- Annual Recurring Revenue increases 29% YoY to $49.1 million
- Total revenue grows 28% YoY to $20.0
million, subscription revenue of $11.3 million, a 24% YoY increase
VANCOUVER, BC, May 10, 2023
/CNW/ - Copperleaf Technologies Inc. (TSX: CPLF) ("Copperleaf" or
the "Company"), a provider of enterprise decision analytics
software solutions, today announced financial results for the three
months ended March 31, 2023. All
amounts are expressed in Canadian dollars unless otherwise
stated.
"Copperleaf's first quarter demonstrated continued momentum with
material year-over-year growth spread across our geographies and
sectors. During the quarter, we welcomed Scottish Water as our
ninth UK-based water client and signed our first Australian water
client, underscoring the global applicability of our solution,"
said Paul Sakrzewski, CEO of Copperleaf. "Water
utilities in particular are facing unprecedented challenges, making
it increasingly challenging to meet service level targets and
minimize disruptions. Copperleaf provides water companies with
proven tools to address these complex challenges, providing a
comprehensive understanding of asset risk."
"Copperleaf's strategic go-to-market investments continue to pay
dividends, resulting in new industry sales, pipeline growth, and
accelerated lead generation," continued Mr. Sakrzewski.
"During the first quarter we successfully expanded into the ports
industry, as well as into upstream Oil & Gas. For the remainder
of 2023, we will remain focused on executing our go-to-market
strategy, maintaining a prudent approach to managing our expenses
as we navigate through the current economic environment. We
anticipate that our growth for the remainder of the year will be
driven by the maturation of our newly expanded salesforce and
increasing partner traction, which will drive bookings and ARR
growth in the second half of 2023. With a deep sales pipeline, a
strong balance sheet, a growing client base, and market leading
solution, we are poised to extend our leadership position and drive
future growth."
First Quarter 2023 Financial Highlights
(All Capitalized terms used but not defined in this press
release have the meanings ascribed to them in Management's
Discussion and Analysis for the three months ended March 31, 2023; Comparison period is the first
quarter ended March 31, 2022, unless
otherwise stated)
- Revenue of $20.0 million, an
increase of 28% over Q1 2022, driven by the delivery of new clients
and expansion within existing clients.
- Annual Recurring Revenue1 as at March 31, 2023 of $49.1
million, a 29% increase from $38.0
million as at March 31,
2022.
- Subscription revenue of $11.3
million, an increase of 24% over Q1 2022.
- Gross profit of $13.7 million
representing a Gross margin of 68%, a 22% increase from
$11.2 million and a Gross margin of
72% in Q1 2022. Gross margin decreased temporarily primarily due to
an increase in subcontractor costs for the quarter plus increased
headcount, travel costs, and product support related to our growing
client base.
- Adjusted EBITDA1 loss of $10.0 million, compared to Adjusted
EBITDA1 loss of $9.0
million in Q1 2022.
- Net loss of $11.8 million, or a
loss of $0.17 per basic and diluted
share, compared to a net loss of $10.9
million, or a loss of $0.16
per basic and diluted share, in Q1 2022.
- As of March 31, 2023, the
Company's Net Revenue Retention Rate1 was 111%.
- As of March 31, 2023,
Copperleaf's Revenue Backlog1 grew 15% to $110.5 million compared to $96.0 million, as of March
31, 2022.
- Strong balance sheet with cash and cash equivalents of
$145.9 million as at March 31, 2023, compared to $149.5 million at December
31, 2022.
1 Please refer to "Non-IFRS
Measures" section of this press release
|
Key Developments
- In Q1 we completed the successful transition of our CEO.
- We took significant steps to improve scalability, sales
effectiveness, and efficiency by establishing a new Global Business
Operations function and introducing the Global Growth Office, which
brings together Product Management, Industries, Partners, and Value
Engineering to better support the global Go-to-Market teams.
- Copperleaf's strategic go-to-market investments have driven
further pipeline growth, accelerated lead generation, and adoption
in new industries and geographies. During the first quarter, the
Company expanded into the ports industry, and upstream Oil &
Gas with its first oil sands client. We also closed our first
clients in France and the
Middle East.
- Water continues to be a key focus for Copperleaf. In Q1
Scottish Water selected Copperleaf H2O to become our ninth water
company in the UK, and we expanded this success internationally
being selected at Sydney Water, our first water client in
Australia.
- The Alliance Ecosystem continued to gain traction as the
Company's partners invested in expanding their Copperleaf practice
areas. In Q1 Copperleaf signed an Endorsed Apps initiative
agreement with SAP signaling SAP's recognition of Copperleaf's
industry-leading technology and the value that the combined
solutions can deliver to organizations globally.
- The Company had strong engagement with the Copperleaf Community
through Copperleaf Labs where we collaborated with clients on
initiatives spanning scenario organization, GIS, and data
visualizations.
- During Q1, Copperleaf released version 23.1 of its product
suite which included numerous new features including: a
configurable performance management dashboard enabling nimble
visualization and adaptation of plans; improved GIS integration
allowing users to manage their portfolios and plans directly
through the GIS mapping interface; and improved support for
multi-part or dependent projects coupled with an intuitive
graphical user interface which will drive better outcomes and
improved optimization results.
Q1 2023 Financial Results Conference Call
Details
Paul Sakrzewski, Chief Executive Officer and Chris Allen, Chief Financial Officer, will host
a conference call followed by a question-and-answer session today,
May 10, 2023, at 5:00 PM ET.
Date: May 10, 2023
Time: 5:00pm ET
Dial-In Number: 416-764-8659 or 1-888-664-6392
Webcast: https://app.webinar.net/9LZYzqVGRl8
Replay: 416-764-8677 or 1-888-390-0541 (Available until
May 17, 2023)
Replay Entry Code: 376144#
Key Performance Indicators
The Company monitors a number of key performance indicators
(KPIs) to evaluate performance. Some of the KPIs used by management
are recognized under IFRS, whereas others are non-IFRS measures and
are not recognized under IFRS. These non-IFRS measures are included
as additional information to complement the IFRS measures,
providing further understanding of our results of operations from
management's perspective. We believe that non-IFRS financial
measures are useful to investors and others in assessing our
performance; however, these measures should not be considered as a
substitute for reported IFRS measures nor should they be considered
in isolation. As these measures are not recognized measures under
IFRS, they do not have a standardized meaning prescribed by IFRS
and therefore may not be comparable to similar measures presented
by other companies. For a reconciliation of non-IFRS measures to
the most directly comparable measures calculated in accordance with
IFRS, see section "Non-IFRS Measures" below.
1Non-IFRS Measures
Annual Recurring Revenue ("ARR")
We define ARR as the annualized equivalent value of the
subscription and term-based software license revenue of all
existing contracts as at the date being measured, excluding
non-recurring SaaS and hosting fees. Our clients generally enter
into three-to-five-year contracts that are non-cancelable or
cancelable with penalty. Our calculation of Annual Recurring
Revenue assumes that clients will renew the contractual commitments
on a periodic basis as those commitments come up for renewal.
Subscription and term-based software license agreements are subject
to price increases upon renewal reflecting both inflationary
increases and the additional value provided by our solutions. In
addition to the expected increase in subscription and term-based
software license revenue from price increases over time, existing
clients may subscribe for additional products or services during
the term. We believe that this measure provides a fair real-time
measure of performance in a subscription-based environment.
Net Revenue Retention Rate
We believe that our Net Revenue Retention Rate is a key measure
to provide insight into the long-term value of our clients and our
ability to retain and expand revenue from our client base over
time. Our Net Revenue Retention Rate is calculated over a trailing
twelve-month period by considering the group of clients on our
platform as of the beginning of the period and dividing our Annual
Recurring Revenue attributable to this same group of clients at the
end of the period by the Annual Recurring Revenue at the beginning
of the period. By implication, this ratio excludes any Annual
Recurring Revenue from new clients acquired during the period but
does include incremental sales added to the cohort base of clients
during the period being measured. This measure provides insight
into client expansions, downgrades, and churn, and illustrates the
growth potential of our client base alone. Our success in
delivering exceptional value and extraordinary experiences to our
clients is fully realized when we can achieve a high Net Revenue
Retention Rate. However, this percentage can vary from period to
period due to the timing of large expansion contracts with our
existing clients. In addition, only the recurring component
of expansions with our perpetual license clients, such as on-going
support & maintenance, is recognized in this calculation.
Revenue Backlog
Revenue Backlog represents the total revenue expected to be
recognized in the future, related to performance obligations that
are unsatisfied or partially unsatisfied at period end. The
recurring nature of our revenue provides high visibility into
future performance, and upfront payments result in cash flow
generation in advance of revenue recognition. Subscription
contracts require annual upfront payments; however, some clients
pay multiple years upfront. Typically, approximately 50% of our
expected annual revenue is recognized from client contracts that
are in place at the beginning of the year; however, we expect this
percentage to increase going forward as our client base continues
to transition toward SaaS and our Q4 seasonality persists.
Agreements with new clients or agreements with existing clients
purchasing incremental product and services in a quarter may not
contribute significantly to revenue in the current quarter. For
example, for SaaS contracts and professional services, a new client
who enters into an agreement late in a quarter will typically have
limited contribution to the revenue recognized in that quarter.
Software licenses, by contrast, are often recognized as revenue
upon delivery of the software which typically occurs immediately
upon contracting, and thus rarely enters Revenue Backlog.
Adjusted EBITDA
Adjusted EBITDA is used by management as a supplemental measure
to review and assess operating performance and to provide a more
complete understanding of factors and trends affecting our
business. Management believes that Adjusted EBITDA is a useful
measure of operating performance and our ability to generate
cash-based earnings, as it provides a more relevant picture of
operating results by excluding the effects of financing and
investing activities, including removing the effects of interest
and other expenses such as non-cash items and non-recurring
expenses that are not reflective of our underlying business. In
addition to interest, the other non-cash or non-recurring items
adjusted for include depreciation and amortization, share-based
payments expense, foreign exchange loss (gain), current income tax
expense, and CEO transition expenses. Our management also uses
Adjusted EBITDA in order to facilitate operating performance
comparisons and decision making from period to period and to
prepare annual operating budgets and forecasts. In addition, it is
used to provide securities analysts, investors, and other
interested parties with supplemental measures of our operating
performance and thus highlight trends in our business that may not
otherwise be apparent when relying solely on IFRS measures.
The following tables reconciles Adjusted EBITDA to net loss for
the periods indicated:
|
|
|
|
|
Three months ended
March 31,
|
|
2023
|
2022
|
Change
|
|
|
Net
loss
|
(11,790)
|
(10,906)
|
(8 %)
|
Depreciation and
amortization
|
475
|
435
|
9 %
|
Share-based payments
expense 1
|
1,633
|
739
|
121 %
|
Finance
costs
|
289
|
274
|
5 %
|
Finance and other
income
|
(1,357)
|
(270)
|
(403 %)
|
Foreign exchange (gain)
loss
|
(45)
|
737
|
(106 %)
|
Current income tax
(recovery) expense
|
55
|
11
|
400 %
|
CEO transition expenses
1
|
695
|
-
|
-
|
Adjusted
EBITDA
|
(10,045)
|
(8,980)
|
(12 %)
|
1 Expenses incurred in the
transition to our new CEO in 2023, which are non-recurring. CEO
transition costs include share-based payments expense of $169 due
to the modification of certain stock options.
|
Selected Financial Information
Consolidated Statements of Loss and Comprehensive Loss
(expressed in thousands of Canadian dollars, except for share and
per share amounts)
|
|
For the three months
ended March 31,
|
|
|
2023
|
2022
|
|
|
$
|
$
|
Revenue
|
|
19,966
|
15,569
|
|
|
|
|
Cost of
revenue
|
|
6,308
|
4,392
|
|
|
|
|
Gross
profit
|
|
13,658
|
11,177
|
|
|
|
|
Operating
expenses
|
|
|
|
Sales and
marketing
|
|
10,399
|
8,565
|
Research and
development
|
|
9,663
|
6,649
|
General and
administrative
|
|
6,444
|
6,117
|
|
|
26,506
|
21,331
|
|
|
|
|
Loss from
operations
|
|
(12,848)
|
(10,154)
|
|
|
|
|
Other expenses
(income)
|
|
|
|
Finance
costs
|
|
289
|
274
|
Finance and other
income
|
|
(1,357)
|
(270)
|
Foreign exchange (gain)
loss
|
|
(45)
|
737
|
|
|
(1,113)
|
741
|
|
|
|
|
Loss before income
taxes
|
|
(11,735)
|
(10,895)
|
|
|
|
|
Income
taxes
|
|
|
|
Current income tax
expense
|
|
55
|
11
|
|
|
|
|
Net loss and
comprehensive loss for the period
|
|
(11,790)
|
(10,906)
|
|
|
|
|
Net loss per
share
|
|
|
|
Basic
and diluted
|
|
(0.17)
|
(0.16)
|
Weighted average
number of common shares outstanding,
basic and diluted
|
|
70,429,455
|
68,425,389
|
Consolidated Statements of Financial Position
(expressed in thousands of Canadian Dollars)
|
|
|
|
|
|
March
31,
2023
|
December 31,
2022
|
|
|
$
|
$
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
|
145,884
|
149,458
|
Accounts
receivable
|
|
17,954
|
21,232
|
Contract
costs
|
|
919
|
852
|
Contract
assets
|
|
3,974
|
4,337
|
Prepaid
expenses
|
|
3,851
|
3,050
|
|
|
172,582
|
178,929
|
Non-current
assets
|
|
|
|
Deposit and prepaid
expenses
|
|
594
|
702
|
Contract
costs
|
|
1,515
|
1,566
|
Contract
assets
|
|
692
|
458
|
Property and
equipment
|
|
1,684
|
1,901
|
Intangible
assets
|
|
1,309
|
1,407
|
Right-of-use
assets
|
|
581
|
730
|
|
|
6,375
|
6,764
|
TOTAL
ASSETS
|
|
178,957
|
185,693
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
|
13,505
|
12,232
|
Contract
liabilities
|
|
30,362
|
28,098
|
Lease
liabilities
|
|
1,042
|
1,039
|
|
|
44,909
|
41,369
|
Non-current
liabilities
|
|
|
|
Contract
liabilities
|
|
10,739
|
11,038
|
Lease
liabilities
|
|
-
|
259
|
|
|
10,739
|
11,297
|
TOTAL
LIABILITIES
|
|
55,648
|
52,666
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Share
capital
|
|
184,787
|
183,778
|
Share-based payments
reserve
|
|
9,688
|
8,625
|
Deficit
|
|
(71,166)
|
(59,376)
|
TOTAL SHAREHOLDERS'
EQUITY
|
|
123,309
|
133,027
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
178,957
|
185,693
|
Disaggregation of revenue
(expressed in thousands of
Canadian Dollars, except percentages)
|
Three months ended
March 31,
|
|
2023
|
2022
|
Change
|
Subscription
1
|
11,276
|
9,082
|
24 %
|
Professional services
and custom software contracts 2
|
6,933
|
5,998
|
16 %
|
Perpetual and
term-based software licenses 3
|
1,757
|
489
|
259 %
|
|
19,966
|
15,569
|
28 %
|
1
Subscriptions represent revenue from software as a service
("SaaS"), support and maintenance services, and
hosting.
|
2
Professional services and custom software contracts represent
revenue earned substantially from professional services.
|
3 Perpetual
and term-based software licenses represent software licenses that
are client hosted or with the option for the client to
host.
|
Forward-Looking Statements
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
information") within the meaning of applicable securities laws in
Canada.
Forward-looking information may relate to our future business,
financial outlook, and anticipated events or results, and may
include information regarding our financial position, business
strategy, growth strategies, addressable markets, budgets,
operations, financial results, taxes, dividend policy, plans and
objectives. Particularly, information regarding our expectations of
future results, performance, achievements, prospects, or
opportunities, or the markets in which we operate, is
forward-looking information. In some cases, forward-looking
information can be identified by the use of forward-looking
terminology such as "plans", "targets", "expect" or "does not
expect", "is expected", "is poised to", "an opportunity exists",
"budget", "scheduled", "estimates", "outlook", "future", "financial
outlook", "forecasts", "projection", "prospects", "strategy",
"intends", "anticipates", "does not anticipate", "believes", or
variations of such words and phrases, or statements that certain
actions, events, or results "may", "could", "would", "might",
"will" occur or be taken , or "will continue to" or
"are poised to" be achieved. In addition, any statements that
refer to expectations, intentions, projections, or other
characterizations of future events or circumstances contain
forward-looking information. Statements containing forward-looking
information are not historical facts but instead represent
management's expectations, estimates and projections regarding
possible future events or circumstances.
Forward-looking information may include, among other things: (i)
the Company's expectations regarding its financial performance,
including among others, revenue, gross profit, expenses, Adjusted
EBITDA; (ii) the Company's expectations regarding industry trends,
addressable market growth, overall market growth rates, and growth
rates and growth strategies; (iii) our business plans and
strategies; (iv) the continued success of our commercial model; (v)
our expectations regarding growth in our customer base, our ability
to retain clients and increase margin per customer; (vi)
acceleration in the growth and adoption of new technologies; (vii)
relationships with our technology partners; (viii) our ability to
continue to attract and retain talent; (ix) our competitive
position in our industry; and (xi) and the long-term impact of
COVID-19 on our business, financial position, results of operations
and/or cash flows.
Forward-looking information is necessarily based on a number of
opinions, estimates and assumptions that we considered appropriate
and reasonable as at the date such statements are made, and are
subject to known and unknown risks, uncertainties, assumptions and
other factors that may cause the actual results, level of activity,
performance or achievements to be materially different from those
expressed or implied by such forward-looking information, including
but not limited to the risk factors described in our 2022 Annual
Information Form ("AIF") under "Risk Factors". A copy of the 2022
AIF can be accessed under our profile on the System for Electronic
Document Analysis and Retrieval ("SEDAR") at www.sedar.com.
There can be no assurance that such forward-looking information
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such information.
Accordingly, readers should not place undue reliance on
forward-looking information, which speaks only as at the date
made.
In addition, forward-looking financial information with respect
to potential outlook and future financial results contained in this
press release are based on assumptions about future events
including economic conditions, the assumptions noted above and
proposed courses of action, based on management's reasonable
assessment of the relevant information available as at the date of
such forward-looking information. Readers are cautioned that any
such forward-looking financial information should not be used for
purposes other than for which it is disclosed.
About Copperleaf:
Copperleaf provides enterprise decision analytics software
solutions to companies managing critical infrastructure. We
leverage operational and financial data to empower our clients to
make investment decisions that deliver the highest business value.
What sets us apart is our commitment to providing extraordinary
experiences, shaped by people who care deeply, products that
deliver exceptional value, and partnerships that stand the test of
time. Copperleaf is a patron of The Institute of Asset Management
and actively participates in shaping the future of asset management
standards, including ISO 55000. Headquartered in Vancouver, Canada, our solutions are
distributed and supported by regional staff and partners worldwide.
Together, we are transforming how the world sees value.
For more details, visit https://www.copperleaf.com/
Source: Copperleaf Technologies Inc. CPLF-IR
SOURCE CopperLeaf Technologies Inc.