Author: Atrium Research August 20, 2026
Nicholas Cortellucci, CFA | Equity Research Analyst | [email protected] | 647-391-3314
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What you need to know:
- SBIO reported Q2 financials that came in below our expectations, with revenue of $8.2M (-26% YoY) compared to our estimate of $12.8M.
- Gross margin improved to 61% from 53% in Q1 and beat our 55% estimate, but Adjusted EBITDA was ($2.7M) vs. our estimate of ($0.6M).
- Management expects adjusted EBITDA to return to profitability in H2, supported by over $5M of political and advocacy commitments already secured and the second-half seasonality.
Yesterday, after market close, Sabio Holdings Inc. (SBIO:TSXV, SABOF:OTCQB) reported its Q2 financial results that came in below our expectations, as the ad-tech market continues to see struggles against the stronger comparable period. We are still awaiting the turnaround to begin for Sabio in H2 as political spending returns. We are maintaining our BUY rating and lowering our target price to C$0.30/share from C$0.50/share.
Key Highlights
- Q2 revenue was $8.2M (-26% YoY, +15% QoQ), below our $12.8M estimate. Gross revenue was up 6% YoY if you exclude political revenue.
- Q2 was comprised of $5.4M in ad-supported streaming revenue (-26% YoY), $2.7M in mobile display revenue (-23% YoY), and $0.1M in other revenue.
- U.S. programmatic revenue was $2.9M compared to $0.8M in Q2/25, with the number of customers increasing by 116% YoY and 90% in quarterly renewals. EMEA sales were $5.0M in H1, matching full-year 2025 EMEA sales. Reoccuring revenue represented 82% of revenues, 92% in the U.S.
- SBIO has over $5M in political and advocacy commitments secured for H2.
- Gross margin was 61% for the quarter, above our estimate of 55% and improving from the 53% reported in Q1.
- Adjusted EBITDA for the quarter came in at ($2.7M), below our estimate of ($0.6M) but improving QoQ. S&M was flat YoY, G&A declined by 10% YoY, and cloud hosting costs increased 42%.
- Cost reduction initiatives should save $1.2M in 2026 and $2.0M annualized.
- SBIO generated $0.2M in OCF, as A/R decreased and A/P increased QoQ.
- Net income was ($3.9M) for the quarter, vs. our estimates of ($1.2M).
- Sabio ended the quarter with $1.5M in cash and $9.0M in debt (up slightly QoQ). The balance sheet remains troubled, with $21.3M in A/P.
Outlook
Management stated that SBIO is positioned for positive adjusted EBITDA in H2. The team believes that its early investments in its EMEA market are proving strong across customers, retention, and margins. U.S. programmatic and EMEA sales combined for 49% of gross revenue, compared to 10% in Q2/25, resulting in a more diversified approach. SBIO began testing AI automation functions for its demandside platform and began monetizing its new digital out-of-home offering. In 2025, 88% of EMEA revenue and 82% of U.S. programmatic revenue was generated in the second half, while in 2024 (political year), 69% of total revenue came in the second half; as such, Sabio is gearing up for larger revenues in the quarters to come.
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Atrium Research Ratings System
BUY: The stock is expected to generate returns of over 20% over the next 24 months.
HOLD: The stock is expected to generate returns of 0-20% over the next 24 months.
SELL: The stock is expected to generate negative returns over the next 24 months.
NOT RATED (N/R): Atrium does not provide research coverage on the respective company.
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