TRIBE PROPERTY TECHNOLOGIES INC. - Operational improvements and cost reduction strategies have resulted in Tribe achieving 34% year-over-year improvement in Adjusted EBITDA.
- Positive growth outlook driven by the anticipated closing of the previously announced
Meritus Group acquisition and the onboarding of an increasing number of real estate development projects and new communities.
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1 Non-IFRS measure. Please see "Non-IFRS Measures" section of this news release for additional information. |
Q3-2023 Financial Highlights
- Revenue: Third quarter 2023 revenue was
$4.80 million ; an increase of 6% compared to$4.53 million for the third quarter of 2022. Revenue for the first nine months of 2023 was$14.28 million ; an increase of 9.3% compared to$13.06 million for the first nine months of 2022. - Gross profit2: Gross profit for the third quarter of 2023 was
$1.87 million (39.0%) compared to$1.59 million (35.0%) in the third quarter of 2022; Gross profit for the first nine months of 2023 was$5.65 million (39.6%) compared to$5.12 million (39.2%) for the first nine months of 2022. - Adjusted EBITDA: Adjusted EBITDA for the third quarter of 2023 was an outflow of
$1.44 million ; an improvement of 34.2% compared to an outflow of$2.19 million in the third quarter of 2022. Adjusted EBITDA for the first nine months was an outflow of$5.51 million compared to an outflow of$6.10 million for the first nine months of 2022.
Q3-2023 Business Highlights:
July 12, 2023 - Partnership announced withOctoAI Technologies Corp. to provide condo boards and strata councils with enhanced reporting and benchmarking to better understand the operational and financial health of their buildings.July 27, 2023 - Partnership announced with KnockNok, an app connecting maintenance and repair services to residents and homeowners; adding to more than 20 partnerships available through Tribe Market, the Company's digital marketplace for residents.August 29, 2023 - Announcement made to acquireToronto -based property management companyMeritus Group Management Inc. ("Meritus"), marking a significant milestone for the Company as it expands management services directly into the largest metropolitan area inCanada , with the addition of 5,000 homes under management. Closing of the Meritus acquisition remains subject to approval by theTSX Venture Exchange .
Events Subsequent to
October 5, 2023 - the Company signed a definitive loan agreement with a Canadian Schedule A bank, which provides a senior term loan facility for up to$15 million . The facility consists of a$3 million operating line to support the Company's working capital requirements, and an M&A facility of$7 million , with an additional accordion feature of$5 million .October 10, 2023 - the Company announced the appointment ofAngelo Bartolini as Chief Financial Officer (CFO). An accomplished executive leader with over 12 years of experience in a public company setting,Mr. Bartolini most recently led as the CFO of Altus Group, where he helped drive transformative growth and significant shareholder value. Reporting directly to CEOJoseph Nakhla ,Mr. Bartolini will have responsibility for all finance, accounting, financial reporting, audit, tax and capital planning functions.November 8, 2023 - the Company was recognized for its rapid revenue growth as part of the 2023 Deloitte Technology Fast 50™ award program with 361% revenue growth from 2019 to 2022. Tribe was also ranked on the Deloitte North America Technology Fast 500™, joining a list of top-growing technology, media, telecommunications, life sciences, fintech, and energy tech companies inNorth America .
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2 Non-IFRS measure. Please see "Non-IFRS Measures" section of this news release for additional information. |
Key Business Metrics as of Q3-2023
- 4 new property developers signed on to use Tribe Home Pro construction software for a total of 18 new property developer relationships in the first nine months of 2023.
- 15 new Tribe Home Pro software licensing agreements were signed in Q3 for new construction projects, for a total of 29 software license agreements in the first nine months of 2023.
- 9 projects using Tribe Home Pro software licensing agreements were successfully onboarded and began generating revenue in Q3-2023, for a total of 20 in the first nine months of 2023.
- 12 property management agreements were signed in Q3, for a total of 32 property management agreements signed in the first nine months of 2023.
- 12 properties were successfully onboarded for management services and began generating revenue in Q3-2023, for a total of 33 properties onboarded in the first nine months of 2023.
Outlook
Despite concerns surrounding the real estate market and increasing interest rates, these factors have not hindered Tribe's growth opportunities thus far. Tribe remains resilient and its growth in 2023 and 2024 will be fueled by a robust pipeline of new development opportunities, strategic partnerships, winning new software agreements, and the potential increases in digital services revenue. Tribe continues to be active in its negotiations for additional acquisition targets.
Management remains optimistic that 2023 will be a strong year for Tribe, expecting improved revenue, profitability and expanding margins. Management is pleased to report the Company is on track to achieve its key goals for 2023:
Key Goals | Progress |
• Increase monthly recurring revenue through organic and acquired means. | • Achieved 9.4% total revenue growth in the first nine months of 2023. |
• Expand acquisition pipeline in underserved markets such as greater | • Announced the acquisition of Meritus in the greater |
• Drive efficiencies in the business resulting in improved gross margin and EBITDA. | • Implemented operational improvements and cost reduction strategies including headcount reductions. • Continued to consolidate client and corporate accounting and service delivery platforms. |
• Invest in our software platform to innovate and add functionality to our suite of products. | • Started working on Multi-Factor Authentication for our proprietary software Tribe Home. • Deployed multiple admin and accounting dashboard enhancements within Tribe Home to better support Yardi and MyBalance integrations. |
• Focus on increasing the number of new developers that are onboarded and drive new software, management, and digital services revenue. | • Added 18 new property development partners in the first nine months of 2023. |
Third Quarter Financial Webcast
The Company will hold a webcast to discuss its performance with the investment community at
Webcast Link: https://www.gowebcasting.com/13090
International Toll: +1 (604) 638-5340.
Approximately two hours after the Q&A session has ended, an archived version of the webcast will be available via the webcast URL link above. An audio-only recording of the webcast will also be available in the investor section of Tribe's website.
Non-IFRS Measures
The following and preceding discussion of financial results includes reference to Gross Profit, Gross Profit Percentage and Adjusted EBITDA, which do not have a standardized meaning under IFRS, and therefore may not be comparable to similar measures presented by other issuers.
We believe Adjusted EBITDA1 is a useful measure as it provides important and relevant information to our management about our operating and financial performance. Adjusted EBITDA also enables our management to assess our ability to generate operating cash flow to fund future working capital needs, and to support future growth. The measure of Gross Profit2 and Gross Profit Percentage2 is provided as management believes this is a good indicator in evaluating financial performance and the operational efficiency of the Company.
Adjusted EBITDA1 | Three Months Ended | Nine Months Ended | ||
$000s | 2023 | 2022 | 2023 | 2022 |
Net loss | ||||
Depreciation | 208 | 228 | 646 | 662 |
Amortization | 147 | 107 | 441 | 299 |
Stock-based compensation | 47 | 101 | 136 | 299 |
Interest expense | 145 | 174 | 436 | 536 |
Interest income | (19) | (70) | (71) | (153) |
Severance costs | 73 | - | 73 | - |
Acquisition costs | 28 | - | 28 | - |
Other | 3 | 8 | - | 21 |
Adjusted EBITDA 1 | ||||
Gross Profit2 | Three Months Ended | Nine Months Ended | |||
$000s | 2023 | 2022 | 2023 | 2022 | |
Revenue | |||||
Cost of software & services and software license fees | 2,928 | 2,943 | 8,625 | 7,943 | |
Gross Profit2 | |||||
Gross Profit2 Percentage | 39.0 % | 35.0 % | 39.6 % | 39.2 % | |
(1) Adjusted EBITDA is also not a measure recognized in accordance with IFRS and does not have a prescribed or standardized meaning by IFRS. We define Adjusted EBITDA attributed to shareholders as net income or loss excluding severance and acquisition costs, interest expense and finance costs, foreign exchange gains and losses, current and deferred income taxes, depreciation and amortization, stock-based compensation, fair value gains and losses on investments, and other expenses. It should be noted that Adjusted EBITDA is not defined under IFRS and may not be comparable to similar measures used by other entities. We believe Adjusted EBITDA is a useful measure as it provides important and relevant information to our management about our operating and financial performance. Adjusted EBITDA also enables our management to assess our ability to generate operating cash flow to fund future working capital needs, and to support future growth. Excluding these items does not imply that they are non-recurring or not useful to investors. Investors should be cautioned that Adjusted EBITDA attributable to shareholders should not be construed as an alternative to net income (loss) or cash flows as determined under IFRS.
(2) Gross profit and gross profit percentage do not have a standardized meaning under IFRS, and therefore may not be comparable to similar measures presented by other issuers. We define gross profit as revenue less cost of software and services and software licensing fees, and gross profit percentage as gross profit calculated as a percentage of revenue. Gross profit and gross profit percentage should not be construed as an alternative for revenue or net loss in accordance with IFRS. We believe that gross profit and gross profit percentage are meaningful metrics in assessing our financial performance and operational efficiency.
Financial Statements and Management's Discussion & Analysis
Please see the consolidated financial statements and related Management's Discussion & Analysis ("MD&A") for more details. The unaudited consolidated financial statements for the three and nine months ended
"Joseph Nakhla"
Chief Executive Officer
Phone: (604) 343-2601
Email: joseph.nakhla@tribetech.com
About
Tribe is a property technology company that is digitizing the traditional property management industry. As a rapidly growing tech-forward property management company, Tribe's integrated service-technology delivery model serves the needs of a much wider variety of stakeholders than traditional service providers. Tribe's three revenue pillars are made up of software and service (recurring licensing and management fees), transactional (rent or condo fees, banking services, lease-ups) and digital services and partnership (smart building products, financial and insurance service) revenue. Tribe seeks to acquire highly accretive targets in the fragmented North American property management industry and transform these businesses through streamlining and digitization of operations. Tribe's platform decreases customer acquisition costs, increases retention, and allows for the addition of value-added products and services through the platform. Visit tribetech.com for more information.
Cautionary Statement on Forward-Looking Information
This news release may contain certain "Forward-Looking Statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws regarding the Company and its business. When or if used in this news release, the words "anticipate", "believe", "estimate", "expect", "target, "plan", "forecast", "may", "schedule" and similar words or expressions identify forward-looking statements or information. Forward-looking statements or information in this news release may relate to statements with respect to the aims and goals of the Company; profitability projections, financial projections; growth plans including future prospective consolidation in the property management sector; future acquisitions by the Company; closing and integration of the acquisition of Meritus; beliefs of the Company with respect to the independent owner-investors market; prospective benefits of the Company's platform; and other factors or information. Such statements represent the Company's current views with respect to future events and are necessarily based upon several assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political, and social risks, contingencies, and uncertainties. Many factors, both known and unknown, could cause results, performance, or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements. The Company does not intend, and do not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules, and regulations.
Neither the
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