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AcuityAds Reports Second Quarter 2022 Financial Results

·15 min read
AcuityAds Holdings Inc
AcuityAds Holdings Inc

Generated $28.3 million in Total Revenue
illumin Revenue Up 96% YOY to $10.2 million

TORONTO and NEW YORK, Aug. 10, 2022 (GLOBE NEWSWIRE) -- AcuityAds Holdings Inc. (TSX:AT) (NASDAQ:ATY) (“AcuityAds” or “Company”), a Journey Advertising technology company that empowers marketers to make smarter decisions about communicating with online consumers, today announced its financial results for the three months ended June 30, 2022.

Second Quarter 2022 Highlights

  • Total revenue for the three months ended June 30, 2022, was $28.3 million, up 18.6% sequentially. On a year over year basis, revenues decreased by 6.6% which was largely anticipated as we continue to build and transition our sales team from our legacy DSP product to our Journey Advertising product, illumin. As previously communicated, we believe our new sales personnel will become more productive in the second half of FY2022. However, the Company remains mindful of potential macro-economic headwinds and is monitoring the situation accordingly.

  • illumin second quarter revenue rose 96.1% year over year to $10.2 million or 36% of total revenue.

  • illumin self-serve revenue increased 94% sequentially to $1.0 million, while illumin self-serve clients grew 24% sequentially.

  • Second quarter 2022 gross margin was 51.9%, compared to 52.2% in 2021.

  • Net revenue or gross profit (revenue less media costs) for the three months ended June 30, 2022 was $14.7 million, compared to $15.8 million for the same period in 2021.

  • Adjusted EBITDA was $1.5 million for the second quarter of 2022, compared to $5.4 million in the prior year.

  • Q2 2022 net income was $0.9 million, compared to $3.4 million in Q2 2021, primarily due to our previously communicated strategic investments in both R&D and sales.

  • During the second quarter of 2022, the Company repurchased 2,269,480 of its common shares at an average price of $3.15 per share for total consideration of $7,140,296. As of August 5, 2022, the Company has repurchased 3,525,620 of its common shares for total consideration of $11,143,292.

  • At June 30, 2022, the Company had cash and cash equivalents of $92.5 million, compared to $102.2 million as of December 31, 2021, reflecting share repurchases during the quarter.

“During the second quarter, revenue from illumin, our Journey Advertising platform, grew 96% year-over-year, reaching $10.2 million or 36% of total revenue,” said Tal Hayek, Co-Founder and Chief Executive Officer of AcuityAds. “While total company revenue was lower than the prior year due to salesforce transition issues, we continue to see growing adoption of illumin-particularly in self-serve usage. Our strategic initiatives to grow illumin self-serve revenues have already begun to pay off as these revenues grew 94% sequentially, even as illumin self-serve clients grew 24%. This sequential growth supports our belief that illumin’s tremendous ease of use naturally lends itself to self-serve operation and we expect to see continued growth.”

Mr. Hayek continued, “Looking ahead, we believe we will realize further benefits from our strategic investments in R&D, Sales and Marketing. These initiatives will also prepare our organization for its next growth phase. Based on customer demand and our current expectations, we anticipate resuming solid year-over-year revenue growth in the third and fourth quarter of 2022, despite the challenging macro-environment. We remain confident that we are taking the right actions to generate long-term shareholder value, highlighted by our share repurchase activity in the quarter.”

Elliot Muchnik, AcuityAds’ Chief Financial Officer, commented, “We continued to see strong demand for illumin in the quarter, which drove over 30% of sequential illumin revenue growth. The Company repurchased 2.3 million of our common shares for $7.1 million via the normal course issuer bid (“NCIB”) we initiated in the quarter. The Company is permitted to purchase up to 5.5 million of the Company’s common shares over the course of the year. This share buy-back underscores our confidence in our balance sheet as well as our fundamental belief in the Company’s long-term prospects. In addition, our healthy balance sheet and considerable liquidity allows us to continue to explore M&A opportunities that fit our corporate strategy.”

The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the periods ended:

 

Three months ended

 

Six months ended

 

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss) for the period

$

910,782

 

$

3,361,572

 

$

(3,579,611

)

$

4,725,453

 

Adjustments:

 

 

 

 

Finance costs

 

125,249

 

 

258,974

 

 

271,104

 

 

533,854

 

Foreign exchange gain

 

(3,183,361

)

 

(1,303,044

)

 

(1,392,259

)

 

(734,561

)

Depreciation and amortization

 

1,198,379

 

 

1,261,634

 

 

2,402,378

 

 

2,644,660

 

Income taxes

 

101,176

 

 

201,357

 

 

53,635

 

 

231,600

 

Share-based compensation

 

2,074,988

 

 

1,624,119

 

 

3,553,985

 

 

2,488,511

 

Severance expenses

 

268,782

 

 

34,209

 

 

282,431

 

 

90,758

 

Other expenses

 

-

 

 

-

 

 

79,132

 

 

-

 

Total adjustments

 

585,213

 

 

2,077,249

 

 

5,250,406

 

 

5,254,822

 

Adjusted EBITDA

$

1,495,995

 

$

5,438,821

 

$

1,670,795

 

$

9,980,275

 

Conference Call Details:

Date: Wednesday, August 10, 2022
Time: 8:30AM Eastern Time
To register for the conference call webcast and presentation, please visit
https://illumin.com/investors/earnings-call/

Participant Dial-in Numbers:
Session ID 371702
Session PIN 4375
Dial-in numbers

+1 833 790 7344 US (Toll-free)
+1 650 514 4442 US (North California)
+1 360 244 4406 US (Tacoma)
+1 281 394 4441 US (Texas)
+1 619 603 4444 US (South California)
+44 752 064 5003 United Kingdom

Please connect at 15 minutes prior to the conference call to ensure time for any software download that may be needed to hear the webcast.

A recording of the conference call webcast will be available after the call by visiting the Company’s website at https://illumin.com/investors/.

Non-IFRS Measures

This press release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures including “revenue less media costs”, “revenue less media costs margin”, “Adjusted EBITDA” and “Adjusted Net Income (Loss)” (as well as other measures discussed elsewhere in this press release).

The term “revenue less media costs margin” refers to the amount that “revenue less media costs” represents as a percentage of total revenue for a given period, while the term “revenue less media costs” refers to the net amount of revenue after deducting direct media costs. Revenue less media costs is used for internal management purposes as an indicator of the performance of the Company’s solution in balancing the goals of delivering excellent results to advertisers while meeting the Company’s margin objectives and, accordingly the Company believes it is useful supplemental information.

“Adjusted EBITDA” refers to net income (loss) after adjusting for finance costs, impairment loss, fair value gain, income taxes, foreign exchange gain (loss), depreciation and amortization, share-based compensation, acquisition and related integration costs, severance expenses and adjustments to the carrying value of investment tax credits receivable. The Company believes that Adjusted EBITDA is useful supplemental information as it provides an indication of the results generated by the Company’s main business activities before taking into consideration how those activities are financed and taxed and also prior to taking into consideration depreciation of property and equipment and certain other items listed above. It is a key measure used by the Company’s management and board of directors to understand and evaluate the Company’s operating performance, to prepare annual budgets and to help develop operating plans.

“Adjusted Net Income (Loss)” refers to net income (loss) after adjusting for non-cash items such as impairment loss, fair value gain, depreciation and amortization, share-based compensation and foreign exchange gain/loss. The Company believes that Adjusted Net Income (Loss) is useful supplemental information as it provides an indication of the results generated by the Company’s main business activities on a cash basis. It is another key measure used by the Company’s management and board of directors to understand and evaluate the Company’s operating performance, to prepare annual budgets and to help develop operating plans.

These non-IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our business that may not otherwise be apparent when relying solely on IFRS measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers, and that these non-IFRS measures in particular are relevant to their analysis of the Company.

About AcuityAds:

AcuityAds is a leading advertising technology company that empowers marketers to make smarter decisions about targeting and communicating with online consumers. Its Journey Advertising platform, illumin™, offers media planning, buying and real-time intelligence from a single platform. With proprietary Artificial Intelligence, illumin™ brings unique programmatic capabilities to connect the consumer journey and help marketers understand a consumer’s true value to their brand. The Company brings an integrated ecosystem of privacy-protected data, inventory, brand safety and fraud prevention partners, offering trusted solutions with proven, above benchmark outcomes for the most demanding marketers.

AcuityAds is headquartered in Toronto with offices throughout Canada, the U.S., Europe and Latin America. For more information, visit illumin.com.

Disclaimer in regards to Forward-looking statements

Certain statements included herein constitute “forward-looking statements” within the meaning of applicable securities laws. These statements may relate to the Company’s future financial outlook, financial position, anticipated events, results, success of its work from home policies, the Company’s strategy with respect to the illumin platform, or the effect of the COVID-19 pandemic on the Company’s business and operations. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Also, given the evolving circumstances surrounding the COVID-19 pandemic, it is difficult to predict how significant the adverse impact of the pandemic will be on the global and domestic economy, the business, operations and financial position of the Company’s clients and the business, operations and financial position of the Company. Investors are cautioned not to put undue reliance on forward-looking statements. Many factors could cause the Company’s actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the factors discussed in the "Risk Factors" section of the Company's Annual Information Form dated March 10, 20221 for the fiscal year ended December 31, 2021 (the "AIF") and the Company’s Management Discussion and Analysis for the three months ended March 31, 2022 dated May [x], 2022 (the “MD&A”). A copy of the AIF, MD&A and the Company's other publicly filed documents can be accessed under the Company's profile on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com. In addition, the effects of COVID-19, including the duration, spread and severity of the pandemic, create additional risks and uncertainties for the Company. In particular, the impact of the virus and government authorities’ and public health officials’ responses thereto may affect: the Company’s actual results, performance, prospects or opportunities; domestic and global credit and capital markets and its ability to access capital on favourable terms, or at all; and the health and safety of its employees. The Company cautions that the list of risk factors and uncertainties described in the AIF and the MD&A are not exhaustive and other factors could also adversely affect its results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such information.

Except as required by law, AcuityAds does not intend, and undertakes no obligation, to update any forward-looking statement to reflect, in particular, new information or future events.

For further information, please contact:

Daniel Gordon
Investor Relations Manager
AcuityAds Holdings Inc.
416-218-9888
investors@acuityads.com

Babak Pedram
Investor Relations –
Canada
Virtus Advisory Group Inc.
416-644-5081
bpedram@virtusadvisory.com

David Hanover
Investor Relations – U.S.
KCSA Strategic Communications
212-896-1220
dhanover@kcsa.com

        

AcuityAds Holdings Inc.
Consolidated Balance Sheets
As at December 31, 2020

 

 

 

 

 

 

 

 

 

(expressed in Canadian dollars)

 

 

 

 

 

 

 

 

 

 

 

June 30,
2022
$

 

December 31,
2021
$

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

92,484,650

 

102,208,807

Accounts receivable

 

25,911,648

 

30,972,608

Prepaid expenses and other

 

4,006,169

 

3,278,624

 

 

 

 

 

 

 

122,402,467

 

136,460,039

Non-current assets

 

 

 

 

Deferred tax asset (note 16)

 

81,803

 

81,803

Property and equipment (note 3)

 

5,662,542

 

5,369,619

Intangible assets (note 4)

 

4,005,329

 

3,044,278

Goodwill

 

4,869,841

 

4,869,841

 

 

 

 

 

 

 

137,021,982

 

149,825,580

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

Accounts payable and accrued liabilities

 

20,332,386

 

24,853,497

Income tax payable

 

25,375

 

910,165

Borrowings (note 15)

 

5,223,356

 

2,946,150

Lease obligations (note 5)

 

1,963,968

 

2,058,161

 

 

 

 

 

 

 

27,545,085

 

30,767,973

Non-current liabilities

 

 

 

 

Borrowings (note 15)

 

253,748

 

3,852,891

Lease obligations (note 5)

 

2,805,512

 

2,148,708

 

 

 

 

 

 

 

30,604,345

 

36,769,572

 

 

 

 

 

Shareholders’ Equity (note 7)

 

106,417,637

 

113,056,008

 

 

 

 

 

 

 

137,021,982

 

149,825,580

 

 

 

 

 


AcuityAds Holdings Inc.
Condensed Interim Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)

 

(Expressed in Canadian dollars)

 

 

Three
months
ended

June 30,
2022
$

Three
months
ended

June 30,
2021
$

Six
months
ended

June 30,
2022
$

Six
months
ended

June 30,
2021
$

 

 

 

 

 

Revenue

 

 

 

 

Managed services

18,148,130

 

23,620,786

 

33,912,859

 

45,877,003

 

Self-service

10,112,215

 

6,664,436

 

18,168,374

 

11,862,811

 

 

 

 

 

 

 

28,260,345

 

30,285,222

 

52,081,233

 

57,739,814

 

 

 

 

 

 

Media costs

13,597,200

 

14,476,192

 

25,498,630

 

27,566,692

 

 

 

 

 

 

Gross profit

14,663,145

 

15,809,030

 

26,582,603

 

30,173,122

 

 

 

 

 

 

Operating expenses

 

 

 

 

Sales and marketing (note 17)

5,453,295

 

5,167,203

 

10,841,727

 

9,721,227

 

Technology (note 11 and 17)

4,222,675

 

3,342,054

 

7,521,005

 

7,135,424

 

General and administrative (note 17)

3,759,962

 

1,895,161

 

6,910,639

 

3,426,954

 

Share-based compensation (note 7)

2,074,988

 

1,624,119

 

3,553,985

 

2,488,511

 

Depreciation and amortization

1,198,379

 

1,261,634

 

2,402,378

 

2,644,660

 

 

 

 

 

 

 

16,709,299

 

13,290,171

 

31,229,734

 

25,416,776

 

 

 

 

 

 

Income (loss) from operations

(2,046,154

)

2,518,859

 

(4,647,131

)

4,756,346

 

 

 

 

 

 

Finance costs (note 8)

125,249

 

258,974

 

271,104

 

533,854

 

Foreign exchange gain

(3,183,361

)

(1,303,044

)

(1,392,259

)

(734,561

)

 

 

 

 

 

 

(3,058,112

)

(1,044,070

)

(1,121,155

)

(200,707

)

 

 

 

 

 

Net income (loss) before income taxes

1,011,958

 

3,562,929

 

(3,525,976

)

4,957,053

 

 

 

 

 

 

Income taxes (note 16)

101,176

 

201,357

 

53,635

 

231,600

 

 

 

 

 

 

Net income (loss) for the period

910,782

 

3,361,572

 

(3,579,611

)

4,725,453

 

 

 

 

 

 

Basic net income (loss) per share (note 9)

0.02

 

0.06

 

(0.06

)

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AcuityAds Holdings Inc.
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2021, and 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Expressed in Canadian dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income (loss) per share                                               
        (note 9)

0.02

 



0.06

 

(0.06

)



0.08

 

 

 

 

 

 

Exchange loss on translating foreign operations

244

 

248,433

 

234,335

 

1,002,764

 

 

 

 

 

 

Comprehensive income (loss) for the period

910,538

 

3,113,139

 

(3,813,946

)

3,722,689

 


AcuityAds Holdings Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
For the six-month periods ended June 30, 2022, and 2021

 

(Expressed in Canadian dollars)

 

 

 

2022
$

 

 

2021
$

 

 

 

 

 

 

Cash provided by (used in)

 

 

 

 

 

 

 

 

 

Operating activities

 

 

 

 

Income (loss) for the period

 

(3,579,611

)

 

4,725,453

 

 

 

 

 

 

Adjustments to reconcile net income to net cash flows

 

 

 

 

Depreciation and amortization

 

2,402,378

 

 

2,644,660

 

Finance costs (note 8)

 

271,104

 

 

533,854

 

Share-based compensation (note 7(c))

 

3,553,985

 

 

2,488,511

 

Foreign exchange gain

 

(1,392,259

)

 

(734,561

)

Change in non-cash operating working capital

 

 

 

 

Accounts receivable

 

5,060,960

 

 

829,380

 

Prepaid expenses and other

 

(727,573

)

 

(549,210

)

Accounts payable and accrued liabilities

 

(4,469,629

)

 

(1,008,800

)

Income tax payable

 

(884,790

)

 

-

 

Interest paid – net

 

(203,621

)

 

(466,497

)

 

 

 

 

 

 

 

30,944

 

 

8,462,790

 

 

 

 

 

 

Investing activities

 

 

 

 

Additions to property and equipment (note 3)

 

(1,922,440

)

 

(129,570

)

Additions to intangible assets (note 4)

 

(1,733,912

)

 

-

 

 

 

 

 

 

 

 

(3,656,352

)

 

(129,570

)

 

 

 

 

 

Financing activities

 

 

 

 

Repayment of term loans principal (note 15)

 

(1,227,584

)

 

(1,213,020

)

Additions to international loans (note 15)

 

1,074,905

 

 

159,168

 

Repayment of international loans (note 15)

 

(1,204,845

)

 

(994,941

)

Additions to leases

 

1,780,790

 

 

57,020

 

Repayment of leases

 

(1,134,566

)

 

(1,661,907

)

Net proceeds from equity financing (note 7)

 

-

 

 

64,293,097

 

Repurchase of shares for cancellation (note 7 (f))

 

(7,140,297

)

 

-

 

Proceeds from the exercise of warrants

 

-

 

 

61,723

 

Proceeds from the exercise of stock options

 

293,217

 

 

992,141

 

 

 

 

 

 

 

 

(7,558,380

)

 

61,693,281

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

(11,183,788

)

 

70,026,501

 

 

 

 

 

 

Foreign exchange impact on cash

 

1,459,631

 

 

734,561

 

 

 

 

 

 

Cash and cash equivalents – Beginning of period

 

102,208,807

 

 

22,638,300

 

 

 

 

 

 

Cash and cash equivalents – End of period

 

92,484,650

 

 

93,399,362

 

 

 

 

 

 

Supplemental disclosure of non-cash transactions

 

 

 

 

Additions to property and equipment under leases

 

1,780,790

 

 

71,556