WINNIPEG, MB – March 29th, 2021 – Farmers Edge Inc. (“Farmers Edge” or the “Company”) (TSX: FDGE), a Winnipeg-based pure-play digital agriculture company reported its financial results for the fourth quarter and year ended December 31st, 2020. All amounts are expressed in Canadian dollars. Certain metrics are non-IFRS measures or key performance indicators. See “Non-IFRS Financial Measures and Key Performance Indicators” below.
Increased fiscal year 2020 revenue to $45.9 million, up 93% from 2019.
December 31, 2020 Annual Recurring Revenue reaching $53.4 million, up 81%.
Signed strategic partnership agreements to accelerate global growth and reduce costs.
Subscribed Acres grew to 23.4 million at December 31st, 2020 up 42%.
Improved fiscal EBITDA Loss by 37% and Free Cash Flow by 47%.
Generated positive Adjusted Gross Profit in fourth quarter.
Successfully completed Initial Public Offering on March 3rd, 2021.
“Despite the unforeseen challenges many businesses have experienced during the pandemic, I’m proud to say that our performance in 2020 offered many highlights and accomplishments that we take great pride in. Our Farmers Edge team adapted quickly to the ever-changing circumstances of the pandemic while consistently demonstrating a commitment to our growers and partners,” said Wade Barnes, Chief Executive Officer and founder of Farmers Edge. “Financially, we delivered top-line growth while driving strong gains in acres under subscription. Strategically, we made important progress expanding our partnerships in insurance, imagery, Cloud and technology services, which will help us further advance the Farmers Edge position as a global leader in digital agriculture. We also successfully completed an IPO to bring Farmers Edge to the public markets raising $117.6 million of net proceeds after deducting costs and repayment of shareholder debt. It was great to experience the support for our Company’s vision. The funds give us the ability to accelerate growth and speed up digital transformation on the farm and beyond.
“We believe our robust data-driven, customer-centric approach to digital agriculture, in tandem with strong strategic partnerships, provides value to both the farmer and the expanded agricultural ecosystem. Our strength in combining deep industry knowledge and experience with our development teams’ technical acumen makes our digital platform of unique benefit to farmers and those who serve them. We help growers achieve higher yields with fewer inputs, improving profitability and ensuring sustainable food production for a rapidly growing population.”
Fiscal 2020 Financial Highlights
- Generated revenue of $45.9 million, up 93% from $23.8 million.
- Digital agronomy solutions revenue increased 85% to $35.5 million.
- Business analytic solutions revenue of $2.6 million grew primarily from insurance related activities.
- Proven scalable business model and cost management with lower EBITDA costs realized even with significant Subscribed Acres and revenue growth that resulted in EBITDA improving $27.2 million (37%) on $22.1 million of revenue growth.
- Signed new satellite imagery (Airbus DS Geo Inc.), cloud hosting and technology (Google Cloud Canada), and commercial insurance and carbon partnership agreements.
- Free Cash Flow improved by $45.4 million (47%) to negative $51.3 million.
Fourth Quarter 2020 Financial Highlights
- Generated revenue of $19.1 million, up 186% from $6.7 million.
- Digital agronomy solutions revenue increased 214% to $11.7 million.
- Business analytic solutions revenue included carbon credit revenue for the first time in the Company’s history.
- Non-recurring commercial contract revenue was $5.7 million, an increase of $3.7 million.
- Positive Adjusted Gross Profit of $7.0 million (37% margin), included non-recurring commercial contract revenue of $5.5 million, is an improvement of $12.4 million and a significant portion of the fiscal year’s negative Adjusted Gross Profit improvement of $19.9 million (2020 – $2.3 million vs 2019 – $22.2 million).
- EBITDA loss of $4.6 million was an improvement of $13.1 million (74%) on $12.4 million of revenue growth.
- Free Cash Flow improved by $20.4 million (83%) to negative $4.1 million as the Company benefits from its increased scale of operations.
(1) Operating Expenses include Cost of revenue, Data and technology infrastructure expenses, Selling and marketing expenses, Product research and development expenses, and General and administrative expenses as set out on the Company’s Statements of Operations and Comprehensive Loss in its Financial Statements.
(2) Due to net losses incurred, potentially dilutive securities have been excluded from the calculation of diluted loss per share because including them would be anti dilutive.
See the Company’s management discussion and analysis and audited consolidated financial statements for the years ending December 31, 2020 for more information on the period’s results which are available on the Company’s website (www.farmersedge.ca/investor-relations/) and on SEDAR (www.sedar.com).
During Q4, the Company formed a strategic partnership with Google Cloud Canada and entered into a multi-year contract for cloud hosting services. Together the partners will launch a global co‑sell initiative to deliver the next generation of digital agricultural technology tools to growers and partners globally. Farmers Edge also entered into a new multi‑year contract with Airbus DS Geo Inc. as the Company’s satellite imagery provider which will reduce the cost of imagery by 60% beginning in 2021. The combined impact of these new contracts is estimated to be a reduction of approximately $15 million on an annualized basis based on 2020 actual costs.
Furthermore, in Q4, Farmers Edge completed its first sale of carbon credits to a corporate North American power producer as part of Alberta’s regulated carbon program. This sale makes Farmers Edge only one of three companies in North America who have sold carbon credits coming from growers’ operations in a regulated market. Farmers Edge is expanding this unique Carbon Program on the strength of the robust and verifiable data made possible through the company’s fertility and digital solutions.
In 2020, the Company introduced the “Progressive Grower” program to promote the adoption of its Smart Solution, a full-service digital package that has attracted new growers and significantly contributed to increasing the Subscribed Acres to 23.4 million as at December 31, 2020 (2019 – 16.5 million). Additionally, the Company launched a new stream of revenue enhancing opportunities under its business analytics solutions, which expands its scope of market beyond the farm, partnering with global insurance, reinsurance, and other prominent agriculture industry participants, including Munich Re, ProAg, Hudson Insurance Group, and Fairfax Brasil Seguros Corporativos S/A.
Non-IFRS Financial Measures and Key Performance Indicators
This press release makes reference to certain non-IFRS measures and key performance indicators (“KPIs”). These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We make reference to the following non-IFRS measures: “Adjusted Gross Profit”, “EBITDA”, “Adjusted EBITDA” and “Free Cash Flow”. This press release also makes reference to “Annual Recurring Revenue” or “ARR” and “Subscribed Acres”, which are operating metrics used in our industry. These non-IFRS measures and KPIs are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures and KPIs in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. Definitions of these non-IFRS measures and KPIs, as well as a reconciliation of the non-IFRS measures to their most directly comparable measures calculated in accordance with IFRS, can be found under the heading “Key Performance Indicators and Non IFRS measures” in the Company’s management discussion and analysis filed today, March 29, 2021, which is available on the Company’s website (www.farmersedge.ca/investor-relations/) and on SEDAR (www.sedar.com).
About Farmers Edge
Farmers Edge is leading the next agricultural revolution with the industry’s broadest portfolio of proprietary technological innovations, spanning hardware, software, and services. Powered by a unique combination of connected field sensors, artificial intelligence, big data analytics, and agronomic expertise, the Company’s digital platform turns data into actions and intelligent insights, delivering value to all stakeholders of the agricultural ecosystem. Farmers Edge disruptive technologies accelerate digital transformation on the farm and beyond, protecting our global resources and ensuring sustainable food production for a rapidly growing population.
This press release may contain forward-looking information within the meaning of applicable securities legislation. Such information includes, but is not limited to, statements related to the Company’s anticipated results and future cost savings and its future business prospects, partnerships and opportunities, including the planned further expansion into the carbon credit market, and the anticipated benefits therefrom. Words such as “expect,”, “anticipate”, “intend,”, “may,”, “will”, “estimate” and variations of such words and similar expressions are intended to identify such forward-looking information. This information is based on the Company’s reasonable assumptions and beliefs in light of the information currently available to it and the statements are made as of the date of this press release. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such assumptions, risks and uncertainties include, but are not limited to, the factors discussed under “Forward-Looking Information” and “Risk Factors” in the Company’s Annual Information Form dated today, March 29, 2021 and under the “Risk Factors” section in the Company’s management discussion and analysis filed today, March 29, 2021, each of which are available on the Company’s website (www.farmersedge.ca/investor-relations/) and on SEDAR (www.sedar.com). The Company cautions that the list of risk factors and uncertainties is not exhaustive and other factors could also adversely affect the Company’s results. Readers are urged to consider the risks, uncertainties and assumptions associated with these statements carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. The Company does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
For further information:
Farmers Edge Inc.
Chief Financial Officer
VP, Communications & Public Affairs