MVP MediaValet Inc

Delivered Record Quarter with Year over Year Increase of 43% in Revenue and 41% in ARR

VANCOUVER, April 23, 2019 /CNW/ - MediaValet Inc. (TSX-V:MVP) (the Company), a leading provider of cloud‐based digital asset management ("DAM") and creative operations software, is pleased to report its results for the year and the three months ended December 31, 2018.

Summary of Quarterly Results

"Q4 marks another significant quarter for MediaValet with 2018 as a whole being a pivotal year for the company," commented David MacLaren, Founder and CEO. "In Q3'18 we achieved Net Billings⁽⁵⁾ of $1.11 million, surpassing the $1 million mark for the first time in Company history.  In Q4, we beat this milestone again, with Net Billings of $1.33 million, up 167% from Q4'17 and 20% from Q3'18. These results were in line with our expectations for 2018 following our increased investment in Sales & Marketing in Q1'18 and our releases of V4, Advanced Search and Creative Spaces mid-year. We've spent years perfecting our platform, and identifying our ideal customer profiles. At the same time, we've continued to hone our go-to-market strategies, including developing our partner channel which led to our largest new customer in 2018 at US$150,000, and generated 31% of 2018 new customer wins – up 196% from last year and up 462% in Q4 over Q4 2017. In 2018, this all came together and was fuelled by our $8.6 million funding round."

Continued Mr. MacLaren, "With $3.51 million in ARR at December 31^st 2018 and our customer acquisition levels at new highs, we finished the year with unprecedented strength and momentum of which we have already seen carry into 2019."

Rob Chase, Executive Chairman and CFO commented, "The many milestones achieved in 2018 have set the stage for an exciting fiscal 2019; and we're already off to a strong start. In February 2019, we announced two new Board Members, bringing 45+ years of combined technology growth and sales and marketing expertise to our team, and we completed a growth-capital financing of $1.55 million in convertible debentures, of which insiders and employees, including the new directors, subscribed for $1.03 million. Thanks to the hard work and commitment of our team, we are solidly positioned to achieve another record year at MediaValet."

Results of Operations

Key Financial Metrics:

• Grew revenue to $2.92 million in fiscal 2018, up 34% from $2.19 million in fiscal 2017, and up 117% from $0.94 million in fiscal 2016. Fourth quarter revenue of $0.84 million increased 43% from $0.59 million in Q4 last year, and increased 9% sequentially. As over 90% of revenue is from annual subscriptions, the growth reflects the increasing ARR from continued customer acquisition and retention.
• Achieved fiscal 2018 Gross Margin of 79%, down from 82% last year. For the fourth quarter, gross margin was 81%, up from 79% in Q4-2017, and up sequentially from 77% in Q3-2018. The reduced margin for the year is due to duplicative data center costs being incurred during migration from the Company's V3 to V4 platforms which was completed at the end of Q3-2018.  The Q4 improvement over last year is due to increased sales volume, improved operating efficiencies, and new paid feature add-ons. 
• Incurred Operating Expenses of $5.92 million for fiscal 2018, a 3% increase (2017 proforma 6%) from $5.72 million last year. Q4-2018 Operating Expenses were $1.52 million, a 17% increase (2017 proforma 22%) from $1.29 million in Q4-2017 and a sequential increase of 4% compared to Q3-2018.  The change from the prior year is due to increased spend on direct and partner sales and marketing programs following the equity financing completed in February 2018. This is offset by reductions in R&D following the completion of V4 development. Note that "2017 proforma" percentages are provided where applicable to provide the change from prior periods had IFRS 15 been applied with retroactive restatement.
• Reported a fiscal 2018 EBITDA loss of $3.62 million, an 8% reduction (2017 proforma 4%) from a loss of $3.93 million in fiscal 2017. The Q4-2018 EBITDA loss was $0.84 million, consistent (2017 proforma up 8%) with Q4-2017, and a 3% sequential decline from Q3-2018. The reduced losses reflect continued revenue growth as a result of the Company's growing recurring revenue base and efforts to manage operating cost levels.
• Increased Annual Recurring Revenue ("ARR") to $3.51 million, an increase of 41% compared to $2.49 million at December 31, 2017, and an 11% sequential increase from Q3-2018. The increased ARR is a result of efforts to maintain and grow the customer base through delivering must-have innovations (eg. V4, Advanced Search and Creative Spaces), and executing on our go-to-market strategy.
• Ended the year with $0.12 million of cash on hand (2017 - $0.04 million), modified working capital (excluding deferred revenue and debt), of negative $0.16 million (2017 – negative $1.70 million) and total debt of $3.15 million (2017 - $6.18 million).

Technology and Product:

• In September 2018, announced successful rollout of V4 to all existing customers, increasing customer value and user experience, while enabling a reduction in operating costs. V4 delivers industry leading platform and application speed and advanced search capabilities, resulting in increased user adoption metrics and opportunity win rate, and a doubling in MediaValet's developer community.   
• In June 2018, announced that Gartner, Inc. (NYSE:IT) (Gartner) named MediaValet in its 2018 Market Guide for Digital Asset Management, as one of nineteen Representative Vendors covering on-premises, cloud, hybrid and SaaS deployments. MediaValet was positioned as one of the most enterprise-grade, globally available DAM systems on the market.
• In May 2018, delivered a number of technology and product milestones including the launch of V4 for new customers and Creative Spaces for large, high volume creative teams, which management believes will materially increase the value delivered to customers, enable us to attract more new customers, and increase existing customer retention and expansion. These developments increased the enterprise class capability of the system – including providing unparalleled speed and search features – and provide unique integrations and features that solve critical customer issues and provide differentiation to MediaValet.

Operations and Corporate:

• Announced a new enterprise customer win on December 13, 2018 worth approximately US$150,000 in annual revenue. The win is a direct result of the artificial intelligence capabilities included in MediaValet's Advanced Search module, which was released in May 2018. In addition, as a partner-generated customer win, it is an indication of the Company's progress on its channel partner strategy.
• On October 25, 2018, announced modification of the $3.00 million of secured senior debentures, reducing the interest rate to 7% (from 10%) and extending the maturity dates to November 7, 2021. 
• Provided an update on Creative Spaces (October 18, 2018), announcing that the new solution has received rave reviews from customers, Creative Directors and creatives. Customers indicate that it is addressing unique and long standing file management problems experienced by creative teams during the ideation and work-in-progress (WIP) stages of media production. Since its launch in May 2018, Creative Spaces has driven 22% (updated) of new subscriptions to December 31, 2018, and the deal size has been 50% to 100% higher than average.
• Launched a new channel partnership (October 3, 2018) with Wrike, Inc., a leading collaborative work management platform for high performance teams, to deliver an all-in-one solution for marketing departments. Wrike has since created an integration using MediaValet's industry leading API, and as of November 15th, 2018 is offering it as a value-added solution to their 17,000 plus customer base. This follows announcements on September 19th of MediaValet's channel program progress which led to a 196% increase in channel-generated sales in fiscal 2018, and on September 20th of MediaValet winning Top Enterprise Solution at the 2018 Canadian Channel Innovation Awards. In Q4 2018, channel-generated sales reached a record high, generating 31% of new customer subscriptions in the quarter, up 462% from Q4 2017.
• Announced go-to-market progress in the Asia-Pacific region (August 16, 2018) and with high-security conscious organizations (September 13, 2018). As the only Cloud-DAM provider who can offer a data residency guarantee in Australia and New Zealand, and following the launch of targeted marketing programs, the region has grown to >5% of recurring revenue in the last year. In addition, positioned as one of the highest enterprise-grade Cloud-DAM on the market, MediaValet is seeing strong adoption from security-focused and tightly regulated customer segments such as financial, government, healthcare and legal, which now accounts for nearly 20% of ARR.
• Established the DAM industry's first supply chain consortium in May 2018, focused on leveraging Blockchain technology to transform the DAM industry and the future of enterprise content distribution. As a founding member, MediaValet will help develop interoperability standards across service providers for the adoption of new supply chain technologies for DAM.
• In February 2018, Rob Chase expanded his role with the Company, joining the senior management team as Executive Chairman and Chief Financial Officer. Rob also increased his ownership position in MediaValet to 10% as part of the February 2018 financing round.      
• On February 22, 2018, announced closing of an $8.6 million brokered and non-brokered private placement, issuing 143,341,864 common shares at $0.06 per share.

Subsequent Events:

• On February 14, 2019, strengthened its Board of Directors with the addition of seasoned technology executives, Thomas Kenny (former SVP of Sales for Absolute Software and HP) and Jake Sorofman (Chief Marketing Officer of Pendo, and former Gartner analyst). At the same time, Barry Jinks stepped down from the Board and the Company thanked him for his many years of service.
• Announced another large customer win on February 26, 2019 valued at approximately US$140,000 with one of the world's leading design agencies. The win was in large part due to the Company's Creative Spaces offering, a unique DAM module launched by the Company in May 2018.
• The Company completed a $1.55 million convertible debenture financing on March 20, 2019; sufficient to return the Company to positive working capital and to fund the Company's current operating capital requirements.

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-based digital asset management industry. Built exclusively on Microsoft Azure and available in 140 countries, 54 Microsoft data center regions, 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 and local desktop-to-cloud support for creative teams, 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.

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SOURCE MediaValet Inc.