Achieves a 31% increase in Revenue and 25% increase in Annual Recurring Revenue
VANCOUVER, Aug. 28, 2018 /CNW/ - MediaValet Inc. (TSX-V:MVP)
(the Company), a leading provider of enterprise cloud‐based digital asset management ("DAM") software, is pleased to report its
results for the three and six months ended June 30, 2018.
Summary of Quarterly Results
|
|
3 months
ended June
30, 2018
|
3 months
ended June
30, 2017
|
6 months
ended June
30, 2018
|
6 months
ended June
30, 2017(1)
|
|
Revenue
|
$
|
696,420
|
$
|
533,275
|
$
|
1,311,463
|
$
|
999,233
|
|
% Increase from prior year period
|
31%
|
57%
|
31%
|
68%
|
|
Gross Margin
|
529,154
|
443,995
|
1,020,627
|
827,093
|
|
Gross Margin %
|
76%
|
83%
|
78%
|
83%
|
|
Cost of Revenue + Operating Expenses(2)
|
1,742,328
|
1,644,105
|
3,233,705
|
3,231,398
|
|
% Increase from prior year period
|
6%
|
8%
|
(0%)
|
6%
|
|
EBITDA Loss(3)
|
(1,045,908)
|
(1,110,830)
|
(1,922,242)
|
(2,232,165)
|
|
% Decrease from prior year period
|
(6%)
|
(7%)
|
(14%)
|
(10%)
|
|
Net loss
|
(1,176,631)
|
(1,423,712)
|
(2,291,177)
|
(2,800,911)
|
|
Loss per share
|
(0.01)
|
(0.02)
|
(0.01)
|
(0.03)
|
|
|
|
As at June
30, 2018
|
As at
December 31,
2017
|
|
Annual Recurring Revenue ("ARR")(4)
|
|
|
$
|
2,867,630
|
$
|
2,488,494
|
|
% Increase from prior year period
|
|
|
25%
|
38%
|
|
Working Capital (Net of debt and deferred revenue)
|
|
|
870,496
|
$
|
( 1,703,442)
|
|
Deferred Revenue
|
|
|
1,501,396
|
$
|
1,478,285
|
|
Total assets
|
|
|
2,287,898
|
$
|
591,990
|
|
Total Debt
|
|
|
3,000,000
|
$
|
6,180,250
|
|
Shareholder (Deficiency)
|
|
|
$
|
(3,209,515)
|
$
|
( 9,321,028)
|
"Q2 was another solid quarter for MediaValet," commented David MacLaren, CEO of MediaValet. "We
grew revenue by 31%, improved EBITDA by 6% over Q2 last year, and were able to begin investing in our sales and marketing
campaigns. Combined with the success of our channel program, our increased sales and marketing activities have us entering our
third quarter with the largest and strongest pipeline of qualified opportunities to date."
Mr. MacLaren continued, "Our infrastructure and product achievements this quarter have increased our competitive advantage and
directly improved our win rate. Our mission, as always, is to build an industry leading solution to the challenges marketing
teams face as they execute their go-to-market strategies. This mission was expanded with the launch of Creative Spaces in
May 2018, which adds creative teams and operations to our target market opportunity. We believe
this is a one-two punch to win more market share. We're confident our Advanced Core DAM (V4) + Creative Spaces + Unlimited
Support, Training and Users are a winning combination – a belief that is supported by the robustness of our sales pipeline."
Results of Operations
Key Financial Metrics:
- Grew second quarter revenue to $0.70 million, up 31% from $0.53
million in Q2 2017, and up 13% sequentially from Q1 2018. For the year-to-date ("YTD") period, revenue of $1.31 million was up 31% from $1.0 million in 1H 2017. Over 90% of revenue is
recurring from annual Software-as-a-Service (SaaS) agreements. The increases in revenue reflect the growth in the annual
recurring revenue base as the Company continues to win new customers, expand its markets, and retain existing customers.
- Achieved 1H 2018 Gross Margin of 78%, down from 83% last YTD. The high Gross Margin levels is consistent with the SaaS
business model and reflects increasing sales volume, improving operating efficiencies, and adoption of new paid feature
add-ons. The decline in 1H 2018 compared to the prior year is mostly due to duplicative data center costs being incurred during
migration from the Company's V3 to V4 platform. In addition, the release of V4 and several new high powered features, has
increased customer usage of the system. Management believes this to be a positive development for long term customer retention
and expansion.
- Incurred Operating Expenses of $1.55 million for Q2 2018, a 1% (restated 5%) increase from
$1.55 million in Q2 last year, and a 15% sequential increase from Q1 2018. YTD Operating Expenses
were $2.94 million, a decrease of 4% from 1H 2017 (restated 0%). The Q2 increases are due to
increased sales and marketing spend following the equity financing completed in February 2018.
Note that restated percentages are provided throughout this document where applicable to provide the change from prior periods
had IFRS 15 been applied with retroactive restatement.
- Reported a Q2 2018 EBITDA loss of $1.05 million, a 6% (restated 0%) reduction from a EBITDA
loss of $1.11 million in Q2 2017 and a 19% sequential increase from Q1 2018. For the YTD period,
the EBITDA loss was $1.92 million, down 14% (restated 9%) from $2.23
million last YTD. The reduced losses compared to last year reflect continued revenue growth as a result of the Company's
growing recurring revenue base and efforts to balance operating costs and funding levels. The sequential increase in Q2 is
primarily due to increased sales and marketing expenses following the equity financing in February
2018.
- Increased Annual Recurring Revenue ("ARR") to $2.87 million, an increase of 25% compared to
$2.30 million at June 30, 2017, and a 9% sequential increase from
Q1 2018. The increase in ARR is a result of efforts to maintain and grow our customer base through continuing to deliver on our
go-to-market strategy.
- Ended the quarter with $0.84 million of cash on hand (December 31,
2017 - $0.04 million), working capital of $0.87 million
(December 31, 2017 – negative $1.70 million) and debt of
$3.00 million (December 31, 2017 - $6.18
million).
Technology and Product:
- In June 2018, announced that Gartner, Inc. (NYSE:IT) (Gartner) named MediaValet in its
2018 Market Guide for Digital Asset Management, as one of nineteen Representative Vendors covering on-premises, cloud, hybrid
and SaaS deployments. MediaValet was positioned as one of the most enterprise-grade, globally available DAM systems on the
market.
- In May 2018, launched a number of technology and product milestones which management
believes will materially increase the value delivered to customers, enable us to attract more new customers and increase
existing customer retention and expansion. These developments increase the enterprise class capability of the system –
including providing unparalleled speed and search features – and provide unique integrations and features that solve critical
customer issues and provide differentiation to MediaValet. The milestones include:
-
- Launch of MediaValet V4 which included new features such as Advanced Search, Multi-Libraries, and Interactive
User Success Guides. V4 in particular was an 18 month project and is a major platform upgrade that removes all legacy
technical debt and dramatically increases system performance. Advanced Search leverages artificial intelligence to enable
customers to search for assets based on system discovered asset characteristics. Multi-Library supports the enterprise need
for parent-child structures for independent multi-divisional organizations.
- Introduction of Creative Spaces, an innovative new solution for creative teams that combines all the benefits of
working locally on a server with those of MediaValet's Cloud DAMS. Developed with deep customer collaboration, Creative
Spaces launched with support for linking work-in-process creative assets in the MediaValet DAM with Adobe's Creative Cloud
– an essential and previously un-solved challenge for users of any DAM system.
- Announced integration of MediaValet with Workfront, a leading provider of cloud-based enterprise work management
solutions, enterprise project management and workflow software. Integrations are essential for helping customers to maximize
adoption of the DAM within their environment.
Operations and Corporate:
- Announced the DAM industry's first supply chain consortium in May 2018, focused on leveraging
Blockchain technology to transform the DAM industry and the future of enterprise content distribution. As a founding
member, MediaValet will help develop interoperability standards across service providers for the adoption of new supply chain
technologies for DAM.
- Launched a new reseller channel partnership with IO Integration ("IOI") in February
2018, a global digital asset management, marketing, and creative operations technology solutions consultancy with a
select portfolio of marketing and creative operations technology solutions. Building a synergistic and effective reseller
channel partner program is one of MediaValet's key growth strategies.
- In February 2018, Rob Chase expanded his role with the
Company, joining the senior management team as Executive Chairman and Chief Financial Officer. Rob also increased his ownership
position in MediaValet to 10% as part of the February 2018 financing round.
- On February 22, 2018, announced closing of an $8.6 million
brokered and non-brokered private placement, issuing 143,341,864 common shares at $0.06 per
share.
|
1 Fiscal 2017 figures have not been restated for
adoption of IFRS 9 and IFRS 15 as the changes were applied starting in Q1 2018 on a cumulative effect basis. The percent
change for YTD to June 30, 2018 compared to restated 2017 amounts, is a 4% increase for Cost of Revenue and Operating
Expenses, and a 9% decline for EBITDA Loss. See the "Adoption of New Account Standards" section
below.
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|
|
2 Operating Expenses include Sales & Marketing,
Research & Development and General & Administrative expenses.
|
|
|
3 EBITDA is a non-IFRS 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.
|
|
|
4 Annual Recurring Revenue (ARR) is a non-IFRS measure
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. 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 over the contract term.
|
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 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.
Follow MediaValet: Blog, Twitter and LinkedIn
Surf: www.mediavalet.com
"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.
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