Blackbird (LSE:BIRD) — Final results for the year ended 31 December 2020

0:02 Good morning, ladies and gentlemen, and welcome to the BLACKBIRD PLC Investor Presentation for the Final Results for the Year Ended 12/31/2020. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Simply type in your question and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via

0:33 your investor meet company dashboard, and we'll get a to you when they're ready for your review. I'd also like to remind you this presentation is being recorded. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Ian MacDonough, CEO Steve White, CFO and Stephen Streeter, R and D Director. Good morning. Good morning. Thank you very much, and welcome, everybody. Thank you for joining us this morning, and welcome to our presentation on the full year results for 2020. Right. I'm Ian MacDonald. I'm the CEO. I'm gonna start off, and and and Steve will talk about the finance slides a little bit later, but I'm I'm gonna do the majority of the of the presentation. So just a quick intro, first of all, for those that are new to the presentation, who we are and what we do. Blackbird is is AIM listed. As of last week, we're around 94,000,000 market cap.

1:22 We have dipped a little this week in terms of price, but as you may have seen in the news yesterday, myself and and the chairman, Andy Bentley, dipped into the market and topped up our own our own share holdings ourselves. So in terms of what our company does, we are, at the heart, an IP company. Including the patents that are pending, we have 14 patents around our IP, around our technology, and that is everything from the the codec at the very heart of the of of the platform that allows for that very impressive, user experience right the way to the very high end, tool sets that we have all available in a web browser. So very different to other people in the market because everything is in is is available in a web browser.

2:07 That means no plug ins, no downloads, no configurations, etcetera to use our platform. And we are indeed the only cloud native professional video editor in the world. Very careful to qualify some of those things that cloud native as opposed to cloud based and professional as opposed to a simple cloud clipper. We are a we are a professional tool. In terms of the the business model, we're a SaaS model, software as a service, and we sell our our access to our platform on an annual and a multiyear basis. We put out a paper this week actually on on how efficient and carbon friendly our our platform platform is, which I'll touch on later, but we think that is a a very strategically important part of our technology, and it will be one of a series of white papers that we'll be putting out this year around around our architecture and the key attributes of Blackbird.

2:57 Also key to us and as we go into a post COVID world are some of the whys that we have around our platform. They can be simplified into the words freedom and resilience. Freedom, because we use so little of the resources of the earth, we and only use we need we only can, we can be used on very low powered computers on very low bandwidth connections and available purely in a web browser, it means that the end user, the the the the content creator, has an awful lot of freedom with regards to where and how they create content. As you go into a post COVID world, we we are hearing from from our customers how people don't wanna be traipsing into the office five days a week to sit in a, you know, enclosed edit bay. It's not really the way things want to that you would want to work these days. The flip side of using very few of the the Earth's resources is, of course, that we'd also have a lot of resilience. So for the customers that are are are bringing Blackbird in to their workflows, you know, the fact that we don't need we use very low powered kits and very low powered Internet, available to web browser means that there's a lot of resilience built into the into the workflow.

4:05 We have a an excellent board. Other than Steve and Steven and myself, we have some some some very well known faces in the in the media sector. I'll just point out there that we that our chairman, Andy Bentley, who was previously CEO of Virgin and Electrolux, was was a buyer of shares this this week. Dawn Arie, who was previously CEO of Getty Images, CEO of Channel five, and very senior at Sky and ITV, and and at at Yahoo. And we have, the newest addition, which who is, John Honeycutt, who came in just last year, who's just recently been appointed as chair of IBC. David Mayden is also with the group. He's a previous chairman, and he's a he's a next partner of of Bain and Company.

4:53 So we're all we're all shareholders, all except John, actually. We're all shareholders. Steven has around 18% of the shareholding, and I and my with my family have around seven and a half percent of the shares. So just a very quick exact summary before we move on. In terms of revenue, we're up 45% year on year, and this is despite the challenging market. We're now not gonna lay on the market, challenges too thick. You all understand exactly what's been happening in the last twelve months or so. But for us, it's been really been a double edged sword. You know, we've had, we've had an amazing toolset to to to solve people problems, but selling into a a media market that's been pretty decimated. Advertising sales are right down. The the the the sports industry stopped for for large portions of last year, and when it did come back, it came back as a skeleton schedule with no bumps on seats and and and and much reduced sponsorship.

5:48 So when you when we're selling into that market, it of course, there are there are, there are challenges. But as you come through the back of that and into the, to the end of COVID, then the fact that we've got a solution that has raised its profile enormously over that period of time, and we're going into a a market now where there's a there's a hybrid way of working, a way that people want to to to to mix and match how they how they attend and and where they work from, then we're in a very strong position. Our cash burn has also been reduced 30% year on year, so that's a great story. Very, very most most of it's been because of increased revenues. It's dropped to the bottom line, but we're also very tight on on cash management. For those of you who have, have joined the presentation before, you'll know that we have a, a strategy around scaling our business through OEMs, and we've made some super progress there against our OEM strategy, including bringing a lot on Tata Communications and most recently, early this year, announcing a partnership with with EVS, who've already put us into two very prestigious international, games in the next few months.

6:54 So we're well positioned to to capitalize on on the changing environment. And we'd like to just take say a few slides, take you through on a on a bit of a story about where this world has gone and why we think it is so different to how it was pre COVID. And, simply, we think that the world has really gone remote. It's not just just about about video creation or about content creation. It's really across the whole way that we exist as as human beings, and it's everything from from the the the winners on the you know, in in retail, you know, versus the high streets or main streets, wherever you're calling it from, whether it's on premise kits that's now been moved to the cloud, whether it's the global streamers that are that are taking huge swathes of of revenue out of the the traditional broadcasters or, in fact, Zoom or Teams or investor meets who who are taking taking, you know, huge swathes of revenue out of commercial real estate and and and travel.

7:47 So, you know, we're we're on the right side of this where we've we've got the right solution for this this new world. And we put the the the last, the last item there, ARM versus traditional chip technology, because we see some comparisons between ARM's model and and and and BLACKBIRD's model. It's not just because it's a it's a UK based or UK originated solution, but ARM really is a low powered but very high quality chip technology, a chip licensor, and we see some some real parallels not yet in the market cap, I have to say, but certainly in in the way that they look at the industry. We're a low powered technology, and we have a high degree of of of precision and quality, And we could also be a licensor into the video technology. So that's just a little one to to tease you within there that that we we see some some parallels potentially, with ARM.

8:38 So why why are the winners winning? Well, there's there's there's probably dozens of reasons. We've just picked out a couple here that that, you know, it's really about winners win because they can help reduce costs. They can help increase the leverage of of of human capital. And as we've seen, that's that's becoming more and more important over over recent, recent months is they can be an awful lot more carbon efficient. But the real key reason why why why winners win in this world generally is because they're more convenient. People are looking for a much more convenient way of living post post COVID. If we pull this story now back to to to us a little bit more, one of our key partners last year has talked about the world of remote. Devar Ponder from Tata Communications said that the number of remotely produced events in the next next period of time, we're talking, you know, short short period of time, won't just double. It's going to pretty much treble.

9:29 And the fact is that that that Tata have brought Blackbird in to be a key part of the functionality within Tata Communications' abilities to to to help companies re to to remote produce. Tata, of course, is a is is a is a global telco. They they they happen to own around 30% of the global infrastructure, the physical infrastructure of the Internet, all that fiber backbone. And so there's a huge amount of market for for Tata and BLACKBIRD to approach and touch together and to bring on board. And the key reasons why why companies like Tata have brought us on board, of course, is that we are we're very fast. We talk about ourselves as being the world's fastest video editor, and and that's every second count every second counts when we talk about sports and news. We are incredibly flexible.

10:17 As I've mentioned, we we use very, very few of the world's resources, and that means that, you know, we we we're on low powered kits and low powered Internet. But if you're talking about this excuse me a second. Adding a user to to our Blackboard infrastructure, you only have to provide them a simple laptop. If you're talking about adding an infrastructure one user to our our alternative solutions, there is a huge amount of infrastructure that needs to be added. You're talking about a GPU computer, a fat bandwidth pipe, a Teradici often subscription, local storage, and cloud storage. So we're incredibly scalable for for big companies. We're we're a small company with a very big company solution, and we're very resilient and true proven. Now we've we've we've been around some time, and we've been in some of the most important workflows in media for some time, and we are very, very resilient.

11:16 So that ends the first part of our our presentation and just takes it just sets the scene on the market. We're now gonna go through a couple of slides, three slides actually, on some of the strategic importance of Blackbird. So this is new information for those that have joined before, and this the first slide here is around the pricing of Blackbird versus competition and the share of wallet. So on the left hand side of this chart, you've got a bar chart that shows, the price or the total cost of ownership of a nonlinear traditional nonlinear editor based in the cloud versus Blackbird. So you can see from that green arrow that we're around 25% more cost effective than our competition. Additionally, on the on the right hand side of this chart, we've broken out that red bar and that yellow bar to show what the share of wallet is between between a nonlinear editor and Blackbird, and that's because Blackbird's not selling exactly the same product. We're also we're also selling a basket of services around our our our licensing that includes bandwidth, it includes cloud storage, and it includes IT support, etcetera, around it. So for each transaction that, the black the Blackbird makes in the in the market, a similar size with 25% better better price for the end consumer, the end customer, we take about a 10 x, a 10 times amount of the value of the share of wallet.

12:41 The left hand side chart is something that we've started to show to our customers recently, and they welcome the fact that we can you know, this this this market this information is not generally known in the market, and that they're they're very appreciative of the fact that we can show them that saving. These numbers, by the way, weren't picked out of the air by BLACKBIRD. We had a an external consultant come in, someone that had worked at DELET for twenty years and is now working with AWS, and he did an analysis for us and and and built a calculator for us. So we show that to to our customers now, and they're very they're very appreciative that we can show them these numbers. We, of course, think that it's interesting for investors that for every deal that we do, that we take about a ten x of the of of the the share that the competition do. So I hope that's clear.

13:27 We're now gonna show this is this is the market opportunity. So this is the TAM and SAM. TAM is the total addressable market, and SAM is the serviceable addressable market. So there are three circles on this page. The brown circle represents $1,100,000,000, which is the total video editing software market forecast for 2025. That includes all consumer. It includes all high end, workflows that for the very high end of of of media production. It's not the entire market that we play in because as you you you might know, we don't we don't have a consumer proposition, and we don't have the very high end tools. But the pink air the pink circle is the area that we are serviceable for.

14:12 So that's that that's the market that suits our tool sets. So that's about a a $600,000,000,600,000,000 dollar market, and that is largely split between two players, Avid and Adobe. Now as we just explained on the previous slide, because we we make about a 10 x of them on every every transaction, our market is around that 6,000,000,000, that that yellow circle that exists. That includes the all the additional services that we add. And the key players in the in that yellow circle are are the majority of the the major cloud providers and some telcos like Tata. So the yellow circle is our is our serviceable addressable market, around 6,000,000,000. In addition to that, we also sell other services that aren't naturally thought of as as video editing. So we also sell review and approve, and we also sell legal and compliance workflows that you wouldn't naturally associate with a with a pure video editing software market. So we don't have the actual numbers for the plus, but you can imagine that it's 6,000,000,000 plus.

15:14 So I I hope that's that's clear. There's a few you know, it's the first time I've presented these these these these concepts this this time around, but I hope that's really useful additional information around our market size and market opportunity. Now another important strategic area that we focused on recently is around our our efficiency as regards carbon and carbon emissions. Now the reason that we've we've we've focused on this is because we've always known we've been very efficient. We use very few resources, as we said earlier, but we didn't know how how much different it was. So we we brought in an external consultant, Green Element, to do the analysis for us. The infographic below on this slide talks about the production of a two week sporting event and the amount of carbon that's emitted by by just the just the video editing portion of that event.

16:04 So we're a Wimbledon based company. You can imagine this is a Wimbledon event. Now the the red bar represents the on premise traditional systems. The 174 at the top of that bar is a 174 tonnes of carbon that's emitted in that two week event. That is equivalent to the to the loss of two tennis courts surface area of sea ice, So it's quite considerable and quite quite visual. The the we are less than 10% of that, and we're also 80% more more more more, carbon efficient than a cloud based system because a cloud based system into with traditional systems is basically putting all that high res into the cloud and powering it up there. It takes a lot of it takes a lot of energy. You don't have to travel, but you do have an awful lot of data centers, data transmission, and and and storage, etcetera, that needs to be powered.

16:57 So it's it's a it's a it's quite a stark difference, and I think it's really important to be able to show that difference, not only because it's good for our conscience and not only because it's good for our reputation, but it's also very good strategically because we're talking now about a world where some of the largest players in the world have decided or or are are being forced to by government to go carbon neutral. Carbon neutral can be achieved in two ways. It can be achieved by producing less carbon, or it can be achieved by buying offsets that that that balance out the carbon that's that's emitted. We would advise that the focus really be put on producing less carbon. It's good better for the atmosphere, and it's certainly better for for for their for their finances because buying carbon offsets is an expensive deal.

17:42 So as as all these big companies move towards a carbon neutral environment in the in the next few years, then we would we would we would advise strongly that they that that existing technologies that exist today are leveraged correctly. And if they are, then we can have a large positive and immediate impact. So an important important report that we are getting out widely. I was actually interviewed on Sky News about this last week, and in the next couple of days or next week or so, I think I'll be in in Forbes, and I've been interviewed on on numerous in industry press and and conferences, etcetera. So you will see more of this. We will be taking this this part of our our strategic advantage much further.

18:25 So our direction. Our direction is very is very constant. We haven't changed this at all. We came from an artisanal tool and working in small areas of London, which was, you know, very small small deals, I'd say, when I first joined the company. We moved it very much into an infrastructure play, bringing on board the likes the likes of, you know, the the the world's largest global news organization or the US State Department. What's been the focus of the last twelve to eighteen months has bring been bringing large OEM partners on board. OEM gives us the chance to scale, gives us the chance to be part of an an end to end workflow to work with larger sales teams than than ourselves and and to and to get to hit multiple fronts very, very quickly. I've mentioned Tata already today, so I'm not gonna go back onto onto that again just yet, but the the the other deal that we mentioned that we have announced just recently has been EVS.

19:18 EVS are a large company based in Belgium. They have, they're synonymous with with live sport production. They're a hardware broadcast manufacturer that sell into the into into sports, news, and and entertainment.

19:32 EVS are are are very proud to partner with BLACKBIRD and announced it, we announced it a few weeks ago, and they've already deployed us into two of the world's most prestigious sporting events taking place, one in the summer of this year and one in the winter of early next year. This is this is very exciting for us. It's it's it is it is game changing in many ways mostly because when we get to that second games, we have we will have built around our platform single sign on and and multifactor authentication as well as a number of APIs on user management, on content management, on data management that take us into a a a new a new tier of of of product. And it's it's a huge, exciting, and and and ambitious move forward and shows a lot of the trust that is put now in the in in the Blackbird platform because when we get to those second games, we will be used as a central hub for for the world's, international, rights holders, which is pretty much every country in the world.

20:36 Will be able to to, should they wish to, plug into Blackbird and and edit edit their their their own sporting clips from from that from that central hub and publish from there to their own individual country national networks. So really exciting step forward, and watch this space on that. Right. Now public cloud. I've talked about this in several meetings so far, and this is now really a a front and center of my time. Public cloud will allow us to reach a much more mass market. We're talking with with the largest public cloud company that there is who are very happy to support us in terms of credits and in terms of solution architects to make sure that the the the cloud product that we built for for public cloud is gonna be absolutely approved and and supported from their marketing and sales teams as we move into into that world.

21:34 This is something that I hope to be able to show you when we come around to the the next presentation later in the year. It's very much front and center of my my my approach right now, and I think this is this is something that we're actually also doing with one of our key OEMs because, well, we have the the the the cloud expertise in in many cases. Our OEMs have the end customer expertise. In in many cases, they've got hundreds of customers around the world. So by working together with them and and and and passing ideas between us, we can make sure that that is absolutely world class product that's being built on the public cloud. And as I said earlier as well, it's really important for us to be to be carbon efficient. So when we're working with our own cloud, the BLACKBIRD cloud, we can we we're fully in control of that. As we now design our public cloud product, we will also make sure that it's as as it's as efficient as possible in terms of cost and in terms of of of carbon efficiency.

22:30 Okay. So in terms of the infrastructure customers that we brought on board last year, we don't publish every every every individual deal, but we're going we're talking about some of the major ones here.

22:40 A and E Networks, who is a major customer, from from 2019, they came on board, and and doubled their order with us in in early last year. Ride Games, who who came on in the summer last year, They they come on for short term because we they needed to to to get their their Los Angeles based, editors to have access to their broadcast streams. We helped them out very quickly, and they managed to, to to turn around content very, very quickly for that. That was a short term deal. It's now been extended into a much longer term deal. And the NHL, again, another short short term deal from last year. We managed to get the NHL back to return to play when the Stanley Cup playoffs happened in in late summer last year. We helped them when they were all dotted around the country.

23:30 We we've now been extended to a multiyear deal with the NHL and been reinstalled back into their New York hub so that we're a we're a long term a long term player there within the NHL's infrastructure. So they've seen the value not just in terms of a COVID emergency, but now we're we're into a long term deal with them out of New York. I should mention that we're we used it within the a and e setup and right the way across across their organization now, the way from all the content creation, departments, right the way through to marketing, social media, and all the way through to legal and and compliance. A and E are so happy with us that they've actually, submitted our work with them for a national Emmy. So that that that submission has now been put to towards the academy, to the academy, the for for television and film, and the the award show is later this

24:22 year. So let's hope we get some some great success there. They also created a video for us which really talked about how much they were passionate about Blackbird and the solution and how delighted the word that they had our solution in place when COVID hit last year.

24:39 So the OEM highlights. Well, we've TownNews is probably quite familiar to a number of you. TownNews, we are a 100% penetrated within TownNews deployments and in 50 plus, local news stations across across The States. But the key ones I wanna focus on today are these ones at Tata and EBS. Tata, we we we we announced a deal together with our partnership. We launched our partnership in in August last year. That is a a large Indian broadcaster. It's a household name. You will all be familiar with with the broadcaster that we haven't we have we we have signed up with. In addition, we also have a second deal with with Tata. That is a global sporting franchise, And we haven't announced that one, but it's but it's something that that that is already is already in the books, we're already we're already operationalized.

25:31 We're hopefully about to announce a third deal with Tata shortly. EVS, I've talked about a lot, but EVS is is a is a is a super partner. It's it's early stages, but it's a super partner for us. Really prestigious within within our industry. And the fact that EBS is, you know, has has ambitions, very public ambitions to move towards the cloud, and Blackbird obviously has is provides us a fantastic gateway to the cloud. This is a really, really an excellent partnership made made in the cloud, let's say. And we expect to see a lot more inform a lot more action and and and deal flow from the EVS side of things shortly. I know it's it's certainly in in the ambition of the EVS team to have us deployed very widely within their within their customer base.

26:20 Okay. So just a last slide for me before I pass to Steven. We are really aligned with our with our platform development and road map and our strategic direction. Everything we have on our road map is is what is is is is comfort and additional reasons to buy for our OEMs and and customers. So first of all, security. You're you're all investors in this business, so you will all be aware of how important security is. We've since since the last time we came out to the road, we've we've moved from being SOC two type one accredited to being SOC two type two accredited. And what that means is all the all the processes that we put in place for type one have now been audited and and approved. We're also building a single sign on structure and multifactor authentication structure for not just for for for EVS and and and the big games that we're doing next year, but for all our all our OEMs and indeed for for for big studios that are that are requesting multifactor authentication.

27:21 The APIs, this is this this is this is really important for OEMs. They want to be able to bring in as much data as possible from either manual feeds like Okta or indeed AI engines or indeed user or or or content management APIs just to make that that that transition into into bringing Blackbird into the stack as frictionless as possible.

27:42 And we've talked about public cloud. This is this is something that you're you're you're gonna see in the in the very near future as we work very closely with those teams that we've we've mentioned earlier from these very good public cloud companies to to make sure that our our product is absolutely world class and as efficient as it possibly can be. Okay. I'm gonna pass over to to Steve who's gonna take you through the the finance slides. Good morning, ladies and gentlemen. First of all, I'd like to apologize for not having my camera on, but I'm having bandwidth issues to my end, which is a little bit of the story of the times at the moment. As Ian mentioned upfront, you know, our revenue increased by 45% year on year to 1,570,000. North America is a really key market for us, because they are the trendsetters in terms of migration to the cloud, and we saw a doubling of revenues there, a very positive sign, to just under £1,000,000.

28:40 Again, as Ian mentioned a little bit earlier as well, it has been a very challenging environment. You know, we saw a hiatus in production. Live sport was on hold, and post production stopped.

28:51 We saw companies, you know, sweating their assets toward the end of last year, towards, you know, the end of q three and q four in particular. And, again, just to give you a little bit more color around this, you know, I was talking to a colleague who works for one of the major studios just last week, and he was saying that, you know, up to a third of their staff were being laid off. So businesses were having to react to the the pressures they were getting in terms of a reduction in top line, which made it challenging to close deals. The good news is at the start of this year, we've seen a flurry of new deals and with confidence returning to the marketplace as the vaccination problem program rolled out. If we now move over to the right hand chart, you know, what you have there is an indication of our future order book at the end of twenty twenty.

29:44 So in totality, our order book was up 3% to £1,930,000. But, actually, this hides a little bit of a story. If you go to the graph and look at year one,

29:58 the yellow bar chart against the orange bar chart, you'll see the yellow bar chart is much higher. And that's showing that our revenue secured for the next fiscal year as at the end of twenty twenty was actually 33% higher than it was at the end of two thousand and nineteen. If you look at years two to years four, you can see the bars are pretty flat. The yellow and orange bars are pretty similar. And, again, this was definitely something we saw last year with the impact of COVID. The companies were trying to mitigate their risks, so they didn't want to enter into long term deals. The great news, again, is that, you know, we've seen that trend change. As Ian mentioned earlier, we did short term deals with the likes of Riot Games and NHL, and now they signed up to much longer term contracts.

30:47 Yeah. I'm really you know, we we we pride ourselves in terms of our customer care and looking after our customers. We speak to each of them on a quarterly basis and, you know, getting feedback on the platform and on our staff, and we get really positive, you know, feedback there. And our customer retention is very high. You know, of the OEM and infrastructure customers that we had, you know, generating revenue in 2019, we had 94% of those generating revenue again in 2020. Again, just a reminder, we have very high gross margins so that when we do sign up new deals, the vast majority of that revenue falls to the bottom line.

31:32 So moving on to cash burn, we made significantly, you know, good progress there. It was down 32% or three quarters of 1,000,000 to £1,580,000. This was driven by the increase in revenue and a tight control of our cost base. Together with the shift that we moved to a SaaS based model in 2019 and charging annual license fees upfront.

31:58 We do invest in the business, you know, where where is required. And, again, we took on some incremental staff in terms of r and d last year, and we're gonna take on some people this year too as it's important to us to, you know, keep our competitive advantage and, you know, make sure that we accelerate those important items that Ian flagged earlier. The company is in a very strong financial position. We don't have any debt, and we had over 6,500,000 of cash in short term deposits at the end of twenty twenty. I'll now pass you back to Ian. Thanks, Steve. So, before finish the presentation, a few slides time, I just wanted to give, everyone some proof points, from from the market,

32:46 from our customer base about how they they feel about Blackbird. I won't read every every quote verbatim, but some of the language that's been put onto these slides is really precise, and it really explains in detail the kind of attributes that that they find in Blackbird and what separates us from from the rest of the the tools that are out there. I mean, the key thing here is the fact that they they see us as a leader, and and and we've had it, you know, quoted just in the last last few days is that we're streets ahead of of any other tool that's trying to do something similar in the market. Streets ahead. So much so, we won the emerging tech company of the year awarded by SportsPro in December last year.

33:28 SportsPro, one of the most respected industry bodies within the sports production field, and really fantastic visibility for us as a company. So I'd like to conclude. We are a well capitalized business. We have plenty of cash behind us. We are delivering on our OEM strategy, and that's got its own momentum now with some of the biggest sporting events and potentially the biggest sporting portfolios of businesses in the in the world, and it's got its own momentum. We it allows me now to focus much more on getting the the public cloud, solution and and product designed, built, and and working fully, and we see that as a 2021 product. The carbon efficiency is but one of the the the areas that we are strategically important around.

34:19 Another is cost, which we talked about here today, but also user experience.

34:24 And carbon efficiency is gonna be the first of a series of white papers that we'll get out this year that will will highlight key attributes, key key points of differentiation in in our product that are related to the architecture. So so you can watch out for those those white papers because what's really important to us is that we are indeed trusted at that strategic level. You know, there's plenty of questions, I'm sure, about about about our revenues versus our our market cap. And then the key thing there is that we're a strategic piece of software with with with very high barriers to entry that could be plugged into much larger infrastructures than than than we are currently that that would quickly leverage up our our

35:03 our revenue. Okay. Thank you very much, dear. That's the end of the presentation. I know that we've got quite a number of questions, but Quite a few. Ian and Steve, thank you very much indeed for your presentation. And ladies and gentlemen, do please continue to submit your questions using the Q and A tab situated on the right hand corner of the screen. But just while the team take a few moments to review those and investor questions submitted already, I'd like to remind you the recording of the presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor dashboard on the investor meet company platform. I'd also like to remind you that your feedback is important to the company, and immediately after the presentation has ended, you'll be redirected for the opportunity to provide feedback in order that the company can better understand your views and expectations.

35:50 In Steve, Steven, we have received a number of presubmitted questions ahead of today's event, and I know quite a few of these, I think, were addressed in the actual presentation. But perhaps if I could just start the q and a session off with with a couple of these to start with, that'd be great. Yeah. The first one we've got here is because of lockdown this year, would it be possible for shareholders to meet in person with the company, say, at the half year results? It's not been possible to meet up with the last two AGMs. We very much hope so. Yes. I I'm not sure that that we normally have our AGM in the middle of the year, so I don't I'm not sure that that's gonna be time enough to get everything, everyone vaccinated and and and allowed to meet, but, you know, hopefully, very soon, we would absolutely welcome meeting everybody in person. Thank you. And the next one reads as follows. I'm interested in the relationship between the various entities like Tata, Zixie, EVS, AWS, etcetera.

36:42 Are these all competing entities, or do, work together to form a larger ecosystem? That's a really interesting question, and it's it's it's largely the second part. It's it's like they're largely a a part of it for the ecosystem, but you can imagine that all kinds of technology has various parts overlap. So so with the ones you just mentioned have some overlap in some areas, but they're they're generally not true competitors. However, I wouldn't rule out unless unless, you know, we did sign something exclusive, which we haven't done yet, rule out there being competitive tension within within within our partners. You know, we're very much a BLACKBIRD inside model. And like any piece of technology that's componentized

37:20 within a larger stack, then then some of those stacks will compete. So, yeah, no no no problems with that and and being part of that competition. That's great. Thank you. Next one we've got here is what is your prediction for how long your billing relationship will grow with the sorry. How your billing relationship will grow with the major East Coast financial news organization in 2021? Yes. The anonymous confidential financial news organization out of New York. Well, it's going very well. They they're they're very happy buyers of the technology, and we've we've we've we've worked hard to to expand the technology across their their base. I have to say, though, I don't think that any you know, they're they're a very they're a very closed bunch and and and for, you know, many reasons, they were in a very competitive environment themselves. So I think it's unlikely that we'll be announcing anything around around, you know, big expansions there, but, safe to say that it's, it's going very well.

38:16 Right. Thank you. And next one we have here, your website states the following, BLACKBIRD PLC partners with high profile global media and technology organizations to extend the capability I can't even speak to that. Capabilities cloud video production platform. Can you please elaborate more precisely what this means? Please provide some specific examples of current collaborations. Yes. What it means is that we're a component in in a in a in a media workflow. The key the key well, one of the key reasons for going into an OEM strategy is that we want to make it easier for our customers to buy to buy us with other with other types of types of of solutions. So an example would be we haven't really talked about it today, but Edit Share is a is a is a customer of our or a partner of ours, I should say. And Edit Share are really focused on storage.

39:03 When we look at EVS, they're focused on live production. If we look at Tata, they're, you know, they're focused on infrastructure. So for us, it's it's a you know, we we we can't do everything, you know, we certainly don't do everything. So we're going to partner with types of companies that can provide, an easier reason to buy, for the end customer because we're attached to that. That's great. Thank you, Ian. And the last presubmitted question we have here is, what is your competitive edge? Who are your competitors, and why do you think you'll beat them? Isn't video editing going to become a commodity product? If if you unmute Steven Streeter, think he'll be best placed to Yep. I'm unmuted. Can you hear me? Yes. So with any technology like this, it's constantly moving. And the things that twenty years ago or ten years ago were very unusual become much more standardized.

39:53 And what we've done to answer that and to preserve the value, in fact, increase the value of our system is to constantly innovate and constantly move forward. So for example, the charts that Ian showed you earlier showed that for share of wallet, we get a lot more than a traditional editor. In fact, we make 10 times as much revenue for what was previously have been seen as an editing solution because the editor is only 10% of the value that we provide with all the other things in it. And of course, it's very easy to just, you know, to describe it as an editor. But it's actually a whole platform and it has a whole load of infrastructure behind it. So I think it's constantly moving forward, constantly adding value. And particularly as we're in a disruptive stage of the world, as people are moving much more to the cloud and to the web.

40:43 Apparently, the Internet market is 10 12% of UK GDP. It's a fast growing area, and we are not just sitting with our original editor. We're moving much further outside that area. That's fantastic, Stephen. Thank you very much for that. That concludes the pre submitted questions. We've also had a number of questions submitted by investors today. Due to the number of attendees, we have company the may not be in the business to get around to every single question, but they can review the post the event. But perhaps I could hand back to you, Ian, just to to click on that q and a tab and just just scan through the questions that have been submitted. Sure. Just if you could read them out and and give your response where appropriate, that'd be fantastic. Yeah. So this this is a long question, so forgive if I stumble on this one. In trying to understand the potential for a step change in growth to reach profitability, is it possible to have a report on progress of sales within existing OEM clients to give some color on what can be expected in the coming year?

41:40 In order to reach profitability, are any of the OEM deals are any new OEM deals required? Will existing OEM deals be sufficient? What else is required to reach profitability? Well, we're not issuing forecasts on profitability, so that answers a little bit of your your your your next question as well. But we do think that within within our existing financial base that we will reach profitability, that we'll reach reach reach cash breakeven. Will it will it need more OEM customers? Yeah. I think it will. You know, I think I think that we we will we would like to have have well, we've got quite a few in the wings as well. We would like to bring bring on board fairly soon to give that real boost. A little bit of internal competition doesn't doesn't ever go go amiss. In terms of what we've updated on, what we've talked about, the the the the three deals, two in and and one in the offing with with Tata.

42:31 We've talked about the deals with EVS, and you know the the the the TANU situations. We've got, of course, you know, growth and and other companies within, you know, DeltaTray and IMG, etcetera, also OEMs. But I'd expect to see more on the OEM front shortly. We we we're we're we're very confident that there's there's gonna be more things coming through that that area of the business pretty soon. I hope that answers your questions sufficiently. Next question. Just a quick Steve White, can you see these questions, by the way? I just wanted to make sure. I can, Ian. Yeah. Okay. Number five. Yeah. It's on CapEx and r and d spend. You see any significant increases in the coming year, And how do you see the trends in these key figures progressing? You know, as I mentioned earlier, we will invest where we see value, and r and d is one of those key areas to maintain our competitive advantage.

43:22 You know, I would have thought that, you know, you'll see probably, you know, a 20%, you know, increase in r and d spend, you know, over the over the next sort of a couple of years or so. But, again, in terms of value, that's that's probably around, you know, sort of a 100 a 100 to a 150,000 mark. Great. There there's a question on on Tata again, but I think we clarified that for Graham. So, Ian, it's probably good if I give a little bit more color on Tata because I know I've seen a few questions in this area. So what I'd like to say is that we gave sort of previous guidance in that we we, you know, we were we believed that the deals that would land would fall within the range of $50,000 to a $100,000 per annum each.

44:08 And, you know, our first two deals closed, when you combine them, yes, they fall within that range. Yeah. Good. Question from Tim, do you do you if you do raise funds by issuing equity in the near or medium term, can you ensure that any fundraise includes an open offer to existing shareholders? Thank you, Tim. It's not in the plan, I have to say. As we've we've said, we think we can get to where we we would do on on our our current base, but noted. Mark, company has floated the term public cloud a few times. BLACKBIRD is already available on the public Internet, so it feels a bit contradictory and would appreciate some clarification. What is the limitation at the moment that makes the technical development necessary? What new commercial opportunities does it create? Steve, Steven, do you wanna talk about the technical development first of all, and then I can talk about the opportunities it creates?

44:58 Yes. So we have our own cloud that we we created ourselves. It's very efficient, but it is a fixed size. I mean, you know, we can add to it a bit. But if someone came along and wanted 10 or a 100 times or a thousand times the volume, that would be very hard for us to implement because our job is to develop software and not to have racks of servers. So what the public cloud allows is for us to have essentially unlimited scale. So while we're on the public Internet, we're using our own cloud at the moment. And the plan is to make our offer available using the public cloud infrastructure. And the main the main providers that we saw on inside are Microsoft Azure, Amazon Web Services, and Google Cloud. And maybe Amazon Web Services is our current preferred avenue for that. And we have clients saying, if we had it on Amazon Web Services, they could have, for example, local service in their own country.

45:54 Because some countries, you know, like governments and people need to have the contents stored locally. So that is a a natural way to to increase our scale without us having to do lots of sort of simple work of plugging in servers, but to do the high value work. Yeah. You know, and and I I in in terms of commercial opportunities, Steven's absolutely right. It provides it provides that kind of opportunity, but also, you know, having having a behemoth the size of AWS or indeed the other public clouds provides a much larger base to talk to, provides the leverage of their sales and marketing teams, provides comfort sometimes in in in in the the five nines or six nines that the companies ask for in terms of reliability, etcetera.

46:41 So I think there's there's just a know, it helps with opening up with vast vast parts of the market. It becomes a real mass type type of market rather than than than medium term or large scale market. Okay. There's another question on equity raising, which we're not planning, so I'll move move with that one. Will the three or four ongoing Tata deals be completed in in h one twenty twenty one? Certainly, yes. That's what we we we would hope. Through Tata, you have access to 400 potential customers. You have signed two and a third hopefully on the way. What is your target out of the 400, and and what is the revenue targeted this year and next? Well, think that's a question around targeting and and and and forecasts, which we we don't do. But what I did say when we came out to the market last time was when you see what we did with TownNews and how we managed to get into, you know, that that number of customers, I don't think that's unreasonable to look at and look at look at Tata or look at the other the other OEMs we're bringing on board. You know, they've got we've got 50 plus deals with with TownNews. I don't think that's unreasonable.

47:49 Okay. You indicated NHL and Wright Games have now signed much longer contracts, and yet it does not seem to show in the contracted revenue. Were they signed up pre or post year end? Steven Steve? Yeah. I'll take this one. Yeah. So we signed one of those deals prior to the end of the year and one post year end. You know, I gave our guidance as well in the press release in terms of, you know, our order book as of today's date is 1Point95000000. So both of them were included within that figure. Again, we gave some indication even though it was being a tough, you know, tough few months or so with you know, as I mentioned earlier, we're seeing confidence return, and our revenue secured for this year is with 1,200,000, and that's up 33% compared to a comparative figure last year.

48:39 Good. There's a question there from from Pat about Tata as well. Would you like to pick that one, Steve? Yeah. I'll read it out. Is revenue from Tata customers included within the contracted revenue figures in Monday's r and s? Yes. That that is the case. Yep. Good. And, again, I I I spoke earlier and with the deals above the 50 to 150 k range suggested. As I mentioned earlier, yeah, if you take the two combined, they fell within $50,000 to a $100,000 per deal per annum. Yeah. Which of the OEM partners delivered revenue to date? Well, the ones we've mentioned just now, which was Delta Trade, IMG, TownNews, Tata Communications, and EDS. Tim g.

49:27 What is the average duration of contract signed over the last twelve months? Is there a trend for contracts to increase in the in duration as you become more established? I I think Steve pretty much touched on this in the finance slides is that there was there was a shortening of deal cycle, but there was also a shortening of contracts as people were less were were were mitigating risk and signing up for short term deals. But as we've said in the the riots and in in the in the case of NHL And, actually, in case of the of A and E, is not yet in our numbers, the the that extension contract that they are extending now. So the the the confidence has has in vast you know, vastly improved and and and returned to the market so that they are now signing up long term deals again. And, yes, the the more we become established, the more confident the customers are with us to to to extend their relationship with us.

50:19 Okay. There's a question here on hang on. There was an indication from a customer at the start of the year that they're keen to I I can't answer that, I'm afraid, because that is a confidential, as I explained earlier during the presentation, pass, I'm afraid. Are Zytek and Veritone partnerships still active, and what if so, what hopes do you have for each? Zytek is not active. I have to say that wasn't in the end a suitable partner for we weren't suitable partners. And Veritone, we are we are in discussion with Veritone continually. They're they're having, you know, really fantastic COVID with with with AI coming to the fore. So, you know, that's that's an interesting discussions, but nothing nothing's come from that. How many of the 400 Tata customers do you estimate will learn? I think we've covered that one.

51:11 What is the status of Ascent? The slimmed down editor Steven Streeter mentioned during the previous presentation on who is the target market. So what we've done with Ascent is that we've we've reconfigured our front our front page, our UX, to make it simpler to to launch our product now for a for a a new editor, so a a an editor that is mainly just is focused on social media and one that is more much more experienced. So we've adapted the interfaces that we currently have to work with with with Ascent. That doesn't mean that we've stopped working on on on new product variants or variations, but that's the ones that we're gonna talk about. That that one we can talk about today is that we we have actually built into our platform. We'd actually call it Ascent.

51:56 It's it's called the, you know, the the kind of simple interface, but it's it is something that we have adapted adapted our current product for that market. Sorry if this isn't the slide, but do you have specific KPIs with regards to reducing carbon emissions? Great question. Look out for for for for for as we as we advance our our research into carbon emissions, this may well be something that we publish with regards to targets. What we really wanna do with regards to to to the emissions is to be able to explain and demonstrate along with a total cost of ownership reduction, also what a what a reduction in carbon emissions will will will mean to a company in terms of tons. So we we're we're building that calculator now with green elements to make sure that all of our customers will understand what kind of saving of of of carbon emissions choosing BLACKBIRD over choosing other types of solution would mean.

52:52 So, yes, thank you very much for that question. That's something that we're we're we're really focused on. Sean, is public cloud store is public cloud storage only, or do you envisage developing a complementary display platform too like Vimeo or YouTube? I have said developing Vimeo or YouTube is not currently in our strategic plan. You know, whether we would one day work with Vimeo and YouTube, that may well happen, but we're we're looking not at public cloud storage but at but about housing our our proxy cloud, the cloud that that that that works with the proxy and has the editor inside it inside the public cloud. That's that's where we're going with our with our cloud product. When would you be expected to be cash positive? It's a question about forecast, which we've we've we've said we're not answering, but we we are saying that we have enough cash in our resources to get to cash positive.

53:47 Steven, would you like to field a question from Dan on BLACKBIRD 10? When is BLACKBIRD 10 due to be completed? Yeah. I can ask BLACKBIRD 10 and also give you a little bit more background. So when BLACKBIRD nine came out, which is what everyone's using, it was about three or four times the resolution of BLACKBIRD, previous BLACKBIRD, and double the frame rate. So we're having about eight times the pixel rate. And that was a big jump. So we haven't had a lot of demand from our existing clients for the next upgrade. But because we're a technology company, we're constantly pushing. And so with BLACKBIRD 10, we're expecting a similar increase. Originally, it was going to be four times the resolution, which would take us to seven twenty p, which hard you need a high risk screen to edit at 07:20 p. We'll probably push minimum ten eighty p and probably quite a lot further. So maybe a factor of nine minimum increase.

54:35 So we'll have the first demos later this year. We're not sure what shows we'll be doing, but that might be a good chance to see it. Ian might talk about that later. And probably I mean, it depends on which customers who actually need that sort of resolution for editing or for other uses that we have. But I'd expect the first customers to be trying it out later this year. Yeah. But great question. Thank you very much, Dan, for asking that. A question from Richard. As a leader in video cloud editing, do you anticipate to launch a new product in the market which capitalizes on your strength, e. G, a social media app similar to Eva or TikTok app or something similar to to YouTube? I I think the key thing here is that we demonstrated or showed on a on a on a slide around the the market opportunity that we have a huge market opportunity within our current focus.

55:29 We if we if we were to move into anything around around consumer, it would definitely be with somebody that that understands that market and has the has the financial clout far more than we do within our within our current current base. So never rule it out because I think that that, you know, consumer apps around around around video editing and video will always will rise in importance, and we have something very, very clever right at the heart of of the Blackbird platform. But it's not something that would currently be part of our strategy, but I say we're never never rule that out to partner with somebody that that would that would be able to do that. Question from Andrew. You have pivoted so well from the former target market to the infrastructure model to evolve OEM and cloud.

56:17 Has the industry kept up with your capabilities, or you do do you still need industry accelerated awareness? Well, we tell our story pretty well, I think. I don't think maybe not me, but the the sales team tell our story pretty well. And our marketing team, I think, are really second to none. I think we're we we have got our name and our profile really high, and I think people are much more, you know, much more coherent around the the BLACKBIRD proposition and and our USPs now. However, this year, as I as I mentioned, I'm gonna put out four papers. We're gonna put out four papers around our carbon efficiency, around our our our total cost of ownership, and around our speed and and and user experience that all plays back to that that that that unique architecture that we have to make sure that we you know, for all the engineers and for the for for the for everyone who likes getting a little bit more detail can really understand the the the the clear blue water between us and and any of the competition that exist. So thank you, Andrew, for that question.

57:17 I've held BLACKBIRD shares previously for BIRD PLC since first listing back in 2000. The shares were, I think, worth more than more twenty years ago than they are today. Do you have any comments on that? They weren't, for a start. They were actually they were they were quoted at 20 p, but we did a share split five to one. So that would be equivalent to four p in today's money. So they're up getting up well just over six times. But apart from that, I mean, obviously, we're not happy with six times, as you know, Ian. Perhaps you'd like to carry on from there. Six times is not enough. Well, you know, it's not I when when I joined the company, there were four p. So I think I think we've we've done okay in the in the last three years, and I hope the people aboard when I came on board are happy indeed.

58:05 I've got much bigger ambitions for from from where we are today, and I hope that was demonstrated by the fact I bought shares yesterday, when they were even higher than they are today. So, that that that's the that's the comment I'll leave you with. I'm not gonna say that we're gonna get x or y number, but I am far more ambitious than we are currently, and I think we can we can really do it. We are in a we're, you know, we're neat uniquely placed leadership position in so many strategic ways and the market has really shifted towards us, you know. Timing is everything that they say and maybe Steven's timing was a little early, but our I I think our timing is is is fantastic now and, you know, as as much as we you know, it's been an awful time with with COVID, etcetera.

58:50 It hasn't been a bad a bad result for for BLACKBIRD as a as a technology. As a technology, the market has really shifted again towards us, so, you know, very ambitious. Good. What is your standard the term of your standard contract going forward? Well, we don't really do anything less than than twelve months, and and we we really aim for for multiyear deals, Paul. Colin, what has happened to the 40 leads a month that you were talking about last year? Were they landed and not announced, or have they mainly gone away? The thing about last year was, I think we touched on it, it was a tough market. People were looking at a a lot of different solutions. Most of them weren't weren't followed up on and and assets were generally sweated that we've we we saw last year. So people had hardware that had for three years. They generally said, well, we can keep it another twelve months.

59:38 What we're seeing now, though, Colin, is a is a is a real uptick both in the numbers of leads that we're talking to, but also in the conversions of them. So as as the confidence has returned, you know, then then then we're we're very well placed. Peter, can you find a broker to provide some estimates of the market? Does that mean the total addressable market? I think we've covered that one, but it may mean something else. So I'm sorry. I'll answer your question maybe if you can can supplement it with something else to to maybe explain it. Ian, I think Ian, I can take that one. I I think they're trying to say, you know you know, as we've said stated, not currently issuing forecast. That is the company's decision. That's not the broker's decision. You know, we really need to get a regular cadence from, you know, a few OEM partners on board. You know, we've we've just started our relationship with Tata and EBS.

1:00:33 So once we get into a regular cadence and we can see the volume of the deals and, you know, how quickly they come through, we'd be in a position to actually issue forecasts. Yeah. The BBC did an in-depth evaluation of Blackbird a couple of years ago and didn't seem to ready to move ahead. Has COVID changed that view? I don't wanna kinda talk about individual, you know, potential in-depth. What I would say is that as we move into that that EVS relationship that that's that's happening around those two international sporting tournaments and and especially the second one that's happening in the winter next year, that will open up BLACKBIRD to to pretty much every international rights holder, which is in pretty much every country around the world that has those has those rights.

1:01:19 And BBC Sport will certainly be amongst those that that that are offered that. But, you know, BBC has has a a policy where they will sweat assets for, you know, quite a number of years before moving ahead on a on a another purchase, generally, it's seven years. Right. Andrew, thank you for the earlier question. Gravio seems to have a client list which covers The UK domestic champions like ITV in Channel four and Premier League and Wimbledon. Are you aiming for the same customers, and is this a product with the same functionality? So, yeah, good question. So so we have a a a two areas in which we compete with with a with a group of competitors. One is on the social media side of things and and and social media clipping, and that's where the where Gravio generally sit. They also have some live switching as well as part of their their platform. And the other side of it is is where we have the much more sophisticated tools that are the heavy duty ones like Adobe and Avid that make the feature films and and Game of Thrones. And Blackbird is a is a is a technology that sits across those two types of organizations.

1:02:22 So often what we find is that we will replace either or, the the likes of Gravio or indeed the likes of of Adobe. And often, you'll see our customers take one tool, I. E. Blackbird rather than take having to buy two tools because they're two two two separate types. So some of the times that we are competing with Grabio and some of the times we're competing with with Adobe, but we don't have the same functionality, although there will there will be some overlap. And I think the direction of Grabi in particular is going much more towards the live switching rather than the high end editing. So we see we see more value for us in terms of the the higher end of that editing sort of functionality. Right. Okay. So I think that's pretty much the end of the question. What type of news might we expect to hear next?

1:03:10 Exciting news, Dan. That's the the the key thing here. Well, I hope that I have some very exciting news for you soon. But, you know, I certainly will be around around OEM. It will certainly be around our core markets. But, also, I think you might have seen in the last few weeks that we've had news around new verticals like like elearning. We've had two two deals, one we've announced, one we haven't announced in in the elearning space. So it's a it's a new exciting bit of a new vertical for us. I think the key thing there about the elearning deals as well is that we've pushed out processes that were kind of the high end, so the kind of Adobe and Avid type workflows because those two companies that we've sold into have got distributed work workflows, got teams all over the world making content, and we can, know we talk about we're having the fastest video ads in the world, and we can shave seconds off sporting workflows.

1:04:02 However, when you talk about this kind of elearning workflow versus an Adobe or an Avid system, we can shave hours off a workflow and sometimes days off a workflow. If you add it all up, you can even call out weeks at some point. So the fact that we've got those that kind of broader church of of videographers and video companies now talking to us is is is a a compliment to Steven and his team in terms of the the situation that we have with with our with our tool sets and and and our APIs, but also the fact that the world has changed and people now are are understanding that the time is money, and they want things to be faster. Ian, Steve, Steven, thank you so much. I think you've pretty much addressed every single question you've had through, so thank you very much for your generosity and your time. And, of course, if there are any further questions that do come through, we will be able to review those, and we'll publish responses where it's appropriate to do so. Iain, just before I redirect investors to give you some feedback, perhaps if I could just ask you for a final few words just to wrap up, please?

1:04:58 Yeah. I mean, I've got the the conclusion slide slide up now, so it it really is about that to everybody. You know, we're in a we're in a great shape financially. We're in a great shape reputation wise. I think that people look at us as as leaders in the industry. Strategically, this this this this is very important too. So we've talked about cost. We've talked about carbon efficiency. We've talked about share of wallet. So, you know, I wanna leave leave everybody with the thoughts that that once our our our components of this workflow is plugged into much larger machines, then you can really see the shift in that, in that revenue line. So I'll leave it there. Thank you very much. Fantastic. Ian, Steve. Stephen, thank you very much for updating investors today. Can I please ask investors not to close the session? It should be automatically redirected for the opportunity to provide your feedback.

1:05:46 If you've accessed the meeting from our website, the feedback page will appear. If you've accessed it via the link in the email, it'll just be sent back to to give you a feedback. That would be fantastic. Now it takes a few seconds to do so. On behalf of the company, we'd to say thank you very much indeed for attending, and that concludes today's presentation. Thank you very much, and good afternoon.