ARR Jumps 84% to $5.81M and Net Billings Increase 93% to
$2.14M
VANCOUVER, Nov. 6, 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 and nine months
ended September 30, 2019.
Summary of Quarterly Results
|
|
|
|
Three months
ended
September 30
|
Nine months
ended
September 30
|
|
2019
|
2018
|
2019
|
2018
|
|
Revenue
|
$
|
1,368,936
|
$
|
769,739
|
$
|
3,483,958
|
$
|
2,081,202
|
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% Increase from
prior year period
|
78%
|
29%
|
67%
|
30%
|
|
Gross
Margin
|
1,183,158
|
593,742
|
2,996,078
|
1,614,369
|
|
Gross Margin
%
|
86%
|
77%
|
86%
|
78%
|
|
Operating
Expenses(2)
|
1,783,286
|
1,454,283
|
4,905,241
|
4,397,152
|
|
%
Increase
|
23%
|
6%
|
12%
|
(1%)
|
|
EBITDA
Loss(3)
|
(600,128)
|
(860,541)
|
(1,909,163)
|
(2,782,783)
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|
%
Decrease
|
(30%)
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(1%)
|
(31%)
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(10%)
|
|
Net
loss
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(796,417)
|
(993,707)
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(2,550,029)
|
(3,284,884)
|
|
%
Decrease
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(20%)
|
(14%)
|
(22%)
|
(17%)
|
|
Loss per
share
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(0.05)
|
(0.06)
|
(0.16)
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(0.24)
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|
|
As at
September
30,
2019
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As at
September
30, 2018
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As at
December
31, 2018
|
|
Annual Recurring
Revenue ("ARR")4
|
|
$
|
5,808,349
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$
|
3,150,232
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$
|
3,511,967
|
|
% Increase over
prior year
|
|
84%
|
25%
|
41%
|
|
Modified Working
Capital (excluding Deferred
|
|
|
|
|
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Revenue and
Debt)
|
|
3,154,091
|
192,514
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( 164,546)
|
|
Deferred
Revenue
|
|
3,764,988
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1,839,061
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2,323,742
|
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% Increase over
prior year
|
|
105%
|
17%
|
57%
|
|
Total
assets
|
|
5,921,717
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1,710,401
|
1,980,184
|
|
Lease
Liabilities
|
|
519,306
|
-
|
-
|
|
Total Long-Term
and Convertible Debt
|
|
3,277,026
|
3,000,000
|
3,150,000
|
|
Shareholder
Deficiency
|
|
(3,399,803)
|
(4,184,544)
|
(
5,174,656)
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"Q3 was a momentous quarter for us," commented David MacLaren, Founder and CEO of MediaValet.
"In addition to being the first quarter that we've added more than
$1M in net new ARR ("NNARR"), it's
also the first quarter that we reach a breakeven Net Billings
level. The MediaValet team has done a tremendous job of executing
our strategic go-to-market plan and delivering on our innovative
product roadmap. Thanks to their ongoing commitment and hard work,
we continue to gain market share in the enterprise DAM market and
grow our strong, robust customer base. This has led to a record
breaking Q3 with ARR growing to $5.81
million, up 84% from last year and 23% sequentially; our
NNARR for the quarter increasing 282% to $1.08 million over Q3 last year; and, our
year-to-date NNARR climbing 247% to $2.30 million over the same period last
year."
Mr. MacLaren continued, "Q3 saw our highest number of customer
adds in a single quarter and our existing customer net retention
rate, year-to-date, maintained near 100%. I'm extremely proud of
these results, but I believe we've truly only just begun. With each
new quarter, we expect our revenue and ARR to continue to increase,
and our customer acquisition and retention rates to remain
strong."
"Q3 Net Billings(5) reached a new record at
$2.14 million, up 93% from Q3 last
year and up 69% sequentially," commented Rob Chase, Executive Chair and CFO. "This
milestone is monumental for us as, at $2.14
million, it is the first quarter of Net Billings at a
breakeven level compared to Operating Expenses plus Cost of Sales
of $1.97 million in Q3. In Q3 last
year, we considered reaching the million dollar mark in a quarter a
major milestone; one that was years in the making. Just one
year later, we have more than doubled that accomplishment – and
have done so with increasing predictability thanks to our SaaS
business model and consistent investment in our R&D and sales
& marketing teams."
Mr. Chase continued, "With our recurring revenue now at
$5.81 million, strong customer
retention rates, and a solid balance sheet, we have set the stage
for an exciting year ahead."
Results of Operations
Key Financial Metrics:
- Grew revenue to $1.37 million in
Q3 2019, up 78% from $0.77 million in
Q3 2018, and up 22% sequentially from Q2 2019. For the year-to-date
("YTD") period, revenue of $3.48
million is up 67% from $2.08
million last YTD. With over 90% of revenue from annual
subscriptions, the growth reflects the increasing deferred revenue
and ARR from customer acquisition and retention. These increases
are a direct result of continuous new feature development and
platform enhancements, such as new Advanced Search and
CreativeSPACES™ updates, and of industry leading sales and
marketing strategies.
- Increased Gross Margins to $1.18
million, up 99% from $0.59
million in Q3 2018, and up 23% sequentially. YTD Gross
Margin increased 86% to $2.97
million. As a percent of revenue, Gross Margin was 86% in Q3
and year-to-date, up from 78% last YTD.
- Incurred Operating Expenses of $1.78
million in Q3 2019, a 23% increase from $1.45 million in Q3 2018 and up 9% from
$1.64 million in Q2 2019. YTD
Operating Expenses were $4.91
million, an increase of 12% from $4.40 million last YTD. The increases are
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 saw increased
levels for projects required to execute enterprise-grade security
initiatives, and to accelerate enterprise product features. This is
in response to the Company's growing traction within the enterprise
segment of the DAM market.
- Reported a Q3 2019 EBITDA loss of $0.60
million, a 30% improvement from a loss of $0.86 million in Q3 2018, and 12% improvement
from Q2 2019. The YTD EBITDA loss of $1.91
million improved 31% compared to $2.78 million last YTD. The reduced loss reflects
continued revenue growth as a result of the Company's growing
recurring revenue base, offset by a measured increase to operating
costs in balance with funding levels and organic growth
objectives.
- Increased Annual Recurring Revenue ("ARR") to $5.81 million, an increase of 84% compared to
$3.15 million at September 30, 2018, and a 23% sequential increase
from June 30, 2019. The Net New ARR
("NNARR") for Q3 2019 were $1.08
million, a 282% increase compared to NNARR of $0.28 million in Q3 2019, and an 80% sequential
increase from $0.61 million in Q2
2019. YTD, NNARR was $2.30 million, a
247% increase over $0.66 million last
YTD. Since launch of MediaValet 4.0 in May
2018 and with a process of continuous enhancements to the
Company's enterprise-class Cloud DAM offerings, the Company has
consistently improved existing customer net retention rates to near
100%, increased its average customer size, and significantly
expanded its overall rate of new customer acquisition.
- Ended the quarter with $2.56
million of cash on hand, modified working capital (excluding
deferred revenue, lease liabilities and debt) of $3.15 million, lease liabilities of $0.52 million, long-term debt of $3.00 million, and convertible debt of
$0.28 million at carrying value.
Technology and Product:
- MediaValet first launched its new V4 platform along with its
unique Advanced Search (artificial intelligence), Multi-Library and
CreativeSPACES™ modules in 2018. Since then, it has continued to
enhance each of these components, doing incremental releases on a
weekly and monthly basis. In Fiscal 2019, this continued commitment
to product innovation and advancement has led to a number of
announcements, including:
-
- October 29, 2019: wins a
$494,000 subscription under a Master
Services Agreement ("MSA") with a world leader in
entertainment.
- October 3, 2019: awarded a
$115,000 DAM subscription with a US
federal energy and power agency, helping to generate a 125%
increase in revenue from government customers over last year, and
to grow the government vertical to 10% of total revenue.
- October 2, 2019: adds another
higher-education ("Higher-Ed") customer, winning a $65,000 contract for DAM plus CreativeSPACES™.
Higher-Ed remains a 10% market vertical and has increased 29% this
year.
- September 19, 2019: wins an RFP,
resulting in an $85,000 contract from
a division of an aerospace manufacturing company who is
implementing DAM for the first time.
- September 12, 2019: a
$94,000 DAM subscription including
enterprise integrations awarded by a leading healthcare provider.
Organizations with a high-security requirement represent 46% of new
customer wins, an increase of 337% over the prior year.
Operations and Corporate:
- September 12, 2019: $1.20 million of convertible debentures were
converted for 2,287,162 units at 0.525 per unit.
- September 10, 2019: announces
closing of a $3.5 million brokered
private placement with Cormark Securities, Inc., issuing 6,666,666
units at $0.525 per unit. Each unit
includes one common share and one share purchase warrant with an
exercise price of $0.90 for a period
of 3 years, subject to the Company's right to force exercise if the
10 day average share price exceeds $1.50. Broker commissions were $245,000 plus 136,111 broker warrants with an
exercise price of $0.90 for a period
of 3 years.
- September 10, 2019: Francis Shen of Shen Capital Corporation joins
MediaValet's Board of Directors, and Shen Capital becomes an 11.74%
shareholder through its participation in the brokered private
placement. Mr. Shen was the former Chairman, Co-Chief Executive
Officer and founder of Aastra Technologies Ltd.
- September 9, 2019: the Company's
shares began trading on a consolidated basis, having completed a
15:1 share consolidation, reducing the number of shares outstanding
to 24,346,836.
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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 14% increase for Operating
Expenses, and a 27% 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.
