CALGARY, AB / ACCESSWIRE / August 26, 2022 / Ivrnet Inc. (TSXV:IVI) ("Ivrnet" or the "Company") announces that it has filed its condensed interim consolidated financial statements for the three and six-months ended June 30, 2022 (the "Interim Financial Statements") and the accompanying management's discussion and analysis for the six-months ended June 30, 2022 (the "Interim MD&A").
The following Q2 2022 financial highlights should be read in conjunction with the Interim Financial Statements and the accompanying Interim MD&A, which can be found on the Canadian System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com.
Q2 2022 Financial Highlights
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The Corporation saw continued growth in its financial technology recurring revenues. Fixed recurring revenue increased by $5,766 (approximately 7%) to $86,441 in Q2 2022 compared to $80,675 in Q2 2021 and variable recurring revenue increased by $12,475 (approximately) 21% to $70,667 in Q2 2022 compared to $58,192 in Q2 2021. During the six months ended June 30, 2022, fixed recurring revenue increased by $22,837 (approximately 15%) to $173,082 compared to $150,245 in the six months ended June 30, 2021 and variable recurring revenue increased by $2,549 (approximately 2%) to $125,412 compared to $122,863 in the six months ended June 30, 2021. The overall increase in financial technology services revenues was driven by the addition of a new customer.
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Fixed recurring revenue from Central decreased by $12,126 (approximately 26%) to $34,284 in Q2 2022 compared to $46,411 in Q2 2021 and decreased by $22,128 (approximately 22%) to $80,384 in the six months ended June 30, 2022 compared to $102,512 in the six months ended June 30, 2021. The decrease was primarily due to a new pricing strategy implemented in Q1 2022 for homeowner association customers which saw a shift from fixed recurring to variable recurring revenue. Variable recurring revenue from Central increased by $26,684 (approximately 51%) to $78,851 in Q2 2022 compared to $52,167 in Q2 2021 and increased by $50,417 (approximately 50%) to $151,919 in the six months ended June 30, 2022 compared to $101,502 in the six months ended June 30, 2021. This increase is partially due to the change in pricing strategy of homeowner associations described above together with an increase in sports registrations in the six months ended June 30, 2022 due to the relaxing of COVID-19 health guidelines as compared to the six months ended June 30, 2021.
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Fixed recurring revenue from Communications decreased by $30,984 (approximately 9%) to $317,673 in Q2 2022 compared to $348,657 in Q2 2021 and decreased by $45,091 (approximately 7%) to $639,851 in the six months ended June 30, 2022 compared to $684,942 in the six months ended June 30, 2021. The decrease in fixed recurring revenues is primarily due to reduced fees from existing customers. Variable recurring revenue from Communications increased by $10,610 (approximately 8%) to $147,954 in Q2 2022 compared to $137,344 in Q2 2021 and increased by $11,508 (approximately 5%) to $266,152 in the six months ended June 30, 2022 compared to $254,644 in the six months ended June 30, 2021. As companies adapted to the COVID-19 restrictions the use of the Corporation's toll free and audio conference solutions has declined. The Corporation plans to implement a new video conferencing product to enhancing its existing product offering.
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Total direct costs decreased by $2,716 to $232,111 or approximately 31% of revenues in Q2 2022 compared to $234,827 or approximately 32% of revenues in Q2 2021. Total direct costs increased by $27,699 to $487,512 or approximately 33% of revenues in the six months ended June 30, 2022 compared to $459,813 or approximately 31% of revenues in the six months ended June 30, 2021. This overall increase is primarily due to an increase in certain variable communication costs tied to fixed recurring customer contracts and an increase in virtual data center costs which the Corporation received a partial credit for in Q2 2022.
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Earnings before Interest, Depreciation and Amortization ("EBITDA") for Q2 2022 was $157,287 compared to a loss of $102,744 for Q2 2021. This represents an increase of $260,031 in EBITDA. The increase is primarily a result of decreased salaries and wages and general and administrative costs in Q2 2022 as compared to Q2 together with non-recurring and non-cash items from Q2 2021 which did not recur in Q2 2022, including share based compensation, a loss on the settlement of liabilities through the issuance of common shares and an impairment loss on the right of use asset. EBITDA was a loss of $244,869 for the six months ended June 30, 2022 compared to a loss of $392,989 for the six months ended June 30, 2021. This represents an increase of $148,120 in EBITDA. The increase is primarily a result of non-recurring and non-cash items from the six months ended June 30, 2021 which did not recur in the six months ended June 30, 2022, including share based compensation, a loss on the settlement of liabilities through the issuance of common shares, a of loss on disposal of property and equipment and an impairment loss of on the right of use asset which was partially offset by additional expenses incurred in connection with the Reverse Takeover Transaction together with reimbursable expenses submitted by the commercial lender of approximately $495,000, including sales taxes, related to the expected settlement of the term loan and credit facility with the issuance of preferred shares which is contingent on the completion of the Reverse Takeover Transaction.