Delivering strong customer growth and improved retention

NZX and Media Release 27 August 2021 GEO DELIVERING STRONG GROWTH IN NEW CUSTOMERS & IMPROVED RETENTION GEO (NZX.GEO) today announces its financial results for the year ended 30 June 2021 and details the continuation of the strong growth trends in new customer numbers and revenue retention resulting from the Company's 'Scaling Programme'. Summary o Net losses from operations improve 12.9% to $(1.8)m(1), EBITDA(2) losses improve 35.6% to $(0.8)m and operating and investing cash outflows improve 10.9% to $(1.3)m on a 17.2% reduction in Group revenues (significantly due to the divestment of Geo for Sales). Subscription revenues for the continuing Geo product reduce by 7.3% versus the prior year, largely due to the annual recurring revenue (ARR) reduction in the prior year (and therefore lower starting ARR for FY21) but end the year growing strongly. o FY21 saw strong and consistent improvements in new customer ARR and revenue retention trends, particularly in the second half (H2) as marketing spend was progressively increased on improved metrics: - new customer numbers up 286% in H2 on prior corresponding period (PCP) and up 87% on H1 FY21; - new licence sales up 174% in H2 vs PCP and up 75% on H1 FY21; - new customer ARR up 107% in H2 vs PCP and up 60% on H1 FY21; - five of the six largest new customer months in the last three years were delivered in H2; and - ARR retention rate improved to 90.5% across FY21, up from 87.2% in PCP. o Costs reduced significantly in FY21 through a combination of permanent efficiencies, and temporary reductions in salaries, rent and marketing spend in H1 due to COVID. Marketing spend across FY21 was down 32% on FY20, principally due to reductions during the H1 lockdowns, with the run rate spend largely restored by June 2021. Other direct costs and overheads were reduced by 21%. o Operating and investing cash outflows improved by 11% on FY20 and averaged $(0.14)m per month in H2 (in line with previous indications given). o The Geo for Sales platform was considered non-core and was also impacted by early COVID restrictions. The platform and customer base were sold to SalesRabbit USA during the year. o The new customer growth run rate (before customer churn) grew progressively during H2 to an annualised run rate of 24% for June 2021. GEO plans to double its investment in customer acquisition marketing across FY22 while maintaining ARR retention above 90%, providing a clear path to achieving the Company's target of 30-40% top line growth. o Scaling up in other markets such as the UK is now underway. o As at 30 June 2021, GEO had $0.9m of cash at hand and $0.3m in annual R&D grants due. The Company has a range of options available to fund its growth programme including $0.5m in headroom under its 2019 convertible note facility. Roger Sharp Chairman End CA:00378122 For:GEO Type:FLLYR Time:2021-08-27 17:06:23