Mr. Paul Sakrzewski reports

COPPERLEAF ANNOUNCES THIRD QUARTER 2023 RESULTS

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

• Annual recurring revenue increases 26 per cent YoY (year over year) to $53.3-million;
• Subscription revenue grows 30 per cent YoY to $13.0-million;
• Backlog grows 23 per cent to $114.2-million.

"Copperleaf's third quarter results demonstrated continued momentum across all of our key financial metrics," said Paul Sakrzewski, chief executive officer of Copperleaf. "We delivered a 26-per-cent YoY increase in annual recurring revenue, drove a 30-per-cent YoY increase in subscription revenue and ended the quarter with a record $114.2-million backlog.

"Our third quarter performance underscores the effectiveness of our industry-leading decision analytics software, the strength of our refreshed operating model and the improved execution of our team, despite continuing uncertain market conditions. During the quarter, we made further progress on geographic and industry sector expansion with the addition of one of the largest gas distribution companies in the United States as well as signing one of Brazil's largest integrated power utilities, validating go-to-market investments made in the region. Additionally, we continued to make substantial progress across our alliance and partner ecosystem. In the third quarter we saw the commencement of co-operative go-to-market activities with SAP under the Endorsed Apps program, resulting in material incremental pipeline for 2024 and beyond. These results highlight the significant value we provide to our clients, as well as the sustained demand for the innovative solutions Copperleaf provides," added Mr. Sakrzewski.

"For the remainder of 2023, we will remain focused on executing our go-to-market strategy while continuing to prudently manage company expenses as we navigate uncertain economic conditions. We anticipate that growth in ARR and pipeline for the remainder of the year will be driven by continuing refinement of our go-to-market model, the maturation of our sales force and increasing partner traction," Mr. Sakrzewski concluded.

Third quarter 2023 financial highlights

(Comparison periods in each case are the three months ended Sept. 30, 2022, unless otherwise stated.)

• Revenue of $19.9-million, an increase of 10 per cent compared with Q3 2022, driven by an increase in subscription and perpetual and term-based licence revenue partially offset by a decrease in professional services revenue.
• Annual recurring revenue as at Sept. 30, 2023, of $53.3-million, a 26-per-cent increase from $42.3-million as at Sept. 30, 2022.
• Subscription revenue of $13.0-million, an increase of 30 per cent over Q3 2022.
• Gross profit of $14.5-million representing a gross margin of 73 per cent, a 9-per-cent increase from $13.3-million and 73 per cent in Q3 2022.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $5.9-million, compared with adjusted EBITDA loss of $8.1-million in Q3 2022.
• Net loss of $5.2-million, or a loss of seven cents per basic and diluted share, compared with a net loss of $7.5-million, or a loss of 11 cents per basic and diluted share, in Q3 2022.
• As of Sept. 30, 2023, the company's net revenue retention rate was 111 per cent compared with 109 per cent as of Sept. 30, 2022.
• As of Sept. 30, 2023, Copperleaf's revenue backlog grew 23 per cent to $114.2-million compared with $93.1-million as of Sept. 30, 2022.
• Strong balance sheet with cash and cash equivalents of $46.3-million, short-term investments of $62.2-million, and long-term investments of $20.0-million as at Sept. 30, 2023.

Key developments

• In Q3, Copperleaf made further progress on geographic and industry sector expansion with the addition of one of the United States's largest gas distribution companies which materially extends the company's footprint in natural gas distribution in the U.S., as well as the signing of one of Brazil's largest integrated power utilities which represents another important geographic expansion while establishing the company's beach-head in Brazil.
• Further to the announcements in Q1 and Q2 regarding the developing relationship with SAP under the Endorsed Apps program, Q3 saw the commencement of co-operative go-to-market activities resulting in material incremental pipeline for 2024 and beyond, across all regions.
• Q3 also saw the deepening of Copperleaf's global relationship with Accenture as they assigned a global partner director to programmatically coordinate joint go-to-market activities across all regions.
• Verdantix published its inaugural Green Quadrant report on AIP during Q3 with Copperleaf positioned as the clear leader in the segment.
• As part of Copperleaf's continuing commitment to best-in-class cyber security standards, in Q3 the company successfully completed SOC 2 and ISO 27001 audits.
• In Q3, Copperleaf was granted a U.S. patent for an advanced software optimizer which enhances the company's comprehensive asset management capabilities to accommodate large numbers of assets, across all stages of an asset's life cycle. This patent highlights Copperleaf's dedication to developing pioneering solutions that facilitate better investment decisions.
• During Q3, Copperleaf released Version 23.3 of its product suite which included numerous new innovations including: new modelling for complex asset relationships and asset interventions in the Copperleaf Value Model Library (CVML); visualization of predictive analytics asset strategies in the company's Interactive GIS Experience option; and significant enhancements to the company's popular Dashboard Library which empowers Copperleaf's clients to communicate their value-based decision outcomes more effectively.

Q3 2023 financial results conference call details

Paul Sakrzewski, chief executive officer, and Chris Allen, chief financial and operating officer, will host a conference call followed by a question-and-answer session today, Nov. 8, 2023, at 5 p.m. ET.

Date:  Nov. 8, 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 Nov. 15, 2023)

Replay entry code:  038919 followed by the pound key

About Copperleaf Technologies Inc.

Copperleaf provides enterprise decision analytics software solutions to companies managing critical infrastructure. It leverages operational and financial data to empower its clients to make investment decisions that deliver the highest business value. What sets Copperleaf apart is its industry-leading products and its 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 its participation in the United Nations Global Compact, the Institute of Asset Management and other organizations. Headquartered in Vancouver, Canada, Copperleaf's solutions are distributed and supported by regional staff and partners worldwide.

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