VIQ Solutions Provides Preliminary Q3 Results and Updates Full Year 2020 Revenue Outlook

VIQ Solutions Inc. (“VIQ” or the “Company”) (TSX Venture Exchange: VQS and OTCQX Markets: VQSLF), a global provider of secure, AI-driven, digital voice and video capture technology and transcription services, today announced preliminary top-line results for the third quarter 2020, and provided an update of its full-year 2020 outlook. The Company also announced it secured a number of new multi-year contracts including one valued at up to $30 million in revenue over six year period ($5 million annualized revenue) expected to yield gross margins in the range of 50% to 55%. All numbers are expressed in US dollars.

Preliminary Q3 Results

The Company plans to provide its Q3 interim earnings report in mid-to-late November. Based on preliminary results, the Company anticipates revenue in the third quarter in the range of $8.1-$8.2 million, up by 25%-28% for the same period in 2019. At the end of Q3, more than 600 clients were migrated into VIQ’s new cloud-based transcription platform NetScribe powered by aiAssist.

The $30 million contract is over six years, representing approximately $5 million of revenue per year commencing in 2021 based on customers’ historical and anticipated annual volumes and expected to yield gross margins of 53.5%.

“Our organic sales accelerated in the third quarter as strong demand for our transcription cloud platform drove steady revenue and a number of important new multi-year contracts,” said Sebastien Paré, President and CEO VIQ Solutions. “We are well-positioned to continue delivering on our growth and margin commitments as we further extend our leadership platform with these new long-term contracts.”

“These new multi-year contracts represent landmark gains for VIQ in markets where the digitization pace towards end-to-end cloud platform augmented by artificial intelligence is accelerating rapidly,” said Susan Sumner, COO VIQ Solutions.

Earlier Covid-19 restrictions, mainly in courts, law enforcement and insurance verticals, temporarily caused delays in customer migrations and new rollouts. Most restrictions are being lifted, and ongoing rollouts have resumed.

Due to Covid-19, approximately $2.5 to $3.35 million of planned 2020 revenues have been delayed to 2021. As a result, the Company updated its full-year revenue outlook to a range of approximately $31-$32 million (previous revenue goal was $34 million to $37 million), representing growth of approximately 24%-27% versus the prior year. There is no change to VIQ’s previously stated gross margin, reiterated at 50% - 55% range driven by migrations into NetScribe aiAssist. Aligned with the updated full-year revenue outlook, the Adjusted EBITDA goals were revised to $3.5 million - $4.5 million for the 2020 full year.