mCloud Talks Negative EBITDA, Omits P and L in Q3 NR

mCloud Talks Negative EBITDA, Omits P&L in Q3 NR

2019-11-14 07:40 ET – News Release

Ms. Chantal Schutz reports


mCloud Technologies Corp. (TSX-V:MCLD) (OTCQB:MCLDF) has provided its financial results for the third quarter ended Sept. 30, 2019.

  • Q3 2019 normalized income grew to over $1.2-million compared with a $132,368 loss in Q2 2019.
  • In the last 90 days, AssetCare revenue grew organically by 36 per cent to $4.1-million, up from $3.0-million in Q2 2019.
  • Annualized organic growth of over 160 per cent in AssetCare revenue.
  • Q3 2019 total revenue, accounting for an abbreviated period for Autopro, was $9.2-million.
  • Year-to-date revenues at $14.4-million compared with $1.8-million for full FY 2018.
  • Guidance for 2020 was provided, with expected annual revenues between $70-million to $80-million, normalized income between $11.5-million to $14.0-million, and over 50 per cent of total revenues coming from AssetCare.
  • Over 70-per-cent growth in connected assets under management expected in 2020.

“In the third quarter of 2019, we saw strong and persistent organic growth in recurring revenues across all business segments, resulting in positive $1.2-million in normalized income,” said Russ McMeekin, mCloud president and chief executive officer. “As we announced in early October, we are now on track to exceed over 40,000 connected assets by year-end, enabled by our strong business performance in getting assets connected in three continents across our smart facilities, smart energy and smart process lines of business.

“The bottom line is that our AssetCare platform is now the primary driver for mCloud’s growth through the rapid addition of new customers, connected assets and recurring revenues,” Mr. McMeekin added. “The high performance technologies and domain expertise that we have acquired, our aggressive market entry into process industries such as oil and gas, and our international expansion plans in Continental Europe, Southeast Asia and soon the Middle East, are quickly growing our reach globally.

“For 2020, we expect to see revenues double in the range of $70.0-million to $80.0-million with normalized income between $11.5-million to $14.0-million,” Mr. McMeekin continued. “We estimate that no less than 50 per cent of our 2020 revenues will be derived from high-margin AssetCare contracts, with 65 per cent to 70 per cent of these from implementations with multi-year recurring revenues.

“We expect to grow AssetCare revenues by approximately 70 per cent in 2020 and to have at least 70,000 connected assets or 75-per-cent growth on an asset basis in the next fiscal year.”

Q3 2019 financial results

Revenue for the third quarter grew 207 per cent to $9.2-million compared with $3.0-million in the second quarter of 2019, representing a July 10, 2019, cut-off for the acquisition of Autopro.

                  (all figures in thousands of dollars)                                           

Revenues                                                                    $9,233    
Gross margin                                                                 5,038     
General and administrative expenses (G&A)                                    1,125     
Research and development (R&D)                                               1,163     
Sales and marketing (S&M)                                                    1,542     
Normalized income                                                            1,208     
Acquisitions, financings, technology integration and new market expansion   (5,575)   
Other items                                                                 (2,502)   
EBITDA                                                                      (6,869)   

Financial results for the first nine months of FY2019

Revenue for the nine-month period ended Sept. 30, 2019, was $14.4-million compared with $1.8-million for full fiscal 2018.

                  (all figures in thousands of dollars)                                           

Revenues                                                                    $14,430   
Gross margin                                                                  9,130     
General and administrative expenses (G&A)                                     2,245     
Research and development (R&D)                                                2,120     
Sales and marketing (S&M)                                                     4,245     
Normalized income                                                               520       
Acquisitions, financings, technology integration and new market expansion    (7,722)   
Other items                                                                  (3,616)   
EBITDA                                                                      (10,818)  


The company has completed all documentation related to the sales and purchase agreement for CSA Inc. in accordance with TSX Venture Exchange requirements. Final disclosure processes are being completed while the company seeks approval from the TSX-V.

  CSA stand-alone -- July to September, 2019 
  (all figures in 000's of Canadian dollars)

Revenues                                   $233                                  
EBITDA                                      101                                   

Q3 2019 operating highlights

In the third quarter of 2019, the company continued to focus on integrating acquired technologies into a single, unified AssetCare offering, in addition to introducing the platform to new customers and markets across all its business segments.

The smart facilities segment saw continued growth through the addition of new quick-service restaurant and retail customers across North America. As announced in early October, the company now has over 7,000 buildings in the AssetCare smart facilities portfolio, each with multiple connected assets including HVAC (heating, ventilation and air conditioning) units and smart lighting all managed through the use of AssetCare’s AI (artificial intelligence) and analytics capabilities. With the first implementation of AssetCare at the Heiwado Shopping Center in Changsha, Hunan province, now complete and showing 25-per-cent HVAC energy savings and 8-per-cent net reductions in overall energy use, the smart facilities team has begun making plans to implement AssetCare at dozens of additional malls across Greater China.

The smart energy segment also saw new customers and connected wind turbines, most notably an agreement with Longyuan Construction Investment (Chengde) Wind Power Co. Ltd. to connect 35 GE wind turbines at Longyuan’s Pu Fa wind farm in China, originally announced in August. The smart energy team worked with Longyuan to use AssetCare’s AI and analytics to identify substantial opportunities to improve performance. Guided by AssetCare, Longyuan has been able to improve asset operations, with some wind turbines seeing increases as large as 30 per cent in continuing wind turbine energy production.

The smart process segment has made substantial progress in bringing AssetCare capabilities on-line for customers in process facilities for oil and gas, petrochemical, and pipeline management. As announced in July shortly after the acquisition of Autopro, the smart process team had delivered AssetCare to six oil and gas facilities in Alberta, Canada. As a result of this timely connectivity to AssetCare, the team estimates it has improved response times to unplanned outages by at least 300 per cent at these sites, in one instance preserving approximately $50,000 in production at one of these facilities by cutting recovery times from six hours to two. As announced in October, the company estimates that it has connected 100 new oil and gas assets in the third quarter.

Substantial advances in product and technology development were demonstrated in the third quarter through the introduction of new capabilities. Supported by the smart process team in mCloud’s Calgary office, the team proved its ability to field 3-D scanners to create digital replicas of process facilities in support of the company’s 3-D digital twin agenda. Research and development continued on the use of drones for AI-driven digital blade inspection on wind turbines, in addition to the measurement of fugitive emissions at oil and gas plants in response to increasing demand from oil and gas operators worldwide.

Q4 2019 outlook

mCloud expects to see the proportion of business coming from new customers and AssetCare recurring revenues to continue growing at a fast pace through the fourth quarter. The company anticipates quarterly revenues in the $13-million to $15-million range, reflecting an expected annualized revenue run rate of more than $50-million in Q4 2019. Factors expected to influence performance include the timing of the closing of the CSA acquisition and the completion of certain customer projects over the holiday season.

In Q4 2019, the company expects that revenues directly attributable to AssetCare will be no less than 40 per cent with a final tally of more than 40,000 connected assets under management. On that basis, full-year revenues from AssetCare are anticipated to be at least double those seen year over year from 2018.

Q3 2019 conference call

The company is hosting a conference call to discuss the financial results for the third quarter at 5:30 p.m. ET today. The conference call will include prepared remarks from Russ McMeekin, chief executive officer, and Chantal Schutz, chief financial officer. After the prepared remarks, the company will accept questions.

To access the conference call by telephone, dial 647-427-7450 or 1-888-231-8191. Please connect approximately 10 minutes prior to the beginning of the call to ensure participation. The conference call will be archived for replay by telephone until Thursday, Nov. 21, 2019, at midnight ET. To access the archived conference call, dial 1-855-859-2056 and enter the reservation No. 4472726.

A live audio webcast of the conference call will be available on-line. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived at the above website for one year.

About mCloud Technologies Corp.

mCloud Technologies Corp. (TSX-V:MCLD) (OTCQB:MCLDF) is creating a more efficient future with the use of AI and analytics, curbing energy waste, maximizing energy production, and getting the most out of critical energy infrastructure. Through mCloud’s AI-powered AssetCare platform, mCloud offers complete asset management solutions to three distinct segments: smart facilities, power generation and process industries including oil and gas. IoT sensors bring data from connected assets into the cloud, where AI and analytics are applied to maximize their performance. Headquartered in Vancouver, Canada, with offices in 12 locations worldwide, the mCloud family includes an ecosystem of operating subsidiaries that deliver high performance IoT, AI, 3-D and mobile capabilities to customers, all integrated into AssetCare.

We seek Safe Harbor.

Please visit the company’s website at For a free report on mCloud Technologies Corp. (TSX-V:MCLD) (OTCQB:MCLDF) (the “Company“) visit

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