MediaValet Reports Fiscal 2017 and Fourth Quarter Results

Achieves a 62% increase in Revenue, a 38% increase in Annual Recurring Revenue, and a 6% reduction in Operating Expenses

Vancouver, British Columbia--(Newsfile Corp. - April 30, 2018) - MediaValet Inc. (TSXV: MVP) (the Company), a leading provider of cloud-based digital asset management ("DAM") software, is pleased to report its results for the year and the three months ended December 31, 2017.

Summary of Quarterly Results


3 months
ended

December 31, 2017
3 months
ended

December 31, 2016
Year ended
December 31, 20
17
Year ended
Dec
ember 31, 2016
Revenue $ 589,967 $ 392,240$ 2,187,738$ 1,349,501
   % Increase50%65%62%43%
Gross Margin $ 466,799$ 310,830$ 1,796,258$ 1,041,850
   Gross Margin %79%79%82%77%
Cost of Revenue + Operating Expenses1 $ 1,418,157$ 1,780,379$ 6,113,190$ 6,406,386
   % Increase(20%)35%(5%)62%
EBITDA Loss2$ (828,190)$ (1,388,139)$ (3,925,452)$ (5,056,885)
   % Decrease(40%)(27%)(22%)60%
Net loss $ (1,026,037)$ (1,655,946)$ (4,981,306)$ (5,838,367)
Loss per share $ (0.01)$ (0.02) $ (0.06)$ (0.07)
Annual Recurring Revenue ("ARR")3

$ 2,488,494$ 1,799,722
    % Increase

38%86%
Working Capital (Net of

$ (1,703,442) $ 49,431
Deferred Revenue

$ 1,478,285$ 1,203,687
Total assets

$ 591,990$ 1,505,088
Total Debt

$ 6,180,250$ 3,520,000
Shareholder Deficiency

$ (9,321,028)$ (4,464,810)

 

"In fiscal 2017 and Q4 2017, we delivered solid revenue 62% and 50% respectively, expanded our gross margins, improved our EBITDA and delivered on key technology and product initiatives," said David MacLaren, CEO of MediaValet. "These milestones were achieved against a backdrop limited growth capital and we are extremely proud of our team as they not only adapted to the challenging capital levels, but worked tirelessly to continue growing our business and maintain our industry leading user experience rating. Our team, our business, and our customer base has come out of 2017 stronger than ever and we are now in a solid cash position to accelerate our growth rate in 2018."

Continued Mr. MacLaren, "A key component of our ongoing success is our commitment to innovation. We continued to invest in research and development in fiscal 2017, at spending levels similar to 2016, enabling us to continue delivering on our mission and brand promise. In addition to the many new features, functionality and integrations delivered in 2017, we are now in the process of launching the fourth iteration of our 100% cloud-based, enterprise class, digital asset management platform. This is a significant achievement for us as we have completely re-engineered our platform to fully leverage Microsoft Azure's innovative new Services Fabric technology. We made this decision two years ago, before our code-base prohibited us from cost-effectively moving to this next-generation platform. While this has been a major investment for us, it sets us further apart in the industry. With the launch of V4, we will be the fastest and most secure Cloud DAM on the planet. As an added benefit, V4 will enabled us reduce our cost of operations and to increase our speed of innovation and development."

Rob Chase, Executive Chairman and CFO commented, "Subsequent to year end, on February 22, 2018, we announced the close of our $8.6 million financing round. Insiders and employees subscribed for $1.48 million of the financing and key institutional investors subscribed for $3.8 million co-led by Canaccord Genuity and Gravitas Securities. This financing has provided the growth capital required to execute on our growth strategy for fiscal 2018 and to retire $3.18 million of debt. We are grateful to our investors for the confidence they have placed in our execution and in the opportunity ahead. Combined with the milestones we have achieved and the time our team has spent honing our capability, this capital is essential to our mission and growth platform. We have already begun deploying this capital on our sales and marketing strategies, and are excited by the response we're seeing."

Results of Operations

Key Financial Metrics:

  • Grew revenue to $2.19 million in fiscal 2017, up 62% from $1.35 million in fiscal 2016. Fourth quarter revenue of $0.59 million increased 50% from $0.39 million in Q4 last year. Over 90% of fiscal 2017 revenue is recurring from annual Software-as-a-Service (SaaS) agreements. The increases in revenue reflect the growth in the annual recurring revenue base as the Company continues to win new customers and retain existing ones.
  • Achieved a Gross Margin of 82% for fiscal 2017, up from 77% last year. For the fourth quarter, gross margin was 79%, consistent with 79% in Q4-2016. The improved margin for the year is due to increased sales volume, improved operating efficiencies, and new paid feature add-ons.
  • Incurred Operating Expenses of $5.72 million for fiscal 2017, a 6% decline from $6.10 million last year. Q4-2017 Operating Expenses were $1.29 million, a 24% reduction from $1.70 million in Q4-2016. The reduction in Operating Expenses reflects efforts to optimize spending levels and to manage expenses with funding availability.
  • Reported a fiscal 2017 EBITDA loss of $3.93 million, a 22% reduction from a loss of $5.06 million in fiscal 2016. The Q4-2017 EBITDA loss was $0.83 million, a 40% decline from $1.39 million in Q4-2016. The reduced losses reflect continued revenue growth as a result of the Company's growing recurring revenue base, increased Gross Margins and efforts to balance operating costs and operating capital levels.
  • Increased Annual Recurring Revenue ("ARR") to $2.49 million, an increase of 38% compared to $1.80 million at December 31, 2016. The increase in ARR is a result of efforts to maintain and grow our customer base through continuing to develop our go-to-market strategies and deliver innovative solutions to customers' DAM challenges.
  • Ended the year with $0.04 million of cash on hand (2016 - $0.68 million), negative working capital of $1.70 million (2016 - positive $0.05 million) and debt of $6.18 million (2016 - $3.52 million). Subsequent to year end, on February 22, 2018, the Company completed an $8.6 million equity round of financing; sufficient to return the Company to positive working capital, retire $3.18 million of debt, and to fund the Company's current operating capital requirements.

Technology and Product:

  • Launched a number of product integrations in fiscal 2017, with 3rd party marketing, automation and operational software solutions, to optimize the effectiveness of DAM within customer environments. These integrations have proven highly valuable in customer acquisition and retention, and include:
    • Slack (July 2017) - Slack is the world's fastest growing team collaboration and communication platform. This integration will provide organizations with an elegant and simple way to collaborate on marketing assets and manage asset related workflows and approvals.
    • Microsoft SharePoint (April 2017) - The world's leading document management and storage system, Microsoft SharePoint. For the first time in DAM, users can view, manipulate and share all popular formats and sizes of photos, videos, audio files, graphics, animations and 2D and 3D CAD files within the platform.
    • Microsoft Office 365 (April 2017) - Completed full integration with Office 365 and released a full-screen, multi-page Microsoft Office and PDF viewer. Users now have the ability to view, edit and save Microsoft Word, Excel and PowerPoint documents directly within MediaValet - an industry first that will further help expand the reach of DAM beyond marketing departments, increasing productivity across organizations.
    • WordPress (April 2017) - WordPress is the world's most popular website content management system (CMS). Our integration enables creative and administrative web teams to access the latest, approved media assets directly from within WordPress, saving organizations valuable time and resources and ensuring brand consistency across all digital platforms.
    • AutoCAD (February 2017) - Became the first DAM to integrate with AutoCAD to enable viewing, sharing and publishing of 2D and 3D rendered models. MediaValet's integration with AutoCAD paves the way for organizations that create and work with 2D and 3D rendered models to embrace the cloud and DAM.
  • Continued to enhance MediaValet DAM by providing new features that improve overall user experience and utility, and enable MediaValet to attract, win and retain more customers. New feature releases in fiscal 2017 included:
    • Content Publishing and Analytics (December 2017) - Allows customers to publish assets across an unlimited number of digital channels and web properties from a single, centralized location. By enabling our customers to identify their top performing channels and assets, we can help them maximize the ROI of their marketing spend, drive more sales, and increase their bottom line.
    • Mobile Apps (March 2017) - Extended Mediavalet's functionality to iOS and Android platforms. Providing mobile apps helps our customers maintain brand consistency; increase individual, team and corporate wide productivity; and enable deeper collaboration across organizations and their corporate ecosystems.
  • Awarded Gold by the International Association of Microsoft Channel Partners (IAMCP) in their 2017 award competition for partner-to-partner solutions that drive customer value. The award recognized MediaValet's partnership with Long View Systems for their outstanding efforts that deliver exceptional solutions and services to their customers through implementation of joint partner solutions.
  • Won the 2017 IMPACT Award for Digital Transformation Leadership at Microsoft's world partner conference, Inspire. The award recognizes a partner that has set the standard for the evolution of businesses in the digital age by transforming their business practices and enabling their customers to harness the opportunities of cloud, big data, mobile and social to become more empowered, engaged, and efficient.
  • Recognized by MarketsandMarkets as an Innovator in its 2017 Competitive Leadership Map of the global digital asset management market. In their research, MarketsandMarkets highlights the strength of MediaValet's product offering and business strategy.
  • For the second year in a row, MediaValet was awarded the Seal of Excellence by Computer Dealer News for service providers who go above and beyond industry norms in delivering exceptional customer service and value.

Operations and Corporate:

  • Building a synergistic and effective reseller channel partner program is one of MediaValet's key growth strategies. This effort has begun to produce new sales opportunities and customer wins for MediaValet.
    • IO Integration (February 2018) - A global digital asset management, marketing, and creative operations technology solutions consultancy with a select portfolio of marketing and creative operations technology solutions that target the world's top marketing and ad agencies, consumer brands and retailers.
    • Long View Systems (May 2017) - One of the most powerful information technology services and solutions companies in North America. Long View Systems is focused on combining business and technology to create innovative, flexible, cost-effective, and business solutions, and is a leading Microsoft Licensed Solutions Provider.
  • In February 2018, Rob Chase expanded his role with the Company, joining the senior management team as Executive Chairman and Chief Financial Officer. Rob brings over 20 years of technology, software-as-a-service, start-up and M&A experience, including 14 years with Absolute Software as CFO and COO where he helped lead the company from $4 million to $100 million in profitable sales, and 2 years as Director with PNI Digital Media which concluded with the successful sale of the company to Staples. Rob also increased his ownership position in MediaValet to 10% as part of the February 2018 financing round.
  • Subsequent to year end, on February 22, 2018, announced the closing of a $8.6 million financing to retire $3.18 million of debt and fund the Company's 2018 growth initiatives.

____________________

1 Operating Expenses include Sales & Marketing, Research & Development and General & Administrative.
2
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. Refer to the Operating Results section for further information on the calculation and definition of EBITDA.
3
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 ratably on a monthly basis over the contract term.

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

Ends

About MediaValet, Inc.

MediaValet stands at the forefront of the enterprise cloud-based digital asset management industry. Built exclusively on Microsoft Azure and available on 50 Microsoft data centers 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, 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.

For further information, please contact:

Corporate Office
David MacLaren, CEO | david.maclaren@mediavalet.com | (604) 688-2321
Rob Chase, Executive Chairman and CFO | rob.chase@mediavalet.com | (604) 688-2321

Press Relations
Babak Pedram | babak.pedram@mediavalet.com | (416) 644-5081

"Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."

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