A solid quarter for children\u2019s content provider WildBrain (WildBrain Stock Quote, Chart, News TSX:WILD) has been overshadowed by the disruption caused by YouTube policy changes that will impact the company\u2019s Spark platform, according to analyst Rob Goff of Echelon Wealth Partners. Goff reviewed WILD\u2019s fiscal second quarter results in an update to clients on February 14, keeping his \u201cSpeculative Buy\u201d recommendation but paring down his price target from $2.70 to $2.25 per share. Halifax-based WildBrain (formerly DHX Media) released its Q2 fiscal 2020 results on February 13, showing revenue growth of four per cent year-over-year to $122.1 million and a net loss of $2.3 million or $0.02 per share compared to a loss of $17.9 million or $0.13 per share a year earlier. EBITDA came in at $25.6 million with margins at a healthy 20.9 per cent up from 18.8 per cent a year earlier. WildBrain Spark, which delivers kids content on YouTube and YouTube Kids, grew its viewership by 36 per cent to over 9.9 billion views for the quarter and over 22.0 billion views for the first half of the fiscal year, a 51 per cent increase. The good news from the quarter was juxtaposed with YouTube\u2019s new rules regarding advertising on kids\u2019 content put in place last month and resulting from a US Federal Trade Commission charge for violating children\u2019s privacy, settled last year for US$136 million. YouTube policy has now removed so-called interest-based advertising from kids content, a targeted and more lucrative form of advertising for content providers such as WildBrain Spark. \u201cWe\u2019re taking actions to address the changes made by YouTube and continue to see significant value in our large and growing user base, We believe these changes will result in a more positive and curated environment for kids, and ultimately, improved monetization that will reward quality content. We\u2019re ideally positioned to benefit from this move over the long term,\u201d said WildBrain CEO Eric Ellenbogen in the quarterly press release. The YouTube changes are a definite setback for WildBrain and a source of uncertainty for investors, says Goff, but the overall impact could be rosier than all that. \u201cWe look for modest fine-tuning by YouTube (given the sensitivity and scrutiny around the issue), a shift to advertiser adoption of context-based advertising along with new sales strategies including a build-up of direct sales to return advertising revenues to a growth trajectory,\u201d Goff wrote. \u201cAfter all, viewership on the quarter gained 36 per cent year-over-year and advertisers will recognize that YouTube remains a targeted (past demographics are well-known), cost effective (aka low CPMs) platform. On the positive, the volatility associated with YouTube and the underlying flight to quality\/scale strengthen WildBrain Spark\u2019s role as an aggregator\/multi-channel network with scale does bring opportunities. However, investors are left waiting to see where revenues shake out and what the financial impact is to WildBrain,\u201d he wrote. Back to the quarterly results, WILD had top and bottom line beats of Goff\u2019s estimates of $113.4 million in revenue and $25.3 million in EBITDA. The analyst also highlighted in his update the positive news concerning WILD\u2019s Consumer products-owned business and largest contributor, Peanuts, which gained nine per cent year-over-year with the launch on Apple TV+ which has been well received and has renewed interest in Peanuts merchandise, the analyst noted. After minor revisions to his forecasts, Goff is now calling for fiscal 2020 revenue of $440.2 million and adjusted EBITDA of $78.9 million. His $2.25 target represented at press time a projected 12-month return of 52.0 per cent.