Destiny Media Technologies Q1 2025 Earnings Report

Destiny Media Technologies EPS Results

• Actual EPS: $0.01
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Destiny Media Technologies Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Destiny Media Technologies Announcement Details

• Quarter: Q1 2025
• Date: 1/14/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, January 14, 2025
• Conference Call Time: 5:00PM ET

Destiny Media Technologies (OTCMKTS:DSNY) develops technologies that enable the distribution of digital media files in a streaming or digital download format over the Internet. It offers Play MPE, an online platform that distributes promotional content, including broadcast quality audio, video, images, promotional information, and other digital content from record labels and artists to broadcasting professionals, music curators, and music reviewers to discover, download, broadcast, and review the content; Play MPE CASTER; Play MPE Quickshare provides a distribution tool for Play MPE customers to promote music; and Play MPE Player for music curators to review and download content through cloud-based player and mobile apps. The company also provides Music Tracking Radar, a digital tracking service that tracks and reports the number and times customers track is played; Clipstream, an online video platform for encoding, hosting, and reporting on video playback that can be embedded in third party websites or emails; and playback through its JavaScript codec engine. It markets and sells its products in the United States, Canada, Europe, Asia, South America, Africa, and Australia. The company was founded in 1991 and is based in Vancouver, Canada.

Destiny Media Technologies Q1 2025 Earnings Call Transcript

Key Takeaways

• Revenue rose 6.2% year-over-year despite a temporary marketing lead-generation setback, with volume discounts and strategic pricing boosting average sale size.
• EBITDA reached just under $300k, or roughly $100k adjusted for software capitalization changes, with underlying operating costs up only 2% on a comparable basis.
• The launch of self-service sign-up and automated invoicing and payment within the Castor platform moves the company toward a fully automated sales process aimed at independent labels globally.
• Integration of the new MTR radio-tracking product with Play MP simplifies upselling to existing customers, with volume-selling capabilities expected by Q3 to accelerate MTR adoption.
• Investments in marketing—including SEO optimization, lead-source tracking, site performance enhancements—and hiring a Director of Business Development aim to drive customer acquisition and re-engagement.

Presentation

[Rebecca Collins, Operations Manager at Destiny Media Technologies]

Good afternoon, everyone. Thank you for joining us on today's webinar. Before we begin, I'd like to announce that we'll be referring to today's earnings release, which was sent to the news wires earlier this afternoon. I'd also like to remind you that this conference call could contain forward-looking statements about Destiny Media Technologies within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon current beliefs and expectations of management and are subject to risks and uncertainties, which could cause actual results to differ materially from those forward-looking statements. Such risks are fully discussed in the company's filings with the SEC and SEDAR, and the company does not assume any obligation to update information contained in this call. During the webinar, we will discuss certain non-GAAP financial measures.

[Rebecca Collins, Operations Manager at Destiny Media Technologies]

The non-GAAP financial measures are presented in the supplemental disclosures and should not be considered in isolation of, or as a substitute of, or superior to the financial information prepared in accordance with GAAP, and should be read in conjunction with the company's financial statements filed with the SEC and SEDAR. The non-GAAP financial measures used in the company's presentation may differ slightly from similarly titled measures presented by other companies. A reconciliation of the non-GAAP financial measures to the most comparable GAAP financial measures can be found in the earnings press release. Also, I'd like to mention that following the presentation, there will be a questions and answers session during which you can submit your questions by selecting the raise hand icon at the bottom of your screen.

[Rebecca Collins, Operations Manager at Destiny Media Technologies]

Your questions will be pulled in the order that they're received, and at which point you will be prompted to unmute your microphone before speaking. With that, I'd like to turn the call over to your host, Fred Vandenberg.

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

Thanks, Rebecca. Q1 revenue was up 6.2%. Unfortunately, we had a little bit of a blip in our marketing efforts where our lead generations weren't as effective as we would like them to be. So this increase is really just in spite of that, a little bit of a setback there. But we've adjusted that back, and we've learned a few things from it. We also implemented new pricing discounts for volume users. We've talked in previous quarters about independent sales, where we're trying to focus in on larger international distributions. And what we've seen is that, while we had a little bit of a lower sales amount for independents, we increased the average sale per purchase. So we think that's a great sign. EBITDA is just slightly short of $300,000. Expenditures are up on the P&L. You can see that in the P&L. They're up about 27%.

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

But this is really a function of how we've been capitalizing software and the impacts of that. So depreciation of that previously capitalized software development cost is hitting the P&L, and now we've lowered the amount of salaries and wages that are capitalized. So if you exclude all those things, our EBITDA is about $100K. Really, while the P&L shows a fairly large increase in expenditures, our real costs are only up about 2% for the quarter. I'd like to talk about our core strategy again. Really, the core strategy is to grow Play MPE use in new and existing territories. We've invested heavily in making it easy to expand. We do that by several investments across the platform, making it easier to purchase, user-driven network growth initiatives. And outside of the platform, we've made some improvements in marketing and biz dev.

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

We want to build a foundation of that core Play MPE revenue. We want to expand that core revenue base and leverage that sort of anchor business and add new layers of new businesses and new services. MTR is one example of that. What we've done is Caster is the sending side of the Play MPE platform. It's the platform that our customers use to purchase the distribution. What we did in Q1 is we built this self-sign-up, so new account creations can be done by customers themselves. We talked about that at the annual results because it was before we had talked about the annual results. We also added automated payment and invoicing for full-service users, including e-commerce package selection, pricing and payment support, and promotional code and volume pricing.

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

The last bit of that really marries up with some of the marketing initiatives that we're working on. These are really the self-sign-up and the automated payment process, two legs of the three legs that will make it fully automated sales process, and I'll talk about why we're doing that and what we hope to achieve with that a little bit later, but basically, we're just trying to sell more to independents globally, and we think that this is going to be a big step forward. On the player side, what we did is, again, we're trying to make the network grow itself. Essentially, the more traffic there is in it, the more revenue we'll be able to get from it, and what we did in the quarter is we put in something called invited connection. That's where the recipients themselves can invite others to join the platform.

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

It's really just the first minor step in a whole slew of things we're working on. But that will help us grow that recipient network. And then on MTR, which is the new platform that we launched that tracks radio plays. So Play MPE is the distribution to different promotional destinations, including radio. MTR is an add-on or a product that we've added in late fiscal 2024. And what we worked on in Q1 was the Caster integration, so the Play MPE integration. So it's much easier for existing Play MPE customers to purchase MTR. So looking forward, why are we doing this? Again, I talked earlier about the fully automated sales process.

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

Once we do this, and we're targeting later this fiscal year to have this complete, we think this would be a bit of a game changer in terms of our ability to sell to independents in territories that currently exist, but also into new territories where we have a network of use. We have recipients engaged. We just have very little independent record label revenue. And that's what we're really targeting here. Those territories are Sweden. We have some independent sales where New Zealand, we have very little, or Portugal, we have none. And so there's a lot of different territories. And those are just three examples around the world. But we have a lot of different examples. And we hope to build both distributions within those territories, but again, those international sales. And we think those are the largest sales. Longer-term analytics.

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

Analytics is a big word for Caster, but it's a value add that we hope to build into Caster to reinforce sales and also add detailed analytics that are saleable themselves. Again, with a player, we're adding release cross-promotion, which is really just a tie on to the invited connection, is where recipients can share releases if they're given permission to do that. And that'll help build that recipient platform. Longer-term, we are building out the abilities to add information that we think is saleable to the actual recipients. We have currently tens of thousands of recipients around the world that are interested in other pieces of information we think that we can include in the platform and sell that information for premium users. We're still going to keep the free access that they have so that the promotion aspect of Play MPE is still there.

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

But we think one-stop shop for the recipients will be a saleable feature. MTR sales are still small, but they're growing, and we're retaining customers, and we're growing the average sale per customer and all these nice little things. But it's still a pretty small volume of sales. And that's because we are building out the ability to sell at volume. There's a lot of customers that have expressed interest in using MTR. But until we have the capacity to easily sell larger sales, we have not been able to sell. And that should be ready this fiscal year. I don't know the precise date. I don't want to put a precise date on it, but I believe it's Q3 that it should be ready.

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

Marketing. I've mentioned this a few times that we've made last year in Q1 of 2024. We made a big investment in acquiring new staff and really taking a hard look at what we were doing in marketing, and we came up with a lot of things to improve. We are working on the basic search engine optimization, increasing the ranking of keywords, so if prospective customers are searching for us, that we can rank higher in the search and have a stronger ability to grow organically. We implemented lead source tracking in Q1 just this past quarter. We had lead tracking, but we didn't have it split by source, which severely limits the usefulness of it, but we implemented that in Q1, and we're looking at improving the ROI of any of our marketing efforts. We increased our domain authority and our site speed.

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

I don't know if you've ever looked at our sites, but they're a lot faster now. They're a lot easier to navigate. And we're measuring a number of things on there: leads, leads to account, all these different returning customers, site visits, all these different metrics to figure out what will make our platform grow. And there's just too much to talk about. But basically, we're spending a lot on marketing, focusing in on that. As well, in Q1, in October, we hired a new director of business development. And we're working on new market acquisition strategies and account re-engagement processes to really automate the selling to existing customers, the low-hanging fruit. And with that, I think I'll turn it over to Q&A. Great. Thank you, Fred.

[Rebecca Collins, Operations Manager at Destiny Media Technologies]

So yeah, if you do have a question, please use the raise hand option at the bottom of your screen, and your question will be pulled in the order that they're received. If you raise your hand, please ensure that you have got access to unmute your microphone. And if you wish to retract that question, you can also just click the raise hand icon again to lower your hand. Your camera will remain off, but once prompted, you can unmute your microphone before asking your question. So to start, it looks like we do have one just in the Q&A box, Fred. Can you also track radio ads that are played with radar?

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

Radio advertising. We could. We don't. But the functionality is the same. It's actually a really good question because it is a really good possible business where advertisers will want to see if their ad gets played at the appropriate time. And the functionality of the way MTR works is precisely capable of doing that. Yeah.

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

Great. It doesn't look like we have any other raised hands or any other questions. I think that's it.

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

I think one just maybe popped up.

[Rebecca Collins, Operations Manager at Destiny Media Technologies]

Oh, one just popped in. Yes. Do you have comments on Downtown Music Holdings acquisition by Universal Music Group and how it can bring new business?

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

Sorry, can you read that one again?

[Rebecca Collins, Operations Manager at Destiny Media Technologies]

Yep. Do you have comments on Downtown Music Holdings acquisition by Universal Music Group and how it can bring new business?

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

I don't. Universal is constantly acquiring new companies. I haven't really thought through how that would impact us.

[Rebecca Collins, Operations Manager at Destiny Media Technologies]

Great. That could be it.

[Fred Vandenberg, President and CEO at Destiny Media Technologies]

Okay. Thanks, everyone. I know this was a tight quarter next to the year-end, so not a ton of information to share, but I hope that was useful, and I'll see you next quarter.

Participants

Executives

• Fred Vandenberg, President and CEO
• Rebecca Collins, Operations Manager