During the third quarter, government sales improved to $1.9 million compared with $0.6 million for the prior year. Growth came from domestic and foreign sources. Following a national election in Colombia, including a change in government during the quarter, Intermap experienced booking-to-billing delays as a result of the transition. Revenue for the three months ended September 30, 2022 declined to $1.2 million compared with $1.4 million last year as a result of delayed book-to-bill timing.
Commercial sales recognized a 50% increase in subscription-based revenue compared with the third quarter of 2021. Intermap's recurring subscription sales now represent 46% of total revenue. Unearned Revenue, a balance sheet item, increased by $0.98 million on September 30, 2022, driven by new pre-paid software subscriptions, representing the highest growth quarter in high-margin, cash-generating accounts.
The number of unique software subscribers increased 14% as of September 30, 2022, compared with September 30, 2021, and the average subscription size increased 19% during the period. These contracts enable customers to outsource to Intermap the collection, production, quality control, refresh and delivery of 3D geospatial intelligence, avoiding the cost, uncertainty and infrastructure associated with large in-house GIS workflows.
More than 25% of value-added data revenue for the nine months ending September 30, 2022 was derived from recurring customer licenses. Value-added data increased to $2.1 million for the nine months ended September 30, 2022, compared with $1.3 million for 2021, a 62% improvement. The increase was due to recurring updates for refresh data, with similar annual updates expected to continue.
The increase in high-margin subscription and cloud-based revenue also drove a 37% increase in gross margin from 35% for the nine months ended September 30, 2021 to 48% for the same period this year. As Intermap continues to grow recurring revenue, fixed overhead associated with data infrastructure and public company reporting obligations are better absorbed, and it expects further benefits from operating leverage, and the continued expansion of gross and operating margins.
Cash used in Operating Activities improved to $1.2 million compared with $1.7 million last year. The drawdown in operating cash flow is largely due to radar and software system upgrades that are not capitalized as Intermap designed and prepared to implement modifications for an upcoming country-wide collection mission. Intermap continues to invest significant capital to maintain and improve its one-of-a-kind airborne remote sensing platform and radar systems, including salaries and equipment. IFRS accounting does not permit the Company to capitalize this investment, leading to a large difference between cost basis and book value. However, the Company believes its material ongoing investment in proprietary property and equipment maintains its critical competitive advantage over other providers in its markets, which is demonstrated through ongoing and expected contract wins. The decline in Total Assets came from depreciation related to the legacy radar system.
The Company also announced completion of a non‑brokered private placement offering for potential gross proceeds of C$3.37 million (the "Offering"). The Offering consisted of 1 million Class A common shares ("Shares") at C$0.40 as well as 2.97 million units ("Units") at a price of C$0.40 per Unit. Each Unit will consist of one Share and one transferable common share purchase warrant (a "Warrant"). Each Warrant will entitle the holder to purchase one additional Share at a price of C$0.60 per Share. The Warrants are subject to an acceleration clause whereby in the event that the closing price of the Shares on the Toronto Stock Exchange is equal to or greater than C$1.00 for 20 consecutive trading days, the Company shall have the right, by providing notice to the holder of the Warrants within five trading days thereof, to accelerate the expiry date of the Warrants to the 21st trading day after the issuance of the notice to the holder of the Warrants providing for the new expiry date.
Intermap's consolidated financial statements for the quarter ended September 30, 2022, along with management's discussion and analysis for the corresponding period and related management certifications for third quarter financial results, are available on SEDAR at www.sedar.com.
Selected Annual Information
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| Three months ended | Nine months ended | ||||||
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| September 30, | September 30, | ||||||
U.S. $ millions, except per share data | 2022 | 2021 | 2022 | 2021 | |||||
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Revenue: |
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Acquisition services | $ | 0.2 | $ | 0.2 | $ | 1.1 | $ | 0.2 | |
| Value-added data |
| 0.3 |
| 0.5 |
| 2.1 |
| 1.3 | |
| Software and solutions |
| 0.7 |
| 0.7 |
| 2.4 |
| 2.0 | |
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| Total revenue | $ | 1.2 | $ | 1.4 | $ | 5.6 | $ | 3.5 |
| Operating loss | $ | (1.9) | $ | (1.2) | $ | (3.8) | $ | (4.7) | |
| Net (loss) income | $ | (1.8) | $ | (1.0) | $ | (3.7) | $ | (3.7) | |
| EPS basic and diluted | $ | (0.06) | $ | (0.04) | $ | (0.12) | $ | (0.14) | |
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| September
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| Assets: |
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| Cash, amounts receivable, unbilled revenue | $ | 1.2 | $ | 2.7 |
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| Total assets | $ | 5.6 | $ | 7.3 |
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| Liabilities: |
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| Long-term liabilities (including lease obligations) | $ | 0.8 | $ | 1.0 |
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| Total liabilities | $ | 6.7 | $ | 6.8 |
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