MediaValet Reports First Quarter Fiscal 2019 Results
Momentum Accelerates: Revenue up 62% and ARR up 57%
VANCOUVER, May 14, 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 months ended March 31, 2019.
Summary of Quarterly Results
Three Months Ended |
||
March 31, 2019 |
March 31, 2018(1) |
|
Revenue |
$ 996,076 |
$ 615,043 |
% Increase |
62% |
32% |
Gross Margin |
850,662 |
491, 473 |
Gross Margin % |
85% |
80% |
Operating Expenses1,2 |
1,479,636 |
1,367,805 |
% Increase |
8% |
(9%) |
EBITDA Loss1,3 |
(628,974) |
(876,334) |
% Decrease |
(28%) |
(22%) |
Net loss |
(825,665) |
(1,114,546 ) |
% Decrease |
(26%) |
(22%) |
Loss per share |
(0.00) |
(0.01) |
As at March 31, 2019 |
As at December 31, 2018 |
|
Annual Recurring Revenue ("ARR")4 |
4,128,320 |
$ 3,511,967 |
% Increase over prior year |
57% |
41% |
Modified Working Capital ex. of Deferred Revenue and Debt |
924,171 |
( 164,546) |
Deferred Revenue |
2,853,275 |
2,323,742 |
% Increase over prior year |
89% |
57% |
Total assets |
3,319,386 |
1,980,184 |
Lease Liabilities |
608,400 |
- |
Total Long-Term and Convertible Debt |
4,179,841 |
3,150,000 |
Shareholder Deficiency |
(5,809,035) |
( 5,174,656) |
"2019 is off to a tremendous start with revenue, ARR, gross margin and Net Billings(5) hitting all-time highs," commented David MacLaren, Founder and CEO of MediaValet. "This follows the momentum that we began building after our Q2'18 funding round. That round allowed us to complete the latest version of our platform, putting in place the foundation of the next phase of our product strategy, and ramp up our sales and marketing efforts. Today, a year later, our go-to-market and product led development efforts are generating three times the number of leads and opportunities, and accelerating our growth trajectory."
Continued MacLaren, "I'm particularly proud to report that we achieved another record quarter of Net Billings at $1.53 million, up 136% over Q1'18 and 15% sequentially. This marks our third consecutive quarter of significant and record level Net Billings. Equally important is how we achieved these results – a combination of strong new customer acquisition and significant licensing expansion within our existing customer base. This truly is the Holy Grail of SaaS businesses and we intend to maintain our focus on product led development to continue expanding our market share and increasing customer usage. All things considered, our numbers indicate a strong and committed customer base and a differentiated product offering that's solving real challenges being faced by organizations today."
Added Rob Chase, Executive Chair and CFO, "Our focus on product led development has resulted in yet another milestone achievement with ARR reaching $4.13 million; up 57% over Q1 2018, and up 18% sequentially. The net additions to ARR were a record $0.62 million, up 330% from last year, and up 70% sequentially, reflecting our product development achievements and the success of our sales and marketing strategies. We are also pleased to have added experienced sales and marketing leaders to our Board, and to have completed a $1.55 million financing round to provide the capital required to continue to fund our growth strategy. We have the means, tools, people and processes in place to deliver an exciting 2019."
Results of Operations
Key Financial Metrics:
- Grew revenue to $1.00 million in Q1 2019, up 62% from $0.62 million in Q1 2018, and up 18% sequentially from Q4 2018. As over 90% of revenue is from annual subscriptions, the growth reflects the increasing deferred revenue and ARR from customer acquisition and retention.
- Returned to 80%+ Gross Margins following migration to MediaValet V4 in September 2018, at 85% for Q1 2019, up from 80% in Q1 2018 and 79% for fiscal 2018. The improved margin is due to completion of the migration to V4, increased sales volume, improved operating efficiencies, and new paid feature add-ons.
- Incurred Operating Expenses of $1.48 million in Q1 2019, an 8% increase (2018 proforma 12%) from $1.37 million in Q1 2018 and down 5% from $1.52 million in Q4 2018 (2018 proforma up 5%). Excluding the impact of IFRS 16 changes, the increases from the prior periods is 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 were increased from Q4 2018 levels for projects required for enterprise grade security initiatives such as SOC II audit and single sign-on. This is in response to the Company's growing traction within the enterprise segment of the DAM market. Note that "2018 proforma" percentages are provided where applicable to provide the change from prior periods had IFRS 16 been applied with retroactive restatement.
- Reported a Q1 2019 EBITDA loss of $0.63 million, a 28% reduction (2018 proforma 16%) from a loss of $0.88 million in Q1 2018, and a 25% sequential decline (2018 proforma 12%) from Q4 2018. The reduced loss reflects 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 $4.13 million, an increase of 57% compared to $2.63 million at March 31, 2018, and an 18% sequential increase from December 31, 2018. The increase reflects a higher the level of new customer acquisition – which the Company has been consistently achieving since Q3 2018 – and increased customer usage and adoption statistics that have led to growth in the existing customer subscription base. This led to a record $0.62 million in net additions to ARR for the quarter, an increase of 330% over Q1 2018 and 70% sequentially over Q4 2018. Both of these developments are a direct result of the May 2018 launch of V4, Advanced Search, Multi-Library and Creative Spaces.
- Ended the quarter with $0.62 million of cash on hand (December 2018 - $0.12 million), modified working capital (excluding deferred revenue, lease liabilities and debt) of $0.92 million (December 2018 – negative $0.16 million), lease liabilities of $0.61 million, long-term debt of $3.00 million, and convertible debt of $1.18 million at carrying value (December 2018 – total debt of $3.15 million).
Technology and Product:
- MediaValet first launched its new V4 platform along with its unique Advanced Search (artificial intelligence), Multi-Library and Creative Spaces modules in May 2018. Since then it has continued to enhance each of these components, doing incremental releases on a weekly and monthly basis. In the first quarter of fiscal 2019, this continued commitment to innovation and advancement led to a number of announcements, including:
- April 30, 2019: Existing customer usage and adoptions numbers increasing following migration of V4 in September 2018, leading to strong first quarter 2019 renewals and expansion. In particular – (i) an Agency customer expanded its DAM package to enable it to support more of its clients, resulting in a doubling of its subscription value to US$125,000 in ARR; and (ii) a Fortune 50 customer added a subscription for a seventh division, increasing its subscription value from US$68,500 to US$95,000 in ARR.
- April 2, 2019: New customer, Measurand, adopts MediaValet for V4's best-in-class enterprise capability to support its global operations and distributors.
- March 21, 2019: Reports that its integration with Wrike is making a difference for customers. Mutual customer, Pendo, finds the integration improves the user experience across both Wrike and MediaValet platforms, allowing Pendo's team to save money, improve brand consistency and maximize the impact of their digital assets.
- February 26, 2019: A global leader in design selects MediaValet for its unique Creative Spaces solution, which became a must-have for its distributed creative operation teams. MediaValet was awarded a US$140,000 subscription to its Cloud DAM and Creative Spaces solution.
Operations and Corporate:
- The Company completed a $1.55 million convertible debenture financing on March 20, 2019; sufficient to return the Company to positive working capital and to fund the Company's current operating capital requirements.
- On February 14, 2019, strengthened its Board of Directors with the addition of seasoned technology executives, Thomas Kenny (former SVP of Sales for Absolute Software and HP) and Jake Sorofman (Chief Marketing Officer of Pendo, and former Vice President and Chief of Research at Gartner). At the same time, Barry Jinks stepped down from the Board and the Company thanked him for his many years of service.
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 12% increase for Operating Expenses, and a 16% decline for EBITDA Loss. IFRS 16 did not impact the Net Loss. See "Adoption of New Account Standards" |
2 Operating Expenses include Sales & Marketing, Research & Development and General & Administrative. |
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. |
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. |
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. |
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.
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SOURCE MediaValet Inc.
Corporate Office: David MacLaren, CEO | [email protected] | (604) 688-2321; Rob Chase, Executive Chairman and CFO | [email protected] | (604) 688-2321; Press Relations: Babak Pedram | [email protected]| (416) 644-5081
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