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Records 18% growth in recurring revenue over Q2 2019

OTTAWA, Aug. 20, 2020 (GLOBE NEWSWIRE) — ProntoForms Corporation (TSXV: PFM), the global leader in field-focused low-code application platforms for enterprise, announced today its second quarter (Q2) financial results for the period ended June 30, 2020.

 “We acknowledge our customers’ continued resilience and patience during these challenging times. When the COVID-19 pandemic started, we successfully adapted our operations with new home and virtual work environments,” said Alvaro Pombo, Founder and Chief Executive Officer of ProntoForms. “We saw a slight decrease in our revenue base in March, April, and May but ended the quarter with a strong June resulting in the net growth of our Annual Recurring Revenue (ARR) Base of 2.5% over the previous quarter. We recorded positive income in the quarter by accessing COVID-related government assistance and managing expenses. We ended the quarter in a strong financial position with $5.5 million in cash.”

Mr. Pombo continued, “Recurring revenue decreased by 1% sequentially following 4% sequential growth in Q1 2020. Despite elevated SMB churn early on, our ARR Base increased to $16.14 million at June 30, 2020 as several deals were finalized towards the end of the quarter. We continued strong enterprise expansion, and customers with more than $100,000 of ARR each represented 38% of that base—up from 30% a year ago.”

Mr. Pombo continued, “Leading IT analysts see continued investment in low-code applications as a long-term business trend. Additionally, they note that the pandemic is elevating custom low-code apps to the CIO office as key solutions to accelerate enterprise digital transformation strategies. We continue to invest in and release cutting edge capabilities in our platform to bolster existing field operation tech stacks and empower field technicians. We see the ongoing expansion of use cases and subscribers of our enterprise base as an indicator of the quantifiable value our platform provides to customers.”

Financial Highlights – 2020 Second Quarter

  • Recurring revenue in Q2 2020 increased by 18% to $3.89 million compared to $3.30 million in Q2 2019 and decreased by 1% compared to $3.94 million in Q1 2020.
  • Total revenue for Q2 2020 increased by 13% to $4.16 million compared to $3.68 million in Q2 2019 and decreased by 2% compared to $4.24 million in Q1 2020.
  • Gross margin for Q2 2020 was 88% of total revenue compared to 84% in Q2 2019 and 85% in Q1 2020. Gross margin on recurring revenue was 93% for Q2 2020 compared to 90% in Q2 2019 and 92% in Q1 2020.
  • Operating income for Q2 2020 was $0.35 million, up from an operating loss of $0.42 million in Q2 2019 and $0.24 million in Q1 2020. Gross margins and operating income were positively impacted by government assistance of $0.6 million that was earned in the second quarter.
  • Net income for Q2 2020 was $0.21 million, up from a net loss of $0.53 million in Q2 2019 and $0.17 million in Q1 2020.
  • As at June 30, 2020, ProntoForms’ cash and net working capital balances were $5.52 million and $3.59 million respectively, compared to $5.70 million and $3.37 million as at December 31, 2019.

Recent Operational Highlights

  • Notable new and expansion progress from enterprise customers, including:
    • A Fortune 500 medical equipment manufacturer signed a $580K, forty-month commitment to expand the use of ProntoForms to improve equipment uptime, increase service reliability and meet meticulous compliance requirements.
    • A top ten global medical device manufacturer signed a $415K professional services agreement with ProntoForms to develop expanded capabilities that would enable multiple technicians to collaborate over extended periods of time on complex medical equipment installations.
    • A global brand manufacturer grew its ProntoForms deployment from 8K to 12K+ subscribers. The subscriber addition encompasses all North American-based employees working in corporate offices and customer locations as a key technology component of its re-opening strategy to improve the safety of employees and customers.
    • A Global 500, European-based logistics company has expanded its ProntoForms subscribers to support outsourced logistic services.
    • A leading American food manufacturer and processing company signed a $80K agreement and rapidly deployed a ProntoForms solution. The solution helps ensure employee safety and uninterrupted operations across multiple plants.
    • A global brand manufacturer of facility equipment expanded its commitment to ProntoForms with an agreement of $132K ARR, bringing its total commitment to over $1.1M of ARR. The company uses the platform to create custom applications to improve the full cycle of equipment installation, maintenance, and services.
  • ProntoForms, with ServiceMax, hosted an invitation-only digital transformation Zoom event for 25 top medical device manufacturers. Founder and CEO, Alvaro Pombo, was moderator of a digital transformation panel discussion featuring two of world’s top ten medical manufacturing brands—Philips Healthcare and Medtronic—on how custom low-code applications are key part of their digital strategy supporting the field engineers.

Q2 Conference Call Date:

Date: Thursday, August 20th, 2020
Time: 9:00 AM Eastern Time

Participant Dial-in Numbers:
Local Toronto – (+1) 416 764 8688
Toll Free – (+1) 888 390 0546
Conference ID: 47753649

Recording Playback Numbers:
Local Toronto– (+1) 416 764 8677
Toll Free – (+1) 888 390 0541
Passcode: 753649 #
Expiry Date: Thursday, August 27th, 2020 at 11:59pm EST

About ProntoForms Corporation
ProntoForms is the global leader in field-focused low-code application platforms for enterprise. The Company’s solution is used to create apps and forms to collect and analyze field data with smartphones and tablets – either as a standalone solution or as a mobile front-end to enterprise systems of record.

The Company’s 100,000+ subscribers harness the intuitive, secure, and scalable solution to increase productivity, improve quality of service, and mitigate risks. The Company is based in Ottawa, Canada, and trades on the TSXV under the symbol PFM. ProntoForms is the registered trademark of ProntoForms Inc., a wholly owned subsidiary of ProntoForms Corporation.

For additional information, please contact:

Alvaro Pombo
Chief Executive Officer
ProntoForms Corporation
613.599.8288 ext. 1111
[email protected]
Babak Pedram
Investor Relations
Virtus Advisory Group Inc.
416-644-5081
[email protected]

Certain information in this press release may constitute forward-looking information. For example, statements about the Company’s future growth or value, the revenues anticipated to be received by the Company from recent contracts referred to above and anticipated market trends are forward-looking information. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Company’s business and value may not grow as anticipated or at all, revenue anticipated from contracts may not be received due to many risks, including factors specific to the customer, and anticipated market trends may not occur or continue. Historical growth levels and results may not be indicative of future growth levels or results. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. There are a number of risk factors that could cause future results to differ materially from those described herein. Please see “Risk Factors Affecting Future Results” in the Company’s annual management discussion and analysis dated April 10, 2019 found at www.sedar.com for a discussion of such factors. Please also refer to the Company’s management discussion and analysis for the year ended December 31, 2019 for a description of how the Company determines and uses ARR. ARR is a key performance indicator used by the Company and is not meant as an indication such amounts will necessarily be included in revenues in any given fiscal year.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

     
ProntoForms Corporation    
Condensed interim consolidated statements of financial position  
as at June 30, 2020 and December 31, 2019    
(in United States dollars)
     
  June 30,   December 31,  
  2020   2019  
  $   $  
     
Assets    
Current assets    
Cash and cash equivalents 5,523,551   5,700,003  
Accounts receivable 2,202,519   2,538,530  
Investment tax credits receivable 85,093   185,213  
Unbilled receivables 188,311   197,264  
Related party loan receivable 78,847   82,694  
Prepaid expenses and other receivables 1,442,100   1,031,390  
  9,520,421   9,735,094  
     
Property, plant and equipment 442,290   481,242  
Right-of-use asset 785,085   912,399  
  10,747,796   11,128,735  
     
Liabilities    
Current liabilities    
Accounts payable and accrued liabilities 2,329,644   2,493,913  
Deferred revenue 3,284,111   3,562,816  
Derivative liability – current portion 72,094   65,041  
Lease obligation – current portion 241,334   246,517  
  5,927,183   6,368,287  
     
Long-term debt 2,681,075   2,717,146  
Lease obligation 588,358   745,599  
Derivative liability 16,872   61,524  
  9,213,488   9,892,556  
     
Shareholders’ equity    
Share capital 25,089,907   25,069,032  
Contributed surplus 864,907   864,907  
Share-based payment reserve 3,583,439   3,345,960  
Warrant reserve 692,960   692,960  
Deficit (28,881,340 ) (28,921,115 )
Accumulated other comprehensive income 184,435   184,435  
  1,534,308   1,236,179  
  10,747,796   11,128,735  

ProntoForms Corporation          
Condensed Interim Consolidated Statements of income (loss) and comprehensive income (loss)
For the three and six months ended June 30, 2020 and 2019      
(in United States dollars)
           
  Three months ended June 30,   Six months ended June 30,
  2020   2019     2020   2019  
  $   $     $   $  
Revenue          
Recurring revenue 3,890,920   3,304,579     7,832,875   6463530  
Professional and other services 271,424   371,688     572,183   729922  
  4,162,344   3,676,267     8,405,058   7193452  
           
Cost of Revenue          
Recurring revenue 275,865   339,635     597,665   701074  
Professional and other services 216,129   264,038     514,100   554792  
  491,994   603,673     1,111,765   1255866  
           
Gross Margin 3,670,350   3,072,594     7,293,293   5937586  
           
Expenses          
Research and development 1,161,873   1,245,161     2,343,240   2285248  
Selling and marketing 1,545,168   1,561,004     3,411,237   3103827  
General and administrative 615,590   683,665     1,429,051   1364084  
  3,322,631   3,489,830     7,183,528   6753159  
           
Income (loss) from operations 347,719   (417,236 )   109,765   (815,573 )
           
Foreign exchange (loss) gain (43,813 ) (17,118 )   123,104   -53145  
Interest and accretion (95,232 ) (94,808 )   (191,557 ) -183851  
Change in fair value of derivative liability (954 ) (880 )   (1,537 ) -10407  
Net and comprehensive income (loss) 207,720   (530,042 )   39,775   (1,062,976 )
           
Net comprehensive loss per common share          
basic and diluted 0.00   0.00     0.00   (0.01 )
           
Weighted average number of common shares          
basic and diluted 117,455,093   109,926,030     117,437,968   109165685  
           
           
Share-based compensation included in accounts:          
Cost of revenue 8,243   9,616     29697   22341  
Research and development 24,327   13,956     51918   32562  
Selling and marketing 27,937   28,674     68825   68124  
General and administrative 37,563   30,074     95829   70804  
  98,070   82,320     246,269   193831  
           

     
ProntoForms Corporation    
Condensed interim consolidated statements of cash flows  
For the six months ended June 30, 2020 and 2019  
(in United States dollars)
     
  Six months ended June 30,
  2020   2019  
  $   $  
     
Operating activities    
Net income (loss) 39,775   (1,062,976 )
Items not affecting cash    
Share-based compensation 246,269   193,831  
Accretion on long-term debt 90,913   79,332  
Accretion on lease obligations 23,984   31,573  
Change in fair value of derivative liability 1,537   10,407  
Amortization of property, plant and equipment 80,371   56,959  
Amortization of right-of-use asset 127,314   134,802  
Unrealized foreign exchange (gains) losses (133,599 ) 91,878  
Lease interest paid (23,984 ) (31,573 )
Changes in non-cash operating working capital items (408,600 ) 627,614  
  43,980   131,847  
     
Financing activities    
Payment of lease obligations (116,808 ) (119,880 )
Partial settlement of derivative liability (33,028 ) (34,393 )
Proceeds from the exercise of warrants   2,433,948  
Proceeds from the exercise of options 12,085   41,335  
  (137,751 ) 2,321,010  
     
Investing activities    
Purchase of property, plant and equipment (41,419 ) (126,057 )
     
Effect of exchange rate changes on cash (41,262 ) 93,396  
     
Net cash (outflow) inflow (176,452 ) 2,420,196  
Cash and cash equivalents, beginning of year 5,700,003   3,325,241  
Cash and cash equivalents, end of year 5,523,551   5,745,437  

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