TSX Venture Exchange: QIS
Welcome to Quorum’s July 2021 Investor Newsletter!
As we move into the summer months, Quorum is hard at work on our multiple growth initiatives, including selling our DMS solution to more auto dealerships and dealer groups, and building the capabilities of machine learning of our software.
In June, we announced that automotive group O’Regan’s in Nova Scotia selected best-in-class from Quorum XSellerator dealership management system (DMS) and related product suite as a leading supplier of DMS software.
Earlier this week, we announced that we had received an NRC IRAP grant of up to $ 750,000 to add machine learning capabilities to our Sales CRM, PowerLane and Communicator Cloud-based applications. This funding will also accelerate our project in partnership with Microsoft to consolidate the data of our dealers in Microsoft Azure Synapse.
On May 26, we announced our Q1 2021 results, delivering a revenue growth rate of 3% quarter over quarter (or 12% annualized). Total revenue was $ 8.6 million in the first quarter of 2021, compared to $ 8.3 million in the fourth quarter of 2020.
Most exciting was the significant increase we saw in March. Our SaaS revenue the annual execution rate based on March 2021 was $ 24.9 million, an increase from $ 24.2 million based on the fourth quarter of 2020, an increase of 3%, or 12% on an annualized basis . Our BDC turnover the annual execution rate based on March 2021 was $ 9.4 million compared to $ 7.8 million based on the fourth quarter of 2020, an increase of 20%, or 80% annualized. Adjusted EBITDA1 increased 46% from Q1 2020 to $ 1.3 million, we ended the quarter with 1,010 dealership rooftop customers, and our monthly recurring revenue per customer, or MRRPU, increased to 2 $ 013 in the first quarter of 2021, compared to $ 1,971 in the fourth quarter of 2020.
The digital transition of car dealerships – growing and here to stay
At the end of the third quarter of 2020, the quorum is published My offer, an online vehicle purchasing solution for car dealers evolving needs for robust digital retail solutions.
While My offer continues to experience strong market adoption in 2021, we were delighted to see the results of a recent study by Desrosiers Automotive Consultants Inc. (DAC) of 3,328 new vehicle dealers across Canada that reinforced our belief that the transition to digital is developing rapidly. The DAC study published in DesRosiers Automotive Reports indicates that:
- Buying new vehicles online is here to stay – The first online contact rose from an average of 29.7% of cases in 2019 to 38.9% in 2020. The share of sales made entirely online rose to 7.6%. When asked about the future, dealers overwhelmingly predicted a sharp increase in the number of online-only sales, reaching an expected average of 17.8% for 2025.
- Online used vehicle shopping will also continue to grow – While online-only sales made up only 2.6% of total used sales in 2019, that number rose to 6.7% in 2020. Asked about their future prospects, dealers said that they expected second-hand online-only sales to occupy 15.5% of the market. in 2025.
- Decrease in the number of salespeople per store to continue – Dealers don’t expect their average number of sellers to rebound to 2019 levels, even by 2025, increasing to only 9.7 sellers per store on average. The expected growth in online-only sales could be a factor in this shift if online processes allow fewer salespeople to handle more customers.
- Dealers Invest in Website and System Upgrades to Facilitate the Transition to More Online Sales – With these heightened expectations for online sales, 19.9% of resellers noted upgrading their website / systems in 2020. Of the 80.1% who haven’t, 58.5% are planning to do so in 2021. If forecasting new online sales in the future is one thing, dealers are clearly spending resources internally to facilitate this change.
July 6, 2021 – Quorum receives research funding for machine learning project – We will receive advisory services and funding of up to $ 724,746 from the National Research Council of Canada’s Industrial Research Assistance Program (NRC IRAP) to support a research and development project aimed at consolidating dealer data from Quorum and add machine learning capabilities to its applications. NRC IRAP support is the next step in a process that began in 2020 when Quorum launched QAnalytics – an enterprise reporting tool for the Quorum product suite powered by Microsoft PowerBI. QAnalytics is now used by 30% of Quorum XSellerator dealership management system (DMS) customers.
June 28, 2021 – Quorum announces partnership with O’Regan automotive group – O’Regan’s Automotive Group in Nova Scotia has selected Quorum’s best XSellerator dealership management system (DMS) and related product suite as the leading DMS software vendor. Susan Johnston, Vice President of Marketing and Communications at O’Regan’s Automotive Group, said, “Quorum’s product suite and corporate vision have helped O’Regan’s Automotive Group grow revenues over the past four years. years. We look forward to working even more closely with Quorum and using their solutions to streamline and improve our operations across all sites. ‘
May 26, 2021 – Q1 2021 results – “While SaaS growth was partially limited at the start of the first quarter of 2021 due to COVID-19 travel restrictions, it rebounded in March and our SaaS revenues continue to grow in the second quarter. BDC’s growth was strong in the first quarter of 2021 and we have identified a number of BDC gross margin expansion opportunities that we plan to implement throughout 2021, ”said Maury Marks, President and CEO of Quorum. In addition, our transformative MyDeal and PowerLane solutions, which enable dealer customers to purchase a vehicle online and have a contactless service experience, are seeing stronger market adoption and increasing our ‘portfolio share’. “.
RECENT INVESTOR EVENTS:
Wednesday May 26:
First quarter 2021 results press release
Quarterly report for the first quarter of 2021:
Presentation to investors of the quarterly results for the first quarter of 2021:
Thursday May 27:
First Quarter 2021 Results Conference Call(Webcast replay)
NEXT AOT EVENTS (exact dates to come)
- annual general meeting
- Q2 2021 results
Thank you for your continued interest in Quorum. Have a great summer and we look forward to providing you with our second quarter 2021 results in August.
President and CEO
1Adjusted EBITDA (non-GAAP) – Net income (loss) before interest and financing costs, taxes, depreciation, amortization, stock-based compensation, foreign exchange gains and losses, non-recurring expenses related to acquisitions and restructuring.