Mr. Doug Vickerson reports

RENOWORKS ANNOUNCES PROFITABLE THIRD QUARTER 2023 FINANCIAL RESULTS AND PROVIDES OUTLOOK

Renoworks Software Inc. has released its financial results for the third quarter ended Sept. 30, 2023 (Q3 2023). The financial statements and related management's discussion and analysis (MD&A) can be viewed on SEDAR+. Unless otherwise stated, all dollar amounts are Canadian dollars.

Financial highlights year to date 2023, with comparatives for 2022, are as follows:

• Year-to-date revenues of $4,789,569, a slight increase from $4,740,321 in the prior year;
• Deferred revenue of $1,489,509 for the nine months ended Sept. 30, 2023, compared with $1,413,786 at Dec. 31, 2022;
• Gross margin of 72 per cent, versus 64 per cent in 2022;
• Net loss of $284,664, compared with a net loss of $615,185 in 2022, as key investments were made into growth areas such as AI Gen 2, Renoworks Pro solution for contractors and the integration of new features sets, which all should lead to growth in 2024;
• Cash at Sept. 30, 2023, was $316,850, down $387,230 from $704,080 at the end of fiscal 2022. Subsequent to the quarter-end, a significant amount of accounts receivable were collected and cash as at Oct. 31, 2023, increased to $896,625;
• Recurring revenue of $1,632,485, versus $1,396,519 for the same period in 2022, a 17-per-cent increase;
• As at Sept. 30, 2023, the company had 40,664,635 common shares issued and outstanding.

Financial highlights for the third quarter of fiscal 2023, with comparatives for 2022, are as follows:

• Quarterly revenue of $1,716,307 for the three months ended Sept. 30, 2023, versus $1,653,445 in 2022;
• Gross margins continue to be strong at 71 per cent and 63 per cent, respectively, for the third quarters of 2023 and 2022;
• Net income of $68,174 for the quarter ended Sept. 30, 2023, compared with a net loss of $225,110 in 2022;
• Recurring revenue of $559,660, versus $476,915 for the same period in 2022, a 17-per-cent increase.

Renoworks revenue in the third quarter totalled $1,716,307, an increase of $62,862 compared with the corresponding period in 2022. The company remains resolute in its pursuit of sustained growth as evident in its net profit of $68,174, compared with a net loss of $225,110 for the same period in 2022.

The company's continues to focus on expanding the adoption of the Renoworks Pro contractor solution. For the remaining part of 2023 and into 2024, the company's two primary go-to-market strategies for Renoworks Pro will focus on adding additional strategic partners to resell or co-market the solution and bundling the pro solution with its existing enterprise offering to building product manufacturers.

Doug Vickerson, chief executive officer of Renoworks, commented on the company's third quarter performance, stating: "Our continued focus on enhancing our platform with AI technologies and fostering strong strategic partnerships for technological innovation, value delivery and Renoworks Pro adoption is yielding promising outcomes. As the industry evolves, Renoworks remains committed to delivering cutting-edge solutions that empower our customers, driving their success while building upon our wins in 2023."

Renoworks' adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the three months ended Sept. 30, 2023, reached a positive $92,382, indicating a noteworthy increase of $245,595 compared with a negative adjusted EBITDA of $$153,213 for the corresponding period in 2022. This positive trajectory underscores the company's continuing efforts to optimize platform and operational efficiency and performance.

Financial results from operations year to date, with comparatives for 2022, are provided in an attached table.

Financial results from operations for the third quarter 2023, with comparatives for 2022, are provided in an attached table.

The company's financial position as of Sept. 30, 2023, and Dec. 31, 2022, is shown in an attached table.

About Renoworks Software Inc.

Renoworks develops and sells unique digital visualization software and integration solutions for the remodelling and new home construction industry. Renoworks delivers its technology to manufacturers, contractors, builders and retailers offering solutions to one of the home improvement industry's greatest challenges: enabling homeowners to review their product selections in a hyperrealistic, virtual environment before committing to purchases and construction. Renoworks markets its technologies as an innovative engagement, sales and marketing platform and generates revenues from five main business lines: Renoworks Enterprise, Renoworks Pro, Renoworks Design Services, Renoworks FastTrack and Renoworks API (application programming interface).

Non-IFRS (international financial reporting standards) measures

Adjusted EBITDA is a measure not recognized under IFRS. However, management of Renoworks believes that most shareholders, creditors, other stakeholders and investment analysts prefer to have these measures included as reported measures of operating performance and a proxy for cash flow and to facilitate valuation analysis. Adjusted EBITDA is defined as earnings before interest income, taxes, depreciation and amortization, stock-based compensation, restructuring costs, impairment charges, and other non-recurring gains or losses. Management believes adjusted EBITDA is a useful measure that facilitates period-to-period operating comparisons.

Adjusted EBITDA does not have any standardized meanings prescribed by IFRS and therefore may not be comparable with similar measures presented by other issuers. Readers are cautioned that adjusted EBITDA is not an alternative to measures determined in accordance with IFRS and should not, on its own, be construed as indicators of performance, cash flow or profitability. References to the Renoworks' adjusted EBITDA should be read in conjunction with the financial statements and management's discussion and analysis of Renoworks posted on SEDAR+.

We seek Safe Harbor.