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spk00: Ladies and gentlemen, thank you for standing by. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the KL Discovery Q1 2022 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. Should you require operator assistance, press star zero and an operator will come on the line to assist you. Thank you. I would now like to turn the call over to Ms. Dawn Wilson, Chief Financial Officer. Please go ahead.
spk02: Thank you, Operator. Welcome to KLDiscovery's Q1 2022 conference call. Today's call contains forward-looking statements. These statements are not guarantees of future performance. Actual results may differ materially from these forward-looking statements due to assumptions, risks, and uncertainties that are described in more detail in our earnings press release issued yesterday and filings with the SEC. KL Discovery undertakes no obligation to amend, update, or clarify these forward-looking statements made as of today. During this call, we will also present non-GAAP financial measures, which were not prepared in accordance with GAAP, reconciliation to the most directly comparable GAAP measure to the non-GAAP financial measures discussed on this call, including EBITDA and adjusted EBITDA, are shown in detail in our press release issued last night, along with definitions for those terms. Management believes that our presentation of non-GAAP financial measures provides useful supplemental information to investors regarding our results of operations. Our non-GAAP financial measures should only be considered in addition to and not as a substitute for or superior to any GAAP measure. Please refer to our press release on how to access a replay of this call. I will now turn the call over to our CEO, Chris Weiler.
spk01: thanks don and good morning everyone uh thank you very much for joining kl discovery's first quarter 2022 financial results conference call my name is chris weiler and i'm the ceo and co-founder of kl discovery thank you all for joining we started 2022 with an outstanding first quarter i am very proud of the global kld team as it continues to consistently deliver excellence by working hard being committed and achieving tremendous results despite the challenging macroeconomic and geopolitical environment we are operating in we remain laser focused on what we can control and the results continue to be strong we achieved our first highest first quarter revenue in our company history with 82 million powered by a 14 increase in legal technology revenue and a 13 increase in nebula revenue in the first quarter of 2022 over the first quarter of 2021 Our Q1 revenue was up 9% year over year, and now for the fourth quarter in a row, we have exceeded $80 million in revenue, demonstrating our consistency even while operating in difficult times. Our EBITDA and adjusted EBITDA for the first quarter of 2022 are slightly down from Q1 of 2021, which is a result of planned investments in research and development and sales and marketing. Our cash position and liquidity continue to be strong as we ended March of 2022. with $38 million in cash and cash equivalents, and we remain undrawn on our $40 million revolving credit facility. Our Nebula platform continues to gain significant traction. In the first quarter of 2022, we increased the number of Nebula clients and Nebula matters 31% and 24%, respectively, compared to the first quarter of 2022. To date, active data hosted on the Nebula platform increased 61% since the end of Q1 2021. We will continue our investment into Nebula in 2022 over the next several years. We expect this powerful platform to gain even more adoption and market share. We also continue to innovate our legal technology client portal. This is a major initiative that we believe will transform the client experience. This week, we are releasing advanced features that make managing workloads easier and more streamlined for our clients. Our clients want and need quick and reliable access to important case information and metrics. This release puts that information at their fingertips on demand via dynamic and customizable visualizations. We will continue to roll out new features throughout 2022 and beyond that will make our client portal a must-have for all of our legal technology clients. Nebula and the client portal demonstrate our technology-driven culture of innovation that is ingrained in the KLD DNA and separates us from the rest of the industry. Our plans for a capital raise are on hold until market conditions improve. Until that timing is right, we will continue to focus on growing this great company and delivering outstanding products, services, and customer support that is unrivaled in the industry. We are off to a great start in 2022 as the momentum we generated in 2021 continues. We have global scale and are proud of our large customer base. many of which are long-time TLD clients. We have demonstrated that we can deliver strong, consistent financial results while developing and delivering transformational shifts in legal technology since our inception in 2005. I will now turn the call over to our CFO, Dawn Wilson.
spk02: Thank you, Chris. As Chris said, the first quarter of 2022 was an excellent quarter and the fourth consecutive quarter of strong revenue. Revenue in the first quarter of 2022 was $81.9 million, up 9% compared to the first quarter of 2021. We achieved our second highest quarter of revenue, nearly surpassing our Q4 2021 revenue total. For the first quarter of 2022, our Nebula ecosystem revenue grew 13% to $6.1 million in 2022 versus $5.4 million in the first quarter of 2021. As Chris mentioned, we are seeing excellent traction from the service offering, demonstrated by strong growth of matters and customers, all of which are great indicators of how Nebula can be a significant contributor to revenue in the future. In the first quarter of 2022, we decreased our net loss to 9.6 million. Additionally, as a result of continued planned investments in research and development to support revenue growth of our technology and planned increases in sales and marketing, Our EBITDA and adjusted EBITDA were down in Q1 2022 compared to Q1 2021. EBITDA in the first quarter of 2022 was $11.3 million, down from Q1 2021 EBITDA $15.1 million. Our EBITDA margin was 14% in Q1 2022 compared to 20% in Q1 2021. These are short-term trade-offs for long-term revenue growth. Q1 2022 adjusted EBITDA plus $14.1 million compared to $15.4 in the first quarter of 2021. Liquidity continues to be strong as our cash and cash equivalents were $38.4 million on March 31, 2022, and we have nothing drawn on our $40 million revolving credit facility. In closing, as we operate in a world of increasing economic and geopolitical uncertainty, we continue to deliver strong results. Our entire team has worked hard to ensure that KLD delivers results and continues to build upon our outstanding foundation. I would now like to turn the call over to Chris for final comments.
spk01: Thanks, Dawn. And I want to thank everyone for joining this morning. And a special thanks to all the wonderful KLD global employees. Go KLD. One unique fingerprint.
spk00: Ladies and gentlemen, thank you for your participation. This concludes today's call. You may now disconnect.
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