MediaValet Reports Second Quarter 2021 Results

Investing in long-term growth and delivering a 34% U.S. dollar increase in ARR

Vancouver, British Columbia--(Newsfile Corp. - August 16, 2021) - MediaValet Inc. (TSX: MVP) (the Company), a leading provider of cloud-native enterprise digital asset management ("DAM") and creative operations software, is pleased to report its results for the three and six months ended June 30, 2021.

Summary of Quarterly and Annual Results

 3 months ended June 30,6 months ended June 30,
 2021202020212020
Revenue$2,245,889$1,746,426$4,417,842$3,471,126
     % Increase29%56%27%64%
Gross Margin1,808,9871,419,4553,583,3662,844,624
     Gross Margin %81%81%81%82%
Operating Costs14,032,5402,184,5427,176,5734,360,204
     % Increase85%33%65%40%
EBITDA Loss2(2,223,553)
(765,087)
(3,593,207)
(1,515,580)
     % (Decrease) / Increase191%13%137%16%
Net loss(2,521,155)
(1,077,581)
(4,098,306)
(2,017,328)
     % Increase / (Decrease)134%16%103%15%
Loss per share(0.07)
(0.03)
(0.11)
(0.07)
   As at June 30, 2021As at December 31, 2020
Annual Recurring Revenue ("ARR")3  $9,420,962$8,639,943
     % Increase over same period last year  30%33%

Modified Working Capital ex. of Deferred
     Revenue and Debt

  11,834,22516,102,539
Deferred Revenue  5,205,5555,735,133
     % Increase over same period last year  17%30%
Total assets  15,477,01619,565,137
Lease liabilities  886,464989,390
Long-term and Convertible Debt  1,000,0001,000,000
Shareholder Equity (Deficiency)  6,423,28010,031,159

 

"We continue to see digital asset management ("DAM") rising to the top of the core technologies that organizations require to be successful in today's digital age," commented David MacLaren, Founder and CEO of MediaValet. "Transforming to a digital-first, work-from-anywhere, anytime environment is a global challenge faced by organizations of all sizes, across all industries. This is reflected in our continued growth this past year and by the wide variety of organizations we signed up across manufacturing, higher education, not-for-profit, government, consumer packaged goods, and more. This widespread demand is a key factor in deciding how we deploy our growth capital to maximize our long-term market opportunity. We're grateful to have this opportunity and to continually attract amazing people to help us do so."

Mr. MacLaren continued, "We've come a long way to date; developing the first global, 100% cloud-based, enterprise DAM platform; attracting some of the largest brands and organizations in the world; and creating the opportunity to truly revolutionize the DAM industry. Organizations that choose MediaValet, truly get a DAM partner and champion that will not only help them transform their operations to address the challenges of today - but those of tomorrow as well. As a DAM partner, we help our customers increase their top and bottom lines by increasing the productivity of their teams; the ROI of their high-value digital assets; and the velocity, integrity and continuity of their operations. As of today, we feel we've only just begun as recent advances in technology are just beginning to unlock many of the innovations we've dreamed of."

Rob Chase, Executive Chair and CFO commented, "In Q2 and year-to-date ("YTD") 2021, we made important strides forward on our long-term growth plan. With run-rate revenue achieving a breakeven level at the end of Fiscal 2020, we set out to deploy our available growth capital in 2021. We are pleased to report that we have been successful at scaling up our operations to increase our sales capacity and accelerate our product roadmap. This discretional investment in our future resulted in a 65% YTD increase in Operating Costs to $7.18 million. The results are already starting to show, with the sales and marketing team expansion delivering a record level of leads, opportunities, and new customer U.S. dollar contracts (excluding prepaid multi-year amounts) for our first and a second quarter periods, exceeding 2020 YTD by 64% and 2019 (the prior record) by 13%. Even so, the S&M team is still ramping up after the expansion and is expected to continue building on this momentum with a target of reaching their performance potential in 2022. The expanded R&D team is also ramping up and is expected to result in an accelerated pace of innovation, delivering new modules and features, optimizing our platform to further enhance enterprise performance and deliver best-of-breed operational metrics, and working on long-term innovative projects that will enable customers to reach new digital maturity levels. We believe these investments will set MediaValet apart as the clear leader in the global DAM industry and deliver long-term revenue growth sufficient to reach cash positive operations within our available capital resources."

Mr. Chase continued, "In U.S. dollars, ARR increased 34% (versus 30% in Canadian dollars) and net new ARR ("NNARR") increased 85% (versus 8% in Canadian dollars) over Q1'20. This growth is despite COVID variants still weighing on sales cycles, deal velocity and churn, and the impact of the stronger Canadian dollar. However, these macro-challenges have been offset by the continuing increase in importance for DAM as a must-have technology as organizations set themselves up for a digital-first world. We are encouraged by this momentum as we head into what is typically the stronger quarters of our fiscal year."

Results of Operations

Key Financial Metrics:

  • Grew revenue to $2.25 million in Q2 2021, up 29% from $1.75 million in Q2 2020, and up 3% sequentially from Q1 2021. For the year to date ("YTD") period, revenue of $4.42 million is up 27% from $3.47 million last YTD. The majority (generally 90%+) of revenue is from monthly recognition of annual SaaS subscriptions. As a result, the growth reflects increases in deferred revenue and ARR from customer acquisition, retention, and expansion through industry leading sales and marketing strategies, and continuous new feature development and platform enhancement.
  • Increased Gross Margin to $1.81 million in Q2 2021, up 27% from $1.42 million in Q2 2020, and up 2% sequentially. The YTD Gross Margin increased 26% to $3.58 million from $2.84 last YTD. The Gross Margin percentage was to 81% for Q2 2021 compared to 81% in Q2 2020 and 82% in Q1 2021.
  • Incurred Operating Costs of $4.03 million in Q2 2021, an 85% increase from $2.18 million in Q2 2020, and up 28% from Q1 2021. YTD Operating Costs were $7.18 million, an increase of 65% from $4.36 million last YTD. The increases are primarily due to an implementation of the Company's long-term growth plan, including a step-increase in research and development ("R&D") and sales and marketing ("S&M"), and a one-time increase in general and admin ("G&A") for TSX listing fees. Headcount was increased to 81 by the end of Q2 2021 compared to 69 at Q1 2021, 59 at Q4 2020 and 57 at Q2 2020. After a ramp-up period, the planned expansions are expected to impact sales growth through increased global market reach and accelerated enterprise product development.
  • Reported a Q2 2021 EBITDA loss of $2.22 million, up 191% from $0.77 million in Q2 2020, and up 62% sequentially. The YTD EBITDA loss of $3.59 million increased 137% compared to $1.52 million last YTD. The increased annual loss was expected and is primarily due to the planned step-increase in Operating Costs in line with the Company's long-term growth strategy. The growth investment is balanced with available growth capital and requires a ramp period before impacting sales growth.
  • Increased Annual Recurring Revenue ("ARR") to $9.42 million, an increase of 30% (34% in U.S. dollars) compared to $7.27 million at June 30, 2020, and 9% (13% in U.S. dollars) from $8.64 million at December 31, 2020. The Net New ARR ("NNARR") for Q2 2021 was $0.41 million, up 8% (up 85% in U.S. dollars) from $0.38 million in Q2 2020, and up 8% (24% in U.S. dollars) sequentially. YTD NNARR of $0.78 million is up 2% (up 55% in U.S. dollars) over last YTD. Included in NNARR is a record first and second quarter for new customer acquisition, with YTD new subscription contracts (excluding multi-year portions) increasing by 50% (64% in U.S. dollars) over YTD Q2 2020. The improved new customer performance reflects the continuing rebound in the DAM market from COVID, and the Company's investment in its product and go-to-market strategies.
  • Ended the second quarter with $11.41 million of cash on hand (December 2020: $14.24 million), modified working capital (excluding deferred revenue, lease liabilities and debt) of $11.83 million (December 2020: $16.10 million), lease liabilities of $0.89 million and long-term debt of $1.00 million (December 2020: total lease liabilities and debt of $1.99 million).

Technology and Product:

MediaValet has a continuous development process to enhance its DAM with incremental releases on a weekly and monthly basis. These releases include new features, fixes and product upgrades aimed at expanding its Enterprise DAM use-cases and target addressable market, and at increasing its market differentiation with innovative solutions in the areas of advanced search (such as its Guided Artificial Intelligence module), audio and video management (such as its Audio/Video Intelligence module), creative team enablement (such as its CreativeSPACESTM module), and dynamic distribution (such as its Branded Portals module). This continued commitment to product innovation and advancement has led to an increase in new customer win-rates, customer retention and expansion, and average contract value. The Company has announced a number of customer wins to provide examples of the impact of its development process, which recently included the following:

  • July 28, 2021: announced the Jane Goodall Institute as a customer with a 5-year contract, paid annually. This names the customer which was announced on a no-name basis in in Fiscal 2020 to highlight the unique projects with the Institute to explore how artificial intelligence, digital asset management and the Cloud can augment and revolutionize scientific research, conservation and storytelling at a global scale.
  • July 20, 2021: selected to replace an incumbent cloud DAM for a North American Not-For-Profit ("NFP") organization specializing in children's entertainment for the last 50 plus years. The first-year billing of $84,000 includes an auto-renewing subscription of MediaValet's core digital asset management ("DAM") platform; creative operations platform, CreativeSPACES™; Audio/Video Intelligence ("AVI") services; and professional services covering implementation, training and support.
  • July 15, 2021: selected to replace an on-premise legacy DAM for an enterprise space technology manufacturer with multi-billion dollar revenues and a rich 60-year history. The first-year billing of $75,000 includes an auto-renewing subscription of MediaValet's core digital asset management platform; creative operations platform, CreativeSPACES™; Audio/Video Intelligence services; Azure Single Sign-on integration; and professional services covering implementation, training and support.
  • April 20, 2021: selected by a leading North American direct-to-customer manufacturer with over 4,000 employees with a first-year billing of $156,000 that includes an auto-renewing subscription of MediaValet's enterprise, cloud-native digital asset management platform, CreativeSPACES™ and Branded Portals; integrations with Wrike and Azure Active Directory; Advanced Artificial Intelligence; and professional services covering implementation, training and support.
  • March 1, 2021: announced continued wins in the manufacturing sector, which totaled $186,000 in new contract value signed in Q4 2020, growing the vertical to 15% of ARR. While MediaValet has not verticalized its offering or go-to-market strategy, it has proven to be able to adapt to the nuances of specific verticals like the manufacturing sector. At the same time, the need for Enterprise DAM platforms is industry agnostic and management believe these wins are testament to the applicability of its Enterprise DAM use-case across all verticals.

Operations and Corporate:

  • During the first half of Fiscal 2021, the Company began to implement the next phase of its long-term growth plan, increasing its headcount, expanding its direct and channel go-to-market initiatives, and bolstering its investment in R&D to accelerate its product roadmap. While the Company had attained a breakeven level of new and recurring sales by the end of Fiscal 2020, management believes it can attain a leadership position within the growing DAM market by increasing its operational investment levels. With its growth capital in place, the Company will continue increasing its Operating Costs throughout the fiscal year, with an emphasis on R&D and S&M.
  • On June 14, 2021 MediaValet graduated to the Toronto Stock Exchange and continued trading under the "MVP" symbol. Concurrently, its common shares were de-listed from the TSX Venture Exchange.
  • Subsequent to quarter end, on July 30, 2021, the Company issued 110,000 stock options to new hires with an exercise price of $2.34 per share. The options granted have a term of five years, and vesting terms of four equal instalments on the first four annual anniversary dates from grant date.

1 The Company defines Operating Costs to include Sales & Marketing, Research & Development and General & Administrative expenses, which aligns with the expenses included in EBITDA. This is a non-IFRS measure and represents operating expenses less share-based compensation and depreciation.

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.

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 evenly on a monthly basis over the contract term at the US dollar exchange rate in effect at the time of invoicing. The average US dollar exchange rate of ARR was C$1.2903 at June 30, 2021, C$1.3313 at December 31, 2020 and C$1.3369 at June 30, 2020.

MediaValet's full financial statements and related MD&A 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 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, Drupal, WordPress 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."

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/93318

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