VANCOUVER, BC, Nov. 14,
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 Q3 2022 and nine
month financial results for the period ended on September 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.
"TikTok's micro-content format has been a competitive disruptor
in the video content space for several quarters," said Shahrzad Rafati, Chairperson and CEO of BBTV.
"YouTube Shorts is emerging as a formidable alternative to TikTok
and represents approximately 26% of our total views after we signed
up 1.1 billion YouTube Short views in Q3 alone, representing a
sequential quarterly growth rate in YouTube Shorts views of 33%.
Once these are monetized, we anticipate a significant improvement
in RPMs and views. Notwithstanding, we have mitigated the impact of
declining overall views by concentrating on growing higher margin
Plus Solutions revenue streams with our largest Plus Solution,
Content Management, having grown by 24% this quarter and by a
combined 40% for the twelve months ended September 30, 2022. Subsequent to quarter-end, we
announced the acquisition of Outloud Media, which is a key offering
in Multi-Platform Partnerships for BBTV creators. The Outloud Media
asset acquisition helps us distribute and monetize creator content
across multiple social media platforms like Meta, and has among the
highest gross margins across both Base and Plus Solutions revenue
streams."
Q3 2022 Financial and Operational Highlights:
- The Company ended the quarter with $20.8
million of cash and $10.6
million drawn on its overdraft facility, both of which are
comparable to the previous quarter. Effective September 30, 2022, BBTV reduced part of its
long-term debts by 40% through debt forgiveness to position the
Company for a potential new debt financing to further strengthen
the balance sheet and fuel growth.
- BBTV's cash burn rate has reduced significantly from Q2 2022
due to its cost optimization program, under which overall headcount
was reduced by approximately 14%. As a result, Q3 2022
operating costs declined sequentially by $2.2 million from Q2 2022. The Company expects
its cost optimization program will result in further reductions in
operating costs in the coming months.
- While overall views continued to trend lower, being down
approximately 10% year-over-year, data shows that the COVID-related
pullback in viewership appears to have subsided and begun to
normalize as we exit Q3 2022 with views up 1% sequentially from Q2
2022 to Q3 2022, which is more favourable than the sequential
seasonal decline typically seen in past years. Views retention
remained exceptionally strong at 98% for Q3 2022 and 93% LTM
September 2022.
- Over the past few quarters, YouTube Shorts viewership
consistently represented 20% of BBTV's total views. Since
activating its Content Acquisition team to pursue YouTube Shorts
content in Q3 2022, the Company has signed creators generating 1.1
billion monthly views, increasing YouTube Shorts to 26% of total
views in just one quarter, or a 33% sequential increase. As a
result, it's been a catalyst for views growth and it also increases
YouTube Shorts future revenue potential. Google recently
publicly stated that shorts monetization and revenue sharing with
creators would begin early next year.
- While RPMs were down 12% year-over-year in Q3 2022, when
excluding YouTube Shorts views, RPMs were only down 2%
year-over-year. This highlights that despite the recessionary
environment, RPMs have remained relatively stable, particularly
given that BBTV's performance is closely tied to YouTube's, which
continues to be the most resilient platform for monetization in the
creator economy.
- Revenues from the Company's largest Plus Solution, Content
Management, grew by 24% in Q3 2022 in comparison to the same
quarter last year, and now represents 22% of the Company's Adjusted
Gross Profit1.
- While Plus Solutions revenue has grown by 40% over the last 12
months, with the recessionary environment so far in the latter half
of this year, management is revising its 2022 year-over-year
revenue growth rate guidance for Plus Solutions to 30%. In
addition, management is confident that Plus Solutions will see more
than 30% year-over-year revenue growth in 2023, driven by the
strength of BBTV's Content Management division, particularly during
the second half of 2023.
- Gross Margin Excluding PPA
Amortization2 improved by 1% year-over-year and
this improving trend is expected to continue as the Company further
scales its Plus Solution revenues which have gross margins 3-4X
higher than Base Solutions. Plus Solutions now represents 11%
of total revenue, and 30-40% of total Adjusted Gross
Profit1.
Content Management
BBTV's Content Management offering is proven to build and grow
engaged communities for the Company's clients. BBTV is uniquely
positioned through its solutions to make large and established
consumer brands relevant to the digital generation.
BBTV's unique combination of technology, data, and reach
provides major media companies and brands Channel Management,
Rights Management, and Content Development that create
low-cost fan bases that generate high brand ROI which are otherwise
unreachable through traditional media.
During the quarter, the Company signed a partnership deal with
Harlem Globetrotters, providing 360 solutions across a number of
platforms including YouTube & Meta. BBTV also signed an
agreement with Revolt TV to manage their video strategy on
Facebook.
Subsequent to quarter end, the Company also signed agreements
with premier Hispanic Mixed Martial Arts (MMA) Sports Franchise,
Combate Global, and Wondery, Amazon's subsidiary podcast
network. The Company's pipeline of opportunities for Content
Management with major publishers has never been stronger.
_______________________________________
|
1 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.
|
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.
|
Outloud Media Acquisition
Subsequent to quarter end, BBTV announced the acquisition of the
assets of Outloud Media, a Detroit-based creator economy business with
expertise distributing and monetizing creator content across
multiple social media platforms like Facebook and Snapchat. The
acquisition bolsters BBTV's Multi-Platform Partnership solution,
which provides content creators additional revenue across multiple
social platforms.
The acquisition is mainly structured as a 5-year performance
earn-out of up to US$5 million. The
performance-based earn-out will be calculated as a percentage of
shareable revenue from Facebook and Snapchat, which is comparable
to gross profit less certain additional direct operating costs.
Q3 2022 Financial Tables:
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
Q3
2022(1)
|
Q3
2021(1)
|
$
Change
|
%
Change
|
Q3
2022(1)
|
Q3
2021(1)
|
$
Change
|
%
Change
|
Base Solutions
revenue
|
$84,563
|
$104,079
|
($19,516)
|
(19 %)
|
$257,519
|
$310,971
|
($53,452)
|
(17 %)
|
Plus Solutions
revenue
|
$10,513
|
$9,201
|
$1,312
|
14 %
|
$36,321
|
$26,862
|
$9,459
|
35 %
|
Total
revenue
|
$95,076
|
$113,280
|
($18,204)
|
(16 %)
|
$293,840
|
$337,833
|
($43,993)
|
(13 %)
|
Gross profit (which
includes PPA
Amortization)
|
$703
|
$1,793
|
($1,090)
|
(61 %)
|
$3,200
|
$7,621
|
($4,421)
|
(58 %)
|
Gross Margin (which
includes PPA
Amortization)
|
1 %
|
2 %
|
|
|
1 %
|
2 %
|
|
|
Adjusted Gross
Profit
|
$ 8,173
|
$ 8,945
|
($772)
|
(9 %)
|
$ 25,615
|
$ 27,756
|
($2,141)
|
(8 %)
|
Gross Margin Excluding
PPA
Amortization
|
9 %
|
8 %
|
|
|
9 %
|
8 %
|
|
|
Net loss
|
($4,775)
|
($10,490)
|
$5,715
|
(54 %)
|
($31,558)
|
($23,815)
|
($7,743)
|
33 %
|
Adjusted
EBITDA
|
($3,181)
|
($1,991)
|
($1,190)
|
60 %
|
($12,551)
|
($7,866)
|
($4,685)
|
60 %
|
Cash flow from (used
in) operating
activities
|
($3,286)
|
$10,279
|
($13,565)
|
(132 %)
|
($17,651)
|
($4,377)
|
($13,274)
|
303 %
|
(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 Profit1, 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 Q3 2022 was
$8.2 million, a 9% decrease in
comparison to $8.9 million reported
for the same quarter last year due to the decrease in revenue
across Base Solutions.
- BBTV Share1 of revenue, which is a non-GAAP
financial measure and defined as revenue less content creator and
third-party platform fees, for Q3 2022 was $8.6 million, an 8% decrease compared to
$9.4 million reported for Q3
2021.
- Gross Margin Excluding PPA Amortization2, which is a
non-GAAP ratio and defined as Adjusted Gross Profit1
divided by revenue, was 8.6% in Q3 2022 up from 7.9% in Q3 2021 due
to the higher revenue mix of Plus Solutions. Plus Solutions
should continue to 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 Profit1 divided by BBTV
Share1, was 95.2% for Q3 2022, comparable to 95.6%
reported for Q3 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 Q3 2021 was primarily due to the changes in the
timing of receipts or payments of working capital items.
|
|
|
|
|
|
Three Months
Ended
|
|
Q3
2022(1)
|
Q2
2022(1)
|
$
Change
|
%
Change
|
Base Solutions
revenue
|
$84,563
|
$86,932
|
($2,369)
|
(3 %)
|
Plus Solutions
revenue
|
$10,513
|
$12,996
|
($2,483)
|
(19 %)
|
Total
revenue
|
$95,076
|
$99,928
|
($4,852)
|
(5 %)
|
Gross profit (which
includes PPA
Amortization)
|
$703
|
$806
|
($103)
|
(13 %)
|
Gross Margin (which
includes PPA
Amortization)
|
1 %
|
1 %
|
|
|
Adjusted Gross
Profit
|
$ 8,173
|
$ 8,266
|
($93)
|
(1 %)
|
Gross Margin Excluding
PPA
Amortization
|
9 %
|
8 %
|
|
|
Net loss
|
($4,775)
|
($14,244)
|
$9,469
|
(66 %)
|
Adjusted
EBITDA
|
($3,181)
|
($5,654)
|
$2,473
|
(44 %)
|
Cash flow from (used
in) operating
activities
|
($3,286)
|
($6,361)
|
$3,075
|
(48 %)
|
(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 Q2 2022 was primarily due to improved Adjusted
EBITDA performance.
Q3 2022 Key Metrics:
|
|
|
|
|
|
Three Months
Ended
|
|
Q3
2022
|
Q3
2021
|
Change
|
%
Change
|
|
|
|
|
|
Views
(billions)
|
96
|
107
|
(11)
|
(10 %)
|
RPMs (in
dollars)
|
$0.87
|
$0.99
|
($0.12)
|
(12 %)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Q3
2022
|
Q2
2022
|
Change
|
%
Change
|
|
|
|
|
|
Views
(billions)
|
96
|
95
|
1
|
1 %
|
RPMs (in
dollars)
|
$0.87
|
$0.94
|
($0.07)
|
(7 %)
|
Revenue for the three months ended September 30, 2022 decreased by $18.2 million or 16% 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.
Conference Call Details:
Monday, November 14th, 2022 at
2:15pm Pacific Time / 5:15pm Eastern Time
Participant Information:
Access code: 508645
Canada dial-in number (Toll Free):
1 833 950 0062
Canada dial-in number (Local): 1
226 828 7575
United States: 1 844 200
6205
United States (Local): 1 646 904
5544
All other locations: +1 929 526 1599
Press *1 to ask a question, *2 to withdraw your question, or *0 for
operator assistance.
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:
A recording will be available until
Monday, November 28 2022
UK (Local): 0204 525 0658
US (Local): 1 929 458 6194
US Toll Free: 1 866 813 9403
Canada: 1 226 828 7578
All other locations: +44 204 525 0658
Access Code: 632301
Income Statement:
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September
30,
|
2022
$
|
2021
$
|
%
change
|
|
2022
$
|
2021
$
|
%
change
|
|
|
|
|
|
|
|
|
Revenue
|
$95,076
|
$113,280
|
(16 %)
|
|
$293,840
|
$337,833
|
(13 %)
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
|
|
|
|
|
Content creator and
other fees
|
$86,508
|
$104,020
|
(17 %)
|
|
$267,101
|
$309,153
|
(14 %)
|
Amortization
|
$7,865
|
$7,467
|
5 %
|
|
$23,539
|
$21,059
|
12 %
|
Total cost of
revenue
|
$94,373
|
$111,487
|
(15 %)
|
|
$290,640
|
$330,212
|
(12 %)
|
|
|
|
|
|
|
|
|
Gross
profit
|
$703
|
$1,793
|
(61 %)
|
|
$3,200
|
$7,621
|
(58 %)
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Sales and
marketing
|
$6,762
|
$6,561
|
3 %
|
|
$23,049
|
$21,038
|
10 %
|
General and
administration
|
$3,993
|
$3,501
|
14 %
|
|
$12,870
|
$12,397
|
4 %
|
Research and
development
|
$1,290
|
$1,363
|
(5 %)
|
|
$4,030
|
$3,568
|
13 %
|
Share-based
compensation
|
$989
|
$265
|
273 %
|
|
$2,708
|
$927
|
192 %
|
Amortization and
depreciation
|
$944
|
$1,488
|
(37 %)
|
|
$2,916
|
$4,887
|
(40 %)
|
Total operating
expenses
|
$13,978
|
$13,178
|
6 %
|
|
$45,573
|
$42,817
|
6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
($13,275)
|
($11,385)
|
17 %
|
|
($42,373)
|
($35,196)
|
20 %
|
|
|
|
|
|
|
|
|
Foreign exchange
loss
|
($2,345)
|
($919)
|
155 %
|
|
($2,700)
|
($665)
|
306 %
|
Interest
expense
|
($2,383)
|
($2,232)
|
7 %
|
|
($6,765)
|
($4,619)
|
46 %
|
Gain on debt
modification
|
$11,264
|
-
|
NA
|
|
$11,264
|
$2,974
|
279 %
|
Other income
(expense)
|
$240
|
$60
|
300 %
|
|
($251)
|
$90
|
(379 %)
|
Transaction-related
costs
|
($59)
|
$-
|
NA
|
|
($598)
|
$-
|
NA
|
Total
non-operating
(expenses) income
|
$6,717
|
($3,091)
|
(317 %)
|
|
$950
|
($2,220)
|
(143 %)
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
($6,558)
|
($14,476)
|
(55 %)
|
|
($41,423)
|
($37,416)
|
11 %
|
|
|
|
|
|
|
|
|
Recovery of income
taxes
|
$1,783
|
$3,986
|
(55 %)
|
|
$9,865
|
$13,601
|
(27 %)
|
|
|
|
|
|
|
|
|
Loss
|
($4,775)
|
($10,490)
|
(54 %)
|
|
($31,558)
|
($23,815)
|
33 %
|
|
|
|
|
|
|
|
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
Exchange differences
on
translation of operations in
currencies other than Canadian
dollars
|
$272
|
$344
|
(21 %)
|
|
($228)
|
($212)
|
8 %
|
|
|
|
|
|
|
|
|
Loss and
comprehensive loss
|
($4,503)
|
($10,146)
|
(56 %)
|
|
($31,786)
|
($24,027)
|
32 %
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per
share (in dollars)
|
($0.22)
|
($0.51)
|
|
|
($1.49)
|
($1.16)
|
|
|
|
|
|
|
|
|
|
Weighted average
number
of shares outstanding
Basic and diluted (in whole
numbers)
|
21,474,508
|
20,696,888
|
|
|
21,237,784
|
20,588,151
|
|
Non-GAAP Financial Measures and non-GAAP Ratios
Reconciliation Tables
Adjusted EBITDA and Adjusted EBITDA Margin
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|
2022
|
2021
|
2022
|
2021
|
Net
loss
|
($4,775)
|
($10,490)
|
($31,558)
|
($23,815)
|
Amortization and
depreciation(1)
|
$8,809
|
$8,955
|
$26,455
|
$25,946
|
Share-based
compensation
|
$989
|
$265
|
$2,708
|
$927
|
Unrealized and
realized foreign exchange
|
$2,345
|
$919
|
$2,700
|
$665
|
Interest
expense
|
$2,383
|
$2,232
|
$6,765
|
$4,619
|
Gain on debt
modification
|
($11,264)
|
$-
|
($11,264)
|
($2,974)
|
Other expense
(income)
|
($240)
|
($60)
|
$251
|
$90
|
Receivable factoring
banking fees
|
$296
|
$174
|
$659
|
$457
|
Transaction-related
costs
|
$59
|
$-
|
$598
|
$-
|
Recovery of income
taxes
|
($1,783)
|
($3,986)
|
($9,865)
|
($13,601)
|
Adjusted
EBITDA
|
($3,181)
|
($1,991)
|
($12,551)
|
($7,866)
|
Total
revenues
|
$95,076
|
$113,280
|
$293,840
|
$337,833
|
Adjusted EBITDA
Margin
|
(3.3 %)
|
(1.8 %)
|
(4.3 %)
|
(2.3 %)
|
(1)
|
Includes depreciation
and amortization reported in cost of revenue and operating expenses
for all periods.
|
BBTV Share, Adjusted Gross Profit, and Adjusted Gross
Margin
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|
2022
|
2021
|
2022
|
2021
|
Revenue
|
$95,076
|
$113,280
|
$293,840
|
$337,833
|
Less: content creator
and third-party platform fees
|
($86,493)
|
($103,927)
|
($267,000)
|
($308,772)
|
BBTV Share
(A)
|
$8,583
|
$9,353
|
$26,840
|
$29,061
|
|
|
|
|
|
Gross
Profit
|
$703
|
$1,793
|
$3,200
|
$7,621
|
Add: amortization
associated with intangible assets
acquired as part of the Business Combination
Transaction
|
$7,470
|
$7,152
|
$22,415
|
$20,135
|
Adjusted Gross
Profit (B)
|
$8,173
|
$8,945
|
$25,615
|
$27,756
|
|
|
|
|
|
Adjusted Gross
Margin (B/A)
|
95.2 %
|
95.6 %
|
95.4 %
|
95.5 %
|
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
Definitions" section of this press release.
Free Cash Flow
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|
2022
|
2021
|
2022
|
2021
|
Cash flow from
(used in) operating activities
|
($3,286)
|
$10,279
|
($17,651)
|
($4,377)
|
Purchase of property
and equipment
|
($21)
|
($19)
|
($267)
|
($142)
|
Purchase or
development of intangible assets
|
($528)
|
($523)
|
($1,944)
|
($1,219)
|
Free Cash
Flow
|
($3,835)
|
$9,737
|
($19,862)
|
($5,738)
|
Free Cash Flow is a non-GAAP financial measure. Further details
on this measure is included in the "Key Metrics Definitions"
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 Metrics 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
are:
"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 once YouTube shorts are
monetized, we anticipate a significant improvement in RPMs and
views; BBTV reduced part of its long-term debts by 40% through debt
forgiveness to position the Company for a potential new debt
financing to further strengthen the balance sheet and fuel growth;
the Company expects its cost optimization program will result in
further reductions in the coming months; based on current trends,
forecasts, expected debt financing, and Adjusted EBITDA breakeven
timelines, management is comfortable that it has adequate liquidity
for the foreseeable future; the acquisition of YouTube Shorts views
in Q3 2022 increases YouTube Shorts future revenue potential; the
improving trend for Gross Margin Excluding PPA Amortization is
expected to continue as the Company further scales its Plus
Solution revenues which have gross margins 3-4X higher than Base
Solutions; management is revising its 2022 year-over-year revenue
growth rate guidance for Plus Solutions to 30%; management is
confident that Plus Solutions will see more than 30% year-over-year
revenue growth in 2023; Plus Solutions should continue to
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; and Adjusted Gross Margin2
should remain stable and above 90% for the foreseeable
future. 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 that reducing
part of its long-term debt positions the Company for a potential
new debt financing; industry growth trends in views and RPMs will
improve 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; the
monetization of YouTube Shorts will improve RPMs, views and revenue
potential; management's Adjusted EBITDA breakeven timelines will be
realized; the Company's Plus Solutions revenue will continue to
grow as expected and to show gross margins 3-4x higher than its
Base Solutions; RPMs will increase; the Company's business
will otherwise expand; the Company's cost optimization
program will continue to result in further cost reductions; 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 on a timely
basis; our assumptions regarding foreign exchange rates and other
matters are correct; and that there will be no changes in general
industry, market and economic conditions adverse to the
Company. 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,
which is not assured; the Company's significant reliance on its
relationship with one digital platform; and the impact of the
continuing COVID-19 pandemic and of the current recessionary
environment; the risks of potential claims of infringement by
the Company or its content providers of third party intellectual
property and other rights; changes in laws and regulations; as well
as other factors discussed in the Company's Final Long Form
Prospectus dated October 22, 2020,
its Annual Information Form dated March 29,
2022 and in our MD&A dated November 14, 2022 each 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.