Mr. Robert Stabile reports

OPTIVA INC. REPORTS FOURTH QUARTER 2023 FINANCIAL RESULTS

Optiva Inc. has released its fourth quarter financial results for the three-month and full-year period ended Dec. 31, 2023. All amounts are stated in U.S. dollars unless otherwise indicated.

During the quarter, Optiva secured three new customers, including a leading technology company in Nigeria specializing in cutting-edge telecom projects, a North American mobile virtual network operator providing critical data-driven services to military veterans and a new market entrant in New Zealand, demonstrating the company's global impact. In addition, Optiva recently announced an expansion of its strategic partnership with BT Group and its role in powering Humane, an artificial intelligence device designer with embedded mobile connectivity. All of these customers selected Optiva cloud-native BSS technology to rapidly bring innovative digital services to market and provide a superior customer experience and differentiated digital service offerings.

"New and existing customers are embracing our cloud-native portfolio with increased momentum. As our bookings continue to grow, I am encouraged by our success and agility in delivering a next-generation digital customer experience," said Robert Stabile, chairman of the board of directors and chief executive officer of Optiva.

Business highlights:

• TCV of Q4 2023 bookings totalled $24.3-million. For the year ended Dec. 31, 2023, TCV bookings totalled $74.9-million.
• On Jan. 23, 2024, the company provided revenue growth guidance for 2024 of at least 10 per cent.
• Humane, an innovative experience company that recently launched Ai Pin, announced that it had selected Optiva's full-stack BSS solution to help power the billing, network integration and value-added services for its users. With Ai Pin, Humane is defining a new class of devices to bring AI to a personal level. The Optiva BSS platform, available as a cloud-native software-as-a-service solution, will support personalized experiences for Ai Pin customers through its modular and unified end-to-end suite of integrations and services deployed on the public cloud. Optiva's software and years of global telecom industry expertise will empower Humane to focus on its vision and deliver a simplified, intuitive customer experience.
• In the fourth quarter, BT Group, the United Kingdom's leading fixed and mobile telecommunications provider, extended its strategic partnership with Optiva to develop and monetize new business-to-business, business-to-consumer and business-to-business-to-everything services. Optiva's application server, a key component of the Optiva charging engine, will be upgraded to a next-generation, cloud-native, open-architecture service creation platform. It will include Optiva's Open API framework, enabling integration with new cutting-edge technology partners, including blockchain and artificial intelligence tools. BT Group needs a fully flexible service creation environment that enables rapid design, testing and deployment of new services, which Optiva will provide, allowing BT to achieve its business objectives across a wide variety of industries and use cases.

Fourth quarter 2023 financial results highlights:

• Revenue for Q4 2023 was $12.0-million. On a year-over-year basis, the change by revenue type included a $1.8-million decrease in support and subscription revenue and a $1.3-million decrease in software and service revenue, and third party software and hardware revenue remained unchanged. The year-over-year decline in support and subscription reflects the runoff of a few customers which had previously notified the company of their intentions to replace Optiva. The drop in software and services is mainly due to fewer software implementations, primarily in the Europe, Middle East and Africa region, compared with the prior period.
• Gross margin for Q4 2023 was 63 per cent compared with 70 per cent during the same period in 2022. The decline in gross margin is primarily attributable to lower revenue from high-margin licence and support and subscription revenue, along with customizations with lower margins ordered by customers that required fulfilment, compared with the previous period. The company expects that its gross margins may fluctuate as its proves its cloud-native model and product capabilities to new and existing customers when they on-board the public or private cloud in future periods.
• General and administrative expenses decreased to $3.1-million compared with $3.4-million during the same period in 2022. During the quarter, a provision was recorded in the amount of $1.1-million for an unbilled amount related to a legacy customer contract. The company continues to have a strong relationship with the customer and is working toward executing a new contract. Excluding the provision, the G&A expenditures decreased to $2.0-million compared with $3.4-million last year. The decrease in G&A expenditures in the three months ended Dec. 31, 2023, is mainly due to lower share-based compensation and lower amortization costs.
• Adjusted earnings before interest, taxes, depreciation and amortization for Q4 2023 decreased to a loss of $1.8-million as compared with income of $3.0-million during the same period in 2022, primarily driven by lower revenue and gross margin.
• Net loss for Q4 2023 was $4.0-million compared with a net loss of $1.5-million during the same period in 2022.
• The company ended the fourth quarter with a cash balance of $20.4-million (including restricted cash). The company used $900,000 of cash from operating activities during the quarter.

TCV is the total contract value of all bookings closed in the period.

About Optiva Inc.

Optiva is a leader in powering the telecom industry with cloud-native billing, charging and revenue management software on private and public clouds. Its products are delivered globally on the private and public cloud. The company's solutions help service providers maximize digital, 5G, Internet of Things and emerging market opportunities to achieve business success. Established in 1999, Optiva is on the Toronto Stock Exchange (OPT).

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