LifeSpeak Inc. Announces Second Quarter 2022 Results

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LifeSpeak Inc. Announces Second Quarter 2022 Results

Canada NewsWire

  • Second quarter 2022 revenue of $12.1 million, an increase of 117% compared to the same period in 2021
  • Consolidated ARR1 as at June 30, 2022 reached $50.2 million, a 119% increase over the same period in 2021; on a pro forma basis, enterprise client ARR increased 33% over the comparable period
  • Total Number of Clients2 increased by 264% to 921 as at June 30, 2022, compared to 253 in the same period in 2021
  • Second quarter 2022 Adjusted EBITDA3 of $2.4 million, and Adjusted EBITDA Margin3 of 20%; second quarter 2022 Adjusted EBITDA3 increased $2.0 million over the first quarter of 2022
  • Annualized acquisition synergies realized through the first six months of 2022 of $6.8 million, including $1.2 million recognized in the second quarter

TORONTO, Aug. 3, 2022 /CNW/ - LifeSpeak Inc. ("LifeSpeak" or the "Company") (TSX: LSPK), the leading SaaS-based mental health and total wellbeing platform for employers, health plans, and insurance companies, today announced its financial and operational results for the three and six months ended June 30, 2022. All references to dollar values in this press release are in Canadian dollars, unless otherwise indicated.

"LifeSpeak continued to strengthen and diversify its business during the second quarter," said Michael Held, CEO and Founder of LifeSpeak. "Cross-selling initiatives across our expanded SaaS-based mental health and total wellbeing platform continued with the completion of the sales integration in the quarter, and we are now seeing the benefit of the integrated platforms in our financials. In addition, the broader integration of our four recent acquisitions continued as planned. Our cost-reduction initiatives have resulted in a leaner and more efficient business that remains poised for growth in the near and long term. Going forward, we are focused on driving organic growth within our unified platform through the acquisition of net new enterprise and embedded solutions clients, and the cross-sale of products to our existing client base."

Mr. Held continued, "The overall demand for LifeSpeak's affordable and effective SaaS-based mental health and total wellbeing platform remains strong despite the macro pressures associated with inflation and rising interest rates. We anticipate that this demand will continue as employers and organizations remain focused on prioritizing the mental and physical well-being of their employees."   

___________________

1 See "Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators" for a definition of "ARR" 

2 See "Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators" for a definition of "Number of Clients"

3 See "Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators" for a definition, "Adjusted EBITDA", and "Adjusted EBITDA Margin" 


Consolidated Business Highlights for the Three Months Ended June 30, 2022


(All capitalized terms not defined herein shall have the meaning ascribed to them in the Management's Discussion and Analysis for the three months ended June 30, 2022, unless otherwise stated)

  • Second quarter 2022 revenue reached $12.1 million, an increase of 117% compared to the same period in 2021, representing a continuing trend of growth in the usage of the Company's platform.
  • Gross Margin for the second quarter 2022 was 91%, a significant increase compared to Gross Margin of 85% in the first quarter of 2022.
  • Annual Recurring Revenue (ARR) of $50.2 million as at June 30, 2022, an increase of 119% over the same period in 2021. Of the $50.2 million of ARR, approximately $41.0 million of ARR, or 82% originated from enterprise clients, an increase of approximately 33% compared to the same period in 2021 on a pro forma basis. Of the $50.2 million of ARR, approximately 66% originated from clients outside of Canada. The Company achieved LTM ARR growth despite deciding to take the conservative stance of removing ARR contribution from a client that historically has been a major embedded solutions client.
  • Second quarter 2022 Adjusted EBITDA3 of $2.4 million, an increase of $0.2 million compared to the same period in 2021, and a significant increase of $2.0 million when compared to the first quarter of 2022. This includes approximately $1.2 million of direct cost savings in the second quarter of 2022, achieved as part of the Company's comprehensive focus on integration of acquisitions, operations and cost base review.
  • Second quarter 2022 net loss of $6.5 million, an increase of $7.0 million compared to the same period in 2021, largely due to non-cash related items, including the ongoing expense of stock-based compensation related to the implementation of an omnibus incentive plan at time of IPO.
  • Total Number of Clients of 921 as at June 30, 2022, a 264% increase when compared to 253 at the same date in 2021, and an increase of 35% compared to the same period in 2021 when calculated on a pro forma basis.
    • Notable enterprise client additions for the quarter included Sherritt International Corporation (Canada), the State of Illinois (US), Unified Women's Healthcare, L.P. (US), Ministère du Transport (Canada), City of Charlotte (US), APM Group (Australia) and Bowmer & Kirkland (UK).
    • Subsequent to quarter end, LifeSpeak signed several additional significant enterprise clients, including Common Spirit Health (Catholic Health Initiatives) (US), Stanley Black and Decker (US), the Workers Compensation Board of Nova Scotia (Canada).
    • Embedded solution client additions continued through the second quarter with the launch of new embedded partnerships with FSEAP (Canada), Mindfit at Work (Australia) and Mid-Atlantic Employers (US) bringing the Company's total embedded Number of Clients to 18 at the end of the second quarter 2022. Subsequent to quarter end, LifeSpeak continued to sign meaningful embedded solutions clients, such as MetLife Gulf, its first Gulf region client, highlighting the global nature of the platform.
  • Cross-selling initiatives progressed well through the second quarter of 2022, with the successful closing of several cross-sale / multi-product opportunities including with Fasken Martineau DuMoulin LLP (Canada), Pillsbury LLP (US), and Laurentian Bank of Canada (Canada).
  • Subsequent to quarter end, the Company completed additional and significant cross-sell deals with Maximus Inc. (US) – LifeSpeak's largest cross-sale to date – and PricewaterhouseCoopers (US & Canada). The Company anticipates accelerated cross-sale growth in the second half of 2022, as net new clients are added with multi-product solutions, and as the current portfolio of client cross-sell opportunities are harvested.

________________


3 See "Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators" for a definition of "Adjusted EBITDA" and a reconciliation to the nearest comparable measurement under IFRS.

Review of Operations and 2022 Financial Outlook

Demand for the Company's SaaS-based mental health and total wellbeing platform continues to be strong as evidenced by growth in the Company's ARR and Number of Clients.

Similar to the Company's first quarter, LifeSpeak's second quarter was adversely impacted by significantly reduced recognizable revenue related to an embedded solutions client. As previously disclosed, the contract with such client, which, at its peak, represented the largest client in LifeSpeak's embedded solutions platform, was extended and continues through to August 31, 2022, with the client's customers maintaining access to the platform during this period where renewal discussions remain ongoing.

Despite the challenges, the fundamentals of LifeSpeak's core business remain robust. ARR increased on  a last twelve-month (LTM) basis by 3% when accounting for acquisitions. When excluding the large, embedded client, ARR growth was approximately 24% over the LTM period on a pro forma basis, and core enterprise client ARR growth was approximately 33%. This demonstrates the strength of the core enterprise business, even when taking a conservative approach to the contribution of the large, embedded customer

The historical continued pattern of growth in the enterprise client demographic, which comprises approximately 82% of overall ARR as at June 30, 2022, and the diversity of customer, industry, and sector concentration demonstrates the strength of the business and lays a strong foundation for resilience and growth at the core of the LifeSpeak portfolio.

Pro Forma ARR Breakdown

In C$ millions, unless otherwise noted

Q2-2021

Q3-2021

Q4-2021

Q1-2022

Q2-2022


Q2-2022

YoY Growth









   Total Enterprise ARR

$30.8

$32.9

$36.7

$39.4

$41.0


33 %

   Total Embedded Solutions & Other ARR

$17.9

$18.7

$19.0

$11.7

$9.2


(5 %)

Total ARR

$48.8

$51.5

$55.6

$51.1

$50.2


3 %









Total ARR (Ex Large Embedded Solutions Client)

$40.5

$42.7

$46.4

$49.6

$50.2


24 %









Additionally, growth in the Number of Clients continued quarter-over-quarter, with strong net adds in the enterprise client base and the embedded solutions area. Total Number of Clients increased to 921, or by approximately 264% when compared to the previous period on an as-reported basis. On a pro forma basis, Number of Clients grew by approximately 35% year-over-year.

Pro Forma4 Number of Clients


Q2-2021

Q3-2021

Q4-2021

Q1-2022

Q2-2022


Q2-2022

YoY Growth









   Total Enterprise Clients

677

720

803

847

903


33 %

   Total Embedded Solutions Clients

3

12

14

15

18


500 %

Total Number of Clients

680

732

817

862

921


35 %









Consolidated Net Dollar Retention Rate5 for the quarter was 76%, largely due to the Company's conservative decision regarding ARR of the large, embedded customer, and compares to a Net Dollar Retention Rate of 104% for the comparative period in 2021. Despite the impact of the large, embedded customer on consolidated Net Dollar Retention Rate, Net Dollar Retention Rate for the enterprise clients remained strong at approximately 98% as at June 30, 2022.

Despite slightly lower enterprise client Net Dollar Retention Rate in the enterprise client base, largely driven by lower overall Logo Retention Rate6 for the LTM period of 89% as at June 30, however upsell and cross-sell within the portfolio of existing enterprise clients helps effectively replaced churned client ARR.

As retention is measured on an LTM basis, higher logo churn is primarily attributable to the expected loss of several smaller client logos following the acquisition of Wellbeats in the first quarter of 2022 and is expected to normalize through the balance of the year.  Of important note regarding logo loss, the enterprise business, is trending in the direction, that new logo adds are now coming with larger ARR than those being lost. In addition, as the cross-sell and up-sell efforts continue, the Company expects Net Dollar Retention Rate to increase as existing clients purchase additional products and services over time.

In addition to the continued focus on revenue growth, the Company has also made good progress in acquisition integration, which has led to the ability to generate significant cost savings. While there has been a reduction in headcount, largely through identified redundancies, it is important to note the Company has been focused on optimizing the cost base in all areas. 

This focus on integration has not only created significant momentum and efficiencies in sales and the sales process, it has also allowed the Company to generate annualized cost savings at a level even higher than suggested at the conclusion of the first quarter of 2022.  In the second quarter of 2022, the Company generated annualized cost savings of approximately $2.8 million, bringing the total annualized savings to approximately $6.8 million.   

As cost rationalization has been a clear positive outcome from the acquisitions, the Company has maintained a strong operational focus, and from a management perspective, the depth of the team is stronger than ever.  Many key management team members, including all of the CEOs / founders from the acquired businesses have taken on senior roles at LifeSpeak including COO, Chief Growth Officer, Chief Strategy Officer and SVP Finance.

_____________

4 Pro Forma number of clients is calculated assuming that the acquisitions of "Lift session",  "ALAViDA", "Torgchlight" and "Wellbeats" as described in our AIF had been completed prior to the applicable period. This metric is provided for illustrative purposes to provide a comparative measure to show number of clients as if all the businesses had been reporting as a combined entity.

5 See "Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators" for a definition, "Net Dollar Retention Rate".

6 See "Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators" for a definition, "Logo Retention Rate".


While the strength in sales and focus on cost rationalization has clearly stabilized the foundation of the business and positioned the Company for a strong second half of 2022, in light of the ongoing discussions with the large, embedded client, the Company is updating its 2022 annual guidance.

For the balance of 2022, LifeSpeak has chosen to take a conservative approach to forecasting, assuming no contribution from the aforementioned large, embedded client in its revised guidance. Senior management continues to engage in discussions with the embedded client.

Based on current sales pipeline visibility and the ongoing successful integration of the platform, LifeSpeak expects 2022 revenue growth to be in the range of 110% – 140% for the year ending December 31, 2022. This compares to the Company's original guidance disclosed on February 14, 2022, of revenue growth for 2022 in the range of 180% – 200%.

LifeSpeak now expects ARR to be in the range of $60 million$70 million as at December 31, 2022 and expects Adjusted EBITDA Margin to be in the range of 20% –30% for the year ending December 31, 2022, reaching 30%+ for the fourth quarter of 2022.

While the new guidance is lower than original guidance disclosed on February 14, 2022 of ARR for 2022 in the range of $75 million$85 million, and Adjusted EBITDA Margin in the range of 30% – 40%, the Company believes that the fundamentals of the business remain strong and unique, especially in the current market context.

Credit Agreement Update

Concurrent with the completion of the Wellbeats transaction in February 2022, LifeSpeak entered into a $97.5 million revolving credit facility with Scotiabank's Technology Innovation and Banking Group ("Scotiabank") and Desjardins Capital Markets ("Desjardins").

During the quarter, the Company voluntarily repaid $10 million of the credit facility, reducing total debt to $87.5 million.  Following the voluntary repayment of debt, the Company, in collaboration with Scotiabank and Desjardins, also revised the terms of its credit facility to better position LifeSpeak to achieve its growth targets going forward.

The revised credit facility will allow the Company to focus on performance through the balance of 2022, measuring quarterly performance against the credit facility based on financial results versus a traditional Net Debt-to-Adjusted Bank EBITDA multiple. 

The Company and the lenders expect these changes to provide the necessary time for the Company's revenue growth to support moving to a ratio-based (Net Debt-to-Adjusted Bank EBITDA) covenant test in 2023. 

Beginning in 2023, a portion of the total facility will transition from a fully revolving facility to a traditional term-based facility. The Company anticipates that the requirement of a fully revolving facility will be reduced in 2023 as LifeSpeak focuses on organic growth and does not expect any significant acquisition activity in 2023 given the strength of its current platform.

The Company intends to provide further updates on this matter as required and believes the changes to the credit facility are sufficient to ensure strength in operations well into the future.

Financial Results for the Three and Six Months Ended June 30, 2022

Selected Consolidated

Financial Information

(in thousands of Canadian dollars)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,


2022

2021

2022

2021






Revenue



12,139

5,585

20,849

10,507

Less:







Product Development and Content



1,152

378

2,434

783

Gross Profit



10,987

5,207

18,415

9,724

Gross Profit Margin (1)







Gross Profit Margin



91 %

93 %

88 %

93 %








Deduct Expenses:







Sales and marketing



3,555

1,935

7,024

3,624

General and administrative



6,928

1,250

11,824

2,809

Share-based compensation



2,898

401

5,844

1,333

Foreign exchange loss (gain)



(1,253)

40

440

78

Depreciation and amortization



4,290

14

6,856

29




16,417

3,641

31,987

7,873








Income (loss) before restructuring and other costs and finance expense



 

(5,430)

 

1,567

 

(13,572)

 

1,851








Restructuring and other costs (2)



970

726

9,750

915

Revaluation gain on contingent consideration



(1,041)

--

(1,735)

--

Finance expense, net



1,635

332

2,871

339








Income (loss) before income taxes



(6,986)

508

(24,541)

598

Income taxes (recovery)



(536)

--

(1,647)

--








Net income (loss)



(6,457)

508

(22,811)

598








Earning (loss) per share - basic



(0.13)

0.02

(0.46)

0.03

Earnings (loss) per share- diluted



(0.13)

0.01

(0.46)

0.02








Non-IFRS Measures







EBITDA (3)



(1,069)

855

(14,731)

965

Adjusted EBITDA (4)



2,412

2,224

2,794

4,093

Adjusted Net Income (Loss) (5)



(2,976)

1,877

(3,551)

(4,158)

Adjusted earnings (loss) per share – basic (6)



(0.06)

0.09

(0.07)

0.17

Adjusted earnings (loss) per share – diluted (7)



(0.06)

0.05

(0.07)

0.10


Notes:

(1)

Gross profit margin is calculated as gross profit divided by revenue for the relevant period.

(2)

Restructuring and other costs are costs related to the entry into of the Company's credit agreement and recapitalization distributions and expenses related to the investment by the Institutional Investors, costs and expenses in connection with the Company's IPO and related matters and costs and expenses in connection with the Company's acquisitions.

(3)

"EBITDA" has the meaning ascribed herein under "Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".

(4)

"Adjusted EBITDA" has the meaning ascribed herein under "Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".

(5)

"Adjusted Net Income (Loss)" has the meaning ascribed herein under "Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".

(6)

"Adjusted earnings (loss) per share – basic" has the meaning ascribed herein under "Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".

(7)

"Adjusted earnings (loss) per share – diluted" has the meaning ascribed herein under "Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".



Conference Call Notification

The Company will hold a conference call to provide a business update on Wednesday, August 3, 2022, at 8:00 a.m. ET hosted by:

  • Nolan Bederman, Executive Chairman
  • Michael Held, CEO
  • Michael McKenna, CFO

A question-and-answer session will follow the business update.

CONFERENCE CALL DETAILS


DATE:

Wednesday, August 3, 2022



TIME:

8:00 a.m. ET



DIAL-IN NUMBERS:

Toll free at 1.833.950.0062 or 1.833.927.1758



REFERENCE NUMBER:

469720



This live call is also being webcast and can be accessed by going to:

https://events.q4inc.com/attendee/158400747

An archived replay of the webcast will be available for two weeks by clicking the link above.

Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators

LifeSpeak supplements its results of operations determined in accordance with IFRS with certain non-IFRS financial measures, non-IFRS ratios and key performance indicators that the Company believes are useful to investors, lenders and others in assessing its performance and which highlight trends its core business that may not otherwise be apparent when relying solely on IFRS measures. LifeSpeak management also uses non-IFRS measures, non-IFRS ratios and key performance indicators for purposes of comparison to prior periods, to prepare annual operating budgets, for the development of future projections and earnings growth prospects, to measure the profitability of ongoing operations and in analyzing our financial condition, business performance and trends. As such, these measures and indicators are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective, including how it evaluates its financial performance and how it manages its capital structure. LifeSpeak also believes that securities analysts, investors and other interested parties frequently use these non-IFRS measures, non-IFRS ratios and key performance indicators in the evaluation of issuers. These non-IFRS measures, non-IFRS ratios and key performance indicators are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and may include or exclude certain items as compared to similar IFRS measures, and such measures may not be comparable to similarly-titled measures reported by other companies. Accordingly, these measures and indicators should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.

Non-IFRS Measures, Non-IFRS Ratios and Reconciliation of Non-IFRS Measures

The Company uses non-IFRS measures, including "EBITDA", "Adjusted EBITDA", "Adjusted Net Income (Loss)", and the non-IFRS ratios, including "Adjusted earnings (loss) per share – basic", "Adjusted earnings (loss) per share – diluted" and "Adjusted EBITDA Margin". This press release also makes reference to "Annual Recurring Revenue" or "ARR", "Net Dollar Retention Rate", "Number of Clients" and "Logo Retention Rate", which are key performance indicators used in our industry.

EBITDA and Adjusted EBITDA 

"EBITDA" is defined as net profit or loss before income tax expenses, finance costs and depreciation and amortization

"Adjusted EBITDA" is defined as EBITDA before non-recurring restructuring and other costs related to the entry into of the Company's credit agreement and recapitalization distributions, expenses related to the investment by the Institutional Investors, costs and expenses in connection with the Company's IPO and related matters, cost and expenses related to the Company's acquisitions, synergies realized in connection with the acquisitions, share-based compensation, foreign exchange loss (gain) and shareholders distributions. These non-recurring costs are independent events which are non-recurring in nature and incurred over several financial periods.

"Adjusted EBITDA Margin" is calculated as Adjusted EBITDA divided by revenue for the relevant period.

Selected Consolidated Financial Information (In thousands ofCanadian
dollars)





Three Months Ended June 30,

 

 

Six Months Ended June 30,



2022

2021

2022

2021


Net income (loss)

(6,457)

508

(22,811)

598


Add:






Amortization and depreciation expense

4,290

14

6,856

29


Finance expense

1,635

332

2,871

339


Income tax expense (recovery)

(536)

--

(1,647)

--


EBITDA(1)

(1,069)

855

(14,731)

965


Add:






Restructuring and other costs (2)

970

726

9,750

133


Share-based compensation

2,898

401

5,844

--


Foreign exchange loss (gain)

(1,253)

40

440

63


Revaluation gain on contingent consideration

 

(1,041)

 

--

 

(1,735)

 

--


Shareholders distributions (3)

--

--

--

600


Synergies realized (4)

1,218

--

1,938

--


Additional one-time costs (5)

691

202

1,288

202


Adjusted EBITDA (6)

2,412

2,224

2,794

4,093


Adjusted EBITDA Margin (7)

20 %

40 %

13 %

39 %


Notes:


(1)

"EBITDA" has the meaning ascribed herein under "Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".

(2)

Restructuring and other costs are costs related to the entry into of the Company's credit agreement and recapitalization distributions and expenses related to the investment by the Institutional Investors, costs and expenses in connection with the Company's IPO and related matters and costs and expenses in connection with the Company's acquisitions.

(3)

Shareholders distributions includes private company legacy profit sharing payment to shareholders.

(4)

Synergies realized relates to the impact of the full period of cost synergies related to the reduction of employees and professional services in relation to acquisitions.

(5)

One-time costs related to IPO specific adjustments, acquisitions specific adjustments and transition costs related to the Wellbeats acquisition.

(6)

"Adjusted EBITDA" has the meaning ascribed herein under "Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".

(7)

"Adjusted EBITDA Margin" has the meaning ascribed herein under "Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".

Adjusted Net Income (Loss) / Adjusted Earnings (Loss)

"Adjusted Net Income (Loss)" is defined as net income (loss) before non-recurring restructuring and other costs related to the entry of the Company's credit agreement and recapitalization distributions, expenses related to the investment by the Institutional Investors and costs and expenses in connection with the Company's IPO and related matters, cost and expenses related to the Company's acquisitions, synergies realized in connection with the acquisitions, share-based compensation, foreign exchange loss (gain). These non-recurring costs are independent events which are non-recurring in nature and incurred over several financial periods.

"Adjusted earnings (loss) per share – basic" is defined as Adjusted Net Income (Loss) divided by the weighted average number of shares outstanding – basic for the relevant period.

"Adjusted earnings (loss) per share – diluted" is defined as Adjusted Net Income (Loss) divided by the weighted average number of shares outstanding – diluted for the relevant period.

 

Selected Financial Information

 

(In thousands ofCanadian dollars)

 

 

 

Three Months Ended June 30,

 

 

 

Six Months Ended June 30,



2022

2021

2022

2021


Net income (loss)

(6,457)

508

(22,811)

598


Add:






Restructuring and other costs (1)

970

726

9,750

915


Share-based compensation

2,898

401

5,844

1,333


Foreign exchange loss (gain)

(1,253)

40

440

78


Revaluation gain on contingent consideration

 

(1,041)

 

--

 

--

 

--


Shareholders distributions (2)

--

--

--

600


Synergies realized (3)

1,218

--

1,938

--


Additional one-time costs (4)

691

202

1,288

202


Adjusted Net Income (Loss) (5)

(2,976)

1,877

(3,551)

3,726


Adjusted earnings per share – basic (6)

(0.06)

0.09

(0.07)

0.17


Adjusted earnings per share – diluted (7)

(0.06)

0.05

(0.07)

0.10



Notes:

(1)

Restructuring and other costs are costs related to the entry into of the Company's credit agreement and recapitalization distributions and expenses related to the investment by the Institutional Investors, costs and expenses in connection with the Company's IPO and related matters and costs and expenses in connection with the Company's acquisitions.

(2)

Shareholders distributions includes private company legacy profit sharing payment to shareholders.

(3)

Synergies realized relates to the impact of the full period of cost synergies related to the reduction of employees and professional services in relation to acquisitions.

(4)

One-time costs related to IPO specific adjustments, acquisitions specific adjustments and transition costs related to the Wellbeats acquisition.

(5)

"Adjusted Net Income (Loss)" has the meaning ascribed herein under "Cautionary Note Regarding Non-IFRS Measures and Key Performance Indicators."

(6)

"Adjusted earnings (loss) per share – basic" has the meaning ascribed herein under "Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".

(7)

"Adjusted earnings (loss) per share – diluted" has the meaning ascribed herein under "Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".

Key Performance Indicators

Annual Recurring Revenue

"Annual Recurring Revenue" or "ARR" is equal to the annualized value of contracted recurring revenue from all clients of our platform at the date being measured. Contracted recurring revenue is revenue generated from clients who are, as of the date being measured, party to contracts with LifeSpeak. Such revenue is annualized by: (i) in the case where a contract was in existence for the entire month, multiplying recognized revenue in the calendar month of the date measured by 12; and (ii) in the case where a contract was entered into mid-month, extrapolating recognized revenue at the date measured for the entire calendar month, and then multiplying by 12. Contract lengths typically range from one to three years and, based on our past experience, the vast majority of clients renew their contracts upon expiry. ARR is mainly comprised of revenue from enterprise and embedded solutions and includes revenue from small business and ancillary services (comprised of portals, kits and events purchased by our existing clients or distributed through our channel partners). ARR provides a consolidated measure by which we can monitor the longer-term trends in our business.

 "embedded solutions client ARR" is ARR at a particular date attributable to our embedded solutions clients.

 "enterprise client ARR" is ARR at a particular date attributable to enterprise clients.

Net Dollar Retention Rate

"Net Dollar Retention Rate" for a period is defined by considering a cohort of clients at the beginning of the period, and dividing the ARR from enterprise and embedded solutions attributable to that cohort at the end of the period, by the ARR from enterprise and embedded solutions attributable to that cohort at the beginning of the period. Net Dollar Retention Rate provides a consolidated measure by which we can monitor the percentage of recurring ARR retained from existing clients

Number of Clients

"Number of Clients" is defined as the number of clients at the end of any particular period as the number of enterprise clients and clients of our embedded solutions for which the term of services has not ended, or with which we are negotiating contract renewal and which meet a minimum revenue threshold..

Logo Retention Rate

"Logo Retention Rate" for a period is defined by considering a cohort of clients at the beginning of the period, and dividing the Number of Clients from that cohort at the end of the period, by the Number of Clients from that cohort at the beginning of the period. Logo Retention Rate provides a consolidated measure by which we can monitor the percentage of contracted clients retained every year.

About LifeSpeak Inc.

LifeSpeak is a leading software-as-a-service provider of a platform for mental health and total wellbeing education for organizations committed to taking care of their employees and customers. With 18+ years of experience creating and curating thousands of expert-led micro-learning videos and other digital content, LifeSpeak's proprietary library's depth and breadth of easily consumable content helps companies around the world support their people anytime and anywhere. LifeSpeak serves a diverse global client base across many industries and sectors, including Fortune 500 companies, government agencies, insurance providers, and other health technology firms. LifeSpeak is the parent company of Lift Digital Inc. ("LIFT session"), ALAViDA Health Ltd. ("ALAViDA"), EnCompass Education Solutions ("Torchlight") and Wellbeats Inc. ("Wellbeats"). To learn more, follow LifeSpeak on LinkedIn (http://www.linkedin.com/company/lifespeak-inc), or visit www.LifeSpeak.com.

Forward-Looking Information

This press release may contain "forward-looking information" within the meaning of applicable Canadian securities laws. Forward-looking information may relate to the Company's future business, financial outlook and anticipated events or results and may include information regarding the Company's financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, taxes, and the Company's plans and objectives. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "budget", "scheduled", "estimates", "outlook", "forecasts", "projection", "prospects", "strategy", "intends", "anticipates", "does not anticipate", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will", "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Particularly, information regarding the Company's expectations of future results, revenue growth, ARR, EBIDTA, EBITDA margin, adjusted EBITDA, adjusted Net Income (Loss), Number of Clients, Net Dollar Retention Rate, performance, synergies, achievements, prospects, industry trends, or opportunities, including for cross-selling, or the markets in which the Company operates is forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding possible future events or circumstances.

This forward-looking information and other forward-looking information are based on opinions, estimates and assumptions in light of the Company's experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the Company currently believes are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. These opinions, estimates and assumptions include, but are not limited to, the following: the Company's ability to build its market share and enter new geographies; the total available market for its products; the Company's ability to retain key personnel; the Company's ability to maintain and expand geographic scope; the Company's ability to execute on its expansion plans; the Company's ability to continue investing in infrastructure to support its growth and brand recognition; the Company's ability to continue maintaining and enhancing its technological infrastructure and functionality of its platform; the Company's ability to obtain financing on acceptable terms; the Company's ability to effectively integrate its recent acquisitions; the Company's ability to generate sufficient cash to deleverage, the impact of competition; the changes and trends in the Company's industry or the global economy; and changes in laws, rules, regulations, and global standards.

The risks and uncertainties that may affect forward-looking statements include, among others: performance of the market sectors that the Company serves; general market performance including capital market conditions and availability and cost of credit; foreign currency and exchange risk; impact of factors such as increased pricing pressure and possible margin compression; the regulatory and tax environment; that expected cost and revenue synergies are not realized within the expected timeframe or at all; that revenue, ARR, EBITDA margin and cash flow expectations are not met for any number of reasons; political, labour or supplier disruptions; that our clients face recessionary pressures, and other risks detailed from time to time in the Company's filings with Canadian provincial securities regulators, including the risk factors which are described in greater detail under "Risk Factors" in the Company's annual information form for the fiscal year ended December 31, 2021. Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not currently known to the Company or that the Company currently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information.

Accordingly, prospective investors should not place undue reliance on forward-looking information. The forward-looking information contained in this press release represents the Company's expectations as of the date of this press release (or as the date it is otherwise stated to be made) and is subject to change after such date. However, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable Canadian securities laws.

All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements. Prospective investors should read this entire press release and consult their own professional advisors to ascertain and assess the income tax, legal, risk factors and other aspects of an investment in the Company.

SOURCE LifeSpeak Inc.

Cision View original content: http://www.newswire.ca/en/releases/archive/August2022/03/c5318.html

Copyright CNW Group 2022

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