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• Fiscal 2023 revenue of $52.4 million, an increase of 11% over Fiscal 2022
• Adjusted EBITDA¹ for Fiscal 2023 of $13.0 million, representing an Adjusted EBITDA Margin¹ of 25%
• Total Number of Clients² of 956 as at December 31, 2023

TORONTO, March 21, 2024 /CNW/ - LifeSpeak Inc. ("LifeSpeak" or the "Company") (TSX: LSPK), the leading whole-person wellbeing solution for employers, health plans and other organizations, announced today its financial and operational results for the three and 12 months ended December 31, 2023. All references to dollar values in this press release are in Canadian dollars, unless otherwise indicated.

"Fiscal 2023 marks the third consecutive year of revenue growth for LifeSpeak," said Michael Held, CEO and Founder of LifeSpeak. "The addition of new customers, and greater revenue related to acquisitions drove this growth. Looking ahead, our pipeline of sales opportunities is diverse and growing. In addition,  as demonstrated by the participation of our senior management team and board members in our recent private placement, insider confidence in our business remains strong as we sharpen our focus on LifeSpeak's growth moving forward."  

Consolidated Business Highlights for the Three and 12 Months Ended December 31, 2023

(All capitalized terms not defined herein shall have the meaning ascribed to them in the Management's Discussion and Analysis for the three and 12 months ended December 31, 2023, unless otherwise stated)

• Fourth quarter 2023 revenue reached $12.9 million, a decrease of 6% compared to the same period in 2022, largely due to one-time revenue recognized in the fourth quarter of 2022. Fourth quarter 2023 revenue was moderately higher than third quarter 2023 revenue.
• ARR³ of $51.0 million as at December 31, 2023, representing a decrease of 3% over the same period in 2022. Of the $51.0 million of ARR³, approximately $43.4 million, or 85%, originated from enterprise clients, a 2% increase compared to the same period in 2022. Of the $51.0 million of ARR³, approximately 66% originated from clients outside of Canada.
• As at December 31, 2023, no single client accounted for more than 5% of ARR³.
• ARR³ is reported on a constant currency basis using a 1.30 USD:CAD exchange rate. When adjusting for the exchange rate at the end of the fourth quarter 2023 of 1.3226 USD:CAD, ARR³ would be approximately $51.6 million.
• Fourth quarter 2023 Adjusted EBITDA¹ of $2.7 million, a decrease of $2.1 million compared to the same period in 2022. The decrease is largely due to one-time revenue and cost adjustments recognized in the fourth quarter of 2022.
• Fourth quarter 2023 Adjusted EBITDA¹ Margin of 21%, a decrease when compared to an Adjusted EBITDA Margin¹ of 35% in the comparable quarter of 2022, which is largely attributable to one-time revenue and cost adjustments recognized in the fourth quarter of 2022.
• Adjusted EBITDA¹ of $13.0 million for Fiscal 2023, an increase of $2.3 million when compared to Fiscal 2022.
• Fourth quarter 2023 net loss of $17.7 million, a decrease from a net loss of $24.5 million in the fourth quarter of 2022. The decrease in net loss for the three months ended December 31, 2023, is primarily due to lower goodwill impairment.
• Notable client additions for the fourth quarter of 2023 included Canada Goose, Virtusa Corporation and TravelBrands. Subsequent to quarter end, the Company added Accenture, Knitwell and Ascena Retail as new clients. 
• Uptake in the expansion of multi-product clients continued with the close of new multi-product launches, including with Grant Thornton LLP in fourth quarter of 2023, and the successful closing of a cross-sale expansion with Amazon Canada subsequent to quarter end, among others.
• The Company anticipates continued uptake in cross-sell as we further execute on opportunities within the current portfolio, as well as an increase in multi-product sales with net new clients.
• Subsequent to quarter end, on March 14, 2024, the Company closed a private placement for gross proceeds of approximately $5.0 million. Proceeds of the private placement were used to repay outstanding senior indebtedness, resulting in total senior indebtedness of $66.4 million following repayment. The Company anticipates that amortization of the senior indebtedness will be approximately $1.8 million per quarter for 2024.

ARR, Number of Clients, Consolidated Net Dollar Retention Rate and Logo Retention Rate

ARR³ was approximately $51.0 million as at December 31, 2023, with core enterprise client ARR³ of approximately $43.6 million.

Total Number of Clients² was 956 as at December 31, 2023, compared to 1,002 as at December 31, 2022.

Consolidated Net Dollar Retention Rate⁴ for the quarter was 87%, a 11% increase from the same period in 2022. Net Dollar Retention⁴ for Enterprise Clients was approximately 87% as at December 31, 2023, as compared to 94% for the comparative period in 2022. Enterprise Net Dollar Retention⁴ is lower primarily due to an increase in overall Enterprise Client churn, counteracted by cross-sell and multi-product opportunities within the existing Enterprise Client base.

Logo Retention Rate⁵ was 79% as at December 31, 2023 compared to 86% for the comparable period in 2022. The lower Logo Retention Rate⁵ is primarily attributable to the loss of smaller enterprise client logos within the portfolio of customers. Despite the decrease in Number of Clients⁴, the relative contribution to ARR³ of new clients is, on average, larger than that of lost clients.

Financial Results for the Three and 12 Months Ended December 31, 2023:

Conference Call Notification

The Company will subsequently hold a conference call to provide a business update on Thursday, March 21, 2024, at 8:00 a.m. ET hosted by:

• Nolan Bederman, Executive Chairman
• Michael Held, CEO
• Michael McKenna, CFO

A question-and-answer session will follow the business update.

This live call is also being webcast and can be accessed by going to:

https://events.q4inc.com/attendee/475714595

An archived telephone replay of the call will be available for two weeks by dialing 1.226.828.7578 or 1.866.813.9403 and entering access code 178125.   

Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators

LifeSpeak supplements its results of operations determined in accordance with IFRS with certain non-IFRS financial measures, non-IFRS ratios and key performance indicators that the Company believes are useful to investors, lenders and others in assessing its performance and which highlight trends its core business that may not otherwise be apparent when relying solely on IFRS measures. LifeSpeak management also uses non-IFRS measures, non-IFRS ratios and key performance indicators for purposes of comparison to prior periods, to prepare annual operating budgets, for the development of future projections and earnings growth prospects, to measure the profitability of ongoing operations and in analyzing our financial condition, business performance and trends. As such, these measures and indicators are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective, including how it evaluates its financial performance and how it manages its capital structure. LifeSpeak also believes that securities analysts, investors and other interested parties frequently use these non-IFRS measures, non-IFRS ratios and key performance indicators in the evaluation of issuers. These non-IFRS measures, non-IFRS ratios and key performance indicators are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and may include or exclude certain items as compared to similar IFRS measures, and such measures may not be comparable to similarly-titled measures reported by other companies. Accordingly, these measures and indicators should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.

Non-IFRS Measures, Non-IFRS Ratios and Reconciliation of Non-IFRS Measures

The Company uses non-IFRS measures, including "EBITDA", "Adjusted EBITDA", "Adjusted Net Income (Loss)", and the non-IFRS ratios, including "Adjusted earnings (loss) per share – basic", "Adjusted earnings (loss) per share – diluted" and "Adjusted EBITDA Margin". This press release also makes reference to "Annual Recurring Revenue" or "ARR", "Net Dollar Retention Rate", "Number of Clients" and "Logo Retention Rate", which are key performance indicators used in our industry.

EBITDA and Adjusted EBITDA 

"EBITDA" is defined as net income (loss) before income tax recovery, finance expenses, net and amortization and depreciation.

"Adjusted EBITDA" is defined as EBITDA before acquisition and other costs, share based compensation, foreign exchange loss (gain), impairment, changes in fair value of contingent consideration, synergies realized and additional one time items. These non-cash and/or non-recurring costs are independent events and incurred over several financial periods.

"Adjusted EBITDA Margin" is calculated as Adjusted EBITDA divided by revenue for the relevant period.

Adjusted Net Income (Loss) / Adjusted Earnings (Loss)

"Adjusted Net Income (Loss)" is defined as net income (loss) before acquisition and other costs, share based compensation, foreign exchange loss (gain), impairment, changes in fair value of contingent consideration, synergies realized and additional one-time items. These non-cash and/or non-recurring costs are independent events and incurred over several financial periods.

"Adjusted earnings (loss) per share – basic" is defined as Adjusted Net Income (Loss) divided by the weighted average number of shares outstanding – basic for the relevant period.

"Adjusted earnings (loss) per share – diluted" is defined as Adjusted Net Income (Loss) divided by the weighted average number of shares outstanding – diluted for the relevant period.