- Revenues of US$7.2 million in
Q2-2022 compared to US$4.2 million in
Q2-2021, year over year (YoY) growth led by a 106% jump in CTV
sales and a 44% increase in mobile sales
- Continued to add new Fortune 100 brands as customers and win
upfront deals from major brands
- The outlook for 2022 remains strong; expecting strong
topline growth and adjusted EBITDA profitability during the second
half of the year1
NOT FOR DISTRIBUTION TO UNITED
STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES. THIS NEWS RELEASE DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY
ANY SECURITIES IN THE UNITED
STATES. ANY SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S.
SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO U.S. PERSONS UNLESS REGISTERED UNDER THE U.S.
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE.
TORONTO, Aug. 25,
2022 /CNW/ -- Sabio Holdings Inc.(TSXV: SBIO) (OTCQX:
SABOF) (the "Company" or "Sabio"), a leading provider
of CTV/OTT advertising platforms validated by performance, is
pleased to announce its unaudited financial results for the second
quarter ended June 30, 2022.
Unless otherwise indicated, all amounts are expressed in U.S.
dollars.
"Our early focus on the ad-supported streaming/connected TV
(CTV) market continues to pay dividends as we are pleased to
deliver yet another record revenue quarter. Our investments in
sales and technology backed by a complete end-to-end product suite
enables us to out-grow the market and gain share despite the
uncertain macro-economic environment. We continue to add major
brands as new customers and deepen our relationships with existing
customers— as witnessed by increasing average deal size and, for
the first time in Company's history, winning upfront deals from
major brands. This is a testament to our team's talent and passion
- a team that we have substantially expanded and strengthened over
the last few quarters to take advantage of the rapidly expanding
market opportunity fully. We expect to continue to deliver strong
growth in the second half as we see robust demand from our major
market segments, including political campaigns, where we have made
key investments ahead of the upcoming mid-term election spending,"
stated Aziz Rahimtoola, CEO and
founder of the Company.
Sajid Premji, Sabio's Chief
Financial Officer, added, "We are pleased to have delivered our
fourth consecutive quarter of record revenues and, on a trailing
twelve-month basis, have grown revenues by 96% to US$30.2 million. Moreover, we are just beginning
to realize the returns on the substantial investments we have made
in our sales and marketing apparatus, which includes senior-level
talent. These new additions have already played an instrumental
role in expanding our average deal sizes and negotiating
longer-term customer commitments. We believe the investments are
sufficient to meet our growth objectives over the next 18 months.
We expect to generate positive Adjusted EBITDA1 in the
second half of 2022 and see improving operating margins in 2023. We
ended the quarter with ample cash reserves and over US$3 million of untapped credit available under
our line of credit with Avidbank."
1 Adjusted EBITDA is a non-IFRS performance
measure. See "Use of Non-IFRS Measures" and "Forward-Looking
Statements" below.
Second Quarter 2022 Financial
Highlights
- Sabio delivered record revenues of US$7.2 million in Q2/2022, an increase of 70%
compared to Q2/2021 revenues of US$4.2
million. Revenue growth was driven by both the addition of
new, Fortune® 100 brands and deepening relationships with existing
clientele.
- CTV/OTT streaming generated revenues of US$3.2 million in Q2/2022, compared to
US$1.5 million in Q2/2021, led by
Sabio's unique "CTV powered by App Science" solutions. Management
believes that the Company is well positioned to continue to take
advantage of the fast-growing CTV opportunity.
- Mobile generated revenues of US$3.9
million in Q2/2022, up 44% from US$2.7 million in Q2/2021.
- Gross Profit of US$4.3 million in
Q2/2022, compared to US$2.6 million
in Q2/2021. Gross margin was 59.3%, compared to 61.9% in Q2/2021.
The slight decrease was attributed to the integration of the newly
acquired wholly owned subsidiary, Vidillion Corp. (formerly, Sabio
Acquisition Inc.) ("Vidillion"), a U.S. based CTV/OTT
streaming supply-side platform and technology provider for content
creators.
- Adjusted EBITDA1 loss of US$1.4 million in Q2/2022, compared to
approximate breakeven in Q2/2021. The higher loss was primarily
driven by investments in growth initiatives, the additional
overhead required with being a public company (versus a private
company in the previous year), and costs associated with employees
returning to the office.
- Average deal size increased 48% from the prior year quarter,
led by the larger CTV campaigns.
- As of June 30, 2022, the Company
had cash of US$2.5 million, compared
to US$3.3 million on December 31, 2021. Management believes it is well
funded, with sufficient cash reserves on hand to manage its
operational requirements over the next 12 months.
- As of June 30, 2022, the Company
had US$3.9 million outstanding under
its credit facility with Avidbank.
1 See "Use of Non-IFRS Measures"
below
Second Quarter 2022 Business
Highlights:
- During the second quarter of 2022, the Company renegotiated its
existing line of credit with Avidbank. The amended terms include an
increase in credit available under the line to US$7 million from US$4
million, subject to debtholder consents, which were
subsequently obtained.
- Sabio qualified to trade on the OTCQX® Best Market under the
symbol SABOF.
Events Subsequent to June 30, 2022:
- On July 3, 2022, the Company
entered into a lease for a new office in the Detroit, Michigan area for a five-year period
with Center Street Ventures, LLC.
- On August 4, 2022, the Company
obtained the required debtholder consents to remove the
US$5 million maximum balance
limitation under its existing line of credit with Avidbank, thereby
increasing the maximum allowable balance to the full US$7 million of credit available under the
line.
- On August 8, 2022, the Company
entered a lease for a new office in Hyderabad, India with Gowra Ventures (P) Ltd
for an assured period of five years from the rental commencement
date.
The financial results set forth above have not been audited and
are based on a review conducted by the Company's independent
auditor, MNP LLP. The Company's auditor has not audited the
accompanying interim financial results, accordingly, does not
express an opinion with respect thereto. Furthermore, the unaudited
financial results have been reviewed by the audit committee of the
Company and approved by its board of directors. These unaudited
financial results however should not be viewed as a substitute for
audited financial statements prepared in accordance with
International Financial Reporting Standards (IFRS) and are not
necessarily indicative of the Company's results for any future
period. In addition, the results highlighted in this release are
not a comprehensive statement of the Company's financial results. A
more complete description of the Company's financial position is
provided in its unaudited consolidated financial statements,
including the notes thereto, and management's discussion and
analysis (MD&A) for the three months ended June 30,
2022, and June 30, 2021, which can be found under Sabio's
profile on SEDAR at www.sedar.com.
Please Note: Investors are urged to consider closely the
disclosures in Company's annual and quarterly reports and other
public filings available under Sabio's profile on SEDAR at
www.sedar.com
Outlook
In what is traditionally the slowest half of the calendar year
due to the seasonal trends affecting the advertising industry, the
Company experienced significant revenue expansion in the current
quarter compared to the second quarter of 2021. Our revenue growth
was driven by the addition of new Fortune® 100 brands and deepening
relationships with existing clientele. In the second half of 2022,
Sabio expects it will continue to deliver robust organic revenue
growth on a year-over-year basis and gain market share, driven by
our strengthened salesforce, continued investments in our political
apparatus ahead of the 2022 U.S. midterm elections, the investments
we have made in our product offerings, including the
commercialization of our App Science business and the completion of
an end-to-end, CTV/OTT ecosystem through our acquisition of
Vidillion. As a result, we are in a unique position to continue to
capitalize on the burgeoning CTV/OTT streaming advertising market.
Management believes the heavy investment period in the operating
infrastructure is largely complete and expects Adjusted
EBITDA to be profitable in the second half of the year and see
continued improvements in operating margin in 2023.
The financial disclosures in this news release are subject to
several 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.
1 See "Use of Non-IFRS Measures" and
"Forward-Looking Statements" below
Conference Call:
The Company will host an investor conference call for the three
months-ending June 30, 2022, at
9:00 a.m. ET on Thursday, August 25,
2022. The webinar details are below:
Date: August 25, 2022
Time: 9:00 a.m. ET (6:00 a.m. PT)
Webinar Registration: https://bit.ly/3dlMCFP
Or dial:
|
For higher quality,
dial a number based on your current location.
Canada:
+1 778 907 2071 (Vancouver local)
+1 647 374 4685 (Toronto local)
|
|
|
Webinar ID:
|
821 0076
1600
|
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|
About Sabio
Sabio Holdings Inc. (TSXV: SBIO) (OTCQX: SABOF) is a
technology provider in the high-growth advertising-supported video
on demand and streaming space. Its cloud-based CTV/OTT technologies
enable content creators' distribution, monetization, and analytics
while providing ROI validation for brands and agencies that sponsor
them. The Sabio Holdings portfolio is comprised of the trusted and
transparent content monetization platform Sabio DSP, its cutting
edge, non-panel based, real-time measurement and attribution SAAS
platform App Science™ along with Vidillion, a pioneer in ad
insertion cloud technologies. 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 construed as an alternative to
other financial measures determined in accordance with 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.
Accordingly, non-IFRS measures should not be considered in
isolation nor as a substitute for analysis of financial information
reported under IFRS. Management believes that these non-IFRS
measures provide useful information to investors in measuring the
financial performance of Sabio for the reasons outlined below.
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.
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.
Forward-Looking
Statements
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
the second half of 2022 and its expectations with respect to
improving operating margins in 2023 and cash flow management, 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 at www.sedar.com. Actual
financial results may differ materially from the financial outlook
provided in this press release and the financial outlook has not
been audited or reviewed. 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.
SOURCE Sabio Holdings Inc.