Absolute Software Corporation - Interim / Quarterly Report 2020

Absolute Reports Fiscal 2020 Second Quarter Financial Results

Company reaches $100 million in ACV, double-digit enterprise growth and strong profitability

VANCOUVER, British Columbia--(BUSINESS WIRE)--February 3, 2020--Absolute (TSX: ABT) (“Absolute” or the “Company”), the leader in endpoint resilience, today announced its financial results for the three and six months ended December 31, 2019. All dollar figures are stated in U.S. dollars, unless otherwise indicated.

“We are pleased to report continued strength in our Enterprise market, and strong profitability across the business,” said Christy Wyatt, CEO of Absolute. “During Q2 we hit a significant milestone, surpassing $100 million in our ACV base. Our unique firmware-embedded position means we have roots into the most trusted part of the endpoint device, enabling us to be the most trusted partner for our customers. This led to us to adding five new Fortune 500 customers and driving notable customer expansions and wins with Mercy Health, State of Louisiana, and Hamilton Health Sciences.”

Second Quarter Fiscal 2020 Financial Highlights

Total revenue in Q2-F2020 was $25.8 million, representing a year-over-year increase of 6%. Year-to-date total revenue was $51.4 million, representing an increase of 6% over the prior year-to-date period.
The Annual Contract Value Base (“ACV Base”) at December 31, 2019 was $100.3 million, representing an increase of 5% over the prior year balance and a sequential increase of 1% over Q1-F2020.
The Enterprise & Government portions of the ACV Base, combined, increased by 12% annually and by 4% sequentially. Enterprise & Government sector customers represented 69% of the ACV Base at December 31, 2019.
The Education sector portion of the ACV Base decreased by 8% annually and by 4% sequentially. Education sector customers represented 31% of the ACV Base at December 31, 2019.
Incremental ACV from New Customers was $1.3M in Q2-F2020, compared to $1.0 million in Q2-F2019.
Net ACV Retention from existing customers was 100% in Q2-F2020, compared with 101% in Q2-F2019.
Adjusted EBITDA in Q2-F2020 was $6.2 million, or 24% of revenue. Adjusted EBITDA – pre-IFRS 16 was $5.7 million, or 22% of revenue, compared to $4.5 million, or 18% of revenue, in Q2-F2019. Year-to-date Adjusted EBITDA was $13.2 million, or 26% of revenue. Year-to-date Adjusted EBITDA – pre-IFRS 16 was $12.3 million, or 24% of revenue, compared with $8.6 million, or 18% of revenue, in the prior year-to-date period.
• Cash generated from operating activities in Q2-F2020 was $2.2 million. Cash from operating activities – pre-IFRS 16 in Q2-F2020 was $1.8 million, compared to $1.9 million in Q2-F2019. Year-to-date cash from operating activities was $9.6 million. Yearto-date cash from operating activities – pre-IFRS 16 was $8.8 million, compared with $5.9 million in the prior year-to-date period.
Absolute paid a quarterly dividend of CAD$0.08 per common share during Q2-F2020.

Quarterly Developments

In October 2019, Absoluteannounced the appointment of Will Morris as Executive Vice President, Engineering, and Ameer Karim Executive Vice President, Product Management.
In October 2019, the Company partnered with ServiceNow to certify the Absolute ITSM Connector for ServiceNow, enabling joint customers to view Absolute’s single source of truth asset intelligence for Windows and Mac devices.
In November 2019, Absolute hosted its Financial Analyst Day in New York. The event featured executives from across the Company who provided technical and business updates, and Absolute’s strategy around Resilience to financial analysts and shareholders.
In December 2019, the Company expanded the ecosystem of security controls and applications that Absolute customers can persist, self-heal, and ensure are undeletable - adding VMware Workspace ONE[®] , VMware[®] Carbon Black, CrowdStrike Falcon[®] and Netcloud to the nearly 40 applications that make up the growing Absolute Resilience ecosystem.
In December 2019, Absolute saw its first Persistence as a Service (PaaS) licensee ship their Persistence enabled application and start to onboard with their first customers.
In December 2019, Absolute activated its first public cloud data center in the EU - a significant milestone in Absolute’s journey to the cloud and an important enabler for access to the EU market more broadly.
In December 2019, Absolute introduced a software release with several new user interface enhancements. This included a new Missing Devices feature, making it easier for Absolute’s customers to manage their deployments, including the ability to locate, track and manage missing devices.

Summary of Key Financial Metrics

USD Millions, except per share data	Q2 F2020F2019Change	Q2 F2020F2019Change	YTD F2020F2019Change
Revenue			$ 49.5 $46.6 6% $ 1.9 $ 2.1 (9%) $ *51.4* $48.7 6% $ 13.2 26 % $ 12.3 $ 8.6 42% 24 %18% $ 6.2 $ 3.0_104%_ $ 0.15 $0.07 $ 0.14 $0.07 $ 9.6
Commercial recurring(1)	$ 24.9 $ 23.4 6%
Professional Services and Other	$ 0.9 $ 1.0_(11%)_
Total	$ *25.8* $ 24.4 6%

Adjusted EBITDA(2)	$ 6.2
As a percentage of revenue		24 %

Adjusted EBITDA – pre IFRS 16(2)(3)	$ 5.7 $ 4.5 28%
As a percentage of revenue		22 % 18%

Net Income	$ 2.7 $ 1.8 54%
Per share (basic)	$ 0.06 $ 0.04
Per share (diluted)	$ 0.06 $ 0.04

Cash from operating activities	$ 2.2

Cash from operating activities – pre IFRS 16(3)	$ 1.8 $ 1.9 (9%)	$ 1.8 $ 1.9 (9%)

Dividends paid	$ 2.5 $ 2.4 3%
Per share (CAD)	$ 0.08 $ 0.08 -

Cash, cash equivalents, and short-term investments $ 38.6 $ 34.2 13%
Total assets	$ 105.1 $ 90.2 16%
Deferred revenue	$ 128.8 $131.7 (2%)

Common shares outstanding		42.3 40.6 4%

Notes:

Commercial recurring revenue represents revenue derived from Cloud Services (as defined below) and recurring managed professional services, both of which are included as part of our ACV Base. Other revenue represents revenue derived from non-recurring professional services and ancillary product lines, including consumer products.
Throughout this document, “Adjusted EBITDA” is used as a profitability measure. Please refer to the “Non-IFRS Measures” section of this MD&A for further discussion on this and other non-IFRS measures.
The Company adopted IFRS 16, “Leases” , effective July 1, 2019 using the modified retrospective approach (please refer to the “ New Accounting Pronouncements” section of this MD&A and to Note 2(e) in the notes to the Q2-F2020 Condensed Consolidated Financial Statements). Accordingly, financial information presented for fiscal 2019 has not been adjusted for the impact of the adoption of IFRS 16. Figures presented that include the title “pre-IFRS 16” represent operating results had IFRS 16 not been adopted, and provide a meaningful comparative to similar operating results for F2019.

F2020 Corporate Outlook

The Company’s outlook for F2020 is unchanged and is as follows:

Revenue is expected to be between $103 million and $106 million, representing 4% to 7% annual growth.
Adjusted EBITDA is expected to be between 18% and 22% of revenue.
Cash from operating activities is expected to be between 16% and 22% of revenue.
Capital expenditures are expected to be between $3.5 million and $4.0 million.

The Company’s forecast for Adjusted EBITDA and cash from operating activities incorporates the impact of IFRS 16, “ Leases ”, which was adopted July 1, 2019. IFRS 16 is expected to positively impact both F2020 Adjusted EBITDA and cash from operating activities by approximately $2.0 million as a result of amortization of right of use assets and from increased interest expense. See “New Accounting Pronouncements” in the Company’s December 31, 2019 MD&A.

The foregoing expectations constitute forward-looking information and financial outlook and are qualified in their entirety by the cautionary statement below.

Quarterly Dividend

On January 20, 2020, the Company declared a quarterly dividend of CAD$0.08 per share on its common shares, payable in cash on February 28, 2020 to shareholders of record at the close of business on February 7, 2020.

Quarterly Filings

Management’s Discussion and Analysis (“MD&A”) and Consolidated Financial Statements and the notes thereto for the fiscal period ended December 31, 2019 can be obtained today from Absolute’s corporate website at www.absolute.com. The documents will also be available under Absolute’s profile at www.sedar.com.

Notice of Conference Call

Absolute will hold a conference call to discuss its Q2-F2020 financial results on Monday, February 3, 2020, at 5:00 p.m. ET (2:00 p.m. PT). All interested parties can join the call by dialing 647-427-7450 or 1-888-231-8191. Please dial-in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until Monday, February 10, 2020 at midnight. To access the archived conference call, please dial 416-849-0833 or 1-855-859-2056 and enter the reservation code 5717697 .

A live audio webcast of the conference call will be available at www.absolute.com and here. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. An archived replay of the webcast will be available on the Company’s website for 90 days.

Non-IFRS Measures and Definitions

Throughout this press release, the Company refers to a number of measures that the Company believes are meaningful in the assessment of the Company’s performance. All these metrics are nonstandard measures under International Financial Reporting Standards (“IFRS”), and are unlikely to be comparable to similarly titled measures reported by other companies. Readers are cautioned that the disclosure of these items is meant to add to, and not replace, the discussion of financial results or cash flows from operations as determined in accordance with IFRS. For a discussion of the purpose of these non-IFRS measures, please refer to the Company’s MD&A for the period ended June 30, 2019.

These measures, as well as their method of calculation or reconciliation to IFRS measures, are as follows:

1) ACV Base, Net ACV Retention and ACV from New Customers

As the majority of the Company’s customer contracts are sold under multiyear term licenses, there is a significant lag between the timing of the billing and the associated revenue recognition. As a result, the Company focuses on the aggregate annualized value of its subscriptions under contract, measured by Annual Contract Value, as an indicator of its future revenues.

The ACV Base measures the amount of recurring annual revenue Absolute will receive from its commercial customers under contract at a point in time, and therefore is an indicator of the Company’s future revenue streams. Net ACV Retention measures the percentage increase or decrease in the Commercial ACV Base at the end of a period for the customers that made up the Commercial ACV Base at the beginning of the same period. This metric provides insight into the effectiveness of Absolute’s customer retention and expansion functions. ACV from New Customers measures the addition to the Commercial ACV Base from sales to new commercial customers during the quarter.

We believe that increases in the amount of ACV from New Customers, and improvement in the Company’s Net ACV Retention, will grow our Commercial ACV Base and, in turn, our future revenues.

2) Adjusted EBITDA and Adjusted EBITDA – pre-IFRS 16

Management believes that analyzing operating results exclusive of significant noncash items or items not controllable in the period provides a useful measure of the Company’s performance. The term “Adjusted EBITDA” refers to earnings before deducting interest and investment gains (losses), income taxes, amortization of property and equipment and right of use assets, foreign exchange gain or loss, share-based compensation, and restructuring and reorganization charges and post-retirement benefits. The items excluded in the determination of Adjusted EBITDA are share-based compensation, amortization of property and equipment and right of use assets, and restructuring and reorganization charges and certain post-retirement benefits.

Management believes that presenting F2020 Adjusted EBITDA on a pre-IFRS 16 basis will provide a meaningful comparative to F2019 Adjusted EBITDA.

About Absolute

Absolute empowers more than 12,000 customers worldwide to protect devices, data, applications, and users against theft or attack—both on and off the corporate network. With the industry’s only tamper-proof endpoint visibility and control solution, Absolute allows IT organizations to enforce asset management, security hygiene, and data compliance for today’s remote digital workforces. Absolute’s patented Persistence® technology is embedded in the firmware of Dell, HP, Lenovo, and 22 other leading manufacturers’ devices for vendor-agnostic coverage, tamper-proof resilience, and ease of deployment. See how it works at www.absolute.com and follow us on Twitter at @absolutecorp.

©2020 Absolute Software Corporation. All rights reserved. ABSOLUTE, the ABSOLUTE logo, and PERSISTENCE are registered trademarks of Absolute Software Corporation. Other names or logos mentioned herein may be the trademarks of their respective owners.

Forward-Looking Statements

This press release contains certain forward-looking statements and forward-looking information (collectively, “forward-looking statements”) which relate to future events or Absolute’s future business, operations, and financial performance and condition. Forward-looking statements normally contain words like “will”, “intend”, “anticipate”, “could”, “should”, “may”, “might”, “expect”, “estimate”, “forecast”, “plan”, “potential”, “project”, “assume”, “contemplate”, “believe”, “shall”, “scheduled”, and similar terms and, within this press release, include, without limitation, the information under the heading “F2020 Corporate Outlook” and any statements (express or implied) respecting: Absolute’s future plans, strategies, and objectives; projected growth, revenues, margins, Adjusted EBITDA, profitability, expenses, cash from operating activities, capital expenditures, and earnings; existing and new product functionality and suitability; and expectations for the size of the IT security industry. Forwardlooking statements, including the F2020 Corporate Outlook, are provided for the purpose of presenting information about management’s current expectations and plans relating to the future and allowing investors and others to get a better understanding of our anticipated financial

position, results of operations, and operating environment. Readers are cautioned that such information may not be appropriate for other purposes.

Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable, and appropriate in the circumstances. The material expectations, assumptions, and other factors used in developing the forward-looking statements set out herein include or relate to the following, without limitation: Absolute will be able to successfully execute its plans, strategies, and objectives; Absolute will be able to successfully manage cash flow, operating expenses, interest expenses, capital expenditures, and working capital and credit, liquidity, and market risks; Absolute will be able to leverage its past investments to support growth and increase profitability; the size of the IT security industry will be in line with industry experts’ and Absolute’s expectations; Absolute will maintain and enhance its competitive advantages within its industry and certain markets; Absolute will keep pace with or outpace the growth, direction, and technological advancement in its industry; Absolute will be able to adapt its technology to be compatible with changes to existing, and new, operating systems such as Microsoft Windows; Absolute will be able to maintain and develop its partner and reseller network; Absolute’s current and future (if any) OEM partners will continue to provide embedded firmware and distribution and resale support; Absolute will be able to maintain or grow its sales to education customers; Absolute’s existing and new products will function as intended and will be suitable for the intended end users; Absolute will be able to design, develop, and release new products, features, and services and enhance its existing products and services; Absolute will be able to protect against the improper disclosure of data it may process, store, and/or manage; Absolute’s revenues will not become subject to increased seasonality; future financing will be available to Absolute on favourable terms if and when required; Absolute will be in a financial position to buy back some of its shares and/or issue dividends in the future; fluctuations in applicable tax rates, foreign exchange rates, and interest rates will not have a material impact on Absolute; certain tax credits will remain or become available to Absolute; Absolute will be able to attract and retain key personnel; Absolute will be successful in its brand awareness and other marketing initiatives; Absolute will be able to successfully integrate businesses, intellectual property, products, personnel, and/or technologies that it may acquire (if any); Absolute will be able to maintain and enhance its intellectual property portfolio; Absolute’s protection of its intellectual property will be sufficient and its technology does not and will not materially infringe third party intellectual property rights; Absolute will be able to obtain any necessary third party licenses on favourable terms; Absolute will not become involved in material litigation; Absolute will not face any material unexpected costs related to product liability or warranties; foreign jurisdictions will not impose unexpected risks; and Absolute will maintain or enhance its accounting policies and standards and internal controls over financial reporting; and Absolute will be able to recruit and hire a suitably qualified new Chief Financial Officer on the timeline currently intended.

Although management believes that the forward-looking statements herein are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Absolute’s business, as more particularly described in the “Risk and Uncertainties” section of Absolute’s most recently filed Management’s Discussion and Analysis, which is available at www.absolute.com and under Absolute’s profile on www.sedar.com.

Additional material risks and uncertainties applicable to the forward-looking statements herein include, without limitation, unforeseen events, developments, or factors causing any of the aforesaid expectations, assumptions, and other factors ultimately being inaccurate or irrelevant. Many of these factors are beyond the control of Absolute.

All forward-looking statements included in this press release are expressly qualified in their entirety by these cautionary statements. The forward-looking statements contained in this press release are made as at the date hereof and Absolute undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable securities laws.

ABSOLUTE SOFTWARE CORPORATION Condensed Consolidated Statements of Financial Position

(Expressed in United States dollars) (Unaudited)

December 31, 2019 June 30, 2019

ASSETS

CURRENT Cash and cash equivalents Short-term investments Trade and other receivables Income tax receivable Prepaid expenses and other Contract acquisition assets – current PROPERTY AND EQUIPMENT RIGHT OF USE ASSETS DEFERRED INCOME TAX ASSETS CONTRACT ACQUISITION ASSETS GOODWILL LIABILITIES CURRENT Trade and other payables Income tax payable Accrued warranty Lease liabilities – current Deferred revenue – current LEASE LIABILITIES DEFERRED REVENUE COMMITMENTS CONTINGENCIES	$ 18,951,424$ 18,690,539 19,609,274 17,108,226 16,232,050 22,194,252 108,777 707,923 1,925,365 3,088,082 5,887,556 6,592,335
	62,714,446 68,381,357 5,622,879 6,156,814 8,090,700 - 22,835,561 22,359,165 4,758,066 5,313,496 1,100,000 1,100,000
	$ 105,121,652$ 103,310,832
	$ 13,612,381$ 19,034,996 49,135 13,543 239,415 450,000 1,541,453 - 73,938,001 76,312,162
	89,380,385 95,810,701 7,387,311 - 54,867,691 58,115,799
	151,635,387153,926,500

SHAREHOLDERS’ DEFICIENCY Share capital Equity reserve Treasury shares Deficit	80,267,136 76,778,014 36,121,869 36,744,933 (263,840) (359,973 ) (162,638,900) (163,778,642)
	(46,513,735) (50,615,668)
	$ 105,121,652$ 103,310,832

ABSOLUTE SOFTWARE CORPORATION Condensed Consolidated Statements of Operations and Comprehensive Income Three and six months ended December 31, 2019 and 2018

(Expressed in United States dollars) (Unaudited)

REVENUE COST OF REVENUE GROSS MARGIN OPERATING EXPENSES Sales and marketing Research and development General and administration Share-based compensation OPERATING INCOME OTHER (EXPENSE) INCOME Finance income, net Interest expense – lease liability Foreign exchange loss NET INCOME BEFORE INCOME TAXES INCOME TAX EXPENSE NET INCOME AND TOTAL COMPREHENSIVE INCOME BASIC INCOME PER SHARE	Three months ended December 31, Six months ended December 31,
	2019 2018 2019 2018
	$ 25,797,614 $ 24,446,301 $ 51,450,103 $ 48,749,866 3,022,265 3,179,7796,255,632 6,468,183
	22,775,349 21,266,52245,194,471 42,281,683 9,521,739 9,103,06419,040,524 18,728,264 4,185,723 4,466,0777,925,309 9,492,483 4,111,620 4,096,0607,436,477 7,207,063 1,070,385 1,189,2842,237,186 2,508,809
	18,889,467 18,854,48536,639,496 37,936,619
	3,885,882 2,412,0378,554,975 4,345,064 128,605 71,646 240,746 147,328 (126,727) - (257,928) - (40,426) (74,725) (53,245) (113,763)
	(38,548) (3,079) (70,427) 33,565
	3,847,334 2,408,9588,484,548 4,378,629 (1,137,000) (646,000) (2,323,000) (1,352,000)
	$ 2,710,334 $1,762,958$ 6,161,548 $3,026,629
	$ 0.06 $0.04 $ 0.15 $0.07

DILUTED INCOME PER SHARE $ 0.06 $ 0.04 $ 0.14 $ 0.07 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC 41,722,849 40,483,250 41,723,856 40,394,608 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, DILUTED 43,859,350 40,483,250 43,848,893 40,394,608

ABSOLUTE SOFTWARE CORPORATION Condensed Consolidated Statement of Changes in Shareholders’ Deficiency

(Expressed in United States dollars) (Unaudited)

Share Capital	Equity reserve Treasury shares Deficit	Total
Number of Common shares Amount
40,224,231 $68,362,445 145,475 974,560 45,616 202,653 7,872 43,646 210,903 1,142,541 - - - - - -	$36,972,197 $ (359,973 ) $ (161,484,035) (240,190 ) - - - - - (43,646 ) - - (1,142,541 ) - - 2,155,742 - - - - (4,917,121) - - 3,026,629	$(56,509,366) 734,370 202,653 - - 2,155,742 (4,917,121 ) 3,026,629
40,634,097 $70,725,845	$37,701,562 $ (359,973 ) $ (163,374,527)	$(55,307,093)
609,622 3,998,837 44,638 192,718 11,949 69,924 345,246 1,790,690 - - - - - -	(857,913 ) - - - - - (69,924 ) - - (1,790,690 ) - - 1,761,898 - - - - (4,956,636) - - 4,552,521	3,140,924 192,718 - - 1,761,898 (4,956,636 ) 4,552,521
41,645,552 $76,778,014	$36,744,933 $ (359,973 ) $ (163,778,642)	$(50,615,668)

Shares issued on options exercised Shares issued under Employee Share Purchase Plan Shares issued under Performance and Restricted Share Unit plan Share-based compensation Dividends paid Net income and total comprehensive income BALANCE, DECEMBER 31, 2019	135,862 912,602 (161,710 ) - - 750,892 35,963 180,842 - - - 180,842 483,927 2,395,678 (2,493,580 ) 96,133 - (1,769 ) - - 2,032,226 - - 2,032,226 - - - - (5,021,806) (5,021,806 ) - - - - 6,161,548 6,161,548
	42,301,304 $80,267,136 $36,121,869 $ (263,840 ) $ (162,638,900) $(46,513,735)

ABSOLUTE SOFTWARE CORPORATION Condensed Consolidated Statements of Cash Flows Three and six months ended December 31, 2019 and 2018 (Expressed in United States dollars) (Unaudited)

OPERATING ACTIVITIES Net income Items not involving cash Amortization of property and equipment Amortization of right of use assets Amortization of contract acquisition assets Share-based compensation Deferred income taxes Unrealized gain on short-term investments Unrealized foreign exchange loss on lease liability Change in non-cash working capital Trade and other receivables Income tax receivable Prepaid expenses and other Contract acquisition assets incurred Trade and other payables Income tax payable Accrued warranty Deferred revenue CASH FROM OPERATING ACTIVITIES INVESTING ACTIVITIES Purchase of property and equipment Proceeds from maturities of short-term investments Purchase of short-term investments	Three months ended December 31, Six months ended December 31,
	2019 2018 2019 2018
	$ 2,710,334$ 1,762,958$ 6,161,548$ 3,026,629 846,050 884,013 1,671,1941,770,459 413,336 - 826,673 - 2,103,6032,296,762 4,352,8984,524,565 1,070,3851,189,284 2,237,1862,508,809 (108,615 ) (207,000 ) (476,396)(292,000 ) (100,165 ) - (199,272) - 65,631 - 56,840 - (555,165 ) 922,692 5,962,2026,025,825 84,406 (40,105 ) 599,146 6,934 808,900 249,902 1,162,717 220,512 (1,669,443 )(2,944,771 )(3,092,689)(4,619,720 ) (1,251,078 )2,273,672(3,813,540) 737,630 21,932 (15,262 ) 35,592(383,126 ) (290,085 ) (10,000 ) (210,585) (80,000 ) (1,976,458 ) (4,435,474) (5,622,269) (7,530,786)
	2,173,5681,926,671 9,651,2455,915,731 (713,409 ) (459,705 )(2,362,562)(1,880,572 ) 16,410,000 -23,280,000 - (13,796,274 ) -(25,581,776) -

CASH FROM (USED IN) INVESTING ACTIVITIES FINANCING ACTIVITIES Dividends paid Issuance of common shares Payment of lease liabilities CASH USED IN FINANCING ACTIVITIES FOREIGN EXCHANGE EFFECT ON CASH INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS, END OF PERIOD	1,900,317 (459,705 )(4,664,338)(1,880,572 ) (2,512,563 )(2,443,723 )(5,021,806)(4,917,121 ) 905,135 676,724 1,056,261 871,179 (417,862 ) - (827,727) -
	(2,025,290 )(1,766,999 )(4,793,272)(4,045,942 ) 78,181 (104,485) 67,250 (107,504)
	2,126,776 (404,518 ) 260,885(118,287 ) 16,824,64834,243,21918,690,53933,956,988
	$ 18,951,424$33,838,701$ 18,951,424$33,838,701

Contacts

Media Relations

Shannon Tierney [email protected] 415-544-7226

Investor Relations

Joo-Hun Kim [email protected] 212-868-6760

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Absolute Software Corporation Interim / Quarterly Report 2020

44958_rns_2020-02-03_20cba64c-cb09-4e76-ac3e-aa8fa7cc2092.pdf

Absolute Reports Fiscal 2020 Second Quarter Financial Results

Company reaches $100 million in ACV, double-digit enterprise growth and strong profitability

Second Quarter Fiscal 2020 Financial Highlights

Quarterly Developments

Summary of Key Financial Metrics

Notes:

F2020 Corporate Outlook

Quarterly Dividend

Quarterly Filings

Notice of Conference Call

Non-IFRS Measures and Definitions

2) Adjusted EBITDA and Adjusted EBITDA – pre-IFRS 16

About Absolute

Forward-Looking Statements

ABSOLUTE SOFTWARE CORPORATION Condensed Consolidated Statements of Financial Position

December 31, 2019 June 30, 2019

ASSETS

ABSOLUTE SOFTWARE CORPORATION Condensed Consolidated Statements of Operations and Comprehensive Income Three and six months ended December 31, 2019 and 2018

ABSOLUTE SOFTWARE CORPORATION Condensed Consolidated Statement of Changes in Shareholders’ Deficiency

ABSOLUTE SOFTWARE CORPORATION Condensed Consolidated Statements of Cash Flows Three and six months ended December 31, 2019 and 2018 (Expressed in United States dollars) (Unaudited)

Contacts

Media Relations

Investor Relations

AI assistant

Absolute Software Corporation — Interim / Quarterly Report 2020

44958_rns_2020-02-03_20cba64c-cb09-4e76-ac3e-aa8fa7cc2092.pdf

Absolute Reports Fiscal 2020 Second Quarter Financial Results

Company reaches $100 million in ACV, double-digit enterprise growth and strong profitability

Second Quarter Fiscal 2020 Financial Highlights

Quarterly Developments

Summary of Key Financial Metrics

Notes:

F2020 Corporate Outlook

Quarterly Dividend

Quarterly Filings

Notice of Conference Call

Non-IFRS Measures and Definitions

2) Adjusted EBITDA and Adjusted EBITDA – pre-IFRS 16

About Absolute

Forward-Looking Statements

ABSOLUTE SOFTWARE CORPORATION Condensed Consolidated Statements of Financial Position

December 31, 2019 June 30, 2019

ASSETS

ABSOLUTE SOFTWARE CORPORATION Condensed Consolidated Statements of Operations and Comprehensive Income Three and six months ended December 31, 2019 and 2018

ABSOLUTE SOFTWARE CORPORATION Condensed Consolidated Statement of Changes in Shareholders’ Deficiency

ABSOLUTE SOFTWARE CORPORATION Condensed Consolidated Statements of Cash Flows Three and six months ended December 31, 2019 and 2018 (Expressed in United States dollars) (Unaudited)

Contacts

Media Relations

Investor Relations

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Absolute Software Corporation Interim / Quarterly Report 2020