Vancouver-based media and technology company BroadbandTV saw record revenue and views on its platform in the third quarter of 2020, according to the latest financial results released by its parent company BBTV Holdings.
The quarterly financial report, released Friday and relevant to the three-month period ended September 30, 2020, is BroadbandTV’s first since its parent company BBTV Holdings began trading on the Toronto Stock Exchange via initial public offering (IPO).
“The global COVID-19 pandemic has accelerated the shift of consumption from mainstream media to digital media.”
Although the company provided an update on its IPO on Friday, financial figures related to the IPO are not relevant to BroadbandTV’s Q3 results. BBTV Holdings is reporting results for the BroadbandTV business, as BBTV is a holding company that does not generate revenue. Shahrzad Rafati, chairperson, founder and CEO of BBTV Holdings, said she was pleased with BroadbandTV’s Q3 performance.
“We executed on our strategy to increase our global scale and experienced strong growth in audience views of our content, accelerated by beneficial secular tailwinds including television viewers ‘cutting the cord’ to watch digital video on demand,” added Rafati, who now owns 83 percent voting control following BBTV’s IPO.
BroadbandTV creates, distributes, manages, and monetizes video content. Founded in 2005, the company provides end-to-end content management and technology solutions for independent content creators and media companies to grow their presence online.
According to the quarterly report, BroadbandTV’s revenue reached a record $120.7 million in Q3 2020, an increase of $28.3 million or 31 percent year-over-year. The company said this was driven by growth in views and improved ad sell through rates. BroadbandTV experienced an 18 percent year-over-year increase in views across various platforms including YouTube, to 121.2 billion, up from 102.7 billion last year.
“The global COVID-19 pandemic has accelerated the shift of consumption from mainstream media to digital media, and we are seeing advertisers follow these audiences online as digital advertising rebounded in the third quarter following a temporary slowdown in growth in Q2,” added Rafati.
Gross profit over Q3 2020 decreased by $400,000 or four percent compared to Q3 2019. BBTV Holdings attributed this to less advertising on kids’ content, the impact of COVID-19 on its Plus Solutions, and its previous strategy employed to capture market share. BBTV Holdings said it expects gross margins to improve as some of the effects related to the pandemic ease off.
Although BroadbandTV’s Plus Solutions business, which is its paid service, was more heavily impacted by COVID-19, Plus Solutions revenue increased 27 percent from July to September during Q3 2020. Direct advertising sales also showed signs of rebounding, growing 55 percent from July to September.
BBTV’s recent market debut was described as somewhat disappointing, as subordinate voting shares of BBTV Holdings traded down on its first day, closing at $15, less than its $16 issue price. The IPO pulled in a total of $172.4 million.
BroadbandTV was one of several Canadian tech companies to IPO in recent months. Toronto-based Nuvei closed its IPO at $833 million USD, the largest technology IPO in TSX history. Lightspeed POS debuted on the New York Stock Exchange following a $397.7 million USD IPO.
With fees and expenses related to the IPO, BBTV will have approximately $10 million in cash and cash equivalents and $46 million in long term debt in the form of convertible notes.
Since going public, BBTV has appointed three new board members: Clearbanc’s Michele Romanow, Hootsuite’s Ryan Holmes, and Marcel Reichart of German media conglomerate Bertelsmann.
Image source Wikimedia Commons.