Ottawa-based Martello shows sizeable revenue growth in first public earnings
With the company’s stock still acclimating to the waters of the public market, Martello Technologies (TSX-V:MTLO) made a splash in its quarterly earnings debut on Tuesday morning.
The Kanata-based communications services firm reported revenues of $2 million for the three months ending Sept. 30, up 92 per cent from last year. The company’s revenues across the first half of the year stand at $3.9 million, an increase of 86 per cent year-over-year.
Though most of that growth can be attributed to Martello’s merger with Elfiq Networks at the beginning of 2018, the company also reported organic growth of 21 per cent for sales of its network performance management software.
Martello’s aggressive growth over the past year has been accompanied by deeper spending and losses. The firm’s operating expenses more than doubled to $2.7 million in the third quarter, leading Martello to a net loss of $2.2 million compared with $141,000 in the same period last year.
Expect the M&A strategy to continue at Martello, as the company’s $7.5-million private placement in June of this year bolstered its cash reserves. Working capital stood at $9.3 million at the end of the quarter.
Martello’s already put some of the money to use, acquiring Netherlands-based Savision B.V. in a cash-and-stock deal valued at roughly $12 million in October. Its latest acquisition specializes in alerting customers of issues with their Microsoft-based applications.
Despite the rising revenues, Martello’s stock has stumbled on the public markets. The company’s shares soared shortly after its reverse takeover in September, cresting to prices of more than a dollar on the TSX Venture Exchange only to fall back to 39 cents as of the start of this week.
Shares of Martello were down 6.4 per cent in morning trading.