Pivotree Inc. (TSXV:PVT) (“Pivotree” or the “Company”), a leader in frictionless commerce solutions, today reported financial results for the three and nine month period ended September 30, 20...
Autore: Business Wire
Company executes on significant changes to support future operating cash flows while maintaining focus on growth
TORONTO: Pivotree Inc. (TSXV:PVT) (“Pivotree” or the “Company”), a leader in frictionless commerce solutions, today reported financial results for the three and nine month period ended September 30, 2024. All amounts are expressed in Canadian dollars unless otherwise stated.
“The quarter has been marked by a focused effort in 2024 to streamline our operational and administrative functions, positioning us for leaner and more sustainable growth. We expect to see the effects of these changes in our financial results beginning in Q4 and fully reflected by Q2 2025.” said Bill Di Nardo, CEO of Pivotree. “We continue to have world class delivery people who have a very strong reputation in the market which is contributing to our overall pipeline health.”
Pivotree also announced today that it has released a letter to shareholders from Bill Di Nardo, CEO. The letter can be accessed from the Company’s website at investor.pivotree.com and filed on SEDAR at www.sedar.com.
Third Quarter 2024 Financial Highlights
(All figures are in Canadian dollars and all comparisons are relative to the three-month period ended September 30, 2023 unless otherwise stated):
1 Please refer to “Key Performance Indicators” section of this press release.
2 Please refer to “Non-IFRS Measures and Reconciliation of Non-IFRS Measures” section of this press release.
Third Quarter 2024 Business Highlights
Third Quarter 2024 Results
Selected Financial Measures
| Three months ended September 30, |
| Nine months ended September 30, | ||||||||||||
| 2024 | 2023 | $ Change |
| % Change |
| 2024 |
| 2023 |
| $ Change |
| % Change | ||
| $ | $ | $ |
| % |
| $ |
| $ |
| $ |
| % | ||
MIPS | 3,478,857 | 3,730,499 | (251,642) |
| -6.7% |
| 9,446,115 |
| 10,446,177 |
| (1,000,062) |
| -9.6% | ||
LMS | 3,995,035 | 5,505,583 | (1,510,548) |
| -27.4% |
| 17,572,029 |
| 12,810,705 |
| 4,761,324 |
| 37.2% | ||
Total MIPS & LMS | 8,687,789 | 11,193,395 | (2,505,606) |
| -22.4% |
| 27,281,774 |
| 32,865,330 |
| (5,583,556) |
| -17.0% | ||
Professional Services | 10,129,300 | 9,858,046 | 271,254 |
| 2.8% |
| 32,726,981 |
| 35,909,153 |
| (3,182,172) |
| -8.9% | ||
Total Revenue | 18,817,089 | 21,051,441 | (2,234,352) |
| -10.6% |
| 60,008,755 |
| 68,774,483 |
| (8,765,728) |
| -12.7% | ||
Results of Operations
The following table outlines our consolidated statements of loss and comprehensive loss for the three and nine months ended September 30, 2024 and 2023.
| Three months ended September 30, |
| Nine months ended September 30, | |||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |
| $ |
| $ |
| $ |
| $ | |
Revenue | 18,817,089 |
| 21,051,441 |
| 60,008,755 |
| 68,774,483 | |
Cost of revenue | 11,542,539 |
| 11,315,907 |
| 34,221,224 |
| 37,121,059 | |
Gross profit | 7,274,550 |
| 9,735,534 |
| 25,787,531 |
| 31,653,424 | |
Operating expenses |
|
|
|
|
|
|
| |
General and administrative | 2,648,359 |
| 3,090,622 |
| 8,333,204 |
| 9,321,706 | |
Sales and marketing | 2,104,542 |
| 2,227,695 |
| 7,418,941 |
| 7,641,292 | |
Research and development | 522,648 |
| 475,247 |
| 1,408,966 |
| 1,875,186 | |
IT and Operations | 2,715,474 |
| 3,520,241 |
| 9,147,994 |
| 11,134,699 | |
Loss (gain) on foreign exchange | 120,063 |
| (170,186) |
| (190,790) |
| 181,461 | |
Amortization and Depreciation | 1,543,901 |
| 1,592,223 |
| 5,728,793 |
| 4,814,244 | |
Stock based compensation | 238,148 |
| 210,008 |
| 712,199 |
| 679,063 | |
Restructuring and Other | 2,299,829 |
| 424,663 |
| 4,372,792 |
| 1,340,093 | |
Interest | 41,052 |
| 80,729 |
| 119,956 |
| 263,541 | |
| 12,234,016 |
| 11,451,242 |
| 37,052,055 |
| 37,251,285 | |
Loss before other items | (4,959,466) |
| (1,715,708) |
| (11,264,524) |
| (5,597,861) | |
Interest income | 21,541 |
| 77,385 |
| 137,005 |
| 153,270 | |
Operating loss | (4,937,925) |
| (1,638,323) |
| (11,127,519) |
| (5,444,591) | |
Current taxes | (147,006) |
| (199,809) |
| (546,468) |
| (396,902) | |
Net loss | (5,084,931) |
| (1,838,132) |
| (11,673,987) |
| (5,841,493) | |
Other comprehensive income (loss) |
|
|
|
|
|
|
| |
Foreign translation adjustment | (369,671) |
| 497,362 |
| 233,211 |
| (331,819) | |
Comprehensive loss | (5,454,602) |
| (1,340,770) |
| (11,440,776) |
| (6,173,312) | |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Loss per share - basic | (0.18) |
| (0.07) |
| (0.43) |
| (0.22) | |
Weighted average number of common shares outstanding - basic | 26,365,127 |
| 26,582,333 |
| 26,346,573 |
| 26,616,338 | |
Cash Flows
| Three months ended September 30, |
| Nine months ended September 30, | |||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |
| $ |
| $ |
| $ |
| $ | |
Cash and cash equivalents, beginning of period | 6,236,085 |
| 11,089,814 |
| 8,619,161 |
| 17,346,028 | |
Net cash provided by (used in): |
|
|
|
|
|
|
| |
Operating activities | (267,159) |
| 1,228,423 |
| (2,629,585) |
| (3,688,135) | |
Investing activities | (372,308) |
| (2,541,777) |
| 187,547 |
| (3,131,426) | |
Financing activities | (105,956) |
| (943,556) |
| (717,421) |
| (1,576,841) | |
Effect of foreign exchange on cash and cash equivalents | (13,557) |
| 136,224 |
| 17,403 |
| 19,502 | |
Net decrease in cash and cash equivalents | (758,980) |
| (2,120,686) |
| (3,142,056) |
| (8,376,900) | |
Cash and cash equivalents, end of period | 5,477,105 |
| 8,969,128 |
| 5,477,105 |
| 8,969,128 | |
Conference Call
Management will host a live Zoom Video Webinar on Wednesday, November 13, 2024 at 8:30 am ET to discuss these third quarter 2024 results. The webinar can be accessed through the following registration link: https://pivotree.zoom.us/webinar/register/WN_3ImixfaEQaKixSq7tsycjQ#/registration.
A replay will be available approximately two hours after the conclusion of the live event and posted on https://investor.pivotree.com/.
Non-IFRS Measures and Reconciliation of Non-IFRS Measures
This press release makes reference to certain non-IFRS measures including key performance indicators used by management and typically used by our competitors in the technology industry. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore not necessarily 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 our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. These non-IFRS measures and technology metrics are used to provide investors with supplemental measures of our operating performance and liquidity and thus highlight trends in our business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures, including technology industry metrics, in the evaluation of companies in the technology industry. Management also uses non-IFRS measures and technology industry metrics in order to facilitate operating performance comparisons from period to period, the preparation of annual operating budgets and forecasts and to determine components of executive compensation. The non-IFRS measures and technology industry metrics referred to in this press release include, “Total Contract Value (TCV) Booking”, “Managed & IP Solutions (MIPS) Revenue”, “Legacy Managed Services (LMS) Revenue”, "Adjusted EBITDA".
Key Performance Indicators
Due to our operating model, we recognize revenue within Total MIPS & LMS and professional services. Total MIPS & LMS, while largely based on minimum monthly recurring fees, also includes transactional and overage charges that may be variable from month to month.
Management uses a number of metrics, including the ones identified below, to measure the Company's performance and customer trends, which are used to prepare financial plans and shape future strategy. Our key performance indicators may be calculated in a manner different than similar key performance indicators used by other companies.