Adjusted EBITDA loss nears break-even as MRR grows year over year.
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OTTAWA, ON, July 8, 2020 /CNW/ - Martello Technologies Group Inc., ("Martello" or the "Company") (TSXV: MTLO), a developer of enterprise digital experience monitoring ("DEM") solutions that improve the user experience of telephony and video conferencing for more than 5,000 customers around the world, today released financial results for the three months and fiscal year ended March 31, 2020.
"As COVID-19 has disrupted the global economy, it has also accelerated digital transformation, creating greater urgency for organizations to deliver reliable remote collaboration services such as video conferencing and office productivity solutions", said John Proctor, President and CEO of Martello. "As we focus on addressing this challenge, I'm pleased that in Q4 FY2020 Martello has achieved monthly recurring revenue growth and cut adjusted EBITDA losses dramatically to move close to breakeven. This creates a stable and resilient foundation from which to pursue the rapidly growing market for Microsoft Teams and Office 365, with the acquisition of GSX. We believe our DEM strategy will drive monthly recurring revenue growth, and as we divest from the Company's SD-WAN division, we can focus on accelerating this strategy".
Q4 and FY2020 Highlights
Martello's mission is to provide the industry's clearest picture of the digital user experience, as a leading vendor in the enterprise DEM market.
As COVID-19 continues to disrupt the global economy, Martello has a core resilience and growing market opportunity that positions the Company for future MRR growth. A focus in the 2020 fiscal year on monthly recurring revenue and reducing operating expenses yielded results in Q4 FY2020: 13% year-over-year MRR growth and adjusted EBITDA near breakeven, despite COVID-19 economic uncertainty.
Martello made several strategic decisions subsequent to Q4 FY20 to maximize its MRR growth opportunity in the DEM space.
To expand its DEM offering into the rapidly growing Microsoft Office 365 space, Martello completed the acquisition of Swiss-headquartered GSX, a Gartner-recognized DEM vendor that specializes in Office 365. This strategic acquisition adds significantly to Martello's MRR and diversifies Martello's revenue stream, while offering access to an addressable market of 200 million monthly active users of Microsoft Office 365.
To ensure a strong focus on this growth market, as Martello integrates GSX, the Company is divesting from the Elfiq SD-WAN line of business, which is not aligned with Martello's renewed SaaS-based DEM strategy and MRR growth focus. Discussions with a third-party to purchase the assets of this division continue to progress.
Martello upgraded its senior sales capabilities by appointing Mike Danforth as VP, Global Sales and Partnerships, to drive growth for our DEM solutions in both the Mitel and Microsoft channels with global partners and through direct sales. Mr. Danforth has strong relationships with industry players like PWC, Salesforce, Accenture, Deloitte and Microsoft, and a proven track record of bringing value to customers and partners.
To achieve DEM market dominance, Martello has a focused strategy to expand the addressable market for its DEM monitoring and analytics capabilities, bringing value to enterprises that rely on cloud-based services.
The Mitel channel will continue to be important to Martello's MRR growth and DEM strategy. As the world has shifted to remote work, Martello supports many of the Mitel remote collaboration platforms that are experiencing growth in demand, and earns a royalty on sales of Premium Software Assurance for these. As Mitel continues to provide its customers and partners with a path to cloud communications, Martello has an increasingly important role to play in delivering strong voice quality and user experience for these Mitel solutions.
Microsoft is a key channel for Martello's DEM solutions, which include Martello iQ, a service monitoring and analytics platform that provides insight into the performance of key services such as Microsoft Office 365. Martello will pursue large enterprise opportunities in this segment along with strategic partnerships such as the OEM relationship with Paessler, while presenting a value proposition to the Microsoft community that leverages both iQ and GSX solutions.
The successful integration of GSX is critical to Martello's DEM strategy, and the Company is tracking several key milestones as this process moves forward. These milestones include bringing GSX Gizmo onto a multi-tenant cloud SaaS platform, achieving cross-sell success in Mitel and Microsoft channels, and the development of new partnerships that are beneficial to both Martello and GSX business lines. We expect most integration activities to be complete within 12 months.
The financial statements, notes and Management Discussion and Analysis ("MD&A") are available under the Company's profile on SEDAR at www.sedar.com, and on Martello's website at www.martellotech.com. The financial statements include the wholly-owned subsidiaries of Martello. All amounts are reported in Canadian dollars.
Four institutional investment firms provide research coverage of Martello. The Company does not endorse the research of third-party institutions.
Conference Call Details
Martello will host a conference call and audio webcast with John Proctor, President & CEO and Erin Crowe, CFO at 8:00 AM Eastern Time on Wednesday, July 8, 2020.
Canada/USA Toll Free: 1-800-319-4610
International Toll: +1-604-638-5340
Callers should dial in 5 – 10 min prior to the scheduled start time and simply ask to join the Martello call. An audio recording of the call will be available on July 8, 2020 at https://martellotech.investorroom.com/quarterly-results.
About Martello Technologies Group
Martello Technologies Group Inc. (TSXV: MTLO) is a technology company that provides digital experience monitoring (DEM) solutions. The company develops products and solutions that provide monitoring and analytics on the performance of real-time applications on networks, while giving IT teams and service providers control and visibility of their entire IT infrastructure. Martello's products include unified communications performance analytics software, and IT analytics software. Martello Technologies Group is a public company headquartered in Ottawa, Canada with offices in Montreal, Amsterdam, Paris, Dallas and New York. Learn more at http://www.martellotech.com
This press release does not constitute an offer of the securities of the Company for sale in the United States. The securities of the Company have not been registered under the United States Securities Act of 1933, (the "1933 Act") as amended, and may not be offered or sold within the United States absent registration or an exemption from registration under the 1933 Act.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.
Cautionary Note Regarding Forward-Looking Statements
This news release contains "forward-looking statements". Forward-looking statements can be identified by words such as:"anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding accretive monthly recurring revenues and effect of closing on the Company's gross margins.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:
Any forward-looking statement made by us in this news release is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by applicable securities laws, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
SOURCE Martello Technologies Group