Kidoz Inc.

Hello everyone. Thank you for joining us and welcome to Kiddos Inc. 2025 Annual Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Jason Williams, CEO. Please go ahead.

Thank you, Jade. I'm Jason Williams, the CEO of Kiddos Inc., and very excited to be here today to present to you our fiscal 2025 year-end results and a look ahead at the exciting opportunities, developments, investments, and everything that is Kiddos. So, Kiddos, is an ad tech platform that is currently scaling. We create brand performance in mobile games without personal data. Just jumping into the presentation now, quick look at the topics that we're going to cover. We've got our fiscal 2025 results in the Q4, which were both records. We're going to look at the growth drivers behind the platform and the business. We're going to take a look at what we're doing to build a competitive moat and some of the investments we're making to create an AI-first ad tech company with operating leverage, And we're going to head into some Q&A and take a look at what's happening at kiddos. Of course, we have the forward-looking statement to consider. And so anything revealed here, of course, please be aware. Thank you. So Kiddos is a mobile advertising technology company. We are software. We build technology. We've got just under 60 staff globally across the world. And our system is reaching more than 500 million users in mobile games each month. And we're working with a whole raft of different brand partners, over 150. and we're reaching over 40,000 different mobile games. Revenue in 2025 was over 18 million, coming in at 18.4 million. which was a record for the company and over 30% growth, which we'll get into in a moment. There are two key segments, kiddos. Kiddos, our core segment is a kids compliant advertising platform in the core business. And we launched more recently the Prado segment, which is our mass market initiative for all ages for in-game marketing. Quick look at the evolution, the kiddos, system and brand was brought into this public entity and became our core focus in 2019. And so we've been building and iterating and growing the system since that time. In 2023, we launched Prado and in 2024, we turned profitable and have been scaling both the platform, our revenues and our net income since that time. bunch of highlights to look at. We've really grown revenue, like I mentioned, 32% year over year from 2024 to 2025, coming in at 18.4 million. And we're demonstrating operating leverage by increasing our costs at a slower pace. Operating expenses only increased 22% to 8.5 million for 2025. We've made good investments in our sales and marketing and in our R&D, which is fully capitalized. So there is no drag on future earnings. And that R&D investment in 2025 was 4.5 million, which also was a 32% increase. And I'm going to talk a little bit more about that as we move forward. The cash position has increased 60% to 4.5 million and working capital just over 5 million at the end of the year. And net cash to the operation of 1.7 million, which was a 31% increase over 2024. An excellent result all around. Very proud of what we've achieved. The entire company is working harmoniously together between our core departments of technology, operations, sales and commercial, and the corporate group, of course, helping to shepherd this business and continue its scale up. The net income for the year, 2025 was 457,000, which was a 29% increase. So just below our revenue growth figure and far ahead of the growth in operating expenses. So ticking all the boxes for a high growth software, large market, strong clients, and very excited for the future. We've built this platform now, and if we look at the year over year revenues, we've really hit a turning point now. We've started to... really achieve what we set out to do, which was create value in our media with a platform solution that is turning into an AI-first platform organization that can deliver value through media without being reliant on the data signals that have been inherent in advertising technology. So our system is totally clean of data signals and totally unreliant on them, which allows us to achieve scale and price efficiencies, which our clients love, but maintain the targeting advantages. And so we can see the numbers really starting to grow. Each quarter is pulling away. We do have a high concentration in Q4, given our exposure in the core kids audience. And we see about 50% of our annual revenues in Q4. If we look at a rolling average, 12-month revenue growth, we can see that we're starting to demonstrate that hockey stick graph. Each year is pulling a little bit higher up than the last and so we expect that our investments will enable this fabulous chart to continue and that 26 will put even more distance behind us as we grow the business and achieve our objectives on a very unique technology backed position. Looking at the 12 month of profitability, we can see again now that we've turned the corner mostly in Q4 2024. And we've maintained that on a rolling basis and continue to increase the revenue while maintaining a strong R&D investment, which is really putting that future-proofing what we're building because we're each time we make one of these R&D investments on our infrastructure, we're pulling that much further away from the competition and creating a very unique system that that our clients are leaning into and enjoying and if we look at this uh the three-year history we can see really how we've turned the corner in 24 and 25 was a another example of a pulling away and moving revenues up to 18.4 million from just 14 and 24 net income increase. We're looking really focused on that in twenty six to even see even larger gains and the cash component continuing to grow, which, of course, is critical. And we're feeling well placed. If we look at the revenue distribution on a global scale in terms of what regions are driving that growth, we're seeing very balanced growth between North America and Europe, which are two strongholds for the kiddos brand and our biggest clients. We expect those to continue to grow. We are starting to look more into the APAC region, and I will be visiting some clients in May in Singapore to help to develop some opportunities in that region to help give us that full global scale. So lots of opportunity. We see no real barriers on geographic look. If we think about what's happening in the market versus what we're doing here at Kiddos, it comes down to three components in the market. The real demand for privacy and compliance, which Kiddos has really been strong in. The mobile gaming environment, which is growing phenomenally, more than 3 billion users. And then the combination of these two using technology and AI. And so what we've done, Kiddos now integrating all three of these kind of powerful market forces into our technology stack. We've got that privacy first look, which is helping us to excel in terms of compliance and sensitive audiences with Kiddos. We've got a completely proprietary ad stack. that we can develop and layer on all of our own AI, which we're doing currently. And we've got a dedicated gaming audience that we're reaching at scale globally in a very unique way. And so there are a number of unique characteristics to our platform and our strategy and our key customers, some global, the largest toy and other entertainment brands are leaning in and we've seen a 91% year over year growth from our leading clients. And they're seeing more value in their spend and they're looking to us for new opportunities and those new opportunities are turning into more growth. And it's an incredible way for us to build our system because when it's client led and we understand the challenges of these key clients, we can then work with them to integrate those features into our offering and achieve even higher growth and higher value and a higher tie in terms of trust and partnership so that they continue to work with us over other opportunities. At the core of our business, we're actually working with more than a hundred brands and What we're seeing is that they're coming to us with one of two verticals, which we're really focused on. One is that they're really focused on scale and programmatic execution. And this we deliver usually with a lower marginal cost. or they're coming at us with a premium type offering that they want to represent in the market. And here we satisfy that this with custom creative and really lean into the AI intelligence that we've built. And so these are the two kind of forces at play within the revenue growth, but it allows us to have a unique offering for both ends of the market. and everywhere in between when it comes to brands wishing to reach customers in games and mobile games at scale. Kiddos and Prado is a real solution that is delivering real value. And we can see, actually, what's exciting is the... is the... fact that mobile games is growing at a much faster rate than the two other large pillars of digital advertising, that being CTV and social advertising. And so we're seeing mobile games up in the 16% range, and there are 3 billion users. So there's no shortage of opportunity for us here. And we expect this trend to continue and kiddos to earn oversized gains in the coming years as our platform is specifically built in a very unique way to capture this revenue. What's interesting about Mobile gaming, when you compare it against social or CTV advertising, is that it's far more active and engaging of an audience type. People are leaning into the media. They're touching the screen. They're engaging with it. And this is something brands really like. It's new to them, but it's exciting at the same time. And we can bring them in a way that allows them to either create those custom assets and creative and experiences, or to use their existing video, traditional video channels, and both receive high engagement. We've got a great campaign live right now from a global advertiser, and they wanted a number of particular KPIs met, and we're exceeding all of those KPIs, and none of which the competitors were submitting. So we're really pleased to see those opportunities being captured and scaling up, and it represents... really a look into what's possible for 2026 and beyond. And if we look here, you know, what kiddos is versus what Prado is and kiddos is this kind of core business that built the identity free, marketing and value creation platform and infrastructure that was the seed of this entire business. And now that we see the market changing and identity-based advertising becoming more challenging and it opens an incredible door for Prado in that the mass market is there. We can win approaching more hard to reach audiences such as perhaps seniors or multicultural and also the mass market, which is what we're after. So it's the same platform. But we can we can approach both ends of the market with it. Identity based advertising had a huge growth from maybe 2020, 2005 until 2020. And then it started to decline and it's down more than 50 percent over the last few years. And this really kicked off with Apple and Amazon. you know, introducing the app tracking transparency and making it far easier for users to push do not track, which most people do. And so now, you know, it's very difficult for groups that are dependent on identity based cookies and other signals to achieve and secure the value out of the advertising. And so with a contextual based approach, which is what we're doing, and we've built As far as I know, the leading tools on AI and contextual targeting and delivery and execution when it comes to the mobile environment, this area is up more than 300%. And we expect that to continue. And for kiddos to make outsized gains in this area as it becomes more commonplace, both mobile advertising and contextual targeting. And if we look at this in terms of the market as a whole, a lot of competitors who are dependent on data, they're only able to target about 27% of the signals that they receive because that's how thin the identity-based targeting has become. Whereas Prado and together with kiddos, we can target the full 100% because about 30% is kids, 70% teens and adults, and we can reach the whole market and we're constantly evolving our technology and platform and building opportunities. a real competitive moat around that using an AI first strategy that is rolled out across the company, but is core on our targeting capabilities and our optimization and delivery capabilities. But we're speeding as a company through the adoption and investment in AI so that it helps us to achieve more with just that small staff of under 60. This is a great example of a campaign that we ran with McDonald's for a multicultural audience and was a great success. And we're really proud of our partnership. And they are able to get the value out of the campaign and continue to bring in new customers and repeat customers because of mobile advertising with Prado. Contextual advertising is getting a ton of great coverage from the advertising boards and technology companies. And we're seeing over 40% better engagement, better recall, higher return on investment. And again, Kiddos and Prado are leaders, absolute leaders in the contextual targeting system. And we continue to make great strides in our ability to target and deliver within this vertical. Brands come to us, they just want to reach those customers. And they can do so on our platform, which is totally core to our system. We're connecting and bringing in all these different unique assets that allow us to publish out. It's very powerful. And the input signals that we get allow us to run through the AI targeting system to then deliver with higher value each turn. Each time it spins through the system, it's adding value and allowing us to target better and build that competitive moat. What's exciting too, I spoke to the team, is that sometimes when we look at our position in the market, When you're an enormous company, 500 people, maybe 1,000 plus, it's very difficult to become AI first because there are so many processes and so many structures that you need to change to be able to make that pivot. And if you're small, very small, under 10 people, you don't have the platform or infrastructure to be able to have an impact in the market should you adopt AI. really that 50 people to 60 people is the exact sweet spot to be able to have a leading infrastructure and systems and some incredible staff and capabilities internally, but not have too much bureaucracy nor process nor hierarchical structures so that we're really able to lean into AI and reap the benefits as we move forward, which we're starting to see and is very exciting as a company. And that flywheel is really starting to take off using KiteIQ, which is our targeting system. and augmenting it with with AI and structure. And so, you know, I appeal to the investors out there to continue to look at kiddos and to reach out to myself and Phil and the rest of the investment and finance team here and, you know, speak to us about where we're at and look at the investment case. You know, we put together a great year in 2025, 32% growth to 18.5 million. We're profitable, 475,000. Our second year of profits, increasing cash balance, highly skilled technology operations and commercial team. We've made great investments in sales and marketing, which we expect to see returns on in 26 as we continue to push in the market. and very excited. On the final slide here, I'm just going to leave up for as we move over to Q&A and welcome any questions from the analysts in the audience.

We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. And if you are muted locally, please remember to unmute your device. To begin, the following questions were submitted in advance by investors. What were the key drivers behind the company's strong revenue growth in 2025 and how sustainable are these trends going forward?

Right, thank you. Well, the key drivers for revenue growth are from increased demand from our advertisers as kind of the key component. These advertisers have often worked with us before and are comparing the results that they're getting from kiddos versus other platforms. And they're seeing outside gains. They're seeing better value, better performance. better targeting, and they're also digging in deeper because we get to know their teams more and we can show them that actually this is a platform solution, that actually there's real infrastructure that is making live decisions to help them unlock value. And so this is growth that is sustainable. This is growth that I believe we are going to continue to bring in more global brands into our portfolio. And I honestly believe that we're going to see this growth continue and very excited for the future. Thanks for the question.

Your next question is the company increased investment across research and development and sales. How should investors think about the balance between growth investment and near-term profitability?

Thank you. Yeah, great question. The way that we look at it internally is that we're always prioritizing the revenue growth first. So we want to make sure we're capturing that. And so that was a bit of the story in 2025 because we knew we had a lot more revenue committed and we had some infrastructure build out to do. And so we, through Q4, we captured all that revenue and we proved to ourselves that with the existing platform, we could do it. And that it was totally scalable. And so now in 26, we are kind of working on both ends of this equation. So we've got we know that more revenue is coming, but we're also the platform is that much more mature. And so we're able to spend time not just on capacity expansion, but on infrastructure optimizations. and with the rollout and investment in our AI, which is going to bring in some outsized gains. And so, you know, should our plans come together, we're going to see improvements on both sides of this equation. We're going to see increased revenues and we're going to see more stable R and D investments that are going to create more value and more opportunity to bring a higher percentage of that revenue to the bottom line. And so, you know, it's an AI first system and we're going to be leaning on that to help us be more efficient and realize those operational leverage opportunities that we're creating into higher profitability figure.

Thank you. Your next question. Why is the equity based compensation an important part of your strategy?

Right. Yeah, thank you. Good question. Honestly, the equity compensation is a critical component of our strategy because it is all based around retention. We have incredible culture here at Kiddos and amazing longevity and loyalty with our key team. But at the same time, We have to be constantly aware that retention is critical and the stock-based compensation is a key way to lock employees into our vision and make sure that... you know, they they see the light at the end of the tunnel. We're always conscious of the dilutive aspects. And the more recent awards that we've made are only dilutive after three years. And the company can decide to pay in cash or stock. And we're always operating within what is approved by the shareholders. So it's a critical retention and we want all of our employees to be rewarded based on our success and their hard work.

Your next question. You recently emphasized the teens and adult segment. How does this fit with Kiddos' core kids business and what opportunity do you see with Prado?

Thank you. Yes, the kids business is our core business and we continue to see outsized gains within that core business. And we think that there is still several more years at least to continue to make outsized gains in that business. However, there is a mass market opportunity and Prado continues to see great early signals and great feedback from the brands that are working with us. As we continue to make the investments to create the value out of the platform, I believe that we're going to be able to lock those customers and start to move their share of wallet much, much higher over the next one to three years. And then that will allow us to really begin to scale the business and lean in and start to take budget away from CTV and social on media plans. And one way I look at it with the team is that each year that we have that focus and that investment made on the platform, it creates so much more value for our brand advertisers. And within the sensitive audience of kids, we've proven that capability again and again. And so now it's our opportunity to continue to invest, to continue to move the system forward, to then prove it to the mass market, the non-kids brands, at which point I believe the spend will truly scale.

Your next question, how has Kite IQ progressed in 2026 and what are your key research and development priorities?

KiteIQ is our contextual targeting system. It is an AI system that we have built from scratch and it scans the entire in-app environment and helps to categorize apps and then present them forward for campaigns. And so this system is critical to our future and We have developed new dashboards for it. We've moved it into the core infrastructure. We're putting feedback loops on top of it, which are all AI driven. And so KiteIQ is a central component to our system. And as far as I'm aware, it is the leading AI contextual targeting system across the mobile gaming infrastructure. And it is a core piece of our future that we will continue to invest in and I believe will be a core differentiating factor for the success of Prado as it is already for the success of Kiddos.

Thank you. We will now turn the call over to our analyst. Your next question comes from the line of Sid Rajeev from Fundamental Research Corporation. Your line is open. Please go ahead.

Thank you, Jason. Nice presentation and congratulations on the strong revenue growth. Could you please give some color on the appetite for ad spending so far this year, especially after the onset of the Middle East conflict?

Of course, yeah. Of course, the conflict is a disruption in many markets, although we have not seen any disruption whatsoever in the media spend that we see. I think there are multiple factors there. I think that the main one being that our core markets of North America and Europe have been less disrupted on average. core consumer trends and perhaps any delay that you would see from increased prices through energy disruptions would be more delayed, but we're not seeing any disruption whatsoever from the crisis in the Middle East.

That's good to hear. One more question, if I may. With the global crackdown on social media for kids, are you seeing a shift in user behavior towards

mobile gaming apps towards your segment yes and uh thank you for bringing that up i it the tailwind of the pushback on social media is wonderful for our business um and i think is is still the pendulum has a long way to go with there i have myself a 15 year old and a 12 year old uh girls and i'm well aware of the this the harms that social media can do luckily we stayed away from those for the most part and uh it is truly uh a disruptive technology to um natural development. And I think that governments are entirely correct to be pushing back on the access of these platforms. And absolutely, we are seeing increased interest from advertisers in a number of reasons, not just the ones that have imposed the bans. But if you think about social responsibility, if you know that your audience is negatively affected by a platform, why would you want to put your advertising money there? So I think we're seeing a shift in terms of priorities, both on the consumer usage pattern, but also on the social responsibility thought process of the brand spending the money. And so mobile gaming is benefiting from both of those. And also like... the main substitute against mobile gaming for reaching kids is YouTube, but YouTube with the adoption of YouTube shorts has essentially become the, um, the endless horizontal scroll, uh, that is TikTok. And so, um, the really there is YouTube is a, is a, is a social network of, of similar, um, negative consequences and so mobile gaming benefits on all points from that development and that development of outlawing social media has a long way to go i believe because it is well deserved good to hear thank you jason and again congratulations on the record revenue thank you so much with that we will continue with the previously submitted questions by kiddos investors your next question in a competitive market like ad tech how does kiddos differentiate itself from peers our key differentiator is that we are a full stack infrastructure provider so there are a lot of um different types of competitors there are those that uh compete only at the top layer on the creative layer we have that but we but it doesn't express itself unless you have the the full infrastructure layer and there are large competitors that have infrastructure but do not have the specialization or the kind of tools and levers and triggers that have been built into the kiddos system to specifically provide value to our customers and so because the kiddos system is custom designed we're well differentiated and in an excellent position to continue to grow our market share with all sorts of different brands because it's not just the kids market that these unique aspects of our system help us to differentiate. There is a host of different reasons that we extract more value out of media and create more efficient media and more engaging media for our clients because of the technology path that we've created.

Your next question, how are industry shifts impacting demand for your platform?

Well, certainly privacy regulation is a critical one. We've got the signal loss that I discussed, we've got brand safety, we've got the social media aspect. And so these are all exciting kind of tailwinds that are happening in the market and gaming amazingly is something that parents and families and people young and old are really embracing now more than ever as a positive entertainment format that it welcomes ad-supported units. And so our integration into this leading form of entertainment with fewer of the negatives and also getting over the ad tech challenges positions us in a very unique and high value position. And so 2026 is looking great. And I think each year after that, as we continue on this run, the industry shifts will continue to support our growth.

Can you give some color on the long-term vision for Kiddos?

Of course. So Kiddos, it's an infrastructure first, AI first, value creation engine for brands. And it's totally unique and it scales and is global and it can solve all of the brand's I don't want to say problems, demands and achieve goals for what they're trying to do in the marketplace. They're trying to build awareness. They're trying to secure new customers. They're trying to entertain customers. They're trying to do precision targeting of unique and difficult to reach audiences. And the kiddos and proud of system delivers this. Not only does it do so through with efficiency and with finesse, but it does so in a way that's easy to use and can be executed from brands, DSPs, agencies, and many different ways. And so it's a flexible, powerful AI first value creation tool for brands.

Your next question, what are your key priorities and milestones for 2026?

2026, there are a number of key aspects that we're working on. We continue to, on the technology side, we continue to integrate AI and move outsize productivity gains across our entire system and our entire staff within the operations team. AI, again, using it to integrate across operational aspects and achieve high productivity gains. It's our goal to grow revenue and outstrip operating expenses even greater than we did in 2025. And it's our goal to pass more of that increase in revenue and more of that existing revenue to the bottom line and increase our cash position and open up new opportunities and higher stock price for our investors.

Your next question, how do Kite IQ and your full stack platform enhance performance and positioning?

The KiteIQ system being a contextual targeting system, it helps to create environment and identify the environment where brands, customers are engaging. And so through that tighter targeting, it creates a better performance. Through that tighter targeting, it puts the ads in front of the correct customers and allows us to kind of scale and create more value at the individual campaign level.

Your next question, how do Kiddos and Prado fit together strategically?

Kiddos and Prado fit together strategically because it is one system. Everything is coming from a single engine. The only key difference is that on the Kiddos side, we have guardrails written in so that no data is ever exposed. But the value creation and the targeting tools, because it is all built on a no data principle first, they're the same system and they're both scalable as a shared infrastructure. And as we continue to move in to unlock the opportunities of this AI and the scalability, then we will get the outsized gains.

Your next question, what traction are you seeing with Prado and how do you plan to scale it?

The traction with Prado is very strong. It's still our newer product, but we continue to make gains. We've actually just launched a new kiddos website and coming soon in the next little while will be the new Prado website. And we're excited to kind of bring that new value to market. And we're in a number of great conversations with large brands. And we continue to launch campaigns on a daily basis under the Prado system. Ultimately, it's going to come as brands begin to understand the benefits of the mobile gaming environment. And so there is an educational piece, but our sales and marketing investments are really paving the way to help unlock that growth.

Thank you. This concludes the Q&A portion of our call. I will now turn the call back to Jason Williams for closing remarks.

Thank you, Jade. It's a pleasure to have you here and thank you for spending some time with me and the kiddos story. Please continue to watch us and we will be delivering the growth that we've discussed today and the value that our brand partners are looking for and soon the large gains in our stock. So thank you so much to all the investors and watchers and please reach out at any time. Have a great day. Thank you.

This concludes today's call. Thank you all for attending. You may now disconnect.