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Xcyte Digital: A new high-conviction virtual events technology stock | 2023-11-15 | Investing News

An increasing number of companies are realizing that in-person events are limiting not only their revenue potential, but how well they serve their customers.

While attendee engagement at in-person events can be costly and logistically complex to achieve without the right solutions providers in your corner – given the juggling act required between caterers, exhibitors, venue providers, travel, accommodations and on-site staff – virtual and immersive events are emerging as a viable alternative to doing business for a number of key reasons:

  • They require only a few clicks to join from the comfort of home
  • They save on costs in every respect
  • They can easily accommodate thousands or even millions of attendees
  • They optimize attendee participation through specialized software for registration, reporting, analytics, marketing, lead generation and spatial computing, the latter offering more realistic virtual environments that facilitate the higher engagement

In this way, virtual and immersive events offer a more focused path to reaching customers and employees, and the world is catching on. According to Custom Market Insights, the global events industry will reach US$1.75 trillion by 2032, with the virtual events market expected to quadruple in size from US$236 billion in 2023 to US$1 trillion by 2032 at a CAGR of 18.8 per cent.

What began as a necessary protection measure during the pandemic has become a strategic means of value creation, in terms of cost-savings and business expansion, as evidenced by the valuations behind recent key transactions in the events technology space. In March 2023, private equity giant Blackstone acquired event company Cvent for US$4.4 billion at seven times revenue.

It’s this growing virtual and immersive events market, propelled by a global tailwind, that welcomes Xcyte Digital (TSXV:XCYT), a newly listed virtual events technology and services aggregator and developer with a differentiated value proposition and a management team built to execute it in line with shareholder value.

A turnkey events solution

Xcyte is the result of a C$14.75 million reverse takeover involving a diverse suite of events technologies and services applicable across conferences, expos, meetings and training, to name a few. The suite has produced more than 150,000 virtual events for thousands of clients to date, including the first business-to-business (B2B) conference and expo entirely in the metaverse in October 2022.

Xcyte is positioned to play a key role in the post-pandemic growth of virtual and immersive events through its all-encompassing, turnkey and customizable offering, which yields registration, participation, engagement, transaction and behavioural data in real-time to measure results and accelerate client sales cycles. The business is divided into five pillars:

  • The Virtual Events service takes care of everything from registration, to selecting an appropriate meeting space, to vendor and customer engagement, with a focus on informative, interactive and accessible brand experiences
  • The Hybrid Events service will complement a physical event with live and/or pre-produced virtual or metaverse content designed to maximize attendee engagement and information sharing
  • The Immersive Solutions service will build a 3D world for your event backed by Xcyte’s more than 30 years of technology experience, guiding you through the design, production and execution of your company’s introduction to the metaverse. According to Statista, the global metaverse market will reach a value of US$56.6 billion in 2023 and grow at a CAGR of 36.8 per cent to US$507.8 billion by 2030
  • The Event Production service offers a full suite of solutions covering custom staging, sound, lighting, video projection, recording, digital signage, interactive technologies, registration, on-site staffing, pre-event communications, e-mail campaigns and post-show surveys. Xcyte will even provide computer-aided design files, floor plans and renderings to assist in intelligent production budget allocation
  • The Lead Generation service connects clients with exclusive lead-generation communities that bring together buyers, vendors and thought leaders in strategic B2B vertical markets. White glove service ensures messaging is tailored to the right products and target audiences
  • The Digital Marketing service is dedicated to building traffic and long-lasting customer relationships through improvements in copy writing, marketing and design. With three decades of web design and development experience, the company has a track record of exceeding KPI expectations with the clients to prove it

Xcyte’s users gain access to e-commerce functionality, including pay-per-view and multiple currencies, as well as analytics that let them see exactly where each attendee went and who they interacted with to better gauge the general flow of events, leading to greater personalization and sales-enhancing decisions.

This high level of attendee insights is why Xcyte’s legacy user base includes some of the world’s leading companies – such as McDonald’s, American Express, Pfizer, SoftBank, HSBC and more than 78 per cent of the Fortune 100 – in addition to direct relationships with the

world’s largest tradeshow organizers, including Tarsus, Informa and Clarion, offering innumerable opportunities for upselling into its subscription-based model. According to Statista, 30 per cent of trade shows worldwide in 2021 were conducted as hybrid (online, physical) events, with that figure expected to quadruple over the next few years.

To better understand why these industry leaders and others like them are likely to continue relying on Xcyte Digital for their event needs, granting it greater market share and explosive shareholder value potential, let’s dive into the cost-savings and convenience at the heart of the company’s business model.

The Xcyte Digital difference

Xcyte’s Digital’s suite of events technologies and services is composed of one subscription encompassing the world’s leading virtual, immersive and in-person event products, enabling competitors with niche specializations to diversify their own services by becoming paying Xcyte customers.

Immersive products on offer

  • Rooom, an enterprise metaverse solutions provider
  • Beame, a metaverse communication and collaboration platform
  • Glue, a remote meetings platform
  • Vatom, a customer, employee and stakeholder engagement company using Web 3.0 to help brands be more efficient and profitable
  • Meetaverse, a 3D virtual events platform
  • Mootup, an enterprise metaverse solutions provider

Virtual products on offer

  • Eventify, an enterprise events platform
  • swapcard, a smart events technology platform designed to increase lead generation, revenue and audience loyalty
  • Grip, an AI-powered service to establish, maintain and track business relationships
  • eventmobi, an event management software suite behind over 30,000 global events including 16.5 million attendees
  • Airmeet, a virtual events hosting service covering webinars, town halls, conferences, product launches and more
  • Collectivibe, a builder of customized virtual events

Xcyte’s diverse selection of providers is what allows it to maintain an 80 per cent gross margin, which denotes management’s capital efficiency, and earn more than 80 per cent of its revenue from recurring subscriptions, entailing very little in the way of overhead costs.

Subscriptions are supported by revenue from in-house streaming (webcasting, HD video, streaming and large audience broadcast), managed services (training, design, build and production) and Xcyte’s events management platform (ticketing, monetization, pay-per-view, metrics, analytics and reports).

Backed by a dependable source of cash flow, Xcyte has been able to refine its subscription cost to approximately 50 per cent less per event (C$6,665) compared with a direct license from a single platform provider (C$12,999), virtually eliminating technology risk for clients. Should a given platform turn out to be deficient for their needs, a client can simply switch to another included in their Xcyte subscription.

The prospect of a holistic events service that cuts event budgets in half, or even more compared with in-person events, led Xcyte’s collection of assets to generate C$3.7 million in revenue and C$372,000 in EBITDA in 2022, with management projecting a significant increase in revenue and EBITDA by 2026 led by strategic, value-conscious acquisitions.

Acquisitions that enhance development

Xcyte Digital is focused on growing its technology stack through fundamentally sound acquisitions specialized in attendance, leads and interactions that better ensure the success of client events.

It has numerous value-accretive, EBITDA-positive targets in its sights with the intention of building a synergistic universe of solutions that catalyze subscriber growth, while organically growing its streaming, managed services and event management platform businesses. Targets include:

  • A conference and virtual event services company with C$12 million in annual revenue and C$3.5 million in annual EBITDA
  • A webinar technology and production company with ~C$4.5 million in annual revenue and ~C$1.3 million in annual EBITDA
  • A digital marketing agency that increases clicks on client websites with C$500,000 in annual revenue and C$100,000 in annual EBITDA
  • A lead-generation business with C$1.2 million in annual revenue and C$550,000 in annual EBITDA that takes these clicks and turns them into attendance leads for event sponsors
  • Event tech stack additions, including one-on-one meeting, financial services and meeting management software, with C$2 million in annual revenue and C$750,000 in annual EBITDA
  • Two conference telecom companies with combined annual revenue of C$9.5 million and annual EBITDA of C$3.3 million

Xcyte expects significant revenue growth from acquisitions over the next 18 months, with current targets representing revenue potential of ~C$30 million with EBITDA of C$9.4 million, each of them informed by management’s decades of experience customizing events to specific audiences and business goals, and its focus on identifying disruptive event technologies before they achieve wide industry adoption.

Seasoned virtual and immersive event specialists

Xcyte management has an ironclad track record in the events space spanning the production of more than 150,000 events with more than 100 million participants. This includes vast experience with virtual and immersive events, making Xcyte’s executives an ideal fit to aggregate related businesses and technologies while delivering a bullseye on service and support.

Founder and CEO Randy Selman is a technology and capital markets expert who has been active in webcasting and virtual event platforms from their earliest days.

He is a co-founder and previous CEO of Onstream Media, formerly Visual Data Corp., an online service provider of live and on-demand communications that executed on 14 acquisitions over 15 years, and reached a US$250 million market capitalization on the Nasdaq exchange. Several of Onstream’s assets will be transferred to Xcyte Digital upon its public listing on the TSXV.

Mr. Selman is also the founder and former CEO of point-of-sale software developer SK Technologies, which reached a market capitalization of US$80 million on the Nasdaq.

Mr. Selman is supported by Chief Operating Officer (COO) Alan Saperstein, a co-founder and current COO of Onstream Media, with whom he has worked for close to 25 years. Mr. Saperstein’s experience includes running day-to-day operations for Onstream Media (formerly Visual Data), managing patented technologies for hundreds of clients, as well as serving as director of the entertainment division for NFL Films, which saw him produce more than 100 multi-camera arena rock videos for major acts.

Xcyte’s management team is further strengthened by strategic hires with insights across event building, M&A and marketing:

  • Jamie Hayes-Jones, president of event technologies, is the founder of Launch Interactions, an event technology company offering many among Xcyte’s suite of virtual event technology solutions. Mr. Hayes-Jones has worked with thousands of clients across more than 15 million attendees.
  • Michelle Daniels, senior VP operations, brings more than 25 years of senior leadership experience in virtual communications, with past client deliveries for the likes of Dell, General Electric, the Internal Revenue Service, the Federal Reserve Bank and NASCAR. Ms. Daniels has worked alongside Mr. Selman for more than 15 years.
  • Sabrina George, senior VP marketing, is a more than 20-year veteran in digital, event, channel and lead-generation marketing, including more than 15 years as vice president of marketing at Onstream Media.
  • David Adler, a proposed independent director, is a prominent figure in the events industry because of his founding of BizBash, a leading publication for meeting and event professionals. Mr. Adler sold BizBash to Tarsus, a major B2B media and events company, in 2019
  • Michele Middlemore, CPA, CA, CFA, another proposed independent director, has been active in M&A and corporate finance since 1992, and will help to hone Xcyte’s identification of prospective acquisitions, while also developing them through her expertise in growth strategies, raising debt and equity capital, divestitures and succession/transition planning

Captained by a tailormade crew, Xcyte now checks all the boxes of a greenlight investment opportunity, one where high recurring revenue positions the company to ride a market tailwind as its value-added offerings attract and retain more leading brands.

A clear-cut case for growth

Xcyte Digital offers readers access to established technology and proven management at an early stage entry point, a combination usually reserved for accredited venture capital investors. Call it having your cake and eating it too.

A retail investor can find further advantage through the market’s generally fearful approach to new microcap stocks, which often leads to undervaluation, despite business quality and industry demand, through temporary downside volatility.

As Xcyte allocates listing proceeds to advance its technology stack and the quality of client events, an investment in the stock offers exposure to the rarest of occurrences: a path to exponential growth with more than enough evidence to merit high conviction.

Readers can learn more by reading Xcyte Digital’s latest investor presentation and by watching Stockhouse’s recent interview with CEO Randy Selman.

Join the discussion: Find out what everybody’s saying about this new virtual and hybrid event technology stock on the Xcyte Digital Bullboard.

This is sponsored content issued on behalf of Xcyte Digital, please see full disclaimer here.


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