BBTV Holdings Inc.

Welcome to today's BBTV Holdings second quarter 2022 conference call. My name is Dante and I'll be your operator for today's call. All lines will be during the, will be muted during the presentation portion of the call where the question, where the section for questions and answers at the end. If you would like to ask a question, it is star one on your telephone keypad. I would now like to pass the conference over to our host, Ms. Nancy Glaister, chief legal officer of BBTV. Ms. Glaister.

Welcome to BBTV's fiscal second quarter 2022 conference call. I'm Nancy Glaister, Chief Legal Officer for DBTV. During the course of this conference call, we may provide forward-looking information and make forward-looking statements within the meaning of applicable securities laws. These are statements regarding the company's current expectations, goals, and beliefs about future events relating to or which may impact the company, its business, and results. These may include forward-looking statements regarding our expected or anticipated financial position, growth, diversification, expansion, operations, plans, and objectives. Forward-looking statements are statements about the future, and they're inherently uncertain. 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. Certain financial outlooks in particular are provided to aid in understanding management's goals and expectations regarding future financial 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 issued today, as well as in our latest annual information form filed on CDAR.com. 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 today, as well as in our AIF dated March 29, 2022, filed with Canadian Securities Administrators at CDAR.com. Also, our commentary today will include adjusted financial measures and ratios, which are non-GAAP measures. Although the company believes these non-GAAP financial measures and ratios are useful in evaluating the company, these should be considered as a supplement to and not as a substitute for financial information prepared and presented in accordance with IFRS. Reconciliations between the two can be found in our earnings press release and our MD&A, which are available on our website and on cdar.com. Lastly, we also report on certain metrics, such as views and RPMs. A further description of these metrics, which are also non-GAAP measures, can also be found in our earnings press release and our MD&A. I now turn the call over to BBTV's Chief Executive Officer, Sharzad Rafati.

Hi, everyone, and welcome to BBTV's second quarter 2022 analyst call. We press released our financial information earlier and posted our financial statements and MD&A to CDAR. As a reminder to everyone on the call today, we're a creator monetization company with a mission to help creators succeed by increasing their viewership and making more money. From individual content creators to global media companies, BBTV provides comprehensive end-to-end solutions powered by our innovative visual platform, which helps creators make more money while allowing them to focus on their core competency, which is content creation. CBTV has about 600 million unique monthly viewers globally who generate more than 30 billion views of video content every month. Although our base solutions revenue remains flat sequentially and declined year over year, we see significant fundamental tailwinds driving revenue contribution in our business. These tailwinds include the expedited activation of YouTube Shorts monetization and the diversification of our base solutions to additional platforms like Facebook. This is in addition to our focus on growing our plus solutions, which has experienced significant growth. With our cost optimization programs, we see a clear path to adjusted EBITDA profitability for the business. We would also like to note that all margin loans have been paid off. Plus Solutions' growth in Q2 2022 remains strong, driven by content management and direct advertising sales. Plus Solutions' revenue grew in the quarter by 29% over last year and by 46% for the first half of the year, and we are reiterating our guidance for over 40% growth in that segment for 2022. Our core Plus Solutions, specifically content management, direct advertising sales, and mobile gaming apps, grew by a combined 41%. Plus Solutions represented 13% of total revenue in Q2, up from 9% of revenue last year. From a margin perspective, Plus Solutions represents 30% to 40% of our total adjusted gross profit contribution, up from 20% to 30% last year. The growth in Plus Solutions is directly related to investments that we're making in the segments. This continued growth is a strong indicator that our investments in Plus Solutions are paying off, and we will continue to invest in growing these revenue streams because they consistently deliver four times higher gross margins than our current base solutions revenue. They will also continue to strengthen our overall earnings profile as we scale. Our decisions to focus investments on our higher margin plus solutions makes us a lot less sensitive to the short-term volatility of views and RPMs. For content management solutions, dbtv is currently working with some of the largest blue chip clients in the industry, including Sony Pictures, the NBA, Paramount Global, Univision, Fox, and more. This quarter we renewed and expanded our partnerships with Sony Pictures, which saw an expansion on our rights management solution, adding Facebook and Instagram. We also expanded our channel management partnerships, which includes the launch of a number of new channels for their TV shows and movies across a number of verticals. We also expanded our relationship with Fox to add a number of key growth initiatives that will make the partnership even more strategic to help Fox with their overall digital video initiatives. We also renewed deals with PBS, BET, and Relativity Media. Regarding direct advertising sales, Q2 was a strong quarter for the team and capped off a strong first half. Average order size increased by 53% year over year, and our teams are working to increase our brand awareness with agencies and brands. We are concentrating on leveraging the demise of cookies to promote BBTV's strength in contextual advertising. Key wins for the quarter included the addition of a new global music streaming partner and a top five global beverage company to the portfolio while increasing the revenue for existing clients. Typically, views on RPMs in Q2 increase sequentially from Q1 due to seasonality. In Q2 2022, RPMs were 94 cents at 15% sequential increase over 82 cents reported in Q1 2022. Last year, the sequential growth of Q2 over Q1 was 15%. So the pattern this year holds. While RPMs declined over a year by 5% to 94 cents compared to 99 cents last year, when excluding YouTube Shorts viewership, RPMs would have increased by 4%. Atypically, views for Q2 declined sequentially by 10% to 95 billion views down from 105 billion views in Q1. Year-over-year views declined by 14% compared to 111 billion reported last year. BBTV monetization is closely tied to the performance of YouTube. Two weeks ago, Alphabet reported that YouTube ad revenue growth was down year over year. This is due to primarily to a switch in consumer performance to micro content across all major platforms. YouTube introduced YouTube Shorts last year to respond to consumer preferences and this format now represents over 20% of dbtv's viewership. However, as we have stated in our previous conference calls, they have yet to be monetized. Alphabet announced during their conference call that they are accelerating their plans to monetize YouTube Shorts, which should cascade through BBTV. Monetization is starting ahead of expected timing. Once it becomes monetized across our entire library, it could represent incremental revenue of approximately $90 million annually across base solutions at current market rates. With the opposing sequential trajectories of RPMs and views alongside favorable seasonality trends, the end result was that base solutions revenue still grew sequentially by 1% to 86.9 million compared to 86 million in Q1. In the meantime, our emphasis OnPlot solutions continues to mitigate viewership risk for BBTV by concentrating on generating incremental higher margin revenue streams from retained content creators. Our churn rate continues to be low amongst creators on the BBTV platform. In Q1, our views retention was exceptional at 98%. We believe in the inherent value of our services is clearly reflected in our retention performance. We have been able to retain more audiences in comparison to the industry. Again, we are convinced that this is due to the quality of solutions and our effectiveness in monetizing content on behalf of our creators. Overall, we are pleased with the market response towards our Plus solutions, in particular, the growth in content management, which has highly predictable recurring revenue streams and continues to garner a lot of interest from large enterprises. We're also excited about the developments in direct advertising. I'm going to hand the call over to Ben Gruth, our CFO, to review our financial performance in details. And then after that, I will highlight our outlook for the business. Ben, please take it away.