Mr. Paul Sakrzewski reports

COPPERLEAF ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2023 RESULTS

Copperleaf Technologies Inc. has released financial results for the fourth quarter and fiscal year ended Dec. 31, 2023.

Paul Sakrzewski, chief executive officer of Copperleaf, commented: "Copperleaf's ability to generate substantial client value drove sustained demand for our solutions in 2023. This was highlighted by our strong financial performance during the fourth quarter, where Copperleaf delivered a 30-per-cent [year-over-year] increase in annual recurring revenue and a 21-per-cent YoY increase in subscription revenue. Additionally, we ended the quarter with a record backlog. These results are a testament to our improved scalability, efficiency of our sales team and the progress we have made to enhance our go-to-market initiatives, despite challenging market conditions.

"Furthermore, during 2023, our partner and alliance ecosystem continued to gain traction as Copperleaf received premium certification from SAP, deepened its global relationship with Accenture and entered into a strategic alliance with Siemens. These partnerships are resulting in material incremental pipeline for 2024 and beyond," continued Mr. Sakrzewski.

"As a result of our continuous commitment to product innovation, our refreshed go-to-market model and increasing partner traction, we expect continuing robust ARR and pipeline growth in 2024 with our traditional Q4 weighting. These factors, along with our accelerating revenue growth and disciplined approach to managing costs, position us to make material progress back towards profitability," Mr. Sakrzewski concluded.

Fourth quarter 2023 financial highlights (comparison period is with the fourth quarter ended Dec. 31, 2022, unless otherwise stated):

• Revenue of $21.2-million, an increase of 11 per cent compared with Q4 2022, primarily driven by an increase in subscription revenue;
• Annual recurring revenue as at Dec. 31, 2023, of $60.2-million, a 30-per-cent increase from $46.4-million as at Dec. 31, 2022;
• Subscription revenue of $13.6-million, an increase of 21 per cent over Q4 2022;
• Gross profit of $15.0-million, representing a gross margin of 71 per cent, a 2-per-cent increase from $14.7-million and a gross margin of 76 per cent in Q4 2022; gross margin decreased temporarily primarily due to an increase in subcontractor costs and increased head count to support its growing client base;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $5.0-million, compared with adjusted EBITDA loss of $2.0-million in Q4 2022;
• Net loss of $5.5-million, or a loss of eight cents per basic and diluted share, compared with a net loss of $2.4-million, or a loss of three cents per basic and diluted share, in Q4 2022;
• As of Dec. 31, 2023, Copperleaf's revenue backlog grew 30 per cent to $139.5-million compared with $107.3-million as of Dec. 31, 2022;
• Strong balance sheet with cash and cash equivalents of $34.1-million, short-term investments of $82.3-million, and long-term investments of $10.0-million as at Dec. 31, 2023.

Fiscal year 2023 financial highlights (comparison period is with the year ended Dec. 31, 2022, unless otherwise stated):

• Record revenue of $79.6-million, an increase of 8 per cent over the prior year, driven by an increase in subscription revenue that was partially offset by a decrease in perpetual and term-based licences and professional service revenue;
• Subscription revenue of $49.6-million, an increase of 24 per cent over the prior year, offsetting a 37-per-cent decrease in perpetual and term-based licence revenue year over year as its business continues to transition to software as a service;
• Annual recurring revenue as at Dec. 31, 2023, of $60.2-million, a 30-per-cent increase from $46.4-million as at Dec. 31, 2022;
• As of Dec. 31, 2023, the company's net revenue retention rate was 111 per cent compared with 110 per cent as of Dec. 31, 2022;
• Gross profit of $55.9-million, representing a gross margin of 70 per cent, compared with $54.8-million in the prior year, representing a gross margin of 75 per cent; gross margin decreased temporarily primarily due to an increase in subcontractor costs, increased head count to support its growing client base, and a lower mix of perpetual and term-based software licence revenue;
• Adjusted EBITDA loss of $31.5-million, compared with an adjusted EBITDA loss of $24.9-million in the year ended Dec. 31, 2022;
• Net loss of $35.2-million, or a loss of 49 cents per basic and diluted share, compared with net loss of $28.2-million, or a loss of 41 cents per basic and diluted share, in the prior year; net loss increase is primarily due to more personnel supporting the company's growth strategy, increased incentive compensation and the continued transition to SaaS.

Q4 2023 financial results conference call details

Mr. Sakrzewski, and Chris Allen, chief financial and chief operating officer, will host a conference call followed by a question-and-answer session today, March 12, 2024, at 5 p.m. ET.

Date:  March 12, 2024

Time:  5 p.m. ET

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

A webcast will be available.

Replay:  416-764-8677 or 1-888-390-0541 (available until March 19, 2024)

Replay entry code:  528651 followed by the number sign

About Copperleaf Technologies Inc.

Copperleaf (Toronto Stock Exchange: CPLF) provides enterprise decision analytic 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 it 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, it has solutions distributed and supported by regional staff and partners worldwide. Together, it is transforming how the world sees value.

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