Mr. Sebastien Pare reports

VIQ SOLUTIONS REPORTS FIRST QUARTER 2023 FINANCIAL RESULTS

VIQ Solutions Inc. has released its unaudited financial results for the first quarter ending March 31, 2023. Results are reported in U.S. dollars and prepared in accordance with international financial reporting standards (IFRS).

"The increasing demand for digital content by global organizations necessitates the implementation of innovative, specialized technology to process data more swiftly and in a secure and precise manner. Transcribers play a critical role in leveraging artificial intelligence (AI) to achieve greater productivity and accuracy rates to meet evidentiary standards. We are encouraged by our strong Q1 bookings that represent an increase of 69 per cent from the same period in 2022," said Sebastien Pare, VIQ's chief executive officer.

"We are pleased to have completed the migration to the Queensland contract. Despite short-term revenue impacts, it is a crucial step to provide us with revenue predictability as we continue to scale. We believe this contract, combined with the effects of foreign currency exchange, would have normalized quarter-over-quarter revenue showing growth in Australian revenue," said Mr. Pare.

First quarter 2023 operational highlights:

• $2.8-million of net new bookings sold for the quarter, representing 69-per-cent increase from Q1 2022;
• First active installations of NetScribe sold in India for an international transcription company;
• First quarter in full implementation of Queensland contract in Australia;
• Initial sales closed in the ORdigiNAL agreement;
• Launched CapturePro Mobile.

"As we pivot to meet market demand for SaaS solutions, there will be a positive impact to the revenue mix for organic and run rate revenue. This change is expected to protect long-term revenue and ultimately lead to significant margin improvement but will impact our top-line revenue in the short term. Q1 had a slight decline in our U.S. revenue due to the acceleration of SaaS sales in insurance and law enforcement," said Susan Sumner, VIQ's president and chief operating officer.

First quarter 2023 financial highlights:

• Revenue of $10.1-million, a decrease of $1.5-million or 13 per cent in the same period of the prior year, was primarily due to the expected change in the Queensland contract.
• Gross profit was $4.4-million or 44.0 per cent of revenue, compared with $5.5-million or 47.6 per cent of revenue in the same period of the prior year. The decrease in the gross margin was primarily due to the expected change in the Queensland contract.
• Net loss was $3.5-million or 10 cents per diluted share, versus a net loss of $2.0-million or seven cents per diluted share in the same period of the prior year.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) deficit was $1.1-million, versus adjusted EBITDA deficit of $900,000 in the same period in the prior year. The increase in adjusted EBITDA deficit was primarily due to decreased gross profit, partially offset by decreased selling and administrative expenses, primarily due to lower insurance premiums, reduction in IT-related (information technology) costs due to system integrations and lower head count related costs due to organizational restructuring.

"With a focus on cost containment and the refinancing in January, we were able to shore up our balance sheet. The new senior debt facility with Beedie Investments Ltd. extends the terms of our lending and will provide additional capacity to fuel our future growth while allowing the company to execute on our operational plans to drive margin improvement," said Alexie Edwards, VIQ's chief financial officer.

As of March 31, 2023, the company held a total of $2.5-million in cash. On Jan. 13, 2023, the company entered a senior debt facility with Beedie Investments Ltd., with maximum available funds of $15-million. Of the loan, $12-million was provided to the company as an initial advance with an additional $3-million available to the company to be drawn in subsequent advances in a minimum of $1-million tranches subject to the company satisfying certain conditions.

Conference call details

VIQ will host a conference call and webcast to discuss its first quarter 2023 financial results on Thursday, May 11, 2023, at 11 a.m. Eastern Time. The call will consist of updates by Mr. Pare, Mr. Edwards and Ms. Sumner, followed by a question-and-answer period.

Investors may access a live webcast of the call on the company's website or by dialling 1-888-440-4052 (toll-free in North America) or 1-646-960-0827 (international) to be connected to the call by an operator using conference ID No. 4983233. Participants should dial in at least 10 minutes prior to the start of the call.

A replay of the webcast will be available on the company's website approximately one hour after the conference call concludes.

About VIQ Solutions Inc.

VIQ Solutions is a global provider of secure, AI-driven (artificial intelligence), digital voice and video capture technology and transcription services. VIQ offers a seamless, comprehensive solution suite that delivers intelligent automation, enhanced with human review, to drive transformation in the way content is captured, secured and repurposed into actionable information. The cybersecure, AI technology and services platform are implemented in the most rigid security environments, including criminal justice, legal, insurance, government, corporate finance, media and transcription service provider markets, enabling them to improve the quality and accessibility of evidence, to easily identify predictive insights and to achieve digital transformation faster and at a lower cost.

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