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Optiva Inc. Reports First Quarter 2024 Financial Results

All amounts are stated in United States dollars unless otherwise indicated

TORONTO, May 09, 2024 (GLOBE NEWSWIRE) — Optiva Inc. (“Optiva” or “the Company”) (TSX:OPT), a leader in powering the telecom industry with cloud-native billing, charging and revenue management software on private and public clouds, today released its first quarter financial results for the three-month period ended March 31, 2024.

Demonstrating continued momentum, Optiva signed contracts with two new customers leveraging telecom opportunities in Africa during the three-month period ended March 31, 2024. Over the past 12 months, a total of eight new customers selected Optiva, indicating confidence in the Company’s software portfolio. During the quarter, Optiva entered into a partnership to deliver integrated BSS and OSS solutions to leverage data and GenAI for faster time to market and new digital customer experiences. Subsequent to quarter end, the Company also announced that its BSS was selected to enable platforms to connect transitioning U.S. veterans with peer mentors and community resources.

As Optiva continues to sign new customers, the more subjected it is to customer specific delays as experienced in the most recent quarter stemming from regulatory complexity and supply chain challenges. These delays have impacted Optiva’s short-term revenue, but given the large number of new customer deliveries scheduled for 2024, the expectation remains for full-year revenue to be back-end weighted. R&D spending will remain elevated throughout 2024 as Optiva completes the substantial roadmap commitment made in 2021. While these expenditures have weighed on near-term margins and masked the underlying profitability of the business, the Company is seeing meaningful positive impacts from this investment in the form of increasing customer wins, win-backs and growing revenue backlog. “Customer retention continues to be positive, including the win back of two operators in the first quarter, serving as another data point for the technical leadership that Optiva’s products have re-established after the recent investments. We remain confident we will achieve our year-over-year revenue growth target of at least 10% in 2024,” said Robert Stabile, Chairman of the Board of Directors and Chief Executive Officer of Optiva.

For more information about Optiva, please visit: https://www.optiva.com/investors

Business Highlights

First Quarter 2024 Financial Results Highlights:

       
  Q1 Fiscal 2024 Highlights Three Months Ended
   
  ($ US Millions, except per share information) March 31,
   
  (Unaudited)   2024     2023    
  Revenue   11.7     12.7    
  Net Income (Loss)   (6.0 )   (2.8 )  
  Earnings (Loss) Per Share ($0.98 ) ($0.45 )  
  Adjusted EBITDA(1)   (2.3 )   1.0    
  Cash from (used in) operating activities   (3.4 )   (1.7 )  
  Total cash, including restricted cash   12.0     14.9    
         

(1) EBITDA, Adjusted EBITDA, TCV and adjusted EPS are non-IFRS measures. These measures are defined in the “Non-IFRS Financial Measures” section of this news release.

Non-IFRS Measures

“EBITDA” and “Adjusted EBITDA” are not financial measures calculated and presented in accordance with International Financial Reporting Standards (IFRS) and should not be considered in isolation or as a substitute to net income (loss), operating income or any other financial measures of performance calculated and presented in accordance with IFRS, or as an alternative to cash flow from operating activities as a measure of liquidity. The Company defines EBITDA as net income (loss) excluding amounts for depreciation and amortization, other income, finance costs, finance income, income tax expense (recovery), foreign exchange gain (loss) and share-based compensation. The Company defines “Adjusted EBITDA” as EBITDA (as defined above), excluding restructuring costs, one-time provision amounts and other one-time unusual items. The Company believes that Adjusted EBITDA is a metric that investors may find useful in understanding the Company’s financial position. The following table provides a reconciliation of Net Income to EBITDA and Adjusted EBITDA (in thousands of U.S. dollars).

     
  Three months ended, March 31,  
    2024     2023    
     
Net loss for the period $ (6,032 ) $ (2,776 )  
     
Add back / (substract):    
Depreciation of property and equipment   179     157    
Amortization of intangible assets       361    
Finance income   (193 )   (135 )  
Finance costs   2,829     2,365    
Income tax expense   239     567    
Foreign exchange loss   162     290    
Share-based compensation   507     197    
               
EBITDA and Adjusted EBITDA $ (2,309 ) $ 1,026    

Adjusted EPS is reported diluted EPS excluding the impact of change in the fair value of warrants, release of provisions and other one-time unusual items.

TCV is the Total Contract Value of all bookings closed in the period.

About Optiva

Optiva Inc. is a leader in powering the telecom industry with cloud-native billing, charging and revenue management software on private and public clouds. Its products are delivered globally on the private and public cloud. The Company’s solutions help service providers maximize digital, 5G, IoT and emerging market opportunities to achieve business success. Established in 1999, Optiva Inc. is listed on the Toronto Stock Exchange (TSX: OPT). For more information, visit www.optiva.com.

Caution Concerning Forward-Looking Statement

Certain statements in this document may constitute “forward-looking” statements that involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this document, such statements use such words as “may,” “will,” “expect,” “continue,” “believe,” “plan,” “intend,” “would,” “could,” “should,” “anticipate” and other similar terminology. Forward-looking statements in this document include statements regarding the Company’s “qualified pipeline”, the TCV of the qualified pipeline and the Company’s expectations regarding future revenues.  These statements are forward-looking as they are based on our current expectations, as at May 9, 2024, about our business and the markets we operate in and on various estimates and assumptions. Our actual results could materially differ from our expectations if known or unknown risks affect our business or if our estimates or assumptions turn out to be inaccurate. As a result, there is no assurance that any forward-looking statements will materialize. Risks that could cause our results to differ materially from our current expectations include the risk that the Company will not secure contracts with customers that are included in its qualified pipeline, the risk that existing customers may decrease their spend with the Company and other risks that are discussed in the Company’s most recent Annual Information Form, available on SEDAR at www.sedar.com and Optiva’s website at www.optiva.com/investors/. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Optiva does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

For additional information, please contact:  

Media Contact: 

Misann Ellmaker
media@optiva.com

Investor Relations: 

Ali Mahdavi
investors-relations@optiva.com

OPTIVA Inc.      
Condensed Consolidated Interim Statements of Financial Position    
(Expressed in thousands of U.S. dollars)      
(Unaudited)      
       
       
    March 31,     December 31,    
    2024     2023    
       
Assets      
       
Current assets:      
Cash and cash equivalents $ 11,243   $ 19,642    
Trade accounts and other receivables   8,811     7,504    
Unbilled revenue   14,104     14,362    
Prepaid expenses   1,989     2,185    
Income taxes receivable   3,743     3,633    
Other assets   548     480    
Total current assets   40,438     47,806    
       
Restricted cash   784     793    
Property and equipment   988     963    
Deferred income taxes   386     383    
Other Assets   1,378     1,371    
Long-term unbilled revenue   636     727    
Goodwill   32,271     32,271    
Total assets $ 76,881   $ 84,314    
       
Liabilities and Shareholders’ Equity (Deficit)    
       
Current liabilities:      
Trade payables $ 1,626   $ 2,256    
Accrued liabilities   10,046     11,919    
Income taxes payable   4,255     4,299    
Deferred revenue   2,026     1,555    
Total current liabilities   17,953     20,029    
       
Deferred revenue   221     206    
Other liabilities   2,132     1,702    
Pension and other long-term employment benefit plans   41     132    
Debentures   101,669     101,348    
Deferred income taxes   136     185    
Total liabilities   122,152     123,602    
       
Shareholders’ equity (deficit):      
Share capital   270,610     270,610    
Contributed surplus   15,166     15,117    
Deficit   (334,917 )   (328,885 )  
Accumulated other comprehensive income (loss)   3,870     3,870    
Total shareholders’ equity (deficit)   (45,271 )   (39,288 )  
Total liabilities and shareholders’ equity (deficit) $ 76,881   $ 84,314    
       
OPTIVA Inc.      
Condensed Consolidated Interim Statements of Comprehensive Income (loss)  
(Expressed in thousands of U.S. dollars, except per share and share amounts)  
(Unaudited)      
       
       
  Three months ended March 31,  
    2024     2023    
       
Revenue:      
Support and subscription $ 7,330   $ 8,439    
Software licenses, services and other   4,374     4,212    
    11,704     12,651    
       
Cost of revenue   4,888     3,984    
       
Gross profit   6,816     8,667    
       
Operating expenses:      
Sales and marketing   2,756     2,519    
General and administrative   3,017     2,478    
Research and development   4,038     3,359    
    9,811     8,356    
       
Income (loss) from operations   (2,995 )   311    
       
Foreign exchange loss   (162 )   (290 )  
Finance income   193     135    
Finance costs   (2,829 )   (2,365 )  
       
Loss before income taxes   (5,793 )   (2,209 )  
       
Income tax expense (recovery):      
Current   294     571    
Deferred   (55 )   (4 )  
    239     567    
       
Total net loss and comprehensive loss $ (6,032 ) $ (2,776 )  
       
Loss per common share      
Basic $ (0.98 ) $ (0.45 )  
Diluted   (0.98 )   (0.45 )  
       
       
Weighted average number of common shares (thousands):    
Basic   6,180     6,178    
Diluted   6,180     6,178    
       
       
OPTIVA Inc.      
Condensed Consolidated Interim Statements of Cash Flows    
(Expressed in thousands of U.S. dollars)      
(Unaudited)      
       
       
  Three months ended March 31,  
    2024     2023    
       
Cash provided by (used in):      
       
Operating activities:      
Loss for the period $ (6,032 ) $ (2,776 )  
Adjustments for:      
Depreciation of property and equipment   179     157    
Amortization of intangible assets       361    
Finance income   (193 )   (135 )  
Finance costs   2,829     2,365    
Pension   (87 )   (426 )  
Income tax expense   239     567    
Unrealized foreign exchange (gain) / loss   (314 )   (57 )  
Share-based compensation   507     197    
Change in non-cash operating working capital   (300 )   (1,328 )  
    (3,172 )   (1,075 )  
Interest paid       (6 )  
Interest received   172     111    
Income taxes paid   (436 )   (742 )  
    (3,436 )   (1,712 )  
       
Financing activities:      
Interest paid on debentures   (5,086 )   (4,424 )  
    (5,086 )   (4,424 )  
       
Investing activities:      
Purchase of property and equipment   (200 )   (178 )  
Decrease in restricted cash   9     778    
    (191 )   600    
       
Effect of foreign exchange rate changes      
on cash and cash equivalents   314     71    
       
Decrease in cash and cash equivalents   (8,399 )   (5,465 )  
       
Cash and cash equivalents, beginning of period   19,642     18,386    
       
Cash and cash equivalents, end of period $ 11,243   $ 12,921    
       


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