Mr. Paul Sakrzewski reports

COPPERLEAF ANNOUNCES SECOND QUARTER 2023 RESULTS

Copperleaf Technologies Inc. has released its financial results for the three and six months ended June 30, 2023. All amounts are expressed in Canadian dollars unless otherwise stated.

"Copperleaf delivered a 26% YoY increase in Annual Recurring Revenue, and a 23% YoY increase in subscription revenue in the second quarter. This represents material year-over-year growth despite uncertain market conditions persisting in most of our geographies. Our ability to unlock value, through improved capital efficiency and increased alignment of resource allocation with our client's strategy is a huge benefit under constrained conditions. These results are a great indication that we are gaining traction in articulating that value to clients." said Paul Sakrzewski, CEO of Copperleaf.

"In the second quarter, Copperleaf welcomed Societa Gasdotti Italia, Italy's second largest gas transmission operator, as its first client in Italy. Additionally, Copperleaf secured its first client in Ireland and its first Oil and Gas client in Europe, validating our strategic investments in these regions and our deliberate, programmatic approach to introducing Copperleaf's solutions to new industries," added Mr. Sakrzewski. "Momentum also continues to build across our Alliance Ecosystem, and following our announcement in Q1, we have now achieved Premium Certification and are live on the SAP store, marking the onset of joint go-to-market activities between Copperleaf and SAP."

"For the remainder of 2023, we will remain focused on executing our go-to-market strategy and further strengthening our global salesforce, while prudently managing our expenses. The maturation of our global go-to-market approach, supported by increasing partner traction, will drive ARR and pipeline growth in the second half of the year. With continued innovation in our market leading solutions, a strong balance sheet, and a growing client base, we are poised to extend our leadership position and drive future growth." Mr. Sakrzewski concluded.

Second 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 and six months ended June 30, 2023; Comparison periods in each case are the three months ended June 30, 2022, unless otherwise stated)

• Revenue of $18.5 million, a decrease of 10% compared to Q2 2022, driven primarily by a 97% decrease in perpetual and term-based software license revenue over Q2 2022.
• Annual Recurring Revenue1 as at June 30, 2023 of $51.2 million, a 26% increase from $40.6 million as at June 30, 2022.
• Subscription revenue of $11.7 million, an increase of 23% over Q2 2022.
• Gross profit of $12.8 million representing a Gross margin of 69%, a 19% decrease from $15.7 million and a Gross margin of 76% in Q2 2022. Gross margin decreased temporarily primarily due to a decrease in perpetual and term-based software license revenue, an increase in subcontractor costs for the quarter, plus increased headcount and product support related to our growing client base.
• Adjusted EBITDA1 loss of $10.6 million, compared to Adjusted EBITDA1 loss of $5.8 million in Q2 2022.
• Net loss of $12.6 million, or a loss of $0.18 per basic and diluted share, compared to a net loss of $7.4 million, or a loss of $0.11 per basic and diluted share, in Q2 2022.
• As of June 30, 2023, the Company's Net Revenue Retention Rate1 was 111% compared to 107% as of June 30, 2022
• As of June 30, 2023, Copperleaf's Revenue Backlog1 grew 16% to $107.7 million compared to $93.0 million, as of June 30, 2022.
• Strong balance sheet with cash and cash equivalents of $62 million, short-term investments of $55 million, and long-term investments of $20 million as at June 30, 2023.

Key Developments

• In Q2, Copperleaf made further progress on geographic and industry sector expansion, closing its first clients in Ireland, Italy, and its first Oil and Gas client in Europe.
• Further to the public announcement in Q1 of Copperleaf and SAP entering into an Endorsed Apps agreement, the Company has now achieved Premium Certification and is live on the SAP store. This milestone means that Copperleaf has passed stringent security and interoperability requirements enabling organizations to add Copperleaf to their SAP ecosystem with confidence. Achievement of Premium Certification and inclusion on the store is the trigger for the commencement of joint go-to-market activities between Copperleaf and SAP.
• During the quarter, the Company released its inaugural Environmental, Social and Governance (ESG) Report for the year ended December 31, 2022. The ESG Report includes responses to the recommendations outlined in the Task Force on Climate Related Disclosures (TCFD) framework and shares the Company's progress and plans to address important ESG issues, in addition to showcasing Copperleaf's internal and external ESG impact.
• The Company convened the first in-person Global Copperleaf Summit since 2019 in Vancouver, exceeding client attendance goals and record attendance from partners.
• In Q2, Copperleaf saw growing engagement in Copperleaf Community working groups, with the introduction of the H2O water working group and held five working group meetings in the quarter.
• During Q2, Copperleaf released version 23.2 of its product suite which included numerous new features comprising:
  • Interactive GIS Experience, a new chargeable option where users can improve their decision making and storytelling on their asset management plans by directly visualizing their Copperleaf Asset results in ESRI's ArcGIS (Geographic Information System) system.
  • New enterprise-standard SCIM (System for Cross-domain Identity Management) API which enables automatic management of users and groups directly through user management systems such as Azure Active Directory or OKTA.

1 Please refer to "Non-IFRS Measures" section of this press release

Q2 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, August 3, 2023, at 5:00 PM ET.

• Date: August 3, 2023
• Time: 5:00pm ET
• Dial-In Number: 416-764-8659 or 1-888-664-6392
• Replay: 416-764-8677 or 1-888-390-0541 (Available until August 10, 2023)
• Replay Entry Code: 264037#

About Copperleaf:

Copperleaf (TSX:CPLF) provides enterprise decision analytics software solutions to companies managing critical infrastructure. We leverage operational and financial data to empower our clients to make investment decisions that deliver the highest business value. What sets us apart is our industry-leading products and our commitment to providing extraordinary experiences, shaped by people who care deeply and partnerships that stand the test of time. Copperleaf is actively involved in shaping and implementing global industry standards and sustainability principles through our participation in the United Nations Global Compact, the Institute of Asset Management, and other organizations. Headquartered in Vancouver, Canada, our solutions are distributed and supported by regional staff and partners worldwide. Together, we are transforming how the world sees value.

We seek Safe Harbor.