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MediaValet Reports Annual and Fourth Quarter 2023 Results

Revenue growth 28%, and Software ARR up 22%

Achievements in fiscal 2023 include continued overall growth in revenue at 28% to $16.4 million, resulting in a reduction in adjusted EBITDA loss of 40% compared to fiscal 2022. Ending Software ARR increased 22% to $18.0 million on Net New ARR of $0.6 million (NNARR) in Q4 2023, down 45% from Q4 2022 and down 43% sequentially.

MediaValet recently announced on January 24th, 2024, that the Company had entered into an arrangement agreement pursuant to which, subject to shareholder and other customary approvals, an affiliate of STG Partners LLC will acquire all of the issued and outstanding common shares of the Company for $1.71 per Share in cash. In light of this announcement, the Company will forego its quarterly earnings call.

Q4 2023 Highlights

Key Financial Metrics:

• Revenue grew to $4.33 million in Q4'23, up 20% from $3.61 million in Q4'22, and up 5% sequentially from Q3'23. Revenue in Fiscal 2023 grew to $16.40 million, up 28% from $12.84 million in Fiscal 2022. The increases are due to revenue growth from new customer acquisition as well as the relative strength of the U.S. dollar to Canadian dollar.

• The Company completed December 31, 2023 with $18.0 million of software ARR and $18.1 million of Total ARR, growing 22% and 23% over December 31, 2022, respectively. However, this reflects a significant slowdown in our rate of ARR growth, generating just $0.6 million of Software ARR from new and existing customers in the three months ended December 31, 2023, down 45% from the $1.1 million in the three month period ended December 31, 2022 and a 43% sequential decline from $1.1 million in the three month period ended September 30, 2023.

• Gross margins remained strong at 83% ($3.61 million) in Q4'23 compared to 80% ($2.88 million) in Q4'22 and 81% ($3.34 million) in Q3'23. Gross Margins in Fiscal 2023 of 81% ($13.33 million), remained steady from 81% ($10.43 million) in Fiscal 2022.

• Incurred Adjusted Operating Costs of $4.44 million in Q4'23, a 14% decrease from $5.17 million in Q4'22, and remained steady from $4.46 million incurred in Q3'23. Adjusted operating costs in Fiscal 2023 were $19.18 million, a 5% decrease from $20.11 million in Fiscal 2022.

• Reported a Q4'23 Adjusted EBITDA loss of $0.83 million, an improvement of 64% from $2.30 million in Q4'22, and an improvement of 26% sequentially from Q3'23. EBITDA loss in Fiscal 2023 was $5.84 million, a decrease of 40% from $9.69 million in Fiscal 2022. The decrease in Adjusted EBITDA loss is evidence of the Company's plan to reduce Adjusted Operating Costs while growing Revenue in line with the Company's long-term strategy.

• Ended Fiscal 2023 with modified working capital (excluding contract acquisition assets, deferred revenue, lease liabilities and debt) of $0.78 million (December 2022: $2.31 million), total lease liabilities and debt of $3.77 million (Fiscal 2022: total lease liabilities and debt of $1.07 million). For the year ended December 31, 2023, the Company increased $3.00 million of bank indebtedness, collected proceeds of $3.50 million from a private placement and increased its Revolving Credit Facility to $9.00 million, with $3.46 million drawn.

¹ Adjusted Operating Costs, Adjusted EBITDA Loss, and Modified Working Capital are non-IFRS measures. See "Non-IFRS Measures" section of the Company's MD&A for further discussion, the "Results of Operations" section and the "Liquidity and Capital Resources" section of the MD&A for reconciliation to the most directly comparable IFRS measure. Adjusted Operating Costs includes Sales and Marketing, Research and Development, and General and Administrative expenses, and excludes share-based compensation, depreciation, and certain non-recurring expenses. The Company considers Restructuring Costs, as defined in the Company's MD&A, to be non-recurring in nature and not indicative of continuing operations. We use this metric as a supplemental measure to review and assess operating performance and assess our ability to generate cash flow. Management believes Adjusted EBITDA Loss provides a meaningful measure for assessment of Company performance as it removes non-cash and non-operating expenses such as financing costs, and non-recurring expenses. Modified Working Capital is a non-IFRS measure that represents current assets less current liabilities and adjusted to exclude contract acquisition assets, deferred revenue, lease liabilities and debt. We use this metric as a supplemental measure to assess financial sustainability and sufficient liquidity to preserve the Company's capacity to continue operating, in providing benefits to our stakeholders and in providing an adequate return on investment to our shareholders by selling our services at a price commensurate with the level of operating risk assumed by the Company.
²Annual Recurring Revenue (ARR) provides an indication of future revenue and billings from customers as of the reporting date. ARR represents the sum of the annualized recurring software and managed service fees from existing customer contracts or commitments as of the reporting period end date, and as such management believes ARR to be a meaningful measure for assessment of Company performance. ARR is recorded as deferred revenue when it is invoiced and is recognized in revenue evenly on a monthly basis over the contract term at the US dollar exchange rate in effect at the time of invoicing. Substantially all of the Company's ARR is denominated in USD. The average US dollar exchange rate of ARR was C$1.3437 at December 31, 2023 and C$1.3141 at December 31, 2022.

MediaValet's full financial statements and related MD&A are now available on SEDAR+ at www.sedarplus.ca.

About MediaValet, Inc. MediaValet stands at the forefront of the enterprise, cloud-native, software-as-a-service digital asset management and creative operations industries. Built exclusively on Microsoft Azure and available across 61 Microsoft data center regions in 140 countries around the world, MediaValet delivers unparalleled enterprise-class security, reliability, redundancy, compliance, and scalability; while offering the largest global footprint of any DAM solution. In addition to providing enterprise cloud-native DAM capabilities at a global scale, desktop-to-server-to-cloud support for creative teams, and overall cloud redundancy and management for all source, WIP and final assets, MediaValet offers industry-leading integrations into Slack, Adobe Creative Suite, Microsoft Office 365, Workfront, Wrike, monday.com, Drupal, WordPress and many other best-in-class 3rd party applications.

For further information, please contact:

Corporate Office
Rob Chase, President & CEO | rob.chase@mediavalet.com | (604) 688-2321
Dave Miller, CFO | dave.miller@mediavalet.com | (604) 688-2321

Investor Relations

Babak Pedram | babak.pedram@mediavalet.com | (416) 646-6779

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/202715