Mr. Louis Tetu reports

COVEO REPORTS THIRD QUARTER FISCAL 2023 FINANCIAL RESULTS

Coveo Solutions Inc. has released financial results for its third quarter of fiscal 2023, ended Dec. 31, 2022. All amounts are in U.S. dollars and in accordance with international financial reporting standards (IFRS).

"Coveo once again delivered solid results, in line with our expectations and demonstrating an accelerated path to profitability," said Louis Tetu, chairman and chief executive officer of Coveo. "The trend of large enterprises investing in AI-powered customer experience platforms to drive business optimization -- an imperative -- continues. We had a number of significant transactions in the quarter and continued to see demand for our solutions across all lines of business, which we believe bodes well for our future growth prospects."

Third quarter fiscal 2023 financial highlights

(All comparisons are relative to the three-month period ended Dec. 31, 2021, unless otherwise stated)

• Software-as-a-service subscription revenue grew 25 per cent to $26.4-million compared with $21.2-million.
• Total revenue was $28.5-million, an increase of 23 per cent compared with $23.2-million.
• Current SaaS subscription remaining performance obligations of $92.1-million as of Dec. 31, 2022, up 28 per cent compared with $72.2-million as of Dec. 31, 2021.
• Gross profit was 77 per cent, an increase of 3 per cent, and product gross profit was 81 per cent, an increase of 2 per cent. Adjusted gross profit was 78 per cent, an increase of 2 per cent, and adjusted product gross profit was 82 per cent, an increase of 2 per cent.
• Operating loss was $10.7-million and adjusted operating loss was $3.9-million. Net loss was $10-million, compared with net income of $426.3-million. Net income in the comparable period was impacted by a non-cash gain of $269.2-million and an associated income tax recovery of $184.4-million, both related to the company's preferred shares converted immediately prior to the initial public offering of the company in November, 2021.
• Cash and cash equivalents were $207.6-million as of Dec. 31, 2022.

Third quarter fiscal 2023 operational highlights

• Net expansion rate of 107 per cent as of Dec. 31, 2022;
• Announced the Coveo Relevance Cloud for financial services to help meet the demands of today's retail banks, insurance companies and wealth management organizations. The Coveo Relevance Cloud for financial services is used by over 50 leading, diverse institutions across the financial services sector, including the Royal Bank of Canada, Manulife and United Wholesale Mortgage, to help them realize tangible return on investment;
• Named the winner for e-commerce innovation by the U.K. Ecommerce Awards 2022 for Coveo's personalization-as-you-go capability. With 86 per cent of e-commerce shopping sessions coming from anonymous users, this feature enables brands to deliver highly relevant and personalized query suggestions, product rankings and product recommendations without the need for high volumes of data, predefined persona segments or logged-in user profiles;
• Named a leader in the 2022 Gartner Magic Quadrant for Insight Engines for the fifth consecutive time for its completeness of vision and ability to execute;
• Launched an intelligent, out-of-the-box facet generator that automatically returns all relevant search facets for a given search or listing page to provide a best-in-class navigation experience for large enterprises with complex needs. This feature works with zero traffic, leveraging the intelligence within Coveo's unified index to return the most relevant results;
• Released analytics and developer tools for use within Snowflake. The new features provide real-time access to Coveo Analytics through Snowflake's reader account where data can be leveraged in any business intelligence tool -- and even combined with other external data sources -- for a more complete visualization of search engagement and business performance.

Financial outlook

Coveo anticipates SaaS subscription revenue, total revenue, adjusted operating loss and weighted average shares outstanding to be in the ranges noted herein.

Q3 conference call and webcast information

Coveo will host a conference call today at 5 p.m. Eastern Time to discuss its financial results for its fiscal third quarter 2023. The call will be hosted by Mr. Tetu, chairman and CEO, and Jean Lavigueur, chief financial officer.

Dial-in number: 1-888-664-6392

Confirmation No.: 16289972

Replay: Coveo website under the news and events section

About Coveo Solutions Inc.

Coveo believes that relevance is critical for businesses to win in the new digital experience economy and to serve people the way they expect while ensuring optimal business performance, and that applied artificial intelligence is an imperative to achieve these goals.

Coveo is a market-leading AI-powered relevance platform that injects search, recommendations, personalization and merchandising intelligence into digital experiences such as commerce, service, website and workplace applications. Coveo's platform is cloud-native SaaS, multitenant, application programming interface-first and headless, and can easily integrate into almost any digital experience. Its solutions are designed to provide tangible value to its customers by helping to drive improvements in conversion, revenue and margins, reduce customer support costs, increase customer satisfaction and website engagement, and improve employee proficiency and satisfaction.

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