Q4 conference call https://m.youtube.com/watch?v=AChe9JOsjW4
Cliff notes: they are expecting 20- 25% top line growth for 2022 and Ebitda growth of 10% y/y
Based on my understanding, these are very conservative estimates as mentioned as well by the CFO. The 20-25% growth will come from the continued Illumin and CTV growth plus the return of the hospitality/ travel and entertainment clients. This does not take into account any potential clients signing on board with a $10m contract. I believe they will easily beat these estimates on both top and bottom line.
Q1 2022 will produce lower top and bottom line y/y due to a large client that did not repeat for the current quarter. Plus additional investments in sales and marketing is going to ramp up in the first half of the year which will put pressure on ebitda margins. This is necessary for their illumin sales to continue its growth well into the future. $11m of additional money will go towards sales and marketing(70% of total) + r&d (30% of total)
- they've hired some experienced sales teams with experience in managing enterprise clients.
- they are thinking about a share buyback.
Q3 is going to be a big quarter for them even if you exclude any potential Tier 1 deals. As I mentioned before, hospitality and travel represented 30% of 2019 revenue numbers or about $35m. If they get just half of that $35m business back, this will add almost 15% to their revenue numbers all else being equal. At least 10% growth will come from the smaller advertisers but the big surprise will come from the tier 1 clients. If they pick up just a couple tier 1 clients, then all of a sudden you have $20m + revenue growth potential.
By Q3 the majority of their revenue will be Illumin and by Q4 they expect it to be 60% of their revenue. Q3 + Q4 is likely to grow by about 30% y/y given the guidance they provided for q1.
Overall I was pleased with Q4 and the necessary steps management is taking to invest in its core business. When talking about growth, it's important to focus on Illumin as they are not supporting the legacy platform anymore and it will be a small part of their business by years end.