TORONTO, Oct. 30, 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 provide a business update for the third quarter of 2023, including its cost and operational efficiency initiatives, preliminary results for its Q3-2023 financial performance, a status update on upfront commitments negotiated for 2024, and a leadership update.
Cost and Operational Efficiency Initiatives and Q3-2023 Financial Performance
The CTV/OTV space is continually evolving, and aligned with that, the Company is continuously seeking opportunities to create a more efficient and streamlined business. During the third quarter, management implemented several initiatives aimed at creating operational efficiencies and reducing costs. These initiatives, which are expected to result in approximately US$4.0 million in annualized cost savings included strategic headcount reductions; the exiting of non-essential contractor and supplier arrangements; and the optimization of certain operational processes, including enhancement of the Company's cloud storage strategy.
"The macro headwinds impacting overall advertising spend were pronounced in the third quarter, as rising interest rates and category-specific events including the auto workers strike impacted short-term advertising budgets," commented Sajid Premji, Sabio's CFO. "During the quarter, Sabio faced these challenges head-on implementing several cost and operational initiatives to optimize our operating infrastructure. While some of these initiatives, including our headcount reductions, did not take effect until the beginning of September, they were instrumental in helping us maintain Adjusted EBITDA neutrality in Q3-2023. Moreover, our reduced break-even point positions us well to realize meaningful positive Adjusted EBITDA in the fourth quarter, and into 2024 when the full benefit of these reductions will be realized. Our performance in winning the upfront commitments has already set a Company record without the expected tailwinds of the 2024 U.S. election cycle, demonstrating the strength of our technology-led value proposition in the CTV/OTT market."
Sabio expects revenues for Q3-2023 to be in the range of US$8.5 million to US$8.8 million, and Adjusted EBITDA to be in the range of a loss of US$0.2M to slightly positive. Overall operating expenditures are expected to decrease sequentially compared to the second quarter of 2023 and on a year-over-year basis compared to the third quarter of 2022. The Company expects to end Q3-2023 with over US$2.0 million in cash on hand.
The Company will provide the full financial results in the upcoming filing of the Company's financial statements and MD&A which are anticipated to be filed on SEDAR and made available on the Company's website before November 29, 2023.
Sabio is also pleased to announce commitments from various parties to endeavor to spend an aggregate of a minimum of US$9.0 million in 2024, and does not include potential political and advocacy commitments ahead of the 2024 election cycle. The commitments span across several diversified verticals including automotive, quick-service and casual restaurants, and sports and entertainment.
"These multi-million-dollar upfronts, secured with some of the biggest agency holding companies in advertising, speaks volumes to Sabio's differentiated position in CTV/OTT" said Aziz Rahimtoola, CEO. "Our focus on assembling one of the most complete end-to-end technology stacks in the fast growing ad-supported streaming space, where the U.S. market is expected to grow to over $29 billion in 20241, has delivered increased revenue from existing customers along with a 38% increase in new Fortune 500 nameplates."
The Company also announces that Humera Kassem, Sabio's Chief People Officer will be leaving her position and the Company effective November 30, 2023 as she moves on to new challenges and opportunities in her home state of Texas.
"Humera has played an important role in the growth and development of Sabio's team culture and human resources systems." said Aziz Rahimtoola. "We wish her the best in her future endeavors and appreciate the contributions she has made to Sabio through her tenure."
The preliminary results set forth above are based on management's initial review of the Company's operating and financial results for Q3-2023 and are subject to change as these results have not been reviewed. Final reported results could differ from these preliminary results following the completion of quarter-end and year-end accounting procedures, final adjustments, and other developments arising between now and the time that the Company's financial results are finalized, and such changes could be material. The Company's independent auditor, MNP LLP, has not reviewed, or performed any procedures with respect to the accompanying preliminary financial results and other data and, accordingly, does not express an opinion or any other form of assurance with respect thereto.
These estimates 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. The purpose of this financial outlook is to provide readers with early guidance regarding management's current reasonable expectations as to the anticipated results for Q3-2023. Readers are cautioned that this financial outlook may not be appropriate for other purposes.
About Sabio Holdings
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 portfolio is comprised of: Sabio — our trusted and transparent content monetization demand-side platform (DSP); App Science® — our cutting edge, non-panel based, real-time measurement and attribution software as a service (SAAS) platform; and Vidillion — our cloud-based ad-insertion, and content distribution and management platform. For more information, visit: sabioholding.com
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 release of Q3-2023 results, 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 risk factors disclosed in the Filing Statement which is publicly available on SEDAR at www.sedar.com. 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.
Sajid Premji, Chief Financial Officer
Sam Wang, Investor Relations
Hollis Guerra, Daddi Brand Communications