I've decided to take a look at how well Acuity spends on its sales general and administrative as well as research and development relative to its gross profits. I've also decided to take a look at how well the company collects its accounts receivables relative to its sales. I took it a step further and did similar calculations for some of their peers; namely, Pubmatic,Magnite and The Trade Desk. I was going to include Kubient but they lagged so badly that I didn't even bother with them. Let's just say they are clearly in last place except for maybe accounts receivable collection.
r&d= research and development expenses
g&a= general and administrative expenses
s&m= sales and marketing expenses
ar= accounts receivables
gp= gross profit
s=sales or revenue
In general, the lower any of these numbers are relative to its sales the more efficient the company is at spending their money. Let's look to see how we've done in chart form. Keep in mind that investments in r&d for all companies but specifically for Illumin has not reached its full potential as Illumin has only just started. The number underneath the percentages would be their ranking out of the 4 companies. The lower obviously being better. All numbers provided by stockhouse.
r&d/Gp g&a/Gp. s&m/Gp ar/s
Acuityads 24.3%. 12.78%. 33.51%. 30.39%
(2) (1) (1) (1)
Pubmatic 11.38% 18.83% 40.25% 147%
(1) (2) (3) (2)
Trade Desk 25.35% 26.11% 26.58% 189%
(3) (3) (2) (3)
Magnite 35.82% 36.83% 52.84% 212.8%
(4) (4) (4) (4)
A few things I observed. Notice how much higher the accounts receivable to sales ratios are compared to Acuityads. They are well over 100% of sales which I find absolutely alarming and a bit worrisome if I were an investor. We are hands down the best in this department. We rank number 1 in every area except for r&d relative to gp but this could partially be explained by Illumin only recently being launched. Mind you we came in second here so not too bad. Magnite came in last in all four categories I looked at. The next best company on this list would be Pubmatic followed by the Trade Desk. If we add all these values for each company (the lower the better) we get a score of 5 for Acuity, 8 for Pubmatic, 11 for Trade Desk and 16 for Magnite.
Our future looks bright and it's very encouraging to see these numbers trending in the right direction for us.
Here is to a good week,
cheers!