Welcome to the Market Herald Video Q&A podcast.
I’m Brieanna McCutcheon.
Today, we are joined by CEO Aziz Rahimtoola and CFO Sajid Premji from Sabio Holdings.
I want to start off and say congratulations on the record quarters.
TMH: Your Q2 revenues were up 70% when compared to the same period last year – What is driving this well above market growth?
AR: We’re fortunate, first of all that we’re in a rapidly growing industry of streaming and CTV. That’s one aspect of it. Our differentiated technology is certainly a key driver for us and then finally slightly before the RTO and during the RTO process and post RTO, we’ve been making investments into sales, apparatus, marketing and to a lesser extent technology because we had a biggest portion of that but really it’s just been increasing our sales and marketing spend overall.
TMH: What has traditionally been the strongest two quarters given the uncertain macro conditions?
AR: Traditionally and that’s a great question because it’s a fluid situation but traditionally the strongest quarters tend to be Q3 and Q4 and we don’t see that any different this year but it is a really interesting time overall, as we all are dealing with both from a supply issue perspective and inflation but we’re still seeing some amazing traction and forward momentum.
TMH: Gross margin was down a bit compared to last year and the first quarter? Are you seeing pricing pressure or is there something else at play?
AR: That had more to do with just integrating a new acquisition of ours Vidillion, which we required in April and that was really around that and as we integrate them a little bit deeper we don’t expect any type of erosion in terms of margins. In fact, we see an opportunity to grow margin so that we suspect is going to be kind of a short live phenomenon.
TMH: You have made significant investments across the business but especially in sales and marketing – do you expect this to continue for the rest of the year?
AR: If you look at kind of where we received our capital or initial infusion was pre-RTO, then during the RTO process, obviously because the RTO we received capital and we started really scaling up our hiring before even we went public last year and if you look at that same time, it really starts kind of leveling off for us in Q3 of this year. So we will continue making investments because we see a lot of opportunity, a lot of growth and because of that we’re going to continue making investments but we’re not at the pace we were doing the early part of this year or even at the end of last year. I don’t know statistically if you’re aware but for the first time in history, there are as many people in terms of time spent watching cable TV as there are on streaming devices and so for the first time streaming viewership has surpassed cable TV. So with that backdrop, we’re going to continue making investments because we have that unique platform opportunity and certainly a lot of opportunity to grow the overall business.
TMH: We have also seen user privacy/consent issues facing the industry; How do you see this impacting your business?
AR: Well, we are CCPA and GDPR compliant and I’m sure every other acronym that’s headed our way we’ll be ready for. We anticipated some of the changes as it relates to consumer privacy regulation and that has actually one of the reasons why we purchased Vidillion. As a business, we are getting much closer to the consumer and are starting to actually, an example of that being is partnering up with content companies to actually help them launch content apps. So we are continuing to get once again closer to the consumer where we directly have the opt in from them and that’s an anticipation of where we believe privacy is going to continue to move forward now on the IDFA and on the Apple ID and the Google ID front. We have not seen a whole lot of deprecation. I mean, there’s certainly always changes going on but we haven’t had a lot of major effect there.
In fact, if anything, it’s creating a motor on our business, we were early in mobile, we understood what it took to actually create an infrastructure that was not reliant on those two platforms and those two behemoths and in addition to that, we’ve never used cookies. So as a company there’s no company that is ever proof from all the changes that tend to happen in a dynamic environment like streaming and mobile. We feel like we’re always a few steps ahead. So we feel pretty good about where we’re at and in fact, we think we have a real competitive advantage over a lot of our competitors in the space who are still trying to figure out what they’re going to do when the cookie goes away.
TMH: In closing Sajid, do you want to say anything before we sign off here or add anything before we let you go today?
SP: I think Aziz has covered it well, as far as constructing back to where we are right now, as far as the investments that we’ve made subsequent to the second quarter of last year, when we started to build out our sales and marketing team, we hired a number of C-suite positions that we were able to fill. We were also able to make some several key hires in our key market and that heavy investment period is now complete and we do expect to be EBITDA profitable in the second half of this year and also see improvements in our operating margin into 2023.
Thanks again for joining us and I’m sure this is not the last time we will see you.
We have been speaking with Aziz Rahimtoola the CEO of Sabio Holdings and Sajid Premji the CFO.
You can follow the company on the TSXV under the symbol SBIO
I am Brieanna McCutchon, thank you for watching.
For regular updates, visit https://www.sabio.inc/
FULL DISCLOSURE: This is a paid article produced by The Market Herald.