Subscription revenues increased to $4.47 million, up 14% from FY21
VANCOUVER, BC, May 2, 2023 /CNW/ - HS GovTech Solutions Inc. (the "Company" or "HS GovTech") (CSE: HS) (OTC: HDSLF) (Frankfurt: 38H) a leading provider of SaaS applications for government, announced its financial results for the year ended December 31, 2022. All financial figures contained herein are expressed in U.S. dollars ("USD") unless otherwise noted.
- For the year months ended December 31, 2022, total revenues are up 6% over FY21, at $6.03 million, compared to $5.68 million.
- Subscription revenues showed strong growth through FY22, up 14% to $4.47 million, compared to $3.91 million, with subscription revenue from the company's largest contract to date (announced September 7, 2022) only coming online late in November. A full year's subscription from that contract will be recognized in FY23.
- Professional services revenue in FY22 was $1.56 million, compared with $1.77 million for FY21. FY23 is expected to include a significant amount of professional services delivery already contracted, including the entirety of the largest contract mentioned above.
- Annual Recurring Revenue ("ARR") under contract increased to $6.01 million at December 31, 2022, compared to $4.16 million at December 31, 2021.
- Adjusted EBITDA was a loss of $4.26 million in FY22, compared to a loss of $3.00 million in FY21, as expected following the scaling of capacity over the past two years.
Chief Executive Officer, Silas Garrison, commented on the year's financial results.
"I continue to be proud of what we have built at HS GovTech. Over the past two years, we have scaled the company to handle the pace of growth that we enjoy now and expect to see for the next several years. We have also addressed some of the growing pains that came with that growth; our product development team has been reorganized to focus on new functionality, and our implementation team is operating more efficiently than ever before. Our sales team continues to cultivate and grow our market penetration while expanding our footprint into new territories. This constant cultivation and expansion is resulting in a continual close of new business while replenishing the sales pipeline with new opportunities as fast as contracts close.
HS is a strong company, delivering crucial services across a broad base of government agencies. The platform we deliver is making a real difference in the operations of the agencies who make up our customer base. There is a deep gratification that comes with serving the public sector and working alongside a team that works tirelessly to innovate in ways these agencies only dreamt was possible. In FY22, we built an immense amount of momentum and energy in the customer markets we serve and I am thrilled to carry it forward into FY23."
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.
EBITDA is a non-IFRS measure that is used as a measure of profit and loss. Management believes EBITDA provides a meaningful measure for assessment of Company performance as it removes non-cash and non-operating expenses such as financing costs. EBITDA is defined and calculated as net loss adjusted to remove interest, taxes, depreciation and amortization.
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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