- Annual Recurring Revenue increases 26% YoY to $46.4 million
- 2022 Subscription Revenue reaches $39.9 million, a 27% increase
- Backlog grows to $107.3
million
VANCOUVER, BC, March 23,
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 fourth quarter and fiscal year ended December 31, 2022. All amounts are expressed in
Canadian dollars unless otherwise stated.
"Copperleaf's ability to deliver material and tangible return on
investment for our clients, combined with our commitment to support
our clients' environmental, social and governance initiatives,
drove continuing demand for our solutions in 2022," commented
Paul Sakrzewski, CEO of Copperleaf. "Our strategic
investments in go-to-market activities led to expansion into new
sectors, including Metro Transit and Pharmaceuticals, and new
geographies, including France and
Portugal. Throughout 2022, we made
substantial progress enhancing our Alliance Ecosystem, with
partners continuing to support the majority of our deals and
contributing to a record global pipeline. In 2023, with dedicated
Copperleaf Partner and Ecosystem managers now in place in each
region, we will continue to focus on expanding our reach, and
establishing the tools, community and structure needed to scale the
business."
"The fundamental tailwinds that drive demand for Copperleaf's
solutions continue to strengthen; however, growth in the fourth
quarter was slower than expected due to the continued shift of our
clients toward SaaS driving lower perpetual license
revenue, and temporary deal elongation resulting from the
challenging macro-economic climate," continued Mr.
Sakrzewski. "Overall, we continue to see a healthy demand
environment. In 2023, we expect our growth to be driven by
recent investments in sales and marketing, which are demonstrating
early positive results with increased lead generation and pipeline
activity, and our investments in R&D, which have resulted in
exciting new innovations that continue to advance our leadership
position in the decision analytics market. With a deep sales
pipeline, a strong balance sheet, a growing customer base, and a
market leading solution, we are poised to expand our leadership
position in the decision analytics market and drive future
growth."
Fourth Quarter 2022 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 fiscal years ended December 31, 2022; Comparison period is the
fourth quarter ended December 31,
2021, unless otherwise stated)
- Revenue of $19.2 million, a
decrease of 12% over Q4 2021, driven by our clients continued shift
to SaaS and a year over year decrease in the number of Perpetual
License deals closed in Q4.
- Subscription revenue of $11.3
million, an increase of 32% over Q4 2021.
- Gross profit of $14.7 million
representing a Gross Margin of 76%, a 15% decrease from
$17.3 million and a Gross Margin of
79% in Q4 2021, driven by the decrease in Perpetual License revenue
year over year.
- Adjusted EBITDA1 loss of $2.0
million, compared to Adjusted EBITDA1 gain of
$2.3 million in Q4 2021.
- Net loss of $2.4 million, or a
loss of $0.03 per diluted share,
compared to a net gain of $0.1
million, or a gain of $0.00
per diluted share, in Q4 2021.
- As of December 31, 2022,
Copperleaf's Revenue Backlog1 grew 5% to $107.3 million compared to $101.9 million, as of December 31, 2021.
- Strong balance sheet with cash and cash equivalents of
$149.5 million as at December 31, 2022, compared to $161.4 million at December
31, 2021.
Fiscal Year 2022 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 fiscal year ended December 31, 2022; Comparison period is the year
ended December 31, 2021, unless
otherwise stated)
- Record revenue of $73.4 million,
an increase of 6% over the prior year, driven by the increase in
new clients and the expansion of existing clients.
- Subscription revenue of $39.9
million, an increase of 27% over the prior year, offsetting
a 60% decrease in Perpetual license revenue year over year as our
clients continue to transition to SaaS.
- Annual Recurring Revenue1 as at December 31, 2022 of $46.4
million, a 26% increase from $36.8
million as at December 31,
2021.
- As of December 31, 2022, the
Company's Net Revenue Retention Rate1 was 110%.
- Gross profit of $54.8 million
representing a Gross Margin of 75%, compared to $54.9 million in the prior year, representing a
Gross Margin of 79%
- Adjusted EBITDA1 loss of $24.9 million, compared to an Adjusted
EBITDA1 gain of $2.1
million in the year ended December
31, 2021.
- Net loss of $28.2 million, or a
loss of $0.41 per basic and diluted
share, compared to net loss of $6.5
million, or a loss of $0.24
per basic and diluted share, in the prior year.
1 Please refer to "Non-IFRS Measures"
section of this press release
Key Developments
In 2022, Copperleaf successfully expanded its rapid-start
strategy with several new sales of the Copperleaf H2O solution into
the water market. The Company also introduced the Copperleaf CNAIM
solution, developed to meet the needs of electrical utilities
seeking to adopt the best-practice asset risk modeling methodology
developed by British Distribution Network Operators.
As a result of the Company's recent go-to-market investments,
Copperleaf successfully expanded into new sectors including Metro
Transit and Pharmaceuticals, with pilot projects ongoing in Mining
and Air Services. Copperleaf also expanded geographically with
projects initiated in Switzerland,
France, Italy, Portugal, and the Middle East.
Throughout 2022, the Alliance Ecosystem continued to gain
traction as our partners invested in expanding their Copperleaf
practice areas. As trusted advisors to shared clients and
prospects, the Company's partners played an increasingly important
role by supporting the majority of sales in 2022 and contributing
to the growth of the global pipeline.
The Copperleaf Community is active and growing. In 2022,
in addition to the Company's virtual global community summit held
in May, three in-person community summits were introduced in each
of Copperleaf's sales regions with attendees from over 95% of
client accounts worldwide. The Company held 11 client-led working
group sessions in the natural gas, water, and electricity
industries, and nearly half of the Company's clients participated
in client-led innovation with Copperleaf Labs. The Company also
delivered four product releases over the year and released numerous
new innovative features to the client base, including:
Q1: A new application for creating candidate
projects from predictive analytics to inform strategy in Copperleaf
Portfolio; automation of investment capture and cost estimation;
new security features; and the first edition of the Copperleaf
dashboard library, creating more value for clients throughout the
entire planning process.
Q2: Multi-native currency support; new workflow
visualization; and process automation for reviews and
approvals.
Q3: New options for native Geographic
Information System support and strategic dashboards for executive
reporting; advanced analytical software for system level modelling;
and turbocharged scenario analysis support delivering a four-fold
increase in performance.
Q4: Optimize Ready which is machine-learning
backed functionality that helps clients improve their investment
quality and portfolio values by automatically analyzing investments
and portfolios to spot issues and inconsistencies and provides
recommended solutions; Geographic Information System integrations
allowing users directly interact with their investment portfolio on
a map; and interactive asset intervention modeling which allows
Asset Managers to quickly and easily explore the impacts of
shifting their asset interventions in time, allowing quick what-if
analysis without waiting for complete asset management strategies
to be created.
In 2022, Copperleaf filed three patent applications and was
issued two patents on scenario planning and asset intervention
bundling.
Throughout 2022, the increasing focus on ESG initiatives and the
energy transition across the Company's target market sectors helped
generate increased interest in Copperleaf solutions. As a result,
ESG influenced nearly a third of Copperleaf's sales in 2022 and has
contributed to the expansion of the global pipeline.
In Q3, Copperleaf joined the UN Global Compact (UNGC) which
requires companies to communicate their progress annually.
Additionally, Copperleaf will be making climate-related financial
disclosures aligned with TCFD recommendations in the Company's 2022
annual report.
Q4 and Fiscal
Year 2022 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,
March 23, 2023, at 5:00 PM ET.
Date: March 23, 2023
Time: 5:00pm ET
Dial-In Number: 416-764-8659 or
1-888-664-6392
Webcast: https://app.webinar.net/1KPVOx6b0Zp
Replay: 416-764-8677 or 1-888-390-0541
(Available until March 30, 2023)
Replay Entry Code: 809214#
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, gain on lease modification, foreign exchange loss
(gain), current income tax expense, and IPO transaction related
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
December
31,
|
For the year
ended
December
31,
|
|
2022
$
|
2021
$
|
Change
%
|
2022
$
|
2021
$
|
Change
%
|
|
(in thousands, except
percentages)
|
Net
loss
|
(2,368)
|
149
|
NM
|
(28,202)
|
(6,524)
|
(332 %)
|
Depreciation and
amortization
|
516
|
430
|
20 %
|
2,159
|
2,115
|
2 %
|
Share-based payments
expense
|
1,292
|
875
|
48 %
|
4,402
|
2,306
|
91 %
|
Finance
costs
|
239
|
186
|
28 %
|
1,013
|
786
|
29 %
|
Finance and other
income
|
(1,124)
|
(148)
|
NM
|
(2,687)
|
(157)
|
NM
|
Gain on lease
modification
|
-
|
-
|
-
|
-
|
(181)
|
100 %
|
Foreign exchange (gain)
loss
|
(533)
|
21
|
NM
|
(1,493)
|
723
|
(307 %)
|
Current income tax
(recovery) expense
|
(21)
|
148
|
(114 %)
|
(82)
|
247
|
(133 %)
|
IPO transaction related
costs1
|
-
|
660
|
(100 %)
|
-
|
2,753
|
(100 %)
|
Adjusted
EBITDA
|
(1,999)
|
2,321
|
(186 %)
|
(24,890)
|
2,068
|
NM
|
NM – Not
meaningful
1 IPO
transaction -related costs include costs related to our IPO and
consist of external consulting and professional
fees that are non-recurring, would otherwise not have been
incurred, and are not reflective of our underlying
business.
|
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 years ended
December 31,
|
|
|
2022
|
2021
|
|
|
$
|
$
|
Revenue
|
|
73,385
|
69,283
|
|
|
|
|
Cost of
revenue
|
|
18,545
|
14,370
|
|
|
|
|
Gross
profit
|
|
54,840
|
54,913
|
|
|
|
|
Operating
expenses
|
|
|
|
Sales and
marketing
|
|
34,942
|
22,805
|
Research and
development
|
|
27,231
|
18,957
|
General and
administrative
|
|
24,118
|
18,257
|
|
|
86,291
|
60,019
|
|
|
|
|
Loss from
operations
|
|
(31,451)
|
(5,106)
|
|
|
|
|
Other expenses
(income)
|
|
|
|
Finance
costs
|
|
1,013
|
786
|
Finance and other
income
|
|
(2,687)
|
(157)
|
Gain on lease
modification
|
|
-
|
(181)
|
Foreign exchange (gain)
loss
|
|
(1,493)
|
723
|
|
|
(3,167)
|
1,171
|
|
|
|
|
Loss before income
taxes
|
|
(28,284)
|
(6,277)
|
|
|
|
|
Income
taxes
|
|
|
|
Current income tax
(recovery) expense
|
|
(82)
|
247
|
Net loss and
comprehensive loss for the year
|
|
(28,202)
|
(6,524)
|
|
|
|
|
Net loss per
share
|
|
|
|
Basic
and diluted
|
|
(0.41)
|
(0.24)
|
Weighted average
number of common shares outstanding,
basic and diluted
|
|
69,602,130
|
27,693,445
|
Consolidated Statements of Financial Position
(expressed in thousands of Canadian Dollars)
|
|
December 31,
2022
|
December 31,
2021
|
|
|
$
|
$
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
|
149,458
|
161,432
|
Accounts
receivable
|
|
21,232
|
32,252
|
Investment tax credits
receivable
|
|
-
|
1,408
|
Contract
costs
|
|
852
|
719
|
Contract
assets
|
|
4,337
|
2,199
|
Prepaid
expenses
|
|
3,050
|
2,250
|
|
|
178,929
|
200,260
|
Non-current
assets
|
|
|
|
Deposit and prepaid
expenses
|
|
702
|
81
|
Contract
costs
|
|
1,566
|
1,262
|
Contract
assets
|
|
458
|
-
|
Property and
equipment
|
|
1,901
|
2,009
|
Intangible
assets
|
|
1,407
|
1,107
|
Right-of-use
assets
|
|
730
|
1,324
|
|
|
6,764
|
5,783
|
TOTAL
ASSETS
|
|
185,693
|
206,043
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
|
12,232
|
13,182
|
Contract
liabilities
|
|
28,098
|
20,849
|
Lease
liabilities
|
|
1,039
|
1,032
|
|
|
41,369
|
35,063
|
Non-current
liabilities
|
|
|
|
Contract
liabilities
|
|
11,038
|
14,728
|
Lease
liabilities
|
|
259
|
1,234
|
|
|
11,297
|
15,962
|
TOTAL
LIABILITIES
|
|
52,666
|
51,025
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Share
capital
|
|
183,778
|
181,279
|
Share-based payments
reserve
|
|
8,625
|
4,913
|
Deficit
|
|
(59,376)
|
(31,174)
|
TOTAL SHAREHOLDERS'
EQUITY
|
|
133,027
|
155,018
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
185,693
|
206,043
|
Disaggregation of revenue
(expressed in thousands of Canadian Dollars, except
percentages)
|
Three months
ended
December
31,
|
|
For the year
ended
December
31,
|
|
2022
$
|
2021
$
|
Change
%
|
|
2022
$
|
2021
$
|
Change
%
|
Subscription
|
11,301
|
8,546
|
32 %
|
|
39,909
|
31,399
|
27 %
|
Professional
services and
custom
software contracts
|
7,584
|
6,443
|
18 %
|
|
28,342
|
25,171
|
13 %
|
Perpetual
and term-based software
licenses
|
285
|
6,809
|
(96 %)
|
|
5,134
|
12,713
|
(60 %)
|
|
19,170
|
21,798
|
(12 %)
|
|
73,385
|
69,283
|
6 %
|
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", "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 l 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.