- Revenues grow 90% year over year to
$1.95 million in quarter
-
TORONTO, May 22, 2019 /CNW/ - VersaPay
Corporation (TSXV: VPY) ("VersaPay" or the "Company"), a
leading provider of cloud-based invoice-to-cash solutions including
electronic invoice presentment and payment, automated collections
and cash application, today announced its financial results
for the three-month period ended March 31,
2019.
"The first quarter was another record quarter, with total
revenues growing 90% year-over-year to $1.95
million. The biggest driver of this was
ARCTM which grew 175% year-over-year to $1.46 million," said Craig O'Neill, CEO of VersaPay. "Our recurring
business (ARR) is approximately $6.56
million at the end of the quarter with ARCTM
representing approximately 70% of this figure. This is
significant because of the positive impact it has on our gross
margins, which grew to 79% this quarter, up from 71% in Q1
2018."
Mr. O'Neill continued, "Our subscription backlog and
professional services backlog ended the quarter at $1.10 million and $0.47
million, respectively, with new subscription sales of
$0.90 million and professional
services sales of $0.31 million in
the quarter. We will see the majority of this backlog translate to
revenue in the coming one to two quarters."
Operational Highlights for Q1:
- Strong quarter for ARC™ sales: 10 new
ARCTM contracts were signed during the quarter that
represented $0.90 million in new ARR,
with about 41% of sales coming through channel partners. From
a geographic standpoint, 100% of sales came from the U.S. which
marked the first quarter that all sales are concentrated in the
U.S. Moreover, the Company signed professional services
contracts worth approximately $0.31
million in the quarter representing the highest quarter of
such sales to-date.
- High conversion of backlog to ARC™ Revenue: The Company
converted approximately 89% of its ARCTM subscription
backlog (which are contractually signed but unbilled clients) as of
December 31, 2018 to revenue in the
quarter. With this high backlog conversion rate, the subscription
backlog at the end of Q1 2019 was $1.10
million.
- New ARC™ module released: During the quarter, the
Company launched a new module on the ARC™ platform that offers
enhanced cash application and bank reconciliation capabilities
powered by Cashbook. With the introduction of this new module, ARC™
provides a true end-to-end solution for invoice-to-cash, automating
all steps in the process for all types of payments, including
gathering remittance data from customers' emails and vendor
websites, and reconciling bank statements with accounting books and
records.
- Continued growth in ARC™ usage metrics: The usage of
ARCTM is an important indicator of the value clients are
receiving from the platform and a good predictor of continued sales
and revenue growth. As at the end of the quarter, 162,560
end-customers were using ARCTM compared to 106,746 at
the end of Q1 2018, and approximately 545,000 invoices were
delivered to end-customers during the quarter compared to 393,000
invoices in Q1 2018. 247,000 invoices worth $222 million were paid on ARCTM in Q1
2019, compared to 198,000 invoices worth $157 million in Q1 2018.
Financial Highlights:
- Total Revenue for Q1 2019 increased by 90% to $1.95 million compared to $1.03 million in Q1 2018.
- Gross margin percentage for the three-month period ended
March 31, 2019 was 79%, compared to
71% in Q1 2018.
- ARCTM ARR increased to $4.57
million compared to $1.92
million in Q1 2018 and $3.30
million in Q4 2018. This represents an increase of
138% year-over-year, and an increase of 38%
quarter-over-quarter.
- PayPortTM ARR grew to $1.99
million, bringing our total recurring revenue to a run rate
of approximately $6.56 million at the
end of Q1 2019, compared to $3.72
million in the prior year, an increase of 76%.
- Operating expenses from operations increased by $0.91 million to $4.32
million (Q1 2018: $3.41
million), an increase of 27% year over year. Largest
portion of the overall increase ($0.39
million or 43%) was driven by non-cash mark-to-market
adjustment for share-based compensation and non-cash amortization
of right-of-use assets related to the new IFRS 16 – Leases
accounting standard implementation1. Total
salaries and benefits for the Company was approximately
$2.43 million in Q1 2019, an increase
of $0.46 million from Q1 2018. The
increase is consistent with the growth of headcount between the two
periods and consistent with the growing revenue trend of the
Company. IT &Infrastructure increased by $0.11 million in relation to the Company's
investment in research and development activities. Offsetting the
increase in the above costs is a decrease in Sales and Marketing
expenses by $0.21 million due to
timing. Marketing and promotion activities are expected to pick up
in Q2 2019.
- Adjusted EBITDA was a loss of $2.02
million in Q1 2019, compared to a loss of $2.27 million in Q1 2018.
1 See further details on the new IFRS 16 –
Leases accounting standard implementation in the Financial
Highlights sections of the Q1 2019 Management Discussion &
Analysis on SEDAR.
The following is a reconciliation of Adjusted EBITDA to total
comprehensive (loss) income:
|
|
|
|
For the three
months ended March 31
|
|
2019
|
2018
|
|
$
|
$
|
|
|
Recast
|
Adjusted
EBITDA
|
(2,019,048)
|
(2,265,905)
|
Share based
compensation
|
(420,240)
|
(326,852)
|
Net finance expense
(IFRS 16)
|
(124,500)
|
-
|
Other finance income
(costs)
|
23,639
|
17,959
|
Amortization - RoU
assets (IFRS 16)
|
(215,359)
|
-
|
Amortization - other
assets
|
(114,923)
|
(32,765)
|
Other non-operating
expenses 3
|
-
|
(55,000)
|
Foreign currency
translation differences
|
(19,701)
|
5,050
|
Total comprehensive
(loss) income
|
(2,890,132)
|
(2,657,513)
|
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 (including
M&A and non-recurring restructuring activities), 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 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.
The term Backlog for ARCTM Subscriptions
represents the annual recurring amount that customers have
contractually committed to but have not yet been billed. The term
Backlog for ARCTM Professional Services represents
revenue expected to be recognized in the future related to
contracted non-recurring implementation services that are yet to be
performed.
Conference Call Details:
Date: Thursday, May
23rd, 2019
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: 03845926
Recording Playback Numbers:
Toronto (+1) 416 764 8677
Toll Free – North America (+1) 888
390 0541
Passcode: 845926 #
Expiry Date: Thursday, May
30th 2019
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
ARCTM 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.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/versapay-announces-q1-2019-financial-results-300855531.html
SOURCE VersaPay Corporation