TORONTO, Aug. 21, 2023 -- Sabio Holdings Inc. (TSXV: SBIO)(OTCQX: SABOF) (the "Company" or "Sabio"), a leading provider of connected TV ("CTV")/over-the-top ("OTT") advertising platforms validated by performance, is pleased to announce its unaudited financial results for the second quarter ended June 30, 2023. Unless otherwise indicated, all amounts are expressed in U.S. dollars.
"We are pleased to have once again delivered double-digit revenue growth in a challenging economic environment, led by a 57% increase in our CTV/OTT business," said Aziz Rahimtoola, Chief Executive Officer. "Supported by our highly differentiated, end-to-end CTV/OTT technology stack, under which the majority of Sabio's CTV impressions are delivered through direct supply, we continue to gain market share and outpace industry averages1 in the category."
Sajid Premji, Chief Financial Officer, added, "In a testament to the stability and scalability of our sales model, 74% of consolidated revenues in the first half of 2023 were from repeat customers, as we continue to attract and retain customers at high rates, resulting in larger average deal sizes and acquisition-cost efficiencies. Moreover, management's ongoing focus on reducing costs and increasing efficiencies has offset continued investments in our technological capabilities, including a new programmatic offering anticipated to launch in the first half of 2024. Our ability to maintain strong gross margins, combined with the stability in our cost structure, positions Sabio well for Adjusted EBITDA (as defined below) gains in the second half of the year and into 2024. Subsequent to quarter end, we strengthened our cash position with the closure of a non-brokered CAD$1.7 million convertible note offering. Meanwhile, the renewal of our loan facility with Avidbank continues to progress well. Amendments under an executed term sheet include a potential US$3 million increase to the facility, subject to approval from the bank's loan committee."
Second Quarter 2023 Financial Highlights
1 See "Use of Non-IFRS Measures" below
Second Quarter 2023 Business Highlights
Events Subsequent to June 30, 2023:
1 See "Use of Non-IFRS Measures" below
Sabio's interim consolidated financial statements, including the notes thereto, and management's discussion and analysis (MD&A) for the three months ended June 30, 2023, and June 30, 2022, can be found under Sabio's profile on SEDAR at www.sedar.com
Despite what is traditionally the slowest half of the calendar year due to the seasonal trends effecting the advertising industry, the Company continued its expansion into the Connected TV/OTT market by delivering 59% revenue growth in the category for the six-months ended as we continue to substantially outpace the market and take market share. Moreover, in the first half of the year, approximately 74% of consolidated revenues came from repeat customers as Sabio continues to attract and retain customers at high rates, bringing more stability and larger deal sizes to its revenue model and gaining cost efficiencies. Additionally, our customer mix continues to become less transitory and more predictable. Approximately 26% of the revenues in the first half were generated from top logos that did not spend with Sabio previously, successfully replacing Covid-19 and 2022 U.S. election-related spending that dissipated in 2023.
While economic uncertainty, driven by macro interest rate policies, continues to impact advertising budgets, management remains cautiously optimistic as we enter the second half of the year. The Company expects political and advocacy spending to accelerate in the leadup to the 2024 U.S. elections. Further, as a result of the Company's ongoing focus on cost optimization and efficiencies, OPEX spend, normalized for sales commissions, remained flat from previous quarters, with further efficiency gains expected in the quarters ahead. Sabio's ability to maintain strong gross margins, combined with the stability in our cost structure, positions Sabio well for Adjusted EBITDA gains in the second half of the year and into 2024. The majority of Sabio's CTV impressions delivered are through direct supply gained via the acquisition of Vidillion, making Sabio one of the highest direct supply options in the CTV/OTT space, and supporting strong gross margins.
Sabio continues to invest in technology to further enhance our end-to-end CTV/OTT technology stack. Sabio expects to launch a new programmatic CTV/OTT offering in the first half of 2024 which is anticipated to drive further incremental revenue gains in 2024.
To the extent the Company finds suitable and attractive acquisition candidates that are complementary to its long-term objectives, Sabio may also pursue further inorganic growth through strategic business acquisitions.
1 See "Use of Non-IFRS Measures" below
The tables below set out selected financial information relating to Sabio's. and should be read in conjunction with Sabio's condensed interim consolidated financial statements, including the notes thereto, and MD&A for the three months ended June 30, 2023, and June 30, 2022, copies of which can be found under Sabio's profile on SEDAR+ at www.sedarplus.ca.
1 See "Use of Non-IFRS Measures" below
The financial disclosures in this news release are subject to a number of cautionary statements, assumptions, contingencies and risks as set forth in this news release. The foregoing outlook and expectations constitute forward-looking statements and financial outlook and are qualified in their entirety by the "Forward-Looking Statements" cautionary statement below. Readers are cautioned that this release if for information purposes only and may not be appropriate for other purposes.
The Company will host an investor conference call for the second quarter ended June 30, 2023, at 9:00 a.m. ET on August 22, 2023. The webinar details are below:
Date: August 22, 2023
Time: 9:00 a.m. ET (6:00 a.m. PT)
Webinar Registration: https://bit.ly/3YneYmH
For higher quality, dial a number based on your current location.
+1 778 907 2071 (Vancouver local)
+1 647 374 4685 (Toronto local)
Webinar ID: 873 6691 0387
Please connect 5 minutes prior to the conference call to ensure time for any software download that may be required.
Sabio Holdings Inc. (TSXV: SBIO) (OTCQX: SABOF) is one of the fastest-growing CTV/OTT technology and service providers in the high-growth ad-supported video-on-demand (AVOD) and FAST channel space. Its cloud-based CTV/OTT technologies provide publishers with distribution, monetization, and analytics while delivering ROI validation for brands and agencies. The Sabio Holdings portfolio is comprised of: Sabio — our trusted and transparent content monetization DSP; App Science™ — our cutting edge, non-panel based, real-time measurement and attribution SAAS platform; and Vidillion — our cloud-based ad-insertion, and content distribution and management platform.
For more information, visit: sabioholding.com
Use of Non-IFRS Measures
This press release makes reference to certain non-IFRS (International Financial Reporting Standards) measures including, but not limited to, Adjusted EBITDA. These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other companies and should not be considered in isolation nor as a substitute for analysis of financial information reported under IFRS. Rather, these non-IFRS measures are provided as additional information to complement IFRS measures by providing a further understanding of operations from management's perspective.
Management uses adjusted earnings before interest, income taxes, depreciation, and amortization ("Adjusted EBITDA") as a key financial metric to evaluate Sabio's operating performance as a complement to results provided in accordance with IFRS. The term "Adjusted EBITDA", as defined by management, refers to net income (loss) before adjusting earnings for finance costs, income taxes, stock-based compensation, amortization, non-recurring items, and severance costs. Refer to reconciliation to Adjusted EBITDA under the "Selected Financials" section of this release and in the Company's MD&A for the three months ended June 30, 2023 and June 30, 2022, copies of which can be found under Sabio Holdings Inc.'s profile on SEDAR Plus at www.sedarplus.ca
Management believes that the items excluded from Adjusted EBITDA are not connected to and do not represent the operating performance of Sabio. Management believes that Adjusted EBITDA is useful supplemental information as it provides an indication of the results generated by Sabio's main business activities prior to taking into consideration how those activities are financed and taxed as well as expenses related to stock-based compensation, depreciation, amortization, restructuring costs, other expense (income), and foreign exchange (gain) loss. Accordingly, management believes that this measure may also be useful to investors in enhancing their understanding of Sabio's operating performance. It is a key measure used by Sabio's management and board of directors to understand and evaluate Sabio's operating performance, to prepare annual budgets and to help develop operating plans.
This press release may contain certain forward-looking information and statements ("forward-looking information") within the meaning of applicable Canadian securities legislation, including but not limited to the Company's operations, growth and sales expectations and business plans, the Company's outlook for fiscal 2023 and 2024 and cash flow management, including the final loan approval of its executed term sheet with Avidbank , that are not based on historical fact, including without limitation statements containing the words "believes", "anticipates", "plans", "intends", "will", "should", "expects", "continue", "estimate", "forecasts" and other similar expressions. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. The Company undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Company, its securities, or financial or operating results (as applicable). Although the Company believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events that may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including the effect of the macro-economic environment adversely impacting the Company's business more than anticipated, unexpected funding and cash flow management difficulties, and the other risk factors disclosed in the Company's filing statement and management's discussion and analysis (MD&A), which are publicly available on SEDAR Plus at www.sedarplus.ca. The Company has assumed that the material factors referred to herein will not cause such forward-looking statements and information to differ materially from actual results or events. However, there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. The forward-looking information contained in this press release is expressly qualified by this cautionary statement and is made as of the date hereof. The Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
App Science is a trademark or registered trademark of Sabio Inc. in the United States, Canada, and other countries.