Good evening all.
Find below my rough notes from the Martello interview that Small Cap Discoveries posted Friday. My notes focus on what may be "new information" or what I did not already know before the interview from my independent research. As a newly mint shareholder of MTLO, please do not place undue reliance on my notes and always do your own research and consult your advisor to assess suitability.
In summary, a very strong and positive tone and perspective from management. I am certainly looking forward to the Fiscal year ahead. I look forward to all your comments to the video and my notes.
- Mitel is still growing single figures
- Looking to add depth in Microsoft or breadth in DEM from M&A (mentions SAP, Salesforce)
- Microsoft will be a fabulous growth engine in Fiscal 2022
- Pivoted to a pure digital channel very strongly in last year
- Pushing much harder into channel development (MSPs, CSPs)
- Strong sales pipeline, seeing upsell and cross sell in bookings
- Expects over 90% gross margins to continue in the future
- Expects legacy businesses to be fully out of the business by Fiscal 2024
- The CFO used to be the CFO of the Ottawa Senators (fun fact)
- Chairman Sir Terry Matthews is fully engaged and speaks with the CEO at least once a week
- Next few months they will become a Microsoft Managed Partner (current in the Co-Sell Program)
- Total addressable market of Microsoft is $800 million+. This number is much bigger when considering different platforms (SAP, Salesforce, etc.)
- They think they can take a significant portion of the US $800 million Microsoft addressable market
- It would be very expensive for Mitel to find someone else for analytics. No competition
- 4 companies that do DEM for Office 365 (Martello, Cisco, and 2 others). Martello is much deeper in Microsoft than Cisco is. The other 3 do not do synthetic transactions. MTLO has a toe hold and competitive advantage in Microsoft Office 365
- Big enterprise and/or government are typical customers today
- A multi billion-dollar Canadian insurance firm renewed their licenses the morning of the interview
- Speaking to big system integrators, big MSPs
- Creating a whole partner program this quarter, a lot of work going into this
- 2-3 years is an average client commitment on Microsoft side, minimum 1 year term
- One client in mid Q4 bought 3 years in advance (government client)
- An ebook is coming out shortly on experience level agreements
- Normally 3-6 months for sales cycle to enterprise
- Have a lot of proof of values out at the moment with a solid conversion rate of over 60%
- No customer concentration, truly global
- United nations is a client, government of Birmingham
- Average deal size on Mitel is 11-20 cents and is a per month royalty, for Microsoft $50k to few hundred thousand, for IQ anywhere from $10k to $100k and based on number of integrations
- Microsoft is really pushing Teams to crush Zoom, new features coming
- Mitel will be integrating with Microsoft and MTLO will pull this together to make systems more efficient into one picture
- Have hired a few data scientists (machine learning) to find out what they can see inside their Office 365 data already. Data play coming
- Covid has exacerbated the system and urges the need for DEM
- Proof of values and deal signings take a little longer because everyone is remote
- The demand is out there, need to make sure they have horsepower to meet the demand
- The last 2 financings were primarily institutional based
- Have 10-15% of TAM at the moment. John wants to head higher and capture more and get to 20%. Key metrics to follow is Office 365 seats (user)
- Revenue lags signing a deal and adding Microsoft seats
- One partner has 800k users and MTLO onboarding 40k users/month and the partner wants to grow the 800k
- They will consolidate shares within 12 months and will find the right opportunity when there is a transaction
- They receive a per user fee from the partner who is onboarding 800k users
- Are tracking to get the 3.2 million users by March 2022 and feel very confident
- Really focused on driving revenue growth and then will start talking about an uplist
- Very difficult and is very significant to become a Microsoft manager partner
- Confident on user growth of 3.2 million. Signing a couple of indirect channel partners will significantly up this. Is being fairly conservative.
- They are in quiet period right now but will make some noise in the near future with partnership pieces
- Financial results coming out end of June
- Please watch the O365 numbers, they will make a difference
- The pressure is really building (steam engine analogy)