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 fourth quarter and year-end of Fiscal 2017.
As most of you know, this quarter is traditionally our quietest due to the way the mainstream sporting season is structured. This was especially the case when compared to Q4 F2016, which included the Rio Olympics, as well as the European Championships and Copa America soccer tournaments. Without such events, we saw an impact to our US programmatic business.
Revenue for the quarter was slightly down year-over-year. For Q4 F2017 we achieved revenue of $4.8M versus $5M for the same period last year.
At year-end, we recorded total revenue of $26.3M for fiscal 2017 versus $23.9M last year – an increase of 10%, which was testament to the engagement within our mobile apps throughout the year.
Our Q4 softness in our US programmatic business was offset slightly by a year-over-year increase in Canadian advertising, which was $2.1M versus $1.9M last year. Canadian revenue for the fiscal year was up from $6.8M to $9.4M as big brands continue to flock to theScore up here to reach engaged sports fans.
Ultimately, these results leave us well on track to achieve adjusted EBITDA profitability in fiscal 2018, as discussed on previous earnings calls.
The lack of major sporting events during this quarter also contributed to our app audience decrease year-over-year, from 4M average monthly active users to 3.7M. As a result, sessions were also slightly down year-over-year, reaching 261M compared to 278M last year – although that’s still users accessing us 70 times each a month on average during our slowest season.
Looking forward, fiscal 2018 is already underway – as is our game plan to continue strengthening theScore’s position as a true leader in digital sports media and introduce our brand and products to even more sports fans. This essentially boils down into three core pillars:
Number 1: Launch, and then continue to build upon, the biggest ever update to our much-loved flagship app in our history. This will ensure we lead the way in providing an app that meets AND surpasses the evolving expectations of sports fans. Last month we hit the ground running here, with the goal of providing an experience sports fans – especially younger sports fans – demand, while also forging a stronger connection between our app offering, and the social content we produce. The reaction to this update has been very exciting. We’ve always been blessed with an extremely passionate and loyal user base, and yes, in the early days some were a little shaken by such a big update to their favorite app – and told us all about it! But in just a few days it was evident, as they familiarized themselves with our new-look and feature offering that engagement and audience growth were moving in the right direction. This continues to be the case. More on that shortly.
Number 2: Make theScore top of mind for the next generation of sports fans by continuing to amplify our reach through our social and other off-platform channels. We’re already reaching more than 30 million fans a month across Facebook, Instagram, Twitter and our web and chatbot platforms. Our intention is to double-down on this, continuing to expose the brand with younger sports fans, building a relationship with them that will bring them into our ecosystem.
And the third pillar: Ensure we stay at the very cutting edge of technology, successfully executing a product roadmap for emerging platforms that will significantly strengthen our position as a world-class provider of digital sports media. Our objective here is to capitalize and grow the areas where we already have a strong foothold – apps, chatbots, esports, social and web – while also ensuring we continue to identify opportunities with high-growth potential and ensure we’re early to market there. Our newly formed Emerging Platforms team is 100% focused on this, and we look forward to sharing more on where they’ll be taking us in due course.
Of course, at the core of all this is our market-leading sports app. We’re thrilled with how the roll-out of our new app went, and more importantly how it’s performing in the early stages. I’ll now turn things over to Benjie, who’ll dive a little deeper into our product strategy and, primarily, our recent app re-design.
Benjie: Thanks John, and good morning everyone.
Last month, after many months of product development and live testing, we launched the biggest app update ever for theScore app to our entire user base. It went live on iOS first, with the Android version following just a couple of weeks ago, and the early results have been very exciting.
We always knew that theScore app was a great game-time companion for sports fans thanks to our lightning fast alerts, detailed box scores and deep stats. Where we felt we could serve sports fans better, was by truly empowering their experience 24/7.
This comprehensive redesign provided deeper team & topic coverage, a sleek new user interface and a dynamically enhanced multimedia content offering, including videos and GIFs. We believe this update makes theScore the only sports app any fan needs, making it easier than ever for them to uncover the biggest stories, scores and stats from their favorite teams.
One of the major new features we added was our Discover section. Joining the dots between the highly-engaging content being produced by our team and shared across our social channels was a large consideration during the redesign process. We have a strong social presence – reaching more than 30 million people a month – so it made total sense to bring this highly engaging content into our app ecosystem. Discover now means sports fans finding our app after first being introduced to us on social channels will be able to enjoy the same content there as they do off-platform, plus lots more.
Our Favorites page was also a big addition. This takes the personalization elements of theScore to the next level, delivering even deeper team coverage and third-party content from curated sources – including teams and leagues. This new feature provides a much more rounded experience for our users.
The redesign also provided us with a perfect opportunity to review how we deliver advertising to our users. The continued sophistication of our programmatic business is being supported by our data analytics team, helping us better identify how and where to serve ad units on our platforms, while also setting ourselves up to add more high value units, including improving our ability to serve programmatic video.
Turning to esports, video has become a core element of our strategy. While our app offering remains a great experience for hardcore fans of the competitive video game scene, it’s become clear that the vast majority of gaming enthusiasts still lean heavily on desktop experiences to get the content about the teams and tournaments they care about. To meet this demand, we’ve broadened our esports focus to offer original video coverage and storytelling, and over the past quarter we’ve significantly optimized this area of our business to produce a number of franchises which are showing tremendous promise by generating regular six figure viewing figures. Built for social consumption, but syndicated across our web, app and owned platforms, these videos demonstrate great growth potential, and we’ve already executed direct ad buys with clients that want to attach themselves to our content.
As John touched on earlier, one of our core growth pillars is investing resources into exploring platforms that show high growth potential for us. We recently formed our own Emerging Platforms team within our product department, whose task is to identify scalable opportunities to take our existing content and data offering and deliver it on new platforms that expose theScore brand to new and large audiences. As part of this undertaking, we continue to develop our chatbot offering, working extremely closely with Facebook to ensure we’re delivering a best-in-class product on their Messenger platform. This relationship has enabled us to actively explore other potential product offerings with the social network, with the team also looking closely at developing technology like voice assistants and the role we could play here. theScore’s success has been built on being early to market on the platforms that matter, so it’s important we continue to look beyond our existing offerings to ensure we’re meeting the demands of the next generation of sports fans.
I’ll now turn things over to Tom who’ll run through our financials in more detail.
Tom: Thanks Benjie.
2017 revenue, compared to 2016 revenue, grew from $23.9 million to $26.3 million, an increase of 10%.
Our revenue growth in for the year was driven by better direct sales in Canada, which offset slightly lower sales in the US.
For Q4 FY 2017 revenue was $5.0 million compared to $4.8 million.
This year-over-year decrease was primarily due to the absence of the major sporting events that took place in Q4 F2016, including the Rio Olympics and the 2016 UEFA EURO and Copa America soccer tournaments. Without these events in Q4 FY2017 we saw a modest decline in US programmatic revenue, partially offset by an increase in Canadian sales.
In Q4 FY2017, expenses declined to $7.6 million from $10.1 million in the prior year. The reduction is mainly driven by reduced external contractor and personnel costs, as well as lower marketing costs.
In Q4 FY2017, personnel costs were $3.6 million, compared to $4.7 million in the prior year. For FY2017, personnel costs decreased to $16.9 from $18.3 million in FY2016.
Marketing costs are down year over year due to more strategic & cost effective external discretionary spend and more investment in our social content strategy as a way to build the company brand. As John and Benjie have noted, this is in line with our strategy of merging our app content with our social media content to appeal to a broader audience
Headcount at August 31, 2017 was 186 full time staff, versus 195 at August 31, 2016. As we commented in the previous quarters conference call we see an approximately 200 person contingent as the right base for operating the company and maintaining growth opportunities, which will help drive us to profitability. We continue to hire top quality development staff and believe we have the right mix of personnel to continue growing in FY2018
Adjusted EBITDA loss for Q4 FY2017 was $1.9 million versus $3.8 million in FY2016. Reduced expenses allowed us to significantly improve profitability each quarter this year.
We finished the quarter with $10.1 million in the bank. Cash use for the year was 5.4 million. Our operational cash use is down over 35% compared to the previous year, and overall cash use was down 67%.
Operator, we will now take questions.
theScore Q4 F2017 & Year End Conference Call Presentation
OCTOBER 19, 2017
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 August 31, 2017.
Q4 F2017 Overview
•Quarterly revenue of $4.8M versus $5.0M in Q4 F2016..
• Quarterly programmatic revenue primarily impacted by absence of major sporting events that took place in Q4 F2016, including Rio
Olympics, UEFA EURO and Copa America soccer tournaments.
• Revenue for F2017 of $26.3M versus $23.9M for F2016.
• Increase for fiscal testament to engagement growth within our mobile applications.
• Remain on track to achieve adjusted EBITDA profitability in F2018.
• Average monthly active users of 3.7M versus 4M in Q4 F2016.
• Audience impacted by absence of major sporting events that took place in Q4 F2016, as noted above.
• Average monthly sessions 261M versus 278M in Q4 F2016.• Users accessing theScore70 times eacha monthonaverageduring our traditionally quietest quarter.
F2014 F2015 F2016 F2017
Taking theScore to
the next level!
•Launch the biggest ever
update to our flagship app.
• iOS version launched in
August and Android in
• Goal of providing fans
with the only sports app
• Early data showing
positive results in
Make theScore top-of
-mind for the next
generation of fans!
•Continue amplifying our reach
through social and off-platform
• Already reaching more than
30M fans a month across
Twitter, web and chatbots.
• Strengthen bond with fans,
widening our funnel to bring
more into theScore
Stay at the cutting-edge
of digital sports media!
•Execute robust product roadmap to
emerging platforms to strengthen our
position as a world-class operator in
• Build on areas where we
already have strong foothold
(e.g. apps, chatbots, esports,
social & web).
• Proactively identify
opportunities with high-growth
potential that make strategic
Biggest update to our
flagship app – ever!
•Empower the fan’s experience
24/7 – to complement what sports
fans already loved about theScore.
• Redesign provided even
deeper team & topic
coverage, sleek new user
interface and dynamically
• Now truly the only sports
app fans need.
‘Discover’ section makes social an app experience.
•Better connects our engaged app audience and large social following.
• Ensures fans finding us on social have a comparable experience in-app.
‘Favorites’ takes personalization to the next level.
•Delivers deeper team coverage and third-party content from selected sources.
• Provides a more rounded experience for users, enabling them to consume
personalized multimedia content right in their newsfeed.
New ways to
with sports fans.
•Continue to test new ad
placements and units.
• Sophistication of
supported by data
analytics team, helping
identify ways to
Video now core element of esports strategy.
• Continue to broaden our focus to offer original video content and storytelling,
producing franchises that show considerable potential by generating regular
• Subscribers to our YouTube channel have now grown to more than 140,000.
Reaching NEW fans
•Formed new ‘Emerging Platforms’
team to explore scalable and
• Includes further chatbot
closely with Facebook to
deliver a best-in-class
offering here, and exploring
other areas to expand
theScore’s offering, such as
• F2017 revenue of $26.3 million versus $23.9 million for F2016.
• Growth driven by increased direct advertising sales in Canada
• Q4 F2017 revenue of $4.8 million versus $5.0 million for the same period in
• Lower US Programmatic revenue primarily due to absence of major sporting events
that took place in Q4 F2016, including Rio Olympics, UEFA EURO and Copa
America soccer tournaments.
Revenue – Q4
Revenue - YTD $ 26,348 $ 23,916
Fiscal Year: September 1 – August 31
Financials – Revenue Q4 F2017
• Bottom line improvements with significantly lower expenses
• Expense decreases mostly in external content, personnel costs and marketing.
•Lower expenses in almost all line items
$ (1,896) $ (3,821)
Q4 F2017 Q4 F2016
Fiscal Year: September 1 – August 31
Financials – Q4 F2017
• Strong balance sheet to start F2018
• Cash use down 67% versus last year.
$ 14,129 $ 21,900
Aug 31, 2017 Aug 31, 2016
Fiscal Year: September 1 – August 31
Financials – Q4 F2017