- Record revenues of US$17.6
million in Q4-2022 compared to US$10.5 million in Q4-2021.
- Record adjusted EBITDA1 of US$2.4 million for Q4-2022 compared to
US$1.7 million for Q4-2021.
- Connected TV/OTT sales as a category increased by 144% to
US$12.7 million, compared to
US$5.2 million in the prior year's
quarter.
- Revenues of US$42.3 million,
adjusted EBITDA1 of US$1.3
million and gross profit margin of 60% for FY-2022.
- Outlook for 2023 remains strong; addition of new Fortune 500
nameplates.
NOT FOR DISTRIBUTION TO UNITED
STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.
TORONTO, March 22,
2023 /CNW/ -- 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 audited
consolidated annual results and results for the fiscal fourth
quarter ended December 31, 2022.
Unless otherwise indicated, all amounts are expressed in U.S.
dollars.
"Sabio ended 2022 on a record note, delivering the best
quarterly financials in the history of our Company," said
Aziz Rahimtoola, Chief Executive
Officer. "Through our proprietary end-to-end CTV/OTT
technology stack, we deliver compelling returns on investment for
our customers, differentiating ourselves "from the pack" as we
continue to significantly outgrow the CTV and OTT streaming
markets. Our CTV/OTT business posted 144% year-over-year growth -
largely organic - in the fourth quarter. Sabio is outpacing the
estimated 23% growth1 in U.S. CTV advertising spend and
taking market share. Moreover, our proven ability to expand
our share of customer wallets in short-order bodes well for 2023
and beyond, as we continue to add large brands to our customer
roster, while making further inroads with our existing Fortune 500
nameplates."
Sajid Premji, CFO, added, "This
sixth consecutive quarter of record revenues was also the most
profitable quarter in the history of our Company, with adjusted
EBITDA1 of US$2.4
million. CTV/OTT streaming sales have now grown by
over 100% in each quarter since Sabio went public, and was our
dominant sales category, accounting for 72% of our sales mix for
the fourth quarter and 59% for the year. Symbolizing the
rapid and largely organic growth of the business, our CTV/OTT
streaming sales in 2022 exceeded Sabio's consolidated revenues
across all sales categories in the prior year, as we once again
achieved a 60% gross margin and delivered positive adjusted
EBITDA1 for the third consecutive year."
1 See "Use of Non-IFRS Measures" below
Fiscal 2022 Annual Financial Highlights
- Sabio delivered record revenues of US$42.3 million in fiscal 2022 up 75% over fiscal
2021.
- CTV/OTT streaming generated revenues of US$24.8 million in fiscal 2022 up 144% from
US$10.2 million in fiscal 2021.
- Mobile generated revenues of US$17.0
million, up 22% from US$14.0
million in fiscal 2022.
- Record gross profit of US$25.3
million, up 74% over fiscal 2021 with gross margin of 60% in
2022, in line with 2021.
- Positive adjusted EBITDA1 of US$1.33 million compared to US$1.85 million in 2021.
- Average deal size increased 43% from the prior year.
- 45% of brands who spent $100,000
or more had an App Science™ component to their deals.
- As of December 31, 2022, the
Company's cash position improved to US$4.0
million, as compared to US$3.3
million on December 31, 2021,
with the increase due to free cash flow generated from our
operations.
1 See "Use of Non-IFRS Measures"
below
Fourth Quarter 2022 Financial Highlights
- Sabio delivered record revenues of US$17.6 million in Q4/2022, an increase of 66%
compared to Q4/2021. CTV/OTT generated revenues of US$12.6 million in Q4/2022 compared to
US$5.2 million in Q4/2021 – an
increase of 144% over the prior year's quarter. CTV/OTT sales
accounted for 72% of the Company's sales mix.
- Mobile generated revenues of US$4.8
million in Q4/2022, a 10% decrease compared to US$5.3 million in Q4/2021, as more mobile
campaigns shifted from mobile display to mobile video, recognized
under our CTV/OTT revenue category.
- Gross Profit of US$10.4 million
in Q4/2022, compared to US$6.3
million in Q4/2021. Gross Margin was 59% in Q4/2022,
consistent with a gross profit margin of 59% in Q4/2021.
- Record positive adjusted EBITDA1 of
US$2.4 million in Q4/2022, compared
to US$1.7 million in Q3/2021.
- As of December 2022, the Company
had US$3.9 million outstanding under
its credit facility with Avidbank.
1 See "Use of Non-IFRS Measures"
below
Fourth Quarter 2022 Business Highlights:
- In October 2022, an aggregate of
244,375 share options of the Company were granted to certain
employees of the Company at an exercise price of CAD$0.80. The options will vest quarterly from
the grant date over a vesting period of 2 to 3 years. 395,313
restricted stock units ("RSUs") of the Company were also granted at
the grant-date fair-value of the Company's common shares of
CAD$0.80. 137,500 of these RSUs were
granted to directors of the Company and will fully vest on first
anniversary of the grant date. The remaining 257,813 RSUs were
granted to employees and contractors of the Company and will vest
over two years with 1/2 vesting at the one-year anniversary of the
grant and quarterly vesting over the second year.
- On November 14, 2022, the
Depository Trust Company ("DTC") completed its eligibility review
and approved Sabio Holdings Inc. (OTCQX: SABOF). Sabio Holdings is
now eligible for book entry and depository service through DTC in
the United States.
- On November 21, 2022, the Company
entered into a lease for a new office in Surat, India, with a lock-in period of 3 years from
the rent commencement date. The lease contains an option for the
Company to renew for two terms of three years each, and the sum of
monthly base rent and maintenance charge less security deposit for
the assured period is approximately $81,467 (INR 6,638,970).
- For the first time in Company history, Connected TV and OTT
streaming was the Company's largest sales category for a fiscal
year, composing 72% and 59% of our sales mix for the three months
ended and the year ended December 31,
2022, respectively.
- In December 2022, to proactively
ensure maintenance of the applicable requirements relating to its
foreign private issuer ("FPI") status under United States ("U.S.") securities laws,
certain U.S. shareholders voluntarily exchanged a total of
5,646,807 common shares of the Company for the same number of
convertible restricted voting shares.
Events Subsequent to December 31,
2022:
- In January 2023, the loan
obligation under the Wisper Ventures Leasing, LLC promissory notes,
comprising all principal and interest owned until the maturity
dates, was settled in full and discharged.
- On February 6, 2023, Sabio London
Limited, a wholly owned subsidiary of the Company, was incorporated
in London, the United Kingdom for the Company's business
expansion in the United Kingdom
and European markets.
- On March 17, 2023, the TSX
Venture Exchange accepted a notice filed by the Company to
implement a Normal Course Issuer Bid, whereupon the Company may,
during the 12-month period commencing March
22, 2023 and ending March 21,
2024, purchase, for cancellation, up to 754,571 Shares in
total, being 5% of the total number of 15,091,425 common shares
outstanding as at February 15, 2023.
The Company also had 31,755,764 issued and outstanding convertible
restricted voting shares as of this date.
1 See "Use of Non-IFRS Measures"
below
Sabio's annual consolidated financial statements, including
the notes thereto, and management's discussion and analysis
(MD&A) for the three and twelve months ended December 31, 2022 and December 31, 2021, can be found under Sabio's
profile on SEDAR at www.sedar.com
Outlook
The Company experienced significant revenue expansion in both
the three and twelve months ended December
31, 2022, as compared to the prior year's comparable
periods. Sabio's revenue growth was driven by both the addition of
new, Fortune 500 brands and deepening relationships with existing
clientele. In 2022, approximately 72% of consolidated revenues came
from repeat customers versus approximately 55% in the prior year,
as Sabio continues to attract and retain customers at higher rates,
bringing more stability to its revenue model and increasing its
cost efficiencies. The Company's average deal size continued
to increase, growing 43% year-over-year, from approximately
$100,000 in 2021 to $138,000 in 2022. Looking ahead, the first
quarter is traditionally the slowest quarter of the calendar year
due to the seasonal trends affecting the advertising industry.
In a continuation of recent patterns, management expects the
seasonal declines we typically see in the first quarter to be more
pronounced in 2023 due to some spending delays in the market, as
persistent labor shortages continue to impact customer planning
cycles and the macro environment remains volatile. However,
the Company expects strong year-over-year revenue growth and market
share gains in 2023 and is positioning itself for a solid bounce
back in the remaining quarters of the year. That said, should
spending delays continue to persist beyond expectations, management
will act swiftly and decisively to implement several cost-cutting
initiatives already identified with the aim to maintain positive
Adjusted EBITDA1 in 2023. Sabio continues to
benefit from its strengthened salesforce, highly differentiated
data-driven and end-to-end Connected TV product offering, and an
increasing number of Fortune 500 brands as repeat customers.
Additionally, approximately 57% of the logos that spent with
Sabio in 2022 did not spend with it in 2021, presenting a potential
opportunity to further expand the Company's share of the wallet
with these new nameplates, just as Sabio did with existing
clientele in 2022. In 2022, connected TV and OTT streaming
emerged as Sabio's dominant sales category and represented 72% of
the Company's sales mix during the fourth quarter. The rapid
growth of the category further validates the differentiated
positioning of Sabio's ecosystem to capitalize on the burgeoning
Connected TV/OTT streaming advertising market in 2023 and beyond.
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 in accordance with relevant
securities laws.
1 See "Use of Non-IFRS Measures"
below
Selected Financials
The tables below set out selected financial information relating
to Sabio Holdings Inc. and should be read in conjunction with Sabio
Holdings Inc.'s audited consolidated annual financial statements,
including the notes thereto, and MD&A for the three and twelve
months ended December 31, 2022, and December 31, 2021,
copies of which can be found under Sabio Holdings Inc.'s profile on
SEDAR at www.sedar.com
|
For the three months
ended
|
|
For the year
ended
|
|
December
31,
2022
|
December 31,
2021
|
|
December
31,
2022
|
December 31,
2021
|
|
$
|
$
|
|
$
|
$
|
Revenue
|
17,606,761
|
10,590,624
|
|
42,305,732
|
24,220,173
|
Gross profit
|
10,358,531
|
6,252,919
|
|
25,350,591
|
14,560,153
|
Gross margin
|
59 %
|
59 %
|
|
60 %
|
60 %
|
Adjusted
EBITDA(1)
|
2,363,541
|
1,677,755
|
|
1,326,107
|
1,850,072
|
Net increase in cash
and cash equivalents during the period
|
388,783
|
2,813,909
|
|
719,067
|
3,232,445
|
Cash and cash
equivalents - end of the period
|
3,999,402
|
3,280,335
|
|
3,999,402
|
3,280,335
|
|
For the three months
ended
|
|
For the year
ended
|
December
31,
2022
|
December 31,
2021
|
|
December
31,
2022
|
December 31,
2021
|
$
|
$
|
|
$
|
$
|
Income (Loss) for
the period
|
2,016,200
|
548,824
|
|
(846,765)
|
(583,811)
|
Finance
Costs
|
(35,968)
|
365,353
|
|
417,362
|
1,314,896
|
Transaction
Costs
|
-
|
1,335,142
|
|
156,752
|
1,717,240
|
Amortization of
intangible Assets
|
55,651
|
342,645
|
|
378,043
|
841,441
|
Stock-based
compensation
|
97,041
|
22,730
|
|
667,722
|
329,975
|
Amortization of
lease
|
114,215
|
40,799
|
|
338,489
|
64,414
|
Gain on loan
forgiveness
|
-
|
(1,050,000)
|
|
-
|
(2,172,500)
|
Settlement
fees
|
-
|
-
|
|
-
|
162,000
|
Income taxes
|
35,966
|
4,379
|
|
38,640
|
6,871
|
Foreign exchange
differences
|
-
|
62,749
|
|
-
|
62,749
|
State and local taxes
(recovery)
|
12,510
|
(17,699)
|
|
48,716
|
37,037
|
Loss on disposal of
intangibles
|
17,926
|
-
|
|
24,148
|
-
|
Severance
expenses
|
50,000
|
22,833
|
|
103,000
|
69,760
|
Adjusted
EBITDA(1)
|
2,363,541
|
1,677,755
|
|
1,326,107
|
1,850,072
|
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.
Conference Call:
The Company will host an investor conference call for the fourth
quarter and year ended December 31,
2022, at 9:00 a.m. ET on
March 23, 2023. The webinar
details are below:
Date: March 23, 2023
Time: 9:00 a.m. ET (6:00 a.m. PT)
Webinar Registration: http://bit.ly/3ZLUR15
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:
|
881 3888
2915
|
|
|
Please connect 5 minutes prior to the conference call to ensure
time for any software download that may be required.
About Sabio
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 (VOD) and streaming 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 and twelve months
ended December 31, 2022, and December 31, 2021, copies of
which can be found under Sabio Holdings Inc.'s profile on SEDAR
at www.sedar.com
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
fiscal 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. 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.
1 eMarketer, November
2022
SOURCE Sabio Holdings Inc.