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Tribe Property Technologies Achieves Record Revenue and 51% Improvement in Adjusted EBITDA in Q4-2023

  • Cost reduction strategies have resulted in Tribe achieving 51% year-over-year improvement in Adjusted EBITDA in Q4-2023.

  • Management provides a strong growth outlook for 2024 driven by increasing monthly recurring revenue, gross margin improvement, improved profitability and robust pipeline of potential M&A targets.

VANCOUVER, BC, May 6, 2024 /CNW/ - Tribe Property Technologies Inc. (TSXV: TRBE) (OTCQB: TRPTF) ("Tribe" or the "Company"), a leading provider of technology-elevated property management solutions, today announces its financial results for the fiscal year and fourth quarter ended December 31, 2023. All amounts are stated in Canadian dollars on an as reported basis under IFRS (International Financial Reporting Standards) unless otherwise indicated.  The Company's Management Discussion and Analysis ("MD&A") and audited consolidated financial statements for the fiscal year and fourth quarter ended December 31, 2023 are available under the Company's SEDAR+ profile at www.sedarplus.ca.

Tribe Property Technologies Inc. Logo (CNW Group/Tribe Property Technologies Inc.)
Tribe Property Technologies Inc. Logo (CNW Group/Tribe Property Technologies Inc.)

Joseph Nakhla, Tribe's CEO commented, "We are thrilled to announce our strong performance for the fourth quarter and fiscal year 2023, marked by record-breaking revenue and a 51% year-over-year improvement in Adjusted EBITDA in Q4-2024. Improving profitability has been Tribe's strategic focus over the past year, and we're delighted to report that our efforts are yielding significant results. Through streamlined workflow optimizations, the consolidation of backend services and subscriptions, and various cost reduction initiatives, our team has propelled us toward profitability with remarkable momentum. These efforts are reflected in our improved gross margin, and reduced cash burn. This outstanding progress underscores our unwavering commitment to delivering value to our shareholders."

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Mr. Nakhla further added, "We are expecting healthy organic growth to continue in 2024 with a focus on improving profitability. We are very pleased with the successful acquisition of the Meritus Group, which closed at the end of Q4, strengthening our foothold in the Greater Toronto Area. We expect improving Adjusted EBITDA in the upcoming fiscal year through our ongoing cost optimization endeavors and potential positive Adjusted EBITDA contributions from future acquisitions. The Company has a robust pipeline of profitable acquisition opportunities. While profitability remains paramount, it's crucial to state our commitment to pursuing additional acquisition opportunities and fostering organic growth prospects."

Angelo Bartolini, Tribe's recently appointed President and Chief Financial Officer stated, "Tribe's commitment to achieving profitability remains strong as strategic steps are being taken to position the Company for sustainable financial success. We continue to see a large growth opportunity ahead of us, despite current macroeconomic conditions."

Fiscal 2023 Annual Financial Highlights:

  • Revenue: Fiscal 2023 revenue was $19.39 million; an increase of 8.8% compared to $17.81 million for fiscal 2022. The increase in revenue was due to an increase in software and service fees as a result of more properties on the Tribe platform, an increase in financial services revenue associated with our banking partnership, software licensing fees, and the acquisition of Meritus.

  • Gross profit(2): Gross profit for fiscal 2023 was $6.63 million (41.0%) compared to $5.75 million (37.9%) in fiscal 2022. The increase in gross profit and gross profit percentage was a result of the addition of service contracts through organic growth, acquisitions and restructuring efforts.

  • Adjusted EBITDA(1): Adjusted EBITDA for the fiscal 2023 was an outflow of $6.56 million; an improvement of 19.8% compared to an outflow of $8.18 million in fiscal 2022. The improvement in Adjusted EBITDA was achieved as a result of an increase in revenue and cost-cutting efforts.

Q4-2023 Financial Highlights:

  • Revenue: Tribe achieved record revenue in the fourth quarter 2023 with revenue of $5.11 million; an increase of 7.6% compared to $4.75 million for the fourth quarter of 2022. Revenue growth was positively impacted by the acquisition of Meritus in the fourth quarter.

  • Gross profit(2): Gross profit for the fourth quarter of 2023 was $2.06 million (46.7%) compared to $1.455 million (36.7%) in the fourth quarter of 2022. Gross profit percentage improvement was primarily accomplished through restructuring and cost reduction efforts.

  • Adjusted EBITDA(1): Adjusted EBITDA for the fourth quarter of 2023 was an outflow of $1.03 million; an improvement of 50.8% compared to an outflow of $2.08 million in the fourth quarter of 2022.

Key Business Metrics as of Q4-2023:

  • 3 new property developers signed on to use either Tribe Home Pro construction software or Tribe Management services, for a total of 21 new property developer relationships in the twelve months of 2023.

  • 8 new Tribe Home Pro software licensing agreements were signed in Q4 for new construction projects, for a total of 37 software license agreements in the twelve months of 2023.

  • 14 projects using Tribe Home Pro software licensing agreements were successfully onboarded and began generating revenue in Q4, for a total of 34 in the twelve months of 2023.

  • 18 property management agreements were signed in Q4, for a total of 50 property management agreements signed in the twelve months of 2023.

  • 22 communities/clients were successfully onboarded for management services and began generating revenue in Q4-2023, for a total of 55 in the twelve months of 2023.

Outlook:

In 2024, management expectations are for improved revenue growth, profitability and expanding margins. Tribe remains resilient in the current macroeconomic environment owing largely to the Company's technology solutions.  The Company's key goals for 2024 are as follows:

  • Increase monthly recurring revenue. Growth will be fueled by landing new property management agreements, onboarding more communities onto the Tribe platform, winning new software licensing agreements and increasing digital services revenue.

  • Make additional acquisitions. Tribe has a robust pipeline of profitable acquisition opportunities. We anticipate that potential acquisitions will be immediately accretive.

  • Improving profitability. The Company expects to continue to drive efficiencies in the business resulting in improved gross margins and enhancing Tribe's EBITDA profile.

  • Continue to innovate. Tribe is committed to investing in its software platform and adding functionality to its suite of products in order to maintain its industry leadership position.

Fourth Quarter and Fiscal 2023 Financial Webcast

The Company will hold a conference call and simultaneous webcast to discuss its results on May 7, 2024 at 12:30 pm ET (9:30 am PT). The call will be hosted by Joseph Nakhla, Chief Executive Officer, and Angelo Bartolini, President & Chief Financial Officer. Please dial-in 10 minutes prior to start of the call.

Webcast Details

TOPIC: Tribe Property Technologies Q4 and Full Year 2023 Financial Results Conference Call
DATE: May 7, 2024
TIME: 9:30 am PT (12:30 pm ET)
SPEAKERS: Joseph Nakhla, CEO; Angelo Bartolini, President & CFO

Joining the Conference Call:

Toll Free-North America: 1-844-763-8274
International Toll: 1-647-484-8814
Webcast Link: https://www.gowebcasting.com/13319

Approximately two hours after the Q&A session has ended, an archived version of the webcast will be available via the webcast URL link above. An audio-only recording of the webcast will also be available in the investor section of Tribe's website.

Capital Markets and Investor Relations Advisory  

Tribe is also pleased to announce that it has extended its contract with Angad Capital Inc. ("Angad Capital"), to provide corporate strategy, capital markets advisory and investor relations services. In connection with the engagement, which started on June 20, 2023, a contract extension was signed December 11, 2023 for a term of six months for a fee of $10,000 per month, with no option for automatic renewal after 6 months. Angad Capital was founded and operated by Pardeep Sangha, a former ranked investment equity analyst who specialized in covering small-cap technology companies. At the time of this announcement Angad Capital owns 31,000 common shares of Tribe.

Non-IFRS Measures

The following and preceding discussion of financial results includes reference to gross profit, gross profit percentage and Adjusted EBITDA, which are all non-IFRS financial measures. Non-IFRS measures have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS and should be read in conjunction with the consolidated financial statements for the periods indicated.  The measure of gross profit2 and gross profit percentage2 is provided as management believes this is a good indicator in evaluating the operating performance of the Company. Adjusted EBITDA1 is provided as a proxy for the cash earnings (loss) from the operations of the business as operating income (loss) for the Company includes non-cash amortization and depreciation expense and stock-based compensation.  A reconciliation of the above-mentioned non-IFRS measures IFRS is provided in the Company's consolidated financial statements and related MD&A available under the Company's SEDAR+ profile at www.sedarplus.ca.

Adjusted EBITDA1

Three months ended
December 31,

Years ended
December 31,

$000s

2023

2022

2023

2022

Net loss

$ (6,968)

$  (2,783)

$ (14,167)

$(10,544)

Depreciation

212

232

858

894

Amortization

518

248

959

547

Impairment of goodwill  3

5,025

-

5,025

-

Stock-based compensation

(29)

79

107

377

Interest expense

187

171

623

707

Interest income

(3)

(52)

(75)

(204)

Income tax recovery

(22)

-

(12)

-

Severance costs

2

-

74

-

Acquisition costs

29

-

56

-

Other

(4)

20

(11)

41

Adjusted EBITDA 1

$ (1,053)

$ (2,085)

$ (6,563)

$ (8,182)





Gross Profit2

Three Months
Ended December 31,


Years ended
December 31,

$000s

2023

2022


2023

2022

Revenue, excluding ancillary revenues

$ 4,401

$ 3,965


$16,160

$15,170

Cost of software & services and
software license fees (excluding costs
related to ancillary revenues)3

2,344

2,510


9,527

9,418

Gross Profit2

$ 2,057

$ 1,455


$6,633

$ 5,752

Gross Profit2 Percentage

46.7 %

36.7 %


41.0 %

37.9 %

Financial Statements and Management's Discussion & Analysis

Please see the consolidated financial statements and related MD&A for more details. The audited consolidated financial statements for the fiscal year and fourth quarter ended December 31, 2023 and related MD&A have been reviewed and approved by Tribe's Audit Committee and Board of Directors. Tribe recognizes that most of its investors are now accessing corporate and financial information either through pushed news services, directly from www.tribetech.com or SEDAR+. Thus, Tribe has prepared this truncated news release to alert investors to its results and that a more detailed explanation and analysis is readily available in the MD&A. These reports have been filed on SEDAR+ at www.sedarplus.ca and posted at www.tribetech.com.

Footnotes

(1) Non-IFRS measure that does not have a standardized meaning and may not be comparable to a similar measure disclosed by other issuers. Adjusted EBITDA is not a measure recognized in accordance with IFRS and does not have a prescribed or standardized meaning by IFRS. We define Adjusted EBITDA attributed to shareholders as net income or loss excluding severance and acquisition costs, interest expense and finance costs, foreign exchange gains and losses, current and deferred income taxes, depreciation and amortization, stock-based compensation, fair value gains and losses on investments, and other expenses. It should be noted that Adjusted EBITDA is not defined under IFRS and may not be comparable to similar measures used by other entities. We believe Adjusted EBITDA is a useful measure as it provides important and relevant information to our management about our operating and financial performance. Adjusted EBITDA also enables our management to assess our ability to generate operating cash flow to fund future working capital needs, and to support future growth. Excluding these items does not imply that they are non-recurring or not useful to investors. Investors should be cautioned that Adjusted EBITDA attributable to shareholders should not be construed as an alternative to net income (loss) or cash flows as determined under IFRS.

(2) Non-IFRS measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Gross profit and gross profit percentage do not have a standardized meaning under IFRS, and therefore may not be comparable to similar measures presented by other issuers. We define gross profit as revenue, excluding ancillary revenues, less cost of software and services and software licensing fees. Cost of software and services include direct costs of community managers, client accounting staff and accounting software, excluding client administration and other administrative applications. We define gross profit percentage as gross profit calculated as a percentage of revenues, excluding ancillary revenues. Gross profit and gross profit percentage should not be construed as an alternative for revenue or net loss in accordance with IFRS. We believe that gross profit and gross profit percentage are meaningful metrics in assessing our financial performance and operational efficiency.

(3) During the year ended December 31, 2023, we had an impairment of $5,025,000 to our goodwill. The carrying value of one of our cash generating units exceeded its recoverable value, and as a result, an impairment charge for the difference was recorded.

"Joseph Nakhla"
Chief Executive Officer
1606-1166 Alberni Street
Vancouver, British Columbia V6E 3Z3
Phone: (604) 343-2601
Email: joseph.nakhla@tribetech.com

About Tribe Property Technologies

Tribe is a property technology company that is disrupting the traditional property management industry. As a rapidly growing tech-forward property management company, Tribe's integrated service-technology delivery model serves the needs of a much wider variety of stakeholders than traditional service providers. Tribe seeks to acquire highly accretive targets in the fragmented North American property management industry and transform these businesses through streamlining and digitization of operations. Tribe's platform decreases customer acquisition costs, increases retention, and allows for the addition of value-added products and services through the platform. Visit tribetech.com for more information.

Cautionary Statement on Forward-Looking Information

This news release may contain certain "Forward-Looking Statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws regarding the Company and its business.  When or if used in this news release, the words "anticipate", "believe", "estimate", "expect", "target, "plan", "forecast", "may", "schedule" and similar words or expressions identify forward-looking statements or information. Forward-looking statements or information in this news release may relate to statements with respect to the aims and goals of the Company; financial projections; growth plans including future prospective consolidation in the property management sector; future acquisitions by the Company and impact on the Company; 2024 outlook; ability to draw on the senior term loan facility; beliefs of the Company with respect to the independent owner-investors market; prospective benefits of the Company's platform; and other factors or information. Such statements represent the Company's current views with respect to future events and are necessarily based upon several assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political, and social risks, contingencies, and uncertainties. Many factors, both known and unknown, could cause results, performance, or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements. The Company does not intend, and do not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules, and regulations.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Tribe Property Technologies Inc.

Cision
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