- Added 2,921 new connected assets and workers, totaling
67,471 connections in Q2 2022
- As part of Agnity transition, mCloud received a one-time
US$5.96 million payment from Agnity
on July 29, 2022
- After considering a $2.6
million one-time balance sheet charge and other impacts
related to the Company's transition of its licensing of Agnity
technology, Q2 2022 net revenues as reported were C$2.3 million compared to C$6.6 million in Q2 2021
SAN
FRANCISCO, Aug. 15, 2022 /CNW/ - mCloud
Technologies Corp. (NASDAQ: MCLD) (TSXV: MCLD), ("mCloud" or
the "Company") a leading provider of AI-powered asset management
and Environmental, Social, and Governance ("ESG") solutions today
announced its financial results for the second quarter ended
June 30, 2022 ("Q2 2022").
mCloud President and CEO Russ
McMeekin commented on Q2 2022:
"Since the first quarter of 2022, we have made continuous
progress in executing our growth plans – in particular, our efforts
to deliver Digital Oilfield solutions, the commencement of our
first oil and gas implementations in Saudi Arabia, and our rollout of EV charging
optimization solutions at auto dealerships in New York and California. All our business segments are
beginning to see a resurgence in engagement as our customers have
transitioned out of pandemic restrictions. We remain on track to
achieve our target of 90,000 connected asset and workers by the end
of year."
"In the second quarter, we moved to optimize our financial and
technology relationship with Agnity, transitioning the royalty
agreement we have had with them since 2018 into a new licensing and
technology continuation agreement, resulting in a US$5.96 million one-time payment made to us on
July 29, 2022 and a $2.6 million one-time non-cash charge for balance
sheet items and other adjustments to revenues in quarter."
"Progress is positive and continuous as we connect oilwells and
deliver AssetCare Digital Oilfield solutions in the United States. Our first customers there
are now in deployment and will soon see the direct benefits of our
AI-driven connected asset and connected worker capabilities. In the
Middle East, we have moved to
commercial contracts and early-stage implementation efforts for
AssetCare solutions at various sites in Saudi Arabia, leveraging our approved vendor
status with Aramco. We plan to have a joint customer showcase of
our AssetCare solutions with Aramco by December of this year.
"We are further engaged with other oil and gas, refining, and
petrochemical customers in Saudi
Arabia as we leverage the progress we have made in
establishing a fully approved and stringently-compliant cloud
presence in Saudi Arabia. From
here, we expect major growth and scale in this region to the end of
this year and beyond."
"We continue to grow our sales pipeline and advance auto
dealership prospects to contracting for our AssetCare solutions
related to EV charging optimization. Some issues were experienced
in securing the required permitting and delivery of certain
equipment to customers, but we expect these will be alleviated by
September of this year keeping us on track to our target of 45 or
more dealerships by year end. Activity has grown and scaled
rapidly, and we are continually improving our internal operations
to accelerate our ability to scale."
"Our AssetCare for Wind team, delivering vertical energy
optimization solutions, especially in the EU, has embarked on
customer engagements with wind owners and operators in the region
as well as developing a go-to-market strategy with one of the
world's largest wind turbine providers. This team is also set to
have a presence at WindEnergy Hamburg 2022 in September."
"We are also very excited about the progress we are making in
our Connected Buildings business with our announcement in July that
we are bringing AssetCare to Mercedes Grand-Prix Limited at
Brackley. This implementation is
set to leverage all aspects of AssetCare including HVAC, indoor air
quality, and industrial equipment mCloud is uniquely qualified to
manage. In addition, this implementation builds on the success we
have achieved in delivering excellent indoor air quality, energy
optimization, and enterprise reporting capabilities in Canada and elsewhere around the world. We are
also beginning to see growth and engagement in the UK and EU around
our connected worker segment with AssetCare Mobile and 3D."
Q2 2022 Revenue Highlights
All figures in millions of Canadian dollars
|
Q2
2022*
|
Q2
2021
|
AssetCare
Initialization
|
$
0.029
|
$
0.303
|
AssetCare
Solutions
|
4.695
|
6.080
|
Engineering
Services
|
0.117
|
0.173
|
Total
|
$
4.841
|
$
6.556
|
One-Time Agnity Adjustment
|
$
(2.572)
|
--
|
Total After One-Time
Adjustment
|
$
2.269
|
$
6.556
|
Gross
Profit
|
$
0.336
|
$
4.496
|
Salaries, Wages, and
Benefits
|
$
5.059
|
$
6.333
|
Sales and
Marketing
|
1.140
|
0.328
|
Research and
Development
|
0.568
|
0.712
|
General and
Administrative
|
2.065
|
1.556
|
Total Direct
Expenses
|
$
8.832
|
$
8.929
|
Operating
EBITDA
|
$
(8.496)
|
$
(4.433)
|
* Includes all required revenue adjustments due to transition of
agreement with Agnity
On August 2, 2022, mCloud
announced it had entered into a new technology continuation
agreement with Agnity Global Inc. ("Agnity"), which resulted in the
Company receiving a one-time US$5.96
million payment from Agnity on July
29, 2022, the exclusion of certain revenues, and a one-time
adjustment that largely accounts for the net reduction in Q2 2022
revenues.
The timing of the Agnity transition required mCloud to exclude
certain revenues in the AssetCare Initialization and AssetCare
Solutions revenue categories. The net resulting impact was the
reporting of negligible revenues per newly connected asset and
lower recurring revenues per connection despite the Company's
progress in adding new connected assets and workers and the ongoing
delivery of AssetCare and related services. Going forward, mCloud
will record AssetCare in both categories without any impacts,
sharing, or adjustments.
The Company also recorded a one-time adjustment related to items
from Agnity's balance sheet in prior periods. This culminated in a
C$2.6 million decrease as a
standalone adjustment in Q2 2022 revenues representing the full
required adjustment across these prior periods.
The Company does not anticipate any further non-recurring,
Agnity-related adjustments in the future. Additionally, the Company
will no longer consolidate Agnity financial items such as revenues
and expenses going forward. mCloud will continue to record direct
revenues from customers benefiting from Agnity technology embedded
in the Company's solutions but will not record any further
Agnity-related items.
Without considering the one-time adjustment but reflecting the
impact of the Agnity transition, Q2 2022 total revenues were
C$4.9 million for the quarter
compared to C$6.6 million in Q2 2021.
After the one-time adjustment, Q2 2022 total revenues as reported
were C$2.3 million. Gross margins
were correspondingly impacted by the Agnity transition from a
one-time passthrough of Agnity-related delivery expenses.
The Company added 2,921 new connected assets and workers in the
quarter reaching a cumulative total of 67,471 connections. The
Company noted that increased customer activity in the quarter and
the retraction of many pandemic restrictions are expected to have a
sustained positive impact on revenue growth going forward.
Q2 2022 Conference Call
The Company will host a conference call at 10:00am EDT on August 16,
2022 to discuss the financial results. 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 416-764-8659 or
1-888-664-6392 with the confirmation number 41933518. 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 August 23,
2022 at midnight (ET). To access the archived conference
call, dial 1-888-390-0541 and enter the reservation number
933518.
A live audio webcast of the conference call will be available at
https://bit.ly/3ddX6Hl. 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 unlocking the untapped potential of energy intensive
assets with 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 for 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.
With a worldwide presence and offices in San Francisco, Vancouver, Calgary, London, Perth, Singapore, and Beijing, 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 67,000 assets connected in thousands of locations worldwide,
mCloud is changing the way energy assets are managed.
mCloud's common shares trade in the
United States on the Nasdaq and in Canada on the TSX Venture Exchange under the
symbol MCLD. For more information, visit www.mcloudcorp.com.
Non-GAAP Measure
Selected financial information for the three-month periods ended
June 30, 2022 and June 30, 2021 set out above include reference to
"Operating EBITDA," which is not recognized under International
Financial Reporting Standards and is a non-generally accepted
accounting principle ("Non-GAAP") measure.
The Company defines Operating EBITDA attributed to shareholders
as gross profit less all expenses related to sales and marketing,
wages, salaries, and benefits, research and development, and
general and administrative activities.
The Company believes Operating EBITDA is a useful measure as it
provides important and relevant information to management about the
operating and financial performance of the Company. Operating
EBITDA enables management to assess its ability to generate
operating cash flow to fund future working capital needs, and to
support future growth.
This information should be read in conjunction with the
unaudited consolidated financial statements for the quarter ended
June 30, 2022 and the audited
consolidated financial statements for the year ended December 31, 2021 along with mCloud's MD&As
for the corresponding periods, which are available under mCloud's
profile on SEDAR at www.sedar.com and EDGAR at www.sec.gov.
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
regional growth in the Middle
East, plans for a joint customer showcase with Aramco, and
positive revenue growth resulting from increased customer activity
and the lifting of pandemic restrictions.
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.
A more complete discussion of the risks and uncertainties facing
the Company appears in the prospectus supplement, the base shelf
prospectus and the registration statement and in the Company's
Annual Information Form and other continuous disclosure filings,
which are available on SEDAR at www.sedar.com and EDGAR at
www.sec.gov. 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.
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SOURCE mCloud Technologies Corp.