SaaS Subscription Revenue(1) of $32.3 million, at the top end of previous guidance
Record new bookings in the quarter, with accelerating contribution from Commerce
Continued Generative AI momentum, with 36% growth in customers since Sept 30, 2024
Coveo reports in U.S. dollars and in accordance with International Financial Reporting Standards (“IFRS”)
MONTREAL and SAN FRANCISCO, Feb. 10, 2025 /CNW/ – Coveo (TSX: CVO), the market leader in AI-Relevance — delivering AI-search, generative, and business-aware relevance at every point-of-experience —, today announced financial results for its third quarter of fiscal year 2025 ended December 31, 2024.
“Our third quarter performance underscores growing momentum across our business,” said Louis Têtu, Chairman and CEO of Coveo. “Enterprises are increasingly recognizing that Search and AI-Relevance is critical to unlocking the business outcomes they are seeking in their AI projects in digital and generative experiences. We believed this year would see an inflection where enterprises moved from experimentation to adoption, and our third quarter is validation that we are tracking well on accelerating our revenue growth in the coming quarters.”
“Coveo’s leadership in bringing AI-Relevance to large enterprise customers has enabled us to innovate quickly in generative AI and commerce. Our customers are consistently telling us that the Coveo AI-Relevance platform is a critical component to powering their generative AI ambitions, and I’m thrilled with the results we are helping them achieve”, said Laurent Simoneau, President and CTO of Coveo.
Third Quarter Fiscal 2025 Summary Financial Highlights
The following table summarizes our financial results for the third quarter of fiscal year 2025:
In millions of U.S. Dollars, except as otherwise
indicated
Q3 2025
Q3 2024
Change
SaaS Subscription Revenue(1)
$32.3
$29.9
8 %
Coveo core platform(2)
$31.1
$27.8
12 %
Qubit platform(3)
$1.2
$2.1
(44 %)
Total revenue
$34.0
$31.8
7 %
Gross margin
78 %
77 %
1 %
Product gross margin
82 %
81 %
1 %
Net income (loss)
$4.0
($6.2)
166 %
Adjusted EBITDA(4)
$0.6
($0.7)
178 %
Cash flows used in operating activities
$0.2
$2.3
92 %
Third Quarter Fiscal 2025 Financial Highlights
(All comparisons are relative to the three-month period ended December 31, 2023, unless otherwise stated)
SaaS Subscription Revenue(1) of $32.3 million, an increase of 8% compared to $29.9 million, at the top end of guidance. Within this, SaaS Subscription Revenue for Coveo’s core platform(2) was $31.1 million, an increase of 12%.Total revenue was $34.0 million compared to $31.8 million, an increase of 7%, and above the top end of guidance.Gross margin was 78%, up from 77% in the prior period. Product gross margin was 82%, up from 81% in the prior period.Operating loss was $5.4 million compared to $6.5 million, and net income was $4.0 million compared to a net loss of $6.2 million.Adjusted EBITDA(4) was $0.6 million compared to ($0.7) million last year, and within our guidance range.Cash flows used in operating activities were $0.2 million compared to $2.3 million.Cash and cash equivalents were $119.1 million as of December 31, 2024.Net Expansion Rate(1) of 101% as of December 31, 2024. Net Expansion Rate(1) was 105% excluding customer attrition from customers using the Qubit platform(5).
Other Business and Subsequent Highlights
Achieved record new bookings, fueled by a combination of new and existing clients and well diversified bookings across geographies and customer use cases.Strong growth in Commerce, with record number of new clients added. Customers such XXXLutz, Agilent Technologies, Trek Bicycles and others adopted Coveo’s Commerce solution. 50% of new Commerce customers were acquired through our partnership with SAP.Unveiled at NRF 2025 in New York, Coveo showcased its AI-Search and recommendations within a Shopify Enterprise environment.Continued strong demand for Coveo’s Generative AI solution, with a 36% sequential increase in customer count. Customers such as ABB Ltd, Verisk Analytics and Lexmark adopted Coveo’s Generative AI in the quarter. In addition, after a successful initial deployments, existing customers such as SAP, Vanguard, and Edward Jones signed additional order forms to further expand their use of Coveo’s Generative AI solution.After a successful beta program that was over-subscribed, Coveo announced the general availability of Passage Retrieval API, empowering organizations to connect their own Large Language Models (LLMs) with the full power of the Coveo AI-Relevance Platform™.Expanded partnership with SAP to deliver AI capabilities across CX channels from Commerce to Customer Service.Accelerated European growth with DACH expansion. New bookings growth in EMEA was 79% in the quarter as compared to the same period last year.Poised for continued expansion into Australia and the broader APAC region. After winning Freedom Furniture, a leading Australian and New Zealand retailer, pursuant to a competitive RFP process, Freedom recently reported a 15% uplift in customer sessions utilizing Coveo’s AI-powered search, along with a 5.5% improvement in Average Order Value.
Financial Outlook
The company is encouraged by the strengthening customer demand for its AI powered solutions and continues to anticipate momentum in new bookings in the fourth quarter of the fiscal year.
The company’s financial outlook continues to include the assumption that the remaining revenue from the acquired Qubit Platform will continue to decline, as Coveo completes its integration of the platform and IP that was acquired with Qubit. Additionally, the company’s outlook incorporates the current FX rates which lead to lower recognized amounts for non-USD denominated international revenue and expenses.
Taking these factors into consideration, Coveo anticipates SaaS Subscription Revenue(1), Total Revenue, and Adjusted EBITDA(4) for Q4 FY’25 and Full Year FY’25 as follows:
Q4 FY’25
FY’25
SaaS Subscription Revenue(1)
$32.3 – $32.8 million
$126.3 – $126.8 million
Total Revenue
$34.1 – $34.6 million
$133.0 – $133.5 million
Adjusted EBITDA(4)
$0.0 – $1.0 million
$0.3 – $1.3 million
The company continues to anticipate achieving positive cash flow from operations of approximately $10 million for Fiscal 2025.
These statements are forward-looking and actual results may differ materially. Coveo’s outlook constitutes “financial outlook” within the meaning of applicable securities laws and is provided for the purpose of, among other things, assisting investors and others in understanding certain key elements of our expected financial results, as well as our objectives, strategic priorities and business outlook, and in obtaining a better understanding of our anticipated operating environment. Investors and others are cautioned that it may not be appropriate for other purposes. Please refer to the “Forward-Looking Information” and “Financial Outlook Assumptions” sections below for additional information on the factors that could cause our actual results to differ materially from these forward-looking statements and a description of the assumptions underlying same.
Q3 Conference Call and Webcast Information
Coveo will host a conference call today at 5:00 p.m. Eastern Time to discuss its financial results for its third quarter of fiscal year 2025. The call will be hosted by Louis Têtu, Chairman and CEO, Brandon Nussey, CFO and other members of its senior leadership team.
Non-IFRS Measures and Ratios
Coveo’s unaudited condensed interim consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board. The information presented in this press release includes non-IFRS financial measures and ratios, namely (i) Adjusted EBITDA; (ii) Adjusted Gross Profit, Adjusted Product Gross Profit, and Adjusted Professional Services Gross Profit (collectively referred to as our “Adjusted Gross Profit Measures”); (iii) Adjusted Gross Margin, Adjusted Product Gross Margin, and Adjusted Professional Services Gross Margin (collectively referred to as our “Adjusted Gross Margin Measures”); (iv) Adjusted Sales and Marketing Expenses, Adjusted Research and Product Development Expenses, and Adjusted General and Administrative Expenses (collectively referred to as our “Adjusted Operating Expense Measures”); and (v) Adjusted Sales and Marketing Expenses (%), Adjusted Research and Product Development Expenses (%), and Adjusted General and Administrative Expenses (%) (collectively referred to as our “Adjusted Operating Expense (%) Measures”). These measures and ratios are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures and ratios are provided as additional information to complement IFRS measures by providing further understanding of the company’s results of operations from management’s perspective.
Accordingly, these measures and ratios should not be considered in isolation nor as a substitute for analysis of the company’s financial information reported under IFRS. Adjusted EBITDA, the Adjusted Gross Profit Measures, the Adjusted Gross Margin Measures, the Adjusted Operating Expense Measures, and the Adjusted Operating Expense (%) Measures are used to provide investors with supplemental measures and ratios of the company’s operating performance and thus highlight trends in Coveo’s core business that may not otherwise be apparent when relying solely on IFRS measures and ratios. The company’s management also believes that securities analysts, investors, and other interested parties frequently use non-IFRS financial measures and ratios in the evaluation of issuers. Coveo’s management uses non-IFRS financial measures and ratios in order to facilitate operating performance comparisons from period to period, and to prepare annual operating budgets and forecasts.
See the “Non-IFRS Measures” section of our MD&A for the quarter ended December 31, 2024, which is available as of the date hereof under our profile on SEDAR+ at www.sedarplus.ca for a description of these measures. Please refer to the financial tables appended to this press release for additional information including a reconciliation of (i) Adjusted EBITDA to net income (loss); (ii) Adjusted Gross Profit to gross profit; (iii) Adjusted Product Gross Profit to product gross profit; (iv) Adjusted Professional Services Gross Profit to professional services gross profit; (v) Adjusted Sales and Marketing Expenses to sales and marketing expenses; (vi) Adjusted Research and Product Development Expenses to research and product development expenses; and (vii) Adjusted General and Administrative Expenses to general and administrative expenses.
Key Performance Indicators
This press release refers to “SaaS Subscription Revenue” and “Net Expansion Rate”. They are operating metrics used in Coveo’s industry. We monitor our key performance indicators to help us evaluate our business, measure our performance, identify trends, formulate business plans, and make strategic decisions. Our key performance indicators provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors, and other interested parties frequently use industry metrics in the evaluation of issuers. Certain of our key performance indicators are measures that do not have any standardized meaning prescribed by IFRS Accounting Standards and therefore may not be comparable to similar measures presented by other issuers and cannot be reconciled to a directly comparable IFRS measure. Our key performance indicators may be calculated and designated in a manner different than similar key performance indicators used by other companies.
“SaaS Subscription Revenue” means the company’s SaaS subscription revenue, as presented in our financial statements in accordance with IFRS.
“Net Expansion Rate” is calculated by considering a cohort of customers at the end of the period 12 months prior to the end of the period selected and dividing the SaaS Annualized Contract Value (“SaaS ACV”, as defined below) attributable to that cohort at the end of the current period selected, by the SaaS ACV attributable to that cohort at the beginning of the period 12 months prior to the end of the period selected. Expressed as a percentage, the ratio (i) excludes any SaaS ACV from new customers added during the 12 months preceding the end of the period selected; (ii) includes incremental SaaS ACV made to the cohort over the 12 months preceding the end of the period selected; (iii) is net of the SaaS ACV from any customers whose subscriptions terminated or decreased over the 12 months preceding the end of the period selected; and (iv) is currency neutral and as such, excludes the effect of currency variation.
In this section and throughout this press release, “SaaS Annualized Contract Value” means the SaaS annualized contract value of a customer’s commitments calculated based on the terms of that customer’s subscriptions, and represents the committed annualized subscription amount as of the measurement date.
Please also refer to the “Key Performance Indicators” section of our latest MD&A, which is available under our profile on SEDAR+ at www.sedarplus.ca, for additional details on the abovementioned key performance indicators.
Forward-Looking Information
This press release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable securities laws, including with respect to Coveo’s “financial outlook” (within the meaning of applicable securities laws) and related assumptions (as set forth below and elsewhere in this press release) for the three months and the year ending March 31, 2025 (for greater certainty, for cash flows from operations, solely the year ending March 31, 2025), and expectations regarding the remaining Qubit SaaS ACV, bookings performance, reacceleration of revenue growth and gross retention rates for fiscal 2025 (collectively, “forward-looking information”). This forward-looking information is identified by the use of terms and phrases such as “may”, “would”, “should”, “could”, “might”, “will”, “achieve”, “occur”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, “continue”, “target”, “opportunity”, “strategy”, “scheduled”, “outlook”, “forecast”, “projection”, or “prospect”, the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking information contains these terms and phrases. In addition, any statements that refer to expectations, intentions, projections, or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates, and projections regarding future events or circumstances.
Forward-looking information is necessarily based on a number of opinions, estimates, and assumptions (including those discussed under “Financial Outlook Assumptions” below and those discussed immediately hereunder) that we considered appropriate and reasonable as of the date such statements are made. Although the forward-looking information contained herein is based upon what we believe are reasonable assumptions, actual results may vary from the forward-looking information contained herein. Certain assumptions made in preparing the forward-looking information contained in herein include, without limitation (and in addition to those discussed under “Financial Outlook Assumptions” below): our ability to capitalize on growth opportunities and implement our growth strategy; our ability to attract new customers, expand our relationships with existing customers, and have existing customers renew their subscriptions; our ability to maintain successful strategic relationships with partners and other third parties; market awareness and acceptance of enterprise AI solutions in general and our products in particular; the market penetration of our generative AI solutions, both with new and existing customers, and our ability to continue to capture the generative AI opportunity; our future capital requirements, and availability of capital generally; the accuracy of our estimates of market opportunity, growth forecasts, and expectations around cash flow; our success in identifying and evaluating, as well as financing and integrating, any acquisitions, partnerships, or joint ventures; the significant influence of our principal shareholders; and our ability to convert pipeline into closed deals, and the timeframe thereof. Moreover, forward-looking information is subject to known and unknown risks, uncertainties, and other factors, many of which are beyond our control, that may cause the actual results, level of activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to macro-economic uncertainties and the risk factors described under “Risk Factors” in the company’s most recently filed Annual Information Form and under “Key Factors Affecting our Performance” in the company’s most recently filed MD&A, both available under our profile on SEDAR+ at . There can be no assurance that such forward-looking 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, which speaks only as of the date made. Although we have 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 presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information.
You should not rely on this forward-looking information, as actual outcomes and results may differ materially from those contemplated by this forward-looking information as a result of such risks and uncertainties. Additional information will also be set forth in other public filings that we make available under our profile on SEDAR+ at www.sedarplus.ca from time to time. The forward-looking information provided in this press release relates only to events or information as of the date hereof, and is expressly qualified in their entirety by this cautionary statement. Except as required by law, we do not assume any obligation to update or revise any forward-looking information, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
Financial Outlook Assumptions
Our financial outlook under the “Financial Outlook” section above and elsewhere in this press release is based on several assumptions, including the following, in addition to those set forth under the “Financial Outlook” section above and under the “Forward-Looking Information” section above:
Remaining Qubit SaaS ACV(6) will continue to churn in the fourth quarter of fiscal 2025, with the revenue impact being that the SaaS Subscription Revenue(1) recognized in fiscal 2025 for subscriptions to the Qubit Platform will decline by approximately half.Bookings performance for the second half of fiscal 2025 exceeding the first half.Maintaining gross retention rates(7) at their historical levels.Achieving expected levels of sales of SaaS subscriptions to new and existing customers, including timing of those sales, as well as expected levels of renewals of SaaS subscriptions with existing customers.Achieving expected levels of implementations and other sources of professional services revenue.Maintaining planned levels of operating margin represented by our Adjusted Gross Profit Measures(4) and Adjusted Gross Margin Measures(8).The market for our solutions showing ongoing improvements in customer buying behaviors.Our ability to attract and retain key personnel required to achieve our plans.Foreign exchange rates environment remaining consistent with end of Q3 levels, and similar or better inflation rates, interest rates, customer spending, and other macro-economic conditions.Our ability to collect from our customers as planned, and to otherwise manage our cash inflows (including government grants and tax credits) and outflows as we currently expect.Expected financial performance as measured by our Adjusted Operating Expense Measures(4) and Adjusted Operating Expense (%) Measures(8).
Our financial outlook does not include the impact of acquisitions that may be announced or closed from time to time.
Notes to this press release:
(1)
SaaS Subscription Revenue and Net Expansion Rate are Key Performance Indicators of Coveo. Please see the “Key Performance Indicators” section below.
(2)
SaaS Subscription Revenue earned in connection with subscriptions by customers to the Coveo core Platform for the period, and thus excluding revenue from subscriptions to the Qubit Platform.
(3)
SaaS Subscription Revenue earned through subscriptions to the Qubit Platform for the period covered.
(4)
The Adjusted Gross Profit Measures, the Adjusted Operating Expense Measures, and Adjusted EBITDA are non-IFRS financial measures which may not be comparable to similar measures or ratios used by other companies. Please see the “Non-IFRS Measures and Ratios” section below and the reconciliation tables within this release.
(5)
Net Expansion Rate excluding the effect of SaaS ACV attributable to subscriptions to the Qubit Platform.
(6)
SaaS ACV means the SaaS annualized contract value of a customer’s commitments calculated based on the terms of that customer’s subscriptions, and represents the committed annualized subscription amount as of the measurement date.
(7)
Gross retention rate (“GRR”) is generally calculated for a period by subtracting SaaS ACV contractions and losses over the period selected from SaaS ACV at the beginning of the period selected and dividing the result by the SaaS ACV from the beginning of the period selected. We use GRR to provide insight into the company’s success in retaining existing customers.
(8)
The Adjusted Gross Margin Measures, the Adjusted Operating Expense (%) Measures, and Adjusted Product Gross Margin are non-IFRS ratios. Please see the “Non-IFRS Measures and Ratios” section below and the reconciliation tables within this release.
About Coveo
Coveo brings superior AI-Relevance to every point-of-experience, transforming how enterprises connect with their customers and employees to maximize business outcomes.
Relevance is about moving from persona to person, the degree to which the enterprise-wide content, products, recommendations, and advice presented to a person online aligns easily with their context, needs, preferences, behavior and intent, setting the competitive experience gold standard. Every person’s journey is unique, and only AI can solve the complexity of tailoring experiences across massive, diverse audiences and large volumes and variety of content and products.
Our Coveo AI-Relevance Platform™ ️enables enterprises to deliver hyper-personalization at every point-of-experience, unifying all their data securely, with the highest level of contextual and prescriptive accuracy while simultaneously optimizing business outcomes.
Coveo brings AI-Relevance to the digital experiences of many of the world’s premier and most innovative brands, serving millions of people across billions of interactions.
What we believe is bold: Digital is table stakes, Relevance is not. It’s the only way to win in the digital age.
The Coveo AI-Relevance Platform™ is ISO 27001 and ISO 27018 certified, SOC2 compliant, HIPAA compatible, with a 99.999% SLA available. We are a Salesforce ISV Partner, an SAP EndorsedⓇ App, an Adobe Gold Partner, MACH Alliance member, Optimizely Partner, Shopify Partner, and a Genesys AppFoundryⓇ ISV Partner.
Coveo is a trademark of Coveo Solutions Inc.
Stay up to date on the latest Coveo news and content by subscribing to the Coveo blog, and following Coveo on LinkedIn and YouTube.
Condensed Interim Consolidated Statement of Income (Loss) and Comprehensive Income (Loss)
(expressed in thousands of U.S. dollars, except share and per share data, unaudited)
Three months ended
December 31,
Nine months ended
December 31,
2024
2023
2024
2023
$
$
$
$
Revenue
SaaS subscription
32,284
29,901
94,015
87,842
Professional services
1,681
1,860
4,907
5,670
Total revenue
33,965
31,761
98,922
93,512
Cost of revenue
SaaS subscription
5,932
5,731
17,107
16,182
Professional services
1,410
1,439
4,039
4,467
Total cost of revenue
7,342
7,170
21,146
20,649
Gross profit
26,623
24,591
77,776
72,863
Operating expenses
Sales and marketing
15,282
13,788
43,881
41,146
Research and product development
8,322
9,153
27,367
27,035
General and administrative
6,709
6,409
19,605
20,032
Depreciation of property and equipment
610
605
1,985
1,777
Amortization and impairment of intangible
assets
743
721
2,205
5,926
Depreciation of right-of-use assets
355
383
1,091
1,182
Total operating expenses
32,021
31,059
96,134
97,098
Operating loss
(5,398)
(6,468)
(18,358)
(24,235)
Net financial revenue
(1,052)
(1,663)
(4,040)
(4,970)
Foreign exchange loss (gain)
(6,546)
1,583
(5,804)
1,327
Income (loss) before income tax recovery
2,200
(6,388)
(8,514)
(20,592)
Income tax recovery
(1,844)
(236)
(1,077)
(1,032)
Net income (loss)
4,044
(6,152)
(7,437)
(19,560)
Net income (loss) per share – Basic and diluted
0.04
(0.06)
(0.08)
(0.19)
Weighted average number of shares
outstanding – Basic
96,398,006
102,471,561
99,237,691
103,601,713
Weighted average number of shares
outstanding – Diluted
104,858,139
102,471,561
99,237,691
103,601,713
The following table presents share-based payments and related expenses recognized by the company:
Three months ended
December 31,
Nine months ended
December 31,
2024
2023
2024
2023
$
$
$
$
Share-based payments and related expenses
SaaS subscription cost of revenue
241
200
601
666
Professional services cost of revenue
148
119
329
432
Sales and marketing
900
810
2,748
1,747
Research and product development
1,361
1,391
4,239
4,622
General and administrative
1,603
1,518
5,100
5,334
Share-based payments and related expenses
4,253
4,038
13,017
12,801
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(expressed in thousands of U.S. dollars, unaudited)
Three months ended
December 31,
Nine months ended
December 31,
2024
2023
2024
2023
$
$
$
$
Net income (loss)
4,044
(6,152)
(7,437)
(19,560)
Net financial revenue
(1,052)
(1,663)
(4,040)
(4,970)
Foreign exchange loss (gain)
(6,546)
1,583
(5,804)
1,327
Income tax expense (recovery)
(1,844)
(236)
(1,077)
(1,032)
Share-based payments and related
expenses(1)
4,253
4,038
13,017
12,801
Amortization and impairment of intangible
assets
743
721
2,205
5,926
Depreciation expenses(2)
965
988
3,076
2,959
Transaction-related expenses(3)
–
–
388
–
Adjusted EBITDA
563
(721)
328
(2,549)
(1)
These expenses relate to issued stock options and share-based awards under our share-based plans to our employees and directors as well as related payroll taxes that are directly attributable to the share-based payments. These costs are included in product and professional services cost of revenue, sales and marketing, research and product development, and general and administrative expenses.
(2)
Depreciation expenses include depreciation of property and equipment and depreciation of right-of-use assets.
(3)
These expenses relate to professional, legal, consulting, accounting, advisory, and other fees relating to transactions that would otherwise not have been incurred. These costs are included in general and administrative expenses.
Reconciliation of Adjusted Gross Profit Measures and Adjusted Gross Margin Measures
(expressed in thousands of U.S. dollars, unaudited)
Three months ended
December 31,
Nine months ended
December 31,
2024
2023
2024
2023
$
$
$
$
Total revenue
33,965
31,761
98,922
93,512
Gross profit
26,623
24,591
77,776
72,863
Gross margin
78 %
77 %
79 %
78 %
Add: Share-based payments and related
expenses
389
319
930
1,098
Adjusted Gross Profit
27,012
24,910
78,706
73,961
Adjusted Gross Margin
80 %
78 %
80 %
79 %
Product revenue
32,284
29,901
94,015
87,842
Product cost of revenue
5,932
5,731
17,107
16,182
Product gross profit
26,352
24,170
76,908
71,660
Product gross margin
82 %
81 %
82 %
82 %
Add: Share-based payments and related
expenses
241
200
601
666
Adjusted Product Gross Profit
26,593
24,370
77,509
72,326
Adjusted Product Gross Margin
82 %
82 %
82 %
82 %
Professional services revenue
1,681
1,860
4,907
5,670
Professional services cost of revenue
1,410
1,439
4,039
4,467
Professional services gross profit
271
421
868
1,203
Professional services gross margin
16 %
23 %
18 %
21 %
Add: Share-based payments and related
expenses
148
119
329
432
Adjusted Professional Services Gross Profit
419
540
1,197
1,635
Adjusted Professional Services Gross Margin
25 %
29 %
24 %
29 %
Reconciliation of Adjusted Operating Expense Measures and Adjusted Operating Expense (%) Measures
(expressed in thousands of U.S. dollars, unaudited)
Three months ended
December 31,
Nine months ended
December 31,
2024
2023
2024
2023
$
$
$
$
Sales and marketing expenses
15,282
13,788
43,881
41,146
Sales and marketing expenses (% of total revenue)
45 %
43 %
44 %
44 %
Less: Share-based payments and related expenses
900
810
2,748
1,747
Adjusted Sales and Marketing Expenses
14,382
12,978
41,133
39,399
Adjusted Sales and Marketing Expenses (% of total
revenue)
42 %
41 %
42 %
42 %
Research and product development expenses
8,322
9,153
27,367
27,035
Research and product development expenses (% of total
revenue)
25 %
29 %
28 %
29 %
Less: Share-based payments and related expenses
1,361
1,391
4,239
4,622
Adjusted Research and Product Development Expenses
6,961
7,762
23,128
22,413
Adjusted Research & Product Development Expenses (%
of total revenue)
20 %
24 %
23 %
24 %
General and administrative expenses
6,709
6,409
19,605
20,032
General and administrative expenses (% of total revenue)
20 %
20 %
20 %
21 %
Less: Share-based payments and related expenses
1,603
1,518
5,100
5,334
Less: Transaction-related expenses
–
–
388
–
Adjusted General and Administrative Expenses
5,106
4,891
14,117
14,698
Adjusted General and Administrative Expenses (% of total
revenue)
15 %
15 %
14 %
16 %
Condensed Interim Consolidated Statements of Financial Position
(expressed in thousands of U.S. dollars, unaudited)
December 31,
2024
March 31,
2024
$
$
Assets
Current assets
Cash and cash equivalents
119,108
166,586
Trade and other receivables
38,506
29,947
Government assistance
9,144
9,987
Prepaid expenses
6,758
8,622
173,516
215,142
Non-current assets
Contract acquisition costs
10,446
10,168
Property and equipment
4,271
5,608
Intangible assets
6,506
8,710
Right-of-use assets
4,514
6,032
Deferred tax assets
2,794
4,265
Goodwill
25,831
25,960
Total assets
227,878
275,885
Liabilities
Current liabilities
Trade payable and accrued liabilities
21,178
21,822
Deferred revenue
71,022
64,731
Current portion of lease obligations
1,747
2,153
93,947
88,706
Non-current liabilities
Lease obligations
5,159
6,885
Deferred tax liabilities
–
1,771
Total liabilities
99,106
97,362
Shareholders’ Equity
Share capital
767,684
836,271
Contributed surplus
73,730
40,484
Deficit
(663,035)
(655,598)
Accumulated other comprehensive loss
(49,607)
(42,634)
Total shareholders’ equity
128,772
178,523
Total liabilities and shareholders’ equity
227,878
275,885
Condensed Interim Consolidated Statements of Cash Flows
(expressed in thousands of U.S. dollars, unaudited)
Nine months ended December 31,
2024
2023
$
$
Cash flows from (used in) operating activities
Net loss
(7,437)
(19,560)
Items not affecting cash
Amortization of contract acquisition costs
3,248
3,337
Depreciation of property and equipment
1,985
1,777
Amortization and impairment of intangible assets
2,205
5,926
Depreciation of right-of-use assets
1,091
1,182
Share-based payments
13,528
11,759
Interest on lease obligations
323
407
Deferred income tax recovery
(478)
(987)
Unrealized foreign exchange loss (gain)
(5,826)
1,113
Changes in non-cash working capital items
(4,368)
(5,388)
4,271
(434)
Cash flows used in investing activities
Additions to property and equipment
(836)
(953)
Additions to intangible assets
(17)
(23)
(853)
(976)
Cash flows used in financing activities
Proceeds from exercise of stock options
1,116
1,392
Tax withholding for net share settlement
(2,454)
(1,267)
Payments on lease obligations
(1,869)
(1,750)
Shares repurchased and cancelled
(46,868)
(29,649)
Repurchase of stock options
–
(4,553)
(50,075)
(35,827)
Effect of foreign exchange rate changes on cash and cash equivalents
(821)
1,903
Decrease in cash and cash equivalents during the period
(47,478)
(35,334)
Cash and cash equivalents – beginning of period
166,586
198,452
Cash and cash equivalents – end of period
119,108
163,118
Cash
42,875
21,854
Cash equivalents
76,233
141,264
View original content to download multimedia:https://www.prnewswire.com/news-releases/coveo-reports-third-quarter-fiscal-2025-financial-results-302372732.html
SOURCE Coveo Solutions Inc.
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