Givex Announces Third Quarter 2022 Financial Results

Rhea-AI Summary

Givex Information Technology Group Limited reported a 26% revenue increase to $18.4 million for Q3 2022, compared to Q3 2021. Customer locations rose 23% to 118,000. The POS Gross Transactional Value grew 53% to $377 million, while overall Gross Transactional Value increased 19% to $1.34 billion. For the nine-month period, revenue was $51.6 million, marking 29% growth. Adjusted EBITDA was $3.3 million, down from $5.8 million due to prior government subsidies. Givex remains positive about its growth strategy despite market challenges.

Positive

• Revenue increased 26% to $18.4 million in Q3 2022.
• Customer locations grew 23% to 118,000 year-over-year.
• POS Gross Transactional Value rose 53% to $377 million.
• Overall Gross Transactional Value increased 19% to $1.34 billion in Q3 2022.
• Nine-month revenue reached $51.6 million, a 29% increase.
• Adjusted EBITDA remained positive at $3.3 million.

Negative

• Adjusted EBITDA decreased from $5.8 million in 2021 to $3.3 million in 2022 due to the withdrawal of government subsidies.
• General and administrative costs increased by approximately $1.0 million as a result of being a public company.

Revenue increased 26% to $18.4 million and customer locations increased 23% to 118,000, compared to the three-month period ending September 30, 2021.

TORONTO, Oct. 31, 2022 /PRNewswire/ - Givex Information Technology Group Limited ("Givex") (TSX: GIVX) (OTCQX: GIVXF), is pleased to present its financial results for the three-month period and the nine-month period ending September 30, 2022.

Givex reports in Canadian dollars and in accordance with International Financial Reporting Standards ("IFRS").

"Our third-quarter results illustrate our continued growth, both in revenue and customer locations. Revenue grew 26% this quarter to $18.4 million, and our location count now exceeds 118,000," said Don Gray, CEO of Givex. "POS Gross Transactional Value for the nine months also increased by 83% to $960 million, which highlights our continued gains in the POS space. This quarter, we signed agreements with major multi-unit merchants and expanded the depth of our relationships with existing clients. As we enter the last quarter of our first full year as a public company we are faced with the same challenges as others in the tech sector as it pertains to general stock market conditions. However, I am confident that our strategy is sound and the Givex team will continue to focus on growth with positive EBITDA and cashflow."

Third Quarter Financial Highlights

Three-month period ending September 30, 2022 (with comparisons relative to the three-month period ending September 30, 2021)

• Revenue increased $3.8 million from $14.6 million to $18.4 million, 26% growth. Adjusted EBITDA* was $1.0 million in 2022 compared to $2.7 million in 2021.  (However, 2021 includes $0.3 million received for the Canadian Government's COVID-19 wage subsidy). Total Gross Transactional Value** increased approximately $0.21 billion or 19%, from $1.13 billion in Q3 2021 to $1.34 billion in Q3 2022.
• POS Gross Transactional Value*** increased approximately $131 million or 53%, from $246 million in Q3 2021 to $377 million in Q3 2022.
• Customer Locations**** increased approximately 22,000 or 23%, from 96,000 in Q3 2021 to 118,000 in Q3 2022.

Nine-month period ending September 30, 2022 (with comparisons relative to the nine-month period ending September 30, 2021)

• Revenue increased $11.6 million from $40.0 million to $51.6 million, 29% growth.
• Adjusted EBITDA was $3.3 million in 2022 compared to $5.8 million in 2021.  (However, 2021 includes $0.8 million received for the Canadian Government's COVID-19 wage subsidy).
• Cashflows***** provided by operating activities were a positive $2.1 million. 
• Total Gross Transactional Value increased approximately $0.78 billion or 22%, from $3.61 billion in 2021 to $4.39 billion in 2022.
• POS Gross Transactional Value increased approximately $435 million or 83%, from $525 million in 2021 to $960 million in 2022.

Three-month period ending September 30, 2022 (with comparisons relative to the three-month period ending June 30, 2022).

• Revenue increased $1.6 million from $16.8 million to $18.4 million, an increase of 10%, of which 8% was organic growth of Givex and its subsidiaries.

Third Quarter Operational Highlights

• Payroll costs are the key focus to improved EBITDA. For the nine-month period ending September 30, 2022 and 2021, Employee Compensation****** as a % of Gross Profit was 55% and 56% respectively. For the 12-month period ending December 31, 2021 and 2020, Employee Compensation as a % of Gross Profit was 55% and 56%, respectively. Givex believes that its ability to reduce Employee Compensation as a % of Gross Profit is an indicator of its success in managing costs and profitability. In Q4 2022, Givex expects normal attrition and the consolidation of staff from the three business acquisitions in 2022 to be consistent with this objective. 
• Costs to support Givex's first full year as a public company have added approximately $1.0 million to our general and administrative costs for the nine months ending September 30, 2022, compared to the same period last year as a private company. These costs include professional fees and investor relations fees, many of which are transitory and one time in nature and the company expects to be able to reduce going forward.
• For the nine-month period ending September 30, 2022, sales and marketing costs are $1.9 million higher than the same period last year as Givex has actively re-engaged in global tradeshows and invested other direct marketing expenses as the impact of COVID-19 subsides.

More Information
Additional financial information, such as the audited annual Consolidated Financial Statements, Management's Discussion and Analysis of Financial Condition and Results of Operations, and Annual Information Form, is available on the company's SEDAR at sedar.com.

More information about Givex, including the Management Presentation and Overview, are posted on the company's investor relations website at investors.givex.com.

About Givex
Givex (TSX: GIVX) (OTCQX: GIVXF) is a global fintech company providing merchants with customer engagement, point of sale and payment solutions, all in a single platform. We are integrated with 1000+ technology partners, creating a fully end-to-end solution that delivers powerful customer insights. Our platform is used by some of the world's largest brands, comprising approximately 118,000 locations across more than 100 countries. Learn more at givex.com.

Non-IFRS Measures and Reconciliation of Non-IFRS Measures
The information presented includes certain financial measures such as "Adjusted EBITDA" (see below for definition), which are not recognized 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. These non-IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors, and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation.

Forward Looking Statements
This press release contains forward-looking information, including statements about reducing general and administrative expenses going forward. Forward-looking information is necessarily based on a number of opinions, estimates and assumptions that we considered appropriate and reasonable as of the date such statements are made, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to, the risk factors described under the "Risk Factors" section in the Risk Factors section in the Annual Information Form ("AIF") dated March 30, 2022, available on SEDAR at sedar.com and other filings with the Canadian securities regulatory authorities. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, prospective investors should not place undue reliance on forward-looking information, which speaks only as of the date made. See "Cautionary Note Regarding Forward-Looking Information" in the AIF.

Additional Notes
* Adjusted EBITDA is defined as net profit (loss) excluding interest, taxes, depreciation and amortization ("EBITDA") as adjusted for share-based compensation and related expenses, foreign exchange gains and losses and transaction-related expenses including those related to going public.

**Gross transaction volume ("GTV") means the total dollar value of stored and point-of-sale ("POS") transactions processed through our cloud-based SaaS platforms in the period, net of refunds, inclusive of shipping and handling, duty, and value-added taxes. We believe GTV is an indicator of the success of our customers and the strength of our platforms. GTV does not represent revenue earned by us.

***POS gross transactional volume ("POS GTV") means the total dollar value point-of-sale ("POS") transactions processed through GivexPOS, our cloud-based POS SaaS platform, in the period net of refunds, inclusive of shipping and handling, duty and value-added taxes. We believe POS GTV is an indicator of the success of our customers and the strength of our platforms. POS GTV does not represent revenue earned by us.

****Customer Location means a billing customer location for which the term of services has not ended, or with which we are negotiating a renewal contract.  It includes both merchant locations that have transactions processed through our cloud-based SaaS platform, as well as merchant locations not on our platform but for which we provide other Givex services. A single unique customer can have multiple Customer Locations including physical and eCommerce sites.   We believe that our ability to increase the number of Customer Locations served by our platform and products is an indicator of our success in terms of market penetration and growth of our business. 

*****Cashflows from operating activities means net income (loss) adjusted for non-cash items, changes in working capital, interest paid, and income tax paid.

******Employee Compensation as a % of Gross Profit means the total employee compensation for a period divided by the gross profit for the same period. Employee Compensation means total employee compensation including salaries and benefits, excluding both government assistance and share-based compensation. Gross Profit means revenue less direct cost of revenue.

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SOURCE Givex

FAQ

What is Givex's revenue for Q3 2022?

Givex reported a revenue of $18.4 million for Q3 2022, a 26% increase from Q3 2021.

How many customer locations does Givex have?

Givex has reached 118,000 customer locations as of Q3 2022, representing a 23% increase year-over-year.

What was Givex's Adjusted EBITDA for the nine-month period ending September 30, 2022?

Givex's Adjusted EBITDA for the nine-month period is $3.3 million, down from $5.8 million in the same period last year.

What challenges is Givex facing in the current market?

Givex noted that it is facing challenges common to the tech sector due to general stock market conditions.

What is Givex's outlook for growth?

Despite market challenges, Givex's management expresses confidence in its growth strategy and continues to focus on achieving positive EBITDA and cash flow.