Privacy-Forward AdTheorent Grows 6.5% Y/Y in a Tough Ad Environment
|52 Week Range||$2.36-$11.90|
|Avg. Daily Vol. (30 day)||269,207|
|Shares Out (MM)||86|
|Market Cap (MM)||$243|
|Fiscal Year End||December|
- 2Q22 revenue of $42.5 million was up 6.5% Y/Y, partially driven by a 107% increase in CTV revenue, but below consensus of $45.4 million. Adjusted gross profit margin was roughly flat at 66.7%. The company’s number of active customers grew by 15% Y/Y to 331. AdTheorent Health saw good demand, adding 37 brands.
- Even with lighter-than-expected revenue, the company delivered $7.3 million in EBITDA, above the high end of the guidance range issued in May, representing over 25% margin. This profitability occurred while the company executed its growth hiring plan: by year-end 2022, the company will have 17 more fully ramped sellers than year-end 2021, and in the first half of the year, the company filled 21 tech, product, data science, analytics, and strategic partnerships positions, positioning the company for continued platform and product development and innovation.
- In June, the ad environment became more challenging as the macroeconomic outlook did, so AdTheorent is now taking a more measured approach to 3Q22 guidance. 3Q22 revenue guidance is now for $38.5 million at the mid-point and adjusted EBTIDA is expected to be between $3.1 million and $4.0 million, a still-healthy double-digit margin, while continuing to invest meaningfully behind initiatives and resources that will drive accelerated growth and share gains once the environment normalizes.
- Given with the current macroeconomic outlook and less visibility into future monthly and quarterly ad spend, the company lowered its revenue guidance for 2022 to $170 million at the mid-point, down from $204 million. The smaller size of the company’s customer list is making it more sensitive to ad budget pullbacks, but when those customers resume normal spending trends, the company could see significant upside, particularly when it rolls out its forthcoming enhanced AdTheorent Health solution set and as it continues to scale its Direct Access (or enterprise/SaaS) offering.
- AdTheorent’s ability to drive business performance for advertisers continues to advance and makes it unique among its peers. The company’s proprietary tools, methodologies, and vertical solutions maximize campaign performance and ROI for advertisers, while operating in a privacy-first manner, which has quickly escalated as an essential element for brand marketers worldwide.
- Read all our reports on AdTheorent on our website.
AdTheorent is a privacy-forward, machine-learning powered programmatic advertising company. Put simply, the company uses machine learning and data science to target digital ads based on non-individualized predictive scores. Its biggest clients are sophisticated data-driven advertisers who know digital and expect their digital campaigns to drive tangible results.
AdTheorent is improving the digital world for advertisers and consumers. By way of illustration, consider the following: when a consumer accesses content on a device—a mobile device, tablet, or laptop, or even a connected television—a content page will render on that device and that screen will likely contain an opportunity to show an ad, which is called a digital impression.
Advertisers want to know which of these impressions or opportunities to show/serve ads to are most likely to yield engagement, conversions, or other advertiser-specified actions by their customers, such as credit card signups, online sales, hotel or airline bookings, whatever action is behind the given ad campaign the advertiser is using to try to drive those actions. They want to buy the media that will do just that.
Behind the scenes, there is a marketplace to buy and sell those ad opportunities. It’s an auction system that takes place in microseconds. AdTheorent occupies the demand-side platform silo in this ecosystem, enabling advertisers to purchase digital media and digital ad impressions in real time and one at a time.
The key to AdTheorent’s success is that it has transformed how that is done. AdTheorent uses machine learning and data science as its core method of ad targeting and campaign optimization. This contrasts with cookie-based or other ID-based or user profile-based targeting, which focus more on individual identities and retargeting users and profiles across the Internet.
2Q22 revenue of $42.5 million was up 6.5% Y/Y, partially driven by a 107% increase in CTV revenue, but below consensus of $45.4 million. Adjusted gross profit margin was roughly flat at 66.7%. The company’s number of active customers grew by 15% Y/Y to 331. AdTheorent Health saw good demand, adding 37 brands.
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