VICTORIA, British Columbia--(BUSINESS WIRE)-- WeCommerce Holdings Ltd. (“WeCommerce” or “the “Company”) (TSXV: WE) today announced its financial results for the three-month period ended December 31, 2020 (“Q4 2020”) and the year ended December 31, 2020 (“Fiscal 2020”). Currency amounts are in Canadian dollars unless otherwise noted.
Q4 2020 Highlights
- Closing of $60,000,871 financing (gross proceeds) and listing on the TSXV through a reverse acquisition of Brachium Capital Corp.
- Revenue in the fourth quarter of 2020 (“Q4 2020”) was $6,145,268, an increase of $2,140,467 or 53% compared to the fourth quarter of 2019 (“Q4 2019”).
- Net loss was $5,469,103 in Q4 2020 compared to a net loss of $309,417 in Q4 2019.
- The net loss for Q4 2020 includes a one-time listing expense of $1,634,081 incurred in connection with the reverse acquisition transaction that took place in December 2020. Q4 2020 also includes non-cash stock-based compensation of $3,865,047 relating to the accelerated vesting of stock options on the date of the reverse acquisition transaction. Excluding these expenses, net income for Q4 2020 would have been $30,025.
- Cash on hand on December 31, 2020 amounted to $61,193,367 compared to $2,869,581 on December 31, 2019.
- Adjusted EBITDA1 for Q4 2020 amounted to $1,706,264 or 28% of revenue, compared to $685,980 or 17% of revenue in Q4 2019.
Fiscal 2020 Highlights
- Revenue for Fiscal 2020 was $21,281,499, an increase of $6,113,448 or 40% compared to the year ended December 31, 2019 (“Fiscal 2019”).
- Net loss was $4,416,476 in Fiscal 2020 compared to a net income of $128,999 in Fiscal 2019.
- Excluding the one-time expenses incurred in Q4 2020, net income for Fiscal 2020 would have been $1,082,652.
- Adjusted EBITDA1 for Fiscal 2020 amounted to $6,340,057 or 30% of revenue, compared to $3,501,548 or 23% of revenue in Fiscal 2019.
- Acquisition of Foursixty Inc. in June 2020 contributed $2,232,223 to subscription revenues for Fiscal 2020.
Q4 2020 and Fiscal 2020 Financial Results
| | For the three-month periods
ended December 31, | For the years ended
December 31, |
| | 2020 | | 2019 | | 2020 | | 2019 | |
| Revenue | | | | |
| Recurring subscription revenue | 2,232,030 | | 1,167,528 | | 6,887,246 | | 4,246,600 | |
| Digital goods revenue | 2,304,446 | | 1,728,864 | | 8,973,746 | | 7,017,057 | |
| Agency service revenue | 1,608,792 | | 1,108,409 | | 5,420,507 | | 3,904,394 | |
| | 6,145,268 | | 4,004,801 | | 21,281,499 | | 15,168,051 | |
| Operating income/(loss) | (3,410,817 | ) | 28,053 | | (1,386,370 | ) | 933,871 | |
| Net income/(loss) | (5,469,103 | ) | (309,417 | ) | (4,416,476 | ) | 128,999 | |
| EBITDA(1) | (4,200,197 | ) | 571,322 | | 17,902 | | 3,118,043 | |
| EBITDA % | (68 | %) | 14 | % | 0.1 | % | 21 | % |
| Adjusted EBITDA(1) | 1,706,264 | | 685,980 | | 6,340,057 | | 3,501,548 | |
| Adjusted EBITDA % | 28 | % | 17 | % | 30 | % | 23 | % |
| | | | | | |
Notes:
1. See “Non-IFRS financial measures” for further information.
Revenues for the year ended December 31, 2020 increased by $6,113,448 or 40% from $15,168,051 in 2019 to $21,281,499 in 2020. Revenues for our Apps segment increased by $2,640,646 or 62%, from $4,246,600 in 2019 to $6,887,246 in 2020. The increase for the year can be attributed to the acquisition of Foursixty Inc. on June 1, 2020, contributing $2,232,223 of revenue in 2020, with the remaining increase attributed to our Pixel Union Apps portfolio.
Revenues for our Themes segment increased by $1,956,689 or 28%, from $7,017,057 in 2019 to $8,973,746 in 2020. Theme's revenue is correlated to Shopify’s new merchant growth and benefitted from the significant pivot to e-commerce made by small and medium sized businesses in response to the COVID-19 pandemic. These results were further supported both by product investments in theme catalogue design refreshes and pricing adjustments for both the Pixel Union and Out of the Sandbox brands, as well as marketing investments such as the launch of our "Outstanding Shop Awards" program that saw participation from over one thousand merchants, agencies, and e-commerce influencers.
Revenues for our Agency segment increased by $1,516,113 or 39%, from $3,904,394 in 2019 to $5,420,507 in 2020. This increase is primarily due to the inclusion of a full year of revenue contribution from Rehash Ltd., amounting to an increase of $1,107,997 in Agency revenues compared to the prior year which only included two months of contribution. The remaining increase can be attributed to organic growth in core agency sales as well as expansion of a project with the Government of British Columbia relating to the creation and launch of an online cannabis store.
“2020 continued to be a very active year for WeCommerce, culminating in the commencement of trading on the TSX Venture Exchange,” said Chris Sparling, CEO of WeCommerce. “We have continued this pace of activity in 2021 with the acquisition of Stamped, and we continue to believe we can identify and acquire targets in the Shopify partner ecosystem.”
Financial Statements
WeCommerce’s Audited Annual Consolidated Financial Statements and Management’s Discussion and Analysis (“MD&A”) for Q4 2020 and Fiscal 2020 are available on the Company’s Website at https://www.wecommerce.coor on SEDAR at www.sedar.com.
About WeCommerce Holdings Ltd
WeCommerce is a holding company that owns a family of companies and brands in the Shopify partner ecosystem, including Pixel Union, Out of the Sandbox, Yopify, SuppleApps, Rehash, Stamped and Foursixty. The Company’s primary focus is to build, grow and acquire businesses that serve the Shopify Partner ecosystem. These businesses consist largely of Software as a Service, Digital Goods and Services businesses. Generally, these businesses build Apps and Themes and run Agencies that support Shopify merchants.
WeCommerce is focused on acquiring businesses with growth potential, a sustainable competitive advantage and that are, or have the potential to become, a leader within their particular market. The Company targets businesses within the Shopify ecosystem due to its confidence in the Shopify platform, the fragmented nature of the ecosystem and the attractive economics that the businesses generally exhibit. As one of Shopify’s first partners since 2010, WeCommerce believes it is well positioned to continue to identify acquisition opportunities in the Shopify Partner ecosystem.
Non-IFRS financial measures
This news release makes reference to certain non-IFRS measures. These measures are not recognised measures under IFRS, and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures including “EBITDA” and “Adjusted EBITDA”. Management uses these non-IFRS measures in order to facilitate operating performance comparisonsfrom period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. As required by Canadian securities laws, we reconcile these non-IFRS measures to the most comparable IFRS measures in our MD&A for Fiscal 2020.