Martello Navigates Transition as Legacy Revenue Declines, Bets on AI-Driven Monitoring

Toronto, ON – November 13, 2025 – Martello Technologies Group Inc. (TSX-V: MRT) is undergoing a significant transformation as it sheds legacy software revenue and focuses on its core strengths: digital experience monitoring (DEM) for Microsoft 365 and its long-standing partnership with Mitel Networks. Recent financial results reveal a continued decline in legacy product sales, but the company is banking on the growth of its AI-powered Vantage DX platform and a strategic alignment with its key partners to drive future growth.

Reporting its Q2 FY26 results, Martello confirmed a 34.8% year-over-year decline in revenue from sunsetting legacy products. While this decrease was anticipated, it highlights the urgency of the company’s strategic shift. Martello is proactively discontinuing older software like Gizmo, iQ, LiveMaps, and Domino, a move aimed at streamlining operations and focusing resources on high-growth areas.

“The decline in legacy revenue is part of a deliberate plan,” explained a source close to the company. “Martello recognizes the need to adapt to the evolving market and concentrate on solutions that address the current needs of enterprises, particularly around optimizing the Microsoft 365 experience.”

A Dual Focus: Microsoft & Mitel

At the heart of Martello’s transformation is its strong relationship with both Microsoft and Mitel. The company's Vantage DX platform is designed to proactively monitor and optimize the performance of Microsoft 365, addressing the critical need for enterprises to ensure a seamless user experience. According to industry analysis, the DEM market is currently valued at over $1.21 billion and is projected to exceed $2 billion by 2033, making it a lucrative space for specialized providers like Martello.

“Microsoft 365 is a cornerstone of modern enterprise IT, but its complexity can often lead to performance issues,” said an industry analyst specializing in the DEM space. “Martello's focus on proactively identifying and resolving those issues is a smart move.”

However, the most crucial relationship for Martello remains its partnership with Mitel Networks. Mitel currently accounts for 50% of Martello’s total revenue – a substantial increase from 43% in the prior year – and the company views this segment as a key growth driver. Martello’s Mitel Performance Analytics (MPA) software is integrated with Mitel’s MiCloud Flex platform and is essential for provisioning, monitoring, and upgrading the company’s communications and collaboration offerings.

“The partnership with Mitel is a win-win,” explained a source familiar with the relationship. “Martello provides valuable performance analytics that enhance Mitel’s offerings, while Mitel provides a stable revenue stream and a platform for growth.” The recent amendment to the commercial agreement, extending the contract term and simplifying the licensing model, further solidifies this critical partnership.

Diving into the AI-Powered Future

Beyond Microsoft and Mitel, Martello is actively exploring opportunities in the rapidly growing field of AI-powered observability. The company is leveraging AI and machine learning algorithms to enhance its Vantage DX platform, enabling proactive issue detection, automated incident resolution, and improved user experience optimization.

The broader market for AI in Observability is projected to reach $10.7 billion by 2033, growing at a robust CAGR of 22.5%. “AI is transforming the IT landscape,” said an expert in AI-driven observability. “The ability to proactively identify and resolve performance issues before they impact users is becoming increasingly critical for businesses.”

Martello’s approach involves using AI to analyze vast amounts of data generated by Microsoft 365 and Mitel systems, identifying patterns and anomalies that indicate potential performance problems. This allows the company to provide its customers with actionable insights and automated remediation capabilities.

Challenges & Outlook

While Martello’s strategic shift appears promising, the company faces several challenges. The decline in legacy revenue is a significant headwind, and the company must continue to execute its strategy effectively to offset this loss. Competition in the DEM and AI-driven observability spaces is fierce, and Martello must differentiate itself from larger players like Dynatrace, New Relic, and Micro Focus.

Furthermore, the company’s reliance on Microsoft and Mitel creates a degree of concentration risk. Any disruption in these partnerships could have a material impact on Martello’s financial performance.

Despite these challenges, Martello remains optimistic about its future. The company is confident that its focus on Microsoft 365, its strong relationship with Mitel, and its investments in AI-powered observability will drive sustainable growth.

“Martello is navigating a challenging period, but the company has a clear vision for the future,” said a source close to the company. “The key will be to execute its strategy effectively and continue to innovate in a rapidly evolving market.”

Investors will be closely watching Martello’s performance in the coming quarters to see if the company can successfully navigate this transition and deliver on its growth potential. The company’s ability to offset the decline in legacy revenue and capitalize on the opportunities in the AI-driven observability space will be crucial to its long-term success.