Announces Series of New Multi-Year Contracts Valued at up to $30 million
PHOENIX, Ariz.--(BUSINESS WIRE)--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 approximately $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 more information about VIQ, please visit viqsolutions.com.
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.
Certain statements included in this news release constitute forward-looking statements or forward-looking information under applicable securities legislation. Such forward-looking statements or information are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements or information in this news release include, but are not limited to, VIQ’s revenues for Q3 2020, the proportion of VIQ’s revenues derived from Netscribe™ and aiAssist, the estimated future value of contracts entered by VIQ, the timing of VIQ’s provision of its Q3 earnings report and VIQ’s anticipated revenues for fiscal 2020.
Forward-looking statements or information is based on several factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect. Although VIQ believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because VIQ can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this news release, assumptions have been made regarding, among other things, the continued good standing of VIQ’s customer contracts, the effect of Covid-19 related measures on VIQ’s clients and revenues and VIQ’s ability to migrate its clients to NetScribe™ and aiAssist. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions that have been used.
Forward-looking statements or information is based on current expectations, estimates and projections that involve several risks and uncertainties which could cause actual results to differ materially from those anticipated by VIQ and described in the forward-looking statements or information, including those described in VIQ’s Annual Information Form for the year ended December 31, 2019, filed with the Canadian securities regulatory authorities under VIQ’s SEDAR profile at www.sedar.com. These risks and uncertainties may cause actual results to differ materially from the forward-looking statements or information. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
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