Mr. Mike Reinhart reports

QUISITIVE REPORTS FULL YEAR 2023 FINANCIAL RESULTS

Quisitive Technology Solutions Inc. has released financial results for the full year ended Dec. 31, 2023.

Management commentary

"In recent months, we've successfully executed two major divestitures, significantly streamlining Quisitive's operations and sharpening our focus on our core mission as a premier provider of Microsoft Cloud and AI solutions," said Quisitive chief executive officer Mike Reinhart. "The divestiture of our payments division has removed financial constraints, allowing us to reallocate growth enabling resources to our cloud operations. The foundational strength and competitive edge of Quisitive is our deep partnership with Microsoft. To bolster our position as a leader in cloud and AI solutions, we have been collaborating with Microsoft to develop AI go-to-market strategies and service offerings. We expect these initiatives to begin producing revenue within the next 12 months, driven by expanding momentum in the AI market for these offerings."

"Admittedly the IT industry for professional services was challenging in 2023, but we responded quickly by reducing our work force, shifting our revenue mix towards recurring services, and identifying new growth opportunities in AI and data. These strategic changes resulted in gross margins that exceeded the industry average, reaching 43 per cent in the latter half of 2023, and have effectively positioned Quisitive for future growth. With a streamlined organization, a deleveraged balance sheet and a strengthened leadership team in place, we are well positioned to drive organic growth and enhance shareholder value in the coming year and beyond."

Full-year 2023 financial results

The company's condensed consolidated financial statements for the full year ended Dec. 31, 2023, and related management's discussion and analysis can be found on the company's website and on the company's issuer profile on SEDAR+. All figures are expressed in United States dollars unless otherwise stated.

• Revenue from continuing operations was $121.2-million compared with $137.8-million for the full year ended Dec. 31, 2022. The decline was driven by reduced market demand for professional services revenue and the company's corresponding reduction in revenue-generating headcount.
• Gross profit from continuing operations as a percentage of revenue increased to 40.2 per cent compared with 39.8 per cent for the full year ended Dec. 31, 2022.
• Gross profit from continuing operations was $48.8-million compared with $54.8-million for the full year ended Dec. 31, 2022.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations was $13-million compared with $15.5-million for the full year ended Dec. 31, 2022. Pro forma adjusted EBITDA (as if the divestures of BankCard and PayiQ (which were completed in January and April, 2024, respectively) closed on Jan. 1, 2023) was $16.4-million for the full year ended Dec. 31, 2023, or 14 per cent of revenue.
• The company's total senior debt to adjusted EBITDA ratio was 3.04:1.00 at Dec. 31, 2023. Following the close of the sale of Bankcard and the company's amended and restated credit agreement, the company's total senior debt to adjusted EBITDA ratio is approximately 2.1:1.

Fourth quarter and full-year 2023 and recent operational highlights:

• Appointed Dan Kunz as executive vice-president of Microsoft Cloud and AI global delivery organization;
• Announced and completed the sale of BankCard USA;
• Announced the coming launch of MazikCare co-pilot and previewed at the 2024 HIMSS Conference;
• Participated alongside Microsoft at the 2024 HIMSS Conference;
• Awarded the AI and machine learning in Microsoft Azure specialization;
• Announced and completed the sale of PayiQ;
• Recognized as the 2023 Solution Partner of the Year by Board International at the Board Americas Partner Summit for its outstanding channel marketing collaboration and introduction of the Microsoft Dynamics 365 Trial Balance Extractor solution to Board;
• Announced the appointment of two new directors to the board of directors;
• Collaborated with Microsoft to leverage new health care data solutions in Microsoft Fabric for Ontario Workers Network, the Ottawa Hospital and other hospitals in the network

Pro forma adjusted EBITDA further adjusts adjusted EBITDA for the impact of (i) certain cost savings realized by the continuing operation following the divestitures of PayiQ and Bankcard, and (ii) head count reductions made in response to market demand during the year ended Dec. 31, 2023, as if the savings from those reductions had been realized as of Jan. 1, 2023, offset by the removal of the benefit of variable compensation recognized during the year. The revenue and pro forma adjusted EBITDA for fiscal year 2023 are based on the assumption that both the sale of PayiQ and BankCard, which were completed in January and April, 2024, respectively, were finalized on Jan. 1, 2023. This calculation only includes outcomes for the remaining cloud segment and corporate expenses. For fiscal year 2024, the revenue and pro forma adjusted EBITDA projections also assume the completion of the sale of PayiQ and BankCard on Dec. 31, 2023, focusing solely on financial forecasts for the remaining cloud segment and corporate costs.

Quisitive reaffirms strategic road map

Quisitive reaffirms its strategic commitment to refocus its corporate vision to capitalize on the expanding opportunities emerging from artificial intelligence advancements, enabled by the Microsoft Cloud. Leveraging a rich legacy of integrating both custom and proprietary technologies for transformative results, Quisitive is set to innovate further in its service offerings by enhancing its AI capabilities. This includes developing more intuitive and predictive solutions tailored to meet the varied needs of its broad clientele across all sectors. Building on its robust foundation in cloud solutions and its partnership with Microsoft, Quisitive is determined to lead the market in creating customized AI-driven solutions. These solutions aim to not only boost operational efficiencies for its customers but also forge new avenues for growth and competitive advantage in a rapidly evolving digital landscape.

Conference call

Quisitive management will hold a conference call today (April 29, 2024) at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss these results.

Company CEO Mr. Reinhart and chief financial officer Scott Meriwether will host the call, followed by a question-and-answer period.

Toll-free dial-in: 1-877-704-4453

International dial-in: 1-201-389-0920

Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Group at 949-574-3860.

A telephonic replay of the conference call will be available after 7:30 p.m. Eastern Time today and will expire after Monday, May 13, 2024.

Toll-free replay number: 1-844-512-2921

International replay number: 1-412-317-6671

Replay ID: 13746060

For additional information, please visit the investor relations section of Quisitive's website.

About Quisitive Technology Solutions Inc.

Quisitive is a premier, global Microsoft partner leveraging the power of the Microsoft cloud platform and artificial intelligence, alongside custom and proprietary technologies, to drive transformative outcomes for its customers. The company focuses on helping enterprises across industries leverage the Microsoft platform to adopt, innovate and thrive in the era of AI.

We seek Safe Harbor.