AcuityAds Reports Fourth Quarter and Full Year 2021 Financial Results

Reported $36.8 million in Fourth Quarter Total Revenue

illumin Revenue of $10.2 million in the Fourth Quarter

Generated $26.0 million of illumin Revenue for the Full Year

 

AcuityAds Holdings Inc. (TSX:AT) (NASDAQ:ATY) (“AcuityAds” or “Company”), a technology leader that provides targeted digital media solutions enabling advertisers to connect intelligently with audiences across all digital advertising channels, today announced its financial results for the three and twelve months ended December 31, 2021.

 

Fourth Quarter 2021 Highlights

  • Total revenue for the three months ended December 31, 2021, was $36.8 million, a 33.9% sequential increase from the third quarter of 2021, a 5% year over year increase and an 8.3% year over year increase on a constant currency basis. The sequential increase was due to both illumin and legacy revenue growth.
  • illumin revenue was $10.2 million for the fourth quarter of 2021 or 28% of overall revenues, up 37% sequentially.
  • Gross margin for the three months ended December 31, 2021 was 52.0%, compared to 52.1% for the same period in 2020.
  • Net revenue or gross profit (revenue less media costs) for the three months ended December 31, 2021 was $19.1 million, compared to $18.3 million for the same period in 2020.
  • Adjusted EBITDA was $5.9 million for the three months ended December 31, 2021, compared to $7.8 million for the three months ended December 31, 2020, reflecting the Company’s investments to scale the business and capitalize on illumin market momentum. Adjusted EBITDA margin as a percent of total and net revenue was 16% and 31%, respectively.
  • Q4 total Connected TV segment revenue grew approximately 171% year-over-year and 19% sequentially from the third quarter of 2021.
  • Net income for the three months ended December 31, 2021 was $2.5 million, compared to net income of $4.2 million for the three months ended December 31, 2020.
  • Operating cash flow for the three months ended December 31, 2021, was $3.6 million, compared to operating cash flow of $3.4 million for the same period in 2020.
  • At December 31, 2021, the Company had cash and cash equivalents of $102.2 million, compared to $22.6 million as of December 31, 2020.

 

Fiscal Year 2021 Highlights

  • Total revenue for the year ended December 31, 2021 was $122.0 million, an increase of 16.3% compared to the same period in 2020, and a 23.6% year over year increase on a constant currency basis. The increase was driven mainly by new illumin revenue.
  • illumin revenue was $26.0 million for the year ended 2021.
  • Gross margin for the year ended December 31, 2021 was 52.1%, compared to 51.6% for the same period in 2020.
  • Net revenue or gross profit (revenue less media costs) for the year ended December 31, 2021 was $63.6 million, up 17.5% compared to $54.1 million for the same period in 2020.
  • Adjusted EBITDA increased 28.3% to $20.3 million for the year ended December 31, 2021, compared to $15.8 million for the prior year. Adjusted EBITDA margin as a percent of total and net revenue was 17% and 32%, respectively.
  • Total Connected TV segment revenue grew approximately 251% year-over-year.
  • Net income increased 186% to $10.6 million for the year ended December 31, 2021, compared to net income of $3.7 million for the year ended December 31, 2020.
  • Operating cash flow was $19.7 million for the year ended December 31, 2021, compared to operating cash flow of $19.4 million for 2020.

 

 

“illumin revenue growth in 2021 dramatically exceeded our original expectations, reaching $10.2 million in revenue for the fourth quarter, or 28% of total Company revenue, and $26.0 million in revenue for the full year,” said Tal Hayek, Co-Founder and Chief Executive Officer of AcuityAds. “Additionally, the Company generated strong operating cash flow in 2021, which along with the proceeds from our cross-border public offering in June, significantly strengthened our balance sheet to its strongest level in Acuity’s history. I would like to thank all the members of the Acuity Family whose hard work made all this possible.”

 

Mr. Hayek continued, “As we enter 2022, illumin continues to propel our growth while it fundamentally changes the world of advertising. Our success with illumin adoption,  reinforced our actions to support its future growth by strategically investing in sales and marketing activities as well as R&D, enhanced organizational capability and our people. Complementing this, we are also seeing encouraging signs of recovery in COVID-affected industries such as travel, and leisure and entertainment, which represents further potential upside. All of these trends, in combination with initial traction we’ve seen from our strategic investments, make us very confident in our long-term growth. We expect to see the benefits of our strategic actions take hold in the second part of the year.”

 

Elliot Muchnik, AcuityAds’ Chief Financial Officer, commented, “Despite on-going global supply chain issues, we grew 2021 revenues by over 16% both from rapid illumin growth and the continuing post-pandemic economic recovery. Our cash position also grew to a record $102.2 million as we generated additional cash flow in the quarter, despite increased spending in the latter part of the year to further capitalize on our unique consumer journey platform, illumin. Our strong cash position will enable us to continue executing on our organic growth strategies as well as to pursue strategic M&A opportunities to enhance our business.”

 

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

 

 

Three months ended Twelve months ended
December 31, December 31, December 31, December 31,
2021 2020 2021 2020
Net income for the period $2,467,930 $4,165,399 $10,555,510 $3,690,990
Adjustments:
    Finance costs           256,208          358,844        1,053,282 1,663,039
    Foreign exchange (gain) loss (774,611)          669,294 (3,374,098) 138,335
    Paycheck Protection Program loan forgiveness (1,816,836) (1,816,836)
    Depreciation and amortization        1,240,123       2,253,557        5,057,117       8,894,174
    Income taxes (refunds) 919,317          105,717 1,150,917          219,001
    Non-cash income tax adjustment                     –       1,278,700                     –       1,278,700
    Share-based compensation        1,375,221          513,156        5,329,438          998,307
    Severance expenses 27,500 4,231 139,133 245,365
    Nonrecurring expenses 360,600 287,907 360,600 487,044
Total adjustments 3,404,358 3,654,570 9,716,389 12,107,129
Adjusted EBITDA $5,872,288   $7,819,969 $20,271,899   $15,798,119

 

 

Conference Call Details:

Date: Thursday, March 10, 2022
Time: 8:30 AM Eastern Time

To register for the conference call webcast and presentation, please visit https://www.acuityads.com/q4-2021/

 

Participant Dial-in Numbers:

Canada – (+1) 778 907 2071

US – (+1) 646 558 8656

Webinar ID:  819 9739 6674

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://www.acuityads.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 technology company that provides marketers a powerful and holistic solution for digital advertising across all ad formats and screens to amplify reach and Share of Attention® throughout the customer journey. Via its unique, data-driven insights, real-time analytics and industry-leading activation platform based on proprietary Artificial Intelligence technology, AcuityAds leverages an integrated ecosystem of partners for data, inventory, brand safety and fraud prevention, offering unparalleled, trusted solutions that the most demanding marketers require to be successful in the digital era.

AcuityAds is headquartered in Toronto with offices throughout the U.S., Europe and Latin America. For more information, visit AcuityAds.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 [x], 2021[1] for the fiscal year ended December 31, 2021 (the “AIF”) and the Company’s Management Discussion and Analysis for the three and nine months ended December 31, 2021 dated March [x], 2021 (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:

 

Tal Hayek

Chief Executive Officer

AcuityAds Holdings Inc.

416-218-9888

tal.hayek@acuityads.com

 

Babak Pedram

Investor Relations – CA

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

 

 

 

 

 

 

    December 31,

2021

$

  December 31,

2020

$

         
Assets
Current assets
Cash and cash equivalents 102,208,807 22,638,300
Accounts receivable 30,972,608 31,859,306
Prepaid expenses and other 3,278,624 1,901,067
Investment tax credits receivable 21,922
136,460,039 56,420,595
Non-current assets
Deferred tax asset (note 18) 81,803
Property and equipment (note 3) 5,369,619 7,945,110
Intangible assets (note 4) 3,044,278 3,197,953
Goodwill 4,869,841 4,869,841
149,825,580 72,433,499
Liabilities
Current liabilities
Accounts payable and accrued liabilities 25,763,662 23,232,661
Borrowings (note 17) 2,946,150 3,573,847
Lease obligations (notes 6) 2,058,161 2,850,497
30,767,973 29,657,005
Non-current liabilities
Borrowings (note 17) 3,852,891 6,684,386
Lease obligations (notes 6) 2,148,708 4,041,520
36,769,572 40,382,911
Shareholders’ Equity (notes 8) 113,056,008 32,050,588
149,825,580 72,433,499

 

 

 

 

 

 

      Year ended

December 31,
2021

$

Year ended

December 31,

2020

$

         
Revenue
Managed services 91,807,683 80,500,355
Self-service 30,218,619 24,393,693
122,026,302 104,894,048
Media costs 58,461,333 50,808,810
Gross profit 63,564,969 54,085,238
Operating expenses
Sales and marketing (note 20) 22,274,113 18,127,414
Technology (note 12 and 20) 12,680,460 13,156,538
General and administrative 8,838,230 5,918,740
Share-based compensation (note 8) 5,329,438 998,307
Depreciation and amortization 5,057,117 8,894,174
54,179,358 47,095,173
Income from operations 9,385,611 6,990,065
Finance costs (note 8) 1,053,282 1,663,039
Foreign exchange (gain) loss (3,374,098) 138,335
(2,320,816) 1,801,374
Net income before income taxes 11,706,427 5,188,691
Income taxes (note 18) 1,150,917 1,497,701
Net income for the year 10,555,510 3,690,990
Basic net income per share (note 10) 0.18 0.07
Diluted net income per share (note 10) 0.18 0.07
Exchange differences on translating foreign operations (31,169) 866
 
Comprehensive income for the year 10,524,341 3,691,856

 

    2021

$

  2020

$

         
Cash provided by (used in)
Operating activities
Income for the year 10,555,510 3,690,990
Adjustments to reconcile net income to net cash flows
Depreciation and amortization 5,057,117 8,894,174
Finance costs (note 9) 1,053,282 1,663,039
Share-based compensation (note 8(c)) 5,329,438 998,307
Foreign exchange (gain) loss (3,374,098) 138,335
Change in non-cash operating working capital
Accounts receivable 886,698 6,375,446
Prepaid expenses and other (1,345,158) 676,584
Investment tax credits receivable 299,051
Deferred tax asset (81,803) 1,278,700
Accounts payable and accrued liabilities 2,531,001 (3,201,778)
Interest paid – net (918,443) (1,381,698)
19,693,544 19,431,150
Investing activities
Additions to property and equipment (note 3) (1,068,786) (4,923,514)
Additions to intangible assets (note 4) (1,259,165) (393,007)
(2,327,951) (5,316,521)
Financing activities
Amount drawn from revolving line of credit (note 16) 67,340,097
Repayment of revolving line of credit (note 16) (83,066,960)
Net proceeds from term loans (note 17) 12,266,281
Repayment of term loans principal (note 17) (2,495,887) (9,101,681)
Additions to international loans 1,297,598 1,719,864
Repayment of international loans (2,395,741) (2,182,955)
Additions to leases 674,927 4,013,250
Repayment of leases (3,360,075) (3,417,975)
Net proceeds from equity financing (note 8) 63,955,491 10,617,887
Proceeds from the exercise of warrants 61,723 1,601,418
Proceeds from the exercise of stock options 1,072,089 1,465,658
58,810,125 1,254,884
Increase (decrease) in cash and cash equivalents 76,175,718 15,369,513
Foreign exchange impact on cash 3,394,789 (138,335)
Cash and cash equivalents – Beginning of year 22,638,300 7,407,122
Cash and cash equivalents – End of year 102,208,807 22,638,300
Supplemental disclosure of non-cash transactions
Additions to property and equipment under leases 674,927 4,129,910

 

[1] NTD: AcuityAds to confirm that the December 31, 2021 AIF and MD&A will be filed on the date of this release.

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