10
September 2024
Blackbird
plc
(the
"Company")
Interim
results
Blackbird plc (AIM: BIRD), the
technology licensor, developer and seller of the market-leading
cloud video editing platform, Blackbird®, and developer
of the online multiplayer video editor, elevate.io, announces its interim
results for the six months ended 30 June 2024.
Ian
McDonough, CEO of Blackbird plc, commented:
"During the six months ended 30 June
2024 we continued with our significant investment in the
transformation of the Company into a Product Led Growth focused
business.
"I am delighted to report excellent
progress in the product development of elevate.io. The platform progressed to
general release in March 2024. In line with successful product led
growth ("PLG") companies in adjacent industries, additional
features, functionality and refinements of elevate.io are being added continually.
By 4 September 2024 we had circa 800 users and, following a limited
Google Ads campaign over the last five days, these numbers have
more than doubled to circa 1,800 users. This gives an indication of
latent demand and attractiveness of elevate.io's customer proposition. Free
user acquisition is also a vital next step in PLG. We are
gaining valuable insights from this growing user base.
"In building elevate.io we have leveraged our
world-class technological video know-how around smoothness of
playback, navigation and speed, on top of proven reliability. We
also solved many difficult problems such as building a multiplayer
application that enables co-creation for our users and have built
the platform natively on the AWS public cloud, which gives us the
ability to easily scale and integrate with third party plug ins.
This will help us drive user retention and adoption, which will be
accelerated through increased marketing activity as we move towards
launching a payment gateway, which is expected in Q1 2025. Key
recent items added to the platform include video transformations
and transitions.
"Although revenue for the six months
to 30 June 2024 from our Blackbird platform was down 30% on the
prior period at £692K this was mainly due to the previously
announced deal losses of A+E Networks and Deltatre. Despite
challenges to this model, we continue to be used on the pinnacle of
sports and news content and, via our core dedicated team, landed
new deals with CBS19 and a South Korean broadcaster. In July and
August 2024, through an OEM provider, we were used by broadcasters
around the globe for fast turnaround content at the summer games.
We are targeting break even for this division in 2024.
These prestigious, high pressure
Blackbird use cases continue to provide the proof points needed for
the technology to succeed in the Creator Economy with elevate.io.
"As we execute against our
elevate.io strategy, it is
important that we have the necessary Board skills. I am absolutely
thrilled that we have been able to bring on board a best in class
set of Non-Executive Directors led by Anne de Kerckhove, who joined
in March 2024 and became Chair of the Board in June 2024. Youri
Hazanov joined in August 2024 and Nick Lisher, who is joining us on
16 September 2024. Their expertise and experience across marketing,
digital, the Creator Economy and growing businesses will be
invaluable as we scale the business.
"We are very excited about the
future and the huge size of the opportunity for elevate.io which is in a market ripe
for disruption. We look forward to providing investors with further
updates in due course."
Operational highlights (post period)
·
Youri Hazanov joined the Board on 15 August 2024
as a Non-Executive Director. Youri is an experienced international
Creator Economy executive with a track record of growing businesses
and a background in technology, partnerships and marketing. Youri
is currently General Manager and Chief Partnerships Officer and
member of the executive team at JellySmack and previously led
partnerships, business & strategy at YouTube in EMEA, CEE,
Russia, Israel and the Middle East
·
Blackbird deployed at the summer games through an
OEM partner with up to 75 live concurrent feeds being used for fast
turnaround content for global broadcasters
·
Nick Lisher is joining the Board on 16 September
2024 as a Non-Executive Director. Nick is a growth marketeer who
has driven performance marketing, community building, digital
marketing, and innovative brand development at a number of
ecommerce companies including Flo Health, Nextdoor and
Depop
·
Expansion at Blox with an additional three local
news stations taking the total to 72
·
Successful renewals with US Department of State,
CBS Sports and Televisa Univision
Financial highlights (post period)
·
£1,482k* secured revenue for 2024 as at 31 August
2024, down 18.3% vs prior year (2023 comparative:
£1,813k)
·
Contracted but unrecognised revenues of £1,299k*
as at 31 August 2024 (2023 comparative: £1,997k). £495k relates to
2024 and £506k revenue relates to 2025 and the remainder to
2026
*
Subject to exchange rate fluctuations
Operational highlights (during the period)
·
elevate.io went on general
release in March 2024 in accordance with the previously announced
time frame
·
elevate.io is being continually
enhanced via a rapid deployment method and during the period
multiple features were added including more transformations,
transitions, editing controls, general performance improvements and
the addition of markers
·
Anne de Kerckhove joined the Board on 6 March 2024
and became Chair of the Board following the AGM on 18 June 2024.
Anne is an experienced Board member and executive with a background
in technology, innovation and digital. Anne currently chairs the
Board at Eagle Eye Solutions Group and is a Senior Independent
Director and Chair of the Nominations and ESG committees at evoke
plc
·
Deal signed with CBS19, a Charlottesville-based
local TV station, for collaborative and
scalable video editing and publishing for its broadcast and digital
workflow
·
New deal, through an OEM partner, with a South
Korean TV station for fast turnaround of sports content to their
OTT platform
·
Successful renewals with NRL, Arsenal and Sky News
Arabia
Financial highlights (during the period)
·
Placing and management subscription raised c.
£1.05 million (net of expenses) to bring onboard some engaged high
net worth investors and assist with elevate.io's growth
·
Revenues of £692k for the six months to 30 June
2024, down 30% year on year (six months to 30 June 2023: £985k).
The majority of the decrease arose due to the previously announced
deal losses of A+E Networks and Deltatre
·
Contracted but unrecognised revenues down 40% year
on year to £1,262k as at 30 June 2024 (£2,120k as at 30
June 2023) due to the one year less
under contract from our major deals
·
Decreased operating costs, excluding LTIP charge,
of £2,028k (six months to 30 June 2023: £2,442k), driven by
restructuring of the core Blackbird platform team in April
2023
·
Reduced EBITDA loss of £1,408k (six months to 30
June 2023: £1,523k) due to lower operating costs partially
offsetting lower revenues as explained above
·
Slightly reduced net loss before tax of £1,544k
(six months to 30 June 2023: £1,617k) due to reduced EBITDA loss
and strong net finance income
·
Cash burn, excluding proceeds from share issues
and transfers from short term investments, decreased slightly to
£1,900k (six months to 30 June 2023: £1,921k) due to higher
investment in elevate.io
offset by savings from restructuring of the Blackbird
team
·
Cash and short-term investments of £5,618k (30
June 2023: £8,177k) and no debt
Contacts:
Blackbird plc
Tel: +44 (0)20 8879 7245
Ian McDonough, Chief Executive
Officer
Stephen White, Chief Operating and
Financial Officer
Allenby Capital Limited (Nominated Adviser and
Broker)
Tel: +44 (0)20 3328 5656
Nick Naylor / Piers Shimwell
(Corporate Finance)
Amrit Nahal / Guy McDougall (Equity
Sales and Corporate Broking)
About Blackbird plc
Blackbird plc operates in the
fast-growing SaaS, Media and Entertainment and content creation
markets. Blackbird plc's patented technology allows for frame
accurate navigation, playback, viewing and editing in the cloud and
it has two products.
BlackbirdⓇ a market leading suite of
cloud-native computing applications, is used by rights holders,
broadcasters, sports and news video specialists, live events and
content owners, post production houses, other mass market digital
video channels and corporations.
elevate.io is the company's new
browser-based collaborative content creation platform currently in
general release. elevate.io is
built using Blackbird's core technology and is aimed at
professional teams and the fast growing Creator Economy.
Blackbird plc also licences its core
video technology, under its 'Powered by Blackbird' licensing model,
enabling video companies to accelerate their path to true cloud
business models.
www.blackbird.video
www.linkedin.com/company/blackbird-cloud
www.twitter.com/blackbirdcloud
www.facebook.com/blackbirdplc
www.youtube.com/c/blackbirdcloud
Operational
review
The period under review was a
continuation of significant investment and transformation for the
Company.
The Company continued to make good
progress against its product led growth strategy for elevate.io, specifically:
•
elevate.io went to general
release in March 2024 in accordance with the previously announced time frame;
• high
hundreds of users were using the platform by the end of the period
and providing valuable insights and feedback;
• this
elevate.io user base had
grown to circa.800 by 4 September 2024 and, following
a limited Google Ads campaign, has grown to
circa1,800 users by 9 September 2024 showing
strong demand for the user proposition;
•
elevate.io is built on the
AWS public cloud giving us the ability to
easily scale and integrate with third party plug
ins;
• a period
of engineering-focus leaning on our
world-class technological video know-how around smoothness of
playback, navigation, and speed, on top of proven
reliability;
• solved
difficult problems such as building a world-class multiplayer
experience on the back of a simple, easy-to-use interface;
and
• adopted a
rapid development deployment cycle leading to regular updates of
elevate.io adding
functionality and features driving user retention and
adoption.
The Serviceable Addressable Market
("SAM") for elevate.io is
$6.9billion and, the Board believe, is ripe for disruption. As we
have seen in parallel SaaS industries there are huge rewards for
companies who succeed.
On the Blackbird platform,
commercial activity during the six months under review
included:
·
a signed deal with CBS19, a Charlottesville-based
local TV station, for collaborative and
scalable video editing and publishing for its broadcast and digital
workflow;
·
a new deal, through an OEM partner, with a South
Korean TV station for fast turnaround of sports content to their
OTT platform; and
·
successful deal renewals with NRL, Arsenal and Sky
News Arabia.
We continue to focus our resources
on fast turnaround content from live feeds in the sports and news
markets which build on the Blackbird platform's strengths. This is
supported by a core team providing first-class customer service.
The Blackbird platform has previously been the main focus and drive
of our go to market strategy. However, each of our major accounts
has often required bespoke integrations which are both
time-consuming and costly. Combined with the pressures that major
broadcasters face with diminishing audience share and reduced
advertising or subscription revenues, it has proved a challenging
task to grow our share of the Media and Entertainment ("M&E")
services market. This is reflected in the H1 2024 revenue
decreasing compared to the prior period due to a number of
previously announced deal losses. The Board recognised the
challenges of the M&E market back in 2021 leading to a
successful fundraise and a refocus of our investment and resources
into the creator space and elevate.io.
As the Company's strategy has
evolved and the focus shifts towards elevate.io, the Board needed to ensure
the right skill sets are in place to execute our product led growth
strategy. Accordingly, there have been a number of changes to the
Board during the period with John Honeycutt and Dawn Airey leaving
and Anne de Kerckhove joining. Post period, Andrew Bentley has also
retired from the Board with Youri Hazanov and Nick Lisher
joining.
Financial
review
H1 2024 revenue decreased by 30% to
£692k compared to the corresponding period last year (six months to
30 June 2023 £985k). The majority of the decrease
can be explained by the A+E Networks and Deltatre deal losses.
The cyclical and structural
changes in the M&E market continue to make this a challenging
environment.
Contracted but unrecognised revenue
was £1,262k at 30 June 2024, a decrease of 40% compared to 30 June
2023 (£2,120k) due to one year less in the order book on our larger
deals. Whilst we have started the post period well by securing an
extension to our CBS Sports deal and expanding our Blox contract,
there are still a few of our larger contracts to renew in H2
2024.
Operating costs, excluding LTIP
charges, for the period decreased to £2,028k versus £2,442k in the
corresponding period. The year on year decrease resulted
predominantly from: i) restructuring costs being £121k higher in H1
2023 than H1 2024; ii) a net increase of £72k in development costs
capitalized in the current period compared to prior year period due
to increased work on elevate.io; iii) £70k lower events and
marketing costs for the Blackbird platform in the period compared
to H1 2023; and iv) £78k lower staff holiday cost accrual compared
to prior year.
Adjusted EBITDA loss, excluding
share option costs movement, of £1,387k (six months to 30 June
2023: £1,513k) from lower operating costs partially offset by lower
revenues, as explained above.
EBITDA loss of £1,408k (six months
to 30 June 2023: £1,523k) due to the movement in Adjusted EBITDA
loss, excluding share option costs and higher share option expense
in the period compared to prior year which included credits from
people leaving as the business was restructured.
The net loss for the period was
£1,544k (2023: £1,617k). A lower EBITDA loss was partially offset
by a decrease in net financial income from higher average cash
balances in the prior period.
The Company raised c.£1,045k (net of
expenses) in February 2024 from some engaged high net worth
investors who wanted to invest directly into our story and from a
subscription by management. The proceeds will be used to help fund
the early months of elevate.io's growth.
Cash burn in the period, excluding
proceeds from share issues and transfers from short-term
investments, was £1,900k versus £1,921k in the same period in 2023
driven by lower operating costs partially offset by lower revenues,
as explained above.
Outlook
There is continued momentum behind
our product led growth strategy for elevate.io, with a focus around quality
engineering enhancing the platform and driving user retention.
There will be a shift towards increased marketing activity to drive
user adoption prior to a payment gateway in Q1 2025. The Company is
well positioned to execute its strategy with a world-class team in
place and funds of c.£5.6 million at 30 June 2024.