[Software] Absolute Software Reports Fourth Quarter and Full-Year Fiscal 2022 Financial Results, Revenue up 63-65% YoY, But Net Loss Rises Sharply

[FazzNoth]

Company closes transformative year with record F2022 revenue of $197.3 million, with accelerated Enterprise and Government ARR growth of 17%, up from 11% in prior year

Achieves second consecutive year of Rule of 40

Vancouver, BC, August 26, 2022--(T-Net)--Absolute Software Corporation (Nasdaq: ABST) (TSX: ABST), a provider of self-healing, intelligent security solutions, today announced its financial results for its fourth quarter and full-year fiscal 2022 ended June 30, 2022.

All dollar figures are stated in U.S. dollars, unless otherwise indicated.

 

"This year was the strongest in recent history - driven by the strong customer demand and our team's continued focus and execution, we are ending the year with our successful integration of NetMotion almost complete and very well-positioned for success in fiscal 2023," said Christy Wyatt, President and CEO of Absolute Software.

"Security and IT teams are increasingly acknowledging the need for both cyber defense as well as cyber resilience and, as a result, the industry is increasingly aware of the value in our unique intelligent, self-healing security solutions. We intend to continue investing in growth through F2023, while maintaining focus on meeting the Rule of 40 for the year."

 

Fourth Quarter ("Q4") and Full-Year Fiscal 2022 ("F2022") Financial Highlights

• Revenue was $52.5 million for Q4 F2022 and $197.3 million for F2022, an increase of 65% and 63% respectively, compared to the same period of the previous fiscal year.
• Adjusted Revenue(1) was $54.0 million for Q4 F2022 and $210.4 million for F2022, an increase of 70% and 74% respectively, compared to the same period of the previous fiscal year. Adjusted Revenue(1) for Q4 F2022 and F2022 increased by 13% and 15% respectively, compared to Q4 F2021 and F2021 revenue on an as-if combined basis without factoring in acquisition related adjustments(2).
• Net loss was $5.3 million for Q4 F2022 and $24.5 million for F2022, compared to net loss of $3.0 million for Q4 F2021 and net income of $3.7 million for F2021.
• Adjusted EBITDA(1) for Q4 F2022 was $15.4 million or 29% of Adjusted Revenue(1), compared to $8.0 million or 25% of Adjusted Revenue for Q4 F2021. Adjusted EBITDA(1) for F2022 was $55.8 million or 27% of Adjusted Revenue(1), compared to $31.9 million or 26% of Adjusted Revenue for F2021.
• Total ARR(4) as of June 30, 2022 was $209.5 million, representing an increase of 70% over the prior year reported ARR, and an increase of 16% compared to an as-if combined basis for June 30, 2021(3).
• The Enterprise & Government portions of Total ARR increased by 99% year over year, and by 17% compared to an as-if combined basis for June 30, 2021(3). The Enterprise & Government portion represented 78% of Total ARR as of June 30, 2022.
• The Education sector portion of Total ARR increased by 12% year over year, and by 12% compared to an as-if combined basis for June 30, 2021(3). The Education sector portion represented 22% of Total ARR as of June 30, 2022.
• Net Dollar Retention(4) was 108% for Q4 F2022, an increase from 106% for Q4 F2021.
• Cash from operating activities was $8.7 million for Q4 F2022 and $39.8 million for F2022, a decrease of 24% and 15% respectively from $11.4 million for Q4 F2021 and $46.8 million for F2021. Cash was negatively impacted as a result of one of our largest partners having a one-time migration of their payment system, which caused a delay in payment and pushed it into the following quarter. This payment has been subsequently received. Had it not been for that, our cash balance would have been approximately $72 million.
• A quarterly dividend of CAD$0.08 per outstanding common share was paid in Q4 F2022.

 

 

Q4 F2022 Business Highlights

Business and organizational developments:

 

• In April, we launched operations in Australia and New Zealand, as well as expanded operations across Europe, the Middle East and Africa (EMEA), as a result of continued demand for our intelligent, self-healing security solutions.
• In May, we were named the winner of a Bronze Stevie Award, part of the 20th Annual American Business Awards®, in the category of Company of the Year - Computer Software.
• In June, we were named the winner of two Global InfoSec Awards by Cyber Defense Magazine (CDM) for 'Most Comprehensive Endpoint Security' and 'Market Leader - Zero Trust at RSAC.'
• In June, Absolute completed a reorganization to consolidate and integrate NetMotion Software, Inc. ("NetMotion") into Absolute creating a more efficient operating structure going forward.
• Product and service highlights:
• In Q4, we reached13.6 million active endpoints across our global customer base - an increase of 18% year over year.
• In Q4, we added 11 mission-critical applications to our Application Persistence™ ecosystem, including BlackBerry CylancePROTECT® and Ivanti Neurons for Unified Endpoint Management (UEM), enabling joint Absolute Resilience™ customers to ensure they remain healthy and undeletable.
• In April, we delivered enhancements to our Secure Access product portfolio, including self-healing Zero Trust Network Access (ZTNA); a resilient deployment architecture; and expanded network and ZTNA policy intelligence.
• In April, we launched Absolute Ransomware Response, enabling customers with the capabilities and services needed to strengthen ransomware preparedness and accelerate endpoint recovery.
• Partner and other highlights:
• In Q4, we partnered with Lenovo to launch Lenovo Smart Lock Services, powered by Absolute, and the Lenovo Commercial Vantage Program.
• In April, we named Orca Tech as Australia and New Zealand distributor, as well as appointed new sales leadership, to accelerate growth and awareness in the region.
• In June, we announced Ericom, Utopic, and WinMagic® as new partners leveraging Absolute Application Persistence-as-a-Service (APaaS) to strengthen resiliency of their endpoint applications.
• In June, we published 'The Value of Zero Trust in a Work-from-Anywhere World' report, revealing the increased risk exposure organizations face amid the shift to distributed and hybrid work.

F2022 Business Highlights

Business and organizational developments:

 

• In July 2021, we completed the acquisition of NetMotion.
• In F2022, we made key executive appointments, including Ron Fior as Interim Chief Financial Officer (CFO), Peter Chess as General Counsel and John Herrema as Executive Vice President of Product and Strategy. In addition, Andre Mintz joined our Board of Directors.
• In F2022, we were featured as a Representative Vendor in the Gartner "Market Guide for Zero Trust Network Access" (ZTNA) report.
• In F2022, we were recognized as a winner or finalist in 13 award programs - including BC Tech's 'Technology Impact Awards,' G2's 2022 Best Software Awards, the CRN® 2022 Partner Program Guide, and the Gartner Peer Insights Customer Choice Awards - and were named a Leader in the G2 Summer 2022 Grid® Report for Endpoint Management for the 10th consecutive quarter.
• Product and service highlights:
• In F2022, we grew the total number of mission-critical applications in our Application Resilience library to more than 60.
• In F2022, we launched Application Persistence-as-a-Service (APaaS) - empowering ISVs and system manufacturers to leverage Absolute's firmware-embedded, self-healing device connection to strengthen the resiliency of their mission-critical applications. We also announced APaaS partnerships with leading ISVs including Plurilock, Smart Eye Technology, Ericom, WinMagic, and Utopic Software.
• In F2022, we continued to deliver a steady cadence of product innovations, including:
• The first combined product milestone following our acquisition of NetMotion, with the launch of the industry's first self-healing Zero Trust platform.
• Absolute Insights™ for Endpoints and Networks, enabling customers to analyze critical performance metrics spanning endpoints, users, applications, and network connections.
• Enhancements to our Secure Endpoint product portfolio, including the Absolute DataExplorer™ tool and enhanced geolocation capabilities.
• Critical certifications for our Secure Access product line, including Common Criteria Evaluation Assurance Level (EAL) 4+ - the highest certification level recognized under the Common Criteria program for software products - and the completion of a System and Organizational Controls (SOC 2) Type I audit.
• A new K-12 offering, Absolute Resilience for Student Devices, enabling education IT teams with critical capabilities to better manage and secure 1:1 device programs.
• Partner and other highlights:
• In F2022, Absolute continued to be included as a key component in the global security portfolios of Dell, Lenovo, and HP.
• Named as a strategic security partner by Lenovo in the launch of their global 'Everything-as-a-Service' strategy and Lenovo Smart Lock Services.
• Partnered with HP to launch a successful retail bundle on QVC in North America and turn on factory activation for consumer devices in EMEA.
• In F2022, we continued to scale our business in international markets, appointing the Nuvias Group as distributor in the DACH region, expanding on the previous distribution agreements in the UK and Benelux.
• In F2022, AT&T named our Secure Access platform as a key solution helping to power FirstNet®, the only nationwide network built for America's first responders.

F2023 Financial Outlook

The Company's financial outlook for its 2023 fiscal year (July 1, 2022 - June 30, 2023) is as follows(1):

• Full-year F2023 adjusted revenue(2) is expected to be in the range of $241.5 million to $246.5 million; this equates to a full-year F2023 adjusted revenue growth of approximately 14.8% to 17.1% (3).
• Full-year F2023 Adjusted EBITDA(2) margin, calculated on adjusted revenue, is expected to be in the range of 21.0% to 24.0%.

 

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