- Increased annualized revenue run-rate from Q1 2018 to Q3 2018 by 46% to over $14M
- Connected assets increased in excess of 300% since beginning of 2018 to ~22,000; expected to exceed 25,000 by year-end
- Adjusted EBITDA approaching near break-even in Q3 2018 representing a significant improvement over Q2 2018
VANCOUVER, Nov. 27, 2018 /CNW/ – Universal mCloud Corp. (TSX-V: MCLD) (OTCQB: MCLDF) (“mCloud” or the “Company”), a leading provider of Artificial Intelligence and Analytics (“AI&A”) and IoT-connected asset care technology, has reported Q3 2018 operating results for the three month period ended September 30, 2018 and provided a progress update at its one-year anniversary of trading on the TSX-V.
Strategic Update, Acquisitions and Customer Wins:
In Q3 2018, the Company continued to execute on its growth plans by adding new customers and expanding existing accounts, aggressively investing in technology development and identifying targeted acquisitions that are aligned with the Company’s strategic road map.
In September 2018, the Company announcedt a binding letter of intent to acquire Ascent AeroSystems (“Ascent”) to expand its total attainable market for connected assets, including those in remote or inaccessible locations. The Company believes that the acquisition of Ascent, along with CSA, the Agnity Global Royalty via Flow Capital and the acquisition of NGRAIN, the latter of which closed in Q1 2018, will build on the Company’s technology foundation to create a more efficient future using artificial intelligence and analytics in the cloud.
The Company began completing roll-outs of AssetCare implementations via its TELUS relationship in Q3 2018. This relationship is expected to ramp-up and produce significant revenues in 2019. mCloud also continued to support and grow key existing customer accounts – major theater operators, quick service restaurants, large facility footprint owners, and a major bank primarily operating in Canada, to drive growth throughout the quarter. Additionally, in the quarter the Company’s leading-edge technology was further adopted by several major defense customers.
In regards to the global efforts, mCloud has signed agreements in direct support of its initiative to enter the China market. The company signed a multi-year LOI for a joint project via its SCN partnership for AssetCareTM at Heiwado Shopping Center in Changsha. Additionally, the company entered into a MOU with Wuhan City, Qingshan District government to promote mCloud technology as part of their overall green city initiatives.
At the inaugural mCloud Connect Conference, held in September 2018, mCloud hosted a range of global AI and IoT leaders. Over 80 participants were in attendance including C-suite and senior executives from a variety of industries, along with major players from the Canadian and U.S. investment community. Attendees received a preview of what’s to come from mCloud, as it strives to be the industry leader in the AI and Analytics space, supporting a more efficient future.
Recently, the Company has begun the process to become listed on the NASDAQ. Near the end of Q3 2018, the Company also announced the commencement of a $2M private placement to support pending M&A activities and general working capital purposes. Due to significant investor demand, mCloud ultimately closed $4.5M in financing in October 2018, demonstrating strong market interest in supporting the next phase of the Company’s growth plans.
mCloud CEO Russ McMeekin stated: “Our strategy is working and gaining momentum, as evidenced by the significant increase in connected assets, revenue and improvement in our bottom line. The Company grew to a $14M run rate up from a $9.5M run rate in the first quarter of 2018. We have more than tripled the asset count in less than 10 months and have major momentum going into 2019. We continue to make targeted investments while approaching adjusted EBITDA breakeven. We are now very well positioned in three major geographic markets – USA, Canada and China – where energy rates are high and the leverage of wind generated electricity is key to their policies. We are continuously adding world class customers to our portfolio and building a very impressive feet of connected assets. mCloud is aggressively working to formally close our pending acquisitions that are the basis of our technology and operational foundation.”
Operating Results and Improvements
The Company has provided unaudited proforma operating results for each quarter in 2018 on a sequential basis assuming the acquisitions of NGRAIN, CSA, Ascent and the Flow Transaction were in effect during each of these periods for comparability purposes. Readers are cautioned that the Company’s results would differ if one or more of these acquisitions are not completed.
The momentum that the Company achieved earlier in 2018 continued in Q3 2018, with total revenue for the quarter surpassing $3.5M, up from $3.1M and $2.4M in Q2 2018 and Q1 2018, respectively. While generating double-digit revenue growth sequentially quarter-over-quarter, mCloud’s margins were 68% in Q3 2018, up from 64% in Q2 2018. The Company managed recurring operating expenses and deployed capital in areas that supported growth, helping to drive adjusted EBITDA closer to break-even, and building on progress made in prior quarters.
mCloud CEO Russ McMeekin and CFO Darren Anderson are hosting the Company’s Q3 conference call on Tuesday November 27, 2018 at 5PM ET. For complete details on the conference call, please visit: https://mcloudcorp.com/2018/11/13/universal-mcloud-to-host-q3-conference-call-on-tuesday-november-27-2018-at-500-p-m-et/.
|Pro Forma Statements of Operations|
|Unaudited & Unconsolidated|
|in Canadian dollars|
|Three Months Ended||Three Months Ended||Three Months Ended|
|Cost of Sales||1,138,647||1,128,287||755,348|
|Gross Margin %||68%||64%||69%|
|Sales and Marketing||1,240,642||1,095,667||$950,175|
|Research and Development||503,082||445,288||370,507|
|General and Administrative||885,529||792,390||784,929|
Note: The above financial information is presented on a pro forma, unconsolidated, unaudited basis, and includes the revenues and expenses of NGRAIN, CSA, Ascent AeroSystems, and the Flow Transaction as though these acquisitions had been completed and in effect for the periods presented for comparability purposes. Readers are cautioned that the Company’s results would differ if one or more of these acquisitions are not completed. This information also excludes certain expenses that management has deemed non-recurring in nature and are not reflective of the ongoing operation of the Company.
About Universal mCloud Corp.
Universal mCloud is headquartered in Vancouver, BC with technology and operations centers in San Francisco, CA and Bristol, PA. mCloud is an Artificial Intelligence and Analytics, IoT connected asset care cloud solution company utilizing connected IoT devices, AI, deep energy analytics, secure mobile and 3D technologies that rally all asset stakeholders around an Asset-Circle-of-Care™, providing complete real-time and historical data coupled with guidance and advice based on deep analytics and diagnostics resulting in optimal performance and care of critical equipment. It’s all about the asset. The powerful and secure AssetCare™ environment is accessible everywhere, 24/7 through standard mobile devices, ruggedized headsets, and web browsers. For more information, visit www.mCloudCorp.com.
Forward-Looking Information and Statements
This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information contained herein includes, but is not limited to, prospective financial results and business prospects of the Company and the completion of proposed transactions with CSA, Flow Capital and Ascent AeroSystems.
By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements.
An investment in securities of the Company is speculative and subject to a number of risks including, without limitation, the risks discussed under the heading “Risk Factors” on pages 29 to 46 of the Company’s filing statement dated October 5, 2017. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
In connection with the forward-looking information and forward-looking statements contained in this press release, the Company has made certain assumptions. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward- looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice.
Neither 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.
SOURCE Universal-mCloud Corp