VANCOUVER, BC, May 12, 2023
/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 Q1 2023 for the period ended on
March 31, 2023.
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.
"The first quarter saw early stages of YouTube Shorts
monetization, which now represents about 46% of total views in the
quarter. With more Shorts content coming online, total views in our
Base Solutions business grew year-over-year by 8%, our first growth
quarter since the end of the pandemic," said Shahrzad Rafati, Chairperson and CEO of BBTV.
"Our outlook for our monetization opportunity for our Base
Solutions increases substantially for the remainder of 2023 as a
result of growing views. In the first quarter, we began deploying
some of the largest Plus Solution contracts signed to date, which
should positively impact performance for the remainder of fiscal
year 2023. Our pipeline for Content Management solutions for the
quarter continues to be the strongest ever and we expect that Plus
Solutions revenue should continue to grow by 30% on an annualized
basis."
KB Brinkley, CFO of BBTV commented "We extended our cost
containment and optimization efforts by re-aligning operations
towards Plus Solutions, and removing costs from our increasingly
automated Base Solutions line of business. Our cost containment
efforts resulted in a 22% decline in operating expenses compared to
Q1 2022. Our liquidity remains adequate, allowing us to fulfill our
strategic plans while accelerating our path to profitability and
helping to create a buffer against potential macroeconomic risks
and uncertainties."
Q1 2023 Financial and Operational Highlights:
Management believes the Company's current cash on hand, the sale
of trade receivables pursuant to the receivables purchase
agreement, available credit, expected debt financing, and ongoing
cost optimization programs will provide sufficient liquidity to
meet its working capital requirements as well as its financial
obligations due.
BBTV ended Q1 2023 with $18.8
million in cash compared to $21.6
million in the previous year Q1. Its long-term debt balance
was $69.5 million as of March 31, 2023 with maturities primarily in 2026
or 2027, which is up by $17.0 million
from $52.5 million in the prior year
first quarter. The increase of debt is primarily related to the
$21.5 million MEP loan announced
during the quarter, which was partially offset by a reduction in
the Company's secured convertible promissory loan note by
approximately $12.8 million.
In the past two quarters, and especially during the first
quarter of 2023, the Company has worked to optimize margins
generated from Base Solutions. In that effort, the Company has
discontinued contracts with a number of creators for which margins
were very low in comparison to our portfolio of thousands of
creators, and to the market generally. These undertakings
negatively impacted Base Solutions views, Base Solutions revenue,
and total revenue in the short term, although gross margin on Base
Solutions revenue should be positively impacted over the coming
quarters. Initiatives to optimize gross margins will continue
throughout the year. Notwithstanding these optimization efforts,
total views for the quarter reached 113.2 billion, an 8% increase
compared to the previous year quarter, and a 12% increase compared
to Q4. The increase in views was driven by a 143% year-over-year
increase in YouTube Shorts viewership to 51.8 billion views in Q1,
which is approximately 46% of total views. For the first time since
the end of the pandemic, year-over-year views grew organically,
despite offsetting contract cancellations initiated by BBTV.
The Company continued efforts to optimize its cash cost base, to
re-align operations for maximum performance, and to accelerate
towards profitability. Combined with cost optimization completed
last year, the Company has reduced cash expenses in the Base
Solutions business. The Company continues to focus on operational
efficiencies and alignment towards maximum performance, and the
expense ratio in the Base Solutions business supports current
strategies going forward.
Overall, BBTV's operating expenses of $12.1 million have declined by $3.3 million or 22% compared to the previous year
Q1, and 6% compared sequentially to Q4 2022 due to staff reductions
and operational realignment. The Company expects to continue to
find ways to optimize operations in the coming months.
On February 1, 2023, YouTube began
to share monetization with BBTV for YouTube Shorts. Although the
first few months of YouTube Shorts monetization is modest, it is
inline with internal forecasts and monetization growth is tracking
as expected. Due to this early stage of monetization of Shorts
content, Revenue Per Thousand Views (RPMs) declined by 36% to
$0.53 compared to Q1 2022. Excluding
Shorts, the monetization of 61.6 billion standard form content
views remained steady near typical rates at $0.97, a 5% decline compared to $1.03 in Q1 2022. As YouTube Shorts RPMs track
higher, notwithstanding typical seasonality, overall RPMs are
expected to increase over time.
Plus Solutions, including popular solutions such as Content
Management and Direct Advertising Sales, deliver higher margin
monetization opportunities for BBTV. Overall, during Q1, Plus
Solutions represented approximately 15% of total revenue and 35-40%
of Adjusted Gross Profit compared to 13% and 30-35%, respectively,
in Q1 2022. With a large pipeline of mostly global enterprise
clients, Plus Solutions should continue to grow as a percentage of
total revenue and Adjusted Gross Profit, even as Shorts
monetization increases.
As of Q1, Content Management revenue is tracking as our
strongest Plus Solution with solid visibility on pipeline
conversion. During the quarter, the Company began deploying a major
Content Management contract that has the potential to become the
single largest Content Management revenue stream. As a result,
management expects Plus Solutions revenue to grow by 30% on an
annualized basis for fiscal 2023.
Overall, total revenue of $71.8
million declined by 27% compared to $98.8 million in Q1 2022 primarily due to a
higher mix of YouTube Shorts views, which are at early stages of
monetization, and some cancellations of unprofitable
contracts.
Outlook:
BBTV's monetization is closely tied to the performance of
YouTube. Consumer preference has shifted from long-form content to
micro-content across all major platforms, and while YouTube
introduced YouTube Shorts a number of years ago to respond to
consumer preferences, BBTV's monetization on YouTube Shorts only
began on February 1, 2023. This
format now represents about 46% of BBTV's viewership, up from 20%
of viewership in Q1 2022. Once monetization of YouTube Short views
matures across the Company's entire library, it could represent
significant incremental revenue to BBTV depending upon the uptake.
Google has stated publicly that, over time, it expects to close the
monetization gap between YouTube Shorts and regular YouTube
content.
Plus Solutions continue to represent significant revenue growth
potential for the Company as well as viewership and valuable
incremental revenue streams for content creators. Led by recent
Content Management contract success and a growing overall pipeline
for the solution, the Company expects to maintain a 30% annualized
growth rate for Plus Solutions for this fiscal year. Additionally,
Direct Advertising Sales should continue to grow.
Overall, the diversity of revenue streams, combined with
improved liquidity and cost optimization programs, have positioned
BBTV to weather future macro uncertainties while also accelerating
towards sustained profitability.
Q1 2023 Financial Tables:
|
|
|
|
|
|
Three Months
Ended
|
|
Q1
2023(1)
|
Q1
2022(1)
|
$
Change
|
%
Change
|
Base Solutions
revenue
|
$60,897
|
$86,024
|
($25,127)
|
(29 %)
|
Plus Solutions
revenue
|
$10,867
|
$12,812
|
($1,945)
|
(15 %)
|
Total
revenue
|
$71,764
|
$98,836
|
($27,072)
|
(27 %)
|
Gross profit (loss)
(which includes PPA Amortization)
|
($795)
|
$1,691
|
($2,486)
|
(147 %)
|
Gross Margin (which
includes PPA Amortization)
|
(1 %)
|
2 %
|
|
|
Adjusted Gross
Profit
|
$ 6,685
|
$ 9,176
|
($2,491)
|
(27 %)
|
Gross Margin Excluding
PPA Amortization
|
9 %
|
9 %
|
|
|
Net loss
|
($14,599)
|
($12,539)
|
($2,060)
|
16 %
|
Adjusted
EBITDA
|
($2,872)
|
($3,716)
|
$844
|
(23 %)
|
Cash flow from (used
in) operating activities
|
($10,844)
|
($8,004)
|
($2,840)
|
35 %
|
(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".
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Q1
2023(1)
|
Q4
2022(1)
|
$
Change
|
%
Change
|
Base Solutions
revenue
|
$60,897
|
$94,510
|
($33,613)
|
(36 %)
|
Plus Solutions
revenue
|
$10,867
|
$13,985
|
($3,118)
|
(22 %)
|
Total
revenue
|
$71,764
|
$108,495
|
($36,731)
|
(34 %)
|
Gross profit (which
includes PPA Amortization)
|
($795)
|
$2,088
|
($2,883)
|
(138 %)
|
Gross Margin (which
includes PPA Amortization)
|
(1 %)
|
2 %
|
|
|
Adjusted Gross
Profit
|
$ 6,685
|
$ 9,569
|
($2,884)
|
(30 %)
|
Gross Margin Excluding
PPA Amortization
|
9 %
|
9 %
|
|
|
Net loss
|
($14,599)
|
($165,718)
|
$151,119
|
(91 %)
|
Adjusted
EBITDA
|
($2,872)
|
($775)
|
($2,097)
|
271 %
|
Cash flow from (used
in) operating activities
|
($10,844)
|
$944
|
($11,788)
|
(1249 %)
|
(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".
|
Q1 2023 Key Metrics:
|
|
|
|
|
|
Three Months
Ended
|
|
Q1
2023
|
Q1
2022
|
Change
|
%
Change
|
|
|
|
|
|
Views
(billions)
|
113
|
105
|
8
|
8 %
|
RPMs (in
dollars)
|
$0.53
|
$0.82
|
($0.29)
|
(35 %)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Q1
2023
|
Q4
2022
|
Change
|
%
Change
|
|
|
|
|
|
Views
(billions)
|
113
|
101
|
12
|
12 %
|
RPMs (in
dollars)
|
$0.53
|
$0.94
|
($0.41)
|
(44 %)
|
Conference Call Details:
Friday, May
12, 2023 at 2:15pm Pacific
Time / 5:15pm Eastern Time
Operator Assisted Dial-In:
Access Code: 630766
North America (Toll Free): 1 833
470 1428
North America (Local): 1 404 975
4839
Global Dial-In Numbers
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.
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: 761297
North America (Toll Free): 1 866
813 9403
North America: 1 929 458 6194
Replay Expiration Date: Wednesday, May 26th,
2023 at 11:59 PM PDT
Income Statement:
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
2023
$
|
2022
$
|
%
change
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
$71,764
|
$98,836
|
(27 %)
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
|
|
|
|
|
Content creator and
other fees
|
|
|
|
|
$64,665
|
$89,321
|
(28 %)
|
Amortization
|
|
|
|
|
$7,894
|
$7,824
|
1 %
|
Total cost of
revenue
|
|
|
|
|
$72,559
|
$97,145
|
(25 %)
|
|
|
|
|
|
|
|
|
Gross profit
(loss)
|
|
|
|
|
($795)
|
$1,691
|
(147 %)
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
|
|
|
$5,167
|
$7,741
|
(33 %)
|
General and
administration
|
|
|
|
|
$3,993
|
$4,312
|
(7 %)
|
Research and
development
|
|
|
|
|
$1,192
|
$1,336
|
(11 %)
|
Share-based
compensation
|
|
|
|
|
$714
|
$1,033
|
(31 %)
|
Amortization and
depreciation
|
|
|
|
|
$1,024
|
$1,019
|
- %
|
Total operating
expenses
|
|
|
|
|
$12,090
|
$15,441
|
(22 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
|
|
($12,885)
|
($13,750)
|
(6 %)
|
|
|
|
|
|
|
|
|
Foreign exchange gain
(loss)
|
|
|
|
|
($60)
|
$599
|
(110 %)
|
Interest
expense
|
|
|
|
|
($2,738)
|
($2,179)
|
26 %
|
Other
expense
|
|
|
|
|
($963)
|
($339)
|
184 %
|
Transaction-related
recovery (costs)
|
|
|
|
|
$29
|
($485)
|
(106 %)
|
Total non-operating
expenses
|
|
|
|
|
($3,732)
|
($2,404)
|
55 %
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
|
|
|
($16,617)
|
($16,154)
|
3 %
|
|
|
|
|
|
|
|
|
Recovery of income
taxes
|
|
|
|
|
$2,018
|
$3,615
|
(44 %)
|
|
|
|
|
|
|
|
|
Loss
|
|
|
|
|
($14,599)
|
($12,539)
|
16 %
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
Exchange differences
on translation of foreign operations
|
|
|
|
|
$41
|
($392)
|
(110 %)
|
|
|
|
|
|
|
|
|
Loss and
comprehensive loss
|
|
|
|
|
($14,558)
|
($12,931)
|
13 %
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share (in dollars)
|
|
|
|
|
($0.68)
|
($0.60)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
Basic and diluted (in whole numbers)
|
|
|
|
|
21,489,682
|
21,016,374
|
|
Non-GAAP Financial Measures and non-GAAP Ratios Reconciliation
Tables:
Adjusted EBITDA and Adjusted EBITDA Margin
|
|
Three months ended
March 31,
|
|
|
|
2023
|
2022
|
Net
loss
|
|
|
($14,599)
|
($12,539)
|
Amortization and
depreciation(1)
|
|
|
$8,918
|
$8,843
|
Share-based
compensation
|
|
|
$714
|
$1,033
|
Unrealized and
realized foreign exchange
|
|
|
$60
|
($599)
|
Interest
expense
|
|
|
$2,738
|
$2,179
|
Other expense
(income)
|
|
|
$963
|
$339
|
Receivable factoring
banking fees
|
|
|
$381
|
$158
|
Transaction-related
costs
|
|
|
($29)
|
$485
|
Recovery of income
taxes
|
|
|
($2,018)
|
($3,615)
|
Adjusted
EBITDA
|
|
|
($2,872)
|
($3,716)
|
Total
revenues
|
|
|
$71,764
|
$98,836
|
Adjusted EBITDA
Margin
|
|
|
(4.0 %)
|
(3.8 %)
|
|
|
|
|
|
(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
March 31,
|
|
|
|
2023
|
2022
|
Revenue
|
|
|
$71,764
|
$98,836
|
Less: content creator
and third-party platform fees
|
|
|
($64,665)
|
($89,239)
|
BBTV Share
(A)
|
|
|
$7,099
|
$9,597
|
|
|
|
|
|
Gross Profit
(Loss)
|
|
|
($795)
|
$1,691
|
Add: amortization
associated with intangible assets acquired as part of the Business
Combination Transaction
|
|
|
$7,480
|
$7,485
|
Adjusted Gross
Profit (B)
|
|
|
$6,685
|
$9,176
|
|
|
|
|
|
Adjusted Gross
Margin (B/A)
|
|
|
94.2 %
|
95.6 %
|
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
March 31,
|
|
|
|
2023
|
2022
|
Cash flow from
(used in) operating activities
|
|
|
($10,844)
|
($8,004)
|
Purchase of property
and equipment
|
|
|
($3)
|
($185)
|
Purchase or
development of intangible assets
|
|
|
($402)
|
($659)
|
Free Cash
Flow
|
|
|
($11,249)
|
($8,848)
|
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 2022, BBTV had the fourth most unique
monthly viewers among digital platforms with more than 600 million
globally, who consumed more than 30 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
2022 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 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 our outlook for our monetization opportunity for our Base
Solutions increases substantially for the remainder of 2023 as a
result of growing views; in the first quarter, we began deploying
some of the largest Plus Solution contracts signed to date, which
should positively impact performance for the remainder of fiscal
year 2023; our liquidity remains adequate, allowing us to fulfill
our strategic plans while accelerating our path to profitability
and helping to create a buffer against potential macroeconomic
risks and uncertainties; management believes the Company's current
cash on hand, the sale of trade receivables pursuant to the
receivables purchase agreement, available credit, expected debt
financing, and ongoing cost optimization programs will provide
sufficient liquidity to meet its working capital requirements as
well as its financial obligations due; gross margin on Base
Solutions revenue should be positively impacted over the coming
quarters; initiatives to optimize gross margins will continue
throughout the year; the Company continues to focus on operational
efficiencies and alignment towards maximum performance, and the
expense ratio in the Base Solutions business supports current
strategies going forward; the Company expects to continue to find
ways to optimize operations in the coming months; as YouTube Shorts
RPMs track higher, notwithstanding typical seasonality, overall
RPMs are expected to increase over time; with a large pipeline of
mostly global enterprise clients, Plus Solutions should continue to
grow as a percentage of total revenue and total gross profit, even
as Shorts monetization increases; during the quarter, the Company
began deploying a major Content Management contract that has the
potential to become the single largest Content Management revenue
stream; management expects Plus Solutions revenue to grow by 30% on
an annualized basis for fiscal 2023; once monetization of YouTube
Short views matures across the Company's entire library, it could
represent significant incremental revenue to BBTV depending upon
the uptake; Plus Solutions continue to represent significant
revenue growth potential for the Company as well as viewership and
valuable incremental revenue streams for content creators; Direct
Advertising Sales should continue to grow; overall, the diversity
of revenue streams, combined with improved liquidity and cost
optimization programs, have positioned BBTV to weather future macro
uncertainties while also accelerating towards sustained
profitability. 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 growth
trends in views and RPMs overall will improve and the Company's
growth targets will not be adversely affected 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 over
time, with RPMs for YouTube Shorts having similar RPM rates to
long-form video content over time; the Company will continue to
acquire significant content management clients resulting in the
Company's Plus Solutions revenue continuing to grow as expected and
to show gross margins 3-4 times higher than its Base Solutions;
that BBTV will continue to acquire new content partners of the same
nature and type and at least at the same rate or better than it has
historically; the Company's business will otherwise expand; the
Company will continue to implement cost reductions; our content
providers and our strategic and other partners will perform as
contractually required; we will be able to seamlessly enter into
new markets and diversify to new platforms; we will be able to
increase our sales of advertising inventory as planned; 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 may not become profitable as
anticipated by management or at all; the Company's need for
additional capital on acceptable terms, which is not assured; the
Company's significant reliance on its relationship with YouTube;
the impact of the continuing COVID-19 pandemic and of economic
uncertainty; 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; future
market, consumption patterns and other trends may fail to meet or
exceed historical trends or current expectations; failure of the
Company to realize significant distribution on new platforms or at
all; as well as other factors discussed in the Company's Final Long
Form Prospectus dated October 22,
2020, its Annual Information Form dated March 31, 2023 and in our MD&A dated
May 12, 2023 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.