06:35:10 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



MediaValet Inc (2)
Symbol MVP
Shares Issued 39,048,482
Close 2022-08-15 C$ 1.20
Market Cap C$ 46,858,178
Recent Sedar Documents

MediaValet loses $2.68-million in Q2 2022

2022-08-15 18:16 ET - News Release

Mr. David MacLaren reports

MEDIAVALET REPORTS SECOND QUARTER 2022 RESULTS

MediaValet Inc. has released its results for the three and six months ended June 30, 2022. All figures are in Canadian dollars unless otherwise stated for figures in United States dollars.

"We're pleased to report our strongest second quarter, and first half of a year (H1) in our history," commented David MacLaren, founder and chief executive officer of MediaValet. "Following our strongest first quarter ever, we added an additional $770,000 in net new annual recurring revenue (NNARR) in Q2 for a year-to-date record of $1.92-million in NNARR. We're excited to see the initial impact of the investments that we've made over the past 18 months. With our team now hitting their stride, we expect to innovate and deliver new features at an increasing velocity throughout the remainder of the year and into 2023, and to continue tapping into the excess capacity of our sales team."

Mr. MacLaren continued: "Despite the current macroeconomic environment, we're seeing strong demand in the market for enterprise-level solutions that can quickly help organizations increase the productivity of their marketing and creative teams, while ensuring their operations and assets are safe and secure at all times. Corporate-wide productivity and operational continuity are the two major things that organizations are trying to solve today; and being able to confidently and quickly stand up a solution is an absolute imperative. While the overall economic climate remains uncertain, the underlying long-term market shift towards a digital-first future is accelerating faster today than even a year ago."

Mr. MacLaren added: "While there are many components to a successful digital strategy, they all rely on high-value media, corporate and brand assets. Managing, protecting and maximizing the ROI of these assets creates a significant challenge for organizations of all sizes -- simply put, a DAM is required to address this challenge in times of growth, as well as in times of uncertainty, to help reduce costs, minimize the number of people and systems required to manage media-related work flows, and to ensure operational continuity. We stand out as a leader in this area as we do all this -- and more -- at a scale and across a global footprint that few, if any, can match. Combined with innovations like our video content management solution, which provides unparalleled video storage, indexing, searching, advanced AI and sharing capabilities, this has enabled us to attain a five-year CAGR for ARR of 44-per-cent and 100-per-cent net dollar retention of our ARR. We expect our momentum to build as our expanded team continues to accelerate our product road map and go-to-market initiatives."

Dave Miller, chief financial officer, also commented: "The strong start to our first half of FY22 despite a challenging global economic environment is a testament to our strong team, our competitive strength, our market share gaining strategy and the investments we've made in new and exciting features in our core DAM technology. As we manage through this period, we will continue to invest strategically in our growth while maintaining an intense focus on operational excellence and discipline. Our net billings for the first half of $6.03-million are ahead of plan and well ahead of the $3.89-million achieved in the first half of FY21 (an increase of 55 per cent). The strong start to FY22, along with holding our operating expenditures flat, will help accelerate our push to cash flow positive. We are confident our available cash resources, including our working capital, outstanding warrants that we expect to be exercised in Q3, and our unused operating facility of $7-million is sufficient to get us to this objective."

Results of operations

Key financial metrics:

  • Achieved a second-quarter record for net new ARR (NNARR) of $770,000, bringing the company's Q2 2022 annual recurring revenue (ARR) to $12.76-million, an increase of 35 per cent (38 per cent in U.S. dollars) compared with $9.42-million at June 30, 2021, and a 6-per-cent increase (6 per cent in U.S. dollars) from $12.00-million at March 31, 2022. NNARR increased 89 per cent from $400,000 Q2 2021 and decreased 34 per cent sequentially from a record $1.15-million in Q1 2022. For the year-to-date (YTD) period, NNARR of $1.92-million is up 146 per cent from $780,000 last YTD. The increases reflect the company's operational expansion completed in 2021 and the continuing market demand for enterprise DAM solutions.
  • Revenue grew to $3.13-million, up 39 per cent from $2.24-million in Q2 2021, and up 11 per cent sequentially from Q1 2022. Revenue YTD grew to $5.95-million, up 35 per cent from $4.42-million last YTD. The increases are due to the ARR and deferred revenue growth from ramping customer acquisition and net retention performance.
  • Gross margins remained strong at 82 per cent ($2.56-million) compared with 81 per cent ($1.81-million) in Q2 2021 and 83 per cent ($2.33-million) in Q1 2022. YTD gross margins were $4.89-million, or 82 per cent, compared with $3.54-million last YTD or 81 per cent.
  • Incurred operating costs of $5.04-million, a 25-per-cent increase from $4.03-million in Q2 2021, and a sequential increase of 2 per cent compared with Q1 2022. YTD operating costs were $10.00-million, a 39-per-cent increase from $7.18-million last YTD. The company has not expanded its operational infrastructure in fiscal 2022 as evidenced by the reduction in headcount to 95 from 102 at Dec. 31, 2021. As such, the increases in reported operating costs reflect the normalized impact of the operational expansion completed in fiscal 2021, variable cost increases with revenue growth and inflationary adjustments to payroll. Management continues to tightly manage operating costs to balance its market opportunity, strategic vision and available capital resources.
  • Reported a Q2 2022 EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $2.48-million, a 12-per-cent increase from $2.22-million in Q2 2021, and an improvement of 5 per cent sequentially from Q1 2022. YTD EBITDA loss was $5.11-million an increase of 42 per cent from $3.59-million last YTD. 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.
  • Ended the period with modified working capital (excluding deferred revenue, lease liabilities and debt) of $3.36-million (December, 2021: $9.15-million), total lease liabilities and long-term debt of $690,000 (December, 2021: total lease liabilities and debt of $1.78-million). In the first half of 2022, the company repaid $1.00-million of long-term debt and secured a $7.00-million revolving credit facility which remains 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 include: a Fortune 500 global auto-industry manufacturer with first-year billings of $85,000; a leading manufacturer of physical security products with first-year billings of $75,000; MediaValet's third NBA franchise, with first-year billings of $103,000; a producer of a highly rated, multiyear television drama series with first-year billings of $113,000. All of the new customer wins have contracts commencing in June, 2022, and selected MediaValet for its industry-leading highly scalable enterprise DAM platform and audio/visual intelligence (AVI) engine that has raised the bar for handling petabytes of 8K video files in the cloud.

Operations and corporate:

  • Employees exercised 44,834 options during the quarter at an average exercise price of $1.02 per share and proceeds of $45,731; shareholders exercised 591,380 warrants (May 25 and June 21, 2022) with an exercise price of 90 cents per share and proceeds of $532,242.
  • Issued new hire stock options grants (April 14, 2022) to certain employees of 133,000 options, exercisable at $2.00 per share, and to new and existing directors, officers and employees (May 19, 2022) of 811,500 options exercisable at $1.13 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.
  • The company repaid the existing secured debentures of $1-million on April 1, 2022.

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 (digital asset management) 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 (work in progress) and final assets, MediaValet offers industry-leading integrations into Slack, Adobe Creative Suite, Microsoft Office 365, WorkFront, Wrike, Drupal 8, WordPress and many other best-in-class third party applications.

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