Pineapple Financial Inc. Reports 7.5% Revenue Growth in 2024, and Accelerates Growth to Start 2025

Rhea-AI Summary

Pineapple Financial Inc. (NYSE: PAPL) reported a 7.5% increase in net revenue to $2.69 million for fiscal year 2024, compared to $2.50 million in 2023. The company's growth was driven by expanding subscription services and strong mortgage sales. Total gross billings reached $16.26 million, up from $15.03 million. The company successfully completed an IPO on NYSE American, raising $3.5 million, and launched a new insurance vertical through Industrial Alliance.

Early fiscal 2025 shows accelerated growth with Q1 (September-November 2024) reporting 13.3% YOY volume growth, 13.9% YOY gross billing growth, and 20.8% YOY net revenue growth. The company expects to achieve ongoing monthly profitability by April 2025.

Positive

• Net revenue increased 7.5% YOY to $2.69 million in FY2024
• Gross billings grew to $16.26 million from $15.03 million
• Successful IPO raising $3.5 million
• Q1 2025 showing strong growth: 20.8% YOY net revenue increase
• Launch of new insurance vertical creating additional revenue streams

Negative

• Net loss increased to $4.10 million in FY2024 from $2.81 million in FY2023
• Operating loss widened to $3.82 million from $2.78 million
• Cash position decreased to $580,356 from $720,365
• Loss per share increased to $0.57 from $0.45

Insights

Financial Analyst

The financial results reveal a mixed picture for Pineapple Financial. While the $2.69 million revenue represents a 7.5% YOY growth, the company's net loss widened to $4.1 million in FY2024 from $2.81 million in FY2023. The accelerating Q1 FY2025 metrics (20.8% net revenue growth) and projected profitability by April 2025 are promising, but must be viewed against significant cash burn and mounting losses. The balance sheet shows concerning trends with cash position declining to $580,356 from $720,365 YOY, while total liabilities remain substantial at $2.75 million. The $3.5 million IPO proceeds provide some runway, but the burn rate needs careful monitoring. The loss per share increased to $0.57 from $0.45, indicating dilution and deteriorating profitability metrics.

Tech Industry Analyst

The strategic focus on AI-driven tools and technology investment, evidenced by $1.11 million in intangible asset development, positions Pineapple well in the competitive fintech landscape. The launch of the insurance vertical through Industrial Alliance partnership demonstrates solid platform expansion capabilities. However, the $838,843 in depreciation and amortization costs, up significantly from $441,159, suggests heavy technology infrastructure costs that need to be balanced against revenue growth. The subscription service model shows promise for recurring revenue, but technology investment needs to translate into operational efficiency and reduced customer acquisition costs to achieve the projected profitability timeline.

Market Research Analyst

The 13.3% volume growth and 13.9% gross billing growth in early FY2025 indicate positive market momentum, likely benefiting from Bank of Canada rate cuts. However, the increasing operational costs (SG&A up to $2.38 million from $2.17 million) and higher marketing expenses suggest challenges in achieving profitable scale. The diversification into insurance services could provide margin expansion opportunities, but the 7.5% revenue growth rate needs to accelerate substantially to justify the current market valuation and achieve sustainable profitability. The company's ability to maintain growth while controlling costs will be important for meeting the April 2025 profitability target.

Expecting 20% YOY Net Revenue Growth in early 2025, on Track for Ongoing Profitability by April 2025

Toronto, Canada--(Newsfile Corp. - December 23, 2024) - Pineapple Financial Inc. (NYSE American: PAPL), a leading Canadian mortgage and insurance fintech, today reported its audited financial results for the fiscal year ended August 31, 2024. The company achieved a 7.5% increase in net revenue year-over-year, driven by growth in its subscription services and strong mortgage sales. Early reporting indicated Pineapple is expecting to experience a strong start to fiscal year 2025, with significant growth across key metrics, including 13.3% YOY volume growth, 13.9% YOY gross billing growth, and 20.8% YOY net revenue growth from September through November. These results reflect both the company's effective growth initiatives and a shifting market sentiment. With these strong figures and a clear path forward, Pineapple is on track to achieve ongoing profitability by April 2025.

Fiscal Year 2024 Highlights

• Revenue Growth: Pineapple Financial achieved net revenue of $2.69 million in fiscal year 2024, marking a 7.5% increase compared to $2.50 million in fiscal year 2023. This growth was driven by the company's expanding subscription services and strong mortgage sales, demonstrating the effectiveness of its customer acquisition strategies.
• Gross Billings: The company reported total gross billings of $16.26 million in fiscal year 2024, up from $15.03 million in the previous fiscal year, reflecting continued success in service delivery and customer retention across its brokerage network.
• IPO Success: Pineapple Financial successfully completed its Initial Public Offering (IPO) on the NYSE American, raising $3.5 million in gross proceeds. This milestone demonstrates investor confidence in Pineapple's business model and growth potential.
• Insurance Vertical Launch - Key Milestone: As part of its strategic use of IPO proceeds, Pineapple launched a new insurance vertical, offering life, creditor, and disability insurance on behalf of Industrial Alliance. This milestone further diversifies Pineapple's service offering, strengthens customer relationships, and creates additional revenue streams, positioning the company for continued success.
• Innovation Leadership: Pineapple continued to lead in mortgage technology innovation, investing heavily in proprietary AI-driven tools to improve the efficiency and experience of brokers and clients. These innovations contributed to the company's development of $1.11 million in intangible assets, reinforcing Pineapple's position at the forefront of digital mortgage solutions.
• Strong Fiscal Q1 2025 Performance: From September to November 2024 (Fiscal Q1), Pineapple Financial has delivered strong growth, with a 13.3% year-over-year increase in volume, a 13.9% increase in gross billings, and a 20.8% increase in net revenue. These results underscore the positive momentum Pineapple is experiencing as it enters 2025, driven by both internal growth initiatives and favorable market conditions.

Comment from Leadership

Shubha Dasgupta, CEO of Pineapple Financial Inc., stated:

"Fiscal 2024 laid a strong foundation for Pineapple, and we are seeing significant momentum as we enter 2025. The recent performance in Q1, with over 13% growth in both volume and gross billings, demonstrates the effectiveness of our growth initiatives and the favorable shifts in market sentiment. The launch of our insurance vertical has been a key milestone, further strengthening our value proposition and diversifying revenue streams."

"We are confident that with the combination of our continued growth in core mortgage services, the addition of the insurance vertical, and market momentum from recent Bank of Canada rate cuts and favorable policy changes, Pineapple is well on its way to achieving ongoing monthly profitability by April 2025. Our trajectory is clear, and we remain focused on capitalizing on these opportunities to drive continued growth and value creation."

Future Outlook

Pineapple Financial is poised for continued growth, with a clear path to monthly profitability by April 2025. With a strengthened balance sheet, a growing broker network, and the successful launch of the insurance vertical, Pineapple is well-positioned to capitalize on the improving macroeconomic conditions. The company's investments in technology, customer experience, and operational efficiencies will continue to drive revenue growth and increased customer retention as the Canadian mortgage market recovers in 2025.

Pineapple Financial Inc.
Consolidated Balance Sheets
As at August 31, 2024 and 2023
(Expressed in US Dollars)

As at:		August 31, 2024				August 31, 2023
Assets
Current assets
Cash		$		580,356		$	720,365
Trade and other receivables				155,224			758,988
Prepaid expenses and deposits				157,911			218,150
Total current assets				893,491			1,697,503
Investment				10,042			10,013
Right-of-use asset				828,674			960,377
Property and equipment				152,610			242,091
Intangible assets				2,211,775			1,718,954
Total Assets		$		4,096,592		$	4,628,938
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities		$		1,125,477		$	605,319
Deferred revenue				111,921			-
Loan				-			430,098
Current portion of lease liability				161,508			138,372
Total current liabilities				1,398,906			1,173,789
Deferred government incentive				491,251			699,627
Lease liability				815,599			969,589
Warrant liability				41,520			-
Total liabilities		$		2,747,276		$	2,843,005
Shareholders' Equity
Common shares, no par value; unlimited authorized; 8,425,353 issued and outstanding shares as of August 31, 2024 and 6,306,979 as at August 31, 2023.				8,559,856			4,903,031
Additional paid-in capital				2,955,944			2,955,944
Accumulated other comprehensive loss				(408,510	)		(417,727	)
Accumulated deficit				(9,757,974	)		(5,655,315	)
Total stockholders' equity				1,349,316			1,785,933
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$		4,096,592		$	4,628,938

 

F-3 

Pineapple Financial Inc.
Consolidated Statements of Operations and Comprehensive Loss
For the years ended August 31, 2024 and 2023
(Expressed in US Dollars)

For the year ended		August 31, 2024				August 31, 2023
Revenue		$		2,688,987		$	2,502,264
Expenses
Selling, general and administrative				2,382,225			2,170,149
Advertising and Marketing				860,047			844,796
Salaries, wages and benefits				2,436,783			2,330,127
Interest expense and bank charges				93,472			56,316
Depreciation and amortization				838,843			441,159
Share-based compensation				-			33,091
Government Incentive				(97,646	)		(591,480	)
Total expenses		$		6,513,724		$	5,284,158
Loss from operations				(3,824,737	)		(2,781,894	)
Write down of investment				-			(27,143	)
(Loss) on extinguishment of liability				(156,339	)		-
Foreign exchange gain (loss)				(38,836	)		-
Gain on change in fair value of warrant liability				63,769			-
Gain on change in fair value of conversion feature liability				76,543			-
Accretion expense				(223,059	)		-
Loss before income taxes		$		(4,102,659	)	$	(2,809,037	)
Net loss				(4,102,659	)		(2,809,037	)
Foreign currency translation adjustment				9,217			(64,509	)
Net loss and comprehensive loss		$		(4,093,442	)	$	(2,873,546	)
Loss per share - basic and diluted		$		(0.57	)	$	(0.45	)
Weighted average number of common shares outstanding - basic and diluted				7,145,939			6,306,979

 

About Pineapple

Pineapple is an award-winning fintech and leading Canadian mortgage brokerage network, focusing on both the long-term success of agents and brokers as well as the overall experience of homeowners. With hundreds of brokers within the network, Pineapple creates cutting-edge cloud-based tools and AI-driven systems to enable its brokers to help Canadians realize their dream of owning a home. Pineapple is active within the community and is proud to sponsor charities across Canada to improve the lives of fellow Canadians.

Follow us on social media:

Instagram: @pineapplemortgage @empoweredbypineapple

Facebook: Pineapple Mortgage

LinkedIn: Pineapple Mortgage

Safe Harbor Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. They are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and economic needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "potential," "continue" or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances or changes in its expectations that arise after the date hereof, except as may be required by law. These statements are subject to uncertainties and risks including, but not limited to, the uncertainties related to market conditions and the completion of the initial public offering on the anticipated terms or at all, and other factors discussed in the "Risk Factors" section of the registration statement filed with the SEC. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure that such expectations will be correct. The Company cautions investors that actual results may differ materially from the anticipated results. It encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the SEC. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov.

Media Contact:

For media inquiries, please contact Shubha Dasgupta, Chief Executive Officer, at Pineapple.

Email: shubha@gopineapple.com

Related Links:

https://gopineapple.com

http://empoweredbypineapple.com

Investor Relations Contact:

For investor relations inquiries, please contact Pineapple Financial Inc.

ir@gopineapple.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/234653

FAQ

What was Pineapple Financial's (PAPL) revenue growth in fiscal year 2024?

Pineapple Financial reported a 7.5% revenue growth in fiscal year 2024, reaching $2.69 million compared to $2.50 million in 2023.

When does PAPL expect to achieve profitability?

Pineapple Financial expects to achieve ongoing monthly profitability by April 2025.

How much did PAPL raise in its NYSE American IPO?

Pineapple Financial raised $3.5 million in gross proceeds from its IPO on the NYSE American.

What are PAPL's Q1 2025 growth metrics?

In Q1 2025 (September-November 2024), PAPL reported 13.3% YOY volume growth, 13.9% YOY gross billing growth, and 20.8% YOY net revenue growth.

What new business vertical did PAPL launch in 2024?

PAPL launched a new insurance vertical offering life, creditor, and disability insurance through Industrial Alliance.