Blackpearl Group Q3 FY24 Results Announcement

1
BLACKPEARL GROUP | Investor Announcement

22 January 2024
Blackpearl Group Q3 FY24 Results Announcement
Blackpearl Group targets $10 million milestone as annual recurring
revenue doubles.

Introduction
Blackpearl Group (BPG) today announced its results for the three-month period to 31
December 2023, showcasing significant growth driven by strategic initiatives and
technological advancements.

Key Highlights

• Subscription Revenue: Achieved a 215% increase year-on-year, reaching $1.2
million in Q3 FY24, up 29% from the previous quarter, Q2 FY24.
• Annual Recurring Revenue (ARR): Achieved a 122% increase year-on-year,
totalling $5.5 million as of 31 December 2023, up 20% from the previous
quarter, Q2 FY24.
• Gross profit margin increased to 73%, compared to 50% in Q3 FY23 and 70%
in the previous quarter, Q2 FY24.
• ARR Per Employee: Demonstrated a significant increase of 314% year-on-
year and 28% from the previous quarter, highlighting our team's productivity
and effectiveness.

BPG’s Chief Executive Nick Lissette commented on Q3 results, saying: "Every
comparative metric has soared into triple digits, some even surpassing expectations
multiple times over.” Despite challenges in the US market, recurring revenues
increased 20% from Q2. Our short-term goals of $10 million recurring revenue and
cash-flow profitability are imminent.

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BLACKPEARL GROUP | Investor Announcement


Lissette’s focus is on sustained exponential growth through product development,
infrastructure optimisation, and robust operations. With bolder long-term targets,
including reaching the $100 million revenue mark, BPG remains committed to
innovation, strategic growth, and continued success.

Financial Update
BPG’s Q3 success marked a leap forward. We achieved substantial growth in
subscription revenue, a rise in ARR, and demonstrated our continuing operational
scalability and efficiencies through offshore resourcing and prior investment in our
private platform, the Pearl Engine," notes Karen Cargill. "These results highlight our
team's dedication, positioning us for ongoing success in the dynamic market.”

Future Outlook

Looking forward, BPG continues to navigate a path of robust growth and assured
profitability. Our focus remains firmly on the strategic pillars of innovation, market
expansion, and customer-centric product development. This approach has not only
solidified our position but also set the stage for significant expansions and new
ventures.

This quarter has been marked by significant progress in our technology and strategic
partnerships. Notably, the development of our Pearl Large Language Model (LLM)
prototype stands as a pivotal achievement. This hybrid large language model
integrates open-source and proprietary capabilities alongside our bespoke AI. Pearl
LLM will underpin additional product features that help our customers find more
customers through refining audience targeting and strengthening the utility of
insights for sales and marketing functions.

The value of this technology lies not only in the immediate use to enhance our current
products, but also provides the backbone for further innovation. This technology
improves with additional data flows and the use cases expand as customers engage
with it. Our hybrid approach means we continue to leverage advancements in the AI
eco-system while being centred on the most powerful specific use cases for our
customers.

3
BLACKPEARL GROUP | Investor Announcement


Future Quarterly Reporting
BPG aims to release these updates by the 20th of the month following the end of
each quarter.

Contact
Released for and on behalf of BPG,
Karen Cargill
Chief Financial Officer

For further information, please contact:
Karen.cargill@blackpearl.com | +64 21 135 5183


ENDS

About Blackpearl Group
Blackpearl Group (BPG) is a market leading data technology company that pioneers
AI driven, sales and marketing solutions for the US market.

Specifically engineered for small-medium sized businesses (SMEs), BPG consistently
delivers exceptional value to its customers. Our mantra is simple: ‘Better Growth
Together’. When our customers win, we win.

Founded in 2012, BPG is based in Wellington, New Zealand, and Phoenix, Arizona.

Blackpearl.com

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Quarterly
Investor Update
Black Pearl Group Limited - Quarter Three Report
Quarter Three Report for the three-month period to 31 December 2023

Contents:
04
Contents:
06
Foreword from the CEO
Highlights
08
Commentary from CFO
10
Future Outlook
Blackpearl Group - Quarter Three Report
3

Dear Shareholders,
Our results last quarter highlight two important achievements.
Firstly, it shows the impact of our latest product releases. In Q3 FY24, we experienced
triple-figure growth compared to the same reporting period (Q3 FY23) a year earlier.
It should be noted that Q3 FY23 had triple-figure growth compared to Q3 FY22, which
leads me to our next point.
Secondly, and perhaps more importantly, it shows that our growth is consistent with
no signs of slowing. Q3 is a tough period when selling into the US market. It covers
Thanksgiving in late November, Christmas, Hanukkah, New Year revelries, and the
end of the US tax year! Yet our recurring revenues increased by 20% from Q2.
We have stated to the market that our short-term goals are $10 million in recurring
revenue and cash-flow profitability. Both are an inevitability.
While that has been the primary theme of our updates and communication, I’d like
to take this opportunity to make it clear that it is not the sum total of our aspiration
but simply an operational stepping stone.
Black Pearl Group has invested over $25 million in our technology and data platform.
Powered by AI, this investment gives us many first-mover advantages in the
hyper-growth AI industry. We have demonstrated the power of our technology
engine through the creation and execution of Pearl Diver.
We will continue to innovate and release cutting-edge, data-driven services to
the business market. We will ensure our technology helps our customers get more
customers. We will continue rapid growth and secure a position as the preeminent
data engine for small-medium-sized businesses in the US market.
Ad Astra – to the stars
Foreword from the CEO
Nick Lissette
CEO, Blackpearl Group
5
Blackpearl Group - Quarter Three Report

1 October 2023
Highlights
$1.2M subscription revenue booked in Q3 FY24,
up 29% from the previous quarter Q2 FY24.
As of 31 December 2023.
Churn has increased 1.3ppt YOY and 0.4ppt
from the previous quarter.
Total ARR at 31 Dec 2023 is $5.5M, up 20% from
the previous quarter Q2 FY24.
As of 31 December 2023.
A 6ppt increase YoY and 3ppt increase on
previous quarter Q2 F24.
Subscription Revenue
Revenue Churn
215%
3.7%
Annual Recurring Revenue
Top 10 Customers % of Revenue
122%
Was 50% in Q3 FY23 and 70% in the previous
quarter Q2 FY24.
Gross Profit Margin
73% 11%
ARR per employee is $185k per employee as at
31 December 2023, up 28% from the previous
quarter Q2 FY24.
Annual Recurring Revenue Per Employee
314%
31 December 2023
Blackpearl Group - Quarter Three Report
Note:
• Comparative figures relate to Q3 FY23 unless otherwise stated.
• PPT stands for percentage points.
7
7

Delivering on our strategy – Profitability
Blackpearl Group's Q3 success marked a leap forward. We achieved
substantial growth in subscription revenue, a rise in ARR, and
demonstrated our continuing operational scalability and efficiencies
through offshore resourcing and prior investment in our private platform,
the Pearl Engine," notes Karen Cargill. "These results highlight our team's
dedication, positioning us for ongoing success in the dynamic market.”
Commentary
from CFO
Key Commentary
$6 m
$5 m
$4 m
$3 m
$2 m
$1 m
$0 m
$200 k
$180 k
$160 k
$140 k
$120 k
$100 k
$80 k
$60 k
$40 k
$20 k
$0 k
Q3 FY23
Q3 FY23
Q4 FY23
Q4 FY23
Q1 FY24
Quarter, Financial Year
Quarter, Financial Year
Q1 FY24
Q2 FY24
Q2 FY24
Q3 FY24
Q3 FY24
Total ARR at Quarter End
ARR per employee at Quarter End
Our effective utilisation of global resourcing plays a
pivotal role in the increase of ARR per employee.
Off-shoring certain functions allows 24/7 customer
support and enhances customer experience and
satisfaction. As we continue to scale and add to our
global team, we expect this number to drop in the short
term and then rise with future increases in revenue.
314%
Revenue Churn has increased 1.3ppt YOY and 0.4ppt
from the previous quarter. This is expected as we move
to higher value products. This is still below the assumed
5% churn rate used in our planned path to profitability.
3.7%
We are not reliant on large customers due to our
diverse customer base.
11%
The 215% increase in subscription revenue is
representative of the acquisition of our Newoldstamp
product in November 2022 and the release of our higher
value flagship product Pearl Diver in April 2023.
215%
In this quarter we achieved new annual recurring
revenue of $1.8M. This is a significant achievement
in the quarter that contained the Thanksgiving and
Christmas holiday periods. Exchange rate changes
worked against us, reducing the calculated ARR at
quarter end.
122%
Prior investment in Blackpearl Group's private
platform, the Pearl Engine, is still providing scalability
and efficiency at near-zero marginal cost allowing
us to maintain our strong gross profit margin. We
are forecasting an increase in platform costs as we
continue towards achieving $10M ARR.
73%
Karen Cargill
CFO, Blackpearl Group
Total ARR (NZD)
Total ARR (NZD)
9
Blackpearl Group - Quarter Three Report
9

Future
Outlook
Looking forward, Blackpearl Group continues to
navigate a path of robust growth and assured
profitability. Our focus remains firmly on the
strategic pillars of innovation, market expansion,
and customer-centric product development. This
approach has not only solidified our position but
also set the stage for significant expansions and
new ventures.
This quarter has been marked by significant progress
in our technology and strategic partnerships.
Notably, the development of our Pearl Large
Language Model (LLM) prototype stands as a pivotal
achievement. This hybrid large language model
integrates open-source and proprietary capabilities
alongside our bespoke AI. Pearl LLM will underpin
additional product features that help our customers
find more customers through refining audience
targeting and strengthening the utility of insights for
sales and marketing functions.
The value of this technology lies not only in the
immediate use to enhance our current products, but
also provides the backbone for further innovation.
This technology improves with additional data flows
and the use cases expand as customers engage
with it. Our hybrid approach means we continue to
leverage advancements in the AI eco-system while
being centred on the most powerful specific use
cases for our customers.
Delivering on our strategy – Profitability
Blackpearl Group
targets $10 million
milestone as
annual recurring
revenue doubles.
Nick Lissette has now set his sights on
continuing that upward trajectory and
hitting the $10 million target within the
next financial year.
Longer term, Lissette has set even bolder
targets for the business to achieve.
“I believe our sights will soon be on the
$100 million revenue mark,” said Lissette.
11
Blackpearl Group - Quarter Three Report

About Blackpearl Group
Blackpearl Group (BPG) is a market leading data
technology company that pioneers AI driven,
sales and marketing solutions for the US market.
Specifically engineered for small-medium sized
businesses (SMEs), BPG consistently delivers
exceptional value to its customers. Our mantra
is simple: ‘Better Growth Together’. When our
customers win, we win.
Founded in 2012, Blackpearl Group is based in
Wellington, New Zealand, and Phoenix, Arizona.
Blackpearl.com