Destiny Media Technologies Q1 2026 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: $1.24 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Destiny Media Technologies Announcement Details

• Quarter: Q1 2026
• Date: 1/14/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, January 15, 2026
• 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 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Signed a 3‑year renewal with Universal at a base fee of $1.6M in year one (2% inflation in years two and three) that excludes development fees and is expected to reduce 2026 revenue by about 6.5%.
• Positive Sentiment: Independent label momentum: lead generation up ~24%, Caster customers +7.3% (new Caster customers +27%), and a strong 15.5% revenue bump in November that carried into December.
• Positive Sentiment: Cost and liquidity improvements: realized ~1.3% total cost reduction this quarter (salaries down 8.2%), cash balance rose ~22% (+$244.5K), no debt, and management says up to an additional ~16% of spending could be trimmed if chosen.
• Positive Sentiment: Product monetization initiatives — web migration, self‑serve Caster/Caster Plus, integrating MTR into Caster and planned in‑app purchase plus new satellite radio lists — aim to increase MTR and add‑on revenue.
• Positive Sentiment: Legal proceeds potential: the company won a litigation judgment and expects an award of costs (appeal noted but not yet pursued), which could provide a further one‑time cash benefit if collectible.

Presentation

[Operator]

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 newswires earlier this afternoon. I'd also like to remind everyone 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 SEC and SEDAR, and the company does not assume any obligation to update information contained in this call. During the webinar, we'll discuss certain non-GAAP financial measures.

[Operator]

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 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 would like to mention that the following presentation, there will be a questions and answers session during which you can submit questions by selecting the raise hand icon at the bottom of your screen.

[Operator]

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

[Fred Vandenberg, CEO at Destiny Media Technologies]

Thanks, Michelle, and thanks to everyone for joining the call. I wanted to talk about a few main things before I hand it over to Asel and Jen for a little bit more detail on the finances and our marketing and sales strategies. The first is a Universal agreement that shortly after we had the call last quarter, or at the year end, we came to terms with Universal on a longer-term agreement that had been in the works for a reasonably long time. The core challenge was really aligning the priorities of multiple stakeholders, finance, which is under pressure to reduce costs, and the operation promotion teams who were really focused on maintaining the effectiveness and the reach of the platform, as well as senior decision makers above them.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Navigating these competing mandates really required a lot of stickhandling, but the result is an agreement that we think works across all interests. It provides Play MPE, a long-term anchor client that underpins the platform itself, provides revenue stability, and opportunities for growth within Universal and future growth initiatives that really strengthens the company's platform and growth trajectory. This agreement really supports both of us for a longer term and expanding and working through as a partnership going forward, and we're really excited about it. I'll go through some of the terms. First, the fees. Ultimately, the structure of the agreement has changed such that the fees now cover use of the existing platform, but excludes any development that they require.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Then what we will do is really provide a justification, an ROI internally for them if there is any new development that they desire, and then fees for that will be separately negotiated. The base fee is $1.6 million annually for the first year with inflation indexes for years two and three. That base fee is 5% lower than the 2023 fees that we had, and this really is a recognition of a longer-term agreement eliminating the short-term premiums that we had and the cost savings from a reduction in the development requirements for them. We expect that the 2026 revenue will be adversely impacted by about 6.5%. This includes a development fee that we've already negotiated on top of the $1.6 million, and we're going through their wish list, so it's currently unknown if we will be able to add any new development fees for them.

[Fred Vandenberg, CEO at Destiny Media Technologies]

To make up this difference, we would need to increase independent label revenue by about 14%, and I'll talk about that shortly, what we're doing on the independent front. I think it's worth going through a few more of the terms. As I alluded to above, it's a three-year agreement. We've never had a three-year agreement before. We've been in business with Universal for about 20 years now, so it's a long-standing relationship, but this three-year agreement is the longest agreement we've had, and it really provides a runway to work as a partner with them. The index we have for inflation is, there's a 2% increase in 2027 and 2028 on top of that. Again, we've never had an inflation index.

[Fred Vandenberg, CEO at Destiny Media Technologies]

When we've come to terms, we've always been looking back at a fee that has never indexed for inflation during the years, and so this represents a fairly significant shift in the mentality, recognizing that our costs do rise over time. It also excludes any labels for which UMG does not have a distribution agreement or is currently not owned by UMG. So in the event that they expand their distribution services or expand by acquiring new labels, we can negotiate new fees for that. And it's not articulated in the agreement, but we've had some really productive conversations.

[Fred Vandenberg, CEO at Destiny Media Technologies]

The main contact that I've been negotiating with has returned to digital distribution, and she's a really tough negotiator, obviously, but she's very pragmatic, and she recognizes that where we save them money, whether it's efficiencies that we can work on or we displace competing platforms, that will help us negotiate in the future. So it's an agreement that we're really excited about. Moving on to independent labels, we've been working on a number of things that have started to come together in timing. We mentioned last quarter about the modernization of the platform. That has really two main things that we moved Universal over to the online, the web platform, and retired the old PC applications. But we also introduced Caster and Caster Plus.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Now, Caster Plus is what we used to brand as Caster, so it can be a little bit confusing there, but Caster is now a fully self-serve platform for labels to sign up and send out content themselves. We have noticed a significant increase in the conversion of leads, and I can talk about marketing in a second, but with that, we've noticed we've transitioned people during the quarter to allow them to have the choice between Caster and Caster Plus. We have noticed that it's a high degree of, what I would say, a poor quality of distribution. So we have some work ahead of us in terms of training our customers on the platform and/or making it a little bit easier to use so that we can fully scale, so we can fully leverage that.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Essentially, we're allowing our customers to, we're making significant headway in allowing our customers to scale client-led distributions. Last year, we talked a lot about our marketing efforts. That was really focused in on a few different things: SEO improvements, so website improvements, so that we hit more leads, we generate more leads. We've tracked those leads to identify which customers we really want to focus in on, which has really helped over the course of the last 12 months allocate resources internally on things that we think are going to help us more. We've recently begun investing a little bit more in social media. We've had a 10% increase in followers. We've improved our digital advertising, and we've expanded our automated outreach to certain clients. Jen will expand a little bit more on that.

[Fred Vandenberg, CEO at Destiny Media Technologies]

And then also, the last thing we did here is increased pricing in certain areas. One area where we, it's not really an increase in pricing, it's just that we eliminated volume discounts that we enacted last year that were designed to expand the volume of distributions or grow the average size of a distribution. That really didn't have an effect. We've noticed that customers that are trying to do global distributions through Play MPE aren't that price sensitive. It doesn't help to provide discounts, so we removed those, and we also increased our catalog pricing. The upshot of all these things is that we had almost a 24% increase in lead generation, and those leads are really better qualified leads. We've had a 7.3% increase in Caster customers, which is pushed by a 27% increase in new Caster customers.

[Fred Vandenberg, CEO at Destiny Media Technologies]

During the quarter, that represented almost a 3% increase in independent label revenue. Some of those changes really took effect later in the quarter, so you'll see a bump in November revenue of about 15.5%. That really is starting to flow into Q2 as well. We've seen a very strong December result so far. Lastly, we saw MTR revenue go up by 30.5%. Now, MTR is still quite low, and we're working on some things that we think will expand MTR's presence. We are going to be reporting, MTR is tracking, just so for anybody who doesn't know, MTR is tracking the actual airplay of a song that goes through Play MPE. We are incorporating the reporting of that into Caster, which I think just makes MTR more visible. And then shortly after that, we're going to make it so you can buy MTR directly within Caster.

[Fred Vandenberg, CEO at Destiny Media Technologies]

It's really changing our focus on product development into a narrow focus on things that are really going to directly impact Play MPE revenue. And with that, oh, sorry, cost reductions. Because of the things we've done over the last year, we've really been able to reduce our costs. During the quarter, we realized a total cost reduction of 1.3%. That includes all costs: cash, non-cash, and capitalized costs. So it doesn't translate neatly into the financial statements, but it essentially is all of our costs. Salary and wages, these are costs that we've realized during the quarter, so 8.2% reduction. Had we undertaken all of these cost reductions at the beginning of the quarter, they would have translated into a 7.7% reduction in total spending with 14.8% on salaries and wages. With those efficiencies that we've gained and the modernization of the platform, we can further reduce our spending.

[Fred Vandenberg, CEO at Destiny Media Technologies]

We think it's about 16% that we can comfortably reduce if we want to maintain our revenue growth, but just reduce our investing in product development and taking advantage of some of these efficiencies. With that, I will turn it over to Asel.

[Assel Mendesh, CFO at Destiny Media Technologies]

Thank you, Fred. I will now walk you through our financial performance for the quarter, and I'll start from revenue. Revenue for the quarter increased by 1.3%, and if foreign currency adjusted, it's actually 1.6%. The major labels are immaterially decreased by $1,500, and independent labels increased by 2.5%. That was a combination of several factors, as Fred mentioned. Increase in independent customers, it's 7.3% in the quarter. Again, most of the increase came in November, as Fred mentioned. Total releases, total purchases increased by 3.7%. Average spend declined by 2.4% per customer.

[Assel Mendesh, CFO at Destiny Media Technologies]

However, this is mostly from our new customer acquired, where we see new customers spending less and while we see older customers spending more. So we believe that as these new customers return, once they see the success using our platform effectiveness and leveraging our automated marketing campaigns and sales outreach, that we'll have a chance to move those customers into greater spends, and the last one was pricing changes. As Fred mentioned, we reduced volume discounts that we had enacted in the prior year to induce larger distributions. We found that these were not working as larger international distributions are not really that price sensitive, and we also increased our price for the annual year-end catalog distribution. So that was for independent labels, and the MTR is still less than 1%, very close to 1% of the total revenue, but it keeps growing. So the increase was around 30%.

[Assel Mendesh, CFO at Destiny Media Technologies]

The revenue continues to be mostly U.S. dollar denominated, 94.5% this quarter. Fred, next one, let's move to the overall results. Thank you. As you can see from the table, the Adjusted EBITDA for the quarter was $252,500, which is a slight decrease on paper of less than $35,000. However, this decline is mostly just capitalizable activity during the quarter. So this quarter, we only capitalized a pretty small amount of less than $30,000. Turning to liquidity, the cash balance increased significantly, as you can see, by $244,500, 22%, and is mostly, as Fred mentioned, driven by the several cost reduction initiatives we had during the quarter, which translated into higher operating cash flow. The last point, the company continues to operate with no debt and no material capital expenditure commitments.

[Assel Mendesh, CFO at Destiny Media Technologies]

So with that, I'll pass to Jennifer to cover sales and marketing portion of today's call.

[Jennifer Rainnie, Senior Business Development Specialist at Destiny Media Technologies]

Thank you, Asel. I'm going to start off with our sales highlight for Q1. We've had a focus on major account engagement and reporting for Q1. Our goal was to really engage with our major accounts, aiming for regular strategic review meetings for long-term growth. We were able to conduct in-person platform presentations with RCA, Epic, and Virgin to reengage accounts and reinforce system value. We also felt like we had a lot to share with these accounts with so many enhancements that had been seen in fiscal 2025. The results from these meetings were a 180% increase in RCA usage and Epic reactivating on the platform for the first time in two years.

[Jennifer Rainnie, Senior Business Development Specialist at Destiny Media Technologies]

We also presented an updated enhanced reporting overview to UMG, to both their hubs, their Europe hub and LA teams, providing all labels with a deeper and more actionable promotional data. Staff training and enablement, we developed and implemented a standardized training syllabus for new major account onboarding, and we delivered this training both virtually and in-office on-site with Warner promotional teams and other major independent labels. On the side of independent label growth, our indie business revenue significantly increased in Q1, particularly a sharp 15.5% rise in November, and growth was driven by an improved pricing strategy that we had previously mentioned, also a targeted marketing campaign encouraging holiday releases, plus our sales team upselling compatible lists. This led to a strong Q2 interest, better lead generation, and improved conversion rates overall in Q1.

[Jennifer Rainnie, Senior Business Development Specialist at Destiny Media Technologies]

For sales tools and list add-ons, we've been continuing to develop sales tools to boost our platform usage. We launched a new list brochure detailing expanded contact database offering, and we've had strong adoption of list add-ons. So we've been focused on supporting the list team and offering to upgrade from domestic to international holiday packages during our holiday campaign, as well as adding multi-supervisor lists. And all of these add-ons will significantly increase average order value per campaign. We're going to be continuing to do this going forward. Some of our marketing highlights. So our holiday campaign focus was really what we focused on in Q1. Marketing really centered on the annual holiday format campaign. We saw a significant increase in holiday releases, and we were provided with a healthy year-over-year revenue increase. I think a key success factor in this was an earlier marketing push.

[Jennifer Rainnie, Senior Business Development Specialist at Destiny Media Technologies]

Internally, our emails launched on August 27th, and then we followed up with October 6th, October 20th, and a November 17th push. These were a month ahead of our marketing last year for our holiday initiative. The promotion ran in Q1 and also into Q2, and our content also doubled during the holiday campaign with active users and visitor rates compared to last year. And just in general, our social media growth has been strategically focused on authentic content and partnerships, resulting in a 35% increase in organic Facebook views and a 10% year-over-year increase in followers. And then finally, I'll touch on our operations and list management highlights for Q1. Overall, we've seen an improved communication and strategic planning between list management and marketing. We really saw the impact of this with the boosted campaign results in Q1 and moving into Q2 with our holiday campaign.

[Jennifer Rainnie, Senior Business Development Specialist at Destiny Media Technologies]

Also, the list team have been busy working on introducing a new satellite radio list in Q1. This is going to be offering channel and show-specific content across various genres. The satellite radio offers significantly higher royalties, so basically 10 times more per spin than a terrestrial broadcast, creating a strong value proposition. We feel like these trackable lists offer a direct spend tied to measurable ROI, making them an ideal selling tool for independent artists and labels. And our new satellite radio lists are soft launching in Q2. We're expecting a high client interest in these new lists. And that ends my highlights for Q1. I will turn it back over to you, Michelle.

[Operator]

Thank you, Jennifer. We will now begin the question and answer session.

[Operator]

If you have a question, please press the raised 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 you have access to a microphone. Your camera will remain off, but once prompted, please unmute your mic before asking your question. If you wish to retract your question, please click on the raised hand icon again to lower your hand. Our first question today is from Olivier. After years of saying revenues would snowball and repeated software iterations, growth still hasn't materialized. No buyback to support the share price, and ROIC is now negative. Any updates from the consultant engaged to unlock shareholder value?

[Fred Vandenberg, CEO at Destiny Media Technologies]

The consultant engaged didn't provide anything revelatory, but I mean, we do see a very promising increase in independent revenue in November, and that's continued into December.

[Fred Vandenberg, CEO at Destiny Media Technologies]

So I think with growth in independent revenue and cost reductions, we'll see profitable results going forward. As far as buyback or returning capital to investors, we'll have to decide on what we do with that surplus going forward.

[Operator]

Our next question is from Jerry, asking for a breakdown of revenue % by product segment in Q1.

[Fred Vandenberg, CEO at Destiny Media Technologies]

We break down our segments into customer type, and what we talk about publicly is really independent versus major labels, and then we break that into geography. In the United States or internationally, we break that down further into music format. And now with MTR, we have an additional product that we break it down into.

[Fred Vandenberg, CEO at Destiny Media Technologies]

MTR, again, is a little bit less than 1% of revenue, so it's still pretty small, but it grew by 30%, and we're working on things going forward that we think will improve that revenue growth. One is making it a little bit easier to purchase by putting it really in front of our Play MPE customers in Caster and making it easy to buy as you buy a Caster promotion. But we're also doing an ad tracking test. I believe it's this month or at least this quarter. We are looking at more global tracking and also more volume tracking for MTR. For other groups, worth talking about where there's been significant change. There was reasonable growth with U.S. independents in Q1, where it was a little over 4%. Canadian independent growth was in excess of 50%. That was offset by some reductions in major label use.

[Fred Vandenberg, CEO at Destiny Media Technologies]

What we've seen is that periodically major labels go through cost-cutting initiatives where they cut senior staff. We think it's going on right now or it has gone on recently, and that's why you see Jen was talking about certain things about onboarding new people at major labels, training them, getting them engaged in the platform. That really is a function of the turnover we're seeing at the major labels. We think that that reduction is temporary. Those are the major changes in segments.

[Operator]

I see here that Jerry has raised his hand. Jerry, you can go ahead and unmute your mic.

[Operator]

Can you hear me?

[Fred Vandenberg, CEO at Destiny Media Technologies]

Yep. Hi, Jerry.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Hey, how's it going? I see a couple of questions here. You talked about OpEx savings of 7.7%. Will those be fully reflected in your fiscal Q2?

[Fred Vandenberg, CEO at Destiny Media Technologies]

They should be. Yes, that's right. I mean, barring any other changes, but yes, that's effectively what we're talking about.

[Fred Vandenberg, CEO at Destiny Media Technologies]

And you also mentioned that you believe there are additional cost savings to be had, taking the total cost savings up to 16%. The 16% was on top of the 7%. It was on top of the 7%.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Now, those changes have not been made, but that's what's available and what we're looking at. We're considering right now.

[Fred Vandenberg, CEO at Destiny Media Technologies]

And when do you anticipate if you decide those changes to take, when would they be reflected?

[Fred Vandenberg, CEO at Destiny Media Technologies]

It's really what we're looking at internally, and I would expect that we will go one way or the other. And if the decision will be made very shortly, I believe, so.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Okay. Can you talk about your capital allocation priorities for fiscal 2026? Does it include any acquisition plans?

[Fred Vandenberg, CEO at Destiny Media Technologies]

Okay. That's a good question, Jerry. We are capable of generating, I think, significant cash. We have about $0.14 per share in cash right now. There are acquisition opportunities available to us, and we are looking at them. And I think they are becoming more and more attractive as time moves on. One in particular where we're showing a significant headway in Canada, and I think we can move forward there potentially. As far as other capital expenditures, it's really only always been software development. That's what we capitalize cost for. And with the modernization of the platform, we've significantly reduced those. That's what we've been talking about with the cost reductions.

[Fred Vandenberg, CEO at Destiny Media Technologies]

In your press release, you talked about momentum heading out of Q1. How should investors quantify that momentum to revenue growth? What should we be looking for, or what should we be seeing, or maybe clarify what that momentum? How should we quantify the momentum?

[Fred Vandenberg, CEO at Destiny Media Technologies]

I mean, that's a good question. We talked about momentum in November where we saw independent revenue growth by 15.5%. That growth, we've seen pretty strong growth into December. In fact, it's widely outstripped the 15%. Some of that is seasonal. So we don't expect this kind of growth. But we had a really strong continuation after the quarter. I would say about a third of our customers are, in any particular time, our new customers, but they generated about 7% of our revenue. The new customers are really ones that are smaller. Our customer purchasing demand is highly variable. It's not; you're not buying a software package or something that people use every month and use at the same level. We're looking at customers that are small independent labels to Universal, which is the largest collection of record labels in the world.

[Fred Vandenberg, CEO at Destiny Media Technologies]

So our marketing approach really has moved customers into customer buckets, personas, we call them. And our approach is really to align our marketing efforts where we attract customers that we believe are going to be larger in spend. And then secondarily, so we're tracking bigger customers, and we're encouraging customers that we do attract to spend more. So there's things that we're working on where we leverage expanded analytics that we've worked on to market to these people what we've seen. For example, we see that typically, if an artist sends out a song, they tend to get greater results the more they send out. So we leverage analytics like that to programmatically email out or market to, rather, those kinds of customers to grow use. As far as projecting it, I mean, we've really had a really strong December.

[Fred Vandenberg, CEO at Destiny Media Technologies]

And I mean, I think our marketing approach is the right way to go. So we're just combined with the cost savings, I think, in terms of our value, we're really looking at profitable runways forward where we can maintain our ability to grow sales while at the same time generating a positive net margin.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Final question, Fred. You mentioned the renewal of the Universal agreement. I think you mentioned that the annual fee or recurring fee over three years will be 6% lower on an annual basis. Is that correct?

[Fred Vandenberg, CEO at Destiny Media Technologies]

That's how it'll impact this year, yeah. It's really a restructuring of the agreement so that they're going to pay separately for development. If we can negotiate new development fees, that will eat into the impact. Plus, as we move forward, inflation will grow by 2% per year.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Do you still anticipate for fiscal 2026 that as a result of the new agreement that you will be in a net revenue growth position?

[Fred Vandenberg, CEO at Destiny Media Technologies]

That's a good question. If we continue on the results of November and December, we will easily grow revenue. We have to continue that strong performance over the last couple of months, yes. But the cost reductions that we have and can consider will ensure that we will have a positive net margin. As far as where we end up revenue, I would really probably like to see a few more months where I can see how our revenue is growing. The revenue that we, sorry, I'm fumbling with this question, but the revenue growth that we've seen in independents is coming from a number of different sources, so we've got increased lead generation, increased lead conversion.

[Fred Vandenberg, CEO at Destiny Media Technologies]

That conversion rate is, sorry, the conversion rate is increasing, but it's also the speed with which it's converting is improving. We're reengaging older customers. The price changes that we had are not inconsequential. And so it's not just one thing that's impacting our independent revenue growth. It's a few different things. So I'm pretty optimistic about how it's going to play out. Whether that overshoots the cost reduction of UMG, it's hard to predict at this stage. I would like a little bit more run room before I predict it.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Okay. Fred, my last question. You talked about reengaging with some acquisition targets or target. How should investors look at the size of acquisitions you're capable or willing to make from an annual revenue contribution that these acquisitions could bring? Is it one million, two million, four million? Just try to quantify what type of acquisition would you be willing to digest and scale?

[Fred Vandenberg, CEO at Destiny Media Technologies]

Willing to digest? Our ability to service the customers that would result from an acquisition is very strong. It's easy to incorporate that growth. So it's a very high margin purchase of customers, essentially, what it would be. It's whether or not we can purchase it at a price that is appropriate. I believe we are the largest. We're obviously a small company, but I believe that we're the largest in the world at what we do. I believe we're the best in the world at what we do, and I think that Universal's contract renewal is a clear indication of that. Whether we can acquire customers at a price is really a negotiation by negotiation endeavor.

[Fred Vandenberg, CEO at Destiny Media Technologies]

We see some competitors with international presence, but generally, they are within a particular geography, and there's a number of them, and I think we can look at acquisitions, so the size of the acquisition varies tremendously, I believe. We're the largest in the world, so if you look at that, then anything that we acquire would be smaller, but there's a few of them out there that we could acquire, and it's just a matter of whether the price is right, and we do have enough cash, I think, to make some cash offers on those, so.

[Operator]

Thank you, Jerry. Our next question was submitted by Andy. What is the company doing with the cash on hand it has? Is it invested? Will the company be issuing dividends?

[Fred Vandenberg, CEO at Destiny Media Technologies]

Yeah, cash on hand is invested. It's a reasonably, well, it's a very safe investment, so the returns are small. As far as, I mean, we have a decision facing us right now whether we focus in on maximizing cash to growing cash or we continue to invest in the platform to accelerate revenue growth. If we decide to maximize cash flow, I mean, I think we can be profitable as it is. Then we have a choice of what to do with that cash.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Whether we use it to make acquisitions or not is one question. But then as far as growing investor value, we have to be, I mean, we have to consider what's best in our best interest of our investors. We can issue dividends or initiate a buyback. The issuing of dividends is not a costly endeavor. I mean, it's a fairly simple process. But there's a few things that we need to be careful of.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Just the mechanics of moving profit around in the company, getting dividends from a profit from a Canadian company through a U.S. parent. We have to be careful about how we do that. And also, there's a choice between providing our investors liquidity or the choice between how dividends are taxed in their hands versus gains, capital gains. And all of those decisions have to be made in the context of the stock price. If we're generating positive net margins, even though we're a small company, the margins can be significant considering the stock price. We have, I think, roughly about $0.14 a share in cash, and we can generate a reasonable amount of per-share earnings that we then will have to decide whether or not we do buybacks or dividends to investors.

[Operator]

We have another question from Andy. Are you able to provide the revenue based on geographical region? How much is North America compared to non-North America?

[Fred Vandenberg, CEO at Destiny Media Technologies]

That's right in the 10-Q, I believe. Asel, is that fair? We've used Universal is allocated to one territory, and we've moved that from a euro-based contract to a U.S. dollar contract. There's a little bit less risk, I suppose, in terms of fluctuations, and going forward, we're probably focused more on the U.S., but I'm not sure exactly what the breakdown is off the top, but I think it's right in the quarter. Sorry, I probably interrupted you there.

[Operator]

Nope. Yeah. It's note number eight in the 10-Q. But again, yeah, UMG contract is in North America. Yeah.

[Fred Vandenberg, CEO at Destiny Media Technologies]

It's not as simple, I guess, to show UMG because UMG distributes with us around the world: Africa, Asia, Europe, everywhere but Antarctica, I suppose.

[Operator]

It looks like we have one more question here from Thomas, who's raised a hand to speak. Thomas, you can go ahead and unmute your mic.

[Operator]

Hey, Fred. Hi. I'm not sure if you can give more color on the litigation proceeds, if I can say it like that. I know it hasn't been too long since Q4, but did you guys have any updates or?

[Fred Vandenberg, CEO at Destiny Media Technologies]

Well, there's nothing to really update. We won the litigation, so we're getting an award of costs. That hasn't been established yet. I suppose that would be established soon. Then there's a question of collectibility. We would think it's fairly significant, so we would probably pursue the collection of it. He has filed a notice of appeal. That's an intention to appeal. It's not actually an appeal. And I don't think he'll actually follow through on it.

[Fred Vandenberg, CEO at Destiny Media Technologies]

I don't want to dare him to it by saying that, but I don't think that there will be an appeal.

[Fred Vandenberg, CEO at Destiny Media Technologies]

It's good money after bad for that, for sure. Thank you. Last call, you disclosed the growth of MTR revenue. Was that on a year-over-year basis or on a quarterly basis? Was it for Q4 or for the full year when you disclosed it?

[Fred Vandenberg, CEO at Destiny Media Technologies]

Not sure if I remember. We disclosed, sorry, what did we disclose? The MTR revenue during the Q4 call, like two months ago. I don't think we actually disclosed the dollar amount. We disclosed the percentages. Yeah, the percentage and the absolute growth.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Was that for Q4 or for the whole year? I think it was for the full. That was for the full year. The 30% this quarter is easy. This quarter versus last year's quarter, yeah.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Okay. And then on the Universal contract, so it's $1.6 million plus how much for fees that have been already agreed upon for this year?

[Fred Vandenberg, CEO at Destiny Media Technologies]

$35,000 for this year. That's just with one project done, so.

[Fred Vandenberg, CEO at Destiny Media Technologies]

So I have a hard time figuring out how is it 6% if so Universal was like, what, $2.1 million last 12 months if we add up last four quarters? So that's $500,000.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Yeah. It's what will impact this year. So we've had some premiums for the first four months of the year. So it's after those premiums. So 6.5% for this year. It will be a reduction on an annual basis. I'd have to figure that out. But the premiums were the short-term premiums that we had were reasonably significant, and those have been eliminated, so.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Okay. And why did we not know about those premiums? I mean, I asked you in April, I guess, about that contract, and you told me it's on a rolling basis. We won't fix anything that's broken, and there were no plans to change it. I mean, we're kind of blindsided by that new contract, I guess.

[Fred Vandenberg, CEO at Destiny Media Technologies]

I mean, I have to sort of negotiate what is in the best interest of the company. It's not a. I mean, we disclosed that we were charging them short-term premiums. We've disclosed that in the past. The growth was there. Universal has a global mandate to reduce costs, and negotiating those fees was a long process. I think it really reflects our ability to reduce our costs associated with that. It's a net reduction in our revenue, for sure, but we can also reduce our costs to support that contract.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Yeah. I mean, it's not really the result. It's more the way it's being communicated and all of that. Where was those? I'm following the company pretty closely, okay? And where was it disclosed that there's premiums in our contract with UMG in an 8-K somewhere, or? I can't remember seeing one in the last year. It wouldn't be in an 8-K, it'd be in these calls here, so. It would be during the calls that it says that our annual contract currently has premiums?

[Fred Vandenberg, CEO at Destiny Media Technologies]

Well, I would have to go back and see what, but it is on a month-to-month basis, and we've discussed that before, for sure.

[Fred Vandenberg, CEO at Destiny Media Technologies]

And what's the difference between, or why are we happy about an inflation hike if there was already an annual price hike? If I refer to what you told me in April last year, what's the difference between last year having annual price hikes and inflation? Are they the same, or we used to have different annual price hikes?

[Fred Vandenberg, CEO at Destiny Media Technologies]

Well, the price hike for the month-to-month, we had a price hike that kicked in just last month. The long-term, I guess, if you look at whenever we've had a longer-term deal, this is the first time that they've offered an inflation index for it. This was a month-to-month agreement, so they could cancel at any time. So this is the first time that they've actually committed to a locked-in price increase.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Okay. Yeah. I mean, again, it's not, I mean, the result is disappointing, but I understand why. I don't know how it's communicated, I guess. I don't know. I would have told that there's somehow negotiations to have a longer-term contract.

[Fred Vandenberg, CEO at Destiny Media Technologies]

No matter what the price it is, I guess you were not able to disclose it, but just why not kind of tell us in advance that it's in the works? I guess it reduced the risk of being an investor, right? Because it's not like they're going to just disappear the next month like it could have been. I don't know. Just a bit disappointed with how it's being communicated. Same thing for cost reductions. Why was it not communicated last quarter for Q1? I mean, Q1 was basically over. You could have told us that there would be cost reductions in Q1. And I mean, this is kind of positive, right? It's just what can be done to better communicate to investors, positive things and negative things. They could be. I don't know. I just like thinking about.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Well, I mean, I'll take the criticism. I believed we did communicate that we would have cost reductions. We are considering more, so it's not written in stone yet. I mean, when we were talking, we didn't provide numbers. I know that. But we did communicate during the year-end call that we had the capacity to reduce costs associated with product development simply because of the retirement of the old PC application and some efficiencies that we've got. So now I've got harder numbers on it. But I mean, don't always need to provide hard numbers. I guess it's just, I don't know, a good way of telegraphing what's coming up. I mean, it's fair enough. I mean, the Universal agreement, they've been wanting to reduce their fees with us for some time.

[Fred Vandenberg, CEO at Destiny Media Technologies]

It's just a matter of, I mean, they were silent on the agreement for the better part of, well, probably more than a year, and I think things have changed internally for them, so I didn't have much indication from them that they were still considering a longer-term agreement, and I think when we started talking with them a few months ago, again, started talking with them. We're always talking to them, but when we started talking about this specific renewal, the longer-term renewal, we got into certain things that I think ultimately really work for us. Obviously, we considered a bunch of different things, and we didn't know where it would end up. The fees, I would like them to be higher, obviously, but I think it's something we can work with. It does provide us a long-term sort of anchor tenant.

[Fred Vandenberg, CEO at Destiny Media Technologies]

And the costs associated with supporting that are lower. And we just can reflect that in our costs to support them. Their need to reduce cost, I think, is really a reflection of the finance mandate to become more profitable. They went public in September of 2021, and their initiative to force that reduction and maximize profits has been going on since then.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Yeah. Yeah. I get that.

[Fred Vandenberg, CEO at Destiny Media Technologies]

And they're Universal. I mean, I think this is a good result for us. I think it's a great result for us. I wish it was higher fees. But ultimately, we're a small company that can provide a positive net margin in this context.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Yeah. Yeah. And I mean, yeah, it's disappointing, but I understand the context. You can take my suggestion or not of just communicating, I guess, more in advance just so it attracts investors of knowing what's to come so they can better, I guess, model what could come up and see that it's a good opportunity. But yeah.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Understood.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Last point, I mean, it's kind of, yeah, I'm not even sure if I want to touch it, but there's someone that reported selling 1% of the business on the same date that the contract was signed. And it doesn't look good. I know that person is considered an insider, even though he's not on the board. It does look weird, but.

[Fred Vandenberg, CEO at Destiny Media Technologies]

That was tax loss selling, and I was aware of that. Yeah.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Yeah. That's what I was a bit surprised at the timing of it, but that was just a pure coincidence. Yeah. Yeah. I know. I know.

[Fred Vandenberg, CEO at Destiny Media Technologies]

It does look bad for someone just looking at it like highest volume day in like five years, and then it's someone that needs to declare this transaction. But anyway, yeah, I figured it was tax loss, but.

[Fred Vandenberg, CEO at Destiny Media Technologies]

I mean, I can't control that, obviously. I know it was a tax loss selling endeavor. I'm not even sure if I should say that, actually, but it wasn't a reflection of the contract or the company.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Yeah. Thank you. I just needed to voice it. All right. Thank you.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Thanks, Thomas.

[Operator]

Thank you, Thomas. That concludes all the questions for today. Thank you very much, everyone.

[Fred Vandenberg, CEO at Destiny Media Technologies]

Yeah. Thanks very much, everyone. And thanks to Michelle, who's joining us from Turks and Caicos on her vacation. Thanks. I really appreciate you helping us out. My pleasure. Thanks, everyone. Thank you.

Participants

Executives

• Fred Vandenberg, CEO
• Jennifer Rainnie, Senior Business Development Specialist
• Assel Mendesh, CFO

Analysts

• Analyst 1
• Analyst 2