Pivotree Announces First Quarter 2025 Results

Pivotree delivers another record Adjusted EBITDA of $2.0 million in Q1 2025 since going public in 2020

TORONTO, ON / ACCESS Newswire / May 14, 2025 / Pivotree Inc. (TSXV:PVT) ("Pivotree" or the "Company"), a leader in frictionless commerce solutions, today reported financial results for the three month period ended March 31, 2025. All amounts are expressed in Canadian dollars unless otherwise stated.

"We achieved sequential revenue growth, another record quarter with Adjusted EBITDA reaching $2.0 million and for the first time since being public we reported $232k in net income." said Bill Di Nardo, CEO of Pivotree. "We also recently announced the divestiture of our WMS software business with a purchase price of $2.7M, bringing more focus to fewer products with our R&D investments moving forward."

Pivotree also announced today that it has released a letter to shareholders from Bill Di Nardo, CEO. The letter can be accessed from the Company's website at investor.pivotree.com and filed on SEDAR at www.sedar.com.

First Quarter 2025 Financial Highlights

(All figures are in Canadian dollars and all comparisons are relative to the three-month period ended March 31, 2024 unless otherwise stated):

• Total Revenue of $19.2 million, a decrease of 8.5% or a decrease of 13.5% in constant currency. In comparison to the most recent quarter, Total Revenue posted an increase of 5.1% growth and Total Revenue excluding Legacy Managed Services (LMS) increased 8.0%.

  • Total Managed & IP Solutions + Legacy Managed Services (MIPS + LMS) of $8.0 million, a decrease of 14.9%, or 19.6% in constant currency.

    • Managed & IP Solutions (MIPS) Revenue declined 8.0% to $3.7M in Q1 2025, due to the ramp down of MIPS SKU Build volume from the higher transaction levels experienced in the prior year. In comparison to the most recent quarter, Total Revenue posted an increase of 8.0% growth

    • Legacy Managed Services (LMS) Revenue declined 20.1% to $4.3M in Q1 2025, from $5.4M in Q1 2024, related to churn and melt of Legacy Oracle customers.In comparison to the most recent quarter, Total Revenue posted a decrease of 3.8% growth

  • Professional Services Revenue of $11.2 million, a decrease of 3.2% or a decrease of 8.5% in constant currency. These three month ended results contain new customer projects, which helped partially offset completed projects from the prior year. In comparison to the most recent quarter, Total Revenue posted an increase of 8.0% growth

• Gross profit of $8.4 million, a decrease of 11.6% and representing 44.1% of total revenue compared to $9.6 million or 45.7% of revenue for the prior year period.

  • The decrease is primarily due to the mentioned decline of LMS revenues.

• Net income of $0.2 million compared to a net loss of $2.2 million for the prior year period, primarily due to reduced operating expenses as a result of restructure efforts, as well as foreign exchange impact.

• Adjusted EBITDA¹ of $2.0 million compared to an adjusted EBITDA¹ of $0.2 million for the prior year period.

¹ Please refer to "Key Performance Indicators" section of this press release.

² Please refer to "Non-IFRS Measures and Reconciliation of Non-IFRS Measures" section of this press release.

First Quarter 2025 Business Highlights

• Commerce TCV bookings were primarily driven by the extension of Professional Services engagements, including a notable project to migrate a customer from Oracle ATG to VTEX. Additionally, Commerce continued to see steady expansion of projects leveraging next-generation platforms, such as Shopify and Spryker.

• Data delivered another strong quarter of TCV Bookings, with contributions across the full portfolio of offerings. The team secured new logo wins spanning the grocery, defense, e-commerce, and industrial tools sectors. In addition, multiple Control Tower trials were won, highlighting emerging data-centric use cases. The quarter also saw renewals in the MIPS category from FAS, MAS, and DIVE, alongside typical extensions of Professional Services engagements within the Data segment.

• Supply Chain secured several Control Tower-related wins, including Managed Services engagements where Control Tower is being actively leveraged. The business also saw continued momentum in the Order Management space, with multiple extensions across platforms such as Fluent OMS and Sterling OMS.

First Quarter 2025 Results

Selected Financial Measures

Results of Operations

The following table outlines our consolidated statements of income (loss) and comprehensive income (loss) for the three months ended March 31, 2025 and 2024.

Cash Flows

Conference Call

Management will host a live Zoom Video Webinar on Wednesday, May 14, 2025 at 8:30 am ET to discuss these first quarter 2025 results. The webinar can be accessed through the following registration link: https://pivotree.zoom.us/webinar/register/WN_RZgpexT9ROeW4l5tu-rKAQ.

A replay will be available approximately two hours after the conclusion of the live event and posted on https://investor.pivotree.com/.

Non-IFRS Measures and Reconciliation of Non-IFRS Measures

This press release makes reference to certain non-IFRS measures including key performance indicators used by management and typically used by our competitors in the technology industry. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore not necessarily 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. These non-IFRS measures and technology metrics are used to provide investors with supplemental measures of our operating performance and liquidity and thus highlight trends in our business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures, including technology industry metrics, in the evaluation of companies in the technology industry. Management also uses non-IFRS measures and technology industry metrics in order to facilitate operating performance comparisons from period to period, the preparation of annual operating budgets and forecasts and to determine components of executive compensation. The non-IFRS measures and technology industry metrics referred to in this press release include, "Total Contract Value (TCV) Booking", "Managed & IP Solutions (MIPS) Revenue", "Legacy Managed Services (LMS) Revenue", "EBITDA", and "Adjusted EBITDA".

Key Performance Indicators

Due to our operating model, we recognize revenue within Total MIPS & LMS and professional services. Total MIPS & LMS, while largely based on minimum monthly recurring fees, also includes transactional and overage charges that may be variable from month to month.

Management uses a number of metrics, including the ones identified below, to measure the Company's performance and customer trends, which are used to prepare financial plans and shape future strategy. Our key performance indicators may be calculated in a manner different than similar key performance indicators used by other companies.

• Total Contract Value (TCV) Booking: This is defined as the total value of the contract executed with customers by the Company in the quarter. This is a new KPI to provide improved visibility to total bookings. It is important to note that while this is an indicator of revenue and future potential revenue, it cannot be reconciled to actual revenue recognized or industry book to bill metrics due to variances to time and material estimates, transactional or overage revenue that may not appear in bookings. The TCV Booking will be reported for the professional and Managed and IP Solutions (MIPS) & Legacy Managed Services (LMS) revenue segments.

• Managed & IP Solutions (MIPS) Revenue: This supplementary information will provide visibility into the revenue growth of managed services and licenses when the legacy managed services business is excluded.

• Legacy Managed Services (LMS) Revenue: This supplementary information will provide visibility into the revenues associated with supporting certain technology platforms in which the Company is not actively investing to grow. This metric should provide the readers with an overview of the underlying growth of the Company when these services are excluded from the results. This is a one-time segmentation for specific contracts of which the company intends to continue to report on until the revenues become less material to the overall Company's results.

• Total MIPS & LMS Revenue: This was referred to as managed services in prior reporting and will now be referenced using the new term. This segment combines both the MIPS and LMS supplementary segmentations introduced within.

Total Contract Value (TCV) Booking

TCV bookings for the three months ended March 31, 2025 were $3.1 million lower or 15.1% lower than the three months ended March 31, 2024. MIPS bookings growth was the result of a multiyear support contract which helped partially offset lower LMS bookings resulting from decreased renewals. Professional services bookings delivered stronger new customer additions which was more than offset by decline in existing customer booking.

Total MIPS and LMS Revenue Segmentation

Total MIPS & LMS for the three months ended March 31, 2025 were $1.4 million lower or 14.9% lower than the three months ended March 31, 2024. The Managed and IP Solutions, had a