Delivers record revenue and positive Adjusted EBITDA for the year
Burnaby, British Columbia--(Newsfile Corp. - March 19, 2025) - Tantalus Systems (TSX: GRID) (OTCQX: TGMPF) ("Tantalus" or the "Company"), a technology company dedicated to helping utilities modernize their distribution grids by harnessing the power of data, is pleased to announce its financial and operating results for the three-month period and full year ended December 31, 2024.
All amounts are presented in this news release are in United States dollars ("U.S. dollars"), unless otherwise indicated.
Q4 2024 FINANCIAL HIGHLIGHTS
Revenue increased by 21% year-over-year to $12.6 million, setting a new milestone for revenue generated in a quarter. Revenue from Utility Software Applications & Services ("Software") increased by 36% while revenue from Connected Devices & Infrastructure ("Connected Devices") increased by 14%. The increases in revenue were a result of adding new utility customers and continuing to expand deployments with existing accounts. Recurring Revenue as a percentage of total revenue was consistent at 24% of total revenue in the quarter.
Gross Profit Margin1 increased 100 basis points to 52.4% as a result of increased contributions from the Software segment compared to the prior year period.
Income for the period was $289,000 and decreased compared to last year as a result of the $2.3 million recovery of contingent consideration from the acquisition of DLC Systems, Inc. d/b/a Congruitive ("Congruitive") in the prior year period.
Diluted income per share was $0.01 compared to $0.04 for the reasons stated above.
Adjusted EBITDA1 increased to $1.4 million compared to $348,000 during the prior year period.
The Company generated positive Cash Flow from Operating Activities of $3.3 million compared to $131,000 in the prior year.
At December 31, 2024, Tantalus had available liquidity of $18.0 million compared to $5.2 million as at December 31, 2023. The available liquidity was comprised of a cash balance of $13.2 million and borrowing availability of $4.8 million under its revolving line of credit.
1 See definitions for Non-IFRS and Other Financial Measures below.
2024 FINANCIAL HIGHLIGHTS
The Company achieved a new annual milestone by delivering $44.3 million of revenue, representing 5.1% growth over the prior year. Revenue from the Software segment increased by 12% as a result of adding new utility customers and continuing to expand deployments with existing accounts.
ARR1 grew by over 10% year-over-year to $12.7 million as of December 31, 2024.
Gross Profit Margin1 increased 200 basis points to 54% as a result of increased contributions from the Software segment compared to the prior year.
Net loss was $2.6 million compared to $1.7 million last year. On a comparative basis, the prior year included a $2.3 million recovery of contingent consideration from the acquisition of Congruitive.
Diluted loss per share was $0.05 compared to $0.04 last year for the reasons stated above.
Adjusted EBITDA1 increased to $1.3 million as compared to negative $28,000 in the prior year.
The Company generated positive Cash Flow from Operating Activities of $2.6 million compared to negative $0.8 million in the prior year.
"Thanks to the hard work of our entire team and continued expansion of our community of customers, Tantalus was able to deliver record results in 2024 and reinforce our positive momentum heading into 2025," said Peter Londa, President & CEO of Tantalus. "We delivered another year of growth and reverted to positive Adjusted EBITDA for the year, all while making significant investments in the commercialization of the TRUSense Gateway™. We continue to gain traction with the TRUSense Gateway as utilities seek flexible and cost-effective solutions to modernize their distribution grids. Going into 2025, we believe Tantalus is well-positioned to help utilities accelerate their grid modernization efforts."
OTHER KEY DEVELOPMENTS
Sales Order Conversion: The Company converted $11.0 million in sales orders from its sales pipeline bringing the year-end orders number to $51.2 million. In addition to representing approximately 46% growth in orders year-over-year, the Company set a new corporate record for orders converted from its sales pipeline during a calendar year.
Growth of User Community: The Company added a record number of utilities in 2024 by adding 31 new customers, marking the most conversions in a calendar year for the Company.
Bought Deal Financing: In May 2024, the Company completed a bought deal financing by issuing an aggregate of 6,250,000 common shares for total gross proceeds of approximately $7.3 million.
TRUSense GatewayTM Progress: The Company announced the certification of the TRUSense Fiber Gateway in April 2024, the TRUSense Ethernet Gateway in July 2024, and the TRUSense Cellular Gateway in November 2024. In addition, the Company received orders from 27 utilities to commence field trials, pilots and deployments.
Appointment of Board Members: In December 2024, the Company appointed Ms. Kristi Honey and Mr. David McLennan to its Board of Directors.
Term Loan Advance: In December 2024, the Company obtained additional loan proceeds of $4.0 million from its existing term loan and used those funds to pay down its revolving line of credit.
SUBSEQUENT EVENTS
Expansion of Leadership Team: Subsequent to year end, Tantalus announced the appointments of Mr. Azim Lalani as Chief Financial Officer and Mr. Chris Allen as Chief Operating Officer and Executive Vice President of Solution Strategy.
Qualification for the OTCQX® Best Market to increase visibility and enhance liquidity: In February 2025, Tantalus began trading on the OTCQX® Best Market under the ticker symbol TGMPF.
The Company will hold a conference call and webcast to discuss the financial results on Thursday, March 20, 2025, at 11:00 am Eastern Time.
A conference call and webcast replay will be available until March 27, 2025. To access the conference call replay, please see details below:
U.S. Toll Free: 1-877-344-7529 International Toll: 1-412-317-0088 Canada Toll Free: 1-855-669-9658 Replay Access Code: 3464672
FINANCIAL STATEMENTS AND MANAGEMENT DISCUSSION & ANALYSIS
Information included in this press release is a summary of results and financial statement excerpts and should be read in conjunction with the Company's consolidated financial statements ("Annual Financial Statements") and related Management's Discussion & Analysis ("MD&A") for the year ended December 31, 2024 which can be found on SEDAR+ at www.sedarplus.ca and is also available on the Company's website at www.tantalus.com.
All comparisons presented in this press release are between the three-month and twelve-month periods ended December 31, 2024 and the three-month and twelve-month periods ended December 31, 2023, unless otherwise indicated. In addition, all results are reported in U.S. dollars, unless otherwise noted.
The accompanying notes are an integral part of these following consolidated financial statements and can be found on the Company's website at www.tantalus.com or on www.sedarplus.ca.
This press release contains certain financial measures that do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS"). Therefore, these financial measures may not be comparable to similar measures presented by other issuers. Investors are cautioned these measures should not be construed as an alternative to net income (loss) or to cash provided by (used in) operating, investing, financing activities, cash, and indebtedness determined in accordance with IFRS, as indicators of our performance.
We provide these additional non-IFRS measures, non-IFRS ratios and supplementary financial measures to assist investors in determining the Company's ability to generate earnings and cash provided by (used in) operating activities.
a) "EBITDA" is calculated as income (loss) less interest, income tax and depreciation and amortization. Management believes that EBITDA is a useful indicator for investors and is used by management in evaluating the operating performance of the Company.
b) "Adjusted EBITDA" is calculated as income (loss) less interest, income tax, depreciation, amortization, stock-based compensation, restructuring expenses, foreign exchange gain (loss) and other income (expenses) not attributable to the operations of the Company. Management believes that Adjusted EBITDA is a useful indicator for investors and is used by management in evaluating the operating performance of the Company. Beginning in the fourth quarter of 2024, the Company excludes restructuring expenses in our presentation of Adjusted EBITDA as these expenses are not representative of ongoing operating performance.
c) "Adjusted Working Capital" is calculated as current assets less current liabilities exclusive of the Company's loans. Management believes Adjusted Working Capital is a useful indicator for investors, and is used by management, for evaluating the Company's operating liquidity. Beginning in the fourth quarter of 2024, the Company no longer excludes contingent consideration relating to the acquisition of Congruitive in our presentation of Adjusted Working Capital as there was no contingent consideration payable. As part of the acquisition of Congruitive on January 31, 2022, there was contingent consideration based on the achievement of certain revenue targets being met in the period following the acquisition date to December 31, 2023. As no revenue targets were met, no contingent consideration was payable resulting in a recovery of the contingent consideration by the Company in the prior year.
This news release also refers to the following non-IFRS ratios:
d) "Gross Profit Margin" is calculated as Gross Profit expressed as a percentage of the Company's revenues. Management believes that Gross Profit Margin is a useful indicator for investors and is used by management in evaluating the operating performance of the Company.
e) "Adjusted EBITDA Margin" is calculated as Adjusted EBITDA expressed as a percentage of the Company's revenues. Management believes that Adjusted EBITDA Margin is a useful indicator for investors and is used by management in evaluating the operating performance of the Company.
This news release also refers to the following supplementary financial measures:
f) "Recurring Revenue" is comprised of the Company's revenues recognized in a period that are recurring in nature and attributable to its analytics, subscriptions and software as a service ("SaaS") offerings, hosting services, software maintenance and technical support agreement services.
g) "Annual Recurring Revenue" or "ARR" is comprised of the Company's Recurring Revenue as expressed on a forward looking annualized revenue basis attributable to its analytics, subscriptions and SaaS offerings, hosting services, software maintenance and technical support services agreements at a point in time.
ABOUT TANTALUS SYSTEMS HOLDING INC. (TSX: GRID) (OTCQX: TGMPF)
Tantalus is a technology company dedicated to helping utilities modernize their distribution grids by harnessing the power of data across all their devices and systems deployed throughout the entire distribution grid. We offer a grid modernization platform across multiple levels: intelligent connected devices, communications networks, data management, enterprise applications and analytics. Our solutions provide utilities with the flexibility they need to get the most value from existing infrastructure investments while leveraging advanced capabilities to plan for future requirements. Learn more at www.tantalus.com.
FORWARD-LOOKING STATEMENTS
This news release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information is generally identifiable by use of the words "believes", "may", "plans", "will", "anticipates", "intends", "could", "estimates", "expects", "forecasts", "projects" and similar expressions, and the negative of such expressions. Forward-looking information in this news release includes statements such as those relating to gaining traction with the TRUSense Gateway as utilities seek flexible solutions to modernize their distribution grids beyond the traditional approach of replacing metering infrastructure and increased visibility and enhanced liquidity from trading on the OTCQX® Best Market.
To the extent any forward-looking information in this news release constitutes a "financial outlook" within the meaning of securities laws, such information is being provided because management's estimate of the future financial performance of Tantalus is useful to investors, and readers are cautioned that this information may not be appropriate for any other purpose and that they should not place undue reliance on such information.
In connection with the forward-looking information contained in this news release, Tantalus has made numerous assumptions, regarding, among other things: increasing demand for the Company's solutions in support of utilities' grid modernization efforts, the commercialization and adoption of the TRUSense Gateway, and the ability of the Company to execute on its plan. While Tantalus considers these assumptions to be reasonable, these assumptions are inherently subject to significant uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause Tantalus' actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. A complete discussion of the risks and uncertainties facing Tantalus is disclosed under the heading "Risk Factors" in Tantalus' Annual Information Form dated March 31, 2024 and the Company's Annual Information Form to be filed on or prior to March 28, 2025, as well as those risk factors included with Tantalus' continuous disclosure filings with Canadian securities regulatory authorities available at www.sedarplus.ca. All forward-looking information herein is qualified in its entirety by this cautionary statement, and Tantalus disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.
