Revenue of $11.7 millionOptiva selected by three new customersTotal Contract Value (“TCV”)1 bookings of $13.6 millionGross margin of 61%Adjusted EBITDA1 loss of $0.8 millionAdjusted EPS1 loss of ($0.76)$21.7 million of cash

TORONTO, Nov.  08, 2023  (GLOBE NEWSWIRE) -- Optiva Inc. (“Optiva” or “the Company”) (TSX:OPT), a leader in powering the telecom industry with cloud-native billing, charging and revenue management software on private and public clouds, today released its third quarter financial results for the three-month period ended September 30, 2023.

During the third quarter, Optiva was selected by three new customers and one additional customer shortly after the quarter ended, totaling five new customers year to date. These new logos are a testament to Optiva’s strong brand in the telecom BSS market and the significant investment the company has made in its products. As the Company looks at its pipeline, approximately 80% of bookings are expected to come from new customers, signaling that the Company's strategy is resonating.

“We continue to execute on our strategic priorities, including the growth of our sales pipeline, as cloud-native SaaS continues to resonate and expand in the markets we are pursuing,” said Robert Stabile, Chairman of the Board of Directors and Chief Executive Officer of Optiva. “We are proud to be recognized with multiple industry awards while we make significant roadmap advancements, including leveraging Optiva’s gold mine of BSS data to power AI-based personalization and extending our strategic partnership with Google Cloud with the launch of Optiva MVNO Hubs.”

For more information about Optiva, please visit: https://optiva.com/q3-2023-investor-presentation/

Business Highlights

TCV of Q3'23 bookings totaled $13.6 million. On a trailing 12-month basis, TCV bookings totaled $72.3 million. REALLY, a United States-based innovative telecom company, selected Optiva to help launch its new mobile phone service nationwide, powered by Optiva BSS on Google Cloud. REALLY is on a mission to bridge the digital divide by introducing a nationwide decentralized wireless (DeWi) network across the U.S., commencing in Austin, Texas. REALLY will be empowered by Optiva’s full suite of comprehensive BSS features, pre-integrated carrier APIs, third-party services, dual-network provisioning and turnkey managed services and support. Inclusive of REALLY, Optiva has secured a total of five new customer wins year to date, including a leading technology company in Nigeria specializing in cutting-edge telecom projects, one of the fastest-growing wholesale carriers in local and international voice and data traffic in Africa and an innovative technology company in North America. These customers have all selected the Optiva BSS Platform, with two choosing to leverage Optiva MVNO Hubs, enabling them to deliver a superior customer experience with innovative and integrated digital services. lifecell Ukraine and Optiva were named winners of Excellence in Serving People and Planet in TM Forum’s 16th Annual Awards. TM Forum’s Excellence Awards recognize the world’s leading companies for their innovative achievements spanning digital transformation, business and IT agility, customer centricity, cross-industry partnering and collaboration, and product and service innovation. The Company announced the launch of Optiva MVNO Hubs on Google Cloud. The multi-tenant solution is offered as a SaaS product on Google Cloud in multiple regions worldwide, beginning with the Americas. Optiva MVNO Hubs deliver BSS as a service and include deep integration with Google Cloud’s BigQuery for BSS-data-based, AI-powered insights. These regional MVNO hubs extend Optiva BSS Platform with key MVNO integrations such as payment gateway, taxation, customer care, chat, customer relationship management (CRM) ticketing and a dealer portal for rapid onboarding and management of dealer channels. Innovative digital MVNOs in the United States are already capitalizing on the time to market and fully integrated functionality of Optiva MVNO Hubs on Google Cloud. Optiva announced the launch of its next-generation converged Optiva Charging Engine, the latest advancement in the Company’s billing and charging portfolio. The new release features AI-based personalization to enable real-time digital customer experiences. The new Optiva Charging Engine release delivers convergent rating and charging capabilities that empower telecom operators, especially new market entrants focused on digital customer experience and rapid time to market, to create elevated customer offerings and new revenue streams. On September 29, the Company completed a US$13,500,000 debenture financing on a private placement basis for growth and working capital purposes.

Third Quarter 2023 Financial Results Highlights:

Q3 Fiscal 2023 HighlightsThree Months Ended Nine Months Ended  ($ US Millions, except per share information)September 30, September 30,  (Unaudited) 2023  2022   2023  2022  Revenue 11.7  15.2   35.5  46.7  Net Income (Loss) (4.2) 0.9   (8.2) 2.2  Earnings (Loss) Per Share($0.68)$0.14  ($1.33)$0.36  Adjusted Earnings (Loss) Per Share(1)($0.76)($0.16) ($1.42)($0.16)  Adjusted EBITDA(1) (0.8) 3.3   (0.1) 10.9  Cash from (used in) operating activities 0.4  (2.6)  (2.4) (2.2)  Total cash, including restricted cash 21.7  18.3   21.7  18.3

Revenue for Q3’23 was $11.7 million. On a year-over-year basis, the change by revenue type included a $2.0 million decrease in support and subscription, a $1.5 million decrease in software and services, and third-party software and hardware revenue remained unchanged. The year-over-year decline in support and subscription reflects the run-off of a few customers who had previously notified the company of their intentions to replace Optiva. The drop in software and services is mainly due to fewer software implementations, primarily in the EMEA region, compared to the prior period. Gross margin for Q3’23 was 61% compared to 72% during the same period in 2022. The decline in gross margin is primarily attributable to lower revenue from high-margin license and support and subscription revenue, along with customizations with lower margins ordered by customers that required fulfillment, compared to the previous period. We expect that our gross margins may fluctuate as we prove our cloud-native model and product capabilities to new and existing customers when they onboard the public or private cloud in future periods. General and administrative expenses (“G&A”) increased to $2.2 compared to $1.4 million during the same period in 2022. The increase is mainly due to a release of a provision related to a settlement of a contractual dispute last year in the amount of $1.6 million, offset by lower share-based compensation, lower headcount-related costs and lower amortization costs in Q3 of 2023. Adjusted Earnings before interest, taxes, depreciation and amortization ("EBITDA")1 for Q3’23 decreased to a loss of $0.8 million as compared to income of $3.3 million during the same period in 2022, primarily driven by lower revenue and gross margin. Net loss for Q3’23 was $4.2 million compared to a net income of $0.9 million during the same period in 2022. The Company ended the third quarter with a cash balance of $21.7 million (including restricted cash). The Company generated $0.4 million of cash from operating activities during the quarter.

1 EBITDA, Adjusted EBITDA, TCV and Adjusted EPS are non-IFRS measures. These measures are defined in the "Non-IFRS Financial Measures" section of this news release.

Non-IFRS Measures

“EBITDA" and "Adjusted EBITDA" are not financial measures calculated and presented in accordance with International Financial Reporting Standards (IFRS) and should not be considered in isolation or as a substitute to net income (loss), operating income or any other financial measures of performance calculated and presented in accordance with IFRS, or as an alternative to cash flow from operating activities as a measure of liquidity. The Company defines EBITDA as net income (loss) excluding amounts for depreciation and amortization, other income, finance costs, finance income, income tax expense (recovery), foreign exchange gain (loss) and share-based compensation. The Company defines "Adjusted EBITDA" as EBITDA (as defined above), excluding restructuring costs, one-time provision amounts, any one-time transaction costs associated with shareholder conflict and other one-time unusual items. The Company believes that Adjusted EBITDA is a metric that investors may find useful in understanding the Company's financial position. The following table provides a reconciliation of Net Income to EBITDA and Adjusted EBITDA (in thousands of U.S. dollars).

Three months ended
 September 30,Nine months ended
September 30, 2023  2022  2023  2022  Net income (loss) for the period$(4,176)$870 $(8,246)$2,215  Add back / (substract): Depreciation of property and equipment 159  119  482  355 Amortization of intangible assets -  361  361  1,083 Finance income (79) (97) (316) (256)Finance costs 2,433  2,105  7,190  5,518 Income tax expense 1,074  893  2,096  1,630 Foreign exchange loss 233  254  643  792 Share-based compensation 48  375  (1,810) 1,084 EBITDA (308) 4,879  400  12,421  Other income (498) -  (498) - Release of provisions -  (1,571) -  (1,571) Adjusted EBITDA$(806)$3,308 $(98)$10,850

Adjusted EPS is reported diluted EPS excluding the impact of change in the fair value of warrants, release of provisions and other one-time unusual items.

TCV is the Total Contract Value of all bookings closed in the period.

About Optiva

Optiva Inc. is a leader in powering the telecom industry with cloud-native billing, charging and revenue management software on private and public clouds. Its products are delivered globally on the private and public cloud. The Company’s solutions help service providers maximize digital, 5G, IoT and emerging market opportunities to achieve business success. Established in 1999, Optiva Inc. is on the Toronto Stock Exchange (TSX: OPT). For more information, visit www.optiva.com.

Caution Concerning Forward-Looking Statement

Certain statements in this document may constitute "forward-looking" statements that involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this document, such statements use such words as "may," "will," "expect," "continue," "believe," "plan," "intend," "would," "could," "should," "anticipate" and other similar terminology. Forward-looking statements in this document include statements regarding the Company's "qualified pipeline", the TCV of the qualified pipeline and the Company's expectations regarding future revenues. These statements are forward-looking as they are based on our current expectations, as at November 8, 2023, about our business and the markets we operate in and on various estimates and assumptions. Our actual results could materially differ from our expectations if known or unknown risks affect our business or if our estimates or assumptions turn out to be inaccurate. As a result, there is no assurance that any forward-looking statements will materialize. Risks that could cause our results to differ materially from our current expectations include the risk that the Company will not secure contracts with customers that are included in its qualified pipeline, the risk that existing customers may decrease their spend with the Company and other risks that are discussed in the Company's most recent Annual Information Form, available on SEDAR at www.sedar.com and Optiva's website at www.optiva.com/investors/. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Optiva does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

For additional information, please contact:
 Media Contact: 
Misann Ellmaker
[email protected]

Investor Relations: 
Ali Mahdavi 
[email protected]

OPTIVA Inc. Condensed Consolidated Interim Statements of Financial Position (Expressed in thousands of U.S. dollars) (Unaudited)    September 30,December 31,  2023  2022  Assets  Current assets: Cash and cash equivalents$20,912 $18,386 Trade accounts and other receivables 7,208  7,535 Unbilled revenue 16,068  17,821 Prepaid expenses 1,744  1,938 Income taxes receivable 3,693  3,820 Other assets 697  610 Total current assets 50,322  50,110  Restricted cash 766  1,948 Property and equipment 992  1,221 Deferred income taxes 352  376 Long-term unbilled revenue -  332 Pension and other long-term employment benefit plans 966  - Intangible assets -  360 Goodwill 32,271  32,271  Total assets$85,669 $86,618  Liabilities and Shareholders' Equity (Deficit)  Current liabilities: Trade payables$1,279 $3,147 Accrued liabilities 8,218  11,624 Income taxes payable 4,563  4,365 Deferred revenue 2,575  1,995 Total current liabilities 16,635  21,131  Deferred revenue 220  403 Other liabilities 1,659  2,302 Pension and other long-term employment benefit plans -  713 Debentures 101,039  87,716 Deferred income taxes 341  433 Total liabilities 119,894  112,698  Shareholders' equity (deficit): Share capital 270,610  270,560 Contributed surplus 15,027  15,941 Deficit (324,876) (316,630) Accumulated other comprehensive income (loss) 5,014  4,049 Total shareholders' equity (deficit) (34,225) (26,080)  Total liabilities and shareholders' equity (deficit)$85,669 $86,618

OPTIVA Inc. Condensed Consolidated Interim Statements of Comprehensive Income (loss) (Expressed in thousands of U.S. dollars, except per share and share amounts) (Unaudited)    Three months ended
September 30,Nine months ended
September 30,  2023  2022  2023  2022  Revenue: Support and subscription$7,948 $9,900 $23,933 $29,859 Software licenses, services and other 3,776  5,260  11,532  16,836  11,724  15,160  35,465  46,695  Cost of revenue 4,544  4,215  12,420  12,742  Gross profit 7,180  10,945  23,045  33,953  Operating expenses: Sales and marketing 2,259  2,534  7,523  7,369 General and administrative 2,187  1,431  4,673  7,666 Research and development 3,747  2,955  9,980  9,019  8,193  6,920  22,176  24,054  Income (loss) from operations (1,013) 4,025  869  9,899  Foreign exchange loss (233) (254) (643) (792) Other income 498  -  498  - Finance income 79  97  316  256 Finance costs (2,433) (2,105) (7,190) (5,518)  Income (loss) before income taxes (3,102) 1,763  (6,150) 3,845  Income taxes (recovery): Current 1,190  1,032  2,169  1,727 Deferred (116) (139) (73) (97)  1,074  893  2,096  1,630  Net income (loss) (4,176) 870  (8,246) 2,215  Other comprehensive income: Items that will not be reclassified to net income: Actuarial gain on pension and non-pension post-employment benefit plans, net of income tax expense of nil: 965  6,239  965  6,239  Total comprehensive income (loss) (3,211) 7,109  (7,281) 8,454  Net income (loss) per common share Basic$(0.68)$0.14 $(1.33)$0.36 Diluted (0.68) 0.14  (1.33) 0.36   Weighted average number of common shares (thousands): Basic 6,179  6,178  6,178  6,178 Diluted 6,179  6,178  6,178  6,178

OPTIVA Inc. Condensed Consolidated Interim Statements of Cash Flows (Expressed in U.S. dollars) (Unaudited)    Three months ended
 September 30,Nine months ended
September 30,  2023  2022  2023  2022  Cash provided by (used in):  Operating activities: Income (loss) for the period$(4,176)$870 $(8,246)$2,215 Adjustments for: Depreciation of property and equipment 159  119  482  355 Amortization of intangible assets -  361  361  1,083 Finance income (79) (97) (316) (256) Finance costs 2,433  2,105  7,190  5,518 Pension (66) 746  (708) (959) Income tax expense 1,074  893  2,096  1,630 Unrealized foreign exchange loss (gain) (38) 278  (49) (1,066) Share-based compensation 48  375  (1,810) 1,084 Change in provisions -  (4,200) -  (4,200) Change in non-cash operating working capital 1,692  (3,393) 189  (5,064)  1,047  (1,943) (811) 340 Interest paid (5) (4) (11) (26) Interest received 55  59  247  118 Promissory note paid -  -  -  (2,000) Income taxes (paid) received (716) (709) (1,821) (672)  381  (2,597) (2,396) (2,240)  Financing activities: Issuance of Debentures 13,500  -  13,500  - Transaction costs on debentures (776) -  (776) - Interest paid on Debentures (4,351) (4,351) (8,775) (8,775)  8,373  (4,351) 3,949  (8,775)  Investing activities: Purchase of property and equipment (45) (320) (245) (844) Decrease (increase) in restricted cash 10  (815) 1,183  (800)  (35) (1,135) 938  (1,644)  Effect of foreign exchange rate changes on cash and cash equivalents 11  (853) 35  (268)  Increase (decrease) in cash and cash equivalents 8,730  (8,936) 2,526  (12,927)  Cash and cash equivalents, beginning of period 12,182  25,596  18,386  29,587  Cash and cash equivalents, end of period$20,912 $16,660 $20,912 $16,660

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1 EBITDA, Adjusted EBITDA, TCV and Adjusted EPS are non-IFRS measures. These measures are defined in the "Non-IFRS Financial Measures" section of this news release.