- Record revenue for the quarter up 16% to $2.7M for Q2 2023 compared to $2.3M for Q2 2022.
- As a result of significant revenue growth and cost optimization initiatives, loss from operations was $(0.6)M, an improvement of $1.6M or 71%, when compared to Q2 2022.
- Adjusted EBITDA(1) loss for Q2 2023 was $(0.2)M, an improvement of $1.7M, or 88% relative to Q2 2022, positioning Carebook to achieve its goal of generating positive Adjusted EBITDA(1) in the near future.
- Adjusted EBITDA Margin(1) of (9)% in Q2 2023 compared to (81)% in Q2 2022.
- Net Loss for Q2 2023 was $(0.7)M and also improved by 72% year-over-year.
- Raised $2.5M in additional gross proceeds from equity financings during the six months ended June 30, 2023.
- $4.4M in additional contract value signed during the first two quarters of 2023.
- ARR(2) of $10.6M as of June 30, 2023, an increase of 19% over the same date in 2022.
MONTREAL, Aug. 22, 2023 /CNW/ - Carebook Technologies Inc. ("Carebook" or the "Company") (TSXV: CRBK) (OTCPK: CRBKF) (XFRA: PMM1), a leading Canadian provider of innovative digital health solutions today announced its results for the quarter ended June 30, 2023.
"We continue to execute on our business plan, completed several large implementations during the quarter and signed over $4M in additional contract value during the first two quarters" commented Michael Peters, Carebook CEO. "We reached another new high this quarter in terms of our revenue and continued our drive towards profitability. Our focus on cost management coupled with significant contract expansions confirms Carebook's positive trajectory and reinforces our belief in our ability to achieve profitable growth in the near future."
_______________________________ |
Q2 2023 Highlights
Revenue
Revenue for the quarter ended June 30, 2023 was $2.7M compared to $2.3M for the quarter ended June 30, 2022, an increase of 16% which was primarily driven by organic growth in the pharmacy vertical and an increase in license revenue from CoreHealth offset by a decrease in implementation revenue at CoreHealth and a decrease in license revenue at Infotech. Revenue generated in the quarter ended June 30, 2023, was 61% from the employer vertical, down from 75% during the same quarter in 2022 due to significant contract expansions from our major pharmacy client. Recurring revenue from the employer vertical business is expected to increase during 2023, following the implementation of several large customers during the fourth quarter of 2022 and the first half of 2023.
Loss from Operations and Net Loss
Loss from operations for the quarter ended June 30, 2023, was $(0.6)M compared to $(2.3)M in the same period of 2022, an improvement of $1.6M or 71%. The decrease in operating expenses was due to lower general and administrative costs and lower sales and marketing costs.
Net loss was $(0.7)M for the quarter ended June 30, 2023, compared to a loss of $ (2.4)M for the quarter ended June 30, 2022, an improvement of 72%. The variance is driven mostly by higher revenue and a lower loss from operations.
Adjusted EBITDA
Adjusted EBITDA(1) loss for the quarter ended June 30, 2023 was $(0.2)M compared to $(1.9)M for the quarter ended June 30, 2022, an improvement of $1.7M or 88% over the same period in 2022. The corresponding Adjusted EBITDA Margin(1) for the quarter ended June 30, 2023 was (9)% compared to (81)% in Q2 2022, and represented a meaningful improvement, positioning Carebook to achieve its goal of generating positive Adjusted EBITDA(1) in the near future.
Additional Financing During the First Half of the Year
On March 8th, 2023, the Company announced the closing of a non-brokered private placement of units at $0,10 per unit with UIL Limited, its largest shareholder, for $1.25M in gross proceeds. The private placement resulted in the issuance of 12,500,000 Common Shares and 187,500 Common Share purchase warrants, with each whole warrant entitling the holder to acquire one Common Share for $0.15 on or before March 8th, 2025.
On May 23rd, 2023, the Company announced the closing of a non-brokered private placement of units at $0.10 per unit with Permanent Mutual Limited, an affiliate of UIL Limited, for $1.25M in gross proceeds. The private placement resulted in the issuance of 12,500,000 Common Shares and 187,500 Common Share purchase warrants, with each whole warrant entitling the holder to acquire one Common Share for $0.15 on or before May 23rd, 2025.
Large Contract Increase with existing European client and Expansion of Statement of Work with Major Pharmacy Client
On June 30, 2023, CoreHealth, a wholly-owned subsidiary of the Company signed a significant extension to an existing contract with a large European client, representing an increase in contract value of $2.8M over the extended 3.5-year term. On July 19th, 2023, CoreHealth announced further details regarding the contract extension, confirming its partnership with AG Health Partner ("AGPH") and that the CoreHealth platform was made available to an additional 550,000 eligible members, most of whom are employees working for clients of AG Insurance, AGPH's parent company and market leader in Belgium.
In 2022, Carebook announced a significant new order under its pharmacy solution agreement with its major pharmacy client. On April 21, 2023, Carebook further expanded the scope of work under its pharmacy solution with its major pharmacy client, adding another $1.6M in contract value over a one-year term.
Cost Reduction Measures and Sublease of Montreal Headquarters
During the last quarter of 2022, the Company implemented additional cost reduction measures that resulted in additional annual savings. On November 10, 2022, the Company entered into an agreement to sublease the entire premises of its Montreal office commencing on May 1, 2023 until the end of the lease on July 31, 2028. These initiatives, when combined with the strong revenue growth that the Company is experiencing, reinforce the trajectory of the Company towards profitability.
Financial Outlook
Carebook's financial outlook continues to be positive for 2023. The Company is poised to achieve significant revenue growth while effectively managing its costs and delivering sustained growth in cashflows. Carebook's strong organic growth and efficient cost management initiatives will allow the Company to continue to successfully execute on its strategy. Carebook is expecting to maintain strong performance in 2023 for the entire Company as a whole. To complement its organic growth strategy, Carebook will continue to seek out accretive acquisitions and partnerships that improve the accessibility, quality, and functionality of its comprehensive solutions, surrounding ecosystem, and supporting services. Carebook has adopted a disciplined approach towards exploring strategic M&A opportunities in order to grow its reach in other markets and offer new services to its customer base, while maintaining a focus on its organic growth. This financial outlook is fully qualified and based on a number of assumptions and subject to a number of risks described under the headings "Financial Outlook Assumptions" and "Notice Regarding Forward-Looking Statements" of this press release.
Conference Call Details
A conference call will be held at 8:30 AM Eastern on August 22, 2023 to discuss Carebook's year end financial results. Participants may join the Company's conference call by using the following information
Conference Call Details |
|
Date |
Tuesday, August 22, 2023 |
Time: |
8:30 a.m. Eastern Time |
Local: |
416-764-8659 |
North American Toll Free: |
1-888-664-6392 |
RapidConnect URL: |
|
Webcast URL: |
|
Conference Replay |
|
Local: |
416-764-8677 |
North American Toll Free: |
1-888-390-0541 |
Entry Code: |
730905 # |
Expiration Date: |
08/29/2023 |
Carebook's interim condensed consolidated financial statements and accompanying notes, and Management's Discussion and Analysis for the quarter ended June 30, 2023 are available on the Company's website at www.carebook.com and on SEDAR at www.sedar.com.
Cautionary Note Regarding Non-IFRS Measures, non-IFRS Ratios and Key Performance Indicators
This press release makes reference to certain non-IFRS measures and key performance indicators. These measures are not standardized financial measures under IFRS as issued by the IASB and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be 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. We use non-IFRS measures, including "EBITDA" and "Adjusted EBITDA" and non-IFRS ratios including "Adjusted EBITDA Margin". This press release also makes reference to "Annual Recurring Revenue" or "ARR", which is a key performance indicator used in our industry. These non-IFRS measures, non-IFRS ratios and key performance indicators 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. The Company also believes that securities analysts, investors, and other interested parties frequently use non-IFRS measures, non-IFRS ratios and key performance indicators in the evaluation of issuers. The Company's management also uses non-IFRS measures, non-IFRS ratios and key performance indicators in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management and executive compensation. The key performance indicators used by the Company may be calculated in a manner different than similar key performance indicators used by other companies.
Non-IFRS Measures and Non-IFRS Ratios
"Adjusted EBITDA" is defined as EBITDA adjusted for non-recurring M&A and other transaction costs, certain non-recurring costs (or savings), share-based compensation, foreign exchange loss (gain), intangible asset and goodwill impairment, changes in fair value of warrants or changes in fair value of contingent consideration. Adjusted EBITDA provides management with a useful supplemental measure in evaluating the performance of our operations and provides better transparency into our results of operations. Adjusted EBITDA indicates our ability to generate profit from our operations prior to considering our financing decisions and costs of consuming intangible and capital assets.
"EBITDA" is defined as net income or loss before income tax expenses, finance costs and depreciation and amortization.
"Adjusted EBITDA Margin" is calculated as Adjusted EBITDA divided by revenue for the relevant period.
Key Performance Indicators
"Annual Recurring Revenue" or "ARR" represents contracted software and services revenues that are expected to have a duration of more than one year, and is equal to the annualized value of contracted recurring revenue from all clients on our platforms at the date being measured. Contracted recurring revenue is revenue generated from clients who are, as of the date being measured, party to contracts with Carebook that are contributing to revenue in the calendar month of the date being measured, and also include revenue from clients who are, as of the date being measured, party to contracts with Carebook that are to contribute to revenue within a year of the date being measured. ARR provides a consolidated measure by which we can monitor the longer-term trends in our business.
Non-IFRS Measures and Reconciliation of Non-IFRS Measures EBITDA and Adjusted EBITDA
THREE MONTHS |
THREE MONTHS |
SIX MONTHS |
SIX MONTHS |
||||||||||||
Net loss |
$ |
(687) |
$ |
(2,435) |
$ |
(1,146) |
$ |
(4,239) |
|||||||
Add: |
|||||||||||||||
Amortization and depreciation expense |
$ |
402 |
$ |
557 |
$ |
819 |
$ |
1,046 |
|||||||
M&A costs |
$ |
- |
$ |
17 |
$ |
- |
$ |
17 |
|||||||
Finance costs |
$ |
378 |
$ |
290 |
$ |
751 |
$ |
562 |
|||||||
Other income (1) |
$ |
(197) |
$ |
- |
$ |
(211) |
$ |
- |
|||||||
Income Tax expense (recovery) |
$ |
(320) |
$ |
(137) |
$ |
(640) |
$ |
(273) |
|||||||
Impairment (2) |
$ |
178 |
$ |
- |
$ |
178 |
$ |
- |
|||||||
EBITDA (3) |
$ |
(246) |
$ |
(1,708) |
$ |
(249) |
$ |
(2,887) |
|||||||
Add: |
|||||||||||||||
Share-Based compensation |
$ |
12 |
$ |
(195) |
$ |
58 |
$ |
124 |
|||||||
Additional One-Time Costs (Savings) (4) |
$ |
- |
$ |
- |
$ |
(512) |
$ |
- |
|||||||
Adjusted EBITDA (3) |
$ |
(234) |
$ |
(1,903) |
$ |
(703) |
$ |
(2,763) |
|||||||
(1) |
Other income includes a gain following the initial recognition of the net investment from the Montreal office sublease. |
(2) |
Impairment on disposal of leasehold improvements from Carebook subleasing the Montreal office. |
(3) |
Non-IFRS financial measures without a standardized definition under IFRS, which may not be comparable to similar measures used by other issuers. Refer to the Section "Non-IFRS Measures and Non-IFRS Ratios" for an explanation of the composition and usefulness of these non-IFRS financial measures. |
(4) |
Additional One-Time Costs (Savings) relate to a grant from the Quebec government. |
About Carebook Technologies
Carebook's digital health platform empowers its clients and more than 3.5 million members to take control of their health journey. During 2021, the Company completed the acquisitions of InfoTech Inc. ("InfoTech"), a global leader in health and productivity risk management, and CoreHealth Technologies Inc. ("CoreHealth"), owner of an industry-leading wellness platform. In combination, these companies create a comprehensive digital health platform that includes both assessment tools and the technology to deliver complementary solutions. Carebook's shares trade on the TSXV under the symbol "CRBK," on the OTC Markets under the symbol "CRBKF," and are listed on the Open Market of the Frankfurt Stock Exchange under the symbol "PMM1."
For further information contact:
Carebook Investor Relations Contact:
Olivier Giner, CFO
Email : [email protected]
Telephone: (450) 977-0709
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Financial Outlook Assumptions
Our financial outlook is based on a number of assumptions, including assumptions related to inflation, changes in interest rates, consumer spending, foreign exchange rates and other macroeconomic conditions; our major revenue streams remaining in line with our expectations; customers adopting our solutions at an average contract value at or above that of our planned levels; our ability to price our products in line with our expectations and to achieve suitable margins; our ability to achieve success in the continued expansion of our product lines and solutions; continued success in additional product adoption and user base expansion throughout our customer base; our ability to derive the benefits we expect from the acquisitions we have completed; our ability to attract and retain key personnel required to achieve our plans; our expectations regarding the costs, timing and impact of our cost reduction initiatives; our ability to manage customer churn and churn rates remaining at planned levels. Our financial outlook does not give effect to the potential impact of acquisitions that may be announced or closed after the date hereof. Our financial outlook, including the various underlying assumptions, constitutes forward-looking information and should be read in conjunction with the cautionary notice on forward-looking statements below. Many factors may cause our actual results, level of activity, performance or achievements to differ materially from those expressed or implied by such forward-looking information.
Notice Regarding Forward-Looking Statements:
This release includes forward-looking information and forward-looking statements within the meaning of Canadian securities laws regarding Carebook, its subsidiaries and their business. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information in this release include statements with respect to revenue, our 2023 full year outlook, the Company's growth strategy, management's expectations regarding revenue growth and cost management, contract generation and the overall value of recently signed contracts, the Company's path to profitability, the Company's M&A strategy and the expected benefits from completed and integrated acquisitions. Such statements are based on the current expectations of the management of Carebook and are based on assumptions and subject to risks and uncertainties. Although the management of Carebook believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and undue reliance should not be placed on such forward-looking statements. The forward-looking statements reflect the Company's current views with respect to future events based on currently available information and are inherently subject to risks and uncertainties. The forward-looking events and circumstances discussed in this release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company, including economic factors, management's ability to manage and to operate the business of Carebook, management's ability to identify attractive M&A opportunities, management's ability to successfully integrate the Company's completed acquisitions and to realize the synergies of such acquisitions, management's ability to successfully complete product studies, the equity markets generally and risks associated with growth and competition, management's ability to achieve profitability for the Company, as well as the risk factors identified in the Company's management's discussion and analysis for the year ended December 31, 2022, a copy of which can be found on SEDAR under the Company's profile at www.sedar.com. Although Carebook has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on any forward-looking statements or information. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Carebook does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
SOURCE Carebook Technologies Inc.
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