CUPERTINO, Calif., Nov. 27, 2020 /PRNewswire/ – (TSXV: BWLK) (OTCQB: BWLKF) – Boardwalktech Software Corp. (“Boardwalktech” or the “Company”), the leading digital ledger platform and enterprise software solutions company, is pleased to report its financial results for the three-month period ended September 30, 2020. All figures are reported in U.S. dollars, unless otherwise indicated. Boardwalktech’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”).
Financial Highlights:
- Revenues for Q2-FY21 of $1.1 million versus $1.2 million of revenue in Q2-FY20, as this decrease was due to lower professional services revenue and the impact of legacy contracts (supplemental hosting and premium services) shifting in favor of the Company’s new SaaS model, implemented in 2018. As a result of those legacy contracts being retired, Annualized Recurring Revenue for Q2-FY21 was $3.7 million, compared to $3.9 million in Q1-FY21, though the Company projects ARR to be over $5 million by Q1-FY22.
- As evidenced of the traction of the new SaaS model, 67% of subscription revenue in Q2-FY21 came from contracts executed since 2018, up from 50% last year. Further, subscription licenses contributed 66% of total revenue in Q2-FY21 versus 53% 18 months ago (the balance of total revenue from Professional Services).
- Despite COVID-19 headwinds, the sales pipeline grew again in Q2-FY21 and is approaching $8 million compared to $4.5 million last year.
- Gross margin in Q2-FY21 was 86.3%, flat with Q2-FY20 but lower than the 87.0% in Q1-FY21 due to lower revenue. Cost of sales decreased in absolute dollars, even given infrastructure enhancement expenses.
- Cash from Operating Activities for Q2-FY21 totaled $(0.1) million compared to $(0.0) million in Q2-FY20 and an 87% improvement versus $(0.9) million in Q1-FY21, reflecting continued progress towards cash-flow breakeven.
- Adjusted EBITDA loss of $(0.4) million in Q2-FY21, a 37% improvement from a loss of $(0.6) million in Q2-FY20.
- Non-IFRS loss for Q2-FY21 (as defined in the Non-IFRS Financial Measures section) totaled $(0.5) million, or $(0.03) per basic and diluted share, a 35% improvement versus a $(0.8) million loss in Q2-FY20, or $(0.07) per basic and diluted share.
- Reported loss for Q2-FY21 was $(0.9) million, or loss of $(0.04) per basic and diluted share, representing an 31% improvement versus a $(1.3) million loss, or $(0.11) per basic and diluted share in Q2-FY20.
Operations highlights
- On July 3, 2020, the Company completed a new amendment with its existing investor, SQN Venture Income Fund LP, to extend the maturity of its loan to August 2022, extended interest-only payment until August 2020.
Subsequent to the quarter:
- On October 21, 2020, the Company announced that it had been awarded a Defense Logistics Agency (DLA) research and development project subcontract based on Boardwalk’s digital ledger solution to track and ensure food safety and prevent food contamination to U.S. military and officials stationed overseas.
- On November 11, 2020, the Company closed a $1.3 million non-brokered private placement.
- On November 11, 2020, the Company announced that it had completed an amendment with its existing investor, SQN Venture Income Fund LP, to: extend the maturity to January 1, 2023, extend the interest-only period of the loan by six months to February 28, 2021, and a reset of the interest rate to 14.95%.
“Boardwalktech continues to see its pipeline grow despite experiencing some extension of our sales cycle as a result of the COVID-19 pandemic,” said Andrew T. Duncan, CEO of Boardwalktech. “While total revenue may have declined slightly in the quarter, revenue from new SaaS contracts continues to grow as we see a larger proportion of our revenue base being made up of high-quality, sticky, recurring SaaS license revenue. This strategy of driving growth from new enterprise licenses is the direct result of the new business model we implemented in 2018 – to focus on establishing ourselves as a pure SaaS organization and we are pleased to see Boardwalktech gaining customer traction with this approach. The decline is directly attributable to a decrease in professional services and revenue from some legacy contracts (hosting and stand-alone services) as we continue to migrate these legacy customers towards our enterprise licensing model.”
Mr. Duncan continued, “As we continue into calendar year 2021, we anticipate a good portion of our pipeline converting into customers in the new year as they recognize the significant value that our proprietary digital ledger SaaS platform provides across the enterprise. As well, we continue to make material and permanent progress towards achieving profitability in the near future as we convert our pipeline into a long term recurring revenue base.”
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