Good morning, everyone, and welcome to Sabio Holdings Q2 2025 Earnings Call. The financial statements and MD&A have been filed and can be accessed through the CEDAR website. Today is Wednesday, August 27th, 2025, and joining us are Aziz Rahimtoola, Founder and CEO, and Sajid Premji, CFO of Sabio Holdings. They will be presenting the company's Q2 2025 results and developments, followed by a Q&A session. Analysts can ask questions live by pressing the Raise Hand button to unmute. Investors are encouraged to submit their questions via the Q&A box, and we will address them at the end of the session along with any questions submitted in advance. Before we begin, I would like to remind everyone that certain statements made today may contain forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors.
For a complete description of the risks and uncertainties facing the company, please refer to the MD&A and other continuous disclosure filings, which are also available on the CEDAR website. Also note that all figures discussed today are in US dollars unless stated otherwise. With that, I'll turn it over to Aziz.
Thank you, Martin, and good morning, everyone. In a year without election tailwinds and tariff pressures, this quarter highlights Sabio's ability to deliver strong results through consistency, innovation, and diversification, positioning us well for even greater success ahead. This quarter also reflects both the resiliency of our business and the rapid adoption of our new products, going into what promises to be a very lucrative 2026 U.S. election cycle. We continue to maintain a 92% recurring revenue model, a powerful validation of how our App Science data-driven approach drives positive client outcomes. In today's environment, ROI and return on ad spend matter more than ever. Our proprietary 80 million cross-screen household graph delivers measurable value to both brands and agencies through better insights and outcomes. Now, talking about innovation, growth at Sabio has always been fueled by anticipated shifts and executing ahead of the curve.
From the building and execution of our proprietary App Science household graph in 2016, when mobile apps were not as prevalent and streaming apps really didn't exist, Sabio was there. Today, our ad-supported streaming business now accounts for 60% of revenue and is our largest contributor to annual growth. Our international expansion, launched in 2023, is already generating meaningful revenue, with revenues up four times year-over-year with tangible growth ahead and geographic diversification becoming a reality. The explosive growth of our new programmatic offering, launched in 2025, in the first half of this year alone, sales grew an average of 94% month-over-month. Most recently, the launch of Creator Television in January 2025, now one of the fastest growing creator-driven streaming channels in the streaming space today.
Viewership has surged more than 300% across streaming partners, including Comcast's X umo , Plex, Sling, and Amazon Fire TV networks, with more added monthly. The creator economy is real, a category where spending is estimated to be $52 billion. Yes, I mean billion by 2030. Taken all together, our consistent revenue, rapidly adopted new products, and geography expansion are providing both predictable growth and revenue diversification. We already built one of the best ad-serving technologies in Sabio, one of the best analytics engines in App Science, and now have tremendous momentum building one of the fastest growing creator-inspired television networks in Creator Television. We are beyond excited about all we have accomplished and what more there is to come. I'm now going to hand it over to Sajid Premji to dig into the details a little bit more. Sajid?
Thanks, Aziz. We are pleased to report record second-quarter revenues and our fifth consecutive quarter of double-digit revenue growth. Our shift to a streaming sales model from a mobile display-dependent model continues to deliver a robust compound annual growth rate, increased customer retention, and has captured substantial cost efficiencies. For the three months ended June 30th, 2025, Sabio generated $11.2 million in sales, up 25% from the prior year, or 29% excluding political sales. The increase in sales was once again fully organic and driven by strong advertising demand, broader client adoption in key verticals, and expansion into new geographies in combination with new product offerings and previous investments made. Double-digit growth rates were realized across several geographies within Sabio 's footprint, including from the company's New York, Los Angeles, and Detroit offices.
Meanwhile, the company's advocacy business and international business out of the United Kingdom continue to demonstrate robust strength, compounding at triple-digit growth rates. By segment, ad-supported streaming sales grew 8% to a record $7.4 million, compared to $6.9 million in the same period last year. Excluding political campaigns, ad-supported streaming grew 13%, marking our sixth consecutive quarter of double-digit growth in our core ad-supported streaming business. Included in second-quarter ad-supported streaming sales were approximately $342,000, and programmatic ad sales recognized net immediate costs. The increase in revenues was spread across several verticals, including automotive, finance, lottery, legal and professional services, and advocacy. For the first half of 2025, Sabio 's 21% growth in ad-supported streaming sales once again outpaced the estimated 13% growth rate for the U.S. ad-supported streaming market at large, as we continue to take market share.
As Sabio 's dominant sales category, accounting for 70% of our overall sales mix in the first half, our ad-supported streaming sales feature predictable and sustained growth through very high customer retention rates. 92% of our first-half sales normalized for political sales came from repeat customers. Additionally, second-quarter mobile ad sales increased 88% to $3.5 million from $1.9 million in the prior year, reflecting strong adoption of Sabio 's new performance marketing offering and increased use of non-OTT mobile video. Sabio's end-to-end technology stack, powered by a proprietary App Science cross-screen graph and featuring several direct supply integrations, continues to yield strong gross margins, with first quarter and second quarter margins repeating consistently strong at 61%. Furthermore, programmatic ad sales recognized into consolidated revenues net immediate costs benefited gross margins by approximately 1.2%.
Sabio's programmatic sales typically feature lower gross margins compared to its managed service offerings, but also feature a lower OpEx profile. If the company's programmatic sales continue to make up a greater proportion of Sabio's overall sales mix, we expect downward pressure on margin to be gradually offset through greater OpEx efficiencies. With approximately 60%- 70% of its sales taking place in the second half of the year, the company has historically incurred first-half losses followed by second-half profitability. Our second quarter adjusted EBITDA loss was $1.2 million compared to a loss of $0.3 million in the prior year's period. The loss was driven by investments in our new Creator TV, programmatic, and performance marketing offerings, and international expansion, which we will also soon discuss further.
Also contributed to the loss was a $0.532 million increase in cloud computing costs over the prior year's second quarter, as usage began to normalize from first-quarter investments that will enhance the company's data security, capture AI-driven efficiencies, and facilitate a robust data platform for continued growth. With the heaviest investments undertaken in the first quarter, Sabio saw a 15% sequential reduction from the previous quarter despite increased business activities. Going forward, management remains intently focused on unlocking further efficiency gains within the platform. Sabio ended the quarter with $2.2 million in cash. Delving deeper into Sabio's newest product offerings and geographical expansion, it is clear that our investments are already paying off, with substantial benefits still to be realized over the coming quarters. Creator TV continued to expand its distribution during the second quarter.
Since its launch, the channel's average viewership has grown by over 300% across several platforms, including Comcast Xumo Play, Plex, Sling, and Amazon Fire TV. Our new programmatic CTV/OTT offering has seen a 94% month-over-month revenue growth in the first half of the year. Meanwhile, sales from our international business have quadrupled over the prior years, with triple-digit growth rates continuing on into the third quarter. It is also worth reiterating that our new performance marketing offering helped underpin a robust 88% surge in second-quarter mobile ad sales. Finally, Sabio's sales force has grown nearly 40% in 2025, with most hires being made within the last six months. The company has already realized early returns from these investments, with new logos to Sabio representing 33% of our first-half brand mix. Historically, it takes close to six months before a new seller starts to contribute, with a meaningful ramp-up thereafter.
Therefore, while we have already reached early returns through the first-applying client base, the substantial benefits of our investments are expected to be realized in the second half of 2025 and into the 2026 election year as our newest sellers ramp up. Sabio's debt load consists of $1.7 million in short and long-term debt instruments and $6.4 million outstanding under a three-year revolving credit facility backed by Sabio sales. This facility is used to borrow against eligible accounts receivable of the company, effectively bringing the collection of receivables forward to the draw date, similar to a factoring arrangement. Sabio's receivables have historically experienced nominal loss rates due to a customer base that is largely composed of the most significant U.S. brands and advertising agencies.
When accounts receivable are collected on, the amounts received are first directly paid towards the outstanding loan balance, which the company can then use for working capital purposes through subsequent withdrawals. As a result, the facility is continuously being repaid as AR on sales is collected upon. At quarter end, we had 50.6 million shares outstanding, 3.4 million options and RSUs outstanding, and subsequent to quarter end, Sabio retired all CAD 1.7 million of convertible notes, or approximately $1.3 million , through a new CAD 1.8 million debenture financing as described in part by Sabio's CEO. The financing reduced Sabio's fully diluted share count by approximately 1.7 million. Our acquisition of Vidillion in 2022 remains our only material diluted event since going public in 2021. Insiders own 54% of the company, with high alignment between our management team and the interests of our shareholders.
Looking ahead, macroeconomic certainties continue to weigh on current advertising budgets, presenting near-term challenges across the industry. That said, Sabio's high repeat revenue rates, rapid programmatic adoption, and ongoing international expansion position the company well as we approach a traditionally strong fourth quarter in the 2026 midterm election year, where our compound annual growth rate has historically exceeded 60% in election year periods. I will now turn it over to Aziz, who will provide a quick recap.
Thank you, Sajid. Before we get into what is in store ahead, I want to spend a few minutes expanding on the earlier discussed debt transaction and our whole debt picture. Our recent debt transaction was a replacement of a convertible debt instrument that was coming due. Our hesitancy to do an equity financing deal with the tailwinds we have is exactly why we just swapped out a convertible debt instrument for a non-convertible one. We're not concerned about paying off the debt instrument, with revenue generating in our highest revenue quarters of Q4, being assisted by what is anticipated to be one of the most expensive midterm election cycles in U.S. history in 2026. Just to clarify, in the U.S., election dates are set for November 3rd every two years, unlike that in Canada. We have the predictability of what will happen in the next few months.
Next, I want to clarify details on our debt. As Sajid discussed, outside of $1.35 million held by non-insiders, we don't have any really long-term debt. The amount that is classified as debt is really a mechanism that allows us to make use of receivables faster. As invoices get paid, so does our line. This type of mechanism allows us to leverage one of the best assets more effectively, which is blue chip customer payables, versus having to keep large reserves on hand and not being able to deploy them for growth. What has been our default rate on invoices from our top customers, or really anyone, the answer is close to zero. That is why this really should not be considered a big debt component.
In terms of the road ahead, we are winning and growing in a challenging environment, positioned perfectly as we enter what promises to be a record political cycle, from national elections to high-profile local races, including the California governor's and Los Angeles mayor's race, which, by the way, the last mayor's race four years ago had a record $100 million spent just in a matter of a few months. That is scheduled for next year here in Los Angeles. Sabio is built for growth. Consistency gives us strength. Innovation gives us momentum. Diversification gives us more reach. Together, they ensure we're ready for the next wave of opportunity. This was both a record second quarter and first half revenues in Sabio history. We're just getting started. On that note, I'm going to hand it back to Martin for any questions. Martin?
Thank you very much. Speakers, are you going to be turning on your video at this point?
Yes, we will.
Our first analyst question comes from Gabriel Leung. Gabriel, you are able to speak now.
Great, thanks. Hey guys, thanks for taking my questions and congrats on the progress. Just curious if you can talk a little bit about the current programmatic pipeline, how you think that's going to shape up over the course of the year and into 2026. I'm also curious whether the growth in programmatic is going to, do you expect it'll come at the expense of your managed business?
Welcome, Gabe. Thank you for the question. The first of which, the first part of that is, you know, in terms of our programmatic pipeline, we're seeing tremendous opportunity of growth. That dovetails into your second question. It really is driven by two factors. First of which is we're not seeing a cannibalization of our managed service business because of programmatic. What we're seeing is there are pots of money that we did not have access to when we weren't offering programmatic. Now we have the benefit of both managed and programmatic, hence the fact that you could see that 92% recurring revenue model still consistent. The second part of this equation, what's also happening is because of the tariff situations here in the U.S. and of course globally, advertisers aren't able to plan further ahead.
It allows them to now turn off and on very quickly as it relates to, you know, a changing tariff environment that we see coming out of the U.S. That has really facilitated the growth of programmatic. Now, as you probably know, Gabe, 90% of all CTV/OTT is transacted programmatically. While our managed service business is consistent and we see growth there in certain categories, we do see a huge opportunity with programmatic. That also dovetails nicely as we grow our Creator Television channel because that provides us, once again, unique supply and inventory. Did that answer your question, Gabe?
That was super helpful. For this midterm election cycle, do you anticipate more of a programmatic spend versus, obviously you didn't have it before, but do you expect that it'll be a contributor to your programmatic growth on the political side this year?
Yes, very much so. In fact, we think we were limited while we had a record political year last year. It did limit us by not having programmatic. This year, we are excited about the new offering programmatic. We are seeing, quite honestly, a lot of great success. We are seeing advertisers start testing us and just continue to keep those campaigns going and keeping them evergreen. The consistency of our revenue will start becoming more of a factor with programmatic. Sajid, anything you want to add to that?
I think that was very well captured, Aziz. I think that it's worth pointing out that in political spending, most political spending is done programmatically. We haven't had a programmatic offering in the past, right? In 2024, all our programmatic sales were through managed services. Now we have a programmatic offering. To Aziz's point, we definitely expect that to benefit us in the midterm election year and beyond. You have to escape where the puck is going. The puck is going towards programmatic, which is why we're investing in it. We definitely expect to reap the benefits of those investments.
To that point, next year's election cycle, we're super excited about because not only do we have programmatic, but we have our own channel, the Creator Television product, which is exactly where these politicians need to be. Younger audiences who can make an impact, younger diverse audiences who can make an impact on the next cycle.
Gotcha. Maybe that leads to my next question. On the Creator TV side, I'm curious if you have any talking points around whether that's been helping to drive additional growth in your core business or any evidence of that, I guess.
Yeah, it has. The reality is the first of which is the fact that it's increased our visibility. As you know, we have been, as you know all too well, we have probably been a tech player, right? Monetizing everyone else's inventory, providing insights and analytics. Now we're in a position where we have our owned-and-operated inventory that's exclusive to us. What that does is it puts us in a completely different category of business. Not only is it a different category of business, it is one of the hottest growing categories of business, which is the creator-driven network business. The creator content business, which I talked about, is, you know, on pace to be a $500 billion industry in a matter of years. It does put us in a different place. It also helps us with our data and App Science.
Going back to your question of, you know, is there anything specific that we could point to that, you know, from a numbers perspective? At this point, what we want to kind of point to is this growth in our viewership and our programming. What you will hear from us in the coming months is collaboration that is driven by this unique opportunity program. It's a very cost-effective approach we're taking. We're partnering up with other companies to collaborate with them on programming and collaborating with the creators. It's going to give us a whole new set of selling opportunities, not just in the U.S., but globally, just in time as our global expansion and footprint is expanding. We really are setting ourselves up for a really great acceleration, more so towards the end of this year and into 2026.
Is it worth highlighting at this point how much of your revenues are being influenced by Creator TV, or is it a number that you might provide maybe down the road?
Yeah, it's probably something we're going to start talking about more at the beginning of 2026, just simply because we do think there's going to be some opportunities for it to be influenced at the end of this year. Really, where we see it to start making a meaningful impact is in 2026. In the meantime, as we talked about, programmatic's making a meaningful impact, international's making a meaningful impact, and those are the two new products that we're already in the works, while Creator TV now is getting that third leg going in a big way. We're super excited. I mean, we got so many things hitting on all gears. I think, as it relates to the loss this quarter, it's not indicative of the full picture, just simply because the investments we're continuing to make are setting us up for this acceleration. We're excited. We're primed.
This engine is starting to hit on all gears. As you saw what we did in the 2024 election cycle, we came out a challenging 2023. We hit on all gears in 2024. That was before we had all of the tools in our toolbox that we have now. Super, super excited about that. Sajid, anything you want to add there?
I think you captured it well, Aziz. I think that just what you're reiterating, that, you know, Creator TV just launched Xumo and Fire TV within the last couple of months, some of these platforms after Q2 ended. While they're not showing up in the Q2 numbers, viewership has exploded on these platforms since their launch. We definitely expect them to have more of a contribution in Q3 and Q4.
Gotcha. Maybe one last thing for me is the mobile group obviously had great growth this quarter. Just curious if there's any commentary around that and what could we expect to see from that group over the course of the year.
I think it's a function of this need for some of our brands to go into a very performance mindset, with the tariff situation and some of the uncertainties that's unfolded because of it. We do believe that, while mobile will continue being a key component, the ad-supported streaming business of ours will continue being the key driver. We don't think there's any kind of shift ahead. I think I'll let Sajid get into this, but we think this is just also a situation where people want to leverage our data science capabilities, our insights, our analytics to drive outcomes on a lower funnel basis. What we suspect will also happen is branding will be coming back into vogue in a lot of ways, and that will push the CTV upper funnel movement. Sajid, anything you want to add to that?
Yeah, it's just, again, worth reiterating that Creator TV, programmatic CTV/OTT offering, and performance marketing all launched this year. This is their first year of operations. They did not contribute last year. Already, performance marketing has contributed to an 88% increase in our Q2 sales in its formative stages. Programmatic CTV/OTT offering is going to contribute seven figures in Q3, and it's going to ramp up very fast afterwards. Creator TV has exploding viewership since being launched on Xumo Play and Fire TV. We are still in the early innings of what we expect to be a very robust growth cycle.
Awesome. No, I appreciate the feedback and congrats on the progress.
Thank you, Gabe. Appreciate the time.
Our next question is from Thomas Hui.
Hi Tom, how are you?
Sajid, good morning.
My question is around the uptick in expenses due to those internal investments. I understand you're trying to stand up these new products. We're just wondering if these are ongoing investments or if they're going to trail off anytime soon.
Thanks for your question, Tom. I'm going to hand it over to Sajid.
Sajid?
Yeah, I think that whenever you have a new product being launched, you have to expect some sort of upfront investments being made. That's what we've been doing in Creator TV, programmatic CTV/OTT, and our international business. I think our international business is a great example. Last year, we had one seller there who contributed $1.4 million in sales. Now we have four sellers, going to be five very soon. What's the return on that? We are going to exceed all of 2024 sales in Q3 internationally. It's already paying dividends. Mobile sales, again, surged 88% because of our performance marketing product in part. Programmatic CTV/OTT is going to make up a greater portion of our sales mix in Q3 and beyond. To answer your question, Tom, yes, these have required early investments, but we definitely expect that as these become more mature, the OpEx requirements will level off.
We see that happening around Q4 and going into the 2026 election year. We suspect the 2026 election year to be a big one. We were able to turn around, for perspective, a loss in 2023 into a close to $4 million gain in 2024. Going into 2026, we have a lot more growth pillars set up for us. We expect 2026 to be a very big year for us.
That's well said, Sajid. I think also, Tom, one of the things to keep in mind is that we had put a strategy. One of the things, as Sajid talked about, we came off a really strong election cycle in 2024. The thinking was like, OK, great. Can Sabio, can you grow the revenue outside of election cycle? We're doing it, right? We're executing. We did it not simply. We're doing it in a tough environment. I don't think sometimes we get enough credit for that. We started putting infrastructure in place last year, investments this year, and are executing on those. We are growing in a tariff-infused environment and diversified our business at the same time, going into one of the best election cycles in U.S. history. We're super excited. I think the reality is those investments are paying off.
Sometimes, sure, if we had it, if everything worked out the way we would have thought it worked out, there wouldn't be this thing called tariffs that showed up out of the White House that then affected some of the automotive components. There wouldn't be tariffs that affected some quick service restaurant or retail. Surely we were affected by that. Despite that, and if the tariffs did not exist, let me just be very clear, you wouldn't see this loss today. I mean, we were very much on our trajectory, on an upward trajectory, if it wasn't for the tariff situation. I think in the broad economy, it's being impacted everywhere. Despite that, we were able to execute and continue. That was because of the diversification that we have and the investments we put in new products. Otherwise, we would be down in a considerable way. We're not.
I don't think it necessarily shows up in the way that we know it's going to show up later on this year.
Understood. Definitely very strong performance this quarter. I guess my last question would be on sort of the competitive landscape here. I think looking at all the U.S. ad tech companies, they all mention CTV advertising as a major growth driver for them. We also see some increased competition, such as Amazon forming an exclusive partnership with Roku, which is a big C TV player. I was just wondering, I was curious your thoughts on how the C TV landscape is shaping up and if you're seeing some competition from large players.
You know, Tom, I think you saw early on when we showed you our thinking around Creator Television. This was probably a year ago when we first started talking about it. This is a key differentiation. If you think about our competitors in the space, right? We are now not competing with Amazon. We're on Amazon Fire , right? We're not competing with comcast Xumo. We're on Xumo. We're going to be on all these other platforms. The way to think about us, and then while we have now content, we have our channel on these platforms, and we're having conversations with more platforms to distribute Creator Television, we are now not competing with them. We're playing with them, and we're enjoying the growth that they're having. We also have the benefit of App Science, playing with them and insights.
Now we're talking to them about, you know, how do we use our insights for their platform? I think the way to approach, the way to think about Sabio is we continue to expand. Now we are a piece of their environment versus us competing in their environment. That's how we're different from a Trade Desk. The Trade Desk is competing with Amazon. There is zero-sum game there. With us, there's no zero-sum game. We are actually on Amazon. We are on Plex. We are going to be on all these other platforms. I think that's where we see the opportunity going. We're super excited. The more competition, the better. The more, you know, distribution sources, the better for us. Because, you know, not only do we have now content, which is the newest edition, we still have the great data and insights that these folks don't have.
Really, we see them as partnerships more than we see them as competitors. Does that answer your question, Tom?
Yeah, sounds good. Thank you for taking my questions.
Sure.
Next questions come from Nicholas Cortellucci.
Aziz, hey Sajid, thanks for taking the time and answering my questions. Just a couple here. Firstly, maybe if you guys could talk a bit more about the international approach with the U.K. office and how that's opening the door to new clients and, you know, a more integrated approach.
Yeah, you know, what we learned, and that the way this all came about, I think I got asked by one of the investors, why would you go into the international markets, Aziz, when you have a lot of growth opportunity in the U.S.? What would you, you know, we're still a small company. What's the rationale there? The rationality for that is the fact that what we started seeing is our brands, some of the biggest brands in the world, started saying to us that this tariff environment was going to, you know, that we saw this three years ago in the 2023 pullback in the total U.S. market. What we saw is international markets were doing better. We were not diversified in 2023.
Our thinking in 2023 was like, look, if we are going to now weather storms that are going to head our way, let's start diversifying from a geography perspective. Let's not have all our eggs in one basket, in the U.S. basket. We started working on this in 2023. What has happened along the way is we have leapfrogged some of our competitors now in the international market because we have differentiated analytics. We have our ad-serving capabilities that could be anywhere in the world. We are now connecting those dots and those pipes. We are literally showing up on a lot of new campaigns across the regions, whether it is in the U.K . We're doing campaigns in Africa. We're doing campaigns in Asia. We are literally seeing opportunity everywhere.
What our brands are telling us is this is really great for them because as they now shift some dollars, as is happening from some of the brands we've talked to, they're shifting dollars out of the U.S. They're European brands. They're not pushing into the U.S. They're keeping, because of the tariff situation, they're keeping those dollars in Europe. We are benefiting from that. We are seeing a tremendous level of upside there. It fits really well with our product set. We're leapfrogging our competitors. It is really, you know, we're super excited about that. Sajid, anything you want to add to that?
I think that's exactly right, Aziz. We are in the early innings there too. 2024 was our first year's revenue out of the United Kingdom. In 2025, we're going to exceed all last year's sales in Q3 alone. We are set up to win there. A lot of our peers who don't have this kind of international expansion, who are stuck in one or two markets, are not reaping the benefits that we are in a year that's generally more challenging for the U.S. economy.
Nicholas, you know, obviously this all goes back to the initial question, the question that we've been asked a lot. Aziz, you grew revenue, but then you also grew your expenses. Yes, because we have that much opportunity. If we couldn't show it in terms of our numbers of growth in Europe or growth of Creator TV or growth of programmatic, then we should be questioned. The fact is we are executing at a high level, and we're taking market share, and we're having fun doing it. I hope the market understands that we are here to win. We're not here to lay around and just wait for yesterday's cycle. We're continuing to evolve and grow revenue altogether.
Yeah, I think that's well said. One of the easiest things that we could have done is just rest on our laurels, you know, kind of bank on expanding even our margins this year. Next year and the year afterwards, our growth would be subdued. That wasn't what we wanted to do, right? We are, because of the investments we're making now, it's not only setting us up well for 2026, which we're going to profit in a big way from, but beyond that as well.
Got it. OK, thank you for that. That's great. My second question was on profitability. Looking forward to 2026, what can things look like from, you know, an EBITDA margin perspective on when the business does hit that inflection point from the political revenue?
I think that in 2024, we saw 8% EBITDA margins. I don't see why we can't match that or not exceed that in 2026.
Nicholas, just so you know, Sajid and I have a very good partnership in the sense that I get to think of some growth opportunities in the years we need to expand, and then I have to pay the bank back in the years that we're making the money. Next year is the payback period. I don't get to, you know, that's kind of, you look at our track record. We expand, we invest, we grow, and then we really capitalize. Next year we will capitalize. I think that's really, I mean, how could we not? We've, you know, as I just mentioned earlier on this call, $100 million was spent in the U.S., just the L.A. City mayor's race four years ago, which we didn't participate at all because we weren't even in that space. Now we have one of the fastest growing Creator Television channels.
We have deeper analytics. We have programmatic offerings. That race alone, we're going to play in. Midterms, the Senate races, the House races, the California governor's race is big. We are beyond giddy. We're excited. We are making waves. People are taking notice of what we're doing. We're super excited.
Awesome. All right, thanks for the time, guys. Those are my only questions.
Cool.
All right, thank you for those analyst questions. We are now taking questions from the audience. Please type your questions into the Q&A feature, and I will read them out. First question here, can you discuss the 15, why the 15% financing?
Yeah, it's a good question. We had a few different options. Number one would be just to pay back that loan in its entirety, which was definitely a viable option. We are investing in our future growth. If we took out over $1 million to pay back that loan, that's $1 million less to grow our business. The next question is, maybe you do an equity financing. That was also on the table. We want to do an equity financing on our own terms, not just do it because we're under the gun for a note expiring. It wasn't really appealing for us. I think that to do an equity financing has to be more than just to pay back a loan. It has to be to really funnel your future growth. You really have to have an articulate growth plan to back that out.
I think that's why we weren't too keen on doing that all under the gun of a maturity date. This was a good option in the fact that we were able to bring down our dividend shares by 1.7 million. We were able to pay back this convertible debt, swap it into a short-term fix. The way our AR line works is that you're able to borrow more from it when you have the collateral for it. That usually happens later on in the year, around Q3 and Q4, when your AR is higher. We're going to have a few different options at the end of the year. We can pay it back through our profitability. Q3, Q4, and in combination are usually profitable historically. The other option would be to pay it back through our line at a much reduced interest rate.
This was the best option, which incurred, in the grand scheme, very modest dilution.
As Sajid mentioned, we're very aligned with investors in the sense that we don't want dilution, right? We are not one of those companies that just dilutes down and raises and raises for no reason. We raise and we think about what is behind the raise and what's the impact and how does that impact our own ownership and that of our investors. We are very aligned with that of our investors. Dilution to us is something that we will fight at every turn unless we really need to. We did get approached about doing dilution through a capital raise and an equity raise. We said, look, for the time being, we need to show, as we're seeing the success of our programmatic, as we're seeing the success of our Creator Television network, we're seeing the success of international growth, we could show these tangible differences.
I think the market will appreciate it. I do believe that the proof's in the pudding. As we have, as Sajid talked about, look at the 2023 and 2024 trajectories. We invested in 2023. We put the resources in place. We came back and had the best numbers, both top line and bottom line, in 2024. That's not going to be any different in 2026, except the numbers are going to be even bigger. I think that's really what we really want people to understand is that we have to invest. We're still a small company that needs to invest in growth. How we do it is very critical because we don't want to dilute shareholders on the way up. That's what we don't.
Yeah, and a coupon on that 15%, you know, the convertible debt that we retire with at 14%. Essentially the same, and we're growing our business north of 20%. It is a good use of capital, we feel, to retire, to keep this debt going and invest in our business.
Thank you. The following question is, is there a share buyback plan given the current share price?
Yeah, I think that we obviously feel that our share price is depressed. We also have to balance that with our competing priorities being the growth that we're seeing in our business, right? When you have a quarter where performance marketing contributed to 88% of your mobile sales growth, when you're reaching a Q3 where international is supposed to do more than all 2024 sales in one quarter alone, the question becomes, where is the best bang for your buck in allocating resources? While we feel our stock price is depressed, our bias for capital will always be where we're going to get the highest ROI. We are seeing a lot of growth pillars right now in front of us.
I couldn't agree more, Sajid. I think next year will present us an opportunity to do buybacks. This year goes back to what we were kind of saying, it's investment and putting in and setting us up for the rest of this year and really acceleration of 2026. I mean, 2026, sorry, 2016, flashing me back. 2026 is really going to be super exciting.
Thank you. Several questions here on some guidance. Are you providing any guidance for this year?
Yeah, I think at this point, just given the choppy nature of the macroeconomic backdrop, it would be a bit irresponsible for us to put our line in the sand and say this is where it's going to be. I think that we're expecting further top line growth in our core business. I think that's what we've seen in Q1 and Q2, and we expect our core business to continue growing. Profitability, you know, we always have an aim of being profitable for a year. This is a challenging year. I think what we are confident in is that the moves we're making today are going to pay off in a big way next year and thereafter. We're going to see an expansion of even the margins next year. We're going to see even stronger top line growth across our core business and also growth in our political apparatus too.
The moves we're making today are going to pay off in a big way. Anything else to add to that, Aziz?
Yeah, I think, look, as you know, we're shifting this business model in a bigger way. As programmatic, we talk about, you know, the industry is shifting from a managed service business to programmatic, which we're taking advantage of. The other part that you should really think about is the fact that, you know, as we've talked about, our margins roughly have been around 60% on the core business. When we do our own channel, as our channel continues to grow, those margins have an opportunity to go up just simply because our profit margin on our own channel is much higher. That presents a new opportunity in our ability to monetize these things globally, which is now the position we're in, becomes even more important. We're set up. We're the most complete end-to-end tech stack in ad-supported streaming, one of the most complete between our ad server, our analytics.
Now you add a channel that we monetize ourselves. That is the nirvana situation. We just need to, like, we have this, the three trifecta here that is now just starting to click. If we just continue doing what we need to do, which is our goal the whole time, was build the most complete ecosystem we can build. Now we're on the cusp of it with the Creator Television channel. That's the last leg of the stool. When that takes off, as it's already doing, that allows us to change the whole dynamics of our company. I mean, this is that watershed moment to change, you know, from just simply being an ad tech player to being an actual network. That's what we're headed to. That provides some really tangible benefits to investors in a big way.
Yeah, and I'd just like to add one thing to that is that, you know, we all get D1 for short-term profitability. I will say that if you were to jump off our ship back in mid-2023 and sell during a period where we weren't expanding even our margins because we were investing in our business, that would have been a losing trade. We tripled our stock price in 2024 as the political year unfolded and our sales ramped up. I would just, you know, kind of caution everyone to kind of learn from the past. I think that we're expecting a very big year ahead of us. We're making the moves right now to reap the benefits of that. We're already seeing the early traction, seeing the programmatic sales ramp up, seeing the international sales ramp up, seeing Creator TV viewership expand.
Thank you. Can you say what quarter you expect to be cash flow positive?
Yeah, I think that, you know, historically, we're always cash flow positive in Q4. I think that we don't see any reason why that won't be the same this year, you know, as far as on an individual quarter basis. I think for the year, I think if you look back in the political year of 2024, we were cash flow positive for the year. We are going to be cash flow positive again in 2026. This has obviously been a year of investment in the first half of the year. Is it a possibility of being cash flow positive for this year? There's the possibility, but there's also a very challenging economic backdrop as we invest. That said, we definitely expect 2026 to be cash flow positive.
I think it's challenging, right? One little post on X can change the dynamics of everyone's business. If automakers and major companies all over the globe can't figure out where they're going to be, it's really hard for us to be predicting that as well. The environment is too fluid. We're certainly fortunate. We have a consistency of business that now we're growing despite the environment. The tariff corrosion is real, and I think there's so much uncertainty. The benefit we have, as we keep talking about, is we've diversified our business geographically, product-wise, and we're going into an election cycle. Yeah, sure, look, we do expect Q4 to be much stronger, and we're seeing good signs of that. We're also excited about 2026.
Thank you. You said before that you're in partnership with big brands, and you saw opportunities in the international market. What market regions are really growing fast?
We don't want to get into too much detail, just simply because we have a lot of competitors that also track us. We will say this, that we're seeing a lot of opportunity in Europe. Specifically, the tariff situation that Europe is dealing with is really having them think about internal growth relative to U.S. growth. Across all of Europe is where we're seeing great momentum. We haven't really touched on Asia a whole lot just yet. It's been the Middle East and Europe that really have been driving our growth. We see a lot of untapped opportunity. I think Asia is, you know, we've had a fully owned subsidiary in India since 2016. As you can imagine, we are positioned well to enter that market. We have not wanted to enter that market before we had something tangible.
Our Creator Television channel is tangible, and it's going to provide us an opportunity to grow there. It is Europe and the Middle East for the time being, but we do see huge upside in Asia and Africa.
Thank you. How do you ensure competitive advantage internationally without the cross-screen household graph that you have in the U.S.?
It's a great question. We are doing it. We are actually expanding, working on part of investments. What we're working on that are going to be deployed now is the expansion of our household graph into Europe. We are working on that. We're putting resources there, and it really allows us to start expanding into that market and have a key differentiation. Today what is happening is the key differentiation is also happening through some creative units, some third-party data sets we're able to really leverage. We do believe that our household graph will be in existence in Europe sometime next year. That's part of the investment thesis of this year.
We got to invest in some of these things and these demands that we're seeing, these opportunities that we're seeing that don't necessarily come to fruition, pay off the day you make that investment, but they do pay off in a few months from now. We're seeing it.
Thank you. Can you please share what the AR line financing cost is?
Yeah, yeah. It's about prime + 2.15%. A little over 9% is the financing cost of the line.
All right. Are you considering any strategic alternatives considering how the share price has performed?
Strategic alternatives in terms of mergers or acquisitions?
I believe so. There's no clarification in there. It's just as strategic alternatives.
You know, it behooves us to always keep our eyes open and explore every opportunity there is out there. We have had conversations in the past, and we're always open to different ideas. I will say this, that we are very confident about the trajectory ahead, going into one of the most hotly contested midterm election cycles in history, not to mention the L.A. City mayor's race and governor's race of California. We're feeling pretty good about where things are headed in the short run. While the numbers don't show it, the demonstration of our execution on the product side does. It's going to take, you know, we're open to all ideas, but really, we're feeling pretty good about our strategy overall and how we want to get there. Sajid, anything you want to add to that?
No, I think that's well said.
OK. Do you have any sort of timing or idea as to when to enter the India market for advertising and how those operations could grow?
Yeah, so, you know, look, we have some preliminary thoughts. We don't have any specifics. Our teams, that's another project our teams are working on. We believe the entry into the India market will be through our own app. You know, keep in mind, we are App Science. We own App Science. We understand more about the app ecosystem than a lot of folks do. We understand we have a performance product that can help us deliver downloads. We have all these capabilities. Now we have Creator Television. The creator economy in India, a $1.2 billion, you know, population economy and growing, I think the number might be even higher since the last, you know, 10 seconds ago. It is a huge opportunity.
What we see in India is not simply going into India from a, you know, advertising tech perspective, but going into India with our own app, with our own Creator Television app. There is excitement there. We've already had some initial, you know, assessments. That's part of the investment roadmap. I think, you know, when you think about Sabio, you think about just so much untapped opportunity and so many, and that's our challenge. We are not one-trick pony. Our challenge is the fact that we are so diversified, both from a product and now from a geography perspective, that the opportunity is limitless. I think we're super excited about that. To answer the question, this is part of our investment this year that is going to take place in next year sometime in India is what we would like to have happen.
We're just, we're really busy this year with some of the, you know, planning on that, planning on the household graph for Europe, putting some investments there, our, you know, obviously our sales expansion in the U.S., our sales expansion in Europe. There are a lot of various things that we're working on and really busy with. India is on a roadmap for next year. We're pretty excited about the possibility that brings.
There are no further questions at this time. Do you have any final comments to make? Otherwise, this concludes today's conference call. Thank you very much.
Thank you.