Q4 2024 illumin Holdings Inc Earnings Call
plans, estimates and attentions, and similar statements concerning anticipated future events results, circumstances, performance, or expectations that are not historical facts.
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Speaker Change: Following the presentation, we will conduct a Q&E session. I would now like to turn the conference call over to Mr. Simon Cairn, Chief Executive Officer.
Speaker Change: Thank you, Steve. Welcome everyone and thank you for joining us for today's fourth quarter and full year 2024 earnings call.
Speaker Change: I'll start off by reviewing some of the highlights from the quarter, which demonstrate the success of the customer centric approach we started applying in the second half of 2024 in 2004.
Speaker Change: All also discussed the testing we're doing around enhanced marketing and sales initiatives, which have contributed to our growth in self-service, managed service, and our exchange services revenue lines.
Speaker Change: Then I'll turn the call over to our chief financial officer, Elliot Muchnik, who will review the highlights of our fourth quarter and full year 2024 financial and operating results.
After that, we'll be happy to take your questions.
Elliot Muchnik: For the fourth quarter, we delivered strong year-over-year revenue growth of 35%.
Elliot Muchnik: This growth was driven by increases across all revenue lines, including self-service, managed service, and our exchange services businesses.
Elliot Muchnik: Most notably, we continue to see considerable revenue growth in alluminous self-service, which grew 45% year-over-year and 55% sequentially.
Elliot Muchnik: Sal Service, represented 26% of total company revenue for the 4th quarter, up from 23% in the 3rd quarter and 24% in the same period last year.
Elliot Muchnik: What's important to point out is that this self-service growth came from a variety of inputs similar to what we saw in Q3.
Elliot Muchnik: For example, during the fourth quarter, we onboarded 23 new self-service customers driven by strong customer interest in both our standard self-service option as well as our newer hybrid or a guided addition of self-service that we launched in Q3.
Elliot Muchnik: In addition to new customers, revenue growth in self-service was also fueled by improving average revenue per customer.
Elliot Muchnik: largely due to our customers finding more value in the new features we launched in Q3 and Q4 such as programmatic guarantee and are consistently improving support for CTV which I'll talk about more shortly.
Elliot Muchnik: Further supporting our revenue growth and self-service, existing customers have indicated they are very pleased with the recent platform enhancements we've made, including our integration with wall gardens like Mehta, resulting in better customer stickiness.
Elliot Muchnik: There's integration extends our ability to drive exceptional campaign performance across both the open web and now into and through Wal Gardens.
Elliot Muchnik: Resulting an improved overall conversion for that brand and a lot less work for said brand when compared to the traditional legacy single channel focused campaign planning tools.
Elliot Muchnik: This multi-channel approach we've been employing in self-service has been paying off with existing customers, increasing their sticking
as a second example of improving stickiness.
Elliot Muchnik: More of our existing customers are now testing and trying out more advanced features such as PathLate, an AI-driven tool that delivers real-time recommendations in the campaign planning and performance analysis stages, enabling quick adjustments and readjustments to get that extra awareness or conversion performance.
Elliot Muchnik: All supported by our recently revised automated reporting, enables our customers to focus on insights from reporting rather than just building reports.
Elliot Muchnik: our efforts are delivering better performance for customers with less effort on their behalf and we believe this will drive even further sticking us over time.
Elliot Muchnik: This product and platform focus on better conversion, better insights and more automated workflows, better positions us not just as another DSP, or just another vendor, but rather as a key partner in our customer's marketing success, creating both a reliance on our technology and a trust in our team.
Elliot Muchnik: This focus on conversion, insights, and more automated workflows are a manifestation of our customer-centric approach that we want to build upon to deliver more value to our customers, our investors, and our cells over the next several quarters.
Further complementing these platform improvements.
Elliot Muchnik: We are also expanding the types of programmatic deals that advertisers want to use when planning their marketing campaigns such as programmatic guarantee or PG for CTV channels, as well as our forthcoming forecasting tool that we expect to launch in Q2.
Elliot Muchnik: Has CTV grows on our platform in terms of adoptability, it's important we preposition ourselves for a win here.
Elliot Muchnik: Hence our efforts during the last couple of quarters to expand CTV audience support, allow for more automated reporting and now providing support for more deal types such as programmatic guarantee.
to drive further stickiness in the second half of 2025.
Elliot Muchnik: In the near future, we expect to release our AI-driven forecasting tools for programmatic channels, including OpenWeb, CTV, and Digital Out of Home. Until now, AI-driven forecasting has been available to only to exclusive brands. We're going to pay a premium within exclusive applications.
Elliot Muchnik: with Illumans Campaign Forecaster, Self-Service Challenger Brands and agency customers can access the convenience of Integrated Cross-Channel Forecasts at no additional cost while up-leveling their speed to market and increasing their confidence in their digital marketing buys by utilizing Illumans Self-Service.
all without having to commit to big upfront contracts.
We expect to launch this feature in the coming weeks.
Elliot Muchnik: A company in these platforms, our quarterly results also reflect the success of our enhanced sales initiatives, which have been targeting higher spend clients.
Elliot Muchnik: So, in addition to reaching more customers, we will continue to refine our sales and market efforts to be more strategic and effective, manifested in the revisions we're making to illumine self-service go-to-market strategy.
Elliot Muchnik: We believe all these changes we've been implementing are expanding our addressable market and positioning our company for further illumined self-service customer growth in both the near and long term. We are continually testing and refining our marketing, sales tactics, and product priorities both to address customer feedback and to drive revenue growth.
Elliot Muchnik: This is how we've been able to achieve the substantial growth that you've been seeing in recent quarters.
Elliot Muchnik: which have been historic challenge points for us trying to carve out a unique and valuable part in the market that is vibrant and where our self-service solution can be of tremendous value.
Elliot Muchnik: Simultaneously, we have continued to implement strategic shifts in our business transitioning from a transaction-oriented revenue model with no contractual commitment to a more sustainable recurring self-service model that favors longer-term customer contracts.
Elliot Muchnik: We continue to believe that in the long run the strategy will give us the ability to deliver a consistent, sustainable revenue growth and profitability.
Elliot Muchnik: In addition to self-service growth and after a few years of decline, the fourth quarter also represents our second consecutive quarter of resumed managed services revenue growth, which increased 28% as more companies recognize the complementary purposes of both our managed service and our self-service products.
Elliot Muchnik: As I've stated in our prior calls, customers are telling us that they have always valued us for managed services' capabilities.
Elliot Muchnik: and while self-service may indeed outpace managed services in the future,
Elliot Muchnik: For now, our customers are telling us that managed services remains an important option for them.
Elliot Muchnik: In line with this thinking, in the second half of 2024, we told customers that we will continue to offer managers as so long as there is meaningful demand and that we can genuinely add value.
Elliot Muchnik: as our customer performance in both Q3 and Q4 clearly indicates.
That was indeed the case.
Elliot Muchnik: This also aligns with the more customer-centric approach we've been taking the past several months, which includes building complementary, interlocking cross-gradable customer-facing options.
Elliot Muchnik: consisting of self-service, managed services as well as a hybrid approach if that makes the most sense for the customer. All of these options are supported by the improvements to our platform that I mentioned earlier, combining to deliver better customer insights and added value to our customers.
Elliot Muchnik: As our most recent quarterly result show, this approach has been working, helping more customers see the value in utilizing both self-service and more recently managed service products.
Elliot Muchnik: We also found that this complimentary set of solutions has opened a wider range of customer segments for us, including both agencies and brands encompassing different sizes and spend profiles.
Elliot Muchnik: We believe this wider applicability and early response indicates that both illumine self service and manage service options have greater potential growth opportunities than we've seen so far giving us motivation to continue on this path.
Elliot Muchnik: Complementing our self-service and managed service business, we continue to see substantial growth in exchange services where revenue increased 39% in the fourth quarter compared to the prior year period. In the third quarter of 2024, we saw increased demand for our proven exchange services capabilities.
Elliot Muchnik: Reconizing this opportunity, we successfully capitalized on that demand, and in Q4 we delivered 39% growth for the third revenue segment compared to the same quarter in the prior year.
Elliot Muchnik: Further diversifying our revenue sources and extending the value of our Aluminum platform into publisher services.
Elliot Muchnik: us. It is important to note that the publisher side is a very tight market, and so we are dedicating a focused effort to offer meaningful value and capture opportunities, but not derailing our focus from delivering on the promise of self-service.
Elliot Muchnik: Our proprietary tech platform supports this type of test and prove expansion, as we continue to leverage our existing platform and existing operations and abilities to offer new value to new customers.
Elliot Muchnik: Moving down the income statement closer to the bottom line, adjusted EBITDA increased significantly during the quarter, growing 42% year-to-year compared to the same period in 2023 and 113% quarter over quarter. This improvement was due to our sales growth as well as enhanced sales productivity and improved operating efficiency. This improvement was due to our sales growth as well as enhanced sales productivity and improved operating efficiency. This improvement was due to our sales growth as well
Elliot Muchnik: Thanks. Going forward, we will continue to focus on improving operational efficiencies throughout the business. As I mentioned earlier, we are still in the very early stages of refining our sales and marketing activities, but based on our Q4 results, these initial actions seem to be paying off.
Elliot Muchnik: This is due in no small part to some of the key hires who made in 2024, including the editions of Liz Ritz-Koven, our chief revenue officer.
and Bridget Westerholz, our SVP for marketing. [inaudible]
Elliot Muchnik: Liz Brings over 20 years of print, digital media, and software sales experience with industry leading organizations to Aluminum. Bridget is a global marketing leader with over 20 years of experience inside advertising agencies and inside brands.
Elliot Muchnik: A lot of changes we've made to our sales and marketing activities to improve their effectiveness have been due to their efforts.
Elliot Muchnik: I'm extremely happy with the results we've seen and I want to thank them both and their entire teams for the success we've achieved so far. I believe the success is still only in the very beginning stages of what we can accomplish.
Elliot Muchnik: To summarize, our fourth quarter results show the accumulated benefits of all the actions we've been taking since the second half of 2024, to drive revenue, improve overall performance and build a solid foundation for long-term growth.
Elliot Muchnik: As these results show, we're seeing what I have been looking for. Patterns of growth.
Most pleasantly gross in more than one area.
as well as we are still delivering on EBITO.
Elliot Muchnik: Looking ahead, we are still in the very early stages of our strategic transformation.
Elliot Muchnik: While we currently are facing demonstral economic uncertainties with respect to terrorists and inflation, we intend to continue to utilize and capitalize on the customer-centered approach that has served us quite well so far. Our strength and team will continue to focus on marketing and selling more effectively and efficiently to customers as we advance aluminum-cell service roadmap.
Elliot Muchnik: For 2025, we have a specific track that has dedicated to increasing qualified opportunities, engaging in a more solution-centric approach and removing friction from our selling process.
Elliot Muchnik: Again, we are happy with what we've already achieved and our results show that.
Elliot Muchnik: However, we believe we were still in the very early stages of growth.
Elliot Muchnik: And there's still ample marketing improvements, a new brand strategy, further improvements to our product line, better focus and selling an engagement, an ample friction to be removed within 2025. So in our minds, the best is still yet to come and as such, we look forward to updating you on our continued progress.
Elliot Muchnik: With that, let me turn the call over to Elliot and give a detailed review of our financial results.
Thank you, Simon.
Elliot Muchnik: and good morning, everyone, and thank you for joining our earnings call. Today, we reported our fourth quarter and full year 2024 results.
Elliot Muchnik: During the fourth quarter we delivered increases across all of our revenue lines and an adjusted EBITDA improvement of 42% compared to the prior year.
Elliot Muchnik: for the full year revenue increased 11% and adjusted even die increased by 104%.
Elliot Muchnik: These financial results signify the strongest quarter in the company's history, and I'm pleased to provide additional details on our quarterly and full year results.
Elliot Muchnik: Fourth quarter of 2024 revenue was 49.9 million, up 35% compared to 37 million in Q4 2023. As I mentioned earlier, this year over year growth reflects increases across all revenue segments, including sales service, managed service, and exchange services.
Elliot Muchnik: Specifically, our self-service business showed strong growth during the quarter, rising 45% to reach 13 million compared to 8.9 million in Q4 2023.
Elliot Muchnik: Simon noted we are especially pleased with the fact is that drove this terrific performance, including 23 new customer relationships and increased average revenue per client. And we have continually refined our focus on targeting customers with higher spend potential and a greater likelihood of benefiting from the unique attributes of our platform.
Elliot Muchnik: And with our increased focus and enhanced sales efforts as well as our investment in brand product management, we expect this momentum to continue as we see further adoption and utilization of our self-service platform.
Elliot Muchnik: In addition to self-service, the fourth quarter of 2024 represents our third consecutive quarter of growth. In our managed service revenue line which reached 23.7 million, up 28% year over year and 33% sequentially from Q3 of this year.
Elliot Muchnik: As discussed earlier, our clients appreciate and value the performance we delivered through our managed service business line and we see continued opportunity to deliver meaningful results for our clients and the company in this segment.
Elliot Muchnik: And finally, our exchange services business delivered strong results with revenue of 13.2 million increasing 39% year-over-year with strong demand during a particularly active period which included the presidential election cycle in the U.S.
Elliot Muchnik: Gross Profit, or Net Revenue for the Fourth Quarter 2024, was 22.7 million compared to 18 million in Q4 2023.
Elliot Muchnik: reflecting higher sales year over year. Gross margin for the quarter was 45% compared to 49% for the same period in 2023, driven by change in product mix and increased client activity in lower margin verticals.
Elliot Muchnik: and going forward are overall margins are expected to be more aligned with our full year, gross margin of approximately 47% with some anticipated further downward pressure due to increased self-service revenue growth.
Elliot Muchnik: Total operating expenses for the fourth quarter of 2024 were 21.8 million, compared to 19 million during the same period in 2023.
Elliot Muchnik: The year-over-year increase reflects higher technology expenses related to higher variable data costs, higher sales and marketing expenses, and increased G&A expenses for higher recruiting and bonuses.
Elliot Muchnik: Q4 2024 operating expenses as a percentage of revenue were 43.7% compared to 51.4% in Q4 2023.
Elliot Muchnik: And again, as noted earlier, fourth quarter of just a bit dollar rose 42% year over year to 3.9 million compared to 2.8 million in the prior year period.
Elliot Muchnik: And this improvement was primarily attributable to higher revenue, strength and US dollar that were partially offset by higher operating expenses.
Elliot Muchnik: Night Income for the fourth quarter of 2024 was 4.1 million compared to a net loss of 2.6 million in the same period last year.
Elliot Muchnik: This year, over your increase was primarily a result of higher revenue and net foreign exchange gain versus a loss in the prior year period, which is partially offset by higher costs.
Turning to our full-year results.
Elliot Muchnik: Total 2024 revenue grew 11% to $140.4 million versus $126.3 million in 2023.
Elliot Muchnik: The annual increase was driven by strong revenue growth in our self-service business which increased by 78% from prior year to 38.4 million.
Elliot Muchnik: exchange services revenue increased by 8% from 2023 to 34.3 million.
Elliot Muchnik: and its services revenue declined 7% year over year to 67.7 million with our growth during the second half of 2024, mostly offsetting the declines earlier in the year.
Elliot Muchnik: 2024 gross profit or net revenue was $65.5 million versus $60.3 million in 2023, an 8.6% increase due to higher revenues.
Elliot Muchnik: and Gross Margin slightly declined to 47%, compared to 48 last year, reflecting the higher portion of self-service revenue in the overall mix.
Elliot Muchnik: Operating expenses for 2024 were 70.5 million, a 1.7 million priest versus the 71.7 million of the prior year despite the growth we experienced in our top line.
Elliot Muchnik: This outcome is consistent with the commitment management made at the beginning of 2024 to grow revenue while not sacrificing our focus on operational efficiency and cost management.
Elliot Muchnik: the operating expenses in 2024 were 50% of revenue versus 57% 2023.
Elliot Muchnik: As a result of this focus on operational efficiency, our 2024 full year EBITDA increased by 104% to 6.3 million compared to 3.1 million in the prior year.
Elliot Muchnik: Net income for 2024 was 0.9 million considerable improvement compared to the net loss of 11 million in 2023 and this increase was driven by better performance as described during my earlier comments
Elliot Muchnik: and the reversal of a 2.8 million FX loss in the prior year to a 5.1 million gain in 2024.
Turning briefly to our balance sheet.
Elliot Muchnik: Q4, we continue to strengthen our balance sheet by growing cash from 51.4 million at the end of Q3, the 56 million as of December 31st, 2024, and an increase of half a million from the end of 2023.
Elliot Muchnik: This year over your increase was primarily attributable to strong cash flow from operating activities.
A favorable foreign exchange impact on cash and cash equivalents.
Elliot Muchnik: which was partially offset by the repurchase of the company shares and further investments to enhance our platform as well as for property and equipment, payments on leases.
Elliot Muchnik: Our balance, she continues to be a source of strength for Lumen.
Elliot Muchnik: In addition to providing us necessary liquidity to support our growth initiatives,
It also provides illumine financial flexibility and flexibility.
Consider Strategic Acquisition Opportunities
in a marketplace with increasingly more attractive.
Elliot Muchnik: in a creative expansion opportunities both in North America and beyond in areas where we already operate or see potential strategic fits.
Elliot Muchnik: Also in the year, the company concluded that the November 2023 normal course issued a bid or NCIB on November 12, 2024.
Elliot Muchnik: Under this 2023 NCIB, during the year the company repurchased 3.31 million shares at an average price of $1.61 per share for total consideration of 5.3 million.
Elliot Muchnik: On December 23, 2024, the company commenced a new NCIB to purchase for cancellation of the 3.9 million of its outstanding commas shares. No repurchases were made under this facility between its commencement and the end of the fiscal year.
Elliot Muchnik: This 2024 NCID remains open and can continue until December 22, 2025, or until we reach our targeted repurchase limit.
Elliot Muchnik: As of December 31, 2024, the total number of our outstanding common shares stood at 51,238,056 shares.
Elliot Muchnik: Following a series of strategic adjustments to our share structure compared to 51,350,973 as of December 31,2023.
Elliot Muchnik: This figure includes the impact that we're sharing purchases during the year under the 2023 NCIB. It was offset by shares issued through the exercise of stock options and other vested equity instruments.
Elliot Muchnik: On a fully diluted basis, our shares outstanding are 56.4 million, and our insider share ownership percentage remains at just over 23%.
Elliot Muchnik: In conclusion, during the fourth quarter, we delivered a significant year-over-year increase in total revenue, reflecting growth in all revenue lines, including self-service, managed service, and exchange services, which was driven by a successful and enhanced sales initiative.
Elliot Muchnik: As we move ahead in 2025, we anticipate some short-term headwinds related to tariffs and persistent economic uncertainty.
Elliot Muchnik: We expect 2025 to be a year of progressive growth, especially in our most active quarters during a second half of the year.
Elliot Muchnik: Further, we expect to record higher expenses in the first half of the year, mainly from our continued investments to enhance our product platform, strengthen brand identity, and as well as for initiatives to increase our sales capacity and efficiency for the more profitable third and fourth quarters, once these investments have been completed.
Elliot Muchnik: Having said that, we continue to believe in our long-term growth prospects and intend to remain focused on generating strong sustainable revenue growth across all our revenue lines for 2025.
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 very pleased with our fourth quarter and full year 2024 results. These results demonstrate we are now starting to see the benefits of the actions we've been taking to drive growth in our self-service, manage service, and exchange revenue lines.
Simon Cairns: a growth continues to be driven by a variety of input sources, including the advent of our hybrid service, better average spending per customer and improvements we've been making on our platform to drive stickiness as per my earlier notes.
Simon Cairns: Having said this, we intend to keep focusing on managing costs and improving operational efficiencies as well throughout our organization.
Simon Cairns: to spite headwinds such as tariffs and inflation, both of which we can create pauses in marketing budgets. Our outlook is bright and we appreciate the continued support of all of our stakeholders as we work through to build a stronger base for future growth. In closing as CEO , I am looking not just for better performance. Thank you very much.
Simon Cairns: But for patterns of performance that we can replicate to build upon and to this day, I like the new patterns that I'm seeing
Simon Cairns: Thank you all for your time today. This concludes our formal remarks.
Speaker Change: Good morning, gentlemen, and thank you to everyone for joining us as Aluminum Holdings presents our fourth quarter and full year 2024 financial and operating results.
if there are any questions from the audience.
Daniel?
Rosenberg: Rosenberg from Paradise. Daniel, please proceed with your question when you are ready.
Speaker Change: Good morning, Simon and Elliot, congrats on a strong quarter. My first question comes around the self-service strength.
Speaker Change: I was curious outside of the election spending, obviously the seasonal impacts, how you're thinking about the growth prospects of self-serve over 25.
Speaker Change: Good morning, Daniel. It's good to hear from you. I hope you're well. We are bullish about the growth prospects related to self-service and if I break that back into the inputs, I think that's where the story lies. So through Q3 and Q4, we saw an increase overall in marketing and qualified leads.
It came in specifically related to our ever-improving self-service product.
Speaker Change: Furthermore, we saw a better time to market and engagement amongst our sales team as we started to remove friction in Q3 and through Q4. We will continue that in 2025.
Speaker Change: and so that, you know, shortened the sales cycle and at the same time we saw again another improvement in the average revenue for a customer within the Solve Service.
Speaker Change: which means that they're finding good value. We saw a strengthening of the number of channels that they're using within self-service and at the aggregate self-service is overall stickiness with the customers. In other words, the number of months they can use the product in a row.
Speaker Change: and continues to improve. So we're sort of thinking about self-service, not do necessarily to any seasonality in orderly or elect or anything else. It's really focused on building a quality product, and the customer seem to be responding to that.
Speaker Change: Mr. Daniel. Do you have a follow-up?
that if I can have one more.
Sure.
Speaker Change: So my question is around the sales and branding investment that you spoke to in your prepared remarks. So I was just wondering if you could unpack a little bit what you're thinking about in terms of branding strategy. Is it product specific? Is it company wide? Is it new segment targeted?
Speaker Change: Just curious about the investment in resources and branding strategy for next year, and I'll pass the line. Thank you.
Speaker Change: a couple. A couple of maybe different pieces done packed for you. So in Q3 and then again in Q4, we evolved our tactical marketing that we deployed, for example, in on LinkedIn and other social media channels to generate customer interests in aluminum self-service.
Speaker Change: and we moved away from some of the aspirational messages that the company had transmitted over the last several quarters, such as we are a journey advertising platform.
Speaker Change: and we move more towards more tactical, you know, like you can be successful with CTV with aluminum and we, you know, we launch new and additional features.
Speaker Change: the mantra that we are in the hero making business. We want to set our customers up to appear to be heroes with their bosses and their customers. So we give them, you know, examples of channels, we give them examples of success stories instead of us sort of preaching. So we give them examples of success stories. So we give them examples of success stories.
Speaker Change: the destination. We let our customers and examples and data sort of do the talking for us. And that seems to be driving more and more, or I should say better and ever improving leads coming into the business and leads translate to sales.
Speaker Change: How do we also get more leads? Well, we have to layer in front of that brand because if leads lead to sales, then brand leads to leads.
Speaker Change: and so brand is essential when we interviewed both existing customers and recent and also lost customers and never been customers in Q4 and Q3.
Speaker Change: We have a fairly decent brand reputation and a brand rank. We're sort of in the middle in terms of a brand rank.
Speaker Change: which is good news because if we if we were high and really well known then I would be concerned because you know how do we grow and extract more market share
Speaker Change: But given that people kind of know us, they know of it but they don't necessarily know enough detail, that mandates that we have a brand strategy, people need to know what we stand for.
Speaker Change: in the marketplace and be able to carve out not only a product entity but a call out an emotional entity but what it is that we value and what value we're going to deliver.
Speaker Change: for our customers. So this brand piece is essential this year and it is evolving largely driven by data, largely driven by customer response. And we like what we see so far, we have a parallel that I can't disclose right now, but we sort of have a parallel that we're sort of shadowing and heading towards. [inaudible]
Speaker Change: So you will see us continue to evolve the tactics of our marketing, but you will see us start to layering in Q2 and Q3, much more brand positioning because we believe that brands will lead to leads and leads will lead to the sales. We continue to draw the leads as well, but that's the link to brand and it is a conservative ever on our behalf. We like the fact that aluminum is known.
Speaker Change: But we want to position ourselves as being better known and more accurately, more specifically known about the value we can bring customers.
Speaker Change: Thank you, Daniel. I appreciate the question. I believe our next question comes from...
Speaker Change: Rob Goff of Ventum Financial. Rob, please proceed with your question when you're ready. Good morning and let me echo the congratulations on like a strong beat for the quarter well done there. It's good to see
Thank you. Thank you, Rob. Thank you, Rob.
Speaker Change: Welcome. Could you talk perhaps to your success with selling direct to customers and selling through agencies? Are you seeing more momentum with one versus the other? Are you changing your tactics there?
Speaker Change: We are actively changing our tactics and what I find, again, I'm not necessarily looking for results, I'm looking for patterns and I do see patterns within the customers that are responding to our revised marketing and our ever improving product and our engaging sales team. There's a few patterns I see, I see both agencies and brands.
Speaker Change: sort of looking for the word we use is transformative results, they're looking for better conversion and better results so they're sort of converting some of their [inaudible]
Speaker Change: their spending, their deployment they've done with, say, competitive lesser DSPs, and they're leveling up to the better quality that illumine and in particular, illumine journey as part of self-service is offering them, supported by our managed services.
Speaker Change: and so those groups of challenger brands that are sort of coming up from the everyday DSPs, they're looking for transformative results and we seem to be delivering on that so far.
Speaker Change: At the same time, we are seeing some very top tier upper middle level challenger brands, very well known brands, you know, looking for a second option. They're looking for another way to reach new customers and new audiences beyond the big Titans. I won't say their names, but you know who they are.
Speaker Change: And so they are looking for, you know, a second partner, they like to take control, aluminum self service allows them to take more control. They like the fact that aluminum self services predicated off of proven track record manage services so they feel like they're getting good results and good sports. They can always level up to manage services at any point during their self service journey as well. So we seem to be attracting. [inaudible]
Speaker Change: both agencies and brands of equal vigor, but if they're using ordinary DSPs, they're coming up to our quality. If they're using the big titans, they're looking for a second partner, a second way to take a little bit more control over their spend and their experience and also get a little bit more insight into how they're existing, but also their potential customers are responding to their messages and their positions.
Speaker Change: Thank you. Can I ask about your social platforms, or your social media access, how that is working as either part of a bundle strategy, or as a standalone access service?
It's still in the early stages.
Speaker Change: it. We see good performance in particular on the social media channels, the wall guards will say specifically that we have integrated into the self-service.
Speaker Change: And so it's but I would still characterize it as very early on and it's because it's unique. It's an individual in the marketplace. It's you know, it's I think it's a feature that attracts a lot of people.
Speaker Change: One thing I have been looking for in terms of patterns is, do people adopt aluminum self service and really use it for one channel or run reason? Are they genuinely migrating across channels?
Speaker Change: and we just recently pulled the data, and I will say sort of qualitatively, as opposed to quantitatively, we have seen a transition, starting really through the midpoint of 2024, and definitely into Q4, where we...
Speaker Change: The more more customers moving from using Aluminum Self Service, say one or two channels, to now more aggressively, one, two, three, and four, and so we are starting to pick up
some velocity and some spin and some performance.
through the Integrated Wall Gardens, and so in 2025, [inaudible]
Speaker Change: We will continue to focus on growing that in terms of tactical marketing and awareness, first and foremost.
Speaker Change: me. But secondarily that it gives us a great, so it's called upsell or sticking a cell to existing customers who maybe know and rely on aluminum self service for one or two primary reasons. It gives our revised account management team something additional that take to them.
Speaker Change: and an opportunity to drive further stickiness and most importantly, add more value to the customer. So this will remain a conservative effort for us.
Thank you.
Speaker Change: Thank you very much for the question. I believe we have a question from Vince Valentini of TV securities as well. Vince, please proceed with your question when you are ready.
Vince Valentini: Yeah, thanks very much. Two questions. Let me throw them out both at once. So Steve doesn't cut me off in between. We first is on on revenue in the fourth quarter, apologies if I missed it, but it seems like you.
You called out foreign exchange of the benefit to profit.
Vince Valentini: But I'm not sure I saw it quantified in terms of the impact to revenue. Do you know what the 35% would have been on a on a same currency basis or anyway, you can adjust out the [inaudible]
the strength in the U.S. dollar.
the second question.
Vince Valentini: is you seem to be warning a little bit about weekly seasonality and the trade war disruption in the first quarter.
Vince Valentini: I mean, the first quarter is almost over, so you must have some decent visibility. Does weaker seasonality mean, instead of 35% growth, you do 20% year-over-year growth, or are you trying to signal that it could be as bad as negative growth temporarily?
Speaker Change: Thank you, Vince. I'll take that first question. You're absolutely right that the fluctuation in the exchange rate was a benefit to us, particularly in Q4. In general, we'd say, over all the year, if I could quantify on a consistent currency, it would be probably about two and a half million dollars that was beneficial to our bottom line with the majority of that in the fourth quarter.
Speaker Change: So at the same time though, the overnight percent of our expenses, particularly media related are in the US decurrency as well, so it doesn't necessarily just affect our top line. So, but it is a benefit to us on the overall number.
Speaker Change: a second question. I'm going to have Simon give his perspective on it.
Simon Cairns: Good morning. Thanks for the question. In terms of Q1, I will say that the Q1 did start slower than we wanted. That was primarily due to the market coming back just on the calendar adjustment week plus later.
Simon Cairns: and then some of the macro uncertainty related specifically to the macroeconomic condition right now that everybody is well aware of. So that can put some pause pressure on marketing budgets. So we did see marketing budgets in January get approved later than normal.
Simon Cairns: I have seen deal velocity pick up in the second half.
Simon Cairns: of Q1 2025. I had seen improved ARPU, average revenue per customer related to the self-service products in particular. I have seen improved overall channel adoption and stickiness, and so we are currently tracking ahead.
Simon Cairns: of Q1 fiscal year 24, but the overall sort of, I think, for the entire industry and include in ourselves, I think the...
Simon Cairns: there's some uncertainty just in general for the next several months as long as the global situation remains highly fluid in terms of stability, but we are we are tracking ahead of Q1 2024.
you. Thank you.
Thank you very much for the question, Vince.
Just wondering if you have a follow-up question?
Now that's good.
Speaker Change: you. That sounds good. I appreciate it. Thank you so much. We do have a couple of questions coming in from the chat. I'll just go ahead and read them out. First question is, you have an Envyble Cash Balance sheet. What are your plans to deploy your cash?
Speaker Change: In terms of deploy the cash, so again as CEO I'm always looking not necessarily for results, I'm looking for patterns. Can we consistently sort of add value to our customers and therefore to ourselves and our investors? Yes, yes, yes.
Speaker Change: In that sense, I am seeing an attractive pattern related to growth itself, but I would say even more on the macro, we have demonstrated a pattern where we can grow not just one product line, but three as we saw in
Q4 and two degree and Q3.
Speaker Change: And so in terms of using cash, I'm very conscious of one thing which is not papering over a genuine good-go story with acquisitions. I want to continue to demonstrate that core growth which for us makes key investments in 2025 related to our product, our marketing and our selling.
But nonetheless, we remain sort of, you know...
Speaker Change: Opportunistic, we remain focused. If we can acquire additional customer pools, for example, that would make a very good marketplace for our self-service product, then that is something that we are willing to execute on.
Speaker Change: But first and foremost, it will always come back to making sure that we are continuing to add value in our self-service and service and our exchange services, it with investments being made in product marketing and sales is our key focus and we always want to keep that pattern going.
Speaker Change: Thank you very much, Simon. Another question is coming in. Are you looking at M&A as a means of growth?
Speaker Change: Our primary pattern for growth, again, will be to, you know, if I said more granularly, we can sell well, but we know we can sell better. So we want to remove a lot of, we have a dedicated, dedicated track this here to remove friction in our selling process. Now, let's take a look at this.
Speaker Change: We know that we can market now, we've got more confidence, we've got our leads are up, so we want to springboard to that and get the leads really up, so that will be a big piece for us.
Speaker Change: and we are generating more stickiness in the products. We are seeing better performance in terms of channel adoption and definitely better performance is in terms of average revenue per customer.
Speaker Change: So that's going to be our core sort of growth focus. And again, as it comes back to M&A, if there's an opportunity for us to buy customer segments or customer pools, maybe a territory that we are, you know, not necessarily known for, that we can leverage an existing business that would be a creative.
Speaker Change: and then build a path to then opportunize that existing segment with, say, our self-service product. That is something that we may pounce on, but again, our core focus is to grow the business at its core.
Speaker Change: Thank you very much, Simon. I'll just take a pause to see if there are any other questions coming in.
If there are no more questions,
Vince Valentini: That will conclude our time for this quarter by thanks to Simon and Elliot and our participants.