Report Highlights
- KIDZ is up 100% since our Q3 update report in November 2024.
- Yesterday, KIDZ reported unaudited Q4-2024 financial results. Q4 revenue increased 23% YoY to $7.4M, the highest quarterly revenue in the company’s history, surpassing our estimate by 22%. Revenue growth was driven by advertisers launching multiple global campaigns on the KIDZ platform during the quarter.
- We were pleasantly surprised by the strong Q4 rebound. Despite management’s upbeat guidance, we were cautious in our forecast, given 2024 (9M) revenue was down 10% YoY.
- Gross margins increased 23 pp YoY to 56%, beating our estimate by 10 pp. EPS rose 489% YoY to $0.015, significantly exceeding our forecast of $0.008
- In 2024, YouTube (NASDAQ: GOOGL) and Meta (NASDAQ: META) reported 8% and 22% YoY ad revenue growth, respectively, in 2024, compared to 5% for Kidoz.
- Major digital ad companies saw average YoY revenue growth of 14% in 2024, with consensus forecasts predicting 10% revenue growth in 2025. We are modeling 7% revenue growth for KIDZ in 2025.
- In 2025, global digital advertising spending is expected to continue growing, though at a moderated pace compared to the previous year, primarily driven by economic uncertainty, and stricter data privacy laws. We believe the recent stricter ad regulations introduced by the U.S. COPPA 2.0 will push advertisers toward companies like KIDZ, which specialize in kid-friendly advertising.
- KIDZ’s forward EV/R is 1.3x vs the sector average of 2.9x, a 55% discount. With 2024 revenue and EPS surpassing our expectations, we are revising our 2025 projections higher.
*This report and research coverage is paid for and commissioned by Kidoz Inc. – See the bottom of this report for other important disclosures rating, and risk definitions. All figures in C$ unless otherwise specified.
