Q4 2021 AcuityAds Holdings Inc Earnings Call
[music].
Good morning to everyone before we begin the official remarks, I will read the cautionary note regarding forward looking information.
Certain information to be discussed during this call contains forward looking statements within the meaning of applicable security laws, including among others statements concerning the company's objectives.
Company strategy to achieve those objectives as well as statements with respect to management's beliefs plans estimates an intention and similar statements concerning anticipated future events results circumstances.
<unk> or expectations that are not historical facts.
Such forward looking statements reflects managements current beliefs and are based on information currently available to management and are subject to a number of significant risks and uncertainties that could cause actual results to differ materially from those anticipated.
Please refer to the cautionary statements and the risk factors identified in our filings with SEDAR and Edgar for a more detailed explanation of the inherent risks and uncertainties that could affect such forward looking statements.
Following the presentation, we will conduct the Q&A session I would now like to turn the conference call over to Tom <unk> Co founder and Chief Executive Officer of acuity ads to update you on the operations of the business.
Good morning, everyone and welcome to our Q4 and 2021 Investor presentation. My name is <unk> and I'm, the co founder and CEO of acuity.
And I am very happy to be here alive from our Toronto office up there.
Many quarters that we were not here in the office is alive again full of energy and I can't even describe I happen to see that.
I'd like to start by thanking the acuity family for the delivery and amazing here, we've seen a year of growth of 16% on a year over year basis, we've seen it.
Alumina numbers grew by 37% in Q4 alone sequentially.
And 580% year over year growth.
Now we can compare it on a year over year basis, our fifth quarter and on the alumina side. So look at those numbers growth our expectations. When we launched lumen is to reach about $10 million in the first year and last year alone we reached 26 million.
So a lumen went from zero to $27 million in just five quarters.
Brand new product that was launched in Q4 of 2020.
$27 million and that's five quarters, one of the major achievement to celebrate.
Q4, our overall revenue was up by 5% was that was below our expectations the.
The majority of the reasons are things like the supply chain issue.
Slower travel and hospitality sector that it's coming back, but still hasn't come back like we expected to come back by now.
Yes.
Overall revenue was $122 million for the year, well thats a growth of 16%.
But when you look at it on a constant currency basis, it's closer to 24% growth and why does the board look at it this way.
Because our revenue most of our revenue are in U S dollars and were reporting Canadian dollars. So if you really want to know the true growth rate look at our constant currency numbers.
In Q4, we delivered $36 8 million, 5% growth in our constant currency growth of eight.
<unk>, 8%.
That was below our expectation.
As I said before some of the reasons are supply chain issues and the travel and hospitality industry, that's taking longer than we expected.
<unk> chain I think it's pretty self explanatory, we have a whole bunch of clients that are typically don't have products are not enough products to ship. So they are slowing down their spend.
We also have.
Potential clients that are on the pipeline that are not closing as fast as we expected because again they don't have the product to ship so that slows down.
That part as well.
Obviously, that's a temporary issue and we expect that to be resolved sometime this year.
In addition to that we have the travel and hospitality.
We were expecting to come back by now Big time, and we'll share a little bit more information about that in a second.
In Q4, 28% of our revenue was already from Illumina. So we're starting to get to a place that illumina is more and more critical mass of our business and we do expect in the second part of the year is going to be the majority of our business.
Q4, we had 62 clients using our new platform.
62 clients.
Taking advantage of being able to connect the journey.
Of the campaign.
And being able to.
Really send the messages that they want us to their clients.
As a journey and not <unk>.
Every message on its own so that is something thats very important that more and more clients are taking advantage of we've seen 26 clients tier one clients running on the Goldman.
In Q4.
And we've seen some specific verticals that did very well so we talked about the travel is.
As it is coming back and we've seen 831% growth.
But it was only 3% of our revenue as you guys may recall before the pandemic travel and hospitality it used to be close to 30% of our revenue, but we do predict that it's coming back and it's coming back big time.
This year, and we will see that big.
Big growth driver in.
Another driver is healthcare healthcare has grown 256% in Q4 alone over Q4 of last year. It's now 11, 4% of our business in Q4, and we again see healthcare to continue driving forward.
Connected TV connected TV is an integral part of what we do with Illumina.
It's easy to sell a connected TV campaign, but when you can put it on a little bit and you can see the effect of seeing an add.
On television to your ROI that makes it a much more appealing story, we're seeing more and more of our clients resonating with that message we've seen over 200% growth.
In CTV sales in this year's or 2021 over 2020, and we expect that to be.
It continues to be a driver cross in the future.
And I'd like to share a little bit of the alumina success story and today, we will focus a little bit on our legacy clients that move into them. So it's a bucket of core clients.
Let's use our system our legacy system in 2020.
We spent $2 4 million.
And they move to Illumina last year, and then they spent $5 2 million the same clients and thats up 118%.
I'm, telling that story, because I do believe that as we get more and more clients moving from the legacy system into the aluminum system. Then we will see the average spend per client goal.
And this is something we all at acuity extremely proud of the growth rate of aluminum.
Again, we launched it five quarters ago.
And look at look at the way it's been growing.
We've achieved.
$6 million in revenue.
In 2021.
And product that is brand new and just went to market very recently.
So when we see all of these signs it's so encouraging to us that we feel very comfortable.
That illumina is changing the world and it's time to invest more in warranty.
So we are investing to meet the growing demands of the future.
The investment is really happening across the org.
Majority of the investment is obviously marquee happening in sales and marketing, but also in research or development and infrastructure and people and organization in general.
And to be more specific we're investing $11 million this year into that.
And we don't believe the results will happen in the second part of the year.
Why does that results.
To be simply put we believe that the top line growth this year will be 20% to 25%.
Again, we're making those investments we will see the top line. The majority of the topline growth happening in the second part of the year I also like to share that when you think about ILUVIEN revenue.
I'd like to share that 70% of that revenue came from new business to acuity.
Which means brand new logo, that's been our focus from from they want to bring brand new logos to ILUVIEN.
And the concept of alumina opened up a lot of new doors, and a lot of new customers for us.
And many people were asking us when are you going to start switching more and more of your legacy clients into ILUVIEN.
Close to it.
Some of the reasons are.
One we've been focused on bringing new business in but number two there is a whole bunch of features on the roadmap that are not completed yet and we're working very hard to complete them and without them. It doesn't makes sense too.
For some of our legacy clients into it.
Once we're in that position, which I do believe it's going to be in second part of the year, we will be able to move more and more of those.
Legacy clients into the alumina side and then we expect the average spend per client to go.
I'd like to share that the bulk of aluminum revenue is coming from managed service.
Hawaii.
There are two reasons number one it's a brand new product is brand new concept. So people are not you don't always know how to run a fully connected journey.
We're doing it for them they are learning a lot from it we're learning a lot from it and make the product better and where the dentist to move them along.
Move them to the self serve side.
Very quickly.
On top of that I'm very happy to announce that we've made an investment into a dedicated sales team that only self self serve I do think there is something to be said about focus.
I believe that this investing investment is already starting to pay off big time.
By next Investor Conference.
Do believe we'll be able to share some more specific numbers and I do believe that people are going to be very happy with the results that we're showing up there.
With that I'd like to introduce Elliot, our CFO to share some financial results.
Okay.
Good morning, and thank you for joining us today.
I am pleased to present, our Q4 and our full year results, which were driven by strong alumina growth and continued economic recovery post pandemic.
Our focus is on 2021 financial results, but we are extremely excited about what lies ahead in the second half of 2022 and.
And beyond as investments we made in Q4 and continue to make in early 2000, and 2022 will begin to contribute to growth in revenues and profitability.
As we move forward, we are dedicated to expanding the reach of our unique and industry, leading technology platform to advertisers throughout the world and on that note I would like to discuss our financial results for Q4 and fiscal 2021.
In Q4 total revenue was $36 8 million compared with $35 one.
Q4, 2020, which is up 5% year over year non aluminum revenue, which includes managed service.
Self serve was $26 6 million in Q4, 2021 compared to $27 8 million in Q4, 2020, a slight decrease year over year.
We attribute this decline to the adoption of aluminum by legacy clients as well as select industry verticals that are still recovering from the epic and revenue from our aluminum platform totaled $10 2 million up 37% sequentially compared to $7 4 million in Q3, 2021, and it is up considerably from a first.
Quarter of aluminum revenue of $1 million at the end of 2020.
Gross profit or net revenue was $19 $1 million in Q4 2021 compared to $18. Three in Q4 2020 up four 8% increase year over year gross profit margin or net profit margin was 52% in Q4 2021, which is in line with our Q4.
For 2020 margin of two 1%.
Total operating expenses for the quarter totaled $16 3 million compared to 11, 7% for the same period in 2020, an increase of 39% and operating expense as a percentage of revenue was 44, 2% for the quarter compared to 33, 3% in the prior year.
I'd like to discuss the key drivers of this increase in operating expense.
Primarily increase was driven by a $1 million increase in head count costs, driven by higher commissions tied to higher overall annual revenues new hires in sales technology and administration and an increase of $5 million for travel and entertainment as we return to pre pandemic level of sales related activities.
In Q4 2020, our costs also benefited from the forgiveness of a pandemic payroll loan of $1 8 million. This onetime benefit was recorded in Q4 2020 and applied against our U S payroll costs.
This is also a material driver of our year over year comparison.
And finally, the balance of the increase in operating expenses was driven by a return to our offices and related cost plus increases in year over year run rates related to our NASDAQ listing earlier in the year, including but not limited to insurance listing fees and professional and advisory fees.
Our adjusted EBITDA in Q4, 2021 totaled $5 9 million compared to $7 8 million in Q4 2020 at 24, 9% decrease quarter over quarter. This decline is related to our strategic investments to drive amendments future growth that we discussed earlier as well as the factors that I mentioned impacting.
Our overall opex, specifically the loan forgiveness of $1 8 million net.
Net income for Q4 was $2 5 million compared to $4 2 million in Q4 2020.
For overall fiscal 2021 results total revenue was $122 million, which is up 16, 3% compared to $109 million. In 2020. This includes $26 million in aluminum revenue for the full year, which considerably surpassed our own internal target of $10 million.
We are very proud to have achieved this rapid growth in 2021, despite the supply chain and COVID-19 related headwinds, we encountered a gross profit or net revenue in $2021 $63 6 million compared to $54 1 million.
Prior year, four up 17, 5%.
Gross margin was $52 one for the year compared to 51 six in the prior year.
And our total operating expenses for the full 2021 year totaled $54 2 million compared with $47 1 million in 2020, an increase of 15%.
This increase related in part to the investments I mentioned earlier that will support our future growth and the variances discussed during the Q4 overdue, but to a larger degree specifically for travel and entertainment insurance and our listing fees.
<unk> expenses as a percentage of revenue in 2021 were 44, 4% compared to 44, 9% in 2020.
We generated adjusted EBITDA of $20 3 million for the full year up 28, 3% from the $15 eight you generated in 2020 and.
Net income for the full year 2021 totaled $10 6 million, which is an increase of 186% compared to the net income of $3 seven in 2020.
Moving onto the balance sheet as you can see on this slide our cash balance as of December 31, 2021 stood at $102 2 million a considerable increase from the $22 6 million at December as of December 31, 2020.
And this increase is largely due to the proceeds from our successful cross border public offering in June as well as additional cash flow we generated during the fourth quarter. Despite increased spending in the latter part of the year to further capitalize on our unique consumer journey platform.
I am very happy to report that acuity is balance sheet is now at the strongest level in the company's history.
For some additional corporate data points as of December 31, 2021, acuity at $60 7 million common shares outstanding or in a $64 4 million on a fully diluted basis translating into a market cap of just under $200 million.
Insider ownership is at approximately 12% of issued and outstanding shares.
In summary, while we saw lingering effects of the pandemic, we're extremely proud of our strong revenue growth in the fourth quarter and for the full year, given our performance and the continued sales momentum driven by aluminum we're comfortable with reiterating the previous guidance, we provided for fiscal 2022.
Our top line growth is expected to grow organically by 20% to 25% for the next year.
We're taking a conservative approach as we not only continued effects of COVID-19 on key client segments uncertainty around the macroeconomic outlook and inflation as well as overall geopolitical uncertainty supply chain issues are likely to be exacerbated given the tragic events in Ukraine on.
On a more granular level, we expect revenue growth to be more weighted towards the second half of the year and based on our current pipeline. We expect modestly lower Q1 revenues on a year over year basis. This was reflective of both the return to more normal pre COVID-19 seasonality.
Headwinds from supply chain and the surgery Omicron and Delta variance in the Q4 and also in Q1 2020, we benefited from the concentrated spend from a one off large campaigns around legislative change around the late tax filings and as we move through the course of 2022, we will continue to invest into our platform and capabilities.
<unk>.
70% of that investment will be directed towards sales growth by increasing our presence in key markets and the balance of the investment is focused on research and development to enhance <unk> product support new client relationships and increased data throughput capacity.
These investments will impact 2022 by approximately $11 million again, the majority of which is driven by new hires and investing in our brand presence and reach.
We expect the higher almost 90% of our hiring targets by the end of Q2 and this upfront investment will temporarily exacerbate the impact of our initially lower revenues and EBITDA.
Despite these short term effects. This upfront investments will also reset the stage for both delivery and support increased level of activity and market demand that we have experienced over the previous quarters.
Overall, we expect 2022 EBITDA to increase by 10% over the prior year.
Furthermore, we remain steadfast in our acquisition strategy and hope to add to <unk> platform.
During the course of the year. We are currently evaluating several accretive opportunities and look forward to providing you with updates on our progress.
With that I would like to pass it over back to conclude.
Concluding remarks, thank you.
Thank you Elliot as you can see we are super excited about the alumina adoption.
We believe that we will see 20% to 25% top line growth this year and the majority will happen in the second part of the year.
I want to reemphasize the illumina over exceeded our expectation after we launched it and we are ready for us over exceeded our expectations again.
And it leaves us very comfortable in making investments in the future.
Investments in growth the majority of our investment is happening in sales and marketing.
I want to share something.
In the past it was very hard for acuity to come into a new geographical markets and hired the best of the best people and thus market. So.
So what we did is we went and we hire amazing people and together, we develop them to be superstars.
And today the situation is a little better we can come into a market and higher existing superstars. One for two main reasons number one we have the budget.
That's a small part of it.
Big part is we have a movement.
And I would tell you as soon as we demo aluminum to that salespeople that thinking about joining our lumen and if they had any doubt in their minds. That's the moment that they changed her mind because ILUVIEN is the one that sells everything.
It shows that the future of advertising and they want to be a part of it. So we're so glad to report that we have quite a few salespeople that we've made it higher to the best of the best in the field and with when you do those kind of fees. There is always a lag.
We're very happy that those people are taking a chance of us because they are taking a chance, leaving a very successful job with a huge book of business and coming to our new business is always a risk, but theyre, taking that risk because they see the future and see the very bright future of aluminum the lagged.
I'm talking about I do believe is going to be smaller than normal because of the.
The people that we're getting in and therefore, we will see major results in the second part of the year.
From the $11 million investment that we're making 70% of it will go into marketing and sales.
With that I would like to thank you all for joining us today, and Elliot and I would like to welcome you to our Q&A section.
Thank you tell thank you Elliot.
Reminder, to our analysts to please use the zoom raise hand function. When you are ready to ask a question as well if possible to please limit it to two questions per analyst.
Our first question comes from Arab Linda at Canaccord.
Ara Winda Youre on mute you May go ahead, when you're ready.
Hi, Good morning, gentlemen, thanks for taking my question.
Congrats on a robust quarter under difficult conditions I suspect.
Two for me I'll stick to that limit the first stage, where tile actually left off on the development of the sales team can you just.
Give us a sense of what proportion of the expanded sales team you hired so far and a little bit more about the makeup of that.
The sales people that you hired Rps.
Individuals with existing enterprise relationships that they can kind of bring into to acuity or or is it sort.
Be good.
The account would be sort of relatively new to them, but with obviously a lot of sales background. That's my first question and my second question is.
For both talent and Elliot.
Given where the share prices.
Given where your cash is and given very specific guidance, you've given is there a temptation to maybe consider share buybacks.
I know that you've raised.
We're looking to grow maybe some M&A.
Given the variance of what.
Well I think most of the inquiries and intrinsic value of the stock where it is.
Is that a discussion that youre, having at this point. Thank you.
Thank you.
And good morning, so yes, so regarding the sales org, we've done a lot of changes to the sales org.
Reorganizing its too splitting it up and having a self serve seem now.
And after we've done that we started going in hiring.
People with books of business So to answer your question everybody that.
We are hiring now they have a book of business Theyre very experienced people that have deep relationships.
And that's why we expect the normal lag that you have our salespeople to be much much shorter.
And obviously your payback because it's faster.
And as I said before it was tough for us to hire these types of people.
Beginning because.
Budget issues, but mostly because we didn't really have something to wow them with them on the lumen.
So it's something that everybody wants to come and join the what we're doing because they see what it's doing for the future. So.
That's what that's what it is from a sales perspective now.
You asked about the share buyback and you.
You and I've talked about it before and we were generally against it because we want to use our cash for growth.
But when we talked about is the share price was in a different place and now it's becoming to a place that it's starting to be very hard not to do it. So I'm going to say that we are not very very serious discussions with our board and.
Strongly considering it.
And we will share the news obviously, when we make a final decision but.
I can't see anything more attractive to buy right now than acute.
Great. Thank you.
But from a percentage perspective about two thirds of our target for the sales account typing a hired despite.
<unk> market conditions that we've been very successful in attracting.
Those sales professionals.
With some of that already in the Q4 numbers as well some of that spend or not really very little okay.
Joined US late in Q4, so the impact was minimized during Q4 with the majority of it.
Yes.
Okay perfect. Thank you gentlemen, and all the best.
Okay. Thank you thanks for joining thank you Herb Linda.
Our next question comes from Laura Martin Needham.
And while we wait for Laura can come on I would like to share with everyone that we are live from the Toronto office very very exciting time here at acuity.
To see the office full of energy and live again so.
A good indicator.
The World is back to life and Hi, Laura Good morning, all.
Good morning.
I'll just ask two I have Ken I'll ask you.
So the first one is we saw total revenue for the year about 16, it went to 5% growth year over year.
Revenue in the fourth quarter, you kind of go negative revenue. According to Allianz comments. So my question becomes what gives you confidence you can hit your full year number given the diesel we've actually seen in the P&L near term, let's start there yes, there's a few things okay. So let's talk about Q1, so in Q1 of.
2020, we had one very large seasonal client that did not renew due to agency.
Switching agencies, and so forth, but it was a very large clients, we actually isolate that number we're actually would have seen growth, but putting that aside.
We're fairly happy with.
What's happened in Q1, just because of what I, just mentioned, but on top of that.
When we talk about the $11 million of investment that we made and remember 70% of it went into marketing and sales. We haven't made investments in our in that type of growth for many many years, where we're really focusing on the on the EBITDA part.
And now that we number one we've proven that the aluminum story resonates with our with our markets. So we're very comfortable making those types of investments in the future. So all of the money, bringing to a marketing itself is going to accelerate our growth and because there's a lag time every time you make those types of investments.
We see that happening in the second part of the year. So that's that's now we're already seeing great.
Great results number one from a hiring we hired great people.
So.
And.
Looking at our pipeline when looking at our closed sales our annual closed sales already all the indicators are that we will have about 22, 5% top line growth this year.
Okay, and then Elliot on your comments I just made a couple of things actually I'm going to try to cram them into my second question I thought what I heard you say Ali is that alumina and lowered your year over year margin.
Would have guessed that alumina would have increased your margins did I misunderstand that about when you said the transition to aluminum lowered your net revenue margin.
I don't believe it actually.
Give me if thats, what they have it came across.
I don't believe you said that.
That was a misunderstanding.
<unk> has not we still see it as very similar margins across the board.
Confidence.
The underpinnings of our ability to buy media well and so it hasn't happened yet we do expect that as we move more into what the offset of a self service. They will see a decline in our margins. So you'll see that as a proportion of self serve a little growth for sure.
Okay, and then what's the CTV just a housekeeping thing play out.
How much CTV I saw in your slide it was up 251% for CTV for 'twenty, what was CTV revenue in 2000, and the fourth quarter, our 'twenty, one which everyone you have off the top of your head around.
I think we're comfortable with saying that we believe that this year is going to be about 10% of our revenue. So that should give you a good indicator of the of the numbers.
But youre not going to get us last year.
We didn't put the subsea.
Alright, that's all I have thanks, guys. Thank you. Thank you Laura.
Laura.
Our next question dialing in by phone comes from drew Mcreynolds at RBC.
Drew you May go ahead, when you're ready and you are on mute currently.
Okay.
And thank you everyone for joining us by video I know this is something we've been trying for the last two quarters and we're getting really good feedback for that.
And we appreciate all the analysts coming on.
And cooperating with video.
Little bit outside the box.
But we love seeing your faces.
Drew good morning.
Yes. Good morning can you hear me.
We can hear you cannot see.
Yeah, alright, because I, just a little bit of a compliant block but.
Yes, thanks, very much a couple for me.
Maybe first just on the M&A side.
Just maybe provide an update on just the environment out there.
Things that would be of interest to acuity and just within the context of a quickly changing market in all aspects.
Fair.
Secondly, just on the looming.
And obviously, the new Kid on the block here from the analyst perspective.
In terms of modeling the revenue contribution from aluminum.
Is there kind of a target percentage of revenues I think in your remarks you.
I spoke to maybe the majority of our brands.
<unk> is coming in the back half of 2022, but I may have missed that so just trying to kind of level.
Fed expectations around the revenue trajectory for aluminum and then third and final in terms of the reinvestment I think Elliot.
Widely communicated that that ramp up.
You get the success that you are anticipating in the back half of 2022.
Should we expect another kind of ramp up in.
And reinvesting in the business to go in and capture incremental growth looking into 2023. Thank you.
Okay, Great question, let's start with the M&A one.
So we've seen a lot of activities in last few weeks.
From the M&A side some of it is due to our efforts. So we set up our own team here and we hired.
A consultant in Europe that is actively going out and looking for targets for US. We're also looking at many targets in North America as well.
We're looking at menu, we're having many conversations there is nothing imminent at the moment.
But what I would say it's I.
I do think it's a better time now.
The expertise the evaluation expectations definitely came down.
And.
And there are some great companies out there that we can do a lot together with them and add a lot of value strategic value and financial value to us. So I'm very encouraged with where the science.
What we're seeing and the pipelines on the M&A side, and just getting Fuller and Fuller all the time.
So.
Obviously, it's something that we really want to do this year.
We're always very fast just not to make a mistake there because I think there is.
<unk>.
It could be a big mistake so.
We've done four acquisitions to date all of them are successful we have a lot of experience with it by now with the integration of everything and we know exactly what we're looking for.
In a moment.
Yes.
So 28% of the revenue in Q4 was <unk>, we're seeing that continue to grow so the percent of revenue.
<unk> will grow every quarter I believe every quarter.
By the second half of the year I believe it is going to be the majority so over 50% of it is going to be illumina.
And.
Our intent is to start transferring people from the legacy system into the Illumina system later on this year and at some point to turn off the legacy system.
Don't know exactly when that's going to be again, the intent is hopefully by the end of the year or theres going to be very small amount of people left on the on the on the legacy system.
We do expect the customers that we move to Illumina. Thus, we're going to see an increase in average spend so there is an upside there and obviously, we keep adding more and more new deals new logos new companies.
Into elements on top of that we were making all those investments in new salespeople that has no relationship with making the new introductions and we're investing in the marketing of the brand. So more leads are coming internally.
So all of that.
Great recipe for success and then you asked an interesting question you asked if the investment pays off.
Hey, Doug Ward, if I would say when this investment pays off because we thought very hard and long before we did it and we are very confident that it's going to pay off.
We're only going to see a fraction of its happening in 2022. The majority of the payback from that is going to happen in 2023 without any further investment we could make a decision to invest more and to hire more and more people on the sales side.
And.
And that could be a very logical decision, but because of the lifetime most of it's going to affect some of this year, but the majority of the of the payback is happening in 2023, so <unk> III is going to be even more aggressive growth.
I hope that answered the question Thats great.
Yes, it's all that's fantastic. Thank you very helpful.
Thank you thanks for joining us.
Thank you drew.
Our next question is going to come from Eric Marta Newsy from Lake Street.
Okay.
Eric You May go ahead, when you're ready.
Yes.
Okay.
Thanks for taking the question guys.
Trying to better feel for the seasonality of the revenue during the year, obviously, you've given us a full year number of about $150 million and you've given us a Q1, that's down slightly year on year, but if I can look at it maybe on a first half second half and this is for.
<unk> Elliot.
There's kind of a 40 60.
35, 65 help me with the seasonality of the revenue during the year based on what you're seeing now.
So we're not really breaking up.
Our soft guidance into.
Into into those kind of numbers, but if you look at our historical than historical in the AD Tech in general.
Again, I'm, not giving you exact numbers, but I think the.
Number is usually 40 16, maybe.
Slightly under 40 for the first half and slightly over 60 for the second half.
But again.
Im not looking at concrete numbers.
I think thats, what you will find if you look at historical.
And I fully acknowledge the large seasonal customer you had in the year ago comp.
Hello, It is more difficult than maybe.
A normal year.
And then second question for me on the adjusted EBITDA, you talked about revenues down potentially.
In Q1 here a year ago, we had adjusted EBITDA of.
I've got $4 5 million here on revenue of $27 four but should we assume the same kind of.
If revs are down here in Q1, its funding to slightly adjusted EBITDA will be down slightly as well and then can you size that can you put a number on it or is it just too difficult.
In Q1, you are referring to Q1 of course, yes.
So for Q1, we expect it to be.
Lower than the prior year from a from a relative perspective because of the investments that we're making and the lower revenue guide.
Guided to so for Q1, our EBITDA will be.
Naturally lower than the prior year, but by the end of the year, which is important we expect overall EBITDA growth year over year by 10%.
Okay Alright.
Thanks, Joe.
Still positive in Q1 of 'twenty two.
We believe very close yes, Barry we believe that it will be.
And lower EBITDA, but as you can see.
Would be positive.
Okay. Thanks, Eric.
Eric just to add to that is remember we were not on the NASDAQ into Q1.
Before the NASDAQ itself.
Naturally a lot of expense is mostly from insurance perspective.
Understand thanks for taking my questions.
Thanks, Chris.
Sure.
Our next question is when it come from Dillon Heslin at Roth.
Okay.
Yes.
Yes.
Okay.
Dylan you can go ahead, when you're ready.
Hi, Hey can you hear me.
Okay, Alright, and hear you thanks for taking the questions first on aluminum.
How much of that growth is coming from moving some of your legacy customers onto illumina during the second half of the year.
Organic from from new pipeline versus.
Customers that Youre switching over and then I think you mentioned in 2020 versus 2021, those that you did switch there their spend is up a 100% or 118.
In dollar terms.
Is that a realistic expectation for what you see going forward.
So the percentage of.
70% of our revenue for alumina, so far came from brand new business to a third.
Right so.
That would leave about 30%.
Let's move over.
So that's your first question. The second was yes, we saw when we look at the group of four customers that switched.
From 2000 22021 from the legacy system to aluminum, we saw 118% increase in spend.
Is it realistic to see it for every customer probably not is it realistic for some clients.
Yes.
Remember when you're running a campaign on alumina you are running a full funnel campaign, which is very different than just the lower funnel.
People, who normally do on DSP.
Therefore, your investments in the campaign is usually larger now there are customers, who are going to use aluminum for the lower funnel part which is for us it's a shame because.
It's not using it through to the full potential but there is still a customer who is used to doing it that way.
And those customer we will see more or less the same results.
No.
I do believe the average spend per client will go up.
And it's potentially will go up by 118%, but probably the average is going to be lower which will be lower.
Okay. Thank you.
With pleasure.
Thank you Dylan.
Our next question is going to come from Rob Goff had echelon.
Rob you May go ahead, when you're ready.
Yes.
I'm just interested phenomenon people working out of the office of how many people working from home these days.
Yes.
Yes can you hear me, yes, we can hear you Rob.
Soon we will be able to see me.
Good morning, Rob.
But you can't tell them working out of the home office. This morning.
You can tell us anything you like okay.
Congratulations on a very solid quarter and I'm pleased to see the revenues very pleased in the mornings and come.
With respect to your revenue guidance.
Guidance of 20%, 25%.
Mathematically.
If you're starting off lower on the first quarter would it be fair to say that you look to exit the year pushing 30% revenue growth.
It would make sense.
We didn't run the exact numbers, but obviously it's going.
Going to be more aggressive growth at the end of the year.
To achieve those numbers.
In looking at the composition exiting the year.
You indicated more than half the revenues exiting would be from illumina.
<unk> also indicated the CTV could be roughly 10%.
There's some overlapping CTV aluminum could you talk to.
The reasonableness of <unk>.
Aluminum plus CTV exiting the year being more than 60% of revenues.
Again.
It's hard to tell because it's.
It's a little bit far away, but my best guess is that absolutely we're going to be on a run rate of more than 60%.
And the last quarter.
And then just one last one with respect to the revenue guidance there.
Sort of recovery would it be reflecting in the COVID-19 sensitive areas.
And we didn't reflect any very significant alumina contracts I know the sales cycles, there are longer but if you could address that would be very much appreciate it.
So.
I would say the.
We're when we're thinking about the one sector of the travel entertainment.
We see that.
That's it.
Coming back now, we're not thinking it's going to be 30% of our revenue this year.
But it's going to be a more significant part and so that's that's a great upside.
At the same time there is there is other.
Industries like when we sure like the healthcare.
It's something that always does well right. So with project without cover it does well and more and more of the budget is going online and more and more of devices going programmatic. So.
So I don't think were so dependent on specific industries coming up also our sales team is very.
<unk>.
When the pandemic started and we lost 30% of our revenue more than 30% 30 on the travel and entertainment right away. They started shifting into health into retail into all these other things.
Recovered us very fast from from that downturn.
So.
In general I would say that we have a very good team and very good products.
And.
If things change to more pandemic or more issues with.
With war issues or anything else that would lead for.
Specific verticals not to do well, we are very well equipped to move to other verticals.
Will do.
Okay.
And Rob we did not assume any large wins, we've taken a very conservative perspective there.
We're making terrific progress, but we also know that that is like you mentioned the longer sales cycle. So in our assumptions, we did not assume that although we think very pleased to see that occur, but we arent just basing it on a more.
Yeah.
Constructively and more of a conservative approach to our forecast.
<unk> forecast.
Thank you Tom Thank you Elliot.
Thank you for joining us this morning.
Rob.
Our next question will come from Daniel Rosenberg at paradigm.
Yeah.
Daniel you can go ahead, when you're ready you are on mute.
Hi, Good morning, Tom Good morning Elliot.
Questions.
I had a question around privacy.
The regulation I was just wondering if you can provide some commentary on.
Any changes on how you view the.
The impacts of big Tex privacy changes on your business.
Since we last spoke.
No I always like to go back to the way that the open Internet operates alright. So we can go into details on how to do things and how it's going to get done and all of that but I think the better way to approach it as how does it work and how does the work today is all of the content is being provided free for consumers.
And it's being paid for by advertisers my personal belief is the consumer.
Consumers are not going to start to pay for the content that they're getting for free today.
Therefore, it has to be continue to be subsidized by advertisers and therefore, the advertisers and we will have to show relevant ads to the consumers.
So having said that we will be able to.
To find a mechanism to do it today there is no issues, we can fully do that.
As always main thoughts about either the cookies or idea Fei and all that other stuff.
At the end of the day, we're not dependent on IPSA.
The cookies have not are not going away as we know for about two years and then it's very doubtful if they're ever going to go away, but even when and if they go away, we will switch to either the universal device idea or any of the other partnership that we're doing and developing with our.
And our suppliers our customers our vendors our <unk>.
Even our competitors, we are working on a regular basis to build those systems.
And theres going to be a replacement so that's.
<unk>.
That's where I believe it's going to take us.
The Cookie has been tried the third party Hooker has been tried to be taken away for over 20 years now and it's.
Unsuccessfully.
Because the internet needs at the moment so if.
If we make changes to that we also have to make changes in other ways.
But we will be able to.
To deliver even in a better way.
So I mean, certainly agree that.
The risks are manageable and our solution.
But in terms of actual expectations around exposure to any immediate changes whether it be on.
Android phone tracking R. R.
If in two years from now cookies do come any commentary you can give around how dependent are you on.
On these things and the preliminary tests, maybe youre running with other alternatives.
So I think Thats for example, when Google made their change in.
And people, who are really dependent on the traffic on their apps.
They were hurting.
We don't.
We don't do anything less than 1% of our traffic is on the apps.
So we're not really dependent on it and it didn't really affect us right.
So.
The biggest impact that could happen to us as a cooking issue rights and.
So thats, what we really really are working towards to solve and we're doing that by replacing it with.
Some type of universally we're working with many companies to do it.
And we have our own universal idea the backend that matches them altogether. So we can figure out who the people are and in fact, the universal I'd for me is a better solution to the cookies because now we don't have to guess that you're the same person on your mobile device on a computer on a connected TV you all going to have one.
Universal I'd connect to so.
In my opinion, that's where we're going.
And therefore, I don't believe there's a there's a revenue impact on acuity.
Great.
Leave it there thanks for taking my questions.
Sure.
Thank you Daniel.
Our final question comes from Kevin Krishna Rodney at Desjardin.
Sure.
Okay.
Yeah.
Kevin You May go ahead, when you're ready.
Hi, there can you hear me, we can hear you Kevin Good morning, Kevin Good morning, gentlemen, Hari and makes it Jack you I had a question for you on an alumina the alumina wins, maybe the conversations youre, having with the clients that are spending on alumina.
In any sense.
How.
You are being viewed from a competitive point of view, where does this budget coming from in your view is it.
Our clients simply expanding their budget or do you think you might be winning some.
Sure from a from a company like <unk> for example, any any commentary on essentially how you're stacking up now it's been one year out with the product against some of the bigger guys out there.
Yes, I would say both so some of it budgets are coming from the general.
And then they're just allocating it to to alumina.
They're seeing what the results they are seeing the inside they're getting from that they're spending more on it and they're liking. It some of it budget is coming from innovation. So it's all about trying new things and learning new things.
And an increase in budget in general as it comes to the what you spend on the Internet So and don't forget that ROI is also very important to them.
At the end of the day, so when you deliver that ROI.
And then you get more and more of their budgets. So it's a combination of all of it.
We're definitely taking some business from other companies, we are definitely capturing some of the.
The incremental spend that people are spending and.
The things that we're trying to do renovations.
Yes.
Okay, well, that's good to hear that Theres, some potentially some competitive displacements there sort of a part b. On this question is just I'm trying to understand a lumen.
I would think the consumer journey and the weight of product.
Design that there should be.
How to think about the amount of CTV.
That you're driving on an alumina win.
Is it and then after Greg.
The client budget spend on a campaign coming from CTV is more it would seem that you should be getting a bigger portion of <unk> when youre, winning an aluminum windows any thoughts there.
Kevin I'm not sure if we can see what's happening behind us, but there is a room, that's both journey and those three sections.
Uh huh.
The science is awareness then it goes to engagement then it goes to conversion.
So but awareness is usually dependent the piece that.
You would see the CTV on an awareness is usually the biggest investment all the campaigns because once you move to triple from the awareness you may have a million people in the awareness side and then you decide which ones are moving into that next stage.
And.
And it's substantially a lower amount of people, let's say 20000 people that now are aware of you and how you want to engage them more and then you start engaging them, but there'll be with videos, but it could be a combination of many things and then once they are fully engaged all you wanted to do is bring them back to the website to convert them right.
And thats, even a smaller amount of people so it could be more than 30% of the budget between let's say video online video and CTV, but every campaign a lot of it is about the algorithm, making decision and seeing what works best for for that specific campaign.
So I'm sorry, I can't give you a general rule of Hamas CTV per campaign I can tell you that.
It's very effective.
It's easy to see that it's effective when using aluminum if you're just finding CTV is very hard to see so that's why people really really like it is a part of our campaign.
Got you so look forward to hopefully pushing much higher than 10% CPE rose over the amp coming back.
Back half of the year.
Just the last question you know as you think about it a lot of people have asked about the guidance forming for 2022 and maybe it's more Q on Q2 can you talk about anything on Europe , I think Europe is maybe 10% maybe a little higher than your revenue any and you guys thoughts on client discussions there given what's happening.
In that region right now would.
It would be helpful. Thanks, guys.
Yes.
So Europe is as you know we have.
We have a location in Barcelona.
It's doing well, it's growing is delivering its numbers, we're actually seeing more and more self serve clients coming out of that region.
We don't really see so far any effect.
As for what's happening in the region and the region.
So.
It's really hard to say nobody knows what's going to happen next so far we haven't seen any any serious effect on revenue.
Okay. Good to hear yes, so the client and the discussions with clients further spending it's just as is.
Absolutely yes.
Okay good stuff.
Thanks for taking my questions have a great day.
Thank you. Thank you.
Tao Elliott and Thats, all we have for questions today, I'll hand, it back to you to close up shop.
Thank you Corey.
Thanks, everyone for joining us today.
We would like to.
All are.
Shareholders.
For being our partners and for allowing us to do what we're doing and to create a successful.
Company that we've created and of course, the looming we're super excited about what we're doing with Illumina.
And just can't wait to what happens next this year and I would like to welcome Elliot for joining the team.
Just here for a little bit and already showing a lot of great.
Progress.
With the organization.
Judy so.
Warm welcome and.
Thank you for joining us.
And.
All our viewers.
We're looking forward to the future.
Thank you Tal.
Thank you everyone. Thank.
Thank you.