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AcuityAds Reports Second Quarter 2021 Financial Results

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Generated $30.3 million in Revenue and $5.4 million in Adjusted EBITDA

Self-Serve Advertising Automation Platform, illumin, Generated $5.2 million in Revenue

Completed a US$57.5 million Cross-Border Offering and Successful Listing on the Nasdaq Capital Market

TORONTO and NEW YORK, Aug. 10, 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 six months ended June 30, 2021. Unless otherwise specified, all amounts are in Canadian dollars.

Second Quarter 2021 Highlights

  • Total revenue for the three months ended June 30, 2021 was $30.3 million, a 54.9% increase year-over-year, and a 74.9% increase on a constant currency basis. Revenue growth was largely driven by our new advertising automation platform, illumin, and newer emerging verticals such as pharmaceutical, technology, automotive and direct-to-consumer brands.

  • Gross margin for the three months ended June 30, 2021 was 52.2% compared to 51.7% for the same period in 2020, an increase of 50 basis points.

  • Net revenue or gross profit (revenue less media costs) for the three months ended June 30, 2021 was $15.8 million, compared to $10.1 million for the same period in 2020, an increase of 56.4%.

  • Adjusted EBITDA increased over 154% to $5.4 million for the three months ended June 30, 2021, compared to $2.1 million during the comparable prior year period. Adjusted EBITDA margin as a percentage of total revenue was 18% and as a percentage of net revenue was 34.4%. Adjusted EBITDA for the trailing 12-month period totaled $21.8 million, an increase of 88.7% from the comparable period last year.

  • Total Connected TV segment revenue for the first quarter of 2021 grew over 400%, compared to the second quarter of 2020.

  • illumin second quarter 2021 revenue was $5.2 million, up over 60% compared to the first quarter of 2021, as previously announced on July 15, 2021.

  • Net Income was $3.4 million for the three months ended June 30, 2021 compared to a net loss of $1.6 million for the same period in 2020.

  • Operating cash flow for the three months ended June 30, 2021 was $3.5 million, compared to operating cash flow of $5.3 million for the same period in 2020.

  • At June 30, 2021, the Company had cash and cash equivalents of $93.4 million, compared to $22.6 million as of December 31, 2020.

  • In the quarter, the Company completed a US$57.5 million cross-border public offering in the United States and Canada, and is now trading on The Nasdaq Capital Market ("Nasdaq") under the ticker symbol "ATY".

"We are very pleased to report 55% revenue growth and 154% Adjusted EBITDA growth on a year-over-year basis for our second quarter. We saw strength throughout our business including some initial signs of recovery in COVID-affected industries such as travel, leisure and entertainment. This outstanding performance would not have been possible without the hard work of all our team members and I want to thank them for their efforts," said Tal Hayek, Co-Founder and Chief Executive Officer of AcuityAds. "As we look to the third quarter, based on our current momentum, we expect to generate solid year-over-year revenue and EBITDA growth despite any normal seasonality."

Mr. Hayek continued, "The biggest second quarter growth driver was illumin, which continues to surpass our expectations with sequential sales growth in excess of 60% and new clients growing over 135%. We continue to see rapidly increasing interest for illumin as evidenced by very significant pipeline growth in the quarter. Given this very strong pipeline growth, we expect illumin to experience strong sequential revenue growth in the second half of 2021 and continue to believe it is fundamentally changing the programmatic advertising landscape. With our latest illumin release, which further enhances the platform's features and functionality, and the ongoing expansion of our consumer journey expertise, we are continuing to extend our leadership position in the marketplace."

Jonathan Pollack, AcuityAds' Chief Financial Officer, commented, "We are proud to report increasing year-over-year revenue and bottom-line growth for the quarter. Our revenues grew nearly 75% on a constant currency basis, while Adjusted EBITDA grew over 154% compared to the prior year. As a result of the strong cash flow generation and the proceeds from our recent cross-border public offering, our cash position grew to a record $93 million, providing significant financial strength to execute on our growth strategy. Finally, we successfully listed on Nasdaq, a significant milestone for the Company. We believe this listing will allow us to broaden our U.S. investor base."

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,


2021

2020

2021

2020

Net income (loss) for the period

$3,361,572

$(1,600,405)

$4,725,453

$(1,395,630)

Adjustments:





Finance costs

258,974

450,644

533,854

1,053,036

Foreign exchange (gain) loss

(1,303,044)

632,594

(734,561)

(881,702)

Depreciation and amortization

1,261,634

2,256,647

2,644,660

4,422,991

Income taxes

201,357

38,743

231,600

142,608

Share-based compensation

1,624,119

89,692

2,488,511

232,816

Severance expenses

34,209

74,127

90,758

170,492

Non recurring expenses

-

199,136

-

199,136

Total adjustments

2,077,249

3,741,583

5,254,822

5,339,377

Adjusted EBITDA

$5,438,821

$2,141,178

$9,980,275

$3,943,747

Conference Call Details:

Date: Tuesday, August 10, 2021
Time: 8:30 AM Eastern Time
To register for the conference call webcast and presentation, please visit
https://www.acuityads.com/q2

Participant Dial-in Numbers:
Canada – (+1) 778 907 2071
US – (+1) 646 558 8656
Webinar ID: 981 7548 3355

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/q2.

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 six months ended June 30, 2021 dated August [10], 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)



June 30,
2021
$


December 31,
2020
$






Assets










Current assets





Cash and cash equivalents


93,399,362


22,638,300

Accounts receivable


31,029,926


31,859,306

Prepaid expenses and other


2,472,199


1,901,067

Investment tax credits receivable


-


21,922








126,901,487


56,420,595

Non-current assets





Property and equipment (note 3)


6,128,780


7,945,110

Intangible assets (note 4)


2,499,193


3,197,953

Goodwill


4,869,841


4,869,841








140,399,301


72,433,499






Liabilities










Current liabilities





Accounts payable and accrued liabilities


22,045,671


23,232,661

Term loans (note 16)


2,401,338


2,481,550

International loans (note 17)


472,509


1,092,297

Lease obligations (notes 5)


1,891,533


2,850,497








26,811,051


29,657,005

Non-current liabilities





Term loans (note 16)


4,455,310


5,796,454

International loans (note 17)


671,947


887,932

Lease obligations (notes 5)


3,261,765


4,041,520








35,200,073


40,382,911






Shareholders' Equity (notes 7)


105,199,228


32,050,588








140,399,301


72,433,499

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

(expressed in Canadian dollars)


Three months
ended
June 30,
2021
$

Three months
ended
June 30,
2020
$

Six months
ended
June 30,
2021
$

Six months
ended
June 30,
2020
$






Revenue





Managed services

23,260,786

14,639,657

45,877,003

33,957,933

Self-service

6,664,436

4,917,153

11,862,811

9,814,477







30,285,222

19,556,810

57,739,814

43,772,410






Media costs

14,476,192

9,448,182

27,566,692

21,475,395






Gross profit

15,809,030

10,108,628

30,173,122

22,297,015






Operating expenses





Sales and marketing

5,167,203

3,751,002

9,721,227

8,579,928

Technology (note 11)

3,342,054

2,823,182

7,135,424

6,876,204

General and administrative

1,895,161

1,666,528

3,426,954

3,266,764

Share-based compensation (note 7)

1,624,119

89,692

2,488,511

232,816

Depreciation and amortization

1,261,634

2,256,647

2,644,660

4,422,991







13,290,171

10,587,051

25,416,776

23,378,703






Income (loss) from operations

2,518,859

(478,423)

4,756,346

(1,081,688)






Finance costs (note 8)

258,974

450,644

533,854

1,053,036






Foreign exchange (gain) loss

(1,303,044)

632,595

(734,561)

(881,702)







(1,044,070)

1,083,239

(200,707)

171,334






Net income before income taxes

3,562,929

(1,561,662)

4,957,053

(1,253,022)






Income taxes (note 18)

201,357

38,743

231,600

142,608






Net income for the year

3,361,572

(1,600,405)

4,725,453

(1,395,630)






Net income per share (note 9)





Basic and diluted

0.06

(0.03)

0.08

(0.03)

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

(expressed in Canadian dollars)



2021

$


2020

$






Cash provided by (used in)










Operating activities





Income for the year


4,725,453


(1,395,630)






Adjustments to reconcile net income to net cash flows





Depreciation and amortization


2,644,660


4,422,991

Finance costs (note 8)


533,854


1,053,036

Share-based compensation (note 7(c))


2,488,511


232,816

Change in non-cash operating working capital





Accounts receivable


829,380


14,679,253

Prepaid expenses and other


(549,210)


(167,596)

Investment tax credits receivable


-


328,541

Accounts payable and accrued liabilities


(1,008,800)


(8,953,621)

Interest paid – net


(466,497)


(904,364)








9,197,351


9,295,426






Investing activities





Additions to property and equipment (note 3)


(129,570)


(2,925,120)

Additions to intangible assets (note 4)


-


(306,285)








(129,570)


(3,228,026)






Financing activities





Amount drawn from revolving line of credit (note 15)


-


43,519,550

Repayment of revolving line of credit (note 15)


-


(52,657,365)

Net proceeds from term loans (note 16)


-


9,205,581)

Repayment of term loans principal (note 16)


(1,213,020)


(6,106,331)

Additions to international loans


159,168


848,493

Repayment of international loans


(994,941)


(1,078,320)

Additions to leases


57,020


2,424,378

Repayment of leases


(1,661,907)


(1,743,947)

Net proceeds from equity financing (note 7)


64,293,097


-

Proceeds from the exercise of warrants


61,723


1,112,460

Proceeds from the exercise of stock options


992,141


70,200








61,693,281


(4,405,301)






Increase (decrease) in cash and cash equivalents


70,761,062


1,658,720






Cash and cash equivalents – Beginning of year


22,638,300


7,407,122






Cash and cash equivalents – End of year


93,399,362


9,065,842






Supplemental disclosure of non-cash transactions





Additions to property and equipment under leases


71,556


2,752,932

Cision
Cision

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SOURCE AcuityAds Holdings Inc.