Scotiabank analyst Jeff Fan is bullish on\u00a0BBTV Holdings (BBTV Holdings Stock Quote, Chart, News, Analysts, Financials TSX:BBTV), reinstating a "Sector Outperform" rating and target price of C$18.50\/share with a projected return at press time of 182.9 per cent in his latest update to clients on Thursday. Vancouver-based BBTV provides end-to-end online content management and monetization services to content creators who run the gamut from individual creators on platforms like Instagram and TikTok to corporations like the NBA. Fan\u2019s updated analysis comes after BBTV released its second quarter financials, which prompted changes to Fan's future revenue and gross profit assumptions. \u201cManagement has guided for EBITDA-positive in 2022 which is sooner than we previously expected," Fan wrote. "Based on our F22 opex estimate of approximately $55 million, we expect BBTV will achieve approximately $55 million of gross profit and $618 million of revenue to reach breakeven. Our revised revenue and gross profit estimates reflect management's confidence in Plus Solution growth and the continued secular tailwinds of digital advertising.\u201d BBTV reported revenues of $118.1 million in the quarter, a 23.5 per cent increase compared to the second quarter of 2020. Revenue from its Base Solutions platform came in at $108 million, up 20.6 per cent from the $89.5 million in revenues the company reported in the second quarter of 2020, while its Plus Solutions generated revenues of $10.1 million, up 65.6 per cent from the $6.1 million reported in the same quarter last year. Overall, BBTV turned a gross profit of $9.2 million in the quarter, good for a margin of 7.8 per cent, with the company expecting its Plus Solutions to help expand margins in future quarters. However, the company also reported its second consecutive quarter of adjusted EBITDA losses, posting a loss of $3.4 million in the quarter. BBTV also ended the quarter with $15.5 million in cash, but they collected another $11 million after the end of the quarter to push the balance over $27 million at the end of July, while the company has long term debt of $48.1 million on its balance, which will mature in 2026. Prior to reporting its financial results, BBTV also reported an increase of 5.5 billion monthly views through YouTube Shorts from some of the creators the company signed in the first half of the year, marking a continuation of the company\u2019s growth strategy across platforms, markets and verticals. \u201cOur second quarter performance demonstrates our continued growth momentum,\u201d said Shahrzad Rafati, Chairperson and CEO of BBTV in the company\u2019s August 11 press release. \u201cWe are pleased that our investments towards Plus Solution revenue growth are beginning to show results, and we are confident that momentum will continue. Our entire organization is focused on scaling towards profitability. Based on current growth trends, we continue to expect to be Adjusted EBITDA positive sometime next year. Our continued financial progress is underpinned by our commitment and passion to help and support creators with our industry leading platform.\u00a0 We are grateful to have an opportunity to power the creator economy and serve thousands of creative and talented creators.\u201d Fan expects continued growth in the second half of 2021, eventually finishing with projected revenue of $515 million for a 12.2 per cent year-over-year increase, with another 20 per cent jump to a projected $618 million forecasted for 2022. Fan\u2019s adjusted EBITDA projections for 2021 come in at a $9.1 million loss, but he also expects this value to turn positive for 2022, forecasting a $900,000 positive adjusted EBITDA, which Fan indicated was earlier than expected. With the company still posting record numbers, Fan believes the makeup of BBTV\u2019s audience will play a role in its future growth. \u201cWe expect the mix of viewership amongst BBTV's content creators drove the lower margins in the quarter offsetting some of the strength from Plus Solutions,\u201d he said. \u201cLooking forward, we expect margin expansion in F22 due to the higher mix of Plus Solutions but we will continue to monitor Base gross margin performance given its significantly larger proportion.\u201d "BBTV is currently trading at 0.3x NTM revenue and 3.5x NTM Gross Profit, which is attractive based on the revenue and gross profit growth outlook. Our NAV is based on an average of 0.6x revenue and 9.5x gross profit as we expect margin expansion from a higher mix of Plus Solutions over the target horizon," Fan wrote. At press time, BBTV Holdings finished the week at $6.48\/share, putting the stock down 54 per cent year-to-date, with a high point of $14.81\/share coming on January 13. Earlier this month, BBTV released a corporate update, speaking to the company's improving fundamentals and avenues for growth, along with a couple of management changes. BBTV has taken on a new acting CFO in Ben Groot and strategic consultant for direct advertising sales in Martin Cass. The company said industry trends are positive, with online video taking more of a share of internet traffic on social media platforms like Facebook. BBTV said Direct Ad Sales show that more brands are using its platform, while BBTV's Mobile Apps business is improving and the company has added Non-Fungible Tokens (NFTs) as a new revenue generating Plus Solution. Disclaimer: Nick Waddell owns shares of BBTV and BBTV is an annual sponsor of Cantech Letter.