Mr. Dan Matlow reports

VITALHUB CORP. REPORTS FOURTH QUARTER AND YEAR-END 2023 RESULTS

Vitalhub Corp. has filed its consolidated financial statements and management's discussion and analysis report for the year ended Dec. 31, 2023, with the Canadian securities authorities. These documents may be viewed under the company's profile on SEDAR+.

"As Vitalhub closes another quarter, it's with a great sense of achievement that we reflect on the strides we've made. Our Q4 2023 revenue reached $13,603,419, marking a 20-per-cent increase over the same period last year. This growth underscores the successful execution of our strategy and the unwavering dedication of our team. Q4 gross profit as a percentage of revenue improved to 83 per cent, up from 82 per cent in the prior-year quarter, demonstrating our ability to enhance margins while expanding our service offerings. This is a reflection of our growing recurring revenue base to 83 per cent of revenue compared to 77 per cent in the prior year quarter. We achieved annual recurring revenue (ARR) of $44,573,739, a testament to our robust business model and the trust our clients place in our solutions. ARR increased 23 per cent over the same period last year. The bulk of this ARR growth, $6,387,730 or 18 per cent, was organic, $1.1-million or 3 per cent was from acquisitions, and $938,859 or 3 per cent was from currency fluctuations. Significantly, our EBITDA for Q4 surged by 536 per cent to $2,992,273 and our adjusted EBITDA (non-IFRS measure) saw a 62-per-cent increase to $3,985,553. These figures are a clear indication of our operational efficiency and the scalability of our platform. Notably, our net income before taxes stood at $1,984,246, illustrating a substantial improvement from the previous year and underscoring our fiscal health and the effectiveness of our growth strategies," said Dan Matlow, chief executive officer of Vitalhub.

"Looking at the annual highlights, our revenue for 2023 was $52,508,298, a 31-per-cent increase from the previous year, with gross profit remaining robust at 82 per cent. Our EBITDA for the year almost doubled to $9,887,842 and we closed with an adjusted EBITDA of $13,291,526, reinforcing our operational strength and market position. Our cash position improved, with $33,480,018 on hand, thanks to our disciplined approach to cash management and operational excellence. This solid financial foundation empowers us to continue our investment in innovation, pursue strategic acquisitions and further our mission to transform health care technology. As we look to the future, our focus remains on driving sustainable growth, expanding our market reach, and delivering exceptional value to our clients and shareholders. With a clear strategy and a dedicated team, I am confident in our ability to navigate the opportunities and challenges ahead. I want to extend my heartfelt thanks to our employees for their dedication and hard work, our customers for their trust and partnership, and our shareholders for their continued support. Together, we are setting new standards in health care technology and I am excited for what the future holds for Vitalhub."

Vitalhub's quarterly investor conference call will take place on Friday, March 22, 2024, at 9 a.m. EST.

Register on-line for the call.

Fourth quarter 2023 highlights:

• Revenue of $13,603,419, as compared with $11,289,606 in the equivalent prior-year period, an increase of $2,313,813 or 20 per cent;
• Gross profit as a percentage of revenue was 83 per cent, compared with 82 per cent in the equivalent prior year period (Q3 2023 -- 82 per cent):
  • The increase in Q4 2023 was primarily due to higher-term licences, maintenance and support revenue, with recurring revenue representing 83 per cent of revenues in the quarter compared with 77 per cent in Q4 2022;
• ARR (1) (2) at Dec. 31, 2023, was $44,573,739, as compared with $42,612,166 at Sept. 30, 2023. ARR (1) (2) growth was due to organic growth in Q4 2023 of $1,959,986 or 5 per cent (21.7 per cent annualized);
• EBITDA (earnings before interest, taxes, depreciation and amortization) (2) of $2,992,273, compared with $470,220 in the equivalent prior-year period, an increase of $2,522,053 or 536 per cent;
• Adjusted EBITDA (2) of $3,985,553 or 29 per cent of revenue, compared with $2,455,377 or 22 per cent of revenue in the equivalent prior-year period, an increase of $1,530,176 or 62 per cent:
  • The increase in EBITDA (2) and adjusted EBITDA (2) from Q4 2022 to Q4 2023 was primarily attributable to the higher recurring revenues of $11,302,366 in Q4 2023, as compared with $8,736,265 in Q4 2022, coupled with a continuing effort to reduce costs and gain operating cost synergies;
• Net income before income taxes of $1,984,246, as compared with a net loss of $656,336 in the equivalent prior-year period, an increase of $2,640,582 or 402 per cent:
  • The increase was primarily attributable to the significant increase in revenues from organic growth and acquisitions, coupled with a continuing effort to reduce costs and gain operating cost synergies.

Annual 2023 highlights:

• Revenue of $52,508,298, as compared with $39,970,814 in the equivalent prior-year period, an increase of $12,537,484 or 31 per cent;
• Gross profit as a percentage of revenue was 82 per cent, compared with 82 per cent in the equivalent prior-year period:
  • Gross profit as a percentage of revenue is largely dependent upon the sales mix, with perpetual and term licences, maintenance, and support generating a higher margin than consulting services and hardware revenue;
• ARR (1) (2) at Dec. 31, 2023, was $44,573,739, as compared with $36,145,150 at Dec. 31, 2022, an increase of $8,428,589 or 23 per cent:
  • ARR (1) (2) benefited from organic growth of $6,387,730 or 18 per cent; growth from acquisitions of $1.1-million or 3 per cent, and a gain of $938,859 or 3 per cent primarily due to the fluctuation in the British pound sterling and U.S. dollar rates relative to the Canadian dollar;
• EBITDA (2) of $9,887,842, compared with $5,250,015 in the equivalent prior-year period, an increase of $4,637,827 or 88 per cent;
• Adjusted EBITDA (2) of $13,291,526 or 25 per cent of revenue, compared with $9,524,708 or 24 per cent of revenue in the equivalent prior-year period, an increase of $3,766,818 or 40 per cent:
  • The increase in EBITDA and adjusted EBITDA from Q4 2022 to Q4 2023 was primarily attributable to the higher recurring revenues of $42,333,253 for the year ended Dec. 31, 2023, as compared with $29,359,361 in the equivalent prior year, coupled with a continuing effort to manage costs and gain operating cost synergies;
• Cash on hand at Dec. 31, 2023, was $33,480,018, compared with $17,452,210 as at Dec. 31, 2022:
  • The increase was primarily due to an increase in cash generated from operations, as management continues to gain synergies from acquisitions and continues to reduce costs of operations;
• Cash from operations before changes in working capital was $11,180,747, as compared with $7,119,817 last year;
• Net income before income taxes of $5,327,733, as compared with $1,306,717 in the equivalent prior-year period, an increase of $4,021,016 or 308 per cent:
  • The change in net income was primarily attributable to higher revenues from term licences, maintenance and support, services and hardware.

(1) The company defines annual recurring revenue (ARR) as the recurring revenue expected based on yearly subscriptions of the renewable software licence fees and maintenance services.

(2) Non-IFRS (international financial reporting standards) measure.

About Vitalhub Corp. -- software for health and human services providers designed to simplify the user experience and optimize outcomes

Vitalhub provides technology to health and human services providers, including hospitals, regional health authorities, mental health, long-term care, home health, community and social services. Vitalhub solutions span the categories of electronic health record (EHR), case management, care co-ordination and optimization, and patient flow and operational visibility solutions.

The company has a robust two-pronged growth strategy, targeting organic growth opportunities within its product suite, and pursuing an aggressive merger and acquisition (M&A) plan. Currently, Vitalhub serves more than 1,000 clients across Canada, the United States, the United Kingdom, Australia, the Middle East and Europe.

Vitalhub is based in Toronto, Canada, with an offshore development hub in Sri Lanka. The Vitalhub team comprises more than 400 team members globally. The company is publicly traded on the Toronto Stock Exchange under the symbol VHI and on the OTC (over-the-counter) market, the OTCQX Exchange, under the symbol VHIBF.

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