Quisitive Reports Second Quarter 2024 Financial Results

TORONTO, Aug. 20, 2024 (GLOBE NEWSWIRE) -- Quisitive Technology Solutions Inc. (“Quisitive” or the “Company”) (TSXV: QUIS, OTCQX: QUISF), a premier Microsoft Cloud and AI solutions provider, today reported financial results for the second quarter ended June 30, 2024.

Management Commentary
“The first half of 2024 has unfolded as anticipated, with consistent revenue and earnings, alongside promising growth in customer demand,” stated Quisitive CEO Mike Reinhart. “Our AI roadmap services have been met with strong customer interest, resulting in a robust backlog of engagements. This is a positive sign, as the initial readiness phase is crucial for setting the stage for the full-scale AI deployment in 2025, which is key to maximizing our AI investment returns. With 90% of our first-half revenue coming from long-standing customers, we are seeing strong reengagement and continued trust in our services. As customer purchasing patterns have improved, we are optimistic about the remainder of this year and into 2025, especially as we align with Microsoft’s AI go-to-market strategy to drive innovation in this transformative AI landscape.”

Second Quarter 2024 Financial Results
The Company’s condensed consolidated interim financial statements for the three months ended June 30, 2024 and related management’s discussion and analysis can be found on the Company’s website and on the Company’s issuer profile on SEDAR at www.sedarplus.ca. All figures are expressed in United States dollars unless otherwise stated.

• Revenue from continuing operations was $29.6 million compared to $30.2 million for the second quarter ended June 30, 2023. The decline was driven by reduced market demand within professional services revenue and the Company’s corresponding reduction in revenue-generating headcount. The decrease in professional services revenue was partially offset by increased revenue from managed services and software licensing. Additionally, recurring revenue increased to 41.9%, a record for Quisitive, driven primarily by growth in our managed services revenue.
• Gross profit from continuing operations as a percentage of revenue increased to 42% compared to 39% for the second quarter ended June 30, 2023. The improvement was primarily due to the Company streamlining its cost basis as part of headcount reductions.
• Gross profit from continuing operations was $12.5 million compared to $11.7 million for the second quarter ended June 30, 2023.
• Adjusted EBITDA from continuing operations was $3.9 million compared to $1.9 million for the second quarter ended June 30, 2023.
• The Company’s total senior debt to Adjusted EBITDA ratio was approximately 1.8x on a pro forma basis at June 30, 2024.
  

Second Quarter 2024 and Recent Operational Highlights

• Awarded the 2024 Microsoft Global Analytics Partner of the Year Award
• Recognized as Board International’s Solution Partner of the Year for the second consecutive year.
• Appointed Dan Kunz as Executive Vice President of Microsoft Cloud and AI Global Delivery Organization
• Completed the sale of BankCard USA and exited the payments division, transforming into a unified entity centered around Microsoft cloud services and AI.

Fiscal Year 2024 Guidance
Quisitive reaffirms its prior disclosed guidance for fiscal year 2024:

Conference Call
Quisitive management will hold a conference call today (August 20, 2024) at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss these results.

Company CEO Mike Reinhart and CFO 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
Webcast Link: Here

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 8:00 p.m. Eastern time today and will expire after Tuesday, September 3, 2024.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13748315

For additional information, please visit the Investor Relations section of Quisitive’s website at: https://quisitive.com/investor-relations/.

The following table summarizes results for the three and six months ended June 30, 2024 and 2023:

About Quisitive:
Quisitive (TSXV: QUIS, OTCQX: QUISF) 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. For more information, visit www.Quisitive.com and follow @BeQuisitive.

Quisitive Investor Contact
Matt Glover and John Yi
Gateway Group
QUIS@gateway-grp.com
949-574-3860

Tami Anders
Chief of Staff
tami.anders@quisitive.com
972.573.0995

Financial Measures and Adjusted EBITDA
There are measures included in this news release that do not have a standardized meaning under generally accepted accounting principles (GAAP) and therefore may not be comparable to similarly titled measures and metrics presented by other publicly traded companies. The Company includes these measures because it believes certain investors use these measures and metrics as a means of assessing financial performance. EBITDA (earnings before interest, taxes, depreciation and amortization is calculated as net earnings before finance costs (net of finance income), income tax expense, and depreciation and amortization of intangibles) is a non-GAAP financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.

We prepare and release quarterly unaudited and annual audited financial statements prepared in accordance with IFRS. We also disclose and discuss certain non-GAAP financial information, used to evaluate our performance, in this and other earnings releases and investor conference calls as a complement to results provided in accordance with IFRS. We believe that current shareholders and potential investors in the Company use non-GAAP financial measures, such as Adjusted EBITDA, in making investment decisions about the Company and measuring our operational results.

The term "Adjusted EBITDA" refers to a financial measure that we define as earnings before certain charges that management considers to be non-operating expenses and which consist of interest, taxes, depreciation, amortization, stock-based compensation (for which we include related fees and taxes), changes in fair value of derivatives, transaction and acquisition-related expenses, US payroll protection plan loan forgiveness, and earn-out settlement losses..

Management considers these non-operating expenses to be outside the scope of Quisitive's ongoing operations and the related expenses are not used by management to measure operations. Accordingly, these expenses are excluded from Adjusted EBITDA, which we reference to both measure our operations and as a basis of comparison of our operations from period-to-period.

Management believes that investors and financial analysts measure our business on the same basis, and we are providing the Adjusted EBITDA financial metric to assist in this evaluation and to provide a higher level of transparency into how we measure our own business. However, Adjusted EBITDA is a non-GAAP financial measure and may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA should not be construed as a substitute for net income determined in accordance with IFRS or other non-GAAP measures that may be used by other companies, such as EBITDA. The use of Adjusted EBITDA does have limitations as some investors may consider these charges and expenses as a recurring part of operations rather than expenses that are not part of operations.

Cautionary Note Regarding Forward Looking Information

This news release contains certain “forward‐looking information” and “forward‐looking statements” (collectively, “forward‐ looking statements”) within the meaning of applicable Canadian securities legislation regarding Quisitive and its business. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward‐looking statements. Forward‐ looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward‐looking statements. These forward-looking statements include, but are not limited to, statements relating to: the future growth potential of the Company, including new revenue streams; future financial outlook of the Company; and potential for growth and expectations regarding the Company’s ability to capitalize on the expanding opportunities emerging from AI advancements.

These forward-looking statements are based on reasonable assumptions and estimates of management of the Company at the time such statements were made. Actual future results may differ materially as forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors, among other things, include: the expected results from the completion of the sale of BankCard; fluctuations in general macroeconomic conditions; fluctuations in securities markets; the ability to realize on cost saving measures; the Company’s limited operating history; future capital needs and uncertainty of additional financing; the competitive nature of the technology industry; unproven markets for the Company’s product offerings; lack of regulation and customer protection; the need for the Company to manage its future strategic plans; the effects of product development and need for continued technology change; protection of proprietary rights; network security risks; the ability of the Company to maintain properly working systems; foreign currency trading risks; use and storage of personal information and compliance with privacy laws; use of the Company’s services for improper or illegal purposes; global economic and financial market conditions; uninsurable risks; changes in project parameters as plans continue to be evaluated; and those factors described under the heading "Risks Factors" in the Company's annual information form dated May 23, 2023 available on SEDAR+ at www.sedarplus.ca. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking statements and information. There can be no assurance that forward-looking information, or the material factors or assumptions used to develop such forward-looking information, will prove to be accurate. The Company does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law..

This news release also contains future-oriented financial information and financial outlook information (together, “FOFI”) about the Company’s prospective results of operations, including statements regarding expected pro-forma Adjusted EBITDA. FOFI is subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraph. The Company has included the FOFI to provide an outlook of management’s expectations regarding the Company on a post-Transaction basis and other anticipated activities and results, and such information may not be appropriate for other purposes. The Company and management believe that the FOFI has been prepared on a reasonable basis, reflecting management’s reasonable estimates and judgements; however, actual results of operations and the resulting financial results may vary from the amounts set forth herein. Any financial outlook information speaks only as of the date on which it is made and the Company undertakes no obligation to publicly update or revise any financial outlook information except as required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.