Mr. Tal Hayek reports

ILLUMIN REPORTS SECOND QUARTER 2023 FINANCIAL RESULTS

Illumin Holdings Inc. has released its financial results for the second quarter ended June 30, 2023.

Second quarter 2023 highlights

• Second quarter 2023 revenue was $33.2-million, an increase of 17.3 per cent year over year, and an increase of 25.3 per cent over first quarter 2023 revenue, as the company continues to see the benefits of its strategic investments in Illumin sales, marketing and product development.
• Illumin self-serve revenue was $5.4-million, up 145 per cent from $2.2-million in Q1 2023 and represents 16.4 per cent of total revenue, up from 8.3 per cent in Q1 2023. The company exited the second quarter at an annualized revenue run rate of $22-million.
• Illumin's self-serve client base grew 54 per cent sequentially to 145, positioning the company for further Illumin self-serve revenue growth in 2023.
• Second quarter 2023 gross margin was 47.8 per cent, compared with 51.9 per cent for the same period in 2022, reflecting changes in geographic mix and an increasing proportion of self-service revenue.
• Net revenue or gross profit for the three months ended June 30, 2023, was $15.9-million, an increase of 8.2 per cent compared with $14.7-million for the same period in 2022.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $20,000 for the second quarter, compared with $1.5-million in the prior-year period, reflecting continuing strategic investments in R&D (research and development), sales, and marketing to support Illumin's growth.
• Q2 2023 net loss was $(5.6)-million compared with net income of $1.2-million in Q2 2022, reflecting the previously mentioned strategic investments in Illumin and a foreign exchange loss of $2.4-million in the current period, compared with a gain of $3.2-million in Q2 2022.
• At June 30, 2023, the company had cash and cash equivalents of $65.7-million, compared with $85.9-million as of Dec. 31, 2022. This decrease was largely attributable to a combination of net loan repayments, share repurchases, investments in the company's platform, negative cash from operations, unfavourable changes in non-cash working capital due to timing and the foreign exchange impact of a weakening United States dollar on the company's U.S. dollar cash. Reversal of timing differences postquarter-end increased the cash balance to $71.8-million.
• Postquarter-end, the company launched a substantial issuer bid (SIB) to purchase for cancellation up to 15.8 million of its common shares for an aggregate purchase price not to exceed $40.0-million.
• Additionally, the company announced its intention to voluntarily delist from the Nasdaq stock market as soon as practical after the expiry of the SIB. The reasons for this decision include high insurance, accounting, and legal and compliance costs associated with a continued U.S. stock exchange listing. The company currently expects that the delisting will be effective immediately prior to the open of trading on Sept. 11, 2023.

"We reported strong total revenue growth of more than 17 per cent year over year during the second quarter," said Tal Hayek, co-founder and chief executive officer of Illumin. "This was due to the substantial boost from Illumin's distinct self-serve journey advertising platform. The ongoing enhancement of Illumin remains a priority, and we anticipate expanding our groundbreaking technological platform with compelling new features in the upcoming period, including the incorporation of Digital Out-of-Home."

Mr. Hayek continued: "We continued to scale up our Illumin growth engine by adding 51 new self-serve logos in the quarter, which represented a 54-per-cent sequential increase in new logos added. We also performed 178 demos in the second quarter, a 27-per-cent sequential increase. Importantly, customer satisfaction with Illumin continues to remain very high and our self-serve demo pipeline continues to expand rapidly. As mentioned last quarter, we continue to focus our efforts on signing long-term self-serve contracts, with guaranteed revenue minimums and terms greater than one year. This has garnered some early success with an increasing number of these types of Illumin self-serve contracts. We believe this approach will provide us with increasing revenue visibility into the future."

Elliot Muchnik, Illumin's chief financial officer, commented: "Our strong revenue growth this quarter highlights the early returns we have seen from our investments in Illumin. The positive adjusted EBITDA we achieved was in line with our expectations and is also a product of those investments. Over all, we continue to be very excited about our progress and Illumin's vast potential, which we believe is not reflected in our current share price. As a result, subsequent to the quarter-end and the completion of our prior normal course issuer bid program, the board authorized a $40.0-million SIB. Further, the company announced its intention to voluntarily delist from Nasdaq owing to the costs associated with maintaining this listing. We believe it is prudent to manage our costs given current macroeconomic concerns and remain cognizant of the challenges many organizations are facing in this environment."

The attached table presents a reconciliation of net income (loss) to adjusted EBITDA.

Conference call details

Date:  Thursday, Aug. 10, 2023

Time:  8:30 a.m. Eastern Time

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