Sabio Holdings Inc.

Good morning everyone and welcome to the Savio Holdings earnings call for the first quarter of 2023. The financial statements and MD&A have been filed and they can be accessed through the CDAR website. My name is Aideen McDermott, Investors Relations Associate and joining us on our call today we have co-founder and CEO Aziz Rahim Tula and Sajid Premji, Chief Financial Officer. We'll start today's call with Aziz and Sajid's prepared remarks, and after that, they will take questions. Please note that certain statements made today may contain forward-looking information that is subject to both known and unknown risks, uncertainties, and other factors. For a complete description of risks and uncertainties facing the company, please refer to the company's MD&A and other continuous disclosure filings that are also available on the CDAR website. Please also note that all figures discussed today are in US dollars unless otherwise stated. With that, I will hand it over to Aziz.

Thank you, Aideen. Good morning, everyone. Q1 was probably one of our most challenging quarters we've had since becoming a public company. Not only did we have to deal with advertiser delays caused by uncertainty in the macro environment, but also in some cases, requests for additional third-party analytics integrations with Google, which our engineering team did at lightning speed, providing us another unique offering relative to some of our peers. Despite those factors, we were still able to not only deliver strong year-to-year growth, organic top-line growth, but also deliver our Sabia first in being adjusted EBITDA positive for one-third of Q1. As many of you know, we have a seasonal business, but even in our record year last year, we didn't manage to deliver monthly positive EBITDA until Q3 2022. While this doesn't mean we'll be positive adjusted EBITDA from here on out, we do believe that this demonstrates that we have the levers to deliver on our goals of making 2023 the fourth straight year of positive adjusted EBITDA and double digit top line organic growth while continuing to outperform our peers in CTV, OTT, market share growth. Speaking of CTV OTT, the transformation of our business that we started two years ago from one focused on mobile display into one of the fastest growing players in the high growth CTV OTT marketplace continues to provide strong momentum with 63% year-to-year growth, helping us secure historical high amount of dollars from new top 50 US nameplates in Q1. All while continuing to maintain a very healthy renewal rate of our existing brands. Overall, we feel the worst is behind us, and although the recovery in the ad market is slow and uneven, the fact that we have one of the most complete end-to-end tech stacks in the ad-supported streaming space, along with the fact that we have a strong foundation of repeat customers delivering strong organic growth, positions us well in one of the only areas of the market that continues to see overall growth in the ad market. I'm going to now hand it over to Sajid Premji, our CFO, to dig deeper into the numbers. Sajid?

Thanks, Aziz. Despite planning cycle delays and macro volatility that had a pronounced impact on the first two months of the quarter, we were once again able to post double-digit revenue growth for Q1 on the back of a strong turnaround in March. For the three months ended March 31st, 2023, Savio generated 6.5 million US in sales, up 16% from 5.6 million US in the prior year. In further evidence of the stability of our sales model, 79% of sales were generated from repeat customers. The turnaround was led by our growing connected TV and OTT business. Connected TV and OTT sales once again outpaced the competitive growth rates of our peers in the estimated 21% growth rate for the U.S. CTV industry at large. Connected TV and OTT sales grew 63% to 3.8 million U.S. compared to 2.3 million U.S. in the prior year's quarter. For the third straight quarter, connected TV and OTT streaming was our dominant sales category, accounting for 59% of our overall sales mix versus 42% in the prior year. This growth was substantially organic, with the Videlian acquisition contributing approximately 10% of our first quarter CTV OTT sales growth. First quarter mobile display sales were 2.5 million US, down 23% from 3.25 million US in the prior year's period. Aligned with our sales strategy, our legacy mobile display customers continue to shift their spend with Savio from mobile display to higher margin mobile OTT streaming, which is recognized under our CTV and OTT streaming category. On a trillion 12-month basis, the shift from mobile display to connected TV OTT has contributed to a 45% increase in average deal sizes, with CTV OTT as a category representing 61% of our overall sales mix on a trillion 12-month basis. A quarterly adjusted EBITDA loss of US$2.2 million was fully incurred in the first two months of the quarter as labor shortages within our partners contributed to a delayed start to the 2023 planning cycle. In a testament to our ability to quickly adapt our operating infrastructure to changes in market conditions, SABIA was able to quickly implement cost efficiencies both above and below the line. These measures, in addition to the return to significant top-line growth in March, culminated in Southdale delivering positive adjusted EBITDA for the month of March. Digging in deeper, gross margins increased to 62% from 61% in the prior year's quarter, aided by greater use of bd supply, while our closest peer group experienced year-over-year margin compression. As part of our supply path optimization strategy, approximately 70% of our CTV supply came through direct supply integrations. Meanwhile, operating expenses normalized for higher Q4 commissions declined on a sequential basis as our cost efficiency initiatives had an expedited impact, with further returns expected to be realized over the next quarters. While we expect some monthly variability, our ability to post monthly positive adjusted EBITDA at the earliest point in our company's history, despite the infrastructure investments in the billion overhead added since the prior year's period, positions as well for the rest of the year. Consistent with prior years, over 85% of our annual revenues are expected to be generated over the next three quarters. We ended 2022 with 3.3 million U.S. in cash on our balance sheet and 2 million U.S. still available under Atlantic Credit without a bank. We intend to renew the line when the renewal negotiation period commences this summer under bank policy. Early discussions under the intentions to renew have been positive with no renewal concerns communicated. At period end, we had 46.9 million shares outstanding, 4.2 million warrants outstanding, and 3.3 million options in RSUs outstanding, with insiders owning 64% of the company. Now we'll turn things back to Aziz to discuss our 2023 outlook.