Good morning, everyone, and thank you everyone for joining us today, and welcome to Avante's first quarter investor webinar. Joining me on the call today are Emmanuel Mounouchos, founder and CEO of Avante, and Raj Kapoor, the company's CFO. This call is being recorded. There will be a question and answer session at the end of this call. I trust that everyone has received a copy of our financial results press release that was issued last week. Listeners are encouraged to download a copy of our quarterly financial statements and management discussion analysis from sedarplus.com. Please note, portions of today's call, other than historical performance, include 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 views and assumptions, and that this discussion is qualified in its entirety by the cautionary note regarding forward-looking statements that is appended to our news release today or last week. 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 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 definitions set out in our management discussion 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 Q1 results, and I will provide a general update and business overview of where the company is today and our positive outlook. Before we get into this financial results, I will provide a high-level overview of Avante. Avante is a leading provider of security, operative, and technology-enabled security solutions to residential and commercial clients. Avante's mission is to deliver an elevated level of security globally, with white glove mentality to high-net-worth families and corporations alike, through advanced solutions and methods of detecting conditions that require immediate response. The company has developed a diversified security platform to leverage advanced technology solutions to provide a superior level of security services, with an experienced team and proven track record of solid growth.
Avante is taking steps to establish a broad portfolio of security businesses and solutions for its customers through organic growth and complemented by strategic acquisitions. Avante acquires, manages, and builds industry-leading businesses, which provide specialized mission-critical solutions that address the security risks of its clients. Avante is headquartered in Toronto, Ontario, and we have approximately 149 employees in the company. The first quarter of fiscal 2025 marked an exceptional period of growth for Avante, with a 46% increase in quarterly revenues compared to the previous year. Our core business remains strong, demonstrated by a 23% growth in recurring monthly revenue. The success of the NSSG acquisition is evident in our continued growth, as it positions us to significantly expand our international revenue and enhance our global customer service and capabilities.
As we move forward into fiscal twenty twenty-five, we are planning on developing new technologies and leveraging third-party technologies to enhance our offering, which detect, predict, mitigate future threats, and catastrophic events through predictive data analysis. We are also enhancing our service offerings to new and existing clients by leveraging trusted relationships to manage the home with highly trained internal staff and trusted third parties. We remain dedicated to pursuing organic growth, complemented by strategic acquisitions, to further strengthen the Avante security business. Today, I can proudly announce that the company is bank debt-free and that Avante is now growing revenues and generating positive cash flows. We have CAD 12 million available of undrawn credit facilities. We've achieved positive Adjusted EBITDA in eight of the past 10 quarters. We are in a very strong financial position going forward into fiscal twenty twenty-five.
I will provide additional details on our outlook later on the call, but first, I would like to turn it over to Raj, our CFO, who will review the financial results of Q1 2025.
Thank you, Manny. Before I get into our Q1 results, I would like to quickly highlight the current growth trajectory of Avante. On this slide, you can see a graphical display of our five-year annual revenue. After a period of stagnant growth in fiscal 2020 to 2022, you can see that over the past two years, we've gotten back on the path of growing the company. This was achieved through the onboarding of new customers with our focused sales efforts, improved customer supports, introduction of new services, and accretive acquisitions. First quarter was another exceptional quarter for Avante, as we increased revenue by 46% compared to the same quarter last year. Avante achieved quarterly revenues of CAD 7.9 million during Q1 2025, compared to revenue of CAD 5.4 million generated during Q1 2024.
The increase was mainly due to the acquisition of NSSG, increased demand for the company's products and services, new product launches, such as Halo, and an increase in pricing effective April first. Avante achieved gross profit of CAD 3 million in Q1 2025, compared to CAD 2 million during Q1 2024, representing an increase of 47%. The increase was primarily due to sales growth in Avante Security, the acquisition of NSSG, and the growth of Avante Black. Avante's gross margin percentage in Q1 2025 was 38%, compared to 37.7% in Q1 2024, indicating a consistent level of profitability. During Q1 2025, Avante achieved adjusted EBITDA gain from continuing operations of CAD 363,000, in line compared to an adjusted EBITDA gain of CAD 407,000 in Q1 2024.
We have a very predictable business model, as a significant portion of our revenue is recurring in nature. We continue to have strong visibility and predictability for future performance, with over 41% of our revenue in fiscal Q1 coming from contracted recurring revenue. Recurring revenue growth has been entirely from the from the core business. Our core business as a diversified security platform, leveraging advanced technology solutions remains solid, with recurring monthly revenue increasing by 23%. The Avante Security segment delivered recurring monthly revenues, or RMR, of CAD 3.3 million during the first quarter of fiscal 2025, up from two point six million during the company's first quarter in the prior year. The increase in recurring revenue was driven by net growth in monitoring customers.
As you can see from the graph, in the past three quarters, there have been an increase in overall non-recurring revenue, which was primarily due to the acquisition of NSSG and the growth of Avante Black. Our client contracts are one year in length, and we continue to maintain 98% client retention and renewal, demonstrating the value proposition and trust in our solutions. I'm pleased to report that we continue to have a strong balance sheet and are able to fund the company's organic growth initiatives. We continue to have a positive outlook for the next fiscal year. As of June 30th, 2024, Avante is bank debt-free and had CAD 6.2 million in cash and short-term investments.
The company has access to a Senior Secured Revolver of CAD 2 million and to a CAD 10 million Unsecured Term Loan facility, for a total of CAD 12 million, all of which remains completely undrawn as of today. We feel confident to continue funding growth with cash flow from operations. Overall, the company is in a very strong position going forward. I will now turn the call back towards Manny.
Thank you, Raj. I will now give a brief update on our NSSG acquisition. Effective as of April 1st, 2023, Avante acquired 55% majority interest in North Star Support Group, or NSSG, through its subsidiary, Avante International Inc.. The company paid an aggregate purchase price of 1.3 million EUR by way of combination of cash and shares in the capital of the company. First, some background on NSSG. 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 services.
NSSG has a worldwide clientele and has established itself as a trusted partner to Fortune 500 companies in the risk management industry. The NSSG acquisition not only increases our revenue and long-term profitability, but it is also strategically very important for us. We service high-net-worth clients and the corporations in North America who frequently fly to Europe and other parts of the globe. NSSG helps us provide protection services to these clients on a global scale. Since the acquisition, NSSG has increased its opportunities with the existing clientele, and we are seeing a boost, a boost in NSSG sales pipeline activity, because it now has the backing and reputation of Avante behind it. NSSG has also attracted additional new Fortune 500 corporations. During the first quarter, NSSG generated $830,000 in revenue. This acquisition truly is a win-win for both Avante and NSSG.
Additional business highlights. We are very pleased with 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 the Avante Crisis Center, with a real-time location tracking, 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. Our implementation of Avante HomeWorks and Avante ToyBox has been a huge success. HomeWorks is Avante's new home management service, providing trusted, vetted, and security background-checked tradespersons for luxury homes to perform home repairs and maintenance services. It also provides services such as boarding up windows and repairs after a break-in.
Meanwhile, ToyBox is an exclusive top-tier auto storage service tailored for automotive enthusiasts, collectors, and owners of high-value vehicles. We've had tons of interest in ToyBox, given the high volume of car thefts in the Greater Toronto Area. I would also like to talk about Avante's new Halo video monitoring device for customers in the Greater Toronto Area. Our Halo video detection device not only detects human silhouettes, but also limbs and body parts. This ability does not exist in any other video monitoring device, and is proprietary to Avante. Halo has seen strong sales from the onset, driven by the necessity of pairing the product with our response services. Currently, Halo has been installed in 110 locations in Avante's core neighborhoods.
The company is currently testing version two of Halo device, a software upgrade that will include additional features such as facial recognition and two-way voice. Version three of the device, which will be launched later in the year, will enable Halo Track, which will give the ability for the Avante control center to identify an intruder, turn on all devices in the area, and follow the intruder automatically to assist police in locating that individual. Our outlook. Our outlook continues to look promising, with increasing sales, positive EBITDA, clean balance sheet, and the potential for future acquisitions. Raj mentioned our price increase on April 1st, and I want to highlight that despite the increase, attrition has remained minimal, demonstrating our clients' satisfaction with our services.
We believe there is no comparable competitor offering all levels of services, our price points, particularly for our target market of high-net-worth families and corporate clients. As a result, Avante holds significant pricing power as we continue to rebuild and turn around the business from the previous management group. The company's long-term financial objectives serve as a guide in developing our strategy, and should not be considered as guidance. The company's long-term financial objectives are: invest in tuck-in acquisitions to build 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 future business growth. I believe we have laid an excellent foundation for the company in fiscal 2024, and have a positive outlook for fiscal 2025.
We expect continued improvement in revenues, cash flow, and EBITDA, driven by organic growth, introduction of new products and services, and increased NSSG revenues. We expect international revenue 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. We are very excited about the potential growth opportunities with our new launch services, such as the Argus app, HomeWorks, ToyBox, Halo, and also Avante Black. We are expecting overall revenues to benefit over the next year from these new services. Meanwhile, we continue to actively seek new opportunities to expand and enhance our services through acquisitions. We maintain a positive outlook for fiscal 2025, with renewed optimism based on continued sales growth, improving cash flows, and potential M&A activity.
Finally, I want to thank the entire team at Avante, 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. I will now hand it back to Pardeep for questions.
Thank you, Manny. With that, we will now open the call to questions. To submit your questions, please use the Q&A button on the bottom of your screen. Please note that Pardeep will be getting to questions from analysts. I'll give a second here to get some questions in. First question here comes in from a listener on the line. "What feedback have you received from customers regarding the current version of the Halo devices?
We've received positive feedback, of course, 'cause we've been catching people. We've actually had two arrests in the last three weeks because of Halo detecting trespassers hiding in bushes, and it's been a positive experience. We do have to work out some bugs in terms of the management of the signals coming in, but it's minimal, and training is occurring every day as we update our monitoring station software to provide more information to the operators that are manning the desks.
Second question here, follow-on from that same listener: "Can you elaborate on how the proprietary technology in Halo devices compares to competitors' offerings in the market?
Presently, the competitors need a silhouette of a person to be detected, where Halo just needs a body part, a limb. It needs just portions of a body, parts of a body to detect. It also allows us to have two-way voice, facial recognition, to allow family members to enter the home without creating more detection. And the most powerful thing that is gonna occur is when we detect an intruder and we click on Halo Track, all the Halo devices, up to two hundred, will wake up and start tracking this person on Google Maps. So when we're talking to the police, we're not telling the police, "Can you go to one, two, three, four, street name?" We're telling them, "Okay, he's north on this street, he's going south on this street.
He's going across- he just jumped around the block." So we actually follow him as a point on Google Maps. There's nothing like this that exists in one solution.
Okay, and a question from a listener here: Can you provide more detail on why the recurring revenue growth is so strong? Any more details with regards to new customer additions versus new services, like HomeWorks or ToyBox, versus the price increases?
The Halo technology charges a higher recurring revenue fee, and in turn, to have Halo, you need to have our rapid response services in our targeted area. That generated a lot of revenue for us. We have been installing now Halo devices outside of the Avante targeted area. We've gone further up north, we've gone east, where we don't have the rapid response, but we're experimenting and testing, the clients know, with the two-way voice, and we warn intruders to leave. That's generating a lot of revenue for us, that's recurring, and the people are happy, the clients are happy. HomeWorks is really...
There's a pleasant surprise with HomeWorks, where people are signing up for the monthly membership, which allows them to get the trades at a less cost if they were not members of Avante. So the way HomeWorks works is you either sign up as a member and you pay us whatever amount of hours, similar to our driving services, that you want per month. So you can pay us CAD 1,000 a month for 10 hours, CAD 4,000 a month for 40 hours, and that's just recurring. When we do work there, then you'll get a discount from retail of the trade. So we've been really, really busy, and that. I think that division's gonna be a huge division for Avante.
Okay, question here with regards to Avante Black from a listener. What is the Avante Black service, and is any of this recurring revenue? Perhaps just provide some more color on Avante Black.
Avante Black is, it's difficult to describe on a webinar, but I'd be more than happy to speak to you over the phone. It starts off with very high-level protection, with using specialized people to protect executives or their families traveling in areas of the world that are high at risk. There's a lot of competitors, like Kroll and Control Risks, that we compete directly with now. It also includes things like investigations that are deep investigations, family conflicts. It includes investigations that are not following or domestic issues, but more of a financial situation with families and other corporations that may have a situation occurring. It's a very unique business. It's getting a lot of traction, and it's also a very fast-growing business.
I know that we've been traveling and generating about $100,000 a month for the last six months for particular projects. Sorry, can I add to the last point? There's no recurring revenue as of now, but I do have some technology that we're gonna launch that will also have recurring revenue to the Avante Black offering.
Okay, next question is on the pricing increase. Can you comment on what's been the customer reaction to the price increase, and any churn?
Our customers have commented of, "Why did it go...?" Some of the customers says, "Well, it went up 20% and 30%." And when we look and investigate, they haven't had an increase for five years. So we took the we made a decision and said, "Everybody's gonna be paying what our market value is. There's no favoritism, there's no friends and family discounts. We're gonna have everybody on the same playing field." And when you explain to them that they haven't received an increase in five years, whether it was not in the system or bad software or bad data, for whatever reason, they accepted it and paid the new rates. We could probably have increased the pricing more, but I don't think we are perfect yet.
And until we're perfect in our solutions and our service, I don't think we can go much higher than the 10% that we increased.
A follow-up question was, Do you think there could be price increases in the future?
Of course. You know, there's... With our new back end that we hopefully gonna implement, we'll have a cost of living increase, just like our contract state. We have to kind of, like, play it by ear as we see how our service is. Again, I believe that our clients would pay a reasonable amount of money if we provide the best service. We can't charge and not provide the best service. That's what ruins companies.
Okay, we have another question here. Does the acquisition of NSSG signal a broader strategy for future acquisitions? If so, what criteria will you use to evaluate potential targets, and what regions or sectors are you most interested in expanding through acquisition?
You know, we're always open to acquisitions. The global market is what I like. I do, I do like that kind of business. We charge USD, so we get an upside of the exchange. We protect corporate CEOs, C-levels, and a lot of their staff that fly all over the place. So if we find another kind of NSSG type of company, maybe in North America this time, we'll see if we could make a deal to be able to do an acquisition. But I find the global market, the global stage, is much better for Avante than the Forest Hills, Oak Lawn, Palos Park, Chicago areas.
Follow-up question, and in particular, the acquisition strategy sort of in the U.S., can you comment on that?
We were strongly moving in the U.S., but we've slowed down now just only because there's so much going on, and we need to, again, build our foundation strongly, get our team around me that will help me, and then proceed. We can't just be running around and putting out fires. It's gotta be the right way of doing it. So the U.S., to answer the question, the U.S. has slowed down on the expansion there for now.
Okay, another question here: Can you provide more details on how NSSG's contribution to revenue and how it compares to your initial expectations? Is it meeting your initial expectations? How do you foresee this acquisition impacting overall revenue growth in the coming years?
The NSSG learning curve for both sides has been a little slower than what I thought it would be, but what it has done is opened doors for Avante Black to be able to do more business than it would have done without NSSG on board. There are some solutions that NSSG cannot do that Avante Black can do, and that's where I see the benefit. So although NSSG sales may not be where I want them to be, Avante Black sales have gone through the roof as a result of the NSSG acquisition and the NSSG depth in services and knowledge of the security industry globally.
There's a question here about when does the next update for the company? I think I'll just comment here. I think that makes sense to maybe next update, talk a bit more. Maybe we'll have some slide on Avante Black, and give our listeners some more color, commentary on Avante Black in particular, and that update will be in three months' time when we report the next quarter.
Right.
Yeah, last question here. I think we're wrapping up here soon. This question said, "It's great to see the company's return to growth. What would you say have been the key catalyst for this growth since you took over?
The delivery of quality services, making sure that I'm available to speak to clients that need hand-holding sometimes from being disappointed in the past. The sales team has been really aggressively selling. Our new services have really made us the choice for people. For example, you know, we launched the Avante Ghost, which was a vehicle immobilizer. We were the first to do that, and by sending out e-blasts during cars being stolen, all the neighbors are talking about the Avante Ghost. Whether they bought it or not, you know, it wasn't so important. What was important, that they were talking about Avante Black. These are the people that were not Avante clients at the time.
Then we launched Halo and the video analytics, and we sent out an e-blast, and the neighbors started talking about Halo, and they started talking about how we detect trespassers and how quick we are. We're responding and arresting, or cars are getting smashed because the burglars are trying to get away. Now we're starting to get the phone calls, and it's ringing, and we're selling, and so being, having the reputation that Avante has to be the only... the first name to come to mind if you think security, is because we're initializing all these new services, all these new products, and we're standing behind them, and we're responding quicker and saving people from being traumatized.
That's all the questions we have. Manny, I'll pass it back to Manny for closing remarks.
Okay. In closing, I want to thank everyone once again for joining our call today. Thank you to the analysts for their questions. We look forward to providing more regular updates in the future. Thank you very much.