Mr. Louis Tetu reports

COVEO REPORTS THIRD QUARTER FISCAL 2024 FINANCIAL RESULTS

Coveo Solutions Inc. has released financial results for its third quarter of fiscal 2024 ended Dec. 31, 2023.

"We had a strong third quarter and saw a broad resurgence in new bookings with new and existing customers," said Louis Tetu, Chairman and CEO of Coveo. "We believe we are beginning to see the strong early interest in generative AI turning into tangible opportunities with customers, especially in situations with a compelling ROI. Our leading AI platform is strategically positioned to empower customers to leverage AI, helping them to drive higher revenue and profitability and improve overall efficiency across their operations. We believe the GA release of Relevance Generative AnsweringTM in December will allow us to continue to build on this momentum."

Third Quarter Fiscal 2024 Financial Highlights

(All comparisons are relative to the three-month period ended December 31, 2022, unless otherwise stated)

SaaS Subscription Revenue( 1) of $29.9 million compared to $26.4 million, an increase of 13%.

Total revenue was $31.8 million compared to $28.5 million, an increase of 11%.

Gross margin was 77% and product gross margin was 81%, both consistent with last year.

Operating loss was $6.5 million compared to $10.7 million, and Adjusted Operating Loss( 2 ) was $1.7 million compared to $3.9 million, both representing significant improvements.

Net loss was $6.2 million compared to net loss of $10.0 million.

Cash flows used in operating activities were $2.3 million for the quarter and $0.4 million year-to-date.

Cash and cash equivalents were $163.1 million as of December 31, 2023.

Third Quarter Fiscal 2024 Business Highlights

Net Expansion Rate( 1 ) of 105% as of December 31, 2023. Net Expansion Rate was 109% excluding customer attrition from customers using certain deprioritized legacy Qubit product capabilities( 3).

The company continues to see strong momentum with its enterprise-ready Relevance Generative Answering(TM) solution, an extension of its AI platform that combines Large Language Model ("LLM") technology with secure indexing and AI relevance capabilities. Coveo signed agreements with customers such as SAP Concur and Blackbaud in the quarter, and has completed expansion transactions for Relevance Generative Answering(TM) in each of its four solution areas (commerce, service, websites, and workplace).

Coveo announced the general availability of Relevance Generative Answering(TM) on December 15, following successful beta testing with a number of customers. Customers so far have seen notable benefits, such as a reported 40% reduction in customer search time and a 20% improvement in case deflection.

The company introduced early access to Relevance Generative Answering(TM) for B2B and B2C commerce, revolutionizing eCommerce by providing scalable, secure, and traceable generative AI question-answering capabilities to drive better online customer experiences across product discovery and post-sales support.

Coveo earned leadership recognition in The Forrester WaveTM: Cognitive Search Platforms, 2023, excelling in the Intelligence, Roadmap, Pricing, Flexibility, and Transparency criteria, with a focus on its AI Search and Generative Experience platform. The report highlights Coveo's evolving cognitive search capabilities, advanced hybrid search, and strong integrations, making it a compelling choice for firms seeking automated relevancy tuning and impactful search experiences.

Coveo was acknowledged as a Leader in the 2023 IDC MarketScape for General-Purpose Knowledge Discovery Software, highlighting strengths in pre-packaged solutions and content source integration / management, with recent advancements ensuring scalable, intuitive, and technology-agnostic solutions for transforming customer and employee interactions.

Financial Outlook

Following our strong third quarter of fiscal 2024, we are improving our outlook for SaaS Subscription Revenue, Total Revenue, and Adjusted Operating Loss for the full year. Coveo now anticipates SaaS Subscription Revenue( 1), Total Revenue, and Adjusted Operating Loss( 2 ) to be in the following ranges:

Q4 FY'24 Full Year FY'24 SaaS Subscription Revenue( 1) $30.2 - $30.7 million $118.0 - $118.5 million Total Revenue $32.1 - $32.6 million $125.6 - $126.1 million Adjusted Operating Loss( 2 ) $2.0 - $3.0 million $7.5 - $8.5 million

Cash flows used in operating activities for the first nine months of fiscal 2024 were $0.4 million. As such, the company remains on track to achieve positive operating cash flow in its next fiscal year (fiscal 2025).

Q3 Conference Call and Webcast Information

Coveo will host a conference call today at 5:00 p.m. Eastern Time to discuss its financial results for its third quarter fiscal year 2024. The call will be hosted by Louis Tetu, Chairman and CEO, and other members of its senior leadership team.

Conference Call: https://emportal.ink/3v6O5c0

Use the link above to join the conference call without operator assistance. If you prefer to have operator assistance, please dial: 1-888-664-6392

Live Webcast: https://app.webinar.net/kyG796eaxJj

Webcast Replay: ir.coveo.com under the "News & Events" section

About Coveo

Coveo powers the digital experiences of the world's most innovative brands serving millions of people and billions of interactions across every digital experience. After a decade of enriching our market-leading platform with forward-thinking global enterprises, we know what it takes to gain a trusted AI-experience advantage.

We strongly believe that the future is business-to-person, that experience is today's competitive front line, a make or break for every business.

For enterprises to achieve this AI-experience advantage at scale, it is imperative to have an Enterprise Spinal and composable ability to deliver AI semantic search and generative experiences at each customer and employee interaction.

Our single SaaS AI platform and robust suite of AI & GenAI models are designed to transform the total experience from CX to EX across websites, ecommerce, service, and workplace. Powering individualized, trusted, and connected experiences across every interaction to delight customers and augment employees, and drive superior business outcomes.

Our platform is certified ISO 27001 certified, HIPAA compliant, SOC2 compliant, and 99.999% SLA resilient. We are a Salesforce Summit ISV Partner, an SAP(R) Endorsed App, and an Adobe Gold Partner.

We seek Safe Harbor.