Just released an in-depth analysis on KIDOZ Inc. (TSXV: $KIDZ)!
Despite a Q3 revenue dip of 20% YoY, our scrutiny reveals strategic maneuvers and a resilient ad network. The shift towards direct sales and Prado, their teen-focused platform, is gaining traction.
Key insights include:
- Revenue Challenges: Q3 saw a 20% YoY drop, below expectations. However, this isn't the full picture.
- Sales Strategy Shift: KIDZ pivoting to direct sales is a bold move with potential upsides in revenue and margins.
- Ad Network Dominance: With 5,000+ apps and 400M kids reached, KIDZ's ad network includes powerhouse brands like McDonald's, Disney, Lego, Kellogg Company's, and Nintendo.
- Prado Momentum: The newly-launched ad platform for teens and parents, Prado, is gaining significant momentum.
What's next? Q4 results will be pivotal, constituting 50% of annual revenue. Will KIDZ's direct sales strategy prove successful?
Financial Snapshot: Q3 saw a 2 ppt YoY improvement in gross margins, aligning with our forecast. However, EBITDA and EPS declined due to lower revenue.
Market Perspective: With a forward EV/R of 1.3x vs. the sector average of 3.0x, KIDZ is trading at a 57% discount.
Growth Anticipation: We project a faster growth trajectory in global ad spending for 2024, driven by cooling inflation and lower interest rates.
*FRC provides issuer paid coverage.
*Past performance is not indicative of future results.