Investor Update & NEW Sustainability Statement
January 2023 Investor Newsletter
Happy New Year and welcome to our January 2023 Investor Newsletter!
As we move into the new year Quorum is preparing to further execute our strategy of balanced growth and profitability in 2023, and implementing specific levers to get there. These include pursuing our $55 million SaaS revenue cross-selling opportunity, while at the same time reducing our cost base.
In this Newsletter you can review:
- Highlights of our Latest Financial Results (Q3 2022)
- Accessible Accessories Acquisition has been Quorum’s Most Effective Integration to Date/li>
- Recent News and Investor Presentations
- And, our NEW 2022 Sustainability Statement
On November 24th, 2022 we announced our Q3 2022 Results, posting record total revenue, SaaS revenue and adjusted EBITDA*.
- $7.0 million – Recurring SaaS Revenue
- $2.6 million – Recurring Services (BDC) Revenue
- $38.4 million – Annualized Recurring Revenue
“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.”
– Maury Marks, President and CEO.
Q3 2022 adjusted EBITDA*
2022 Successful Acquisition and Integration of Accessible Accessories Ltd.
- The fourth acquisition in five years for Quorum.
- Accessible Accessories’ web-based platform enables franchised (OEM) dealership to sell accessories more effectively.
- Acquisition was closed on April 1.
- An additional 688 rooftops for Quorum (423 new/unique rooftops for Quorum).
- The full integration into “One Quorum” was completed in Q3 2022 and has been the most effective integration to date.
- Quorum now has a proven template for future acquisitions.
Quorum Information Technologies Inc.
(The full version of our Sustainability Statement is available here)
CUSTOMERS AND SOLUTIONS
Founded in 1996, Quorum develops, supports, acquires and markets innovative and robust technology solutions and services to traditional and electric vehicle dealerships and Original Equipment Manufacturers (“OEM”) across North America.
Quorum’s vision is to modernize how the automotive industry delivers an exceptional consumer experience through innovative products and services. Two important trends shaping the industry today are:
increased demand by consumers for online purchasing of vehicles and related service and parts offerings; and
increased demand by consumers for electric vehicles and related service and parts offerings.
CORE VALUES AND CULTURE
Quorum’s core values and culture drive everything we do. These values enable our teams to deliver and support solutions for our customers, and the values fully engage, and acknowledge the contribution and health of our employees. Our values are Integrity & Transparency, Wellbeing & Success, Quality & Efficiency, Innovation & Improvement, Support & Teamwork, and Caring & Commitment.
HUMAN CAPITAL SUSTAINABILITY PRACTICES
Through a remote workforce across Canada, Quorum relies on our human and intellectual capital. We invest in our culture and people across the organization, deepening key brand associations with employees, and building awareness of Quorum as an employer of choice. We are evolving our human capital practices to improve the employee experience (EX), including communication, onboarding, and performance management process improvements, and employee learning and development (L&D), We proudly acknowledge our employees and customers publicly as they are the driving force behind our continued growth and drive to innovate.
ENVIRONMENTAL SUSTAINABILITY PRACTICES
One hundred percent of Quorum’s software solutions are hosted in the cloud, with 70% of our dealership customers accessing Quorum solutions through cloud services. This has enabled us to minimize energy use, utilize sustainable data centre power sources as well as alternative sources of power. We utilize cloud service providers who are committed to reducing energy consumption, including maximizing cooling efficiency required to cool cloud-based datacenters.
SOCIAL CAPITAL SUSTAINABILITY PRACTICES
Quorum manages multiple social capital practices including strict data privacy measures, not collecting customer data for secondary purposes, performing regular security vulnerability assessments, leveraging a cloud-unified security management system for advanced threat protection, and deploying security patches. We utilize industry leading products and cybersecurity frameworks to define and assess data security practices and assess security vulnerabilities.
Recent News and Events
Quorum continues to work hard to build and provide a product and services strategy that resonates with automotive dealerships across North America, especially as the industry continues to evolve. Our successful history of organic growth and accretive acquisition have led to our position as a leading auto dealership SaaS software solutions provider, with at least one Quorum solution installed in 42% of dealerships in Canada, and with substantial growth runway across North America.
If you would like to jump on call with me to discuss how we plan to hit our sweet spot of balanced growth and profitability in 2023, and the levers we plan to use to get there (including pursuing our $55 million SaaS revenue cross-selling opportunity while at the same time reducing our cost base), please send an email to our Investor Relations lead, Daniela Trnka, to set up a direct call with me (firstname.lastname@example.org).
On behalf of Quorum, thank you for your support in 2022 and best wishes for a happy, healthy and prosperous 2023!
President and CEO
FORWARD LOOKING INFORMATION DISCLAIMER – Certain content in this Investor Newsletter is forward-looking in nature. This includes statements that involve known and unknown risks (such as the continued risks related to COVID-19), uncertainties, and other factors outside of management’s control that could cause actual results to differ materially from those expressed in the forward-looking statements. Quorum does not assume any responsibility for the accuracy and completeness of the forward-looking statements and does not undertake any obligations to publicly revise these forward-looking statements to reflect subsequent events or circumstances. For additional information on possible risks, including risks related to COVID-19, please refer to our annual MD&A dated December 31, 2021 on the SEDAR website.
*Adjusted EBITDA is calculated as 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.