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Good morning, everyone. Before we begin the official remarks, I will read the cautionary note regarding forward-looking information. Certain information to be discussed during this call contains forward-looking statements within the meaning of applicable security laws, including, among others, statements concerning the company's objectives, the company's strategy to achieve those objectives as well as statements with respect to management's 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 statements reflect management's current beliefs and are based on information currently available to management and are subject to a number of significant risks and uncertainties that could cause actual results to differ materially from those anticipated. Please refer to the cautionary statements and risk factors identified in our filings with SEDAR for a more detailed explanation of the inherent risks and uncertainties that could affect such forward-looking statements. Following the presentation, we will conduct a Q&A session.
I would now like to turn the conference call over to Mr. Simon Cairns, Chief Executive Officer.
Thank you, Steve. Welcome, everyone, and thank you for joining today's first quarter 2024 earnings call. As Steve mentioned, I've recently joined illumin as its Chief Executive Officer. I look forward to helping shape and lead illumin's next phase of growth.
Today, I'd like to give you my perspective on the opportunities I see and what I believe will drive our future growth. Then I'll turn the call over to our Chief Financial Officer, Elliot Muchnik, who will walk you through the highlights of our first quarter 2024 financial and operating results. After that, we'll be happy to take your questions.
Firstly, though, a little bit of my background. Through my 24-year career, I've been focused on driving growth and performance in technology, services and SaaS platform companies. My expertise includes strategic leadership, finance, marketing, operations and business and corporate development.
Before joining illumin, I served as the Chief Executive Officer of Spud, Western Canada's largest online and omnichannel retailer of fresh foods and healthy products. At Spud, I was responsible for returning the business to growth and performance by focusing on: a, continuously generating value for the customer; b, significantly increasing financial performance; c, reviewing and aligning our operations for organizational effectiveness; and d, reinventing our brand value.
Before Spud, I served as the Chief Executive Officer and General Manager of PNI Media, an enterprise class e-commerce and value-added services SaaS platform provider. In that time, I helped drive the business firstly to $400 million and then 3 years later to over $1 billion a year. Over the years, I've served in a number of senior roles at different organizations, including Staples, ESPN, Simple Star and ACD Systems, all technology providers in various forms and all tied to both client and end consumer performance.
I view my new role at illumin as a culmination of these past experiences. And while my experience may be diverse, there are certainly some common threads. Firstly, a core focus on driving smart growth by investing in and executing on better understanding of the customer needs and preferences.
Secondly, implementing a customer-centric operating model of always adding value to their experience with us. Thirdly, leveraging the passion of our team to invest in and strengthen our brand relevance and lastly, implementing and sustaining healthy financial discipline to shape our decision-making and process to generate maximum value over time for our shareholders.
As of today, I've been at illumin for 4 weeks. Since joining the company, I spent this time reviewing what resonates with customers, how the teams are aligned to support customers and what our forecast entails. My initial takeaways trend towards focusing on how we connect, enable, manage and retain customers while also better positioning ourselves to take advantage of trends in the adtech and martech sectors.
I look forward to working with our team and moving forward as we execute on growth plans. I'm also excited about the products and services we are offering to customers across the advertising industry. I see the illumin platform as the mirroring of adtech and martech into one, enabling a fully integrated workflow for both marketers and planners across multiple customer data sources and advertising channels.
Supported by unlocking the best-in-class insights by leveraging our proven AI and the ability to spin up campaigns and test faster than ever before as we move to lead the experience of executing multichannel campaigns into a quick, easy and detailed user interface, delivering a new level of insight for marketers and agencies alike.
On the self-service side of our business, we have a growing opportunity that is just starting to emerge. Even in my limited time here, I've seen customers come on to the platform because they realized they could activate and engage their audience faster than ever before, seizing a quick opportunity and moving to an even higher level of customer engagement across all their campaigns.
I view these customers as early adopters as they present a unique opportunity for us to learn from their feedback. That way, we can best see what is already working on the illumin platform, what they most like about us and more importantly, what we can do to improve upon and better service their customer needs.
I will also be taking a close look at the managed service side of our business. This [ slide ] is still an important part of our existing customer base and our revenue. And while self-service is the engine of our future growth, our managed services business remains quite important to both our customer base and ourselves. Additionally, I am already reviewing operations and with the rest of the senior team, we're building to ensure that we strategically manage all of our resources in a focused and targeted manner.
We will continue to make investments in areas that represent the greatest return on investment, including advancing our technology, continuing to improve the illumin platform experience and strengthening our sales and service efforts. In particular, we are going to take a fresh look at how we do things, including how we are supporting customers as well as how we're marketing our products and services relative to the marketplace.
We will continue to explore new opportunities for growth but also, we're going to make sure we are fully benefiting from the products and services that we already have available to us. By doing this, we will become better aligned with our customers and the end markets we choose to be in.
Ultimately, I expect this focus will improve productivity and bolster our sales efforts, which will drive higher revenue and build a track record of profitability. Of note, we will also set clear achievable targets and hold ourselves accountable to them. I believe this is how we will fuel illumin's long-term growth.
Lastly, on behalf of our Board, I'd like to thank Tal for his leadership over the years and for establishing a solid foundation for illumin's future growth. I also want to thank our Board and the entire leadership team here for expressing their confidence in me to be the steward of this legacy and to our listeners today, I look forward to speaking and meeting with many of you as we work with the rest of our senior management team to deliver results for our customers, our employees and, of course, our shareholders.
With that, let me turn the call over to Elliot to give a detailed review of all of our financial results.
Thank you, Simon. Good morning, everyone, and thank you for joining our first quarter 2024 earnings call. Before I give a detailed review of our results, I'd like to review some important highlights. During the first quarter, illumin's self-service revenue surged 282% on a year-over-year basis, while declining 5.6% quarter-over-quarter. This year-over-year growth not only reflects the strength and scalability of our illumin platform, but it also highlights the growing recognition this platform is gaining in the marketplace as well as the effectiveness of our strategies to increase market penetration.
The decline sequentially is notable because it's fairly limited despite the fact that we're comparing our usually most active quarter from the end of last year to Q1, which is traditionally our lightest. And in addition, we've actively managed our costs, reflecting a more streamlined and efficient operations throughout our entire organization.
At the beginning of this year, we reorganized and scaled down a part of our back office to better align with the strategic direction of our firm. This drove a year-over-year improvement in adjusted EBITDA, which was positive for the quarter compared to a negative $766,000 during the same period last year.
We're also pleased to report significant progress in our customer engagement strategies. We have fine-tuned our sales efforts, aligning them more closely with high-value customer segments. This targeted approach not only optimizes our resource allocation but also sets the stage for future revenue growth as economic conditions improve.
And as we continue through 2024, our focus remains on driving revenue growth and profitability, innovating our offerings and delivering value to our stakeholders. Let's now take a closer look at our detailed financial results.
For the first quarter of 2024, total revenue was $25 million compared to $26.5 million for the same period last year. This decline of 5.8% was entirely due to our decision at the end of fiscal 2023 to reduce activity within Argentina due to a challenging economic climate and inflationary pressures within that country. The decline in managed services revenue from $17 million in the prior year to $11.8 million in this quarter was offset by a 282% increase as previously mentioned, in our Self-Serve illumin or $6.2 million growth over comparable quarters.
This growth was from new clients and a higher utilization of the platform by our existing clients. Gross profit or net revenue was $11.7 million compared to $12.5 million in the comparable period. Gross margin was 47%, unchanged from the same period in 2023 despite the change in mix of our revenue towards Self-Serve. The year-over-year decrease in gross profit reflects the reduced sales in the quarter.
Total operating expenses for the first quarter of 2024 were $14.3 million, a decrease of almost 14% compared to the $16.6 million during the same period in 2023 and thus reflecting our strategic cost management initiatives leading to more streamlined and focused operations.
As I mentioned earlier, we saw improvement in adjusted EBITDA during the quarter, which was slightly positive compared to the negative $766,000 we reported in the same period last year, which again is a testament to our focus on operational efficiency and cost control.
As reflected in our press release, we reclassed nonrecurring costs related to our former NASDAQ listing outside of the EBITDA calculation for this quarter and for Q1 2023. The reclass impact improved Q1 results this year by $423,000, while similarly, Q1 last year was improved by $513,000.
Net loss for the quarter of 2024 was $1.1 million, an improvement from a net loss of $3.6 million in the same period last year, again, illustrating our lower operating costs on a year-over-year basis and an impact from strengthening U.S. dollar, which resulted in a $1.4 million gain versus a small loss of $54,000 in the prior year.
As we previously communicated, the company made a decision to voluntarily withdraw from the NASDAQ capital market as of September 11, 2023. Concurrent with this step, we began the process of deregistering with the SEC, which was completed effective March 6, 2024.
This deregistration reduced both current costs and, as importantly, avoided future cost escalation due to regulatory burden and related activity. And in light of the current economic landscape, these moves are strategic, aiming to optimize our capital deployment to maximize shareholder value, though we anticipate the majority of these benefits will actually occur in 2025.
Shares of the company remain actively traded on the Toronto Stock Exchange under the symbol ILLM. Additionally, we are progressing towards securing a presence on the OTCQB platform, which will facilitate wider and more convenient access for U.S. investors. We anticipate this transition to be finalized in a matter of weeks.
On November 13, 2023, the company launched a Normal Course Issuer Bid to buy back and cancel up to 4.3 million of outstanding common shares. As part of our ongoing commitment to return value to shareholders, we have utilized this program to repurchase shares at a favorable market conditions. During the first quarter, the company purchased and canceled approximately 1.15 million of its common shares at an average price of $1.66 per share totaling consideration of $1.91 million.
And since Q1, we've continued the program and purchased additionally 442,000 shares at an average price of $1.67. Therefore, since inception, we have acquired just under half of our allotted limit or approximately 2 million shares with an average cost of $1.63 per share and a total spend of $3.3 million.
The NCIB remains active and can continue until November 12, 2024, or until we reach our targeted repurchase limit. This initiative is part of our broader strategy to optimize our capital structure while maintaining the flexibility to invest in growth opportunities. As of March 31, 2024, our cash and cash equivalents stood at $55.5 million, unchanged from $55.5 million at the end of 2023. This is despite the previously discussed $1.91 million spent on acquiring shares under the NCIB.
This stability is the result of our disciplined approach to working capital and cash flow management. Our ongoing efforts to enhance cash flow from operations and manage expenditures prudently have allowed us to maintain a solid cash reserve, ensuring we can respond to those growth opportunities as they arise.
As of March 31, 2024, the total number of our outstanding common shares stood at 52.3 million shares following a series of strategic adjustments to our share structure compared to 56.8 million shares as of March 31, 2023. This figure includes the impact of our recent share repurchases under the NCIB, offset by a modest number of shares issued through the exercise of stock options and other vested equity instruments.
In conclusion, our progress during the first quarter of 2024 clearly reflects our strong commitment to achieving long-term revenue growth and improved operational efficiency by refocusing on high-value customer segments, enhancing our self-service offering and carefully managing expenses, we have laid a solid foundation for sustainable success. As we begin to see signs of stabilizing macroeconomic environment, our optimism for 2024 strengthens.
We remain dedicated to driving growth through innovation, improving our operational efficiencies and delivering substantial value to our shareholders through thoughtful strategic management. And with that, I'd like to turn the call back to Simon for his closing remarks.
Thank you, Elliot. In closing, I am honored to assume the CEO role, and I am very excited about the company's future as we offer marketers and advertisers new and differentiated solutions for managing their advertising journey. As you heard today, our illumin self-service platform continues to experience rapid growth driven by these new and existing relationships with customers who recognize our platform as uniquely complementary to our proven managed service offerings.
Building on this preliminary early adopter momentum, we will be honing our product market fit and our sales processes to find what works best for our customers. By focusing on long-term self-service contracts with guaranteed minimums, and terms exceeding 1 year, we expect to generate a more consistent recurring revenue stream.
As we build our illumin self-service business, expect us to keep a sharp eye on our expenses and priorities as we shape the best path forward to support our customers as they navigate challenging markets with their new products and services.
Thank you all for your time today. And now we'll open up the floor for questions.
[Operator Instructions] Our first question this morning comes from Tanvi Gabriel at Echelon Wealth Partners.
Congratulations on the quarter. And I'll be stepping in for Rob Goff. In terms of my questions, I was just wondering if you could provide some insights into the momentum that you've observed in the Self-Serve contracts?
Right now, we're seeing a very strong and positive response from the customer base. Self-Serve opens up different opportunities for us to attract new customers. And so we are seeing a good diverse range of both brands and then also some other sectors that are coming into Self-Serve. I'm very encouraged by what I see so far 4 weeks in, in terms of what our potential can be around the Self platform.
Okay. Perfect. And my second question would be, you mentioned that you've been integrating with social media. So we were just wondering if you could elaborate on the traction that you've seen with regards to that?
Yes. Thank you, Tanvi. I'll take. So that integration has commenced, and we are seeing increased use of that and that makes us actually quite unique in the marketplace, as you know, that we are one of the only firms out there that are integrating that with the normal programmatic approach to our canvas.
So we are adding traction, but I think it's still very early for us to see meaningful results coming from that channel, and we're focusing on just ensuring that we have a good end-to-end solution for our clients right now and not necessarily using our social aspect as a specific channel.
It just makes sure that when they work with us that they have access to the various tools that they would need. And so we don't really see that as an isolated item on itself, but is part of creating an end-to-end solution that's effective for our clients.
Your next question comes from Daniel Rosenberg of Paradigm Capital.
So my first question comes around, I guess, at a high level. Just wondering what -- you mentioned product market fit and potential to tweak the illumin product. I was wondering if you had any time frame or plans around kind of the timing of first goals, any targets around just giving us your first impressions on formally the direction you want to go to.
So I would sort of prefer to say, we're already sort of diving in to ensure that self-service as a solution can meet and beat the customer needs as we sort of bring together a leading adtech and martech solution into 1 sort of single canvas workflow.
We want to level that up with a bit more automation and AI generation and provide essentially a quicker to market a series of options as part of campaign planning and then couple that all off with what we believe will be best-in-class results in terms of insights.
So that's our key focus. We're advancing on that very, very quickly. So I'm not in a position to sort of provide any guidance, but look for us to move -- we're already [indiscernible] we're already moving very, very fast around leveling up a product market fit.
I think we've got some very good traction already with early adopter customers. We're hearing from them. I'm meeting with them, bringing the customer voice into the product journey here. I'm already seeing that. So I'm seeing positive response already. We'll continue relatively going forward until we get to a place where we're really happy.
Okay. I appreciate that context. And then when you think of illumin's customer base, there is a managed service offering that has been successful. I was just wondering if you have any thoughts around that balance between, you're talking about product market fit for a new flagship product. Does that serve all of your customer needs? And how focused are you on the traditional portion of the business?
The managed service business is important to our customer base, and it is important to us. So it is very much -- I see them as complementary to each other. I see customers coming into the illumin experience, wanting some managed support and then heading into a self-service solution.
I also see the opposite where they're coming to us through a self-service solution and doing well and getting better insights and being able to plan and implement their campaigns at a faster rate and then wanting to bump up your experience into a managed service offering.
So I see them as complementary. But we -- from my point of view, I think it's important that we do have a very good and clean and effective offering on both managed and self and that will be part of our focus going forward.
All right. And just lastly for me, one of the interesting assets of illumin is a financial one. So you have a large cash position. I was just wondering how you think about balancing the growth opportunity versus profitability versus investment?
I don't know if I have a comment specifically on between in terms of overall [indiscernible]. I mean, right now, the focus is on really bringing the customer into the equation and making sure that we have the best product market fit and the best complementary offering between self and managed and then implementing any improvements that we identify very quickly to sort of opportunize the product line and best support the customer.
That's the main focus for now. And at the same time, between Elliot and myself and the others, we are focused on very solid financial discipline, as you saw in this past quarter. And so we'll continue on that path as well and continue to level up our overall financial performance.
It appears that there are no further questions this morning. That will conclude our time for this quarter. My thanks to Simon and Elliot and our participants this morning. Please join us the next time as we present our Q2 financial and operating results. Goodbye for now.