BBTV Holdings Inc.

Good day and thank you for standing by and welcome to the BBTV 2021 First Quarter Results Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question after the session, you will need to press star 1 on your telephone or touchtone key. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to Ms. Nancy Glaser, General Counsel of BBTV. Thank you. Please go ahead.

Welcome to BBTV's Fiscal First Quarter 2021 Conference Call. I'm Nancy Glaser, General Counsel for the company. During the course of this call, we will be providing forward-looking information and making forward-looking statements within the meaning of applicable securities laws which are statements regarding the company's current expectations, goals, and beliefs about future events. Any financial or other goals discussed are goals only and are not meant to be taken as future-oriented financial information or guarantees of future results or performance. All of our forward-looking statements are necessarily based on a number of assumptions and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements. including the risk that our assumptions may not be accurate. Our risks are also included in our press release and MD&A issued today. We undertake no obligation to update these forward-looking statements, except as required by law. You can read more about these assumptions, risks, and uncertainties in our press release and MD&A issued earlier today, as well as in our filings with Canadian securities regulators on CDAR. I now turn the call over to BBTV's Chair and Chief Executive Officer, Sharzad Rafati.

Thank you and thank you to everyone on the line for joining us today to review our first quarter 2021 results. Joining me today is Todd Tappan, CFO of BBTV, who will review our financials and will also participate with me on the Q&A session after our prepared remarks. My remarks will begin with an overview of the Crater Economy, and a reminder of the opportunities that we're working to exploit. And then I will review our progress towards our KPIs. Todd will review the financials, and then I will close with a general outlook prior to taking analyst questions. BBTV is a global creator monetization company that helps creators make more money from their content. From individual to global media companies, creators rely on BBTV to generate meaningful revenue for them while they focus on their core competency, content creation. BBTV helps thousands of creators around the world generate an income while entertaining and informing 600 million monthly unique viewers. Investors may ask, why do creators matter? And why is BBTV a uniquely positioned stock to generate returns from the creator economy? More than 50 million people around the world consider themselves to be content creators. And this is growing rapidly. More than 2 million of these creators consider content creation to be their profession. And there's a massive and fast-growing economy that is building. Let's put the 2 million into perspective. There are about 1.2 million e-commerce retailers in the U.S. fueling the $500 billion segment of the $4 trillion U.S. retail economy by 2022. rising almost at 50% from 2018. Digital video advertising, which is just one corner of the creator economy is expected to more than double in the same timeframe to 82 billion. And it's expected to grow to 185 billion by 2025 at a 40% CAGR. The creator economy as a whole is poised to rise at an even faster pace than the early days of e-commerce. This is in part because of the world of entertainment is anyone's game now, and the creators have the tools they need to create content right in their pocket and connect with their audiences authentically. Gamers on YouTube, beauty gurus on Instagram, or musicians and comedians on TikTok are seeing similar reach as major sports leagues and film studios as digital has leveled the playing field. And the creator economy is a powerful driver for digital revenue. as millennials and Gen Z are driving this shift. Advertisers trying to reach these generations are spending more in digital video, as millennials have the highest buying power amongst generations with an expected 15 trillion in spending by 2022. Each of the platforms in the equator economy has billions of users, and the vast majority of which are in this digital native generation who are virtually inaccessible through traditional advertising. Creators' content play a big role in buyer behavior as well, as more than half of social media and video users leverage social platforms to research products, and nearly three-quarters of them are more likely to purchase products and services based on content creators' recommendations. So what happens when one part of an economy booms, such as advertising? New revenue streams rise and flourish. That's what we are seeing in the creator economy now. The number of creators that are making six figures or more on YouTube alone has increased by 40% year over year. And consumers spend 22 billion on mobile games in the first quarter of 2021, up 25% from Q1 2020. This is a testament to BBTV's existing revenue streams, from advertising to mobile gaming apps. At the same time, non-fungible tokens, featuring sports moments are selling for hundreds of thousands of dollars each, and thousands of creators are making five figures or more annually through social commerce platforms. Advertising is often the first to follow consumer behavior, as new technologies have time and time again changed how we consume content in the areas of print, radio, TV, and the Internet. Following advertising, just like we are seeing in the digital video space, merchandise, video games, trading cards, monthly subscriptions and more have all stemmed from these new mediums. And for the first time in history, the playing field has been leveled in the entertainment industry. This is just the tip of the iceberg. And the two pillars of making money in the creator economy are reach and engagement. BBTV is a global leader for both. with 600 million monthly unique viewers and over 50 billion minutes of watch time every month. We work with thousands of content creators and we give them tools they need to reach further and make more money. BBTV has 500 creators making $100,000 or more and 100 creators making more than half a million annually. On top of that, we have the rights and the infrastructure to simply turn on new revenue streams. from advertising and mobile games like we do today to emerging streams like NFTs, which we announced last week. The shift in entertainment has already happened, and the money is starting to flow with BBTV at the center of it all. This is not a future economy. This is a 2021 industry, and the ship is setting sail. BBTV is the boat that you want to be on. And the technology plays a key role in what makes us appealing in the markets. from potential M&A targets to the creators themselves. Here's a small example of how our technology, data, analytics, and processes work together to make creators more money. Video titles, tags, and descriptions, which seem innocuous at first, are key to discovery and engagement of content. Our technology continuously analyzes more than 2.5 billion video assets. learning in real time exactly which words and trends attract the most viewers. Our tech automatically recommends these terms to the creators when they post new videos, which in turn translates to higher views and higher revenues. This is just one part of how we help creators make more money. And it's one of the hundreds of ways we use our data and algorithms to power success for creators. As you saw last Thursday, we made our first announcement regarding NFTs and our emerging NFT strategies. Investors should expect more announcements related to NFTs in the future, along with additional potential revenue streams as we help creators make more money from the content they produce. For fiscal 2021, we have added two non-IFRS KPIs to our MD&A. One of the two non-IFRS metrics that we have added is BBTV's share of revenue. BBTV operates on a revenue share model whereby we allocate revenue to creators and we keep a portion of it. BBTV share of revenue is a better reflection of our operations, especially as we extend revenue streams. For our base solutions, which is programmatic, we keep between 8% and 10% depending on the creator. Our plus solutions are sold directly, targeted and configured to generate ads at the value that is more than five times greater to advertisers compared to programmatic ads for our base solutions. As a result, we generate more revenue per ad and we keep a larger share of available revenue. Advertising sales via direct are incremental to base solutions ad sales. Moreover, the customers and the ad units are also different. base is sold programmatically, while direct is sold on a reserved basis directly to agencies and brands. For every dollar sold on a direct basis, gross profits for these sales are greater than 15x more profitable. Base provides the lion's share of bottom line contribution today, and we expect it will continue to provide half or more of our contribution as both our base and plus solutions grow in revenue and margin. BBTV share of revenue is a KPI that we monitor closely for operating effectiveness, and we expect to grow at a faster pace than our top-line revenue. Our second and related non-IFRS measurement is adjusted gross margin. This is simply our gross profit divided by the BBTV share. We still anticipate the adjusted gross margin should be maintained over 90%. Fluctuations will be impacted by solution mix over time. With respect to our operational KPIs, views grew to 115 billion for Q1, up 4% from 111 billion views in Q1 2020. RPMs, or revenue per thousand views, grew 12% to 86 cents, up from 70 cents in the previous year quarter. The views growth was lower this quarter as the year-over-year comparison is against the first quarter of COVID, which saw spikes in viewership due to the global lockdowns. Although views increased modestly over the last year, RPM growth was solid. Our trend rate is low amongst creators on the BBTV platform. We continue to have views retention rates greater than 95% amongst the creator base. This is similar to customer retention as the use times RPMs equals revenue, which gives us a great light on site to our future revenues. The split in total revenue for the quarter was 99 million for base solutions and 8 million for plus solutions. Performance in base category was ahead of our expectations and plus performance was in line with our expectations. Q1 2021 and 2020, had the same headcount in sales personnel across Plus Solutions. All in, both of our top line and gross margin were ahead of a consensus, as published by Bloomberg. During the quarter, we announced some key operational developments, which generates additional confidence in our outlook. First, some commercial milestones. In January, we announced expanded solutions with both Instagram and TikTok to monetize creators across these platforms. This allows us to add more creators from those platforms and allows us to extend monetization of current BBTV creators to those platforms. We're just starting the programs now and we expect this to impact future quarters. We announced multiple new creator agreements during the quarter, adding nearly 750 million monthly views to the BBTV platform across multiple segments, including sports, gaming, lifestyle, and entertainment. This adds further to our scale. We highlighted renewed partnerships with Univision and Just for Laughs for an additional term, and we also renewed our MBA Playmakers partnership with the MBA. At the end of the quarter, we continued our global expansion with our moving to India and Thailand, bringing our global reach to 30 countries and 12 languages. Now, key operational milestones. At the end of February, we announced our cross-listing on OTCQX under the symbol BBTVF, and we acquired our DTC eligibility. We did this to fulfill demand from US-based investors. To lead a disciplined M&A strategy in March, we hired a VP of Corp Dev, Blake Corbett, who's already immersed in actively developing and expanding Targetless. We have also expanded our operations in Brazil, leading to further operational efficiencies for Plus Solutions. Now I would like to turn over the call to our CFO, Todd Tappan, to review the financial metrics for the quarter.