Record revenues of US$8.9 million in Q2/2024, up 11% compared to US$8.0 million in Q2/2023
High re-occurring revenues with 91% of first-half sales from repeat customers
Record second quarter Connected TV/OTT ad-supported sales of US$6.9 million, up 39% compared to US$4.9 million in Q2/2023, and representing 77% of the Company's sales mix
Gross Margin increased to 61% Q2-2024 from 60% in Q2-2023
Improved operating leverage resulted in Adjusted EBITDA 1 Loss of US$0.3 million compared to a loss of US$1.7 million in Q2/2023
TORONTO, Aug. 21, 2024 /CNW/ -- Sabio Holdings Inc . (TSXV:SBIO) (OTCQB:SABOF) (the "Company" or "Sabio"), a California -based ad-tech company that specializes in delivering highly targeted ads, insights, and services in ad-supported streaming to top Fortune 100 brands, is pleased to announce its unaudited financial results for the second quarter ended June 30th, 2024. Unless otherwise indicated, all amounts are expressed in U.S. dollars.
"As our Q2 results illustrate, we continue to execute on our 2024 narrative and key operating attributes that will drive a sustainable and profitable growth model for the back-half of the year and going forward into 2025," said Aziz Rahimtoola, CEO of Sabio.
He continued, "Our commitment to driving higher growth in Connected TV/OTT revenue, securing larger upfront commitments, and improving operating efficiencies has laid a strong foundation for our success. Our full tech stack — including App Science's unique reach and insights with data integrity and fidelity at its core — has been instrumental in achieving a 91% customer retention rate. This positions us optimally as we enter our historical peak sales quarters for 2024.
It's still anticipated that the company will seasonally benefit from political ad-spending as the election cycle continues in the US until the November election date. This macro-backdrop, complimented with Sabio's ability to continually capture market share within the fast-growing ad-supported streaming space, will help lead to record sales and profitability for the company in 2024."
"Despite the seasonal trends of the advertising business, where close to 70% of our annual revenues are typically generated in the second half of the year, we are pleased to have exited the first half of 2024 with the lowest first-half Adjusted EBITDA1 loss since becoming a public company in November 2021," commented Sajid Premji, Sabio's Chief Financial Officer. "Sabio is firing on all cylinders as we enter the second half of 2024. Our 39% second-quarter sales growth in Connected TV/OTT ad-supported streaming continues to out-pace the market growth rate. Additionally, the predictability of our high reoccurring revenues, complimented with our recently announced record upfront commitments in our Q1 press release, will provide a springboard to near-term sales growth for the rest of 2024.
As we continue to focus on cost discipline to support a sustainable growth model, we expect material improvements in operating leverage in the second half of the year and a return to Adjusted EBITDA profitability."
Second Quarter 2024 Financial Highlights
Sabio delivered record second quarter revenues of US$8.9 million in Q2/2024, an increase of 11% from US$8.0 million in Q2/2023.
Connected TV/OTT sales as a category increased by 39% to US$6.9 million, compared to US$5.0 million in the prior year's quarter, continuing the trend of Sabio's dominant sales category, representing 77% of the Company's sales mix, up from 62% in the prior year's quarter. This represented the highest second quarter Connected TV/OTT ad-supported revenues in Sabio's history.
Mobile generated revenues of US$1.9 million in Q2/2024, down 36% from US$2.9 million in Q2/2023. More mobile campaigns continue to shift from mobile display to mobile streaming, which is recognized under the Company's Connected TV/OTT revenue category.
Gross profit of US$5.4 million in Q2/2024, compared to US$4.8 million in Q2/2023. Gross margin was 61% compared to 60% in Q2/2023, as Sabio continued to leverage its end-to-end technology stack, including the use of Sabio SSP supply.
Adjusted EBITDA1 loss of US$0.3 million in Q2/2024 compared to a loss of US$1.7 million in Q2/2023. Despite the seasonal trends of the advertising business where the majority of spend typically takes place in the second half the year, Sabio's focus on cost discipline and generating consistent & predictable revenue streams, driven by record upfront commitments, produced the lowest second quarter loss since becoming a public company in November 2021.
13% decrease in second quarter OPEX, normalized for sales commissions and bonuses, compared to the prior year's period.
As of June 30, 2024, the Company had cash of US$1.6 million, as compared to US$1.7 million on June 30, 2023. Management believes it is well funded, with sufficient cash on hand to meet its growth objectives.
As of June 30, 2024, the Company had US$5.6 million outstanding under its credit facility with Avidbank.
1 See "Use of Non-IFRS Measures" below.
Second Quarter 2024 Business Highlights
On June 4, 2024, the Company granted 210,000 stock options under the Company's Omnibus Equity Incentive Plan to certain directors and officers of the Company to acquire an aggregate of 210,000 common shares in the capital of the Company. The Company does not currently pay cash to its independent directors.
On April 22, 2024, Sabio's App Science™ subsidiary announced a multi-year renewal with Pivot Marketing Group to support their clients including Toyota Motor North America. App Science's cross-platform measurement solutions will empower Pivot to reach, engage, and validate their audiences and their behaviors at a deeper level, and will leverage the platform's AI capabilities.
Events Subsequent to June 30, 2024:
On July 31, 2024, the Company closed of a new credit facility pursuant to the terms of a credit agreement between its U.S. operating subsidiaries including Sabio, Inc., AppScience, Inc. and FWD Tech Inc. and SLR Digital Finance ("SLRDF"). The facility replaces the Company's existing credit facility with Avidbank and provides for a US$10 million senior-secured revolving credit facility at an interest rate of the greater of: (i) Prime rate plus 2.15%, or (ii) 8.5%. The facility has a three (3)-year term and is secured against all of the assets of the Company.
Outlook
Sabio exited the first half of 2024 with the highest first-half consolidated revenues in its history, driven by double-digit revenue growth in the second quarter. The Company enters the second half of the year where, historically, close to 70% of annual revenues are typically generated, armed with record upfront commitments, high reoccurring revenues (91% in the first half) and lowest first-half Adjusted EBITDA1 loss as a public company. Management expects accelerating revenues and a lower cost infrastructure to culminate in the quarters ahead to a return to meaningful Adjusted EBITDA1 profitability for the year. As Connected TV/OTT ad-supported streaming continues to be one of the fastest-growing channels in advertising, Sabio's 34% revenue growth in this category during the first half of 2024 demonstrates that we are continuing to outpace the broader market and take market share. In further testament to the strength of our core business, ...
