competitive environment, the Company may from time to time make certain pricing, service, marketing or acquisition decisions that could have a material adverse effect on its business, prospects, financial condition and results of operations.\n\n \n\n \n\n12\n\n[Index](#INDEX)\n\nAchieving greater profitability depends on the Company’s ability to generate and sustain increased revenue levels. The Company believes that its success will depend in large part on its ability to (i) increase its brand awareness, (ii) provide its subscribers with outstanding value, thus encouraging renewals, and (iii) achieve sufficient sales volume to realize economies of scale. Accordingly, the Company intends to continue to invest in product development, operating infrastructure, marketing and promotion. The Company believes that these expenditures will help it to sustain the revenue growth it has experienced over the last several years. The Company anticipates that sales and marketing expenses will continue to increase in dollar amount and as a percentage of revenues into 2026 and future periods as the Company continues to expand its business on a worldwide basis. Further, the Company expects that product development expenses will also continue to increase in dollar amount and may increase as a percentage of revenues into 2026 and future periods because it expects to employ more development personnel on average compared to prior periods and build the infrastructure required to support the development of new and improved products and services. However, as some of these expenditures are discretionary in nature, the Company expects that the actual amounts incurred will be in line with its projections of future cash flows in order not to negatively impact its future liquidity and capital needs. There can be no assurance that the Company will be able to achieve these objectives within a meaningful time frame.\n\n \n\nThe Company expects to experience fluctuations in its future quarterly operating results due to a variety of factors, some of which are outside the Company’s control. Factors that may adversely affect the Company’s quarterly operating results include, among others, (i) the Company’s ability to retain existing subscribers, attract new subscribers at a steady rate and maintain customer satisfaction, (ii) the Company’s ability to maintain margins in its existing business and in future product lines and markets, (iii) the development of new services and products by the Company and its competitors, (iv) price competition, (v) the Company’s ability to obtain products and services from its vendors, including information suppliers, on commercially reasonable terms, (vi) the Company’s ability to upgrade and develop its systems and infrastructure, and adapt to technological change, (vii) the Company’s ability to attract and retain personnel in a timely and effective manner, (viii) the Company’s ability to manage effectively its development of new business segments and markets, (ix) the Company’s ability to successfully manage the integration of operations and technology of acquisitions or other business combinations, (x) technical difficulties, system downtime, cybersecurity breaches, or Internet brownouts, (xi) uncertainties related to AI, (xii) the amount and timing of operating costs and capital expenditures relating to the Company’s business, operations and infrastructure, (xiii) governmental regulation and taxation policies, including undetermined state tax obligations, (xiv) disruptions in service by common carriers due to strikes or otherwise, (xv) risks of fire or other casualty, (xvi) litigation costs or other unanticipated expenses, (xvii) interest rate risks and inflationary pressures, and (xviii) general economic conditions and economic conditions specific to the Internet and online commerce.\n\n \n\nDue to the foregoing factors, the Company believes that period-to-period comparisons of its operating revenues and results are not necessarily meaningful and should not be relied on as an indication of future performance.\n\n \n\nForward-Looking Statements\n\n \n\nThis Quarterly Report on Form 10-Q contains forward-looking statements. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts contained herein, are forward-looking statements. Forward-looking statements include, without limitation, statements regarding our results of operations; financial position and performance; liquidity and our ability to fund business operations and initiatives; capital expenditure; business strategies, plans and goals, including those related to marketing, expansion of our business; industry trends; general economic conditions, including inflation, interest rates and other pricing pressures that could impact our operating margins; expectations regarding consumer behaviors and trends; human resource management; and our objectives for future operations. The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” “likely,” “opportunity,” “may,” “could,” “outlook,” “can,” “trend,” “might,” “drives,” “hope,” “potential,” “project,” “predict,” and similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are based largely on our current expectations and projections about future events and financial or other trends that the Company believes may affect our business. Any forward-looking statement speaks only as of the date it is made. These forward-looking statements are subject to inherent uncertainties, risks, changes in circumstances and other important factors that are difficult to predict. Moreover, the Company operates in a very competitive and rapidly changing environment in which new risks emerge from time to time. It is not possible for our management to predict all risks, nor can the Company assess the impact of all important factors on our business or the extent to which any factor, or combination of such factors, may cause actual results to differ materially from those contained in any forward-looking statements the Company may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed may not occur and our financial condition and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. The Company cautions you therefore against relying on these forward-looking statements. Some of the important factors that could cause actual results to differ from our expectations include regional, national, or global political, economic, business, competitive, market and regulatory conditions and the other important factors included in this report under sections captioned “Results of Operations,” and “Future Operations,” among others, as well as those described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 in “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The Company qualifies all of its forward-looking statements by these cautionary statements. Except as required by applicable law, the Company does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.\n\n \n\n \n\n13\n\n[Index](#INDEX)"}