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BBTV Announces 1st Quarter 2022 Financial Results, Q1 Revenue Down 7% to $98.8 Million, Net Loss Rises
Wednesday, May 18, 2022Company Profile | Follow Company
Vancouver, BC, May 18, 2022--(T-Net)--BBTV Holdings Inc. (TSX: BBTV, OTCQX: BBTVF), a media tech company, today announced financial results for Q1 2022 ended on March 31, 2022.
All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards ("IFRS").
The company reported that its Plus Solutions revenue growth is expected to exceed 40% on an annual basis for 2022, or almost double previous annual growth rate guidance of 23% provided by the Company.
Shahrzad Rafati, Chair and CEO, BBTV
"Q1 2022 results show continued strong growth in higher margin Plus Solutions," said Shahrzad Rafati, Chairperson and CEO of BBTV. "Plus Solutions Revenue grew by 69%, led by strong uptake of Content Management solutions by major media brands during the quarter. Our investments in Plus Solutions are beginning to show up in our performance, where revenue from all our major Plus Solutions categories including Content Management, Direct Advertising Sales, and Mobile Gaming Apps, have all grown by over 40% in the quarter. "
Q1 2022 Financial Highlights:
[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.
The current period increase in cash outflows from operating activities over Q1 2021 was primarily due to the changes in the timing of receipts or payments of working capital items.
[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.
The current period increase in cash outflows from operating activities over Q4 2021 was primarily due to the changes in the timing of receipts or payments of working capital items.
Revenue for the three months ended March 31, 2022 decreased by ($7.7) million or (7%) 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.
The increase in Views associated with COVID-19 consumers' consumption patterns started to subside when lockdowns ended in many parts of the world, resulting in a decline in Views when compared to the same period of the prior year. The decline in RPMs was due to a lack of monetization on YouTube Shorts content, and when removing this impact, RPMs would have grown by 16% when compared to the same quarter in the prior year.
In Q1 2022, about 20% of the company's views came from YouTube Shorts, which presents a significant upside for when that format becomes monetized, and the company says it believes that this will begin soon. RPMs for monetizable content grew by 16% compared to Q1 last year.
The continued growth of their Base Solutions business alongside the changing consumption landscape presents opportunities for RPM growth as monetization continues to mature across all key platforms. While micro content like YouTube Shorts isn't monetized today, once it becomes monetized across their entire library, the company says it could represent incremental revenue of over $90 million annually across their Base Solutions at current market rates.
The Company expects its RPMs for monetizable content to continue to trend upward, particularly as their Plus Solutions continue to scale and as the YouTube Shorts monetization is activated.
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 = January 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.
The Management Discussion and Analysis ("MD&A"), along with full financial statements are posted and available on SEDAR at www.sedar.com.
Forward-Looking Statements
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