Financial Highlights for the 3-Months Ended March 31, 2019
- Recurring revenue increased by 25% over the previous year period to $669,421;
- A 9% decrease in total revenue ($1.66 million versus $1.82 million) resulting primarily from the sale of a $627,764 perpetual license in Q2 FY18 vs $3,922 in Q2 FY19;
- Gross margin of 42% compared to 67% in the year-ago quarter, due to the aforementioned decrease in perpetual license revenue;
- Adjusted EBITDA loss of $820,726 compared to a positive $106,803 in Q2 FY18;
- Net loss of $1.32 million ($0.02/share) versus a $122,835 loss ($0.00/share) in Q2 FY18.
Second Quarter FY19 Revenue Mix
|Revenue||Q2 FY19||Q2 FY18|
|Perpetual Software License||1%||34%|
|Setup, implementation, and other fees||33%||9%|
Operational Highlights for the 3-Months Ended March 31, 2019
- Successfully completed the phase 1 deployment of TrackX GAME throughout America’s second largest insurance company;
- Implementing linen management solution for an international hotel chain;
- Added leadership veteranRick Kasch to the Board of Directors;
- Successful implementation of the TrackX solutions across additional locations within existing customer base.
“TrackX has remained focused on the continued execution of its core strategies,” said CEO Tim Harvie. “The Company’s land and expand strategy and customer success efforts have generated meaningful results. In Q2, the Company expanded its solution footprint both in terms of capabilities and number of locations for many customers including a global household appliance manufacturer, Carvana, a large US baked snack food manufacturer, the world’s second largest processor and marketer of beef, pork and poultry and the Port of Oakland. We will remain focused on driving increased recurring revenue, which was up 25% over the same period last year with significant growth anticipated throughout 2019. This revenue gain will be realized from both the onboarding of new customers and the expansion commitments we have as a result of the successful execution of our land and expand strategy.”
Highlights Subsequent to the Second Quarter
- Port of Oaklandextends license for security and compliance solution;
- Announce support for Amazon Managed Blockchain;
- Acase studywith a global household appliance manufacturer.
Selected Financial Information
|C$(000s) (except per share)||Three-month Period Ended March 31|
|Gross Margin %||42%||67%|
|Loss for the period||($1,315)||($123)|
|Loss per share||($0.02)||($0.00)|
|Adjusted EBITDA (Loss)*||($821)||$106|
|* Adjusted EBITDA is a non-IFRS (international financial reporting standards) measure and excludes stock-based compensation|
With expansion opportunities occurring as planned, TrackX is on target to more than double the total number of implementations in fiscal 2019 over fiscal 2018. As expansion in the accounts continue, we anticipate a substantial increase in recurring revenue run rate at the end of 2019.
Through continued focus on customer success and high quality of customer service, TrackX will continue to improve communication to the market – like the case study with a global household appliance manufacturer – with new use cases and webinars showcasing our clients and their implementations of TrackX solutions. TrackX will leverage our success within existing accounts to target additional enterprise accounts within these respective industries. In doing so, the Company expects to see shorter sales cycles in the closing of new pipeline opportunities, and increased velocity in expansions of existing accounts.
The main areas of focus in 2019 will continue to be returnable asset tracking, high value asset tracking (i.e. IT asset tracking) and supply chain management. Yard management opportunities continue to emerge, but throughout 2019 the Company is seeing an increase in pipeline activity specifically related to high value asset tracking and returnable asset tracking opportunities. Within enterprise accounts, opportunities in these areas typically address a large volume of assets, span multiple locations, generate a rapid ROI, are more readily implemented by our partners, and represent larger revenue opportunities with higher gross margins.
TrackX has continued to invest in its core GAME platform and solution offerings, developing features and updating our product roadmap based upon customer feedback. In Q2 2019 TrackX enabled dozens of new enhancements to workflows, IoT Sensor support, and the configurability of its GAME platform and plans to offer support to new ERP and operational systems.
TrackX will also continue to expand and leverage its partner network. Not only do partners provide implementation resources to meet increased demand, they have access to a very large potential customer base. Through recent joint marketing initiatives and solution webinars in collaboration with partners, the Company generated numerous leads and pipeline opportunities. Throughout the balance of fiscal 2019, the Company has commitments from multiple partners to host additional solution webinars and marketing events. As partner activity continues to increase, new opportunities are generated and TrackX converts them into customer implementations, the Company anticipates significant growth in higher margin recurring SaaS revenue throughout Fiscal 2019.
The Company has also begun to develop relationships with additional partners to expand its solutions into other industries, increase its delivery capacity and to expand upon its IoT sensor support. Over subsequent quarters, the Company anticipates that it will formalize additional partnerships over the subsequent quarters and that these partnerships will further accelerate revenue growth for TrackX.
TrackX Hosting Conference Call Today at 4:30pm EST
Chairman and CEO Tim Harvie and CFO Gene McConnell will host a conference call to discuss the results at 4:30pm EST on Wednesday, May 29, 2019. All interested parties are invited to participate in this conference call and should dial the numbers below 10 minutes before the starting time.
DATE: Wednesday, May 29, 2019
TIME: 4:30pm Eastern Standard Time
DIAL-IN NUMBER: 800‑895‑3361, 785‑424‑1062
CONFERENCE ID: TRACKX
TrackX Holdings, Inc., based in Denver, Colorado, is an enterprise asset management company deploying SaaS-based solutions leveraging multiple auto-ID and sensor technologies for the comprehensive tracking and management of physical assets. TrackX’s Global Asset Management for Enterprises (GAME) platform enables the Industrial Internet of Things (IIoT) by providing unique item level tracking, workflow processing, event management, alerting and powerful analytics to deliver solutions across a growing number of industries. TrackX delivers significant value to a growing list of Fortune 500 companies and for customers in industries such as transportation, beverage, brewery, healthcare, hi-tech, hospitality, mining, agriculture, horticulture, manufacturing and government.
For more information, please contact:
Gene McConnell, TrackX Holdings Inc.
Sean Peasgood, Sophic Capital
Neither TSX Venture Exchange nor its Regulations 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.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. All statements that address future plans, activities, events or developments that the Company believes, expects or anticipates will or may occur including the Company’s anticipated pipeline and value of current and customer deployments and future opportunities are the managements best estimates and cannot be guaranteed or relied upon and is forward-looking information. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements in this news release, whether as a result of new information, future events or otherwise, except as required by law.