TORONTO, Nov. 30, 2020 /CNW/ -- Engagement Labs Inc. (TSXV: EL) released results for its third quarter ended September 30, 2020. Condensed interim consolidated Financial Statements and Management Report are available on SEDAR's website at www.sedar.com.
Since March 2020, COVID-19 has had a significant impact on the marketplace and led to a reduction in marketing spend by major brands of the type who are our customers and with it a pull back in spending on services of the type we provide. This had a revenue impact on our Q3 results. Despite the decrease in revenue, the Non-GAAP Adjusted EBITDA loss improved due to cost containment measures implemented by the Company.
Third Quarter Financial Highlights
Revenue decreased by 51% to $509,940 in Q3 2020 from $1,042,909 in Q3 2019.
Operating expenses before impairment loss on goodwill decreased by 54% to $874,900 for Q3 2020 from $1,906,986 for Q3 2019.
EBITDA(1) loss improved by 20% to -$959,381 for Q3 2020 from -$1,203,021 for Q3 2019.
Non-GAAP Adjusted EBITDA(1) loss improved by 58% to -$388,702 for Q3 2020 from -$919,345 for Q3 2019.
Net loss for Q3 2020 decreased to -$1,129,113, down 11% from -$1,367,046 for Q3 19.
Gross profit was $186,148 for Q3 2020, a decrease of 66% compared to $546,539 for Q3 2019.
Basic and diluted loss per share was ($0.00) for Q3 2020, compared to ($0.01) for Q3 2019.
As at September 30, 2020, the Company was holding cash of $899,272 compared to $844,107 as at December 31, 2019.
Nine-month Period Financial Highlights
Revenue decreased by 28% to $2,106,372 for the nine-month period ended September 30, 2020 from $2,915,712 for the nine-month period ended September 30, 2019.
Operating expenses before impairment loss on goodwill decreased by 38% to $2,839,214 for the nine-month period ended September 30, 2020 from $4,576,274 for the nine-month period ended September 30, 2019.
EBITDA(1) loss improved by 11% to -$2,175,644 for the nine-month period ended September 30, 2020 from -$2,441,404 for the nine-month period ended September 30, 2019.
Non-GAAP Adjusted EBITDA(1) loss improved by 50% to -$904,866 for the nine-month period ended September 30, 2020 from -$1,800,496 for the nine-month period ended September 30, 2019.
Net loss for the nine-month period ended September 30, 2020 decreased to -$2,758,414, down 19% from -$3,420,704 for the nine-month period ended September 30, 2019.
Gross profit was $831,740 for the nine-month period ended September 30, 2020, a decrease of 41% compared to $1,402,375 for the nine-month period ended September 30, 2019.
Basic and diluted loss per share was ($0.01) for the nine-month period ended September 30, 2020, compared to ($0.02) for the nine-month period ended September 30, 2019.
EBITDA is defined as earnings before interest, income taxes, depreciation and amortization. Number for comparative periods were revised to exclude SRED credit tax, variation on exchange, and bank charges in EBITDA. Adjusted EBITDA is a non-GAAP financial measure defined as EBITDA to which the Company adds stock-based compensation including the grant of stock options, restricted shares units, and restricted share awards as these expenses do not result in any use of operating cash flows by the Company, severance payments, impairment loss on goodwill, write-off of intangible assets, change in fair value of investment in shares, expenses related to acquisition or disposal of business, and loss on extinction of debt and equity components of convertible debentures, which are extraordinary and non-recurrent expenses, and Board remuneration, which is paid in shares units. EBITDA and non-GAAP adjusted EBITDA are provided as a supplementary earning measure to assist readers in determining the ability of ENGAGEMENT LABS INC. to generate cash from operations and to cover financial charges. They are also widely used for business valuation purposes. These measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.
"We were off to strong start of the year, as evidenced by the TotalSocial revenue growth of 11% in Q1 '20 and a 64% reduction in our Non-GAAP Adjusted EBITDA loss," said Ed Keller, CEO. "COVID-19 continued to have a significant impact on our revenues in Q3. The Company has taken quick action to reduce costs and those efforts succeeded in cushioned the impact of the pandemic on our Non-GAAP Adjusted EBITDA loss, which in fact improved over 2019. We had some important signings in Q3 including renewals of one of the largest OTT Media and Entertainment companies and one of the largest telecommunications companies in the U.S., and new deals such as the sports division of another large media and entertainment companies. Our pipeline of new business opportunities is beginning to fill again, but it is not possible to know how quickly those opportunities will convert," Keller continued.
About Engagement Labs
Engagement Labs (TSXV: EL) is an industry-leading data and analytics firm that provides social intelligence for Fortune 500 brands and companies.
To learn more visit www.engagementlabs.com.
Disclaimer in regard to Forward-looking Statements
Certain statements included herein constitute "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Investors are cautioned not to put undue reliance on forward-looking statements. Except as required by law, Engagement Labs does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events.
Neither 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.
SOURCE Engagement Labs
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