[August 13, 2018]

Absolute Reports Fiscal 2018 Fourth Quarter and Annual Financial Results

Absolute (TSX: ABT), the endpoint visibility and control company, today announced financial results for the three months and fiscal year ended June 30, 2018. All dollar figures are unaudited and stated in U.S. dollars, unless otherwise indicated.

"Our fourth-quarter performance was highlighted by continued momentum within our Enterprise sales teams, including particularly strong performances in the healthcare, financial services and professional services verticals," said Steve Munford, interim chief executive officer at Absolute. "Moving into our new fiscal year, we expect to increase our emphasis on these verticals while leveraging our strong OEM channel relationships to drive new customer acquisition opportunities. Incremental investments in these focus areas will be funded within our existing cost structure, meaning continued operating margin expansion as our top line continues to grow."

Key Financial Metrics

• Commercial recurring revenue in Q4-F2018 was $22.9 million, representing a year-over-year increase of 5%. F2018 commercial recurring revenue was $88.9 million, increasing 4% over F2017.
• Total revenue in Q4-F2018 was $24.1 million, representing a year-over-year increase of 4%. F2018 total revenue was $93.6 million, representing an increase of 3% over the prior year.
• The Commercial Annual Contract Value (ACV) Base⁽¹⁾ at June 30, 2018, was $91.5 million, an increase of 4% year-over-year and 1% sequentially.
• The Enterprise portion of the ACV Base increased 12% year-over-year and was up 2% sequentially. Enterprise customers represented 53% of the ACV Base at June 30, 2018, compared with 49% in the prior year. The Public Sector portion of the ACV Base decreased 3% year-over-year and increased 1% sequentially.
• Net ACV Retention from existing Absolute customers was 101% during Q4-F2018, compared with 99% in Q4-F2017.
• Incremental ACV from New Customers was $0.8 million in Q4-F2018, and was $3.4 million in F2018, compared with $0.8 million and $4.4 million in the respective periods of F2017.
• Adjusted EBITDA in Q4-F2018 was $3.1 million, or 13% of revenue, compared with $2.0 million, or 9% of revenue, in Q4-F2017. For F2018, Adjusted EBITDA was $9.2 million, or 10% of revenue, compared with $7.9 million, or 9% of revenue in the prior year.
• Cash generated from operating activities in Q4-F2018 was $5.0 million compared with $0.7 million in Q4-F2017. For F2018, cash generated from operating activities was $12.5 million, compared with $1.0 million in the prior year period. The Q4-F2018 and F2018 figures were net of a tax refund of $2.3 million and the F2017 figure was net of reorganization and income tax payments of $6.0 million.
• Absolute paid a quarterly dividend of CAD$0.08 per common share during Q4-F2018.

Products and Organizational Developments

• In April 2018, we announced the General Data Protection Regulation ("GDPR") Data Risk and Endpoint Readiness Assessments to help global organizations identify and secure their sensitive data and devices in order prepare for the commencement of GDPR. The assessment delivers a measurable estimate of risk and actionable recommendations to improve endpoint hygiene as well as insights into where sensitive data is at risk of being accessed, stored or shared.
• In April 2018, the Absolute platform was recognized by three award programs. Cyber Defense Magazine's 2018 InfoSec Awards recognized the Absolute platform at RSA Conference 2018 as a winner in Endpoint Security. The Absolute platform was also named a Bronze winner in the 14th Annual 2018 Info Security Products Guide's Global Excellence Awards in the endpoint security category. Finally, the Absolute platform, featuring Reach, was also recognized recently as a finalist in endpoint security by the 2018 Cybersecurity Excellence Awards.

F2019 Corporate Outlook

The Company's outlook for F2019 is as follows:

• Revenue is expected to be between $96.0 million and $99.0 million, representing 3% to 6% annual growth;
• Adjusted EBITDA is expected to be between 13% and 16% of revenue;
• Cash from operating activities is expected to be between 10% and 14% of revenue; and
• Capital expenditures are expected to be between $3.5 million and $4.0 million.

Quarterly Dividend

On July 23, 2018, the Company declared a quarterly dividend of CAD$0.08 per share on its common shares, payable in cash on August 23, 2018, to shareholders of record at the close of business on August 2, 2018.

Quarterly Filings

Management's Discussion and Analysis (MD&A) and Consolidated Financial Statements and the notes thereto for the fiscal year ended June 30, 2018 can be obtained today from Absolute's corporate website at www.absolute.com. The documents will also be available at www.sedar.com.

Notice of Conference Call

Absolute will hold a conference call to discuss the Company's Q4-F2018 results on Monday, August 13, 2018, at 5:00 p.m. ET. All interested parties can join the call by dialing 647-427-7450 or 888-231-8191. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until Monday, August 20, 2018, at midnight ET. To access the archived conference call, please dial 416-849-0833 or 1-855-859-2056 and enter the reservation code 2580187.

A live audio webcast of the conference call will be available at www.absolute.com and https://bit.ly/2JswxK1. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. An archived replay of the webcast will be available on the Company's website for 90 days.

Non-IFRS Measures and Definitions
Throughout this press release, the Company refers to a number of measures that the Company believes are meaningful in the assessment of the Company's performance. All these metrics are nonstandard measures under International Financial Reporting Standards (-IFRS-), and are unlikely to be comparable to similarly titled measures reported by other companies. Readers are cautioned that the disclosure of these items is meant to add to, and not replace, the discussion of financial results or cash flows from operations as determined in accordance with IFRS. For a discussion of the purpose of these non-IFRS measures, please refer to the Company's June 30, 2018 MD&A on SEDAR at www.sedar.com.

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

1) Commercial ACV Base, Net ACV Retention and ACV from New Customers
As the majority of the Company's customer contracts are sold under multiyear term licenses, there is a significant lag between the timing of the billing and the associated revenue recognition. As a result, the Company focuses on the aggregate annualized value of its subscriptions under contract, measured by Annual Contract Value, as an indicator of its future revenues.

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

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

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

3) Adjusted Operating Expenses
A number of significant noncash or nonrecurring expenses are reported in the Company's Cost of Revenue and Operating Expenses. Management believes that analyzing these expenses exclusive of these noncash or nonrecurring items provides a useful measure of the cash invested in the operations of its business. The items excluded in the determination of Adjusted Operating Expenses are share-based compensation, amortization of acquired intangible assets, amortization of property and equipment, and restructuring and reorganization charges and certain post-retirement benefits. For a description of the reasons these items are adjusted, please refer to the "Non-IFRS Measures" section of the June 30, 2018, MD&A.

About Absolute
Absolute provides visibility and resilience for every endpoint with self-healing endpoint security and always-connected IT asset management to protect devices, data, applications and users - on and off the network. Bridging the gap between security and IT operations, only Absolute gives enterprises visibility they can act on to protect every endpoint, remediate vulnerabilities, and ensure compliance in the face of insider and external threats. Absolute's patented Persistence technology is already embedded in the firmware of PC and mobile devices and trusted by over 12,000 customers worldwide. For the latest information, visit www.absolute.com and follow us at @absolutecorp.

Forward-Looking Statements

This press release contains forward-looking statements and financial outlook that involve risks and uncertainties. These forward-looking statements and financial outlook relate to, among other things, the expected performance, functionality and availability of the Company's services and products, and other expectations, intentions and plans contained in this press release that are not historical facts. When used in this press release, the words "plan," "expect," "believe" and similar expressions generally identify forward-looking statements. These statements reflect the Company's current expectations. They are subject to a number of risks and uncertainties, including, but not limited to, changes in technology and general market conditions. In light of the many risks and uncertainties, readers of the press release should understand that Absolute cannot assure them that the forward-looking statements and financial outlook contained in this press release will be realized. Furthermore, the forward-looking statements and financial outlook contained in this press release are made as of the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements and financial outlook, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

©2018 Absolute Software Corporation. All rights reserved. Absolute and Persistence are registered trademarks of Absolute Software Corporation. For patent information, visit www.absolute.com/patents. The Toronto Stock Exchange has neither approved nor disapproved of the information contained in this news release.

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