Nyxoah Issues First Half 2021 Financial Results

REGULATED INFORMATION

Nyxoah Issues First Half 2021 Financial Results

Mont–Saint–Guibert, Belgium "" August 31, 2021, 10:30pm CET / 4:30pm ET "" Nyxoah SA (Euronext Brussels/Nasdaq: NYXH)("Nyxoah" or the "Company"), a medical technology company focused on the development and commercialization of innovative solutions to treat Obstructive Sleep Apnea (OSA), today announced its unaudited condensed consolidated interim financial statements for the first half of 2021.

Highlights

  • $97.8 million Nasdaq IPO gross proceeds
  • On track to complete US DREAM trial enrollment
  • 355 thousand revenue generated in Europe, compared to no revenue for the six months ended June 30, 2020, driven mainly in Germany
  • Increased commercial activities in Germany with 12 active accounts in Q2, up from 2 in Q1 2021
  • Announced BETTER SLEEP study top–line results that showed primary safety and performance endpoints met, with statistically significant mean reduction in the AHI score in full patient population including Complete Concentric Collapse ("CCC") patients
  • To submit full BETTER SLEEP study data to a medical journal for publication and announce results following further analyses
  • Integrated Vanderbilt University technology into our scientific and technology department pipelines including collaboration with US and German key opinion leaders

"In the first half of 2021, we kept pace with our initiatives to deliver significant new accomplishments. In less than 12 months, we completed our second IPO with a Nasdaq listing, further strengthening our balance sheet; made important gains in commercial activities in Germany, our initial commercial proof of concept market; advanced clinical programs, including data to potentially expand our addressable market to include CCC patients; and maintained focused investments in new products and technologies," said Olivier Taelman, CEO of Nyxoah. "In the second half, we look forward to further accelerating our commercial activities in existing markets, enter new markets, scale up, and advance clinical programs, including enrollment completion of our US DREAM study in the fourth quarter."

First Half 2021 Results

For the six months ended
June 30
2021 2020
(in thousands)
Revenue 355 '
Cost of goods sold (115) '
Gross profit 240 '
General and administrative expenses (4 777) (2 400)
Research and development expenses (1 255) (56)
Clinical expenses (631) (509)
Manufacturing expenses (2 171) (207)
Quality assurance and regulatory expenses (642) (86)
Patents fees & Related (793) (107)
Therapy Development expenses (1 502) (761)
Other operating income / (expenses), net (97) 184
Operating loss for the period (11 628) (3 942)
Financial income 43 82
Financial expense (899) (416)
Loss for the period before taxes (12 484) (4 276)
Income taxes (124) (24)
Loss for the period (12 608) (4 300)
Loss attributable to equity holders (12 608) (4 300)
Other comprehensive loss
Items that may be subsequently reclassified to profit or loss (net of tax)
Currency translation differences 192 (89)
Total comprehensive loss for the year, net of tax (12 416) (4 389)
Loss attributable to equity holders (12 416) (4 389)
Basic Earnings Per Share (in EUR) (0.570) (0.262)
Diluted Earnings Per Share (in EUR) (0.570) (0.262)

Revenue

Revenue was 355 thousand for the six months ended June 30, 2021, compared to no revenue for the six months ended June 30, 2020. The increase in revenue was attributable to the Company's commercialization of the Genio system mainly in Germany, and to a lesser extent, Spain and Belgium.

Cost of Goods Sold

Cost of goods sold was 115 thousand for the six months ended June 30, 2021, compared to no cost for the six months ended June 30, 2020. The increase in cost of goods sold was attributable to the sales of the Genio system in Europe.

General and Administrative Expenses. General and administrative expenses increased by 2.4 million, or 99 %, from 2.4 millionfor the six months ended June 30, 2020 to 4.8 million for the six months ended June 30, 2021 mainly due to an increase in consulting and contractors' fees. The increase in consulting and contractors' fees includes variable compensations for an amount of 0.3 million for the six months ended June 30, 2020 and 1.9 million for the six months ended June 30, 2021 related to a cash–settled share based payment transaction and an increase of consultant services to support the company in legal, finance, tax and IT matters.

Research and Development Expenses. Before capitalization of 0.6 million for the six months ended June 30, 2021 and 0.6 million for the six months ended June 30, 2020, research and development expenses increased by 1.1 million or 173 %, from 0.7 million for the six months ended June 30, 2020, to 1.8 million for the six months ended June 30, 2021, due to an increase in staff and consulting costs to support our R&D activities. The Company started as of January 2021 to amortize its intangible assets. This explains the significant increase of depreciation expenses for the six months ended June 30, 2021, compared to the six months ended June 30, 2020.

Clinical Expenses. Before capitalization of 3.1 million for the six months ended June 30, 2021, and 1.4 million for the six months ended June 30, 2020, clinical expenses increased by 1.8 million, or 96%, from 1.9 million for the six months ended June 30, 2020, to 3.7 million for the six months ended June 30, 2021. The increase in the expenses was mainly due to an increase in staff and consulting to support the completion of the BETTER SLEEP trial implantations, continuous recruitment for the EliSA trial and the ongoing DREAM IDE trial in the United States.

Manufacturing Expenses. Before capitalization of 0.3 million for the six months ended June 30, 2021, and 1.2 million for the six months ended June 30, 2020, manufacturing expenses increased by 1.0 million, or 72% from 1.4 million for the six months ended June 30, 2020, to 2.4 million for the six months ended June 30, 2021. The increase in the expenses was mainly due to an increase in staff, in production and engineering team to support capacity and yield improvement. In addition, manufacturing expenses increased for the six months ended June 30, 2021, compared to the same period of 2020 due to the increase demand of our Genio system for non–commercial purposes (clinical trials, development activities, etc) and, therefore, the increase of associated production costs.

Quality Assurance and Regulatory Expenses. Before capitalization of 0.2 million for the six months ended June 30, 2021, and 0.5 million for the six months ended June 30, 2020, quality assurance and regulatory expenses increased by 0.3 million, or 44% from 0.6 million for the six months ended June 30, 2020, to 0.9 million for the six months ended June 30, 2021. The increase in the expenses was mainly due to an increase in staff and QA & regulatory activities to support manufacturing scaling up process.

Patent Fees & Related Expenses. Before capitalization of 0.2 million for the six months ended June 30, 2020, patents fees and related expenses increased by 0.5 million, or 199 % from 0.3 million for the six months ended June 30, 2020, to 0.8 million for the six months ended June 30, 2021, due to expenses related the in–licensing agreement with Vanderbilt University.

Therapy Development Expenses. Therapy development expenses increased by 0.7 million or 97 % from 0.8 million for the six months ended June 30, 2020, to 1.5 million for the six months ended June 30, 2021. The increase in the expenses was mainly due to an increase in staff and consulting, to support the launch of the commercialization in Europe.

Other Operating Income / (Expenses). The Company had other operating expenses of 0.1 million for the six months ended June 30, 2021, and other operating income of 0.2 million for the six months ended June 30, 2020, the evolution being mainly due to the impact of the initial measurement and re–measurement of the financial debt.

Operating Loss

The Company realized a net loss of 12.6 million for the six months ended June 30, 2021, compared to a net loss of 4.3 million for the six months ended June 30, 2020, due to increases of activities in all departments.

Cash Position

Cash and cash equivalents totaled 79.2 million on June 30, 2021, as compared to 23.9 million on June 30, 2020.

Net cash used in operations was 8.4 million for the six months ended June 30, 2021 compared to 4.0 million for the six months ended June 30, 2020. The increase of 4.3 million was primarily due to an increase in a loss for the period of 8.2 million that was mainly attributable to increased general and administrative expenses, research and development expenses, manufacturing expenses and therapy development expenses, which were offset by a positive variation in the working capital and other non–cash transactions of 3.9 million.

Net cash used in investing activities was 4.5 million for the six months ended June 30, 2021 compared 3.7 million to the six months ended June 30, 2020.

Net cash used in financing activities for the six months ended June 30, 2021 was 289 thousand compared to 25.7 million of net cash provided by financing activities during the six months ended June 30, 2020. The decrease was due to the fact that no financing rounds have been organized in the first half of 2021.

Outlook for 2021

The Company's business, operational, and clinical outlook for 2021 include the following expected milestones and goals:

  • Begin marketing in Switzerland with approved DRG, as well as additional European countries by the second half of 2021
  • Ramp up EU revenue through dedicated sales team in Germany
  • Open second independent manufacturing site in Belgium
  • Complete DREAM pivotal trial enrollment in the fourth quarter of 2021

First half–year report 2021
Nyxoah's financial report for the first half of 2021, including details of the unaudited condensed consolidated financial statements, are available on the investor page of Nyxoah's website (https://investors.nyxoah.com/financials).

Conference call and webcast presentation
Nyxoah will conduct a conference call to open to the public tomorrow, September 1, 2021, at 3:00 p.m. CET / 9:00 a.m. ET, which will also be webcasted. To participate in the conference call, please dial one of the following numbers:

Conference ID: 7468474

USA: (844) 260–3718
Belgium: 0800 73264
International: (929) 517–0938

A question–and–answer session will follow the presentation of the results. To access the live webcast, go to https://investors.nyxoah.com/events. The archived webcast will be available for replay shortly after the close of the call.

About Nyxoah
Nyxoah is a medical technology company focused on the development and commercialization of innovative solutions to treat Obstructive Sleep Apnea (OSA). Nyxoah's lead solution is the Genio system, a CE–validated, patient–centered, next generation hypoglossal neurostimulation therapy for OSA, the world's most common sleep disordered breathing condition that is associated with increased mortality risk and comorbidities including cardiovascular diseases, depression and stroke.

Following the successful completion of the BLAST OSA study in patients with moderate to severe OSA, the Genio system received its European CE Mark in 2019. The Company has completed the BETTER SLEEP study in Australia and New Zealand for therapy indication expansion and is currently conducting the DREAM IDE pivotal study for FDA approval and a post–marketing EliSA study in Europe to confirm the long–term safety and efficacy of the Genio system.

For more information, please visit http://www.nyxoah.com/.

Caution "" CE marked since 2019. Investigational device in the United States. Limited by U.S. federal law to investigational use in the United States.

Forward–looking statements
Certain statements, beliefs and opinions in this press release are forward–looking, which reflect the Company's or, as appropriate, the Company directors' or managements' current expectations regarding the Genio system; planned and ongoing clinical studies of the Genio system; the potential advantages of the Genio system; Nyxoah's goals with respect to the development, regulatory pathway and potential use of the Genio system; the utility of clinical data in potentially obtaining FDA approval of the Genio system; and the Company's results of operations, financial condition, liquidity, performance, prospects, growth and strategies. By their nature, forward–looking statements involve a number of risks, uncertainties, assumptions and other factors that could cause actual results or events to differ materially from those expressed or implied by the forward–looking statements. These risks, uncertainties, assumptions and factors could adversely affect the outcome and financial effects of the plans and events described herein. A multitude of factors including, but not limited to, changes in demand, competition and technology, can cause actual events, performance or results to differ significantly from any anticipated development. Forward looking statements contained in this press release regarding past trends or activities are not guarantees of future performance and should not be taken as a representation that such trends or activities will continue in the future. In addition, even if actual results or developments are consistent with the forward–looking statements contained in this press release, those results or developments may not be indicative of results or developments in future periods. No representations and warranties are made as to the accuracy or fairness of such forward–looking statements. As a result, the Company expressly disclaims any obligation or undertaking to release any updates or revisions to any forward–looking statements in this press release as a result of any change in expectations or any change in events, conditions, assumptions or circumstances on which these forward–looking statements are based, except if specifically required to do so by law or regulation. Neither the Company nor its advisers or representatives nor any of its subsidiary undertakings or any such person's officers or employees guarantees that the assumptions underlying such forward–looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward–looking statements contained in this press release or the actual occurrence of the forecasted developments. You should not place undue reliance on forward–looking statements, which speak only as of the date of this press release.

Contacts:
Nyxoah
Fabian Suarez, Chief Financial Officer
corporate@nyxoah.com
+32 (0)10 22 24 55

Gilmartin Group
Vivian Cervantes
IR@nyxoah.com

Attachment


Dante Labs Announces Appointment of Sandra Close to its Board of Directors to Support Strategic Initiatives in Diagnostics

CAMBRIDGE, United Kingdom, Aug. 31, 2021 (GLOBE NEWSWIRE) — Dante Labs, a global leader in genomics and precision medicine, announced today the appointment of Sandra Close, Ph.D., as a member of its Board of Directors. Sandra was formerly the Chief Diagnostics Strategy Officer at Invitae, a leading medical genetics company, which acquired ArcherDX in 2020.

"I'm thrilled to welcome Sandra Close to the Dante Labs Board," said Dante Labs CEO Andrea Riposati. "Sandra's expertise in leading strategic efforts to provide actionable, more personalized medical information have had real life impact on people's healthcare decisions, and her leadership in the field will be a valuable addition to our board as we expand the capabilities of the diagnostics side of our business."

Dr. Close stated, "I'm very pleased to be joining Dante's Board at this exciting time to help accelerate diagnostics in healthcare, particularly in rare disease and oncology where earlier intervention is so essential to better health outcomes."

Dr. Close is an experienced leader in driving quality, regulatory and business strategy for growing diagnostics companies on a global scale. Her work at Invitae was focused on leading diagnostics strategy efforts on the oncology team, having joined Invitae through the acquisition of ArcherDX, where she served as Executive Vice President of Quality, Regulatory and Business Strategy. Prior to that, Dr. Close served as CEO and Independent Consultant at GenEngine, an information company providing genetics support technology and services. Prior to her work at GenEngine, Dr. Close held several roles in biotechnology and biopharma. Dr. Close will join Illumina Chief Operations Officer Bob Ragusa, GRAIL SVP Mark Morgan and Pacific Biosciences Chief Operating Officer Mark Van Oene to Dante Labs Board of Directors.

About Dante Labs
Dante Labs is a global genomic data company building and commercializing a new class of transformative health and longevity applications based on whole genome sequencing and AI. Our assets include one of the largest private genome databases with research consent, a proprietary software platform designed to unleash the power of genomic data at scale and proprietary processes which enable an industrial approach to genomic sequencing.

Headquartered in Cambridge, United Kingdom, with a research laboratory in Wolverhampton, Dante Labs supported the UK Government's urgent requirement to scale–up a high–capacity, highly automated testing solution for Covid–19, including infected patients as well as those with antibodies. Dante Labs was able to deliver by leveraging existing technology that had been developed for whole genome sequencing.

Contact
Giorgio Lodi
media@dantelabs.com
+39 0862 191 0671
www.dantelabs.com


Data Platform Helps Pacific Island Countries Collect, Analyse and Act on Information

Do you know if midwife services are available at the Saupia Health Centre in Paunangisu, on the island of Efate in Vanuatu, in the Pacific Islands? I do, and I’ve never been within 1,000 kilometres of the facility — I found the information online within seconds thanks to a data platform called Tupaia

By Marty Logan
KATHMANDU, Aug 31 2021 – Do you know if midwife services are available at the Saupia Health Centre in Paunangisu, on the island of Efate in Vanuatu, in the Pacific Islands? I do, and I’ve never been within 1,000 kilometres of the facility — I found the information online within seconds thanks to a data platform called Tupaia.

Developed in 2017 as a system for tracking items on the extremely lengthy supply chains of health materials in the Pacific Islands, today Tupaia is aggregating data about health, education and the environment from a number of unrelated sources, analysing it, and presenting it in an interactive online map.

“You can look at the national level and see how many people have accessed health services within a specified time frame or you can zoom into a province or a district and see more specifically details about where there are maybe gaps to people accessing the health system, or where people are doing really well, and that allows a country to set up different responses”

“If you want to see how many people a country has had in respect to a Covid outbreak, or a dengue outbreak, that sort of information will be displayed in Tupaia,” says Erin Nunan, director of Beyond Essential Services, the company that created the platform.

“You can look at the national level and see how many people have accessed health services within a specified time frame or you can zoom into a province or a district and see more specifically details about where there are maybe gaps to people accessing the health system, or where people are doing really well, and that allows a country to set up different responses,” adds Nunan in a video interview ahead of the Small Islands States (SIDS) Solutions Forum taking place online and in person 30-31 August 2021.

Tupaia is one of the innovations being featured at the event, which aims to kickstart SIDS’ efforts to reach the global development goals by 2030. Organised by the UN Food and Agriculture Organisation in partnership with the UN International Telecommunications Union and co-hosted by the Government of Fiji, the forum gathers representatives of the 38 SIDS worldwide, UN agencies and civil society.

The economies of many SIDS have been battered by COVID-19 restrictions, which have smothered the key tourist trade. Many were also already struggling with monumental challenges like rising sea levels and growing numbers of extreme weather events as a result of climate change. The forum, which ends Tuesday, is meant to “incubate, promote and scale-up home-grown and imported solutions to accelerate the achievement of the agriculture, food and nutrition related Sustainable Development Goals (SDGs),” says the website.

The makers of Tupaia believe that the platform has moved countries closer to the targets for SDG3 (health and well-being), SDG6 (water and sanitation for all) and SDG 17 (strengthen implementation and partnership for sustainable development). Their company, Beyond Essential Systems, has also released Tamanu, a medical records system.

Today, Tupaia operates in six Pacific Island countries, and beyond, collecting data in real time from nearly 800 facilities using a variety of sources including its own app, MediTrak, and creating visualizations that health systems, workers and even patients can use for decision-making. In Fiji, it is helping to track Covid-19 swab samples.

Open source and free, thanks to funding from the Government of Australia and others, Tupaia’s data collection, management, and visualization tools can also be used to collect environmental data to manage resources such as water stations and for disaster response. In Papua New Guinea, the platform is used to track the incidence of malaria.

“It might be a nurse in a clinic, it might be an administrator in a single province, those are the people that we really consider to be the customers of the software, the actual end users,” says Michael Nunan, CEO of Beyond Essential Systems, in another video interview for the SIDS Solutions Forum.

For example, in 2018 an order for cold chain medicines for the island of Kiribati was delayed. As a result, a busy facility ran out of several items, including insulin and Hepatitis B vaccine. But the facility nurse was able to log on to Tupaia and instantly see which nearby facilities had a functioning fridge and stock of the needed medicines. She contacted one of them and was able to organise a quick delivery of stock so there was little interruption to patient care.

Named after a Polynesian navigator who joined the crew of Captain James Cook in 1769, Tupaia takes data that is often siloed in specialised software designed for specific purposes and integrates it in dashboards that are customisable for a variety of user groups.

Tupaia’s data sources, supply chain software for vaccines and other medicines, health information software, and data collection applications, deliver information about health infrastructure including cold-chain, critical medical equipment, staff, and service provision.

“Whatever it is you want to do with data, whether it’s data collection, data aggregation, analysis, visualization, or dissemination, we want you to be able to do that with Tupaia,” says Michael Nunan in the video interview.

Is Canada Missing out on Leveraging ITMDs in Its Healthcare Plans?

By Sania Farooqui
NEW DELHI, India, Aug 31 2021 – With elections right round the corner in Canada, Prime Minister Justin Trudeau recently said that a re-elected Liberal government would spend billions in the coming years to hire family doctors. This report says, Justin Trudeau promised that the Liberals would spend $3 billion over four years starting in 2022 to hire 7500 family doctors and nurses as well as tax and student loan incentives for health professionals who set up shop in rural or remote communities and also pledges an extra $6 billion to wrestle with wait lists.

Dr. Shafi Bhuiyan

A 2019 report states that there were 91,375 physicians in Canada, representing 241 physicians per 100,000 population. According to the Canadian Medical Association, around five million Canadians don’t have a primary care physician, or family health care team.

Canada’s overburdened healthcare system is yet to tap into its advantage all the untapped talent and skills available to it, as seen during the significant role Internationally Trained Medical Doctors, ITMDs played in fighting the COVID-19 pandemic, supporting the vaccination clinics, working as contact tracing managers and mental health advisors.

Canada is losing out by not involving and including ITMDs, says Dr. Shafi Bhuiyan, a health professional and Chair of ITMDs Canada Network (iCAN). “Over 4.5 million Canadians are not able to find their family physician, as a result the wait time to see a doctor has been increasing continuously, which is also resulting in social peace and justice disruption.”

Canada currently has more than 13,000 ITMDs, and the visa process, Bhuiyan says, has “a very thorough and rigorous screening program by the Canadian CIC, where medical experience plays a key role along with other requirements to enter the country, but once they come to Canada, due to multiple reasons, they lose out on securing a residency position”.

Saida Azam

Saida Azam is one such ITMD who moved to Canada almost three years ago with her husband for better career opportunities. Azam, a medical professional with experience working in India and Oman, says, “I have performed a number of surgeries and deliveries, I worked as a family physician for three years, but right now I am waiting to be able to do that here.

“The knowledge that I have in this field is really good, the only difference in relation to the Canadian context, with medicine, is that when I move from one territory or one country to another, things will be different, from the patients to the region and other such things. That doesn’t mean that I have less knowledge or the local doctors here have more. What would help people like me is, if there were a training program in place for Internationally Trained Medical Doctors to integrate us better into the Canadian healthcare system.

“Canada is home now, I wouldn’t say I am completely disappointed, but I hope that I will be able to share my expertise and pursue my career, ” says Azam.

One of the key challenges for ITMDs remains cost associated with licensing examinations, the CaRMS application process is often a barrier for newcomers. According to this report, 47 % of foreign-educated health professionals are either unemployed or employed in non-health related positions that require only a high school diploma.

The on-going Pandemic has been a time of crisis all over the world, and with shortage and with the under-utilization of health-care workers in Canada, the country is only creating a strain on its health care system by not including and leveraging on its ITMDs.

The 2020 OECD Policy Responses of Coronavirus (COVID19) report says, “by encouraging the creation of new jobs in the health sector globally, the report suggested a unique opportunity both to respond to the growing global demand for health workers and to address the projected shortages. During the COVID-19 pandemic, many OECD countries have recognised migrant health workers as key assets and introduced policies to help their arrival and the recognition of their qualifications.”

In 2020, Canada, where annual immigration amounts to around 300,000 new immigrants, announced its 2021-2023 Immigration Levels Plan, saying it would target the highest level of immigration in its history by welcoming 401,000 immigrants in 2021, 411,000 immigrants in 2022, 421,000 immigrants in 2023.

“The only time Canada welcomed over 400,000 immigrants in a year was in 1913, when it admitted 401,000 newcomers. It has never come close to this figure again,” this report states.

The International Labour Organization (ILO) says developing countries host more than one-third of international migrants in the world and most immigrants are migrant workers and are employed either formally or more often informally in their countries of destination.

This report by the ILO states the importance of immigrants and how “immigration plays a key role in the destination countries development and public policies can play an important role in enhancing its contribution to the development of destination countries. Excluding immigration from development strategies can represent missed opportunities for host countries.”

“The Canadian government is missing out by not including a pool of talent it has to its access, if these hurdles can be removed, and instead replaced by a more simpler and transparent process towards obtaining approved medical licence, it would be a win-win situation for all,” says Bhuiyan.

If Canada is able to overcome these systemic barriers and inequity towards its ITMDs, with a pool of talented immigrants, it has the potential that will not only impact the countries economic prosperity, immigrants alter the country’s income distribution and influence investment priorities and as taxpayers contribute to the public budget and benefit from public services.

 


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Is Canada Missing out on Leveraging ITMDs in it’s Healthcare Plans?

By Sania Farooqui
NEW DELHI, India, Aug 31 2021 – With elections right round the corner in Canada, Prime Minister Justin Trudeau recently said that a re-elected Liberal government would spend billions in the coming years to hire family doctors. This report says, Justin Trudeau promised that the Liberals would spend $3 billion over four years starting in 2022 to hire 7500 family doctors and nurses as well as tax and student loan incentives for health professionals who set up shop in rural or remote communities and also pledges an extra $6 billion to wrestle with wait lists.

Dr. Shafi Bhuiyan

A 2019 report states that there were 91,375 physicians in Canada, representing 241 physicians per 100,000 population. According to the Canadian Medical Association, around five million Canadians don’t have a primary care physician, or family health care team.

Canada’s overburdened healthcare system is yet to tap into its advantage all the untapped talent and skills available to it, as seen during the significant role Internationally Trained Medical Doctors, ITMDs played in fighting the COVID-19 pandemic, supporting the vaccination clinics, working as contact tracing managers and mental health advisors.

Canada is losing out by not involving and including ITMDs, says Dr. Shafi Bhuiyan, a health professional and Chair of ITMDs Canada Network (iCAN). “Over 4.5 million Canadians are not able to find their family physician, as a result the wait time to see a doctor has been increasing continuously, which is also resulting in social peace and justice disruption.”

Canada currently has more than 13,000 ITMDs, and the visa process, Bhuiyan says, has “a very thorough and rigorous screening program by the Canadian CIC, where medical experience plays a key role along with other requirements to enter the country, but once they come to Canada, due to multiple reasons, they lose out on securing a residency position”.

Saida Azam

Saida Azam is one such ITMD who moved to Canada almost three years ago with her husband for better career opportunities. Azam, a medical professional with experience working in India and Oman, says, “I have performed a number of surgeries and deliveries, I worked as a family physician for three years, but right now I am waiting to be able to do that here.

“The knowledge that I have in this field is really good, the only difference in relation to the Canadian context, with medicine, is that when I move from one territory or one country to another, things will be different, from the patients to the region and other such things. That doesn’t mean that I have less knowledge or the local doctors here have more. What would help people like me is, if there were a training program in place for Internationally Trained Medical Doctors to integrate us better into the Canadian healthcare system.

“Canada is home now, I wouldn’t say I am completely disappointed, but I hope that I will be able to share my expertise and pursue my career, ” says Azam.

One of the key challenges for ITMDs remains cost associated with licensing examinations, the CaRMS application process is often a barrier for newcomers. According to this report, 47 % of foreign-educated health professionals are either unemployed or employed in non-health related positions that require only a high school diploma.

The on-going Pandemic has been a time of crisis all over the world, and with shortage and with the under-utilization of health-care workers in Canada, the country is only creating a strain on its health care system by not including and leveraging on its ITMDs.

The 2020 OECD Policy Responses of Coronavirus (COVID19) report says, “by encouraging the creation of new jobs in the health sector globally, the report suggested a unique opportunity both to respond to the growing global demand for health workers and to address the projected shortages. During the COVID-19 pandemic, many OECD countries have recognised migrant health workers as key assets and introduced policies to help their arrival and the recognition of their qualifications.”

In 2020, Canada, where annual immigration amounts to around 300,000 new immigrants, announced its 2021-2023 Immigration Levels Plan, saying it would target the highest level of immigration in its history by welcoming 401,000 immigrants in 2021, 411,000 immigrants in 2022, 421,000 immigrants in 2023.

“The only time Canada welcomed over 400,000 immigrants in a year was in 1913, when it admitted 401,000 newcomers. It has never come close to this figure again,” this report states.

The International Labour Organization (ILO) says developing countries host more than one-third of international migrants in the world and most immigrants are migrant workers and are employed either formally or more often informally in their countries of destination.

This report by the ILO states the importance of immigrants and how “immigration plays a key role in the destination countries development and public policies can play an important role in enhancing its contribution to the development of destination countries. Excluding immigration from development strategies can represent missed opportunities for host countries.”

“The Canadian government is missing out by not including a pool of talent it has to its access, if these hurdles can be removed, and instead replaced by a more simpler and transparent process towards obtaining approved medical licence, it would be a win-win situation for all,” says Bhuiyan.

If Canada is able to overcome these systemic barriers and inequity towards its ITMDs, with a pool of talented immigrants, it has the potential that will not only impact the countries economic prosperity, immigrants alter the country’s income distribution and influence investment priorities and as taxpayers contribute to the public budget and benefit from public services.

The author is a journalist and filmmaker based out of New Delhi. She hosts a weekly online show called The Sania Farooqui Show where Muslim women from around the world are invited to share their views. You can follow her on Twitter here.

Social Protection at a Crossroad—and Poverty On the Rise

Credit: Frank Dejongh / UNICEF

By Annalena Oppel
HELSINKI, Aug 31 2021 – How can we ensure a resilient and inclusive recovery from COVID-19? How can we hold on to the target of eradicating poverty and hunger by 2030, with the pandemic still ongoing?

I recently had the opportunity to participate as a lead discussant at the UN DESA expert group meeting with many distinguished speakers sharing their insights on achieving the Sustainable Development Goals (SDGs) in 2030 despite the COVID-19 pandemic.

One of sessions discussed future pathways for social protection. Discussants evaluated a set of policies that are gaining significant interest as a tool for recovery but also in building more resilient, adaptive, and inclusive social protection systems going forward.

The COVID-19 pandemic has led to an increased number of social protection measures to help people cope with economic challenges. A total of 4,648 policy measures that addressed the economic and health challenges of the pandemic were identified worldwide.

Most of them fall into the field of social assistance (for example cash or in-kind transfers), with 955 policies receiving fiscal support from a government (UNESCWA, 2021).

However, many of these programmes are temporary, and it is not yet evident whether they will remain an integral part of social protection in the long run.

Annalena Oppel

Many of the challenges that have gained greater visibility during the pandemic have existed long before the pandemic started. As evidenced by the Sustainable Development Goals, the international community and policy makers were still in the pursuit of ending poverty and hunger, and establishing good health and well-being.

Yet as many as 115 million people might be pushed into extreme poverty by the end of 2021 — a major setback in the progress already made. Hence, challenges that continued to exist before can worsen if they remain unaddressed.

Social protection can constitute a tool to address multiple challenges, including poverty, food insecurity or inequalities.

A major concern or point of debate is fiscal space or fiscal prioritization. In other words, to what extent can countries afford and sustain social protection programmes.

This is an ongoing debate, with parties providing various funding solutions, but the most sustainable is often considered to be that of domestic revenues. An initiative in 2015 showed that countries do not need to invest an unreasonable amount in order to implement Social Protection Floors – a framework that captures basic provisions in the area of income and health. In 103 countries, the required resources would amount to less than 5 percent of GDP.

There are then only 12 countries which would require international assistance to implement Social Protection Floors as required resources exceed 10 percent of GDP.

Already in 2012 – the same year that ILO proposed the Social Protection Floor (Recommendation 202), two UN experts proposed a Global Fund for Social Protection (GFSP) for Least Developed Countries (LDCs) to ensure financial feasibility and enable countries to put ambitious social protection schemes into place.

In light of COVID-19, there is a growing momentum to revisit this proposal (for example, see here and here).

Another important aspect that was discussed during the expert forum is the availability of data. Data enables evidence-based policy making or to assess the design and feasibility of social policies.

Regarding fiscal capacity, the Government Revenue Dataset (with a newly released version in August 2021) can provide a valuable source on domestic revenues. It covers tax and revenue collection in 196 countries since the 1980s and can provide some insights into how previous crises may have affected fiscal space.

Band-aids or pathways to sustainable development?

Overall, the GFSP and current discussions provide examples of opportunities to propel social protection forward in order to address poverty and inequality.

Ongoing debates, political will, fiscal space, and prioritization will show whether we are on a pathway towards more adaptive, inclusive, and sustained social protection systems, or whether the current expansion of programmes remain short-lived initiatives.

As we move forward, research can support this process by providing timely insights and advice on the effectiveness of current programmes in addressing persistent challenges, e.g., poverty, hunger, and inequality.

At UNU-WIDER, the GRD project, as part of the Domestic Revenue Mobilization programme, is working on different aspects of revenue collection, which can support developing countries to make social protection a lasting solution towards sustainable development.

It is also important to gain a better understanding of the current political climate to see whether public support is aligned with a global mission of building back better, within which social protection can play a crucial role.

*The UN University- World Institute for Development Economics Research (UNU-WIDER) provides economic analysis and policy advice with the aim of promoting sustainable and equitable development for all. The institute began operations over 30 years ago in Helsinki, Finland, as the first research centre of the United Nations University.

The writer is a Research Associate at UNU-WIDER* working on the World Income Inequality Database and the Government Revenue Dataset. She obtained her PhD from the Institute of Development Studies, University of Sussex, UK.

The views expressed in this piece are those of the author, and do not necessarily reflect the views of the Institute or the United Nations University, nor the programme/project donors.

 


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Allow Least Developed Countries to Develop

By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, Aug 31 2021 – The pandemic is pushing back the world’s poorest countries with the least means to finance economic recovery and contagion containment efforts. Without international solidarity, economic gaps will grow again as COVID-19 threatens humanity for years to come.

Least developed
While bringing some concessions, the ‘least developed countries’ (LDCs) designation – introduced five decades ago – has not generated changes needed to accelerate sustainable development for all.

Anis Chowdhury

The United Nations (UN) General Assembly created the LDCs category for its Second Development Decade (1971-80). Its resolution sought support for its 25 poorest Member States, with Sikkim out after India’s 1975 annexation.

With many others joining, the LDCs list rose to 49 in 2001. Half a century later, with only seven having ‘graduated’ – after meeting income, ‘human assets’ and economic & environmental vulnerability criteria – the 44 remaining LDCs have 14% of the world’s people.

With more than two-thirds in Sub-Saharan Africa, LDCs have over half the world’s extreme poor, surviving on under US$1.9 daily. LDCs are 27% more vulnerable than other developing countries, where 12% are extreme poor.

LDC criteria differ from World Bank low-income country benchmarks for concessional loan eligibility. Some LDCs – especially the resource-rich – are middle-income countries (MICs) disqualified from graduation by other criteria.

Most LDCs have become greatly aid reliant. Despite grandiloquent pronouncements, only 6 of 29 Organization for Economic Cooperation and Development (OECD) ‘development partners’ have kept promises to give at least 0.15% of their national incomes as aid to LDCs.

Chasing mirages?
The UN has organised conferences every decade since to review progress and action programmes for LDC governments and development partners. The first – in Paris – was in 1981, while the fifth will be in Doha in January 2022.

Jomo Kwame Sundaram

The 2011 Istanbul conference ambitiously sought to graduate at least half the LDCs by 2020. But only three – Samoa (2014), Equatorial Guinea (2017) and Vanuatu (2020) – have done so. Worse, most ex-LDCs have had difficulties sustaining development after graduating.

During the 1980s and 1990s, many developing countries implemented macroeconomic stabilisation and structural adjustment policies from the Washington-based International Monetary Fund (IMF) and World Bank.

These imposed liberalisation, privatisation and austerity across the board, including many LDCs. Unsurprisingly, ‘lost decades’ followed for most of Africa and Latin America.

Midas curse
Botswana, the first graduate in 1994, is now an upper MIC. Its diamond boom enabled 13.5% average annual growth during 1968-90. Unsurprisingly, Botswana’s ‘good governance’, institutions and ‘prudent’ macroeconomic policies were hailed as parts of this “African success story”.

However, the accolades do not sit well. Mineral-rich Botswana remains vulnerable. Right after graduation, average growth fell sharply to 4.7% during 1995-2005, and has never exceeded 4.5% since 2008.

Manufacturing’s share of GDP fell to 5.2% in 2019, after rising from 5.6% in 2000 to 6.4% in 2010. Nearly 60% of its people have less than the Bank’s MIC poverty line of US$5.50 daily.

Botswana remains highly unequal. During 1986-2002, life expectancy fell 11 years, mainly due to HIV/AIDS. When the government embraced austerity, its already weak health system suffered a disastrous brain drain.

Policy independence crucial
Although they have not yet graduated, several LDCs have successfully begun diversifying their economies. Their policy initiatives offer important lessons for others.

Neither Bangladesh and Ethiopia would qualify as a ‘good governance’ model by criteria once so beloved by the Bank and OECD. Instead, they have successfully intervened to address critical development bottlenecks.

Once considered a ‘basket case’, Bangladesh is now a lower MIC. Diversifying deliberately, rather than pursuing Washington’s policies, it has become quite resilient, averaging 6% growth for over a decade, despite the 2008-09 global financial crisis and current pandemic.

Bangladesh saw the potential for exporting manpower to earn valuable foreign exchange and work experience. In 1976, it agreed to provide labour for Saudi Arabia’s oil-financed boom.

Similarly, as newly industrialised economies no longer qualified for privileged Multi-Fibre Arrangement market access, Dhaka worked with Seoul from 1978 to take over South Korean garment exports.

Bangladesh is also the only LDC to have taken advantage of the 1982 World Health Organization’s essential drugs policy. Its National Drug Policy blocks imports and sales of non-essential drugs. Thus, its now vibrant generic pharmaceutical industry has emerged.

Allow pragmatism
During 2004-19, Ethiopia’s growth averaged over 9%. Poverty declined from 46% in 1995 to 24% in 2016 as industry’s share of output rose from 9.4% in 2010 to 24.8% in 2019.

Avoiding ‘Washington Consensus’ policies, Ethiopian industrial policy drove structural change. Manufacturing grew by 10% yearly during 2005-10, and by 18% during 2015-17.

With improved governance, state-owned enterprises still dominate banks, utilities, airlines, chemical, sugar and other strategic industries. Ethiopia opened banks to domestic investors, keeping foreign ones out. Meanwhile, privatisation has been limited and gradual.

Instead of full exchange rate liberalisation, it adopted a ‘managed float’ system. While market prices were liberalised, critical prices – e.g., for petroleum products and fertilisers – have remained regulated.

Neither Bangladesh nor Ethiopia have embraced central bank independence or formal ‘inflation targeting frameworks’, once demanded by the IMF and others, ostensibly for macroeconomic stability and growth.

Both countries retain reformed specialised development banks to direct credit to policy priorities, while Bangladesh’s central bank has “remained proactive in its mandated developmental role”.

Policy is destiny
In development and structural transformation, ‘path dependency’ implies policy is destiny. LDCs’ current predicaments are largely due to policies from decades ago, pushed by international organisations and development partners.

Reform agendas now should avoid ambitious comprehensive efforts which will overwhelm LDCs with modest resources and capabilities. Also, there is no ‘magic bullet’ or ‘one-size-fits-all’ policy package for all LDCs.

Policies should be appropriate to country circumstances, considering their limited options and difficult trade-offs. They must be politically, economically and institutionally feasible, pragmatic, and target overcoming critical constraints.

OECD development partners must instead meet their commitments and support national development strategies. They must resist presuming to know what is best for LDCs, e.g., requiring them to ape Washington and OECD fads.

 


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Fiddling in Nairobi While Africa Goes Hungry

Members of Africa’s Rural Women’s Assembly are among the farmer and civil society organizations demanding a shift away from Green Revolution programs in the face of rising hunger. Credit: Rural Women’s Assembly

By Timothy A. Wise
BOSTON, Aug 31 2021 – As the United Nations gears up for its Food Systems Summit September 23, the urgent need for structural changes in how we grow, harvest, distribute, and consume food has never been more apparent.

According to the U.N. Food and Agricultural Organization’s (FAO) annual hunger report, released July 12, the world experienced a nearly unprecedented one-year rise in severe hunger from 2019 to 2020. The agency’s annual estimate of “undernourishment” showed an increase of up to 25% over 2019 levels, to between 720 and 811 million people.

Sub-Saharan Africa saw as many as 44 million more people suffer severe undernourishment, leaving 30% of the continent’s residents struggling to feed their families. A stunning 66% of the continent faced “moderate or severe food insecurity” in 2020, according to FAO estimates, up from 51% in 2014. That is an increase of 244 million food-insecure people in just six years.

You wouldn’t know it to listen to the Alliance for a Green Revolution in Africa (AGRA), which released its 2020 Annual Report the same day the FAO sounded its alarms. After noting the challenges of COVID-19 and climate change, the report gushes about the “evidence of improved productivity, better crop quality, higher incomes, and more months of food from [farmers’] surplus.”

In stark contrast to the well-researched data from the FAO, AGRA’s “evidence” was a sloppy set of hastily compiled data presented with examples carefully chosen to show progress. (See my analysis of AGRA’s report here.)

AGRA seems to be living in a different world from poor, rural Africans, oblivious to the documented shortcomings of its technology-focused approach to agricultural development. AGRA leaders and donors seem unaware that the number of severely undernourished people in Sub-Saharan Africa has risen nearly 50% since AGRA was founded in 2006.

That is why African farmer, faith, and community organizations are now challenging AGRA’s failing model, calling on donor agencies and foundations to stop funding the 15-year-old initiative.

Business as usual at the Food Systems Summit

The COVID-19 pandemic was of course largely to blame for the steep rise in hunger in 2020, but climate change and conflict also contributed. So did misguided agricultural policies.

It was the sixth straight year of increases in undernourishment, a trend that last year prompted U.N. Secretary General Antonio Gutierres to call for this year’s Food Systems Summit. The world was clearly not on track to achieve the core Sustainable Development Goal of eliminating severe hunger by 2030.

The summit has been mired in controversy from the outset. Gutierres was widely criticized for his partnership with the World Economic Forum, the corporate elites who gather each year in Davos to discuss the poor world’s problems, sidelining the Rome-based U.N. agencies that generally take the lead on such matters. He compounded the legitimacy crisis by naming AGRA President Agnes Kalibata as Special Envoy to lead the summit.

Major civil society networks and organizations boycotted the summit preparations, which were denounced for favoring technological solutions offered by corporations while failing to put the right to food – and COVID and climate change – at the center of the agenda. U.N. Special Rapporteur on the Right to Food Michael Fakhri recently issued a blistering critique.

The business-as-usual approach of the summit, with its Nairobi-based staff organizing virtual “dialogues” and vetting “game-changing solutions” to food systems failures, seemed deaf to the loud alarms from the FAO. The worst hunger remains in rural areas in developing countries.

Africa’s failing Green Revolution

For the last 15 years, the Green Revolution has been the dominant approach in Africa. AGRA has led the charge from its Nairobi headquarters, with $1 billion in funding, overwhelmingly from the Bill and Melinda Gates Foundation but also with support from the Rockefeller Foundation a small number of bilateral donors. African governments have chipped in with waves of subsidies to farmers – as much as $1 billion per year altogether – to purchase what the Green Revolution is selling: commercial seeds, fertilizers, and other inputs.

The Green Revolution’s “theory of change” is as simple as it is flawed: put seeds and fertilizers in the hands of small-scale farmers. They will see their yields double, so too their incomes from the sales of surplus crops. And they will become food secure from the food they grow and can now afford to buy.

The evidence suggests that none of that has come to pass. Adoption rates for the expensive new seeds and fertilizers remain low, even with governments subsidizing farmers’ purchases. Many of those who adopt have not achieved large yield increases, even in favored crops such as maize. Few have seen rising incomes from sales of growing surpluses; some have ended up in debt after a bad harvest. And food insecurity has grown from its already alarming levels.

This is less a theory of change than a proven route to continued hunger.

Fiddling in Nairobi

AGRA is set to unveil what it will no doubt present as a bold new strategy. But AGRA will likely do little more than fiddle with its current strategy, just as it has before. Unchanged is the failing premise that commercial seeds and fertilizers can dramatically reduce hunger and poverty in rural Africa through a productivity revolution.

Emperor Nero famously fiddled while Rome burned. AGRA should stop fiddling in Nairobi while more Africans go hungry. And donors should listen to African civil society leaders and say no when AGRA claims to speak for Africans and asks for millions more dollars for its failing strategy.

Timothy A. Wise is senior advisor at the Institute for Agriculture and Trade Policy and author of Eating Tomorrow: Agribusiness, Family Farmers, and the Battle for the Future of Food.

 


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CORRECTION – Zoom Reports Financial Results for the Second Quarter of Fiscal Year 2022

  • Second quarter total revenue of $1,021.5 million, up 54% year over year
  • Number of customers contributing more than $100,000 in TTM revenue up 131% year over year
  • Second quarter GAAP operating margin of 28.8% and non–GAAP operating margin of 41.6%

SAN JOSE, Calif., Aug. 30, 2021 (GLOBE NEWSWIRE) — Zoom Video Communications, Inc. (NASDAQ: ZM) is updating this press release to include the "Amortization on marketable securities" line item in its condensed consolidated statements of cash flows. Complete corrected text follows.

Zoom Video Communications, Inc. (NASDAQ: ZM) today announced financial results for the second fiscal quarter ended July 31, 2021.

"In Q2, we achieved our first billion dollar revenue quarter while delivering strong profitability and cash flow," said Zoom founder and CEO, Eric S. Yuan. "Q2 also marked several milestones on our expansion beyond the UC platform. We launched Zoom Apps, bringing over 50 apps directly into the Zoom experience, and Zoom Events, an all–in–one digital events service. Today we are a global brand counting over half a million customers with more than 10 employees, which we believe positions us extremely well to support organizations and individuals as they look to reimagine work, communications, and collaboration."

Second Quarter Fiscal Year 2022 Financial Highlights:

  • Revenue: Total revenue for the second quarter was $1,021.5 million, up 54% year over year.
  • Income from Operations and Operating Margin: GAAP income from operations for the second quarter was $294.6 million, up from $188.1 million in the second quarter of fiscal year 2021. After adjusting for stock–based compensation expense and related payroll taxes, acquisition–related expenses, and expenses related to charitable donation of common stock, non–GAAP income from operations for the second quarter was $424.7 million, up from $277.0 million in the second quarter of fiscal year 2021. For the second quarter, GAAP operating margin was 28.8% and non–GAAP operating margin was 41.6%.
  • Net Income and Diluted Net Income Per Share: GAAP net income attributable to common stockholders for the second quarter was $316.9 million, or $1.04 per share, up from $185.7 million, or $0.63 per share in the second quarter of fiscal year 2021.

    Non–GAAP net income for the quarter was $415.1 million, after adjusting for stock–based compensation expense and related payroll taxes, acquisition–related expenses, gains on strategic investments, undistributed earnings attributable to participating securities, and expenses related to charitable donation of common stock. Non–GAAP net income per share was $1.36. In the second quarter of fiscal year 2021, non–GAAP net income was $274.8 million, or $0.92 per share.

  • Cash and Marketable Securities: Total cash, cash equivalents, and marketable securities, excluding restricted cash, as of July 31, 2021 was $5.1 billion.
  • Cash Flow: Net cash provided by operating activities was $468.0 million for the second quarter, compared to $401.3 million in the second quarter of fiscal year 2021. Free cash flow, which is net cash provided by operating activities less purchases of property and equipment, was $455.0 million, compared to $373.4 million in the second quarter of fiscal year 2021.

Customer Metrics: Drivers of total revenue included acquiring new customers and expanding across existing customers. At the end of the second quarter of fiscal year 2022, Zoom had:

  • 2,278 customers contributing more than $100,000 in trailing 12 months revenue, up approximately 131% from the same quarter last fiscal year.
  • Approximately 504,900 customers with more than 10 employees, up approximately 36% from the same quarter last fiscal year.
  • A trailing 12–month net dollar expansion rate in customers with more than 10 employees above 130% for the 13th consecutive quarter.

Financial Outlook: Zoom is providing the following guidance for its third quarter fiscal year 2022 and its full fiscal year 2022.

  • Third Quarter Fiscal Year 2022: Total revenue is expected to be between $1.015 billion and $1.020 billion and non–GAAP income from operations is expected to be between $340.0 million and $345.0 million. Non–GAAP diluted EPS is expected to be between $1.07 and $1.08 with approximately 309 million non–GAAP weighted average shares outstanding.
  • Full Fiscal Year 2022: Total revenue is expected to be between $4.005 billion and $4.015 billion. Non–GAAP income from operations is expected to be between $1.500 billion and $1.510 billion. Non–GAAP diluted EPS is expected to be between $4.75 and $4.79 with approximately 308 million non–GAAP weighted average shares outstanding.

Additional information on Zoom's reported results, including a reconciliation of the non–GAAP results to their most comparable GAAP measures, is included in the financial tables below. A reconciliation of non–GAAP guidance measures to corresponding GAAP measures is not available on a forward–looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future, although it is important to note that these factors could be material to Zoom's results computed in accordance with GAAP.

A supplemental financial presentation and other information can be accessed through Zoom's investor relations website at investors.zoom.us.

Zoom Video Earnings Call
Zoom will host a Zoom Video Webinar for investors on August 30, 2021 at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss the company's financial results and business highlights. Investors are invited to join the Zoom Video Webinar by visiting: https://investors.zoom.us/

About Zoom
Zoom is for you. We help you express ideas, connect to others, and build toward a future limited only by your imagination. Our frictionless communications platform is the only one that started with video as its foundation, and we have set the standard for innovation ever since. That is why we are an intuitive, scalable, and secure choice for large enterprises, small businesses, and individuals alike. Founded in 2011, Zoom is publicly traded (NASDAQ:ZM) and headquartered in San Jose, California. Visit zoom.com and follow @zoom.

Forward–Looking Statements
This press release contains express and implied "forward–looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the third quarter of fiscal year 2022 and full fiscal year 2022, Zoom's growth strategy and business aspirations to support organizations and people on multiple fronts as they look to reimagine work, communications and collaboration. In some cases, you can identify forward–looking statements by terms such as "anticipate," "believe," "estimate," "expect," "intend," "may," "might," "plan," "project," "will," "would," "should," "could," "can," "predict," "potential," "target," "explore," "continue," or the negative of these terms, and similar expressions intended to identify forward–looking statements. By their nature, these statements are subject to numerous uncertainties and risks, including factors beyond our control, that could cause actual results, performance or achievement to differ materially and adversely from those anticipated or implied in the statements, including: declines in new customers and hosts, renewals or upgrades, difficulties in evaluating our prospects and future results of operations given our limited operating history, competition from other providers of communications platforms, continued uncertainty regarding the extent and duration of the impact of COVID–19 and the responses of government and private industry thereto, including the potential effect on our user growth rate once the impact of the COVID–19 pandemic tapers, particularly as a vaccine becomes widely available, and users return to work or school or are otherwise no longer subject to shelter–in–place mandates, as well as the impact of COVID–19 on the overall economic environment, any or all of which will have an impact on demand for remote work solutions for businesses as well as overall distributed, face–to–face interactions and collaboration using Zoom, delays or outages in services from our co–located data centers, and failures in internet infrastructure or interference with broadband access which could cause current or potential users to believe that our systems are unreliable. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward–looking statements are included under the caption "Risk Factors" and elsewhere in our most recent filings with the Securities and Exchange Commission (the "SEC"), including our quarterly report on Form 10–Q for the fiscal quarter ended April 30, 2021. Forward–looking statements speak only as of the date the statements are made and are based on information available to Zoom at the time those statements are made and/or management's good faith belief as of that time with respect to future events. Zoom assumes no obligation to update forward–looking statements to reflect events or circumstances after the date they were made, except as required by law.

Non–GAAP Financial Measures
Zoom has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Zoom uses these non–GAAP financial measures internally in analyzing its financial results and believes that use of these non–GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing Zoom's financial results with other companies in its industry, many of which present similar non–GAAP financial measures.

Non–GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with Zoom's condensed consolidated financial statements prepared in accordance with GAAP. A reconciliation of Zoom's historical non–GAAP financial measures to the most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.

Non–GAAP Income From Operations and Non–GAAP Operating Margins. Zoom defines non–GAAP income from operations as income from operations excluding stock–based compensation expense and related payroll taxes, expenses related to charitable donation of common stock, acquisition–related expenses, and litigation settlements, net. Zoom excludes stock–based compensation expense and expenses related to charitable donation of common stock because they are non–cash in nature and excluding these expenses provides meaningful supplemental information regarding Zoom's operational performance and allows investors the ability to make more meaningful comparisons between Zoom's operating results and those of other companies. Zoom excludes the amount of employer payroll taxes related to employee stock plans, which is a cash expense, in order for investors to see the full effect that excluding stock–based compensation expense had on Zoom's operating results. In particular, this expense is dependent on the price of our common stock and other factors that are beyond our control and do not correlate to the operation of the business. Zoom views acquisition–related expenses when applicable, such as amortization of acquired intangible assets, transaction costs, and acquisition–related retention payments that are directly related to business combinations as events that are not necessarily reflective of operational performance during a period. Zoom excludes significant litigation settlements, net of amounts covered by insurance, that we deem not to be in the ordinary course of our business. In particular, Zoom believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses and assist in the comparison with the results of other companies in the industry.

Non–GAAP Net Income and Non–GAAP Net Income Per Share, Basic and Diluted. Zoom defines non–GAAP net income and non–GAAP net income per share, basic and diluted, as GAAP net income attributable to common stockholders and GAAP net income per share attributable to common stockholders, basic and diluted, respectively, adjusted to exclude stock–based compensation expense and related payroll taxes, expenses related to charitable donation of common stock, acquisition–related expenses, litigation settlements, net, gains on strategic investments, and undistributed earnings attributable to participating securities. Zoom excludes gains on strategic investments because given the size and volatility in the ongoing adjustments to the valuation of our strategic investments, we believe that excluding these gains or losses facilitates a more meaningful evaluation of our operational performance. Zoom excludes undistributed earnings attributable to participating securities because they are considered by management to be outside of Zoom's core operating results, and excluding them provides investors and management with greater visibility to the underlying performance of Zoom's business operations, facilitates comparison of its results with other periods and may also facilitate comparison with the results of other companies in the industry.

In order to calculate non–GAAP net income per share, basic and diluted, Zoom uses a non–GAAP weighted–average share count. Zoom defines non–GAAP weighted–average shares used to compute non–GAAP net income per share, basic and diluted, as GAAP weighted average shares used to compute net income per share attributable to common stockholders, basic and diluted, adjusted to reflect the common stock issued in connection with the IPO, including the concurrent private placement, that are outstanding as of the end of the period as if they were outstanding as of the beginning of the period for comparability.

Free Cash Flow. Zoom defines free cash flow as GAAP net cash provided by operating activities less purchases of property and equipment. Zoom considers free cash flow to be a liquidity measure that provides useful information to management and investors regarding net cash provided by operating activities and cash used for investments in property and equipment required to maintain and grow the business.

Customer Metrics
Zoom defines a customer as a separate and distinct buying entity, which can be a single paid host or an organization of any size (including a distinct unit of an organization) that has multiple paid hosts.

Zoom calculates net dollar expansion rate as of a period end by starting with the annual recurring revenue ("ARR") from all customers with more than 10 employees as of 12 months prior ("Prior Period ARR"). Zoom defines ARR as the annualized revenue run rate of subscription agreements from all customers at a point in time. We then calculate the ARR from these customers as of the current period end ("Current Period ARR"), which includes any upsells, contraction, and attrition. Zoom divides the Current Period ARR by the Prior Period ARR to arrive at the net dollar expansion rate. For the trailing 12 months calculation, Zoom takes an average of the net dollar expansion rate over the trailing 12 months.

Press Relations

Colleen Rodriguez
Global Public Relations Lead for Zoom
press@zoom.us

Investor Relations

Tom McCallum
Head of Investor Relations for Zoom
investors@zoom.us



Zoom Video Communications, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)

As of
July 31,
2021
January 31,
2021
Assets
Current assets:
Cash and cash equivalents $ 1,931,370 $ 2,240,303
Marketable securities 3,174,029 2,004,410
Accounts receivable, net 395,266 294,703
Deferred contract acquisition costs, current 162,126 136,630
Prepaid expenses and other current assets 172,288 116,819
Total current assets 5,835,079 4,792,865
Deferred contract acquisition costs, noncurrent 154,971 157,262
Property and equipment, net 193,852 149,924
Operating lease right–of–use assets 91,087 97,649
Strategic investments 137,795 18,668
Goodwill 26,247 24,340
Other assets, noncurrent 69,562 57,285
Total assets $ 6,508,593 $ 5,297,993
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 49,762 $ 8,664
Accrued expenses and other current liabilities 482,162 393,018
Deferred revenue, current 1,154,449 858,284
Total current liabilities 1,686,373 1,259,966
Deferred revenue, noncurrent 23,579 25,211
Operating lease liabilities, noncurrent 83,009 90,415
Other liabilities, noncurrent 57,884 61,634
Total liabilities 1,850,845 1,437,226
Stockholders' equity:
Preferred stock "" ""
Common stock 296 292
Additional paid–in capital 3,440,222 3,187,168
Accumulated other comprehensive income 147 839
Retained earnings 1,217,083 672,468
Total stockholders' equity 4,657,748 3,860,767
Total liabilities and stockholders' equity $ 6,508,593 $ 5,297,993

Note: The amount of unbilled accounts receivable included within accounts receivable, net on the condensed consolidated balance sheets was $35.4 million and $24.6 million as of July 31, 2021 and January 31, 2021, respectively.



Zoom Video Communications, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share and per share amounts)

Three Months Ended July 31, Six Months Ended July 31,
2021 2020 2021 2020
Revenue $ 1,021,495 $ 663,520 $ 1,977,732 $ 991,687
Cost of revenue 261,256 192,271 526,250 295,978
Gross profit 760,239 471,249 1,451,482 695,709
Operating expenses:
Research and development 82,311 42,734 147,486 69,123
Sales and marketing 271,179 159,173 516,846 280,729
General and administrative 112,146 81,238 266,235 134,368
Total operating expenses 465,636 283,145 930,567 484,220
Income from operations 294,603 188,104 520,915 211,489
Gains on strategic investments 32,076 "" 32,076 2,538
Interest income and other, net (2,795 ) 2,081 (176 ) 5,333
Income before provision for income taxes 323,884 190,185 552,815 219,360
Provision for income taxes 6,800 4,196 8,200 6,296
Net income 317,084 185,989 544,615 213,064
Undistributed earnings attributable to participating securities (154 ) (247 ) (309 ) (305 )
Net income attributable to common stockholders $ 316,930 $ 185,742 $ 544,306 $ 212,759
Net income per share attributable to common stockholders:
Basic $ 1.07 $ 0.66 $ 1.85 $ 0.76
Diluted $ 1.04 $ 0.63 $ 1.78 $ 0.72
Weighted–average shares used in computing net income per share attributable to common stockholders:
Basic 295,712,675 282,850,805 294,769,619 281,394,901
Diluted 305,861,051 297,162,309 305,652,628 296,408,229



Zoom Video Communications, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)

Three Months Ended July 31, Six Months Ended July 31,
2021 2020 2021 2020
Cash flows from operating activities:
Net income $ 317,084 $ 185,989 $ 544,615 $ 213,064
Adjustments to reconcile net income to net cash provided by operating activities:
Stock–based compensation expense 102,142 56,855 201,111 85,632
Amortization of deferred contract acquisition costs 41,626 24,494 79,392 40,781
Gains on strategic investments (32,076 ) "" (32,076 ) (2,538 )
Charitable donation of common stock "" 22,312 "" 23,312
Provision for accounts receivable allowances 10,537 11,091 14,592 14,959
Depreciation and amortization 12,028 6,475 22,691 11,814
Non–cash operating lease cost 4,359 2,349 8,633 4,597
Amortization on marketable securities 7,041 947 12,637 1,190
Other (6 ) (36 ) 264 838
Changes in operating assets and liabilities:
Accounts receivable (41,594 ) (54,425 ) (117,259 ) (196,926 )
Prepaid expenses and other assets (27,395 ) (4,649 ) (57,370 ) (53,729 )
Deferred contract acquisition costs (54,784 ) (88,936 ) (102,597 ) (213,790 )
Accounts payable 42,368 9,115 43,960 10,871
Accrued expenses and other liabilities 5,153 34,744 93,809 202,066
Deferred revenue 85,740 196,287 296,636 519,149
Operating lease liabilities, net (4,211 ) (1,266 ) (7,724 ) (979 )
Net cash provided by operating activities 468,012 401,346 1,001,314 660,311
Cash flows from investing activities:
Purchases of marketable securities (669,136 ) (277,336 ) (2,094,587 ) (484,882 )
Maturities of marketable securities 500,859 150,324 791,906 287,338
Sales of marketable securities 119,569 10,284 119,569 36,897
Purchases of property and equipment (12,975 ) (27,981 ) (92,049 ) (35,253 )
Purchases of strategic investments (80,400 ) "" (86,900 ) (13,000 )
Cash paid for acquisition, net of cash acquired (2,121 ) (26,486 ) (2,121 ) (26,486 )
Purchase of intangible assets "" (1,332 ) "" (1,494 )
Other "" "" "" 1,319
Net cash used in investing activities (144,204 ) (172,527 ) (1,364,182 ) (235,561 )
Cash flows from financing activities:
Proceeds from issuance of common stock for employee stock purchase plan 37,846 20,760 37,846 20,760
Proceeds from employee equity transactions to be remitted to employees and tax authorities, net 28,884 15,925 18,900 234,465
Proceeds from exercise of stock options 4,653 7,831 8,021 17,417
Other "" "" 337 ""
Net cash provided by financing activities 71,383 44,516 65,104 272,642
Net increase (decrease) in cash, cash equivalents, and restricted cash 395,191 273,335 (297,764 ) 697,392
Cash, cash equivalents, and restricted cash "" beginning of period 1,600,161 758,139 2,293,116 334,082
Cash, cash equivalents, and restricted cash "" end of period $ 1,995,352 $ 1,031,474 $ 1,995,352 $ 1,031,474



Zoom Video Communications, Inc.
Reconciliation of GAAP to Non–GAAP Measures
(Unaudited, in thousands, except share and per share amounts)

Three Months Ended July 31, Six Months Ended July 31,
2021 2020 2021 2020
GAAP income from operations $ 294,603 $ 188,104 $ 520,915 $ 211,489
Adjustments:
Stock–based compensation expense and related payroll taxes 116,742 61,602 221,117 91,848
Litigation settlements, net "" "" 66,916 ""
Acquisition–related expenses 13,320 4,942 16,604 4,942
Charitable donation of common stock "" 22,312 "" 23,312
Non–GAAP income from operations $ 424,665 $ 276,960 $ 825,552 $ 331,591
GAAP net income attributable to common stockholders $ 316,930 $ 185,742 $ 544,306 $ 212,759
Adjustments:
Stock–based compensation expense and related payroll taxes 116,742 61,602 221,117 91,848
Litigation settlements, net "" "" 66,916 ""
Gains on strategic investments (32,076 ) "" (32,076 ) ""
Acquisition–related expenses 13,320 4,942 16,604 4,942
Charitable donation of common stock "" 22,312 "" 23,312
Undistributed earnings attributable to participating securities 154 247 309 305
Non–GAAP net income $ 415,070 $ 274,845 $ 817,176 $ 333,166
Net income per share – basic and diluted:
GAAP net income per share – basic $ 1.07 $ 0.66 $ 1.85 $ 0.76
Non–GAAP net income per share – basic $ 1.40 $ 0.97 $ 2.77 $ 1.18
GAAP net income per share – diluted $ 1.04 $ 0.63 $ 1.78 $ 0.72
Non–GAAP net income per share – diluted $ 1.36 $ 0.92 $ 2.67 $ 1.12
GAAP and non–GAAP weighted–average shares used to compute net income per share – basic 295,712,675 282,850,805 294,769,619 281,394,901
GAAP and non–GAAP weighted–average shares used to compute net income per share – diluted 305,861,051 297,162,309 305,652,628 296,408,229
Net cash provided by operating activities $ 468,012 $ 401,346 $ 1,001,314 $ 660,311
Less:
Purchases of property and equipment (12,975 ) (27,981 ) (92,049 ) (35,253 )
Free cash flow (non–GAAP) $ 455,037 $ 373,365 $ 909,265 $ 625,058
Net cash used in investing activities $ (144,204 ) $ (172,527 ) $ (1,364,182 ) $ (235,561 )
Net cash provided by financing activities $ 71,383 $ 44,516 $ 65,104 $ 272,642


‘COVICANE’ – How One Caribbean Country is Coping with the Hurricane Season during COVID-19

Dominican Farmer and Vendor Ayma Louis has COVID restrictions and the hurrricane season to contend with. Credit: Alison Kentish (IPS)

By Alison Kentish
DOMINICA, Aug 31 2021 – Around 2 pm on August 18, 89-year-old farmer Whitnel Louis and his wife Ayma began packing up their unsold produce, hoping to leave the capital of Roseau and get home way ahead of the 6 pm curfew recently put in place to curb the spread of the COVID-19 virus.

Their pickup was among dozens that lined the Dame Mary Eugenia Charles Boulevard, known by locals simply as ‘the Bayfront,’ a wide street near the ocean with a cruise ship berth, sea defense wall and a docking port that pre-COVID would receive passenger vessels from neighboring islands.

During the three-week curfew period, farmers were permitted to sell their produce along the Bayfront for a few hours every day.

“The curfew was necessary but it was rough. Look at the sun, the heat we are taking. When it’s raining and windy it’s worse. It’s a challenge. We can’t ship our produce overseas like before. The vendors who buy from us to resell want to give us next to nothing for the produce, forgetting all the hard work that goes into farming,” Louis told IPS.

While the farming couple is dealing with the impacts of measures to curtail the spread of COVID-19, the present hurricane season is anxiety-inducing. The Louis were hard hit by two weather systems in the last six years. In 2015, during Tropical Storm Erika, a river burst its banks and raged through their home, destroying all their belongings. In 2017 category five hurricane Maria destroyed their farm.

“Everything was down. Pears, mangoes, coconuts. I had five sheds and the hurricane ripped them apart. Wood was flying everywhere. Today, I still don’t have a single shed on my farm, because I do not have the money to rebuild,” Louis told IPS.

Ahead of the annual hurricane season, the country’s Prime Minister Roosevelt Skerrit referenced the dual challenge facing small island states in the Caribbean.

“Hurricane Season is here amid a COVID-19 pandemic. To be safe during the season, I suggest you all prepare a COVI-CANE supply kit,” he stated in a social media post.

Residents were urged to follow guidelines that included having a traditional hurricane preparedness bag with adequate supplies to last at least three days, along with a COVID-19 kit with gloves, masks, hand sanitizers and rubbing alcohol.

The messaging, tailored for a time when the country might have to deal with two major crises, mirrored the instructions and operations of the Office of Disaster Preparedness.

“Where we were at this time last year to where we are now, we have a lot more information and we have made some advancements, so all notices and public announcements have included current COVID-19 messaging, reminding Dominicans that even as we prepare for hurricanes, remember that COVID-19 is still around and we must take all necessary precautions to protect lives,” Programme Officer at the Office of Disaster Management Mandela Christian told IPS.

The pandemic has spared no sector and the disaster preparedness official said the department is using technology to continue its work.

“A lot of the old preparations were done face to face including meetings and training to prepare for upcoming hurricane seasons. With this pandemic, one of the key management protocols is physical distancing. It changes things, for example, if we get impacted, we would have had to convene the National Emergency Operation Centre and bring people into a central location. This has to be reformed and restructured. As far as possible we have transitioned to virtual sessions,” Christian said.

“There are some limitations for example in rescue operations. You can’t remotely rescue somebody and there will be times to deliver relief supplies to the population. What we have been doing is reviewing protocols, informed by health systems, not just nationally, but also regionally and internationally,” the disaster official told IPS.

Dominica, like countries the world over, has been promoting vaccination as one of the best safeguards against the pandemic and to avoid a mass outbreak of COVID-19 in the event of a natural disaster.

The country has seen a recent surge in positive cases and in August, recorded its first COVID-19 related death.

“I am confident. For myself, for my family and everyone that vaccination works. I am not saying that it is 100 percent effective, or bulletproof, but it works in reducing transmission and the severe disease form of COVID-19. I am appealing to those still waiting and deciding – it’s time to get vaxxed,” National Epidemiologist Dr Shalauddin Ahmed told an August 24 press briefing.

It is a plea that health officials throughout the hemisphere continue to make.

Director of the Pan American Health Organisation (PAHO), Dominican Dr Carissa Etienne has expressed concern over the slow vaccine uptake in Latin America and the Caribbean.

Just about 18 percent of people in the hemisphere have been fully vaccinated against COVID 19.

“What we are seeing now is persons totally relaxing on the public health measures and a high level of vaccine hesitancy,” Etienne  told a press briefing. “Even when vaccines are available, persons are not coming forward. We are seeing vaccine hesitancy in healthcare workers.”

“I don’t know the sources of the information that is triggering this level of vaccine hesitancy. I can tell you that they are not scientifically proven, and I want to appeal to you to listen to the sources where you have truthful, scientifically based information and evidence,” she added.

PAHO’s suggested measures for a ‘COVICANE’ season include evacuation and emergency shelter plans that factor in physical distancing and rigorous sanitization – along with mass vaccination campaigns.

Dominica’s curfew has been lifted and farmers like Whitnel Louis can sell their produce for longer hours – as long as they adhere to the strict public health and safety protocols.

But with an average of 80 cases a day over the past week and continued appeals for thousands more people to embrace vaccination, COVID-19 concerns are far from over.

“There is no good sign in sight,” said Mr Louis, as he reflected on his series of losses to natural disasters and the present challenges in a pandemic that has left no sector untouched.

“I’m hoping the Lord spares us this hurricane season.”

 


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