MediaValet Reports Third Quarter 2023 Results

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Strong YoY Growth in Revenue, up 26%, and ARR, up 27%

Vancouver, British Columbia--(Newsfile Corp. - November 14, 2023) - MediaValet Inc. (TSX: MVP) (the "Company" or "MV"), a leading provider of cloud-native enterprise digital asset management ("DAM"), video content management and creative operations software, is pleased to report its results for the three and nine months ended September 30, 2023. All figures in Canadian dollars ("CAD").

"In contrast to global economic conditions, we are pleased to report another quarter of strong revenue growth, and that the market demand for DAM continues to be robust," said Rob Chase, President and CEO of MV. "The strength of the DAM market is primarily driven by the need for marketers to build rich digital content pipelines to reach their target audiences in order to achieve their organizational growth objectives. Simply put, a DAM is a must-have component of the tech stack required to deliver on this mission. This necessity for DAM is only amplified in tough economic times - without one, marketers are unable to develop content at the scale and cost efficiency required."

Q3 2023 Highlights





Three months ended
September 30,


Nine months ended
September 30,


 

2023
 
2022

2023
 
2022

Revenue
$4,124,130
$3,278,981
$12,065,846
$9,227,554

   % Increase over prior year

26%

39%

31%

36%

Gross Margin

3,341,921

2,669,196

9,727,206

7,555,295

   Gross Margin %

81%

81%

81%

82%

Adjusted Operating Costs1

4,459,838

4,944,897

14,740,100

14,942,092

   % Increase over prior year

(10%)

21%

(1%)

33%

Adjusted EBITDA Loss1

(1,117,917)
(2,275,704)
(5,012,894)
(7,386,798)

   % Increase (Decrease) over prior year

(51%)

7%

(32%)

29%

Net loss

(1,864,915)
(2,477,294)
(7,032,920)
(8,215,801)

   % Increase (Decrease) over prior year

(25%)

3%

(14%)

26%

Basic and diluted loss per share

(0.04)
(0.06)
(0.16)
(0.21)

 

 

 
 
Balance as at

 

 

 

Sep. 2023

Dec. 2022

Annual Recurring Revenue-Closing ("ARR")2

 

 

17,352,649

13,652,756

Modified working capital1

 

 

(980,883)
2,887,850

Cash

 

 

374,244

216,815

Revolving Credit Facility (up to $9 million)

 

 

(2,404,206)
501,017

 

Mr. Chase continued, "In addition to the DAM market resilience, our revenue growth and improved EBITDA performance is reflective of both our recent strategic restructure and the optimization of our operations. This has enabled us to do more with less through increasingly clear direction and ownership of the critical aspects of our business. Most of this transition was completed in our third quarter, and our team is energized and is significantly improving our solutions delivery and accelerating our strategic product roadmap. We already standout in the DAM market for unrivalled support and best-in-class security and scalability. So, we are looking forward to the impact our current initiatives will have on customers of all sizes in terms of adoption, growth and acquisition as we continue our DAM leadership mission."

"In Q3, we both advanced our strategic business objectives, and closed in on our path to profitability," said Dave Miller, CFO of MV, "We have maintained our strong revenue growth with improved mid-to-large enterprise wins in the third quarter, and with net retention rates above 100% year to date. At the same time, headcount reductions in Q3 have resulted in a 10% decline in our Operating Cost structure, resulting in a 51% decrease in our EBITDA loss for the quarter. As a result, our credit line draw is below our expected level, and we have ample credit room to bridge to cash flow positive operations. We now enter our seasonally strongest billings quarter with the momentum and operational structure to deliver on our goal for billings-based cash positive operations in Q4, putting us with an increasingly clear line-of-sight to profitability."

Key Financial Metrics:

  • Revenue grew to $4.12 million in Q3'23, up 26% from $3.28 million in Q3'22, and up 2% sequentially from Q2'23. Revenue year-to-date ("YTD") grew to $12.07 million, up 31% from $9.23 million last YTD. The increases are due to revenue growth from new customer acquisition as well as the relative strength of the U.S. dollar to Canadian dollar.
  • Grew ARR to $17.40 million, an increase of 27% compared to $13.66 million at September 30, 2022 and a 7% sequential increase from Q2'23. The increases reflect the Company's growth in new customers, 101% net dollar retention from existing customers and continuing market demand for DAM solutions despite the current macro-economic environment.  
  • Gross margins remained strong at 81% ($3.34 million) in Q3'23 compared to 81% ($2.67 million) in Q3'22 and 82% ($3.27 million) in Q2'23.  YTD gross margins were 81% ($9.73 million) compared to 82% ($7.56 million) last YTD. The decrease in Gross Margin percentage is related to the increase in Cost of Sales related to higher support personnel, a higher mix of professional services revenue, and the timing of customer adoption in advance of revenue expansion.
  • Incurred Adjusted Operating Costs of $4.46 million in Q3'23, a 10% decrease from $4.94 million in Q3'22, and a decrease of 13% compared to the $5.11 million incurred in Q2'23. YTD Adjusted Operating Costs of $14.74 million decreased 1% from $14.94 million last YTD. Management continues to tightly manage Adjusted Operating Costs to balance its market opportunity, strategic vision, and available capital resources.
  • Reported a Q3'23 Adjusted EBITDA loss of $1.12 million, an improvement of 51% from $2.28 million in Q3'22, and an improvement of 39% sequentially from Q2'23. YTD Adjusted EBITDA loss of $5.01 million improved 32% from $7.39 million last YTD. The decrease in Adjusted EBITDA loss is evidence of the Company's plan to reduce Adjusted Operating Costs while growing Revenue in line with the Company's long-term growth strategy.
  • Ended Q3'23 with Modified Working Capital (excluding contract acquisition assets, deferred revenue, lease liabilities and debt) deficit of $1.11 million, a decrease of $1.45 million from Q2'23 and a decrease of $3.21 million from Q4'22 ($2.10 million). For the nine months ended September 30, 2023, the Company increased $1.90 million of bank indebtedness, collected proceeds of $3.50 million from an oversubscribed private placement and increased its Revolving Credit Facility to $9.00 million, with $2.40 million drawn.

1 Adjusted Operating Costs, Adjusted EBITDA Loss, and Modified Working Capital are non-IFRS measures. See "Non-IFRS Measures" section of the Company's MD&A for further discussion, the "Results of Operations" section and the "Liquidity and Capital Resources" section of the MD&A for reconciliation to the most directly comparable IFRS measure. Adjusted Operating Costs includes Sales and Marketing, Research and Development, and General and Administrative expenses, and excludes share-based compensation, depreciation, and certain non-recurring expenses. The Company considers Restructuring Costs, as defined in the Company's MD&A, to be non-recurring in nature and not indicative of continuing operations. We use this metric as a supplemental measure to review and assess operating performance and assess our ability to generate cash flow. Management believes Adjusted EBITDA Loss provides a meaningful measure for assessment of Company performance as it removes non-cash and non-operating expenses such as financing costs, and non-recurring expenses. Modified Working Capital is a non-IFRS measure that represents current assets less current liabilities and adjusted to exclude contract acquisition assets, deferred revenue, lease liabilities and debt. We use this metric as a supplemental measure to assess financial sustainability and sufficient liquidity to preserve the Company's capacity to continue operating, in providing benefits to our stakeholders and in providing an adequate return on investment to our shareholders by selling our services at a price commensurate with the level of operating risk assumed by the Company.

2Annual Recurring Revenue (ARR) provides an indication of future revenue and billings from customers as of the reporting date. ARR represents the sum of the annualized recurring subscription fees 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 at the US dollar exchange rate in effect at the time of invoicing. Substantially all of the Company's ARR is denominated in USD. The average US dollar exchange rate of ARR was C$1.3438 at September 30, 2023, C$1.3141 at December 31, 2022 and C$1.2827 at September 30, 2022.

MediaValet's full financial statements and related MD&A are now available on SEDAR at www.sedar.com.

About MediaValet, Inc. MediaValet stands at the forefront of the enterprise, cloud-native, software-as-a-service digital asset management and creative operations industries. Built exclusively on Microsoft Azure and available across 61 Microsoft data center regions in 140 countries around the world, MediaValet delivers unparalleled enterprise-class security, reliability, redundancy, compliance, and scalability; while offering the largest global footprint of any DAM solution. In addition to providing enterprise cloud-native DAM capabilities at a global scale, desktop-to-server-to-cloud support for creative teams, and overall cloud redundancy and management for all source, WIP and final assets, MediaValet offers industry-leading integrations into Slack, Adobe Creative Suite, Microsoft Office 365, Workfront, Wrike, monday.com, Drupal, WordPress and many other best-in-class 3rd party applications.

For further information, please contact:

Corporate Office
Rob Chase, President & CEO | [email protected] | (604) 688-2321
Dave Miller, CFO | [email protected] | (604) 688-2321

Investor Relations
Babak Pedram | [email protected] | (416) 646-6779

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/187333

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