Thunderbird Entertainment Group Inc.

Carrier code 604-683-3555, extension 2, or email investors at thunderbird.tv, and the company will follow up directly after the call. At this time, all lines have been placed on mute to prevent any background noise. I'd like to remind everyone that certain statements made on today's call contain forward-looking information for purposes of applicable securities laws. Forward-looking statements and information discussed on this conference call include, but are not limited to, statements regarding the implementation and effective tariffs on the film and television industry, anticipated adjusted EBITDA growth, sustained growth, and the ability to add more scripted content and grow our production slate, consumer product and ancillary licensing opportunities, Zimmer-McCornell, Starfall, Rocket Saves the Day, The Day You Begin, and Super Team Canada, resonating with North American audiences, the production and success of Sideline 2 intercepted, Thunderbird's ability to navigate industry headwinds, produce and sell more content, and execute on growth strategies, changes in total revenue, and timing for filming new productions. Forward-looking statements are based on estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which are set out in the company's most recent MD&A and other public documents filed under the company's profile on CDAR. Although the company believes that the assumptions and the factors used in preparing these forward-looking statements are reasonable, under-reliance should not be placed on these statements which only apply as of today's date and no assurance can be given that such events will occur in the disclosed time frames or at all. Except for a required by-law, the company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. This conference call is being webcast live, and the archive will be available on the company's website at www.thunderbird.tv following today's call. Please note that Thunderbird reports in Canadian dollars unless otherwise stated. Ms. Twyner-McCarran will now provide the corporate update.

Thank you so much, Frank. My name is Jennifer Twyner-McCarran, and I am the CEO and Chair of Thunderbird Entertainment Group. On behalf of the company, I'd like to thank you for joining today's call to discuss Thunderbird's fiscal 2025 Q3 results. Thunderbird CFO Simon Bodymore is with me, and we appreciate you taking the time to hear the company's earnings update. Once Simon and I are finished, we will happily answer any and all of your questions and provide clarity where needed. We started our last Q2 earnings call by addressing the global tariff situation and we wanted to follow suit with Q3, specifically the recent news around the Trump administration starting to reevaluate the movie production industry. Right now, the entire industry is just waiting to learn more, as limited details have been shared outside of Jon Voight's proposal to make Hollywood great again. As we meet with our partners and wait for more concrete information, we will continue to focus on the health of the business and creating premium content for audiences to enjoy worldwide. At this current juncture, there is no impact to the production we are currently handling. What we do know is that if tariffs are introduced on foreign production, the likelihood of retaliatory tariffs increases at a global level. We also know that the US entertainment industry still maintains a positive trade balance with every market in the world. In fact, according to the Motion Picture Association, the business exports more than three times as much as it imports. Add to this, the world's 10th highest grossing movies last year were all released by U.S. studios. Hollywood benefits from exporting its product all over the world, and movies make a lot of money from international sales. With all this said, this is a fluid situation and one that we will monitor. Our focus is still on just what we can control. We have great relationships with our partners, a busy production slate, and are so proud of the content we regularly deliver to our partners. In the past, Thunderbird has demonstrated resiliency and the ability to thrive in other macro situations, and we will hit this situation in the very same manner. Our company's resilience underpins our success. With or without the possibility of tariffs, it continues to be a time of disruption, and opportunity in our industry. This is witnessed in the evolution of how people consume content with social media platforms further establishing themselves. The 2025 Digital Media Trends Report by Deloitte highlights that the average U.S. consumer consumes about six hours of media and entertainment a day. What's more, the report underscores that each user has a different mix of SVOD, UGC, social, music, podcasts, and more that make up these hours. Not one form of media commands all six hours. Looking across generations, preferences are shifting towards streaming, video services, social platforms, gaming, music, and podcasts. This trend report also highlights that the average household subscribes to four streaming platforms, but consumers are feeling stretched, and many are dropping or considering dropping one or two to ensure that they still have access to content. while also mindfully cutting expenses. An underlying message in this report from our perspective is that business success is reliant on diversification, and this extends across products, content, genres, and partnerships. This is where Thunderbird's business model really shines, and let me explain briefly, starting with our partnerships. Thunderbird has trusted partnerships with the major buyers. Many of you heard me say our company is a go-to for reliable premium content. This is demonstrated by our renewals and repeat business. Highway Through Hell is currently in production on Season 14, and Spidey and His Amazing Friends were renewed for Season 5. Earlier this week, it was announced that Tubi has greenlit the new film, How to Lose the Popularity Contest, based on the 2024 Loveless script by Caitlin Riley and Dorian Keyes. This high school rom-com about a bad boy and a type A overachiever teaming up to win student body president is being produced by Lindsay McAdam and Jason Fisher on behalf of GPM. This exciting announcement demonstrates the traction we are making and the strong reputation we've established in young adults, all underscoring our ability to diversify and thrive. It should be noted in Q3, our company was working on 15 projects with 15 different clients on 24 productions. Cultivating trusted relationships across many productions mitigates risk, spreading our work across multiple channels, and connecting it with viewers worldwide. When it comes to products, we're also diversifying in this respect. For example, JPM's hit series, Dead Man's Curse, has a companion podcast, Dead Man's Curse Volcanic Gold, which has been recognized with a Gold 2024 Signal Award for Best History Series two years in a row. Thunderbird Brands, together with Tokidoki and Space Junk Studios, launched a Murmucorno Roblox game on May 1st. The Roblox game just scratched the surface on the Murmucorno opportunity, and we look forward to more content and consumer products soon to come. Speaking of Roblox, Acquired Preschool Series Mittens and Pants is also featured on the platform with My Carrot Simulator game. Eventually launched this past winter, this game is continually updated with new quest systems and weekly leaderboards. Working with partners like Roblox allows us to tap into new audiences while strengthening brand awareness. Roblox also recently shared its Q1 earnings, and there are no signs of this company slowing down. The gaming platform's revenue increased by 29% to exceed US $1 billion in Q1. while its daily active user count climbed to 97.8 million. Mittens and Pants content is also available on several social platforms, such as YouTube, Instagram, TikTok, with a growing legion of followers across all platforms. This is in addition to Mittens and Pants being available in 78 territories, including U.S. streamers Peacock, Happy Kids, Cadoodle TV, Canadian French-language broadcasters, TFO, and Radio-Canada. Adding podcasts, video games, and social channel content are examples of the new mediums where our content is now being showcased. Increasingly, we are being thought of as a company whose skills in creating content can build and support brands in all industries, not just media. This, of course, in addition to the premium productions we're already widely recognized for, is another great growth area that we see emerging. Premium content continues to set the bar across the industry, and its demand remains constant, even in times of economic volatility, as people still look to content for healthy escapes. In the premium content space, our company is diversifying our portfolio. Atomic Super Team Canada, which premieres on May 16th on Crave, represents our first official story into adult animation with company-owned IP. We're super excited for this series, and we couldn't ask for better timing to launch a show that rallies behind Canada. It truly meets the moment of renewed patriotism, and we're excited to see how this series is being received. Speaking of premieres, Mermacornos Season 2 will be available on May 15th, and Sideline 2 intercepted recently wrapped production. The scripted movie will build on the success of Sideline 1 and the popular Wattpad novel. After its release on Tubi, Sidelined was the number one movie in Canada and the U.S. on Tubi, drawing the largest number of viewers of any title on the platform in its first seven days. With all this said, Thunderbird remains a very healthy company, and our Q3 numbers do reflect this. We are busy today and into the future. While we're seeing, again, a settling back to pre-pandemic levels in terms of demand, Thunderbird's future remains incredibly bright, the strength of the company's growth strategy, and our ability to adapt and be nimble in an ever-changing marketplace. As supply and demand continues to settle and other companies, unfortunately, will go away, it won't be us, and we will get more looks at everything, be it service sales or our own IP. Our multiple locations, including an LA studio, conservative approach, and debt-free balance sheet set us apart from other competitors, demonstrating the incredible upside working with us from every angle thunderbird has tremendous potential content consumption is evolving but it's not diminishing just look at disney's recent numbers the company posted us 23.6 billion in revenue in their q2 representing a seven percent increase over the same period last year and operating income was up 15 percent to us 4.4 billion The streamer added 1.4 million subscribers in Q2 and is forecasting more growth for Q3. Content remains king. The fact is that multiple players are looking for this content, and this has expanded to content for many mediums, sports, games, social, podcasts, you name it. And while the recent threat of media tariffs from the U.S. government compounds an already uncertain environment, our focus will remain on long-term resiliency for the company. which includes capitalizing and seizing opportunities in a time of media disruption while continuing to operationally strengthen our business. These opportunities include exploring deals such as game acquisitions, IP acquisitions, media and entertainment technology, geographic expansion, and other synergistic forms of content creation. All of this is within our means. In fact, We believe initiatives and opportunities like these will provide greater future earnings than a share buyback. We do believe our stock is undervalued. However, in an uncertain environment, cash will remain king. Thunderbird's strong balance sheet provides us with the financial flexibility to act on the right opportunities and ensure the ongoing health of our business. At this time, I will now pass to Simon to go over the numbers. Thank you so much.

Thanks, Jen. And hi, everyone. I'll now walk you through the highlights of our third quarter results. Revenue for the third quarter was $45.5 million, compared to $35.4 million for the same period last year, a 29% increase. Year-to-date, this brings our total revenue to $138.3 million, which is a 22% increase over the $113.5 million recorded for the first nine months last year. The year-on-year growth this quarter is driven by a mix of continued growth in production services, as well as a strong quarter for licensing and distribution revenues. Production services revenue increased 6% year-on-year in the current quarter, totaling $34.6 million, and has grown 31% to $123.4 million for the year to date. While the majority of this revenue comes from our animation division, the current year has seen a meaningful contribution from scripted and unscripted engagements, including for the current quarter where $3.5 million of revenue was contributed. While we haven't traditionally performed a large amount of production services engagement outside of our kids and family division, this year we've been able to secure some high-profile wins in this area. We've previously discussed the work we carried out on the hit movie Sideline, The QB and Me, and we're excited that the current quarter has benefited from the filming of the sequel, Sideline 2, Intercepted. Licensing and distribution revenue also increased by $8.1 million to $10.8 million this quarter compared to the same period last year. This represents a 302% increase and is due to the delivery of 26 episodes of Mermacorn of Starfall and 12 episodes of the 13th season of Highway Through Hell. During the same quarter last year, the main source of license revenue was the delivery of season one of Timber Titans. Year-to-date licensing and distribution revenue has decreased $4.3 million, or 22%, to $14.9 million. This reflects the market conditions we've mentioned in previous calls where the demand for unscripted IP shows has been weaker in the current year. The revenue decline in this area has been filled, though, through scripted and unscripted production service engagements, although that work does generally attract lower margins. And on that front, our gross margin for the quarter was 24.2% compared to 23.3% in the same period last year. This is in line with our expectations and primarily as a result of the higher level of license revenue we recorded this year. For the nine months ended March 31st, our gross margin is 21.7% compared to 22.9% for the same period last fiscal year. And reflects the larger trend we've seen this year, production service engagements representing a larger portion of our overall revenue. For the third quarter we recorded our sixth straight quarter of positive earnings with net income of $2.2 million. This compares to a profit of $5,000 for the same period last year. Management continues to work hard to streamline costs and increase efficiencies wherever possible with the intent of returning the company to profitability on a consistent basis. Like many other companies, we're experiencing pricing pressures from some of our vendors, as well as a small impact from tariffs on certain purchases. We continue to manage these challenges as best we can, and where possible, we'll source other vendors. However, options are limited with respect to certain purchases of software used in our production workflow and therefore were impacted whenever vendors of those products increased their pricing. Third quarter adjusted EBITDA increased to $5.9 million compared to $3.3 million in the same period last year as a result of our lower cost base and growth seen in revenues year-on-year. For the nine-month period, adjusted EBITDA increased 46% from $9.7 million to $14.2 million. As we move forward, we continue to be optimistic and see opportunities to maintain top line growth. However, the recent announcement of potential tariffs directed towards non-US produced content has created a large amount of uncertainty. At this time, we believe our previously announced fiscal 2025 revenue and adjusted EBITDA guidance holds and a targeted revenue growth of 20% and adjusted EBITDA growth of over 10%. While we have a good level of visibility beyond 2025 with several ongoing productions that will continue into the next fiscal year, the potential impact of threatened tariffs is unknown and could lead to buyers changing or delaying their plans. We'll continue to monitor this situation and adapt our plans if required as further details are announced and any policy changes in the U.S. are enacted. Despite the recent uncertainty in the industry, we continue to operate with a strong balance sheet that carries no corporate debt. providing the financial flexibility to pursue growth opportunities as they present themselves or to weather any short-term disruption from broader market conditions. And with that, I'll pass back over to Jen to continue with our corporate update.