ProntoForms Reports Q2 2020 Financial Results

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
apombo@prontoforms.com
Babak Pedram
Investor Relations
Virtus Advisory Group Inc.
416-644-5081
bpedram@virtusadvisory.com

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 equivalents5,523,551 5,700,003 
Accounts receivable2,202,519 2,538,530 
Investment tax credits receivable85,093 185,213 
Unbilled receivables188,311 197,264 
Related party loan receivable78,847 82,694 
Prepaid expenses and other receivables1,442,100 1,031,390 
 9,520,421 9,735,094 
   
Property, plant and equipment442,290 481,242 
Right-of-use asset785,085 912,399 
 10,747,796 11,128,735 
   
Liabilities  
Current liabilities  
Accounts payable and accrued liabilities2,329,644 2,493,913 
Deferred revenue3,284,111 3,562,816 
Derivative liability - current portion72,094 65,041 
Lease obligation - current portion241,334 246,517 
 5,927,183 6,368,287 
   
Long-term debt2,681,075 2,717,146 
Lease obligation588,358 745,599 
Derivative liability16,872 61,524 
 9,213,488 9,892,556 
   
Shareholders' equity  
Share capital25,089,907 25,069,032 
Contributed surplus864,907 864,907 
Share-based payment reserve3,583,439 3,345,960 
Warrant reserve692,960 692,960 
Deficit(28,881,340)(28,921,115)
Accumulated other comprehensive income184,435 184,435 
 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 revenue3,890,920 3,304,579  7,832,875 6463530 
Professional and other services271,424 371,688  572,183 729922 
 4,162,344 3,676,267  8,405,058 7193452 
      
Cost of Revenue     
Recurring revenue275,865 339,635  597,665 701074 
Professional and other services216,129 264,038  514,100 554792 
 491,994 603,673  1,111,765 1255866 
      
Gross Margin3,670,350 3,072,594  7,293,293 5937586 
      
Expenses     
Research and development1,161,873 1,245,161  2,343,240 2285248 
Selling and marketing1,545,168 1,561,004  3,411,237 3103827 
General and administrative615,590 683,665  1,429,051 1364084 
 3,322,631 3,489,830  7,183,528 6753159 
      
Income (loss) from operations347,719 (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 diluted0.00 0.00  0.00 (0.01)
      
Weighted average number of common shares     
basic and diluted117,455,093 109,926,030  117,437,968 109165685 
      
      
Share-based compensation included in accounts:     
Cost of revenue8,243 9,616  29697 22341 
Research and development24,327 13,956  51918 32562 
Selling and marketing27,937 28,674  68825 68124 
General and administrative37,563 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 compensation246,269 193,831 
Accretion on long-term debt90,913 79,332 
Accretion on lease obligations23,984 31,573 
Change in fair value of derivative liability1,537 10,407 
Amortization of property, plant and equipment80,371 56,959 
Amortization of right-of-use asset127,314 134,802 
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 options12,085 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 year5,700,003 3,325,241 
Cash and cash equivalents, end of year5,523,551 5,745,437