- Revenue increased 11.3% in Q2-2023 compared to Q2-2022, driven
by organic growth and acquisitions.
- During Q2-2023 Tribe implemented additional cost reduction
strategies to improve margins and accelerate its path to
profitability.
- Management's outlook is for continued growth from the
increasing number of real estate development projects and
onboarding of new communities.
VANCOUVER, BC, Aug. 29,
2023 /CNW/ - Tribe Property Technologies Inc.
(TSXV: TRBE) (OTCQB US: TRPTF) ("Tribe" or the
"Company"), a leading provider of technology-enabled
property management solutions, today announces its financial
results for three and six months ended June
30, 2023. All amounts are stated in Canadian dollars on an
as reported basis under IFRS (International Financial Reporting
Standards) unless otherwise indicated.
Joseph Nakhla, Tribe's CEO
commented, "I am very pleased with the second quarter results and
the recently announced acquisition of Meritus Group Management Inc.
in the Greater Toronto Area.
Expanding our footprint in Ontario
is a significant milestone for the Company. This is Tribe's twelfth
acquisition! We have established a successful track record of
executing and integrating acquisitions to further accelerate the
Company's revenue growth. In addition, our organic growth profile
remains stable, as we continue to experience a surge in
community onboarding for management services and software
usage, which we expect will result in a record total number of
communities using our platforms and services."
Mr. Nakhla further added, "This year we are also fully dedicated
to improving profitability by reducing costs and optimizing
efficiencies within our operations. During the second quarter we
implemented additional cost reduction strategies which included
employing process improvements, cost optimizations, headcount
reduction and consolidation of back-office systems. We expect these
expense reductions will benefit Tribe's financial performance in
the second half of 2023. We remain excited about the Company's
growth prospects and continue to be committed to improving our
profitability while increasing revenues and strengthening our
market leadership position."
Q2-2023 and Year-to-date 2023 Financial Highlights
- Revenue: Second quarter 2023 revenue was a record $4.82 million; an increase of 11.3% compared to
$4.33 million for the second quarter
of 2022. First half 2023 revenue was $9.48
million; an increase of 11.1% compared to $8.54 million for the first half of 2022.
- Gross profit1: Gross profit for the second quarter
of 2023 was $1.96 million (40.6%)
compared to $1.70 million (39.2%) in
the second quarter of 2022; First half 2023 gross profit was
$3.78 million (39.9%) compared to
$3.53 million (41.1%) for the first
half of 2022.
- Adjusted EBITDA2: Adjusted EBITDA for the second
quarter of 2023 was an outflow of $2.21
million compared with an outflow of $2.43 million in the second quarter of 2022.
First half 2023 Adjusted EBITDA was an outflow of $4.07 million compared to an outflow of
$3.91 million for the first half of
2022.
Business Highlights
On July 12, 2023, Tribe announced
it partnered with OctoAI Technologies Corp. to provide condominium
boards and strata councils with enhanced reporting and benchmarking
capabilities to better understand the operational and financial
health of their buildings.
On July 27, 2023,
Tribe partnered with KnockNok, an app which connects
maintenance and repair services to residents and homeowners. This
adds to a robust offering of over 20 partnerships
available through Tribe Market, the Company's digital marketplace
for residents, which is available to Tribe-managed buildings, as
well as those licensing Tribe software.
On August 29, 2023 Tribe announced
the acquisition of Meritus Group Management Inc., a property
management company based in Toronto,
Ontario. This acquisition marks a significant milestone for
the Company expanding its management services directly into the
largest metropolitan area in Canada, adding more than 5,000 homes under
management. This acquisition strengthens Tribe's national presence,
now with 8 offices across Canada –
5 in BC, 1 in Alberta and 2 in
Ontario, including the Company's
new Meritus office in Greater
Toronto - bringing the Company's full solution of management
services, management software, pre-construction and
post-construction software and digital marketplace for residents
and homeowners across Canada.
Key Business Metrics as of Q2-2023
- 8 new property developers signed on to use either Tribe Home
Pro construction software or Tribe Management services, for a total
of 14 new property developer relationships in the first half of
2023.
- 9 new Tribe Home Pro software licensing agreements were signed
in Q2 for new construction projects, for a total of 14 software
license agreements in the first half of 2023.
- 10 projects using Tribe Home Pro software licensing agreements
were successfully onboarded and began generating revenue in
Q2.
- 15 property management agreements were signed in Q2, for a
total of 20 property management agreements signed in the first half
of 2023.
- 8 communities were successfully onboarded for management
services and began generating revenue in Q2-2023.
Outlook
Management remains optimistic that 2023 will be a strong year
for Tribe, expecting improved revenue, profitability and expanding
margins. Management is pleased to report the Company is on track to
achieve its key goals for 2023:
Key
Goal
|
Progress
|
- Increase monthly
recurring revenue through both organic and acquired
means
|
- Achieved 11% total
revenue growth in the first half of 2023.
|
- Expand acquisition
pipeline in underserved markets such as greater Toronto
area
|
- Announced the
acquisition of Meritus Group Management Inc. in the greater Toronto
area.
|
- Drive efficiencies
in the business resulting in improved gross margin and
EBITDA
|
- Implemented cost
reduction strategies including
headcount reductions.
- Continued to
consolidate client and corporate accounting platforms and service
delivery platforms.
|
- Invest in our
software platform to innovate and add functionality to our suite of
products
|
- Deployed multiple
"Tribe Home" features to support operational efficiencies such as
multi-community loop posts, help desk enhancements, and onboarding
templates.
- Launched a Tribe
Home integration with YardiTM property management accounting software to support
our "My Balance" feature.
- Completed a
proprietary platform integration that simplifies the mandatory
Tarion new home warranty process specific to the Province of
Ontario.
|
- Focus on increasing
the number of new developers that are onboarded and drive new
software, management, and digital services revenue
|
- Added 14 new
property development partners in the first half of
2023.
|
Despite concerns surrounding the real estate sales market and
potential economic downturn, these factors have not hindered
Tribe's growth opportunities thus far. Tribe remains resilient and
its growth in 2023 will be fueled by a robust pipeline of new
development opportunities, strategic partnerships, winning new
software agreements, and the increase of digital services revenue.
Tribe continues to be active in its negotiations for additional
acquisition targets which it plans to announce in the coming
quarters.
Second Quarter Financial Webcast
The Company will hold a webcast to discuss its performance with
the investment community at 9:00 a.m.
PDT (12:00 p.m. EDT) on
Wednesday, August 30, 2023.
Webcast Link:
https://www.gowebcasting.com/12667
Participant Audio
Only Dial-In Toll Free-North America: +1 (800) 319-4610
International Toll: +1 (604) 638-5340.
Non-IFRS Measures
The following and preceding discussion of financial results
includes reference to Gross Profit, Gross Profit Percentage and
Adjusted EBITDA, which are all non-IFRS financial measures. The
measure of Gross Profit2 and Gross Profit
Percentage2 is provided as management believes this is a
good indicator in evaluating the operating performance of the
Company. Adjusted EBITDA1 is provided as a proxy for the
cash earnings (loss) from the operations of the business as
operating income (loss) for the Company includes non-cash
amortization and depreciation expense and stock-based
compensation.
Gross
Profit2
|
Three Months Ended
June 30
|
Six Months Ended
June 30,
|
$000s
|
2023
|
2022
|
2023
|
2022
|
Revenue
|
$ 4,821
|
$ 4,333
|
$9,480
|
$8,535
|
Cost of software and
services and software license fees
|
2,865
|
2,633
|
5,696
|
5,000
|
Gross
Profit2
|
$ 1,956
|
$ 1,700
|
$3,783
|
$ 3,535
|
Gross
Profit2 Percentage
|
40.6 %
|
39.2 %
|
39.9 %
|
41.4 %
|
Adjusted
EBITDA1
|
Three Months Ended
June 30
|
Six Months Ended
June 30,
|
$000s
|
2023
|
2022
|
2023
|
2022
|
Net loss
|
$ (2,715)
|
$ (2,970)
|
$ (5,128)
|
$(5,027)
|
Depreciation
|
221
|
224
|
438
|
433
|
Amortization
|
147
|
96
|
294
|
193
|
Stock-based
compensation
|
13
|
97
|
89
|
198
|
Interest
expense
|
143
|
168
|
291
|
362
|
Interest
income
|
(21)
|
(57)
|
(53)
|
(83)
|
Other
|
4
|
12
|
(2)
|
13
|
Adjusted EBITDA
1
|
$ (2,208)
|
$ (2,430)
|
$ (4,071)
|
$ (3,911)
|
Financial Statements and Management's Discussion &
Analysis
Please see the consolidated financial statements and related
Management's Discussion & Analysis ("MD&A") for more
details. The unaudited consolidated financial statements for the
three and six months ended June 30,
2023 and related MD&A have been reviewed and approved by
Tribe's Audit Committee and Board of Directors. Tribe recognizes
that most of its investors are now accessing corporate and
financial information either through pushed news services, directly
from www.tribetech.com or SEDAR. Thus, Tribe has prepared this
truncated news release to alert investors to its results and that a
more detailed explanation and analysis is readily available in the
MD&A. These reports have been filed on SEDAR at
www.sedarplus.ca and posted at www.tribetech.com.
About Tribe Property Technologies
Tribe is a property technology company that is digitizing the
traditional property management industry. As a rapidly growing
tech-forward property management company, Tribe's integrated
service-technology delivery model serves the needs of a much wider
variety of stakeholders than traditional service providers.
Tribe's three revenue pillars are made up of software and
service (recurring licensing and management fees), transactional
(rent or condo fees, banking services, lease-ups) and digital
services and partnership (smart building products, financial and
insurance service) revenue.
Tribe seeks to acquire highly accretive targets in the
fragmented North American property management industry and
transform these businesses through streamlining and digitization of
operations. Tribe's platform decreases customer acquisition costs,
increases retention, and allows for the addition of value-added
products and services through the platform. Visit tribetech.com for
more information.
ON BEHALF OF THE BOARD
"Joseph Nakhla"
Chief Executive Officer
1606-1166 Alberni Street
Vancouver, British Columbia V6E
3Z3
Phone: (604) 343-2601
Email: joseph.nakhla@tribetech.com
1 Non-IFRS
measure that does not have a standardized meaning and may not be
comparable to a similar measure disclosed by other issuers.
Adjusted EBITDA is also not a measure recognized in accordance with
IFRS and does not have a prescribed or standardized meaning by
IFRS. The Company defines Adjusted EBITDA as net income or loss
excluding depreciation and amortization, stock-based compensation,
interest expense, income tax expense, impairment charges and other
expenses. It should be noted that Adjusted EBITDA is not defined
under IFRS and may not be comparable to similar measures used by
other entities. The Company believes Adjusted EBITDA is a useful
measure as it provides important and relevant information to
management about the operating and financial performance of the
Company. Adjusted EBITDA also enables management to assess its
ability to generate operating cash flow to fund future working
capital needs, and to support future growth. Excluding these items
does not imply that they are non-recurring or not useful to
investors. Investors should be cautioned that Adjusted EBITDA
attributable to shareholders should not be construed as an
alternative to net income (loss) or cash flows as determined under
IFRS.
|
2 Non-IFRS measure that does not have
a standard meaning and may not be comparable to a similar measure
disclosed by other issuers. Gross Profit and Gross Profit
Percentage do not have a standardized meaning under IFRS, and
therefore may not be comparable to similar measures presented by
other issuers. The Company defines Gross Profit as revenue less
cost of software and services and software licensing fees, and
Gross Profit Percentage as Pross Profit calculated as a percentage
of revenue. Gross Profit and Gross Profit Percentage should not be
construed as an alternative for revenue or net loss in accordance
with IFRS. The Company believes that gross profit and gross profit
percentage are meaningful metrics in assessing the Company's
financial performance and operational efficiency.
|
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.
Cautionary Statement on Forward-Looking
Information
This news release may contain certain "Forward-Looking
Statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities laws regarding the Company and its business. When or if
used in this news release, the words "anticipate", "believe",
"estimate", "expect", "target, "plan", "forecast", "may",
"schedule" and similar words or expressions identify
forward-looking statements or information. Forward-looking
statements or information in this news release may relate to
statements with respect to the aims and goals of the Company;
financial projections; growth plans including future prospective
consolidation in the property management sector; future
acquisitions by the Company; closing and integration of the
acquisition of Meritus Group Management Inc.; beliefs of the
Company with respect to the independent owner-investors market;
prospective benefits of the Company's platform; and other factors
or information. Such statements represent the Company's current
views with respect to future events and are necessarily based upon
several assumptions and estimates that, while considered reasonable
by the Company, are inherently subject to significant business,
economic, competitive, political, and social risks, contingencies,
and uncertainties. Many factors, both known and unknown, could
cause results, performance, or achievements to be materially
different from the results, performance or achievements that are or
may be expressed or implied by such forward- looking statements.
The Company does not intend, and do not assume any obligation, to
update these forward-looking statements or information to reflect
changes in assumptions or changes in circumstances or any other
events affecting such statements and information other than as
required by applicable laws, rules, and regulations.
SOURCE Tribe Property Technologies Inc.