Generated $27.5 million in Revenue and $4.4 million in Adjusted EBITDA

illumin Revenue Up 42% Sequentially to $7.4 million

Strong Cash Flow Generation Leads to Record Cash Balance of Over $100 Million

TORONTO and NEW YORK, Nov. 3, 2021 /PRNewswire/ - AcuityAds Holdings Inc. (TSX: AT) (Nasdaq: ATY) ("AcuityAds" or "Company"), the technology leader in consumer journey based advertising automation, today reported financial results for the three and nine months ended September 30, 2021. Unless otherwise specified, all amounts are in Canadian dollars.

Third Quarter 2021 Highlights

  • Third quarter 2021 total revenue was $27.5 million, a 5.4% increase year-over-year, and an 11.3% increase on a constant currency basis. This revenue growth was achieved largely due to strong sequential revenue growth from illumin, which more than offset lower advertising spend partly related to supply chain disruptions from some of our legacy customers. Revenue growth was also aided by newer emerging verticals such as pharmaceutical, technology, automotive and direct-to-consumer brands.
  • illumin third quarter 2021 revenue was up over 42% sequentially to $7.4 million, or 27% of total revenues in the quarter. On a trailing twelve-month basis, as of September 30, 2021, revenue from illumin totalled $17.3 million.
  • Total Connected TV segment revenue for the third quarter of 2021 grew over 220% compared to the third quarter of 2020.
  • Gross margin for the three months ended September 30, 2021 was 51.9%, in line with the same period in 2020.
  • Net revenue or gross profit (revenue less media costs) for the three months ended September 30, 2021 was $14.3 million, a 5.4% increase compared to $13.5 million for the third quarter of 2020.
  • Adjusted EBITDA was $4.4 million for the three months ended September 30, 2021, compared to $4.0 million during the comparable prior year period, an increase of 9.5%. Adjusted EBITDA margin as a percentage of total and net revenue was 16.1% and 31%, respectively. Adjusted EBITDA for the trailing 12-month period totaled $22.2 million, a 58.8% increase from the comparable period last year.
  • Net Income was $3.4 million for the three months ended September 30, 2021, a 265% increase compared to net income of $0.9 million for the same period in 2020.
  • Operating cash flow for the third quarter of 2021 was $9.5 million, an increase of 41.8% compared to operating cash flow of $6.7 million for the same period in 2020, driven by strong collections during the period.
  • At September 30, 2021, the Company had cash and cash equivalents of $100.3 million, compared to $22.6 million as of December 31, 2020.

"We are very pleased to report another quarter of strong sequential illumin revenue growth, as this revenue stream continues to become a more significant percentage of our total revenue. I am incredibly proud that since the launch of illumin only one year ago, the Company has already seen cumulative revenue of $17.3 million from this innovative software offering. We also saw further signs of recovery this quarter in COVID-affected industries such as travel, leisure and entertainment. In addition, the Company generated very strong operating cash flow, which further strengthened our balance sheet. I want to once again thank all of our team members for their hard work and dedication without which this performance would not have been possible," said Tal Hayek, Co-Founder and Chief Executive Officer of AcuityAds. "As we look to the fourth quarter, based on our current pipeline, we expect to generate year-over-year total revenue growth and strong adjusted EBITDA."

Mr. Hayek continued, "On its one-year anniversary, the illumin platform continues to lead our future growth and is fundamentally transforming the programmatic advertising industry.  illumin's sales grew over 42% sequentially during the third quarter and, as importantly, new Tier 1 clients grew 53% sequentially. This strong sequential Tier 1 client growth demonstrates the success of our efforts to engage with larger global brands and bodes well for further illumin revenue growth in the future.  With the strong revenue and pipeline growth we have already achieved and the overwhelming positive feedback we continue to receive from clients, we expect illumin to finish 2021 on a strong note and continue to grow in 2022.  We continue to put additional marketing, sales and product development resources behind illumin to not only extend our leading marketplace position, but also to enhance its long-term growth trajectory." 

Tatiana Kresling, AcuityAds' Interim Chief Financial Officer, commented, "Despite global supply chain disruptions and their effect on some of our legacy customers, we were able to grow overall revenues on a year-over-year basis in the third quarter due to the rapid adoption of illumin in the marketplace. Company revenues grew over 11% on a constant currency basis, while net income grew 265% compared to the same period in the prior year.  As a result of very strong operating cash flow generation in the quarter, our cash position grew to a new record of $100.3 million. We expect to generate substantial cash flow again in the fourth quarter, which will provide additional financial strength to execute on both our organic and M&A growth strategies in the years ahead."

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


Three months ended

Nine months ended

TTM Ended


Sept 30,

Sept 30,

Sept 30,

Sept 30,

Sept 30,

Sept 30,


2021

2020

2021

2020

2021

2020

Net income (loss) for the period

$3,362,127

$921,220

$8,087,580

$(474,410)

$12,252,979

$1,520,834

Adjustments:







    Finance costs

263,220

251,159

797,074

1,304,195

1,155,918

1,875,887

    Foreign exchange (gain) loss

(1,864,926)

350,743

(2,599,487)

(530,959)

(1,930,193)

(302,467)

    PPP Loan Forgiveness

-

-

-

-

(1,816,836)

-

    Impairment loss

-

-

-

-

-

3,231,048

    Fair value gain

-

-

-

-

-

(3,066,799)

    Depreciation and

amortization

1,172,334

2,217,626

3,816,994

6,640,617

6,070,551

9,250,831

    Income taxes

-

(29,324)

231,600

113,284

337,317

150,265

    Non-cash income tax

adjustment

-

-

-

-

1,278,700

-

    Share-based compensation

1,465,706

252,335

3,954,217

485,151

4,467,373

706,626

    Acquisition costs

-

-

-

-

-

-

    Severance expenses

20,875

70,643

111,633

241,134

115,864

358,765

    Non-recurring expenses

-

-

-

199,137

287,907

265,209

Total adjustments

1,057,209

3,113,182

6,312,031

8,452,559

9,966,601

12,469,365

Adjusted EBITDA*

$4,419,336

$4,034,402

$14,399,611

$7,978,149

$22,219,579

$13,990,199

Conference Call Details:

Date: Wednesday, November 3, 2021
Time: 8:30 AM Eastern Time
To register for the conference call webcast and presentation, please visit
https://www.acuityads.com/q3-2021/

Participant Dial-in Numbers:
Canada – (+1) 778 907 2071
US – (+1) 646 558 8656
Webinar ID: 892 4366 9957

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/q3-2021/

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 "net revenue", "revenue less media costs" and "Adjusted EBITDA" (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 and net revenue 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.

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, results of the Company's application to list its shares on NASDAQ 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 1, 2021 for the fiscal year ended December 31, 2020 (the "AIF") and the Company's Management Discussion and Analysis for the three and nine months ended September 30, 2021 dated November 3, 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.

AcuityAds Holdings Inc.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited)


(expressed in Canadian dollars)







Sept 30,

2021

$


Dec 31,

2020

$






Assets










Current assets





Cash and cash equivalents


100,297,463


22,638,300

Accounts receivable


24,525,463


31,859,306

Prepaid expenses and other


3,132,237


1,901,067

Investment tax credits receivable


-


21,922








127,955,163


56,420,595

Non-current assets





Property and equipment (note 3)


5,943,241


7,945,110

Intangible assets (note 4)


3,127,292


3,197,953

Goodwill


4,869,841


4,869,841








141,895,537


72,433,499






Liabilities










Current liabilities





Accounts payable and accrued liabilities


19,816,614


23,232,661

Term loans (note 16)


2,444,544


2,481,550

International loans (note 17)


852,232


1,092,297

Lease obligations (notes 5)


2,248,982


2,850,497








25,362,372


29,657,005

Non-current liabilities





Term loans (note 16)


3,964,185


5,796,454

International loans (note 17)


569,522


887,932

Lease obligations (notes 5)


2,577,356


4,041,520








32,473,435


40,382,911






Shareholders' Equity (notes 7)


109,422,102


32,050,588








141,895,537


72,433,499






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


(expressed in Canadian dollars)






Three months

ended

Sept 30,

2021

$

Three months

ended

Sept 30,

2020

$

Nine months

ended

Sept 30,

2021

$

Nine months

ended

Sept 30,

2020

$






Revenue





Managed services

19,320,662

18,766,560

65,197,665

52,724,493

Self-service

8,164,158

7,297,762

20,026,969

17,112,239







27,484,820

26,064,322

85,224,634

69,836,732






Media costs

13,232,069

12,536,168

40,798,761

34,011,563






Gross profit

14,252,751

13,528,154

44,425,873

35,825,169






Operating expenses





Sales and marketing

5,260,944

5,043,490

14,982,171

13,623,418

Technology (note 11)

2,581,090

2,943,386

9,716,514

9,819,590

General and administrative

2,012,256

1,577,519

5,439,210

4,844,283

Share-based compensation (note 7)

1,465,706

252,335

3,954,217

485,151

Depreciation and amortization

1,172,334

2,217,626

3,816,994

6,640,617







12,492,330

12,034,356

37,909,106

35,413,059






Income (loss) from operations

1,760,421

1,493,798

6,516,767

412,110






Finance costs (note 8)

263,220

251,159

797,074

1,304,195






Foreign exchange (gain) loss

(1,864,926)

350,743

(2,599,487)

(530,959)







(1,601,706)

601,902

(1,802,413)

773,236






Net income (loss) before income taxes

3,362,127

891,897

8,319,180

(361,126)






Income taxes (recovery) (note 18)

-

(29,324)

231,600

113,284






Net income (loss) for the period

3,362,127

921,220

8,087,580

(474,410)






Net income (loss) per share (note 9)





Basic and diluted

0.06

0.02

0.14

(0.01)






AcuityAds Holdings Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
For the nine-month periods ended September 30, 2021 and 2020


(expressed in Canadian dollars)







2021

$


2020

$






Cash provided by (used in)










Operating activities





Income for the year


8,087,580


(474,410)






Adjustments to reconcile net income to net cash flows





Depreciation and amortization


3,816,994


6,640,617

Finance costs (note 8)


797,074


1,304,195

Share-based compensation (note 7(c))


3,954,217


485,151

Change in non-cash operating working capital





Accounts receivable


7,333,843


14,523,223

Prepaid expenses and other


(1,209,249)


4,696

Investment tax credits receivable


-


304,821

Accounts payable and accrued liabilities


(3,390,866)


(5,694,479)

Interest paid – net


(695,976)


(1,102,249)








18,693,617


15,991,564






Investing activities





Additions to property and equipment (note 3)


(779,828)


(3,553,449)

Additions to intangible assets (note 4)


(964,636)


(351,686)








(1,744,464)


(3,905,135)






Financing activities





Amount drawn from revolving line of credit (note 15)


-


60,154,399

Repayment of revolving line of credit (note 15)


-


(74,138,115)

Net proceeds from term loans (note 16)


-


9,205,581)

Repayment of term loans principal (note 16)


(1,818,053)


(6,613,249)

Additions to international loans


852,486


948,897

Repayment of international loans


(1,410,960)


(1,438,323)

Additions to leases


358,644


2,535,440)

Repayment of leases


(2,345,510)


(2,520,751)

Net proceeds from equity financing (note 7)


63,955,491


-

Proceeds from the exercise of warrants


61,723


1,171,285

Proceeds from the exercise of stock options


1,056,489


674,961








60,710,010


(10,019,875)






Increase (decrease) in cash and cash equivalents


77,659,163


2,066,554






Cash and cash equivalents – Beginning of year


22,638,300


7,407,122






Cash and cash equivalents – End of year


100,297,463


9,473,676






Supplemental disclosure of non-cash transactions





Additions to property and equipment under leases


447,869


2,821,959






Cision View original content:https://www.prnewswire.com/news-releases/acuityads-reports-third-quarter-2021-financial-results-301415022.html

SOURCE AcuityAds Holdings Inc.

Copyright 2021 PR Newswire

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