Destiny Media Technologies Inc. (OTC:DSNY) Q4 2025 Earnings Call Transcript

Destiny Media Technologies Inc. (OTC:DSNY) Q4 2025 Earnings Call Transcript November 24, 2025

Unknown Executive: Good afternoon, everyone. Thank you for joining us on today’s webinar. Before we begin, I’d like to announce that we will 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 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. 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 following the 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.

Your questions will be polled 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.

Frederick Vandenberg: Thanks, Michelle. Today, we have myself. As Michelle said, I’m the Chief Executive Officer of Destiny doing business as Play MPE. Along with me, we have Assel is our Chief Financial Officer. Assel will be talking about significant components of our financial results. And we have Jen, who leads our strategic accounts. Jen will outline some of the achievements we made in the sales and marketing area. The first thing I wanted to talk to you today about was the modernization of our platform. We undertook a process to move away from the PC application several years ago. The basic features of that were done a few years ago, and in the recent past, we’ve made 2 significant achievements that have resulted in the retirement of the older platform.

The first was we transitioned our client — our largest client to the online platform. We did that in April of 2023. So it’s a little older now. That transition went flawlessly. But due to the quantum of the data and the historical catalog of the world’s largest record label, we maintained redundancy of that platform for — until this year. Also, internally, we have a very sophisticated list management system, which is essentially the core of what we sell to our customers. We made many upgrades to that system, and we were able to retire that component as well. So we were able to achieve cost savings of not maintaining 2 different platforms. The result of these investments are really the cost savings in the 3 main ways: reduction of platform investments, but also we made a lot of upgrades that make the list management maintenance more efficient, plus our client processing systems are more efficient.

Q&A Session

This is a pretty big deal for us. The other investment that we announced back in August was the launch of Caster and Caster+. Now essentially, Caster+ is the old Caster, [ that’s the sending side ] of Play MPE. And Caster now is the self-service component. This investment really helps us in 3 main ways. It allows us to sell at scale, so customers can self-sign up and distribute content without any Play MPE staff involvement. This also allows us to more easily set up trial accounts. This is an important thing to know and even important for our own staff to be aware of. This is really essentially the best way to sell. Our platform is — the value proposition of our platform is not an easy one to explain. So the best way to sell it is to get people in it, see how easy it is, see how effective it is, see the information relayed back, and really just become hooked.

It becomes an indispensable part of their workflow. Customers in our industry are hesitant for change. But with this, we can get them in the platform and trying it out. Also, it allows us to more easily set up reseller arrangements, whether it’s white labeling, OEM, or partnership agreements. There are several label management services companies where they provide more enhanced distribution in a lot of different ways. Play MPE really is regarded as a leader in radio. That reputation helps us in that avenue, and we can partner with those label services companies to effectively increase our channel distribution. And now with the Caster, it’s a little bit more easy to achieve that. We made a lot of improved sales and marketing capabilities. I’ll let Jen really touch on those, but it’s probably worth mentioning because it’s a pretty significant change.

The last — sorry, not the last thing, but the profitability. We are a B2B company in niche business. We have a very strong position in that niche. We’ve had some success in growing, but it’s at a rate of a little less than 10% while we modernize our platform. We have the largest record label as a customer. We’ve modernized the platform and improved our sales process, so we can continue to target revenue growth while reducing costs and improving shareholder value. MTR. In early fiscal 2022, the Board of Directors wanted to pursue an adjacent business to grow and diversify our revenue base. This led to the launch of MTR last year. MTR fits into a fast-growing radio tracking and analytics market. We’ve seen research reports where this market is in excess of $3 billion.

And we believed that we could target a portion of that as a complementary business opportunity. When we pursued this, we targeted — we had a targeted approach given our size and cost profile, where we only started tracking airplays for customers that would track at a smaller scale, and we started that in the United States, so we could get some real market feedback and assess our success. We had validated this need. It was an unmet customer need for our smaller customers. And that is ultimately who forms our customer base right now. This is a relatively low-cost entry into the market — into a very large market, with a short payback period if we achieved certain targets. And when I say low cost, it’s really a low cost to the size of the market.

The company spent a little less than $600,000 in direct cost in developing MTR, which is a larger expense for a small company. But it was a big opportunity. Since that investment, competitive solutions have emerged, including Apple’s free service. Apple’s free service does pose a little bit of a drag on our sales. But anybody who’s really commercially interested in growing their music presence is probably looking for more details. Certain customers that are really cost conscious can use this for free. We have not achieved our sales targets, and we’re operating at a small loss. We do have repeat customers, though, and we’re exploring ways to expand our sales approach and target markets. We’re expecting to do ad tracking trial in early calendar 2026.

We’re targeting larger volume sales where this is where you get synergistic sales with Play MPE that our sales team can target the same customers with 2 different products. There’s also a lot of other value adds with MTR. We are tracking more customers for Play MPE because of MTR. So it’s not just that we’re selling MTR to Play MPE customers. We are selling Play MPE to customers on MTR. We do also have advantages in that we’re providing both the distribution services and the tracking, which really provides some interesting and valuable data points. We see insights of how customers are using Play MPE and how that results in their airplay tracking, the numbers, so we can provide some really valuable insights to improve their results. We’re just trying to figure out how to monetize that information.

And it also proves out the value of Play MPE. We’ve always known that Play MPE was an effective distribution tool, but now we can really draw the line between the distribution and the airplay. Lastly, I want to be clear on this one because I think maybe some comments I’ve made in the past have not been. We resolved our litigation in October. There was an outstanding claim against the company. The judgment was in our favor, and we were awarded costs. Those costs have not been reflected in the financial statements, but we expect them to be a reasonably large number, and we’ll pursue them. And with that, I will turn it over to Assel.

Assel Mendesh: Thank you, Fred. I will walk you through our financial performance for fiscal year 2025. So we’ll start from the revenue. Our revenue overall was up by 2.3%, and it is 2.6% if we look at the constant currency basis. The major label side was up by $149,000, which is 6.8% for the year, while independent label revenue segment declined by $75,000, which is 3.4% decline. And decline occurred despite the increase in the number of total Caster customers, which was up by 7.4%, as well as the increase in new customers, which was 11.8%. The total number of releases stayed relatively the same, but what we see is the average spend declined by 10% per customer, or 3.2% per release. We believe that there are largely 3 factors that affected that, first being the general economic conditions; second being the volume discounts we gave early in the year, total was approximately $52,000.

These discounts were intended to encourage larger sales, but the expected uplift didn’t materialize. So the structure has now been revised for fiscal 2026. And the last one is that for the period of time, we had reduced sales staffing, which has since been addressed. And MTR revenue still less than 1% of total revenue, but it is up by 345% versus last year. Final point to note about revenue is that it is largely denominated in U.S. dollars. Right now, it is 91.8% in U.S. dollars. And now let’s move on to the expenses and overall results. Cost of revenue, as you can see, declined — sorry, was up by $76,000, which is 12.5%, mostly MTR-related data hosting and processing fees. The operating expenses increased by approximately $751,000, which is 20%.

And mostly the drivers are, as you can see: amortization, which is noncash amortization of the software capitalized in the previous years of $364,000; onetime nonrepeating litigation-related costs of $249,000; onetime recruitment costs of $28,000; and MTR-related operating expenses of $61,000. As a result, adjusted EBITDA was down by $375,000. And turning to the liquidity. The cash balance was pretty strong, USD 1.12 million. The slight change versus last year is just the timing of our AR collection that cleared just a couple of days after the year-end. And the company continues to operate with no debt or any other material capital expenditure commitments. So that was all for the financial results. And now I’ll pass to Jennifer to cover sales and marketing portion of today’s call.

Unknown Executive: Thank you, Assel. I’d like to start off with key marketing achievements for 2025. This included expanding our social media presence, improved digital marketing and site enhancements, as well as customer retention and reengagement sales outreach. Our new lead tracking has now given us full visibility from lead creation to conversion, identifying affiliate partnerships as the highest source. Our strongest partner provided 392 new accounts, 25 new customers, and our website organic referral traffic provided 1,919 new accounts and 379 new customers. We localized our sites, which launched — we completed 3 major localized sites, U.S., Canada, and Australia. We’ve updated our Spanish site and our Latin America launch is planned post main site updates.

SEO and organic traffic exceeded our targets. Our organic traffic was up by 46% on a goal of 20%. We had a goal of 10 keywords resulting in a first page ranking on search, and we have identified 20. And growth has primarily been driven by brand-aware users. Conversions and sales improvements. Our new account sales are up by 41%. That’s 314 to 443, and our conversion rate has increased by 46% from the 6.5% conversion to 9.5%. Time to purchase has significantly dropped from lead to sale has gone from 59 to 24 days and from account to sale has gone from 40 to 24 days. Time between first and second sale on Caster has dropped from 115 to 39 days. On our partnership channels, we have outperformed with our largest partner delivering exceptional low-cost new accounts and customers with high LTV.

Other partners have provided leads that significantly boosted our site referral traffic. Future looking, we will continue to expand our social media presence, evaluate our e-mail marketing campaigns, drip flows, and improve lead flow, and we’ll focus on supporting our larger customer retention and improve our revenue per purchase. Moving on to our key sales achievements for 2025. Our total revenue was up 2.3%. We saw strong growth from our largest enterprise customer, which lifted total revenue of majors. Independents have softened due to volume discounts, as previously mentioned, economic factors, and a lower per-customer spend. Customer acquisition and platform growth, we saw growth in new customers in 2025. Our MTR platform is accelerating and structural corrections are in place to support a stronger 2026.

Increased customer engagement. Our primary focus has been and will be to continue deepening engagement with our major labels through increased personal interaction and relationship building as well as attendance at key networking events in Canada and the U.S. Strengthening our value proposition, we’ve developed new sales tools and executed a full communications push around our Caster enhancements, focused on increasing reporting and analytics to strengthen our value proposition. Forward thinking will be focused on the player recipient relationship to build traction in underrepresented genres as well as our core formats, Triple A, Americana, Country, Non-Comm, and Christian. We’re actively looking at complementary music technologies to explore strategic partnerships and potential expansion into adjacent service offerings.

That concludes our sales and marketing summary, and I’ll pass it over to you, Michelle, to open up for questions.

Unknown Executive: [Operator Instructions] Our first question today is from [ Andy Sudiak ]. Can you advise the plan to increase shareholder value and if there is a plan to return value to investors in some capacity?

Frederick Vandenberg: Thanks, Andy. The Board is considering alternatives on how much to invest for growth. Essentially, the issue before us is do we pursue a value approach even though we’re small, or do we continue to invest into product development for growth and diversification. We’ve already achieved some cost reductions that we’ve talked about during the call. And I’ve made some recommendations to the Board. I’m just gathering some more information for them for their consideration. As far as returning that capital to the shareholders, there are a couple of different ways to do that, and we’re going to pursue the most efficient, whether tax efficient or efficient for our shareholders, as possible.

Unknown Executive: We have another question from [ Andy ]. What percentage of the market does Play MPE feel they currently have?

Frederick Vandenberg: That’s a little bit of a challenge to figure out. I think it’s probably still between 5% and 10%. We are targeting growth. And I think with the recently launched Caster and Caster+, we can more easily integrate with the partners that we spoke about, essentially that can act as resellers. We’re really regarded as the market leader when it comes to radio. That reputation hurts us and helps us. It helps us essentially in the industry, but maybe it hurts us in the sense that we’re perceived as being more than a niche than we really are. But that’s — I think we can still grow quite a bit. We’ve made some improvements with the sales and marketing team, and we can grow from there, sell what we have.

Unknown Executive: Our next question is from Thomas.

Unknown Analyst: First of all, I just want to say thanks for bringing in Jennifer and Assel. I think it’s bringing more color and it’s pretty appreciated. The first question is on the litigation cost. I’m not sure how much you can disclose or tell, but should we assume that total cost of last couple of years could be recouped? Is that how it works normally? Or… p id=”35782327″ name=”Frederick Vandenberg” type=”E” /> It’s a little bit complicated. Essentially, the way it works is you get an award of cost. And if it’s your lowest award, you get probably 25% of your cost back. I don’t think that — there’s a number of things that go into it, but essentially, that would be our worst-case scenario. And I think that we’re very much likely not to be in there.

There are double costs in certain circumstances, which brings us up to 50%, and then there’s special costs. Essentially, those kick in at certain times based on certain events. It gets kind of complicated, but we expect a reasonably healthy award.

Unknown Analyst: And is it — without being too specific, is it like a onetime payment? Or do you guys have to agree with the payer on a schedule? Or is it a onetime payment or…?

Frederick Vandenberg: Well, I do know it’s not quite as easy as that. First is you define what the award is based on a schedule. So we have yet to do that. Then we set a schedule with the claimant.

Unknown Analyst: And do we have a sense of the timing approximately? Or is it a couple of months, a couple of years, or I don’t know?

Frederick Vandenberg: I don’t know. I can’t answer that question.

Unknown Analyst: I think it was last call, you’ve talked about having a consultant reviewing the business holistically. Did he present his findings or whatever or…?

Frederick Vandenberg: Yes, he presented his findings. There was not anything revelatory in the report, I would say. So it really just highlights that we’re taking, I think, the right approach to our growth strategy. And we’re pretty strong in our position in the market, and we can grow from there.

Unknown Analyst: And now that self-serve is available, is the goal to also run ads locally at multiple places in the plan? Or what’s the strategy behind figuring out which market to kind of…?

Frederick Vandenberg: Yes. Essentially, that’s right. We have different markets where self-serve checkout can be used. We’re very strong in that market, but they’re generally small, so it doesn’t — it’s kind of difficult for us to scale in those markets when we are using our staff. So that’s one area where we would be using self-serve checkout. It’s probably worth me reiterating what I said earlier about the billing of it. The billing of self-serve checkout, which we call Caster now, helps us in that what you just asked me about, the selling within a local territory and people can help themselves and come in, sign up, check out, and purchase from that way. And we can do that very efficiently and profitably now. It also helps us provide trial accounts.

So we can provide trial accounts to larger strategic customers, and we’re doing that as we speak. And we can do that now because essentially we restrict the trial use to a particular area. Before we couldn’t do that. And then also, there’s really savings in terms of our own staffing in client processing that is maybe hidden from the top line. It reduces our burden — overhead burden.

Unknown Analyst: Not sure if there are other people in line, but I have a couple more. Why did the currency — not the currency but the denomination of revenue was mostly U.S. Wasn’t it half and half almost with euro before? What changed there?

Frederick Vandenberg: That’s our largest customer moving from euro to…

Unknown Analyst: Okay So there’s nothing other than that [indiscernible]. And one more question. I’m just trying to figure out. Should we expect any more hires in the coming months or…?

Frederick Vandenberg: No, I don’t — I think we’re staffed up sufficiently.

Unknown Analyst: And just to voice back on the first question from Andy, I guess I would like, as a shareholder, to see buybacks. I think with the current share price, I think there could be meaningful value created with not much dollars. Yes. I mean, it’s just my opinion.

Frederick Vandenberg: Noted. Yes. It’s a good strategy for that, for sure, yes.

Unknown Analyst: I mean, yes, I guess you could retire another what, 5% on — I mean, there’s not much stuff in the market.

Frederick Vandenberg: Yes. With the TSX trading, that’s the rate-limiting step on our buyback at 5%. But yes, we can do that.

Unknown Analyst: Is there additional cost to do a substantial issuer bid or at least try or I don’t know even if there’s just admin costs related to those or…?

Frederick Vandenberg: I don’t believe so. But I still think we’re limited potentially by the TSX. But I will — that is one thing I will look into.

Unknown Analyst: Yes. I mean, I guess another point as a shareholder, I would like to see is seeing more insider purchases on the market, at least from the Board. I think it hasn’t been — it’s been a while since I’ve seen some. I know a couple of them are probably maxed out, but a couple of them I haven’t seen probably any buys. I mean just me voicing an opinion.

Frederick Vandenberg: Well, you did see me buy.

Unknown Analyst: Yes, I’ve seen yours.

Frederick Vandenberg: I bought in…

Unknown Analyst: August.

Frederick Vandenberg: Yes, in August, you saw that, okay. That was not in the ESPP. So I mean, I know it’s — anyway. Yes. Okay.

Unknown Analyst: I mean, you don’t have to answer anything. I was just voicing something I think a couple of people probably would like to see as well. And I know I’ve mentioned it last time, but I still haven’t seen the replays from Q2 and Q3 on the website. I mean this time, I just took screenshot, but I’d kind of like to see the slides, but to circle back, but I mean, just if you ever have time.

Frederick Vandenberg: Yes, I’ll check on that.

Unknown Executive: Thank you. That concludes all the questions for today. Thank you very much, everyone.

Frederick Vandenberg: Thanks, everyone.