Total Revenue of $9.9 million, up 7%; Recurring Revenue up 7%
Record Adjusted EBITDA1 of $1.7 million
CALGARY, Alberta, Nov. 23, 2022 — Quorum Information Technologies Inc. (QIS:TSXV) (“Quorum” or the “Company”), a North American SaaS Software and Services company providing essential enterprise solutions that automotive dealerships and Original Equipment Manufacturers (“OEMs”) rely on for their operations, released its results today for the third quarter of 2022, ending September 30, 20222.
“We are happy to report record total revenue, SaaS revenue and adjusted EBITDA for the third quarter of 2022,” stated Maury Marks, President and CEO. “We are delighted that we were able to achieve a record adjusted EBITDA of $1.7 million, which equated to an adjusted EBITDA margin of 17% for the quarter. Our focus on profitable growth has resulted in improved gross and adjusted EBITDA margins. The cornerstones of our 2023 strategy will be to pursue what is now a $55 million SaaS revenue cross-selling opportunity while at the same time reducing our cost base. I would especially like to acknowledge our employees and customers who are the driving force behind our continued growth and drive to innovate to ensure Quorum has a product suite prepared for the future of automotive.”
Consolidated Results for Q3 2022 and Year-to-Date
|Q3 2022||% Change||Q3 2021||2022||% Change||2021|
|Gross Margin %||49||%||47||%||48||%||45||%|
|Adjusted EBITDA Margin||17||%||16||%||14||%||14||%|
|Adjusted Cash Income3||$||1,129,768||56||%||$||726,303||$||2,000,660||13||%||$||1,766,037|
1 Adjusted EBITDA (non-GAAP) – Net income (loss) before interest and financing costs, taxes, depreciation, amortization, stock-based compensation, foreign exchange gains and losses, one-time acquisition-related expenses and restructuring fees.
2 Financial references are expressed in Canadian dollars unless otherwise indicated. Please refer to the MD&A and Financial Statements posted onto SEDAR related to non-IFRS measures and risk factors.
3 Adjusted Cash Income (non-GAAP) – Adjusted EBITDA less capitalized salaries and overhead.
Third Quarter Results
- Total revenue increased by 7% to $9.9 million in Q3 2022 compared to $9.2 million in Q3 2021.
- Recurring SaaS revenue increased by 7% to $7.0 million in Q3 2022 compared to $6.6 million in Q3 2021, which also translates to Q3 2022 Total Annual Recurring SaaS Revenue (“ARR”) of $28.1 million.
- Recurring services revenue (“BDC”) increased by 7% to $2.6 million in Q3 2022 compared to $2.4 million in Q3 2021, which also translates to Q3 2022 Total ARR from BDC services of $10.4 million.
- Recurring revenue was 97% of total revenue for the quarter compared to 97% reported in Q3 2021.
- Gross margin increased by 13% to $4.9 million and 49% of total revenue in Q3 2022 compared to $4.3 million and 47% of total revenue for Q3 2021.
- Adjusted EBITDA increased by 17% to $1.7 million in Q3 2022 as compared to $1.5 million for Q3 2021.
- Adjusted EBITDA margin was 17% for Q3 2022 as compared to 16% for Q3 2021.
- Adjusted Cash Income increased by 56% to $1.1 million in Q3 2022, or 11% of revenue, as compared to $0.7 million for Q3 2021, or 8% of revenue.
SaaS-based dealership rooftops are as follows:
|Q3 2021||Q4 2021||Q1 2022||Q2 2022||Q3 2022|
|Dealer Rooftop Count – Canada||904||920||923||1,343||1,350|
|Dealer Rooftop Count – US||128||125||116||116||114|
|Dealer Rooftop Count – Total||1,032||1,045||1,039||1,459||1,464|
Monthly recurring revenue per unit (“MRRPU”) implies that, as of the end of Q3 2022, each dealership (“Dealer Rooftop”) represents approximately $19.2K of SaaS ARR. Q3 2022 MRRPU decreased, as compared to Q3 2021, due to the addition of rooftops as a result of the Accessible Accessories acquisition.
Q3 2022 Business Highlights
- In September 2022, Quorum announced that that it had signed a definitive agreement to sell the Advantage Complete DMS software. Highlights of the sale and wind down included:
- Sale of software and grant back license agreement for a nominal fee
- Reduction in SaaS revenue from independent dealers of $0.1 million annually
- Reduction in expenses of $0.2 million annually
Quorum Q3 2022 Results Conference Call Details and Investor Presentation
Maury Marks, President and Chief Executive Officer and Marilyn Bown, Chief Financial Officer will present the Q2 2022 results at a conference call with concurrent audio webcast, scheduled for:
|Date:||Thursday, November 24th, 2022|
|Time:||11:00 am MT|
|Dial-In #:||Toll-Free North America: 1 (888) 660-6411|
|Webcast Link:||Quorum Q3 2022 Results Conference Call (Webcast)|
The Q3 2022 Results Investor Presentation, a replay of the conference call and a transcript of the conference call will also be available at www.QuorumInformationSystems.com
About Quorum Information Technologies Inc.
Quorum is a North American SaaS Software and Services company providing essential enterprise solutions that automotive dealerships and Original Equipment Manufacturers (“OEMs”) rely on for their operations, including:
- Quorum’s Dealership Management System (DMS) called XSellerator, which automates, integrates, and streamlines key processes across departments in a dealership, and emphasizes revenue generation and customer satisfaction.
- DealerMine CRM, a sales and service Customer Relationship Management (“CRM”) system and set of Business Development Centre services that drives revenue into the critical sales and service departments in a dealership.
- Autovance, a modern retailing platform that helps dealerships attract more business through Digital Retailing, improve in-store profits and closing rates through its desking tool and maximize their efficiency and CSI through Autovance’s F&I menu solution.
- Accessible Accessories, a digital retailing platform that allows franchised dealerships to efficiently increase their vehicle accessories revenue.
Quorum Information Technologies Inc. is traded on the TSX Venture Exchange (“TSX-V”) under the symbol QIS. For additional investor information, please visit www.QuorumInformationSystems.com.
President and Chief Executive Officer
Chief Financial Officer
This press release may contain certain forward-looking statements and forward-looking information (“forward-looking information”) within the meaning of applicable Canadian securities laws. Forward-looking information is often, but not always, identified by the use of words such as “anticipate”, “believe”, “plan”, “intend”, “objective”, “continuous”, “ongoing”, “estimate”, “expect”, “may”, “will”, “project”, “should” or similar words suggesting future outcomes. Quorum believes the expectations reflected in such forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon.
Forward-looking information is not a guarantee of future performance and involves a number of risks and uncertainties some of which are described herein. Such forward-looking information necessarily involves known and unknown risks and uncertainties, which may cause Quorum’s actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking information.
Quorum has filed its Q3 2022 unaudited condensed consolidated financial statements and notes thereto as at and for the nine months ended September 30, 2022, and accompanying management and discussion and analysis in accordance with National Instrument 51-102 – Continuous Disclosure Obligations adopted by the Canadian securities regulatory authorities.
Quorum Information Technologies Inc. is traded on the Toronto Venture Exchange (TSX-V) under the symbol QIS. For additional information please go to www.QuorumInformationSystems.com.
Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) has reviewed this release and neither accepts responsibility for the adequacy or accuracy of this release.