Mr. Adam Zaghloul reports

NTG CLARITY NETWORKS ANNOUNCES ANOTHER RECORD-SETTING THIRD QUARTER 2023

NTG Clarity Networks Inc. has released its third quarter results for the period ended Sept. 30, 2023 (all figures in Canadian dollars).

Revenues were up 67 per cent in the quarter ($7-million, compared with $4.2-million in Q3 2022) and 64 per cent year to date (YTD) ($19.5-million, compared with $11.9-million in 2022). The company's gross margin for the year was 44 per cent and the income from operations was $3,273,075.

NTG Clarity's trend of rapid revenue growth has continued in 2023, with Q3 2023 having the highest single-quarter revenue ever of $7,003,553. This is due significantly increased revenue from existing customers and 13 new customers in KSA that contributed 16.6 per cent of the YTD revenue (25.1 per cent of Q3 2023 revenue).

Professional service and outsourcing/offshoring revenue continues to be a strategic source of revenue for NTG Clarity. Given its generally recurring nature and along with the continued expansion of NTG Clarity's Egypt offshore centre, outsourcing contributed 95 per cent (88 per cent YTD) of NTG Clarity's quarterly revenue.

Working capital continues to improve with Sept. 30, 2023, being a deficit of $3,004,572, compared with a deficit of $3,557,883 at Dec. 31, 2022, decreasing the deficit by 16 per cent YTD.

Outlook

NTG Clarity has had incredible growth this year, with each quarter breaking revenue records and with Q3 having the highest single-quarter revenue ever. Consolidated revenue for Q3 2023 was $7,003,553, up 67 per cent from $4,185,208 for the same period in 2022. Year-to-date revenues are up by 64 per cent from 2022 ($19,503,993 compared with $11,909,446).

Egypt's unconsolidated revenue is increasing; however, the continuing devaluation of the Egyptian pound has resulted in reduced revenue on translation. Since 2021, as well as supporting Egypt's legacy customers, management has been focusing on transforming NTG Egypt into a supplier of offshore services for international customers through NTG Clarity's Egypt Offshore Centre. This transformation will reduce NTG Clarity's exposure to the volatile Egyptian pound, while making the company's services available to international markets. NTG Clarity's new Cairo office, announced in August, 2023, is now open and the company is accommodating its expanding offshore professional service work force.

KSA continues to be the major contributor to NTG Clarity's revenue growth, with $15,304,687 YTD, an increase of 146 per cent over the same period last year. There is an increasing demand for NTG Clarity's products and services as the region undergoes its digital transformation, with 13 new customers in the banking, real estate and government sectors, as well as increasing work from NTG Clarity's major existing customers in the region. NTG Clarity has been in the region for over 17 years and customers recognize the company's quality of work and record.

As of the Sept. 30, 2023, NTG Clarity has a backlog of $18.7-million in unbilled amounts for purchase orders/contracts on hand. This amount exceeds the total revenue for 2022 and puts NTG Clarity in a healthy position to continue its profitability and organizational growth.

Transactions

At the AGM (annual general meeting) held on held on July 7, 2023, shareholders voted to consolidate the common shares of the company on the basis of one postconsolidation common share for up to five preconsolidation common shares. Management has no plans to proceed in 2023 but will be reviewing in early 2024. Should management decide to go ahead, approval would still be needed from the board and regulators.

About NTG Clarity Networks Inc.

NTG Clarity's vision is to be a global leader in providing networking solutions. As a Canadian company established in 1992, NTG Clarity has delivered networking, information technology (IT) and network-enabled application software solutions to network service providers and large enterprises. More than 600 IT and network professionals provide design, engineering, implementation, software development and security expertise to the industry's leading enterprises.

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