Q3 2024 illumin Holdings Inc Earnings Call

Unknown Executive: Please refer to the cautionary statement. and risk factors identified in our filings with CDAR for a more detailed explanation of the inherent risks and uncertainties that could affect such forward-looking statements.

Any statement.

Speaker Change: And risk factors identified in our filings with SEDAR for a more detailed explanation of the inherent risks and uncertainties that could affect such forward looking statements. Following the presentation. We will conduct a Q&A session I would now like to turn the conference call over to Mr. Simon Karen Chief.

Unknown Executive: Following the presentation, we will conduct a Q&A session.

Simon Cairns: I would now like to turn the conference call over to Mr. Simon Cairns, Chief Executive Officer.

Speaker Change: Officer.

Simon Karen: Thank you Steve.

Simon Cairns: Welcome, everyone, and thank you for joining today's third quarter 2024 earnings call. Today, I'll begin by recapping highlights from the quarter, including our enhanced sales initiatives and how these have started translating into increased revenue throughout our business segment. I'll discuss our IlluminSelfServe business where we see strong growth year-on-year. Then I'll discuss our managed services business, which returned to growth this quarter.

Speaker Change: Welcome everyone and thank you for joining today's third quarter 2024 earnings call.

Speaker Change: Today I'll begin by recapping highlights from the quarter, including our enhanced sales initiatives and how these have started translating into increased revenue throughout our business segments.

Speaker Change: I'll discuss our alumina self serve business, where we see strong growth year on year.

Then I'll discuss our managed services business, which returned to growth this quarter.

Simon Cairns: Afterwards, I'll turn the call over to Elliot Muchnik, our Chief Financial Officer, who will walk you through the highlights of our third quarter 2024 financial and operating results. After that, we'll be happy to take your questions. For the third quarter, we reported record total revenue of $36.3 million, a 23% increase on a year-over-year basis. This included Illumin's self-service revenue of $8.4 million, a 64% increase compared to Q3 2023. In addition to Illumine self-service, we saw an expansion in programmatic revenue, and perhaps more importantly, this quarter marked the resumption of growth in managed services. Going downwards to the bottom line, adjusted EBITDA rose a substantial 200% compared to the same period in 2023.

Speaker Change: Afterwards, I will turn the call over to Elliott much Nick our Chief Financial Officer, who will walk you through the highlights of our third quarter 2024 financial and operating results.

Speaker Change: After that we'll be happy to take your questions.

Speaker Change: For the third quarter, we reported record total revenue of $36 $3 million.

Speaker Change: 23% increase on a year over year basis.

Speaker Change: This included alumina self service revenue of $8 $4 million, a 64% increase compared to Q3 2023.

Speaker Change: In addition to alumina self service, we saw an expansion in programmatic revenue and perhaps more importantly, this quarter marks the resumption of growth in managed services.

Speaker Change: Going downwards to the bottom line adjusted EBITDA Rose a substantial 200% compared to the same period in 2023.

Simon Cairns: Let's start with our illumine self-service business. The third quarter was another period where self-service grew considerably, by 64% year-over-year. IlluminSelfService also represented 23% of total company revenue for the quarter. Similar to recent quarters, Lumen cell service growth was mainly derived from new customer relationships. During the quarter, we onboarded 29 new Illumin self-service clients. This is due in part to customers finding greater value in our ever-improving support for CTV. Feedback we received also indicated that customers valued our integration with walled gardens like META, enabling customers to see unprecedented levels of detail in real time as to how their campaigns were performing, enabling them to leverage our insights and take action to make smarter connections.

Speaker Change: Let's start with our alumina self service business.

Speaker Change: The third quarter was another period, where self service grew considerably by 64% year over year.

Speaker Change: Alumina self service also represented 23% of total company revenue for the quarter.

Speaker Change: Similar to recent quarters alumina self service growth was mainly derived from new customer relationships.

During the quarter, we on boarded 29, new alumina self service clients.

Speaker Change: This is due in part to customers finding greater value in our ever improving support for CTV.

Speaker Change: Feedback we received also indicated that customers valued our integration with walled gardens like meta.

Speaker Change: Enabling customers to see unprecedented levels of detail in real time as to how their campaigns were performing enabling them to leverage our insights and take action to make smarter connections.

Simon Cairns: Our customers are also finding great value in our reporting and automation tools, such as Pathlight, which instantly highlights the next best move to maximize that specific campaign. We continue to receive excellent customer feedback regarding the visibility that our platform offers our customers in terms of measurement. Customers note that they are able to quickly and easily adjust their execution steps in real time so they can realize greater return on each marketing dollar spent. In the current macroeconomic environment, making the most of your advertising dollars is not an option, it's a necessity for advertisers and marketers. These results also demonstrate the success of the recent changes we have made to our sales initiatives.

Speaker Change: Our customers are also finding great value in our reporting and automation tools, such as path light, which instantly highlights. The next best move to maximize that specific campaign.

We continue to receive excellent customer feedback regarding the visibility that our platform offers our customers in terms of measurement.

Speaker Change: Customers note that they are able to quickly and easily adjust their execution steps in real time. So they can realize greater return on each marketing dollar spent.

Speaker Change: And the current macroeconomic environment, making the most of your advertising dollars is not an option, it's a necessity for advertisers and marketers.

Speaker Change: These results also demonstrate the success of the recent changes we have made to our sales initiatives.

Simon Cairns: We are not just talking about greater quantity here, but about being more strategic and effective in how our outbound sales efforts are conducted. This includes placing a greater emphasis on pursuing higher spend customers as well as simplifying our go-to-market step. All of these changes are designed to accelerate our sales process, expand our market share, and to find the most effective and efficient ways to make meaningful connections with potential self-service customers. Even though we did show growth in our self-service business both year over year and as a percentage of total revenue, we believe self-service is still in the very early stages of its potential.

We are not just talking about greater quantity here, but about being more strategic and effective in hour outbound sales efforts are conducted.

Speaker Change: This includes placing a greater emphasis on pursuing higher spend customers as well as simplifying our go to market steps.

Speaker Change: All of these changes are designed to accelerate our sales process expand our market share.

Speaker Change: And to find the most effective and efficient ways to make meaningful connections with potential self service customers.

Speaker Change: Even though we did show growth in our self service business, both year over year and as a percentage of total revenue.

Speaker Change: We believed self service is still in the very early stages of its potential.

Simon Cairns: As I've stated before, we see customers utilizing the platform today as early adopters. We are learning a great deal from their feedback as we continue to refine our sales efforts as well as becoming better from a customer service standpoint in order to meet their needs. This is a large part of how we have been successful at growing so far. At the same time, we continue to execute a strategic shift in our business, transitioning from a transaction-oriented revenue model with no contractual commitments to a more sustainable, recurring self-service model with an emphasis on longer-term contracts. Over time, we continue to believe this strategy will give us the ability to deliver more consistent revenue growth and profitability.

Speaker Change: As I've stated before.

Speaker Change: We see customers utilizing the platform today as early adopters.

We are learning a great deal from your feedback as we continue to refine our sales efforts as well as becoming better from a customer service standpoint in order to meet their needs.

Speaker Change: This is a large part of how we have been successful at growing so far.

Speaker Change: At the same time, we continued to execute our strategic shift in our business transitioning from a transaction oriented revenue model with no contractual commitments to a more sustainable recurring self service model with an emphasis on longer term contracts.

Speaker Change: Over time, we continue to believe this strategy will give us the ability to deliver more consistent revenue growth and profitability.

Simon Cairns: To support longer-term stickiness, we're actively investing to create a better customer experience within self-service, making workflow completion easier and more automated. We are also expanding the types of programmatic deals that advertisers want to use when planning campaigns, such as programmatic guarantee for CTV channels, as well as a new forecasting tool that we expect to launch very soon. Complimenting this, we are taking very active measures to improve our inventory and algorithms to deliver on a continuous promise of effective targeting and results. We believe these platform enhancements Plus efforts that help us streamline our sales process and our targeting of higher spend customers will yield better customer retention and revenue over time.

Speaker Change: To support longer term stickiness, we're actively investing to create a better customer experience within self service, making workflow completion easier and more automated.

Speaker Change: We are also expanding the types of programmatic deals that advertisers want to use when planning campaigns, such as programmatic guarantee for CTV channels as well as a new forecasting tool that we expect to launch very soon.

Speaker Change: Complementing. This we are taking very active measures to improve our inventory and algorithms to deliver on a continuous promise.

Speaker Change: The effective targeting and results.

Speaker Change: We believe these platform enhancements.

Speaker Change: Plus efforts that help us streamline our sales process and our targeting of higher spend customers will yield better customer retention and revenue over time.

Simon Cairns: As I mentioned earlier, in the third quarter, we experience growth throughout all facets of our business. In addition to self-service revenue, programmatic revenue grew 39% during this period, which contributed to managed services revenue experiencing year-over-year growth for the first time in over a year. These results reflect a more customer-centric approach we've been taking to our strategy of building a complementary series of customer-facing options, including self-service and managed services, both supported by improvements in reporting and our AI to deliver better insights. Our results clearly indicate that with this approach, we are being more effective in working with our clients in providing solutions that best fit their needs and strategy.

Speaker Change: As I mentioned earlier in the third quarter, we experienced growth throughout all facets of our business.

Speaker Change: In addition to self service revenue programmatic revenue grew 39% during this period, which contributed to managed services revenue experiencing year over year growth for the first time in over a year.

Speaker Change: These results reflect a more customer centric approach, we've been taking to our strategy of building a complimentary series of customer facing options, including self service and managed services, both supported by improvements in reporting and our AI to deliver better insights.

Speaker Change: Our results clearly indicate that that with this approach we are being more effective in working with our clients and providing solutions that best fit their needs and strategy.

Simon Cairns: We're finding that these solutions span a wider range of customer segments as well, wider than what we've done in the past. These solutions can be self-service, fully managed campaigns, or even in a hybrid approach that appeals to both agencies and brands of a variety of sizes and spend profiles. With this customer-centric approach, we're finding that more customers are seeing the value in utilizing both our managed service and Illumina self-service products. That is what you're now starting to see in our revenue. These results also prove a point I made on prior calls, where I discussed my view on managed services as an area where we could return to growth, moving our story from a single growth track to potentially multiple tracks of growth.

Speaker Change: We're finding that these solutions span a wider range of customer segments as well wider than what we've done in the past.

Speaker Change: These solutions can be self service fully managed campaigns or even in a hybrid approach that appeals to both agencies and brands of a variety of sizes and spend profiles.

Speaker Change: With this customer centric approach were finding that more customers are seeing the value in utilizing both our managed service and alumina self service products.

Speaker Change: That is what you're now starting to see in our revenue.

Speaker Change: These results also prove a point I made on prior calls where I discussed my view on managed services as an area, where we could return to growth moving our story from a single growth track to potentially multiple tracks of growth.

Simon Cairns: The initiatives we've been implementing to refine our sales approach and reorganize our sales and marketing activities include a recommitment to managed services, simplifying our go-to-market steps, testing different market segments as underserviced, and listening closely to how the customer wants to be supported in their success.

Speaker Change: The initiatives, we've been implementing to refine our sales approach and reorganize our sales and marketing activities include a recommitment to managed services simplifying.

Speaker Change: Simplifying our go to market steps testing different market segments has under serviced and listening closely to how the customer wants to be supported in their success.

Simon Cairns: In addition to the measures above, this quarter we also added important new team members, including Liz Ritzkoven, our new Chief Revenue Officer, and Bridget Westerholtz, our new SVP for Marketing. In conjunction with our product and support leaders, we are taking a customer lifecycle approach and optimizing how and where they hear from Illumin, what our brand should stand for, what makes us unique and different, and how we can streamline and assist the customer in getting to their success markers, whether that's via a self or managed service approach, or even a combination of the two. In addition to a focus on growth, we also continue to prioritize improving operational efficiencies throughout our organization.

Speaker Change: In addition to the measures above this quarter. We also added important new team members, including Liz Rich Colvin, our new Chief revenue Officer, and Bridget Western holds our new SVP for marketing.

Speaker Change: In conjunction with our product and support leaders, we are taking a customer lifecycle approach and optimizing how and where they hear from alumina, what our brands stand for what makes us unique and different and how we can streamline and assist the customer and getting to their success markers, whether that's via a self or managed service approach.

Speaker Change: Or even a combination of the two.

Speaker Change: In addition to a focus on growth. We also continued to prioritize improving operational efficiencies throughout our organization.

Simon Cairns: Despite higher expenses due to investments in key areas, our gross margin remained consistent at 47% on a year-over-year basis. Of even greater importance, our adjusted EBITDA increased 200% during the same time frame. This was mainly driven by our improved sales productivity resulting from the actions I described earlier.

Speaker Change: Despite higher expenses due to investments in key areas. Our gross margin remained consistent at 47% on a year over year basis.

Speaker Change: Of even greater importance, our adjusted EBITDA increased 200% during the same timeframe. This was mainly driven by our improved sales productivity, resulting from the actions I described earlier.

Simon Cairns: I'm extremely proud of what our team has accomplished since I joined the company nearly seven months ago, and I am grateful to the leadership team for their welcoming support and hard work. We are still in the early stages of our strategic transformation, but as our third quarter results show, we are making considerable progress. Based on what we've already achieved, our continued growth in Illumin Self-Service Revenue, and the opportunities still ahead of us, we currently expect solid fourth quarter revenue growth resulting, in part, from the recent organizational changes we have made. As we move forward, we will continue to challenge ourselves in part by setting clear, achievable targets for ourselves, constantly reassessing them, and holding ourselves accountable to reaching them.

Speaker Change: I'm extremely proud of what our team has accomplished since I joined the company nearly seven months ago, and I am grateful to the leadership team for their welcoming support and hard work.

Speaker Change: We're still in the early stages of our strategic transformation, but as our third quarter results show, we are making considerable progress.

Speaker Change: Based on what we've already achieved our continued growth in our Lumens self service revenue and the opportunities still ahead of US. We currently expect solid fourth quarter revenue growth, resulting in part from the recent organizational changes we have made.

Speaker Change: As we move forward, we will continue to challenge ourselves and part by setting clear achievable targets for ourselves.

Speaker Change: Instantly reassessing them and holding ourselves accountable to reaching them.

Simon Cairns: We will also continue to refine our approach to sales, rethinking what we've done in the past, and finding ways to make ourselves better. We will also continue to invest in areas that represent the greatest return on investment for us, including improving our sales and customer service activities, building and enhancing our technology, and improving the overall experience of Illumine platform users. We will also continue to identify new opportunities for growth in our managed services business. By doing this, I am confident that we will increase revenues and ensure Illumina's long-term growth.

Speaker Change: We will also continue to refine our approach to sales rethinking what we've done in the past and finding ways to make ourselves better.

We will also continue to invest in areas that represent the greatest return on investment for us, including improving our sales and customer service activities.

Speaker Change: Building and enhancing our technology and improving the overall experience of aluminum platform users.

Speaker Change: We will also continue to identify new opportunities for growth in our managed services business by.

Stravenuse, and Insure Illumines Long-Turn Growth [inaudible]

Elliot Muchnik: With that, let me turn the call over to Elliot to give a detailed review of our financial results.

Elliot Muchnik: Thank you, Simon. Good morning, everyone, and thank you for joining our third quarter 2024 earnings call. As you heard from Simon earlier today, we reported third quarter results, which included increases in self-service illumined revenue and programmatic revenue, as well as a 200% adjusted EBITDA improvement compared to the same period last year. Third quarter 2024 revenue was $36.3 million, up 23% compared to $29.6 million in third quarter 2023. The year-over-year increase reflects increases across all revenue segments, including self-service, programmatic, and managed service revenue. Now, turning to our illumined self-service business, illumined self-serve was $8.4 million in the third quarter, up 64% compared to $5.1 million in Q3 2023, and representing 23% of total revenue compared to 17% in the last year's third quarter.

Thank you, Simon.

Speaker Change: Good morning, everyone, and thank you for joining our third quarter 2024 earnings call.

Speaker Change: As you heard from Simon earlier, today we reported third quarter results which included increases in self-service illumined revenue and programmatic revenue, as well as a 200% adjusted EBITDA improvement compared to the same period last year.

Speaker Change: Third quarter 2024 revenue was $36.3 million, up 23% compared to $29.6 million in third quarter 2023.

Speaker Change: The year-over-year increase reflects increases across all revenue segments, including self-service, programmatic and managed service revenue.

Now, turning to our Illumin Self-Service business.

Speaker Change: Illuminate Self-Serve was $8.4 million in the third quarter, up 64% compared to $5.1 million in Q3 2023, and representing 23% of total revenue compared to 17% in the last year's third quarter.

Elliot Muchnik: This year-over-year growth was driven largely by new customer relationships, and as Simon mentioned earlier, we onboarded 29 net new illumined self-serve clients during the quarter, resulting from sales initiatives targeting higher spend customers. Our self-serve revenue continues to show the success of our sales initiatives and this platform's increased recognition and adoption in the marketplace.

Speaker Change: This year-over-year growth was driven largely by new customer relationships, and as Simon mentioned earlier, we onboarded 29 net new Illumined self-serve clients during the quarter, resulting from sales initiatives targeting higher spend customers.

Speaker Change: Our self-serve revenue continues to show the success of our sales initiatives and this platform's increased recognition and adoption in the marketplace.

Elliot Muchnik: Now I'll give a more detailed review of our financial results for the quarter. As I mentioned, third quarter revenue $36.3 million compared to $29.6 million in Q3. This included a 64% increase in the Lumen self-serve revenue, an increase of 39% in programmatic revenue, and a 3% rise in managed service revenue from the same period last year. This growth was mainly driven by new clients as well as higher platform utilization by existing clients. Importantly, this quarter marked the resumption of Managed Service Revenue growth as more customers see the value in utilizing both our Managed Service and IlluminSelfServe products.

Speaker Change: Now I'll give a more detailed review of our financial results for the quarter. As I mentioned, third quarter revenue $36.3 million compared to $29.6 million in Q3.

Speaker Change: This growth was mainly driven by new clients as well as higher platform utilization by existing clients. Importantly, this quarter marked the resumption of managed service revenue growth, as more customers see the value in utilizing both our managed service and Illumine self-serve products.

Elliot Muchnik: Gross profit for the third quarter of 2024 was $17.2 million, compared to $13.9 million in Q3 2023, reflecting higher sales year over year. Gross margin was 47%, consistent with the same period in 2023, even though self-serve continues to become a larger portion of our revenue mix. Total operating expenses for the third quarter of 2024 were approximately $18 million, compared to $16.8 million during the same period in 2023. The year-over-year increase reflected higher technology costs related to increased consulting expenses and higher variable data costs, and increased general and administrative expenses for higher recruiting and variable compensation.

Speaker Change: Gross profit for the third quarter of 2024 was $17.2 million, compared to $13.9 million in Q3 2023, reflecting higher sales year over year.

Speaker Change: Gross margin was 47%, consistent with the same period in 2023, even though self-serve continues to become a larger portion of our revenue mix.

Speaker Change: Total operating expenses for the third quarter of 2024 were approximately $18 million, compared to $16.8 million during the same period in 2023.

Speaker Change: The year-over-year increase reflected higher technology costs related to increased consulting expenses and higher variable data costs and increased general and administrative expenses for higher recruiting and variable compensation.

Elliot Muchnik: On a year-to-date basis, for the nine months ending September 30th, our expenses are $3.9 million lower, or over 7% lower than the same period in 2023.

Speaker Change: On a year-to-date basis for the nine months ending September 30th, our expenses are $3.9 million lower, or over 7% lower than the same period in 2023.

Elliot Muchnik: And this is consistent with our commitment at the beginning of this year to curtail growth in OPEX while growing the top line. As I mentioned earlier, we saw a substantial improvement in adjusted EBITDA during the quarter of 200% compared to the same period last year. For the quarter, adjusted EBITDA was $1.9 million compared to $619,000 in Q3 2023, and this improvement was primarily attributable to our increased revenue, which was partially offset by the hiring operating expenses discussed. Net loss for the third quarter of 2024 was $1.1 million compared to a profit of $800,000 in the same period last year.

Speaker Change: and this is consistent with our commitment at the beginning of this year to curtail growth in OPEX while growing the top line.

Speaker Change: As I mentioned earlier, we saw a substantial improvement in adjusted EBITDA during the quarter of 200% compared to the same period last year.

Speaker Change: For the quarter, adjusted EBITDA was $1.9 million compared to $619,000 in Q3 2023, and this improvement was primarily attributable to our increased revenue, which was partially offset by the hiring operating expenses discussed.

Speaker Change: Net loss for the third quarter of 2024 was $1.1 million compared to a profit of $800,000 in the same period last year. This was mainly due to a net foreign exchange loss versus a gain in the prior year period and lower income taxes.

Elliot Muchnik: This was mainly due to a net foreign exchange loss versus a gain in the prior year period and lower income tax.

Elliot Muchnik: On November 13, 2023, the company commenced a new Normal Course Issuer Bid, or NCIB, to purchase for cancellation up to 4,330,226 of its outstanding common shares. During the three and nine months ended September 30th, 2024, the company purchased and canceled 819,698 and 3,310,384 of its common shares under this NCIB at an average price of $1.59 and $1.64 per share totaling $1.3 million for the quarter and $5.4 million to date respectively. Since inception and as of September 30, 2024, the company had acquired 3,755,746 shares or 87% of our allotted limit of shares under the program. The NCIB will conclude on November 12th, and any further decisions by the board on the future programs will first require the completion of our planning process for fiscal 2025.

Speaker Change: On November 13, 2023, the company commenced a new Normal Course Issuer Bid, or NCIB, to purchase for capsulation up to 4,330,226 of its outstanding common shares.

Speaker Change: and $3,310,384 of its common shares under this NCIB at an average price of $1.59 and $1.64 per share totaling $1.3 million for the quarter and $5.4 million to date respectively.

Speaker Change: Since inception, and as of September 30th, 2024, the company had acquired 3,755,746 shares, or 87% of our allotted limit of shares under the program.

Speaker Change: The NCIB will conclude on November 12th and any further decisions by the board on the future programs will first require the completion of our planning process for fiscal 2025.

Elliot Muchnik: We recognize the importance of a strong balance sheet to the valuation of Illumin and remain committed to ensuring that we utilize our substantial cash reserves in a manner that is optimal for the strategy and future of the company. All options including synergistic acquisition opportunities and share repurchases will only be undertaken under a structure of continued overall revenue growth and strong consistent cash flow from operations. As of September 30, 2024, our cash and cash equivalents stood at $51.4 million compared to $55.5 million at the end of 2023. This decrease was primarily attributable to the repurchase of the company's shares, investments in our platform and property and equipment, and payments on leases.

Speaker Change: We recognize the importance of a strong balance sheet to the valuation of Illumine and remain committed to ensuring that we utilize our substantial cash reserves in a manner that is optimal for the strategy and future of the company.

Speaker Change: All options including synergistic acquisition opportunities and share repurchases will only be undertaken under a structure of continued overall revenue growth and strong consistent cash flow from operations.

Speaker Change: As of September 30, 2024, our cash and cash equivalents stood at $51.4 million compared to $55.5 million at the end of 2023.

Speaker Change: This decrease was primarily attributable to the repurchase of the company's shares, investments in our platform and property and equipment, and payments on leases.

Elliot Muchnik: This was partially offset by positive cash flow provided by operating activities before changes in working capital, income taxes paid, and interest paid. and from a favorable foreign exchange impact. As of September 30th, 2024, the total number of our outstanding common shares stood at 50,826,666, following a series of strategic adjustments to our share structure compared to 51,350,973 as of December 31st, 2023. And this figure includes the impact of our recent share repurchases under the NCIB offset by a modest number of shares issued through the exercise of stock options and other vested equity instruments. In conclusion, during the third quarter, we continued to see strong illumined self-serve revenue growth complemented by growth in programmatic revenue and managed service revenue.

Speaker Change: This was partially offset by positive cash flow provided by operating activities before changes in working capital, income taxes paid, and interest paid.

and from a favorable foreign exchange impact.

Speaker Change: As of September 30th, 2024, the total number of our outstanding common shares stood at 50,826,666.

Speaker Change: Following a series of strategic adjustments to our share structure compared to $51,350,973 as of December 31st, 2023.

Speaker Change: And this figure includes the impact of our recent share repurchases under the NCIB offset by a modest number of shares issued through the exercise of stock options and other vested equity instruments.

Speaker Change: In conclusion, during the third quarter we continued to see strong Illumined self-serve revenue growth complemented by growth in programmatic revenue and managed service revenue. This growth reflects the success of our enhanced sales initiatives.

Elliot Muchnik: This growth reflects the success of our enhanced sales initiatives, and in addition, we realized an adjusted EBITDA improvement of 200% resulting from this higher revenue and a disciplined approach to cost management. Looking ahead, we expect solid fourth quarter revenue growth resulting in part from the recent organizational changes we have made in the leadership and sales team. For the long term, we remain focused on generating overall strong, sustainable revenue growth and a prudent approach to cost management.

Speaker Change: and in addition we realize an adjusted EBITDA improvement of 200% resulting from this higher revenue and a disciplined approach to cost management.

Speaker Change: Looking ahead, we expect solid fourth quarter revenue growth resulting in part from the recent organizational changes we have made in the leadership and sales team.

Speaker Change: For the long term, we remain focused on generating overall strong, sustainable revenue growth and a prudent approach to cost management. And with that, I'd like to turn the call back to Simon for his closing remarks.

Simon Cairns: And with that, I'd like to turn the call back to Simon for his closing remarks.

Simon Cairns: Thank you, Elliot. In closing, we are happy with our third quarter performance and are cautiously optimistic about our future. Once again, we saw strong growth in Illumina's self-service revenue, which rose 64% year-over-year for the quarter. Our growth continues to be driven primarily by new customers to Illuwin, showing the effectiveness of our enhanced sales initiatives and the growing recognition of our journey platform, Canvas. At the same time, we are balancing our emphasis on maximizing revenue opportunities by maintaining a focus on optimizing operational efficiencies and managing our cost structure.

Simon Cairns: We remain excited about the future and look forward to building great, greater long-term value for our shareholders.

Simon Cairns: Thank you all for your time today. This concludes our formal remarks. We look forward to answering any questions you may have.

Simon Karen: Thank you all for your time today. This concludes our formal remarks. We look forward to answering any questions you may have.

Unknown Executive: Good morning, gentlemen, and thank you to everyone for joining the presentation of Illumina's third quarter 2024 financial and operating results.

Speaker Change: Good morning, gentlemen, and thank you to everyone for joining the presentation of Illumina's third quarter 2024 financial and operating results.

Unknown Executive: I would like to begin by reminding our analysts that in order to present your questions, you must first click the I want to join the stage button at the top of your screen. Please be patient while we assemble the questions.

Speaker Change: I would like to begin by reminding our analysts that in order to present your questions, you must first click the I want to join the stage button at the top of your screen.

Please be patient while we assemble the questions.

Unknown Executive: Gentlemen, your first question this morning comes from Tanvi Gabriel at Ventum Financial. Tanvi, when you are ready, please proceed with your question.

Hi, good morning and congratulations on the quarter.

Tanvi Gabriel: Hi, good morning. And congratulations on the quarter.

Thank you. Thank you.

Simon Cairns: Um, so just wanted to ask, in terms of the question, which is, you know, you've been seeing positive traction for your hybrid service model, but just wanted to elaborate. on any strategies you're employing to retain as well as expand relationships with existing clients. I can answer this in a few ways.

Speaker Change: So just wanted to ask in terms of the question, which is, you know, you've been seeing positive traction for your hybrid service model, but just wanted to elaborate.

Speaker Change: on any strategies you're employing to retain as well as expand relationships with existing clients.

Speaker Change: I can answer this in a few ways. So first and foremost, we

Simon Cairns: So first and foremost, we are you know, really essentially revisiting our entire sort of marketing and sales go-to-market strategy. And we spent this past quarter testing out different marketing reach messages. We spent this quarter focusing on slightly different customer segments. And yes, we did present the customer with options, including a self-service product, our guided service, aka hybrid product, and also our managed services. And this sort of customer-centric approach did come back to us and was a contributor in terms of the good results we did. So we're going to continue down this path of essentially really listening quite closely to the customer, finding different ways that we can support them.

are

Speaker Change: and also our managed services and this sort of customer centric approach.

Speaker Change: did come back to us and was a contributor in terms of the good results we did see in Q3. And so we're gonna continue down this path.

of essentially really listening quite closely to the customer.

Simon Cairns: We're finding that we have a wide array of customers who have both similar but also competing interests and priorities. We believe that we have the right product roadmap in self. We believe that we have the ability to help customers who maybe want self but want some help getting started, and that would be our hybrid service. And we also definitively have customers who want our managed services product as well. And so we're going to continue down this path for the next few quarters. I do like what the hybrid product did contribute in the quarter to our overall business, but our top priority still remains self, but you will see us evolve how we market.

Speaker Change: We have a wide array of customers who have both similar but also competing interests and priorities. We believe that we have the right product roadmap in itself. We believe that we have the ability to help customers who

be

Speaker Change: for the next few quarters. I do like what the hybrid product did contribute in the quarter to our overall business, but our top priority still remains self and but you will see us evolve how we market and sell it.

Tanvi Gabriel: Okay, perfect. Thank you.

Speaker Change: Okay, perfect. Thank you. And so the second question is, in your product service roadmap, you've mentioned previously about social media integration, just wanted to get if there's any updates or insights in terms of that.

Simon Cairns: And so the second question is, in your product service roadmap, you've mentioned previously about social media integration, just wanted to get if there's any updates or insights in terms of that. We have sort of two, there are two sort of leading aspects inside our product portfolio that are definitively creating good attachment with customers, getting good visibility, good response and good spend. They're getting very good value out of it. One is we've seen very solid growth in CTV. Again, it's sort of in line or often beating the market. CTV for us is still small but growing rapidly.

Speaker Change: We have sort of two, there are two sort of leading aspects inside our product portfolio that are that are definitively creating good attachment with customers, getting good visibility, good response, and and you know good spend. They're getting very good value out of it. One is we've seen very solid growth in CTV.

Speaker Change: Again, it's sort of, you know, in line or often beating the market CT for us.

CTV for us is still small but growing rapidly.

Simon Cairns: We really like what we see.

Simon Cairns: And the other, you're absolutely right, is in integrations with walled gardens. That side of the business is attracting customers. They like the fact that they can essentially deploy their marketing spend in an open web format and in walled gardens. They can get reporting that is both segmented and united. They can get much better performance insights on how their campaigns are running. And because they can see more than just the last click with the Illumine self-platform, for example, they can see up the funnel and how customers are actually either acting or reacting. They can see more than the last click.

Speaker Change: We really like what we see and the other you're absolutely right is in you know integrations with walled gardens That side of the business is attracting customers. They like the fact that they can essentially

Speaker Change: Deploy their marketing spend in an open web format and in walled gardens. They can get Reporting that is both segmented and united they can get much better performance insights

Speaker Change: on how, you know, their campaigns are running and because they can see.

More than just the last click.

Simon Cairns: They are finding those extra knots of boat speed that they're really looking for to unlock that 1% or 2% extra conversion in landing that net. So we believe we are adding good value with integrations like that. And we will continue down.

Tanvi Gabriel: Perfect. Thank you so much.

Perfect. Thank you so much.

Unknown Executive: Thank you, Tanvi. Gentlemen, I don't... I don't see any other questions in the queue, so that will conclude our presentation for this quarter.

Thank you, Sandy.

Gentlemen, I don't...

Speaker Change: I don't see any other questions in the queue, so that will conclude our presentation for this quarter. A special thank you to our analysts and shareholders for attending this morning. Please join us the next time as we present our Q4 2024 and year-end financial and operating results.

Unknown Executive: A special thank you to our analysts and shareholders for attending this morning. Please join us the next time as we present our Q4 2024 and year-end financial and operating results. Thank you all for joining. Have a great day.

Thank you all for joining. Have a great day.