As part of the ShareBuyers’ going for growth series, we take a look into the growth prospects of Blackbird (LON: BIRD) – the world’s fastest and infinitely scalable video editing platform used by the likes of the NHL that counts the likes of Schorders among its investors.
With Blackbird shares soaring by over 150% surge since mid-March – it is understandable why interest in BIRD has increased as investors look to enhance technology exposure within their portfolios.
Find out why Blackbird Chief Executive Officer Ian McDonough is confident that the business is ready to fly even higher on the back of booming cloud computing adoption and how he would pitch the business to legendary investor Warren Buffett!
Firstly, could you please tell us about Blackbird and its value proposition?
Blackbird is at its heart an IP technology company that holds multiple patents in the area of cloud based video software. Our core product, also called Blackbird, is the world’s fastest video editing platform and enables professional video content creators the ability to view, frame accurately edit and publish high quality video content remotely. As it is available purely in a browser, very much like a website or social media account, it is infinitely scalable.
We are largely focussed on providing software for the fast turnaround of news and sport content to well known blue chip media companies. We work with sports entities like the NHL, NFL, Arsenal FC, the European Tour as well as A+E, Networks, the US State Department, Sky News Arabia and over 50 local news stations in the USA through our partnership with TownNews.
The video industry is a great place to be with the creation and consumption of video content growing exponentially. By 2022 Cisco forecast that 82% of all internet traffic will be video with over one million minutes of content crossing per second. That volume is 15 times the 2017 number.
Blackbird is the ideal solution for professional video creators. We save our customers time, money, carbon footprint and give them operational resilience while allowing their end users the freedom to create content from anywhere at low bandwidth on any laptop. These unique benefits drive significant cost efficiencies for any organisation working with video production at scale.
The current climate is presenting challenge and opportunity – how has this applied to your business?
The impact of Covid has been profound and largely positive for the trading environment. Despite our core market of live sport evaporating during 2020 our business has grown almost 50% in revenue over the first six months of the year. This increase was largely driven by news, archive enrichment and esports.
As the crisis has evolved then so has the definition of remote production. It used to mean centralising production and minimising travel to far flung events. What is means now is minimising travel but also decentralising production. That production is happening day in day out from home. This massively changes the demands on hardware and infrastructure which is where Blackbird is in a powerful and unique position to help as cloud migration accelerates at pace.
Growth catalysts are crucial to business growth – what do you believe yours are?
Aside from Covid discussed above, the long term and ongoing strategic trend for media companies is to reduce their technological footprints and move rapidly to the cloud. This is to drive efficiencies, outsource their IT department and to have SaaS based solutions like Blackbird that ensure businesses have a continuously updated state-of-the-art software always available for complex tasks.
The fact we are seamlessly integrated with Tata Communications, Amazon Web Services, Microsoft Azure, Google Cloud Platform and other major OEMs ensures that we have the world’s largest and most trusted partners and infrastructure to operate from.
The migration to cloud computing is accelerating at a staggering rate. The market this year is around $371b and with an average CAGR of 14.2%, is expected to reach $832b by 2025 [marketsandmarkets*]. We plan to capitalise on this mega trend of rapid cloud adoption.
Blackbird is also an ultra-green technology that dramatically reduces the need for hardware, travel and energy. Our absolute commitment to broader societal ESG goals aligns with the objectives of our customers and investors as we all commit to a just and clean world in which future generations can flourish.
What are the biggest headwinds you foresee to achieving growth in the coming months and years? How will you tackle them?
Covid has created many opportunities for Blackbird but the uncertainty inherent around the general state of the economy, live sport and the revenue lines for major media pose some questions. However, as Blackbird is a means for companies to reduce costs, cap ex and gain operational resilience we see this being easily managed and communicated.
In addition, although we are currently loss making, we have a low cost base and our gross margin is above 90%. As an AIM listed business the company enjoys the ownership of some very reputable institutions including Premier Miton, Schroders and Cannacord. We are planning to reach break-even on our current cash reserves. It is worth noting that I am one of the largest investors in the business and over a quarter of the stock is held by senior management through individual investments.
Imagine you find yourself in a lift with Warren Buffett. What would be your ‘elevator pitch’ to summarise why he should invest in Blackbird?
Blackbird is hot. We are a well-capitalised SaaS company with proven and reliable technology holding all of its own patents that allows you to take advantage of the long term and mega-trend of migration to cloud computing. We are a pure software model, the margins are very high and our cost base low and fixed.
We are experiencing the very start of an acceleration in revenue growth as Blackbird offers companies operational resilience, major efficiencies and its end users the freedom to operate from anywhere. These factors make is it an excellent play on a recession, a pandemic and the long term growth of cloud computing.
Please note: this discussion with Ian McDonough of Blackbird forms part of the ShareBuyers’ going for growth series – helping companies with high growth potential to share their story. It is not a recommendation to buy or sell shares in BIRD.
* Marketsandmarkets – Cloud Computing Market by Service Model (Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS)), Deployment Model (Public and Private), Organization Size, Vertical, and Region – Global Forecast to 2025