Thunderbird Entertainment Group Inc. (TBRD.V) Earnings Call Transcript

Hello, and welcome to the Thunderbird Entertainment Investor Presentation. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Glen Akselrod with Bristol Capital. Please go ahead, Glen.

Thank you, Kevin, and thank you, everybody, for joining our webcast today with Thunderbird Entertainment. Remember, the purpose of today's presentation is to give our audience a better understanding of the business, and that will be done through a presentation and then questions with management. I'd like to mention that this is not an earnings or quarterly call. Thunderbird did report their year-end last month and a replay is available on the company website of that call. And they're also going to report first quarter earnings in the coming weeks. Today is more about a general overview of the business, the industry, the opportunity that Thunderbird represents for investors. The discussion today is going to be led by CEO, Jennifer McCarron. You should see the presentation in the webcast. We'll break for questions at the end of the formal presentation. When we do break, we encourage those questions. And as a reminder, we're only taking questions through the web portal. If you're listening over the telephone, please access the web link that we would have sent earlier today to ask that question. You could submit a question at any time. I'll ask the questions on the air for everyone to hear and then Jennifer will answer. I'm not going to reference any names, but simply read the questions asked. As we have a fairly large audience today, if I can't get to your question online and in time, and it has not yet been addressed during the call and can be, I'll come back to you through e-mail. I'm not going to read the forward-looking statements, but at these state that they apply and I reference them on Page 2 of this PowerPoint. With that said, thanks again for joining us. Remember, this is fairly informal, and we do encourage those questions to help you better understand the business and its growth path. And now I'll turn the call over to Jennifer to start her part of the discussion and presentation.

Great. Thank you so much, Glen. Welcome to our presentation. We are Thunderbird Entertainment and we are a high-quality global content company. We create, own and distribute award-winning factual, animated and scripted content worldwide. We are well on our way to becoming the next major global studio and have over 250 partnerships such as Netflix, HBO Max, Apple, Disney, Discovery Channel, NBCUniversal and many more. Going through the forward-looking statements to the company overview, our mission is to create content that makes the world a better place, try to make people happy and provides a much needed escape, which in these times is more important than ever. Featured on this slide is some of our amazing work with LEGO. We've handled LEGO MARVEL, LEGO Star Wars, LEGO Pixar Shorts, just to name a few, and we've enjoyed a long and fruitful relationship with LEGO with work planned for many years to come. Moving on to our journey. We were founded in 2003 with a mission of creating libraries to lift and fund IP, exploitation and create major global brands. In 2014, Great Pacific Media was acquired and in 2016 Atomic Cartoons. And the original mission remains very much alive today as our major global brands delight audiences around the world, and we are increasing our footprint in ancillary business like distribution, consumer products, toys and video games. Our service and IT production site continued to grow with Thunderbird working alongside of all the major players keeping quality as our North Star as buyers look to commission more quality content over quantity and look for that elusive hit, increasingly Thunderbird is a destination of choice. Company recognitions in the last year, just to name a few, included Thunderbird ranking in the top 10 of all independent production companies in Canada on Playback 2023 Indie List. Atomic being included in the annual Kidscreen Hot50 list of top production companies, and Great Pacific Media being named to Realscreen's Global 200 list for the 11th consecutive year. Thunderbird is also recognized in Report on Business' Women Lead Here report, while COO Sarah Nathanson won Report on Business Best Executive Awards. Additionally, Thunderbird was named one of Canada's top growing companies in September 2023 by the Globe and Mail and made the TSXCV top 50 list this year. Atomic-produced Molly of Denali and our show Pinecone & Pony are currently nominated for the 2023 children and family Emmy nominees, and I'm wishing the team the best of luck. Moving on to our executive summary. We're a micro-cap company in fiscal year '23 with year-end revenue of $166.7 million, increasing 12% year-over-year from the previous and an average of $17 million per year of EBITDA since going public in 2018, we carry zero corporate debt and have always maintained positive free cash flow. The two main drivers of our company are Atomic Cartoons, our Kids & Family Division and Great Pacific Media, our Factual divisions. We have an award-winning team of over 1,000 artists that are based in Los Angeles, Vancouver, Ottawa and Toronto. Our strategic priorities include growing key brands, investing in owned IPs and expanding and delivering consistent service revenue from returning a new series. We are pleased to share that several animated IP projects were greenlit in fiscal '23, and we expect these projects to begin contributing to net income in fiscal '25. For fiscal '24, we're targeting double-digit revenue growth and for EBITDA levels to retain -- return to those obtained prior to fiscal '23. We anticipate our numbers to reflect this in the second half of our fiscal year. Currently we have 30 programs in various stages of production and are working with 23 clients. Of the 30 programs in production, 10 are Thunderbird IP and 20 are serviced or partner managed production. Partner managed our shows, which are funded by the partner, but developed and managed entirely by Thunderbird, and then we are entitled to receive a percentage of net profits from all merchandise and licensing. With new alliances with toy companies like Jazwares, digital game producers like Smart and publishing companies to be announced, we are further able to leverage our IP and content into the world of consumer products in several categories in retail channels, such as direct-to-consumer, which will open up new and possibly very lucrative revenue stream for our company. Our executive team on this slide were all highly operational with a whole grown up in the industry. Matt and Richard are based in L.A., and this is key with our push for IP ownership and ancillary business and an ever commanding presence in Los Angeles, nurturing relationships with all of our key buyers. Taking a more granular look at Atomic Cartoons, our Kids & Family division. We produce high-end content across multiple 2D and 3D pipelines and genres have been preschool, comedy, action adventure, adult and everything in between. Some of our titles that you recognize are Spider-Man and his Amazing Friends, Disney's hit Zambia, our ongoing LEGO work that again includes Star Wars, Marvel, Pixar, Princess franchise. Princes Power that we optioned and developed a New York Times best-selling book by Savannah Guthrie, Drew Barrymore and sold to Netflix. We've released 2 seasons with several more planned drops and do anticipate participate in any back-end sales with toys, video games, you name it. We also handle My Little Pony, now airing is Young Love that we did with Sony Animation and a series for HBO Max, based on the Academy Award-winning short Hair Love. We've also completed teenage use in Asia and adult series, which is a great follow-up to us doing Little Demon and CoComelon, I'm listening that As anybody under 3, I don't make 6 playing CoComelon. Partner managed shows like we also handle our Wanderers and the Dr. Seuss hit Red Fish, Blue Fish for Netflix. We also embarked on co pros like the highly successful show Molly of Denali with PBS. Our work is highly sought after and evidenced by handling major global brands for clients. We've handled Donald Duck, 101 Dalmatian, Spider-Man, the list goes on. Taking a closer look at our Scripted division, Great Pacific Media, We are a global leader in unscripted television, widely considered best-in-class. Add to this, relying heavily on unscripted programming during the pandemic, broadcasters and streamers continue to order and provide a flow of unscripted programming. GPM generates its own IP almost 100% owned, developed by award-winning content creators with an eye for diverse content across the genres with authenticity and aspiration befitting the times in our Vancouver and Toronto studio. New IP recently announced our shows like Timber Titans for Discovery, [indiscernible] APTN and Blue Ant Media. Styles for HDTV and Hulu, which has been renewed to Season 2 and Deadman's Curse for History and Hulu also renewed into Season 2 and Season 3 was already renewed prior to airing. Highway Thru Hell is going to its 13th season and will hit this incredible milestone of 200 episodes delivered in 2024 with more to come. The international hit just keeps on trucking as Highway Thru Hell is one of the most successful independently-owned unscripted brands in the world. Great Pacific Media also produces for Thunderbird Scripted two dramatic projects in 2023, Reginald the Vampire for Sci-Fi Hulu and Amazon and the movie of the week Boot Camp for [indiscernible]. Moving on to take a look at our premium Scripted division. The further expansion into live action Scripted will build off the third key content vertical on our path to becoming a major global studio while adding value to our existing library. Former Netflix exec Hillary Zwick Turner has joined the company and been appointed SVP of Scripted Content to find best-in-class traders and hone in on new exciting projects in premium scripted content, young, adults and family live action spaces and also oversee Scripted development and production for the company's new Scripted hub. Getting the best possible early indicators of the success of the division, we have already placed two shows in active development with major U.S. networks and have begun network negotiations on the third. Our development site is robust with almost 20 projects in development, including high-profile titles like New York Times best-selling novel Mad Honey by Random House's best-selling author Jodi Picoult and Pitzer nominated Jennifer Finney Boylan. And after that, the brand new Sci-Fi novel by Global best-selling author of Dean Koontz. We have an adaptation of Night still in development, a supernatural crime Trilogy, voted by Stephen King as one of his top 10 beach reads of all time from Southern Gothic's author [indiscernible]. After EU, is another U.S. U.K. co-pro thriller series based on author Julie Buxbaum's first non-young adult novel after The Siren. And is a limited series about the women behind the men who founded the CIA. [los prodigios] a Spanish format, we have on closed rights and are now developing in conjunction with State Street, which is George Tillman's Company and the half-hour comedy [indiscernible] and the popular Canadian podcast team, Kelly and Kelly and Ed Helms Pacific Electric. So much going on. And now the strike is over, I'll just add that as of yesterday, yes. Moving on to our Distribution and Consumer Products Group. In 2022 and '23, we saw the official introduction of Thunderbird Distribution and Thunderbird brands, respectively, to the industry and potential content buyers and merchandising partners, headed by Richard Goldsmith, who joined us in 2021. It shows the strides we've made in exploiting our own IP and select third-party properties. Owning your own IP and distribution and merchandising rights to third-party properties means more control in building, exploiting and profiting from brand. In October, we announced Jazwares as the Global Master Toy licensee for Mermicorno. Starfall our owned IP based on a hugely popular lifestyle designer retailer, Tokidoki, at Mermicorno. In 2025, you'll see Mermicorno Starfall dolls, figures, play sets and other toys at mass market retail. Publishing and apparel programs will not be far behind. In 2022, we acquired global media and merchandising rights for Mittens & Pants. It was quickly greenlit for a second season and Thunderbird distribution has so far sold it into 34 additional territories with sales to major broadcasters like France TV and Warner Bros. Discovery. Next week, we'll be announcing several U.S. streaming partners for this series. It's also been declared one of the most toyetic series ever seen by several potential toy partners. In October, we also announced the acquisition of global media and merchandising rights to BooSnoo. This innovative mixed media series is currently the top rated show on its commissioning platform, Sky Kids in the U.K. and will have more to announce in the coming months in terms of programming sales and merchandising. Now taking a look at our financial overview. Our business models, I really love this slide as it does break down the business of Thunderbird. We essentially produced in three buckets: intellectual property shows, shows that are deemed service or global IP by partner managed shows. With IP, it's where we want 100% own the content, it lives in our library forever. We have full control to leverage in any form of cross-media exploitation. And examples of that would be Highway Thru Hell, Strays, Kim’s Convenience, Last Kids on Earth and the list goes on. We get paid upon delivery for IP service. That's where we're hired to execute on projects, and it's 100% cash flow, so a nice complement to getting paid upon delivery in IP. Examples of that are My Little Pony, Trollstopia, Pinecone & Pony and the list goes well on. In the third bucket, our partner managed, that's where we're hired to handle all creative from tip-to-tail writing through post, we take care of absolutely everything for our partners. As a result, we are fully cash flowed plus an increased substantial producer fee and percentage of any back-end sales from consumer products, merchandise you name it. Examples of that, that we can announce our Princess Power, Oddballs, which was a massive hit, Hello Ninja, Dogs in Space and the list continues. Tax incentives is a really interesting and important part of being a Canadian domicile company. And the incredible tax incentives have been around for well over 30 years. In 2023, a bill was passed by the Canadian government which requires streamers to invest in and buy a certain percentage of Canadian content. Consumers will go with their trusted partners like Thunderbird and as a result, this will just further allow us to turn on more of our own IP. Essentially, up to 50% of the Canadian resident salary will be covered by the government. This allows us to put higher quality on the screen and present high-quality budgets to broadcasters that are almost impossible to say no to. Taking a look at our condensed balance sheet. Our cash position is strong, and we have zero debt. These are updates to our year-end, which was June 30, 2023. Looking at our condensed income statement. Again, we have a very strong balance sheet. And despite a more challenging 2023, our forecast for fiscal year '24 through '26 is growing to our strongest performance as a company. Our trading information and capital structure, again, corporate debt is nothing, and we are nimble and able to be opportunistic in these times. Moving on to recent sales of owned IP. Again, we've recently sold Mermicorno, Starfall, so it's more international deals to be announced. Our original special Rocket Saves the Day has been sold to PBS Kids and will debut in December and season 2 of Reginald the Vampire has been sold to NBCUniversal and M6 Group in Europe with Bell Media in Canada buying both seasons, and there is even more to announce soon. We've also just set up our first fully owned adult animated series, which is [indiscernible], and I can't wait to tell you all more about it very soon. Kim's Convenience and Strays are now available on brand-new FAST channels, CBC comedy as Kim's continues to be distributed on Pluto, Samsung, Amazon Freevee and more. Our outlook, fiscal '24 through '26, we are targeting double-digit revenue growth in '24 and meaningful adjusted EBITDA growth to return pre-2023 levels. This will be evidenced in the second half of our fiscal '24 when the majority of our shows deliver. We are planning for double-digit compound annual revenue growth from fiscal '23 to '26, and forecasted revenue of approximately $220 million in fiscal 2026. Adjusted EBITDA margin growth with double-digit margins projected in fiscal '25 and '26 And we have been working with bank ACF and are planning to go to market in early calendar 2024 as our work with ACF Investment Bank out of Los Angeles continues. We have been open to unsolicited authors, every public company is, but have not yet run a formal process, as we look to maximize shareholder value, and this is planned when we feel we'll be in a very good position of strength in early calendar '24. Moving on to our industry overview in the current landscape. The headline is that OTT and streaming are continuing to boom and set to increase to $4.2 billion spend by 2027. All of these streamers need content and streamers will need to rebuild their libraries over original programming coming out of the SAG strike, which again was ended yesterday. For example, Netflix said it expects to spend about $17 billion on content in TV series and films next year. The belief is that once the next year as we're into it, there'll be some form of consolidation amongst the streamers. And once this happens, the need for high-quality content will continue to ramp, with Thunderbird being incredibly well positioned to deliver on this with our excellent reputation for quality and our well-known ability to deliver. Kids & Family, Unscripted. We're uniquely positioned in that both Factual and Kids & Family are the cornerstone of each streamer strategy to glue that key co-viewing audience, which is essentially families at home gathering to watch content together. This is the stickiest of all demographics as people are less likely to subscribe and unsubscribe when the kids and families are glued. Developing content for the generation alpha. This is an area that we specialize in, and generation alpha is forecasted to be the wealthiest, most educated and technologically literate in history. They also represent the first generation to be completely global from childhood to adulthood and are more socially connected. Looking at Thunderbird's differentiators. We attract outstanding partners. Our reputation in the marketplace is one of excellence, and this is one thing that really sets us apart. We're working with everyone on this flight and have been very careful to maintain great relationships with all of our buyers. We're in over 200 territories and 40 different languages. And we attract top talent. As a content creation company, we're absolutely nothing without the amazing talent and creative source of people that we work with. Talent has joined us at Thunderbird from Disney, DreamWorks, National Geographic and Pixar, just to name a few. They're coming to Thunderbird because they see something special happening and want to be part of this amazing journey that we're on. IP development. Again, this is a huge focus of ours, and we are creating a robust content development pipeline that has been a priority for us. Our projects span all different genres and types of programming, again, from animated preschool shows, adult teens, to unscripted docu series, and shows. We're nimble and responsive to the market and to move quickly to meet the needs of global buyers. Now again, with the strike ending yesterday, with Scripted built out, we're ready to go and are going to hit the ground running. Of note, sustainability is something that sets us apart at Thunderbird. We are building a purpose-led, people-first net positive company that will create value for all stakeholders, investors, shareholders and clients. We partner with Netflix to present storytelling and sustainability and ways to change the narrative through popular content. We're investing in becoming a B Corp Certification to grow our brand and increase employee engagement, attraction and retention. Sustainability initiatives meet the increasing trend of mandatory contractual and regulatory sustainability reporting requirements. Inclusion matters at Thunderbird. The most diverse companies are now more likely than ever to outperform less diverse peers on profitability. Companies in the top quartile for gender diversity on teams were 25% more likely to have above average profitability. This is how diversity wins at Thunderbird. We're so proud of shows that highlight characters from diverse backgrounds like Peabody winner, Molly of Denali, on which we worked with over 60 indigenous actors, writers and producers from Denali in Alaska, many of which are now working full time in the industry today. We were also awarded the prestigious reconciliation Award from the Canadian government last year and Thunderbird was voted BC's most diverse and inclusive company in 2022. Great Pacific has partnered in the launch of fully independent female-led indigenous production company Wapanatahk Media and has created shows like Queen of the Oil Patch and Deadman's Curse. Plus diversity and inclusivity is excellent for business. All buyers need to air content where people, regardless of race or gender, can find themselves reflected back in popular content in a positive light, and we are known to be able to handle such material further adding to all buyers wanting to work with us. Finally, I'm so proud to say that the Sts'ailes indigenous community hosted Thunderbird for an official naming company ceremony and acknowledgment ceremony in December of last year. Celebrated as an active truth and reconciliation, the Sts'ailes acknowledged Thunderbird's exemplary stewardship of the name that is steepen and indigenous heritage and conferred the use of the Thunderbird name upon the company. In summary, here's how you reach out. Please reach out any time. And we are increasing ownership in major global brands, and it's incredibly lucrative. The reason for an example that Hasbro bought eOne for USD 5 billion was because of Peppa Pig and PJ Masks. The value of these global brands when they hit is massive. Never has there been a better company, I believe, than Thunderbird to capitalize on this amazing timely content, and we are well on our way to becoming the next major global studio. Here's how you reach us. Please return any time. I look forward to the questions, and thank you for joining us today.

We do have quite a few questions in the queue already into our audience. [Operator Instructions] So we've got quite a few questions here, Jennifer, regarding the strike. So first, maybe some comments from you, and I'm going to combine all these questions into two sort of questions. First, some comments from you on the impact that it's had on your business to date? And then perhaps, I guess, further insight by you is now that it's settled the potential for the after strike resolution to drive accelerating content spend and how you expect this trend to materialize in your business?

Well, great question. So to address the first part, the impact to date, it was a factor in the slowdown to '23. Certainly, headwinds while Animation and Unscripted were directly affected by the strikes, what did happen was a general just slowdown in all commissioning of content, especially since the summer. Now that these have resolved and we are expecting everyone they need to hit the ground running. All of these streamers need to increase subscribers. There is exciting talk of some forms of consolidation streamers coming together what remains is that they will all need to put up new content to glue those subscribers and stand out amongst all the other streamers that people can subscribe to. So industry sentiment is that while you do see that in our '23 results, it resulted in the slowdown. We are ramping in '24 due to our long-running series. And now as of yesterday, with the results, we are expecting a pop as new content will need to happen to glue everyone. So it's a really good time to be doing this webinar and very pleased to have this behind us heading into the new year.

Perfect. Next question is, are you buying scripts or using writers?

Sorry, Glen, you cut there. Are we buying scripts or using writer?

Yes.

We don't buy scripts. Once we sell a show, set it up, we will hire writers and commission it that way. So unless it's service, occasionally in the service model, scripts will come to us written by Disney or Netflix or if it's that relationship, and then we will take the script and execute upon it. But for our own IP, we will hire writers at the time once it's sold to execute upon it.

Are you seeing any impact from AI? And how do you potentially see that impact in your business?

Yes, great question. Right now, copyright is key. So we have to be able to deliver everything with copyrights. So we could never generate anything fully from AI. We'd Be ignorant not to be exploring it. We are heavily R&D-ing AI in terms of efficiencies, how can we go faster, how can we decrease spend? How do we put more on the screen? How do we create new looks? It's pretty exciting what's transpiring in terms of how do you set yourself apart, what are the differentiators by effective use of AI, and how can we put more money into our shareholders' pockets and on screen? There's a lot of efficiencies.

Can you discuss what profit margins have been compressed significantly over the last 2 years? Is it mostly a mix issue between IP and service work? Is it more difficult to pass through high labor costs, other reasons and your outlook going forward for the drivers of the margin improvement?

Yes. We're definitely going to be seeing improved margins. Certainly, it's always a mix IP as lower gross margin definitely really improves the long-term value of your company and your multiple. Timing is always factor in that how tax credits are handled. There's a lot of different reasons that go into it. Labor, we're coming out at a time of talent wars that sort of settled as the industry settles and getting off site was we had to keep delivering in the boom of 2020, getting 1,000 people off-site, delivering now we've settled into what hybrid looks like. So maximizing efficiencies. We've made a lot of moves to streamline operationally with our corporate overhead, and that will become more and more evident in the quarters and years to come.

Super. And I guess as a follow-up question on the AI question. Are there risks and opportunities, specifically as it relates to margins, animation business? And what could those risks be?

I don't -- I think the risks -- there's definitely opportunity. And I think people that will be affected by AI or those that don't know how to use it. So we're making sure to stay ahead of the curve. We're presenting our AI lens to our board at the Q1 board meeting at the end of the month. And certainly, I guess the risk would be that we're all looking at. It's changing all the time with jobs and whatnot. Right now, we don't see it as a replacement for jobs. We see it as an opportunity to streamline. We still need to copyright everything that we deliver that's not achievable when you're just sort of gathering it from the web. So right now, we're viewing it as a tool as an opportunity to up our game and improve our financials and streamline the process. Everyone is talking about, especially now that the strikes are popping, getting content quicker to screen. That's what I keep hearing from all the buyers. And I think AI will play a big role in that.

Okay. Super. Can you speak a little bit more about your recent Consumer Products and Distribution division, and how much this could potentially contribute to the business?

Absolutely. I mean it's -- that's where when we own a brand and gets monetized it, we get swings. And according to one of our dear long-term shareholders, Frank Giustra, who started Lionsgate, it's just a matter of time. Keep taking those swings at the law of averages. And once you own a brands -- we get paid for doing a show. We monetize it just by making it and distributing it, but then the ability -- brands are what launches anything. You think skating shows, toothpaste, there's brands on everything. Once you own those brands, then we monetize them and they live in our library forever more. So there is a ton of potential upside. When we set up the show, we do low-, mid- and high-level ultimates. We're very conservative. We only ever bet on a low. Ultimately never sort of forecast assuming that we're going to have a giant hit. But should that happen, it would be transformational for our company.

I have, I guess, a number of questions on this theme. So I'm going to combine everything into one, and hopefully, you answered it, address it for everybody. Can you just sort of bullet point on the highlights from the strategic review and the findings? And then any kind of an update that you can share on a share buyback program.

Absolutely. Those are great questions. So the strategic review, which took until sort of this summer to complete. And unfortunately, that's when the strikes happened. So there's a bit of a lull in terms of going to market. It coincided almost to the day. The strategic review found Thunderbird to be a cut above other entertainment companies. Truly something special is happening here. And that we are faring much better than most other media companies and actually have a stronger lens going forward. So the review found us to be a robust, very healthy business. The review also noted when it concluded in the summer that we shouldn't rush to market right away because of the industry headwinds and because we were affected by multiple factors in '23, why would we rush to market when we're not in a position of strength? So the review concluded noting that Thunderbird is a gem of a company, not because of me, but because of the teams and the quality of work and our balance sheet and that we are very -- the years ahead look very strong. So that's why we want to move quickly to maximize shareholder value, but didn't go to market right away because it was a time of weakness for us and so many industry headwinds. Now that those are clearing and we're entering into a renewed period of strength, it is time to go to market and see what we can do to maximize shareholder value. For the second part of your question regarding shareholder buyback that is underway, the obligation is in the TSX, and we're just waiting for approval. Once that happens, we will make an announcement, but we've applied to the maximum benefit. The reason we're doing a share buyback as a growth company is we want to reward the shareholders that want to stay with us. We've also had shareholders, dear shareholders that have been with us a long time and have been wonderful but are looking for a nexus. And as a management team, we just believe in the company, we're I think we're undervalued right now. So we should be doing everything we can to demonstrate that to the market and honor all of our amazing stakeholders.

Super. Next question for you, Jennifer. You mentioned double-digit revenue growth next fiscal year. That could mean 10% or it could be 99%. Is there a way for you to sort of, I guess, help investors get a better sense of what that means as they consider an investment in Thunderbird?

Yes, absolutely. Well, it's definitely not in the low end of double digits. I will say that. We are re-crafting the message to try and provide more clear guidance around what that means for at our Q1, which will be announced at the end of the month.

Super. What do you see as key drivers of your ability to achieve this double-digit revenue CAGR over the next few years?

I think we've done a really good job as a company staying relevant, staying present, staying buyer of choice. We have Disney tell us we're their #1 partner, just as an example. And continuing to invest in our own IP has really allowed us to take those swings really making something exponential happen here and build the long-term value of the company. And again, the teams, we have the best people working here. I can honestly say that. I can't believe I'm so lucky to work with the amazing talent that has joined us from around the world. And in an industry that is creative, the people really do make a difference and continuing to honor all of our stakeholders. We've had shareholders that have been with us for a long time, making sure that -- they showed their belief in the company, we need to honor that back. Our buyers have been incredibly loyal and our talent. So I consider my job work for all stakeholders equally. And all three stakeholders have put us into a position to really accelerate going forward.

Okay. Thank you. You mentioned the 2024 results are going to be back half weighted. What gives you the confidence that you'll see a strong second half of the year at this point?

Just because of what's delivering. What's underway, what we see delivering, it's significant. And the moves we've made to streamline operationally have happened, but those won't be really recognized until the second half of the year.

Perfect. And then I guess on the same theme is a similar question. What gives you the confidence of the $226 million revenue target [ $426 million ] what, if any of this is booked?

I would say we're well over half booked even for '26. There's a lot of long-running series. And again, we are aiming to underdeliver -- we don't want to overpromise and underdeliver. We want to exceed our promises. But we're well on our way to being but because we are lucky to maintain so many long-running relationships like LEGO. We have great visibility right through '26. And again, we're being conservative.