- AssetCare™ Over Time recurring revenues were C$6.6 million in Q3 2021 compared to C$3.6 million in Q3 2020, up 85%
- First Nine Months 2021 AssetCare™ revenues totaled
C$21.5 million compared to
C$12.3 million, up 75%
year-over-year
- Added 945 connected assets in Q3 2021 reaching 63,453
total
- Completed milestone Nasdaq listing simultaneous with
US$9.5 million underwritten public
offering
- First installations in Saudi
Arabia lay groundwork for major accelerated growth in
2022
CALGARY, AB, Nov. 29, 2021 /CNW/ - mCloud Technologies
Corp. (Nasdaq: MCLD) (TSXV: MCLD) ("mCloud" or the "Company"),
a leading provider of AI-powered asset management and
Environmental, Social, and Governance ("ESG") solutions today
announced its financial results for the third quarter and first
nine months ended September 30, 2021
("Q3 2021" and "First Nine Months 2021" respectively). The Company
also provided a general business update.
Russ McMeekin, mCloud President
and CEO said: "Despite ongoing logistical headwinds, we have seen
the continued and sustained growth of our AssetCare Over Time
revenues, directly attributable to our Results-as-a-Service
business model with ongoing adoption by new and existing customers
around the world. Our sales pipeline continues to grow, especially
with the pick-up of our activities in the Middle East and international expansion
outside of North America."
"Our current backlog of hydrocarbon processing assets in
Alberta, our recently announced
license to operate in Saudi
Arabia, and our HVAC and Indoor Air Quality solution helping
customers meet new health and safety regulations are our most
significant near-term growth opportunities."
"We added 945 new connected assets in Q3 2021 to reach a total
of 63,453 – a reflection of the ongoing pandemic restrictions in
Alberta and certain parts of
the United States. We continue to
expect, once these restrictions are lifted, there will be an
acceleration in getting new customers onboarded at which point new
connected assets will resume the brisk pace we have seen in the
past."
mCloud announced earlier this month it had been recognized by
Deloitte as the 57th fastest growing technology company
in North America and the
second-fastest growing clean-tech company in Canada with placements on their Technology
Fast 500 and Clean Technology Fast 50.
In October, the Company also announced it had received a license
from the Ministry of Investment in Saudi
Arabia ("MISA"), followed by the rollout of AssetCare HVAC
and Indoor Air Quality ("IAQ") solutions at two restaurants in
Saudi Arabia. An additional 175
restaurants from the same owner-operator are expected in 2022,
demonstrating how mCloud's partnership supports the ESG and
digitalization objectives of Saudi Vision 2030.
McMeekin added: "As the first industrial AI and cloud company
authorized by MISA to do business in Saudi Arabia, we are well-positioned to bring
our full portfolio of AssetCare solutions to commercial businesses,
government buildings, and the massive number of oil and gas and
petrochemical facilities throughout the Kingdom. We expect our MISA
license to enable marked growth in connected assets and connected
workers, with our first industrial oil and gas connections to be
made either by the end of this year or in early 2022. We anticipate
these connections will scale quickly to become a meaningful
component of our connected asset portfolio."
"In North America, we continue
to bring new customers online with a number of new HVAC and IAQ
solutions recently going live at buildings we signed up earlier
this year. These customers are also anticipated to drive further
growth in connected assets as we add to our backlog of connected
buildings heading into 2022."
The Company noted that in addition to the continued focus on
activities in Alberta,
Saudi Arabia, and buildings in
New York, connected worker
solutions including 3D digital twins, AssetCare Enterprise, and
AssetCare Mobile were seeing continued growth in the First Nine
Months 2021, with even more growth anticipated in 2022, pointing to
the positive reception it received when its connected worker
solutions were showcased at INCHEM 2021 this month in Tokyo, Japan.
Asia Pacific was further called
out as a source of added incremental revenue for 2021 to-date,
highlighting the Company's ability to rapidly localize and deliver
AssetCare for any language in the region as a key strategic
advantage.
As previously announced on November
24, the Company expects to close today a US$9.5 million underwritten public offering,
which was made simultaneously with mCloud's listing and
commencement of trading on the Nasdaq. The Company also announced
on November 25 it had amended its
credit facility with ATB Financial to include an additional
C$5 million accordion, subject to
lender consent, remarking that both the public offering and
accordion would provide mCloud with access to substantial growth
capital and provide a foundation for retiring its 2019 unsecured
convertible debenture, set to retire on May
31, 2022.
Q3 2021 Revenue Highlights
All figures in millions of Canadian dollars
|
Three Months Ended
September 30
|
Nine Months Ended
September 30
|
|
2021
|
2020
|
2021
|
2020
|
AssetCare Over
Time
|
$
6.625
|
$
3.587
|
$
19.265
|
$
7.263
|
AssetCare
Initialization
|
0.506
|
1.592
|
2.246
|
5.017
|
Engineering
Services
|
0.205
|
0.958
|
1.415
|
5.426
|
Total
|
$
7.336
|
$
6.137
|
$
22.925
|
$
17.705
|
Gross
Profit
|
$
4.479
|
$
3.866
|
$
14.748
|
$
11.002
|
Gross
Margin
|
61%
|
63%
|
64%
|
62%
|
Direct
Expenses
|
|
|
|
|
Sales and
Marketing
and Salaries,
Wages,
and
Benefits
|
$
5.344
|
$
5.430
|
$
17.061
|
$
17.631
|
Research
and
Development
|
0.613
|
0.394
|
2.074
|
0.755
|
General and
Administrative
|
1.458
|
1.411
|
4.351
|
3.817
|
Total Direct
Expenses
|
$
7.415
|
$
7.236
|
$
23.486
|
$
22.203
|
Operating
EBITDA
|
$
(2.936)
|
$
(3.370)
|
$
(8.738)
|
$
(11.201)
|
|
|
|
|
|
|
mCloud generated First Nine Months 2021 revenues of C$22.9 million compared to revenues of
C$17.7 million. This represents a 29%
year-over-year increase in total revenue despite a substantial
reduction in Engineering Services revenue and new AssetCare
connections hampered by ongoing pandemic restrictions.
AssetCare Over Time revenues, which are the recurring revenues
attributed to AssetCare, were C$19.3
million in the First Nine Months 2021 compared to
C$7.3 million in the first half of
2020, a 165% increase year-over-year. The Company saw C$6.6 million in AssetCare Over Time revenues in
Q3 2021, an uplift of 85% compared to the same period in 2020. The
Company added 945 new connected assets in Q3 2021 reaching 63,453
total.
Gross margins for the First Nine Months 2021 were 64%, an
improvement over the same period one year ago. This was largely
attributed to the reduced contributions of Engineering Services and
AssetCare Initialization revenues, which carry a lower margin
profile.
Operating EBITDA, defined as gross profit less all direct
expenses, improved in the First Nine Months 2021 compared to 2020
even with the addition of C$1.3
million in research and development expenses. As AssetCare
revenues grow, the Company expects gross profit contributions to
exceed the costs incurred from direct expenses, leading to a
positive Operating EBITDA.
Fourth Quarter 2021 and 2022 Look Ahead
As COVID restrictions lift and ESG mandates are adopted, mCloud
is poised to accelerate the pace of connecting higher value assets
at hydrocarbon processing facilities in Western Canada, the Middle East, and Asia Pacific. mCloud's fugitive gas detection
solution, which is well-placed to capture the global demand for
decarbonization solutions, is undergoing certification to be a
reliable solution supporting auditable ESG reporting. AssetCare's
Mobile and 3D digital twin solutions are expected to scale well
into 2022.
The Company noted it is in the process of negotiating several
enterprise master service agreements based on AssetCare's
Results-as-a-Service model and recurring value per connected asset,
which will serve as the basis for long-term contract arrangements
with certain customers beyond the typical 36-month arrangements
seen in standard AssetCare agreements.
These strategic arrangements leverage the Company's extensive
AI, 3D, and connected worker solutions at scale for some of the
world's most prominent companies and government agencies.
Decarbonization of industrial facilities is another key theme, with
several of these arrangements focused on leveraging the AssetCare
fugitive gas and leak detection solution announced earlier this
year.
Third Quarter and First Nine Months 2021 Conference
Call
The Company will host a conference call to discuss the financial
results for the First Nine Months 2021 at 10:00 a.m. ET today, November 29, 2021.
The conference call will include prepared remarks from
Russ McMeekin, Chief Executive
Officer, and Chantal Schutz, Chief
Financial Officer. After the prepared remarks, the Company will
accept questions.
To access the conference call by telephone, dial 416-764-8659 or
1-888-664-6392 with the confirmation number 19917024. Please
connect approximately 10 minutes prior to the beginning of the call
to ensure participation. The conference call will be archived for
replay by telephone until Monday, December
6, 2021 at midnight (ET). To access the archived conference
call, dial 1-888-390-0541 and enter the entry code 917024#.
A live audio webcast of the conference call will be available at
https://bit.ly/32rX9K5. Please connect at least 15 minutes prior to
the conference call to ensure adequate time for any software
download that may be required to join the webcast. The
webcast will be archived at the above website for one year.
About mCloud Technologies Corp.
mCloud is unlocking the untapped potential of energy intensive
assets with AI and analytics, curbing energy waste, maximizing
energy production, and getting the most out of critical energy
infrastructure. Through mCloud's AI-powered AssetCare™ platform,
mCloud offers complete asset management solutions for commercial
buildings, renewable energy, healthcare, heavy industry, and
connected workers. IoT sensors bring data from connected assets
into the cloud, where AI and analytics are applied to maximize
their performance.
Headquartered in Calgary,
Canada with offices worldwide, the mCloud family includes an
ecosystem of operating subsidiaries that deliver high-performance
IoT, AI, 3D, and mobile capabilities to customers, all integrated
into AssetCare. With over 100 blue-chip customers and more than
63,000 assets connected in thousands of locations worldwide, mCloud
is changing the way energy assets are managed.
mCloud's common shares trade in the
United States on the Nasdaq and in Canada on the TSX Venture Exchange under the
symbol MCLD. mCloud's convertible debentures trade on the TSX
Venture Exchange under the symbol MCLD.DB. For more
information, visit www.mcloudcorp.com.
Non-GAAP Measure
Selected financial information for the nine-month periods ended
September 30, 2021 and September 30, 2020 set out above include
reference to "Operating EBITDA," which is not recognized under
International Financial Reporting Standards and is a non-generally
accepted accounting principle ("Non-GAAP") measure.
The Company defines Operating EBITDA attributed to shareholders
as gross profit less all expenses related to sales and marketing,
wages, salaries, and benefits, research and development, and
general and administrative activities.
The Company believes Operating EBITDA is a useful measure as it
provides important and relevant information to management about the
operating and financial performance of the Company. Operating
EBITDA enables management to assess its ability to generate
operating cash flow to fund future working capital needs, and to
support future growth.
This information should be read in conjunction with the
unaudited interim consolidated financial statements for the three
months ended September 30, 2021 and
audited consolidated financial statements and notes thereto for the
year ended December 31, 2020 along
with mCloud's MD&As for the corresponding periods, which are
available under mCloud's profile on SEDAR at www.sedar.com and
EDGAR at www.sec.gov.
Forward-Looking Information and Statements
This press release contains certain "forward-looking
information" within the meaning of applicable Canadian securities
legislation and may also contain statements that may constitute
"forward-looking statements" within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Such forward-looking information and forward-looking
statements are not representative of historical facts or
information or current condition, but instead represent only the
Company's beliefs regarding future events, plans or objectives,
many of which, by their nature, are inherently uncertain and
outside of the Company's control. Generally, such forward-looking
information or forward-looking statements can be identified by the
use of forward-looking terminology such as "plans", "expects" or
"does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or may contain statements that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "will
continue", "will occur" or "will be achieved". The forward-looking
information and forward-looking statements contained herein may
include statements regarding the growth in connected assets enabled
by the Company's MISA license, plans to onboard an additional 175
restaurants in Saudi Arabia, the
onboarding of new AssetCare HVAC and IAQ solutions in North America, the gross profit of AssetCare
revenues overtaking direct expenses, the expected growth from
targeted oil and gas facilities around the world, the certification
of mCloud's fugitive gas solution, and demand for solutions such as
3D digital twins, AssetCare Enterprise, and AssetCare Mobile.
By identifying such information and statements in this manner,
the Company is alerting the reader that such information and
statements are subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of the Company to be
materially different from those expressed or implied by such
information and statements.
A more complete discussion of the risks and uncertainties facing
the Company appears in the prospectus supplement, the base shelf
prospectus and the registration statement and in the Company's
Annual Information Form and other continuous disclosure filings,
which are available on SEDAR at www.sedar.com and EDGAR at
www.sec.gov. Although the Company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in the forward-looking information
and forward-looking statements, there may be other factors that
cause results not to be as anticipated, estimated or intended.
In connection with the forward-looking information and
forward-looking statements contained in this press release, the
Company has made certain assumptions. Although the Company believes
that the assumptions and factors used in preparing, and the
expectations contained in, the forward-looking information and
statements are reasonable, undue reliance should not be placed on
such information and statements, and no assurance or guarantee can
be given that such forward-looking information and statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such information and
statements. The forward-looking information and forward-looking
statements contained in this press release are made as of the date
of this press release, and the Company does not undertake to update
any forward-looking information and/or forward-looking statements
that are contained or referenced herein, except in accordance with
applicable securities laws. All subsequent written and oral
forward- looking information and statements attributable to the
Company or persons acting on its behalf is expressly qualified in
its entirety by this notice.
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.
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SOURCE mCloud Technologies Corp.