Q4 conference call notes The company made a shift in strategy to focus on direct clients which is 90% coming from e-commerce. Direct clients would be an e-commerce platform advertising directly to consumers. Indirect clients would be advertising agencies using the Adcore platform to advertise to multiple clients. Indirect clients has a higher gross margin but the Ceo mentioned that explosive growth is coming out of direct clients which have lower margins. In q4 they lost a global contract with customer A which was their biggest customer but they are in talks for a regional contract instead. Additional contracts could be given out but under new commercial terms.
In q4 at least 50% of their revenue growth came from new clients which means that many existing clients increased their advertising with the company. They expect gross margins to be in the 30% range as they had in 2017 which compares to gross margins of 64.5% and 55.5% in 2019 and 2018 respectively.
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