AcuityAds Holdings Inc
TSX:AT
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
N/A
N/A
|
| Price Target |
|
We'll email you a reminder when the closing price reaches CAD.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
AcuityAds Holdings Inc
You don't have any saved screeners yet
Good morning. My name is Joanna, and I will be your conference operator today. At this time, I would like to welcome everyone to the AcuityAds second quarter results conference call. [Operator Instructions] Thank you. Mr. Jonathan Pollack, CFO of AcuityAds, you may begin your conference.
Good morning, everyone. Before we begin, I will read our cautionary note regarding forward-looking information. Certain information to be discussed during this call contains forward-looking statements withinthe meaning of applicable securities laws, including, among others, statements concerning the company's 2019 objectives; the company's strategy to achieve those objectives as well as statements with respectto managements beliefs, plans, estimates, and intentions; and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Such forward-looking statement reflect management's current beliefs and are based on information currently available to management and is subject to a number of significant risks and uncertainties that could cause actual results to differ materially from those anticipated.I would now like to turn the conference call over to Tal Hayek, Co-Founder and Chief Executive Officer of AcuityAds, to update you on the operations of the business.
Thank you, Jonathan. Good morning, everyone. I want to first send a big thank-you to the whole Acuity family for delivering our second big quarter of the year and continuing this incredible momentum into the second half of 2019. I'm so excited about the results from Q2. We saw a 116% increase in gross revenue to $25.8 million and EBITDA of $1.1 million. Our trailing 12-months revenue are now over $100 million. I believe that achieving this milestone places Acuity in a very selective and elite group of Canadian software companies. Now that we believe that we have achieved adequate scale, going forward, we are focusing much of our attention on improving profitability. Our gross margin is up 3% in Q2 versus Q1 of this year, from 45% to 48%. We also saw a 94% increase in our Self-Serve revenue in Q2 versus the same period last year. Now these increases are due to a superior performance of our AI system that delivers best-in-class and superior ROI to our advertisers, a large and systematic shift of marketing dollars to digital and programmatic advertising, and better-than-ever sales execution as well as customer service.Now let's talk about the overall industry, as this is important and ever-growing tailwind for Acuity. The overall advertising space is $700 billion. Out of that, over $300 billion is digital, and out of that over $80 billion is programmatic. Programmatic is growing at a rate of 24% a year, and we believe that programmatic will take over the majority of digital. This has been our best Q2 to date. We continue to outperform the growth of the programmatic industry and, in fact, we have grown 4 times faster than programmatic and 20 times faster, more than overall advertising growth. It is also important that we discuss the fact that TV market is changing rapidly, as linear TV is shifting into digital TV, where we transact in digital ads in the programmatic space. This represents a huge increase in our addressable market size, which we are already taking advantage of and will continue to do so. In fact, our Connected TV revenue went up by 800% in Q2 this year versus Q2 of last year. And we see CTV as a big growth driver; for thus, we are continuing to make investments in this rapidly expanding area. Now let's talk about the reason that we are experiencing such tremendous growth. Our AI is best-in-class. In fact, we have run many of our own tests where we compare our AI to some other leading DSPs, AI to AI with no human intervention. And the fact is without question, is that, our AI delivers better ROI than our competitors. Better yet, when our customers initially test our system, they tell us that they get better ROI and come back with higher spend and longer commitments. I would like to give you a few examples about that. A leading global retail chain spent $250,000 with us earlier this year and recently committed to over $5 million for the remainder of the year. That's a 20x increase. An insurance company tested our system for $42,000 earlier in the year and committed to 4x that amount for the second part of the year. On our last call, I mentioned an agency who we gave a $7,000 free test, and they came back with a $2 million commitment for the year. Well, guess what? They just committed to even more and are expected to spend now over $3 million for the year. Another insurance company that spent $35,000 earlier in the year now committed to $0.5 million in the second part of the year. And these are just a few examples of many happy customers using Acuity today. I have even better news about the AI. We have and continue to make investments in ourTechnology. I'm very happy to report that our next generation of AI, which was in beta testing, is now being deployed wider, and we are seeing higher ROI across the board. In addition to better performance, I would like to remind everyone that this new AI is using significantly more input variables and is less dependent on the cookie.I would like to provide some color into Q3. We see continued momentum into Q3 with great performance, bigger deal sizes, and longer terms. We predict that our margin will continue to increase to more normal levels. The rest of the year looks bright as well. And we have now signed several deals into 2020, with a very, very healthy pipeline.In conclusion, we at Acuity are very excited about our performance to date, very positive about our future, and we have been aggressively growing. Our customers are very happy, the addressable size of our market is big and is turning even bigger with the changes in TV, and our AI is getting better with each release. Just before I leave you, I would like to give you a little bit of a teaser on something that we've been working on, which we believe will change the future of programmatic advertising as we know it. I will provide you with more details in the coming weeks, but one thing I will leave you with is that the new technology that we have developed will give Acuity a very significant competitive advantage among all of our peers in the industry.Our CFO, Jonathan Pollack, will now share financial results.
Thank you, Tal. Q2 2019 was yet another strong quarter of growth for AcuityAds, as we continue to capitalize on the significant opportunity in front of us. As Tal mentioned and I will reiterate programmatic continues to capture a larger portion of advertisers budgets, and we are primed to take advantage of that opportunity as we remain at the forefront of industry developments and innovation. In particular and most exciting, PwC recently released their updated report stating that they expect programmatic TV to become one-third of the total global TV advertising budget by 2021. This provides further support to the belief that there will be a massive growth in TV programmatic revenues growing close to $50 billion in just a few years. In addition, the IAB just announced that US digital advertising in Q1 2019 reached $28.4 billion, which is the strongest Q1 on record and close to 20% growth year over year. With respect to Acuity's financial results for the second quarter of 2019, total revenue was $25.8 million compared to Q2 2018 revenue of $12 million, an increase of 116%. Total revenue for the 6 months ended June 30, 2019, amounted to $53.7 million compared to $20 million for the same period in 2018, an increase of 169%. As evident in our financials, we continued to see an influx of larger contracts that are inherently longer in term. Moreover, on a trailing 12-month basis, Acuity now has generated in excess of $100 million of revenue, a milestone we are incredibly pleased to report. Revenue from our Self-Serve business totaled $7.1 million in Q2 compared to $3.6 million in Q2 of last year, an increase of 94% year over year. For the 6 months ended June 30, 2019, revenue from Self-Serve was $13.4 million as compared to $6.2 million the year prior, an increase of 115%. Self-Serve is an important part of our long-term growth strategy, and we continue to invest in its usability and new features to ensure that we are a leader in this sector. Revenue from our Managed Services business grew by 125% in Q2 2019 to $18.7 million as compared to Q2 2018 Managed Service revenue of $8.3 million. This growth is a direct result of the impressive growth of the overall digital advertising sector as well as Acuity gaining market share through our superior technology and the strength of our growing sales team. Gross profit margin was 48% for Q2 2019 compared to 53% in the quarter last year. As important, and consistent with our messaging from our Q1 2019 conference call, gross margins grew in Q2 by 3 percentage points from 45% in Q1. And through July and part of August, we continue to see the margins creeping up to our historical target of around 50%.Operating expenses for the 3 months ended June 30, 2019, totaled $14.7 million compared to $7.8 million for the same period last year, an increase of 87%. While we're pleased that operating expenses increased less year over year than revenues, which grew at close to 120%, we do remain focused on generating positive financial leverage from our revenue growth and are committed to cost containment and reducing any excess from our overhead. As Tal discussed earlier, ensuring that AcuityAds remain at the forefront of industry developments and innovation is critical to the success of our long-term viability and to the growth of our company. That being said, we expect operating expenses as a percent of revenue to decrease as our revenues continue to increase.AcuityAds reported non-GAAP adjusted EBITDA of positive $1.1 million in Q2 2019 compared to an adjusted EBITDA of $400,000 in Q2 of last year. For the 6-month period ended June 30, 2019, adjusted EBITDA amounted to $2.1 million compared to an adjusted EBITDA loss of $1.6 million for the same period last year. It is important to note that we have historically seen a large portion of our adjusted EBITDA come to fruition in the second half of the year, and we expect that trend to continue. Net loss in Q2 2019 totaled $3.5 million compared to a net loss of $2 million in Q2 2018. Please note and very important that the Q2 2019 and 28 (sic) [ 2018 ] loss includes $2.8 million and $1.2 million respectively of noncash items, including depreciation amortization, share-based comp, and foreign exchange loss. Taking this into account, the adjusted net loss for Q2 would be $0.7 million, an improvement over the adjusted net loss from the Q2 last year of $800,000. For the 6 months ended June 30, 2019, net loss totaled $6.2 million as compared to $5.4 million in the 6-month period last year. Again, the 2019 and 28 (sic) [ 2018 ] 6-month net loss includes $5.1 million and $2.2 million respectively in noncash items, as described previously. Taking this into account, the adjusted net loss for the 6 months of 2019 would be $1.1 million, a significant improvement over the adjusted net loss of $3.2 million in the same period last year. Cash on hand as of June 30, 2019, totaled $5.2 million. In addition, we continue to have significant availability on our operating line.And lastly, during the quarter, we closed our previously announced bought-deal financing which was oversubscribed in the amount of $9.2 million. This financing provided the capital necessary to pay theFinal Magnetic earn-out as well as significantly improve our overall working capital position. And on that note, I would like to open the floor for questions.
[Operator Instructions] Your first question is from Rob Goff from Echelon Wealth Partners.
Congratulations on a great quarter. I thought I might lead with looking at 2 regions. Could you talk to the strength in Canada at 4.1 versus 3.07? And the non-North American, where Q-on-Q, it was up by 48%? And I don't know exactly what the seasonality component would be of the non-North American Q1, Q2.
So, yes. Canada, as we spoke about in the first quarter conference call, organically, is up significantly. We continue to see expansion in Canada. We issued an industry release a couple months ago that said we were expanding our operations in Quebec, so we hired a new salesperson there. We're seeing organic -- continued organic growth in Canada, and we're going to continue to spend money here to grow the business because we think we have a unique advantage. With respect to the rest of the world, Q1-Q2 is somewhat similar. Q3 does slow down because most of Europe does take August off, so we will see a little bit of less revenue coming from that area in Q3, but then Q4 ramps right up as most advertising budgets do increase in Q4.
Thank you. And if I may, you were talking about margin expansion, and could you talk to the second half margins, where not to put something out there but jumping ahead, would double-digit EBITDA margins be realistic or a fair consideration for the second half, collectively?
I think we break up the second half into Q3 and Q4; and Q4, as we know, has always been our strongest quarter and where we get the most leverage. And without question, we are expecting double-digit EBITDA in Q4.
Just take a look at Q4 of last year as an example, and we're always aiming to beat that.
Very good. I was trying to lump the 2 together to give a bit more information, as I'm sure you saw.
Your next question is from Suthan Sukumar from Eight Capital.
Congrats on the quarter. Wanted to touch on, kind of, on the obviously, the improving deal size that you guys have been commenting on in prior quarters. So obviously, this quarter was yet another quarter of solid execution and continued momentum. Could you speak to kind of percentage lift in deal size that you're seeing this quarter, both sequentially and on a year-over-year basis?
Yes, so I can tell you without question that our deal sizes are getting bigger, but we're also seeing, as you saw from our numbers, that as our Self-Serve revenue continues to increase, that those deal sizes are typically smaller. So on an average, some of the smaller ones do outweigh some of the bigger ones. But given what we continue to release in press releases with respect to large orders, our team is continuing to focus in on those. There are many that we don't disclose for a bunch of reasons, but we are seeing deal sizes and the number of new clients increasing significantly.
And I think that's the message that we're trying to send when we publicize those things, are not just the fact that we have big -- bigger deal sizes; it's the fact that people are -- and advertisers are starting using our system on a small scale. They see the kind of ROI they get on the system, and then they start spending more and more on the system, which is a clear proof of the way the AI works, and how superior it is in the market.
Got it. Got it. Also want to touch on the Self-Serve platform. So you guys are seeing fairly good and consistent growth trends ahead of the launch of the -- the relaunch of the new platform. What are you guys seeing from a client or, I guess, from a demand environment perspective leading upTo this launch? And any update on the agreement with the agency trading desk that you guys announced last year? Just curious to see if you guys have made any progress executing on that.
Okay. So the first part is the existing part of the Self-Serve, which we've said many times, we have challenge with the usability of that system. It's very, very advanced and powerful system, but you need to be highly, highly trained for it. We've been increasing the revenue of the Self-Serve by fixing some of the issues on usability in it, but we don't want to invest too much because of the new launch that is going to happen later this year. So in general, I believe that we'll see pretty much in Q3, we'll see more of the same of what we saw in Q2 from a usability standpoint. And we're very, very excited about the launch of the new product, which is going to happen later this year. In a few weeks, we'll start sharing some images of the new system. This is a system that weBelieve is going to change the way that programmatic advertising is being transacted, and we're extremely excited about it. We've been investing a lot of time and effort and thought on the system. And it's going to be launched into beta, so I don't imagine there's going to be tons of revenue from it right off the get-go. It's -- we still have a lot of things to fix after we launch it into beta. The excitement level from the -- for the advertisers, and very, very large advertisers that we show it to is extremely, extremely, extremely high. I can't even stress that enough, so we have people lined up for -- lining up for the beta test and in the next few weeks, we're selecting the right ones and go with that.
Okay. Great. That's good color. Will the legacy Self-Serve platform run concurrently alongside the beta launch of the new platform?
Sorry, Suthan. Can you repeat that question?
So my question was, will the legacy Self-Serve platform be commercially available when you guys initially launch the new Self-Serve platform in beta?
Yes. It will be both available until such time that we will switch over sometime next year, the entire system, and then remove the old one.
Okay. Good. And does any -- and do you guys anticipate making any changes to the go-to-market strategy with the new Self-Serve platform?
Yes. We definitely are. We can't just get into it at the moment, but we have a complete new strategy to go to market on this one.
And remember, Suthan, this is going to be additive. It's not like we're taking away clients from one and moving it to the other right away; this is additional. So we're very focused on the excitement that Tal mentioned with respect to some of the people we have spoken to and shown some of our images to, that want to all be part of the beta testing. Those are not existing clients today.
Got it. Okay. Okay. Good. No, that's very positive. And, guys, maybe one last question for me just on the AI platform. Obviously, you guys are seeing some very encouraging results here. What are the anticipated timing of a more broad-based rollout? And when do you guys expect to kind of see a more material impact to financials?
Well, we're doing it in a responsible way so we always add more and more and more campaigns to it. We think we're -- it's not a definitive answer because it really depends on how the campaigns react to it. Right now it's looking really, really good. And I believe, during this quarter, we'll be hopefully be able to roll it completely wide across the system, but it really depends. Sometimes, it reacts in a different way than you expect, and then you have to go back and make changes, and there's delays here. So I can't give you a definite answers on that.
Remember, it is AI, so it is a learning process, too. So it takes time, but we are definitely adding more and more campaigns. And without question we're seeing improvements, and we track it daily. But I would say the material improvements will, large part, be realized later in the year, but every week, we're adding more campaigns.
Your next question is from Daniel Rosenberg from Haywood.
I was wondering just along the lines of the new user interface rollout and investments in the AI. Does that change what your run rate for R&D expense is going forward? Have the investments already been made? Or when should we expect them to tail off?
So as we have mentioned, Tal mentioned in his script, I mentioned on mine, we have been investing in AI and our R&D, and we've seen some of the increases over the past few quarters. We do not expect those numbers to go up. In fact, we're seeing efficiencies already. Over the next few quarters, the absolute number will probably maintain itself or come down a little bit just because some efficiencies we're seeing, but we definitely don't think that number is going up.
Okay. And similarly, on -- let's say on the people front, in terms of you guys invested in some additional sales force in the past, and we saw some press releases of you investing in the Eastern Canada. How do you feel about the sales force as it stands, given the new products coming to market? Are you happy with what you have now? Or do you see increased hiring going forward?
Yes, we are extremely happy with the existing sales force. We feel that they are very ready to take this to market, and we don't expect to need to make any further investments in that side.
Okay. Also on the -- I know you guys spoke about the bump in revenue from the international segment. I was wondering, is that specific to a product line? Was it video? Like, are there any trends in terms of specific products to certain geographies?
So the baseline of the European revenue is the acquisition of ADman Media, which is located in Spain. And then, what we saw after the acquisition, all these salespeople that we're selling the SSP product, started selling the Acuity DSP product, so then we're seeing a major increase because of that, because the adoption on the DSP in Spain is going well. So that's the reason why you're seeing those numbers going up.
Okay. Great to see. Last one from me, just if you could please give an update maybe on the competitive landscape? And what you're seeing in terms of the M&A pipeline? I know you guys are always looking, but any updates on that front?
Well, from a competitive landscape, what you see is the, obviously, the smaller guys that are not achieving scales are either getting bought or disappearing. So we've seen that there. And we are -- as far as our pipeline, we're in the market. We're looking. We have nothingImminent right now. And it's -- we actually just walked away from a deal that we were looking at because at this point, we're going to be extremely, extremely, extremely picky and not take anything that is not, IWould say, transformative to the company in a very, very good way. So lots of opportunities out there. We're still talking to a lot of companies. And there's no rush for us to do an M&A deal at the moment.
Yes. No. We continue -- just furthering on Tal's, we do look and, obviously, lots of transactions do come our way. Most of them, we say no to. The one that we just walked away from, we had started ourInitial due diligence. It wasn't a material transaction, but it was quite interesting. But as we dug in, and we started our own work, we realized that the integration wasn't what it was originally thought to be, and it really wasn't worth our time and effort, given everything else that we have going on organically.
Your next question is from Victor Anthony of Aegis Capital.
Congratulations on a good quarter. So clearly, the momentum is on your side. But I'm curious, though, if you are not investing in, I guess, growing your sales force, and there seems to be not much of an appetite for M&A based on your last response. As you look out into 2020, where do you think you'll need to invest in the business?
So Victor, let's just go over a couple of points. So number one, we have significantly increased our investments in our sales team and our R&D team over the last few quarters. And that, we've talked about and we've seen, and the success of that is very evident in our year-over-year revenue growth. So we're not staying still whatsoever. With respect to sales in particular, I'd say that all of our sales team, as Tal had mentioned, is very interested and very excited by this new products and the new products that we have. And in effect, that will just help them increase their quota, increase what they can sell. So you can grow organically with theExisting sales team, without question. With respect to the R&D in particular, our team has grown. We've upgraded the team substantially, and they continually look at and work on, not only the 1 project that Tal mentioned, but many others. So we think there's a lot of area of growth here, organically. We are interested in M&A. While nothing is imminent, there are very interesting things out there. And while nothing is close to closing at this point in time, a big part of what I do is also work and speak to people outside of the office at various transactions, and it continues to be an interesting part of what we do here. So don't think that we're not doing any M&A.
Got it. Got it. So I guess the follow-up to that is, your AI, you talked about that as a key driver of the business. I think you may have touched upon, I guess, the new technology investments that you're making. So maybe you could just expand on what you guys need to do from a technology perspective to keep the -- I guess, to keep the momentum going?
Well, there's a few parts to it. Obviously, from a scale perspective, we need to keep up with the scale of the industry, which we're doing a very good job of that. Today, we see $110 billion transactions going into our system on a daily basis. So I would say, we're at par or very close to at par to the very large players out there, from a scale perspective. So that -- and by the way, we've done that, and that was done in Q1 of last year. And the way we do things like that is usually in a very efficient way. So we had to build a whole new AI system in order to look at all the inventory that comes into ours on a regular basis, and then make a very quick decision whether it goes down to the bidders or not. So that's one area. The other area that we always invest in is the AI itself, so the engine that makes the decisions, the one that's responsible for the ROI for the advertisers and the ROI for Acuity, frankly. So that's a very important part, and the team always improves on it. And then, the other thing that we're talking about is the usability part, which we've been communicating that we had issues with, and started making investments in that in Q4 of last year and just gearing up to our release to the point that a lot of the people in the organization now are focusing on this new release that's coming up. So I'd say, those are the 3 big areas of concentration from a tech point of view.
Your next question is from Gavin Fairweather of Cormark.
You chatted in your prepared remarks about the expected growth for the industry as some ad spend shifts from linear TV to Connected TV. Maybe you could just give us a flavor of some of your preparations for that? I know you acquired Visible Measures, which is a piece of that. But maybe asideFrom that, what you're doing in terms of R&D in order to make sure you're fully prepared to kind of catch that wave and ride it?
So when you talk about Connected TV, I know there's a lot of conception out there that people are preparing technologies for it and things like that and that -- a lot of that, I guess, is being done more on the publisher side itself. But from the demand side of things, Connected TV is very similar to video -- regular video advertising. So the way that we look at it, as we get bid requests, it's just -- on the bid request, it tells us, is it Connected TV, is it a video ad on a mobile device, so you can pre-roll. Or is it an audio, or is it an outdoor sign call, or a banner. And so from a technology standpoint there's not tons of differences here. The players are similar, and the way the auction work is similar. On the market side of things, there's a lot of things that the publishers themselves have to do, the networks themselves have to do, the ones that are providing the content in a digital kind of a way have to do. But from our side, with our acquisition of Visible Measures a couple of years ago, we became very, very ready for it, and still am very ready to, and doing it on a regular basis.
Okay. That's great. And then, just secondly from me, your press release and your prepared remarks talked about a strong second half of the year. If we think about last year, it was certainly a particularly strong Q4. I guess we're sitting here about halfway through the Q3, can you just provide any kind of high-level comments or color on how your pipeline is looking compared to this time last year?
Gavin. It's Jonathan. So I can tell you without question that our pipeline is extraordinarily strong today. As typical with how the quarters progress, Q3 is very strong. I would say, though, that August is typically a slower month, and September is a stronger month. We see our pipeline for Q3 quite strong. And Q4, it is still early, but we are seeing strength. Last year's Q4 was very, very, very strong. I can't tell you with certainty whether Q4 this year is going to be the percentage increase the same, but I can tell you that our team is very excited, and we're seeing some very good momentum.
I think we'll be able to provide more color on the next quarterly release.
Got it. That's it from me. Congrats on the quarter.
Thank you.
Your next question is from Kevin Krishnaratne from Paradigm.
Just a question on the Self-Serve growth, the strength there. Can you talk about where that's coming from? I know, in Q1, it was largely being driven by existing customers expanding, less so on new customers, as you are still ramping up for the new platform launch. Can you talk about where you saw the strength in Q2 relative to Q1?
Yes. So it's actually funny because this quarter we actually saw new customers on the Self-Serve side, and we're still seeing more spend from the existing service, so I would say our -- we're focusing a little bit more from a customer service point of view on the Self-Serve side, going to our existing clients, showing them all the new stuff that we built. Like I mentioned, into our existing Self-Serve, we've done a whole bunch of fixes to the usability. Again, keeping in mind that it's going -- all go into the garbage soon, so not too much and not too much focus on it, but there were some things that we could do, and we've done those. So that's helped increase revenue from existing clients, and we also managed to get some new clients and engaged with the platform as well. So I would say more so still from the existing clients, but with some new clients in the mix as well.
Okay. That's really helpful to hear. As the launch comes, there should be opportunities for even better growth there, in theory. If you -- you talked about several use cases where you had clients using a few hundred thousand dollars of spend on the system. Now they're moving towards the multimillion-dollar level for the back half of the year. Are those -- are any of those Self-Serve? Or those -- were those all Managed Serve (sic) [Services]?
Most of them were Managed. We have similar cases on the Self-Serve, but there's not to the same magnitude.
Got it. Figured. A question more on the competitive side. Is thereA way you can maybe talk about some of your existing customers? If you've got a view or an idea of conversations with them, how much share of their programmatic spend you have? I guess what I'm trying to understand is how you're positioned versus other DSPs of the -- are you the lead? Do you have all their programmatic spend? Do you have a half of it? Kind of what's the upside there?
Okay. So let's break it down into 2 different areas. When we deal with the advertisers directly, we get much bigger part of their share, and that's happening more and more. And sometimes, you deal with the advertisers directly, and then the ad agency executes. But when you have that relationship, then you get -- you definitely get a bigger part of it. When you deal with an agency, then you usually get a very small part of it. As they -- there's the advertisers spend, and then it gets divided into different things, so non-digital TV, radio, things like that. And then, some of it goes to digital. Within digital, some of it goes to regular digital, and then some goes to programmatic, and then you get a piece of that programmatic side of things. So you get a small piece of the pie when it comes to that. And more and more, when you see that we talked about those big contracts that we're getting, generally speaking, this is when you are closer to the advertiser that makes direct decisions as it comes to their ROI.
And so when you speak about the enhancements that are going to come to your platform and what you're sharing with your customers, and they're kind of lining up for -- to use the system, are they -- is it that they just can't wait to use your platform because they know that you're going to give a better ROI relative to another DSP that they might be using? Or is that coming from just pure growth of them just wanting to push more programmatic dollars from digital and from traditional? I'm just trying to get a sense of like where the dollars, from their perspective, would be coming from?
Are we talking about the new system? Or the existing system?
When the new system comes in, yes.
Well, definitely the new system, so...
Eventually, you just mentioned that there's -- you've got a lot of demand. Your customers are looking forward to use this platform. They're going to probably spend more. I'm just wondering, where that spend is going to come from?
So in a conceptual way, the new system is going to align the way that advertisers think about the consumer journey and with the way that programmatic gets executed. So it's really a different way of looking at things on the -- and executing. So this particular tool could be used for planning, and then all the way down to execution. So it's not just for on the ROI perspective, it's not just that -- it's just -- it's completely different way of running programmatic advertising. Because today, there's a big disconnect from the plan -- the advertisers' planning into the execution of programmatic, and we're going to align that. And the excitement level comes from that because it's not just going to be about the CPA and the ROI, the immediate ROI, it's about -- it's going to be about the consumer journey from beginning to end.
And don't forget -- and remember, don't forget that the industry as a whole is growing, so not only are we riding the tide of the industry, but we are also continuously gaining share. And the switch of TV in itself to Connected TV is going to increase that growth rate substantially. So in reality, the tailwinds are substantial and helping us.
That's helpful there. Maybe the final, last question here on, you mentioned that -- this is not a backlog, but you mentioned that you've started to sign some contracts that get you coverage into 2020. I'm wondering, is that something different? If you're looking a year ago, are you seeing that -- is that happening more and more? Did it happen before? And is there any way you can kind of help quantify the level? Like what are you exactly seeing with regards to the deals that you've got kind of signed into 2020?
So it's very, very different. The business that we're used to, a 1.5 years, 2 years ago was very, very short, like generally short contracts that are 60-, 90-days kind of contracts. And for us to get a 12-month contract was very rare, and we're seeing those all the time. I think that at the same time, last year, we didn't have a lot of signed contracts for -- into the following year, and now we do. Obviously, it's not huge amounts yet, but it's a very, very solid baseline for when you're starting the year off from 2020 in a much better position than last year.
Yes. That's certainly very positive. I guess, the last one from me, more on the OpEx line. So in the quarter, you had restructuring. You also had a onetime nonrecurring item. Can you -- what does that refer to? Maybe you mentioned it. Was that in the G&A line? And then, second, any commentary on the stock-based compensation that doubled quarter-over-quarter? How do we think about that going forward?
The onetime charge that was in the SG&A line that we added back was related to a lease, an office lease that we terminated as part of our consolidation of our office space, so that was a onetime charge. And stock-based comp, I would say, it'll typically be in the range of what we had in the quarter. But obviously, as time goes by, the number does come down because of how the vesting works. But for argument sake, use -- or mathematical sake, use about $400,000 to $500,000 a quarter.
Okay. Great. Congrats on a good Q2. Look forward to Q3.
Thank you.
Your next question is a follow-up from Rob Goff from Echelon Wealth Partners.
Tal, you had previously indicated that with the platform improvementsAbout the new AI, that clients were looking for a significant uptick in the ROI or seeing a significant uptick in the ROI. Could you perhaps talk further to that ROI pickup? And you had, with that same statement talked to the reduced usage of cookies within the AI. Perhaps if you could dive deep there as well?
So the first part, the evidence that we're seeing is the increase in spend that the customers are giving us. So we've been named the number-one performer for quite a few advertisers, and when you're the number-one performers, they shift their budgets from other places to you. So that's the reaction we're seeing with the results of the AI and delivering that better ROI. And what was the second part of the question? Remind me?
With respect to the decreased use of cookies.
Okay. Decrease in cookies. So in the old AI, we had a more limited number of input variables into it. I don't recall the exact number. Now we have significantly more input available that's come into it. So it's more reliant on things like, what is the current page that you are on, what is that page that you are on about. So this is not dependent on the cookie; this is, we know, where we are right now. More about your geographical -- your exact geographical location and where we've seen you in the past. That's not exactly dependent on the cookie; that's more dependent on the device IP, on your mobile device IP. So things of that nature are things that we are growing more and more into the algorithm, so it's less dependent on the cookie. And by the way, not that we have a problem with the cookie or been -- as we all know, the cookie is alive and well, and working on the Internet on a regular basis. But we just wantTo be ready in case something ever happens to it, which we don't think it will.
There are no further questions. I will now turn it back over for closing remarks.
So thank you, everyone, for joining our call today. And again, congratulations to the Acuity team for delivering such an amazing quarter. We're looking forward to -- and as we are in the middle of Q3 and then to Q4 and then to 2020, as I said, making a lot of investment, and there's a lot of excitement into the new product launch coming up. And looking forward to speaking to you guys again on the next call. Thank you, everyone.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.