Martello Completes Integration of GSX and Provides Insight into Growth Plan

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 With integration completed, the Company expects to increase its Microsoft end user footprint by 60% during fiscal 2022. 

OTTAWA, ON, Jan. 21, 2021 /CNW/ - Martello Technologies Group Inc., ("Martello" or the "Company") (TSXV: MTLO), a developer of enterprise Digital Experience Monitoring ("DEM") solutions announced today that the integration of GSX Participations SA ("GSX") is now complete, and provided insight into the Company's growth plan.

Martello acquired GSX in May 2020 to expand into the Digital Experience Monitoring market with Microsoft 365 solutions for the enterprise. With the GSX integration now completed, Martello is focused on accelerating user growth by providing performance and user experience monitoring for Microsoft 365 solutions to businesses of all sizes globally.

As workers are increasingly untethered from the office, Martello's DEM solutions help enterprises to maximize the digital experience of employees. Globally, Microsoft 365 is among the most broadly adopted cloud-based employee productivity suites. According to Microsoft financial filings, there are more than 200 million monthly active users of Microsoft 365, and the Microsoft Teams video conferencing application has seen a 50% increase in daily active users since April 2020, reaching 115 million active users in October 2020. Gartner forecasts that by 2024, 50% of enterprises that use Office 365 will adopt a third-party solution for monitoring the Office 365 digital user experience, up from less than 10% in 2020. Martello strives to be a leader in the Microsoft 365 DEM market.

Martello Business Lines

• DEM for Microsoft 365 cloud-based productivity suite - By teaming the Gizmo solution from GSX with the iQ service analytics software from the 2018 Savision BV acquisition, Martello aims to offer the most comprehensive DEM solution available for Microsoft 365. These solutions represented approximately 58% of total revenue in Q2 FY21 on a combined basis. As disclosed in an October 20, 2020 press release, Martello recently reached 2 million Microsoft users on its software, and forecasts that number to grow by 60% in FY22.
  
  
• Performance analytics for Mitel unified communications - Called Mitel Performance Analytics (MPA), this solution generates 96% gross margins, over 90% recurring revenue, and represented 42% of total revenue in Q2 FY21.This early DEM solution, delivered to thousands of Mitel Networks Corporation ("Mitel") customer networks globally has given Martello knowledge of and insight into managing the performance and user experience of real-time cloud services. This offers the Company an advantage as it pursues DEM market leadership. Martello continues to enjoy a strong relationship with Mitel and expects moderate growth in this business line.
  
  
• Legacy products with declining revenue streams. Both Savision BV and GSX were acquired with certain products which support legacy third-party technology. As a result, Martello is seeing declines in these revenue streams, with some customers migrating to Martello's newer software platforms on renewal. In the short-term, Martello's overall growth rates will be partially offset by a decline in the revenue related to these legacy products. There are minimal expenses related to this revenue.

Growth Plan

Martello's mission is to be the market-leading Microsoft 365 DEM provider. As of October 2020, the Company had reported 2 million Microsoft users on its DEM platform. The Company aims to grow this number by more than 60% by the end of the 2022 fiscal year.

With the integration of GSX complete, Martello is now well-positioned to accelerate DEM user growth in FY22. Going forward, the Company is focused on the following activities to increase user growth:

• Meeting the demands of the 'work from anywhere' digital workforce – Martello is improving the scalability and depth of its DEM solution, driven by the upcoming integration of Gizmo with iQ. Real user monitoring and end-to-end network visualization capabilities will provide insight into actual user activities and quickly pinpoint whether problems are related to the cloud provider, ISP, or the user's network, for better IT support of remote workers. In addition, by improving the scalability of the iQ and Gizmo products, Martello can more efficiently onboard very large enterprises.
  
  
• Onboarding new Managed Service Providers (MSPs) – The integration of GSX and upcoming completion of product enhancements unlocks multi-tenant SaaS (software as a service) capacity, a key capability to capture a leading market position within the Microsoft 365 channel. The MSP channel will allow Martello to cost-efficiently expand its reach into the mid-tier enterprise and SME (small-medium enterprise) market. Martello has been working with one of the world's largest Microsoft MSPs, onboarding their customers successfully and creating a strong and repeatable process for additional MSP onboarding.
  
  
• Deepening Martello's entrenchment in the Microsoft channel – Via the Microsoft Co-Sell program, the Company's gold partnership and other initiatives with Microsoft, Martello will further extend its reach across Microsoft globally. This provides greater access to Microsoft's enterprise, corporate and small and medium accounts, to grow Martello's partner and customer base and increase users on the Company's platform.

"As more CIO's procure services like Microsoft 365 from third party cloud services vendors, monitoring employee user experience has become increasingly complex and expensive", said John Proctor, President and CEO of Martello. "Martello is uniquely positioned to provide a leading Microsoft 365 DEM solution to solve this problem, and our team will work tirelessly to increase our Microsoft user base".

Martello looks forward to announcing the engagement of key new enterprise customers, new MSP and strategic partnerships, and product launches. The Company's Q3 FY 2021 financial results will be released on February 17, 2021.

Any financial outlook provided in this news release is preliminary and investors are cautioned not to place undue reliance on the foregoing information. Any financial outlooks provided in this news release constitute "forward-looking information" within the meaning of applicable Canadian securities laws, are based on several assumptions and are subject to a number of risks and uncertainties. Actual results may differ materially. See "Cautionary Note Regarding Forward-Looking Information".

About Martello Technologies Group
Martello Technologies Group Inc. (TSXV: MTLO) is a technology company that provides digital experience monitoring (DEM) solutions. The company's products provide monitoring and analytics on the performance and user experience of critical cloud business applications, while giving IT teams and service providers control and visibility of their entire IT infrastructure. Martello's software products include Microsoft 365 end user experience monitoring, unified communications performance analytics, and IT service analytics. Martello is a public company headquartered in Ottawa, Canada with employees in Europe, North America and the Asia Pacific region. Learn more at http://www.martellotech.com

This press release does not constitute an offer of the securities of the Company for sale in the United States. The securities of the Company have not been registered under the United States Securities Act of 1933, (the "1933 Act") as amended, and may not be offered or sold within the United States absent registration or an exemption from registration under the 1933 Act.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.

Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information can be identified by words such as:"anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Examples of forward-looking information contained in this news release include, among others, statements with respect to accelerating user growth by providing performance and user experience monitoring; the expectation to increase the number of Microsoft end users by 60% during fiscal 2022; the anticipated expenditures related to legacy product revenue streams; the Company being well-positioned to accelerate DEM user growth in fiscal 2022; the upcoming completion of product enhancements; the ability of the MSP channel to allow the Company to cost-efficiently expand; the expansion of the Company's reach across Microsoft globally, including access to partner and inside sales contacts as well as enterprise customers to grow the Company's partner and customer base and increase users; new MSP and strategic partnerships and product launches; and the timing for the release of the Company's third quarter financial results for fiscal year 2021.

Forward-looking information is neither historical fact nor assurance of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking information relates to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking information. Therefore, you should not rely on any forward-looking information. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking information include, among others, the following:

• continued volatility in the capital or credit markets;
• our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so;
• changes in customer demand;
• disruptions to our technology network including computer systems and software, as well as natural events such as severe weather, fires, floods and earthquakes or man-made or other disruptions of our operating systems, structures or equipment;
• delayed purchase timelines and disruptions to customer budgets, as well as Martello's ability to maintain business continuity as a result of COVID-19;
• and other risks disclosed in the Company's filings with Canadian Securities Regulators, including the Company's annual information form for the year ended March 31, 2020 dated December 24, 2020, which is available on the Company's profile on SEDAR at www.sedar.com.

Any forward-looking information in this news release is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by applicable securities laws, we undertake no obligation to publicly update any forward-looking information, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Financial Outlooks and Future-Oriented Financial Information

To the extent any forward looking information in this press release constitute "financial outlooks" within the meaning of applicable Canadian securities legislation, such information is being provided as certain estimated financial metrics and the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such financial outlooks. Financial outlooks, as with forward looking information generally, are, without limitation, based on the assumptions and subject to various risks and uncertainties as set out herein. The Company believes there is a reasonable basis for the expectations reflected in the financial outlooks, however these expectations may not prove to be correct and the Company's actual financial position and results of operations may differ materially from management's current expectations and the information provided in this press release.

SOURCE Martello Technologies Group

Tracy King, Vice President of Marketing, [email protected], 613.410.7636; John Proctor, President & CEO, [email protected], 613.271.5989

Related Links

https://martellotech.com/