Disclosure: Kidoz Inc. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Subscribe for free to get exclusive insights and fair value data.
Price and Volume (1-year)
* Kidoz Inc. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions. All figures in US$ unless otherwise specified.
Financials
Record Q3 revenue of $3.67M, up 60% YoY, and 3% above our estimate
2025 (9M) revenue rose 35% YoY to a record $8.84M
In Q3-2025, North America accounted for 54% of revenue vs 48% in Q3-2024
Gross margin fell 4 pp YoY to 49%, 1 pp below our forecast, likely due to competition
G&A and other expenses rose 27% YoY, 7% above our estimate, mainly due to higher R&D spending on AI integration; a strategic move we view positively to stay competitive
Higher revenue narrowed EPS losses
Balance sheet remains healthy, with zero debt
Source: FRC / Company
Can raise up to C$1.53M from in-the-money options
FRC Projections and Valuation
The global kids digital ad market is projected to grow from $6B in 2025, to $15B by 2035 (10.5% CAGR), driven by increased device use among children, rising digital media consumption, and engaging ad formats
Per industry consensus, global digital ad spending growth is anticipated to slow to 8% in 2025 vs 10% in 2024, reflecting the absence of major cyclical events, economic and trade uncertainties, and tighter data privacy rules. Growth is expected to accelerate in 2026, supported by rising global GDP from easing monetary conditions, and the potential easing of geopolitical tensions and uncertainties, boosting advertiser confidence.
Source: FRC / Various
Historically, we estimate that KDOZ's revenue growth outpaced global digital ad spending growth by 1.75x on average
Following a strong Q3 and robust ad outlook, we are raising our short- and long-term revenue forecasts
Source: FRC
We are lowering 2025 EPS due to higher R&D, but raising 2026 EPS on stronger revenue
Our DCF valuation rose from C$0.87 to C$0.90/share, driven by higher revenue estimates
Digital AdTech Companies
Source: S&P Capital IQ / FRC
KDOZ is trading at 1.46x forward EV/Revenue (up from 1.05x in our previous report), but still below the sector average of 2.54x (down from 2.74x)
Our comparables valuation fell from $0.53 to $0.51/share due to the lower sector multiple
We are reiterating our BUY rating, and maintaining our fair value estimate at C$0.70 (the average of our DCF and comparables valuations). KDOZ posted strong Q3 revenue growth, outperforming major ad platforms. Regulatory pressures and rising demand for safe, age-verified advertising support continued growth. Trading at 1.46x forward EV/Revenue, KDOZ remains attractively valued versus the sector, offering potential upside.
Risks
We believe the company is exposed to the following key risks:
Maintaining our risk rating of 4 (Speculative)
APPENDIX
