ProntoForms Reports Q2 2023 Financial Results

Growth in TTM ARR Accelerates to 19% and Operating Loss Declines

OTTAWA, July 26, 2023 (GLOBE NEWSWIRE) -- ProntoForms Corporation (TSXV: PFM), the global leader in field intelligence, announced today its second quarter (Q2) financial results for the period ended June 30, 2023. All amounts are in US dollars unless otherwise stated.

“Our Trailing Twelve Months (“TTM”) revenue growth accelerated to 14% from 11.5% in the last quarter, and TTM annual recurring revenue (“ARR”) base growth to 19% from 13% last quarter, with first half net bookings results exceeding all of 2022. The company reported strong subscription growth in the second quarter of 2023 based on a large win, good growth in existing accounts, and the highest level of revenue retention in two years. We continue to focus on four key vertical markets where we can deliver a considerable return on investment to customers through reduced field service costs, richer data, and higher levels of compliance as shown by our recent $3M win in the medical device industry,” said Philip Deck, co-CEO of ProntoForms.

“Consistent with our disclosure last quarter, our lower operating loss still included costs related to organizational changes. These were necessary to support changes made across our operations as we reconfigured our workforce for higher growth and profitability. We anticipate that most of the organizational changes are behind us and remain focused on reaching non-GAAP operating profitability by Q4,” he added.

“In today’s economy, field technicians generate substantial high-margin revenue for their organizations and play a crucial role in delivering customer satisfaction. They also amass valuable data through their job interactions, generating insights that enable new levels of team and process efficiency. However, with the new guard increasingly prizing job satisfaction as part of a generational shift in the industry, they are favouring roles built around their needs more and more. Therefore, it is critical for organizations with significant field service operations to prioritize the technician experience. Our product excels in consolidating this wealth of information while enhancing technician satisfaction and operational productivity. Our name change to TrueContext slated for later this year reflects our wider repositioning as a leader in enterprise field intelligence,” ProntoForms co-CEO and Founder Alvaro Pombo explained.

Financial Highlights – 2023 Second Quarter (All results in USD)

• Recurring revenue in Q2 2023 increased by 16% to $5.79 million compared to $4.97 million in Q2 2022 and increased by 7% compared to $5.43 million in Q1 2023.
• Total revenue for Q2 2023 increased by 17% to $6.12 million compared to $5.21 million in Q2 2022 and increased by 6% compared to $5.77 million in Q1 2023.
• Gross margin for Q2 2023 was 86% of total revenue compared to 84% in Q2 2022 and 86% in Q1 2023. Gross margin on recurring revenue was 91% for Q2 2023 compared to 89% in Q2 2022 and 90% in Q1 2023.
• Operating loss for Q2 2023 was $0.97 million, down from an operating loss of $1.32 million in Q2 2022 and down from an operating loss of $1.04 million in Q1 2023.
• Net loss for Q2 2023 was $1.15 million, down from a net loss of $1.34 million in Q2 2022 and up from a net loss of $1.13 million in Q1 2023.
• As at June 30, 2022, the Company’s cash and net working capital balances were $6.25 million and $1.06 million respectively.

Please refer to https://www.prontoforms.com/company/investor-relations for full financial statements, management discussion and analysis and a downloadable spreadsheet version of our quarterly information.

Recent Operational Highlights

Notable new and expansion progress from enterprise customers, including:

• A subsidiary of a global Fortune 500 medical manufacturing company committed to just over $3M in subscription services over 3.5 years from April 2023 to manage workflows for new machine installations worldwide.
• A Fortune 500 distributor of a large heavy equipment manufacturer deployed ProntoForms for over $95K ARR to support job safety analysis, work orders, and site safety reviews.
• A Fortune Global 500 leader in fire, HVAC, and security equipment added 500 new subscriptions. This expansion will support various initiatives including HVAC and building automation, energy management, and emissions reporting and management.
  

Other Highlights

• ProntoForms shareholders approved the name change to TrueContext Corporation as well as the appointment of directors, auditors, and options plan at the annual meeting held June 21, 2023.
• ProntoForms launched a multi-language add-on that enables multiple language options within a single workflow, creating a universal approach to field work that supports global and diverse field teams.
• ProntoForms attended the Canadian Elevator Contractors Association (CECA) Convention for the first time after becoming a member earlier this year. At the show, ProntoForms unveiled it’s Elevate solution that is tailored to address challenges faced by elevator field teams.
  

Q2 Conference Call Date:

Date: Tuesday, July 26th, 2023
Time: 9:00 AM Eastern Time        

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About ProntoForms Corporation
ProntoForms, soon to be TrueContext, is the global leader in field intelligence. The platform’s field workflows and data collection capabilities enable enterprise field teams to optimize decision-making, decrease organizational risk, maximize the uptime of valuable assets, and deliver exceptional service experiences. Over 100,000 subscribers use ProntoForms across multiple use cases, including asset inspection, compliance, installation, repair, maintenance, and environmental, health & safety with quantifiable business impacts. 

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 co-Chief Executive Officer ProntoForms Corporation 613.599.8288 ext. 1111 [e-mail]	Philip Deck co-Chief Executive Officer ProntoForms Corporation 416.702.3974 [e-mail]	Dave Croucher Chief Financial Officer ProntoForms Corporation 613-286-9212 [e-mail]

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 March 9, 2022 found at www.sedar.com for a discussion of such factors.

ARR is calculated as the annual equivalent of the recurring elements of our contracts with customers that are in effect at the end of the period. It excludes one-time professional service fees and assumes that customers will renew the contractual commitments on a periodic basis as those commitments come up for renewal, unless such renewal is known to be unlikely at period end. Please also refer to the Company’s management discussion and analysis for the year ended December 31, 2022 for a description of how the Company determines and uses ARR.

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 Loss and Comprehensive Loss
For the three and six months ended June 30, 2023 and 2022
(in US dollars)
					Three Months Ended June 30,
					2023				2022
Revenue:
	Recurring revenue			$	5,788,346			$	4,968,802
	Professional and other services				335,246				242,814
					6,123,592				5,211,616
Cost of revenue (1):
	Recurring revenue				529,535				555,304
	Professional and other services				312,520				262,132
					842,055				817,436
Gross margin					5,281,537				4,394,180
Expenses:
	Research and development (1)				1,796,044				1,814,774
	Selling and marketing (1)				3,219,246				2,922,742
	General and administrative (1)				1,235,504				973,382
					6,250,794				5,710,898
Loss from operations					(969,257	)			(1,316,718	)
Foreign exchange loss					(93,217	)			29,212
Finance Income					38,585				5,451
Finance costs					(127,693	)			(60,578	)
Net loss and comprehensive loss				$	(1,151,582	)		$	(1,342,633	)
Net loss and comprehensive loss
	per common share basic and diluted			$	(0.01	)		$	(0.01	)
Weighted average number of common shares
	basic and diluted				130,291,419				128,278,739
(1) Amounts include share-based compensation expense as follows:
Cost of revenue				$	3,267			$	6,199
Research and development					38,462				50,964
Selling and marketing					53,499				35,429
General and administrative					189,635				152,684
Total share-based compensation expense				$	284,863			$	245,277

PRONTOFORMS CORPORATION
Condensed Interim Consolidated Statements of Financial Position
as at June 30, 2023 and December 31, 2022
(in US dollars)
						June 30,				December 31,
						2023				2022
Assets
Current assets:
	Cash and cash equivalents				$	6,251,277			$	6,112,071
	Accounts receivable					2,248,579				4,179,088
	Investment tax credits receivable					151,060				197,553
	Unbilled receivables					185,529				88,453
	Related party loan receivable					81,158				79,331
	Prepaid expenses and other receivables					1,878,757				1,077,015
	Contract acquisition costs					484,856				311,494
						11,281,216				12,045,005
Property, plant and equipment						387,323				286,834
Contract acquisition costs						460,616				190,585
Right-of-use asset						1,033,645				148,515
					$	13,162,800			$	12,670,939
Liabilities and Shareholders' Equity
Current liabilities:
	Accounts payable and accrued liabilities				$	2,704,132			$	2,686,288
	Deferred revenue					7,254,692				6,508,986
	Lease obligation					261,264				172,947
						10,220,088				9,368,221
Long-term debt						6,152,006				6,007,585
Deferred revenue						260,342				-
Lease obligation						900,214				-
						7,312,562				6,007,585
Shareholders' deficit:
	Share capital					32,290,967				32,166,781
	Contributed surplus					864,907				864,907
	Share-based payment reserve					3,888,925				3,398,246
	Deficit					(41,599,084	)			(39,319,236	)
	Accumulated other comprehensive income					184,435				184,435
						(4,369,850	)			(2,704,867	)
					$	13,162,800			$	12,670,939

PRONTOFORMS CORPORATION
Condensed Interim Consolidated Statements of Cash Flows
For the three and six months ended June 30, 2023 and 2022
(in US dollars)
					Three months ended June 30,
					2023				2022
Cash used in:
Operating activities:
	Net loss			$	(1,151,582	)		$	(1,342,628	)
	Items not involving cash:
		Share-based compensation			284,863				315,836
		Accretion on lease obligations			10,209				5,179
		Accretion of transaction costs			2,809				3,663
		Amortization of property, plant and equipment			36,608				37,061
		Amortization of right-of-use asset			58,026				63,657
		Unrealized foreign exchange loss			92,402				(97,982	)
	Other finance costs				76,085				51,464
	Interest paid				(114,670	)			(56,915	)
	Interest received				38,585				5,451
	Changes in non-cash operating working capital items				(44,230	)			391,957
					(710,895	)			(623,257	)
Financing activities
	Payment of lease obligations				(65,184	)			(75,179	)
	Lease interest paid				(10,209	)			(5,179	)
	Procceds from drawdown of credit facility				-				776,000
	Proceeds from the exercise of options				69,836				125,575
					(5,557	)			821,217
Investing activities
	Purchase of property, plant and equipment				(141,432	)			(26,599	)
					(141,432	)			(26,599	)
Effect of exchange rate changes on cash					67,231				(85,262	)
Increase in cash and cash equivalents					(790,653	)			86,099
Cash and cash equivalents, beginning of period					7,041,930				7,431,964
Cash and cash equivalents, end of period				$	6,251,277			$	7,518,063