Absolute Announces Preliminary Financial Results for the Fiscal Quarter Ended September 30, 2020
VANCOUVER, British Columbia – October 26, 2020 – Absolute Software Corporation (“Absolute”; ABT.TO), a leader in Endpoint Resilience™ solutions, today announced that, based on preliminary financial data, revenue for its fiscal quarter ended September 30, 2020 is expected to be approximately USD$28.5 million, Adjusted EBITDA[i] and net income for the same period are expected to be approximately USD$8.1 million and USD$2.6 million, respectively, and cash flow from operating activities for the same period is expected to be approximately USD$14.7 million.
These estimates are preliminary and are inherently uncertain due to a number of factors, and remain subject to Absolute’s management’s and Audit Committee’s reviews and the completion of regular financial closing and review procedures for the three months ended September 30, 2020. Additional adjustments to the preliminary estimates presented above may be identified, and final results for this fiscal period may vary from these preliminary estimates. These preliminary estimates are intended to provide information about management’s current expectations regarding certain aspects of Absolute’s financial performance. Reliance on the information presented herein may not be appropriate for other purposes.
This press release contains certain forward-looking statements and forward-looking information (collectively, “forward-looking statements”) which relate to Absolute’s estimated financial performance and results. Forward-looking statements normally contain words like “will”, “intend”, “anticipate”, “could”, “should”, “may”, “might”, “expect”, “estimate”, “forecast”, “plan”, “potential”, “project”, “assume”, “contemplate”, “believe”, “shall”, “scheduled”, and similar terms and, within this press release, include, without limitation, statements regarding Absolute’s preliminary estimates for revenue, Adjusted EBITDA and net income, and cash flow from operating activities for the three months ended September 30, 2020. Forward-looking statements are provided for the purpose of presenting information about management’s current expectations and plans relating to the future and allowing investors and others to get a better understanding of our anticipated financial position, results of operations, and operating environment. Readers are cautioned that such information may not be appropriate for other purposes.
Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable, and appropriate in the circumstances. The material expectations, assumptions, and other factors used in developing the forward-looking statements set out herein include or relate to the following, without limitation: that Absolute’s actual financial results for the three months ended September 30, 2020 will be consistent with current financial data and the preliminary estimates presented in this press release; that Absolute’s financial closing and review procedures, including management and Audit Committee reviews, will not result in adjustments to its financial results that cause the preliminary estimates presented in this press release to not be met; and that Absolute will be able to successfully predict and manage the impacts of COVID-19 and other economic and market factors on its business, operations, and financial results.
Although management believes that the forward-looking statements herein are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Absolute’s business, as more particularly described in the “Risk and Uncertainties” section of Absolute’s most recently filed Management’s Discussion and Analysis, which is available at www.absolute.com and under Absolute’s profile on www.sedar.com. Additional material risks and uncertainties applicable to the forward-looking statements herein include, without limitation: risks related to Absolute’s business and financial position; risks related to changes and adjustments to these preliminary estimates resulting from Absolute’s management’s and Audit Committee’s reviews and/or regular financial closing and review procedures; that Absolute may not be able to accurately predict its rate of growth and profitability; risks related to economic and political uncertainty; risks related to Absolute’s amortization of revenue over the term of its customer subscriptions; risks related to Absolute’s reliance on its reseller and other partners for billings; income tax related risks; and other unforeseen events, developments, or factors causing any of the aforesaid expectations, assumptions, and other factors ultimately being inaccurate or irrelevant. Many of these factors are beyond the control of Absolute.
All forward-looking statements included in this press release are expressly qualified in their entirety by these cautionary statements. The forward-looking statements contained in this press release are made as at the date hereof and Absolute undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable securities laws.
[i] Absolute believes that analyzing operating results exclusive of significant noncash items or items not controllable in the relevant period provides a useful measure of its performance.
Consistent with its financial disclosure in past quarters, the term Adjusted EBITDA refers to earnings before deducting interest and investment gains (losses), income taxes, amortization of property and equipment and right of use assets, foreign exchange gain or loss, share-based compensation, and restructuring and reorganization charges and post-retirement benefits. The items excluded in the determination of Adjusted EBITDA are share-based compensation, amortization of property and equipment and right of use assets, and restructuring and reorganization charges and certain post-retirement benefits.
Adjusted EBITDA is a nonstandard measure under IFRS and is unlikely to be comparable to similarly titled measures reported by other companies. Readers are cautioned that the disclosure of Adjusted EBITDA is meant to add to, and not replace, the discussion of financial results or cash flows from operations as determined in accordance with IFRS. For a discussion of the purpose of this non-IFRS measure, please refer to “Non-IFRS Measures—Adjusted Operating Expenses” in Absolute’s management’s discussion and analysis for the period ended June 30, 2020 dated August 10, 2020, available on SEDAR.
The following table provides a reconciliation of net income to Adjusted EBITDA, a non-IFRS measure, for the periods presented.
Estimated amount for the three months ended September 30, 2020 assumes an effective tax rate of 33%.
Absolute adopted IFRS 16, “Leases” effective July 1, 2019 using the modified retrospective approach. See the section titled “New Accounting Pronouncements” in the June 30, 2020 MD&A and Note 2(e) in the notes to the June 30, 2020 financial statements, each of which is available on SEDAR.
Absolute Software (NASDAQ: ABST) (TSX: ABST) accelerates customers’ shift to work-from-anywhere through the industry’s first self-healing Zero Trust platform, ensuring maximum security and uncompromised productivity. Only Absolute is embedded in more than half a billion devices, offering a permanent digital connection that intelligently and dynamically applies visibility, control and self-healing capabilities to endpoints, applications, and network access to ensure their cyber resilience tailored for distributed workforces. Trusted by nearly 16,000 customers, G2 recognized Absolute as a leader in Zero Trust Networking in the Fall of 2021.