• AcuityAds, an AdTech firm that provides customer data insights, reported its Q4 2021 and full-year (FY2021) financial performance. The firm achieved a revenue of CAD 36.8 million (5% YoY growth) for Q4 2021, 27% above analyst estimates. The growth was driven by both demands for its customer journey analytics platform “Illumin,” which added 13 new clients during the quarter and accounted for 28% of overall revenue as well as growth in legacy revenue streams. The firm, which also provides a specialized analytics platform for video advertising, recorded strong demand from the connected tv (CTV) space and experienced a 171% YoY growth during the quarter. For FY2021, revenue was CAD 122 million (16% YoY growth) mainly driven by Illumin’s revenue.  

• During the quarter, the firm recorded an adjusted EBITDA of CAD 5.9 million (compared with 7.8 million in Q4 2020) due to higher sales, marketing, and R&D expenses relating to the further development of its Illumin platform. Hence, net income per share was CAD 0.04 (compared with CAD 0.08 in Q4 2020), which was below analyst expectations of CAD 0.06 per share. However, for FY2021, adjusted EBITDA improved to CAD 20.3 million (28% YoY growth), while net income per share was USD 0.18 (compared to CAD 0.07 in FY2020).

• The management stated that at present, the majority of its Illumin revenue is from managed services, given the novel nature of the product. The management expects more clients to gradually shift to a self-serve model and has invested in a dedicated sales team to focus on self-serve activities.

• Having missed its earnings estimates, a number of analysts revised their price targets for AcuityAds, with the majority of analysts providing a “hold” rating for the firm. The firm’s share price fell by ~9.5% subsequent to the release of its earnings report.    

<ul><li> Analyst QuickTake: Having missed its earnings target in Q4 2021 as well as revenue targets in Q3 2021 , analyst sentiment about the firm has been negatively impacted. However, since its launch in October 2020, the Illumin platform has recorded a 10x growth in its revenue, reaching the CAD 10 million mark by Q4 2021. As the firm undergoes this transition, where its clients shift from its legacy systems to the Illumin platform, the management believes that the average spend per client, alongside its operating margins, are expected to rise, potentially improving investor sentiment on the stock.</ul>