LIMERICK, Ireland, Nov. 24, 2020 /CNW/ - kneat.com, inc.
(TSXV: KSI) ("Kneat") today announced its financial
results for the period ended September
30, 2020. All dollar amounts are presented in Canadian
dollars unless otherwise stated.
Third Quarter Highlights
- Revenue of $1.96 million was
recognized during the three-months ended September 30, 2020, representing an increase of
24% when compared to the third quarter in 2019.
- SaaS license fees have continued to grow quarter on quarter
during 2020 and were $0.70 million
for the three-months to September 30,
2020 representing an increase of 210% compared with the same
period in 2019.
- Annualized recurring revenue ("ARR"), which includes SaaS
license fees and maintenance fees, was $3.79
million at September 30,
2020. This is a total increase of 163% compared to the ARR at
September 30, 2019. More
specifically, ARR from SaaS license fees increased by 244% and ARR
from maintenance fees increased by 37% from September 30, 2019.
- In August, Kneat announced that it has signed a three-year
master services agreement with a tier one consumer products
company. This global company employs more than 30,000 staff
in the manufacture and distribution of leading consumer brands
across multiple categories from household to health and personal
care. It selected Kneat's SaaS platform to digitize its
validation processes globally. Initially the customer will
focus on facilities, utilities and equipment validation in several
lead US sites. This agreement allows the customer to deploy
Kneat Gx across its global network
- In November, Kneat announced the appointment of Mr.
Keith Holmes as Chief Technology
Officer. Mr. Holmes is a senior executive with over 30 years'
experience in the international software industry with technology
expertise spanning Mobile, Cloud, SaaS, UX and Database
systems. Kneat will benefit from Keith's broad technology
expertise and his considerable experience in product strategy and
technical leadership as we continue to grow our operations
globally.
Chief Executive Officer Commentary
We are pleased to report continued strong revenue growth for
the third quarter of 2020, in particular, our SaaS revenue which
has increased by 210% compared with the same quarter last year.
SaaS revenue for the 9 months to September 30 represents 77% of the total software
license revenue compared with 33% for the same period last year.
This highlights that the demand in the market is shifting
towards a cloud solution and we are executing well on our plans to
deliver this to our customers.
Kneat continues to operate remotely and effectively during
the pandemic. To date there has been no significant negative
impact to our business and we are optimistic that this will
continue into the future. We are very proud of our team as
they continue to fulfil our mission to help life sciences deliver
therapies to their patients to the highest safety standard, while
working in a challenging remote environment.
Our plan for the remainder of 2020 is to continue to add and
deploy new SaaS customers, continue to expand to new work processes
and new sites with our existing customers and continue to develop
our technology to deliver increasing value for all
customers".
-Eddie Ryan, Chief Executive
Officer of Kneat.
Financial Results Summary for the Second Quarter
Revenue for the three-months ended September 30, 2020 was $1.96 million, an increase of 24% from
$1.59 million for the same period in
2019. In keeping with our SaaS strategy, revenue of SaaS
license fees is up 210% and revenue of on-premise license fees is
down 86%. Gross margin was $0.72
million for the three months ended September 30, 2020 compared to $0.99 million in the third quarter of 2019.
The decrease in gross margin reflects a change in the revenue
mix whereby revenue for quarter three of 2020 included a smaller
amount of higher margin sales of on-premise license fees, and a
higher proportion of professional services revenue.
The increase in cost of revenues to $1.24m for the 3 months ended September 30, 2020 compared to $0.60 million for the third quarter of 2019,
reflects increases in salaries and benefits related to additional
headcount in the professional services team and increased hosting
costs. Professional services costs incurred during the third
quarter were recognised as cost of revenue expenses during the
period. These included costs associated with professional
services of $0.34 million billed
during the quarter, for which revenue will be recognized in future
periods.
Net loss for the third quarter of 2020 was $1.34 million and remains consistent when
compared to a net loss of $1.36
million for the same period in 2019. Kneat have
continued to invest in building our team by hiring talented staff
across many functions. The impact of increased revenue and
favourable foreign currency movements was offset by additional
salaries and benefit costs related to higher headcount on the
professional services and R&D teams, as well as increased
amortization costs relating to the intangible asset.
This press release should be read in conjunction with the
unaudited condensed interim consolidated financial statements and
management's discussion and analysis for the period ended
September 30, 2020 which have been
filed on SEDAR at www.sedar.com and Kneat's website
at www.kneat.com.
Conference Call
Mr. Eddie Ryan, Chief Executive
Officer of Kneat, and Mr. Hugh
Kavanagh, Chief Financial Officer of Kneat, will host a
conference call and Q&A for analysts via webcast on
Wednesday, November 25, 2020 at
09:00 EDT (14:00 GMT).
Interested parties can register for the live webcast via the
following link: https://bit.ly/2IzzCxt
Or, attend via teleconference
Ireland +353 15 360 755
Canada +1 (647) 497-9385
United States +1 (562)
247-8421
United Kingdom +44 330 221
9922
The unaudited condensed interim consolidated financial
statements for the period ended September
30, 2020 will be available from the Financial Information
section of the Investors page on the Kneat Solutions website
at: https://kneat.com/investors/
About Kneat
Kneat, a Canadian company with operational headquarters in
Limerick, Ireland, develops and
markets the next generation Kneat Gx software platform. Multiple
business work processes can be configured on the platform from
equipment to computer system validation, through to quality
document management. Kneat's software allows users to author,
review, approve, execute testing online, manage any exceptions and
post approve final deliverables in a controlled FDA 21 CFR Part 11/
Eudralex Annex 11 compliant platform. Macro and micro report
dashboards enable powerful oversight into all systems, projects and
processes globally. Customer case studies are reporting
productivity improvements in excess of 100% and a higher data
integrity and compliance standard. For more information visit
www.kneat.com.
Non-GAAP measure
Annualized recurring revenue is used by Kneat to assess the
expected annual recurring revenue from the customers that are live
on Kneat Gx at the end of the period. Annualized recurring revenue
is calculated as the licenses delivered to customers at the period
end, multiplied by the expected customer retention rate of 100% and
multiplied by the annual SaaS license fee or maintenance fee at the
related quarter end. Since many of the customer contracts are in
currencies other than the Canadian dollar, the Canadian dollar
equivalent is calculated using the related period end exchange rate
multiplied by the currency amount.
Cautionary and Forward-Looking Statements
Except for the statements of historical fact contained herein,
certain information presented constitutes "forward-looking
information" within the meaning of applicable Canadian securities
laws. Such forward-looking information, includes, but is not
limited to, the relationship between Kneat and the customer,
Kneat's business development activities, the use and implementation
timelines of Kneat's software within the customer's validation
processes, the ability and intent of the customer to scale the use
of Kneat's software within the customer's organization and the
compliance of Kneat's platform under regulatory audit and
inspection. While such forward-looking statements are expressed by
Kneat, as stated in this release, in good faith and believed by
Kneat to have a reasonable basis, they are subject to important
risks and uncertainties. As a result of these risks and
uncertainties, the events predicted in these forward-looking
statements may differ materially from actual results or events.
These forward-looking statements are not guarantees of future
performance, given that they involve risks and uncertainties. The
forward-looking information in this press release does not include
a full assessment or reflection of the unprecedented impacts of the
COVID-19 pandemic occurring since the first quarter of 2020 and the
ongoing and developing resulting indirect global and regional
economic impacts. This has resulted in significant economic
uncertainty and even though the company has to date experienced no
significant impact to its operations, any potential impact on our
future is difficult to understand or measure at this time. Kneat
does not undertake any obligation to release publicly revisions to
any forward-looking statement, except as may be required under
applicable securities laws. Investors should not assume that any
lack of update to a previously issued forward-looking statement
constitutes a reaffirmation of that statement. Continued reliance
on forward-looking statements is at an investors' own risk
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE kneat.com, inc.