Sabio's Q3 Loss Masks a Deeper Bet on Diversification and 2026

TORONTO, ON – November 24, 2025 – Sabio Holdings Inc. (TSXV: SBIO), the Los Angeles-based ad-tech firm, today reported third-quarter financial results that present investors with a classic case of looking past the headlines. On the surface, the numbers were stark: gross revenue plummeted to $9.3 million from $16.1 million in the same period last year, and a healthy $2.6 million Adjusted EBITDA profit flipped to a concerning ($2.2 million) loss.

Yet, beneath this challenging exterior, the company is aggressively painting a picture of strategic transformation. Management attributes the downturn entirely to the cyclical nature of political advertising, arguing that the real story lies in the steady growth of its core business and the rapid scaling of new revenue streams. As Sabio navigates this non-election year trough, it is asking investors to focus not on the present loss, but on a more diversified foundation it believes is being built for a massive rebound in 2026.

The Tale of Two Sabios

The third quarter of 2025 lays bare the two competing narratives defining Sabio. The first is one of cyclical volatility. The prior-year quarter was supercharged by the 2024 U.S. presidential election, a period during which political ad campaigns contributed approximately $5 million—nearly a third of the company's total revenue. Without that powerful tailwind, a significant drop was inevitable.

This is where the second narrative, championed by CEO Aziz Rahimtoola, begins. "What stands out is the performance of our underlying branded business," Rahimtoola stated in the earnings release. The company highlighted that when political and advocacy spending is excluded, its core ad-supported streaming gross revenue actually increased by 2% year-over-year.

This metric is central to Sabio's argument that it is successfully weaning itself off its dependency on election cycles. The company is trying to prove it can build a sustainable, year-round business, even if it means weathering painful comparisons in the interim. The firm also pointed to strong customer loyalty, with an 85% recurring revenue rate for the nine-month period and a 54% increase in the number of branded logos it serves, suggesting its client base is both broadening and deepening.

A Costly Pivot to Diversification

Building that new foundation comes at a price, as the quarter's ($2.2 million) Adjusted EBITDA loss clearly demonstrates. This loss is directly tied to what Sabio calls "ongoing investment in programmatic, Creator TV, and international growth initiatives." These investments are not just theoretical; they are now delivering a substantial portion of the company's revenue.

Two areas stand out: programmatic advertising and international sales. Programmatic revenue, generated from automated ad transactions, reached $1.9 million and now constitutes 20% of gross revenue—a remarkable achievement for a channel that is relatively new for the company. Simultaneously, international revenue exploded by 240% year-over-year, growing from a negligible part of the business to 19% of the total sales mix. Combined, these two strategic pillars now account for nearly 40% of Sabio's consolidated sales.

While these growth percentages are eye-catching, they exist within a fiercely competitive landscape. Sabio's 2% core growth, while positive, appears modest when benchmarked against ad-tech behemoths. Industry leader The Trade Desk, for instance, recently posted 18% year-over-year revenue growth, while sell-side giant Magnite grew its core CTV business by 25% when excluding political spend. This context highlights the scale of the challenge: Sabio is successfully planting seeds in new fields, but it is still a small player competing against rivals who are harvesting much larger crops.

Betting the House on 2026

For investors willing to look past the current losses and competitive pressures, Sabio is making an explicit and compelling bet on the future, specifically on the 2026 U.S. mid-term elections. The company's management is positioning the current period as a strategic trough before an anticipated tidal wave of political spending returns.

"As we look ahead, 2026 represents a meaningful opportunity with the return of U.S. mid-term elections," Rahimtoola noted, adding that the company is entering the year with a "stronger foundation than ever before." As a leading indicator, Sabio reports its pipeline for the first quarter of 2026 is already up nearly 60% year-over-year.

This optimism is not unfounded. Industry forecasts strongly support the thesis. The 2026 mid-terms are widely projected to be the most expensive in history, with some estimates for total ad spending reaching as high as $13 billion. More importantly for Sabio, the connected TV (CTV) space is expected to capture a record share of that budget, with forecasts suggesting political ad spend on CTV could reach nearly $2.9 billion—a massive jump from both the 2024 presidential cycle and the 2022 mid-terms. For a company that has historically derived up to a third of its peak revenue from this single source, the 2026 cycle represents a predictable and powerful catalyst.

Innovating in a Crowded Field

Beyond its cyclical and diversification plays, Sabio is also cultivating unique assets to differentiate itself. Its Creator Television® (Creator TV) network, which brings social media storytellers to streaming platforms, is a key part of this effort. The recent expansion of Creator TV to ad-supported video-on-demand (AVOD) offerings on major platforms like Plex and Xumo Play moves the initiative beyond a linear channel, giving it broader reach and more flexible monetization options. This strategy taps into the powerful trend of leveraging the built-in audiences of popular online creators.

Underpinning these efforts is App Science™, Sabio's proprietary data and analytics platform. The company credits this technology, which operates in a post-cookie environment, for its ability to deliver validated audiences and maintain high customer retention rates. These initiatives signal an ambition to compete not just on sales execution, but on unique content and data technology.

The company also announced the departure of board member Paula Madison. A respected media veteran with a long history at NBCUniversal, Madison served on the board for four years following Sabio's public listing. The departure appears to be a routine transition for a director with extensive professional commitments, with no public indicators suggesting a link to company performance or strategy.

For investors, Sabio presents a complex picture of risk and opportunity. The company is executing a clear strategic pivot toward a more diversified and stable revenue model. Yet, this transition is currently burning cash and its core growth remains modest compared to larger competitors. The entire thesis hinges on whether these new growth engines can achieve true scale, and whether the predictable windfall from the 2026 election cycle will provide the necessary fuel to bridge the gap to sustainable, long-term profitability.