Thank you, everyone, for joining us today, and welcome to Avante's 2024 fiscal third-quarter investor webinar. Joining me on the call today is Emmanuel Mounouchos, founder and CEO of Avante, and Raj Kapoor, the company's CFO. The call is being recorded. There will be a question-and-answer session at the end of the call. I trust that everyone has received a copy of our financial results press release that was issued last week. Listeners are also encouraged to download a copy of our quarterly financial statements and management's discussion and analysis from SEDARplus.ca. Please note, portions of today's call are the historical performance, including statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the safe harbor provisions of those laws.
Forward-looking statements that are based on management's current view and assumptions in that this discussion is qualified in its entirety by the cautionary note regarding forward-looking statements that is appended to our news release. Please review our press release and Avante's reports filed on SEDAR+ for various factors that could cause actual results to differ materially from projections. We use terms such as gross profit, gross margin, adjusted EBITDA, and RMR, recurring monthly revenue, on this conference call, which are non-IFRS and non-GAAP measures. For more information on how we define these terms, please refer to the definition set out in our management discussion and analysis. And with that, let me turn the call over to Mr. Emmanuel Mounouchos, founder and CEO. Manny?
Thank you, Pardeep, and welcome, everyone. We truly appreciate everyone joining us today. On today's call, our CFO, Raj Kapoor, will review our quarterly results released last week, and I will provide a general update and business overview of where the company is today and our positive outlook. For the benefit of the new shareholders, we'll take a moment to provide our backgrounds. I founded Avante in 1996 and took it public in 2008. Subsequently, I left the company in 2015 and rejoined in March 2022 as CEO to help establish a new board of directors that was committed to a successful turnaround of the company. I founded Avante on the idea of providing advanced security to a niche market with a white-glove rapid response service. To do this, I realized I needed to develop technology that didn't exist on the market.
In 1998, I developed a smart box on the Mobitex network used by BlackBerry, developed apps back then which notified our response team of an alarm condition virtually instantly. This allowed Avante to respond to alarms in an average of six minutes. We currently are averaging six minutes. We currently are averaging under six minutes at 5.33 minutes. In 2002, I developed trespass redetection technology utilizing security cameras, and the response became six minutes from the time a person trespassed onto the property of our clients. We completely understood that technology was attracting clients to Avante. The differentiator was extreme. We basically had no competition in our response area. Since then, we developed many more technologies and services to keep Avante ahead of any company trying to compete.
Fast forward to today, and we have a host of technologies that are enhanced and will enhance our offering that are scalable and specifically focused on recurring revenue. Raj, maybe you can give a quick background of yourself.
Yes. Thanks, Manny. I joined the company in September 2022. I have got approximately 20 years of experience overall in finance departments. Most recently, I was working with Optimus SBR, a mid-sized consulting firm downtown Toronto. Prior to that, with Paymount, which was a merchant bank in Toronto, and BizXchange, which was a B2B private currency. Prior to that, Dormond Industries .
Thank you, Raj. Before we get into the fiscal third-quarter results, I will provide a high-level overview. Avante is a diversified security platform specialized in providing security services to high-value commercial and high-net-worth residential markets. The company leverages advanced technology solutions to provide superior security services. Since my return in March 2022, we've executed the sale of Logixx Security Division and also worked towards improving the financial efficiency of the business through the implementation of various cost-saving initiatives and streamlining of operations. This included eliminating the unlimited paid vacation policy that the company had, the lack of sick-day tracking, paid days off. We renegotiated lease agreements, eliminated the Yorkville office, to mention a few. For growth, we purchased C&B Alarms to increase our presence in the Muskokas, and most recently, completed the acquisition of NSSG to expand our global expansion initiative.
Today, I can proudly announce that the company's debt is fully paid off and that Avante is now growing revenues and generating positive cash flow. We've achieved three consecutive quarters of positive Adjusted EBITDA, and seven of the past eight quarters have been positive Adjusted EBITDA. We are in a very strong financial position going into our fiscal 2024 fourth quarter. We are starting to gain traction on our initiatives to increase efficiencies and reinstate our high level of service. Our clients are noticing the difference in the level of service being provided to them and are becoming our advocates through providing a significant increased number of referrals. Meanwhile, we continue to actively seek new opportunities to expand and enhance our services.
We expect international revenues to increase over the next year as NSSG now allows us to attract new clients globally and service them in the boutique manner that Avante offers. The recently launched Argus app allows for real-time medical assistance to our clients while traveling abroad in unfamiliar countries. HomeWorks and ToyBoxx services have received strong interest in the market and allow Avante more stickiness into the home utilizing the reputation and our brand. Meanwhile, we continue to actively seek new opportunities to expand and enhance our services. We maintain a positive outlook for the remainder of our fiscal 2024 and look forward to fiscal 2025 with renewed optimism based on continued sales growth and improving cash flow. Our outlook continues to look promising with increased sales, positive Adjusted EBITDA, and positive cash flow.
I will provide additional details on our outlook later, but first, I would like to turn it over to our CFO, Raj, who will review the financial results for the third quarter.
Thanks, Manny. I'm pleased to report that we have strong fiscal Q3 results for the three months ended December 31, 2023. Our fiscal third quarter of 2024 results are as follows. Third quarter was another exceptional quarter for Avante as we increased revenue by 36% compared to the same quarter last year. Avante achieved quarterly revenues of CAD 6.9 million during Q3 2024 compared to revenue of CAD 5.1 million generated during Q3 2023. Avante achieved gross profit of CAD 2.9 million in Q3 2024 compared to CAD 2.2 million during Q3 2023, representing an increase of 32% driven by an increase in overall revenue. Avante's gross margin percentage in Q3 2024 was 42.5%, remaining relatively stable compared to 42.8% in Q3 2023. The gross margins were within the company's historical range, indicating a consistent level of profitability.
During Q3 2024, Avante achieved positive Adjusted EBITDA from continuing operations at CAD 442,000 compared to a positive Adjusted EBITDA of CAD 600,000 in Q3 2023. Adjusted EBITDA was down slightly in Q3 on a year-over-year basis as there was a one-time share-based compensation adjustment which elevated Adjusted EBITDA in fiscal Q3 of last year, which was eventually reversed at fiscal year-end 2023. As Manny mentioned earlier, this is the third quarter in a row of positive Adjusted EBITDA. We've had seven quarters of positive Adjusted EBITDA in the last two years. Here you can see a graphical representation of our outstanding revenue growth in the third quarter compared to the third quarter in the prior year. We achieved 36% revenue growth driven primarily by the integration with the newly acquired entity, NSSG, and organic growth from the launch of new services.
Our core business as a diversified security platform leveraging advanced technology solutions remains solid with recurring monthly revenue increasing by 11%. The Avante security segment delivered recurring revenues for RMR of CAD 2.9 million during the third quarter of fiscal 2024, up from CAD 2.6 million during the company's third quarter in the prior year. The increasing recurring revenue is driven by net growth and monitoring of customers. On a trailing 12-month basis to December 31, 2023, the company's total revenue was CAD 23.1 million compared to a trailing 12-month revenue of CAD 19.5 million year prior, an increase of 18.0%. The company's organic growth was driven by the company's focused sales efforts, new service introductions, and improved customer support. The company's RMR was CAD 11.1 million, representing 48% total trailing 12-months revenue. We have a very predictive business model as a significant portion of our revenue is occurring in the future.
We continue to have strong visibility and predictability for future performance with over 32% of our revenue in fiscal Q3 coming from contracted recurring revenue. Recurring revenue growth has been entirely from the core business. As you can see from the graph, there is an increase in overall non-recurring revenue, which is primarily due to the acquisition of NSSG. Our client contracts are one year minimum, and we continue to maintain 98% client retention due to our value proposition trusting our solutions. We continue to have a clean and healthy balance sheet. I'm pleased to report—sorry—that we continue to have a strong balance sheet and are able to fund the company's organic growth initiatives through positive cash flows from operations. As of December 31, 2023, Avante was debt-free and had CAD 570 million in cash and short-term investments.
The decrease in cash over the past year was primarily due to the NSSG acquisition and changes in working capital. The company has access to a senior secured revolver of CAD 2 million and to a CAD 10 million unsecured term balance solely for total property, all of which remains completely undrawn as of today. We continue to have a positive outlook for the fourth quarter and into the next fiscal year. Overall, the company is in a very strong position going forward, and I turn the call back over to Manny.
Thank you, Raj. On September 19, 2023, Avante announced its majority stake acquisition of North Star Support Group through its subsidiary, Avante International Inc. NSSG is a highly reputed risk management and security company operating globally. Founded in 2017, NSSG is headquartered in Bucharest, Romania, with offices in New York, Cairo, and Kyiv, with representations in Saudi Arabia, Italy, Israel, and the United Kingdom. NSSG offers a wide range of integrated corporate security solutions with a strong focus on close protection, cyber intelligence, and the ability to open opportunities for Avante's implementation of technology service. NSSG has a worldwide clientele and has established itself as a trusted partner to Fortune 500 companies in the risk management industry. Since our purchase, NSSG has attained additional new Fortune 500 corporations and more opportunity with existing clients that would not have been available in the past.
NSSG generated revenues of $5.9 million in a 12-month period ending December 31, 2022, with a net profit of approximately $1.3 million. The NSSG transaction is effective as of October 1, 2023. Avante acquired a 55% majority interest in NSSG for an aggregate purchase price of EUR 1.3 million, paid by way of a combination of cash and shares in the capital of the company. The NSSG acquisition not only increased our revenue and profitability, but it also strategically is very important for us. We serve as high-net-worth clients and the corporations in America who frequently fly to Europe and other parts of the Middle East and globally. NSSG helps us provide protection services to these clients on a global scale. We are already seeing an increase in our sales pipeline actively as a result of the NSSG acquisition.
Furthermore, NSSG is also seeing an increase in its sales pipeline actively because it now has the backing and reputation of Avante behind it. This acquisition truly is a win-win for both Avante and NSSG. On this slide, you can see some of the NSSG clients, very, very big clients, very big corporations. You can see even some of our friendly competitors like Kroll uses us, Crisis24 uses us, and they're fairly in the same business as NSSG, providing secure transportation globally. But it speaks highly to the ability for Alexander, the CEO of NSSG, and the service he provided. We are getting deeper in with Apple where more North American work is coming towards us. We signed up Verizon since Avante purchased the NSSG. McKinsey & Company continues to bring us business.
New companies like Banca Intesa and Diesel S.p.A. also are providing us opportunities. On the next slide, I would like to share with you some of the recent business highlights. On September 28, 2023, the company announced the launch of Avante Argus app, a mobile connectivity app for corporate clients. Avante Argus app provides peace of mind for Avante's executive clients with instant connectivity to Avante Crisis Center with a real-time location tracking and enabling immediate emergency and medical response capabilities. Argus is designed to provide unparalleled security and support for Avante clients locally and for Avante Black clients internationally. An NSSG branded version will soon be available. On November 2, 2023, the company announced it's accepted an invitation to join the Global Shield Network, a law enforcement and intelligence network immersed in public-private sector partnership designed to prevent crime and terrorism and improve public safety.
After the safe and successful evacuation of its clients from the conflict zone in Israel, Avante was recognized for its world-class security and crisis management services with an invitation to join the Global Shield Network. This strategic alliance provides Avante with real-time access to police and international intelligence agencies worldwide. This has provided us with some very important intel to enhance our services for the near future. In December, the company implemented Avante HomeWorks and Avante ToyBox. HomeWorks is Avante's new home management services providing trusted, vetted, and security background check trades for luxury homes to perform home manager-type services, including home repairs and maintenance. It also provides services such as boarding up windows and repairs after a break-in has occurred, including installing security lighting and other forms of security that isn't Avante's service industry.
Avante ToyBoxx is an exclusive top-tier auto storage service tailored for automotive enthusiasts, collectors, and owners of high-value vehicles. Interestingly enough, our clients are asking us to store their vehicles while they're going away on vacation, March break, reading week. So it's becoming more than just a collectors of cars storage facility. On the next slide, we'll talk about the outlook. The company's long-term financial objectives serve as a guide to developing our strategy. While these financial objectives serve as a guide to developing and executing long-term corporate strategy, the company's management does not anticipate achieving these financial objectives annually, and these should not be considered as guidelines.
The company's long-term financial objectives are: invest in tuck-in acquisitions to build its Avante security business, build recurring revenues, achieve consolidated adjusted EBITDA margins consistent with the industry, achieve growth in adjusted net income per share, reinvest cash flow in the future business growth. I believe we have laid an excellent foundation for the company in the first nine months of fiscal 2023 and have a positive outlook for the remainder of the fiscal year. We expect continued improvements in revenue, cash flow, and EBITDA driven by organic growth, introduction of new products and services, and the acquisition of NSSG. Next slide. Before ending the call, I'd like to address our investor communication efforts. I want to assure you that the company has been very busy for the last two years working on restructuring the business, growing sales, and making an acquisition.
Hence, we haven't been able to spend a lot of time hosting investor-related calls like this one today. Last year, we made a commitment to do a better job and provide more regular updates to our shareholders. We are living up to that commitment as this is now our second investor webinar over the past three months. Moving forward, we expect to host more webinars, attend more conferences, and conduct more meetings with analysts and potential investors. Finally, I want to thank the entire Avante team, including the employees whose hard work continues to elevate the company to higher levels. We want to thank our customers around the globe who trust and rely on us to use innovative technologies to manage risk and provide elevated security solutions and services. Also, I'd like to thank you all for joining us on this call today.
We look forward to providing more updates next year, and I'll hand it back to Pardeep for questions.
With that, we will now open the call to questions. Pardeep will be given to analysts. For anybody else on the call, feel free to send questions to the Q&A button on your screen. You can just type it in and send it in. With that, I think we have the first question from Gabriel Leung of Beacon Securities. Gabriel, go ahead.
Good afternoon. Thanks for taking my questions and congrats on all the progress. Manny, can you spend a little time just talking about NSSG and what we should expect to see from the combined business in terms of geographic expansion, expansion of the pipeline, and perhaps as well other acquisitions that this might lead to? That'd be great. Thank you.
Thank you. The idea with the NSSG purchase is to provide deeper and more services to the corporate 500 top Fortune 500 companies that they have, and in addition to help Avante get more business internationally. By using NSSG, who has a great service, we see ourselves expanding into more countries with more corporations as the global effort to expand occurs. The ability to use NSSG is just a tool for us, and together, we'll grow. The ability for NSSG to use our technology is open doors for them. We have opportunities to sell drones in certain conflict areas. We have opportunities to sell our video analytics in certain areas. There's just so much opportunity for us. In terms of expanding with more acquisitions on this level, I'm interested in pursuing this. I just have to do it a little more slower as we work together with NSSG.
Part of the challenge with NSSG is they're growing organically, and we're working together with our joint marketing teams to provide more of an active marketing campaign like Avante has, send information to the NSSG clients, start having NSSG Avante in the forefront of everybody's mind in the corporation in terms of security. I hope this answers your question, but.
That's great. Thanks for that. Maybe just one question additionally, just in terms of the domestic business, how should we think about growth going forward for the side of the business? Is it going to be a function of, like you said before, upselling additional services? Is it going to be some geographic expansion? Help us think about that.
So our local business is growing, and we're growing about 10%, maybe a little bit more organically. With the introduction of new services, we're adding much more penetration. We have done very well in Muskoka. We have done very well in Etobicoke, and that's growing quickly. And we have a big opportunity to grow in Oakville, which we haven't touched before. But now the need is there as crime has increased. The plan is to try to get more homes in these areas and to get more services. We have implemented a reseller agreement with some of our home automation companies. A lot of the home automation companies are putting in big home automation systems. They put in the security systems, but they don't have anybody to respond. They sometimes call Avante.
But with this reseller opportunity, they're going to be making recurring revenue on all the response services, smart box services, video analytics that they sell. So we have four companies that are coming on board shortly between our salespeople and these other companies and some new interactive two-way voice video analytics that we're bringing on board. I think our platform to grow is much larger because of the added sales force in a sense.
Just to add to that, Gabriel, we are looking at growth on both aspects. We're looking at increasing our penetration with our current base by offering new and innovative solutions, but also looking at other markets. We believe we can replicate what we have here in Toronto in other high-end residential areas, all over North America. Currently, we're looking at the Palm Beach area in Florida as a next step.
Gotcha.
Sorry, was that Gabriel?
Yeah, that's good. Thank you.
Okay. Thanks, Gabe. We have a question from a listener. Can you provide some more color on Homeb ox and HomeWorks and Toy Boxx, the traction you're getting on those new services?
It's unbelievably successful, in my view. We have provided security HomeWorks security services by replacing doors and windows of one client's homes to impenetrable glass and doors that look identical to what was existing there. So basically, what I'm doing is trying to build a safe haven opposed to a safe room. And the difference is your entire house becomes your safe room. Having that and having the various layers outside just makes our client much more safer. They step on the property. They get detected. We use our two-way voice to talk to the person who's trespassing. We immediately dispatch our calls if they're in our executive area. And then if they try to break the window, they can't. So that's actually becoming a very good model for us, and we have high interest in other parts of other clients who are interested in that.
In terms of the seasonal services, I kind of took this model from Jay Hennick at FirstService. He did it in a different way where he had the painting company, pool company, roofing company, and got into the security. We have the trust of our clients, and they're calling us to fix their driveway heaters that aren't working. In my view, that's part of a trusted service. You don't want your car to slide. You don't want somebody to slip. We've fixed their fences that have holes in them. We've added lights around the perimeter with the crime rate that the city is experiencing. Home Works has been very busy. He gets a lead. Corey, who runs Home Works, gets a lead every day. So it's very, very good. Toy Boxx, we kind of finished late in the game with that.
People have already arranged to store their vehicles, but we are gaining traction. We have, I think, 20 or 30 vehicles stored there. We have services of storing vehicles on March break when people go away on vacation. They just don't want to leave them not even in the garage. So with the marketing that we do and the client relations and our sales team, we're gaining a lot of traction. I hope this answers your question.
We have another question here from a listener. The question is about new services. What sort of new services are you thinking about launching this year?
I think we have to build our Toy Boxx and our Homeworks and get that running smoothly and profitably. And then we could think about new services. We are looking at some technology advancements. Let's just say that we'll just keep it at that. We are looking at more technology for this year than actually new divisions with new services, unless something spectacular comes to me, and it's a no-brainer to launch it because of our client base.
Another question here that came in the chat. U.S. expansion plans, can you elaborate on your U.S. expansion plans?
Well, we have a lot of interest from various operators in the U.S. to model what Avante is doing. So it's not necessarily Avante putting in feet on the ground, but it could be a licensing agreement or a reseller agreement, using our control center here, using our monitoring, using our technology to provide services that protect homes. That's kind of what we're talking about right now, and it's still in the process of being implemented. We're walking before we're done, but the opportunity is very big in the U.S. for us. So we're trying to figure out which way to go.
That's all the questions that we have today. Closing remarks, Manny?
Well, I'd just like to thank everybody for coming online, listening to us, and just believe in what the vision is. We are going to grow this company. We are getting a reputation of being global. We have the brand here locally. People are calling us with every announcement that we make on any new service that we have. Our phones ring. If it's not just one or two phone calls, they consistently ring, and we're trying to sell. I do believe this year is going to be a very exciting year. Looking forward to sharing the news with other people and other investors as we provide growth to this business. Thank you very much.