Skip to main content

Martello Reports Financial Results for the First Quarter of Fiscal 2022

image press release
August 25, 2021


Joining the Microsoft Global Solutions Alliance Program subsequent to the quarter strengthens growth outlook.

  • 32% year over year revenue growth driven by strategic investment in Microsoft monitoring.
  • Microsoft DEM becomes the leading revenue stream with 6.4% sequential quarter over quarter growth.
  • 2.8M Microsoft users now on Martello’s software platform
  • Revenue is 97% recurring with 90% gross margins
  • Channel and product development investments in Q1 position Martello for integrated product launch in Q2.
  • Joining the Microsoft Global Solutions Alliance program as one of the only DEM vendors expands sales channels.

OTTAWA, ONAug. 25, 2021 /CNW/ – Martello Technologies Group Inc., (“Martello” or the “Company”) (TSXV: MTLO), a leading developer of enterprise digital experience monitoring (“DEM”) solutions for thousands of customers around the world, today released financial results for the three months ended June 30, 2021. Martello software provides businesses with actionable insights on the performance and user experience of cloud services such as video conferencing and unified communications (UC), with a focus on Microsoft 365 and Microsoft Teams.

“Since acquiring GSX last year, our investments in integration, product and channel development have brought growth in Microsoft DEM revenue, making it Martello’s largest revenue stream this quarter for the first time in the Company’s history”, said John Proctor, President and CEO of Martello. “Joining Microsoft’s Global Solutions Alliance program partner tier as one of the only DEM vendors is both recognition of the value of our solutions, and a game changer for the trajectory of our business. We are already optimistic about performance in the second half of fiscal 2022, due to fundamental investments to enable growth. The Microsoft Global Solutions Alliance Program improves our longer-term financial outlook”.

“Through Q1 FY22, we’ve maintained close to 100% recurring revenue with gross margins over 90%”, said Erin Crowe, Chief Financial Officer of Martello. “Key investments in both product and channel development allow us to cost-effectively enter the small and medium sized enterprise market, which we expect to result in H2 FY22 revenue growth trajectories. Legacy product revenue streams, which have been a drag on our overall growth rates, will continue to diminish in impact as they burn off. Based on activity in our pipeline, we remain comfortable with our target of 3.5 million Microsoft users by the end of fiscal 2022”.

Q1 FY22 Financial Highlights

Financial Highlights

(in 000’s)

June 30,


June 30,


(Three months ended)





Cost of Goods Sold



Gross Margin



Gross Margin




Operating Expenses



Loss from operations



Other income/(expense)



Loss from continuing operations before income tax



Income tax recovery



Net loss from continuing operations



Loss from discontinued operations, net of tax


Net loss



Total Comprehensive loss








Adjusted EBITDA(1)




(1) Non-IFRS measure.  See “Non-IFRS Financial Measures” in MD&A.

Q1 FY22 Financial Highlights

  • Revenues of $4.4M represent a 32% increase compared to $3.33M in the same quarter of FY21, reflecting growth from the successful strategic acquisition of GSX, which shifted Martello into the Microsoft DEM market. This growth was partially offset by legacy product revenue declines and the impact of foreign currency conversion in Martello’s Monitoring – Mitel UC segment.

  • Revenue quality continued to be strong:
    • The recurring portion of total revenue was 97% in Q1 FY22 (98% in Q1 FY21).
    • Gross margin was 90% in Q1 FY22, compared to 94% in Q1 FY21, a slight decline attributable to higher hosting costs associated with growth in cloud users, and sales and distributor commissions in the Monitoring – Microsoft 365 (GSX) reporting segment. The increase in customers on cloud-hosted solutions, anticipated as a result of channel development, is expected to have a moderate impact on gross margins in the near term due to an associated increase in the cost of sales.
  • In Q1 FY22, MRR (monthly recurring revenue) was $1.43M, a decrease of 2% compared to Q1 FY21 MRR of $1.46M. The decrease in MRR is due to exchange rate volatilities in the Monitoring – Mitel UC segment (decrease in USD-CAD exchange rate) and a decrease in maintenance and support revenue associated with diminishing legacy contracts. This was offset by an increase in subscription licenses in IT Service Analytics and Monitoring – Microsoft 365. MRR is a non-IFRS measure and represents average monthly recurring revenues earned in a fiscal quarter.

  • Operating expenses of $5.7M were 34.8% above the $4.2M reported in Q1 FY21. The difference is due to two variables. First, the comparative quarter only included one month of GSX operations, including amortization of intangibles acquired on the acquisition of GSX. Second, at the onset of the COVID-19 pandemic in the comparative period, management implemented measures to manage operational risks and uncertainties, including temporary salary reductions and reduced events and travel.

  • Adjusted EBITDA (a non-IFRS measure) in Q1 FY22 is a loss of $0.96M, compared to positive Adjusted EBITDA of $0.20M in the same period of FY21. The decrease in Adjusted EBITDA is due to higher operating losses, associated with the addition of a full quarter of GSX and the return to normalized operations.

  • The Q1 FY22 net loss of $2.17M has increased from the same period in FY21 ($2.08M) as a result of the items outlined above and increased interest expense for a full quarter of the Vistara term loan, offset in part by a decrease associated with FY21 financing costs relating to the National Bank facility. In addition, Q1 FY21 included a loss from discontinued operations of $0.42M (nil in Q1 FY22) associated with the operations of the NPM segment prior to disposition in Q2 FY21.

  • The Company’s cash and short-term investments balance was $6.63M at June 30, 2021, compared to $8.52M at March 31, 2021. Net working capital was $3.11M at June 30, 2021 compared to $4.50M at March 31, 2021. The Company believes operations can be funded by cash and other available funding sources.

Q1 FY22 Business and Segment Highlights

  • In Q1 of fiscal 2022, Martello invested in the development of new sales channels and product capabilities, to address growing demand for reliable Microsoft 365 service delivery in the ‘work from anywhere’ hybrid workplace. Product milestones reached towards the launch of Vantage DX in Fall 2021 included the launch of a multi-tenant cloud Microsoft 365 monitoring platform, as well as the development of active network path monitoring and real user monitoring.

  • Martello launched its Partner Program in June 2021, to recruit and empower managed service providers (MSPs) to develop new Microsoft 365 revenue streams from user experience monitoring and optimization for small and medium sized enterprises.

  • Regarding the sequential growth of Martello’s Microsoft DEM revenue, excluding the impact of legacy products:
    • The leading driver of Q1 FY22 revenue was Microsoft DEM, with 44% of revenues from this growing revenue stream (40% in Q4 FY21), while 42% was generated from Martello’s Monitoring – Mitel UC business (43% in Q4 FY21), and 14% was from legacy products (17% in Q4 FY21).
    • The Microsoft DEM revenue stream includes the two active DEM products in the Monitoring – Microsoft 365 and Analytics – IT Service Analytics reporting segments, which are targeted at the Microsoft market (Gizmo and iQ). This revenue stream grew by 6% sequentially (Q4 FY21 to Q1 FY22).
    • The Legacy Products revenue stream includes the two legacy products in the reporting segments above (Domino and Livemaps). Legacy products revenue declined by 18% sequentially from Q4 FY21 to Q1 FY22.
  • The number of Microsoft users on Martello’s DEM platform increased to 2.8M, from 2.7M in Q4 FY21. The Company aims to have 3.5M Microsoft users by the end of the 2022 fiscal year (March 31, 2022).

Conference Call Details

Martello will host a conference call with John Proctor, President & CEO and Erin Crowe, CFO at 8:00 AM Eastern Time on Thursday, August 26, 2021, at which they will address Q1 FY22 financial results and the recent Microsoft Global Solutions Alliance announcement.

Canada/USA Toll Free:   1-800-319-4610

International Toll:  +1-604-638-5340

Callers should dial in 5 – 10 min prior to the scheduled start time and simply ask to join the Martello call. An audio recording of the call will be available on August 26, 2021 at

The financial statements, notes and Management Discussion and Analysis (“MD&A”) are available under the Company’s profile on SEDAR at, and on Martello’s website at The financial statements include the wholly-owned subsidiaries of Martello. All amounts are reported in Canadian dollars.

Three institutional investment firms provide research coverage of Martello. The Company does not endorse the research of third-party institutions.

Upcoming Activities

The next issue of Martello’s quarterly Investor Newsletter will be sent to subscribers in September 2021. To join the mailing list, complete the Subscribe form on Martello’s website.

About Martello Technologies Group

Martello Technologies Group Inc. (TSXV: MTLO) is a technology company that provides digital experience monitoring (DEM) solutions. The company’s products provide monitoring and analytics on the performance and user experience of critical cloud business applications, while giving IT teams and service providers control and visibility of their entire IT infrastructure. Martello’s software products include Microsoft 365 end user experience monitoring, unified communications performance analytics, and IT service analytics. Martello is a public company headquartered in Ottawa, Canada with employees in EuropeNorth America and the Asia Pacific region. Learn more at

This press release does not constitute an offer of the securities of the Company for sale in the United States. The securities of the Company have not been registered under the United States Securities Act of 1933, (the “1933 Act”) as amended, and may not be offered or sold within the United States absent registration or an exemption from registration under the 1933 Act.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

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

Cautionary Note Regarding Forward-Looking Statements

This news release contains “forward-looking statements”. Forward-looking statements can be identified by words such as:”anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking information contained in this news release include, among others, statements with respect to increasing Microsoft users on Martello’s DEM platform to 3.5 million in fiscal 2022, and the aim to increase MRR and Microsoft DEM user growth in the second half of FY22. 

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

  • Continued volatility in the capital or credit markets.
  • Our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so.
  • Changes in customer demand.
  • Disruptions to our technology network including computer systems and software, as well as natural events such as severe weather, fires, floods and earthquakes or man-made or other disruptions of our operating systems, structures or equipment.
  • Delayed purchase timelines and disruptions to customer budgets, as well as Martello’s ability to maintain business continuity as a result of COVID-19.
  • and other risks disclosed in the Company’s filings with Canadian Securities Regulators, including the Company’s annual information form for the year ended March 31, 2020 dated December 24, 2020, which is available on the Company’s profile on SEDAR at

Any forward-looking statement made by us in this news release is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by applicable securities laws, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

SOURCE Martello Technologies Group Inc.

For further information: Tracy King, Vice President of Marketing,, 613.410.7636.


Martello provides the only end-to-end Microsoft Teams performance monitoring tool that Microsoft recommends to their customers to maximize employee productivity.

Our solution Vantage DX proactively monitors Microsoft 365 and Teams service quality, enabling IT with complete visibility of the user experience to ease troubleshooting of issues before they impact users.

Find out why Martello is Microsoft’s go-to-solution for Microsoft Office 365 Monitoring >>

Return to top