The Company closed $0.35 million of new ARR with $0.65 million of ARR in deals awaiting execution
VANCOUVER, BC, July 11, 2023 /CNW/ - HS GovTech Solutions Inc. (the "Company" or "HS GovTech") (CSE: HS) (OTC: HDSLF) (Frankfurt: 38H) is pleased to present an update regarding its sales performance and business activities during the quarter ended June 30, 2023 ("Q2"). All financial figures contained herein are expressed in U.S. dollars ("USD") unless otherwise noted.
At the end of Q2 2023 the Total Contract Value ("TCV") for agreements that were either fully executed contracts ("Fully Executed") or agreed to, awarded and out for execution ("Awarded") was $6.49 million, encompassing 27 agreements. The breakdown of Fully Executed deals as at the end of Q2 are as follows:
- $0.44 million in new professional services revenue
- $0.35 in net new ARR (Annual Recurring Revenue)
- As at June 30, 2023 ARR stood at $6.50 million
- Once all of the Awarded activity is Fully Executed, the Company's ARR will stand at $7.1 million and will add an additional $0.97 million in professional services revenue
Notable highlights from the quarter include:
- 7 of the 27 customer agreements were for expanded services and usage across existing customers
- Largest ARR growth continues to come from high demand markets familiar to HS GovTech, notably California and Colorado
HSPay continues to increase in adoption as Total Processed Volume ("TPV") remained steady through Q2. Heading into Q3, it is anticipated TPV to increase as the largest revenue collection season for local government agencies typically takes place between late summer and fall. This is due to permit renewals in larger programs, such as food, being initiated during the summer months.
Chief Executive Officer, Silas Garrison, commented "I am very pleased with how Q2 shaped up in terms of sales development. Q2 for government agencies is typically at the tailend of their fiscal year. We are seeing a lot of momentum heading into Q3 wherein agencies who have engaged with us are intending to move toward contracting as they start their fiscal year. This should give way to a strong Q3. We closed out $0.35 million in new ARR in the quarter, while increasing Awarded ARR to over $0.6 million from deals anticipated to close this year. This strong ARR growth, coupled with continued professional services growth, position us well to achieve our intended cash flow break even target in 2024."
ARR is a non-IFRS measure that provides an indication of the subscription revenue from customers that is expected from continued usage per the term of contract signed, and as such management believes ARR to be a meaningful measure for assessment of Company performance. Key assumptions related to ARR figures are from continued usage of the services over the life of the agreement, with the calculation based on the annual average of subscription revenues over the life of the agreement.
HS GovTechTM is an industry leading software as a service company serving the state, provincial and local government market across the United States and Canada. HS GovTech'sTM cutting edge platforms currently provide inspection, information, communication and data management systems that enable government agencies to operate more efficiently. HS GovTech'sTM cloud and mobile based platforms are currently deployed in over 800 state and local government organizations across North America. HS GovTechTM currently offers the only fully integrated inspection, administration and analytics product suite across all platforms in North America. HS GovTechTM also delivers its government grade technologies to private businesses through its My Health DepartmentTM platform, enabling citizens and private businesses to gain visibility and predictability into their own organizations and move from a reactive to a proactive operational status. As HS GovTechTM continues to deliver focused service and innovative solutions to government organizations, the Company entered the FinTech space through its HSPayTM offering which serves as a payment platform that streamlines the intake of government revenue. Further, HS GovTech's GovCallTM platform offers one of the only teleconferencing and video collaboration platforms tailored exclusively for government agencies.
This release may contain forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although HS GovTechTM believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. HS GovTechTM expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
SOURCE HS GovTech Solutions Inc.
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