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Martello Reports Financial Results for the Second Quarter of Fiscal 2023 

Martello Reports Financial Results for the Second Quarter of Fiscal 2023 
November 22, 2022

 Vantage DX users more than doubled in the first half of fiscal 2023 compared to Q4 FY22 as the Company continues to see market adoption of the Microsoft-recommended offering.

  • Vantage DX users more than doubled to close to half a million in the first two quarters of fiscal 2023 compared to Q4 FY22, representing a 252% increase in monthly recurring revenue (MRR) in the same period as trials converted to bookings and revenue. On a quarterly basis, Vantage DX MRR grew by 56%.

  • Total revenue was $3.8M in Q2 FY23, with 99% recurring. The Mitel business line continues to provide a large and stable recurring revenue base from which to grow Vantage DX. The Vantage DX growth was offset by an 18% or $0.4M decline in sunsetting legacy product revenue.

  • Operating expenses decreased by 9% year over year in Q2 FY23, driven by cost optimization measures implemented in Q2 FY23, which are expected to eliminate 20% of annualized run rate costs. The full benefit of these measures is expected to be realized in Q3 FY23.

  • A private placement announced subsequent to quarter-end is expected to bring capital of USD $2.0M into the company in January 2023.


OTTAWA, ONNov. 22, 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 September 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 Teams and Microsoft 365.

“Vantage DX continues to drive our growth strategy, with new deals closing in Q2 FY23 and subsequent to quarter-end, and the unification of our technology into a single platform creating efficiencies”, said John Proctor, President and CEO of Martello. “While the continued and expected sunsetting of certain legacy product revenue has offset the growth in revenue from Microsoft Teams monitoring and optimization, I am confident that our integration with Microsoft and accelerating sales programs with Orange Business Services, Datacom and other partners will continue to drive Vantage DX growth alongside our direct business. I’m pleased that a number of Mitel partners are also engaged with us to bring Vantage DX to their customers, to manage Mitel and Microsoft Teams performance and user experience.”

“I’m pleased with the indicators I am seeing that Vantage DX momentum is strengthening” said Jim Clark, Chief Financial Officer of Martello. “We are managing the Vantage DX investment program to build a profitable business over the coming quarters, and as a result my focus is on close monitoring of operational KPIs and ensuring we have adequate capital for growth. The injection of an additional USD $2.0M in working capital will allow us to manage growth as we prioritize reaching positive cash flow.”

Q2 FY23 Financial Highlights

Financial Highlights

September 30,

September 30,

September 30,

September 30,

(in 000’s)





(Three months ended)

(Six months ended)







Cost of Goods Sold





Gross Margin





Gross Margin


87.2 %

92.1 %

88.1 %

91.2 %

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 $3.84M, a 13% decrease compared to $4.40M in Q2 FY22. Vantage DX revenue of $0.24M represented 56% sequential growth quarter over quarter. This growth was offset by an 18% or $0.4M decline in sunsetting legacy product revenue. On a constant currency basis, revenue decreased by 11% year-over-year.

  • Gross margin as a percentage of revenue was 87%, compared to 92% in the comparative period. The decrease is primarily attributable to the higher cost of hosting software products on the cloud and an increase in the cost of inventory related to third-party software resale. Management is taking actions that are expected to result in a 52% decrease in the cost of hosting instances in the future. As the Company onboards new Vantage DX clients, the variable cost will continue to reduce.

  • The recurring portion of total revenue was 99%, compared to 98% in Q2 FY22. This is primarily attributable to the growing mix of subscription-based licenses versus perpetual.

  • The Mitel business line continues to provide a steady $7M annual revenue base (99% recurring) as the Company sees strong growth rates from its new Vantage DX product targeted at the Microsoft ecosystem. Management is maximizing the transition of certain users currently on legacy Microsoft-focused products to Vantage DX. Conversion rates will continue to vary by legacy product. Modern Workplace Optimization continues to be Martello’s dominant business line, with 55% of total revenues in Q2 FY23. Mitel Performance Analytics represented 45% of revenues in Q2 FY23.

  • In Q2 FY23, MRR was $1.26M compared to $1.44M, a 12% decrease attributable to declining maintenance and support and subscriptions on sunsetting legacy products, a decrease in Mitel subscriptions and unfavourable currency conversion. MRR is a non-IFRS measure, representing average monthly recurring revenues earned in a fiscal quarter.

  • There were 474,000 Microsoft users on the Vantage DX platform as of September 30, 2022, a 33% increase compared to Q1 FY23 and a 117% increase in the first half of the 2023 fiscal year compared to Q4 FY22. The total number of Microsoft users on all Martello products totaled 2.20M, compared to 2.90M in Q2 FY22. The decrease is related to the offboarding of a sunsetting GSX partner. The Company is focused on driving Microsoft user growth through sales of Vantage DX to new customers and the transition of Microsoft-focused legacy product customers onto the newer Vantage DX platform.

  • Operating expenses decreased 9% year-over-year to $4.69M in Q2 FY23 from $5.14M in Q2 FY22. The decrease is primarily attributable to headcount reductions in the recent cost optimization exercise and decreased depreciation, amortization and acquisition related costs due to a lower foreign currency conversion rate on EUR-CAD.

  • The Q2 FY23 net loss of $2.42M represents a 41% increase compared to a net loss of $1.72M in the same period of FY22. The increase is attributable to the items explained above.

  • Adjusted EBITDA (a non-IFRS measure) loss in Q2 FY23 was $0.85M, compared to a loss of $0.30M in Q2 FY22, due to higher operating losses as described above.

  • The Company’s cash and short-term investments balance was $4.24M at September 30, 2022, compared to $5.02M at March 31, 2022. Working capital now reflects the move of the CAD$10.2M Vistara Growth debt from long-term to current. This is the predominant reason for the $12.0M change in working capital (Minus $9.76M at September 30, 2022 compared to $2.27M at March 31, 2022).

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, November 23, 2022 to discuss the Q2 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 November 23, 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 management’s intent to maximize the transition of certain users currently on legacy Microsoft-focused products to Vantage DX, the expectation of a 52% decrease in the cost of hosting instances in the future, the aim to build a profitable business over the coming quarters, and the expectation that the full benefit of the cost optimization measures implemented in Q2 FY23 will be realized in Q3 FY23. 

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

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