Momentum Accelerates: Revenue up 62% and ARR
up 57%
VANCOUVER, May 14, 2019 /CNW/ - MediaValet Inc.
(TSX-V:MVP) (the Company), a leading provider of cloud‐based
digital asset management ("DAM") and creative operations software,
is pleased to report its results for the three months ended
March 31, 2019.
Summary of Quarterly Results
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|
|
Three Months
Ended
|
|
March 31,
2019
|
March 31,
2018(1)
|
|
Revenue
|
$
996,076
|
$
615,043
|
|
%
Increase
|
62%
|
32%
|
|
Gross
Margin
|
850,662
|
491, 473
|
|
Gross Margin
%
|
85%
|
80%
|
|
Operating
Expenses1,2
|
1,479,636
|
1,367,805
|
|
%
Increase
|
8%
|
(9%)
|
|
EBITDA
Loss1,3
|
(628,974)
|
(876,334)
|
|
%
Decrease
|
(28%)
|
(22%)
|
|
Net
loss
|
(825,665)
|
(1,114,546
)
|
|
%
Decrease
|
(26%)
|
(22%)
|
|
Loss per
share
|
(0.00)
|
(0.01)
|
|
As at March
31,
2019
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As at December
31,
2018
|
|
Annual Recurring
Revenue ("ARR")4
|
4,128,320
|
$
3,511,967
|
|
% Increase over
prior year
|
57%
|
41%
|
|
Modified Working
Capital ex. of
Deferred
Revenue and
Debt
|
924,171
|
( 164,546)
|
|
Deferred
Revenue
|
2,853,275
|
2,323,742
|
|
% Increase over
prior year
|
89%
|
57%
|
|
Total
assets
|
3,319,386
|
1,980,184
|
|
Lease
Liabilities
|
608,400
|
-
|
|
Total Long-Term
and Convertible Debt
|
4,179,841
|
3,150,000
|
|
Shareholder
Deficiency
|
(5,809,035)
|
(
5,174,656)
|
"2019 is off to a tremendous start with revenue, ARR, gross
margin and Net Billings(5) hitting all-time highs,"
commented David MacLaren, Founder
and CEO of MediaValet. "This follows the momentum that we began
building after our Q2'18 funding round. That round allowed us to
complete the latest version of our platform, putting in place the
foundation of the next phase of our product strategy, and ramp up
our sales and marketing efforts. Today, a year later, our
go-to-market and product led development efforts are generating
three times the number of leads and opportunities, and accelerating
our growth trajectory."
Continued MacLaren, "I'm particularly proud to report that we
achieved another record quarter of Net Billings at $1.53 million, up 136% over Q1'18 and 15%
sequentially. This marks our third consecutive quarter of
significant and record level Net Billings. Equally important is how
we achieved these results – a combination of strong new customer
acquisition and significant licensing expansion within our existing
customer base. This truly is the Holy Grail of SaaS businesses and
we intend to maintain our focus on product led development to
continue expanding our market share and increasing customer usage.
All things considered, our numbers indicate a strong and
committed customer base and a differentiated product offering
that's solving real challenges being faced by organizations
today."
Added Rob Chase, Executive Chair
and CFO, "Our focus on product led development has resulted in yet
another milestone achievement with ARR reaching $4.13 million; up 57% over Q1 2018, and up 18%
sequentially. The net additions to ARR were a record $0.62 million, up 330% from last year, and up 70%
sequentially, reflecting our product development achievements and
the success of our sales and marketing strategies. We are also
pleased to have added experienced sales and marketing leaders to
our Board, and to have completed a $1.55
million financing round to provide the capital required to
continue to fund our growth strategy. We have the means, tools,
people and processes in place to deliver an exciting 2019."
Results of Operations
Key Financial Metrics:
- Grew revenue to $1.00 million in
Q1 2019, up 62% from $0.62 million in
Q1 2018, and up 18% sequentially from Q4 2018. As over 90% of
revenue is from annual subscriptions, the growth reflects the
increasing deferred revenue and ARR from customer acquisition and
retention.
- Returned to 80%+ Gross Margins following migration to
MediaValet V4 in September 2018, at
85% for Q1 2019, up from 80% in Q1 2018 and 79% for fiscal 2018.
The improved margin is due to completion of the migration to V4,
increased sales volume, improved operating efficiencies, and new
paid feature add-ons.
- Incurred Operating Expenses of $1.48
million in Q1 2019, an 8% increase (2018 proforma 12%) from
$1.37 million in Q1 2018 and down 5%
from $1.52 million in Q4 2018 (2018
proforma up 5%). Excluding the impact of IFRS 16 changes, the
increases from the prior periods is primarily due to increased
sales and marketing expenses as the Company targets its spend in
line with its current stage of development and team size. In
addition, R&D costs were increased from Q4 2018 levels for
projects required for enterprise grade security initiatives such as
SOC II audit and single sign-on. This is in response to the
Company's growing traction within the enterprise segment of the DAM
market. Note that "2018 proforma" percentages are provided where
applicable to provide the change from prior periods had IFRS 16
been applied with retroactive restatement.
- Reported a Q1 2019 EBITDA loss of $0.63
million, a 28% reduction (2018 proforma 16%) from a loss of
$0.88 million in Q1 2018, and a 25%
sequential decline (2018 proforma 12%) from Q4 2018. The reduced
loss reflects continued revenue growth as a result of the Company's
growing recurring revenue base and efforts to manage operating cost
levels.
- Increased Annual Recurring Revenue ("ARR") to $4.13 million, an increase of 57% compared to
$2.63 million at March 31, 2018, and an 18% sequential increase
from December 31, 2018. The increase
reflects a higher the level of new customer acquisition – which the
Company has been consistently achieving since Q3 2018 – and
increased customer usage and adoption statistics that have led to
growth in the existing customer subscription base. This led to a
record $0.62 million in net additions
to ARR for the quarter, an increase of 330% over Q1 2018 and 70%
sequentially over Q4 2018. Both of these developments are a direct
result of the May 2018 launch of V4,
Advanced Search, Multi-Library and Creative Spaces.
- Ended the quarter with $0.62
million of cash on hand (December
2018 - $0.12 million),
modified working capital (excluding deferred revenue, lease
liabilities and debt) of $0.92
million (December 2018 –
negative $0.16 million), lease
liabilities of $0.61 million,
long-term debt of $3.00 million, and
convertible debt of $1.18 million at
carrying value (December 2018 – total
debt of $3.15 million).
Technology and Product:
- MediaValet first launched its new V4 platform along with its
unique Advanced Search (artificial intelligence), Multi-Library and
Creative Spaces modules in May
2018. Since then it has continued to enhance each of
these components, doing incremental releases on a weekly and
monthly basis. In the first quarter of fiscal 2019, this continued
commitment to innovation and advancement led to a number of
announcements, including:
-
- April 30, 2019: Existing
customer usage and adoptions numbers increasing following migration
of V4 in September 2018, leading to
strong first quarter 2019 renewals and expansion. In particular –
(i) an Agency customer expanded its DAM package to enable it to
support more of its clients, resulting in a doubling of its
subscription value to US$125,000 in
ARR; and (ii) a Fortune 50 customer added a subscription for a
seventh division, increasing its subscription value from
US$68,500 to US$95,000 in ARR.
- April 2, 2019: New
customer, Measurand, adopts MediaValet for V4's best-in-class
enterprise capability to support its global operations and
distributors.
- March 21, 2019: Reports
that its integration with Wrike is making a difference for
customers. Mutual customer, Pendo, finds the integration improves
the user experience across both Wrike and MediaValet platforms,
allowing Pendo's team to save money, improve brand consistency and
maximize the impact of their digital assets.
- February 26, 2019: A
global leader in design selects MediaValet for its unique Creative
Spaces solution, which became a must-have for its distributed
creative operation teams. MediaValet was awarded a US$140,000 subscription to its Cloud DAM and
Creative Spaces solution.
Operations and Corporate:
- The Company completed a $1.55
million convertible debenture financing on March 20, 2019; sufficient to return the
Company to positive working capital and to fund the Company's
current operating capital requirements.
- On February 14, 2019,
strengthened its Board of Directors with the addition of seasoned
technology executives, Thomas Kenny
(former SVP of Sales for Absolute Software and HP) and Jake Sorofman (Chief Marketing Officer of Pendo,
and former Vice President and Chief of Research at Gartner). At the
same time, Barry Jinks stepped down
from the Board and the Company thanked him for his many years of
service.
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1 Adoption of
IFRS 16: Fiscal 2018 figures have not been restated for adoption of
IFRS 16 as the changes were applied starting January 1, 2019 on a
retrospective basis. Had Fiscal 2018 figures been restated, the
percentage change from 2018 would be a 12% increase for Operating
Expenses, and a 16% decline for EBITDA Loss. IFRS 16 did not impact
the Net Loss. See "Adoption of New Account
Standards"
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2
Operating Expenses include Sales & Marketing, Research &
Development and General & Administrative.
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3 EBITDA is a non-IFRS
measure that is used as a measure of profit and loss. Management
believes EBITDA provides a meaningful measure for assessment of
Company performance as it removes non-cash and non-operating
expenses such as financing costs.
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4 Annual Recurring Revenue
(ARR) is a non-IFRS measure that provides an indication of future
revenue and billings from customers as of the reporting date. ARR
represents the sum of the annual recurring revenue from existing
customer contracts or commitments as of the reporting period end
date, and as such management believes ARR to be a meaningful
measure for assessment of Company performance. ARR is recorded as
deferred revenue when it is invoiced and is recognized in revenue
evenly on a monthly basis over the contract
term.
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5 Net Billings are a
non-IFRS measure representing the sum of invoiced sales in the
period, including both existing customer renewal invoices and new
customer invoices with standard payment terms (generally net-30).
Net Billings are calculated by subtracting closing deferred revenue
from opening deferred revenue and adding recognized revenue for the
period. Management believes Net Billings are an important measure
for understanding the business, as given that the related revenue
is deferred and amortized, Net Billings provides a measure of the
amount of cash generated from customers in the
period.
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MediaValet's full financial statements and related MD&A are
now available on SEDAR.
About MediaValet, Inc.
MediaValet stands at the forefront of the enterprise cloud-based
digital asset management and creative operations industry. Built
exclusively on Microsoft Azure and available in 140 countries, 54
Microsoft data center regions, around the world, MediaValet
delivers unparalleled enterprise class security, reliability,
redundancy and scalability while offering the largest global
footprint of any DAM solution. In addition to providing all core
DAM capabilities and local desktop-to-cloud support for creative
teams, MediaValet offers industry leading integrations into Slack,
Adobe Creative Suite, Microsoft Office 365, Oracle Marketing Cloud
(Eloqua), Drupal 8, WordPress, Hootsuite and many other
best-in-class 3rd party applications.
"Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release."
SOURCE MediaValet Inc.