Wildbrain Reports Q3 2022 Results
- Revenue increased 27% to $129.5 million in Q3 2022, compared to $102.2 million in Q3 2021. YTD 2022 revenue grew 16% to $395.2 million, compared to $339.9 million in YTD 2021. These increases reflected continued strong demand for our content and sustained growth in Consumer Products.
- Net income increased to $21.3 million in Q3 2022, compared to net loss of $26.5 million in Q3 2021. YTD 2022 net income grew to $4.5 million, compared to net loss of $18.5 million in YTD 2021.
- Cash provided by operating activities in Q3 2022 was $39.7 million, compared to $22.1 million in Q3 2021. YTD 2022 cash flow provided by operating activities of $39.6 million, compared to $83.0 million YTD 2021.
- Positive Free Cash Flow1 of $8.1 million in Q3 2022, compared with negative Free Cash Flow1 of $3.3 million in Q3 2021. YTD 2022 negative Free Cash Flow1 of $12.7 million, compared to positive Free Cash Flow1 of $17.6 million YTD 2021, primarily due to significant growth in accounts receivables associated with larger deals in the current year and timing of working capital settlements.
- Adjusted EBITDA1 in Q3 2022 increased 75% to $30.2 million, compared with $17.2 million in Q3 2021. YTD 2022 adjusted EBITDA1 increased 21% to $77.3 million, compared to $63.9 million in YTD 2021.
- Content Production and Distribution revenue increased 61% to $57.4 million in Q3 2022 vs $35.6 million in Q3 2021. YTD 2022 revenue grew 11% to $156.3 million, compared to $140.5 million in YTD 2021.
- Consumer Products revenue grew 11% to $50.9 million in Q3 2022, compared to $45.7 million in Q3 2021. YTD 2022 revenue increased 24% to $161.8 million, compared to $131.0 million in YTD 2021.
- WildBrain Spark (“Spark”) revenue increased 11% to $10.7 million in Q3 2022, compared to $9.6 million in Q3 2021. YTD 2022 revenue increased 29% to $44.1 million, compared to $34.1 million in YTD 2021.
Halifax, Nova Scotia –WildBrain reported its Fiscal 2022 third-quarter (“Q3 2022”) and nine-month (“YTD 2022”) results for the periods ended March 31, 2022.
Eric Ellenbogen, WildBrain CEO, said: “Our third-quarter results reflect the success of our 360-degree IP strategy, which is now driving momentum across multiple earnings streams. We’re seeing the returns from investments in our branded IP library, premium productions and consumer products. We have a robust creative pipeline — that we’re constantly adding to — assuring years of opportunities and upside.”
Aaron Ames, WildBrain CFO, added: “In Q3 2022, we delivered a strong quarter, reflecting growth across all our content-driven businesses. We’re aggregating margin across our studio, distribution and licensing sectors, which is responsible for another quarter of EBITDA growth. We’re delighted with our team’s early execution on deals which were expected later in the year. Given our production pipeline and large distribution deals now reported in our results, we remain on track to deliver our guidance for Fiscal 2022 revenue in the range of $480.0 million to $500.0 million and adjusted EBITDA between $87.0 million to $93.0 million.”
Q3 2022 Performance – Executing on Priorities
| PRIORITIES | HIGHLIGHTS |
| Activate IP and Grow Key Brands |
|
| Maximizing the Value of WildBrain Spark |
|
| Deliver Sustainable Growth |
|
Q3 2022 Financial Highlights
| Financial Highlights1
(in millions of Cdn$) |
Three Months ended
March 31, |
Nine Months ended
March 31, |
||
| 2022 | 2021 | 2022 | 2021 | |
| Revenue | $129.5 | $102.2 | $395.2 | $339.9 |
| Gross Margin | $63.7 | $43.9 | $178.9 | $148.9 |
| Gross Margin (%) | 49% | 43% | 45% | 44% |
| Adjusted EBITDA attributable to WildBrain | $30.2 | $17.2 | $77.3 | $63.9 |
| Net Income (Loss) attributable to WildBrain | $21.3 | $(26.5) | $4.5 | $(18.5) |
| Basic Earnings (Loss) per Share | $0.12 | $(0.15) | $0.03 | $(0.11) |
| Cash Provided by Operating Activities | $39.7 | $22.1 | $39.6 | $83.0 |
| Free Cash Flow | $8.1 | $(3.3) | $(12.7) | $17.6 |
In Q3 2022, revenue grew 27% to $129.5 million, compared with $102.2 million in the prior year, reflecting growth across all our content-driven businesses in Content Production and Distribution, Spark and Consumer Products. YTD 2022 revenue increased 16% to $395.2 million, compared to $339.9 million in YTD 2021.
Content Production and Distribution revenue increased 61% to $57.4 million in Q3 2022 vs $35.6 million in Q3 2021, benefiting from the Degrassi library deal, distribution agreements with Amazon Prime and BBC and a pipeline of premium productions including Sonic Prime and a range of new Peanuts content. YTD 2022 revenue grew 11% to $156.3 million, compared to $140.5 million in YTD 2021.
Consumer Products revenue grew 11% to $50.9 million in Q3 2022, compared with $45.7 million in Q3 2021, reflecting the strength of the Peanuts franchise, supported by consistent output of new content and the synergies of our vertically integrated licensing business. YTD 2022 revenue increased 24% to $161.8 million, compared to $131.0 million in YTD 2021.
Q3 2022 revenue at Spark increased 11% to $10.7 million vs $9.6 million in Q3 2021, reflecting stable advertising revenue and growth in other revenue streams from direct-ad sales, paid media and digital production. YTD 2022 Spark revenue increased 29% to $44.1 million, compared to $34.1 million in YTD 2021. Kids continued to be highly engaged on Spark, attracting 8.2 billion views across 49.4 billion minutes of videos watched on our network in Q3 2022, consistent with Q3 2021.
Q3 2022 Gross Margin1 increased to 49% vs 43% in Q3 2021, reflecting a strong slate of premium projects in our studio and the distribution deals in the current quarter. Gross Margin1 for YTD 2022 increased to 45% vs 44% in YTD 2021.
Cash provided by operating activities in Q3 2022 was $39.7 million, compared to $22.1 million in Q3 2021. Positive Free Cash Flow1 of $8.1 million in Q3 2022, compared with negative Free Cash Flow1 of $3.3 million in Q3 2021. YTD 2022 cash flow provided by operating activities of $39.6 million, compared to $83.0 million in YTD 2021. YTD 2022 negative Free Cash Flow1 of $12.7 million, compared to positive Free Cash Flow1 of $17.6 million in YTD 2021, primarily due to significant growth in accounts receivables associated with larger deals in the current year and timing of working capital settlements.
Adjusted EBITDA1 increased 75% to $30.2 million in Q3 2022, compared with $17.2 million in Q3 2021, principally driven by the Degrassi library licensing deal and continued strength in our Content Production and Distribution business. YTD 2022 adjusted EBITDA1 increased 21% to $77.3 million, compared to $63.9 million in YTD 2021. Q3 2021 included $2.2 million of government wage subsidies while YTD 2021 included $4.7 million of government wage subsidies and other income of $4.4 million from a litigation settlement.
Q3 2022 net income grew to $21.3 million vs net loss of $26.5 million in Q3 2021, reflecting higher gross margins. YTD 2022 net income increased to $4.5 million, compared to net loss of $18.5 million in YTD 2021.
| 1. | Free Cash Flow, Gross Margin, Adjusted EBITDA and Adjusted EBITDA attributable to WildBrain are non-GAAP financial measures. Free Cash Flow is defined as operating cash flow less distributions to non-controlling interests, changes in interim production financing, cash interest paid on our long-term debt, bank indebtedness and lease liabilities and principal repayments on our lease liabilities. Gross Margin means revenue less direct production costs and expense of film and television programs produced (per the financial statements). Adjusted EBITDA represents income of the Company before amortization, finance income (expense), taxes, reorganization and development expenses, impairments, equity-settled share-based compensation expense, and adjustments for other identified charges. Adjusted EBITDA attributable to WildBrain means Adjusted EBITDA excluding the portion of Adjusted EBITDA attributable to non-controlling interests. Further details on the definitions of and reconciliation to Free Cash Flow, Gross Margin, Adjusted EBITDA and Adjusted EBITDA attributable to WildBrain can be found in the “Non-GAAP Financial Measures” section of the Company’s Q3 2022 Management Discussion and Analysis (“MD&A”). |
About WildBrain
At WildBrain we inspire imaginations to run wild, engaging kids and families everywhere with great content across all media. With approximately 13,000 half-hours of filmed entertainment in our library – one of the world’s most extensive – we are home to such brands as Peanuts, Teletubbies, Strawberry Shortcake, Yo Gabba Gabba!, Caillou, Inspector Gadget, Johnny Test and Degrassi. At our 75,000-square-foot state-of-the-art animation studio in Vancouver, BC, we produce such fan-favourite series as The Snoopy Show, Snoopy in Space, Chip & Potato, Carmen Sandiego, Go, Dog. Go! and more. Our shows are enjoyed worldwide in more than 150 countries on over 500 streaming platforms and telecasters, and our AVOD business – WildBrain Spark – offers one of the largest networks of kids’ channels on YouTube, garnering billions of views per month from over 245 million subscribers. Through our leading agency, WildBrain CPLG, we also license consumer products and location-based entertainment in every major territory for our own properties as well as for our clients and content partners. Our television group owns and operates four family entertainment channels that are among the most viewed in Canada. WildBrain is headquartered in Canada with offices worldwide and trades on the Toronto Stock Exchange (TSX: WILD). Please visit us at www.wildbrain.com.
