Sabio Holdings Inc. (SBIO) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the Sabio Holdings Q4 and Full Year 2024 Earnings Call. The financial statements and MD&A have been filed and can be accessed through the SEDAR website. Today is Tuesday, March 18, 2025. And joining us are Aziz Rahimtoola, Founder and CEO; and Sajid Premji, CFO of Sabio Holdings. They will be presenting the company's Q4 and full year results as well as the company's growth plans followed by a Q&A session. [Operator Instructions] Before we begin, I would like to remind everyone that certain statements made today may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors. For a complete description of the risks and uncertainties facing the company, please refer to the annual information form, MD&A and other continuous disclosure filings, which are also available on the SEDAR website. Also note that all figures discussed today are in U.S. dollars unless stated otherwise. With that, I turn it over to Aziz.

Thank you, Martin, and good morning, everyone. Welcome to the Q4 and full year 2024 financial call. We are excited to report that our rev, reach, engage and validate full tech stack approach to ad-supported streaming has delivered record top line and bottom line growth. In fact, Q4 marks the third straight quarter of double-digit top line growth, translating to above 40% over the last 3 quarters of 2024 collectively. Our teams flawlessly executed on our key 2024 objectives, which included core growth, core business growth, record political revenue, growth in international markets, along with balance sheet improvement, new product launches, including our Creator TV, performance, programmatic offerings, solidifying -- further solidifying our App Science household graph and growing that to 80 million homes and then strong -- all while delivering strong margins of 60% and increasing operating leverage. Since the founding of the company more than 10 years ago, we never veered from our belief that data-rich and privacy-compliant in-app experiences could benefit advertisers from a targeting and insights perspective. In the decade that has gone by, the app ecosystem has expanded from not only being on your phone to being integrated into every aspect of your life. We'd like to say, you are what you app, including on your TV in the form of ad-supported streaming apps. Sabio and its wholly owned data and analytics subsidiary, App Science, have continued to benefit from proliferation of streaming app usage and the need of insights in a highly competitive and fragmented media market. Our stickiness has demonstrated by a 9% reoccurring business model with 70% of our top customers increasing share of voice. Overall, we are extremely pleased with our execution and how this is all coming about is really driven by our proprietary household graph. And you basically -- how that comes into play, 280 million mobile devices every month in our system, cross reference to 110 CTV households TVs that then give us 80 million validated homes. That is our household graph. And that household graph is unique and proprietary. In comparison, 80 million homes relative to 30,000 Nielsen panel makes a key difference for brands such as Toyota, McDonald's and many others. On that note, I will hand it over to Sajid to talk about our numbers a little bit. Sajid?

Thanks, Aziz. Sabio completed the fourth quarter of 2024 with the best quarterly and annual financial results in its history, achieving record consolidated revenues and profitability. Our shift to a streaming sales model from a mobile display dependent model has delivered a robust 39% compound annual growth rate since 2020, increased customer retention and substantial cost efficiencies. We closed 2024 with USD 49.6 million in consolidated sales or close to CAD 70 million based on average exchange rates, up 38% from the year before. Meanwhile, adjusted EBITDA margin expanded to close to 8% committing in USD 3.8 million in adjusted EBITDA for the year or close to CAD 5 million, as our CAGR and profit margins combined surpassed 40%. The fourth quarter was the strongest financial quarter in Sabio's history. For the 3 months ended December 31, 2024, we generated USD 18.3 million in sales up 44% from the prior year. The increase in sales was primarily driven by robust growth in our ad- supported streaming business and strong 90% reoccurring revenue rates. Sabio's unique capabilities to reach, engage and validate target audiences continues to benefit our political offering and our overall business at large. Normalized for USD 2.4 million in fourth quarter revenues from political campaigns, consolidated revenues grew by a robust 25% during the fourth quarter compared to the prior year's quarter as Sabio's branded business continues to fire on all cylinders. By segment, ad-supported streaming sales grew 57% to USD 14.5 million compared to USD 9.2 million in the same period last year or 32% when normalized for political campaigns. For the fourth straight quarter, ad-supported streaming sales once again outpaced the 16.2% growth rate for the U.S. ad-supported streaming industry at large as we continue to take market share. Ad-supported streaming continues to be our dominant sales category, accounting for 79% of our overall sales mix, up from 73% in the fourth quarter of 2023. 5% of Sabio's fourth quarter ad-supported streaming revenues came from our new international business, Sabio London Limited, which continues to pick up steam, generating over USD 1.4 million in revenues in its first full year of operations. Sabio's ad-supported streaming sales lower OpEx and predictable and sustained growth through high customer retention rates. 90% of our sales in 2024 excluding political campaigns and those from our new international business came from repeat customers compared to 76% in the prior year's period. 70% of our top branded customers increased their spend with Sabio from the prior year's period and meanwhile, 41% of the brands we spent with Sabio during the year were new logos, presenting new opportunities to expand our revenue base in the quarters to come. The strength in our fourth quarter sales also extended to mobile display which grew 16% to USD 3.6 million from USD 3.1 million in the fourth quarter of 2023. On a trailing 12-month basis, our ad-supported streaming business now represents a record 78% of our sales mix, as we continue to capitalize on one of the fastest-growing categories in advertising. Within a span of 4 short years, we have completely transformed ourselves from a company that generated just 8% trailing 12-month sales from ad-supported streaming 4 years ago. The business continues to accelerate and impressively Sabio generated more ad-supported streaming sales in 2024, USD 38.6 million than consolidated sales across all revenue categories in 2023. The inherent cost efficiencies and transitioning to an ad-supported streaming sales model from one more dependent on mobile display continues to drive gains in our operating leverage. For the fourth quarter ending December 31, 2024, Sabio delivered a quarterly record $2.8 million in adjusted EBITDA, while continuing to invest in our key growth pillars, including our growing international business, and the commercial launches of our new programmatic ad-supported streaming, performance marketing and Creator TV product offerings. All of these segments are expected to contribute to revenues in 2025 and beyond. Meanwhile, our end-to-end technology stack powered by our proprietary App Science cross-screen graph and featuring several direct supply integrations continue to support strong gross margins with both fourth quarter and year-end gross margins improving to 62% from 61% in the prior year's comparable periods. All of this resulted in the highest annual adjusted EBITDA gain and adjusted EBITDA margins as a public company with 2024 adjusted EBITDA profit of USD 3.8 million compared to a $1.8 million loss in the previous year, representing an 8% adjusted EBITDA margin. The company used its improved cash flow during the year to pay down its debt by $1.9 million, ending the year with $5.2 million outstanding under a 3-year $10 million credit facility compared to $7.1 million in the previous year. Sabio also ended the year with $3.3 million in cash on hand, up from $2.6 million in the previous year. Armed with a stronger balance sheet, a more predictable sales model, increased product channels and geographical reach, Sabio expects continued sustainable growth in 2025 with first quarter visibility indicating double-digit growth. At quarter end, we had 50.5 million shares outstanding, 3 million options and RSUs outstanding and convertible debt convertible into 1.74 million shares at an exercise price of CAD 1. Insiders continue to own 55% of the company with high alignment between our management team and the interest of our stockholders. As part of our insider ownership group, our Founder and CEO, Aziz Rahimtoola, holds 46% of the company. As detailed in the MD&A, during the company's building years of 2019 and 2021, he voluntarily elected to receive reduced and sometimes irregular compensation. In recognition of this, the company forgave a $936,000 loan to Mr. Rahimtoola, an amount that is less of a difference in compensation he was entitled to received during that period. This forgiveness also reflects his early-stage financial support of the company and his leadership through its transition into a public entity. Management continues to believe the current market valuation of our stock does not reflect the fundamental strength and growth potential of our business. And during the fourth quarter, commenced modest share repurchases under our normal course issuer bid program at prices between CAD 0.42 and CAD 0.50. While reinvesting within the business remains our bias for capital deployment, we believe such opportunistic repurchases will provide an attractive return to our shareholders as demonstrated by these purchases being significantly below current market prices. Back to you, Aziz.

Thank you, Sajid. Before we move into the Q&A portion of the call, I want to take a moment to reflect on the tremendous progress we've made. 2024 was a record breaking year for Sabio with the strongest quarterly and annual financial results in our history. We delivered 38% year-over-year revenue growth achieving $49.6 million in consolidated sales and expanded our EBITDA -- adjusted EBITDA to $3.8 million, demonstrating both top line momentum and improved profitability. Our ad-supported assuming business continues to accelerate, now representing 78% of our total sales mix, and we're seeing strong customer retention. This success is a testament to the strength of our strategy, the value of our proprietary data and technology and the execution of our incredible teams. With a stronger balance sheet, expanding product offerings and geographic locations, continued market share gains, we are well positioned for sustainable growth in 2025 and beyond. With that, let's open up the floor to questions. Back to you.

[Operator Instructions] The first question we have is from Daniel Rosenberg of Paradigm Capital.

Aziz and Sajid, congrats on a strong year-end. My first question was around the international expansion. I know you made a few -- some minor hiring in the U.K. market. So I'm just wondering about what degree of investment you plan on doing there when you think about international expansion? Or is it more broad-based than that?

Daniel, thank you for your question. At this point, what we're doing is we are -- we've not only hired only in the U.K., but we also hired in Turkey. And our view is that we are still in the early stages of the process. We're dipping our toes into the international market. We're seeing a lot of great momentum overall. And -- but at the same time, we have a huge opportunity here in the U.S., the biggest ad market in the world. And so it really is, as always, a balancing act. While we want to see -- while we see the opportunity -- acceleration opportunity in international markets, we see a lot of opportunity here. So yes, we are going to continue adding but it's going to be very targeted and precise in terms of -- measured in terms of our resource usage. Sajid, anything you want to add to that for international markets?

I think that was well said, Aziz. I would just like to add that the international unit is already profitable. There isn't a lot of overhead required. The good thing about our business is that we're able to leverage our North American and then tech stack to facilitate these U.K. campaigns. And so we're able to leverage technology that already exists to fulfill these campaign requirements.

And Daniel, as we've talked about in past calls, Creator Television, which we just launched, is now available globally, our channel, our exclusive channel. And that is also going to be an entry point not only as it relates to the European market, but specifically we've had a fully owned subsidiary in India since 2016. And that subsidiary is positioned well for us to expand. We have engineering, data science and operations out there in India. So we're already preset to go out and start expanding in the largest market in the world, which is one point -- in India, which is 1.3 billion people. So we're excited about that opportunity as well. And it's just a matter of leveraging Creator TV and some of the other assets we have to start expanding out there.

I appreciate that color. I guess turning more domestically or U.S. centrically. I heard in the ecosystem a bit of uncertainty, obviously, with tariffs and trade wars, et cetera. And I think about some of the key advertising verticals like automotive, what are you guys seeing on the front line when it comes to budgeting and how you're thinking about your outlook?

Well, thus far, Canada is not the 51st state, and there's a lot of noise being made in Washington. And fortunately, our advertisers are not, at this point, being affected by it. We have diversified our verticals. Automotive at one point was our top vertical. That was back in 2023. And now we've diversified to where telco has become one of our largest verticals, followed by advocacy and political. And then you have quick service restaurants and automotive playing additional elements there. And so that is to tell you that we've diversified a lot. Now no one is immune to the issues that are happening, the questionable communication and strategy that's happening out of Washington, but we are positioned well. And as it relates to being positioned for next year's midterm election cycles, we're positioned incredibly well. So not only are we going to benefit from a diversification this year and an acceleration, but we're going to benefit next year because the turmoil that's in D.C. right now means a lot of money is going to be flowing into the political midterm election cycles, which we are positioned well in. So while we haven't seen anything yet, we do think there will be some effects in Q3, Q4 if this tariff situation is not dealt with properly as Washington should be doing. Sajid, anything?

I think that was well said, Aziz. I think that what differentiates ourselves this year going into 2025 is that we have a more predictable sales model. We have a 90% recurring customer rate, right? So we're able to be more proactive than reactive. And so if there are any headwinds coming, I'm sure we'll be able to adjust accordingly. And big picture, we are outpacing the market and taking market share. If there is an economic downturn, we still feel that we are very well positioned to keep doing so.

Okay. Good to hear. And in terms of that predictability, can we dive down a bit deeper? Can you help us understand just how much visibility you have? Like what gives you the confidence to look more deeply in the year? Like are these locked-in contracts today? Is it the number of leads you have? Could you just help us understand how you see the pipeline?

Yes. So I think I can start off. And I think that looking at our pipeline for Q1, for example, we're already seeing double-digit growth. We exited 2024, if you exclude election campaigns, with a 25% growth in our business, and we're seeing similar trends take hold in the quarter. We're seeing strong traction in Q2 already. I think that there is obviously some unknowns with this current tariff situation that could change the calculus. But right now, we're seeing a lot of positive signs. Taking a step back, we also have some upfront media commitments as well. We've been able to grow our commitments over 2024. There will be more information coming out shortly on what that number is, but we're seeing growth in that category as well. So all that plus 90% reoccurring customer retention rate bodes very well for our predictability.

And what we're also finding, Daniel, is, look, our secret sauce, and I probably should have been a little bit more clear in my presentation earlier. But that App Science graph is the key differentiation here -- is the fact that when we -- we have an 80 million household reach in terms of insights and understanding, and as the market continues to become more fragmented and diverse, which 48%, 49% of the U.S. population is now diverse -- sorry, 12 to 24 year olds, and we have a deeper understanding there, it allows us to have a unique positioning, and we're filling a need. And that's what advertisers have told us, and that's why, to Sajid's point. Now that's not to say we're immune to the tariffs and the things that are potentially going to happen. And we think that if they are going to manifest, they will manifest themselves further out in Q3, Q4. But thus far, as it relates to Q1 and Q2, we're not seeing any effects of that yet, not to say we won't.

Understood. Understood. My last question was just around the profitability of the company. So you guys hit kind of record numbers as a public company. But obviously, you're confident in the core business, the differentiated positioning that you have. So just wondering from an investment perspective, like is this a good baseline to think of the company from a profitability point of view? Are there incremental investments? Or do you see yourself increasing the margin profile? Just how are you thinking about balancing the growth versus investment?

This year, we're really not interested in optimizing our EBITDA margins. This year is we do believe there's going to be some investments. But from a profile perspective, this is where we do believe is a good baseline, and we can continue to kind of operate from here. We do think that as it relates to next year, that's where you will start seeing additional margin gains. This is the year -- the way to think about our company is in the off election years, we will perform well. And as Sajid pointed out, our core business was up 20-plus percent in the last few quarters of the year. And so we will continue executing on the core business, but we also need to invest and get ready for next year because once again, next year is going to be a blood bath of money again for midterms and political cycle. And so -- and just to give you some context, we're an LA-based company. The last time there was an LA City Mayor's race, $130 million was spent just on the LA City Mayor's race. We have a Governor's race of California. We have midterm elections, which is like Senate seats and House seats. So our objective has always been, and you could see it with our growth rates. We grow 30-plus percent in off years. We grow 60-plus percent in political years. So that means we have to prepare and get ready for what we believe is going to be another incredible year while we are profitable this year, while we execute on our growth priorities this year. Sajid, anything you want to add to that?

No, no, that was well said.

Congrats again on a strong finish to the year.

Thank you Daniel, I appreciate it.

And our next question is from Nicholas Cortelluncci from Atrium Research.

Congrats on a good quarter here. Just a couple of questions here. So maybe if you could tell us a bit more about your comfort levels with the balance sheet given the convertible notes come due in August, are you guys comfortable with the balance sheet and the cash flow cadence here?

Yes. Yes. It's a good question.

Thank you for your question, Nicholas. Thank you for joining us. And Sajid will take that. Sorry Sajid, go ahead.

Yes. No, it's a great question. I think that we're in a lot better situation entering this year than we were the year before. Not only do we have higher cash reserves, but we have almost $2 million of less debt, so we feel very comfortable in our ability to pay back this convertible note quite easily, which is, by the way, denominated in Canadian dollars. So we've seen a favorable move in the FX rate since we issued that note back in 2023. So we see no challenges with us being able to pay off that note in full when the time comes.

Okay. Perfect. And then the other question I had was about the mobile segment, and we've seen 2 quarters here of positive growth kind of breaking the trend that we've seen over the last couple of years. What's driving that? And what should we expect from the segment going forward?

So despite our best efforts to focus in on just CTV/OTT, mobile continues to grow. And here's why. Basically, our advertisers enjoy using mobile from a lower funnel tactic perspective. So we will -- our focus is CTV/OTT is higher funnel, and we have also a new performance product, which is going to be using more mobile. So you're going to see -- you probably will see some growth in mobile because of the fact that while we use CTV/OTT as a higher funnel, the cross-reference capability we have and cross-targeting capability we have at that IP level, and that goes back to the household graph is rich and it's effective. And that's why our advertisers continue wanting to use mobile overall. And we do think that you will see some growth in mobile because our performance business as it continues to accelerate, it will use more mobile than it did in the past. So we'll be able to grow both segments simultaneously is our expectation. We've hit a low in mobile and now you will start seeing -- our focus has always been to -- as Sajid mentioned, we had less than 8% when we -- in mobile when we went -- before we went public during the time we went public. And now it's 70% plus. And so we can continue seeing CTV/OTT continue growing while the mobile starts ticking up again.

Perfect. Okay. Understood. And then the last question here is just about Creator TV. What's been the response so far from advertisers? And when can we kind of expect a revenue contribution?

Advertisers are beyond excited. They like the opportunity of something unique in the marketplace. It's solving a need they have. And the need is they need to reach these younger audiences. They need to reach diverse audiences and they need to have a company that understands insights and analytics and helping them reach it. And so we're really checking all those boxes off. And as it relates to contributions, this year is just about -- it's primarily about scaling the business, scaling the Creator Television platform. We have distribution, obviously, as we've discussed, with Sling, we secured distribution with Plex. There's additional announcements we're going to have. And really contributions, I wouldn't expect until next year, in a decent way. I mean this year is really just about scaling the reach of that platform, then the next step is going to be to double down and starting to really push viewership there. So there's still a lot of work in progress, but our advertisers are once again excited about it. And one of the things you should also remember, Nicholas, that this is -- now we have first-party data going back into our household graph. So not only have we had rich data that has flowed through to us through other publishers and data alliances we have. But now for the first time in history, we have first-party data that we are now integrating to our household graph. So it's just going to make our complete offering even more effective. So Sajid, anything you want to add to that in terms of time lines for Creator Television?

No. I think that's well said. I think that one thing that is also kind of an intangible is that having Creator TV and having your own owned and operated channel is also enticing to the brands that we work with on the DSP side. I think that having Creator TV has been a differentiator for us along with App Science and why we're able to secure more media upfront commitments in 2025 than we did in 2024.

And also, Nicholas, one other thing I will add is if you're a politician and you're running for races, you're looking for that younger audience. And as proven by the last election cycle, the old paradigms of media marketing are changing and the need to get to these influencers is critical. And so we, once again, are providing a solution that not only our brand advertisers are eagerly interested in participating in, but political and advocacy advertisers as well.

We have some questions here from Gabriel Leung of Beacon Securities. He was not able to make the call as he was traveling and I will read those questions out on his behalf. Have there been any notable changes to direct advertiser demand or ARPU over the past couple of weeks that could persist into coming months?

We've done some analysis, and I'll let Sajid jump in here, but we've done some initial analysis. And thus far, we have not seen any degradation of demand or anything that is now slowing down thus far. Sajid, do you want to jump into that a little bit more?

That's correct. Yes. We're not seeing any change in the velocity right now. Things are still moving ahead nicely. Obviously, there are some uncertainties in the broader economy. But as of now, we're not seeing those signs.

All right. What sort of contribution do you anticipate your newer offerings like programmatic and Creator TV to add to the top line?

We're taking more of a pragmatic approach to these new products in 2025. We're modeling in single-digit percentage contributions to our top line, but there is high potential. We've been told by our brands that we're leaving dollars on the table by not having a programmatic offering. We've already seen having our own [O&O] inventory in Creator TV is benefiting our upfront media commitments. Both [might have] big potential going into 2026. Most election spending tends to take place programmatically and for the first time, we'll have an offering to capitalize on that. Where we see more of a near-term win is international. Around 3% of our 2024 sales is from international. We could very well more than double that in 2025.

And one of the things that I think I'd like to add to is if the economy starts slipping, some of the consumer sentiment numbers are starting to look not as rosy as it was last year, performance is going to be a bigger aspect of what brands are going to be looking for. And so we're uniquely positioned now not only as it relates to our brand business, but now a performance business. And so any downshift in brand will usually mean an up-shift in performance. And we also believe that to Sajid's point about international growth, that the European economy seems to be really starting to recover quickly, which is a great diversification for us, along with Asia and Middle East. So we have done our best and continue to diversify our business, and we see a lot of opportunity there. But there's a lot of upside, huge upside in all of these vectors in a big way.

Okay. What sort of qualitative and quantitative feedback have you received from content creators and distributors from Creator TV?

It's still fairly early. We are starting to see -- the numbers are fairly small in terms of viewership, but we are seeing growth in viewership overall. But this -- in all intents purposes, we only launched probably a month ago, a month or two ago. And so still fairly early. We expect to see some substantive information by year's end, but we're super excited about the opportunity it presents. And thus far, once again, albeit small, viewership continues to grow.

Okay. How are you planning for the more difficult year-over-year comparables, notably for Q3 and to a lesser extent Q4? More directly, given your current pipeline, do you anticipate being able to report year-over-year revenue growth in the second half of 2025?

Yes, it's a good question. I think that as I mentioned before, our business in Q4, excluding election spending, grew by 25%, and we're seeing similar trends in Q1. So we're feeling quite optimistic about being able to show Q4 growth this year with that same kind of growth levels being maintained. Q3, a bit more challenging. We're entering into [indiscernible] with a lot more tools in our belt than we did in 2023. We have a more predictable sales model, as I mentioned, a 90% recurring revenue rate, we can be more proactive than reactive. We have expanded geographical reach. International contributed very little to our Q3 revenues in 2024. We believe that we can at least double that this year. We have a more diversified product model. Programmatic will contribute as well as performance marketing. We are already seeing growth in the media upfront commitments through App Science and Creator TV being our differentiators. And our brands are excited to work with us for those reasons. That said, we are facing somewhat unchartered waters. Some of our lower dollar protocols like government are being impacted by the tariffs. It's not really noticeable right now, but should it extend to other verticals, it may present some near-term headwinds. But that said, our sales model was more predictable and we're more diversified than we've ever been. Automotive has historically been around 20% to 25% of our sales mix. Now it's around 15%. And again, as I mentioned before, a big picture, we're outpacing the market. We're taking market share. If there is any sort of a downturn, we feel that we're very well positioned. We continue to be able to do so going forward.

And I'll -- and once again to clarify, we had a total of $5 million in Q3 of political spend. So it wasn't significant. It was decent enough, but wasn't significant. And in preparation for this Q3 year-to-year comp, we did do some hiring at the end of last year. We added additional -- not only do we add new products, we added new sellers. And so our expectation is that we will be able to meet those Q3 challenges. Now having said that, this is a unique backdrop with obviously tariffs and a lot of uncertainty coming out of Washington. So that's the only thing. We've -- as it relates to our strategy, we've been planning this for a while and execution is going to be proven as it relates to Q1 and Q2. As it relates to Q3, that remains to be seen if the tariffs start having a really big effect on spending, [advertise] spending. That's the only thing that we're unsure about at this point, but we're confident about our strategy to beat those numbers.

Thank you. That completes the questions from the analysts, and I will now begin reading out questions from -- that are typed in through the Q&A from the audience. I believe this coming question was largely covered and you can add as needed to it. Can you provide some more color on how you will keep momentum and growth in a non-U.S. election year?

Well, I think Sajid alluded to it, we're doing it. And I think once we finalize our Q1 numbers, proof is in the pudding. And so what it is, is we have a -- our objective was twofold. First of which is add new sellers, add more sellers, which we did in Q3, starting Q3 of last year. That allows us to get out to the marketplace. We don't have an issue with our product. We have an issue with getting out and evangelizing our product. And as Sajid talked about, we have a 9% recurring revenue model. So the minute we lock a deal in, we keep it and we grow it. The second aspect, the second strategy of our strategy here was product launches, providing our sellers and our brands with new opportunities to increase their share of voice -- wallet, sorry. And we did do that. As Sajid mentioned, we launched our performance product. We've launched a programmatic product. We also have the Creator Television opportunity. And so that's really it. Our objective was we have been planning on '25 since early '24. We knew '24 was going to be a great year. We said that to the market at the end of '23. We're going to execute in a big way in '24. That gave us the opportunity and the means by which to start preparing for '25. And so as we will demonstrate in Q1 and Sajid talked about double-digit growth, at the minimum, that is really -- that's the double-digit growth we're already seeing. We're going to see that, we believe, in Q2 as it relates to Q3, Q4, that remains to be seen if the tariffs are going to have any type of corrosive effect. But we're feeling good about our strategy, and our strategy is exactly that. Products, more products, more sellers and retaining our key customers.

The ad-supported streaming market is becoming increasingly competitive with major players like Amazon and Google expanding their presence. How does Sabio plan to maintain and increase its market share and customer loyalty in the face of this competition? And what are the key differentiators that will allow Sabio to compete effectively?

Great question. We are frenemies with them. In other words, they are not pure competitors, they're actually allies. They are going to be -- we're having conversations with all these platforms about Creator Television. We're having conversations about all these platforms about using our data and analytics capabilities. And at the same time, we compete with them for some of those ad dollars. So it's a pretty big -- it's a $48 billion industry overall, projected to be $48 billion in a matter of 2 years. There's a lot of money going around. And so we're fortunate and going back to the differentiation, that App Science household graph, which I keep talking about, we've been building it since 2016. It is really a differentiated product enough so where a brand like Toyota, for example, uses us for analytics and insights, not just helping them reach audiences. It tells you the effectiveness of that App Science graph. And we're super excited about. And as I mentioned in my comments earlier, we've further solidified our graph. We went from 55 million homes to 80 million homes and the richness of that graph continues to grow and that's a key differentiator, especially when you have Nielsen that has a 30,000 survey panel. Brands and agencies are looking to us to be leaders in this space, not Amazon, for insights and understanding, but to Sabio and App Science. So that's really how we continue to be looking at our differentiation.

How is Sabio planning to increase its EBITDA margin or percentage?

We have this point -- sorry, I'll let you get in here, Sajid. We're not looking to optimize our EBITDA margin this year. We have a lot of growth. As I mentioned, $48 billion, $49 billion of opportunity. And next year, we also have a huge political cycle. So our focus is not necessarily optimizing growth this year, our EBITDA margins naturally move up in election years. As the revenue moves up, more falls to the bottom line and Sajid will get into the details of that. But that's where the efficiencies and EBITDA margins will continue growing is as we scale this company up, as we said it since I started the company, when you start hitting that $50 million inflection point, more drops to the bottom line. And that will continue being the process for our EBITDA margin continue increasing. Sajid, sorry.

No, I think that was well said. I think that around that $50 million mark you're seeing economies of scale. And that's why you're seeing that EBITDA margin double or more than double from our last profitable year in 2022 to 2024. As far as the expansion of margins, I think Aziz hit it right on. I think in 2025, we're investing in programmatic. We're investing in performance. We're investing in Creator TV. We're investing in international. We're balancing that while being profitable this year and maintaining our current levels of margin. But I think in next year, it's a great opportunity for us to expand that margin with those -- with that added revenue coming in.

And just to give you some context, we're right in the middle of the stack of our U.S. and Canadian peers as it relates to EBITDA margins and overall margin. And we do see an opportunity. I mean you have the Trade Desk that is at 24% margin profile. But that's a $5 billion huge company, right, scaled up. We believe we will -- as we continue to scale up, we can move to that goal -- to that objective there, getting to the top line of that margin number. But it's going to simply mean just increasing our overall revenue. That's it. As increase of our overall revenue more falls in, but we are -- from where we are today relative to even those scaled companies, we're ahead of where they were from a margin profile because we're a public company. They weren't public at the stage where we're at. And so we're excited. We see the opportunity ahead. We want to be profitable. We want to grow this company in a profitable high-growth opportunity way. That's how we see it.

For international markets, how is the market and the competition and how are the margins in international markets?

Without giving too much detail because we have competitors who also look at it, it's been very positive in general. Profiles -- international markets margin profiles are not as great as the U.S. margin profile, but that's simply because we haven't built our household graph there yet. Our App Science household graph will probably start being worked on -- is already being worked on for the international markets. As we -- what we've seen is our efficiencies are not simply in serving out ads. Our efficiencies are when we can provide data and insights backing up how we're reaching those consumers and unique offering in those markets. And so we do expect that margin profile to increase in the coming years as we put more resources into international markets. But we're seeing a tremendous opportunity, and it's still early streaming TV, while being used on a subscription basis in international markets, ad-supported streaming has not been used in a big way. And so we feel like we're getting ahead of the curve and a huge opportunity.

Can you speak about the benefits of being listed in Canada versus a U.S. listing? And are you considering any share structure options such as a reverse split in order to raise your share price.

Sajid, do you want to take that?

Yes. I think there are many benefits of being on a Canadian market as opposed to U.S. market, especially at our size. Number one, the overhead for being on a Canadian exchange is a lot lower than it would be on a U.S. exchange. So we'd rather use that money to funnel back into investing in our business, investing in our products rather than on some compliance costs. So I think it's a lot better bang for the buck in that respect. Number two, you have a very knowledgeable investor base here in Canada. And there's one as well in the United States, but what you see in the U.S. is that we'll be overshadowed by a lot of the bigger players. And then sometimes it's better to be a bit of a bigger fish in a smaller pond. As far as going on the U.S. exchange, there may be a time for it in the future. But as long as we're getting good traction in Canada, as long as we're seeing that our results are being recognized, we're happy, right? It's a strong market. It's -- we were not getting the recognition for our results. So as far as doing a reverse split, if we were to go on U.S. exchange sometime in the future, maybe that might be a reason for doing so. But as of now, that's not on the agenda.

With such a strong balance sheet, what is the capital allocation strategy for both the short term and going out 3 to 5 years? For example, how will balance sheet reduction with acquisitions and growth prospects?

So our view on acquisitions are, while we haven't seen anything that's out there that we're super excited about, but there certainly could be an opportunity out there. Where we really see the opportunity for our balance sheet improvement is to have more -- to really focus on operating leverage. And what I mean by that is when you have a stronger balance sheet, you can negotiate better upfront commitments for some of the supply costs we have. And the expansion as it relates to expansion of Creator Television. As Creator Television expands, our efficiencies increase. And so our real focus is -- and then, of course, we have ever-increasing storage costs because of all the data and infrastructure that's going to have to be looked at and how do we streamline that a little bit more. So with the balance sheet, we really look at it as an opportunity to really focus in on operating leverage. How do we get more efficiencies in our organization versus we really believe in looking internally before externally. We need to really optimize our company even more and get even more efficiencies before we think about acquisition to bring something in this because we see a lot of opportunity. We've done this all organically. Our growth rates -- our growth has all been organic. And we really enjoyed the organic approach here, and we think that with the additional investments, it's going to allow us to really accelerate our approach and our mission even more so. Sajid, anything you want to add to that?

No, I think that's well said. I think we're seeing a lot of strength in our business through our balance sheet. We're already being able to negotiate better contracts than we had in the past. We're being able to open up our windows to more suppliers than we have in our past as well. I think that it's -- our debt load is also very manageable. We've been able to reduce our debt load by close to $2 million over the last year. And that alone is creating more than enough space for us to pay off that convertible debt later on this year and still have ample room left. And so I think that you are right that our balance sheet has never been in better shape. Aziz is right that M&A, while it's enticing, is not always a [indiscernible], especially when you have so many opportunities to invest in organic growth as we do.

Since there is huge recurring revenue, can you shed some insight about customer concentration?

Yes, I think that we never -- we haven't had this diversified of a sales mix in our history. If you look at the brands that spent with us in 2024, not one brand exceeded 15% of our sales mix. It's very well diversified. And I think that we're continuing to add new logos as well, 41% of the logos that spent with us in 2024 were new logos. That's sort of new opportunities for us to land and expand going forward.

And as I mentioned earlier, we've diversified. We had -- at one point, our highest category was automotive, which is great, but we've diversified outside of automotive. So not only are we diversified from an individual brand perspective, but from a category perspective. And then you add to it a geographic perspective. So we are derisking every aspect of our business we can with this idea of diversification. And then you add to it, product mix. So while we are heavily still today focusing on brand business, we're now getting into performance. We have the Creator Television opportunity. So we are really -- and then, of course, there's App Science, which is also generating some opportunities in cash. So we really are diversifying every aspect of our business overall as we continue to move upstream. So increased operating leverage, increased margins, diversify is really our strategy as we continue getting bigger.

And for the final question here, and if there are any other questions, audience, please input them into the Q&A and for the final question for now, are there any key hires you are looking to make in the next coming quarters?

Well, we just disclosed, we made a key hire in our EVP of Human Resource that just came on board. He was actually Chief of Staff at ABC News, someone who I've worked with in the past. Outside of that, we feel like we have a really strong team overall. We don't feel the need to make any major key hires. We believe that we have the right leadership in place and now we just need to continue adding resources as it relates to sales apparatus and sales support. So we don't see a lot of big hires that we need at this point to continue scaling this business up to a -- we think that we're already a CAD 70 million company. We think getting to $100 million, we have the team it takes to do that and beyond. So we don't feel like there's any areas we're deficient in at this point.

Can you quantify in terms of absolute dollars as opposed to margins of the amount of additional SG&A investments you're planning to make in 2025?

Yes. So part of those investments will be dictated by market developments as well. And how this -- the economy reacts to these tariffs and how the business reacts to what our brands are facing. And so I think it would to be pragmatic. I think it's -- we're not going to be committing to a firm dollar at this point in time. A lot of it is dictated the business and how well it performs. And if we're overshooting our projections in 2025, we may invest more in our sales apparatus. Likewise, if things contract, we may adjust that accordingly.

And sometimes, investments don't necessarily -- while there's an outlay of cash, there's a savings component that goes with it. For example, as we're implementing more AI capabilities within our organization, there's efficiencies that will take place, including as it relates to how we sort data and how much of that data we store. And so while it's hard to put a number in, sometimes that is offset by the actual savings that will take place at the same time. So it's hard to give a specific number or a need. But like Sajid said, that we are addressing and looking and we're always keeping an eye on this idea of the EBITDA. We want to continue being a profitable company. We've been profitable 4 out of the last 5 years. And that is -- we have no interest in changing that parameter. We enjoy being a profitable company, and that is really our focus overall.

Thank you very much. There are no further questions at this time. I turn the call back over to the presenters.

Okay. Well, thank you. Appreciate the time. And once again, as we talked about, our investment summary, unique value proposition and strong moat. Our App Science capabilities, along with now our Creator Television and our overall tech stack is really the key differentiation in a highly competitive market. It's a high-growth and profitable business. As we've talked about, it's estimated -- some estimates have it at $48 billion to $49 billion in the next 2 years for ad-supported streaming. Streaming will continue growing, ad-supported streaming as linear TV and cable continue to collapse and lose viewership. And then finally, landscape and opportunity is incredible. And so our long-term trajectory is not only just based off of U.S. expansion, as you've heard, it's based off of a global expansion. And so we have no limits in the future of where this company can go and really are enjoying be part of the Canadian marketplace and as Sajid talked about and continue growing within that ecosystem. On that note, thank you all for joining us, and thank you, Martin, for hosting this call.

This concludes today's conference call. You may now disconnect.