Page 1

pivotree Pivotree Reports Second Quarter of Fiscal 2021 Results Total bookings growth of 30 % and acquisition of Bridge Solutions Group to contribute to second half growth TORONTO , August 26 , 2021 Pivotree Inc. ( TSXV : PVT ) ( “ Pivotree " or the " Company " ) , a leader in frictionless commerce solutions , today reported financial results for the three and six months ended June 30 , 2021. All amounts are expressed in Canadian dollars unless otherwise stated . " During the second quarter we continued to see steady new bookings from our core target market of large retail and branded manufacturers that are advancing Frictionless Commerce strategies , " said Bill Di Nardo , CEO of Pivotree . " We expect many of the projects signed in the first half of year will go live in the second half , and this will drive higher professional services billings activity and set the stage for a growth in managed services as we transition these customer environments to provide ongoing application support , optimization and cybersecurity services . " Added Mr. Di Nardo , " The organic investments we've made in new technologies and platforms like VTEX are having a strong and positive impact on our business , and with the acquisition of Bridge and others to follow , we will be in a position to accelerate the delivery , at scale , of key products and services that bring end - to - end frictionless experiences for our customers . " Second Quarter 2021 Financial Highlights ( All comparisons are relative to the three - month period ended June 30 , 2020 unless otherwise stated ) : Total Revenue of $ 14.4 million , a decrease of 3.7 % in Canadian dollars and 4.6 % growth in constant currency over the same period last year · ● Managed Services Revenue of $ 8.9 million , a decrease of 19.2 % , or a decrease of 10.5 % on a constant currency basis , driven by foreign exchange and net customer churn from legacy customers that took place in the later part of 2020 and first half of 2021 ● Professional Services Revenue of $ 5.5 million , an increase of 39.9 % , or an increase of 47.4 % on a constant currency basis driven by an improvement in project activity over the past four quarters Annual Recurring Revenue¹ , 2 as at June 30 , 2021 of $ 39.9 million , a 17.6 % decline from the prior year period , and a decline from $ 41.9 million as at March 31 , 2021 Total Bookings ¹ , 2 of $ 10.0 million , an increase of 30.0 . % , driven by new customer wins , extending our relationship with existing professional services customers , and the results of our investments to expand support of new technologies such as VTEX Gross profit of $ 6.3 million representing 43.6 % of total revenue ; adjusting for revenues and cost of revenue related to the new investment areas and growing categories within professional services , the total gross profit as a percentage of total revenue is approximately 46.5 % Net loss of $ 2.9 million , a decline from net income of $ 0.3 million for the prior year period Adjusted EBITDA² of ( $ 1.7 ) million , a decline from positive adjusted EBITDA of $ 2.3 million for the prior year period due to lower gross profit and investments to support growth initiatives Adjusted Free Cash Flow² of ( $ 2.6 ) million , a decline from $ 1.6 million for the prior year period ¹ Please refer to " Key Performance Indicators " section of this press release .