illumin Holdings Inc T.ILLM

Alternate Symbol(s): ILLMF

Communication Services

illumin Holdings Inc. provides a journey advertising platform, which enables marketers to reach consumers at every stage of their journey by leveraging advanced machine learning algorithms and real-time data analytics. It enables advertisers to connect intelligently with audiences across online display, video, social and mobile campaigns. Its Programmatic Marketing Platform, powered by machine learning technology, is at the core of its business, accompanied by patented solutions for analytics-led video and mobile targeting that leverages data. It enables marketers by offering near real-time reporting and analytics, bringing accountability to programmatic advertising to deliver business results and help solve the challenges that digital advertisers face. Its illumin software offers advertising automation technology that offers planning, media buying and omnichannel intelligence from a single platform.

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illumin Holdings Inc

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Post by retiredcfon Nov 13, 2022 6:44am

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Post# 35094541

RBC Report

Their upside scenario target is $7.00. GLTA

November 10, 2022
AcuityAds Holdings Inc Full Steam Ahead on illumin

Our view: Q3/22 results were slightly below our forecast. While macro headwinds are rising, we are encouraged to see continued adoption of illumin with management still expecting YoY revenue growth in Q4/22. Factoring in near-term macro headwinds, our price target decreases from $5.00 to $3.50.

Key points:
• Looking for improved revenue visibility. AcuityAds stock has not been immune to industry headwinds that have included concerns around the potential impacts of evolving privacy controls, a choppy digital ad market, macro uncertainty, greater competitive intensity within ad tech and rising bond yields. At 0.6x FTM EV/net revenue (versus an average of 1.8x for select DSP and SSP peers excluding The Trade Desk), we believe the stock is more fully pricing in these headwinds. While we remain patient for more timely entry points, our focus will remain on the growth trajectory for illumin.

• All illumin all the time. illumin revenues were $13.2MM in Q3/22, representing 46% of total revenues and up +29.4% sequentially versus $10.2MM in Q2/22, and up +78.4% YoY versus $7.4MM in Q3/21. illumin self-serve revenues increased +20% sequentially to $1.2MM with the number of self-serve clients up +42% sequentially (94 clients in total). Following significant ongoing investments in sales and marketing as well as the continuous improvements being made to the illumin platform (including the ability to perform single line campaigns introduced in Q3/22), management is focused on converting increased agency/ advertiser demos (+161%) in shorter periods of time - the revenue flow- through of which should continue to build in Q4/22 and 2023. While illumin adoption is not immune to macro headwinds, management also indicated that: (i) without significant vertical/advertiser concentration or dependence, the company can target the stronger/more resilient verticals for adoption; (ii) previous guidance of exiting 2022 with illumin representing 50%+ of total revenues remains intact; and (iii) self-serve illumin revenues are expected to increase sequentially in Q4/22 and through 2023 with illumin self serve being a cost-effective tool for advertisers to move up and down the marketing funnel as required.

• Other notables from the quarter. (i) with a strong balance sheet (cash of $88MM), management expects to remain focused on making the necessary investments to accelerate illumin adoption/penetration (versus maximizing EBITDA/FCF in the near-term); and (ii) while illumin investments remain the priority, management intends to be opportunistic with respect to further share repurchases and potential M&A (1.8MM shares were repurchased for $5.9MM in Q3/22 at an average price of $3.23/share).