Sabio Holdings Inc.

Good morning, everyone, and welcome to Savio Holdings Q1 2026 earnings call. The financial statements and management discussion and analysis are available on CDAR+. Today is Tuesday, May the 26th, 2026. Joining us are Savio's founder and chief executive officer, Aziz Ramatullah, and chief financial officer, Sajid Premji. After management's remarks, we will open the call for questions. Analysts may raise your hands, your virtual hands, and investors may submit questions in the question and answer window. Before we begin, please note that today's remarks may contain forward-looking information. These statements involve known and unknown risks and uncertainties. Please refer to the filings on CDR Plus for more information. All figures are stated in U.S. dollars unless noted otherwise. With that, I will turn it over to Aziz.

Thank you, Martin. Good morning, everyone. While we have executed well on our overall objectives by growing our business at 26% higher since going public, including average growth of 24% in non-election years and 61% in election years, all while achieving adjusted EBITDA profitability in four of the last six years, we've been equally obsessed with building a more diversified, resilient company that is not dependent on one product geography or category of business. The investments we've made along the way in our unified tech stack with our own DSP analytics and streaming channel, are helping us deliver on that objective. In Q1, a diversification strategy that started to see traction at the end of 2025 has started to accelerate in 2026, and the timing could not be better. Across the industry, managed service business continues to face pressures, as advertisers increasingly shift towards more agile programmatic approaches. This is especially relevant during periods of uncertainty driven by tariffs, inflation, and geopolitical instability, where advertisers require greater flexibility and ability to quickly adapt strategy in real time, precisely what programmatic enables. At the same time, Tariff-related volatility in the U.S. has benefited international advertising markets, with the global brands we work with increasingly leaning into regions where greater stability and less exposure to disruptions is enviable. The result is more diversified revenue composition in company history, while also positioning us for meaningful advocacy and political spend beginning this summer. We've evolved from a business that was 90% U.S.-managed revenue to a business where 62% revenue now comes from programmatic and international, as we saw in Q1. These opportunities are highly scalable and provide long runway for growth. Importantly, these two vectors helped us grow top-line revenue core by 6%, despite continued challenges in major categories, including auto-related tariff disruptions and consumer spending pressure tied to inflation. Our strategy is also resonating with clients. 77% of our new programmatic clients powered by AppScience in Q4 returned in Q1, and 36% increased spend quarter over quarter. In addition, 95% of new international customers renewed, further enforcing the durability of this strategy. We're excited about the year ahead, and we will speak more about that in detail. But first, I'm going to hand it over to Sajid to get into the numbers. Sajid?

Thank you, Aziz. Q1 had some headwinds that impacted the top line, but the underlying business tells a very different story. The investments Fabio made in 2025 are clearly paying off. Consolidated gross revenues declined 10% overall, driven by two temporary factors. First, a $1.4 million shift in political and advocacy spending, which in election years tends to be concentrated in the second half. Second, a temporary advertiser pullback in March tied to the Middle East conflict. Despite those headwinds, 85% of our consolidated Q1 revenues came from returning customers, even in our newest and fastest-growing areas. The sales decline was largely offset by strong growth in our newest international and programmatic offerings. Normalized for political and advocacy, our core business actually grew 6%. Core asset-supported streaming revenues rose 18% year-over-year, excluding political and advocacy. That continued double-digit growth in our foundational business, which made up 81% of total gross sales this quarter. That growth was led by our two newest offerings, which scaled significantly in Q1. International revenues surged nearly 13 times, up 1,173%, to 3.1 million U.S. from just $244,000 in Q1 of 2025, already representing 60% of our full-year 2025 record. Notably, this grew sequentially from a record $2.7 million in Q4, even though Q1 is a historically softer quarter for ad spending. We are seeing these levels remain steady in Q2. Our new programmatic offering is right behind it, also up nearly 13 times, or 1,175%, reaching $2 million from $156,000 in Q1 of 2025. Like international, programmatic also defies seasonal trends. 77% of programmatic customers renewed between Q4 and Q1, and 36% of those customers increased their spend if they moved into a seasonally softer quarter. Together, programmatic and international accounted for nearly 62% of our first quarter consolidated gross revenues. That highlights how quickly these new offerings are scaling. For context, in 2025, 82% of programmatic sales and 88% of international sales came in the second half of the year. As these businesses enter 2026 from a higher Q1 base, they'll be joined by a return of significant political advocacy dollars in the second half. Savio has already secured over $5 million in political advocacy commitments for 2026, with the bulk expected in the second half. Gross margin was 53% in the quarter. This reflects early pricing investments concentrated in January to drive adoption in their international and programmatic offerings, as well as the shift of higher margin political advocacy spend to the second half. Margins improved as the quarter progressed. Adjusted EBITDA was a loss of $3.4 million. This reflects the fact that higher margin political advocacy sales were largely replaced by lower-margin programmatic and international sales versus the prior year's quarter. Year-to-date, we've implemented $2.3 million in annual ed cost reductions. These savings will benefit the second quarter, with the full impact kicking in in Q3 right as material political and advocacy dollars returns. With accelerating momentum in our most scalable channels, a growing customer base, a leaner cost structure, and a strong pipeline of second-half political commitments, Savio is positioned for what we expect to be a record year and a return to strong profitability in the second half. Turning to capitalization, Savio ended the quarter with $1 million in cash. That outstanding under our U.S. and U.K. credit facilities declined to $6.2 million from $9.1 million at year-end coinciding with a decline in AR between Q4 and Q1. Sandville's receivables continue to show very low loss rates. This reflects a customer base made up primarily of major global brands and leading advertising agencies. As collections come in, they are used to repay our facilities, which can be redrawn for ongoing working capital needs, giving us a suffer-punishing source of liquidity. On the strength of our international business, Subsequent to quarter end, Savio was approved for an increase in its UK credit limit from £3 million to £5 million. We also supplemented this by issuing a $900,000 Canadian dollar convertible debt note. Together, these steps give Savio greater balance sheet flexibility as we enter what is historically our strongest revenue quarter of the year. Aziz, back to you.

Thank you, Sajid. And to recap, core growth position for strong growth backed by 90% renewal rate. AppScience powered programmatic is doing incredibly well, delivering strong results with 77% renewal rate. International expansion is accelerating at an even faster rate than we anticipated. And finally, this is a political year, and we have already achieved and received commitments of 5 million political advocacy commitments thus far, with more anticipated. We are beyond excited about the quarters ahead and do see a positive future in the near future. On that note, I'm going to hand it back to Martin for questions.

We will now open the line for questions. Analysts, please raise your virtual hands. Investors, please submit questions in the question and answer window. The first question is, Given the exceptional growth in Sabio London, which is now 38% of gross revenues, how fast can you continue to grow this business?

We don't have any clear, we don't provide forward-looking statements, but we will say that we are incredibly excited and we think there's just a lot of momentum and a lot of untapped opportunities out there that we haven't even started realizing. We're excited. We're very bullish on that, and we're also bullish on our core programmatic and our core business in the U.S., along with our creator TV channel. So we are excited that it is materializing quickly and that it's having meaningful impact on our business today and that that acceleration will continue happening the rest of this year.

Sajid, anything you want to add to that? Yeah, yeah. I think that was very well said by Aziz. I think that One thing just to reiterate is what we said in the transcript is that, you know, Savio London did, you know, we served all of Europe in the Middle East, did 3.1 million U.S. of sales in Q1, and we're seeing those levels remain steady in Q2. So when you think about that, we're already on pace to exceed all of 2025's sales by the end of Q2. If you think about 2025, we did more than 80% of our international sales in the second half of the year. We still expect the second half of 2026 to be bigger than the first half of 2026. And so, you know, all that said, you have the international scaling up at a really fast rate in the second half, and then you have the return of political advocacy dollars returning in the second half, and then you have programmatic office scaling up in the second half of the year. So we really think this is going to be a huge second half. And what the international rate does for us is it provides more sustainability in these off-political years. You know, no more are we stuck in these boom-bump cycles where we have to make up for large political dollars in these off-political years. These international dollars are more sustainable and they're more consistent year after year after year. We did, you know, about $5 million in this last political year, off-political year. Next year, in 2027, if we're starting off with a bigger base at the end of 2026, international loan wouldn't compensate for any, you know, off-political year deterioration in the political side of the spectrum. So we really feel that international has changed our business fundamentally.

And also, I'll add to the programmatic component, is the best part about also programmatic is it's also allowing us to diversify logos very quickly. So we're less dependent on few logos, and now... going back to this idea of resiliency and being able to navigate off election cycles, we've essentially transformed our business effectively to do that. And I think we're seeing the benefits of that, and you'll see the full breadth of that towards the second half of this year, as Sajid alluded to, but also going into 2027.

Thank you. Nicholas Cordellucci from Atrium Research, your microphone is open.

Morning, guys. Thanks for answering my questions. I just wanted to get some more details on the $5 million of political commitments. So what does that mean exactly? Is that cash in the door that people have already paid for, or is it a contractual commitment? Maybe just some more commentary. Okay.

It's basically a contractual commitment, but that's a minimum amount, and we expect that number to increase, and that's just what we have seen so far. So there's a lot of other things that are coming in. So it hasn't been added into our overall number yet. What is going to happen is that is going to have an impact starting this summer. So you haven't even seen, we haven't seen any of that political or even advocacy. And what happens, as Sajid alluded to, is Advocacy in political years gets pushed back to the second half of the year. So while we had the benefit of advocacy in last year's Q1 number, we didn't see any of that in this Q1. And so that gets more concentrated in, you know, usually in July, August, September, and then leading into the election cycle. And we might even see some in June. But, you know, really that is where it sits. Right. Got it.

And with this cost-cutting program, can you tell us a bit more about the details on that? What kind of expenses are you pulling out of the business? Are you guys using AI a lot to supplement that?

We are. We're seeing efficiencies across the board using AI, but it's also looking at our changing business overall. And what we mean by that is, is we are seeing, as you have heard on this call, we're seeing a lot of expansion international. It's allowing us to move some resources from not that we don't see a lot of great growth ahead here in the U.S. We are, but programmatic provides more efficiency from how we execute campaigns. We're also implementing, working on agents to implement and fine-tune some of the procedural things we do on our operations side. So we are looking at efficiencies overall that's benefiting our business, and that is leading to our ability to then move those investments into international. So U.S. market more mature, you know, programmatic taking a hold there provides more efficiency, but then international market providing a lot of growth, which primarily is driven by managed service. So we're able to play in both of these markets. Sajid, anything you want to add to that?

Yeah, I think just, you know, as Zita mentioned, you know, programmatic has played a big part in that. And, you know, we said from the outset that programmatic is a lower growth margin business, but it's less OPEX intensive. You need fewer senior salaries, you need fewer account managers to manage those campaigns. And so now that programmatic has reached a certain level of scale, you know, including 2 million sales in Q1, we're in a position now where we can move on some of those OPEX reductions, and that's what we've done. And so We expect that the programmatic continues to scale, the international continues to scale. There will be further opportunities for efficiency ahead as well.

Yeah, that leads to cost reductions, as Sajid mentioned, overall.

Yeah, understood. Okay, and the last one for me would be just on Creator TV. If you guys could provide an update on what's the latest with that. Has it been contributing meaningfully yet, or do you expect that over the coming quarters?

Creator TV continues. The first objective last year was to get to a minimal viable product, which they did. Now they're on 149 million, have access to 149 million devices across the U.S., And so from a revenue perspective, we do believe that it's going to start contributing. We're already seeing some contributions starting to take place in Q3, but really think that it is in 27 that that's going to play a bigger role. And once again, as Sajid talked about earlier on the call, we're really setting ourselves up for not only a strong second half of 26, but to end these, you know, boom and bust cycles that we've experienced because of political inadequacy. We're streamlining business. We've now diversified the business, and Creator TV plays a role in that next year. So we're excited about the contributions it'll make next year overall.

Okay. That's the time, guys.

Great. Thank you. Gabriel Lung from Beacon Securities. Your microphone is now open.

Morning, Matt. Thanks for taking my questions. Just on the political spend, if I recall, back in 24, I think you guys did about 7.9 million of political. I'm just curious, based on the current backlog of what you've signed so far, how do you think you can attract this year relative to the last cycle?

Right now, we're feeling optimistic. I mean, there's a lot of opportunity. And what was different about the last cycle relative to this one is we had advocacy come in in, you know, like Q1 and Q2. And now the good part is we were able to fill that void with our international and programmatic growth. And so now we have all this money that that is likely to come in and concentrate in the second half of the year. So we're feeling good about still the opportunity to track on that amount. Now, obviously, there's a lot of variables here. Candidates are changing frequently, and so, you know, it's hard to say exactly what's going to turn out, but so far we're feeling cautiously optimistic as with the second half. Saj, anything you want to add to that?

Yeah, I think that, you know, what's sometimes underappreciated is that in these midterm election years, like we saw in 2022, advocacy comes in quite strong. And so, in the second half of the year, you know, that $5 million more commitment, you know, there could be a substantial share of that. That is driven by advocacy as well. So, we're definitely excited about the second half of the year.

We're also seeing international opportunities with advocacy. So, you know, this is going to be, this is opening us up to now other opportunities that are outside of political. And advocacy, of course, is, you know, advocating on behalf of various brands in a communication strategy. And so we see that as a potential of growing globally as well, in line with the growth that we're seeing global, you know, on our brand business.

Thanks for that. And just in terms of the, I guess, your... The rest of the business, you know, what sort of feedback are you getting from some of the customers within the traditional sort of high valley verticals? You know, what are they telling you about their feelings of how, you know, market spend might go for the remainder of this calendar year, notwithstanding any big, you know, unknown events?

Yeah, we're getting a lot of optimistic kind of, you know, sentiment overall. I mean, and you think about specifically, and we've talked about this before, Gabe, right, on the automotive side, which has always been a very strong vertical for us. What we noticed, what happened last year is the tariff impact was significant, especially in the second half of the year. And that impacted, the vertical impacted us. What we're seeing now is those automotive companies are getting a position because they're getting these rebates back, the tariff rebates that they're putting into the hands of – they're actually looking to potentially deploy that in terms of advertising spend. I think Walmart just announced that they're going to use some of those rebates. to help with prices. So there is a sentiment that some of this now, the tariff rebates that are coming back are going to have a positive effect on their bottom line in the second half of the year. But they do want to deploy that to increase that overall revenue. So we haven't yet, despite a war going on, and obviously it had some impact on us in March, that's where we saw the biggest impact was we were pacing incredibly well in January, February, and then March there was a little bit of pullback. And then there was a reverse that started taking place in Q2. So thus far the sentiment is very positive. We haven't heard of any cutbacks. In fact, in our specific case, and it relates to Q4 and Q1, we actually grew like – 30% of, 70 plus percent of our clients who spent on us in Q4 and programmatic came back in Q1. But what was interesting about that, 30-plus percent increased spend. So that was kind of unique in the sense that going from Q4 into Q1, increasing spend, which is something that doesn't happen often. So we believe the sentiment is getting better, especially as it relates to Q2, and we're seeing very positive momentum. But we haven't seen anything that's giving us a lot of caution into the second half of the year. Sajid, anything you want to add to that?

No, I think that was well said. If anything, it's a caution. We're feeling, you know, very optimistic in the way that we have basically three lines meeting in the center, right? You have your programmatic scaling up at a fast pace, you have your international scaling up at a fast pace, and you have political dollars coming back. And that's all culminating in the second half of this year.

Yeah, we're cautiously optimistic. This is going to be one of the best second halves in company history. So, you know, We're super excited.

Maybe one last question for me. In terms of the $2 million in cost savings you're expecting, how much of that has been realized so far?

Not too much has been realized so far. We put in the first cost cut at the beginning of Q1. So there was some benefits in Q1, but you'll see a bigger benefit in Q2. And then the full brunt of both COP cuts will be felt in Q3 and onwards. So they are significant. $2.3 million of COP cuts are significant COP cuts. So it will have a profound impact on our bottom line in Q3 and Q4. It will also benefit in Q2 as well.

And where should we see most of the cuts coming from? Which operating lines?

So they were widespread. You know, we cut in back office functions like finance, NHR. We also cut on the sales side of the coin as well. You know, as we've talked about, we have a business that's transitioning. You know, more and more sales coming internationally. So there's the reallocation of resources there. And there's also the fact that we have programmatic now, which is more operationally efficient. And so there's been cutbacks around there as well.

Gotcha. Thanks for all the feedback.

Thank you.

Thank you. Thomas Hui of Paradigm Capital, your microphone is now open.

Guys, just one question from me. On the 53, I think it was more than this quarter, you mentioned that there was some strategic pricing there, and that those are... expected to revert exiting Q1. You can just dive a bit more on that and what the expected price margin should be heading into Q2 and onwards. That's great. Thanks. Ajay, you want to cover that?

Yeah, yeah. So, you know, at the beginning of the year, we did come out with some aggressive pricing to encourage adoption of our products. And that was really, you know, contained for January for the most part. And so, you know, it did benefit. we saw strong early adoption of programmatic renewal rates between Q4 and Q1. And those renewal rates even persisted after the prices went up in February and March. And so it was definitely beneficial. And so, you know, where we exited, you know, Q4 was in the, I would say, I mean, I think in Q1 was in the mid-50s. You know, I think that there is a roadmap to sustaining that. in Q2. And then what's going to really benefit Q3 and Q4 is that political is a higher margin business. You know, we're talking about plus 60% businesses. We've also are in the process of negotiating better supply terms with our key vendors. And so you'll even see margin improvements on our core business as well as our political business coming back as well. And so there are a couple of things there which we believe can, you know, really pave the path to get us back into the high 50s eventually.

Okay, thank you for that. And if I could squeeze just one more in. You guys have been on the international side. It seems like you guys are having a nice beachhead in London. It's getting expanded fast. Just what are some of the things that are working strategically and resonating with customers? And as you guys scale that international, do you see a need for more resources like headcount or R&D to drive that growth?

Thank you. That's a great question. And fortunately, we have built and we've invested in our infrastructure along this way. So we're using that existing infrastructure to expand out into the international markets. And so what's resonating is the fact that we have this infrastructure. We're one of the very few companies that have this type of tech stack that is owned and operated, that has all of these three functions within its umbrella. And That is a key differentiation for – and especially as new markets adapt to ad-supported streaming. We're experienced. We've executed well. Our renewal rates are just demonstrating that. And so as it relates to CapEx and how we look at that, we're not seeing a lot of additional CapEx that is needed as we continue expanding internationally. We've borne those costs by building what we have built, a very expandable, defensible tech stack. And now we're just benefiting. And certainly we will have to continue adding, you know, some sales folks and operations. But from a technical perspective, we have everything it takes to continue accelerating.

Okay, sounds good.

Thanks for taking the question. Thank you.

Thank you for those questions. And audience, you may please, as a reminder, please type your questions into the Q&A box. You mentioned there were aggressive pricing strategies in January to gain market share. When can these pricing strategies provide more normalized margins?

We're already seeing, as Sajid alluded to, the reversal of some of that aggressive pricing. And now, as we get into these markets, both programmatic and international, and demonstrating the quality of our work and what is unique about our differentiated offering, especially as it relates to AppScience, That allows us to then go back to those advertisers and start pushing some of those margins up and to other new advertisers as well. uh as i just mentioned we already started seeing uh some improvements in q1 we think the improvements will continue in q2 and then q3 will will you know be in a much better trajectory that'll probably be the steady state of where we're going to be at is most likely q3 and q4 and then of course we get back into the q1 cycle next year and that tends to be a little bit more aggressive so i think the better way to look at where we're going to be margin-wise is really Q3, Q4. That gives you a good barometer. But we're feeling good. I mean, we're able to, as Sajid talked about, also renegotiating some supply deals, getting some additional supply. The key is it's not about our supply that makes us unique because everyone has the same supply outside of our Creator TV, which is going to provide us, once again, the ability to push margins up as Creator TV continues to scale. That is unique supply that no one else has access to. But beyond that, what makes us really unique is AppScience and the household graph that we continue building and expanding. And at this point, looking to expand into international markets. We are looking to launch AppScience in there. We're already doing some beta testing as we speak, and we're going to make a formal announcement on that, of the official launch. But we're excited about the ramification AppScience has. especially in global markets, as it has had in the U.S. markets. Once again, as I mentioned, the renewal rate on Programmatic, it's a new product. We've gone into this market, used our AppScience capabilities to really help us start pushing these margins up. So we're excited about the trajectory ahead and believe we can get value-add pricing based off of the unique differentiation of AppScience.

Sajid, anything you want to add to that? No, I think that's a well said.

Do you envision the AppScience platform evolving into a standalone SaaS offering versus its current role powering the rest of your services?

You know, we've been asked that question before, and, you know, quite honestly, there's always a possibility of that. And the reason we say that is in a highly fragmented media ecosystem, and there's all kinds of different transactions happening today, AppScience's value continues to increase. And, you know, at some point, you know, if we're not getting the full credit of what we're doing with that, absolutely, there could be a real path to us potentially spinning it off and giving it the investment it needs. Similar to, you know, it's the same conversation we're having about Creator TV. Creator TV continues to grow and could be a viable product in and of itself. and a standalone basis. So, yeah, you know, it is something we've explored, and we're always open to those kind of, you know, that kind of thinking because it does add meaningful value.

Fifty-seven percent of returning logos grew their spend year over year. Is this expansion coming from growing budgets, moving budget away from linear TV, or shifting from digital competitors?

I think part of it is just due to we launched a new product last year called Programmatic. People tried it out, and they liked it. They saw their ability to pair app science insights and data to meet their desired audiences, and they saw the ROI was coming in, and so this year they're spending more with us. And so I think that it's a function of us proving ourselves and proving our ROI, and so And you see the same thing play out internationally as well. That business has scaled up, has a very high returning rate. You know, 90% of our sales in Q1 internationally were from recurring customers, from existing customers. And so, you know, I think it's a testament to people seeing the ROI when they spend with Stapio.

Are there particular verticals or market segments that find your data-driven approach particularly resonant?

Automotive has been a consistent player in that. You know, as we've mentioned in the past, we even have, you know, we have licensing deals with a major foreign automaker who uses our data. And they're just simply not also using our targeting, but using our data for analytics purposes. And automotive is a category. Quick service restaurant is a great category simply because a lot of transactions are now happening via app. Financial is, we're seeing a resurgence in the financial category as well. And lastly, obviously, political and advocacy. That is a category where they need the data. They need to understand the mindset of the consumer. better than what is available in the off-shelf market today. But those are really the top categories that we see a lot of momentum. And, of course, we're seeing this new resurgence of entertainment just simply because a lot of money is now going into, you know, obviously the subscription services. And so we're seeing a resurgence of that. But the top three categories continue to be automotive, quick service, restaurant, and financial.

Thank you. There are no further questions. Do you have any final comments before concluding this call?

We don't. Thank you again for joining us on the call, and look forward to chatting again next quarter. This concludes Sabio Holdings' earnings call.

Thank you for joining us today, and this call is now over.