Mr. Robert Stabile reports

OPTIVA INC. REPORTS THIRD QUARTER 2023 FINANCIAL RESULTS

Optiva Inc. today released its third quarter financial results for the three-month period ended Sept. 30, 2023.

• Revenue of $11.7-million;
• Optiva selected by three new customers;
• Total contract value (TCV) bookings of $13.6-million;
• Gross margin of 61 per cent;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $800,000;
• Adjusted EPS (earnings per share) loss of (76 cents);
• $21.7-million of cash.

During the third quarter, Optiva was selected by three new customers and one additional customer shortly after the quarter ended, totalling five new customers year to date. These new logos are a testament to Optiva's strong brand in the telecom BSS market and the significant investment the company has made in its products. As the company looks at its pipeline, approximately 80 per cent of bookings are expected to come from new customers, signaling that the company's strategy is resonating.

"We continue to execute on our strategic priorities, including the growth of our sales pipeline, as cloud-native SaaS continues to resonate and expand in the markets we are pursuing," said Robert Stabile, chairman of the board of directors and chief executive officer of Optiva. "We are proud to be recognized with multiple industry awards while we make significant roadmap advancements, including leveraging Optiva's gold mine of BSS data to power AI-based personalization and extending our strategic partnership with Google Cloud with the launch of Optiva MVNO Hubs."

Business highlights

• TCV of Q3 2023 bookings totalled $13.6-million. On a trailing-12-month basis, TCV bookings totalled $72.3-million.
• Really, a United States-based innovative telecom company, selected Optiva to help launch its new mobile phone service nationwide, powered by Optiva BSS on Google Cloud. Really is on a mission to bridge the digital divide by introducing a nationwide decentralized wireless (DeWi) network across the United States, commencing in Austin, Tex. Really will be empowered by Optiva's full suite of comprehensive BSS features, preintegrated carrier APIs (application programming interface), third party services, dual-network provisioning, and turnkey managed services and support.
• Inclusive of Really, Optiva has secured a total of five new customer wins year to date, including a leading technology company in Nigeria specializing in cutting-edge telecom projects, one of the fastest-growing wholesale carriers in local and international voice and data traffic in Africa and an innovative technology company in North America. These customers have all selected the Optiva BSS platform, with two choosing to leverage Optiva MVNO Hubs, enabling them to deliver a superior customer experience with innovative and integrated digital services.
• lifecell Ukraine and Optiva were named winners of Excellence in Serving People and Planet in TM Forum's 16th Annual Awards. TM Forum's Excellence Awards recognize the world's leading companies for their innovative achievements spanning digital transformation, business and IT agility, customer centricity, cross-industry partnering and collaboration, and product and service innovation.
• The company announced the launch of Optiva MVNO Hubs on Google Cloud. The multitenant solution is offered as a SaaS (software-as-a-service) product on Google Cloud in multiple regions worldwide, beginning with the Americas. Optiva MVNO Hubs deliver BSS as a service and include deep integration with Google Cloud's BigQuery for BSS-data-based, AI-powered insights. These regional MVNO hubs extend Optiva BSS platform with key MVNO integrations such as payment gateway, taxation, customer care, chat, customer relationship management (CRM) ticketing, and a dealer portal for rapid on-boarding and management of dealer channels. Innovative digital MVNOs in the United States are already capitalizing on the time to market and fully integrated functionality of Optiva MVNO Hubs on Google Cloud.
• Optiva announced the launch of its next-generation converged Optiva Charging Engine, the latest advancement in the company's billing and charging portfolio. The new release features AI-based personalization to enable real-time digital customer experiences. The new Optiva Charging Engine release delivers convergent rating and charging capabilities that empower telecom operators, especially new market entrants focused on digital customer experience and rapid time to market, to create elevated customer offerings and new revenue streams.
• On Sept. 29, the company completed a $13.5-million (U.S.) debenture financing on a private placement basis for growth and working capital purposes.

• Revenue for Q3 2023 was $11.7-million. On a year-over-year basis, the change by revenue type included a $2.0-million decrease in support and subscription, a $1.5-million decrease in software and services, and third party software and hardware revenue remained unchanged. The year-over-year decline in support and subscription reflects the run-off of a few customers who had previously notified the company of their intentions to replace Optiva. The drop in software and services is mainly due to fewer software implementations, primarily in the EMEA (Europe, Middle East, Africa) region, compared with the prior period.
• Gross margin for Q3 2023 was 61 per cent compared with 72 per cent during the same period in 2022. The decline in gross margin is primarily attributable to lower revenue from high-margin licence and support and subscription revenue, along with customizations with lower margins ordered by customers that required fulfilment, compared with the previous period. The company expects that its gross margins may fluctuate as it proves its cloud-native model and product capabilities to new and existing customers when they on board the public or private cloud in future periods.
• General and administrative expenses (G&A) increased to $2.2 compared with $1.4-million during the same period in 2022. The increase is mainly due to a release of a provision related to a settlement of a contractual dispute last year in the amount of $1.6-million, offset by lower share-based compensation, lower headcount-related costs and lower amortization costs in Q3 of 2023.
• Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for Q3 2023 decreased to a loss of $800,000 as compared with income of $3.3-million during the same period in 2022, primarily driven by lower revenue and gross margin.
• Net loss for Q3 2023 was $4.2-million compared with a net income of $900,000 during the same period in 2022.
• The company ended the third quarter with a cash balance of $21.7-million (including restricted cash). The company generated $400,000 of cash from operating activities during the quarter.

About Optiva Inc.

Optiva is a leader in powering the telecom industry with cloud-native billing, charging and revenue management software on private and public clouds. Its products are delivered globally on the private and public cloud. The company's solutions help service providers maximize digital, 5G, IoT (Internet of Things) and emerging market opportunities to achieve business success. Established in 1999, Optiva is on the Toronto Stock Exchange (TSX: OPT).

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