BBTV Holdings Inc.

Good evening. Thank you for attending today's BBTV 2021 third quarter result conference call. My name is Hannah and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Nancy Gleister with BBTV. Please go ahead.

Welcome to BBTV's fiscal third quarter 2021 conference call. I'm Nancy Gleister, general counsel for BBTV. During the course of this conference call, we may provide forward-looking information and make forward-looking statements to the meaning of a applicable securities law. These are statements regarding a company's current expectations, goals, and beliefs about future events. Forward-looking statements are statements about the future and are inherently uncertain. Any financial or other goals discussed are goal-only and are not meant to be taken as future-oriented financial information or guarantees of future results or performance. The company's forward-looking information, including its financial outlooks, are provided to aid in understanding management goals and expectations regarding future financial and other matters and may not be achieved. Such financial outlooks may not be appropriate for other purposes. 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. These include the risk that our assumptions may not be accurate, as well as the risk factors contained in our press release and MD&A issues 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&E issue earlier today, as well as in our filings with Canadian securities regulators on CEDAW. Also, our commentary today will include adjusted financial measures, which are non-IFRS measures. These should be considered as a supplement to and not a substitute for IFRS financial measures. Reconciliations between the two can be found in our earnings press release and our MD&As, which are available on our website and on CEDAW.com. I now turn the call over to BBTV's Chief Executive Officer, Shahzad Rastafi.

Good afternoon, everyone, and thank you for joining our third quarter 2021 earnings conference call. Today, myself and our newly promoted CFO, Ben Wood, will review the operations, financial results, and our outlook in the prepared remarks. And then we will answer analyst questions after that. What is BBTV? BBTV is a global creator monetization company. From individuals to global media companies, creators rely on BBTV to generate meaningful revenue for them while they focus on their core competency, content creation. We drive success for some of the largest creators in the world that are defining the culture of today and tomorrow. More than 50 million people around the world consider themselves to be content creators. And this is growing rapidly. More than 2 million of those creators consider it their profession. And there's massive and fast-growing economy that is building. As we've mentioned before, the global creator economy is now worth over $100 billion per year and growing at about 40% annually. BBTV works with thousands of creators and more than hundreds of those creators make more than 500,000 of revenue annually with BBTV and almost 50 of our creators making more than 1 million of revenue annually. The two pillars of making money in the creator economy are reach and engagement. BBTV is a global leader for both with one of the largest exclusive libraries of content reaching more than 600 million monthly unique viewers. that are spending tens of billions of minutes watching our content every month. This positions us uniquely to chapter-wide on our scale and our massive library of content. Advertising is one of the most important drivers of Plus Solutions. Advertisers trying to reach millennials and Gen Z generations are spending more in digital video than ever before, as millennials have the highest flying power amongst generations. Digital video advertising is worth about $82 billion in 2022 and is expected to grow to $185 billion by 2026 at a 40% CAGR. And we are very well positioned to capitalize on this given our reach and engagement. At the same time, we're seeing trends like Apple's privacy policy on iOS that limits platforms and advertisers' targeting capabilities, and also the near abolishment of third-party tracking tools and cookies that collect information about audiences. This all means one of the best ways to target audiences is through contextual ads. What are contextual ads? Contextual ads are the bread and butter of BGTV in the marketplace for direct advertising sales. And the tailwinds are all heading in the right direction. We have already accumulated a massive library of content with great reach, which is mainly being monetized programmatically. And this really means ads that are sold on a run-of-category basis at a much lower RPMs. As we scale our direct advertising sales solution, given that the majority of our inventory is being monetized programmatically, there is a significant upside in being able to sell the content directly to the advertisers at much higher RPMs. As direct advertising sales expand, we will see BBTV share and our gross profit growth at a much faster pace than BBTV's top line revenues. This means our growth as a business will be reflected in the growth of BBTV share and gross profit. This will further drive our profitability. Plus, solutions also include content management, mobile gaming apps, and non-fungible tokens, also known as NFTs. Our Plus Solutions revenue stream continues to deliver more monetization opportunities to our creators while securing incremental higher margin revenue streams for BBTV. This is an area where we are focusing on and investing in to further maximize revenue growth and profitability. We are pleased with progress in our Plus revenue stream, reaching $37 million of revenue in the last 12 months, This quarter, revenue grew by 23% over the previous year. We had some great additions to Plus Solutions growth this quarter as we signed meaningful long-term content management agreements with a top three major U.S. news network and cable channel, which is now one of our top five enterprise clients. This is in addition to us also signing a leading talent agency, Three Black Dots. We also launched iRise Planetary Solutions for live events, which is already servicing some of the largest live events in the world, including the recent Fury vs. Wilder fight from premier boxing champions. Subsequent to the quarter end, we announced a significant plus solutions agreement with Slaughter. Slaughter and BBTV entered into an agreement to dedicate up to 125 million to BBTV creators to further scale creator growth and monetization opportunities for the company's existing library of creator content. As I said earlier, we have one of the largest and growing exclusive libraries of video content with engaging audiences that can be monetized through a variety of revenue streams, especially through our cost solutions. This deal is a great example of that, and it represents a 100% gross margin, which is expected to total in a single-digit million. This is a great way to showcase how we can monetize our existing library of content with no incremental cost and the transition from base to plus and high margin. It's also a great value add for the creators to invest in their content and growth, which will translate into even more revenue opportunities for us and them. Be invested in Plus Solutions and it's working. We expect that these developments will all help to expand Thought Solutions' revenue stream, BBTV share, and gross profit in future quarters. Our investment strategy is designed to grow our BBTV share of revenue and gross profit over time. We plan to add more higher margin revenue streams so that BBTV share of revenue will grow at a faster pace than our top-line revenue streams and will also pull our gross profit higher at a similar rate. In addition to our Plus Solutions performance, I'm pleased to highlight that we continue to have strong use retention of 94%, which is similar to customer retention as use times RPMs equal revenues. This gives us a great line of sight for our future revenues. We also saw robust RPM growth of 5% in contrast to some reported industry trends for the quarter. We also improved our adjusted EBITDA margin since the beginning of the year, despite continued investment in our Plus Solutions. Together, these highlights speak to our continued focus and progress on our bottom line growth and on profitability. Speaking of trends of our key metrics like views and RPMs, then we'll dive into more detail in a moment on this. There are some important trends in our state that we're watching closely, namely as viewership returns to pre-COVID levels and consumption trends continue to shift to micro content like YouTube Shorts, TikTok, and Instagram Reels. We are in early stages of finding microcontent creators, and as noted in one of our press releases in August, we have been finding YouTube Shorts creators as we believe YouTube will be one of the first platforms to enable monetization at scale for microcontent, which we expect to benefit from several quarters from now. Before I hand it over to Ben, I just want to conclude by saying that we're really excited about the progress that we're making in base and cost solutions revenue streams. And we're also encouraged that microcontent like YouTube Shorts could become another promising revenue opportunity going forward. We remain an essential source of monetization for thousands of creators globally, and we are finding new ways to generate more revenue for our creators. Remember, 100 creators on the BBTV platform make more than half a million dollars annually, and some of these creators themselves employ thousands. We are very proud of the work that we do to make creators successful now and in the future. Now I would like to turn over the call to our CFO, Ben Brut, to review the financial metrics for the quarter.