Mr. Jay Bedard reports

CLOUD DX REPORTS RESULTS FOR THE FIRST QUARTER OF 2023

Cloud Dx Inc. has released results for the three months ended March 31, 2023.

Highlights include a 151-per-cent increase in subscription revenue, a 68-per-cent increase in total revenue and a 183-per-cent increase in gross profit compared with Q1 2022.

Key developments:

• The company announced 15 new commercial contracts from Jan. 1 to March 31, 2023, compared with 28 contracts/extensions signed in fiscal 2022.
• Total revenue of $568,006 represents an increase of 68.4 per cent compared with the same period in 2022, due to increases in both new contracts signed and growth of existing contracts.
• Gross profit in Q1 2023 was $388,925, or 183 per cent higher than in Q1 2022, due to increased subscription and product revenue from new customers and a reassignment of certain data hosting expenses from COGS (cost of goods sold) to operating expenses.

The company will hold an earnings call webinar on Monday, May 29, 2023, 11 a.m. PDT (2 p.m. EDT).

Summary of results

Revenue

For the period ending March 31, 2023, total reported revenue of $568,006 increased by $230,742, or 68.4 per cent, compared with the same period in 2022.

Subscription revenue increased by $131,961, or 151.3 per cent, while product revenue increased by $89,698, or 39.5 per cent, versus Q1 2022, due primarily to new patient enrolments in Canada and the United States.

These positive results show that growth in Cloud Dx revenue from new contracts continues to accelerate.

Professional services revenue increased by $10,083, or 43.4 per cent, due to increased customization, integration and optimization contracts invoiced and paid in the period.

Government grant funding was $80,887 in 2023, versus $84,991 in 2022, a 4.8-per-cent decrease due primarily to timing of payments on active grants. Fluctuations in professional services revenue and grant funding amounts from period to period are not unusual for Cloud Dx.

Expenses

Operating expenses in the period were $2,599,550, compared with $2,365,848 in the same period in 2022. Office expenses increased by $47,468, or 49.4 per cent, due to a reassignment of data hosting expenses to operations from COGS. Increases in sales, general and administrative expenses and salaries -- due primarily to inflation -- were mostly offset by decreases in professional fees and R&D (research and development) costs.

Cost of sales in Q1 decreased by $21,105, or 10.5 per cent, in compared with the same period in 2022, due to timing of inventory purchases and adjustments to COGS.

A one-time recorded loss of $498,949 due to foreign currency exchange accounts for essentially all of the $496,650, or 22.5-per-cent, increase in net loss.

Gross profit margin

Gross profits increased in the period by $251,847, or 183.7 per cent. As noted herein, approximately $46,000 of this difference is attributable to a reassignment of data hosting costs from COGS to office expenses. Stripping out this one-time change in accounting, gross profit increased by approximately $206,000, or approximately 150 per cent.

Please see the consolidated financial statements and MD&A (management discussion and analysis) posted on SEDAR for more details.

Additional events of note in Q1 2023

The company executed or extended 15 new commercial contracts as of March 31, 2023, compared with 28 contracts/extensions in all of 2022, a run-rate increase of over 200 per cent.

Patient enrolment in the period increased by approximately 30 per cent as demand for remote patient monitoring products and services continued to increase, despite inflation and macroeconomic uncertainty.

During the period, the company was granted its ninth and 10th patents covering innovations in digital biosignal analysis using artificial intelligence.

About Cloud Dx Inc.

Accelerating digital health care, Cloud Dx is on a mission to make health care better for everyone. The company's Connected Health remote patient monitoring platform is used by health care enterprises and care teams across North America to virtually manage chronic disease, enable aging in place and deliver hospital-quality postsurgical care in the home. The company's partners achieve better health care and patient outcomes, reduce the need for hospitalization or readmission, and reduce health care delivery costs through more efficient use of resources. Cloud Dx is the co-winner of the Qualcomm Tricorder XPrize, 2022 Top Innovator by Canadian Business, a 2021 Edison Award winner, a Fast Company World Changing Idea finalist and one of Canada's 10 most prominent telehealth providers. Cloud Dx is an exclusive partner to Medtronic Canada, Teladoc Health Canada and Equitable Life of Canada.

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