In the news release, mCloud Reports Audited Full Year 2019 and Q1 2020 Financial Results, issued
mCloud Reports Audited Full Year 2019 and Q1 2020 Financial Results
FY 2019 Highlights | Q1 2020 Highlights |
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"Our strong top-line revenues and consistent margins made 2019 a solid year of growth for mCloud," said
"These new AssetCare connections and the performance of our acquisitions have built a solid base for ongoing recurring revenue," McMeekin continued. "Additionally, our ability to continually attract top business development talent and tap into a large serviceable obtainable market lets us scale our recurring revenues in a way that makes mCloud directly comparable with peer Software-as-a-Service ("SaaS") technology companies."
On mCloud's navigation of current market conditions, McMeekin commented: "The headwinds created by COVID-19 and lower oil prices impacted our project services revenue, but created unique opportunities as seen through our Q1 2020 revenues of
"Based on current customer activity and the gradual return of economic activity over the year, we expect to connect at least 70,000 total assets, achieve full-year 2020 revenues of between
"At full capacity, our global business development team has the capacity to add more than
"Going forward, mCloud's organic growth in recurring revenues are expected to outpace the Company's non-recurring expenses related to corporate development, including our market up-listing activities and recent acquisitions," McMeekin noted. "That said, we will continue to pursue highly targeted acquisitions that accelerate our ability to deliver greater customer value through technology and evolve our leadership position in the market."
"There is no doubt the current COVID-19 pandemic and economic shocks worldwide have changed the way businesses assess risk, especially as it relates to the disruptions organizations have seen across the board," McMeekin concluded. "Our entire team is very excited about the opportunities we have to help businesses everywhere acclimate to a new normal through our remote connectivity and asset management capabilities."
Full Year 2019 Highlights
- Added 12,680 connected assets including HVAC, lighting, and indoor air quality zones in commercial buildings, wind turbines, and strategic assets at oil and gas facilities exceeding our 2019 year-end objective of 40,000 connected assets
- Completed strategic transactions with
Agnity Global Inc. ("Agnity"), which provides mCloud with mobile communication and remote worker capabilities, andAutopro Automation Consultants Ltd. ("Autopro"), establishing mCloud asWestern Canada's leading process automation provider with world-class process industry expertise - Launched three new technology offerings via the Company's flagship AssetCare platform, including an innovative offering for 3D Digital Twins, a Connected Worker solution using intrinsically safe smart glasses, and a Connected Industry solution enabling the predictive maintenance of numerous critical, underserved assets at oil and gas facilities
- As announced on
March 12, 2019 , delivered new AI-powered capabilities to small-box retail and restaurant operators to improve building energy efficiency – driving up to 50% improvements in daily cost of energy for these operators - As announced on
October 3, 2019 , new wind turbine connections for power curve optimization and digital blade inspection inChina andEurope , which were bolstered by the acquisition of assets fromAirfusion, Inc. as announced onFebruary 10, 2020 - Added business development talent for international customer expansion as seen through the growth in initial customer engagement across
Canada ,the United States , theUnited Kingdom , Continental Europe, andChina - Initiated a private placement of special warrants for
$10 million in December, which was increased toC$13.3 million and closed inJanuary 2020 - Made preparations to list on the NASDAQ and graduate to the TSX senior board in 2020; the process is advancing as the Company's advisors and stakeholders continue working remotely
- As announced on
March 24, 2020 , the Company estimated its asset connectivity has helped reduce the annual carbon footprint of its customers by 80,000 tons in 2019, or the same amount of greenhouse gases emitted by approximately 17,000 passenger vehicles driven for one year
Full Year 2019 and Q1 2020 Summary
All figures in Canadian dollars | ||
Q1 2020 | FY 2019 | |
Revenues | ||
Cost of Goods Sold | 2,496,392 | 7,583,127 |
Gross Profit | 4,061,812 62% | 10,757,122 59% |
Operating Expenses | 11,966,945 | 27,137,556 |
Net Loss | (9,353,397) | (28,709,834) |
Add: Current Taxes | (150,215) | 181,895 |
Deduct: Deferred Tax Recovery | 573,683 | (1,877,313) |
Add: Depreciation and Amortization | 1,573,516 | 4,044,142 |
Add: Share-Based Compensation | 400,862 | 1,468,361 |
Add: Finance Costs | 1,465,266 | 3,217,500 |
Add: Business Acquisition Costs | 73,107 | 9,880,170 |
Add: Foreign Exchange Loss | 501,474 | 494,404 |
Deduct: Finance Income | (12,103) | (167,913) |
Add: Salaries, Wages, and Benefits | 2,404,198 | 3,094,141 |
Add: Professional Services and Consulting1 | 1,671,001 | 2,611,087 |
Adjusted EBITDA2 | (852,609) | (5,763,360) |
1 Management does not include certain expenses as part of its account of regular operations. |
2This release contains reference to "Adjusted EBITDA," which is a non-GAAP measure. See "Non-GAAP Measures" below. |
Q4 2019 Financial Highlights
In Q4 2019, revenues were approximately
These revenues do not reflect any contribution from the Company's acquisition of
Compared to historical norms, mCloud saw approximately
Q1 2020 Financial Highlights
Even with the movement restrictions put in place as a result of the global response to the COVID-19 pandemic, the Company added 7,584 connected assets to its portfolio to reach a total of 48,672 in Q1 2020. A substantial backlog of new AssetCare implementations developed in Q1 2020, with revenues from these implementations awaiting the completion of certain onsite installations, many at heavy industry and process manufacturing sites where onsite access has been substantially limited. The Company expects many of these installations will see completion shortly after pandemic restrictions ease across the board.
Due to the Company's revenue recognition policies, AssetCare revenues attributed to technologies from mCloud's acquisitions were lower in Q1 2020 as compared to Q4 2019. Consistent with the trajectory seen in 2019, these revenues are expected to continually increase over the course of the year with the largest contribution to come in Q4 2020.
The Company's count of connected assets grew by 18% from Q4 2019 to Q1 2020 and is expected to continue growing as the Company secures new business.
Approximately 63% of Q1 2020 revenues were derived from AssetCare solutions.
FY 2020 Outlook
As a result of current market conditions, revenues from the Company's legacy technical project services are expected to remain light until at least the middle of 2020. As mCloud continues to target a total of more than 70,000 connected assets in FY 2020, revenue estimates notwithstanding any further substantial changes due to the influence of COVID-19, are anticipated to reach an FY 2020 total of between
In 2H 2020, the 3D Digital Twin and Connected Worker segments of the Company's business are expected to be significant contributors to overall revenues as they add high-margin recurring revenue growth. New capabilities drawn from mCloud's transactions with Agnity, CSA, and Airfusion, along with a new regional office serving the
The influence of COVID-19 on heavy industry operations worldwide is emerging as a catalyst for new revenue growth opportunities, especially in the 3D Digital Twin, and Connected Worker segments. This is also the case in the
At the end of 2020, the Company expects AssetCare solutions will represent more than 65% of full-year revenues, with the majority generated from multi-year recurring subscriptions.
Combined Full Year 2019, Q4 2019, and Q1 2020 Conference Call
The Company is hosting a conference call to discuss the financial results for the fourth quarter and full-year 2019 at
To access the conference call by telephone, dial 647-427-7450 or 1-888-231-8191. Please connect approximately 10 minutes prior to the beginning of the call to ensure participation. The conference call will be archived for replay by telephone until
A live audio webcast of the conference call will be available at https://bit.ly/2W9FUYl. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived at the above website for one year.
About
mCloud is creating a more efficient future with the use of AI and analytics, curbing energy waste, maximizing energy production, and getting the most out of critical energy infrastructure. Through mCloud's AI-powered AssetCare™ platform, mCloud offers complete asset management solutions in five distinct segments: commercial buildings, renewable energy, healthcare, heavy industry, and connected workers. IoT sensors bring data from connected assets into the cloud, where AI and analytics are applied to maximize their performance.
Headquartered in
mCloud's common shares trade on the
Non-GAAP Measure
Selected financial information for the three month period ended
Forward-Looking Information and Statements
This press release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the
By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements.
An investment in securities of the Company is speculative and subject to several risks as discussed under the heading "Risk Factors" on pages 29 to 46 of the Company's filing statement dated
In connection with the forward-looking information and forward-looking statements contained in this press release, the Company has made certain assumptions. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward- looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice.
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