Mr. Paul Sakrzewski reports

COPPERLEAF ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2022 RESULTS

Copperleaf Technologies Inc. has released its financial results for the fourth quarter and fiscal year ended Dec. 31, 2022. All amounts are expressed in Canadian dollars unless otherwise stated.

"Copperleaf's ability to deliver material and tangible return on investment for our clients, combined with our commitment to support our clients' environmental, social and governance initiatives, drove continuing demand for our solutions in 2022," commented Paul Sakrzewski, CEO of Copperleaf. "Our strategic investments in go-to-market activities led to expansion into new sectors, including Metro Transit and Pharmaceuticals, and new geographies, including France and Portugal. Throughout 2022, we made substantial progress enhancing our Alliance Ecosystem, with partners continuing to support the majority of our deals and contributing to a record global pipeline. In 2023, with dedicated Copperleaf Partner and Ecosystem managers now in place in each region, we will continue to focus on expanding our reach, and establishing the tools, community and structure needed to scale the business."

"The fundamental tailwinds that drive demand for Copperleaf's solutions continue to strengthen; however, growth in the fourth quarter was slower than expected due to the continued shift of our clients toward SaaS driving lower perpetual license revenue, and temporary deal elongation resulting from the challenging macro-economic climate," continued Mr. Sakrzewski. "Overall, we continue to see a healthy demand environment. In 2023, we expect our growth to be driven by recent investments in sales and marketing, which are demonstrating early positive results with increased lead generation and pipeline activity, and our investments in R&D, which have resulted in exciting new innovations that continue to advance our leadership position in the decision analytics market. With a deep sales pipeline, a strong balance sheet, a growing customer base, and a market leading solution, we are poised to expand our leadership position in the decision analytics market and drive future growth."

Fourth Quarter 2022 Financial Highlights

(All Capitalized terms used but not defined in this press release have the meanings ascribed to them in Management's Discussion and Analysis for the fiscal years ended December 31, 2022; Comparison period is the fourth quarter ended December 31, 2021, unless otherwise stated)

Revenue of $19.2 million, a decrease of 12% over Q4 2021, driven by our clients continued shift to SaaS and a year over year decrease in the number of Perpetual License deals closed in Q4.

Subscription revenue of $11.3 million, an increase of 32% over Q4 2021.

Gross profit of $14.7 million representing a Gross Margin of 76%, a 15% decrease from $17.3 million and a Gross Margin of 79% in Q4 2021, driven by the decrease in Perpetual License revenue year over year.

Adjusted EBITDA1 loss of $2.0 million, compared to Adjusted EBITDA1 gain of $2.3 million in Q4 2021.

Net loss of $2.4 million, or a loss of $0.03 per diluted share, compared to a net gain of $0.1 million, or a gain of $0.00 per diluted share, in Q4 2021.

As of December 31, 2022, Copperleaf's Revenue Backlog1 grew 5% to $107.3 million compared to $101.9 million, as of December 31, 2021.

Strong balance sheet with cash and cash equivalents of $149.5 million as at December 31, 2022, compared to $161.4 million at December 31, 2021.

Fiscal Year 2022 Financial Highlights

(All Capitalized terms used but not defined in this press release have the meanings ascribed to them in Management's Discussion and Analysis for the fiscal year ended December 31, 2022; Comparison period is the year ended December 31, 2021, unless otherwise stated)

Record revenue of $73.4 million, an increase of 6% over the prior year, driven by the increase in new clients and the expansion of existing clients.

Subscription revenue of $39.9 million, an increase of 27% over the prior year, offsetting a 60% decrease in Perpetual license revenue year over year as our clients continue to transition to SaaS.

Annual Recurring Revenue1 as at December 31, 2022 of $46.4 million, a 26% increase from $36.8 million as at December 31, 2021.

As of December 31, 2022, the Company's Net Revenue Retention Rate1 was 110%.

Gross profit of $54.8 million representing a Gross Margin of 75%, compared to $54.9 million in the prior year, representing a Gross Margin of 79%

Adjusted EBITDA1 loss of $24.9 million, compared to an Adjusted EBITDA1 gain of $2.1 million in the year ended December 31, 2021.

Net loss of $28.2 million, or a loss of $0.41 per basic and diluted share, compared to net loss of $6.5 million, or a loss of $0.24 per basic and diluted share, in the prior year.

1 Please refer to "Non-IFRS Measures" section of this press release

Key Developments

In 2022, Copperleaf successfully expanded its rapid-start strategy with several new sales of the Copperleaf H2O solution into the water market. The Company also introduced the Copperleaf CNAIM solution, developed to meet the needs of electrical utilities seeking to adopt the best-practice asset risk modeling methodology developed by British Distribution Network Operators.

As a result of the Company's recent go-to-market investments, Copperleaf successfully expanded into new sectors including Metro Transit and Pharmaceuticals, with pilot projects ongoing in Mining and Air Services. Copperleaf also expanded geographically with projects initiated in Switzerland, France, Italy, Portugal, and the Middle East.

Throughout 2022, the Alliance Ecosystem continued to gain traction as our partners invested in expanding their Copperleaf practice areas. As trusted advisors to shared clients and prospects, the Company's partners played an increasingly important role by supporting the majority of sales in 2022 and contributing to the growth of the global pipeline.

The Copperleaf Community is active and growing. In 2022, in addition to the Company's virtual global community summit held in May, three in-person community summits were introduced in each of Copperleaf's sales regions with attendees from over 95% of client accounts worldwide. The Company held 11 client-led working group sessions in the natural gas, water, and electricity industries, and nearly half of the Company's clients participated in client-led innovation with Copperleaf Labs. The Company also delivered four product releases over the year and released numerous new innovative features to the client base, including:

Q1: A new application for creating candidate projects from predictive analytics to inform strategy in Copperleaf Portfolio; automation of investment capture and cost estimation; new security features; and the first edition of the Copperleaf dashboard library, creating more value for clients throughout the entire planning process.

Q2: Multi-native currency support; new workflow visualization; and process automation for reviews and approvals.

Q3: New options for native Geographic Information System support and strategic dashboards for executive reporting; advanced analytical software for system level modelling; and turbocharged scenario analysis support delivering a four-fold increase in performance.

Q4: Optimize Ready which is machine-learning backed functionality that helps clients improve their investment quality and portfolio values by automatically analyzing investments and portfolios to spot issues and inconsistencies and provides recommended solutions; Geographic Information System integrations allowing users directly interact with their investment portfolio on a map; and interactive asset intervention modeling which allows Asset Managers to quickly and easily explore the impacts of shifting their asset interventions in time, allowing quick what-if analysis without waiting for complete asset management strategies to be created.

In 2022, Copperleaf filed three patent applications and was issued two patents on scenario planning and asset intervention bundling.

Throughout 2022, the increasing focus on ESG initiatives and the energy transition across the Company's target market sectors helped generate increased interest in Copperleaf solutions. As a result, ESG influenced nearly a third of Copperleaf's sales in 2022 and has contributed to the expansion of the global pipeline.

In Q3, Copperleaf joined the UN Global Compact (UNGC) which requires companies to communicate their progress annually. Additionally, Copperleaf will be making climate-related financial disclosures aligned with TCFD recommendations in the Company's 2022 annual report.

Q4 and Fiscal Year

2022 Financial Results Conference Call Details

Paul Sakrzewski, Chief Executive Officer and Chris Allen, Chief Financial Officer, will host a conference call followed by a question-and-answer session today, March 23, 2023, at 5:00 PM ET.

Date: March 23, 2023

Time: 5:00pm ET

Dial-In Number: 416-764-8659 or 1-888-664-6392

Webcast: https://app.webinar.net/1KPVOx6b0Zp

Replay: 416-764-8677 or 1-888-390-0541 (Available until March 30, 2023)

Replay Entry Code: 809214#

About Copperleaf:

Copperleaf provides enterprise decision analytics software solutions to companies managing critical infrastructure. We leverage operational and financial data to empower our clients to make investment decisions that deliver the highest business value. What sets us apart is our commitment to providing extraordinary experiences, shaped by people who care deeply, products that deliver exceptional value, and partnerships that stand the test of time. Copperleaf is a patron of The Institute of Asset Management and actively participates in shaping the future of asset management standards, including ISO 55000. Headquartered in Vancouver, Canada, our solutions are distributed and supported by regional staff and partners worldwide. Together, we are transforming how the world sees value.

We seek Safe Harbor.