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

TORONTO and NEW YORK, March 10, 2022 /PRNewswire/ - 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 and the one-time benefit realized last year from the forgiveness of a pandemic related loan of $1.8 million. 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:

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.

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SOURCE AcuityAds Holdings Inc.

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