Mr. Aziz Rahimtoola reports

SABIO HOLDINGS PROVIDES BUSINESS UPDATE REFLECTING RECORD UP-FRONT WINS AND COST SAVING INITIATIVES EXPECTED TO DRIVE POSITIVE ADJUSTED EBITDA FOR 2H-2023

Sabio Holdings Inc. has provided a business update for the third quarter of 2023, including its cost and operational efficiency initiatives, preliminary results for its Q3 2023 financial performance, a status update on upfront commitments negotiated for 2024, and a leadership update.

Cost and operational efficiency initiatives and Q3 2023 financial performance

The connected TV/over-the-top space is continually evolving, and aligned with that, the company is continuously seeking opportunities to create a more efficient and streamlined business. During the third quarter, management implemented several initiatives aimed at creating operational efficiencies and reducing costs. These initiatives, which are expected to result in approximately $4-million (U.S.) in annualized cost savings, included strategic head count reductions; the exiting of non-essential contractor and supplier arrangements; and the optimization of certain operational processes, including enhancement of the company's cloud storage strategy.

"The macro headwinds impacting overall advertising spend were pronounced in the third quarter, as rising interest rates and category-specific events including the auto workers strike impacted short-term advertising budgets," commented Sajid Premji, Sabio's chief financial officer. "During the quarter, Sabio faced these challenges head-on, implementing several cost and operational initiatives to optimize our operating infrastructure. While some of these initiatives, including our head count reductions, did not take effect until the beginning of September, they were instrumental in helping us maintain adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] neutrality in Q3 2023. Moreover, our reduced break-even point positions us well to realize meaningful positive adjusted EBITDA in the fourth quarter, and into 2024 when the full benefit of these reductions will be realized. Our performance in winning the upfront commitments has already set a company record without the expected tailwinds of the 2024 U.S. election cycle, demonstrating the strength of our technology-led value proposition in the CTV/OTT market."

Sabio expects revenues for Q3 2023 to be in the range of $8.5-million (U.S.) to $8.8-million (U.S.), and adjusted EBITDA to be in the range of a loss of $200,000 (U.S.) to slightly positive. Overall operating expenditures are expected to decrease sequentially compared to the second quarter of 2023 and on a year-over-year basis compared with the third quarter of 2022. The company expects to end Q3 2023 with over $2-million (U.S.) in cash on hand.

The company will provide the full financial results in the coming filing of the company's financial statements and management's discussion and analysis which are anticipated to be filed on SEDAR+ and made available on the company's website before Nov. 29, 2023.

Upfront commitments

Sabio is also pleased to announce commitments from various parties to endeavour to spend an aggregate of a minimum of $9-million (U.S.) in 2024, and does not include potential political and advocacy commitments ahead of the 2024 election cycle. The commitments span across several diversified verticals including automotive, quick-service and casual restaurants, and sports and entertainment.

"These multimillion-dollar upfronts, secured with some of the biggest agency holding companies in advertising, speaks volumes to Sabio's differentiated position in CTV/OTT," said Aziz Rahimtoola, chief executive officer. "Our focus on assembling one of the most complete end-to-end technology stacks in the fast-growing ad-supported streaming space, where the U.S. market is expected to grow to over $29-billion in 2024, has delivered increased revenue from existing customers along with a 38-per-cent increase in new Fortune 500 nameplates."

Leadership update

The company also announces that Humera Kassem, Sabio's chief people officer, will be leaving her position and the company effective Nov. 30, 2023, as she moves on to new challenges and opportunities in her home state of Texas.

"Humera has played an important role in the growth and development of Sabio's team culture and human resources systems," said Mr. Rahimtoola. "We wish her the best in her future endeavours and appreciate the contributions she has made to Sabio through her tenure."

The preliminary results set forth above are based on management's initial review of the company's operating and financial results for Q3 2023 and are subject to change as these results have not been reviewed. Final reported results could differ from these preliminary results following the completion of quarter-end and year-end accounting procedures, final adjustments, and other developments arising between now and the time that the company's financial results are finalized, and such changes could be material. The company's independent auditor, MNP LLP, has not reviewed or performed any procedures with respect to the accompanying preliminary financial results and other data and, accordingly, does not express an opinion or any other form of assurance with respect thereto.

About Sabio Holdings Inc.

Sabio Holdings is one of the fastest-growing CTV/OTT technology and service providers in the high-growth ad-supported video-on-demand (AVOD) and FAST (free ad-supported streaming television) channel space. Its cloud-based CTV/OTT technologies provide publishers with distribution, monetization and analytics while delivering return on investment validation for brands and agencies. The Sabio portfolio comprises: Sabio -- the company's trusted and transparent content monetization demand-side platform (DSP); App Science -- the company's cutting-edge, non-panel-based, real-time measurement and attribution software-as-a-service (SAAS) platform; and Vidillion -- the company's cloud-based ad-insertion, and content distribution and management platform.

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