- Revenue increased on a sequential basis to $16.3 million
- New bookings increased 492% to $10.4
million as management focuses on growth
- Gross margin at record levels at 78%
- Net income of $1.3 million
compared to a net loss of $14.8
million in Q2'20
- Adjusted EBITDA[1] of $4.1
million, versus $0.9 million
in Q2'20 representing the fourth consecutive quarter of Adjusted
EBITDA margin above 25%
- Balance sheet remains robust with $33.5
million in cash to support growth
TORONTO, Aug. 10, 2021 /CNW/ - Optiva Inc. ("Optiva" or
"the Company") (TSX: OPT), a leading provider of mission-critical,
cloud-native revenue management software for the telecommunications
industry, today released its second quarter financial results for
the three-month period ended June 30,
2021.
"I am pleased with our Q2 results. We remained focused on
managing costs while also ramping our investment into 5G
cloud-native products during the quarter, which resulted in a
strong financial performance and delivered a number of marquee
customer wins," said John Giere,
President and Chief Executive Officer of Optiva. "Serving our
global customers' business needs by placing them at the center of
our focus is yielding positive results as evidenced by the momentum
building up in our bookings. This momentum has been made possible
by the dedication of our hard-working colleagues together with our
continued investments in both R&D and sales talent. Everyone is
aligned in maintaining our focus on operational discipline with the
goal of building a stable foundation that delivers long-term
profitable growth."
"The recalibration of our growth strategy, combined with a
heightened focus on product innovation, continues to bring us
closer to establishing a trusted relationship with our customers.
We are working on addressing their transition plans to the cloud in
a manner that best fits their respective pathways," added
John Giere.
Business Highlights
- The Company strengthened its balance sheet by completing a
private placement of subordinate voting shares, resulting in
834,500 shares being issued by the Company at a price of
CDN$30.00 per share for aggregate
gross proceeds of approximately $20
million. This will help sustain operational momentum,
accelerate product development efforts and build up cash on the
balance sheet to pursue acquisition discussions in the future.
- Optiva continues to invest in strengthening and building its
sales team as bookings, customer retention, contract renewals,
service enhancement and delivery growth become a strategic focus.
As at the end of Q2 '21, the Company has increased its sales team
from 19 to 32 professionals, which has resulted in a ramp-up in
bookings and visibility into expected revenue growth in 2022.
- The Company continues to add to its R&D talent and is on
strategy to be fully internally sustainable. On a year-over-year
basis, Optiva's R&D team has grown from 41 to 128
professionals.
- The recalibration of strategy and investment in sales talent
resulted in bookings increasing 492% when comparing Q2'21 versus
Q2'20 and 90% when comparing 1H '21 versus 1H'20.
- A leading telecom provider in the Middle East, offering next-generation
information and communications technology solutions, selected
Optiva BSS Platform to enable its new MVNO business strategy to
rapidly bring to market innovative digital services to the
fast-growing consumer market segment. Through the partnership, it
will deploy Optiva cloud-native BSS technology on its
state-of-the-art, private cloud infrastructure.
- Digitel Corporation, a leading mobile network operator in
Venezuela, has signed an agreement
with Optiva for a multi-year support renewal and upgrade to a
state-of-the-art, next-generation convergent online charging system
to accelerate its digital business transformation and significantly
expand its monetization capabilities.
- Mtel Banja Luka, a leading provider of digital services and
telecommunications solutions to over two million customers in
Bosnia and Herzegovina and a
member of the Telekom Srbija Group, signed an agreement for a
private-cloud upgrade and multi-year support renewal with Optiva.
Mtel will deploy Optiva Charging Engine to harness the advanced
operational capabilities and agile service element of Optiva's
cloud-native platform to drive modernization, operational
automation, simplify Mtel architecture and lower its total cost of
ownership (TCO). The new cloud platform will accelerate Mtel's
operational agility and service velocity supporting its
next-generation, 5G and IoT use cases.
Second Quarter 2021 Financial Results Highlights
|
|
|
|
Q2 Fiscal 2021
Highlights
|
Three Months
Ended
|
|
Six Months
Ended
|
($ US Thousands,
except per share information)
|
June
30,
|
|
June
30,
|
(Unaudited)
|
2021
|
2020
|
|
2021
|
2020
|
Revenue
|
16,311
|
19,933
|
|
32,402
|
38,969
|
Net income
(loss)
|
1,331
|
(14,777)
|
|
18,030
|
(13,969)
|
Earnings (loss) Per
Share
|
$ 0.22
|
$(2.78)
|
|
$ 3.16
|
$(2.63)
|
Adjusted
EBITDA
|
$ 4,082
|
$ 944
|
|
$ 9,075
|
$(4,349)
|
Cash from (used in)
operating activities
|
4,083
|
(3,641)
|
|
731
|
(3,881)
|
Total cash, including
restricted cash
|
33,472
|
27,175
|
|
33,472
|
27,175
|
- Revenue for Q2'21 decreased by $3.6
million to $16.3 million,
driven by known attritions while showing early indication of
stabilizing at current levels. The year-over-year decrease in
revenue was primarily due to the discontinuation of software,
support and subscription sales to customers who had previously
notified Optiva of their exit.
- Gross margin reached a new record level at 78% in Q2'21,
increasing 4% over the 74% gross margin achieved during the
corresponding period in 2020. This increase was mainly attributable
to strict cost management and operational efficiencies.
- General and administrative expenses decreased to $4.5 million when compared to $10.1 million during the same period in 2020. The
decrease is mainly due to lower legal and advisory costs related to
activities of the special committee of the board of directors
incurred last year, lower amortization costs and provisions.
- Earnings before interest, taxes, depreciation and amortization
("EBITDA")[1] for Q2'21 of 2021 was $4.1 million compared to a loss of $2.9 million during the same period in 2020.
Adjusted EBITDA[1] ("Adjusted EBITDA") for Q2'21
amounted to $4.1 million as compared
to $0.9 million during the same
period in 2020.
- Net income for Q2'21 was $1.3
million compared to a loss of $14.8
million during the corresponding period in 2020. The
increase in net income is mainly attributable to the Company's
ongoing focus on cost management and overall operating
expenses.
[1] EBITDA and
Adjusted EBITDA are non-IFRS measures. These measures are defined
in the "Non-IFRS Financial Measures" section of this news
release.
|
Conference Call
Optiva Inc. will hold an analyst call on August 11, 2021, to discuss its Q2'21 financial
results for the three-month period ended June 30, 2021. John
Giere, CEO, and Ashish Joshi,
CFO, will host the call starting at 9:00
a.m. Eastern time. A question and answer session will follow
management's discussion.
Date: Wednesday, August 11,
2021
Time: 9:00 a.m. Eastern Time
Toll-free (Canada/US): 1-800-437-2398
International: 1-720-452-9102
Reference number: 3958855
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization.
Non-IFRS Measures
"EBITDA" and "Adjusted EBITDA" are not financial measures
calculated and presented in accordance with International Financial
Reporting Standards (IFRS) and should not be considered in
isolation or as a substitute to net income (loss), operating income
or any other financial measures of performance calculated and
presented in accordance with IFRS, or as an alternative to cash
flow from operating activities as a measure of liquidity. The
Company defines EBITDA as net income (loss) excluding amounts for
depreciation and amortization, other income, finance costs, finance
income, income tax expense (recovery), foreign exchange gain (loss)
and share-based compensation. The Company defines "Adjusted EBITDA"
as EBITDA (as defined above), excluding restructuring costs,
one-time provision amounts, and any one-time transaction costs
associated with shareholder conflict. The Company believes that
Adjusted EBITDA is a metric that investors may find useful in
understanding the Company's financial position. The following table
provides a reconciliation of Net Income to EBITDA and Adjusted
EBITDA.
OPTIVA
Inc.
|
Reconciliation of Net
Income to Adjusted EBITDA
|
(Expressed in U.S.
dollars)
|
(Unaudited)
|
|
|
|
|
|
|
|
Three months
ended,
June 30
|
Six months ended,
June 30
|
|
2021
|
2020
|
2021
|
2020
|
|
|
|
|
|
Net income (loss) for
the period
|
$
|
1,331,539
|
$
|
(14,776,545)
|
$
|
18,029,910
|
$
|
(13,968,896)
|
|
|
|
|
|
Add back /
(substract):
|
|
|
|
|
Depreciation of
property and equipment
|
18,440
|
-
|
18,440
|
-
|
Amortization of
intangible assets
|
362,763
|
2,464,192
|
725,526
|
4,952,521
|
Finance (income) /
loss
|
(70,901)
|
8,913
|
(142,595)
|
(76,823)
|
Finance costs
(recovery)
|
888,881
|
8,384,828
|
(10,304,588)
|
(1,378,110)
|
Income tax
expense
|
1,076,746
|
376,101
|
1,604,974
|
688,306
|
Foreign exchange loss
(gain)
|
(218,307)
|
298,367
|
(525,635)
|
2,181,707
|
Share-based
compensation
|
693,234
|
358,916
|
1,415,832
|
(885,132)
|
EBITDA
|
4,082,395
|
(2,885,228)
|
10,821,864
|
(8,486,427)
|
|
|
|
|
|
Restructuring
costs
|
-
|
26,438
|
-
|
142,722
|
Change in other
provisions
|
-
|
3,072,717
|
(1,313,725)
|
3,072,717
|
One-time costs
(recovery) related to shareholder conflict
|
|
|
|
|
and Debenture
financing
|
-
|
730,540
|
(433,610)
|
921,865
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
4,082,395
|
$
|
944,467
|
$
|
9,074,529
|
$
|
(4,349,123)
|
About Optiva
Optiva Inc. is a leading provider of mission-critical,
cloud-native revenue management software for the telecommunications
industry. Its products are delivered globally on the private and
public cloud. The Company's solutions help service providers
maximize digital, 5G, IoT and emerging market opportunities to
achieve business success. Established in 1999, Optiva Inc. is on
the Toronto Stock Exchange (TSX: OPT). For more information, visit
www.optiva.com.
Caution Concerning Forward-Looking Statement
Certain statements in this document may constitute
"forward-looking" statements that involve known and unknown risks,
uncertainties and other factors that may cause our actual results,
performance or achievements or industry results to be materially
different from any future results, performance or achievements
expressed or implied by such forward looking statements. When used
in this document, such statements use such words as "may," "will,"
"expect," "continue," "believe," "plan," "intend," "would,"
"could," "should," "anticipate" and other similar terminology.
These statements are forward-looking as they are based on our
current expectations, as at August 10,
2021, about our business and the markets we operate in and
on various estimates and assumptions. Our actual results could
materially differ from our expectations if known or unknown risks
affect our business or if our estimates or assumptions turn out to
be inaccurate. As a result, there is no assurance that any
forward-looking statements will materialize. Risks that could cause
our results to differ materially from our current expectations are
discussed in the Company's most recent Annual Information Form,
which is available on SEDAR at www.sedar.com and on Optiva's
website at www.optiva.com/investors/. Other unknown or
unpredictable factors or underlying assumptions subsequently
proving to be incorrect could cause actual results to differ
materially from those in the forward-looking statements. Optiva
does not undertake or accept any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statements to reflect any change in its expectations or any change
in events, conditions or circumstances on which any such statement
is based, except as required by law.
OPTIVA
Inc.
|
Condensed
Consolidated Interim Statements of Financial Position
|
(Expressed in U.S.
dollars)
|
(Unaudited)
|
|
|
|
|
|
|
|
June 30,
|
December
31,
|
|
2021
|
2020
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$
|
32,935,144
|
$
|
17,663,998
|
Trade accounts and
other receivables
|
9,420,819
|
7,868,501
|
Unbilled
revenue
|
4,623,371
|
4,086,395
|
Prepaid
expenses
|
3,278,571
|
2,752,304
|
Income taxes
receivable
|
4,286,292
|
4,281,673
|
Other
assets
|
330,086
|
222,101
|
Total current
assets
|
54,874,283
|
36,874,972
|
|
|
|
Restricted
cash
|
537,487
|
625,692
|
Property and
equipment
|
247,042
|
-
|
Long-term unbilled
revenue
|
3,553,939
|
3,520,177
|
Deferred income
taxes
|
365,606
|
208,237
|
Other
assets
|
508,066
|
624,134
|
Intangible
assets
|
2,529,956
|
3,255,482
|
Goodwill
|
32,271,078
|
32,271,078
|
Total
assets
|
$
|
94,887,457
|
$
|
77,379,772
|
|
|
|
Liabilities and
Shareholders' Deficit
|
|
|
|
|
|
Current
liabilities:
|
|
|
Trade
payables
|
$
|
3,142,452
|
$
|
8,811,407
|
Accrued
liabilities
|
11,289,333
|
9,677,245
|
Provisions
|
4,200,000
|
5,555,373
|
Income taxes
payable
|
4,546,033
|
4,932,157
|
Deferred
revenue
|
6,304,516
|
4,894,195
|
Total current
liabilities
|
29,482,334
|
33,870,377
|
|
|
|
Deferred
revenue
|
525,583
|
661,837
|
Other
liabilities
|
2,373,122
|
2,797,836
|
Pension and other
long-term employment benefit plans
|
14,541,926
|
15,582,459
|
Debentures
|
86,652,639
|
86,338,367
|
Series A
Warrant
|
2,286,508
|
16,662,808
|
Standby
Warrant
|
221,100
|
-
|
Deferred income
taxes
|
879,351
|
898,146
|
Total
liabilities
|
136,962,563
|
156,811,830
|
|
|
|
Shareholders'
deficit:
|
|
|
Share
capital
|
269,992,761
|
250,904,013
|
Standby
Warrant
|
-
|
997,500
|
Contributed
surplus
|
12,642,608
|
11,406,814
|
Deficit
|
(317,812,339)
|
(335,842,249)
|
Accumulated other
comprehensive loss
|
(6,898,136)
|
(6,898,136)
|
Total shareholders'
deficit
|
(42,075,106)
|
(79,432,058)
|
|
|
|
Total liabilities and
shareholders' deficit
|
$
|
94,887,457
|
$
|
77,379,772
|
OPTIVA
Inc.
|
|
|
Condensed
Consolidated Interim Statements of Comprehensive Income
(Loss)
|
(Expressed in U.S.
dollars, except per share and share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended,
June 30
|
Six months ended,
June 30
|
|
2021
|
2020
|
2021
|
2020
|
|
|
|
|
|
Revenue (note
9):
|
|
|
|
|
Support and
subscription
|
$
|
11,481,945
|
$
|
14,837,554
|
$
|
24,269,620
|
$
|
29,953,365
|
Software licenses,
services and other
|
4,828,791
|
5,095,169
|
8,132,199
|
9,016,104
|
|
16,310,736
|
19,932,723
|
32,401,819
|
38,969,469
|
|
|
|
|
|
Cost of
revenue
|
3,598,792
|
5,121,466
|
7,273,740
|
10,475,642
|
|
|
|
|
|
Gross
profit
|
12,711,944
|
14,811,257
|
25,128,079
|
28,493,827
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Sales and
marketing
|
1,926,474
|
1,668,226
|
3,713,642
|
4,691,688
|
General and
administrative
|
4,535,704
|
10,141,137
|
8,993,793
|
15,605,317
|
Research and
development
|
3,241,808
|
8,683,791
|
3,758,578
|
20,607,915
|
Restructuring
costs
|
-
|
26,438
|
-
|
142,722
|
|
9,703,986
|
20,519,592
|
16,466,013
|
41,047,642
|
|
|
|
|
|
Income (loss) from
operations
|
3,007,958
|
(5,708,335)
|
8,662,066
|
(12,553,815)
|
|
|
|
|
|
Foreign exchange gain
/ (loss)
|
218,307
|
(298,367)
|
525,635
|
(2,181,707)
|
Finance income /
(loss)
|
70,901
|
(8,913)
|
142,595
|
76,823
|
Finance (cost)
recovery
|
(888,881)
|
(8,384,828)
|
10,304,588
|
1,378,110
|
|
|
|
|
|
Income (loss) before
income taxes
|
2,408,285
|
(14,400,443)
|
19,634,884
|
(13,280,589)
|
|
|
|
|
|
Income tax
(recovery):
|
|
|
|
|
Current
|
1,203,196
|
386,571
|
1,769,118
|
695,758
|
Deferred
|
(126,450)
|
(10,469)
|
(164,144)
|
(7,451)
|
|
1,076,746
|
376,102
|
1,604,974
|
688,307
|
|
|
|
|
|
Total comprehensive
income (loss)
|
$
|
1,331,539
|
$
|
(14,776,545)
|
$
|
18,029,910
|
$
|
(13,968,896)
|
|
|
|
|
|
Income (loss) per
common share:
|
|
|
|
|
Basic
|
$
|
0.22
|
$
|
(2.78)
|
$
|
3.16
|
$
|
(2.63)
|
Diluted
|
0.22
|
(2.78)
|
3.09
|
(2.63)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares:
|
|
|
|
|
Basic
|
6,076,379
|
5,315,890
|
5,698,728
|
5,315,825
|
Diluted
|
6,127,886
|
5,315,890
|
5,843,464
|
5,315,825
|
|
|
|
|
|
OPTIVA
Inc.
|
|
|
|
|
Consolidated
Statements of Cash Flows
|
|
|
|
|
(Expressed in U.S.
dollars)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended,
June 30
|
Six months ended,
June 30
|
|
2021
|
2020
|
2021
|
2020
|
|
|
|
|
|
Cash provided by
(used in):
|
|
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
Income (loss) for the
period
|
$
|
1,331,539
|
$
|
(14,776,545)
|
$
|
18,029,910
|
$
|
(13,968,896)
|
Adjustments
for:
|
|
|
|
|
Depreciation of
property and equipment
|
18,440
|
-
|
18,440
|
-
|
Amortization of
intangible assets
|
362,763
|
2,464,192
|
725,526
|
4,952,521
|
Finance (income) /
loss
|
(70,901)
|
8,913
|
(142,595)
|
(76,823)
|
Finance costs
(recovery)
|
888,881
|
8,384,828
|
(10,304,588)
|
(1,378,110)
|
Pension
|
219,086
|
4,169
|
(718,048)
|
8,391
|
Income tax
expense
|
1,076,746
|
376,101
|
1,604,974
|
688,306
|
Unrealized foreign
exchange (gain)
|
207,568
|
(249,508)
|
(450,042)
|
(1,044,041)
|
Share-based
compensation
|
693,234
|
358,916
|
1,415,832
|
(885,132)
|
Change in
provisions
|
(23,028)
|
2,807,641
|
(1,355,373)
|
2,357,140
|
Change in non-cash
operating working capital
|
(242,745)
|
(2,352,191)
|
(5,986,012)
|
7,067,452
|
|
4,461,583
|
(2,973,484)
|
2,838,024
|
(2,279,192)
|
Interest
paid
|
(14,438)
|
(3,997)
|
(52,757)
|
(26,414)
|
Interest
received
|
8,382
|
15,135
|
9,969
|
69,914
|
Income taxes
paid
|
(372,819)
|
(678,759)
|
(2,064,199)
|
(1,645,167)
|
|
4,082,708
|
(3,641,105)
|
731,037
|
(3,880,859)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
Payment of
dividends
|
-
|
-
|
-
|
(2,209,426)
|
Issue of share
capital
|
19,088,748
|
-
|
19,088,748
|
-
|
Payment of interest
on loans and borrowings
|
-
|
-
|
(4,412,723)
|
-
|
|
19,088,748
|
-
|
14,676,025
|
(2,209,426)
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
Purchase of property
and equipment
|
(265,482)
|
-
|
(265,482)
|
-
|
Decrease in
restricted cash
|
135,704
|
172,824
|
88,205
|
203,518
|
|
(129,778)
|
172,824
|
(177,277)
|
203,518
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
|
|
|
|
on cash and cash
equivalents
|
(70,797)
|
529,847
|
41,361
|
565,633
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
22,970,881
|
(2,938,434)
|
15,271,146
|
(5,321,134)
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
9,964,263
|
29,365,293
|
17,663,998
|
31,747,993
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
$
|
32,935,144
|
$
|
26,426,859
|
$
|
32,935,144
|
$
|
26,426,859
|
|
|
|
|
|
|
|
|
|
|
SOURCE Optiva Inc.