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AcuityAds Holdings Inc. (ACUIF) CEO Tal Hayek on Q4 2019 Results - Earnings Call Transcript

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AcuityAds Holdings Inc. (ACUIF) Q4 2019 Earnings Conference Call March 3, 2020 9:00 AM ET

Company Participants

Jonathan Pollack - CFO

Tal Hayek - Co-Founder and CEO

Conference Call Participants

Gavin Fairweather - Cormark

Daniel Rosenberg - Haywood Securities


Good morning. My name is Joanna, and I will be our conference operator today. At this time, I would like to welcome everyone to the AcuityAds Fourth Quarter Results Conference Call. [Operator Instructions] Thank you.

Mr. Jonathan Pollack, CFO of AcuityAds, you may begin your conference.

Jonathan Pollack

Good morning, everyone. Before we begin, I will read our cautionary note regarding forward-looking information.

Certain information to be discussed during this call contains forward-looking statements within the meaning of applicable security laws including, among others, statements concerning the Company’s growth objectives, the Company’s strategy to achieve these objectives, as well as statements with respect to management’s beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts. Such forward-looking statements reflects management’s current beliefs and are based on information currently available to management and is subject to a number of significant risks, and uncertainties that could cause actual results to differ materially from those anticipated.

I would now like to turn the conference over to Tal Hayek, the Co-Founder and Chief Executive Officer of AcuityAds, to update you on the operations of the business.

Tal Hayek

Thank you, Jonathan.

Let's start by giving a huge thank you to the Acuity family. Altogether we worked hard and smart which made 2019 a big year and a transformational year. In Q4 of 2019, we delivered our biggest quarter yet with $38.5 million in gross revenue, and $19.5 million in net revenue. Most importantly, we are now clearly showing the financial leverage of our model with $6 million in EBITDA in Q4, which

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Comments (2)

Had a look at financial statements; term debt low ($2-3mm) with 12% cash pay and being paid down. Revolver is main debt and stays relatively high and limited to 80% of AR (standard) which is driving most of financing costs. Liquidity has been an issue which explains the focus of FCF this quarter. Accounts are qualified with “going concern” language (not ideal), but Company seems to have turned corner. Managed Services revenue flat but DIY revenue up considerably which tells me they have focused on trimming headcount in ACCT MGT and pushed higher cash margin (EBITDA) DIY. This might explain revenue deceleration in recent quarter. All in all this appears to be a great spec buy at sub 1x TTM revenue with top line and EBITDA growing nicely and TAM expanding in CTV, audio DIY etc. ps I suspect the DIY trend will continue as Agencies look to control client and large brands look to buy direct.
How much term debt do they have? What term? Amortization? Seems like they forgot to mention??
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