On Friday, November 17th, CLIQ hosted its first ever analyst teach-in, a welcome step in increasing transparency. Here are our key takeaways:

Savvy performance marketing as USP. While CLIQ offers streaming content, it is anything but a mere streaming platform; its main competitive edge lies in its performance marketing expertise. Aided by proprietary business intelligence and predictive analysis, the company places ad banners on numerous marketing URLs, thereby boosting conversions and traffic on its own landing pages.

Investments in quality content. To increase platform desirability and customer retention, the company continues to improve its content catalogue across all verticals with tailored movies, series, sports, audiobooks, music, and gaming. Particularly CLIQ’s entry into cloud gaming capitalizes on the rapidly advancing market, which is expected to grow by 46% CAGR until 2030, according to Statista. Instead of owning the content outright, the company licenses finished content from well-known partners on either a fixed, revenue-linked, or pay-per-use basis (e.g. 90% of CLIQ's licensing agreements are based on a fixed licensing fee). While this will enable CLIQ to operate a flexible and asset-light business model, higher content quality will result in higher licensing fees, presently captured in our estimates.

Sales target of € 500m by 2025 confirmed. Three drivers should contribute to € 500m in sales by 2025: (1) The quality of the membership base is continuously improving with LTV at € 89.01 as of Q3 (+1.7% qoq; +24% yoy) due to selling bundled content as opposed to single content, which strengthens customer loyalty, (2) geographic expansion (e.g. Latin America), and (3) exploring B2B partnerships and resuming affiliate marketing with trusted partners to position CLIQ as a unique D2C brand.

Outlook. FY 23e guidance of sales > € 345m, EBITDA > € 50m and marketing spend > € 120m is maintained. Although sales developed slightly below expectations due to muted consumer sentiment, management maintains the EBITDA guidance and margins should remain at the levels of 9M, in our view. Importantly, CLIQ’s debt-free balance sheet, strong FCF (€ 15m as of 9M) and net cash position of € 12m should support its 40% payout ratio and strong 10% dividend yield, going forward.

CLIQ remains a BUY with an unchanged PT of € 78.30 based on FCFY 23e & 24e.