Martello’s revenues fall 2% in fiscal 2024 as customers migrate to new products

Wireless network Martello stock image

Martello Technologies says its revenues fell two per cent in fiscal 2024 compared with the previous year as the Kanata firm continues to phase out legacy products that have traditionally made up a big chunk of its sales.

Martello, which makes software that improves the performance of cloud-based business applications such as Microsoft Teams, posted revenues of $15.8 million for the fiscal year ended March 31. 

That’s down from $16.1 million in fiscal 2023 as the firm shifts its focus to its emerging Vantage DX software aimed at customers of Teams and other Microsoft 365 products.

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While sales of Vantage DX rose 27 per cent year-over-year, those gains were offset by a drop in revenues from older products that Martello is gradually withdrawing from the market. Martello said sales of those legacy products fell 13 per cent in the fourth quarter compared with the previous year, adding the decline was “expected” in light of customers’ ongoing migration to more advanced technologies.

Martello chairman Terry Matthews said the company is seeing “growing engagement” from Mitel users and other customers, adding “one of the world’s largest telcos” recently launched a Vantage DX trial.

“I’m very encouraged by this groundswell of activity and continue to work closely with the Martello team to maximize the growth with key partners,” Matthews said in a statement.

Chief executive Jim Clark, who assumed the role after former CEO John Proctor left Martello late last year, said the company “recruited exceptional talent in product, marketing and channel leadership” in the second half of fiscal 2024.

Clark said those hires are already bearing fruit in the form of new sales channel partnerships such as a deal finalized in February that allows New Jersey-based global managed services provider Yorktel to offer Vantage DX to its customers.

“By re-engineering our sales processes and go-to-market strategy, we have laid the foundation for growth,” Clark said in a statement. “I’m pleased that we executed on an aggressive slate of improvements across the business while decreasing operating expenses, and will maintain my focus on Vantage DX revenue growth in FY25 as we monitor the impact of these improvements.”

Martello posted a net loss of $5.7 million last year, down from $25.2 million in fiscal 2023 as the company trimmed expenses. The company had $7.7 million in cash on hand and short-term investments at the end of March, up from $2.2 million the previous year.

After officially appointing Clark as the firm’s new CEO in April, Martello recently promoted Nicolae Lungu to the role of interim chief financial officer to replace Clark, who had previously served as CFO. Lungu has been the company’s director of corporate accounting since 2018.

Martello’s stock price remained unchanged at one and a half cents on the TSX Venture Exchange Friday morning.

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