Kidoz Inc. said it has adjusted its 2022 revenue guidance to $16-$18 million, representing approximately 35% year-over-year growth, against a backdrop of macro challenges, including a heightened risk of recession, persistently high inflation, rising interest rates, and a general contraction in advertising demand, particularly in the North American market.
The global adtech company said it expects the 2022 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to remain positive for the third year in a row.
“We believe that this effect is temporary,” the company said in a business update spurred by the TSX Venture Exchange’s recent approval of its Normal Course Issuer Bid, a process in which it may, under certain circumstances, repurchase up to 5% or 6,579,074 of its issued and outstanding common shares for cancellation.
READ: Kidoz reveals plans to proceed with a normal course issuer bid to purchase up to 6.6M shares
Kidoz said the state of California’s announcement that they will raise the regulatory age required by advertisers to market to minors without data targeting to 17 is “very significant” for the company in the near to medium term.
It said the regulatory change enhances the size of Kidoz's addressable market significantly as it expects the adoption of its safe ad technology by app publishers to increase given children and teens make up a significant percentage of users in all online games.
The new landmark ruling extends the protection of children under the age of 13 to 17 online, with many viewing it as a template for other US states and international countries to follow.
Expanding network
Kidoz said it continues to grow its network, and has more than double the adoption of its software development kit (SDK) app than its closest direct mobile ad competitor.
The company continues to build value and trust with advertisers by facilitating market leading performance, service, and technology in the high growth COPPA media landscape, while providing pre-campaign contextual app list planning, live campaign optimizations, and detailed post-campaign reporting and analysis.
It continues to add new app publishers, helping it secure a larger share of the global mobile advertising market that is projected to grow to over $600 billion by 2029 from $144 billion in 2022.
“With the rapidly changing macroeconomic environment currently ongoing around the world, we plan to expand our successful sales partnership model with a direct North American sales force focused on increasing the growth and visibility of Kidoz with our North American partners,” it added.
Raising corporate awareness
Kidoz said the company’s management and board of directors are of the view that its shares are trading at a substantial discount to its net asset value and do not reflect its underlying value.
For that reason, the company will continue to work with Agoracom and Proactive on its Corporate Awareness Program, in particular to generate exposure related to its Normal Course Issuer Bid.
Kidoz will make an initial cash payment of C$20,000 and will pay a total C$80,000 in four installments of C$20,000 worth of shares to Agoracom over the next 12 months. The price of the securities to be issued will be determined after services are provided to the company as per TSX Venture Policy 4.3 (Section 6.1) and calculated using the closing price on each of the payment dates, subject to a four-month hold period.
As well, Kidoz has renewed its partnership with Proactive until May 30, 2023, allowing for unlimited editorial and video interview coverage of Kidoz news and other corporate developments for C$21,600. All content is published on the Proactive websites and further featured through Proactive's network of syndication partners.
“We expect to generate additional new exposure through our continued presence on Proactive's sites, and through its global advertising presence in the rapidly-growing Ad-tech marketplace. Proactive is one of the fastest-growing financial media portals in the world, providing breaking news, commentary and analysis on hundreds of listed companies across the globe, 24/7,” the company added.
Kidoz owns the leading COPPA and GDPR-compliant contextual mobile advertising network that safely reaches hundreds of millions of kids, teens, and families every month. Google-certified and Apple-approved, Kidoz provides an essential suite of advertising technology that unites brands, content publishers and families.
The Kidoz Contextual Ad Network does not use location or PII data tracking commonly used in digital advertising. Instead, Kidoz has developed advanced contextual targeting tools to enable brands to reach their customers with complete brand safety. A focused AdTech solution provider, the Kidoz SDK and Kidoz Programmatic network have become essential products in the digital advertising ecosystem.
Contact the author at jon.hopkins@proactiveinvestors.com