Growth in Revenue Accelerates and Quarterly Non-GAAP Operating Breakeven Achieved
OTTAWA, Nov. 01, 2023 (GLOBE NEWSWIRE) — ProntoForms Corporation (TSXV: PFM), the global leader in field intelligence, announced today its third quarter (Q3) financial results for the period ended September 30, 2023. All amounts are in US dollars unless otherwise stated.
“Our trailing twelve months (“TTM”) revenue growth accelerated to 14.2% in the last quarter and helped eliminate our quarterly non-GAAP operating loss,” said Philip Deck, co-CEO of ProntoForms. “Our tight focus on cost control while funding essential investments for growth resulted in an 11% reduction in operating expenses compared to Q2 2023 and offset unusually low professional services deliveries. TTM annual recurring revenue (“ARR”) base growth continued to be strong at approximately 18%. Net bookings improved with an ARR base increase for the first nine months of 2023 of over 250% compared to the increase for the first nine months of 2022. Revenue retention continues to be strong, particularly with our enterprise customers.”
“We are maintaining our focus on key vertical markets where we deliver a significant return on investment to customers through reduced field service costs, richer data, and higher levels of compliance. We continue to build and focus our marketing and account targeting strategy, and are steadily building customer relationships that will drive additional growth in 2024. Our imminent name change to TrueContext is an important part of our refocused positioning in the market,” continued Mr. Deck.
“In today’s economy, field technicians are pivotal, not only generating significant high-margin revenue but also ensuring customer satisfaction. Their roles have evolved from straightforward tasks to interconnected workflows that must be tailored to specific jobs, assets, and individuals, all while delivering elevated customer service. As we delve deeper into the AI era, technicians themselves become invaluable sensors in the field, facilitating the collection and processing of asset information. Field work is often a collaborative effort, requiring coordination among teams beyond just work orders or asset updates. Our product stands out in its ability to easily and iteratively build these complex workflows with a broader enterprise perspective, and we continue to invest and innovate in this vision,” ProntoForms co-CEO and Founder Alvaro Pombo explained.
Financial Highlights – 2023 Third Quarter (All results in USD)
Recurring revenue in Q3 2023 increased by 14% to $5.96 million compared to $5.23 million in Q3 2022 and increased by 3% compared to $5.79 million in Q2 2023.Total revenue for Q3 2023 increased by 13% to $6.16 million compared to $5.46 million in Q3 2022 and increased by 1% compared to $6.12 million in Q2 2023. Gross margin for Q3 2023 was 87% of total revenue compared to 85% in Q3 2022 and 86% in Q2 2023. Gross margin on recurring revenue was 91% for Q3 2023 compared to 90% in Q3 2022 and 91% in Q2 2023.Operating loss for Q3 2023 was $0.22 million, down from an operating loss of $1.07 million in Q3 2022 and down from an operating loss of $0.97 million in Q2 2023. Non-GAAP operating income for Q3 2023 was $0.01 million, compared to a loss of $0.85 million in Q3 2022 and a loss of $0.68 million in Q2 2023. (See non-GAAP measures below)Net loss for Q3 2023 was $0.27 million, down from a net loss of $1.01 million in Q3 2022 and down from a net loss of $1.15 million in Q2 2023. Non-GAAP net loss for Q3 2023 was $0.03 million, down from a loss of $0.78 million in Q3 2022 and down from a loss of $0.86 million in Q2 2023. (See non-GAAP measures below)As at September 30, 2023, the Company’s cash and net working capital balances were $5.44 million and $0.71 million respectively.
Please refer to www.prontoforms.com/company/investor-relations for full financial statements, management discussion and analysis and a downloadable spreadsheet version of our quarterly information.
Recent Operational Highlights
Notable new and expansion progress from enterprise customers, including:
A global heavy equipment manufacturer added multi-language capability to its existing ProntoForms deployment, covering roughly 2,500 technicians speaking over 10 languages to improve process standardization and compliance.A global medical equipment manufacturer added multi-language capability to its ProntoForms deployment in a deal worth $150K ARR. The feature was rolled out in dozens of countries across six continents.
ProntoForms was awarded Most Viable Technology at the Service Council Symposium in September 2023 after presenting a solution showcase that addressed prevailing challenges in global field service.ProntoForms was hailed leader of 11 categories in the G2 Fall 2023 Grid Report, indicating top performance in user satisfaction, support quality, and market presence. The product led the Enterprise Mobile Forms Automation, Enterprise Relationship Index, and Enterprise Usability Index for Field Service categories.ProntoForms Founder and co-CEO Alvaro Pombo presented a keynote at Field Service Hilton Head in August 2023, discussing the emerging role of intelligent apps in the evolving field service landscape.
Q3 Conference Call Date:
Date: Wednesday, November 1, 2023
Time: 9:00 AM Eastern Time
Participant Login Options
To join the conference call without operator assistance, you may register and enter your phone number at: https://emportal.ink/3FmZBBR to receive an instant automated callback.
You can also dial direct to be enter the call through an operator with the details below:
Participant Dial-in Numbers:
Local Toronto – (+1) 416-764-8650
Toll Free – (+1) 888-664-6383
Recording Playback Numbers:
Local Toronto– (+1) 416-764-8677
Toll Free – (+1) 888-390-0541
Expiry Date: November 8th, 2023, at 11:59pm EST
A live audio webcast and archive of the conference call will be available by visiting the Company’s website at www.prontoforms.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 ProntoForms Corporation
ProntoForms, soon to be TrueContext, is the global leader in field intelligence. The platform’s field workflows and data collection capabilities enable enterprise field teams to optimize decision-making, decrease organizational risk, maximize the uptime of valuable assets, and deliver exceptional service experiences. Over 100,000 subscribers use ProntoForms across multiple use cases, including asset inspection, compliance, installation, repair, maintenance, and environmental, health & safety with quantifiable business impacts.
The Company is based in Ottawa, Canada, and trades on the TSXV under the symbol PFM. ProntoForms and TrueContext are registered trademarks of ProntoForms Inc., a wholly owned subsidiary of ProntoForms Corporation.
For additional information, please contact:
co-Chief Executive Officer
613.599.8288 ext. 1111
co-Chief Executive Officer
Chief Financial Officer
Certain information in this press release may constitute forward-looking information. For example, statements about the Company’s future growth or value, the revenues anticipated to be received by the Company from recent contracts referred to above and anticipated market trends are forward-looking information. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Company’s business and value may not grow as anticipated or at all, revenue anticipated from contracts may not be received due to many risks, including factors specific to the customer, and anticipated market trends may not occur or continue. Historical growth levels and results may not be indicative of future growth levels or results. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. There are a number of risk factors that could cause future results to differ materially from those described herein. Please see “Risk Factors Affecting Future Results” in the Company’s annual management discussion and analysis dated March 8, 2023 found at www.sedar.com for a discussion of such factors.
KEY PERFORMANCE INDICATORS
Annual Recurring Revenue (“ARR”)
ARR is calculated as the annual equivalent of the recurring elements of our contracts with customers that are in effect at the end of the period. It excludes one-time professional service fees and assumes that customers will renew the contractual commitments on a periodic basis as those commitments come up for renewal, unless such renewal is known to be unlikely at period end. Please also refer to the Company’s management discussion and analysis for the year ended December 31, 2022 for a description of how the Company determines and uses ARR.
RECONCILIATION OF NON-GAAP MEASURES
We use Non-GAAP financial measures, including Non-GAAP Operating Income (Loss) and Non-GAAP Net Loss, to provide investors with supplemental measures of our operating performance and to highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. Management also uses non-GAAP measures in order to facilitate operating performance comparisons, prepare annual operating budgets and assess our ability to meet working capital requirements. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. These non-GAAP measures should be read in conjunction with our financial statements and the related notes thereto. Readers should not place undue reliance on non-GAAP measures and should instead view them in conjunction with the most comparable GAAP financial measure.
Non-GAAP Operating Income (Loss)
The Company uses “Non-GAAP Operating Income (Loss)” as a non-GAAP financial measure but it is not a defined term under IFRS to assess performance. Non-GAAP Operating Income (Loss) adjusts the Operating Income or Loss to exclude our share-based compensation plans.
Non-GAAP Operating income (loss) Three months ended September 30, June 30, September 30, 2023 2023 2022 GAAP Operating income (loss)$(221,376) $(969,257) $(1,074,037) Add back: Share based compensation 227,864 284,863 223,629 $6,488 $(684,394) $(850,408)
Non-GAAP Net Income (Loss)
The Company uses “Non-GAAP Net Income (Loss)” as a non-GAAP financial measure but it is not a defined term under IFRS to assess performance. Non-GAAP Net Income (Loss) adjusts net income (loss) to exclude share-based compensation and accretion of long-term debt.
Non-GAAP Net income (loss) Three months ended September 30, June 30, September 30, 2023 2023 2022 GAAP Net income (loss)$(265,112) $(1,151,582) $(1,011,677)
Add back: Share based compensation 227,864 284,863 223,629 Accretion on long-term debt 2,520 2,809 3,663 $(34,728) $(863,910) $(784,385)
Neither 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.
PRONTOFORMS CORPORATION Condensed Interim Consolidated Statements of Loss and Comprehensive Loss For the three and nine months ended September 30, 2023 and 2022 (in US dollars) Three Months Ended
September 30, Nine Months Ended
September 30, 2023 2022 2023 2022 Revenue: Recurring revenue$5,959,451 $5,225,580 $17,176,533 $15,085,098 Professional and other services 202,721 237,726 881,084 630,933 6,162,172 5,463,306 18,057,617 15,716,031 Cost of revenue (1): Recurring revenue 545,124 530,000 1,594,763 1,637,376 Professional and other services 250,497 273,675 828,611 791,183 795,621 803,675 2,423,374 2,428,559 Gross margin 5,366,551 4,659,631 15,634,243 13,287,472 Expenses: Research and development (1) 1,716,583 1,730,394 5,248,172 5,316,920 Selling and marketing (1) 2,695,718 3,046,357 8,779,645 8,903,340 General and administrative (1) 1,175,626 956,917 3,832,779 2,947,673 5,587,927 5,733,668 17,860,596 17,167,933 Operational loss (221,376) (1,074,037) (2,226,353) (3,880,461) Foreign exchange loss 53,641 143,655 (49,368) 145,030 Finance Income 43,360 12,116 115,270 20,886 Finance costs (140,737) (93,411) (384,509) (183,369) Net loss and comprehensive loss$(265,112) $(1,011,677) $(2,544,960) $(3,897,914) Net loss and comprehensive loss per common share basic and diluted$(0.00) $(0.01) $(0.02) $(0.03) Weighted average number of common shares basic and diluted 130,567,809 128,763,361 130,315,305 128,289,657 (1) Amounts include share-based compensation expense as follows: Cost of revenue$1,800 $(1,551) $11,267 $8,849 Research and development 30,374 54,741 119,800 228,958 Selling and marketing 35,525 79,756 124,453 366,736 General and administrative 160,165 90,683 502,484 363,125 Total share-based compensation expense$227,864 $223,629 $758,004 $967,668
PRONTOFORMS CORPORATION Condensed Interim Consolidated Statements of Financial Position as at September 30, 2023 and December 31, 2022 (in US dollars) September 30, December 31, 2023 2022 Assets Current assets: Cash and cash equivalents$5,434,754 $6,112,071 Accounts receivable 2,691,356 4,179,088 Investment tax credits receivable 174,917 197,553 Unbilled receivables 354,255 88,453 Related party loan receivable 79,471 79,331 Prepaid expenses and other receivables 1,420,778 1,077,015 Contract acquisition costs 575,940 311,494 10,731,471 12,045,005 Property, plant and equipment 457,358 286,834 Contract acquisition costs 505,564 190,585 Right-of-use asset 964,039 148,515 $12,658,432 $12,670,939 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable and accrued liabilities$2,520,651 $2,686,288 Deferred revenue 7,215,372 6,508,986 Lease obligation 286,090 172,947 10,022,113 9,368,221 Long-term debt 6,018,985 6,007,585 Deferred revenue 132,329 – Lease obligation 796,295 – 6,947,609 6,007,585 Shareholders’ deficit: Share capital 32,430,789 32,166,781 Contributed surplus 864,907 864,907 Share-based payment reserve 4,072,776 3,398,246 Deficit (41,864,197) (39,319,236) Accumulated other comprehensive income 184,435 184,435 (4,311,290) (2,704,867) $12,658,432 $12,670,939
PRONTOFORMS CORPORATION Condensed Interim Consolidated Statements of Cash Flows For the three and nine months ended September 30, 2023 and 2022 (in US dollars) Three months ended
September 30, Nine months ended
September 30, 2023 2022 2023 2022 Cash used in: Operating activities: Net loss$(265,112) $(1,011,678) $(2,544,960) $(3,897,914) Items not involving cash: Share-based compensation 227,864 223,629 758,004 967,668 Accretion on lease obligations 17,423 4,043 29,636 15,478 Accretion of transaction costs 2,520 3,664 8,138 7,609 Amortization of property, plant and equipment 45,329 35,333 116,504 111,060 Amortization of right-of-use asset 69,606 63,657 191,289 190,971 Unrealized foreign exchange loss (92,269) (262,256) 9,666 (338,289) Other finance costs 77,435 77,632 231,466 154,874 Interest paid (120,795) (89,748) (346,736) (175,760) Interest received 43,360 12,116 115,270 20,886 Changes in non-cash operating working capital items(757,017) (723,898) 994,456 (422,811) (751,656) (1,667,506) (437,267) (3,366,228) Financing activities Payment of lease obligations (55,516) (74,864) (194,496) (224,653) Lease interest paid (17,423) (4,043) (29,636) (15,478) Leasehold Incentive 92,790 – 92,790 – Payment of loan renewal fee (7,351) (7,528) (7,351) (7,528) Procceds from drawdown of credit facility – – – 3,178,124 Proceeds from the exercise of options 95,809 432,178 180,534 645,569 108,309 345,743 41,841 3,576,034 Investing activities Purchase of property, plant and equipment (68,273) (23,311) (239,937) (63,585) Additions to right of use asset (47,092) – (47,092) – (115,365) (23,311) (287,029) (63,585) Effect of exchange rate changes on cash (57,811) (127,342) 5,138 (182,863) Increase in cash and cash equivalents (816,523) (1,472,416) (677,317) (36,642) Cash and cash equivalents, beginning of period 6,251,277 7,518,063 6,112,071 6,082,289 Cash and cash equivalents, end of period$5,434,754 $6,045,647 $5,434,754 $6,045,647