- Annual Recurring Revenue increases 32% YoY to $64.6 million
- Q1 revenue increases 29% YoY to $25.8
million, subscription revenue reaches $14.9 million, a YoY 32% increase
- Record backlog of $145.5 million,
an increase of 32% YoY
VANCOUVER, BC, May 9, 2024
/CNW/ - Copperleaf Technologies Inc. (TSX: CPLF) ("Copperleaf" or
the "Company"), a provider of enterprise decision analytics
software solutions, today announced financial results for the three
months ended March 31, 2024. All
amounts are expressed in Canadian dollars unless otherwise
stated.
Paul Sakrzewski, CEO of Copperleaf commented, "During the
first quarter, Copperleaf delivered material growth across all of
our key financial metrics. This was highlighted by a 32% YoY
increase in Annual Recurring Revenue, and a record backlog,
demonstrating a strengthening market understanding of the
outstanding value we bring to our clients. Overall, this increasing
market understanding, the sustained fundamental tailwinds and
improved execution from our focused go-to-market strategies are
driving expansion within our core sectors, and momentum in new
sectors."
"Throughout the quarter, we added new clients in core sectors
and built upon established beachheads in new sectors in line with
our strategy. In addition to new client acquisitions, our Client
Success Management team showed material success in getting existing
clients excited about some material expansions, resulting in growth
in our Net Revenue Retention to 113%," continued Mr.
Sakrzewski.
"Our strong performance in Q1 underscores the effectiveness of
our refreshed go-to-market model and increasing partner engagement.
We anticipate continued robust growth in ARR and pipeline
development throughout 2024 with our traditional Q4 weighting.
These factors, combined with accelerating revenue growth and
disciplined approach to managing costs, position us for significant
progress back towards profitability," Mr. Sakrzewski
concluded.
First Quarter 2024 Financial Highlights
(All
capitalized terms used but not defined in this press release have
the meanings ascribed to them in Management's Discussion and
Analysis for the three months ended March
31, 2024; Comparison period is to the three months ended
March 31, 2023, unless otherwise
stated)
- Record revenue of $25.8 million,
an increase of 29% compared to Q1 2023, driven by an increase in
new clients and the expansion of existing clients.
- Subscription revenue of $14.9
million, an increase of $3.6
million, or 32%, over Q1 2023, followed by a 27% increase in
professional services revenue to $8.8
million, and a 20% increase in perpetual revenue year over
year to $2.1 million.
- Annual Recurring Revenue1 as at March 31, 2024 of $64.6
million, a 32% increase from $49.1
million as at March 31,
2023.
- As of March 31, 2024, the
Company's Net Revenue Retention Rate1 was 113% compared
to 111% as of March 31, 2023.
- Gross profit of $18.9 million
representing a gross margin of 73%, a 38% increase from
$13.7 million and a gross margin of
68% in Q1 2023. Gross margin increased primarily due to an increase
in subscription, professional services and perpetual license
revenue partially offset by an increase in personnel costs,
subcontractor costs, and product and support expenses related to
our growing client base.
- Adjusted EBITDA1 loss of $3.3
million, compared to Adjusted EBITDA1 loss of
$10.0 million in Q1 2023.
- Net loss of $2.6 million, or a
loss of $0.04 per basic and diluted
share, compared to a net loss of $11.8
million, or a loss of $0.17
per basic and diluted share, in Q1 2023. The decrease in net loss
was primarily due to an increase in revenue and a decrease in
headcount when compared to Q1 2023.
- As of March 31, 2024,
Copperleaf's Revenue Backlog1 grew 32% to $145.5 million compared to $110.5 million, as of March 31, 2023.
- Strong balance sheet with cash and cash equivalents of
$33.5 million, short-term investments
of $77.5 million, and long-term
investments of $18.5 million as at
March 31, 2024.
Key Developments
- During the first quarter, the Company continued to expand in
its core sectors and made progress on its new-sector strategy,
building upon the established beachheads in Transportation,
Upstream Oil & Gas, and the globalization of Copperleaf's Water
sector.
- In addition to new client acquisitions, Copperleaf's Client
Success Management team continued to gather momentum with material
expansions with existing clients.
- The Partner and Alliance Ecosystem continued to gain traction
as the Company's partners played significant roles in wins across
all regions.
- Q1 saw the continued roll out of our successful and popular
"Copperleaf AIPM Forum" series in Italy, the
Netherlands, and Japan with
strong participation from both existing clients and prospects.
- During Q1, Copperleaf released version 24.1 of its product
suite with numerous new features, including: Self-Serve Analysis
functionality, which leverages cloud-native services to enable
flexible enterprise reporting; generative AI Online Help
functionality; and enhancements to the Company's geospatial (GIS)
offering allowing map-based visualization of portfolio
hierarchies.
- In Q1, Copperleaf was granted a Canadian patent for filtering,
displaying and comparing different investment scenarios. This
patent highlights Copperleaf's on-going dedication to R&D -
pioneering solutions that facilitate better investment decision
making.
__________
|
1
Please refer to "Non-IFRS Measures" section of this press
release
|
Q1 2024 Financial Results Conference Call
Details
Paul Sakrzewski, Chief Executive Officer and Chris Allen, Chief Financial Officer and Chief
Operating Officer will host the conference call, followed by a
question-and-answer session today, May
9, 2024, at 5:00 PM ET.
Date: May 9, 2024
Time: 5:00pm ET
Dial-In Number: 416-764-8659 or 1-888-664-6392
Webcast: https://app.webinar.net/3MdDxYdAw1N
Replay: 416-764-8677 or 1-888-390-0541 (Available until
May 16, 2024)
Replay Entry Code: 072916#
RapidConnect URL: https://emportal.ink/4b5Ldfi
Key Performance Indicators
The Company monitors a number of key performance indicators
(KPIs) to evaluate performance. Some of the KPIs used by management
are recognized under IFRS, whereas others are non-IFRS measures and
are not recognized under IFRS. These non-IFRS measures are included
as additional information to complement the IFRS measures,
providing further understanding of our results of operations from
management's perspective. We believe that non-IFRS financial
measures are useful to investors and others in assessing our
performance; however, these measures should not be considered as a
substitute for reported IFRS measures nor should they be considered
in isolation. As these measures are not recognized measures under
IFRS, they do not have a standardized meaning prescribed by IFRS
and therefore may not be comparable to similar measures presented
by other companies. For a reconciliation of non-IFRS measures to
the most directly comparable measures calculated in accordance with
IFRS, see section "Non-IFRS Measures" below.
1Non-IFRS Measures
Annual Recurring Revenue ("ARR")
We define ARR as the annualized equivalent value of the
subscription and term-based software license revenue of all
existing contracts as at the date being measured, excluding
non-recurring SaaS and hosting fees. Our clients generally enter
into three-to-five-year contracts that are non-cancelable or
cancelable with penalty. Our calculation of ARR assumes that
clients will renew the contractual commitments on a periodic basis
as those commitments come up for renewal. Subscription and
term-based software license agreements are subject to price
increases upon renewal reflecting both inflationary increases and
the additional value provided by our solutions. In addition to the
expected increase in subscription and term-based software license
revenue from price increases over time, existing clients may
subscribe for additional products or services during the term. We
believe that this measure provides a fair real-time measure of
performance in a subscription-based environment. ARR provides us
with visibility for consistent and predictable growth to our cash
flows. Our steady year over year revenue growth coupled with
increasing ARR indicates the continued strength in the expansion of
our business and will continue to be our target on a go-forward
basis.
Net Revenue Retention Rate
We believe that our Net Revenue Retention Rate is a key measure
to provide insight into the long-term value of our clients and our
ability to retain and expand revenue from our client base over
time. Our Net Revenue Retention Rate is calculated over a trailing
twelve-month period by considering the group of clients on our
platform as of the beginning of the period and dividing our ARR
attributable to this same group of clients at the end of the period
by the ARR at the beginning of the period. By implication, this
ratio excludes any ARR from new clients acquired during the period
but does include incremental sales added to the cohort base of
clients during the period being measured. This measure provides
insight into client expansions, downgrades, and churn, and
illustrates the growth potential of our client base alone. Our
success in delivering exceptional value and extraordinary
experiences to our clients is fully realized when we can achieve a
high Net Revenue Retention Rate. However, this percentage can vary
from period to period due to the timing of large expansion
contracts with our existing clients. In addition, only the
recurring component of expansions with our perpetual license
clients, such as on-going support & maintenance, is recognized
in this calculation.
Revenue Backlog
Revenue Backlog represents the total revenue expected to be
recognized in the future, related to performance obligations that
are unsatisfied or partially unsatisfied at period end. The
recurring nature of our revenue provides high visibility into
future performance, and upfront payments result in cash flow
generation in advance of revenue recognition. Subscription
contracts require annual upfront payments; however, some clients
pay multiple years upfront. Roughly 50% to 75% of our expected
annual revenue is recognized from client contracts that are in
place at the beginning of the year; however, this percentage will
vary year over year and we expect this percentage to generally
increase going forward as our new clients increasingly adopt SaaS
and our Q4 seasonality persists. Agreements with new clients or
agreements with existing clients purchasing incremental product and
services in a quarter may not contribute significantly to revenue
in the current quarter. For example, for SaaS contracts and
professional services, a new client who enters into an agreement
late in a quarter will typically have limited contribution to the
revenue recognized in that quarter. Software licenses, by contrast,
are often recognized as revenue upon delivery of the software which
typically occurs immediately upon contracting, and thus rarely
enters Revenue Backlog.
Adjusted EBITDA
Adjusted EBITDA is used by management as a supplemental measure
to review and assess operating performance and to provide a more
complete understanding of factors and trends affecting our
business. Management believes that Adjusted EBITDA is a useful
measure of operating performance and our ability to generate
cash-based earnings, as it provides a more relevant picture of
operating results by excluding the effects of financing and
investing activities, including removing the effects of interest
and other expenses such as non-cash items and non-recurring
expenses that are not reflective of our underlying business. In
addition to interest, the other non-cash or non-recurring items
adjusted for include depreciation and amortization, share-based
payments expense, foreign exchange loss (gain), current income tax
expense (recovery), and CEO transition expenses. Our management
also uses Adjusted EBITDA in order to facilitate operating
performance comparisons and decision making from period to period
and to prepare annual operating budgets and forecasts. In addition,
it is used to provide securities analysts, investors, and other
interested parties with supplemental measures of our operating
performance and thus highlight trends in our business that may not
otherwise be apparent when relying solely on IFRS measures.
The following table reconciles Adjusted EBITDA to net loss for
the periods indicated:
|
Three months ended
March 31,
|
|
(in thousands, except
percentages)
|
|
2024
$
|
2023
$
|
Change
%
|
Net
loss
|
(2,628)
|
(11,790)
|
78 %
|
Depreciation and
amortization
|
491
|
475
|
3 %
|
Share-based payments
expense 1
|
854
|
1,633
|
(48 %)
|
Finance
costs
|
270
|
289
|
(7 %)
|
Finance and other
income
|
(1,447)
|
(1,357)
|
(7 %)
|
Foreign exchange
gain
|
(961)
|
(45)
|
NM
|
Current income tax
expense
|
89
|
55
|
62 %
|
CEO transition expenses
1
|
-
|
695
|
(100 %)
|
Adjusted
EBITDA
|
(3,332)
|
(10,045)
|
67 %
|
1 Expenses incurred in the transition
to our new CEO in 2023, which are non-recurring. CEO transition
costs include share-based payments expense of $169 due to the
modification of certain stock options.
|
NM – Not
meaningful
|
Selected Financial Information
Consolidated Statements of Loss and Comprehensive
Loss
(expressed in thousands of Canadian dollars, except for
share and per share amounts)
|
Three months ended
March 31,
|
|
2024
|
2023
|
|
$
|
$
|
Revenue
|
25,830
|
19,966
|
|
|
|
Cost of
revenue
|
6,940
|
6,308
|
|
|
|
Gross
profit
|
18,890
|
13,658
|
|
|
|
Operating
expenses
|
|
|
Sales and
marketing
|
9,728
|
10,399
|
Research and
development
|
7,574
|
9,663
|
General and
administrative
|
6,265
|
6,444
|
|
23,567
|
26,506
|
|
|
|
Loss from
operations
|
(4,677)
|
(12,848)
|
|
|
|
Other expenses
(income)
|
|
|
Finance
costs
|
270
|
289
|
Finance and other
income
|
(1,447)
|
(1,357)
|
Foreign exchange
gain
|
(961)
|
(45)
|
|
(2,138)
|
(1,113)
|
|
|
|
Loss before income
taxes
|
(2,539)
|
(11,735)
|
|
|
|
Income
taxes
|
|
|
Current income tax
expense
|
89
|
55
|
|
|
|
Net loss and
comprehensive loss for the period
|
(2,628)
|
(11,790)
|
|
|
-
|
Net loss per
share
|
|
|
Basic
and diluted
|
(0.04)
|
(0.17)
|
Weighted average
number of common shares outstanding,
Basic and diluted
|
73,963,081
|
70,429,455
|
Consolidated Statements of Financial
Position
(expressed in thousands of Canadian Dollars)
|
March 31,
2024
|
December 31,
2023
|
|
$
|
$
|
ASSETS
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
33,539
|
34,113
|
Short-term
investments
|
77,509
|
82,258
|
Accounts
receivable
|
23,361
|
27,344
|
Contract
costs
|
1,557
|
1,336
|
Contract
assets
|
4,526
|
4,179
|
Prepaid
expenses
|
4,189
|
3,650
|
|
144,681
|
152,880
|
Non-current
assets
|
|
|
Long-term
investments
|
18,532
|
10,000
|
Deposit and prepaid
expenses
|
334
|
434
|
Contract
costs
|
2,182
|
1,844
|
Property and
equipment
|
883
|
1,111
|
Intangible
assets
|
2,514
|
1,158
|
Right-of-use
assets
|
1,845
|
2,012
|
Other
receivables
|
496
|
306
|
|
26,786
|
16,865
|
TOTAL
ASSETS
|
171,467
|
169,745
|
|
|
|
LIABILITIES
|
|
|
Current
liabilities
|
|
|
Accounts payable and
accrued liabilities
|
15,990
|
16,738
|
Contract
liabilities
|
38,573
|
36,879
|
Lease
liabilities
|
197
|
354
|
|
54,760
|
53,971
|
Non-current
liabilities
|
|
|
Contract
liabilities
|
10,357
|
8,622
|
Lease
liabilities
|
1,844
|
1,929
|
Other
liabilities
|
460
|
-
|
|
12,661
|
10,551
|
TOTAL
LIABILITIES
|
67,421
|
64,522
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
Share
capital
|
190,302
|
189,474
|
Share-based payments
reserve
|
10,899
|
10,276
|
Deficit
|
(97,155)
|
(94,527)
|
TOTAL SHAREHOLDERS'
EQUITY
|
104,046
|
105,223
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
171,467
|
169,745
|
Disaggregation of Revenue
(expressed in thousands of
Canadian Dollars)
|
Three months ended
March 31,
|
|
2024
$
|
2023
$
|
Change
%
|
|
(in thousands, except
percentages)
|
Subscription 1
|
14,926
|
11,276
|
32 %
|
Professional
services
|
8,787
|
6,933
|
27 %
|
Perpetual
and term-based software licenses
2
|
2,117
|
1,757
|
20 %
|
|
25,830
|
19,966
|
29 %
|
1
Subscriptions represent revenue from SaaS, support and maintenance
services, and hosting.
|
2 Perpetual and term-based
software licenses represent software licenses that are client
controlled.
|
Forward-Looking Statements
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
information") within the meaning of applicable securities laws in
Canada.
Forward-looking information may relate to our future business,
financial outlook, 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. Particularly, information regarding our expectations of
future results, performance, achievements, prospects, or
opportunities, or the markets in which we operate, is
forward-looking information. In some cases, forward-looking
information can be identified by the use of forward-looking
terminology such as "plans", "targets", "expect" or "does not
expect", "is expected", "is poised to", "an opportunity exists",
"budget", "scheduled", "estimates", "outlook", "future", "financial
outlook", "forecasts", "projection", "prospects", "strategy",
"intends", "anticipates", "does not anticipate", "believes", or
variations of such words and phrases, or statements that certain
actions, events, or results "may", "could", "would", "might",
"will" occur or be taken , or "will continue to" or
"are poised to" be achieved. In addition, any statements that
refer to expectations, intentions, projections, or other
characterizations of future events or circumstances contain
forward-looking information. Statements containing forward-looking
information are not historical facts but instead represent
management's expectations, estimates and projections regarding
possible future events or circumstances.
Forward-looking information is necessarily based on a number of
opinions, estimates and assumptions that we considered appropriate
and reasonable as at the date such statements are made, and are
subject to known and unknown risks, uncertainties, assumptions and
other factors that may cause the actual results, level of activity,
performance or achievements to be materially different from those
expressed or implied by such forward-looking information, including
but not limited to the risk factors described in our 2023 Annual
Information Form ("AIF") under "Risk Factors". A copy of the 2023
AIF can be accessed under our profile on the System for Electronic
Document Analysis and Retrieval ("SEDAR") at www.sedarplus.ca.
There can be no assurance that such forward-looking information
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such information.
Accordingly, readers should not place undue reliance on
forward-looking information, which speaks only as at the date
made.
About Copperleaf:
Copperleaf (TSX:CPLF) provides enterprise decision analytics
software solutions to companies managing critical infrastructure.
We leverage operational and financial data to empower our clients
to make investment decisions that deliver the highest business
value. What sets us apart is our industry-leading products and our
commitment to providing extraordinary experiences, shaped by people
who care deeply and partnerships that stand the test of time.
Copperleaf is actively involved in shaping and implementing global
industry standards and sustainability principles through our
participation in the United Nations Global Compact, the Institute
of Asset Management, and other organizations. Headquartered in
Vancouver, Canada, our solutions
are distributed and supported by regional staff and partners
worldwide. Together, we are transforming how the world sees
value.
For more details, visit https://www.copperleaf.com/
Source: Copperleaf Technologies Inc. CPLF-IR
SOURCE Copperleaf Technologies Inc.