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Good morning. My name is Sergio, and I will be your conference operator today. At this time, I would like to welcome everyone to the Boat Rocker Media Second Quarter 2022 Financial Results Conference Call. [Operator Instructions]
Before I turn the call over to management, I would like to remind listeners that today's remarks include non-IFRS measures. Reconciliations between both Boat Rocker's IFRS and non-IFRS results can be found in the company's MD&A. Additionally, management's outlook for 2022 and beyond, anticipated financial and operating results, plans and objectives, and answers to your questions will contain forward-looking information within the meaning of applicable securities laws. These forward-looking statements reflect management's current opinions, beliefs, estimates, expectations and assumptions, and are based on information currently available to management, which includes assumptions about continued revenue based on historical past performance; perceptions of trends and current business conditions; expected future developments, including expectations around the impact and trajectory of the COVID-19 pandemic; and other factors which management considers appropriate and reasonable in the circumstances. These forward-looking information represents management expectations as of today and accordingly is subject to change. Such information is based on current assumptions that may not materialize and are contained in [indiscernible] MD&A dated March 31, 2022, and is subject to a number of important risks and uncertainties. Actual results may differ materially, and listeners are cautioned not to place undue reliance on this forward-looking information. A description of the risks that may affect future results is contained in Boat Rocker's annual information form, which are available on the corporate website and its filings with the Canadian Securities Administrators on SEDAR at www.sedar.com. With that, I will now turn the call over to Mr. John Young, Chief Executive Officer of Boat Rocker Media. Mr. Young, you may begin your remarks.
Thank you. Thank you very much, Sergio. Good morning, everyone, and thank you for joining us for the Boat Rocker Media Second Quarter 2022 Results Conference Call. On the call with me today, Michelle Abbott, our CFO; Ivan Schneeberg and David Fortier, our Co-Executive Chairman and Co-Chairman of Boat Rocker Studios. I'll provide some introductory commentary on our results for the quarter before turning it over to Michelle for a short financial review. Ivan will then discuss some recent creative highlights before we open the call to questions. So let me turn to our second quarter results. We saw continued momentum across our business in the second quarter with more than 40 shows in various stages of production. Currently, we've got 7 premium scripted series on our 2022 slate, including the recently-renewed American Rust, which will stream exclusively on Amazon Freevee, and Beacon 23, which just renewed for a second season. These are in addition to Orphan Black: Echoes, Slip, Robyn Hood, Invasion and Mrs. American Pie. A number of these shows are scheduled to begin delivering in the second half of 2022 and into early 2023. The expansion of our premium scripted slate from 2 shows in 2021 to 7 this year underscores our focus on creating and delivering high-quality shows to a wide range of leading streamers and broadcasters globally as well as investing in our owned IP. This quarter, we began to deliver on the anticipated ramp in adjusted EBITDA, which we expect will continue in the second half of the year, although revenue was up only modestly over the prior year period, driven by a 61% increase in Kids & Family, and 12% in Representation. Adjusted EBITDA grew by 185%, which speaks to our ability to improve adjusted EBITDA margins as we forecasted previously. With broader markets performing poorly in the first half of the year, we feel this is disproportionately impacting individual issuers like Boat Rocker that have otherwise [ solid ] fundamentals. And as we announced, after considerable discussion at the Board level, we plan to file a notice of our intention to commence a normal course issuer bid with the TSX, which, of course, is subject to their approval. Management and the Board have reviewed the company's capital allocation strategy. We do so on a regular basis. And given the trading price in our stock, we believe that the market price of our shares doesn't reflect what we believe is intrinsic value of the company, and that the repurchase of the stock should provide an attractive return on the investment and is an appropriate use of our funds. This intent to file follows a period of insider buying that saw more than 50,000 shares purchased by both Board members and senior management, in some cases, building on an already significant holding in the business. Looking ahead to the second half of the year, we expect meaningful adjusted EBITDA growth and margin expansion in 2022, supported principally by anticipated deliveries and the beginnings of a meaningful contribution from our consumer products revenue. As you know, we started this year with an expectation that full year adjusted EBITDA would be in the range of $40 million to $50 million as compared with $31.6 million generated in 2021. At this point in the year, we have greater certainty and visibility on the timing of green lights and production schedules, anticipate that some episodes of both scripted and unscripted shows currently in production and previously planned for delivery in Q4, will be completed in early 2023. On that basis, we expect adjusted EBITDA for the year to fall at the lower end of our previously stated range, but still be reflective of significant growth year-over-year. As we've indicated previously, revenue may fluctuate from year-to-year depending on our production budgets, the relative mix of service productions versus owned IP and the timing of green lights and deliveries. For 2022, we anticipate lower revenue compared with last year but improved adjusted EBITDA margin in line with our previously stated expectations. As we've said before, annual adjusted EBITDA is the most important measure of our performance as well as adjusted EBITDA growth over multiple years given the length of the production cycles we have. Looking ahead, we expect demand for both new and returning series to remain robust through the balance of 2022. We anticipate growth in each of our segments over the longer term, including greater revenue from consumer products that is expected to contribute to higher margins, and we intend to realize further synergies resulting from Boat Rocker's enhanced scale. With our diverse content creation engine and long track record of successfully delivering multi-genre programming at all budget levels to the world's leading broadcasters and streamers, we remain of the belief that we are well positioned to capitalize on the ongoing demand for high-quality programming. And before I hand it over to Michelle to conduct our financial review, I would like to just say again how incredibly proud I am of the entire Boat Rocker team throughout the globe, all their efforts as we continue to strive for improved financial performance, working through the last few years, the heightened economic uncertainty, hybrid work arrangements, et cetera. It's been not the easiest of times, but the team has proved that they've done a tremendous job. So with that, I'm going to now turn it over to Michelle to conduct a brief financial review. Michelle?
Thank you, John, and good morning, everyone. As John just mentioned, this quarter, we maintained high levels of activity across the business with over 40 shows in various stages of production. Our revenue and adjusted EBITDA both increased in the second quarter of 2022 when compared to the second quarter of 2021. The company's delivery schedules vary from period to period, with shows being ordered produced and delivered at all times during the year. It's most meaningful to analyze the company's results on an annual period rather than quarter-over-quarter as production deliveries can move across quarter ends. Revenue for Q2 2022 was $65.4 million versus $62.1 million in Q2 2021, an increase of $3.3 million or 5%. Revenue for the 6 months ended June 30, 2022, was $112.3 million compared with $114.6 million for the same period of 2021, a decrease of $2.3 million or 2%. While revenue decreased in the Television segment, revenue in both the Kids & Family and Representation segments increased. The variances are primarily due to the timing of delivery of productions. In the Television segment, 82 and 102 half hours of content were delivered in the second quarter and first 6 months of 2022, respectively, compared with 106 and 162 in the prior year periods. The situation was reversed in the Kids & Family segment, with 4 and 14 half hours of content delivered in the second quarter and first 6 months of 2022, respectively, compared with only short-form content delivered in the prior year periods. The 12% increase in the Representation segment was driven by the timing and scale of projects for on-screen talent, where projects on which they work can vary from period to period. Production, distribution and service costs for Q2 2022 were $35.1 million compared with $42.2 million for the same period of 2021, a decrease of $7 million or 17%. For the 6 months ended June 30, 2022, production distribution and service costs were $66.4 million compared with $76.2 million for the same period of 2021, a decrease of $9.8 million or 13%. Production distribution and service costs this quarter include a reversal of a production-related financial liability of $7.4 million that was recognized due to a change in estimate this period. Adjusted EBITDA for the second quarter was $7.8 million compared with $2.7 million for the same period of 2021, a positive variance of $5.1 million or 185%. Adjusted EBITDA for the year to date was $1.7 million compared with $1.1 million for the same period of 2021, an increase of $0.6 million or 54%. The increase in adjusted EBITDA in both periods was a combination of the following factors: higher segment profit in Television related to the reversal of a production-related liability; a higher segment profit in Kids & Family; increased foreign exchange losses in the current year due to the strengthening of the U.S. dollar compared to the Canadian dollar over the second quarter of 2022. Net income in the second quarter was $4.6 million compared with a loss of $8.8 million for the same period of 2021. Net loss for the year-to-date period was $7.8 million versus $13.8 million in the prior year period. Boat Rocker remains debt-free other than our normal course interim production financing. And as at June 30, 2022, the company had total cash of $100.8 million compared with $97 million at December 31, 2021. Looking ahead, we expect to continue to invest in owned IP, particularly in series we are distributing internationally as well as the broader business. In the 6 months ended June 30, 2022, the company generated positive free cash flow of $7.6 million compared to the negative free cash flow in the same period of 2021 of $44 million. We continue to expect to be cash flow neutral at the end of 2022, a material improvement from 2021. For 2022, we expect our financial results to further improve as we move through the balance of the year, supported principally by a strong slate of deliveries, and we remain focused on annual adjusted EBITDA as the most important measure of the company's performance. I will now turn the call over to Ivan to talk about the studio highlights. Ivan?
Thanks, Michelle. Good morning, folks. It's been an incredibly busy few months in the studio across our divisions. I'm going to touch on a number of recent highlights that showcase Boat Rocker's ability to deliver exceptional programming with every genre and budget size for a range of audiences and for nearly every major global platform. Starting first with our scripted team. As John mentioned at the top of the call, we're thrilled that our premium scripted drama series American Rust, starring Jeff Daniels and Maura Tierney, found a new home in Amazon Freevee. We continue to believe that great content will find champions. Production on Season 2 of that series is set to begin later this year, and scripts are currently being written. We also announced last week an early second season order of our premium sci-fi drama Beacon 23 for Spectrum and AMC. The series is shooting in Toronto and stars Lena Headey and Stephan James, and is going to be distributed internationally by Boat Rocker. In early April, Orphan Black: Echoes, the highly anticipated spin-off of our international hit show Orphan Black was greenlit by AMC. We're excited to announce that we cast Krysten Ritter, who starred in Marvel's award-winning Netflix series Jessica Jones, to star and executive produce in the spin-off. Fan response to Krysten joining the Orphan Black franchise has been fantastic. Season 1 is scheduled to begin principal photography this month in Toronto and will air on AMC in 2023, and again, that series is going to be distributed internationally by the Boat Rocker Rights sales team. Needless to say, we're thrilled to be expanding the Orphan Black universe, and our sales and franchise teams are delighted to have another high-profile sci-fi drama to sell alongside Beacon 23. Our premium scripted series Slip, created, written and directed by and starring the ridiculously talented Zoe Lister-Jones, recently wraps shooting in Toronto and New York. Dave and I have viewed some early cuts of episodes and are really excited about what we're seeing. This is a very special show. Boat Rocker produced Slip with our partners at TeaTime pictures, Dakota Johnson and Ro Donnelly for The Roku Channel. This is another series that we're excited to be selling internationally. It's been a busy start to the summer as we wrapped production on Slip and continued production of Beacon 23 in Toronto. We also commenced principal photography on our series, Robyn Hood, for Corus. This near-fi action drama is a contemporary reimagining of Robin Hood, creatively led by filmmaker, Director X; and Orphan Black producer and writer, Chris Roberts; and featuring an impressive ensemble cast led by Jessye Romeo. This is yet another series Boat Rocker is distributing internationally. In total, that makes 5 original premium scripted series that our internal sales team will be taking out to market this year. in addition to an impressive lineup of Kids & Family and unscripted properties as well as a strong library of third-party titles. As you can see, we continue to focus on developing our own content to which we can bring our full suite of capabilities ranging from IT sourcing and creation, to development, production and financing right through to sales and brand building. Turning to unscripted, our production partner, Insight, recently wrapped production on the first season of Canada's Ultimate Challenge for the CBC. Season 2 of Insight's hit show Dark Side of the 90s premiered on June 14 on VICE TV. And we're all tuning into another exciting season of the Amazing Race on CTV, which was Canada's most watched summer series on broadcast network television when it premier last month. Boat Rocker's Matador Content continues to develop and produce fantastic unscripted content, including Super Sized Salon for WE tv, which premiered on July 29, and Crazy Rich Ancients for History Channel, which premieres July 17. Matador recently received green lights from Hulu for Drag Me to Dinner, a new cooking series executive produced by and featuring Neil Patrick Harris, a client of our Untitled Entertainment, and David Burtka; and is currently in production on Downey's Dream Cars for the Warner Bros. Discovery streaming platform, in partnership with Team Downey, in which Robert Downey Jr. turns sports and muscle cars in his garage into eco-friendly automobiles for the 21st century. Turning next to the Kids & Family segment. Our franchise brand, Dino Ranch, continues its stampede. Season 2 of the series premiered last month on Disney Junior in the U.S. and will launch on Disney+ in October. We now have 52 episodes available that currently run 7 days and 29 times per week on Disney and continues to hold its #1 position in its 7 p.m. time slot in the U.S. The series is now available to watch in 170 countries worldwide. Looking to our Dino Ranch consumer products and merchandising operations, we now have a total of 45 licensees globally, bringing the Dino Ranch world to life through toys, apparel and more. It's worth noting that of these 45 licensees, 19 are North American based. Online toy sales continue to perform at or above target. Our exclusive Dino Ranch Amazon store launched in May and is rolling out in the U.S. and is rolling out in Canada, U.K., Germany and France and Italy later this month. Toy launch in U.S. retail begins this quarter. Our North American retail group includes Target, who have ordered 8 SKUs and are providing the series 2 dedicated feet of shelf space; and Walmart with 8 SKUs and also with 2 dedicated feet of shelf space. We're also thrilled to have the brand featured in Walmart's upcoming 2022 holiday toy catalog. This fall, we'll also see a wide variety of apparel launches in the U.S., including sleepwear at Kohl's, Halloween costumes in Spirit Halloween and Party City, and toddler tees in Old Navy. Our publishing partners already sold more than 110,000 books in the U.S. alone, and broadcast and consumer product rollouts are taking place around the world over the next several quarters.
The Kids & Family team also saw the premiers of 2 new series last month. Rebel Cheer Squad: A Get Even Series premiered on Netflix worldwide; and Amber Brown premiered on Apple TV+ on July 29. Critical reception for both these shows has been fantastic. Turning to our Representation segment. Untitled clients were associated with a multitude of projects that received Emmy nominations; and clients Jean Smart, Christina Ricci, Rhea Seehorn, Alexandra Daddario and Connie Britton all received acting nominations. Untitled's talent roster continues to grow and its clients are regularly being attached to new premium projects. As you can probably tell, it's been an incredibly busy quarter for the studio. We have a significant second half of the year ahead of us as we produce the deepest slate in our history in scripted, in addition to fantastic unscripted and Kids & Family content, and our steady and growing Representation and Rights & Brands businesses. We remain focused on further developing our IP portfolio, forging deeper relationships with top-tier creative talent and growing licensing and merchandising revenue from our key brands. And we look forward to keeping you all updated on our progress as we move through the rest of the year. Sergio, that concludes our prepared comments this morning, and we would now like to begin the question-and-answer session.
[Operator Instructions] One moment for your first question. Your first question from Vince Valentini from TD Securities.
A couple of things. First, let me start with Dino Ranch merchandising. I believe you had said on the last call that you expected to be on the physical shelves at Walmart and Target in August, and now you're saying Q3. I just want to check, has there been a slight slip in the timing where it may be later in Q3? Or are you actually on physical shelves already?
We're rolling out on shelves this month, Vince. This month, they were going to start to appear on shelves across the United States.
Okay. The second, maybe for Michelle, is just on the adjusted EBITDA. I want to make sure I'm clear here. There's a reversal of a prior period production cost of $7.4 million. Maybe you can flesh out a bit more what exactly that is. But my biggest question is, is that part of the adjusted EBITDA of $7.8 million this quarter? It looks like you're backing out the change in fair value of contingent consideration, which maybe I have a follow-up question. I don't think that's the same thing. I think the $7.4 million is a discrete item. So is that in the adjusted EBITDA? And then if it is, does that really mean that's a onetime item? And if you're at the low end of $40 million to $50 million for the year, you're really sort of $35-ish million on an adjusted basis, if you didn't have that onetime production reversal?
Thanks, Vince. Thanks for the question, and let's clarify that. You're right. The reversal of the estimate is a different thing than the contingent consideration. The contingent consideration is not in our adjusted EBITDA, but the reversal is. And that's because when we're delivering productions, there are certain estimates that are embedded in the financials and results of those shows. And over time, those estimates can change. The reversal is directly linked to a production that we had previously delivered, and the production amortization of investment in content also went through that line, production, distribution and service costs. So that is where we reversed it and it is in adjusted EBITDA. We -- because this is in the normal course that we have these estimates built into our results, this isn't -- we don't consider this to be a onetime thing. It's going to go on as we make these large, complex shows. As far as guidance is concerned, John, do you want to?
Sorry, Vince, I'll just jump in here. Yes, as Michelle said, this is operational. It's part of the recognition of, effectively, margin in a show we made, one of the large scripted shows we made. And when we were putting together our guidance and budgets and stuff, we thought this would be the case given what we were seeing in the margin on that show. So something that's in our guidance. The lower end of the range, Vince, is tied more to, again, as we've got all these shows happening and delivering in the back half of the year, just trying to see where they may all fit in, in the last quarter as some can easily slip -- given we're still dealing with some COVID issues here and there, et cetera, there's definitely a chance for some episodes to slip into '23. So we're trying to be mindful of that. And obviously, we've got a better sense of that right now as we sit here in sort of August. So that's the reason for us to guide towards that lower end.
Okay. I appreciate that color. But just to be clear, I mean it may be part of the normal course of business that you have these prior period adjustments to your costs. But I mean this one seems to be pretty large, and I assume these items are lumpy. Just to reclarify, I mean you've had a positive lumpy item in Q2 to the tune of almost the entire EBITDA for the quarter at $7.4 million. And even with that benefit, you're still saying low end. I mean is there an offsetting negative kind of lumpy item in Q3 or Q4 that you think might happen that creates this caution? Or is it purely just a more significant amount of timing differences on stuff flowing -- not coming in, in Q4 and maybe coming in the first half of next year instead?
Yes. It's the latter, Vince, in terms of driving towards the lower guidance. But as I mentioned there, that sort of bigger lumpy item on the margin of that 1 show was something that we anticipated would happen. We didn't know whether it be Q1 or Q2 because as Michelle said, we've got estimates in for certain margin, for certain scripted shows predominantly in our estimates throughout the year, and so we view it was probably going to happen at some point. We've budgeted, and our guidance sort of had that in included in it. So quite the accounting determines where those estimates get finalized and when we finish the shows and when we sort of get the audits done, et cetera, et cetera. So there's a lot of things that go into some of these big scripted dramas. So Q2 was the timing that it happened. The big lumpy [indiscernible] operational item we're talking about is Q2. But it was already in our thoughts that, that would probably be the case that we'd be able to recognize that extra margin effectively in Q2.
And just to be clear one last time, we can take it offline a bit more, but I think the audience on the call probably wants a bit of clarity as well. Is the -- to my understanding, there's always some estimation in terms of revenue, and you have to decide how long a show is going to last, how many repeat sales you're going to have, and that dictates how you amortize the cost of the show over time. And that -- there could always be some flux in that. How does the actual cost of making the show change retroactively? I mean you made the show, you knew what it cost when it was finished. Is it really somehow related to revenue, that because certain costs came in over or under budget, you go back to the primary buyer of that show and they're on the hook for some of that cost and you'd budget or accrue conservatively upfront? And then when you finished negotiations with them, you reallocate the cost, but really, it's getting more money from the ultimate buyer of the show, but it gets counted in the OpEx line instead of revenue. Do I have that directionally right?
It's not so much about revenue. It's about the margin of the show and specifically about things like participation, how much we owe to others, other participants in the show, and that estimate changed during Q2.
Your next question comes from Drew McReynolds from RBC.
Yes. Just kind of driving forward a little bit of Vince's questions. Just in terms of looking forward on kind of the bigger budgeted scripted shows in the pipeline, when you say this is within the normal course, if you're coming out of a kind of prior year series where it's a higher margin, like in terms of what's in the pipeline, like presumably, there's going to be also some margin adjustments potentially to those in the pipeline on a prospective basis. Is that generally what happens in the normal course?
Drew, it's Michelle. Yes, it will continue to happen. This one is, in particular, a large one. So I would say it's probably bigger than what we'll see in future quarters, but we do anticipate estimates on things like overages or distribution costs that are embedded in the original delivery or, as I said earlier, participation would, over time, change and then we'd have some lumpy results.
And Drew, we talked about this a little bit. The structures of these, and Ivan and David can comment, the structure of these bigger premium scripted dramas has changed quite dramatically over the years. And they are quite complex, no longer the case of just making a bunch of fees for making a show. There's a lot of detail in these deals and how we do it, whether it's non-writing EP fees, whether it's back end or how the participation and how much the show goes over budget, how much we share or not in that. They're just complex now. So we -- as Michelle said, we made certain estimates on some of these ones. For the most part, we're on track with them, but they will move around a bit. But it all just goes to that, ultimately, what margin do we end up recognizing for our efforts on the shows.
Okay. Got it. Got it. Maybe shifting gears a little bit. On the Kids & Family revenue in Q2, certainly stronger than what I was looking for. And I apologize if I haven't kind of quite made it into the devil in the details in the MD&A. But can you just unpack where that strength's coming from? Is it all kind of consumer products on Dino Ranch? Or presumably it's a stack of other items as well?
Yes. We've got production where we had the number of half hours delivered were increased over the prior period. The service revenue remains strong. We had both live-action and animation in the quarter delivering versus last year. That was before we had started one of the live-action shows in Kids & Family. And third of all, the distribution revenue line, you're right, does have some consumer product revenue in it. And so if you look at that line, the distribution revenue, it's not -- the increase isn't all consumer products revenue yet. So the actual second window sales were quite strong as well in the quarter. But those are the 3 items that I would call out in Kids & Family revenue.
Drew, I would just say as well, we haven't broken out that specific consumer product piece yet. But to what Ivan was alluding to earlier on the progress of, say, Dino Ranch, for instance, we're starting to see that. So that's something, obviously, we'll talk about in more detail as we get into the back half of the year.
Okay. Super. And maybe just 2 final ones. Actually, I'll just -- I'll limit it to one final one. So obviously, with the share price being ridiculously where it is, M&A -- it may influence kind of your M&A strategy going forward. Are you looking at share repurchases in lieu of M&A? Or is this something you certainly can balance just given the balance sheet and free cash flow profile of the company looking forward? And then just as a follow-up to the buyback, just how you kind of view the trade-off in terms of liquidity in the shares?
Yes, it's a great point, Drew, one we spent a bit of time, as you can imagine, with the Board, discussing. And I think where we land on this is all of the activities you'd expect as an activity as we've told the market we're going to continue with, are all able to be continued. The NCIB, how much we will allocate towards it over the, whatever, that 12-month period. That, along with looking at investing in IP, looking at developing more IP to own it and ultimately exploit it, they're not mutually exclusive. So because of our cash that we've got, we're able to look at all of these things, and none of them are mutually exclusive. So we can do all of it. You're right. There is a trade-off in terms of liquidity. It's not great, but there are -- you can certainly see there are some days when there are shares to be bought and sold. So I think for us, the NCIB is less about supporting the stock. It's much more about an IRR and a real return on the investment we can make with our capital into that -- into the share price as it is right now. So that's how we looked at it. It will mean, from an M&A perspective, that the share price is not allowing us to do the bigger deals and raise capital to do the bigger deals that we were hoping to do, but we still have a lot, in the pipeline, smaller acquisitions and M&As of different types of businesses that add capabilities to Boat Rocker, which we're still sort of looking at. And as we've said before that those smaller types of tuck-ins or acquisitions are still again on the table, given our current balance sheet and cash. So it is a balance of all of that. But I think we couldn't overlook the potential, again, for a real upside of the IRR and investing in our stock at this price.
[Operator Instructions] Your next question comes from David McFadgen.
So I was just wondering what the setup looks like for 2023, if you have some shows being pushed into '23, and I think you already have a pretty good production slate already for '23. I'm just wondering financially what that means for '23. I mean it might be early to provide guidance, but I was just wondering. Just give us some color on do you expect some pretty good growth. It seems like you're setting up well for '23.
Yes. Thanks, David. You're right. It does set us up well for 2023 with these shows, a great slate. I haven't talked about it. We're growing our slate very nicely and we hope to put more into that slate in the next 6 months. As you referred, it is a little early for us to get into the '23 forecast or guidance or otherwise right now. We'll have more on that, I think, as we get towards the end of the year when we finish our budgets, et cetera. But we've said to the market, we really believe we can deliver long-term growth on this business, and we're still confident we can do that.
Okay. And then just a question on Dino Ranch. I was just wondering if you can give us an idea on how that property is doing outside of the U.S.
Yes. I mean it's -- the answer to that is really long in a good way. It's doing really well. I mean, it's rolling out -- like I think I said, it's 170 countries, it's been sold in. And we have a small army of -- within our Brands team, each take a responsibility for different territories within the world, rolling out the consumer products, ancillary products on the heels of the show going live in their various territories. And we literally saw a 100-page deck presented to us last week that went through in detail the rollout in each of these territories. And it's remarkable, the level of detail, the different types of products, the territory-specific products that are being rolled out in each of these markets. I think I mentioned we've got 45 licensees. Just under 20 of those are North American. So the rest of them are international, and they're being added to monthly in different territories. So it's a very robust rollout going on right now. It will -- it paces slightly behind the U.S., so I think we'll probably see results from that a little bit lagging behind the U.S. But yes, really robust, really impressive.
So what's the total number of licensees now that you've signed up for the show?
45. And for what that's worth, just to give you some context. As I understand, the #1 performing show on Disney right now is a show called Bluey, which is 2 seasons ahead of us in terms of their order cycle. When Bluey was at our point in time in its order cycle, as I understand it, they had somewhere between 12 and 14 licensees signed up for their consumer products.
Your next question comes from Vince Valentini from TD Securities.
Sorry to jump back in, but I forgot that other follow-up and nobody else asked it. But the contingent consideration change in fair value, I believe it all relates to Platform One. Any explanation on that? Is it something to do with the performance coming in below what was projected?
Yes. It is Platform One. And there was a target in the agreement about some of their shows. And yes, the change in estimate this quarter required us to reverse the contingent consideration. So yes, it was Platform One.
And does that constantly get remonitored, Michelle, or is this like a final adjustment? Or if they have a show that starts to do better again or get more traction in 2023, does this reversal get reversed again?
So this is final, and if you look at the balance sheet, there's no more contingent consideration on our balance sheet. So there's no more liability there for any of our acquisitions.
Mr. Young, there are no further questions at this time. Please proceed.
Thank you, Sergio, and thank you, again, everyone, for joining us today. As I have said, we look forward to updating you on the progress in the Q3 call and hopefully, some more announcements and results, et cetera, that we'll get into there. So thank you again for joining us today.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.