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WeCommerce Reports Third Quarter 2021 Results

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  • WECMF

VICTORIA, British Columbia, November 22, 2021--(BUSINESS WIRE)--WeCommerce Holdings Ltd. ("WeCommerce" or "the "Company") (TSXV: WE), a leading provider of ecommerce enablement software and tools for merchants, today announced its financial results for the three- and nine-month periods ended September 30, 2021 ("Q3 2021" and "YTD Q3 2021" respectively). Currency amounts are in expressed in Canadian dollars unless otherwise noted.

Q3 2021 and YTD Q3 2021 Financial Results:

For the three-month periods
ended September 30,

For the nine-month periods
ended September 30,

2021

2020

2021

2020

Revenue

Recurring subscription revenue

6,825,881

2,082,268

15,037,414

4,655,216

Digital goods revenue

2,888,589

2,437,078

7,023,420

6,669,300

Agency service revenue

1,228,814

1,306,245

4,271,487

3,811,715

10,943,284

5,825,591

26,332,321

15,136,231

Operating income/(loss)

(338,501)

948,549

(1,151,942)

2,024,447

Net income/(loss)

(2,986,971)

405,605

(4,968,950)

1,052,627

EBITDA(1)

843,687

1,797,519

4,354,452

4,218,099

EBITDA %

8%

31%

17%

28%

Adjusted EBITDA(1)

3,394,242

1,994,711

8,095,297

4,633,793

Adjusted EBITDA %

31%

34%

31%

31%

Notes:
1. See "Non-IFRS financial measures" for further information.

Q3 2021 Highlights

  • Revenue in Q3 2021 was $10,943,284, an increase of $5,117,693 or 88% (101% on a constant currency basis(1)) compared to Q3 2020.

  • Apps segment revenue in Q3 2021 was $6,825,881, an increase of $4,743,613 or 228% (248% on a constant currency basis) compared to Q3 2020. Q3 2021 Apps segment revenue includes the full quarter operating results of Stamped (acquired on April 6, 2021), which contributed revenues of $4,576,870 in Q3 2021. Foursixty contributed revenues of $1,181,544 in Q3 2021, an increase of 37% (44% on a constant currency basis) compared to Q3 2020. Excluding purchase accounting adjustments, Foursixty’s revenue increased 17% (23% on a constant currency basis) compared to Q3 2020.

  • Themes segment revenue in Q3 2021 was $2,888,589, an increase of $451,511 or 19% (30% on a constant currency basis) compared to Q3 2020. Q3 2021 Themes segment revenue includes the results of Archetype (acquired on August 24, 2021), which contributed revenues of $1,164,568 in the quarter.

  • Agency segment revenue in Q3 2021 was $1,228,814, a decrease of $77,431 or 6% (3% on a constant currency basis) compared to Q3 2020.

  • Net loss was $2,986,971 in Q3 2021 compared to net income of $405,605 in Q3 2020. The net loss for Q3 2021 includes depreciation and amortization costs of $3,131,209 (Q3 2020: $961,606), mostly attributable to intangible assets acquired, as well as foreign exchange losses of $1,593,524 (Q3 2020: $112,636).

  • Adjusted EBITDA for Q3 2021 amounted to $3,394,242 or 31% of revenue, compared to $1,994,711 or 34% of revenue in Q3 2020.

  • Cash on hand at September 30, 2021 amounted to $24,569,822 and total debt outstanding was $61,229,149.

Management Commentary
"We’re pleased with our results for the third quarter and first nine months of 2021. Apps continued to show strength with double-digit organic growth, and our Themes business continued to be highly cash generative and highly strategic given its top-of-funnel relationship with Shopify merchants," said Chris Sparling, our CEO. "Our portfolio of companies is well-positioned to continue providing critical tools and services to help merchants this holiday session and beyond by providing best-in-class storefronts, increasing customer engagement, leveraging social media and improving conversion rates. More recently, we appointed David Charron as our new Chief Financial Officer. Dave brings three decades of relevant experience and has already become an integral part of our leadership team. We’re thrilled to have him onboard."

"We’re continuing to execute on our growth strategy and proud of our collective accomplishments in an increasingly uncertain environment for merchants, characterized by supply chain bottlenecks, higher input costs and recent advertising infrastructure changes," added Alex Persson, our President. "Our cash on hand, available liquidity and strong cash flow generation remains a critical advantage, particularly as the valuation environment for attractive portfolio additions continues to normalize. As always, we continue to invest for the long-term across our portfolio companies and at WeCommerce."

Conference Call
Management will host a conference call and webcast today, November 22, 2021, at 2:00 pm PT (5:00 pm ET) to discuss its financial results. Company CEO Chris Sparling, President Alex Persson and CFO David Charron will host the call, followed by a question-and-answer period.

An archived webcast of the conference call will be accessible on WeCommerce’s Investor Relations page at http://investors.wecommerce.co.

Financial Statements
WeCommerce’s unaudited interim consolidated financial statements and Management’s Discussion and Analysis ("MD&A") for Q3 2021 are available on the Company’s website at https://www.wecommerce.co or on SEDAR at www.sedar.com.

About WeCommerce Holdings Ltd
WeCommerce provides merchants with a suite of ecommerce software tools to start and grow their online store. Our family of companies and brands include Pixel Union, Out of the Sandbox, Archetype, Yopify, SuppleApps, Rehash, Foursixty and Stamped. As one of Shopify’s first partners since 2010, WeCommerce is focused on building, acquiring and investing in leading technology businesses operating in the Shopify partner ecosystem.

For more about WeCommerce, please visit www.wecommerce.co or refer to the public disclosure documents available under WeCommerce’s SEDAR profile on SEDAR at www.sedar.com.

Non-IFRS financial measures
This news release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures including "EBITDA" and "Adjusted EBITDA" and "Constant Currency". Management uses these non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. As required by Canadian securities laws, we reconcile these non-IFRS measures to the most comparable IFRS measures in our MD&A for Q3 2021.

Forward looking Information
This news release contains certain forward-looking statements and forward-looking information within the meaning of applicable securities law. Such forward-looking statements and information include, but are not limited to, statements or information with respect to: the Company’s future business and strategies; it’s ability to identify and acquire targets in the Shopify partner; funds available, and uses of funds, and future capital expenditures and other expenses for specific operations.

Forward-looking statements and information are frequently characterized by words such as "plan", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Although the Company’s management believes that the assumptions made and the expectations represented by such statement or information are reasonable, there can be no assurance that a forward-looking statement or information referenced herein will prove to be accurate. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include risks relating to reliance on the Shopify platform; the Company’s limited operating history; reliance on management and key employees; conflicts of interest in relation to the Company’s officers, directors, and consultants; additional financing requirements; resale of Common Shares in the publicly-traded market; market price fluctuations for the Common Shares; global financial conditions; management of growth; risks associated with the Company’s strategy of growth through acquisitions; the ability to identify and enhance the value of acquisitions and the resulting impact on Adjusted EBITDA; tax risks; currency fluctuations; competitive markets; uncertainty and adverse changes in the economy; unsustainability of the Company’s rapid growth and inability to attract new customers, retain revenue from existing merchants, and increase sale to both new and existing customers; adverse effects on the Company’s revenue growth and profitability due to inability to attract new customers or sell additional products to existing customers; future results of operations being harmed due to declines in recurring revenue or contracts not being renewed; security and privacy breaches; changes in client demand; challenges to the protection of intellectual property; infringement of intellectual property; ineffective operations through mobile devices, which are increasingly being used to conduct commerce; and risks associated with internal controls over financial reporting. The Company undertakes no obligation to update forward-looking statements and information if circumstances or management’s estimates should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements and information. More detailed information about potential factors that could affect results is included in the documents that may be filed from time to time with the Canadian securities regulatory authorities by the Company.

For a more detailed discussion of certain of these risk factors, see the Company's most recent MD&A described in the "Risk Factors" as well as the list of risk factors in the Company’s Annual Information Form available on SEDAR at www.sedar.com under the Company’s profile.

NEITHER THE 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211122006608/en/

Contacts

Company Contact:
David Charron
Chief Financial Officer
Phone: 416-418-3881
Email: david@wecommerce.co

Investor Relations:
Tom Colton
Gateway Investor Relations
Phone: 949-574-3860
Email: WE@gatewayir.com

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