CARE Dialogue Health Technologies Inc

ARR nearly doubled to $70 million; iCBT service launched following acquisition of e-Hub Health

MONTREAL, Aug. 11, 2021 /CNW Telbec/ - Dialogue Health Technologies Inc. (TSX: CARE) ("Dialogue" or the "Company"), Canada's premier health and wellness virtual healthcare platform, announced today its financial and operational results for the three and six months ended June 30, 2021. Financial references are in Canadian dollars unless otherwise indicated.

"We expanded our member base by 91% year-over-year and our annual recurring and reoccurring revenue by 96%, driven by significant and sustained organic growth in concert with our ongoing successful acquisition activity," said Cherif Habib, CEO of Dialogue. "We also strengthened our Integrated Health Platform™ offering through the acquisition of iCBT leader e-Hub Health Pty Ltd. and the subsequent launch of Dialogue's iCBT program. As we move into the second half of the year, we are well positioned to maintain a strong momentum through our partnerships, technologies, and multidisciplinary approach to care."

Q2 2021 Financial Highlights

(All capitalized terms not defined herein, shall have the meaning ascribed to them in the Management's Discussion and Analysis for the three and six months ended June 30, 2021; Comparison periods in each case are the three months ended June 30, 2020, unless otherwise stated)

• Annual Recurring and Reoccurring Revenue grew 96.1% year over year to $70.0 million driven by new customer wins, which include a global financial services provider, an international law firm, and a large distributor of electrical material, as well as program expansions and the addition of new services by existing customers.
• Revenue increased 53.0% year-over year to $16.7 million, due to growth in Members, both Direct and from agreements with strategic distribution partners, an increase in attach rate, as well as the acquisition of Optima Global Health Inc. ("Optima") on October 1, 2020.
• Members grew to nearly 1.5 million, an increase of approximately 690,000 year-over-year, or 90.5%, and approximately 185,000, or 14.6%, compared to the first quarter of 2021.
• Attach Rate grew to 1.10, compared to 1.08 at the end of the first quarter of 2021, and 1.04 in the same period last year, as both existing and new customers continue to leverage the multiple services that are offered on Dialogue's Integrated Health Platform™ ("IHP").
• 44% of new customers signed up for two services or more in the second quarter of 2021. Combined with current customer expansions, the cumulative number of customers with two or more services is now 19% compared to 16% in the first quarter of 2021 and 10% at the same time last year.
• Net Retention Rate increased to 103% at the end of the second quarter of 2021 from 102% as at March 31, 2021, and 101% as at December 31, 2020.
• Gross Margin declined to 41.5%, as compared to 51.2% in the second quarter of 2020, due to the lower margin profile of the Optima acquisition, and was stable compared to the first quarter of 2021.
• Adjusted EBITDA¹ loss was $5.6 million, compared to a loss of $2.2 million in the same period last year. The loss was due mainly to higher operating expenses to support our growth, the launch and promotion of new services, and the development of our technology platform, partially offset by higher gross profit.
• Total Comprehensive Loss was $6.4 million, as compared to $3.2 million in the same period last year, due mainly to higher operating expenses, partially offset by higher gross profit.
• Cash and Cash Equivalents were $117.0 million as of June 30, 2021 compared to $42.1 million as of December 31, 2020. The increase was the result of net proceeds from the initial public offering of $90.6 million, offset in part by cash used in operations during the first half of 2021.

Q2 2021 Business Highlights

• We acquired e-Hub Health Pty Ltd., a leading internet-based cognitive behavioural therapy ("iCBT") provider, with products that are amongst the most clinically validated globally. Subsequent to quarter end, we incorporated these products into our IHP. We now offer our clients a wider range of mental health tools with both self-led or practitioner-led therapy.
• We successfully integrated the conversational technology we acquired from Botfront in Q1. This technology has enabled a more efficient design and deployment process for a wide range of current and future conversational experiences.
• We launched a more refined and intuitive triage experience to quickly gather our members' information and connect them to a practitioner in minutes.
• We simplified visits for returning members by organizing all medical summaries in an easily-accessible place - one of the most user-requested features.
• We consolidated our iOS and Android mobile platforms on one codebase technology to deliver new and upcoming features to all users at a faster rate.
• We improved calendar integration functionality, launched pre-appointment notifications, and provided members with simpler ways to move or cancel appointments. These efforts reduced appointment no-shows by 70%.
• We released a set of online instruction tools within our Occupational Health and Safety ("OHS") service, providing a more systematic and fail-proof way for our clients to implement health and safety requirements for their operations.
• We received the Great Place to Work Certification™ for a second consecutive year. This employee-validated recognition positions Dialogue well to get noticed as an employer of choice and attract great talent.
• We added Tim Hodgson to the Board of Directors. Mr. Hodgson currently serves as board chair of both Hydro One and Sagicor Financial Corporation Limited. Hodgson also serves on the board of PSP Investments and was the CEO of Goldman Sachs Canada from 2005 to 2010.

Upcoming events

• Canaccord Genuity 41st Annual Growth Conference on August 12, 2021.
• CIBC 20th Annual Eastern Institutional Investor Conference on September 22, 2021.
• Humanizing Healthcare: The Employee Wellness Conference on September 29-30, 2021: For the second consecutive year, Dialogue will host a virtual event over two days, in English and French respectively, to discuss top-of-mind health and wellness topics for Canadian business and HR leaders. This year's edition will feature renowned speakers, industry experts, and exclusive sneak peeks into health benefits trends.

Notice of Conference Call

Dialogue will host a live video webinar Wednesday, August 11, 2021 at 9:00 a.m. ET to discuss its financial results. Cherif Habib, CEO, and Navaid Mansuri, CFO, will co-chair the call. All interested parties can join the event at the following link, which is also available in the Events and Presentations section of the Company's website. The presentation will be accompanied by slides, which will be available on the screen view and will be made available following the webinar on  the Company's website. Please connect at least 15 minutes prior to the event to ensure adequate time for any software download of Zoom that may be required to attend the event. Listeners that prefer to dial in by phone may do so by accessing the same web link and the dial in details will be provided by email upon registration.

Non-IFRS Financial Measures

This press release makes reference to certain non-IFRS measures, such as "EBITDA" (which stands for net profit or loss before net financing expenses, income taxes, depreciation of property and equipment, amortization of intangible assets and amortization of right-of-use assets) and "Adjusted EBITDA" (which stands for adjusted net profit or loss before net financing expenses, income taxes, depreciation of property and equipment, amortization of intangible assets, amortization of right-of-use assets, transaction costs, acquisition costs, change in fair value of conversion feature, share-based payments expense and foreign exchange gain or loss). These measures are not recognized under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information as reported under IFRS. Management also believes that other users, such as securities analysts, investors and other interested parties, frequently use non-IFRS measures, particularly in the evaluation of issuers.

Management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. Where applicable, we provide a clear quantitative reconciliation from the non-IFRS financial measures to the most directly comparable measure calculated in accordance with IFRS.

The following table reconciles net loss to Adjusted EBITDA loss for the three and six months ended June 30, 2021 and 2020:

DIALOGUE HEALTH TECHNOLOGIES INC.
ADJUSTED EBITDA
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 and 2020

About Dialogue

Incorporated in 2016, Dialogue is Canada's premier virtual healthcare and wellness platform, providing affordable, on-demand access to quality care. Through our team of health professionals, we serve employers and organizations who have an interest in the health and well-being of their employees, members and their families. Our Integrated Health Platform™ is a one-stop healthcare hub that centralizes all of our programs in a single, user-friendly application, providing access to services 24 hours per day, 365 days per year from the convenience of a smartphone, computer or tablet.

Forward-Looking Information

This release includes "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable securities laws. Forward-looking information may relate to our financial outlook (including revenues and Adjusted EBITDA), and anticipated events or results and may include information regarding our financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, taxes, dividend policy, plans and objectives.

In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward-looking terminology such as "plans" "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management's current beliefs, expectations, estimates and projections regarding future events and operating performance.

Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by Dialogue as of the date of this release, are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, but are not limited to, the risk factors identified under "Risk Factors" in the Company's latest annual information form, and in other periodic filings that the Company has made and may make in the future with the securities commissions or similar regulatory authorities in Canada, all of which are available under the Company's SEDAR profile at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect Dialogue. However, such risk factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. You should not place undue reliance on forward-looking statements, which speak only as of the date of this release. Dialogue undertakes no obligation to publicly update any forward-looking statement, except as required by applicable securities laws.

Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not currently known to us or that we currently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, you should not place undue reliance on forward-looking information. The forward-looking information represents our expectations as of the date of this earnings release (or as the date it is otherwise stated to be made) and is subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable Canadian securities laws. All of the forward-looking information contained in this earnings release is expressly qualified by the foregoing cautionary statements.

DIALOGUE HEALTH TECHNOLOGIES INC.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF NET LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020

DIALOGUE HEALTH TECHNOLOGIES INC.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT JUNE 30, 2021 AND DECEMBER 31, 2020

DIALOGUE HEALTH TECHNOLOGIES INC.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020

SOURCE Dialogue Health Technologies Inc.