Mobile-First Performance Marketing Trends Will Support A Broader, Higher-Quality Client Base

Catalysts

About Zoomd Technologies

Zoomd Technologies provides a mobile first performance marketing platform that connects advertisers to multiple digital media sources through a single system.

What are the underlying business or industry changes driving this perspective?

• Growing digital advertising budgets for iGaming, fintech, e commerce, entertainment and crypto, combined with Zoomd Technologies onboarding more than 20 new customers across North America and Europe in 2025, point to a broader client base that can support revenue over time.
• Increasing use of mobile apps and performance based marketing is well aligned with Zoomd's 360 degree, mobile first platform that plugs into hundreds of media sources, which can support higher advertiser spend and potentially improve revenue density per customer.
• Direct relationships with Chief Revenue Officers and the decision to avoid agency intermediaries create a tighter feedback loop and lower churn risk, which can help stabilize revenue and may support better operating leverage as existing accounts grow.
• Partnerships such as the collaboration with E2 and the additional proof of concept focused on broader digital and multimedia channels can open new traffic sources and formats, which may support revenue growth and better gross margin mix if higher value campaigns scale.
• Workforce and cost alignment measures, including a reduction of roughly 20% of the workforce while maintaining investment in technology and business development, reduce the revenue level needed to reach breakeven, which can support adjusted EBITDA and net margin if even modest top line growth resumes.
• Re engagement with two major customers that changed their operating models, with one already increasing spend and the other expected by management to take a couple of quarters to rebuild activity, provides scope for existing account recovery on top of new client wins, which can affect revenue and earnings if those budgets normalize.

Assumptions

How have these above catalysts been quantified?

• This narrative explores a more optimistic perspective on Zoomd Technologies compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Zoomd Technologies's revenue will grow by 16.0% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 19.2% today to 13.4% in 3 years time.
• The bullish analysts expect earnings to reach $10.5 million (and earnings per share of $0.1) by about August 2029, up from $9.6 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 17.5x on those 2029 earnings, up from 3.8x today. This future PE is lower than the current PE for the CA Software industry at 40.0x.
• The bullish analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.76%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Revenue is currently concentrated, and two major customers have already changed their operating models, which contributed to Q1 2026 revenue of US$6.9 million that was 62% lower than Q1 2025. Any further long term shifts in how large advertisers run customer acquisition or measure KPIs could keep Zoomd Technologies' revenue and earnings under pressure.
• Gross margin moved from 44% in Q1 2025 to 34% in Q1 2026 due to changes in customer mix. This shows that a heavier tilt toward lower margin traffic sources or less favorable campaign types over time could structurally weigh on gross profit and ultimately limit net margin.
• Adjusted EBITDA moved from US$5.2 million in Q1 2025 to an adjusted EBITDA loss of US$300,000 in Q1 2026. Even after a roughly 20% workforce reduction, management indicates that an extra US$1 million of quarterly revenue is needed to reach breakeven, so any prolonged period of muted client ramp up or slower new customer scaling could leave earnings and cash generation subdued.
• The decision to run a normal course issuer bid while cash burn is described as almost US$1 million per quarter without revenues, and while visibility on one of the two key disrupted customers remains limited, means that extended revenue weakness or slower contribution from new partnerships could reduce financial flexibility over time and put pressure on net income.
• Zoomd Technologies focuses on performance marketing beyond large walled gardens and relies on integration with hundreds of media sources across fragmented open web channels. A long term trend of advertisers consolidating spend into closed platforms or tightening performance standards could reduce addressable spend for Zoomd and weigh on revenue growth and operating margins.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bullish price target for Zoomd Technologies is CA$2.01, which represents up to two standard deviations above the consensus price target of CA$1.74. This valuation is based on what can be assumed as the expectations of Zoomd Technologies's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$2.01, and the most bearish reporting a price target of just CA$1.47.
• In order for you to agree with the more bullish analyst cohort, you'd need to believe that by 2029, revenues will be $78.1 million, earnings will come to $10.5 million, and it would be trading on a PE ratio of 17.5x, assuming you use a discount rate of 7.8%.
• Given the current share price of CA$0.5, the analyst price target of CA$2.01 is 75.2% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.