- Revenues grow 88% year over year to
$2.18 million in quarter -
TORONTO, Aug. 7, 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 and six-month periods ended June 30, 2019.
"I'm pleased to announce that VersaPay continued its strong
growth for a third consecutive quarter, with total revenues
increasing 88% year-over-year to $2.18
million," said Craig O'Neill,
CEO of VersaPay. "ARCTM continues to be our
primary growth driver with growth of 156% year-over-year to
$1.66 million. Our recurring
business (ARR) is approximately $7.50
million at the end of the quarter with
ARCTM representing approximately 73% of this
figure. As a result, our gross margins were positively
impacted, growing to 81% this quarter, up from 75% in Q2 2018."
Mr. O'Neill continued, "Our new ARCTM sales of
$0.92 million and professional
services sales of $0.42 million in
the quarter resulted in an increase to the subscription and
professional services backlog to $1.18
million and $0.83 million,
respectively. We expect the bulk of this backlog will translate to
revenue in the coming one to two quarters."
Operational Highlights for Q2:
- Partnership with MasterCard: During the quarter,
VersaPay successfully completed a deal with MasterCard, a leading
global payments leader, to partner together to introduce a Virtual
Card Receivables Service. This Virtual Card Receivables Service
will aggregate information from MasterCard Issuers related to
Virtual Card payments by their corporate customers and compile it
into one comprehensive file, available in a digital format that is
preferred by suppliers. The solution eliminates the manual process
of reconciling incoming payment information. This joint initiative
will improve the experience of accepting virtual credit cards for
businesses across the US, Canada,
and around the globe.
- Strong quarter for ARC™ sales: 15 new ARCTM
wins during the quarter that represented over $0.92 million in new ARCTM ARR, with
about 34% of sales coming through channel partners. From a
geographic standpoint, 85% of sales came from the U.S. Moreover,
the Company signed professional services contracts worth
approximately $0.42 million in the
quarter representing the highest quarter of such sales to-date.
- High conversion of backlog to ARC™ Revenue: The Company
converted approximately 69% of its ARCTM subscription
backlog (which are contractually signed but unbilled clients) as of
March 31, 2019 to revenue in the
quarter, while growing its backlog of clients from $1.10 million at the end of Q1, 2019 to
$1.18 million at the end of Q2 2019.
This signals a healthy growth in the business, and continued
revenue growth in the near term.
- 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, 182,435
end-customers were using ARCTM compared to 117,578 at
the end of Q2 2018, and approximately 679,000 invoices were
delivered to end-customers during the quarter compared to 451,000
invoices in Q2 2018. 279,000 invoices worth $266 million were paid on ARCTM in Q2
2019, compared to 203,000 invoices worth $149 million in Q2 2018.
Financial Highlights:
- Total Revenue for Q2 2019 increased by 88% to $2.18 million compared to $1.18 million in Q2 2018.
- Gross margin percentage for the three-month period ended
June 30, 2019 was 81%, compared to
75% in Q2 2018.
- ARCTM ARR increased to $5.50
million compared to $2.30
million in Q2 2018 and $4.57
million in Q1 2019. This represents an increase of 139%
year-over-year, and an increase of 20% quarter-over-quarter.
- PayPortTM ARR grew to $1.99
million, bringing our total recurring revenue to a run rate
of approximately $7.50 million at the
end of Q2 2019, compared to $4.22
million in the prior year, an increase of 78%.
- Operating expenses increased by $0.69
million to $5.03 million (Q2
2018: $4.50 million), an increase of
12% year over year. The increase is comprised of various research
& development costs, and marketing and promotion activities
which are required to support the growing revenue trend of the
business.
- Adjusted EBITDA was a loss of $2.62
million in Q2 2019, compared to a loss of $2.81 million in Q2 2018.
The following is a reconciliation of Adjusted EBITDA to total
comprehensive (loss) income:
|
Three months ended
June 30
|
Six months ended
June 30
|
|
2019
|
2018
|
2019
|
2018
|
|
|
Recast
|
|
Recast
|
|
$
|
$
|
$
|
$
|
Adjusted
EBITDA
|
(2,622,024)
|
(2,805,321)
|
(4,641,072)
|
(5,071,226)
|
Share based
compensation
|
(265,890)
|
(685,879)
|
(686,130)
|
(1,012,731)
|
Net finance expense
(IFRS 16)
|
(152,554)
|
-
|
(279,256)
|
-
|
Other finance income
(costs)
|
25,689
|
20,360
|
51,530
|
38,319
|
Amortization - RoU
assets (IFRS 16)
|
(280,819)
|
-
|
(496,178)
|
-
|
Amortization - other
assets
|
(102,631)
|
(29,292)
|
(217,554)
|
(62,057)
|
Other non-operating
expenses
|
-
|
(100,000)
|
|
(155,000)
|
Foreign currency
translation differences
|
(55,024)
|
(4,693)
|
(74,725)
|
357
|
Total comprehensive
(loss) income
|
(3,453,253)
|
(3,604,825)
|
(6,343,385)
|
(6,262,338)
|
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, August
8th, 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: 21755530
Recording Playback Numbers:
Toronto (+1) 416 764 8677
Toll Free – North America (+1) 888
390 0541
Passcode: 755530 #
Expiry Date: Wednesday, August
14th, 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.
SOURCE VersaPay Corporation