Mr. Rob Chase reports

MEDIAVALET REPORTS ANNUAL AND FOURTH QUARTER 2023 RESULTS

MediaValet Inc. has released its results for the three and 12 months ended Dec. 31, 2023. All figures in Canadian dollars (CAD).

Achievements in fiscal 2023 include continued overall growth in revenue at 28 per cent to $16.4-million, resulting in a reduction in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of 40 per cent compared with fiscal 2022. Ending software ARR (annual recurring revenue) (2) increased 22 per cent to $18.0-million on net new ARR (NNARR) of $600,000 in Q4 2023, down 45 per cent from Q4 2022 and down 43 per cent sequentially.

MediaValet recently announced on Jan. 24, 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.

Key financial metrics:

• Revenue grew to $4.33-million in Q4 2023, up 20 per cent from $3.61-million in Q4 2022 and up 5 per cent sequentially from Q3 2023. Revenue in fiscal 2023 grew to $16.40-million, up 28 per cent 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 Dec. 31, 2023, with $18.0-million of software ARR and $18.1-million of total ARR, growing 22 per cent and 23 per cent over Dec. 31, 2022, respectively. However, this reflects a significant slowdown in the company's rate of ARR growth, generating just $600,000 of software ARR from new and existing customers in the three months ended Dec. 31, 2023, down 45 per cent from the $1.1-million in the three-month period ended Dec. 31, 2022, and a 43-per-cent sequential decline from $1.1-million in the three-month period ended Sept. 30, 2023;
• Gross margins remained strong at 83 per cent ($3.61-million) in Q4 2023, compared with 80 per cent ($2.88-million) in Q4 2022 and 81 per cent ($3.34-million) in Q3 2023. Gross margins in fiscal 2023 of 81 per cent ($13.33-million) remained steady from 81 per cent ($10.43-million) in fiscal 2022;
• Incurred adjusted operating costs (1) of $4.44-million in Q4 2023, a 14-per-cent decrease from $5.17-million in Q4 2022, and remained steady from $4.46-million incurred in Q3 2023. Adjusted operating costs in fiscal 2023 were $19.18-million, a 5-per-cent decrease from $20.11-million in fiscal 2022;
• Reported a Q4 2023 adjusted EBITDA loss (1) of $830,000, an improvement of 64 per cent from $2.30-million in Q4 2022 and an improvement of 26 per cent sequentially from Q3 2023. EBITDA loss in fiscal 2023 was $5.84-million, a decrease of 40 per cent 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 (1) (excluding contract acquisition assets, deferred revenue, lease liabilities and debt) of $780,000 (December, 2022: $2.31-million), and total lease liabilities and debt of $3.77-million (fiscal 2022: total lease liabilities and debt of $1.07-million). For the year ended Dec. 31, 2023, the company increased $3.0-million of bank indebtedness, collected proceeds of $3.50-million from a private placement and increased its revolving credit facility to $9.0-million, with $3.46-million drawn.

(1) Adjusted operating costs, adjusted EBITDA loss and modified working capital are non-IFRS (international financial reporting standards) measures. See the non-IFRS measures section of the company's MD&A (management's discussion and analysis) for further discussion, and 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. It uses this metric as a supplemental measure to review and assess operating performance and assess its 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. The company uses 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 its stakeholders and in providing an adequate return on investment to its shareholders by selling its services at a price commensurate with the level of operating risk assumed by the company.

(2) Annual recurring revenue 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 U.S.-dollar exchange rate in effect at the time of invoicing. Substantially all of the company's ARR is denominated in U.S. dollars. The average U.S.-dollar exchange rate of ARR was $1.3437 (Canadian) at Dec. 31, 2023, and $1.3141 (Canadian) at Dec. 31, 2022.

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

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 centre 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 third party applications.