- ARC Annual Recurring Revenue Grows by 133%
Year over Year -
TORONTO, Aug. 28, 2018 /CNW/ - VersaPay
Corporation (TSXV: VPY) ("VersaPay" or the "Company"), a
leading provider of cloud-based invoicing, accounts receivable
management and payment solutions, today announced second
quarter ("Q2") financial results for the three- and six-month
period ended June 30, 2018.
"The second quarter was a landmark period for the Company," said
Craig O'Neill, CEO of VersaPay. "We
signed 14 new clients representing $1
million in committed ARC ARR in the quarter, an increase of
more than 40% in total ARC ARR as these new clients come
online."
Mr. O'Neill continued, "We are extremely pleased, not only with
this overall sales result, but with the mix of deals closed, with
one half from our direct sales efforts and one half from our
channel partners, and with the continued growth of our sales
pipeline which we expect will support similar sales results in
future quarters."
Operational Highlights:
- Strong new sales ARC™: 14 new clients were signed in the
quarter. This again represents the Company's strongest sales
quarter ever and was made up of nine sales in the US, and five
sales in Canada. Seven of these sales came from channel
partners and seven were from VersaPay's direct sales efforts.
Not only was this a record number of clients signed in a quarter,
US pipeline growth also exceeded previous quarters. These
results are a direct outcome of the US expansion plan the Company
embarked on in Q4 2017. The plan included expanding the sales
team in the US and increasing VersaPay's digital marketing
investment, both are positively impacting sales results in the
first half of 2018.
- Strong increases ARC™ usage metrics: At the end of
June 30, 2018, 117,578 end-customers
were using ARC™ compared to 51,212 at the end of June 30, 2017, and approximately 452,000 invoices
were delivered to end-customers during the Q2 2018 compared to
305,000 invoices in Q2 2017. Total payments in Q2 2018 were
$149 million, compared to
$50 million in Q2 2017 and
$156 million in Q1 2018.
- Expanded Channel program: Five Value-Added Resellers
(VAR) were signed in Q2 2018, bringing the total number of VARs the
Company is partnered with to eight. VARs are well-positioned to
sell and implement ARC as a natural extension of the current
business they do with their clients. VersaPay is marketing to
VARs that specialize in Sage Intacct, Oracle JDE and Accumatica – a
community of more than 5,000 companies – as part of its channel
strategy to complement large channel partners RBC and Ricoh.
Financial Highlights:
- Total Revenue for Q2 2018 increased by 80.1% to $1.14 million compared to $0.63 million in Q2 2017.
- Total Annual Recurring Revenue ("ARR") as of Q2 2018 was
$4.22 million, compared to
$2.23 million as of Q2 2017, an
increase of 86%.
- Annual Recurring Revenue from ARC increased to $2.3 million compared to $1.0 million in Q2 2017 and $1.9 million in Q1 2018. This represents an
increase of 133% year over year and an increase of 20% quarter over
quarter.
- Gross profit percentage for Q2 2018 was 69.1%, compared to
57.3% in Q2 2017.
- Total comprehensive loss for Q2 2018 was ($3.69) million, compared to ($1.95) million for Q2 2017.
- Adjusted EBITDA(1) was ($2.90) million in Q2 2018, compared to
($1.70) million in Q2 2017.
- Total operating expense for Q2 2018 increased by 96% to
$4.5 million, compared to
$2.3 million for the three-months
ended June 30, 2017. Included
in Q2 2018 operating expense are share-based payments representing
$0.2 million (Q2 2017 - $0.1 million), $0.5
million related to restricted share units (Q2 2017 -
$0.04 million), and $0.1 million of one-time expenses (Q2 2017 -
$nil) connected with the Company's exploratory M&A activities.
Excluding these items, expenses increased by 60% compared to Q2
2017.
- As at June 30, 2018, the Company
had cash on hand of $9.9
million compared to $15.83
million as at December 31,
2017.
The term Adjusted EBITDA ("Adjusted EBITDA") is a non-IFRS
measure and refers to earnings before interest, taxes, depreciation
and amortization ("Adjusted EBITDA") and is a non-IFRS financial
measure which does not have any standardized meaning prescribed by
IFRS and is therefore unlikely to be comparable to similar measures
presented by other issuers. Adjusted EBITDA provides useful
information to users as it reflects the net earnings prior to the
effect of non-operating expenses, share based compensation (which
includes share-based payments, restricted share units, performance
share units, and deferred share units), and unusual items such as
discontinued operations. Management uses Adjusted EBITDA in
measuring the financial performance of the Company as this measure
reflects results that are controllable by management in day-to-day
operations. Management monitors Adjusted EBITDA against budget and
past results on a regular basis
The term Monthly Recurring Revenue ("MRR") is a non-IFRS
measure and includes revenues earned in a given month relating to
monthly fixed subscription fee, monthly transaction fees, ARC
LiteTM revenue, and PayPortTM
revenue. MRR is a common metric used in Software as a Service
("SaaS") companies and its definition is not guided by IFRS
standards. Accordingly, MRR is unlikely to be comparable to
similar measures presented by other issuers.
The term Annualized Recurring Revenue ("ARR") is a non-IFRS
measure and refers to multiplying the MRR value defined above by 12
to represent management's best estimate of forward looking 12
months of recurring revenues that the Company would earn based on
the current Monthly Recurring Revenue
The term operating expense is the aggregation of general and
administrative expenses, research and development expenses, and
sales and marketing expenses.
Conference Call Details:
Date: Wednesday, August 29,
2018
Time: 9:00 AM Eastern Time
Participant Dial-in Numbers:
Local – Toronto (+1) 416 764
8609
Toll Free – North America (+1) 888
390 0605
Conference ID: 62830263
Recording Playback Numbers:
Toronto (+1) 416 764 8677
Toll Free – North America (+1) 888
390 0541
Passcode: 830263#
Expiry Date: Wedneday, September 5,
2018 11:59 pm
A live audio webcast and archive of the conference call will be
available by visiting the Company's website
at http://www.versapay.com/company/investor-relations/. Please
connect at least 15 minutes prior to the conference call to ensure
time for any software download that may be needed to hear the
webcast.
About VersaPay
VersaPay is a leading cloud-based invoice presentment and
payment provider for businesses of all sizes. VersaPay's ARC
software-as-a-service offering allows businesses to easily deliver
customized electronic invoices to their customers, to accept credit
card and EFT payments and automatically reconcile payments to their
ERP and accounting software. VersaPay is headquartered in
Toronto, Canada and has operations
in Montreal.
More information about VersaPay can be found on the Company's
website at www.versapay.com or under the Company's profile on SEDAR
at www.sedar.com.
Forward Looking and Other Cautionary Statements
This news release contains "forward-looking information" which
may include, but is not limited to, statements with respect to the
activities, events or developments that the Company expects or
anticipates will or may occur in the future. Such
forward-looking information is often, but not always, identified by
the use of words and phrases such as "plans," "expects," "is
expected," "budget," "scheduled," "estimates," "forecasts,"
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certain actions, events or results "may," "could," "would," "might"
or "will" be taken, occur or be achieved.
These forward-looking statements, and any assumptions upon which
they are based, are made in good faith and reflect our current
judgment regarding the direction of our business. Management
believes that these assumptions are reasonable. Forward-looking
information involves known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking information. Such factors include, among
others, risks related to the speculative nature of the Company's
business, the Company's formative stage of development and the
Company's financial position.
Forward-looking statements contained herein are made as of the
date of this news release and the Company disclaims any obligation
to update any forward-looking statements, whether as a result of
new information, future events or results, except as may be
required by applicable securities laws. There can be no assurance
that forward-looking information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking information.
Neither the 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.
SOURCE VersaPay Corporation