MARKHAM, ONTARIO--(Marketwired - Nov. 29, 2016) - VIQ Solutions Inc. ("VIQ Solutions", "VIQ" or the "Corporation") (TSX VENTURE:VQS), a global expert providing cybersecurity protected technology and services, today reported financial results for the three month and nine month periods ended September 30, 2016. Results are reported in Canadian dollars and are prepared in accordance with International Financial Reporting Standards ("IFRS").
Consolidated quarterly revenue was approximately $2.9M, an increase of $0.6M or 26% over the previous year. Revenue was generated by new customer wins in the medical, law enforcement, intelligence and insurance markets as the transition to a more diversified customer base continues to successfully gain momentum.
Recurring revenue for the quarter grew by 35% over the same period in 2015. During the quarter, the Company made strategic investments to advance the key initiative of transitioning revenue from the historical license plus maintenance model to a modernized subscription and cloud based model.
"VIQ's subscription and cloud based revenue is strengthening with each quarter as customers demand the flexibility of secure cloud based solutions," said Sebastien Paré, President and CEO of VIQ Solutions. "The global transformation to recurring subscription revenue and SaaS holds many opportunities and short term transitioning pressure on trailing revenue, reported revenue and cash flow.
"To drive this transition, we accelerated some strategic technology investments in Q3, ensuring VIQ continues to lead this global shift toward SaaS."
VIQ's technology division recorded $0.8M quarterly revenue, an increase of 82% over the same period in 2015. The shift to paperless secure transfer of sensitive digital evidence, the emergence of low cost hardware enabling the interconnectedness of devices and the collection of vast amounts of audio and video data continue to drive VIQ technology sales. During the quarter, VIQ won new customer contracts that integrate its latest technology including smartphone mobile capture and speech recognition.
"Integrated speech recognition contributed to our technology revenue increase in Q3. It is a key component of our growth plan, particularly in legal, medical and law enforcement markets," said Mr. Paré. "The integration of seamless, secure speech recognition technology through global providers like Nuance ensure VIQ a competitive edge to meet this growing customer demand."
The increased revenue, particularly in the higher margin technology division, increased VIQ's overall gross profit margin to 40% for the quarter as compared to 36% in 2015.
VIQ announced the award of patent pending status on key high performance intellectual property during the quarter. The patents relate to VIQ's secure digital workflow providing AV capture and competency assessment of training procedures. Subsequent to the period, a new medical AV training win was announced with McMaster University School of Medicine employing the VIQ patent pending workflow.
"McMaster University School of Medicine is the first of many opportunities for VIQ with this sophisticated workflow as more and more industries digitize their training and workflow processes," said Mr. Paré. "The investments we made in Q3 to formally secure the patents on our key intellectual property were an important step in ensuring we capitalize on our technological leadership."
VIQ's Australian services posted Q2 revenue of $2.1M, an increase of 17% over the same period in 2015. The revenue increase resulted from new customer wins in higher revenue blended reporting, technology and transcription contracts and breakthroughs in medical transcription.
Business Highlights for the Quarter
- Announced partnership with Nuance Communications, Inc. for the integration of Nuance's powerful Dragon speech recognition solution with the VIQ digital capture and management workflow
- Announced new US police win featuring mobile smartphone capture, integrated Nuance workflow and customized web portal
- Announced Ontario hospital win for leading edge VoIP dictation and cloud based transcription workflow
- Awarded patent protection for key high performance intellectual property related to secure digital AV evidence training workflow
- Increased total quarterly revenue by $0.6M over 2015 with new global customer wins in medical, law enforcement and legal markets
- Posted technology division revenue growth of $0.4M or 82% over Q3 2015 with growth generated through and integrated speech recognition wins
- Recurring revenue for the quarter increased by 35% over 2015 via the transition to a SaaS based revenue model
- Grew revenue in Australian services division by $0.2M over same period in 2015 due to increase in higher revenue blended reporting and transcription contracts
The unaudited third quarter 2016 condensed consolidated interim financial statements and results of operations and Management's Discussion and Analysis of Results and Financial Condition for the three and nine month periods ended September 30, 2016 will be posted on SEDAR's website at www.sedar.com. The financial information included in this release is qualified in its entirety and should be read together with the unaudited third quarter 2016 condensed consolidated interim financial statements and the audited consolidated financial statements for the year ended December 31, 2015, including the notes thereto.
About VIQ Solutions Inc.
VIQ Solutions is the leading technology and service platform provider for digital evidence capture and content management. Our secure modular software allows customers to onboard the VIQ platform at any stage of their organization's digitization, from the capture of digital content from video and audio devices through to online collaboration, mobility, data analytics and integration with sensors, facial recognition, speech recognition and case management or patient record systems. VIQ's technology leads the industry in security, meeting the highest international standards for digital/cyber security and privacy, including military and medical regulations.
Our solutions are in use in over 20 countries with tens of thousands of users in over 200 government and private agencies including law enforcement, immigration, medical, legal, insurance, courts, transportation and transcription service providers. VIQ also provides end to end transcription services to several large government agencies through our Australia-based reporting and transcription partners. VIQ operates worldwide with partners like security integrators, audio-video specialists, and hardware and data storage suppliers. For more information about VIQ Solutions, please visit www.viqsolutions.com.
Certain statements included in this news release constitute forward looking statements or forward looking information under applicable securities legislation. Such forward looking statements or information are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Forward looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward looking statements or information in this news release include, but are not limited to, management's targets for the Corporation's growth in 2016 and beyond.
Forward looking statements or information is based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although VIQ Solutions believes that the expectations reflected in such forward looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because VIQ Solutions can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this news release, assumptions have been made regarding, among other things, the Corporation's recent initiatives, and that sales and prospects may provide incremental value for shareholders. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.
Forward looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by VIQ Solutions and described in the forward looking statements or information. These risks and uncertainties may cause actual results to differ materially from the forward looking statements or information. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.