Mr. David MacLaren reports

MEDIAVALET REPORTS FIRST QUARTER 2022 RESULTS

MediaValet Inc. has released its results for the three months ended March 31, 2022.

"We're pleased to report a record start to our fiscal 2022 and the best quarter in our history," commented, David MacLaren, founder and chief executive officer. "Attaining a record $1.15-million in NNARR [net new annual recurring revenue], surpassing all prior records, is a significant achievement at this point in time and one that we're extremely proud of. As 2022 begins, we're starting to see the impact of the investments we made in 2021. Our expanded team is now hitting their stride as they're entering the norming and performing stage of team evolution. For fiscal 2022, this means the velocity of our product development is ramping up and will continue to accelerate throughout the year and that we're beginning to tap into the excess capacity of our sales team."

Mr. MacLaren continued: "At the same time, we're seeing positive momentum in the DAM [digital asset management] market. While the overall economic climate remains uncertain, the underlying long-term market shift towards a digital-first strategy is accelerating faster than previously expected by industry analysts. From our experience with hundreds of customers across a wide variety of industries and geographies, we strongly believe that all organizations must initiate a digital-first strategy today to stay competitive. While there are many components to a successful digital strategy, they all rely on high-value media, corporate and brand assets. Thus, without a highly scalable and secure DAM platform at the core of an organization's digital strategy and IT [information technology] infrastructure -- one that can meet the current and future scalability, security, compliance and continuity needs of the organization -- their digital strategy is due to have major challenges in the near future. With massive changes in workplace dynamics and pandemic-related disruptions easing, we believe there's a pent-up demand for cloud-native DAM solutions. In Q1, we saw some of this reflected in our results with our average deal cycle shortening significantly and our win rate, average deal value and new customer additions hitting all-time highs. We believe this is a strong validation of both our product and go-to-market strategies."

Dave Miller, chief financial officer, also commented: "Frankly, as Q1 began, we didn't expect to deliver quarterly NNARR above $1-million (U.S.) until the second half of 2022. This is unprecedented for a first quarter and, importantly, was a balanced result in terms of deal size: ranking second in our history of greater than $50,000 (U.S.) new customer wins and first in less than $50,000 (U.S.) new customer wins. We also set a record for new customers signed at 41, building on our prior record of 34 wins in Q4 2021 and bringing our customer count to 425. In addition to performance gains from our team, the result also reflects an improvement in our average deal cycle dropping below 100 days for the first time since the start of the pandemic. Lastly, with our billings increasing 55 per cent over Q1 2021 to $3.2-million, we're well ahead of our 2022 plan. We have also begun to receive additional capital from the exercise of warrants, that enabled us to repay our $1-million of short-term debt in April and, combined with our undrawn $7-million operating line, we are confident that we can fund our operations through to cash positive levels."

Results of operations

Key financial metrics:

• The company achieved NNARR of $1.15-million, bringing the company's Q1 2022 ARR (annual recurring revenue) to $12-million, an increase of 33 per cent (39 per cent in United States dollars) compared with $9.02-million at March 31, 2021, and a 11-per-cent increase (11 per cent in U.S. dollars) from $10.84-million at Dec. 31, 2021. NNARR increased 207 per cent from $380,000 Q1 2021 and increased 38 per cent from $840,000 in Q4 2021. The increase reflects the company's operational expansion completed in 2021, which has increased its sales capacity and marketing reach, bolstered its product development capacity and expanded its customer success programs. In addition, it reflects improved market conditions for digital asset management and an accelerating shift toward digital transformation by organizations of all sizes and industries.
• Revenue grew to $2.82-million, up 30 per cent from $2.17-million in Q1 2021 and up 10 per cent sequentially and increasing from the 22-per-cent growth rate attained in Q4 2021. The accelerating rate is due the increases in ARR and deferred revenue from ramping customer acquisition and net retention performance.
• Gross margins remained strong at 83 per cent ($2.33-million), compared with 82 per cent ($1.77-million) in Q1 2021 and 82 per cent ($2.1-million) in Q4 2021.
• The company incurred operating costs of $4.96-million, a 58-per-cent increase from $3.14-million in Q1 2021 and a sequential increase of 5 per cent compared with Q4 2021. The increases reflect the normalized impact of the operational expansion completed in fiscal 2021, variable cost increases with revenue growth and inflationary adjustments to payroll.
• The company reported a Q1 2022 EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $2.63-million, a 250-per-cent increase from $750,000 in Q1 fiscal 2021. The increased annual loss was expected and is primarily due to the step increase in operating costs in line with the company's long-term growth strategy. Management believes this growth investment is aligned with the company's available capital resources.
• The company ended the period with modified working capital (excluding deferred revenue, lease liabilities and debt) of $6.71-million (December, 2021 -- $9.15-million), total lease liabilities and short-term debt of $1.72-million (December, 2021 -- total lease liabilities and debt of $1.78-million). In addition, the company has a $7-million revolving credit facility available and undrawn.

Technology and product

MediaValet's continued commitment to product innovation and advancement has led to an increase in new customer win rates, as well as customer retention and expansion. The company recently announced a number of customer wins, providing examples of the impact of its innovative feature development:

• New customer win announcements included a well-known global developer, manufacturer and distributor of pharmaceutical and skin care products with first-year billings of $133,000; a leading manufacturer of physical security products with first-year billings of $75,000; an award-winning brand advertising agency to fulfil the digital asset management needs of one of its major U.S. tourism clients, with first-year billings of $139,000; and a premier sports-related not-for-profit foundation that provides learning and leadership programs to minority college students with first-year billings of $130,000. All of these new customer wins have contracts commencing in March, 2022.
• The company announced a $63,500 expansion on March 28, 2022, by one of its largest not-for-profit customers and 100-per-cent net retention in Q1 2022 for the second consecutive quarter.

Operations and corporate:

• Employees exercised 25,554 options (Jan. 13, 2022) at an average exercise price of 80 cents per share and proceeds of $20,443; shareholders exercised 380,047 warrants (March 25, 2022) with an exercise price of 90 cents per share and proceeds of $342,042.
• A $7-million revolving senior credit facility was announced on Jan. 18, 2022, with the TD Bank Group, providing the company with a flexible growth capital option.

Subsequent events:

• The company repaid the existing secured debentures of $1-million on April 1, 2022.
• Employees exercised 34,833 options in April, 2022, for proceeds of $38,570.
• The company issued new hire stock options grants (April 14, 2022) to certain employees of 133,000 options, exercisable at $2 per share, have a term of five years and a vesting term of four equal instalments on the first four annual anniversary dates from grant date.

MediaValet's full financial statements and related MD&A (management's discussion and analysis) are now available on SEDAR.

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 centre 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, Drupal, WordPress and many other best-in-class third party applications.

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