OTTAWA, Canada August 28, 2018 – Intouch Insight Ltd. (“Intouch”) (TSXV: INX) today announced its operating and financial results for the quarter ended June 30, 2018.
Revenue for the second quarter was $3,861,846, which was 2% higher than revenue of $3,784,220 in the same quarter in 2017. Recurring SaaS revenue increased 8% during the second quarter at $610,327 compared to $562,809 in the second quarter of 2017. Recurring services revenue increased 11% to $3,225,904 in Q2 2018 from $2,918,058 in Q2 2017. Non-recurring revenue declined to $25,615 in Q2 2018 from $121,457 in Q2 2017 due to a one-time project in 2017.
Loss from operating activities in Q2 2018 was $669,264 compared to net income of $82,953 in Q2 2017. Net loss and comprehensive loss for the second quarter was $669,605 compared to net income of $82,319 in the same quarter of 2017. Gross Margin decreased to 51% in the second quarter compared to 55% for the same quarter in 2017.
Because of the increased investments in sales, marketing and product development, the Company-defined adjusted EBITDA was negative $453,000 for the second quarter, compared to a positive EBITDA of $300,000 for the same quarter in 2017.
“The losses in Q2 were due to planned expenses for product development, sales and marketing for the launch of LiaCXTM, which was officially launched on May 1, 2018. We continue to focus resources on LiaCX to ensure its success and we are excited to be fully immersed in this new software marketplace. We are pleased with our initial market traction and we remain optimistic about the potential of our newest software product. Due to anticipated sales cycles we do not expect significant revenue from the new product line to occur until 2019,” said Cameron Watt, President & Chief Executive Officer.
“Our legacy business is strong and growing. Based on current sales information we continue to forecast 10% year over year sales growth with revenues exceeding $15.0M for FY 2018. We remain committed to establishing Intouch as the leading provider of Artificial Intelligence (AI) software within the customer experience management space,” said Watt.
| Consolidated Statements of Operations | Q2 2018 | Q2 2017 |
|---|---|---|
| Revenue | $ 3,861,846 | $ 3,784,220 |
| Cost of services | 1,884,476 | 1,713,103 |
| Gross profit | 1,977,370 | 2,071,117 |
| Total operating expenses | 2,646,634 | 1,982,164 |
| Earnings (loss) from operating activities | (669,264) | 88,953 |
| Finance costs | (341) | (16,634) |
| Sale of investment in IPSG Technology | - | 10,000 |
| Net loss before income taxes | $ (669,605) | $ 82,319 |
Certain statements included in this news release contain forward looking statements, which by their nature are necessarily subject to risks and uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such statements reflect the Company’s current views with respect to future events, and are based on information currently available to the Company and on hypotheses which it considers to be reasonable; however, management warns the reader that hypotheses relative to future events which are beyond the control of management could prove to be false, given that they are subject to certain risks and uncertainties.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For more information, please contact:
George Pretli
Chief Financial Officer
gpretli@intouchinsight.com
613-270-7916