Generated $27.5 million in Revenue and $4.4 million in Adjusted EBITDA

illumin Revenue Up 42% Sequentially to $7.4 million

Strong Cash Flow Generation Leads to Record Cash Balance of Over $100 Million

TORONTO and NEW YORK, Nov. 3, 2021 /CNW/ - AcuityAds Holdings Inc. (TSX:AT) (NASDAQ:ATY) ("AcuityAds" or "Company"), the technology leader in consumer journey based advertising automation, today reported financial results for the three and nine months ended September 30, 2021. Unless otherwise specified, all amounts are in Canadian dollars.

Third Quarter 2021 Highlights

Third quarter 2021 total revenue was $27.5 million, a 5.4% increase year-over-year, and an 11.3% increase on a constant currency basis. This revenue growth was achieved largely due to strong sequential revenue growth from illumin, which more than offset lower advertising spend partly related to supply chain disruptions from some of our legacy customers. Revenue growth was also aided by newer emerging verticals such as pharmaceutical, technology, automotive and direct-to-consumer brands.
illumin third quarter 2021 revenue was up over 42% sequentially to $7.4 million, or 27% of total revenues in the quarter. On a trailing twelve-month basis, as of September 30, 2021, revenue from illumin totalled $17.3 million.
Total Connected TV segment revenue for the third quarter of 2021 grew over 220% compared to the third quarter of 2020.
Gross margin for the three months ended September 30, 2021 was 51.9%, in line with the same period in 2020.
Net revenue or gross profit (revenue less media costs) for the three months ended September 30, 2021 was $14.3 million, a 5.4% increase compared to $13.5 million for the third quarter of 2020.
Adjusted EBITDA was $4.4 million for the three months ended September 30, 2021, compared to $4.0 million during the comparable prior year period, an increase of 9.5%. Adjusted EBITDA margin as a percentage of total and net revenue was 16.1% and 31%, respectively. Adjusted EBITDA for the trailing 12-month period totaled $22.2 million, a 58.8% increase from the comparable period last year.
Net Income was $3.4 million for the three months ended September 30, 2021, a 265% increase compared to net income of $0.9 million for the same period in 2020.
Operating cash flow for the third quarter of 2021 was $9.5 million, an increase of 41.8% compared to operating cash flow of $6.7 million for the same period in 2020, driven by strong collections during the period.
At September 30, 2021, the Company had cash and cash equivalents of $100.3 million, compared to $22.6 million as of December 31, 2020.

"We are very pleased to report another quarter of strong sequential illumin revenue growth, as this revenue stream continues to become a more significant percentage of our total revenue. I am incredibly proud that since the launch of illumin only one year ago, the Company has already seen cumulative revenue of $17.3 million from this innovative software offering. We also saw further signs of recovery this quarter in COVID-affected industries such as travel, leisure and entertainment. In addition, the Company generated very strong operating cash flow, which further strengthened our balance sheet. I want to once again thank all of our team members for their hard work and dedication without which this performance would not have been possible," said Tal Hayek, Co-Founder and Chief Executive Officer of AcuityAds. "As we look to the fourth quarter, based on our current pipeline, we expect to generate year-over-year total revenue growth and strong adjusted EBITDA."

Mr. Hayek continued, "On its one-year anniversary, the illumin platform continues to lead our future growth and is fundamentally transforming the programmatic advertising industry. illumin's sales grew over 42% sequentially during the third quarter and, as importantly, new Tier 1 clients grew 53% sequentially. This strong sequential Tier 1 client growth demonstrates the success of our efforts to engage with larger global brands and bodes well for further illumin revenue growth in the future. With the strong revenue and pipeline growth we have already achieved and the overwhelming positive feedback we continue to receive from clients, we expect illumin to finish 2021 on a strong note and continue to grow in 2022. We continue to put additional marketing, sales and product development resources behind illumin to not only extend our leading marketplace position, but also to enhance its long-term growth trajectory."

Tatiana Kresling, AcuityAds' Interim Chief Financial Officer, commented, "Despite global supply chain disruptions and their effect on some of our legacy customers, we were able to grow overall revenues on a year-over-year basis in the third quarter due to the rapid adoption of illumin in the marketplace. Company revenues grew over 11% on a constant currency basis, while net income grew 265% compared to the same period in the prior year. As a result of very strong operating cash flow generation in the quarter, our cash position grew to a new record of $100.3 million. We expect to generate substantial cash flow again in the fourth quarter, which will provide additional financial strength to execute on both our organic and M&A growth strategies in the years ahead."

The following table presents a reconciliation of Net income (loss) to Adjusted EBITDA for the periods ended:

	Three months ended		Nine months ended		TTM Ended
	Sept 30,	Sept 30,	Sept 30,	Sept 30,	Sept 30,	Sept 30,
	2021	2020	2021	2020	2021	2020
Net income (loss) for the period	$3,362,127	$921,220	$8,087,580	$(474,410)	$12,252,979	$1,520,834
Adjustments:
Finance costs	263,220	251,159	797,074	1,304,195	1,155,918	1,875,887
Foreign exchange (gain) loss	(1,864,926)	350,743	(2,599,487)	(530,959)	(1,930,193)	(302,467)
PPP Loan Forgiveness	-	-	-	-	(1,816,836)	-
Impairment loss	-	-	-	-	-	3,231,048
Fair value gain	-	-	-	-	-	(3,066,799)
Depreciation and amortization	1,172,334	2,217,626	3,816,994	6,640,617	6,070,551	9,250,831
Income taxes	-	(29,324)	231,600	113,284	337,317	150,265
Non-cash income tax adjustment	-	-	-	-	1,278,700	-
Share-based compensation	1,465,706	252,335	3,954,217	485,151	4,467,373	706,626
Acquisition costs	-	-	-	-	-	-
Severance expenses	20,875	70,643	111,633	241,134	115,864	358,765
Non-recurring expenses	-	-	-	199,137	287,907	265,209
Total adjustments	1,057,209	3,113,182	6,312,031	8,452,559	9,966,601	12,469,365
Adjusted EBITDA*	$4,419,336	$4,034,402	$14,399,611	$7,978,149	$22,219,579	$13,990,199

Conference Call Details:

Date: Wednesday, November 3, 2021

Time: 8:30 AM Eastern Time

To register for the conference call webcast and presentation, please visit

https://www.acuityads.com/q3-2021/

Participant Dial-in Numbers:

Canada – (+1) 778 907 2071

US – (+1) 646 558 8656

Webinar ID: 892 4366 9957

Please connect at 15 minutes prior to the conference call to ensure time for any software download that may be needed to hear the webcast.

A recording of the conference call webcast will be available after the call by visiting the Company's website at https://www.acuityads.com/q3-2021/

Non-IFRS Measures

This press release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures including "net revenue", "revenue less media costs" and "Adjusted EBITDA" (as well as other measures discussed elsewhere in this press release).

The term "revenue less media costs margin" refers to the amount that "revenue less media costs" represents as a percentage of total revenue for a given period, while the term "revenue less media costs" refers to the net amount of revenue after deducting direct media costs. Revenue less media costs and net revenue is used for internal management purposes as an indicator of the performance of the Company's solution in balancing the goals of delivering excellent results to advertisers while meeting the Company's margin objectives and, accordingly the Company believes it is useful supplemental information.

"Adjusted EBITDA" refers to net income (loss) after adjusting for finance costs, impairment loss, fair value gain, income taxes, foreign exchange gain (loss), depreciation and amortization, share-based compensation, acquisition and related integration costs, severance expenses and adjustments to the carrying value of investment tax credits receivable. The Company believes that Adjusted EBITDA is useful supplemental information as it provides an indication of the results generated by the Company's main business activities before taking into consideration how those activities are financed and taxed and also prior to taking into consideration depreciation of property and equipment and certain other items listed above. It is a key measure used by the Company's management and board of directors to understand and evaluate the Company's operating performance, to prepare annual budgets and to help develop operating plans.

These non-IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our business that may not otherwise be apparent when relying solely on IFRS measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers, and that these non-IFRS measures in particular are relevant to their analysis of the Company.

About AcuityAds:

AcuityAds is a leading technology company that provides marketers a powerful and holistic solution for digital advertising across all ad formats and screens to amplify reach and Share of Attention® throughout the customer journey. Via its unique, data-driven insights, real-time analytics and industry-leading activation platform based on proprietary Artificial Intelligence technology, AcuityAds leverages an integrated ecosystem of partners for data, inventory, brand safety and fraud prevention, offering unparalleled, trusted solutions that the most demanding marketers require to be successful in the digital era.

AcuityAds is headquartered in Toronto with offices throughout the U.S., Europe and Latin America. For more information, visit AcuityAds.com.

Disclaimer in regards to Forward-looking statements

Certain statements included herein constitute "forward-looking statements" within the meaning of applicable securities laws. These statements may relate to the Company's future financial outlook, financial position, anticipated events, results, success of its work from home policies, the Company's strategy with respect to the illumin platform, results of the Company's application to list its shares on NASDAQ or the effect of the COVID-19 pandemic on the Company's business and operations. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Also, given the evolving circumstances surrounding the COVID-19 pandemic, it is difficult to predict how significant the adverse impact of the pandemic will be on the global and domestic economy, the business, operations and financial position of the Company's clients and the business, operations and financial position of the Company. Investors are cautioned not to put undue reliance on forward-looking statements. Many factors could cause the Company's actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the factors discussed in the "Risk Factors" section of the Company's Annual Information Form dated March 1, 2021 for the fiscal year ended December 31, 2020 (the "AIF") and the Company's Management Discussion and Analysis for the three and nine months ended September 30, 2021 dated November 3, 2021 (the "MD&A"). A copy of the AIF, MD&A and the Company's other publicly filed documents can be accessed under the Company's profile on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com. In addition, the effects of COVID-19, including the duration, spread and severity of the pandemic, create additional risks and uncertainties for the Company. In particular, the impact of the virus and government authorities' and public health officials' responses thereto may affect: the Company's actual results, performance, prospects or opportunities; domestic and global credit and capital markets and its ability to access capital on favourable terms, or at all; and the health and safety of its employees. The Company cautions that the list of risk factors and uncertainties described in the AIF and the MD&A are not exhaustive and other factors could also adversely affect its results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such information.

Except as required by law, AcuityAds does not intend, and undertakes no obligation, to update any forward-looking statement to reflect, in particular, new information or future events.

AcuityAds Holdings Inc.

Condensed Interim Consolidated Statements of Financial Position

(Unaudited)


(expressed in Canadian dollars)
	Sept 30, 2021 $	Dec 31, 2020 $

Assets

Current assets
Cash and cash equivalents	100,297,463	22,638,300
Accounts receivable	24,525,463	31,859,306
Prepaid expenses and other	3,132,237	1,901,067
Investment tax credits receivable	-	21,922

	127,955,163	56,420,595
Non-current assets
Property and equipment (note 3)	5,943,241	7,945,110
Intangible assets (note 4)	3,127,292	3,197,953
Goodwill	4,869,841	4,869,841

	141,895,537	72,433,499

Liabilities

Current liabilities
Accounts payable and accrued liabilities	19,816,614	23,232,661
Term loans (note 16)	2,444,544	2,481,550
International loans (note 17)	852,232	1,092,297
Lease obligations (notes 5)	2,248,982	2,850,497

	25,362,372	29,657,005
Non-current liabilities
Term loans (note 16)	3,964,185	5,796,454
International loans (note 17)	569,522	887,932
Lease obligations (notes 5)	2,577,356	4,041,520

	32,473,435	40,382,911

Shareholders' Equity (notes 7)	109,422,102	32,050,588

	141,895,537	72,433,499

AcuityAds Holdings Inc.

Condensed Interim Consolidated Statements of Income (Loss)

(Unaudited)


(expressed in Canadian dollars)
	Three months ended Sept 30, 2021 $	Three months ended Sept 30, 2020 $		Nine months ended Sept 30, 2021 $	Nine months ended Sept 30, 2020 $

Revenue
Managed services	19,320,662	18,766,560	65,197,665		52,724,493
Self-service	8,164,158	7,297,762	20,026,969		17,112,239

	27,484,820	26,064,322	85,224,634		69,836,732

Media costs	13,232,069	12,536,168	40,798,761		34,011,563

Gross profit	14,252,751	13,528,154	44,425,873		35,825,169

Operating expenses
Sales and marketing	5,260,944	5,043,490	14,982,171		13,623,418
Technology (note 11)	2,581,090	2,943,386	9,716,514		9,819,590
General and administrative	2,012,256	1,577,519	5,439,210		4,844,283
Share-based compensation (note 7)	1,465,706	252,335	3,954,217		485,151
Depreciation and amortization	1,172,334	2,217,626	3,816,994		6,640,617

	12,492,330	12,034,356	37,909,106		35,413,059

Income (loss) from operations	1,760,421	1,493,798	6,516,767		412,110

Finance costs (note 8)	263,220	251,159	797,074		1,304,195

Foreign exchange (gain) loss	(1,864,926)	350,743	(2,599,487)		(530,959)

	(1,601,706)	601,902	(1,802,413)		773,236

Net income (loss) before income taxes	3,362,127	891,897	8,319,180		(361,126)

Income taxes (recovery) (note 18)	-	(29,324)	231,600		113,284

Net income (loss) for the period	3,362,127	921,220	8,087,580		(474,410)

Net income (loss) per share (note 9)
Basic and diluted	0.06	0.02	0.14		(0.01)

AcuityAds Holdings Inc.

Condensed Interim Consolidated Statements of Cash Flows

(Unaudited)

For the nine-month periods ended September 30, 2021 and 2020


(expressed in Canadian dollars)
	2021 $	2020 $

Cash provided by (used in)

Operating activities
Income for the year	8,087,580	(474,410)

Adjustments to reconcile net income to net cash flows
Depreciation and amortization	3,816,994	6,640,617
Finance costs (note 8)	797,074	1,304,195
Share-based compensation (note 7(c))	3,954,217	485,151
Change in non-cash operating working capital
Accounts receivable	7,333,843	14,523,223
Prepaid expenses and other	(1,209,249)	4,696
Investment tax credits receivable	-	304,821
Accounts payable and accrued liabilities	(3,390,866)	(5,694,479)
Interest paid – net	(695,976)	(1,102,249)

	18,693,617	15,991,564

Investing activities
Additions to property and equipment (note 3)	(779,828)	(3,553,449)
Additions to intangible assets (note 4)	(964,636)	(351,686)

	(1,744,464)	(3,905,135)

Financing activities
Amount drawn from revolving line of credit (note 15)	-	60,154,399
Repayment of revolving line of credit (note 15)	-	(74,138,115)
Net proceeds from term loans (note 16)	-	9,205,581)
Repayment of term loans principal (note 16)	(1,818,053)	(6,613,249)
Additions to international loans	852,486	948,897
Repayment of international loans	(1,410,960)	(1,438,323)
Additions to leases	358,644	2,535,440)
Repayment of leases	(2,345,510)	(2,520,751)
Net proceeds from equity financing (note 7)	63,955,491	-
Proceeds from the exercise of warrants	61,723	1,171,285
Proceeds from the exercise of stock options	1,056,489	674,961

	60,710,010	(10,019,875)

Increase (decrease) in cash and cash equivalents	77,659,163	2,066,554

Cash and cash equivalents – Beginning of year	22,638,300	7,407,122

Cash and cash equivalents – End of year	100,297,463	9,473,676

Supplemental disclosure of non-cash transactions
Additions to property and equipment under leases	447,869	2,821,959

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SOURCE AcuityAds Holdings Inc.

View original content: http://www.newswire.ca/en/releases/archive/November2021/03/c6290.html

AcuityAds Reports Third Quarter 2021 Financial Results