- ARC Annual Recurring Revenue Grows by 56%
Year over Year -
TORONTO, Nov. 27, 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 third
quarter ("Q3") financial results for the three- and nine-month
periods ended September 30, 2018.
"While overall revenues were slightly short of expectations,
revenues from ARC clients grew nicely, up year over year by 113%
for the quarter and 148% for the nine months ended September 30," said Craig
O'Neill, CEO of VersaPay. "Furthermore, in what is
traditionally the slowest sales period of the year, we closed 13
new sales representing $0.6 million
in committed ARC ARR, on top of the $1.0
million of committed ARC ARR in the backlog coming into the
quarter."
Mr. O'Neill continued, "Although channel sales continued to be
slower than expected, we again saw strong demand in the US, with
much of our direct sales coming from south of the border. We
are making significant inroads, particularly in the commercial real
estate and wholesale distribution sectors and expect continued
growth in these industries in the coming quarters."
The Company also announced a number of organizational changes in
response to its growing client list and increasing project
workload. "We've strengthened key leadership positions in
Client Success/Support, Implementation Services and Engineering,
attracting experienced leaders from top software and e-commerce
companies to our team," said Craig
O'Neill. "In addition, Ross
Pellizzari, CRO, is leaving the company as we further focus
our sales and marketing efforts on direct sales and a select few
channel initiatives. I'd like to thank Ross for his
contributions to our growth and long-term success."
Operational Highlights:
- Strong new sales ARC™: 13 new sales were closed in the
quarter, excluding sales of ARC Lite. This again represents one of
the Company's strongest sales quarter and was made up of 9 sales in
the US, and 4 sales in Canada. 6 of these sales came from
channel partners and 7 were from VersaPay's direct sales
efforts. US new client wins and pipeline growth exceeded
Canadian sales for the second time in as many 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 three-quarters of 2018.
- Strong increases in ARC™ usage metrics: As at
September 30, 2018, 129,231
end-customers were using ARC™ compared to 57,237 at the end of
September 30, 2017, and approximately
616,000 invoices were delivered to end-customers during Q3 2018
compared to 290, 000 invoices in Q3 2017. Total payments in Q3 2018
were $179 million, compared to
$52 million in Q3 2017 and
$149 million in Q2 2018.
- Expanded VAR program: 6 Value-Added Resellers (VAR) were
signed in Q3 2018, bringing the total number of VARs the Company
has partnered with to 14. 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 and Oracle JDE – a community of
approximately 5,000 companies.
Financial Highlights:
- Total Revenue for Q3 2018 increased by 46% to $1.14 million compared to $0.78 million in Q3 2017.
- Total ARC revenues in Q3 2018 were $0.71
million compared to $0.33
million in Q3 2017, an increase of 113%.
- Total ARC revenues for the 9-months ended September 30, 2018 were $1.88 million compared to $0.76 million for the same period in 2017, an
increase of 148%.
- Total Annual Recurring Revenue ("ARR") as of Q3 2018 was
$4.43 million, compared to
$3.06 million as of Q3 2017, an
increase of 45%.
- ARC ARR increased to $2.53
million compared to $1.62
million in Q3 2017 and $2.30
million in Q2 2018. This represents an increase of 56%
year over year and an increase of 10% quarter over quarter.
- Gross profit percentage for Q3 2018 was 73.4%, compared to
73.3% in Q3 2017.
- Total comprehensive loss for Q3 2018 was ($2.95) million, compared to ($2.19) million for Q3 2017.
- Adjusted EBITDA was ($2.83)
million in Q3 2018, compared to ($1.94) million in Q3 2017.
- Total operating expense for Q3 2018 increased by 37% to
$3.81 million, compared to
$2.78 million for the three-months
ended September 30, 2017.
Included in Q3 2018 operating expense are share-based
payments representing $0.18 million
(Q3 2017 - $0.06 million),
$(0.10) million recovery related to
fair value adjustment for restricted share units (Q3 2017 -
$0.16 million). Excluding these
items, expenses increased by 46% compared to Q3 2017.
The term Adjusted earnings before interest, taxes,
depreciation and amortization ("Adjusted EBITDA") 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 before interest, taxes, depreciation and amortization and
adjusted for 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 and sales tax
accrual. 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
LiteÔ revenue, and PayPortÔ 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, November 28,
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: Wednesday, 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,"
"intends," "anticipates," or "believes" or variations (including
negative variations) of such words and phrases, or state that
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.
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SOURCE VersaPay Corporation