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Martello Financial Results for the First Quarter of Fiscal 2023

Grey background image with text reading: Martello Reports Financial Results for the First Quarter of Fiscal 2023
August 23, 2022

Subsequent to quarter-end Company streamlined to focus on its Vantage DX Microsoft opportunity, reduced expenses by 20% and closed a subordinated USD $1.5M debt facility provided by the Co-Chairman of the Board.

  • Total revenue was $4.2M, with 99% of it recurring and 89% gross margins.
  • Modern Workplace Optimization solutions contributed 58% of revenues, with Vantage DX user base growing by 60% sequentially from Q4 FY22 to reach 352,000.
  • Monthly Recurring Revenue (MRR) was $1.4M
  • Adjusted EBITDA loss improved by 32% (to $.65M from $.96M) year over year driven by cost optimization.
  • Cost optimization measures and USD $1.5M subordinated loan subsequent to quarter-end part of Company’s objective to accelerate positive cashflow.


OTTAWA, ONAug. 23, 2022 /CNW/ – Martello Technologies Group Inc., (“Martello” or the  “Company”) (TSXV: MTLO), a provider of software that optimizes the Microsoft Modern Workplace environment, a segment of the broader market for digital experience monitoring (DEM) today released financial results for the quarter ended June 30, 2022. Martello software provides businesses with actionable insights on the performance and user experience of cloud services such as video conferencing and voice calls, with a focus on Microsoft 365 and Microsoft Teams.

“I am confident in the Vantage DX market opportunity as demand continues to grow” said John Proctor, President and CEO of Martello. “Microsoft’s growing dominance is our tailwind helping us shape the market for Modern Workplace environment optimization and we have taken steps to reduce our costs and focus on accelerating the sales cycle. In addition to enterprise sales efforts, we are leveraging our relationships with Microsoft, Orange Business Services and Datacom to expand our sales pipeline.”

“Demand for Vantage DX is strong as Microsoft Teams adoption and user expectations increase. We are applying operational excellence and discipline to increase the velocity of our Vantage DX sales cycle” said Jim Clark, Chief Financial Officer of Martello. “The fiscal 2023 cost optimization measures taken are a key step to ensure we can maximize this demand with a path to positive cash flow and profitability. The injection of USD $1.5M in working capital is a buffer for our operations as we prioritize attaining positive cash flow in future quarters”

“I’m pleased with the market position and timing for Martello,” said Martello Co-Chairman Terry Matthews.  “The company is more active than ever with new partners, global clients, and solid, well-performing technology.  The Martello technology comes at the right time to help clients gain higher service quality and uptime with their new communications platforms while at the same time offering significant reductions in the number of technical support staff required.  Better customer and technician experience with higher service reliability and uptime for the enterprise is a good formula for success.”

Q1 FY23 Financial Highlights

Financial Highlights

June 30,

June 30,

(in 000’s)



(Three months ended)





Cost of Goods Sold



Gross Margin



Gross Margin


88.9 %

90.3 %

Operating Expenses



Loss from operations



Other income/(expense)



Loss from continuing operations before income tax



Income tax recovery



Net loss



Total Comprehensive loss








Adjusted EBITDA (1)




(1) Non-IFRS measure.  See “Non-IFRS Financial Measures”

  • Revenues were $4.18M, a 5% decrease compared to $4.40M in Q1 FY22. The decrease is related to unfavourable foreign exchange conversion, churn on maintenance and support for legacy products which is offset by an increase in software subscriptions. On a constant currency basis, revenue decreased by 2%.

  • Gross margin was 89% in Q1 FY23, compared to 90% in the same period of FY22. The slight decrease is due to higher hosting costs associated with the cloud migration of the product suite.

  • The recurring portion of total revenue was 99%, compared to 97% in Q1 FY22. This is primarily attributable to the growing mix of license subscriptions versus hardware sales.

  • Martello is now reporting its revenues in two lines of business for greater simplicity. Modern Workplace Optimization is Martello’s dominant business line, with 58% of total revenues in Q1 FY23 (58% in Q1 FY22). This line of business includes revenue from Vantage DX and associated products focused on Microsoft. The second business line is Mitel Performance Analytics, which represented 42% of revenues in Q1 FY23 and Q1 FY22.

  • In Q1 FY23, MRR was $1.38M compared to $1.43M, a 4% decrease attributable to unfavourable currency conversion, declining maintenance and support on legacy products and a marginal decrease in Mitel subscriptions. On a constant currency basis, MRR remained flat year over year. MRR is a non-IFRS measure, representing average monthly recurring revenues earned in a fiscal quarter.

  • There were 352,000 Microsoft users on the Vantage DX platform as of June 30, 2022, a 60% increase compared to Q4 FY22. The total number of Microsoft users on all Martello products totaled 2.66M, compared to 2.76M in Q1 FY22. The decrease is related to the offboarding of a legacy GSX partner. The Company is focused on driving Microsoft user growth through sales of Vantage DX. This includes upgrading Microsoft 365 Monitoring customers and converting trials to paid subscriptions.

  • Operating expenses decreased 12% year over year to $5.02M in Q1 FY23 from $5.70M in Q1 FY22. The decrease is primarily attributable to lower headcount and vendor-related costs and other expense reductions taken in Fiscal 2023.

  • The Q1 FY23 net loss of $1.15M represents a 47% improvement compared to a net loss of $2.17M in the same period of FY22. The decrease is attributable to the items explained above as well as lower income taxes.

  • Adjusted EBITDA (a non-IFRS measure) loss in Q1 FY23 improved by 32% to $0.65M, compared to a loss of $0.96M in Q1 FY22, due to lower operating expenses.

  • The Company’s cash and short-term investments balance was $5.67M at June 30, 2022, compared to $4.85M at March 31, 2022. Working capital now reflects the move of the CAD$10.2M Vistara Growth (“Vistara”) debt from long – term to current. This is the predominant reason for the $9.5M change in working capital (Minus $7.16M at June 30, 2022 compared to $2.27M at March 31, 2022).
Subordinate Loan

Martello and its Co-Chairman Terry Matthews, through Wesley Clover International (“WCI”) have agreed to a USD $1.5M (approximately CAD $2M) subordinate loan. Interest will accrue at US Prime plus 8.75%, consistent with the Vistara loan. Interest will accrue and be paid at loan maturity, which is May 28, 2023. No equity or warrants are provided. The company will use the WCI loan to pay down the Vistara loan. This will allow Martello the lead time to grow the revenue trajectory while meeting the Vistara loan covenants through to maturity.

Conference Call Details

Martello will host a conference call with John Proctor, President & CEO and Jim Clark, CFO at 8:00 AM Eastern Time on Wednesday, August 24, 2022 to discuss the Q1 FY23 financial results.

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 ask to join the Martello call. An audio recording of the call will be available on August 24, 2022 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.

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

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.

About Martello Technologies Group

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

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 Information

This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information 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 and ” includes, but is not limited to, statements with respect to activities, events or developments that the Company expects or anticipates will or may occur in the future including the focus on driving Microsoft user growth through sales of Vantage DX, the Company’s focus on becoming a Microsoft Modern Workplace optimization leader, the Company’s objective to accelerate positive cash flow and profitability and the objective to increase the velocity of the sales cycle.

Forward-looking information is neither a statement of historical fact nor assurance of future performance. Instead, forward-looking information is 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 information relates to the future, such statements 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 information. Therefore, you should not rely on any of the forward-looking information. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking information include, among others, the following:

  • Continued volatility in the capital or credit markets and the uncertainty of additional financing.
  • 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, 2021 dated January 7, 2022, which is available on the Company’s profile on SEDAR at

Any forward-looking information provided by the Company in this news release is based only on information currently available 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 information, 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; John Proctor, President & CEO,, 613.271.5989


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 >>

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