- AssetCare™️ Over Time recurring revenues were
C$3.6 million in Q3 2020, up 300%
over the same period in 2019 and 33% quarter-over-quarter
- Total revenue for Q3 2020 was C$6.1
million compared to C$5.0
million in Q2 2020, up 22% quarter-over-quarter
- Total revenue for the nine months ended September 2020 was C$17.7
million, up 113% over the same period in 2019
- Added 3,423 connected assets in the quarter to reach a total
of 54,770
- Continued progress on "pull-forward" capital arrangements
associated with long-term contracts
VANCOUVER, BC, Nov. 12, 2020 /CNW/ - mCloud Technologies
Corp. (TSX-V: MCLD) (OTCQB: MCLDF) ("mCloud" or the
"Company"), a leading provider of asset management solutions
combining IoT, cloud computing, and artificial intelligence ("AI"),
today announced its financial results for the third quarter ended
September 30, 2020 ("Q3 2020").
"Our third quarter results showcase mCloud's success in
transitioning our acquired customers to recurring AssetCare
subscriptions and expanding our footprint worldwide," remarked
Russ McMeekin, mCloud President and
CEO. "Through our recurring subscription business model, we have
grown the value of our customer base as seen through the lenses of
total contract value (TCV) and customer lifetime value (CLV)."
Q3 2020 Revenue Highlights
All figures in Canadian dollars
|
Three Months Ended
September 30
|
Nine Months Ended
September 30
|
|
2020
|
2019
|
2020
|
2019
|
AssetCare
initialization
|
$
1,591,899
|
$
--
|
$
5,016,773
|
$
1,610,689
|
AssetCare over
time
|
3,586,751
|
898,855
|
7,262,966
|
1,663,892
|
Engineering
services
|
958,345
|
5,056,604
|
5,425,542
|
5,056,804
|
Total
|
$
6,136,995
|
$
5,955,459
|
$
17,705,281
|
$
8,331,386
|
The Company saw C$3.6 million in
AssetCare Over Time revenues in the third quarter of 2020, up 300%
compared to the same period in 2019 and 33% quarter-over-quarter.
These Over Time revenues denote the recurring revenues from
mCloud's portfolio of 54,770 connected assets. AssetCare
Initialization revenues attributable to newly connected assets in
the quarter were C$1.6 million.
In Q3 2020, mCloud added 3,423 connected assets to its AssetCare
portfolio under management, a pickup in pace in quarterly connected
growth compared to the 2,675 assets connected in the previous
quarter. This was a result of the Company's continued focus on
remotely connecting assets and adding new customers under the
continued restrictions present in North
America and abroad.
Total revenues for Q3 2020 were C$6.1
million and up 22% quarter-over-quarter, compared to Q2 2020
revenues of C$5.0 million. Compared
to Q3 2019 revenues of C$6.0 million,
total revenues were similar – though Q3 2019 revenues included
C$5.1 million in Engineering
Services, derived from the Company's acquired technical project
services business. In Q3 2020, Engineering Services comprised less
than C$1.0 million of total
revenues.
As such, the continued growth in AssetCare Over Time revenues,
along with the ongoing addition of newly connected assets as seen
in AssetCare Initialization revenues, more than offset the decline
in Engineering Services revenues resulting from pandemic access
restrictions. As announced earlier this week, the Company recently
achieved a sales milestone of over C$10
million in oil and gas TCV driven by the delivery of
AssetCare solutions to oil and gas customers.
On a nine-month basis, total revenues grew 113% to C$17.7 million in 2020 compared to C$8.3 million over the same period in 2019. Of
note, the total revenues attributable to AssetCare from the
Company's top ten customers grew 37% in the first nine months of
2020 compared to the last nine months of 2019, further highlighting
the success and demand for AssetCare among existing customers.
Q3 2020 Achievements
mCloud saw considerable growth in demand from new and existing
customers in Q3 2020, including a record number of inquiries for
the AssetCare solution segment for Connected Buildings. The
Company's introduction of an AssetCare solution to drive indoor air
quality, originally announced in May of this year, in response to
the airborne threat posed by COVID-19 has been well-received as
facility managers and building operators are being challenged to
meet new stringent air quality standards from health and safety
authorities.
The Company announced on October 13,
2020, that it had completed the acquisition of kanepi Group
Pty Ltd ("kanepi"), adding information visualization and analytics
software capabilities that are rapidly being integrated into the
AssetCare platform. In Q3 2020, the Company added a new heat
exchanger asset solution using kanepi technology. The Company also
brought enhancements to AssetCare Mobile for connected workers by
way of kanepi.
The kanepi acquisition has created new business opportunities
currently being pursued in the southern hemisphere with oil and
gas, offshore FPSOs, LNG, and mining customers. Opportunities to
connect workers in Greater China
were also greatly accelerated as a result of kanepi.
mCloud Connect 2020, the Company's annual user conference, took
place virtually in September 2020 and
was well-attended by over 300 industry leaders, customers, and
investors. The event included numerous panels and speakers centered
around the theme of connected asset management and the role of IoT,
AI, and the cloud in digital transformation.
Comparing Q3 2020 vs Q3 2019 Adjusted EBITDA
All figures in millions of Canadian dollars
|
Q3
2020
|
Q3
2019
|
Revenue
|
$
|
6.137
|
$
|
5.955
|
Cost of
sales
|
2.271
|
3.208
|
Gross
profit
|
3.866
|
2.748
|
Operating
expenses
|
11.459
|
10.610
|
Net loss for the
period
|
(8.713)
|
(18.493)
|
Add: Current tax
expense
|
0.173
|
0.072
|
Less: Deferred income
recovery
|
(0.391)
|
(0.665)
|
Add: Depreciation and
amortization
|
1.680
|
1.986
|
Add: Finance
costs
|
1.506
|
1.462
|
EBITDA
|
$
|
(5.745)
|
$
|
(15.638)
|
Less: Other
income
|
(0.969)
|
--
|
Add: Share based
compensation
|
0.338
|
0.347
|
Add: Foreign exchange
loss
|
0.513
|
0.132
|
Add: Business
acquisition costs and other expenses
|
0.287
|
9.122
|
Add: Salaries, wages,
and benefits
|
2.110
|
1.347
|
Add: Professional and
consulting fees
|
1.765
|
1.179
|
Adjusted
EBITDA
|
$
|
(1.701)
|
$
|
(3.511)
|
Looking Ahead to Q4 2020
The Company continues to work with customers through the
business conditions and restrictions created by COVID-19.
Throughout the fourth quarter to end December 31, 2020 ("Q4 2020"), mCloud expects to
complete the connection of as many assets as possible, including
assets from the aforementioned C$10
million in TCV from oil and gas customers. The Company also
remains focused on continuing to convert existing acquired
customers to recurring revenue arrangements by way of AssetCare
subscriptions.
mCloud is working to drive these recurring revenues into a
critical mass capable of providing ongoing sustainable operating
capital and positive cash flow for the business.
At the start of Q4 2020, the Company established terms to
"pull-forward" capital from multi-year AssetCare contracts in
partnership with a strategic supplier of IoT edge devices and
customers who elect to pay a greater proportion of their AssetCare
subscriptions upfront. mCloud anticipates contracts eligible for
this arrangement to grow throughout Q4 2020 and into 2021.
With more than 30% of revenue growth coming from existing
customers and a combined sales pipeline and backlog of contracts
greater than C$120 million in TCV,
mCloud has a solid foundation for rapid growth in 2021, remaining
mindful of the logistics required to navigate the ongoing
pandemic.
Q3 2020 Earnings Conference Call
The Company is hosting a conference call to discuss the
financial results for the third quarter at 5:30 p.m. ET today. The conference call will
include prepared remarks from Russ
McMeekin, Chief Executive Officer, and Chantal Schutz, Chief Financial Officer. After
the prepared remarks, the Company will accept questions.
To access the conference call by telephone, dial 647-427-7450 or
1-888-231-8191. Please connect approximately 10 minutes prior to
the beginning of the call to ensure participation. The conference
call will be archived for replay by telephone until Thursday, November 19, 2020 at midnight (ET). To
access the archived conference call, dial 1-855-859-2056 and enter
the reservation number 2480729.
A live audio webcast of the conference call will be available at
https://bit.ly/2ILaNOB. Please connect at least 15 minutes prior to
the conference call to ensure adequate time for any software
download that may be required to join the webcast. The
webcast will be archived at the above website for one year.
About mCloud Technologies Corp.
mCloud is creating a more efficient future with the use of AI
and analytics, curbing energy waste, maximizing energy production,
and getting the most out of critical energy infrastructure. Through
mCloud's AI-powered AssetCare™ platform, mCloud offers complete
asset management solutions in five distinct segments: commercial
buildings, renewable energy, healthcare, heavy industry, and
connected workers. IoT sensors bring data from connected assets
into the cloud, where AI and analytics are applied to maximize
their performance.
Headquartered in Vancouver,
Canada with offices in twelve locations worldwide, the
mCloud family includes an ecosystem of operating subsidiaries that
deliver high-performance IoT, AI, 3D, and mobile capabilities to
customers, all integrated into AssetCare. With over 100 blue-chip
customers and more than 54,000 assets connected in thousands of
locations worldwide, mCloud is changing the way energy assets are
managed.
mCloud's common shares trade on the TSX Venture Exchange under
the symbol MCLD and on the OTCQB under the symbol MCLDF. mCloud's
convertible debentures trade on the TSX Venture Exchange under the
symbol MCLD.DB. For more information, visit www.mcloudcorp.com.
Non-GAAP Measure
Selected financial information for the three-month period ended
September 30, 2020 set out above
includes reference to "Adjusted EBITDA", which is not recognized
under International Financial Reporting Standards and is a
non-generally accepted accounting principle ("Non-GAAP") measure.
This information should be read in conjunction with the unaudited
interim consolidated financial statements for the three months
ended September 30, 2020 and audited
consolidated financial statements and notes thereto for the year
ended December 31, 2019 along with
mCloud's MD&As for the corresponding periods, which are
available under mCloud's profile on SEDAR at www.sedar.com. Further
information regarding this Non-GAAP measure is contained in
mCloud's annual MD&A for the period ended December 31, 2019.
Forward-Looking Information and Statements
This press release contains certain "forward-looking
information" within the meaning of applicable Canadian securities
legislation and may also contain statements that may constitute
"forward-looking statements" within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Such forward-looking information and forward-looking
statements are not representative of historical facts or
information or current condition, but instead represent only the
Company's beliefs regarding future events, plans or objectives,
many of which, by their nature, are inherently uncertain and
outside of the Company's control. Generally, such forward-looking
information or forward-looking statements can be identified by the
use of forward-looking terminology such as "plans", "expects" or
"does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or may contain statements that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "will
continue", "will occur" or "will be achieved". The forward-looking
information contained herein may include information related to the
initialization of connected assets in Q4 2020, contracts eligible
as pull-forward capital, and the Company's prospects in 2021.
By identifying such information and statements in this manner,
the Company is alerting the reader that such information and
statements are subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of the Company to be
materially different from those expressed or implied by such
information and statements.
An investment in securities of the Company is speculative and
subject to several risks as discussed under the heading "Risk
Factors" on pages 29 to 46 of the Company's filing statement dated
October 5, 2017. Although the Company
has attempted to identify important factors that could cause actual
results to differ materially from those contained in the
forward-looking information and forward-looking statements, there
may be other factors that cause results not to be as anticipated,
estimated or intended.
In connection with the forward-looking information and
forward-looking statements contained in this press release, the
Company has made certain assumptions. Although the Company believes
that the assumptions and factors used in preparing, and the
expectations contained in, the forward-looking information and
statements are reasonable, undue reliance should not be placed on
such information and statements, and no assurance or guarantee can
be given that such forward-looking information and statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such information and
statements. The forward-looking information and forward-looking
statements contained in this press release are made as of the date
of this press release, and the Company does not undertake to update
any forward-looking information and/or forward-looking statements
that are contained or referenced herein, except in accordance with
applicable securities laws. All subsequent written and oral
forward- looking information and statements attributable to the
Company or persons acting on its behalf is expressly qualified in
its entirety by this notice.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE mCloud Technologies Corp.