WeCommerce Reports Fourth Quarter and Full Year 2021 Results

VICTORIA, British Columbia--(BUSINESS WIRE)--WeCommerce Holdings Ltd. (“WeCommerce” or the “Company”) (TSXV:WE), a leading provider of ecommerce enablement software and tools for merchants, today announced its financial results for the three- and twelve-month periods ended December 31, 2021 (“Q4 2021” and “Fiscal 2021” respectively). Currency amounts are expressed in Canadian dollars unless otherwise noted.

Q4 2021 and Fiscal 2021 Financial Results:
	For the three-months ended December 31,		For the year ended ended December 31,
	2021	2020	2021	2020
Revenue
Recurring subscription revenue	7,346,415	2,232,030	22,383,829	6,887,246
Digital goods revenue	3,953,600	2,304,446	10,977,020	8,973,746
Agency service revenue	949,041	1,608,792	5,220,528	5,420,507
	12,249,056	6,145,268	38,581,377	21,281,499
Operating loss	(753,899)	(3,410,817)	(1,905,841)	(1,386,370)
Net income/(loss)	4,126,028	(5,469,103)	(842,922)	(4,416,476)
EBITDA^(1)	8,240,074	(4,200,197)	12,594,526	17,902
EBITDA %^(1)	67%	(68%)	33%	0.1%
Adjusted EBITDA^(1)	3,490,740	1,706,264	11,586,037	6,340,058
Adjusted EBITDA %^(1)	28%	28%	30%	30%
Cash provided by operating activities	3,652,074	869,071	8,001,967	5,662,895
Notes: 1. See “Non-IFRS financial measures” for further information.

Q4 2021 Highlights

• Revenue in Q4 2021 was $12,249,056, an increase of $6,103,788 or 99% (106% on a constant currency basis⁽¹⁾) compared to Q4 2020.
• Apps segment revenue in Q4 2021 was $7,346,415, an increase of $5,114,385 or 229% (240% on a constant currency basis) compared to Q4 2020. Apps segment revenue includes the results of Stamped, which contributed revenues of $5,010,982 in Q4 2021. Foursixty contributed revenues of $1,236,586, an increase of $181,378 or 17% (21% on a constant currency basis) compared to Q4 2020.
• Themes segment revenue in Q4 2021 was $3,953,600, an increase of $1,649,154 or 72% (77% on a constant currency basis) compared to Q4 2020. Archetype contributed revenues of $2,328,653 in Q4 2021.
• Agency segment revenue in Q4 2021 was $949,041, a decrease of $659,751 or 41% (40% on a constant currency basis) compared to Q4 2020.
• Net income was $4,126,028 in Q4 2021 compared to net loss of $5,469,103 in Q4 2020. The net income for Q4 2021 includes fair value adjustments amounting to $5,302,617 which relate to the revaluation of contingent consideration payable as part of the acquisition of Stamped, Foursixty and Archetype. The net loss for Q4 2020 includes a listing expense of $1,634,081, relating to the reverse takeover completed during the quarter.
• Unrestricted cash on hand at December 31, 2021 was $26,122,247 compared to $61,193,367 on December 31, 2020. Total debt outstanding at December 31, 2021 was $60,203,418 compared to $10,572,500 on December 31, 2020.
• Adjusted EBITDA for Q4 2021 amounted to $3,490,740 or 28% of revenue, compared to $1,706,264 or 28% of revenue in Q4 2020.

Fiscal 2021 Highlights

• Revenue in Fiscal 2021 was $38,581,377, an increase of $17,299,878 or 81% (92% on a constant currency basis⁽¹⁾) compared to Fiscal 2020.
• Apps segment revenue in Fiscal 2021 was $22,383,829, an increase of $15,496,583 or 225% (247% on a constant currency basis) compared to Fiscal 2020. Apps segment revenue includes the results of Stamped, which contributed revenues of $13,320,214 in Fiscal 2021. The remaining increase can be attributed to the attrition of the acquisition of Foursixty in 2020, with the inclusion of a full year’s worth of revenue in 2021 compared to six months in 2020.
• Themes segment revenue in Fiscal 2021 was $10,977,020 an increase of $2,003,274 or 22% (29% on a constant currency basis) compared to Q4 2020. The increase is attributable to the acquisition of Archetype Themes, which contributed $3,493,222 of revenue in Fiscal 2021. Excluding Archetype, revenue from the themes segment decreased by $1,489,948 or 17% (11% on a constant currency basis).
• Agency segment revenue in Fiscal 2021 was $5,220,528, a decrease of $199,979 or 4% (1% on a constant currency basis) from $5,420,507 in Fiscal 2020.
• Net loss in Fiscal 2021 was $842,922 compared to net loss of $4,416,476 in Fiscal 2020.
• Adjusted EBITDA in Fiscal 2021 amounted to $11,586,037 or 30% of revenue, compared to $6,340,058 or 30% of revenue in Fiscal 2020.

Management Commentary

“2021 was a transformational year for our business. Beginning with a successful entry to the public markets at the end of 2020, this year was highlighted by several major acquisitions, key leadership appointments, and strong financial results that collectively have us well positioned for the future,” said WeCommerce CEO Alex Persson. “Through our performance in the fourth quarter, we are entering 2022 with significant operating momentum. Our Apps business, recently expanded through our acquisition of leading zero-party data provider KnoCommerce, continues to generate robust double-digit organic revenue growth. In Themes, we are also seeing sustained growth and durable cash generation. Additionally, while we continue to invest in our portfolio companies, we are also actively canvassing the Shopify partner ecosystem for attractive opportunities in an improved acquirer’s market categorized by reasonable valuations. We have the team, capital and resources necessary to build the leading acquirer and operator of ecommerce enablement technology companies.”

Conference Call

Management will host a conference call and webcast today, March 29, 2022, at 5:00 pm ET (2:00 pm PT) to discuss its financial results. Company CEO Alex Persson and CFO David Charron will host the call, followed by a question-and-answer period.

Live Call:	https://conferencingportals.com/event/DWkvUNLo
Live Webcast:	https://event.on24.com/wcc/r/3577892/17D1BEB805F5DFECE6A725E40099BC5D

An archived webcast of the conference call will be accessible on WeCommerce’s Investor Relations page at http://investors.wecommerce.co.

Financial Statements

WeCommerce’s consolidated financial statements and Management’s Discussion and Analysis (“MD&A”) for Q4 and Fiscal 2021 are available on the Company’s website at https://www.wecommerce.co or on SEDAR at www.sedar.com.

About WeCommerce Holdings Ltd

WeCommerce provides merchants with a suite of ecommerce software tools to start and grow their online stores. Our family of companies and brands includes Pixel Union, Out of the Sandbox, KnoCommerce, Archetype, Yopify, SuppleApps, Rehash, Foursixty and Stamped. As one of Shopify’s first partners since 2010, WeCommerce is focused on building, acquiring, and investing in leading technology businesses operating in the Shopify partner ecosystem.

For more about WeCommerce, please visit www.wecommerce.co or refer to the public disclosure documents available under WeCommerce’s SEDAR profile on SEDAR at www.sedar.com.

Non-IFRS Financial Measures

This news release makes to reference to certain non-IFRS measures and ratios, hereafter, referred to as “non-IFRS measures”. These measures are not recognised measures under IFRS, and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the financial information reported under IFRS. The Company uses non-IFRS measures including “EBITDA”, “EBITDA %”, “Adjusted EBITDA”, “Adjusted EBITDA %”, and “Constant Currency”. Management uses these non-IFRS measures to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. As required by Canadian securities laws, the Company defines and reconciles these non-IFRS measures below:

EBITDA and EBITDA %

EBITDA is defined as earnings (net income or loss) before finance costs, income taxes, depreciation and amortization. EBITDA is reconciled to net income (loss) from the financial statements.

EBITDA % ratio is determined by dividing EBITDA by total revenue for the year.

EBITDA and EBITDA % is frequently used by securities analysts and investors when comparing the Company’s results to other companies. EBITDA and EBITDA % are measures commonly reported and widely used as a valuation metric.

Adjusted EBITDA and Adjusted EBITDA %

Adjusted EBITDA removes unusual, non-cash or non-operating items from EBITDA such as listing expenses, acquisition costs, restructuring charges, asset impairments, non-cash stock-based compensation, fair value adjustments to contingent consideration payable and foreign exchange gains and losses. The Company believes adjusted EBITDA provides improved continuity with respect to the comparison of its operating performance over a period of time. Adjusted EBITDA is reconciled to net income (loss) from the financial statements. The definition of Adjusted EBITDA has been updated in the current year to reflect certain specific adjustments that had not been present in the 2020 adjustments, as these items were unique to 2021.

Adjusted EBITDA % is determined by dividing Adjusted EBITDA by total revenue for the year.

Adjusted EBITDA and Adjusted EBITDA % is frequently used by securities analysts and investors when comparing the Company’s results to those of other companies. It provides a consistent basis to evaluate profitability and performance trends by excluding items that the Company does not consider to be controllable activities for this purpose. Adjusted EBITDA and EBITDA % are measures commonly reported and widely used as a valuation metric.

Constant Currency

Constant currency is determined by applying the same foreign currency exchange rates to the financial results of the current and equivalent prior-year period. The Company’s reporting currency is the Canadian dollar but we conduct business in Canadian, U.S. and Singapore dollars. The Company measures its performance before the impact of foreign currency. Constant currency is reconciled to revenue from the financial statements.

The Company believes Constant Currency allows for current financial performance to be understood against comparative periods without the impact of fluctuations in foreign exchange rates against the Canadian dollar.

Non-IFRS Measures Reconciliations

EBITDA and Adjusted EBITDA
	For the three-months ended December 31,
	2021	2020
Net income/(loss)	4,126,028	(5,469,103)
Income tax expense	183,071	99,991
Depreciation and amortization	3,295,125	953,935
Finance costs	635,850	214,980
EBITDA	8,240,074	(4,200,197)
EBITDA %	67%	(68%)
EBITDA adjustments
Stock-based compensation	917,702	4,035,091
Foreign exchange (gain)/loss	(396,232)	109,234
Acquisition costs	30,616	70,366
Listing expense	-	1,634,081
Fair value adjustments of contingent consideration	(5,302,617)	-
Non-recurring professional fees	-	20,189
Severance costs	-	37,500
Loss on disposal of assets	1,197	-
Adjusted EBITDA	3,490,740	1,706,264
Adjusted EBITDA %	28%	28%
	For the years ended December 31,
	2021	2020
Net loss	(842,922)	(4,416,476)
Income tax expense	298,022	423,854
Depreciation and amortization	10,087,571	3,184,607
Finance costs	3,051,855	825,917
EBITDA	12,594,526	17,902
EBITDA %	33%	0.1%
EBITDA adjustments
Stock-based compensation	1,890,466	4,169,265
Foreign exchange (gain)/loss	1,010,460	146,254
Acquisition costs	1,461,844	170,659
Listing expense	-	1,634,081
Fair value adjustments of contingent consideration	(5,302,617)	-
Non-recurring professional fees	91,560	73,588
Severance costs	26,767	128,309
(Gain) on sale of themes	(355,513)	-
Loss on disposal of assets	168,544	-
Adjusted EBITDA	11,586,037	6,340,058
Adjusted EBITDA %	30%	30%

EBITDA % and Adjusted EBITDA %
	For the three-months ended December 31,
	2021	2020
EBITDA	8,240,074	(4,200,197)
Revenue	12,249,056	6,145,268
EBITDA %	67%	(68%)
Adjusted EBITDA	3,490,740	1,706,264
Revenue	12,249,056	6,145,268
Adjusted EBITDA %	28%	28%
	For the years ended December 31,
	2021	2020
EBITDA	12,594,526	17,902
Revenue	38,581,377	21,281,499
EBITDA %	33%	0.1%
Adjusted EBITDA	11,586,037	6,340,058
Revenue	38,581,377	21,281,499
Adjusted EBITDA %	30%	30%

Constant Currency
	For the three-months ended December 31,		% Change
	2021	2020	As reported	Foreign exchange impact	Constant currency
Revenue
Recurring subscription revenue	7,346,415	2,232,030	229%	11%	240%
Digital goods revenue	3,953,600	2,304,446	72%	5%	77%
Agency service revenue	949,041	1,608,792	(41%)	1%	(40%)
	12,249,056	6,145,268	99%	7%	106%
	For the years ended December 31,		% Change
	2021	2020	As reported	Foreign exchange impact	Constant currency
Revenue
Recurring subscription revenue	22,383,829	6,887,246	225%	22%	247%
Digital goods revenue	10,977,020	8,973,746	22%	7%	29%
Agency service revenue	5,220,528	5,420,507	(4%)	3%	(1%)
	38,581,377	21,281,499	81%	11%	92%

Forward-Looking Information

This news release contains certain forward-looking statements and forward-looking information within the meaning of applicable securities law. Such forward-looking statements and information include, but are not limited to, statements or information with respect to: the Company’s future business and strategies; requirements for additional capital and future financing; estimated future working capital, funds available, uses of funds, future capital expenditures and other expenses for specific operations and intellectual property protection; industry demand; ability to attract and retain employees, consultants or advisors with specialized skills and knowledge; anticipated joint development programs; incurrence of costs; competitive conditions; general economic conditions; and scalability of developed technology.

Forward-looking statements and information are frequently characterized by words such as “plan”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Although the Company’s management believes that the assumptions made and the expectations represented by such statement or information are reasonable, there can be no assurance that a forward-looking statement or information referenced herein will prove to be accurate. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include risks relating to reliance on the Shopify platform; the Company’s limited operating history; reliance on management and key employees; conflicts of interest in relation to the Company’s officers, directors, and consultants; additional financing requirements; resale of Common Shares in the publicly-traded market; market price fluctuations for the Common Shares; global financial conditions; management of growth; risks associated with the Company’s strategy of growth through acquisitions; tax risks; currency fluctuations; competitive markets; uncertainty and adverse changes in the economy; unsustainability of the Company’s rapid growth and inability to attract new customers, retain revenue from existing merchants, and increase sales to both new and existing customers; adverse effects on the Company’s revenue growth and profitability due to the inability to attract new customers or sell additional products to existing customers; future results of operations being harmed due to declines in recurring revenue or contracts not being renewed; security and privacy breaches; changes in client demand; challenges to the protection of intellectual property; infringement of intellectual property; ineffective operations through mobile devices, which are increasingly being used to conduct commerce; and risks associated with internal controls over financial reporting. The Company undertakes no obligation to update forward-looking statements and information if circumstances or management’s estimates should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements and information. More detailed information about potential factors that could affect results is included in the documents that may be filed from time to time with the Canadian securities regulatory authorities by the Company.

For a more detailed discussion of certain of these risk factors, see the Company's most recent MD&A described in the “Risk Factors” as well as the list of risk factors in the Company’s Annual Information Form available on SEDAR at www.sedar.com under the Company’s profile.

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: WECOMMERCE HOLDINGS LTD.