Achieves a 29% Increase in Revenue and 25% Increase in ARR
VANCOUVER, Nov. 22, 2018 /CNW/ - MediaValet Inc. (TSX-V:MVP)
("MediaValet" or the "Company"), a leading provider of enterprise cloud?based digital asset management ("DAM") software, is
pleased to report its results for the three and nine month periods ended September 30, 2018.
Summary of Quarterly Results
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3 months
ended
September
30, 2018
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3 months
ended
September
30, 2017
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9 months
ended
September
30, 2018
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9 months
ended
September
30, 2017(1)
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Revenue
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$
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769,739
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$
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598,538
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$
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2,081,202
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$
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1,597,771
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% Increase from prior year period
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29%
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30%
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Gross Margin
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593,742
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502,366
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1,614,369
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1,329,459
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Gross Margin %
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77%
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84%
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78%
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83%
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Operating Expenses(2)
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1,454,283
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1,367,463
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4,397,152
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4,426,721
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% Increase from prior year period
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6%
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(1%)
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EBITDA Loss(3)
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(860,541)
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(865,097)
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(2,782,783)
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(3,097,262)
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% Decrease from prior year period
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(1%)
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(10%)
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Net loss
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(993,707)
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(1,154,358)
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(3,284,884)
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(3,955,269)
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% Decrease from prior year period
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(14%)
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(17%)
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Loss per share
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(0.004)
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(0.013)
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(0.016)
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(0.045)
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As at
September
30, 2018
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As at
December 31,
2017
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Annual Recurring Revenue ("ARR")(4)
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$
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3,150,232
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$
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2,488,494
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% Increase from prior year period
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25%
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Working Capital (Net of debt and deferred revenue)
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192,514
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( 1,703,442)
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Deferred Revenue
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1,839,061
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1,478,285
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Total assets
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1,710,401
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591,990
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Total Debt
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3,000,000
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6,180,250
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Shareholder (Deficiency)
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$
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(4,184,544)
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$
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( 9,321,028)
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"We're extremely pleased with our year-to-date and 3rd quarter performance," commented David MacLaren, founder and CEO of MediaValet. "We've achieved a lot over the past three quarters: we released
V4, the industry's fastest 100% cloud-based DAM platform; we launched the first hybrid (desktop-to-sever-to-cloud)
file-management solution for creative teams, Creative Spaces; and, we raised $8.6M in February,
enabling us to significantly increase our go-to-market partner and direct sales and marketing programs. In our second quarter, we
saw these efforts generate increased sales pipeline activity, and in Q3 we are now beginning to see the impact of these efforts
in our top-line ARR and revenue numbers. In particular, our ARR is up 25% from last year to $3.15
million on third quarter net additions of $282,602, increasing 32% over Q3 last year and 20%
sequentially. This represents nearly half of our net new business for the year, signalling the growth momentum we've been
building toward."
Mr. MacLaren continued, "I'm also pleased to announce that we reached a major milestone in Q3; our Billings(5)
topped $1 million for the first time at a record $1.11 million - up
100% over Q3 last year and up 61% sequentially. This is an important achievement for us, as it results in a significant
reduction in our operating cash requirements and indicates a notable advance toward self-funding operations. The increased
Billings are a result of strong existing customer retention, particularly following the release of V4, and accelerated new
customer acquisition with total new customer Billings increasing 23% over last year and 38% sequentially. As a result, we believe
that our technology and operational milestones delivered this year are on the mark and have us well positioned to continue
building a solid and sustained growth momentum in the quarters ahead."
Results of Operations
Key Financial Metrics:
- Grew third quarter revenue to $0.77 million, up 29% from $0.59
million in Q3 2017, and up 11% sequentially. For the year-to-date ("YTD") period, revenue of $2.08 million was up 30% from $1.60 million last year-to-date. As over 90% of
revenue is from annual subscriptions, the growth reflects the increasing ARR from by solid customer acquisition and
retention.
- Achieved a Gross Margin of 78% YTD, down from 83% last YTD. The decline is primarily due to duplicative data center costs
being incurred during migration from the Company's V3 to V4 platform.
- Incurred Operating Expenses of $1.45 million for Q3 2018, a 6% increase (restated 9%) from
$1.37 million in Q3 last year, and an 8% sequential decrease. YTD Operating Expenses were
$4.40 million, a 1% decrease over $4.43 million last YTD (restated
+1%). The change from the prior year is due to increased spend on direct and partner sales and marketing programs following the
equity financing completed in February 2018. This is offset by reductions in R&D following
the completion of V4 development. Note that restated percentages are provided where applicable to provide the change from prior
periods had IFRS 15 been applied with retroactive restatement.
- Reported a Q3 2018 EBITDA loss of $0.86 million, a 1% decrease (restated +4%) from a EBITDA
loss of $0.87 million in Q3 2017 and an 18% sequential decrease. For the YTD period, the EBITDA
loss was $2.78 million, down 10% (restated 7%) from $3.10 million
last YTD. The reduced losses reflect 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 $3.15 million, an increase of 25% compared to
$2.52 million at September 30, 2017, and a 10% sequential increase.
The increased ARR is a result of efforts to maintain and grow the customer base through delivering must-have innovations (eg.
V4, Advanced Search and Creative Spaces), and executing on our go-to-market strategy.
- Ended the quarter with $68,001 of cash on hand (December 31,
2017 - $44,359), working capital of $0.19 million
(December 31, 2017 – negative $1.70 million) and long term debt of
$3.00 million (December 31, 2017 - $6.18
million).
Technology and Product:
- In September 2018, announced successful rollout of V4 to all existing customers,
increasing customer value and user experience, while enabling a reduction in operating costs. V4 delivers industry leading
platform and application speed and advanced search capabilities, resulting in increased user adoption metrics and opportunity
win rate, and a doubling in MediaValet's developer community.
- 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, delivered a number of technology and product milestones including the
launch of V4 for new customers and Creative Spaces for large, high volume creative teams, 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 increased 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.
Operations and Corporate:
- Subsequent to quarter end (October 25, 2018), announced modification of the
$3 million of secured senior debentures, reducing the interest rate to 7% (from 10%) and
extending the maturity dates to November 7, 2021.
- Provided an update on Creative Spaces (October 18,
2018), announcing that the new solution has received rave reviews from customers, Creative Directors and
creatives, and is proving to be a major differentiator for MediaValet. Customers have indicated that it is successfully
addressing the unique and long standing file management problems experienced by creative teams during the ideation and
work-in-progress (WIP) stages of media production. Since its launch in May 2018, Creative Spaces
has driven 17% (updated) of new subscription revenue year-to-date and the deal size has been 50% to 100% higher than
average.
- Launched a new channel partnership (October 3,
2018) with Wrike, Inc., a leading collaborative work management platform for high performance teams, to deliver
an all-in-one solution for marketing departments. Wrike has since created a full integration using MediaValet's industry
leading API, and as of November 15th, 2018 is offering it as a value-added solution to
their 17,000 plus customer base as announced by Wrike here. This follows announcements on September 19th of MediaValet's channel program progress with a 2.25x increase in channel-generated sales and
on September 20th of MediaValet winning Top Enterprise Solution at the 2018 Canadian Channel
Innovation Awards.
- Announced go-to-market progress in the Asia-Pacific region (August 16th) and with high-security conscious organizations (September
13th). As the only Cloud-DAM provider who can offer a data residency guarantee in Australia and New Zealand, and following the launch of targeted marketing
programs, the region has grown to >5% of recurring revenue in the last year. In addition, positioned as one of the highest
enterprise-grade Cloud-DAMS on the market, MediaValet is seeing strong adoption from security-focused and tightly regulated
customer segments such as financial, government, healthcare and legal, which have accounted for 35% of new customer wins YTD in
2018.
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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 YTD
percent change to September 30, 2018 compared to restated 2017 amounts, is a 1% increase for YTD Operating Expenses, and
a 7% decline for YTD 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.
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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.
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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.
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5 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). Billings are calculated by subtracting closing deferred revenue from opening
deferred revenue and adding recognized revenue for the period. Management believes Billings are an important measure for
understanding the business, as given that the related revenue is deferred and amortized, 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 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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