Tom: Hello and good morning. Many thanks for taking the time to join us on today’s call and webcast for theScore’s Fiscal 2018 Q1 results. On the call will be theScore Founder and CEO John Levy, President and Chief Operating Officer Benjie Levy, and myself, Chief Financial Officer Tom Hearne. At this time, I would like to caution our listeners that this presentation contains forward-looking statements. There are risks that actual results could differ materially from what is discussed and that certain material factors or assumptions are applied in making these forward-looking statements. Any forward-looking statements contained in this presentation represent the views of management and are presented for the purpose of assisting theScore shareholders and analysts in understanding the theScore’s financial position, objectives and priorities and anticipated financial performance. Forward-looking statements may not be appropriate for other purposes. Additional information on items of note, theScore’s reported results and factors and assumptions related to forward-looking information, are all available in our Annual Information Form and our MD&A for Q1 F2018, both of which were filed on SEDAR this morning. With that, let me turn the presentation over to John.
Tom: Hello and good morning. Many thanks for taking the time to join us on today’s call and webcast for theScore’s Fiscal 2017 year-end and Q4 results. On the call will be theScore Founder and CEO John Levy, President and Chief Operating Officer Benjie Levy, and myself, Chief Financial Officer Tom Hearne.
At this time, I would like to caution our listeners that this presentation contains forward-looking statements. There are risks that actual results could differ materially from what is discussed and that certain material factors or assumptions are applied in making these forward-looking statements.
Any forward-looking statements contained in this presentation represent the views of management and are presented for the purpose of assisting theScore shareholders and analysts in understanding the theScore’s financial position, objectives and priorities and anticipated financial performance. Forward-looking statements may not be appropriate for other purposes.
Additional information on items of note, theScore’s reported results and factors and assumptions related to forward-looking information, are all available in our Annual Information Form and our MD&A for the year ended 2017, both of which were filed on SEDAR this morning.
With that, let me turn the presentation over to John.
John: Thanks Tom. Welcome everyone. Thanks for joining us today for this review of the first quarter of fiscal 2018.
Q1 was a quarter that we entered with lots of exciting initiatives. - First and most important we just launched our new flagship app - Next we took theScore experience to new exciting platforms. - We doubled down in esports video content which began to generate significant heat. - We continue to scale engagement and growth on our social platforms - And we did all this while making great progress towards achieving positive EBITDA. So how did we do?
Firstly, we did what we said we would do and made this the first EBITDA positive quarter in our history. We achieved positive EBIDTA of $0.5 million versus a loss of $0.4 million last year. While this is cause to celebrate, it is only the start and we’ll continue to work hard to deliver on our long-term goal of being a self-sustaining and profitable company.
Revenue for the quarter was $8.4 million versus $8.5 million the previous year. The year-over-year change in revenue followed growth in our US programmatic and Canadian direct sales businesses, offset by lower direct US sales. As discussed on previous calls, US direct sales are typically larger in scale but less frequent than their Canadian counterparts, and Q1 was an example of this.
Now, like you, we were all very eager to see how sports fans would respond to our newly redesigned flagship app when we first introduced it at the end of fiscal 2017. And the results have been very encouraging.
In terms of raw user numbers, on iOS we twice broke records in Q1 for the most users on theScore app in a single month, with both October and November setting new best-ever numbers for this platform. For the entire quarter, users for theScore app on iPhones and iPads were up 6% for the same period last year.
Android users of theScore app were down 11% year-over-year. The Android platform remains a challenge, where we have seen general trends that point to slower growth specific to the free sports app category in Google Play over the past year.
This meant our overall average for Q1 in terms of monthly active users for theScore app was 4.3 million versus 4.4 million last year, and average monthly sessions per user were 103 versus 102 last year.
So what did this tell us as far as our flagship app goes? Well, for a start we know that users have reacted positively to the redesign. We’re seeing good growth momentum on iOS, which gives us a really positive position to build on through continued experimentation, feature development and maintaining our speed in delivering updates every two weeks to users to create the best experience possible.
On Android, we still believe that the right combination of product and growth initiatives will enable us to tackle this platform-specific challenge head-on by improving both acquisition and retention tactics. It’s not something that will be solved overnight, but rest assured we are giving it our full attention.
I’m now going to turn things over to Benjie, who’s going to go into more detail about our product initiatives, including our esports and emerging platforms businesses – including some very nice early results from last week’s pioneering launch of theScore fantasy sports for Facebook’s Instant Games platform.
Thanks John and good morning everyone.
When we launched the redesign of our flagship app back in the summer, we said then that this would be where the real work begins. To assist with this, we’ve also restructured our product development team into distinct verticals, to provide a clearer focus and direction, with teams including those for Sports, Social & Community, Growth, Content and Emerging Platforms. We believe we now have a great set-up and team structure to continue driving us forward.
Since pushing the update live in the App Store and on Google Play, our Sports team has been busy analyzing user data, as well as the more qualitative feedback received through our support channels and app store reviews, to help ensure our product roadmap continues to meet and surpass the expectations of sports fans.
In the past quarter we’ve brought our redesign to iPad devices, been among the first to optimize it for the newly-launched iPhone 10, added deeper stats for NBA and NHL, delivered smarter betting information, and also made it even easier for fans to access the headlines they care about.
Our focus for Q2 has been on deepening AND broadening our sports coverage. We’ve virtually completed work on our Winter Olympics section, and are also working on a complete overhaul of our golf section. Golf is the most popular individual sport in our app and is also a favorite among our advertisers due to the more affluent audience demographic that follows it, so it makes perfect sense to deliver an upgrade here and offer more options for our users and advertising partners.
Our redesign also allowed us to better connect the experience users were seeing on our app compared to the content being shared on our social media platforms, which continues to reach more than 30 million people a month. We plan on doubling-down in this area over the coming months, layering deeper social interaction into the app.
Our redesign also allowed us to take a fresh look at the kind of content we were offering and how we were surfacing it. Our Discover section has quickly become a popular destination for the big stories and multimedia social content doing the rounds, but also provides an area for us to showcase the same curated voice that fans love across our social channels off-platform. This has allowed us to expand into areas that didn’t really fit the old look and feel of our app. We now have Discover rivers dedicated to popular topics like high-end sports apparel with our ‘Swag Watch’ section, as well as nostalgia pieces like ‘Turn Back the Clock.’ We’ve also utilized Discover to become a home for quick multimedia game recaps, trending posts from Instagram, or compilations of great plays from fan favorites like Lebron or Messi. In fact, our Discover rivers are now some of the most scrolled rivers just a few months of them being created.
Because we are also now incorporating more third-party content in our app, this has provided greater bandwidth to our in-house content team, allowing them to focus on deeper and more original content. In Q1, this included an exclusive interview with Shaquille O’Neal, who talked about the 25th anniversary of his incredible rookie season. We look forward to seeing more of this.
On to esports and, as discussed on previous calls, we’ve refocused our priorities in recent months away from our app and towards the production of original video content, developing franchises focused on storytelling around the games & outside the live events. While our app remains the leading offering for the more hardcore fan of competitive gaming, what we wanted to do was expand our potential audience beyond the super-fan and into the domain of the more casual esports and gaming viewer.
Our video approach has allowed us to do that, and in Q1 F2018 total video views hit 18 million, up from 3.5 million for the same period the previous year, growth of more than 400%. Our team has created a number of popular video franchises, with a healthy number of videos now garnering at least six-figure views across YouTube, Facebook, and Twitter.
We now have a strong foundation and we think there is further opportunity to build a strong and valuable audience here.
We still see esports as an area that has extremely high growth potential to complement what we’re doing with our flagship app. Tapping this kind of potential is something our recently formed Emerging Platforms team has been solely focused on over the past few months. Their task is to identify and develop for the platforms of the future, to ensure theScore is always one step ahead of the evolving needs of sports fans.
This past quarter was particularly eventful for them. We saw the launch of theScore for Amazon Alexa across North America, with our brand prominently featured on the packaging of Amazon’s extremely popular voice assistant up here in Canada.
We also saw the continued improvement and growth of theScore bot for Facebook Messenger. theScore bot has quickly become the leading independent sports offering on this platform, and serving as a means to widen our top of funnel and introduce more sports fans to our brand.
And only last week we continued to strengthen our relationship with Facebook through the launch of theScore Fantasy for its Instant Games platform. This was the very first fantasy sports game to launch on Facebook’s Instant Games platform, allowing fans to challenge friends through Messenger for quick and fun fantasy contests. Using some of the pre-existing game mechanics of our Squad Up fantasy game meant we were able to develop for this platform very quickly. And we’ve already been encouraged by the interest less than a week after launching, with more than 1.1 million users already trying out the game.
I’ll now turn things over to Tom, who’ll take a closer look at our financial results.
Tom: Thanks Benjie.
Q1 2018 revenue, compared to Q1 2017 revenue, was $8.4 million vs. $8.5 million,
The change in revenue for the quarter was driven by lower direct sales in the US. As we have discussed on previous calls, our US direct sales tend to be bigger campaigns and are less frequent in scope, and are complemented by the more consistent programmatic sales program.
In Q1 FY2018, expenses declined to $7.8 million from $8.9 million in the prior year. The reduction is mainly driven by reduced personnel costs, as well as lower marketing costs. Headcount at November 30, 2017 was 189 full time staff, versus 215 at November 30, 2016. This change is primarily related to the change in focus of our esports group towards video. We believe we have the right mix of personnel for us to meet our business goals in FY2018.
Marketing costs are down year over year due to lower sponsorship costs in the esports space and a more strategic & cost effective external discretionary spend as we focus more investment in our social content strategy as a way to build the company brand.
EBITDA for Q1 2018 was $0.5 million versus an EBITDA loss of $0.4 million in Q1 2017. This is the first EBITDA positive quarter in the companies history and in line with the commitment we have made to make the company profitable.
We finished the quarter with $7.4 million in the bank. Cash use for the quarter was 2.7 million versus 3.9 million in Q1 2017. Q1 is traditionally our largest cash use quarter as the large Q1 sales are usually collected in Q2.
theScore Inc. Q1 F2018 Conference Call Presentation
JANUARY 11, 2018
Forward looking statements
All statements other than statements of historical facts included in this
presentation may constitute forward-looking information and are based on
the best estimates of Management of the current operating environment.
These forward-looking statements are related to, but not limited to,
theScore’s operations, anticipated financial performance, business
prospects and strategies. Forward looking information typically contains
statements with words such as ‘‘anticipate’’, ‘‘believe’’, ‘‘expect’’, ‘‘plan’’,
‘‘estimate’’, ‘intend’’, ‘‘will’’, ‘‘may’’, ‘‘should’’ or similar words suggesting
future outcomes. These statements reflect current assumptions and
expectations regarding future events and operating performance as of the
date of November 30, 2017.
Q1 F2018 Overview
•First EBITDA positive quarter in theScore’s history.
• Positive EBITDA of $0.5M versus loss of $0.4M for the same
period last year.• Users accessing theScore70 times each amonthonaverageduring our traditionally quietest quarter.
Q1 F2018 OverviewCADMillions
•Q1 F2018 Revenue of $8.4M versus $8.5M for the previous year.
• Growth in US programmatic and Canadian direct sales offset by
lower direct US sales.
F2015 Q1 F2016 Q1 F2017 Q1 F2018 Q1
Q1 F2018 Overview
•Redesign driving positive growth on iOS.
• Twice broke records for users on theScore app on iPhones and iPads in a single
month during Q1, with users up 6% on iOS YoY.
•Android growth remains a challenge.
• theScore app users down 11% YoY.
• Reflective of industry wide acquisition challenges seen in free sports app category
in Google Play.
•Total average monthly active users of theScore app were 4.3M in Q1 F2018 versus 4.4M
for the same period the previous year; sessions-per-user 103 vs. 102.
Q1 F2018 Overview
•First full quarter following the redesign of theScore app.
•Positive reaction from users following biggest update to flagship
app in history.
• Demonstrated reinvigorated growth on our iOS platform.
• Tackling Android-specific growth challenge through
combination of product and marketing initiatives.• Users accessing theScore70times eachamonth onaverageduring our traditionally q
• Continue to build on successful launch of redesigned flagship
• Restructured product development team into distinct verticals.
• Sports, Content, Social & Community, Growth, Emerging
•Brought redesigned flagship app to iPad devices.
•Among the first wave of apps to be optimized for iPhone X devices.
•Added deeper stats for NBA and NHL while providing easier access to news.
•Now focused on deepening AND broadening sports coverage.
• Adding support for the upcoming Winter Games; Working on a major
update to our golf section.
• Continue to strengthen the connection between the 30M-plus sports fans
we reach a month on social and our app experience.
•New Discover section has allowed us to
expand our coverage into new areas of
content craved by younger sports fans.
• Rivers dedicated to the storylines
surrounding sports, like high-end
apparel and nostalgia.
• Discover is also home to quick
multimedia game recaps,
trending posts from Instagram or
‘best of’ compilations featuring
the biggest personalities.
• Explored more exclusive content,
including a high-profile interview
with Shaquille O’Neal.
Maintained focus on creation of original esports video content, through esports
“franchises” telling the stories around the game, appealing to hardcore and more casual
Iconic Esports Moments
A Trip Down
Hey Mom, This is Esports
The Story Of
• Video views in Q1 F2018 reached 18M, up from 3.5M for same
period last year. Growth of more than 400%.
• Videos regularly achieving at least six-figure viewing figures each.
•Launched theScore for Amazon Alexa across North America.
•Continued to build on the strength of our bot for Facebook Messenger, the
leading independent sports media bot on that platform.
•One week ago launched the first ever fantasy sports game for Facebook’s
Instant Games platform.
• More than one million people have already tried theScore Fantasy
Sports from Messenger in less than a week.
• YTD revenue of $8.4 million versus $8.5 million in prior year.
• Increased direct advertising sales in Canada
• Q1-over-Q1 revenue decline of 2%.
• Lower US direct sales.
Revenue – Q1 $ 8,548
Fiscal Year: September 1 – August 31
Financials – Revenue Q1 F2018
• First EBITDA positive quarter in Company history
•Tighter expense management
• Expense decreases mostly in personnel costs and marketing.
•Lower expenses in almost all line items
$ 532 $ (357)
Q1 F2018 Q1 F2017
Fiscal Year: September 1 – August 31
Financials – Q1 F2018
• Q1 is usually highest cash use quarter
• Q1 sales are collected mostly in Q2
$ 14,129 $ 14,223
Aug 31, 2017 Nov 30, 2017
Fiscal Year: September 1 – August 31
Financials – Q1 F2018