Display & Programmatic Advertising

AdTheorent Holding Company, Inc. Reports Second Quarter 2022 Results


Revenue Increased 6.5% Lead By Strong Growth in CTV and Healthcare & Retail Verticals;
Company Continues to Expand Predictive Capabilities of Privacy-Forward Media Buying Platform

AdTheorent Holding Company, Inc. (Nasdaq: ADTH) (“AdTheorent” or “the Company”), a programmatic digital advertising leader using advanced machine learning technology and privacy-forward solutions to deliver real-world value for advertisers and marketers, today announced second quarter 2022 financial results.

Second Quarter 2022 Financial Highlights:

  • Revenue: Revenue increased by $2.6 million in second quarter 2022, or 6.5%, to $42.5 million from $39.9 million in second quarter 2021, driven by strength across a diverse portfolio of customer verticals.
  • Gross Profit: Gross Profit of $21.6 million in second quarter 2022 was in line with second quarter 2021. Gross Profit Margin was 50.9%, compared to 54.2% in second quarter 2021.
  • Adjusted Gross Profit*: Adjusted Gross Profit* increased to $28.3 million in second quarter 2022, an increase of $1.7 million, or 6.4%, as compared to second quarter 2021. Adjusted Gross Profit Margin was 66.7% compared to 66.9% in the second quarter of 2021.
  • Net Income: Net Income increased by $56.4 million in second quarter 2022 to $57.8 million from $1.4 million in second quarter 2021. In the second quarter 2022, the Company recognized a total of $55.9 million of mark to market gains related to the change in fair value of the Seller’s Earn-Out and Warrants liabilities.
  • Adjusted EBITDA*: Adjusted EBITDA* decreased to $7.3 million in second quarter 2022, a decrease of $4.7 million, or 39.2%, as compared to second quarter 2021. Adjusted EBITDA as a percentage of Adjusted Gross Profit of 25.8% represented a decrease from 45.2% in second quarter 2021.

Second Quarter 2022 Business and Operating Highlights:

  • AdTheorent’s active customers grew by 44, or 15% year-over year, to 331 at June 30, 2022.
  • AdTheorent’s connected television (“CTV”) revenue grew by 107% during the quarter to $4.0 million, as compared to $2.0 million in the second quarter of 2021. Customers are seeing value in AdTheorent’s differentiated, machine-learning optimized version of programmatic CTV.
  • AdTheorent added 37 new healthcare and pharmaceutical advertiser brands, the Company’s largest vertical, across its active customer base in the first half of the year, and is working to grow these opportunities as part of a strategic focus on scaling a highly differentiated AdTheorent Health offering. On the product, data and platform side, during the quarter, the Company significantly expanded its data infrastructure by executing and operationalizing a broad de-identified insurance claims data license which will allow AdTheorent to provide privacy-friendly claims data modeling to deliver more precise advertising outcomes for the world’s top pharmaceutical and healthcare brands.
  • AdTheorent continued investing to expand its capabilities in the consumer packaged goods (“CPG”) vertical in the second quarter and formalized a partnership with Catalina to optimize campaign performance based on in-store sales attributed to AdTheorent’s media. Catalina has access to 22,000 multi-outlet retail stores nationwide and collects purchase data from more than 420 million loyalty cards through retailer point of sales systems. By pairing Catalina data with AdTheorent’s machine-learning and predictive targeting capabilities, AdTheorent is able to make real-time campaign optimizations across mobile, desktop, and CTV devices to maximize sales for its CPG clients.

Technological Enhancements:

  • AdTheorent improved its capabilities in the area of Predictive Contextual Advertising in which it uses impression-specific predictive scoring to identify the impressions within contextually relevant properties which are most likely to drive specific Key Performance Indicator (“KPI”) conversions (such as website sales), based on historic sales or other KPI conversions which resulted from ad exposure. Now, the Company is able to identify keyword combinations on web pages which the Company’s data suggests are more likely to drive sales or other KPI conversions for customer campaigns and deliver better return on advertising spend to customers.
  • AdTheorent made substantial progress towards its forthcoming third quarter roll-out of AdTheorent Predictive Audiences, which will allow programmatic advertisers to target “audiences” in a more precise, data-driven and less opaque manner than is currently possible with traditional targetable audience segments. In addition to the almost 900 impression-specific data objects already available to be incorporated into AdTheorent models, in the second quarter the Company signed another important data license with Peer 39 to operationalize additional contextual data into AdTheorent’s solutions. Through this integration, the Company’s internal and Direct Access platform users will be able to perform pre-bid targeting based on contextual sentiment, content quality and their own brand safety criteria.
  • AdTheorent implemented platform automation related to the ingestion of advertiser brand web site visitor engagement data for use in its predictive models. This enhancement is an example of the Company’s ongoing efforts to operationalize and automate within its platform valuable data science learnings, which are already being used to improve customer campaigns. For example, during the second quarter the Company used this enhanced platform automation to drive brand website visitation for a destination marketing organization. In a very short campaign window of 2.5 weeks, the Company was able to surpass client benchmarks driving 3.6 times more visits than the client’s campaign goal.
  • In the second quarter, AdTheorent was pleased to be issued a U.S. Patent, “Data Learning And Analytics Apparatuses, Methods and Systems”, recognizing one of the Company’s valuable Machine Learning (“ML”)-based advertising innovations, which the Company leverages as part of its Cost Per Action, or CPA, and KPI optimization capability suite. This and other innovations enable AdTheorent to use advanced ML and statistics to score ad impressions and drive KPI performance for customers.

“During the second quarter we invested behind people and technology that will power AdTheorent for years to come, and we have never been more excited about AdTheorent’s growing potential to disrupt the market and lead programmatic digital advertising into the post-ID future,” said James Lawson, CEO of AdTheorent. “We continue to advance our technological lead over competitors and educate customers on how AdTheorent can meaningfully improve their return on ad spend. Feedback from customers and potential customers is extremely encouraging and we are confident we will benefit disproportionately as advertising budgets build back up.”

Adjusted Gross Profit and Adjusted EBITDA are non-Generally Accepted Accounting Principles (“non-GAAP”) financial measures. See the supplementary schedules in this press release for a discussion of how the Company defines and calculate these measures and a reconciliation thereof to the most directly comparable GAAP measures.

Third Quarter and Updated Full-Year 2022 Financial Outlook:

AdTheorent’s growth may be impacted in the second half of 2022 by macroeconomic factors beyond the Company’s control, such as the COVID-19 pandemic, inflationary pressures, recessionary fears and the ongoing conflict in Ukraine. Based on the current business environment, recent performance and these current trends in the marketplace and subject to the risks and uncertainties inherent in forward-looking statements, the Company’s outlook for the third quarter and full-year 2022 includes the following:

Third quarter 2022:

  • Revenue in the range of $37.5 million to $39.5 million.
  • Adjusted gross profit in the range of $24.6 million to $25.9 million.
  • Adjusted EBITDA in the range of $3.1 million to $4.0 million.

Full-year ending December 31, 2022:

  • Revenue in the range of $160.0 million to $180.0 million.
  • Adjusted gross profit in the range of $105.9 million to $119.0 million.
  • Adjusted EBITDA in the range of $17.5 million to $27.5 million.

Although the Company provides guidance for Adjusted EBITDA, it is not able to provide guidance for net income, the most directly comparable GAAP measure. Certain elements of the composition of net income, including stock compensation expense, are not predictable, making it impractical for the Company to provide guidance on net income or to reconcile its Adjusted EBITDA guidance to net income without unreasonable efforts. For the same reason, the Company is unable to address the probable significance of the unavailable information.

Tune in to Martech Cube Podcast for visionary Martech Trends, Martech News, and quick updates by business experts and leaders!

Previous ArticleNext Article