Executive Summary / Key Takeaways

• Kidoz Inc. is strategically positioned as a leader in privacy-first, compliant mobile advertising for children, teens, and families, a market segment experiencing significant growth due to evolving global privacy regulations like COPPA and Australia's expanded social media ban.
• The company's proprietary AdTech, including the Kidoz Safe Ad Network, the new Prado SDK for broader audiences, and the AI-powered Kite IQ contextual targeting engine, provides a crucial technological moat by enabling effective advertising without relying on personal data.
• Kidoz demonstrated robust financial performance in H1 2025 with record revenue of USD 5.17 million, representing 21% year-over-year growth, building on a record 2024 with USD 14.00 million in revenue and USD 1.13 million in Adjusted EBITDA.
• Despite a Q2 2025 revenue pullback attributed to broader economic uncertainties, the company maintains a healthy balance sheet with zero debt and is poised for continued growth, with analysts forecasting record revenue and EPS in 2025.
• Kidoz's specialized focus on safety and compliance offers a distinct competitive advantage against larger, more generalized AdTech and entertainment platforms, making it an attractive option for brands seeking secure engagement with younger audiences.

The Privacy Imperative: Kidoz's Strategic Foundation in a Regulated Digital World

In an increasingly complex digital landscape, where data privacy and child online safety are paramount concerns, Kidoz Inc. ($KDOZF) has carved out a compelling niche. The Vancouver-based AdTech developer has strategically positioned itself as a global leader in providing mobile advertising solutions specifically designed for children, teens, and families, operating within the stringent frameworks of regulations like COPPA (Children's Online Privacy Protection Act) and GDPR-K (General Data Protection Regulation). This focus is not merely a compliance exercise but a foundational business strategy, transforming regulatory headwinds into significant growth opportunities.

The company’s journey to this specialized position saw a pivotal shift in April 2019, when Shoal Games Ltd. rebranded to Kidoz Inc., aligning its identity with its burgeoning AdTech focus. This strategic pivot was immediately reflected in its financials, with revenue surging from $106,978 in 2018 to $4.52 million in 2019, underscoring the successful reorientation of its business model. Since then, Kidoz has consistently expanded its offerings, building a robust ecosystem that includes the Kidoz Safe Ad Network, the Prado advertising network for audiences over 13, and a suite of related technologies.

The market environment for Kidoz is currently shaped by significant regulatory tailwinds. The Federal Trade Commission's (FTC) updated COPPA rule, effective June 23, 2025, strengthens limits on data collection, restricts behavioral advertising for children, and mandates separate parental consent for third-party data disclosures, along with mandatory age-gating for general audience platforms. Similarly, Australia's decision in August 2025 to expand its under-16 social media ban to include platforms like YouTube, effective December 10, 2025, further underscores the global shift towards stricter child online safety. These developments create an urgent demand for safe, compliant digital advertising solutions, particularly in mobile gaming, a demand Kidoz is uniquely equipped to meet.

Technological Moats: Kite IQ and Prado SDK Drive Compliant Engagement

Kidoz's core competitive advantage lies in its proprietary, privacy-first technology, which enables advertisers to connect with audiences effectively without compromising privacy or safety. The company's offerings include the Kidoz Software Development Kit (SDK), Kidoz Privacy Shield, and advanced contextual targeting tools. These technologies are foundational to its managed and programmatic advertising services, encompassing supply-side platform (SSP), demand-side platform (DSP), and Ad Exchange capabilities.

A significant technological leap for Kidoz came in July 2025 with the unveiling of Kite IQ, its proprietary AI engine. Kite IQ is designed to deliver category-leading contextual targeting at scale by utilizing advanced machine learning and semantic analysis to classify mobile apps across theme, content, and audience appeal. This engine enriches every app with real-time contextual metadata, detecting genre, themes, age-group appeal, and gender targeting through a combination of natural language processing and similarity modeling. The tangible benefit for advertisers is a new level of control, context, and confidence in every impression, leading to higher-value campaigns and increased returns on advertising spend, all while maintaining full compliance with global privacy regulations. This capability directly addresses the long-standing industry challenge of relying on generic store tags that offer little insight into an app's true content or audience.

Complementing Kite IQ is the Prado SDK, officially launched in July 2025. This new platform is designed to increase publisher revenues by bringing premium brand advertising directly to mobile apps for audiences of all ages. Following a successful pilot, the Prado SDK offers a lightweight and flexible solution for privacy-focused and optimized monetization, reducing reliance on third-party vendors and ensuring a seamless user experience. Prado applies the same principles of quality and contextual intelligence that define Kidoz's kid-safe advertising, now tailored for a broader audience, enabling brands to effectively target customers who opt out of providing personal data. This strategic expansion allows Kidoz to leverage its privacy expertise across a wider market, accessing hundreds of thousands of apps and reaching over a billion monthly active users through the Prado platform.

Financial Performance and Outlook: Growth Amidst Market Shifts

Kidoz has demonstrated a strong trajectory of revenue growth and improving profitability. The company reported record H1 2025 revenue of USD 5.17 million (CAD 7.28 million), marking a significant 21% year-over-year increase. This builds on a robust 2024, which saw Kidoz achieve record revenue of USD 14.00 million (CAD 19.19 million) and a record Adjusted EBITDA of USD 1.13 million (CAD 1.55 million). The gross profit ratio stood at a healthy 0.54 in 2024, reflecting efficient cost management. Net income for 2024 was positive at $353,140, a notable improvement from previous years.

While Q1 2025 revenue showed strong growth at USD 2.73 million (CAD 3.93 million), the company experienced a 2% year-over-year pullback in Q2 revenue, missing analyst forecasts by 4%. This was primarily attributed to reduced client ad spending amid U.S. tariff uncertainty and broader economic and trade concerns. However, management noted that excluding R&D costs, the company remains profitable, and adjusted EPS (ex-R&D) increased 46% year-over-year in H1 2025.

Looking forward, Kidoz is poised for continued growth. Analyst consensus forecasts an 11% revenue growth for the sector in 2025, and analysts expect Kidoz to achieve record revenue and EPS in 2025. The clarity on U.S. tariffs and the rising demand for privacy-compliant digital advertising are expected to support the company's growth trajectory. Furthermore, Kidoz maintains a healthy balance sheet with zero debt, providing financial flexibility for future initiatives.

The company's recent commencement of trading on the OTCQB Venture Market under the symbol "KDOZF" in June 2025 is also a strategic move to increase its presence within the U.S. investment community and attract growth-oriented investors.

Competitive Landscape and Strategic Differentiation

Kidoz operates in a highly competitive AdTech and digital entertainment space, but its specialized focus on child-safe and privacy-compliant advertising provides a distinct competitive edge. While larger players like Duolingo (DUOL) focus on language learning with integrated ads, Roblox (RBLX) on user-generated gaming, Electronic Arts (EA) on broader gaming, and The Trade Desk (TTD) on general programmatic advertising, Kidoz differentiates itself through its deep expertise and proprietary technology tailored for younger audiences and families.

Kidoz's emphasis on safety and educational integration, particularly with its Kidoz Safe Ad Network and the Rooplay edugames platform, allows it to appeal directly to privacy-conscious parents and brands seeking compliant engagement. This contrasts with competitors like Roblox, which, despite its massive user base, faces ongoing concerns regarding content moderation and child safety. Kidoz's Kite IQ and Prado SDK further enhance its competitive standing by offering superior contextual targeting and monetization solutions that inherently respect user privacy, a critical factor in today's regulatory environment.

Financially, Kidoz's valuation metrics suggest it trades at a discount compared to some sector averages. Its P/S ratio of 1.32 and P/E ratio of 56.75 (TTM) are noteworthy. While direct, comprehensive financial comparisons across all niche competitors are challenging to ascertain, Kidoz's gross profit margin of 55.02% (TTM) and EBITDA margin of 4.41% (TTM) demonstrate its operational efficiency within its specialized segment. The company's zero-debt balance sheet also provides a strong foundation compared to many growth-oriented technology firms. Kidoz's strategic adaptability is demonstrated by its continuous innovation in privacy-first technology, which positions it to capitalize on regulatory shifts that may challenge less specialized competitors.

Risks and Challenges

Despite its strong positioning, Kidoz faces inherent risks. The company operates in a highly competitive space, requiring continuous innovation to maintain its technological edge. While current regulatory changes favor Kidoz, unfavorable shifts in privacy regulations could pose challenges. Furthermore, the company's revenue can be impacted by broader economic uncertainties and fluctuations in client ad spending, as evidenced by the Q2 2025 pullback due to U.S. tariff uncertainty and economic concerns. The reliance on a niche market, while a strength in terms of specialization, could also limit its overall market reach compared to more diversified AdTech platforms.

Conclusion

Kidoz Inc. stands at the forefront of a rapidly evolving digital advertising landscape, where the demand for child-safe and privacy-compliant solutions is no longer a niche requirement but a regulatory imperative. Through its proprietary AdTech, including the innovative Kite IQ and Prado SDK, Kidoz has built a robust platform that enables brands to connect with children, teens, and families in secure, high-performance environments. This technological leadership, combined with a strong financial performance in the first half of 2025 and a debt-free balance sheet, underpins a compelling investment thesis.

As global privacy regulations continue to tighten, Kidoz's specialized approach and commitment to privacy-first advertising position it as a critical partner for advertisers and publishers alike. While market volatility and competitive pressures remain, the company's strategic alignment with prevailing industry trends and its continuous technological advancements suggest a promising trajectory for sustained growth and profitability. Investors seeking exposure to a specialized AdTech player poised to capitalize on the privacy imperative in digital media should consider Kidoz Inc. as a compelling opportunity.