Ottawa-based Martello’s shares drop despite 59% Q2 revenue jump

proctor
Martello Technologies CEO John Proctor.

After its first 12 months on the public markets, a series of acquisitions and other growth initiatives helped Martello Technologies boost its revenues significantly year-over-year.

The Kanata-based firm, which develops software to manage and troubleshoot cloud-based services, reported revenues this week of $3.1 million for the three months ended Sept. 30. That’s up 59 per cent year-over-year.

Recurring revenue represented 92 per cent of sales in what was Martello’s second quarter of the year, up from 82 per cent a year earlier. Monthly recurring revenue increased 72 per cent year-over-year.

The company went public in September 2018 through a reverse takeover transaction on the TSX Venture Exchange, saying then that it was hunting for acquisitions to build its services. Martello quickly delivered on that promise with its $12-million deal to buy Netherlands-based Savision in October 2018 and a few months ago raised another $4.6 million to fund further acquisitions.

Martello’s operating losses deepened in the quarter to $1.45 million compared to $857,783 in the same period a year ago. The company said in a statement that its losses can be traced to increased spending on sales, marketing and platform development, but this spending should stabilize in the near future.

Martello said in a release that it will focus on building out strategic partnerships – like its lucrative deal supporting customers of Ottawa-based Mitel – to take the company forward. The firm said it joined Microsoft’s co-sell program earlier this month to target clients using the Washington giant’s Office365 and Azure platforms.

Shares of Martello dropped 14 per cent in trading on the TSX Venture Exchange Wednesday, ending the day at 34 cents.