Continued focus on enabling managed service providers as new research reveals the potential of proactive monitoring to reduce their operational costs.

   -- As Martello continues to develop its managed service provider $(MSP)$ 
      channel, new research commissioned by Martello from EnableUC shows that 
      MSPs could achieve up to a 50% reduction in labour required for incident 
      management when using proactive monitoring and advanced diagnostics tools 
      such as Vantage DX. 
 
   -- In FY26 the Company is focused on enabling the success of MSPs by 
      streamlining the onboarding process and delivering a seamless experience 
      for partners and their customers. 
 
   -- Martello's partnership with Mitel and its channel partner network 
      continues to strengthen, with enhancements to Mitel Performance Analytics 
      $(MPA)$ and advancing go-to-market strategies for Vantage DX delivering 
      industry-leading collaboration monitoring solutions to Mitel's partners 
      and customers. 
 
   -- The Company completed an amendment to its loan agreement with Wesley 
      Clover International, extending the maturity date by two years and 
      replacing the interest rate of US Prime plus 8.75% to a fixed rate of 
      12%. 

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES./

OTTAWA, ON, Aug. 14, 2025 /CNW/ - Martello Technologies Group Inc., ("Martello" or the "Company") (TSXV: MTLO), a provider of user experience monitoring solutions for cloud communication and collaboration systems such as Microsoft Teams and Microsoft 365, today released financial results for the three months ended June 30, 2025. Martello's software proactively detects performance issues before they impact users of these systems.

Terence Matthews, Chairman of Martello highlighted the number of initiatives the Company is pursuing to bring Vantage DX to managed service providers: "MSPs face pressure to do more with existing resources and Martello continues to develop Vantage DX to simplify the management of even the most complex hybrid collaboration environments," said Mr. Matthews. "As the Company works to increase momentum in the partner channel, I'm pleased to have amended the Wesley Clover loan agreement to provide Martello with greater flexibility and predictability."

"I'm pleased with our momentum, particularly in the channel, where partners like LDI and Tollring are working closely with Martello to launch Vantage DX as part of their offerings. At the same time, our maturing go to market efforts with partners like Orange Business and Yorktel are helping to solidify Vantage DX's position within their growing pipeline of sales opportunities", said Jim Clark, Chief Executive Officer of Martello. "Having built the foundation to successfully onboard new partners in FY25, I look forward to the continued activation of these partners as we drive more revenue from the channel."

Q1 FY26 Financial Highlights

 
 
 Financial Highlights            June 30,    June 30, 
 (in 000's)                      2025        2024 
                                 (Three months ended) 
 Sales                        $       3,088       3,797 
 Cost of Goods Sold                     461         496 
 
 Gross Margin                         2,627       3,301 
 Gross Margin                 %      85.1 %      86.9 % 
 Operating Expenses                   4,529       4,047 
 Loss from operations               (1,902)       (746) 
 Other income/(expense)               (230)       (407) 
 Loss before income tax             (2,132)     (1,154) 
 Income tax recovery                      -         115 
 Net loss                           (2,132)     (1,038) 
 Total Comprehensive loss     $     (1,932)     (1,093) 
 
 EBITDA (1)                   $     (1,155)       (268) 
 Adjusted EBITDA (1)          $     (1,194)       (791) 
 
 
(1) Non-IFRS measure. See "Non-IFRS Financial Measures". 
 
   -- Revenue of $3.09M was 19% lower than the same quarter of the prior year, 
      primarily due to lower renewal rates on sunsetting legacy product 
      offerings. 
 
   -- Vantage DX monthly recurring revenue decreased by 9% in Q1 FY26 compared 
      to Q1 FY25. The decrease was primarily due to customer churn within our 
      direct sales channel, partially offset by the acquisition of new 
      customers and ongoing efforts to migrate legacy product customers to the 
      Vantage DX platform. Martello's strategy to develop its MSP channel aims 
      to strengthen monthly recurring revenue stability and scalability with 
      greater sales channel diversity. 
 
   -- Sunsetting legacy product revenue declined by 29% or $0.44M in Q1 FY26 
      compared to Q1 FY25. The ongoing decline of legacy product revenue is 
      proceeding as expected. 
 
   -- Revenue from the Mitel business segment decreased by 12% in Q1 FY26 
      compared to the same period in the prior year. This decrease is 
      attributable to a continued shift in the revenue mix from various MPA 
      offerings. The Mitel business represents a growth opportunity as it 
      continues to be a large source of revenue and gross margin, representing 
      49% of total revenues in Q1 FY26 (compared to 45% in Q1 FY25). Martello 
      works closely with Mitel to ensure that MPA remains well-positioned to 
      support both emerging and established market segments, with an emphasis 
      on high-growth opportunities. 
 
   -- 99% of total revenues were recurring in Q1 FY26 compared to 98% in Q1 
      FY25. 
 
   -- Gross margin was 85% in Q1 FY26 compared to 87% in Q1 FY25. The decrease 
      in gross margin reflects a proportionally larger decline in revenue 
      relative to the reduction in cost of sales. This was primarily due to 
      higher hosting, installation, and delivery costs incurred in Q1 FY26 
      compared to the same period in the prior year. 
 
   -- Monthly recurring revenue ("MRR") decreased by 18% to $1.02M in Q1 FY26 
      compared to $1.24M in the prior year. The decrease is primarily 
      attributable to expected declines in sunsetting legacy product renewal 
      revenue and changes in the mix of users subscribed to certain Mitel 
      offerings. 
 
   -- Operating expenses increased by 12% to $4.52M in Q1 FY26 compared to $4M 
      in Q1 FY25. The increase was primarily driven by higher severance and 
      salary and benefit costs and an increase in the value of Deferred Share 
      Units (DSUs). 
 
   -- Loss from operations was $1.90M in Q1 FY26 compared to $0.75M in Q1 FY25. 
      The increase in loss from operations is attributable to decreased revenue 
      and an increase in operating expenses as described above. 
 
   -- Adjusted EBITDA (a non-IFRS measure) was a loss of $1.19M in Q1 FY26 
      compared to a loss of $0.79M in Q1 FY25, attributable to the items 
      described above. 
 
   -- The Company's cash and short-term investments balance was $4.50M as of 
      June 30, 2025 (compared to $6.69M at March 31, 2025). 

The financial statements, notes and Management Discussion and Analysis ("MD&A") are available under the Company's profile on SEDAR+ at www.sedarplus.ca, and on Martello's website at www.martellotech.com. The financial statements include the wholly-owned subsidiaries of Martello. All amounts are reported in Canadian dollars. MRR is a non-IFRS measure, representing average monthly recurring revenues earned in a fiscal quarter.

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 (TSXV: MTLO) is a technology company that provides experience monitoring solutions for enterprise collaboration platforms such as Microsoft Teams and Mitel unified communications. The Company's Vantage DX solution enables IT teams and managed service providers (MSPs) to deliver a frictionless user experience. With Vantage DX, they can move from reactive to proactive support by detecting potential performance issues before they impact users, and speeding resolution time from days to minutes. This leads to increased productivity, realizes efficiencies, and allows businesses to harness the full value of their collaboration platforms. Martello is a public company headquartered in Ottawa, Canada with employees in Europe, the United States and the Asia Pacific region. Learn more at http://www.martellotech.com

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 the aim to drive more revenue from the channel through the continued activation of partners, and the aim to strengthen monthly recurring revenue stability and scalability with greater sales channel diversity.

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