Martello Reports Financial Results for the Second Quarter of the 2026 Fiscal Year

Executive Summary

• Martello Technologies reported a Q2 FY26 net loss of C$7.46 million, driven by a C$5.9 million intangible asset impairment and declining revenues.
• Revenue fell 18% year‑over‑year to C$3.0 million; operating expenses more than doubled to C$9.61 million.
• The company announced an operational restructuring, including the transition of its Vantage DX product to End‑of‑Sale status and a loan amendment extending maturity by two years with a fixed 12% interest rate.

Key Details

• Financial Highlights (Three months ended Sep 30, 2025 vs. 2024)
• Sales: C$2,999 k vs. C$3,640 k (-18%).
• Gross margin: C$2,533 k (84.5%) vs. C$3,131 k (86.0%).
• Operating expenses: C$9,611 k vs. C$4,197 k (+129%), primarily due to a C$5.9 M intangible asset impairment related to the Modern Workplace Optimization segment and Vantage DX EOS transition.
• Loss from operations: (C$7,078 k) vs. (C$1,067 k) FY25.
• Net loss: (C$7,455 k) vs. (C$1,252 k) FY25.

• Adjusted EBITDA (non‑IFRS): (C$759 k) vs. (C$582 k) FY25.

• Six‑month comparison (ended Sep 30, 2025 vs. 2024) – revenue C$6,087 k vs. C$7,437 k; total comprehensive loss (C$9,621 k) vs. (C$2,198 k).

• Revenue Mix

• Legacy product revenue declined 34.8% (~C$0.5 M) YoY.
• Mitel business segment revenue down 5% YoY but now represents ~50% of total Q2 FY26 revenues (up from 43%).

• Vantage DX MRR fell 15% YoY; overall MRR declined 18% to C$0.97 M.

• Recurring Revenue – 97% of total Q2 FY26 revenue was recurring (down from 98%).

• Cash Position – Cash & short‑term investments at September 30, 2025 were C$2.11 M (down from C$6.69 M at March 31, 2025).

• Operational Restructuring

• Transition of Vantage DX to End‑of‑Sale status to accelerate cash flow and lay groundwork for future growth.

• Focus on Mitel Performance Analytics (MPA) product development, integrating AI capabilities and expanding platform support.

• Loan Amendment – Agreement with Wesley Clover International extended maturity by two years; interest changed from US Prime + 8.75% to a fixed 12%.

• Management Commentary

• CEO Jim Clark emphasized the restructuring’s aim to create a sustainable growth foundation and advance AI‑driven service assurance solutions.
• Chairman Terence Matthews highlighted the strategic importance of the Mitel partnership and MPA enhancements.

Notable Quotes

“Martello's operational restructuring is focused on creating the foundation for sustainable growth in the future,” – Jim Clark, CEO

“The longstanding partnership between Mitel and Martello continues with advanced MPA features… I look forward to more AI‑driven innovation within the Martello product programs.” – Terence Matthews, Chairman