WildBrain Ltd.

Hello, and welcome to WildBrain's Fiscal 2024 Q3 Earnings Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question during that time, please press star, then 1 on your telephone keypad. If you would like to withdraw from the queue, press star 2. I would now like to turn the call over to Kasmeen Prasad, Vice President, Investor Relations at WildBrain. You may begin your conference.

Thank you, Joanna. Thank you, everyone, for joining us today for WildBrain's third quarter 2024 earnings call. Joining me today are Josh Sherba, our President and CEO, and Nick Gon, our CFO. Before we begin, please note the matters discussed on this call include forward-looking statements under applicable security law with respect to WildBrain, including but not limited to statements regarding investments and acquisitions by the company, commercial arrangements of the company, the business strategies and operational activities of the company, the company's content production pipeline and greenlights, the markets and industries in which the company operates, cost and expense management, the company's leverage and plans for debt and leverage reduction through the sale of non-core assets, refinancing of the company's indebtedness, the value of the company's assets, and the future growth objectives, targets, and financial and operating performance of the company and its businesses. Such statements are based on facts and assumptions that management believes are reasonable the time they were made and information currently available. Forward-looking statements are subject to a number of risks and uncertainties. Actual results or events in the future could differ materially and adversely from those described in the forward-looking statements as a result of important factors, including the risk factors set out in the company's most recent MD&A and annual information form, which are available on the investor relations section of our website at wildbrain.com under CDR Filings. Please note that all currency numbers are in Canadian dollars and less otherwise stated. After remarks, we will open the call for questions. I will now turn the call over to our President and CEO, Josh Sherbaugh.

Thank you for joining us today. It is now clear that our content production business is returning at a strong pace for fiscal years 2025 and 2026, having bottomed in fiscal 2024 due to an industry-wide slowdown in greenlights this year. We have several projects already greenlit, and our development pipeline is robust. Our acceleration out of the industry slump, which we believe is outpacing most of our peers, is driven by sound decisions and investments we made over the last few years to respond to where we saw the industry heading and reposition our capabilities to focus on premium content. Our key partners in Apple and Netflix have refined their content strategies to focus on quality over quantity in a way that dovetails perfectly with our portfolio of assets, our franchise focus, and our strong creative capabilities. This has led to more deliberate and considered development phases designed to ensure project quality and increase the probability of success with fans. This commitment to development with our partners also ensures much higher degrees of certainty around Greenlights. It's clear to us that premium content for franchise IP is what the industry is demanding, and we offer that in spades. While reported earnings this quarter and next will continue to reflect the significant headwinds from the slowdown in Greenlights, Our Vancouver studio is already ramping hiring to staff the growing number of projects in our pipeline. As we spoke about last quarter, green lights in our content pipeline for fiscal years 2025 and 2026 signal a return to historical levels, driven by strong brands and our 360-degree expertise in content creation, audience engagement, and global licensing. I'll spend a few minutes with an update on each of these pillars for some highlights in the quarter. In Q3, Apple TV Plus announced the global premiere of our new series, Yo Gabba Gabba Land, set for August 2024. The series expands the beloved universe of Yo Gabba Gabba, which has delighted kids and parents alike worldwide with its blend of supremely singable music, colorful live-action characters, and captivating animations. For those of you who may not remember, Yo Gabba Gabba made its debut back in 2007 as a tentpole show showcasing lessons with a beat on Nickelodeon. The original series spanned 66 episodes across four seasons and became a cultural hit with five international live tours, multiple awards, and even a White House appearance. The love for Gabba remains strong with fans. The cast made a surprise appearance at the Coachella Music Festival in April. generating organic social media engagement of 20 million impressions and earned media reach of 790 million potential readers. Working with our partners on the IP, a new consumer products licensing program will be ramping up for Yo Gabba Gabba Land in the months ahead. We also see high-margin opportunities across music and live entertainment to fully monetize the power of the brand. I've seen the series, and it's awesome. It's really everything we could have hoped for in a Gabba 2.0. And in addition to launching Yo Gabba Gabba Land this spring, Apple TV Plus will also be launching our latest peanut series, Camp Snoopy, in the coming months as part of their summer lineup. Turning to audience engagement, this team manages over 500 YouTube channels for our own brands and partners, using data-driven insights and platform expertise to connect with one of the largest audiences of kids watching YouTube. Kids are highly engaged on our YouTube network, with over 60 billion minutes of videos watched in the quarter, up 30% versus last year. We saw particular strength in the Wildbrain channels, which contributed to margin expansion in the quarter. Our digital team in London just received an elite YouTube Diamond Creator Award for surpassing 100 million subscribers on one of our channels. YouTube Shorts continues to be a key engagement tool to attract viewers to our vast network. We're continuing to learn and refine this new lever for audience acquisition to meet audiences where they are. During the quarter, we saw significant increases in watch time in YouTube Shorts. We continue to see strength in several of our KPIs across our YouTube network, including average view duration with double-digit growth rates year over year. Increases in average view duration is an important component in driving engagement and monetization. as it maximizes the amount of ad revenue each video generates. We also saw strength in our Fast business, with new channels launched and sustained growth in watch time across multiple platforms. Fast and non-YouTube AVOD channels on platforms such as Samsung, LG, Roku, and others are a nascent but rapidly growing industry opportunity. Fast stands for free ad-supported television and more closely mirrors the traditional linear viewing experience It's really just a digital version. We are able to leverage both our technology, infrastructure, as well as our content library and deep engagement know-how from our YouTube platform to rapidly enter and scale this market. Our strategic expansion into more kids and franchise-led channels has translated into higher viewership. from under 300 million minutes watched in 2019 to over 5.5 billion minutes watched in the U.S. in 2023. We have more than 85 channels, making us the single largest kids content offering across FAST and are on pace to continue to add more. We will continue to utilize our first mover advantage for both our owned and partner brands and see opportunity for growth in 2025 and beyond as linear dollars continue to migrate to these platforms. Looking at global licensing now, this pillar includes the activities of our leading licensing agency, Wildbrain CPLG, as well as our franchise management activities for key owned brands, such as Teletubbies and Strawberry Shortcake, and our interest in the Peanuts brand operated by the Peanuts Worldwide subsidiary. The Peanuts business continues to perform well particularly in the U.S., and the rollout in China continues to show strength with the onboarding of new key partners. Snoopy donned his astronaut suit again for the new Snoopy Moon Swatch from Omega and Swatch, which launched in both black and white versions, featuring Snoopy lying on the celestial satellite. The coveted watch is sold out at launch. Another of our key brands, Strawberry Shortcake, is celebrating its 45-year anniversary with a slew of new partnerships and collections. Of particular note is the launch of a new Strawberry Shortcake toy line from the loyal subjects in 1,700 Walmart stores, which will be further rolling out this month to all of their locations in the U.S. for a total of approximately 3,900 stores. Sales on the initial launch have been very strong. It is strong partnerships like this and many others in our pipeline that will drive our own brand's growth in 2025 and beyond. In our own brands, the number of licenses grew double digits year over year, and we saw strong growth in Asia-Pacific. With the investments we've made in Asia-Pacific over the past couple of years, we are seeing the increased demand for our IP, particularly peanuts and Teletubbies. During the quarter, we signed several new licenses that will roll out in 2025 and saw particular strength in China and Korea across LBE. Our pipeline is full, and we see strong growth in 2025 and beyond. Wild Brain-owned and third-party brands were nominated for an unprecedented Qualt Licensing International Excellence Awards, which are the industry's top honors, including Best Licensed Brands for Peanuts, Teletubbies, and Strawberry Shortcakes. To put that in context, other comparable kids IP companies received no more than five nominations, highlighting our team's expertise and brand recognition. Global licensing is a core pillar of our business, and with continued growth in brands like Peanuts, large opportunities across Strawberry Shortcake and Teletubbies, and new opportunities with Yo Gabba Gabba, we are well positioned for future growth. Turning to our capital allocation, Reducing leverage and simplifying our company and capital structure remain top commitments. We have made significant progress on both our non-core asset sales as well as our path to refinancing or repaying our convertible to ventures. While we have nothing to announce today, we look forward to providing updates in due course. Given our large portfolio of assets, we're confident that through this sale process, we can accomplish the three core objectives we previously outlined – One, simplify and focus our business. Two, improve our balance sheet. And three, drive shareholder value. With great franchises and a strong team aligned together, we are well positioned to deliver value. With that, I'll turn it over to Nick.