VIQ Options Publicizes Third Quarter 2023 Monetary Outcomes

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PHOENIX, Ariz. — VIQ Options Inc. (“VIQ” or the “Firm”) (TSX:VQS), a world supplier of safe, AI-driven, digital voice and video seize know-how and transcription providers, at present declares its unaudited monetary outcomes for the third quarter ending September 30, 2023. Outcomes are reported in US {dollars} and ready in accordance with Worldwide Monetary Reporting Requirements (“IFRS”).

“The third quarter represents the final comparable quarter towards the prior Queensland Courts Division of Justice and Lawyer Normal (“DJAG”) contracts which created challenges in comparative metrics all through 2023. The business labor shortages that affected the quarter, notably in Australia, are being managed however created vital challenges within the quarter for each acceleration of income and abatements that impacted our backside line. These challenges are actually largely beneath management and the implementation of the NetScribe aiAssist platform is predicted to cut back the labor danger within the coming years. Excluding the DJAG contract and the impression of international trade, VIQ would have reported constructive year-to-date income progress of 1.2% over the comparative interval in 2022,” stated VIQ CEO Sebastien Pare.

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Mr. Pare continued, “Demand is excessive for our AI-enabled transcription and translation applied sciences to transform advanced multi-speaker occasions, resembling court docket hearings, police interviews, and depositions into formatted and usable content material. That is confirmed by the backlog that represented roughly 45 days of regulation enforcement work. Whereas sure challenges have restricted our capability to completely acknowledge this backlog, our bookings stay sturdy, and proof of restoration underscores the resilience within the business and of VIQ.”

The migration of Courts and Legislation Enforcement clients in Australia is underway with completion anticipated in Q1 of 2024. That is anticipated to enhance efficiencies throughout the group and lead to a rise in margins. These efficiencies, together with the fee reductions related to delisting from NASDAQ and the continued operational optimization happening, will additional enhance our future working efficiency and Adjusted EBITDA.

Mr. Pare continued, “Investments in know-how have resulted in a positive pivot to the next share of bookings and pipeline in our Software program as a service (“SaaS”) and Platform as a service options. As these bookings start recurring billing, this can even favorably impression the margins related to our booked progress.”

“Whereas the financial situations leading to labor shortages have definitely slowed our cadence, VIQ is concentrated on utilizing know-how, VIQ’s technique of NetScribe AI-enabled platform to allow our segments, together with VIQ, resolve the backlog and velocity the doc creation course of. This reduces danger in the long run and accelerates our migrations to AI-enabled options we’re bringing to market,” stated Susan Sumner, VIQ’s President and Chief Working Officer.

Highlights from the quarter are as follows:

Third Quarter 2023 Operational Highlights

• Income and margins decreased in Q3 primarily because of the beforehand introduced contract modifications to Queensland DJAG.
• Commenced migrations of Australian court docket clients to NetScribe in Q3, which is predicted to enhance gross margins in 2024.
• Features seen within the insurance coverage vertical with new US consumer that ranks within the Prime 5.
• Consumer transition to AI-only drafts helps to unravel capability challenges.
• Capability restoration and enlargement led to progress in income and margins within the U.S. authorized and legal justice verticals versus the prior yr third quarter.
• Australia’s market demand stays sturdy whereas it additionally continues to be impacted by capability challenges.
• Gross margin reductions in Australia are anticipated to be short-term as a consequence of aggressive capability onboarding and coaching prices.
• Q3 Bookings¹ stay sturdy at $932K, demonstrating continued demand regardless of capability challenges.
• Early success from preliminary AU migrations reveals a 50% enchancment in gross margin share.
• Improve in AI-only SaaS gross sales being pushed by domain-specific skilled AI fashions.

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Third Quarter 2023 Monetary Highlights

• Income of $10.1 million, a lower of $1.7 million, or 14%, in comparison with the identical interval of the prior yr, was primarily because of the anticipated change within the DJAG contract and the weakening Australian greenback and British pound sterling. For the three months ended September 30, 2023, income was negatively impacted by roughly $0.3 million because of the weakening Australian greenback compared to the US greenback. Excluding the DJAG contract change and the impression of international trade, the Firm would have reported constructive year-to-date income progress over a comparative interval in 2022 of 1.2%.
• Gross revenue was $4.3 million, or 42.9% of income, in comparison with $5.6 million, or 47.3% of income throughout the identical interval of the prior yr. The lower in gross margin was primarily because of the anticipated discount in volumes from the high-margin DJAG contract that resulted in 2022. Moreover, for the three months ended September 30, 2023, the gross margin was negatively impacted by roughly $0.1 million because of the weakening Australian greenback and British pound sterling compared to the US greenback. Excluding the DJAG contract change and the impression of international trade, the Firm would have reported the identical gross margin share because the prior-year quarter.
• Internet lack of $4.4 million, or $0.11 per diluted share, versus a web lack of $1.3 million, or $0.04 per diluted share in the identical prior yr interval.
• Adjusted EBITDA¹ deficit of $1.4 million, versus Adjusted EBITDA deficit of $0.6 million in the identical prior interval. The rise in Adjusted EBITDA deficit was primarily because of the decreased gross margin reported above, on account of the anticipated change within the DJAG contract, and the unfavourable impression of international trade, partially offset by decreased promoting and administrative bills.

“Bettering VIQ’s EBITDA efficiency is a prime precedence. We launched a restructuring plan earlier this yr concentrating on a discount of promoting and administrative bills of between $2 million to $2.5 million over the following 12 months. We’re additionally implementing a sequence of measures aimed toward bettering EBITDA efficiency, together with improved margin attainment from volumes being migrated on NetScribe and domain-specific skilled AI fashions and continued offshoring,” stated Alexie Edwards, VIQ’s Chief Monetary Officer.

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A replica of the Firm’s Interim Condensed Monetary Statements and accompanying MD&A for the three and 9 months ended September 30, 2023 and 2022 (unaudited) will probably be accessible beneath the Firm’s profile on SEDAR+ at www.sedarplus.ca.

Convention Name Particulars

VIQ will host a convention name and webcast to debate its third quarter 2023 monetary outcomes on November 13, 2023, at 11:00 a.m. (Jap Time). The decision will encompass updates by Sebastien Paré, VIQ’s Chief Govt Officer, Alexie Edwards, VIQ’s Chief Monetary Officer, and Susan Sumner, VIQ’s President and Chief Working Officer, adopted by a question-and-answer interval.

Traders might entry a reside webcast of the decision on the Firm’s web site at www.viqsolutions.com/buyers or by dialing 1-888-440-4052 (North America toll-free) or +1-646-960-0827 (worldwide) to be linked to the decision by an operator utilizing convention ID quantity 4983233. Contributors ought to dial in no less than 10 minutes previous to the beginning of the decision.

A replay of the webcast will probably be accessible on the Firm’s web site by the identical hyperlink roughly one hour after the convention name concludes.

For extra details about VIQ, please go to viqsolutions.com.

About VIQ Options

VIQ Options is a world supplier of safe, AI-driven, digital voice and video seize know-how and transcription providers. VIQ presents a seamless, complete resolution suite that delivers clever automation, enhanced with human overview, to drive transformation in the best way content material is captured, secured, and repurposed into actionable data. The cyber-secure, AI know-how and providers platform are carried out in essentially the most inflexible safety environments together with legal justice, authorized, insurance coverage, authorities, company finance, media, and transcription service supplier markets, enabling them to enhance the standard and accessibility of proof, to simply establish predictive insights and to realize digital transformation sooner and at a decrease price.

Ahead-looking Statements

Sure statements included on this press launch represent forward-looking statements or forward-looking data (collectively, “forward-looking statements”) beneath relevant securities laws. Such forward-looking statements or data are supplied for the aim of offering details about administration’s present expectations and plans regarding the longer term. Readers are cautioned that reliance on such data might not be acceptable for different functions.

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Ahead-looking statements (sometimes comprise statements with phrases resembling “anticipate”, “consider”, “anticipate”, “plan”, “intend”, “estimate”, “suggest”, “venture” or comparable phrases, together with negatives thereof, suggesting future outcomes or that sure occasions or situations “might” or “will” happen). These statements are solely predictions. Ahead-looking statements on this press launch embody however should not restricted to statements with respect to the submitting of the monetary statements and associated MD&A on SEDAR+, the advantages of the implementation of the NetScribe aiAssist platform, the migration of Courts and Legislation Enforcement clients in Australia, margins related to the Firm’s booked progress, the Firm’s priorities and the convention name to debate the Firm’s third quarter 2023 outcomes.

Ahead-looking statements are primarily based on a number of elements and assumptions which have been used to develop such statements, however which can show to be incorrect. Though VIQ believes that the expectations mirrored in such forward-looking statements are affordable, undue reliance shouldn’t be positioned on forward-looking statements as a result of VIQ may give no assurance that such expectations will show to be appropriate. Along with different elements and assumptions that could be recognized on this press launch, assumptions have been made relating to, amongst different issues, latest initiatives, price financial savings from workforce optimization, price reductions from the Firm’s workflow options, and that gross sales and prospects might enhance income]. Readers are cautioned that the foregoing record just isn’t exhaustive of all elements and assumptions which were used.

Ahead-looking statements are essentially primarily based on a lot of opinions, assumptions and estimates that whereas thought-about affordable by the Firm as of the date of this press launch, are topic to recognized and unknown dangers, uncertainties, assumptions, and different elements which will trigger the precise outcomes, stage of exercise, efficiency or achievements to be materially totally different from these expressed or implied by such forward-looking statements, together with however not restricted to the elements described in better element within the “Threat Components” part of the Firm’s annual report and within the Firm’s different supplies filed with the Canadian securities regulatory authorities and the U.S. Securities and Trade Fee every now and then, accessible at www.sedarplus.com and www.sec.gov, respectively.

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These elements should not supposed to symbolize a whole record of the elements that would have an effect on the Firm; nevertheless, these elements needs to be thought-about rigorously. Such estimates and assumptions might show to be incorrect or overstated. The forward-looking statements contained on this press launch are made as of the date of this press launch and the Firm expressly disclaims any obligations to replace or alter such statements, or the elements or assumptions underlying them, whether or not on account of new data, future occasions or in any other case, besides as required by regulation.

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VIQ Options Inc.
Reconciliation of Non-IFRS Measures
(Expressed in United States {dollars}) (Unaudited)

The next is a reconciliation of Internet Loss to Adjusted EBITDA, essentially the most straight comparable IFRS measure for the three and 9 months ended September 30, 2023, and 2022:

Non-IFRS Measures

The Firm prepares its monetary statements in accordance with IFRS. Non-IFRS measures are supplied by administration to supply further perception into our efficiency and monetary situation. VIQ believes non-IFRS measures are an vital a part of the monetary reporting course of and are helpful in speaking data that enhances and dietary supplements the consolidated monetary statements. Adjusted EBITDA and Bookings should not measures acknowledged by IFRS and would not have standardized meanings prescribed by IFRS. Subsequently, Adjusted EBITDA and Bookings might not be akin to comparable measures offered by different issuers. Traders are cautioned that Adjusted EBITDA shouldn’t be construed as a substitute for web earnings (loss) as decided in accordance with IFRS.

To guage the Firm’s working efficiency as a complement to outcomes supplied in accordance with IFRS, the time period “Adjusted EBITDA” refers to web earnings (loss) earlier than adjusting earnings for stock-based compensation, depreciation, amortization, curiosity expense, accretion, and different financing expense, (achieve) loss on revaluation of choices, (achieve) loss on revaluation of restricted share models, achieve (loss) on revaluation of by-product warrant legal responsibility, restructuring prices, (achieve) loss on revaluation of conversion characteristic legal responsibility, loss on compensation of long-term debt, enterprise acquisition prices, impairment of goodwill and intangibles, different expense (earnings), international trade (achieve) loss, present and deferred earnings tax expense. We consider that the objects excluded from Adjusted EBITDA should not linked to and don’t symbolize the working efficiency of the Firm.

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We consider that Adjusted EBITDA is beneficial supplemental data because it offers a sign of the outcomes generated by the Firm’s primary enterprise actions previous to considering how these actions are financed and taxed in addition to bills associated to stock-based compensation, depreciation, amortization, impairment of goodwill and intangibles, different expense (earnings), and international trade (achieve) loss. Accordingly, we consider that this measure might also be helpful to buyers in enhancing their understanding of the Firm’s working efficiency.

We calculate “Bookings” for a given interval because the estimated contract worth (for providers tied to quantity) of our recurring consumer contracts entered into through the interval from (i) new shoppers and (ii) web upgrades by current shoppers inside the similar workload, plus the precise (not annualized) estimated worth {of professional} providers consulting, advisory or project-based orders acquired, software program licenses, subscriptions, SaaS, and {hardware} through the interval.

Recurring consumer contracts are any contracts entered into on a multi-year or month-to-month foundation, excluding any skilled providers contracts for consulting, advisory, or project-based work, software program licenses, and {hardware}.

We use Bookings to measure the quantity of latest enterprise generated in a interval, which we consider is a crucial indicator of latest consumer acquisition and our capability to cross-sell new providers to current shoppers. Bookings are additionally utilized by administration as a think about figuring out performance-based compensation for our gross sales power. Whereas we consider Bookings, together with different metrics, are an indicator of our near-term future income alternative, it’s not supposed for use as a projection of future income. Reserving data is a non-IFRS measure, that entails judgments, estimates, and assumptions, which doesn’t have a normal business definition. Our calculation of Bookings might differ from equally titled metrics offered by different firms.

Emblems

This press launch contains emblems, resembling “NetScribe”, that are protected beneath relevant mental property legal guidelines and are the property of VIQ. Solely for comfort, our emblems referred to on this press launch might seem with out the ® or TM image, however such references should not supposed to point, in any means, that we are going to not assert our rights to those emblems, commerce names, and providers marks to the fullest extent beneath relevant regulation. Emblems that could be used on this press launch, aside from those who belong to VIQ, are the property of their respective homeowners.

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Contacts

Media Contact:
Tim Johnson
VIQ Options
Electronic mail: advertising@viqsolutions.com

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