BBTV Founder & CEO Sharzad Rafati

BBTV Announces Q4 2021 and Full Year 2021 Audited Financial Results

Operating Cash Flow increases by 41%; Balance Sheet Strengthened Further as Plus Solutions Take Off.

Tuesday, March 29th 2022

Vancouver, B.C.: 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 Q4 2021 and full-year audited financial results for the period ended on December 31, 2021.

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 Canadian currency and are in thousands of Canadian dollars except where otherwise indicated.

“Q4 2021 results continued the trend set in previous quarters whereby our focus on higher margin Plus Solutions continued to drive overall margin improvement and cash flow generation. Our cash flow performance was among the highest in our company’s history – this in the face of some softness in the broader market as people generally watched less content as COVID restrictions eased around the world,” said Shahrzad Rafati, Chairperson and CEO of BBTV. “Q4 2021 cash flow from operations was up over 41% year-over-year adding over $7 million to our balance sheet. The cash balance now stands at approximately $31 million. As we drive towards becoming a dominant Web3 platform, and we begin monetizing short-form video, we are confident we can not only drive profitability but also provide industry-leading solutions for creators making us the number one choice for top performing creators in the marketplace.”

Subsequent to Quarter End

January’s Plus Solutions revenue growth rate exceeded 60%, as a result of which we believe that Q1 2022 is looking like a strong quarter for Plus Solutions.

Earlier this month we announced key hires with the onboarding of Erich Lochner as SVP, Creator Partnerships to help further expand to platforms such as Instagram, TikTok and Facebook. Content Management is an important product in Plus Solutions, and we welcomed former Lionsgate executive Thomas Hughes to provide leadership to accelerate growth of this line of business.

In addition, we recently announced a partnership with ConsenSys, the leading Ethereum software company, to support BBTV’s development of Web3 NFT solutions for content creators.

Q4 2021 Financial Highlights:

(1) These figures are derived from the Company’s Annual Financial Statements and the financial statements filed for the periods ending in year 2021, which are presented in accordance with IFRS.
(2) The comparative prior period figures are first presented in accordance with IFRS and are subsequently adjusted to present on Pro-Forma Basis to include BBTV Corp. consolidated results as if the Business Combination Transaction had occurred on January 1, 2019. The comparative prior period figures with Pro-Forma Adjustments are non-GAAP financial measures. Further details on these measures are included in the “Key Metrics” section of this press release.

(1) These figures are derived from the Company’s financial statements filed for the periods ending in year 2021, which are presented in accordance with IFRS.

Q4 2021 Operating KPIs:

(1) The figures for the quarterly periods ended in year 2021 are based on the Company’s operational and financial results while the figures for the quarterly periods ended in year 2020 are presented on Pro-Forma Basis to include BBTV Corp. consolidated results as if the Business Combination Transaction had occurred on January 1, 2019. Views are non-financial performance measures while RPMs are supplementary financial measures. Further details on these measures are included in the “Key Metrics” section of this press release.

  • Adjusted Gross Profit, 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 Q4 2021 was $10.4 million, a 9% decrease in comparison to $11.4 million reported for the same quarter last year. This was due to the decrease in revenue across Base Solutions.
  • BBTV Share of revenue, which is a non-GAAP financial measure and defined as revenue less content creator and third-party platform fees, for Q4 2021 was $10.8 million, a 11% decrease compared to $12.1 million reported for Q4 2020.
  • Adjusted Gross Margin, which is a non-GAAP ratio and defined as Adjusted Gross Profit divided by BBTV Share, was 95.9% for Q4 2021, compared to 94.4% reported for Q4 2020. Adjusted Gross Margin should remain stable and above 90% for the foreseeable future.
  • Gross Margin excluding PPA amortization, which is a non-GAAP ratio and defined as Adjusted Gross Profit divided by revenue, was 7.5% in Q4 2021 in comparison to 7.6% in Q4 2020. Plus Solutions should help contribute to margin expansion further in future quarters.

In Q4 2021, about 20% of our views came from YouTube Shorts, which presents a significant upside for when that format becomes monetized, and we believe that this will begin soon. RPMs for monetizable content grew by 17% compared to Q4 last year. The continued growth of our Base Solutions business alongside the changing consumption landscape presents strong 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 our entire library, it could represent incremental revenue of over $90 million annually across our Base Solutions at current market rates. We think investors should see this as a good sign for positive future performance for upcoming quarters.

Outlook:

Overall for the quarter, we achieved solid Revenue and Adjusted EBITDA performance, both of which were within the range of analyst consensus, and our ending cash balance significantly beat consensus.

The Company recently announced a partnership with Consensys, a leading global Ethereum software company to support BBTV’s development of Web3 NFT solutions for content creators. This deal marks a key foray into Web3, as BBTV will provide creative, marketing, and content management solutions for creators to enable them to expand, engage and monetize their fan communities outside of major social and video platforms leveraging blockchain technology.

Conference Call Details:

Tuesday March 29, 2022, 2:15pm Pacific Time / 5:15pm Eastern Time.

Participant Information:

Access Code: 579627
United States: 1 844 200 6205
United States (Local): 1 646 904 5544
Canada dial-in number (Toll Free): 1 833 950 0062
Canada dial-in number (Local): 1 226 828 7575
All other locations: +1 929 526 1599

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:

Access Code: 329687
US (Local): 1 929 458 6194
US Toll Free: 1 866 813 9403
Canada: 1 226 828 7578
UK (Local): 0204 525 0658
All other locations: +44 204 525 0658
March 29, 2022 – April 12, 2022

Pro Forma Basis

The pro forma information and adjustments (“Pro-Forma Adjustment”) contained herein combine the Company’s financial results for the periods with results from BroadbandTV Corp. which was acquired by the Company on October 28, 2020 (the “Business Combination Transaction”) as if the Business Combination Transaction had occurred on January 1, 2019 as well as adjustments for the effects of acquisition accounting, but does not include adjustments for costs related to integration activities, cost savings or synergies that might be achieved by the combined businesses. Management believes that reviewing the Company’s operating results by combining actual BBTV Holdings and pro-forma business combination results is useful for comparative purposes as well as in reaching conclusions regarding the overall operating performance of the Company, as the Business Combination Transaction contributed less than three months of results to the results of operations for the prior year ended December 31, 2020. The sources of these pro-forma results are the Q4 2021 Financial Statements combined with the internal, unaudited financial information of the acquired business for the same periods. These pro-forma results are not specified, defined or determined under IFRS accounting rules. Pro-forma results presented are not necessarily indicative of what the Company’s results would have been had BBTV Holdings completed the Business Combination Transaction on January 1, 2019, nor will the historical pro-forma results necessarily be indicative of future results. All pro-forma information or financial results with Pro-Forma Adjustment are non-GAAP financial measures. See also “Key Metrics” below for further information regarding the Company’s non-GAAP and other financial measures.

Pro Forma Income Statement

(1) These figures are presented in accordance with IFRS and are based on the Company’s Annual Financial Statements and the financial statements filed for the periods ending in year 2021.
(2) These figures are presented on Pro-Forma Basis to include BBTV Corp. consolidated results as if the Business Combination Transaction had occurred on January 1, 2019. The comparative prior period figures with Pro-Forma Adjustments are non-GAAP financial measures. Further details on these measures are included in the “Key Metrics” section of this press release
(3) The % changes are calculated based on the current period amounts minus the comparative Pro-Forma prior period amounts and then divided by the comparative Pro-Forma prior period amounts.

Adjusted EBITDA and Adjusted EBITDA Margin

(1) These figures are derived from the Company’s Annual Financial Statements and the financial statements filed for the periods ending in year 2021, which are presented in accordance with IFRS.
(2) These figures are derived from the Company’s Pro-Forma financial statements, which include BBTV Corp. consolidated results as if the Business Combination Transaction had occurred on January 1, 2019.
(3) Includes depreciation and amortization reported in cost of revenue and operating expenses for all periods.
(4) Adjusted EBITDA is a non-GAAP financial measure while Adjusted EBITDA Margin is a non-GAAP ratio. Further details on these measures are included in the “Key Metrics” section of this press release.

BBTV Share, Adjusted Gross Profit, and Adjusted Gross Margin

(1) These figures are derived from the Company’s Annual Financial Statements and the financial statements filed for the periods ending in year 2021, which are presented in accordance with IFRS.
(2) These figures are derived from the Company’s Pro-Forma financial statements, which include BBTV Corp. consolidated results as if the Business Combination Transaction had occurred on January 1, 2019.
(3) 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” section of this press release.

Free Cash Flow


(1) These figures are derived from the Company’s Annual Financial Statements and the financial statements filed for the periods ending in year 2021, which are presented in accordance with IFRS.
(2) These figures are derived from the Company’s Pro-Forma financial statements, which include BBTV Corp. consolidated results as if the Business Combination Transaction had occurred on January 1, 2019.
(3)Free Cash Flow is a non-GAAP financial measure. Further details on this measure is included in the “Key Metrics” 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.

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 we are confident we can not only drive profitability but also provide industry-leading solutions for creators making the Company the number one choice for top performing creators in the marketplace; Q1 2022 is looking like a strong quarter for Plus Solutions; we engaged Thomas Hughes to provide leadership to accelerate growth of our Content Management line of business; the Company’s Plus Solutions should help contribute to margin expansion further in future quarters; YouTube Shorts presents a significant upside for when that format becomes monetized, and we believe that this will begin soon; the continued growth of our Base Solutions business alongside the changing consumption landscape presents strong 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 our entire library, and assuming the same views and the same RPMs on an annualized basis as we had for our Base Solutions in Q4 of 2021, it could represent incremental revenue of over $90 million annually across our Base Solutions at current market rates; we think investors should see this as a good sign for positive future performance for upcoming quarters; and our deal with Consensys marks a key foray into Web3, as BBTV will provide creative, marketing, and content management solutions for creators to enable them to expand, engage and monetize their fan communities outside of major social and video platforms leveraging blockchain technology. 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 Company’s assumptions that the Company will become a dominant Web3 platform, and will begin monetizing short-form video across the Company’s entire library with at least the same views and the same RPMs on an annualized basis as the Company had for its Base Solutions in Q4 2021; that its current growth plans will not change in any material respect; that its internal financial forecasts and models, including its estimates of costs and revenue are accurate are accurate; that its assumptions regarding continued growth, changes and trends in the Company’s industry and the global economy will be met; that the Company’s NFT division and its foray into Web 3 will be successful; that the Company’s Plus Solutions revenue will continue to grow and to show greater margins than its Base Solutions; that the Company’s churn will continue to remain low; that the Company will continue to contract with new content creators and to continue to receive increasing Views; that the Company will enter into an increasing number of Direct Advertising Sales Deals, Content Management agreements and initiatives; that RPMs will continue to increase; the timely receipt of required regulatory approvals and strategic partner support; the absence of new laws, regulations, rules or policies of governments, platforms and other strategic partners, that may negatively impact the business of BBTV; our ability to build our market share, enter new markets and maintain and expand geographic scope; our ability to attract and retain key personnel and to execute on our growth plans; our ability to obtain and maintain financing on acceptable terms; as well as the Company’s assumptions regarding foreign exchange rates. 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; that the Company’s agreements with platforms, creators or others may terminate early or not be renewed either on similar terms or at all; that the Company’s or its creators’ NFTs may not realize significant revenue or at all; that the Company’s Plus Solutions may not continue to be attractive to creators and may not realize our expectations; the Company’s foray into Web 3 may fail; the regulatory environment and in particular, the fact that NFTs are a relatively recent concept and new regulations may be enacted with which the Company may not be able to comply, and government regulation of the Internet as well as privacy regulation which are both evolving and unfavourable developments could have an adverse impact on the Company’s operating results; litigation risk; intellectual property risks; the Company’s need for timely performance by its creators and strategic partners; the Company’s significant reliance on its relationship with one digital platform; and the impact of the continuing COVID-19 pandemic; as well as the factors discussed under “Risk Factors” in the Company’s Annual Information Form dated March 29, 2022 and its prospectus dated October 22, 2020, both 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.

Links to SEDAR filings, conference call recordings and press releases are available on the investor website at: https://investors.bbtv.com/

Key Metrics
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.

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

SOURCE BBTV Holdings Inc.