Subscription revenues for the quarter increased to $1.46 million, up 35% from Q2-22
VANCOUVER, BC, Aug. 30, 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 three and six months ended June 30, 2023. All financial figures contained herein are expressed in U.S. dollars ("USD") unless otherwise noted.
Q2 2023 Highlights (all comparisons are to Q2 2022, unless otherwise noted)
- Total revenues increased in Q2-23 to $2.04 million, compared to $1.83 million, an increase of 11%
- Subscription revenues increased to $1.46 million, compared to $1.08 million.
- Professional Services revenues decreased to $0.58 million, compared to $0.75 million.
- Adjusted EBITDA improved to a loss of $0.58 million, compared to a loss of $0.87 million.
- Annual Recurring Revenue ("ARR") under contract increased to $6.48 million at June 30, 2023, compared to $6.01 million at December 31, 2022, and $4.82 million at June 30,2022.
- As discussed in the Company's Q2 sales update on July 11, 2023, once all deals awarded through the end of Q2-23 are fully executed, ARR is expected to increase to $7.1 million.
Chief Executive Officer, Silas Garrison, commented on the second quarter's financial results.
"Once again, we are pleased to report sustained growth in subscription revenue through the second quarter of 2023, as compared to the same period last year. While professional services revenue is down slightly year over year, that is not unexpected due to the uneven timing of completing performance obligations in individual contracts. We have a number of customers that are wrapping up implementations, along with new customers coming on board, that should significantly increase professional services revenue through the remainder of the year and into 2024.
An intent focus on increasing margins and efficiency has begun to show results, with sales costs down 27% and G&A down 9% through Q2-23 as compared to the same period in 2022. Excluding amortization, G&A is down 14% year over year. We continue to improve processes and systems to increase cost efficiency, and expect further savings in subsequent quarters."
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 GovTech Solutions Inc.
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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