HALIFAX — Kids and family content creator and broadcaster WildBrain reported a year-over-year decrease in annual revenue and a higher net loss for fiscal 2020, ended June 30th.
The company’s revenue in Q4 2020 was $92.2 million, down from $108.8 million compared to the same quarter of 2019. Its full-year fiscal 2020 revenue was $425.6 million, a 3% decrease compared to $439.8 million in fiscal 2019.
WildBrain managed to post a modest net income of $4 million in Q4 2020 vs. a net loss of $62.8 million in Q4 2019. However, the company’s fiscal 2020 net loss was $236 million, compared to a net loss of $101.5 million in fiscal 2019.
The company’s Q4 television revenue (from its Family Channel, CHRGD, Family Jr and Telemagino specialty services) rose 4% to $13.54 million. The increase “which was due to a $2 million equity recoupment earned in the current quarter arising from a previous investment made in a new series for our Family Channel. Subscriber revenue as a percentage of total revenue was 74%, or $10 million (Q4 2019 – 92%, or $12.0 million), while advertising, promotion, digital and other revenues were 26%, or $3.6 million (Q4 2019 – 8%, or $1.1 million), which included the $2 million equity recoupment. The decrease in subscriber revenue was driven by contract renewals at lower rates and subscriber erosion in line with the broader linear TV market,” reads the company’s management discussion and analysis.
For the full fiscal year, the company’s television revenue dropped 6% to $49.5 million.
The higher net loss in 2020 was due primarily to a non-cash goodwill impairment of $184.5 million recorded in Q3 2020, which was taken due to advertising pressures resulting from YouTube’s changes to its “made for kids” content policy regarding targeted ads as well as potential impacts of global economic uncertainties from Covid-19, says the company’s press release announcing its fiscal results.
“Even in the face of continuing economic uncertainties, our results for fiscal 2020 reflect strong demand for our content, as well as the endurance of our television and consumer products businesses. Our studio is now in full production on new Peanuts, Johnny Test and Go, Dog. Go! content for Apple TV+, Netflix and DreamWorks, respectively, contributing to a 46% increase in Q4 production revenue. Additional premium projects are in development including an original animated Green Hornet series with acclaimed filmmaker Kevin Smith,” said Eric Ellenbogen, WildBrain CEO and vice-chair, in the press release.
“While we expect market pressures to persist in coming quarters, in recent weeks we’ve started to see modest improvements in advertising rates and revenue at WildBrain Spark, following declines precipitated by changes at YouTube and Covid-19 impacting global advertising. To fully monetize WildBrain Spark’s extensive viewership, we’re building our direct ad sales team to better access the US$4.5 billion spent annually in global kids’ advertising and tap into the more traditional and very large branded segment of this market. Our incredible reach and engagement present a compelling solution to brands as they seek to reach families in a safe and trusted environment,” said Ellenbogen.
Aaron Ames, WildBrain’s chief financial officer, added: “In Fiscal 2020, we improved our financial position. By implementing our disciplined investment strategy related to our content production requiring less cash outlay, as well as better management of working capital, we increased free cash flow by 160% to $27.1 million. We also took decisive actions to reduce operating costs to offset lower revenue in certain parts of our business, moderating the impact of Covid-19 on adjusted EBITDA. During the year, we paid down debt by $58 million and also secured $25 million in growth capital to fund accretive opportunities and invest across the company. While we remain vigilant on managing our costs, we will continue to invest responsibly in initiatives to grow our business for the long-term.”
WildBrain’s adjusted EBITDA in Q4 2020 was $18.7 million, compared to $20.2 million in Q4 2019. The company’s fiscal 2020 adjusted EBITDA was $81.8 million vs. $79.6 million in fiscal 2019.
Although WildBrain Spark suffered a 64% decline in revenue in Q4 2020 to $6.5 million, compared to Q4 2019, the AVOD network’s viewership grew substantially. In Q4 2020, WildBrain Spark reached 11.6 billion views, up 24% from the same quarter of 2019. More than 72.1 billion minutes of videos were watched on WildBrain Spark in Q4 2020, up 55% from the prior year. For fiscal 2020, WildBrain Spark’s viewership increased 35% to 43.9 billion views, compared to fiscal 2019. More than 239.6 billion minutes of videos were watched on the AVOD network in fiscal 2020, up 45% from the year prior. WildBrain Spark’s full-year fiscal 2020 revenue was $62.3 million compared to $69 million in fiscal 2019.
For more information about WildBrain’s Q4 and full-year 2020 fiscal results, please click here.
