Mr. Rob Chase reports

MEDIAVALET REPORTS SECOND QUARTER 2023 RESULTS

MediaValet Inc. has released its results for the three and six months ended June 30, 2023.

"We continue to deliver strong revenue growth as the market for DAM remains robust despite various macro challenges impacting sales cycles and tech budgets," said Rob Chase, president and chief executive officer of MediaValet. "This is in part due to the increasing need to have an exceptional digital and content-at-scale strategy to be successful today -- a status to which DAM is critical to achieving. Our performance also reflects our HotDAM! vision, which is a whole product concept focused on building an exceptional DAM, unlocking the value for customers through extraordinary service, and enabling an ecosystem of tech integrations that ensures customers can realize the full up-and-down-stream potential of DAM."

Mr. Chase continued: "We have also delivered some exciting new features this year including in-app notifications, forensic watermarking and, most recently, face recognition. Face is a cornerstone of our cognitive AI suite, which we have been building over the past five years, to support content at scale through enhanced metatagging, identification and search capabilities. The AI suite also helps our customers leverage generative AI together with our DAM to streamline content creation. AI is an exciting area for DAM and has heightened the need for DAM. I'm excited about the impact these feature releases are having and about the road map of HotDAM! launches we have coming in the second half of this year and beyond.

"In order to put us in the best position to execute in our HotDAM! vision, we have completed a strategic restructuring that aligns the organization to amplify the voice of the customer and to increase our product focus by having a single owner of each area. Please join me in congratulating Eric Simmons on promotion to chief revenue officer and expansion of his role to include all customer revenue: new, retention and expansion," continued Mr. Chase. "Eric has proven to deliver top-tier performance and operational excellence as leader of our customer acquisition and partner development team. I have no doubt he will bring the same level of impact and success to our customer experience and service delivery teams. Eric is now responsible for the entire customer journey and ensuring not only that we continue to increase our win rates, but that we also deliver on HotDAM! for our existing customers.

"Eric's customer passion is matched by our CTO, Jean Lozano, who I am happy to announce has expanded his role to include product management and to completely own our product vision. This increases product control and clarity, and will improve collaboration between customer and product teams. Jean is the founder of MV's DAM technology, and has a deep knowledge of the needs of customers today and in the future. I am confident that our ability to execute and the value we create for customers will accelerate through having clear ownership of revenue and product in the hands of Eric and Jean. The change will heighten our focus on existing customer requirements as we seek to be No. 1 in adoption and deliver on our HotDAM! vision."

Dave Miller, chief financial officer of MediaValet, added: "The strategic restructuring has streamlined our organization and made certain roles redundant -- enabling us to do more with less. As a result, yesterday's restructuring included the elimination of 10 positions (or 10 per cent of our work force) across the organization, resulting in $1.80-million in annualized savings. We are confident that the increased strategic alignment and focus will enable us to improve our service and offering to benefit both our customers and our shareholders. The changes were completed in [third quarter], and the reduced operating costs will be reflected in our [fourth quarter] results. These changes will accelerate our path towards profitability."

Key financial metrics:

• Revenue grew to $4.06-million in second quarter 2023, up 30 per cent from $3.13-million in Q2 2022 and up 5 per cent sequentially from first quarter 2023. Revenue year to date grew to $7.94-million, up 34 per cent from $5.95-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.
• The company increased annual recurring revenue to $16.27-million, an increase of 27 per cent compared with $12.76-million at June 30, 2022, and a 5-per-cent sequential increase from Q1 2023. The increases reflect the company's growth in new customers, 99.3-per-cent net dollar retention from existing customers, the strengthening U.S. dollar and continuing market demand for DAM solutions despite the current macroeconomic environment.
• Gross margins remained strong at 81 per cent ($3.27-million) in Q2 2023 compared with 82 per cent ($2.56-million) in Q2 2022 and 80 per cent ($3.11-million) in Q1 2023. YTD gross margins were 80 per cent ($6.39-million) compared with 82 per cent ($4.89-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.
• The company incurred adjusted operating costs of $5.11-million in Q2 2023, a 1-per-cent increase from $5.04-million in Q2 2022 and a decrease of 1 per cent compared with the $5.17-million incurred in Q1 2023. YTD adjusted operating costs of $10.28-million increased 3 per cent from $10.00-million last YTD. Management continues to tightly manage adjusted operating costs to balance its market opportunity, strategic vision and available capital resources.
• The company reported a Q2 2023 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $1.83-million, an improvement of 26 per cent from $2.48-million in Q2 2022 and an improvement of 11 per cent sequentially from Q1 2023. YTD adjusted EBITDA loss of $3.89-million improved 24 per cent from $5.11-million last YTD. The decrease in adjusted EBITDA loss is evidence of the company's plan to hold adjusted operating costs while increasing revenue in line with the company's long-term growth strategy.
• The company ended Q2 2023 with modified working capital (excluding contract acquisition assets, deferred revenue, lease liabilities and debt) of $340,000, a decrease of $2.09-million from Q1 2023 and a decrease of $1.76-million from Q4 2022 ($2.10-million). For the six months ended June 30, 2023, the company repaid $400,000 of bank indebtedness, collected proceeds of $3.5-million from an oversubscribed private placement and increased its revolving credit facility to $9.0-million, with $900,000 drawn.

MediaValet's full financial statements and related management's discussion and analysis are 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 operation 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, the Monday website, Drupal, WordPress and many other best-in-class third party applications.