Mr. Harris Liontas reports

NOVRA ANNOUNCES FINANCIAL RESULTS FOR Q1 2023

Novra Technologies Inc. has released its financial results for the three months ended March 31, 2023. All amounts are in Canadian dollars unless otherwise noted.

Novra is pleased to announce several positive trends in the company's financial results for the first quarter, as well as significant customer orders so far this year.

While Novra's revenues fluctuate quarterly reflecting the project-based nature of the company's sales, and Q1 is a low-revenue quarter, both revenue and gross margin percentage were up from the same period in 2022. Overall revenue increased by 17 per cent with service revenue in particular rising by 42 per cent. The company's advanced development work and substantial R&D (research and development) investment over the past few years are paying off as the company books more and more service business, including the recent selection of its MISTiQ solution by two major Canadian broadcasters for their cloud-based content distribution.

The company's services revenue includes a growing contribution from its software-as-a-service (SaaS) and content distribution offerings. This recurring-revenue model is increasingly popular with customers who want to migrate to new technology without a major upfront investment, and it is aligned with the company's continuing strategic goal of generating a more consistent revenue base. This shift in product/service mix contributed to a substantial increase in gross margin percentage to 63.9 per cent for the current quarter. This in turn led to a $433,000, or 57-per-cent, improvement in net income loss compared with the same quarter in 2022 and an 84-per-cent improvement of the company's adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).

See more financial highlights in the attached table.

Operating expenses in Q1 2023 were 3 per cent lower than in 2022, despite significant inflationary pressures, non-recuring expenses related to the company's facilities moves, patent registration expenses and one-time additional accounting expenses related to moving all companies to a common financial accounting system. The company continues to aggressively manage expenses and will take any steps that become necessary to adjust expenditures in response to market conditions. At the same time, the company will also continue to make prudent investments in technology and other areas to facilitate additional continuing cost reductions.

As recently announced, the company received a sizeable order to upgrade encryption technology for a major United States government broadcast service. Deliveries against this order commenced in Q2 and are scheduled to complete later this year. The company is the continuing provider for this long-term program, supplying decryption software integrated into its satellite receivers, as well as desktop client licences. The company is in the process of releasing a next-generation satellite receiver for this program in order to support continuing life cycle refresh requirements. This program also drives multiple business opportunities for software, receiver hardware appliances, IP encapsulators and continuing support.

On March 31, 2023, Novra's deferred revenue and bookings backlog totalled more than $4.1-million. This is an increase of over $600,000 from Dec. 31, 2022, resulting from higher bookings than revenue. The company expects to deliver most of these orders within the remainder of 2023. This provides some visibility into future revenues and helps moderate the volatility the company expects in its revenue and income over the next several quarters, as its clients continue to face global economic uncertainty, elevated interest rates, geopolitical conflicts and threats of recession, all factors that are causing many businesses to delay investments in infrastructure.

"We are pleased to see our sales and bookings momentum continuing into 2023 as customers embrace our latest products and services. Our goal is for our SaaS and distribution services revenue to increase by double digits annually over the next few years as our clients are looking to either switch to, or add, IP distribution capabilities. We will continue our strategy of applying strategic R&D investments to develop flexible and cost-effective products and services to help our clients through these times of accelerating technology changes. We know our customers value a trusted technology partner with a strong commitment to R&D. Novra's mission is to be that trusted partner our clients can depend on," said Harris Liontas, president and chief executive officer.

For additional details on Novra's results and outlook for the three months ended March 31, 2023, please refer to the company's MD&A (management's discussion and analysis) and consolidated financial statements, which are available on SEDAR.

About Novra Technologies Inc.

Novra is an international technology provider of products, systems and services for the distribution of multimedia broadband content. The Novra Group of Companies includes Novra Technologies Inc., International Datacasting Corp. and Wegener Corp. The companies in the group are known for a strong focus on applications, including: broadcast video and radio, digital cinema, digital signage, and highly reliable data communications.

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