AcuityAds Provides Revenue Guidance for Second Half of FY2017
TORONTO, ON; NEW YORK, NY, SEPTEMBER 11, 2017
Expects Revenue Growth of Approximately 50% for the Fiscal Year
TORONTO and NEW YORK, Sept. 11, 2017 /CNW/ – AcuityAds Holdings Inc. (TSXV:AT OTCQB:ACUIF) (“AcuityAds” or “Company”), a technology leader that enables advertisers to connect intelligently with audiences across video, mobile, social and online display advertising campaigns, today announced an adjustment in its revenue expectations and at the current pace is still anticipating 2017 full year growth of approximately 50%.
The Company has outlined three significant factors that have led to this revenue guidance for fiscal 2017.
Europe, Middle East & Africa (EMEA) Self-Service Region:
The Company has identified a select number of Self-Serve partners in the EMEA region that were not meeting AcuityAds’ quality standards for the use of its Self-Serve platform. The Company has chosen to take a long term view and remove these partners from its Self-Serve platform recognizing that there would be an impact on revenue. However, the Company believes that this move would ultimately benefit its long-term growth objectives.
“AcuityAds strives to promote the highest standards in advertising and brand promotion,” said Tal Hayek, AcuityAds Chief Executive Officer. “We have an aggressive long term strategy for the EMEA region and our decision to cull certain Self-Serve Partners in this region is intended to ensure that we maintain our strong brand equity with our customers, partners and stakeholders around the globe”.
The expected impact of this decision will result in an adjustment in revenue expectations from this region of approximately $10M over the balance of fiscal 2017. The Company expects that the impact to net revenue will be somewhat mitigated as this business had been transacted at significantly lower margins.
140 Proof Changes:
A significant customer of 140 Proof recently changed the nature of its relationship with the Company by electing to purchase its proprietary social data rather than making the associated media buys through 140 Proof’s platform. As a result, the Company believes this will have a potential $6M impact on the Company’s 2017 revenue. Despite this change, the 140 Proof acquisition is expected to deliver approximately $5M of revenue this fiscal year.
To date, the Company has made net payments to 140 Proof stakeholders of approximately $2.8M. Furthermore, given the potential risks that the Company determined during the acquisition process, the transaction was structured with an earn-out providing that all future payments would be contingent upon 140 Proof meeting certain financial targets. Given the change with this customer, the Company believes that these targets are unlikely to be met and, as a result, it is expected that the Company will significantly reduce the earn-out obligations currently reflected on its balance sheet. As a result, the Company expects this change to have a positive effect on Adjusted EBITDA of approximately $3M for the quarter and expected to have a negative impact on comprehensive income due to a potential impairment charge on goodwill and intangible assets.
“While we are disappointed that a significant customer of 140 Proof changed the nature of its relationship with AcuityAds, our due diligence and the subsequent deal structure has successfully allowed us to mitigate against such outcomes”, said Mr. Hayek.
Strength of the Canadian Dollar:
As the Company reports its results in Canadian dollars, it is expected that the stronger Canadian dollar will have an adverse effect on the Company’s revenue expectations for the second half of 2017 of approximately $2M.
As a result of these adjustments and changes, the Company has already taken actions to reduce its Selling, General & Administration (SG&A) expenses.
“We feel strongly that our actions this quarter demonstrate that management has taken a long-term view to creating and enhancing shareholder value,” said Mr. Hayek. “When we see any activity that does not meet our high standards, we move swiftly and without compromise. When we acquire, we are meticulously focused on deal structure to mitigate risk. Despite these adjustments to our revenue guidance, we remain more committed than ever to both our organic and non-organic growth strategy.”
AcuityAds is a technology company that enables marketers to connect intelligently with their most meaningful audiences through digital media. A Self-Serve programmatic marketing platform, powered by machine learning, is at the core of our business. This is accompanied by strategic digital advertising solutions that cater to social, mobile and video-specific needs. AcuityAds empowers marketers by offering transparency on costs and brand safety, and real-time reporting and analytics, bringing accountability to programmatic advertising to deliver business results.
AcuityAds is headquartered in Toronto, Canada with sales offices in New York City, Boston, Chicago, Los Angeles, San Francisco, San Diego, Vancouver, Calgary, Montreal and London, England. For more information, visit AcuityAds.com.
Disclaimer in regards to Forward-looking Statements
This press release contains “forward-looking statements” that reflect the Company’s current expectations and projections about its future results. When used in this press release, forward looking statements can be identified by the use of words such as “may”, or by such words as “will”, “intend”, “believe”, “estimate”, “consider”, “expect”, “anticipate”, and “objective” and similar expressions or variations of such words. Forward-looking statements are, by their nature, not guarantees of the Company’s future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward looking statements. No representation or warranty is intended with respect to anticipated future results, or that estimates or projections will be sustained.
Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of the press release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties elsewhere in this press release, actual events may differ materially from current expectations. The Company disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. All forward looking statements, within this release are expressly qualified in their entirety by this cautionary statement.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE AcuityAds Inc.
For further information: Babak Pedram, Investor Relations, Virtus Advisory Group Inc., 416-644-5081, firstname.lastname@example.org; Tal Hayek, Chief Executive Officer, AcuityAds Holdings Inc., 416-218-9888, email@example.com
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