$19.6 million in Revenue, $2.1 million in Adjusted EBITDA, and the Fourth Consecutive Quarter of Positive Cash Flow
TORONTO and NEW YORK, Aug. 13, 2020 /CNW/ –AcuityAds Holdings Inc. (TSX: AT) (OTCQX: ACUIF) (“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 months ended June 30, 2020.
Total revenue for the three months ended June 30, 2020 was $19.6 million, a decrease of 24% compared to the same period in 2019. The decrease was mainly attributable to a reduction in client spend due to the COVID-19 pandemic during the month of April which was partially offset by subsequent increases in May and June.
Gross margin for the three months ended June 30, 2020 was approximately 52% compared to 48% for the same period in 2019 and 50% in Q1 2020.
Net revenue or gross profit for the three months ended June 30, 2020 was $10.1 million as compared to $12.4 million for the same period in 2019, a decrease of 18%.
Adjusted EBITDA increased approximately 100% to $2.1 million for the three months ended June 30, 2020 compared to $1.1 million for the three months ended June 30, 2019. Adjusted EBITDA for the six months ended June 30, 2020 was $3.9 million compared to $2.1 million for the same period in 2019, an 89% increase. Adjusted EBITDA for the trailing 12-month period totalled $11.6 million.
Total Connected TV segment revenue grew 330% year-over-year and approximately 400% sequentially from Q1 2020.
Total Self-Serve segment revenue for the three months ended June 30, 2020 was $4.9 million.
Net loss for the three months ended June 30, 2020 was $1.6 million compared to net loss of $3.5 million for the three months ended June 30, 2019. Net loss for the six months ended June 30, 2020 was $1.4 million compared to $6.2 million for the same period in 2019.
Adjusted Net Income for the three months ended June 30, 2020 was $1.4 million compared to an Adjusted Net loss of $0.7 million in 2019. Adjusted Net Income for the six months ended June 30, 2020 was $2.4 million compared to a loss of $1.2 million for the same period in 2019.
Operating cash flow for the three months ended June 30, 2020 was $5.3 million compared to cash flow used of $4.0 million for the same period in 2019. Operating cash flow for the six months ended June 30, 2020 totaled $9.3 million compared to cash flow used of $6.6 million for the same period in 2019.
As of June 30, 2020, the Company had cash and cash equivalents of $9.1 million compared to $7.4 million as of December 31, 2019.
As of June 30, 2020, the Company had working capital of $4.0 million, compared to approximately $1.0 million as of March 31, 2020.
Acuity selected six large brands to enter into beta testing of the Company’s proprietary, new Self-Serve platform.
Acuity entered into a partnership with OverActive Media to deliver programmatic solutions for advertisers and brands to target audiences associated with esports.
Tal Hayek, Co-Founder and Chief Executive Officer of AcuityAds. “Advertisers continue to recognize the value of our programmatic solutions, specifically ROI that continues to exceed industry expectations. Despite a drop in campaign activity in March and April, we posted another quarter of significant improvement in EBITDA and our overall financial position. We expect the monthly advertising spend improvements to continue into the third quarter of 2020, contributing to another quarter of sequential Adjusted EBITDA growth.”
Mr. Hayek continued, “We continue to make important strides in the launch of our new Self-Serve platform, and throughout the quarter began beta testing with six large brands after receiving applications from more than thirty companies. I am delighted to report that the feedback thus far has been extremely positive and we are delivering ROI metrics that are well above industry standards. As we move closer to an official launch in the fall of this year, we anticipate AcuityAds continuing to grow into one of the leading programmatic providers in the industry, delivering a holistic, omni-channel solution with ROI that exceeds our competitors.”
Jonathan Pollack, AcuityAds’ Chief Financial Officer, commented, “The Company has steadfastly maintained its focus on improving gross margins and controlling its expense structure, which was partially assisted during the quarter by the availability of certain government funding programs. This has resulted in 100% year-over-year growth in quarterly Adjusted EBITDA and a gross margin of 52% for the quarter, which represented an improvement of close to 400 basis points year-over-year. The Company’s net working capital also improved and hit an all-time high of $4.0 million as of June 30, 2020, as our cash balance increased and our outstanding line of credit balance was reduced. As such, our balance sheet continues to improve, putting the Company in one of its strongest financial positions to date.”
Three months ended
Six months ended
June 30,
June 30,
June 30,
June 30,
2020
2019
2020
2019
Net income (loss) for the period
$(1,600,405)
$(3,461,394)
$(1,395,630)
$(6,242,645)
Adjustments:
Finance costs
450,644
766,564
1,053,036
1,375,573
Foreign exchange gain (loss)
632,594
380,291
(881,702)
590,205
Depreciation and amortization
2,256,647
1,840,345
4,422,991
3,648,143
Income taxes
38,743
52,433
142,608
121,974
Share-based compensation
89,692
578,386
232,816
836,783
Acquisition integration costs
–
481,477
–
1,289,920
Severance expenses
74,127
238,362
170,492
272,735
Non-recurring expenses
199,136
195,862
199,136
195,862
Total adjustments
3,741,583
4,533,720
5,339,377
8,331,195
Adjusted EBITDA
$2,141,178
$1,072,326
$3,943,747
$2,088,550
Three months ended
Six months ended
June 30,
June 30,
June 30,
June 30,
2020
2019
2020
2019
Net income (loss) for the period
$(1,600,405)
$(3,461,394)
$(1,395,630)
$(6,242,645)
Adjustments:
Depreciation and amortization
2,256,647
1,840,345
4,422,991
3,648,143
Share-based compensation
89,692
578,386
232,816
836,783
Foreign exchange gain (loss)
632,594
380,291
(881,702)
590,205
Total adjustments
2,978,933
2,799,022
3,774,105
5,075,131
Adjusted Net Income (Loss)
$1,378,528
$(662,372)
$2,378,474
$(1,167,514)
Thursday, August 13th, 2020 Time: 8:30 AM Eastern Time
Thursday, August 20th, 2020 at 11:59pm Eastern Time
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 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.
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.com.” data-reactid=”60″>AcuityAds is headquartered in Toronto with offices throughout the U.S., Europe and Latin America. For more information, visit AcuityAds.com.
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.” data-reactid=”62″>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 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 5, 2020 for the fiscal year ended December 31, 2019 (the “AIF”) and the Company’s Management Discussion and Analysis for the three and six months ended June 30, 2020 dated August 13, 2020 (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.
