Mr. Paul Sakrzewski reports

COPPERLEAF ANNOUNCES FIRST QUARTER 2023 RESULTS

Copperleaf Technologies Inc. today released its financial results for the three months ended March 31, 2023. All amounts are expressed in Canadian dollars unless otherwise stated.

"Copperleaf's first quarter demonstrated continued momentum with material year-over-year growth spread across our geographies and sectors. During the quarter, we welcomed Scottish Water as our ninth U.K.-based water client and signed our first Australian water client, underscoring the global applicability of our solution," said Paul Sakrzewski, chief executive officer of Copperleaf. "Water utilities in particular are facing unprecedented challenges, making it increasingly challenging to meet service level targets and minimize disruptions. Copperleaf provides water companies with proven tools to address these complex challenges, providing a comprehensive understanding of asset risk.

"Copperleaf's strategic go-to-market investments continue to pay dividends, resulting in new industry sales, pipeline growth and accelerated lead generation," continued Mr. Sakrzewski. "During the first quarter we successfully expanded into the ports industry, as well as into upstream oil and gas. For the remainder of 2023, we will remain focused on executing our go-to-market strategy, maintaining a prudent approach to managing our expenses as we navigate through the current economic environment. We anticipate that our growth for the remainder of the year will be driven by the maturation of our newly expanded sales force and increasing partner traction, which will drive bookings and ARR growth in the second half of 2023. With a deep sales pipeline, a strong balance sheet, a growing client base and market leading solution, we are poised to extend our leadership position and drive future growth."

First quarter 2023 financial highlights

(All Capitalized terms used but not defined in this press release have the meanings ascribed to them in management's discussion and analysis for the three months ended March 31, 2023; comparison period is the first quarter ended March 31, 2022, unless otherwise stated.)

• Revenue of $20.0-million, an increase of 28 per cent over Q1 2022, driven by the delivery of new clients and expansion within existing clients.
• Annual recurring revenue as at March 31, 2023, of $49.1-million, a 29-per-cent increase from $38.0-million as at March 31, 2022.
• Subscription revenue of $11.3-million, an increase of 24 per cent over Q1 2022.
• Gross profit of $13.7-million representing a gross margin of 68 per cent, a 22-per-cent increase from $11.2-million and a gross margin of 72 per cent in Q1 2022. Gross margin decreased temporarily primarily due to an increase in subcontractor costs for the quarter plus increased headcount, travel costs and product support related to the company's growing client base.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $10.0-million, compared with adjusted EBITDA loss of $9.0-million in Q1 2022.
• Net loss of $11.8-million, or a loss of 17 cents per basic and diluted share, compared with a net loss of $10.9-million, or a loss of 16 cents per basic and diluted share, in Q1 2022.
• As of March 31, 2023, the company's net revenue retention rate was 111 per cent.
• As of March 31, 2023, Copperleaf's revenue backlog grew 15 per cent to $110.5-million compared with $96.0-million, as of March 31, 2022.
• Strong balance sheet with cash and cash equivalents of $145.9-million as at March 31, 2023, compared with $149.5-million at Dec. 31, 2022.

Key developments

• In Q1 the company completed the successful transition of its chief executive officer.
• The company took significant steps to improve scalability, sales effectiveness and efficiency by establishing a new global business operations function and introducing the global growth office, which brings together product management, industries, partners and value engineering to better support the global go-to-market teams.
• Copperleaf's strategic go-to-market investments have driven further pipeline growth, accelerated lead generation and adoption in new industries and geographies. During the first quarter, the company expanded into the ports industry, and upstream oil and gas with its first oil sands client. The company also closed its first clients in France and the Middle East.
• Water continues to be a key focus for Copperleaf. In Q1 Scottish Water selected Copperleaf H2O to become its ninth water company in the United Kingdom, and the company expanded this success internationally being selected at Sydney Water, its first water client in Australia.
• The Alliance Ecosystem continued to gain traction as the company's partners invested in expanding their Copperleaf practice areas. In Q1 Copperleaf signed an Endorsed Apps initiative agreement with SAP signalling SAP's recognition of Copperleaf's industry-leading technology and the value that the combined solutions can deliver to organizations globally.
• The company had strong engagement with the Copperleaf community through Copperleaf Labs where the company collaborated with clients on initiatives spanning scenario organization, GIS and data visualizations.
• During Q1, Copperleaf released Version 23.1 of its product suite which included numerous new features including: a configurable performance management dashboard enabling nimble visualization and adaptation of plans; improved GIS integration allowing users to manage their portfolios and plans directly through the GIS mapping interface; and improved support for multipart or dependent projects coupled with an intuitive graphical user interface which will drive better outcomes and improved optimization results.

Q1 2023 financial results conference call details

Paul Sakrzewski, chief executive officer, and Chris Allen, chief financial officer, will host a conference call followed by a question-and-answer session today, May 10, 2023, at 5 p.m. ET.

Date:  May 10, 2023

Time:  5 p.m. ET

Dial-in number:  416-764-8659 or 1-888-664-6392

Replay:  416-764-8677 or 1-888-390-0541 (available until May 17, 2023)

Replay entry code:  376144 followed by the pound key

About Copperleaf Technologies Inc.

Copperleaf provides enterprise decision analytics software solutions to companies managing critical infrastructure. The company leverages operational and financial data to empower its clients to make investment decisions that deliver the highest business value. What sets it apart is its commitment to providing extraordinary experiences, shaped by people who care deeply, products that deliver exceptional value and partnerships that stand the test of time. Copperleaf is a patron of The Institute of Asset Management and actively participates in shaping the future of asset management standards, including ISO 55000. Headquartered in Vancouver, Canada, the company's solutions are distributed and supported by regional staff and partners worldwide. Together, it is transforming how the world sees value.

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