- Revenues of US$11.9 million in
Q3-2022 compared to US$6.8 million in
Q3-2022, marking the highest quarterly revenues in the Company's
history.
- Adjusted EBITDA1 grew 78% to US$1.2 million in Q3/2022, compared to
US$0.7 million in Q3/2021
- On a trailing twelve-month basis, sales have grown 85% to
over US$35 million with Adjusted
EBITDA1 of US$0.6
million.
- CTV/OTT sales increased by 132% to $6.7 million, compared to $2.9 million in the prior year's quarter
- Outlook for Q4-2022 remains strong; expecting positive
Adjusted EBITDA1 for FY2022
- Increased average deal size, with existing clients driving
76% of quarterly revenues; addition of new Fortune 500
nameplates.
NOT FOR DISTRIBUTION TO UNITED
STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES. THIS NEWS RELEASE DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY
ANY SECURITIES IN THE UNITED
STATES. ANY SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S.
SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO U.S. PERSONS UNLESS REGISTERED UNDER THE U.S.
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE.
TORONTO, Nov. 29,
2022 /CNW/ -- Sabio Holdings Inc. (TSXV: SBIO)(OTCQX:
SABOF) (the "Company" or "Sabio"), a leading provider
of Connected TV ("CTV")/over-the-top ("OTT") advertising platforms
validated by performance, is pleased to announce its unaudited
financial results for the third quarter ended September 30, 2022. Unless otherwise
indicated, all amounts are expressed in U.S. dollars.
"Sabio has become one of the fastest growing technology and
solutions providers in the rapidly expanding CTV and OTT
advertising space as demonstrated by delivering 132% (virtually all
organic) year-over-year revenue growth, substantially higher than
the market", said Aziz Rahimtoola,
Chief Executive Officer. "Our unique App Science™ data and
analytics approach to reaching CTV/OTT consumers and cord-cutters
continues to resonate with advertisers who are looking for
solutions that help maximize ROI."
Sajid Premji, Sabio's CFO, added,
"Supported by a fifth consecutive quarter of record revenues
coupled with increasing operating leverage, are pleased to have
delivered a record third quarter Adjusted
EBITDA1 of US$1.2
million, an increase of 78% over the prior year's quarter.
Underpinned by our strength in CTV and OTT streaming, which has now
become Sabio's dominant sales category, we expect strong revenue
growth in the fourth quarter on both a sequential and
year-over-year basis and to end 2022 with positive Adjusted
EBITDA1 for the fiscal year. Moreover, we
continue to be well capitalized, having ended the quarter with its
highest cash balance in the Company's history, while still having
over US$3 million of untapped credit
available on our line of credit with Avidbank."
1 See "Use of Non-IFRS Measures" below
Third Quarter 2022 Financial Highlights
- Sabio delivered record revenues of US$11.9 million in Q3/2022, an increase of 75%
compared to Q3/2021. The increase was primarily organic. CTV/OTT
generated revenues of US$6.7 million
in Q3/2022 compared to US$2.9 million
in Q3/2021. This 132% increase marks the first time in the
Company's history that CTV/OTT became the dominant sales category
for a quarter, making up 56% of our sales mix, as we continue to
capitalize on, and outpace, the double-digit growth in the US CTV
and OTT streaming markets.
- Mobile generated revenues of US$5.0
million in Q3/2022, up 27% from US$3.9 million in Q3/2021.
- Gross Profit of US$7.3 million in
Q3/2022, up from US$4.1 million in
Q3/2021. Gross Margin was 61.4%, compared to 60.8% in Q3/2021. The
increase in margin was partially attributable to a favorable
product mix with CTV and OTT streaming becoming the Company's
largest sales category during the quarter and the increased
bundling of App Science™. As the Company continues to integrate the
newly acquired Vidillion business, gross margins also benefited
from the implementation of some of the operational synergies
identified during our pre-acquisition due diligence.
- Adjusted EBITDA1 grew 78% to US$1.2 million in Q3/2022, compared to
US$0.7 million in Q3/2021. The
increase was primarily attributable to the higher revenue and
improved gross margins over the prior year's period. Adjusted
EBITDA also benefited from a sequential moderation in operating
expense growth from the previous quarter. Operating margins also
remained consistent from the prior year's quarter, despite the
added costs of being public (versus a private company in the
comparable period).
- As of September 30, 2022, the
Company had record cash of US$3.6
million, as compared to US$0.5
million on September 30, 2021.
Management believes it is well funded, with sufficient cash on hand
to meet its growth objectives.
- As of September 2022, the Company
had US$3.9 million outstanding under
its credit facility with Avidbank.
- On September 7, 2022, 262,000
Restricted Stock Units ("RSUs") of the Company were granted to a
senior-level employee at the most recent closing trading price of
the Company's common shares on the TSX Venture Exchange from the
grant date of CAD$1.00. The RSUs will
vest over three years with 1/3 vesting at the one-year anniversary
of the grant and quarterly vesting over the next 2 years.
1 See "Use of Non-IFRS Measures" below
Events Subsequent to September 30,
2022:
- On October 14, 2022, 239,375
share options of the Company were granted to certain Company
employees at an exercise price of CAD$0.80. The options will vest quarterly from
the grant date over a vesting period of 2 to 3 years. 395,313 RSUs
of the Company were also granted at the grant-date fair-value of
the Company's common shares of CAD$0.80. One hundred thirty-seven thousand five
hundred of these RSUs were granted to directors of the Company and
will fully vest on the first anniversary of the grant date. The
remaining 257,813 RSUs were granted to employees and contractors of
the Company. They will vest over two years, with 1/2 vesting at the
one-year anniversary of the grant and quarterly vesting over the
second year.
- On November 14, 2022, the
Depository Trust Company ("DTC") completed its eligibility review
and approved Sabio Holdings Inc. (OTCQX: SABOF). Sabio Holdings is
now eligible for book entry and depositary services through DTC in
the United States.
- On November 21, 2022, the Company
entered a lease for a new office in Surat, India, with a lock-in period of 3 years from
the rent commencement date. The lease contains an option for the
Company to renew for two terms of three years each, and the sum of
monthly base rent and maintenance charge less security deposit for
the assured period is approximately $81,467 (INR 6,638,970).
Outlook
The Company experienced significant revenue expansion in the
three and nine months that ended September
30, 2022, and ended September 30,
2022, compared to the prior year's comparable periods. Our
revenue growth was driven by adding new, Fortune® 100 brands and
deepening relationships with existing clientele. In the fourth
quarter of 2022, Sabio expects to generate strong revenue growth
and gain market share as it continues to benefit from its
strengthened salesforce, investments in our political and advocacy
apparatus, highly differentiated product offerings, including the
commercialization of our App Science business and the completion of
an end-to-end, CTV/OTT ecosystem through our acquisition of
Vidillion. As a result, we are uniquely positioned to continue to
capitalize on the burgeoning CTV/OTT streaming advertising market,
with CTV and OTT streaming emerging as our dominant sales category
for the nine months. Management believes the heavy investment
period in its current operating infrastructure is mainly complete,
as demonstrated by improvements in operating margin in the third
quarter. We expect to end 2022 with positive Adjusted
EBITDA1 for the full year 2022 and see continued
improvements in operating margin in 2023. To the extent we find
suitable and attractive acquisition candidates that are
complementary to our long-term objectives, the Company may also
pursue further inorganic growth through strategic business
acquisitions.
Selected Financial Highlights:
The tables below set out selected financial information relating
to Sabio Holdings Inc. and should be read in conjunction with Sabio
Holdings Inc.'s condensed interim consolidated financial
statements, including the notes thereto, and MD&A for the three
and nine months ended September 30,
2022, and September 30, 2021,
copies of which can be found under Sabio Holdings Inc.'s profile on
SEDAR at www.sedar.com.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the nine
months ended
|
|
September 30,
2022
|
|
September 30,
2021
|
|
September 30,
2022
|
|
September 30,
2021
|
|
$
|
|
$
|
|
$
|
|
$
|
Revenue
|
11,919,696
|
|
6,817,536
|
|
24,698,971
|
|
13,629,549
|
Gross profit
|
7,312,802
|
|
4,142,217
|
|
14,992,060
|
|
8,307,234
|
Gross margin
|
61.4 %
|
|
60.8 %
|
|
60.7 %
|
|
61.0 %
|
Adjusted
EBITDA(1)
|
1,195,187
|
|
672,661
|
|
(1,037,434)
|
|
172,317
|
Net increase in cash
and cash equivalents during the period
|
1,149,639
|
|
248,666
|
|
330,284
|
|
418,536
|
Cash and cash
equivalents - end of the period
|
3,610,619
|
|
466,426
|
|
3,610,619
|
|
466,426
|
|
|
|
|
|
|
|
|
Reconciliation to
Adjusted EBITDA1
|
|
|
For the three
months ended
|
|
For the nine
months ended
|
September 30,
2022
|
|
September 30,
2021
|
|
September 30,
2022
|
|
September 30,
2021
|
$
|
|
$
|
|
$
|
|
$
|
Income (Loss) for
the period
|
657,774
|
|
71,273
|
|
(2,862,965)
|
|
(1,132,635)
|
Finance
Costs
|
139,048
|
|
354,826
|
|
453,330
|
|
949,543
|
Transaction
Costs
|
975
|
|
69,038
|
|
156,752
|
|
382,098
|
Amortization of
intangible Assets
|
88,732
|
|
148,792
|
|
322,392
|
|
498,796
|
Stock-based
compensation
|
160,086
|
|
28,614
|
|
570,681
|
|
307,245
|
Amortization of
lease
|
94,813
|
|
-
|
|
224,274
|
|
23,615
|
Gain on loan
forgiveness
|
-
|
|
(20,000)
|
|
-
|
|
(1,122,500)
|
Settlement
fees
|
-
|
|
-
|
|
-
|
|
162,000
|
Income taxes
(recovery)
|
(237)
|
|
(8,198)
|
|
2,674
|
|
2,492
|
State and local taxes
(recovery)
|
996
|
|
19,149
|
|
36,206
|
|
54,736
|
Loss on disposal of
intangibles
|
-
|
|
-
|
|
6,222
|
|
-
|
Severance
expenses
|
53,000
|
|
9,167
|
|
53,000
|
|
46,927
|
Adjusted
EBITDA
|
1,195,187
|
|
672,661
|
|
(1,037,434)
|
|
172,317
|
1 See "Use of Non-IFRS Measures"
below
The financial disclosures in this news release are subject to
several cautionary statements, assumptions, contingencies, and
risks as outlined in set this news release. The foregoing outlook
and expectations constitute forward-looking statements and
financial outlook and are qualified in their entirety by the
"Forward-Looking Statements" cautionary statement below. Readers
are cautioned that this release if for information purposes only
and may not be appropriate for other purposes.
The financial results set forth above have not been audited and
are based on a review conducted by the Company's independent
auditor, MNP LLP. The Company's auditor has not audited the
accompanying interim financial results, accordingly, does not
express an opinion with respect thereto. Furthermore, the unaudited
financial results have been reviewed by the audit committee of the
Company and approved by its board of directors. These unaudited
financial results however should not be viewed as a substitute for
audited financial statements prepared in accordance with
International Financial Reporting Standards (IFRS) and are not
necessarily indicative of the Company's results for any future
period. In addition, the results highlighted in this release are
not a comprehensive statement of the Company's financial results. A
more complete description of the Company's financial position is
provided in the Sabio's unaudited consolidated financial
statements, including the notes thereto, and management's
discussion and analysis (MD&A) for the three months
ended September 30, 2022, and September 30, 2021,
which can be found under Sabio's profile on SEDAR
at www.sedar.com.
Please Note: Investors are urged to consider closely the
disclosures in the Company's annual and quarterly reports and other
public filings available under Sabio's profile on SEDAR at
www.sedar.com
Conference Call:
The Company will host an investor conference call for the three
months ending September 30, 2022, at
9:00 a.m. ET on Tuesday, November 29,
2022. The webinar details are below:
Date: November 29, 2022
Time: 9:00 a.m. ET (6:00 a.m. PT)
Webinar Registration: https://bit.ly/3zZRDfL
Or
dial:
|
For higher quality,
dial a number based on your current location.
Canada:
+1 778 907 2071 (Vancouver local)
+1 647 374 4685 (Toronto local)
|
Webinar ID:
|
825 2778
0161
|
Please connect 5 minutes before the conference call to ensure
time for any software download.
About Sabio
Sabio Holdings Inc. (TSXV: SBIO) (OTCQX: SABOF) is one of the
fastest-growing CTV/OTT technology and service providers in the
high-growth ad-supported video-on-demand (VOD) and streaming space.
Its cloud-based CTV/OTT technologies provide publishers with
distribution, monetization, and analytics while delivering ROI
validation for brands and agencies. The Sabio Holdings portfolio is
comprised of: Sabio — our trusted and transparent content
monetization DSP; App Science™ — our cutting edge, non-panel based,
real-time measurement and attribution SAAS platform; and Vidillion
— our cloud-based ad-insertion, and content distribution and
management platform.
For more information, visit: sabioholding.com
Use of Non-IFRS Measures
This press release makes reference to certain non-IFRS
(International Financial Reporting Standards) measures including,
but not limited to, Adjusted EBITDA. These measures do not
have a standardized meaning prescribed by IFRS and therefore they
may not be comparable to similarly titled measures presented by
other companies and should not be construed as an alternative to
other financial measures determined in accordance with IFRS.
Rather, these non-IFRS measures are provided as additional
information to complement IFRS measures by providing a further
understanding of operations from management's perspective.
Accordingly, non-IFRS measures should not be considered in
isolation nor as a substitute for analysis of financial information
reported under IFRS. Management believes that these non-IFRS
measures provide useful information to investors in measuring the
financial performance of Sabio for the reasons outlined below.
Management uses adjusted earnings before interest, income taxes,
depreciation, and amortization ("Adjusted EBITDA") as a key
financial metric to evaluate Sabio's operating performance as a
complement to results provided in accordance with IFRS. The term
"Adjusted EBITDA", as defined by management, refers to net income
(loss) before adjusting earnings for finance costs, income taxes,
stock-based compensation, amortization, non-recurring items, and
severance costs.
Management believes that the items excluded from Adjusted EBITDA
are not connected to and do not represent the operating performance
of Sabio. Management believes that Adjusted EBITDA is useful
supplemental information as it provides an indication of the
results generated by Sabio's main business activities prior to
taking into consideration how those activities are financed and
taxed as well as expenses related to stock-based compensation,
depreciation, amortization, restructuring costs, other expense
(income), and foreign exchange (gain) loss. Accordingly, management
believes that this measure may also be useful to investors in
enhancing their understanding of Sabio's operating performance. It
is a key measure used by Sabio's management and board of directors
to understand and evaluate Sabio's operating performance, to
prepare annual budgets and to help develop operating plans.
Forward-Looking Statements
This press release may contain certain forward-looking
information and statements ("forward-looking information")
within the meaning of applicable Canadian securities legislation,
including but not limited to the Company's operations, growth and
sales expectations and business plans, the Company's outlook
for the fourth quarter of 2022 and fiscal year 2023, and its
expectations with respect to revenue growth and cash flow
management, that are not based on historical fact, including
without limitation statements containing the words "believes",
"anticipates", "plans", "intends", "will", "should", "expects",
"continue", "estimate", "forecasts" and other similar
expressions. Readers are cautioned to not place undue reliance on
forward-looking information. Actual results and developments may
differ materially from those contemplated by these statements. The
Company undertakes no obligation to comment on analyses,
expectations or statements made by third-parties in respect of the
Company, its securities, or financial or operating results (as
applicable). Although the Company believes that the expectations
reflected in forward-looking information in this press release are
reasonable, such forward-looking information has been based
on expectations, factors and assumptions concerning future events
that may prove to be inaccurate and are subject to numerous risks
and uncertainties, certain of which are beyond the Company's
control, including the Contract not yielding the revenue
anticipated, the effect of the macro-economic environment adversely
impacting the Company's business more than anticipated, unexpected
funding and cash flow management difficulties, and the other risk
factors disclosed in the Company's filing statement and
management's discussion and analysis (MD&A), which are
publicly available on SEDAR
at www.sedar.com. Actual financial results may
differ materially from the financial outlook provided in this press
release and the financial outlook has not been audited or reviewed.
The Company has assumed that the material factors referred to
herein will not cause such forward-looking statements and
information to differ materially from actual results or events.
However, there can be no assurance that such assumptions will
reflect the actual outcome of such items or factors. The
forward-looking information contained in this press release is
expressly qualified by this cautionary statement and is made as of
the date hereof. The Company disclaims any intention and has no
obligation or responsibility, except as required by law, to update
or revise any forward-looking information, whether as a result of
new information, future events or otherwise.
This news release shall not constitute an offer to sell or
the solicitation of an offer to buy any securities in any
jurisdiction.
Neither the TSX Venture Exchange nor its Regulation
Service Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
™ App Science is a trademark or registered trademark of Sabio
Inc. in the United States,
Canada, and other countries.
SOURCE Sabio Holdings Inc.