Plus Solutions Revenue Grew by 29% YoY;
YouTube Shorts Monetization Expected to Generate Positive Revenue
Contribution
VANCOUVER, BC, Aug. 10,
2022 /CNW/ - 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 Q2 2022 and six month
financial results for the period ended on June 30, 2022.
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 thousands of
Canadian dollars except where otherwise indicated.
"Q2 2022 results show continued strong growth in higher margin
Plus Solutions," said Shahrzad
Rafati, Chairperson and CEO of BBTV. "Plus Solutions revenue
grew 29% compared to Q2 2021 and by 46% for the first half of the
year and we are reiterating our guidance for over 40% growth
in that segment for 2022. Although our Base Solutions revenue
remained flat sequentially and declined year-over-year, we see
significant fundamental tailwinds driving revenue contribution in
our business. These tailwinds include the expedited activation of
YouTube Shorts monetization, which could be worth up to
approximately $90 million in
incremental revenue1, and the diversification
of our Base Solutions to additional platforms like Facebook.
Together with our cost optimization programs, we see a clear path
to Adjusted EBITDA profitability for the business."
Q2 2022 Financial Highlights:
- Plus Solutions revenue in Q2 2022 grew by 29% in comparison to
the same quarter last year and in Q2 2022 represents 13% of total
revenue and 30-40% of total Adjusted Gross Profit3.
- Plus Solutions revenue growth is expected to exceed 40% on an
annual basis for 2022.
- The revenue from the Company's core Plus Solutions,
specifically Content Management, Direct Advertising Sales and
Mobile Gaming Apps, grew by a combined 41% in Q2 2022 in comparison
to the same quarter last year.
- Based on forecasts and Adjusted EBITDA breakeven timelines,
management is comfortable that it has adequate liquidity for at
least the next 12 months.
- All shareholder margin loans secured against BBTV shares have
been paid off.
- The Company undertook a cost optimization initiative where it
reduced total headcount by approximately 14%. The effects of
this cost optimization initiative will be reflected in the
Company's results from Q3 2022 onwards.
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|
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|
1 YouTube
Shorts RPMs are not yet known and as a result, the YouTube Shorts
monetization opportunity of approximately $90 million was
calculated using current market rates for regular YouTube content
as follows: Q2 2022 YouTube Shorts views of 18.55 billion
multiplied by 4 quarters to estimate approximate annual views which
is then multiplied by the last twelve month June 2022 RPM
(excluding YouTube Shorts) of $1.22, which equals approximately $90
million in potential annual revenue.
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
Q2
2022(1)
|
Q2
2021(1)
|
$
Change
|
%
Change
|
Q2
2022(1)
|
Q2
2021(1)
|
$
Change
|
%
Change
|
|
Base Solutions
revenue
|
$86,932
|
$107,997
|
($21,065)
|
(20 %)
|
$172,956
|
$206,892
|
($33,936)
|
(16 %)
|
|
Plus Solutions
revenue
|
$12,996
|
$10,061
|
$2,935
|
29 %
|
$25,808
|
$17,661
|
$8,147
|
46 %
|
|
Total
revenue
|
$99,928
|
$118,058
|
($18,130)
|
(15 %)
|
$198,764
|
$224,553
|
($25,789)
|
(11 %)
|
|
Gross profit (which
includes PPA
Amortization)
|
$806
|
$2,049
|
($1,243)
|
(61 %)
|
$2,497
|
$5,828
|
($3,331)
|
(57 %)
|
|
Gross Margin (which
includes PPA
Amortization)
|
1 %
|
2 %
|
|
|
1 %
|
3 %
|
|
|
|
Adjusted Gross
Profit
|
$ 8,266
|
$ 9,191
|
($925)
|
(10 %)
|
$ 17,442
|
$ 18,811
|
($1,369)
|
(7 %)
|
|
Gross Margin Excluding
PPA
Amortization
|
8 %
|
8 %
|
|
|
9 %
|
8 %
|
|
|
|
Net loss
|
($14,244)
|
($4,274)
|
($9,970)
|
233 %
|
($26,783)
|
($13,325)
|
($13,458)
|
101 %
|
|
Adjusted
EBITDA
|
($5,654)
|
($3,368)
|
($2,286)
|
68 %
|
($9,370)
|
($5,875)
|
($3,495)
|
59 %
|
|
Cash flow from (used
in) operating
activities
|
($6,361)
|
($10,690)
|
$4,329
|
(40 %)
|
($14,365)
|
($14,656)
|
$291
|
(2 %)
|
|
(1)
|
These figures are
derived from the Company's IFRS financial statements.
Adjusted Gross Profit and Adjusted EBITDA are non-GAAP financial
measures and Gross Margin Excluding PPA Amortization is a non-GAAP
ratio. These terms are defined under "Key Metric Definitions"
below. A reconciliation of non-GAAP financial measures and
non-GAAP ratios are set out below under "Non-GAAP Financial
Measures and Non-GAAP Ratios Reconciliation Tables".
|
- Adjusted Gross Profit3, 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 Q2 2022 was
$8.3 million, a 10% decrease in
comparison to $9.2 million reported
for the same quarter last year due to the decrease in revenue
across Base Solutions.
- BBTV Share3 of revenue, which is a non-GAAP
financial measure and defined as revenue less content creator and
third-party platform fees, for Q2 2022 was $8.7 million, an 11% decrease compared to
$9.7 million reported for Q2
2021.
- Gross Margin Excluding PPA Amortization2, which is a
non-GAAP ratio and defined as Adjusted Gross Profit1
divided by revenue, was 8.3% in Q2 2022 up from 7.8% in Q2 2021 due
to the higher revenue mix of Plus Solutions. Plus Solutions
should continue to help contribute to further margin expansion in
future quarters. Management expects Gross Profit to grow at a
faster pace than the Company's top-line revenue.
- Adjusted Gross Margin2, which is a
non-GAAP ratio and defined as Adjusted Gross
Profit3 divided by BBTV
Share3, was 95.5% for Q2 2022, comparable to 94.9%
reported for Q2 2021. Adjusted Gross Margin2 should
remain stable and above 90% for the foreseeable future.
- The current period decrease in cash outflows from operating
activities over Q2 2021 was primarily due to the changes in the
timing of receipts or payments of working capital items.
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|
|
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2 Non-GAAP Ratio.
See "Non-GAAP Financial Measures and Non-GAAP Ratios Reconciliation
Tables" section below and the reconciliation to the most directly
comparable IFRS measure included in this press
release.
|
|
3 Non-GAAP Financial
Measure. See "Non-GAAP Financial Measures and Non-GAAP Ratios
Reconciliation Tables" section below and the reconciliation to the
most directly comparable IFRS measure included in this press
release.
|
|
Three Months
Ended
|
|
Q2
2022(1)
|
Q1
2022(1)
|
$
Change
|
%
Change
|
|
Base Solutions
revenue
|
$86,932
|
$86,024
|
$908
|
1 %
|
|
Plus Solutions
revenue
|
$12,996
|
$12,812
|
$184
|
1 %
|
|
Total
revenue
|
$99,928
|
$98,836
|
$1,092
|
1 %
|
|
Gross profit (which
includes
PPA Amortization)
|
$806
|
$1,691
|
($885)
|
(52 %)
|
|
Gross Margin (which
includes
PPA Amortization)
|
1 %
|
2 %
|
|
|
|
Adjusted Gross
Profit
|
$ 8,266
|
$ 9,176
|
($910)
|
(10 %)
|
|
Gross Margin Excluding
PPA
Amortization
|
8 %
|
9 %
|
|
|
|
Net loss
|
($14,244)
|
($12,539)
|
($1,705)
|
14 %
|
|
Adjusted
EBITDA
|
($5,654)
|
($3,716)
|
($1,938)
|
52 %
|
|
Cash flow from (used
in) operating
activities
|
($6,361)
|
($8,004)
|
$1,643
|
(21 %)
|
|
(1)
|
These figures are
derived from the Company's IFRS financial statements. Adjusted
Gross Profit and Adjusted EBITDA are non-GAAP financial measures
and Gross Margin Excluding PPA Amortization is a non-GAAP
ratio. These terms are defined under "Key Metric Definitions"
below. A reconciliation of non-GAAP financial measures and non-GAAP
ratios are set out below under "Non-GAAP Financial Measures and
Non-GAAP Ratios Reconciliation Tables".
|
The current period decrease in cash outflows from operating
activities over Q1 2022 was primarily due to the changes in the
timing of receipts or payments of working capital items.
Q2 2022 Key Metrics:
|
|
|
|
|
|
Three Months
Ended
|
|
Q2
2022
|
Q2
2021
|
Change
|
%
Change
|
|
|
|
|
|
|
Views
(billions)
|
95
|
111
|
(16)
|
(14 %)
|
|
RPMs (in
dollars)
|
$0.94
|
$0.99
|
($0.05)
|
(5 %)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Q2
2022
|
Q1
2022
|
Change
|
%
Change
|
|
|
|
|
|
|
Views
(billions)
|
95
|
105
|
(10)
|
(10 %)
|
|
RPMs (in
dollars)
|
$0.94
|
$0.82
|
$0.12
|
15 %
|
Revenue for the three months ended June
30, 2022 decreased by $18.1
million or 15% when compared to the same period of the prior
year. This decline in revenue for the current three-month period
was due to a decline in Views and RPMs, partially offset by an
increase in revenue in the higher margin Plus Solutions revenue
stream.
Outlook
BBTV monetization is closely tied to the performance of YouTube.
Recently, YouTube's parent, Alphabet reported that YouTube revenue
growth slowed sequentially and year-over-year. This is primarily
due to a switch in consumer preference to micro-content (less than
a minute long videos) across all major platforms. YouTube
successfully introduced YouTube Shorts last year to respond to
consumer preferences driven by the growth of TikTok, and this
format now represents over 20% of BBTV's views. However, as the
Company has stated in previous conference calls, they have yet to
be monetized. Alphabet announced during their most recent earnings
conference call that they are accelerating their plans to monetize
YouTube Shorts, which should cascade through to BBTV. Monetization
is starting ahead of expected timing. Once it becomes monetized
across BBTV's entire library, revenues attributable to YouTube
Shorts views could represent incremental revenue of approximately
$90 million dollars annually across
our Base Solutions at current market rates4 and we
therefore expect our overall blended RPMs to trend upward
Conference Call Details:
Wednesday August 10, 2022,
2:15pm Pacific Time / 5:15pm Eastern Time.
Participant Information:
Access Code: 132461
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: 337253
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
August 10, 2022 20:15 ET –
August 24, 2022 23:59 ET
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|
4 YouTube
Shorts RPMs are not yet known and as a result, the YouTube Shorts
monetization opportunity of $90 million was calculated using
current market rates for regular YouTube content as follows: Q2
2022 YouTube Shorts views of 18.55 billion multiplied by 4 quarters
to estimate approximate annual views which is then multiplied by
the last twelve month June 2022 RPM (excluding YouTube Shorts) of
$1.22, which equals approximately $90 million in potential annual
revenue.
|
Income Statement:
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June
30,
|
|
2022
$
|
2021
$
|
%
change
|
|
2022
$
|
2021
$
|
%
change
|
|
|
|
|
|
|
|
|
|
Revenue
|
$99,928
|
$118,058
|
(15 %)
|
|
$198,764
|
$224,553
|
(11 %)
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
|
|
|
|
|
|
Content creator and
other fees
|
$91,272
|
$108,566
|
(16 %)
|
|
$180,593
|
$205,133
|
(12 %)
|
|
Amortization
|
$7,850
|
$7,443
|
5 %
|
|
$15,674
|
$13,592
|
15 %
|
|
|
|
|
|
|
|
|
|
Total cost of
revenue
|
$99,122
|
$116,009
|
(15 %)
|
|
$196,267
|
$218,725
|
(10 %)
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
$806
|
$2,049
|
(61 %)
|
|
$2,497
|
$5,828
|
(57 %)
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
$8,545
|
$7,189
|
19 %
|
|
$16,286
|
$14,477
|
12 %
|
|
General and
administration
|
$4,566
|
$4,666
|
(2 %)
|
|
$8,878
|
$8,896
|
(0 %)
|
|
Research and
development
|
$1,404
|
$1,146
|
23 %
|
|
$2,740
|
$2,205
|
24 %
|
|
Share-based
compensation
|
$686
|
$398
|
72 %
|
|
$1,719
|
$662
|
160 %
|
|
Amortization and
depreciation
|
$953
|
$1,532
|
(38 %)
|
|
$1,972
|
$3,399
|
(42 %)
|
|
Total operating
expenses
|
$16,154
|
$14,931
|
8 %
|
|
$31,595
|
$29,639
|
7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
($15,348)
|
($12,882)
|
19 %
|
|
($29,098)
|
($23,811)
|
22 %
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain
(loss)
|
($954)
|
$142
|
(772 %)
|
|
($355)
|
$254
|
(240 %)
|
|
Interest
expense
|
($2,203)
|
($1,321)
|
67 %
|
|
($4,382)
|
($2,387)
|
84 %
|
|
Other (expense)
income
|
($152)
|
$3,048
|
(105 %)
|
|
($491)
|
$3,004
|
(116 %)
|
|
Transaction-related
costs
|
($54)
|
$-
|
NA
|
|
($539)
|
$-
|
NA
|
|
Total
non-operating
(expenses) income
|
($3,363)
|
$1,869
|
(280 %)
|
|
($5,767)
|
$871
|
(762 %)
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
($18,711)
|
($11,013)
|
70 %
|
|
($34,865)
|
($22,940)
|
52 %
|
|
|
|
|
|
|
|
|
|
Recovery of income
taxes
|
$4,467
|
$6,739
|
(34 %)
|
|
$8,082
|
$9,615
|
(16 %)
|
|
|
|
|
|
|
|
|
|
Loss
|
($14,244)
|
($4,274)
|
233 %
|
|
($26,783)
|
($13,325)
|
101 %
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
|
Exchange differences
on
translation of operations in
currencies other than Canadian
dollars
|
($107)
|
($376)
|
(72 %)
|
|
($500)
|
($556)
|
(10 %)
|
|
|
|
|
|
|
|
|
|
Loss and
comprehensive loss
|
($14,351)
|
($4,650)
|
209 %
|
|
($27,283)
|
($13,881)
|
97 %
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss
per share (in dollars)
|
($0.67)
|
($0.21)
|
|
|
($1.27)
|
($0.65)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number
of shares outstanding
Basic and diluted (in whole
numbers)
|
21,221,283
|
20,551,508
|
|
|
21,117,461
|
20,532,815
|
|
Non-GAAP Financial Measures and non-GAAP Ratios
Reconciliation Tables
Adjusted EBITDA and Adjusted EBITDA Margin
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|
2022
|
2021
|
2022
|
2021
|
|
Net
loss
|
($14,244)
|
($4,274)
|
($26,783)
|
($13,325)
|
|
Amortization and
depreciation(1)
|
$8,803
|
$8,975
|
$17,646
|
$16,991
|
|
Share-based
compensation
|
$686
|
$398
|
$1,719
|
$662
|
|
Unrealized and
realized foreign exchange
|
$954
|
($142)
|
$355
|
($254)
|
|
Interest
expense
|
$2,203
|
$1,321
|
$4,382
|
$2,387
|
|
Other expense
(income)
|
$152
|
($3,048)
|
$491
|
($3,004)
|
|
Receivable factoring
banking fees
|
$205
|
$141
|
$363
|
$283
|
|
Transaction-related
costs
|
$54
|
$-
|
$539
|
$-
|
|
Recovery of income
taxes
|
($4,467)
|
($6,739)
|
($8,082)
|
($9,615)
|
|
Adjusted
EBITDA(2)
|
($5,654)
|
($3,368)
|
($9,370)
|
($5,875)
|
|
Total
revenues
|
$99,928
|
$118,058
|
$198,764
|
$224,553
|
|
Adjusted EBITDA
Margin(2)
|
(5.7 %)
|
(2.9 %)
|
(4.7 %)
|
(2.6 %)
|
|
(1)
|
Includes depreciation
and amortization reported in cost of revenue and operating expenses
for all periods.
|
|
(2)
|
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
June 30,
|
Six months ended
June 30,
|
|
2022
|
2021
|
2022
|
2021
|
|
Revenue
|
$99,928
|
$118,058
|
$198,764
|
$224,553
|
|
Less: content creator
and third-party platform
fees
|
($91,268)
|
($108,371)
|
($180,507)
|
($204,845)
|
|
BBTV
Share(1) (A)
|
$8,660
|
$9,687
|
$18,257
|
$19,708
|
|
|
|
|
|
|
Gross
Profit
|
$806
|
$2,049
|
$2,497
|
$5,828
|
|
Add: amortization
associated with intangible
assets acquired as part of the Business
Combination Transaction
|
$7,460
|
$7,142
|
$14,945
|
$12,983
|
|
Adjusted Gross
Profit(1) (B)
|
$8,266
|
$9,191
|
$17,442
|
$18,811
|
|
|
|
|
|
|
Adjusted Gross
Margin(1) (B/A)
|
95.5 %
|
94.9 %
|
95.5 %
|
95.4 %
|
|
(1)
|
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
June 30,
|
Six months ended
June 30,
|
|
2022
|
2021
|
2022
|
2021
|
|
Cash flow from
(used in) operating activities
|
($6,361)
|
($10,690)
|
($14,365)
|
($14,656)
|
|
Purchase of property
and equipment
|
($61)
|
($62)
|
($246)
|
($123)
|
|
Purchase or
development of intangible assets
|
($757)
|
($403)
|
($1,416)
|
($696)
|
|
Free Cash
Flow(1)
|
($7,179)
|
($11,155)
|
($16,027)
|
($15,475)
|
|
(1)
|
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.
Links to SEDAR filings, conference call recordings and press
releases are available on the investor website at:
https://investors.bbtv.com/
Key Metric Definitions
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.
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 reiterating our
guidance for over 40% growth in our Plus Solutions segment for
2022; we see significant fundamental tailwinds driving revenue
contribution in our business, which include the expedited
activation of YouTube Shorts monetization, which could be worth
approximately $90 million in
incremental revenue, and the diversification of our Base Solutions
to additional platforms like Facebook; we see a clear path to
Adjusted EBITDA profitability for the business; management is
comfortable that it has adequate liquidity for at least the next 12
months; Plus Solutions should continue to help contribute to
further margin expansion in future quarters; management expects
Gross Profit to grow at a faster pace than the Company's top-line
revenue; Adjusted Gross Margin2 should remain stable and
above 90% for the foreseeable future; Alphabet's acceleration of
its plans to monetize YouTube Shorts should cascade through
to BBTV; such monetization is starting ahead of expected timing;
once it becomes monetized across BBTV's entire library, it could
represent incremental revenue of approximately $90 million dollars annually across our Base
Solutions at current market rates and we therefore expect RPMs to
trend upward. 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 assumptions
stated in footnotes 1 and 4 on pages 1 and 4, respectively, hereof,
as well as the Company's assumptions that current industry growth
trends will continue and the Company's growth plans will not change
in any material respect; its internal financial forecasts and
models, including its estimates of costs and revenue, are accurate;
YouTube Shorts will be monetized as currently anticipated by
Alphabet and the Company and that BBTV will immediately realize the
benefit of that monetization; the Company's Plus Solutions revenue
will continue to grow as expected and to show greater margins than
its Base Solutions; RPMs will increase; the Company's
business will otherwise expand; our creators and our
strategic and other partners will perform as contractually
required; we will be able to seamlessly enter into new markets and
diversify into new platforms; we will be able to obtain and
maintain financing on acceptable terms; as well as that our
assumptions regarding foreign exchange rates and other matters are
correct. 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; the Company's need for additional capital; the
Company's significant reliance on its relationship with one digital
platform; and the impact of the continuing COVID-19 pandemic and of
current economic uncertainty; as well as the factors discussed
under "Risk Factors" in the Company's Annual Information Form dated
March 29, 2022 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.
Contacts:
Media Relations
Mark
Funston,
Head of Marketing and PR,
778-288-4950
mfunston@bbtv.com
Investor Relations
ir@bbtv.com
Ron Shuttleworth
Partner
Oak Hill Financial Inc
(647)–500–7371
rshuttleworth@oakhillfinancial.ca
BBTV-F
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SOURCE BBTV Holdings Inc.