Operating Cash Flow increases by 41%; Balance Sheet Strengthened
Further as Plus Solutions Take Off
VANCOUVER, BC, March 29, 2022 /PRNewswire/ - BBTV Holdings Inc.
(TSX: BBTV) (OTCQX: BBTVF) (the "Company"), a media tech company
that uses technology enabled solutions to help content creators
become more successful, today announced financial results for Q4
2021 and full-year audited financial results for the period ended
on December 31, 2021.
The Management Discussion and Analysis ("MD&A"), along with
full financial statements are posted and available on SEDAR at
www.sedar.com. All dollar amounts are expressed in Canadian
currency and are in thousands of Canadian dollars except where
otherwise indicated.
"Q4 2021 results continued the trend set in previous quarters
whereby our focus on higher margin Plus Solutions continued to
drive overall margin improvement and cash flow generation. Our cash
flow performance was among the highest in our company's history –
this in the face of some softness in the broader market as people
generally watched less content as COVID restrictions eased around
the world," said Shahrzad Rafati,
Chairperson and CEO of BBTV. "Q4 2021 cash flow from operations was
up over 41% year-over-year adding over $7
million to our balance sheet. The cash balance now stands at
approximately $31 million. As we
drive towards becoming a dominant Web3 platform, and we begin
monetizing short-form video, we are confident we can not only drive
profitability but also provide industry-leading solutions for
creators making us the number one choice for top performing
creators in the marketplace."
Subsequent to Quarter End
January's Plus Solutions revenue growth rate exceeded 60%, as a
result of which we believe that Q1 2022 is looking like a strong
quarter for Plus Solutions.
Earlier this month we announced key hires with the onboarding of
Erich Lochner as SVP, Creator
Partnerships to help further expand to platforms such as Instagram,
TikTok and Facebook. Content Management is an important product in
Plus Solutions, and we welcomed former Lionsgate executive
Thomas Hughes to provide leadership
to accelerate growth of this line of business.
In addition, we recently announced a partnership with ConsenSys,
the leading Ethereum software company, to support BBTV's
development of Web3 NFT solutions for content creators.
Q4 2021 Financial Highlights:
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Years
Ended
|
|
Q4
2021(1)
|
Q4
2020(2)
|
$
Change
|
%
Change
|
2021(1)
|
2020(2)
|
$
Change
|
%
Change
|
|
Base Solutions
revenue
|
$127,316
|
$102,491
|
$24,825
|
24%
|
$438,287
|
$102,297
|
$335,990
|
328%
|
|
Pro-Forma Adjustment
(if necessary)
|
-
|
$38,031
|
|
|
-
|
$324,723
|
|
|
|
Base Solutions
revenue, after adjustment (if necessary)
|
$127,316
|
$140,522
|
($13,206)
|
(9%)
|
$438,287
|
$427,020
|
$11,267
|
3%
|
|
Plus Solutions
revenue
|
$11,473
|
$7,388
|
$4,085
|
55%
|
$38,335
|
$7,388
|
$30,947
|
419%
|
|
Pro-Forma Adjustment
(if necessary)
|
-
|
$2,970
|
|
|
-
|
$24,366
|
|
|
|
Plus Solutions
revenue, after adjustment (if necessary)
|
$11,473
|
$10,358
|
$1,115
|
11%
|
$38,335
|
$31,754
|
$6,581
|
21%
|
|
Total
revenue
|
$138,789
|
$109,879
|
$28,910
|
26%
|
$476,622
|
$109,685
|
$366,937
|
335%
|
|
Pro-Forma Adjustment
(if necessary)
|
-
|
$41,001
|
|
|
-
|
$349,089
|
|
|
|
Total revenue, after
adjustment (if necessary)
|
$138,789
|
$150,880
|
($12,091)
|
(8%)
|
$476,622
|
$458,774
|
$17,848
|
4%
|
|
Gross
profit
|
$2,926
|
$2,145
|
$781
|
36%
|
$10,547
|
$1,951
|
$8,596
|
441%
|
|
Gross
margin
|
2%
|
2%
|
|
|
2%
|
2%
|
|
|
|
Pro-Forma Adjustment
(if necessary)
|
-
|
$2,029
|
|
|
-
|
$4,917
|
|
|
|
Gross profit, after
adjustment (if necessary)
|
$2,926
|
$4,174
|
($1,248)
|
(30%)
|
$10,547
|
$6,868
|
$3,679
|
54%
|
|
Gross margin, after
adjustment (if necessary)
|
2%
|
3%
|
|
|
2%
|
1%
|
|
|
|
Net loss
|
($9,025)
|
($6,371)
|
($2,654)
|
42%
|
($32,840)
|
($7,359)
|
($25,481)
|
346%
|
|
Pro-Forma Adjustment
(if necessary)
|
-
|
$1,856
|
|
|
-
|
($24,683)
|
|
|
|
Net loss, after
adjustment (if necessary)
|
($9,025)
|
($4,515)
|
($4,510)
|
100%
|
($32,840)
|
($32,042)
|
($798)
|
2%
|
|
Cash flow from (used
in) operating activities
|
$7,631
|
($8,394)
|
$16,025
|
(191%)
|
$3,254
|
($8,716)
|
$11,970
|
(137%)
|
|
Pro-Forma Adjustment
(if necessary)
|
-
|
$13,791
|
|
|
-
|
$15,706
|
|
|
|
Cash flow from (used
in) operating activities, after adjustment (if
necessary)
|
$7,631
|
$5,397
|
$2,234
|
41%
|
$3,254
|
$6,990
|
($3,736)
|
(53%)
|
(1) These figures are derived from the Company's Annual
Financial Statements and the financial statements filed for the
periods ending in year 2021, which are presented in accordance with
IFRS.
(2) The comparative prior period figures are first presented in
accordance with IFRS and are subsequently adjusted to present on
Pro-Forma Basis to include BBTV Corp. consolidated results as if
the Business Combination Transaction had occurred on January 1, 2019. The comparative prior period
figures with Pro-Forma Adjustments are non-GAAP financial measures.
Further details on these measures are included in the "Key Metrics"
section of this press release.
|
|
|
|
|
|
Three Months
Ended
|
|
Q4
2021(1)
|
Q3
2021(1)
|
$
Change
|
%
Change
|
|
Base Solutions
revenue
|
$127,316
|
$104,079
|
$23,237
|
22%
|
|
Plus Solutions
revenue
|
$11,473
|
$9,201
|
$2,272
|
25%
|
|
Total
revenue
|
$138,789
|
$113,280
|
$25,509
|
23%
|
|
Gross
profit
|
$2,926
|
$1,793
|
$1,133
|
63%
|
|
Gross
margin
|
2%
|
2%
|
|
|
|
Net loss
|
($9,025)
|
($10,490)
|
$1,465
|
(14%)
|
|
Cash flow from (used
in) operating activities
|
$7,631
|
$10,279
|
($2,648)
|
(26%)
|
(1) These figures are derived from the Company's financial
statements filed for the periods ending in year 2021, which are
presented in accordance with IFRS.
Q4 2021 Operating KPIs:
|
|
|
|
|
|
Three Months
Ended
|
|
Q4
2021
|
Q4
2020
|
Change
|
%
Change
|
|
|
|
|
|
|
Views
(billions)(1)
|
107
|
114
|
(7)
|
(6%)
|
|
RPMs(1)
|
$1.19
|
$1.25
|
($0.06)
|
(5%)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Q4
2021
|
Q3
2021
|
Change
|
%
Change
|
|
|
|
|
|
|
Views
(billions)(1)
|
107
|
107
|
0
|
0%
|
|
RPMs(1)
|
$1.19
|
$0.99
|
$0.20
|
20%
|
(1) The figures for the quarterly periods ended in year 2021 are
based on the Company's operational and financial results while the
figures for the quarterly periods ended in year 2020 are presented
on Pro-Forma Basis to include BBTV Corp. consolidated results as if
the Business Combination Transaction had occurred on January 1, 2019. Views are non-financial
performance measures while RPMs are supplementary financial
measures. Further details on these measures are included in the
"Key Metrics" section of this press release.
- Adjusted Gross Profit, which is a non-GAAP financial measure
and defined as Gross Profit excluding amortization associated with
the purchase price allocation ("PPA") related to the initial public
offering, for Q4 2021 was $10.4
million, a 9% decrease in comparison to $11.4 million reported for the same quarter last
year. This was due to the decrease in revenue across Base
Solutions.
- BBTV Share of revenue, which is a non-GAAP financial measure
and defined as revenue less content creator and third-party
platform fees, for Q4 2021 was $10.8
million, a 11% decrease compared to $12.1 million reported for Q4 2020.
- Adjusted Gross Margin, which is a non-GAAP ratio and defined as
Adjusted Gross Profit divided by BBTV Share, was 95.9% for Q4 2021,
compared to 94.4% reported for Q4 2020. Adjusted Gross Margin
should remain stable and above 90% for the foreseeable future.
- Gross Margin excluding PPA amortization, which is a non-GAAP
ratio and defined as Adjusted Gross Profit divided by revenue, was
7.5% in Q4 2021 in comparison to 7.6% in Q4 2020. Plus Solutions
should help contribute to margin expansion further in future
quarters.
In Q4 2021, about 20% of our views came from YouTube Shorts,
which presents a significant upside for when that format becomes
monetized, and we believe that this will begin soon. RPMs for
monetizable content grew by 17% compared to Q4 last year. The
continued growth of our Base Solutions business alongside the
changing consumption landscape presents strong opportunities for
RPM growth as monetization continues to mature across all key
platforms. While micro content like YouTube Shorts isn't monetized
today, once it becomes monetized across our entire library, it
could represent incremental revenue of over $90 million annually across our Base Solutions at
current market rates. We think investors should see this as a good
sign for positive future performance for upcoming quarters.
Outlook:
Overall for the quarter, we achieved solid Revenue and Adjusted
EBITDA performance, both of which were within the range of analyst
consensus, and our ending cash balance significantly beat
consensus.
The Company recently announced a partnership with Consensys, a
leading global Ethereum software company to support BBTV's
development of Web3 NFT solutions for content
creators. This deal marks a key foray into Web3,
as BBTV will provide creative, marketing, and content management
solutions for creators to enable them to expand, engage and
monetize their fan communities outside of major social and video
platforms leveraging blockchain
technology.
Call Details:
Tuesday March 29, 2022,
2:15pm Pacific Time / 5:15pm Eastern Time.
Participant Information:
Access Code: 579627
United States: 1 844 200 6205
United States (Local): 1 646 904
5544
Canada dial-in number (Toll Free):
1 833 950 0062
Canada dial-in number (Local): 1
226 828 7575
All other locations: +1 929 526 1599
Please connect at least 15 minutes prior to the conference
call.
To coincide with the call, an Investor Highlights presentation
will be available at:
https://investors.bbtv.com/events-and-presentations/default.aspx
Links to SEDAR filings, conference call recordings and press
releases are available on the investor website at:
https://investors.bbtv.com/
Telephonic Replay:
Access Code: 329687
US (Local): 1 929 458 6194
US Toll Free: 1 866 813 9403
Canada: 1 226 828 7578
UK (Local): 0204 525 0658
All other locations: +44 204 525 0658
March 29, 2022 – April 12,
2022
Pro Forma Basis
The pro forma information and adjustments ("Pro-Forma
Adjustment") contained herein combine the Company's financial
results for the periods with results from BroadbandTV Corp. which
was acquired by the Company on October 28,
2020 (the "Business Combination Transaction") as if the
Business Combination Transaction had occurred on January 1, 2019 as well as adjustments for the
effects of acquisition accounting, but does not include adjustments
for costs related to integration activities, cost savings or
synergies that might be achieved by the combined businesses.
Management believes that reviewing the Company's operating results
by combining actual BBTV Holdings and pro-forma business
combination results is useful for comparative purposes as well as
in reaching conclusions regarding the overall operating performance
of the Company, as the Business Combination Transaction contributed
less than three months of results to the results of operations for
the prior year ended December 31,
2020. The sources of these pro-forma results are the Q4 2021
Financial Statements combined with the internal, unaudited
financial information of the acquired business for the same
periods. These pro-forma results are not specified, defined or
determined under IFRS accounting rules. Pro-forma results presented
are not necessarily indicative of what the Company's results would
have been had BBTV Holdings completed the Business Combination
Transaction on January 1, 2019, nor
will the historical pro-forma results necessarily be indicative of
future results. All pro-forma information or financial results with
Pro-Forma Adjustment are non-GAAP financial measures. See
also "Key Metrics" below for further information regarding the
Company's non-GAAP and other financial measures.
Pro Forma Income Statement
|
Three Months Ended
December 31,
|
|
Years Ended
December 31,
|
|
2021(1)
|
2020(1)
|
Pro-Forma
Adjustment
|
Pro-Forma
2020(2)
|
%(3)
change
|
|
2021(1)
|
2020(1)
|
Pro-Forma
Adjustment
|
Pro-Forma
2020(2)
|
%(3)
change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$138,789
|
$109,879
|
$41,001
|
$150,880
|
(8%)
|
|
$476,622
|
$109,685
|
$349,089
|
$458,774
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Content creator and
other fees
|
$128,108
|
$101,153
|
$38,020
|
$139,173
|
(8%)
|
|
$437,261
|
$101,153
|
$320,538
|
$421,691
|
4%
|
|
Amortization
|
$7,755
|
$6,581
|
$952
|
$7,533
|
3%
|
|
$28,814
|
$6,581
|
$23,634
|
$30,215
|
(5%)
|
|
$135,863
|
$107,734
|
$38,972
|
$146,706
|
(7%)
|
|
$466,075
|
$107,734
|
$344,172
|
$451,906
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
$2,926
|
$2,145
|
$2,029
|
$4,174
|
(30%)
|
|
$10,547
|
$1,951
|
$4,917
|
$6,868
|
54%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
$6,449
|
$3,495
|
$1,542
|
$5,037
|
28%
|
|
$27,487
|
$3,495
|
$19,217
|
$22,712
|
21%
|
|
General and
administration
|
$4,101
|
$3,295
|
$864
|
$4,159
|
(1%)
|
|
$16,498
|
$3,545
|
$9,191
|
$12,736
|
30%
|
|
Research and
development
|
$1,046
|
$771
|
$303
|
$1,074
|
(3%)
|
|
$4,614
|
$771
|
$4,009
|
$4,780
|
(3%)
|
|
Amortization and
depreciation
|
$1,156
|
$830
|
$383
|
$1,213
|
(5%)
|
|
$6,043
|
$830
|
$4,237
|
$5,067
|
19%
|
|
Share-based
compensation
|
$256
|
$113
|
($438)
|
($325)
|
(179%)
|
|
$1,183
|
$113
|
($202)
|
($89)
|
(1,429%)
|
|
$13,008
|
$8,504
|
$2,654
|
$11,158
|
17%
|
|
$55,825
|
$8,754
|
$36,452
|
$45,206
|
23%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
($10,082)
|
($6,359)
|
($625)
|
($6,984)
|
44%
|
|
($45,278)
|
($6,803)
|
($31,535)
|
($38,338)
|
18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain
(loss)
|
$222
|
$536
|
$1,021
|
$1,557
|
(86%)
|
|
($443)
|
$526
|
($150)
|
$376
|
(218%)
|
|
Interest
expense
|
($2,230)
|
($756)
|
($290)
|
($1,046)
|
113%
|
|
($6,849)
|
($775)
|
($3,217)
|
($3,992)
|
72%
|
|
Other income
(expense)
|
($264)
|
($591)
|
$481
|
($110)
|
140%
|
|
$2,800
|
($607)
|
$209
|
($398)
|
(804%)
|
|
Transaction-related
costs
|
$-
|
($651)
|
$-
|
($651)
|
(100%)
|
|
$-
|
($1,150)
|
($68)
|
($1,218)
|
(100%)
|
|
($2,272)
|
($1,462)
|
$1,212
|
($250)
|
809%
|
|
($4,492)
|
($2,006)
|
($3,226)
|
($5,232)
|
(14%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
($12,354)
|
($7,821)
|
$587
|
($7,234)
|
71%
|
|
($49,770)
|
($8,809)
|
($34,761)
|
($43,570)
|
14%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery of income
taxes
|
$3,329
|
$1,450
|
$1,269
|
$2,719
|
22%
|
|
$16,930
|
$1,450
|
$10,078
|
$11,528
|
47%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
|
($9,025)
|
($6,371)
|
$1,856
|
($4,515)
|
100%
|
|
($32,840)
|
($7,359)
|
($24,683)
|
($32,042)
|
2%
|
|
(1)
|
These figures are
presented in accordance with IFRS and are based on the Company's
Annual Financial Statements and the financial statements filed for
the periods ending in year 2021.
|
|
(2)
|
These figures are
presented on Pro-Forma Basis to include BBTV Corp. consolidated
results as if the Business Combination Transaction had occurred on
January 1, 2019. The comparative prior period figures with
Pro-Forma Adjustments are non-GAAP financial measures. Further
details on these measures are included in the "Key Metrics" section
of this press release.
|
|
(3)
|
The % changes are
calculated based on the current period amounts minus the
comparative Pro-Forma prior period amounts and then divided by the
comparative Pro-Forma prior period amounts.
|
Adjusted EBITDA and Adjusted EBITDA Margin
|
Three Months Ended
Dec 31,
|
Years Ended Dec
31,
|
|
2021(1)
|
2020(1)
|
Pro-Forma
Adjustment
|
Pro-Forma
2020(2)
|
2021(1)
|
2020(1)
|
Pro-Forma
Adjustment
|
Pro-Forma
2020(2)
|
|
Net
loss
|
($9,025)
|
($6,371)
|
$1,856
|
($4,515)
|
($32,840)
|
($7,359)
|
($24,683)
|
($32,042)
|
|
Amortization and
depreciation(3)
|
$8,911
|
$7,411
|
$1,335
|
$8,746
|
$34,857
|
$7,411
|
$27,871
|
$35,282
|
|
Share-based
compensation
|
$256
|
$113
|
($438)
|
($325)
|
$1,183
|
$113
|
($202)
|
($89)
|
|
Unrealized and
realized foreign exchange
|
($222)
|
($536)
|
($1,021)
|
($1,557)
|
$443
|
($526)
|
$150
|
($376)
|
|
Interest
expense
|
$2,230
|
$756
|
$290
|
$1,046
|
$6,849
|
$775
|
$3,217
|
$3,992
|
|
Other expense
(income)
|
$264
|
$591
|
($481)
|
$110
|
($2,800)
|
$607
|
($209)
|
$398
|
|
Receivable factoring
banking fees
|
$145
|
$95
|
$40
|
$135
|
$602
|
$95
|
$456
|
$551
|
|
Transaction-related
costs
|
$-
|
$651
|
$-
|
$651
|
$-
|
$1,150
|
$68
|
$1,218
|
|
Recovery of income
taxes
|
($3,329)
|
($1,450)
|
($1,269)
|
($2,719)
|
($16,930)
|
($1,450)
|
($10,078)
|
($11,528)
|
|
Adjusted
EBITDA
|
($770)
|
$1,260
|
$312
|
$1,572
|
($8,636)
|
$816
|
($3,410)
|
($2,594)
|
|
Total
revenues
|
$138,789
|
$109,879
|
$41,001
|
$150,880
|
$476,622
|
$109,685
|
$349,089
|
$458,774
|
|
Adjusted EBITDA
Margin
|
(0.6%)
|
1.1%
|
|
1.0%
|
(1.8%)
|
0.7%
|
|
(0.6%)
|
|
(1)
|
These figures are
derived from the Company's Annual Financial Statements and the
financial statements filed for the periods ending in year 2021,
which are presented in accordance with IFRS.
|
|
(2)
|
These figures are
derived from the Company's Pro-Forma financial statements, which
include BBTV Corp. consolidated results as if the Business
Combination Transaction had occurred on January 1, 2019.
|
|
(3)
|
Includes depreciation
and amortization reported in cost of revenue and operating expenses
for all periods.
|
|
(4)
|
Adjusted EBITDA is a
non-GAAP financial measure while Adjusted EBITDA Margin is a
non-GAAP ratio. Further details on these measures are included in
the "Key Metrics" section of this press release.
|
BBTV Share, Adjusted Gross Profit, and Adjusted Gross
Margin
|
Three Months Ended
Dec 31,
|
Years Ended Dec
31,
|
|
2021(1)
|
2020(1)
|
Pro-Forma
Adjustment
|
Pro-Forma
2020(2)
|
2021(1)
|
2020(1)
|
Pro-Forma
Adjustment
|
Pro-Forma
2020(2)
|
|
Revenue
|
$138,789
|
$109,879
|
$41,001
|
$150,880
|
$476,622
|
$109,685
|
$349,089
|
$458,774
|
|
|
|
|
|
|
|
|
|
|
Less: content creator
and
third-party platform fees
|
($127,988)
|
($100,920)
|
($37,868)
|
($138,788)
|
($436,760)
|
($100,920)
|
($319,166)
|
($420,086)
|
|
|
|
|
|
|
|
|
|
|
BBTV
Share(3)
|
$10,801
|
$8,959
|
$3,133
|
$12,092
|
$39,862
|
$8,765
|
$29,923
|
$38,688
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
$2,926
|
$2,145
|
$2,029
|
$4,174
|
$10,547
|
$1,951
|
$4,917
|
$6,868
|
|
Add: amortization
associated with intangible assets acquired as part of the Business
Combination Transaction
|
$7,428
|
$6,366
|
$869
|
$7,235
|
$27,563
|
$6,366
|
$22,657
|
$29,023
|
|
Adjusted Gross
Profit(3)
|
$10,354
|
$8,511
|
$2,898
|
$11,409
|
$38,110
|
$8,317
|
$27,574
|
$35,891
|
|
|
|
|
|
|
|
|
|
|
Adjusted Gross
Margin(3)
|
95.9%
|
95.0%
|
|
94.4%
|
95.6%
|
94.9%
|
|
92.8%
|
|
(1)
|
These figures are
derived from the Company's Annual Financial Statements and the
financial statements filed for the periods ending in year 2021,
which are presented in accordance with IFRS.
|
|
(2)
|
These figures are
derived from the Company's Pro-Forma financial statements, which
include BBTV Corp. consolidated results as if the Business
Combination Transaction had occurred on January 1, 2019.
|
|
(3)
|
BBTV Share and
Adjusted Gross Profit are non-GAAP financial measures while
Adjusted Gross Margin is a non-GAAP ratio. Further details on these
measures are included in the "Key Metrics" section of this press
release.
|
Free Cash Flow
|
Three Months Ended
Dec 31,
|
Years Ended Dec
31,
|
|
2021(1)
|
2020(1)
|
Pro-Forma
Adjustment
|
Pro-Forma
2020(2)
|
2021(1)
|
2020(1)
|
Pro-Forma
Adjustment
|
Pro-Forma
2020(2)
|
|
Cash flow from
(used in)
operating activities
|
$7,631
|
($8,394)
|
$13,791
|
$5,397
|
$3,254
|
($8,716)
|
$15,706
|
$6,990
|
|
Purchase of property
and equipment
|
($55)
|
($5)
|
($6)
|
($11)
|
($197)
|
($5)
|
($118)
|
($123)
|
|
Purchase or
development of intangible assets
|
($585)
|
($354)
|
$1
|
($353)
|
($1,804)
|
($354)
|
($1,625)
|
($1,979)
|
|
Free Cash
Flow(3)
|
$6,991
|
($8,753)
|
$13,786
|
$5,033
|
$1,253
|
($9,075)
|
$13,963
|
$4,888
|
|
(1)
|
These figures are
derived from the Company's Annual Financial Statements and the
financial statements filed for the periods ending in year 2021,
which are presented in accordance with IFRS.
|
|
(2)
|
These figures are
derived from the Company's Pro-Forma financial statements, which
include BBTV Corp. consolidated results as if the Business
Combination Transaction had occurred on January 1, 2019.
|
|
(3)
|
Free Cash Flow is a
non-GAAP financial measure. Further details on this measure is
included in the "Key Metrics" section of this press
release.
|
About BBTV
BBTV is a global media and technology company headquartered in
Vancouver, Canada. The Company's
mission is to help content creators become more successful. With
creators ranging from individuals to global media brands, BBTV
provides comprehensive, end-to-end Solutions to increase viewership
and drive revenue powered by its innovative technology, while
allowing creators to focus on their core competency – content
creation. In December 2021, BBTV had
the fourth most unique monthly viewers among digital platforms with
more than 600 million globally, who consumed more than 35 billion
minutes of video content [1]. (www.bbtv.com)
[1] Calculations and classifications made by BBTV based on data
from Comscore's "Top 12 Countries = December
2021 comScore Video Metrix Media Trend – Multi-Platform –
Top 100 Video Properties Report"; Top 12 countries represent ~50%
of world's digital population.
Forward Looking Statements
This press release contains "forward-looking information" and
"forward-looking statements" within the meaning of applicable
securities laws (collectively, "forward-looking information").
Forward-looking information is not information about historical
facts but instead represents the Company's intentions, beliefs,
plans, goals, objectives and strategies regarding future events and
results, and includes certain financial outlooks.
Financial outlooks, in particular, are provided to aid in
understanding management's goals and expectations regarding future
financial matters, and, for all the reasons set out below, may not
be achieved. Such financial outlooks may not be appropriate
for other purposes. Forward-looking information contained in this
press release includes statements that we are confident we can not
only drive profitability but also provide industry-leading
solutions for creators making the Company the number one choice for
top performing creators in the marketplace; Q1 2022 is looking like
a strong quarter for Plus Solutions; we engaged Thomas Hughes to provide leadership to
accelerate growth of our Content Management line of business; the
Company's Plus Solutions should help contribute to margin expansion
further in future quarters; YouTube Shorts presents a significant
upside for when that format becomes monetized, and we believe that
this will begin soon; the continued growth of our Base Solutions
business alongside the changing consumption landscape presents
strong opportunities for RPM growth as monetization continues to
mature across all key platforms; while micro content like
YouTube Shorts isn't monetized today, once it becomes monetized
across our entire library, and assuming the same views and the same
RPMs on an annualized basis as we had for our Base Solutions
in Q4 of 2021, it could represent incremental revenue of over
$90 million annually across our Base
Solutions at current market rates; we think investors should see
this as a good sign for positive future performance for upcoming
quarters; and our deal with Consensys marks a key foray into Web3,
as BBTV will provide creative, marketing, and content management
solutions for creators to enable them to expand, engage and
monetize their fan communities outside of major social and video
platforms leveraging blockchain technology. Forward-looking
information is necessarily based on a number of estimates and
assumptions that the Company considered appropriate and reasonable
as of the date such information is given, including but not limited
to the Company's assumptions that the Company will become a
dominant Web3 platform, and will begin monetizing short-form video
across the Company's entire library with at least the same views
and the same RPMs on an annualized basis as the Company had for its
Base Solutions in Q4 2021; that its current growth plans will not
change in any material respect; that its internal financial
forecasts and models, including its estimates of costs and revenue
are accurate are accurate; that its assumptions regarding continued
growth, changes and trends in the Company's industry and the global
economy will be met; that the Company's NFT division and its foray
into Web 3 will be successful; that the Company's Plus Solutions
revenue will continue to grow and to show greater margins than its
Base Solutions; that the Company's churn will continue to remain
low; that the Company will continue to contract with new content
creators and to continue to receive increasing Views; that the
Company will enter into an increasing number of Direct Advertising
Sales Deals, Content Management agreements and initiatives; that
RPMs will continue to increase; the timely receipt of required
regulatory approvals and strategic partner support; the absence of
new laws, regulations, rules or policies of governments, platforms
and other strategic partners, that may negatively impact the
business of BBTV; our ability to build our market share,
enter new markets and maintain and expand geographic scope; our
ability to attract and retain key personnel and to execute on our
growth plans; our ability to obtain and maintain financing on
acceptable terms; as well as the Company's assumptions regarding
foreign exchange rates. Forward-looking information is subject to
known and unknown risks, uncertainties, and other factors, many of
which are beyond the Company's control, that may cause actual
results, performance or achievements to be materially different
from those expressed or implied by such forward-looking
information, including but not limited to the risk that the
Company's assumptions on which its forward-looking information is
based may not be accurate; the effect of competition; that the
Company has a history of losses and negative cash flow; that the
Company's agreements with platforms, creators or others may
terminate early or not be renewed either on similar terms or at
all; that the Company's or its creators' NFTs may not realize
significant revenue or at all; that the Company's Plus Solutions
may not continue to be attractive to creators and may not realize
our expectations; the Company's foray into Web 3 may fail; the
regulatory environment and in particular, the fact that NFTs are a
relatively recent concept and new regulations may be enacted with
which the Company may not be able to comply, and government
regulation of the Internet as well as privacy regulation which are
both evolving and unfavourable developments could have an adverse
impact on the Company's operating results; litigation risk;
intellectual property risks; the Company's need for timely
performance by its creators and strategic partners; the Company's
significant reliance on its relationship with one digital platform;
and the impact of the continuing COVID-19 pandemic; as well as the
factors discussed under "Risk Factors" in the Company's Annual
Information Form dated March 29, 2022
and its prospectus dated October 22,
2020, both filed on Sedar at www.sedar.com, and in the
Company's other filings with the Canadian securities regulatory
authorities at www.sedar.com. The Company does not undertake any
obligation to update any forward–looking information, whether as a
result of new information, future events or otherwise, except as
expressly required by applicable law.
Links to SEDAR filings, conference call recordings and press
releases are available on the investor website at:
https://investors.bbtv.com/
Key Metrics
The information presented within this press release includes
certain financial measures such as non-GAAP financial measures,
non-GAAP ratios, and supplementary financial measures, as well as a
non-financial performance measure (collectively, "Key
Metrics") to assist investors in assessing the overall
operating performance of the Company. These measures are provided
as additional information to complement IFRS measures by providing
further understanding of our results of operations from
management's perspective. Accordingly, these measures should not be
considered in isolation nor as a substitute for analysis of our
financial information reported under IFRS. They are not
standardized measures under IFRS and do not have standardized
meanings prescribed by IFRS, and might not be comparable to similar
financial measures disclosed by other issuers. These Key Metrics
are used to provide investors with supplemental information on our
operating performance and thus highlight trends in our core
business that may not otherwise be apparent when relying solely on
IFRS measures. We also believe that securities analysts, investors
and other interested parties frequently use Key Metrics in the
evaluation of issuers. Our management also uses Key Metrics in
order to facilitate operating performance comparisons from period
to period, to prepare annual operating budgets and forecasts and to
determine components of management compensation.
The numbers for the Company's Key Metrics and related
information are calculated using external industry data sources
and/or internal company data. These measures may be different from
non-GAAP financial measures or ratios or other metrics used by
other companies and may not be comparable to similar meanings
prescribed by other companies, limiting their usefulness for
comparison purposes. Moreover, some of these adjustments or
measures are provided for period-over-period comparison purposes,
and investors should be cautioned that the effect of the
adjustments provided herein is not indicative of the actual effect
on the Company's operating results.
Non-GAAP Ratios contained in this press release are:
"Adjusted Gross Margin"
means Adjusted Gross Profit divided by BBTV Share; and
"Adjusted EBITDA Margin"
means Adjusted EBITDA divided by revenue.
"Gross Margin Excluding PPA
Amortization" means Adjusted Gross Profit divided by
revenue.
Non-GAAP Financial Measures contained in this press release
include all financial figures with a Pro-Forma Adjustment (see Pro
Forma Basis) as well as the following:
"Adjusted EBITDA"
means net earnings or loss, as applicable, before finance
expenses, income tax expense (recovery), amortization and
depreciation, share-based compensation, unrealized and realized
gains or losses due to foreign exchange, transaction-related costs,
and certain other items as set out in the reconciliation table;
"BBTV Share" means revenue
less content creator and third-party platform fees;
"Adjusted Gross Profit"
means gross profit plus amortization associated with intangible
assets acquired as part of the Business Combination
Transaction;
"Free Cash Flow" means cash
flows from (used in) operating activities less purchases of
property and equipment and purchase or development of intangible
assets;
See the financial tables above for a reconciliation of the
non-GAAP ratios and non-GAAP financial measures.
Supplementary Financial Measures
Supplementary Financial Measures contained in this press
release are:
"Advertising Revenue" means
the revenue generated from advertising sales from the Company's
owned and licensed video on demand content across digital
platforms, rights management revenue from advertising sales on
video on demand content, and in-app advertising on Mobile Gaming
Apps.
"RPMs" or "Revenue per
one thousand video Views" means the Advertising Revenues for
every thousand Views generated by the Company's owned and licensed
digital content. The Company does not provide a reconciliation for
RPMs as there are no directly comparable IFRS measures for the
components that make up RPMs.
"Gross Margin" means gross
profit divided by revenue.
We monitor Advertising Revenue and RPMs to help us evaluate our
business, measure our performance, identify trends affecting our
business, formulate business plans and make strategic decisions.
These measures are also used to provide investors with supplemental
measures of our operating performance and thus highlight trends in
our core business that may not otherwise be apparent when relying
solely on IFRS measures. Unless the context otherwise requires, the
Company believes that readers should consider the applicable
metrics to be indicative of engagement and monetization trends that
are key factors that affect the Company's revenue. The Company may
or may not update these metrics based on the Company's
determination of applicability, circumstance, relevance or other
considerations.
Non-Financial Performance Measures
Views are one of BBTV's non-financial performance measures and
are defined as the number of views, in billions, of the Company's
owned and licensed digital video content on various platforms,
notably YouTube, for the stated period. The presentation of Views
is reliant on certain third-party industry data and therefore is
not comprehensive and may exclude views of the Company's content on
certain platforms or in geographies whereby such data sources are
unable to or do not track such information. Trends in Views affect
revenue and financial results by influencing the Company's volume
of salable media inventory, RPMs, as well as its product offerings,
expenses and capital expenditures.
While Views are reported using reasonable judgments and
estimates of the audience and its engagement with its content for
the applicable period of measurement, there are certain challenges
and limitations in measuring the usage of its content across its
audience. Such challenges and limitations may also affect the
Company's understanding of certain details of its business. For
example, the methodologies used to measure the Company's Views and
RPMs (see "Supplementary Financial Measures" above) may be
susceptible to algorithm, calculation or other technical or human
errors, and following an acquisition or strategic transaction,
certain data may be, among other things, integrated, analyzed and
reported differently by the Company than it was by the target or
the strategic partner. Moreover, the Company's or its data
provider's business intelligence tools may experience glitches or
fail on a particular data backup or upload, which could lead to
certain customer activity not being properly included in the
calculation of Views and RPMs. Although the Company typically
attempts to address and correct any such failures and inaccuracies
relatively quickly, its reported Views and RPMs are still
susceptible to the same and its estimations of such metrics may be
lower or higher than the actual numbers.
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SOURCE BBTV Holdings Inc.