Martello Reports Financial Results for the Third Quarter of Fiscal 2022

Microsoft DEM is the leading recurring revenue stream as Vantage DX momentum grows.

  • Total revenue in Q3 FY22 was $4.46M, with 97% recurring and gross margins of 90%.
  • Microsoft DEM revenue grew for the third consecutive quarter. This revenue stream increased by 4% sequentially from Q2 to Q3 FY22, reaching $2.14M and 48% of total revenue in Q3 FY22.
  • Demand for Vantage DX grew in Q3 FY22, with 500,000 users entering trials, customers representing more than 70,000 users purchasing the product, and new sales pipeline increasing by 70% (compared to Q2 FY22).
  • The addition of Vantage DX to the Microsoft Azure Marketplace creates a new sales channel with incentives for Microsoft sellers.


OTTAWA, ON, Feb. 15, 2022 /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 December 31, 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.

“Momentum continues to grow for our Vantage DX product, with more than half a million users trialing or having purchased the product, over half of which represent new potential customers for Martello which gives us confidence that Vantage DX meets market needs and is differentiated competitively”, said John Proctor, President and CEO of Martello. “We are also working with Microsoft to identify the partners in their ecosystem best positioned to bring Vantage DX to enterprises, in order to optimize their Microsoft Teams user experience, lowering their total cost of ownership and improving productivity. Though Martello’s performance over the last year has been challenging amidst longer sales cycles related to COVID-19 and efforts on the new product offering, this significant increase in commercial activity since the launch of Vantage DX is very encouraging.”

Q3 FY22 Financial Highlights

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  • Revenue of $4.46M in Q3 FY22 represents a slight decrease compared to $4.63M in the same quarter of FY21, reflecting growth in Microsoft 365 monitoring offset by declines in legacy product revenue and a decrease in Mitel UC monitoring revenue (lower perpetual revenue and impact of foreign currency conversion).

  • Revenue quality continues to be strong. The recurring portion of total revenue was 97% in Q3 FY22 (96% in Q3 FY21). Gross margin was 90% in Q3 FY22, compared to 93% in Q3 FY21. The decrease was primarily the result of lower gross margins on Microsoft 365 Monitoring due to higher hosting costs and sales and distributor commissions.

  • In Q3 FY22, MRR (monthly recurring revenue) was $1.45M, a decrease of 3% compared to Q3 FY21 MRR of $1.49M. This slight decrease in MRR is due to a decline in royalties from Mitel UC monitoring (impact of foreign currency conversion) and a decrease of maintenance and support revenue partially offset by an increase in subscription licenses in Microsoft DEM. MRR is a non-IFRS measure and represents average monthly recurring revenues earned in a fiscal quarter.

  • The proportion of Martello’s revenue driven by sales of Microsoft DEM continues to grow, reaching 48% of total revenues in Q3 FY22, up sequentially from 47% in Q2 FY22. The remaining revenue streams are Mitel UC monitoring, which contributed 41% of revenues and is steady sequentially compared to Q2 FY22. The sunsetting Legacy products revenue stream contributed 11% of revenues in Q3 FY22, down sequentially from 12% in Q2 FY22.

  • Operating expenses of $5.53M were 1.4% above the $5.45M reported in Q3 FY21. In the prior year, the Company implemented a strategic cost reduction initiative in view of COVID-19 related uncertainties, including delays in filling vacant positions, and temporary reductions in compensation until part-way through Q3 FY21. Increases in spending in Q3 FY22 related to increased R&D and sales investment, compensation costs associated with return to full salaries, market research, office equipment and software, and professional fees as well as lower government incentives (IRAP and COVID related). These were partially offset by a decrease in G&A costs related to optimization of support functions.

  • Adjusted EBITDA (a non-IFRS measure) in Q3 FY22 is a loss of $0.78M, compared to a loss of $0.26M in the same period of FY21. The decrease in Adjusted EBITDA is due to higher operating losses associated with the return to normalized operations following COVID-19 related strategic cost reduction initiatives in FY21.

  • The Q3 FY22 net loss of $2.17M has increased from the same period in FY21 ($1.46M) as a result of the items outlined above and higher losses on foreign exchange partially offset by lower financing fees.

  • The Company’s cash and short-term investments balance was $5.10M at December 31, 2021, compared to $8.52M at March 31, 2021. Net working capital was $2.31M at December 31, 2021 compared to $4.50M at March 31, 2021. Following the recent insider private placement with aggregate gross proceeds totaling $2.4M, the Company believes it has sufficient cash to fund ongoing organic growth.

Q3 FY22 Business and Segment Highlights

  • Demand for Vantage DX increased in Q3 FY22, driven by the complexity of managing cloud service delivery in hybrid workplaces. Just one fiscal quarter following the product’s launch, as of January 19, 2022 customers representing more than 70,000 Microsoft 365 users had purchased Vantage DX, with over 500,000 users engaged in trials. Martello’s focus in Q4 FY22 is on converting these trials into paid Vantage DX subscriptions.

  • Achieved a key milestone in the Company’s initiatives, as part of the Microsoft Global Solutions Alliance program, with the addition of Vantage DX to the Microsoft Azure Marketplace in December. The ability to transact Vantage DX on the Microsoft Azure Marketplace means that Microsoft sellers are incented to sell Vantage DX and creates a new sales channel for Martello.

  • To further expand sales channels, Martello is actively working with Microsoft to identify those partners in their ecosystem that are uniquely positioned to accelerate Microsoft Teams adoption and optimization. These partners (global systems integrators, telcos, managed service providers and cloud service providers) recognize the value Vantage DX can bring to their customers, who are managing a UCaaS (unified communications as a service) and Microsoft Teams environment in hybrid workplaces.

  • The number of Microsoft users on Martello’s DEM platform decreased slightly to 2.84M in Q3 FY22, from 2.90M in Q2 FY22, reflecting a decrease in Microsoft 365 Monitoring subscriptions. 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.

Conference Call Details

Martello will host a conference call with John Proctor, President & CEO and Kim Butler, Interim CFO at 8:00 AM Eastern Time on Wednesday, February 16, 2022 to discuss the Q3 FY22 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 February 16, 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.

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 March 2022. To join the mailing list, complete the Subscribe form on Martello’s website.

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. 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 Vantage DX, which provides Microsoft 365 and Microsoft Teams end user experience monitoring and analytics. Martello is a public company headquartered in Ottawa, Canada with employees in Europe, North 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 reducing the time that prospects spend in trials to accelerate bookings and the conversion of Vantage DX trials into paid subscriptions.

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.

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