WildBrain Reports Q3 2024 Results
Q3 2024 Highlights
- Revenue was $100.1 million, compared to $140.9 million in Q3 2023.
- Net loss was $14.7 million, compared with net income of $19.4 million in Q3 2023.
- Adjusted EBITDA1 was $19.6 million, compared to $32.9 million in the prior-year period.
- Cash provided in operating activities was $23.3 million, compared to cash provided in operating activities of $24.0 million in Q3 2023.
- Free Cash Flow1 was negative $2.9 million, compared to negative $4.6 million in Q3 2023.
Toronto, Canada – WildBrain reported its third quarter (“Q3 2024”) results for the period ended March 31, 2024.
Josh Scherba, WildBrain President and CEO, said: “As I reflect on my first year as President and CEO, I am encouraged by the significant progress we’ve made to focus on our key franchises and in solidifying our position as a leader in content creation, audience engagement and global licensing. Despite the industry headwinds in content production brought on this year by the slowdown in greenlights, our production pipeline for Fiscal Years 2025 and 2026 is returning to a more normalized output. Major streaming platforms are now looking to WildBrain as a ‘go to’ partner for premium animation—as reflected by projects such as our new Peanuts feature greenlit by Apple TV+ and the success of Sonic Prime as a top-ten show on Netflix. Additionally, in the third quarter, we saw strength in our AVOD business and in licensing for our owned brands in Asia-Pacific. I am optimistic and excited about the path ahead, as we remain committed to executing on our long-term strategy of simplifying and growing our business and improving our balance sheet.”
Nick Gawne, WildBrain CFO, added: “We continue to focus our business on our key franchises that can generate the greatest returns from our integrated 360-degree capabilities. While Fiscal Year 2024 has been impacted by the slowdown in production greenlights, we remain committed to our key financial goals of addressing our 2024 convertible debentures and reducing our leverage over time. We also continue to pursue the sale of non-core assets as announced back in September. While we have nothing to announce today, we’ve made significant progress on both these fronts, and we look forward to providing updates in due course.”
Q3 2024 Performance – Executing on Priorities
| PRIORITIES | HIGHLIGHTS |
| Focus on Key Brands & Partnerships |
|
| Deliver Sustainable Growth |
|
| Improve Balance Sheet |
|
Q3 2024 Financial Highlights
| Financial Highlights
(in millions of Cdn$) |
Three Months ended
March 31, |
|
| 2024 | 2023 | |
| Revenue | $100.1 | $140.9 |
| Gross Margin1 | $50.5 | $67.5 |
| Gross Margin (%)1 | 50 % | 48 % |
| Adjusted EBITDA attributable to WildBrain1 | $19.6 | $32.9 |
| Net Income (Loss) attributable to WildBrain | $(14.7) | $19.4 |
| Basic Earnings (Loss) per Share | $(0.07) | $0.11 |
| Cash Provided by Operating Activities | $23.3 | $24.0 |
| Free Cash Flow1 | $(2.9) | $(4.6) |
In Q3 2024, revenue decreased 29% to $100.1 million, compared to $140.9 million in Q3 2023.
Content Creation and Audience Engagement revenue decreased 49% to $40.8 million in Q3 2024, compared to $80.6 million in Q3 2023. The revenue decline was driven by fewer productions in the studios, reflective of the slower activity in the broader content production industry. The revenue decline in the studio businesses was offset by continued strength in the FAST and AVOD networks, the latter delivering over 60 billion minutes watched compared to 46 billion minutes of videos watched on our network in 3Q23.
Global Licensing revenue decreased 3% to $49.6 million in Q3 2024, compared to $50.9 million in Q3 2023. Revenue for both Peanuts and our global licensing agency, WildBrain CPLG, was lower year over year in Europe. This was offset by continued growth in North America for Peanuts, and in China and Asia-Pacific for both Peanuts and WildBrain CPLG.
Legacy WildBrain Spark revenue in Q3 2024 increased 36% to $12.4 million compared to $9.1 million in Q3 2023. Kids continue to be highly engaged on our YouTube network, with over 60 billion minutes of videos watched in the quarter and the average duration of viewing continuing to improve.
Gross margin1 for Q3 2024 was 50%, compared with gross margin of 48% in Q3 2023. Gross margin percentage was higher as a result of Global Licensing and Audience Engagement revenues being a higher proportion of total revenues, in the current period.
Cash provided by operating activities in Q3 2024 was $23.3 million, compared to $24.0 million provided by operating activities in Q3 2023. Free Cash Flow1 was negative $2.9 million in Q3 2024, compared with Free Cash Flow of negative $4.6 million in Q3 2023.
Adjusted EBITDA1 was down 40% to $19.6 million in Q3 2024, compared with $32.9 million in Q3 2023. The decrease in the quarter was driven by lower gross margin dollars, offset by a $3.1 million reduction in SG&A.
Q3 2024 net loss was $14.7 million compared to net income of $19.4 million in Q3 2023. The decrease was primarily driven by lower gross margin dollars, offset by lower SG&A in the current period, a reduction in the change of the fair value of embedded derivatives, and the non-recurrence of the prior period impairment
