Strong and Sustained Demand Drives Near
Doubling of ARR to Over $75M, 120%
Growth in Revenue, and 1 Million New Members Y/Y
MONTREAL, Nov. 9, 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 nine months ended
September 30, 2021. Financial
references are in Canadian dollars unless otherwise indicated.
![Dialogue logo (CNW Group/Dialogue Health Technologies Inc.) Dialogue logo (CNW Group/Dialogue Health Technologies Inc.)](https://mma.prnewswire.com/media/1682619/Dialogue_Health_Technologies_Inc__Dialogue_Announces_Record_Thir.jpg)
"We continue to see robust demand for Dialogue's products,
which doubled our revenue and drove our pipeline of opportunities
to a historical high as we entered the fourth quarter," said Cherif
Habib, Chief Executive Officer of Dialogue. "These results,
as well as strong momentum in a number of our key indicators as we
exited the third quarter, underscore the growing need within the
Canadian market for the power and convenience of our Integrated
Health PlatformTM ("IHP"). Our customers increasingly
recognize its usefulness, not only to deliver better health and
wellness outcomes for their employees, but also to attract and
retain talent, especially in a competitive labour market."
Navaid Mansuri, Chief
Financial Officer, added: "We showed solid discipline on cost and
capital allocation through the first nine months of the year and
have seen our operating expenses plateau. While we will continue to
make measured investments in our operations, we see the third
quarter as an inflection point in driving operating leverage. Our
balance sheet is well capitalized, providing Dialogue with ample
capacity to act on M&A opportunities and further strengthen our
IHP."
Q3 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 nine months
ended September 30, 2021; Comparison
periods in each case are the three and nine months ended
September 30, 2020, unless otherwise
stated)
- Annual Recurring and Reoccurring Revenue grew 99.5%
year-over-year to $75.4 million,
driven by new Customer wins, which include a global consulting and
engineering firm, a global testing and inspection company, a
leading network of dental practices, and a national apparel
retailer, as well as program expansions and the addition of new
services by existing Customers.
- Third quarter revenue increased by 119.6% year-over-year to
$17.2 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 1.8 million, an increase of more than 1
million, or 132.2%, year-over-year, and approximately 312,000, or
21.5%, compared to the second quarter of 2021.
- Attach Rate grew to 1.11 from 1.06 in the same period last
year.
- Member-Service Units, a new reported metric which we define as
total Members multiplied by the Attach Rate, rose 143.2%
year-over-year to just under 2 million from approximately 800,000
in the same period last year. This meaningful increase demonstrates
the success of Dialogue's land and expand strategy, as both
existing and new Customers continue to leverage our IHP.
- 59% of new direct Members signed up for two services or more in
the third quarter of 2021. Combined with current Customer
expansions, the cumulative number of direct Members with two or
more services is now 17%, compared to 12% at the same time last
year. This traction builds on that of the prior quarter, which saw
44% of new direct Members sign up for two services or more, and
provides further support in favour of Dialogue's IHP.
- Average Monthly Net Retention Rate ("NRR") was 102% for
the third quarter of 2021, marking another quarter of NRR greater
than 100% and a virtually non-existent member churn.
- Gross Margin increased to 42.6%, compared to 32.7% in the third
quarter of 2020, as the lower margin profile at Optima was more
than offset by a favourable utilization rate and by greater scale
year-over-year in both our Mental Health service and Employee
Assistance Program ("EAP"). Additionally, the Gross Margin
in the third quarter of 2020 had been negatively impacted by a
meaningful ramp-up in staffing and Member onboarding. Compared to
the first two quarters of 2021, the Gross Margin improved by 110
basis points, mainly due to a lower seasonal utilization and the
continued migration of Optima customers to our digital EAP.
- Adjusted EBITDA1 loss was $4.9 million, compared to a loss of $5.3millions in the same period last year. The
loss was due mainly to higher operating expenses year-over-year to
support our growth, to launch and promote new services, to develop
our technology platform, and to sustain a public company structure,
partially offset by higher gross profit.
- Total Comprehensive Loss was $6.4
million, as compared to $6.3
million in the same period last year, due mainly to higher
operating expenses, partially offset by higher gross profit.
- Cash and Cash Equivalents were $110.9
million as of September 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 nine months of 2021.
Q3 2021 Business Highlights
- We built on the successful acquisition of internet-based
cognitive behavioural therapy ("iCBT") provider e-Hub Health
Pty Ltd ("eHH") in Q2 by completing the launch of self-care
toolkits, thus enabling Dialogue members to manage anxiety and
depression symptoms to remission using industry-leading, proven
techniques. Several clients have already signed up to use the
program.
- Subsequent to quarter end, we launched an enhanced iCBT option
with guidance from a coach, allowing clients and members to select
their desired level of support and autonomy to treat mental
health.
- We added a meaningful number of new customers in
non-traditional segments, such as students, first responders,
municipal employees, and union members. We also expanded the
coverage of several existing customers in those segments.
- We hosted our 2nd Annual Humanizing Healthcare Conference, with
an agenda that featured a keynote address from Chris Hadfield, Astronaut and First Canadian
Commander of the International Space Station, and that touched on
mental health strategies, diversity and inclusion perspectives, and
much more. The event was sponsored by some of our most important
strategic partners.
- We have been recognized as a 2021 Best WorkplaceTM
for Today's Youth by Great Place to Work®.
- We have been ranked #9 on the 2021 Report on Business list of
Canada's Top Growing Companies
with a three-year revenue growth of 4,215%.
Upcoming events
- TD Virtual Technology Conference on November 16, 2021.
- Benefits Canada Mental Health Summit on November 24, 2021.
- Desjardins Digital Healthcare Conference on November 30, 2021.
Notice of Conference Call
Dialogue will host a live video webinar on Tuesday,
November 9, 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 prior to the start of 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-International Financial Reporting Standards ("IFRS")
Financial Measures
This press release makes reference to certain non-IFRS measures,
such as "EBIT" represents net profit or loss before net
financing (income) expenses and income taxes, "EBITDA"
(which stands for net profit or loss before net financing (income)
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 (income) 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 nine months ended September 30, 2021 and 2020:
DIALOGUE HEALTH TECHNOLOGIES
INC.
ADJUSTED EBITDA
FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2021 and
2020
(in thousands of
CAD)
|
|
Three months
ended
September
30,
|
|
Nine months
ended
September
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(6,305)
|
|
(6,248)
|
|
(244,211)
|
|
(14,341)
|
Net financing
(income) expenses
|
|
(217)
|
|
229
|
|
(155)
|
|
495
|
Income
taxes
|
|
(90)
|
|
—
|
|
(244)
|
|
—
|
EBIT
|
|
(6,612)
|
|
(6,019)
|
|
(244,610)
|
|
(13,846)
|
Depreciation of
property and
|
|
81
|
|
181
|
|
347
|
|
536
|
equipment
|
Amortization of
intangible assets
|
|
421
|
|
109
|
|
1,125
|
|
293
|
Amortization of
right-of-use
|
|
150
|
|
125
|
|
448
|
|
371
|
assets
|
EBITDA
|
|
(5,960)
|
|
(5,604)
|
|
(242,689)
|
|
(12,647)
|
Share-based payments
expense
|
|
997
|
|
414
|
|
1,384
|
|
584
|
Acquisition
costs
|
|
49
|
|
—
|
|
230
|
|
240
|
Change in fair value
of
|
|
—
|
|
(105)
|
|
225,417
|
|
(277)
|
conversion
feature
|
Foreign exchange loss
(gain)
|
|
—
|
|
—
|
|
87
|
|
—
|
Adjusted
EBITDA
|
|
(4,914)
|
|
(5,295)
|
|
(15,572)
|
|
(12,100)
|
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 NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020
|
Three months
ended
September
30,
|
Nine months
ended September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
Revenue
|
17,235,012
|
|
7,846,750
|
|
49,133,038
|
|
22,351,202
|
Cost of
services
|
9,890,881
|
|
5,281,178
|
|
28,549,554
|
|
12,633,974
|
Gross
profit
|
7,344,131
|
|
2,565,572
|
|
20,583,484
|
|
9,717,228
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
General and
administrative
|
7,954,742
|
|
5,174,156
|
|
23,787,537
|
|
13,399,070
|
Sales and
marketing
|
2,940,293
|
|
2,377,948
|
|
8,336,827
|
|
6,573,146
|
Product and
development
|
2,064,055
|
|
723,832
|
|
6,267,196
|
|
3,284,318
|
Share-based payments
expense
|
997,052
|
|
414,191
|
|
1,383,895
|
|
583,505
|
|
13,956,142
|
|
8,690,127
|
|
39,775,455
|
|
23,840,039
|
|
|
|
|
|
|
|
|
Operating
loss
|
(6,612,011)
|
|
(6,124,555)
|
|
(19,191,971)
|
|
(14,122,811)
|
|
|
|
|
|
|
|
|
Other
expenses
|
|
|
|
|
|
|
|
Change in fair value
of conversion
|
—
|
|
(105,000)
|
|
225,416,590
|
|
(276,916)
|
feature
|
Net financing
(income) expenses
|
(217,135)
|
|
229,000
|
|
(155,053)
|
|
494,679
|
|
(217,135)
|
|
124,000
|
|
225,261,537
|
|
217,763
|
|
|
|
|
|
|
|
|
Net loss before
income taxes
|
(6,394,876)
|
|
(6,248,555)
|
|
(244,453,508)
|
|
(14,340,574)
|
Net income tax
recovery
|
89,672
|
|
—
|
|
243,817
|
|
—
|
Net
loss
|
(6,305,204)
|
|
(6,248,555)
|
|
(244,209,691)
|
|
(14,340,574)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive (loss) income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified
|
|
|
|
|
|
|
subsequently to net
loss
|
Foreign currency
translation (loss)
|
(94,315)
|
(93,870)
|
|
534,528
|
|
(281,610)
|
gain
|
|
|
|
|
|
|
|
|
Total
comprehensive loss
|
(6,399,519)
|
|
(6,342,425)
|
|
(243,675,163)
|
|
(14,622,184)
|
|
|
|
|
|
|
|
|
Loss per share -
basic and diluted
|
(0.10)
|
|
(0.56)
|
|
(4.62)
|
|
(1.27)
|
DIALOGUE HEALTH TECHNOLOGIES INC.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
AS AT SEPTEMBER 30, 2021 AND
DECEMBER 31, 2020
|
September
30,
|
|
December
31,
|
|
2021
|
|
2020
|
|
$
|
|
$
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
110,879,451
|
|
42,067,100
|
Trade and other
receivables
|
11,828,226
|
|
11,358,615
|
Asset held for
sale
|
—
|
|
909,541
|
Prepaid
expenses
|
2,402,735
|
|
745,673
|
|
125,110,412
|
|
55,080,929
|
|
|
|
|
Property and
equipment
|
1,135,310
|
|
1,019,406
|
Right-of-use
assets
|
1,724,354
|
|
1,687,434
|
Intangible
assets
|
6,782,889
|
|
5,472,196
|
Goodwill
|
7,262,442
|
|
3,114,927
|
|
142,015,407
|
|
66,374,892
|
Liabilities
|
|
|
|
Current
liabilities
|
|
|
|
Trade payable and
accrued liabilities
|
8,816,687
|
|
7,489,083
|
Unearned
revenue
|
210,262
|
|
476,619
|
Liability related to
asset held for sale
|
—
|
|
430,110
|
Current portion of
contingent consideration payable
|
2,727,645
|
|
1,379,501
|
Current portion of
long-term debt
|
400,020
|
|
398,020
|
Current portion of
lease liabilities
|
661,711
|
|
524,618
|
|
12,816,325
|
|
10,697,951
|
|
|
|
|
Non-current portion
of lease liabilities
|
958,840
|
|
1,086,720
|
Non-current portion
of long-term debt
|
1,200,060
|
|
1,459,407
|
Non-current portion
of contingent consideration payable
|
—
|
|
523,499
|
Redeemable Class B
preferred shares
|
—
|
|
82,805,661
|
Deferred income tax
liability
|
919,761
|
|
976,890
|
Conversion option on
redeemable Class B preferred shares
|
—
|
|
92,755
|
|
15,894,986
|
|
97,642,883
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Shareholders'
equity (deficit)
|
|
|
|
Share
capital
|
458,889,649
|
|
18,890,120
|
Equity
reserve
|
2,841,953
|
|
1,777,908
|
Cumulative
translation adjustment
|
129,365
|
|
(405,163)
|
Deficit
|
(335,740,546)
|
|
(51,530,855)
|
|
126,120,421
|
|
(31,267,990)
|
|
142,015,407
|
|
66,374,893
|
|
Nine months
ended
September
30,
|
|
2021
|
|
2020
|
|
$
|
|
$
|
Operating
activities
|
|
|
|
Net loss
|
(244,209,691)
|
|
(14,340,574)
|
Items not affecting
cash
|
|
|
|
Decrease in contingent
consideration
|
(358,000)
|
|
—
|
Write-off of leasehold
improvements
|
—
|
|
157,715
|
Income tax
recovery
|
(243,817)
|
|
—
|
Change in conversion
feature on preferred shares
|
225,416,590
|
|
—
|
Depreciation of
property and equipment
|
347,396
|
|
536,231
|
Amortization of
right-of-use assets
|
448,266
|
|
370,599
|
Net financing (income)
expenses
|
(155,053)
|
|
494,679
|
Amortization of
intangible assets
|
1,124,959
|
|
292,924
|
Share-based
payments
|
1,383,895
|
|
583,505
|
|
(16,245,455)
|
|
(11,904,921)
|
Net changes in
non-cash operating working capital items
|
|
|
|
Trade and other
receivables
|
(469,611)
|
|
(9,483,413)
|
Prepaid
expenses
|
(1,657,062)
|
|
(4,921)
|
Trade and other
payables
|
1,327,604
|
|
1,572,966
|
Unearned
revenue
|
(266,357)
|
|
17,775
|
Interest
paid
|
(113,131)
|
|
(48,461)
|
Interest
income
|
543,657
|
|
—
|
|
(16,880,355)
|
|
(19,850,975)
|
|
|
|
|
Investing
activities
|
|
|
|
Purchase of property
and equipment
|
(472,938)
|
|
(339,982)
|
Purchase of intangible
assets
|
(86,984)
|
|
(85,797)
|
Sale of asset held for
sale
|
909,541
|
|
—
|
Acquisition of
Botfront
|
(291,800)
|
|
—
|
Acquisition of e-Hub
Health Pty Ltd., net of cash acquired
|
(3,137,531)
|
|
—
|
Payment of Optima
Global Health Inc. Earnout
|
(1,500,000)
|
|
—
|
Payment of Botfront
Earnout
|
(198,500)
|
|
—
|
|
(4,778,212)
|
|
(425,779)
|
|
|
|
|
Financing
activities
|
|
|
|
Issuance of
shares
|
100,008,000
|
|
43,235,247
|
Share issue
costs
|
(9,371,189)
|
|
—
|
Options
exercised
|
536,706
|
|
—
|
Repayment of liability
related to asset held for sale
|
(430,110)
|
|
—
|
Repayment of long-term
debt
|
(300,015)
|
|
(33,333)
|
Repayment of lease
liabilities
|
(507,002)
|
|
(431,055)
|
Transaction
costs
|
—
|
|
(500,000)
|
|
89,936,390
|
|
42,770,859
|
Effect of foreign
currency translation
|
534,528
|
|
(281,610)
|
Net increase in cash
and cash equivalents
|
68,812,351
|
|
21,712,497
|
Cash and cash
equivalents, beginning of the period
|
42,067,100
|
|
24,611,895
|
Cash and cash
equivalents, end of the period
|
110,879,451
|
|
46,324,392
|
SOURCE Dialogue Health Technologies Inc.