- Annual Recurring Revenue increases 30% YoY to $60.2 million
- Subscription Revenue grows 21% YoY to $13.6 million in the fourth quarter
- Record backlog of $139.5 million,
an increase of 30% YoY
VANCOUVER, BC, March 12,
2024 /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, 2023. All amounts are expressed in
Canadian dollars unless otherwise stated.
Paul Sakrzewski, CEO of Copperleaf
commented, "Copperleaf's ability to generate substantial
client value drove sustained demand for our solutions in 2023. This
was highlighted by our strong financial performance during the
fourth quarter where Copperleaf delivered a 30% YoY increase in
Annual Recurring Revenue and a 21% YoY increase in subscription
revenue. Additionally, we ended the quarter with a record
backlog. These results are a testament to our improved scalability,
efficiency of our sales team, and the progress we have made to
enhance our go-to-market initiatives, despite challenging market
conditions."
"Furthermore, during 2023 our Partner and Alliance Ecosystem
continued to gain traction as Copperleaf received Premium
Certification from SAP, deepened its global relationship with
Accenture, and entered into a strategic alliance with Siemens.
These partnerships are resulting in material incremental
pipeline for 2024 and beyond," continued Mr. Sakrzewski.
"As a result of our continuous commitment to product innovation,
our refreshed go-to-market model and increasing partner traction,
we expect continuing robust ARR and pipeline growth in 2024 with
our traditional Q4 weighting. These factors, along with our
accelerating revenue growth and disciplined approach to managing
costs, position us to make material progress back towards
profitability" Mr. Sakrzewski concluded.
Fourth 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 fiscal year ended December
31, 2023; Comparison period is to the fourth quarter ended
December 31, 2022, unless otherwise
stated)
- Revenue of $21.2 million, an
increase of 11% compared to Q4 2022, primarily driven by an
increase in subscription revenue.
- Annual Recurring Revenue1 as at December 31, 2023 of $60.2
million, a 30% increase from $46.4
million as at December 31,
2022.
- Subscription revenue of $13.6
million, an increase of 21% over Q4 2022.
- Gross profit of $15.0 million
representing a gross margin of 71%, a 2% increase from $14.7 million and a gross margin of 76% in Q4
2022. Gross margin decreased temporarily primarily due to an
increase in subcontractor costs and increased headcount to support
our growing client base.
- Adjusted EBITDA[1] loss of $5.0
million, compared to Adjusted EBITDA1 loss of
$2.0 million in Q4 2022.
- Net loss of $5.5 million, or a
loss of $0.08 per basic and diluted
share, compared to a net loss of $2.4
million, or a loss of $0.03
per basic and diluted share, in Q4 2022.
- As of December 31, 2023,
Copperleaf's Revenue Backlog1 grew 30% to $139.5 million compared to $107.3 million, as of December 31, 2022.
- Strong balance sheet with cash and cash equivalents of
$34.1 million, short-term investments
of $82.3 million, and long-term
investments of $10.0 million as at
December 31, 2023.
Fiscal Year 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 fiscal year ended December
31, 2023; Comparison period is the year ended December 31, 2022, unless otherwise
stated)
- Record revenue of $79.6 million,
an increase of 8% over the prior year, driven by an increase in
subscription revenue that was partially offset by a decrease in
perpetual and term-based licenses and professional services
revenue.
- Subscription revenue of $49.6
million, an increase of 24% over the prior year, offsetting
a 37% decrease in perpetual and term-based license revenue year
over year as our business continues to transition to SaaS.
- Annual Recurring Revenue1 as at December 31, 2023 of $60.2
million, a 30% increase from $46.4
million as at December 31,
2022.
- As of December 31, 2023, the
Company's Net Revenue Retention Rate1 was 111% compared
to 110% as of December 31, 2022.
- Gross profit of $55.9 million
representing a gross margin of 70%, compared to $54.8 million in the prior year, representing a
gross margin of 75%. Gross margin decreased temporarily primarily
due to an increase in subcontractor costs, increased headcount to
support our growing client base, and a lower mix of perpetual and
term-based software license revenue.
- Adjusted EBITDA1 loss of $31.5 million, compared to an Adjusted
EBITDA1 loss of $24.9
million in the year ended December
31, 2022.
- Net loss of $35.2 million, or a
loss of $0.49 per basic and diluted
share, compared to net loss of $28.2
million, or a loss of $0.41
per basic and diluted share, in the prior year. Net loss increase
is primarily due to more personnel supporting the Company's growth
strategy, increased incentive compensation, and the continued
transition to SaaS.
______________________________
|
1 Please refer to "Non-IFRS
Measures" section of this press release
|
Key Developments
- In 2023 we completed the successful transition of our CEO and
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 Industries, Partners, and Value Engineering to better
support the global go-to-market teams. Copperleaf's strategic
go-to-market investments have accelerated lead generation and
adoption in new industries and geographies. During 2023, the
Company expanded into the ports industry, airports, upstream Oil
& Gas with its first Oil Sands client, its first Oil & Gas
client in Europe, first water
client in Australia with
Sydney Water, and first transit
agency in the USA.
- Copperleaf also closed its first clients in France, Ireland, Italy, and the Middle East, as well as the signing of one of
Brazil's largest integrated power
utilities, representing another important geographic expansion
while establishing our beach-head in Brazil.
- The Partner and Alliance Ecosystem continued to gain traction
during 2023 as the Company's partners invested in expanding their
Copperleaf practice areas. Copperleaf signed an Endorsed Apps
initiative agreement with SAP and also received Premium
Certification which triggered the commencement of cooperative
go-to-market activities resulting in material incremental pipeline
for 2024 and beyond, across all regions.
- 2023 also saw the deepening of Copperleaf's global relationship
with Accenture as they assigned a Global Partner Director to
programmatically coordinate joint go-to-market activities across
all regions.
- In Q4, Copperleaf announced a strategic alliance with Siemens
Smart Infrastructure, a leading provider of grid planning,
operations and maintenance software, and a domain expert in power
systems. Under this agreement, Copperleaf and Siemens will
integrate technical planning with value-based investment planning
to help utilities, including transmission system operators (TSOs)
and distribution system operators (DSOs), make investment decisions
that deliver the highest business value.
- The Company convened the first in-person Global Copperleaf
Summit since 2019 in Vancouver,
exceeding client attendance goals and record attendance from
partners.
- Technology analysts continue to recognise Copperleaf as
best-of-breed in our sector. Verdantix published its inaugural
"Green Quadrant" report on Asset Investment Planning software in
2023 with Copperleaf positioned as the clear leader.
- The Company delivered four product releases over the year and
released numerous new innovative features to the client base,
including:
- Q1: 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.
- Q2: Interactive GIS Experience, a new chargeable option where
users can improve their decision making and storytelling on their
asset management plans by directly visualizing their Copperleaf
Asset results in ESRI's ArcGIS (Geographic Information System)
system; a new enterprise-standard SCIM (System for Cross-domain
Identity Management) API which enables automatic management of
users and groups directly through user management systems such as
Azure Active Directory or OKTA.
- Q3: Two new methodologies added to the Copperleaf Value Model
Library (CVML); visualization of Predictive Analytics asset
strategies in our Interactive GIS Experience option; and
significant enhancements to the popular Dashboard Library which
empowers clients to communicate their value-based decision outcomes
more effectively.
- Q4: Added improved scenario organization for managing large
numbers of scenarios; ability to create investments in Portfolio
directly from Predictive Analytics; and added new ESG-related CVML
models, covering GHG Scope 1, 2 and 3 emissions.
- In 2023, Copperleaf was granted a US patent for an advanced
software optimizer which enhances the Company's comprehensive asset
management capabilities to accommodate large numbers of assets,
across all stages of an asset's lifecycle. This patent highlights
Copperleaf's dedication to developing pioneering solutions that
facilitate better investment decisions.
- During 2023, the Company released its inaugural Environmental,
Social and Governance (ESG) Report for the year ended December 31, 2022. The ESG Report included
responses to the recommendations outlined by the Task Force on
Climate Related Disclosures (TCFD) and shared the Company's
progress and plans to address important ESG issues, in addition to
showcasing Copperleaf's internal and external ESG impact.
- Copperleaf also submitted its United Nations Global Compact
(UNGC) Communication on Progress (CoP). As a voluntary participant
of the UNGC the Company has committed to conducting business
responsibly and continues to incorporate the UNGC's Ten Principles
and the UN Sustainable Development Goals into its strategy and
operations.
Q4 2023 Financial Results Conference Call
Details
Paul Sakrzewski, Chief Executive Officer and Chris Allen, Chief Financial and Chief Operating
Officer, will host a conference call followed by a
question-and-answer session today, March 12,
2024, at 5:00 PM ET.
Date: March 12, 2024
Time: 5:00pm ET
Dial-In Number: 416-764-8659 or 1-888-664-6392
Webcast: https://app.webinar.net/gyGvJy0BRb3
Replay: 416-764-8677 or 1-888-390-0541 (Available until
March 19, 2024)
Replay Entry Code: 528651#
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 ARR 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. ARR provides us
with visibility for consistent and predictable growth to our cash
flows. Our steady year over year revenue growth coupled with
increasing ARR indicates the continued strength in the expansion of
our business and will continue to be our target on a go-forward
basis.
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 ARR
attributable to this same group of clients at the end of the period
by the ARR at the beginning of the period. By implication, this
ratio excludes any ARR 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. Roughly 50% to 75% of our expected
annual revenue is recognized from client contracts that are in
place at the beginning of the year; however, this percentage will
vary year over year and we expect this percentage to generally
increase going forward as our new clients increasingly adopt 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 (recovery), 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 table reconciles Adjusted EBITDA to net loss for
the periods indicated:
|
Three months
ended
December
31,
|
For the year
ended
December
31,
|
|
(in thousands, except
percentages)
|
|
2023
$
|
2022
$
|
Change
%
|
2023
$
|
2022
$
|
Change
%
|
Net
loss
|
(5,518)
|
(2,368)
|
(133 %)
|
(35,151)
|
(28,202)
|
(25 %)
|
Depreciation and
amortization
|
469
|
516
|
(9 %)
|
1,882
|
2,159
|
(13 %)
|
Share-based payments
expense 1
|
1,035
|
1,292
|
(20 %)
|
4,987
|
4,402
|
13 %
|
Finance
costs
|
253
|
239
|
6 %
|
1,114
|
1,013
|
10 %
|
Finance and other
income
|
(1,430)
|
(1,124)
|
(27 %)
|
(5,773)
|
(2,687)
|
(115 %)
|
Foreign exchange loss
(gain)
|
141
|
(533)
|
(126 %)
|
575
|
(1,493)
|
(139 %)
|
Current income tax
expense (recovery)
|
14
|
(21)
|
(167 %)
|
173
|
(82)
|
(311 %)
|
CEO transition expenses
1
|
-
|
-
|
-
|
695
|
-
|
100 %
|
Adjusted
EBITDA
|
(5,036)
|
(1,999)
|
(152 %)
|
(31,498)
|
(24,890)
|
(27 %)
|
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 years ended
December 31,
|
|
|
2023
|
2022
|
|
|
$
|
$
|
Revenue
|
|
79,576
|
73,385
|
|
|
|
|
Cost of
revenue
|
|
23,679
|
18,545
|
|
|
|
|
Gross
profit
|
|
55,897
|
54,840
|
|
|
|
|
Operating
expenses
|
|
|
|
Sales and
marketing
|
|
38,114
|
34,942
|
Research and
development
|
|
33,433
|
27,231
|
General and
administrative
|
|
23,412
|
24,118
|
|
|
94,959
|
86,291
|
|
|
|
|
Loss from
operations
|
|
(39,062)
|
(31,451)
|
|
|
|
|
Other expenses
(income)
|
|
|
|
Finance
costs
|
|
1,114
|
1,013
|
Finance and other
income
|
|
(5,773)
|
(2,687)
|
Foreign exchange loss
(gain)
|
|
575
|
(1,493)
|
|
|
(4,084)
|
(3,167)
|
|
|
|
|
Loss before income
taxes
|
|
(34,978)
|
(28,284)
|
|
|
|
|
Income
taxes
|
|
|
|
Current income tax
expense (recovery)
|
|
173
|
(82)
|
|
|
|
|
Net loss and
comprehensive loss for the year
|
|
(35,151)
|
(28,202)
|
|
|
|
|
Net loss per
share
|
|
|
|
Basic
and diluted
|
|
(0.49)
|
(0.41)
|
Weighted average
number of common shares outstanding,
Basic and diluted
|
|
72,223,276
|
69,602,130
|
Consolidated Statements of Financial
Position
(expressed in thousands of Canadian Dollars)
|
|
December 31,
2023
|
December 31,
2022
|
|
|
$
|
$
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
|
34,113
|
149,458
|
Short-term
investments
|
|
82,258
|
-
|
Accounts
receivable
|
|
27,344
|
21,232
|
Contract
costs
|
|
1,336
|
852
|
Contract
assets
|
|
4,179
|
4,337
|
Prepaid
expenses
|
|
3,650
|
3,050
|
|
|
152,880
|
178,929
|
Non-current
assets
|
|
|
|
Long-term
investments
|
|
10,000
|
-
|
Deposit and prepaid
expenses
|
|
434
|
702
|
Contract
costs
|
|
1,844
|
1,566
|
Contract
assets
|
|
-
|
458
|
Property and
equipment
|
|
1,111
|
1,901
|
Intangible
assets
|
|
1,158
|
1,407
|
Right-of-use
assets
|
|
2,012
|
730
|
Other
receivables
|
|
306
|
-
|
|
|
16,865
|
6,764
|
TOTAL
ASSETS
|
|
169,745
|
185,693
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
|
16,738
|
12,232
|
Contract
liabilities
|
|
36,879
|
28,098
|
Lease
liabilities
|
|
354
|
1,039
|
|
|
53,971
|
41,369
|
Non-current
liabilities
|
|
|
|
Contract
liabilities
|
|
8,622
|
11,038
|
Lease
liabilities
|
|
1,929
|
259
|
|
|
10,551
|
11,297
|
TOTAL
LIABILITIES
|
|
64,522
|
52,666
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Share
capital
|
|
189,474
|
183,778
|
Share-based payments
reserve
|
|
10,276
|
8,625
|
Deficit
|
|
(94,527)
|
(59,376)
|
TOTAL SHAREHOLDERS'
EQUITY
|
|
105,223
|
133,027
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
169,745
|
185,693
|
Disaggregation of Revenue
(expressed in thousands of
Canadian Dollars)
|
Three months
ended
December
31,
|
For the year
ended
December
31,
|
|
2023
$
|
2022
$
|
Change
%
|
2023
$
|
2022
$
|
Change
%
|
|
(in thousands, except
percentages)
|
Subscription
1
|
13,619
|
11,301
|
21 %
|
49,562
|
39,909
|
24 %
|
Professional
services and custom
software
contracts 2
|
7,047
|
7,584
|
(7 %)
|
26,794
|
28,342
|
(5 %)
|
Perpetual
and term-based
software
licenses 3
|
552
|
286
|
93 %
|
3,220
|
5,134
|
(37 %)
|
|
21,218
|
19,171
|
11 %
|
79,576
|
73,385
|
8 %
|
1
Subscriptions represent revenue from 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
controlled.
|
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 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 2023 Annual
Information Form ("AIF") under "Risk Factors". A copy of the 2023
AIF can be accessed under our profile on the System for Electronic
Document Analysis and Retrieval ("SEDAR") at www.sedarplus.ca.
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.
About Copperleaf:
Copperleaf (TSX:CPLF) 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 industry-leading products and our
commitment to providing extraordinary experiences, shaped by people
who care deeply and partnerships that stand the test of time.
Copperleaf is actively involved in shaping and implementing global
industry standards and sustainability principles through our
participation in the United Nations Global Compact, the Institute
of Asset Management, and other organizations. 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.