Content Assessment: Driving Operational Efficiencies? KLDiscovery Inc. Announces Third Quarter 2022 Financial Results
Information - 90%
Insight - 86%
Relevance - 91%
Objectivity - 86%
Authority - 90%
A short percentage-based assessment of the qualitative benefit of the recent 3Q22 earnings report from global provider of electronic discovery, information governance and data recovery technology solutions, KLDiscovery.
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Background Note: The following announcement shares the 3Q2022 financial results for eDiscovery provider KLDiscovery and may be of interest to legal, business, and information technology professionals operating or investing in the eDiscovery ecosystem. Additionally, a recent post (August 2022) by Tomasz Tunguz, a venture capitalist with Redpoint, provides an interesting consideration that may be of relevance regarding the value of public software companies. The post, titled Growth is No Longer the Best Predictor of a Software Company’s Value, notes that profitability has surged as the most significant correlate and predictor of a public software company’s value.
Press Announcement Extract (November 9, 2022)
KLDiscovery Inc. Announces Third Quarter 2022 Financial Results
Company Continues to Implement Strategic Initiatives and Drive Operating Efficiencies
MCLEAN, Va.–(BUSINESS WIRE)–KLDiscovery Inc. (“KLDiscovery” or the “Company”), a leading global provider of electronic discovery, information governance and data recovery technology solutions, announced today that revenue for the third quarter ended September 30, 2022 was $74.5 million versus $81.1 million in the third quarter of 2021. Net loss for the third quarter of 2022 was $(17.4) million compared to $(29.5) million in the third quarter of 2021.
EBITDA for the third quarter of 2022 was $5.1 million compared to $14.7 million in the third quarter of 2021. Adjusted EBITDA (which excludes stock-based compensation, acquisition financing and transaction costs and other items as described below) for the third quarter of 2022 was $11.3 million compared to $16.8 million in the third quarter of 2021, reflecting planned investments in research and development and sales and marketing.
“In spite of the macroeconomic headwinds from a declining global economy in the third quarter of 2022, we continue to make tremendous progress in implementing strategic initiatives that we believe are strengthening the Company,” said Christopher Weiler, CEO of KLDiscovery Inc. “We remain laser-focused on the things we can control during these difficult economic times.”
Mr. Weiler continued, “While we are projecting a greater net loss for the full year, Adjusted EBITDA is anticipated to be in-line with our expectations, despite lower revenue resulting from this challenging market environment. Year-to-date Nebula revenue continued to grow year-over-year as we gain more traction with this powerful offering. Client feedback on our innovative Client Portal has been very positive as we remain committed to delivering world-class customer service to our clients combined with our fully integrated technology offering.”
Mr. Weiler added, “We continue to look for and implement efficiencies throughout the Company which allow us to redeploy capital to invest for the future. For example, our now well-established ability to work from home has allowed us to reduce occupancy cost by consolidating office space, which included closing our McLean, VA headquarters and moving to Eden Prairie, MN. We also closed offices in Spain, Sweden, Chicago, and Richmond to consolidate further. For Data Recovery, we optimized our personnel and expanded our sales strategy to target global companies and technology partners as we seek larger contracts with stronger margins in that business.”
KLDiscovery provides technology-enabled services and software to help law firms, corporations, and government agencies solve complex data challenges. With 25 locations across 16 countries, KLDiscovery is a global leader in delivering best-in-class data management, information governance, and eDiscovery solutions to support the litigation, regulatory compliance, and internal investigation needs of clients. Serving organizations for over 30 years, KLDiscovery offers data collection and forensic investigation, early case assessment, data processing, application software and data hosting for web-based document reviews, and managed document review services. In addition, through its global Ontrack data management business, KLDiscovery delivers world-class data recovery, disaster recovery, email extraction and restoration, data destruction, and tape management. KLDiscovery has been recognized as one of the fastest growing companies in North America by both Inc. Magazine (Inc. 5000) and Deloitte (Deloitte’s Technology Fast 500), and CEO Chris Weiler was a 2014 Ernst & Young Entrepreneur of the Year™. Additionally, KLDiscovery is a Relativity Certified Partner and maintains ISO/IEC 27001 Certified data centers around the world. Visit www.kldiscovery.com to learn more.
KLDiscovery Inc Announces Third Quarter 2022 Financial Results
- Growth is No Longer the Best Predictor of a Software Company’s Value (Tomasz Tunguz)
- Revenue Headwinds? KLDiscovery Inc. Announces Second Quarter 2022 Financial Results
- Strong Growth? KLDiscovery Inc. Announces First Quarter 2022 Financial Results
- Investments in eDiscovery (A Running Listing)
- An Abridged Look at the Business of eDiscovery: Mergers, Acquisitions, and Investments
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