Announces Series of New Multi-Year Contracts Valued at up to $30 million
PHOENIX, ARIZONA, October 28, 2020 – VIQ Solutions Inc. (“VIQ” or the “Company”) (TSX Venture Exchange: VQS and OTCQX Markets: VQSLF), a global provider of secure, AI-driven, digital voice and video capture technology and transcription services, today announced preliminary top-line results for the third quarter 2020, and provided an update of its full-year 2020 outlook. The Company also announced it secured a number of new multi-year contracts including one valued at up to $30 million in revenue over six year period ($5 million annualized revenue) expected to yield gross margins in the range of 50% to 55%. All numbers are expressed in US dollars.
Preliminary Q3 Results
The Company plans to provide its Q3 interim earnings report in mid-to-late November. Based on preliminary results, the Company anticipates revenue in the third quarter in the range of $8.1-$8.2 million, up by 25%-28% for the same period in 2019. At the end of Q3, more than 600 clients were migrated into VIQ’s new cloud-based transcription platform NetScribe™ powered by aiAssist.
The $30 million contract is over six years, representing approximatively $5 million of revenue per year commencing in 2021 based on customers’ historical and anticipated annual volumes and expected to yield gross margins of 53.5%.
“Our organic sales accelerated in the third quarter as strong demand for our transcription cloud platform drove steady revenue and a number of important new multi-year contracts,” said Sebastien Paré, President and CEO VIQ Solutions. “We are well-positioned to continue delivering on our growth and margin commitments as we further extend our leadership platform with these new long-term contracts.”
“These new multi-year contracts represent landmark gains for VIQ in markets where the digitization pace towards end-to-end cloud platform augmented by artificial intelligence is accelerating rapidly,” said Susan Sumner, COO VIQ Solutions.
Earlier Covid-19 restrictions, mainly in courts, law enforcement and insurance verticals, temporarily caused delays in customer migrations and new rollouts. Most restrictions are being lifted, and ongoing rollouts have resumed.
Due to Covid-19, approximately $2.5 to $3.35 million of planned 2020 revenues have been delayed to 2021. As a result, the Company updated its full-year revenue outlook to a range of approximately $31-$32 million (previous revenue goal was $34 million to $37 million), representing growth of approximately 24%-27% versus the prior year. There is no change to VIQ’s previously stated gross margin, reiterated at 50% – 55% range driven by migrations into NetScribe aiAssist. Aligned with the updated full-year revenue outlook, the Adjusted EBITDA goals were revised to $3.5 million – $4.5 million for the 2020 full year. For additional information:
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About VIQ Solutions Inc.
VIQ Solutions is a global provider of secure, AI-driven, digital voice and video capture technology and transcription services. VIQ offers a seamless, comprehensive solution suite that delivers intelligent automation, enhanced with human review, to drive transformation in the way content is captured, secured, and repurposed into actionable information. The cyber-secure, AI technology and services platform are implemented in the most rigid security environments including criminal justice, legal, insurance, media, government, corporate finance, media, and transcription service provider markets, enabling them to improve the quality and accessibility of evidence, to easily identify predictive insights and to achieve digital transformation faster and at a lower cost.