#24: Q4+FY21 Rundown
15 out of 18 adtechies near 52-Week Low
Reading Time: 13 minutes
After each quarterly earnings season in Programmatic Land, we update our model and tell you what we see. For our growing community’s delight, we’re adding a company-by-company rundown that will follow our quarterly model update. Here’s how our portfolio rundown works:
Where do they stand against 52-Week Low?
Out of all 18 adtechies that we track, only three are above 52-week lows (for now) — AdTheorent, Zeta, and Innovid. All the other 15 companies are very close to 52-week lows. Some will no doubt dip into new territory and struggle to gain upward momentum.
The Trade Desk / DSP / TTD
Biggest News: TTD launched “Open Path,” a direct-to-publisher inventory strategy. That means TTD is looking to get in the sandbox on direct terms with publishers just like agencies do. And who knows, maybe TTD is looking to kick SSPs out of the sandbox at some point. Technically it’s not a problem, but will enough publishers want to play as they add more bricks to their walled garden? Frenemies unite!
QoQ revenue was up 24% ↑ from 2021.
Based on Q4 net revenue of $320M last year, TTD's forward annualized run-rate expectation for 2021 was $1.3B. Management just missed, with 2021 full-year revenue coming in at $1.2B.
TTD’s stock price is down -31% ↓ since the 21-Q4 earnings call a few weeks ago.
Unicorn Status: “In” at $26B in market cap and slipping. It used to be above $40B at its peak, but still #1 on our list.
Criteo / DSP / CRTO
Big Hiring News: Criteo hired media industry heavyweight Brian Gleason from GroupM as CCO. Given his background at GroupM and Xaxis, he’s a proven sales dude putting points on the board. Criteo also made a big splash in Q4 buying Russia-based IPONWEB, a company that happens to power pretty much every adtech company in some way, shape, or form. And just like Winston Churchill said about Russia, IPONWEB (and the programmatic ecosystem) is a riddle, wrapped in a mystery, inside an enigma. At least for marketers, that's been mostly the case. CRTO is the only company that provides take-rate transparency and reasonable unit economics to understand its health and future (see our analysis here.)
QoQ net revenue was up 12% ↑ from one year earlier.
Based on Q4-2020 net revenue (ex-TAC) of $219M, CRTO's forward run-rate expectation for 2021 was $874M, but management missed by 11%, coming in at $782M.
Similar to TTD, CRTO’s stock is down -30% ↓ since its earnings call at a 52-week low.
Unicorn Status: “In” with $1.6B market cap.
S4 Capital / Creative & Media Agency / SFOR.L
Biggest News: We think the big news for S4 Capital (Media.Monks) will come when management reports more solid FY2021 results around March 18. Like so many others, we’re looking forward to hearing what Sir Martin Sorrell and the team have to say about the ad world and the global economy at large.
Based on half-year results of £279, we expect SFOR.L to come in with FY2021 gross revenue of at least £558.
The stock has taken a beating since our Q3 update in November, off –30%.
Our agency tracking portfolio as a whole is off –11% since November IPG, OMC, PUBGY, WPP, DNTU, SFOR.L and NFC.L) while the S&P is off –7% over the same time period. When we exclude all-digital agencies (S4 Capital and Next Fifteen Communications) and look only at legacy holding companies, that portfolio sub-group is up +5% since November.
Unicorn Status: “In” at $2.3B, but S4 has lost over half its value since reaching a peak in September 2021.
Magnite / SSP / MGNI
Biggest News: Nothing game-changing to report, other than potentially getting squeezed by The Trade Desk's “Open Source” launch. That said, Magnite was "selected" by GroupM to power its new GroupM "Premium Marketplace" in North America as a preferred technology partner. GroupM chose Pubmatic for the same drill in EMEA.
QoQ net revenue was up 97% ↑ (MGNI no longer reports advertising spending flowing through its platform).
MGNI's run-rate expectation for 2021 was $328M, and management exceeded forward year potential by a whopping 43%, coming in at $468M. A meaningful share of this increase is due to Telaria/SpotX acquisitions vs. organic growth. Another component of net revenue growth that could be conflated with “organic” growth is an increase in undisclosed take-rates.
All in all, the stock is down 10% ↓ since Q4 earnings.
Unicorn Status: “In” at $1.4B and falling.
Pubmatic / SSP / PUBM
Biggest News: PubMatic was selected by GroupM to support its "Premium Supply Chain of the Future" in EMEA. Magnite got the better end of the stick taking that coveted prize known as North America, where everything is bigger. Since words like "premium" or "transparency" lost all their meaning in Programmaticland long ago, we’re not sure what to make of this “news.” Is it just another fugazi to keep the same programmatic show running 24/7 365, or will marketers be better off thanks to this so-called premium supply? What makes it so premium? You see, when you start to dig into these new client storytelling approaches, you usually find more story than substance. If it’s really just the same ol’ inventory packaged in a new way. It’s just like how Pizza Hut takes 4 ingredients — dough, tomato sauce, cheese, and pepperoni —to make endless variations of the same exact thing… pizza. The only thing that matters is whether marketers like to eat pizza for breakfast, lunch and dinner. Will they buy the new story? If historical behavior is a good predictor, the odds say they will but the “new” pie.
QoQ net revenue up 35% ↑ from one year earlier.
PUBM's forward run-rate expectation for 2021 was $225M, and management just made it by 1%, coming in at $226M.
That result drove the stock down by –39% ↓ toward a 52-week low. Investors might be worried about PUBM’s ability to attract ad budget and extract more take-rates.
Unicorn Status: “In”... but just by a hair at $1B in market cap value.
Roku / Publisher (with DSP+SSP components) / ROKU
More CTV News — hurray! Roku is heavily vested in programmatic CTV ads. The problem now (and even more so down the road) is no one knows where all this supposed ad-supported CTV ad inventory is lurking. And is it murky? Caveat emptor is the best advice we can give marketers lost in the dark forest of Programmaticland, but don’t hold your breath. If anything moves investor sentiment in the right direction for a programmatic stock, it’s the notion that marketers aren’t the caveat emptor types. If they were, media budgets would be cut in half, and CFOs would book tons of present-value cash for shareholders.
QoQ revenue was up 27% ↑ from 2021.
Roku did $680M in Q4-20, putting 2021 run-rate expectations at $2.72B — management barely made it at $2.76B.
ROKU’s stock is down -38% ↓ since earnings.
Unicorn Status: “In” with $13.8B in market cap value taking the #2 position in our portfolio behind TTD.
LiveRamp / Data Provider / RAMP
Good News: LiveRamp's biggest challenge and biggest opportunity is dealing with — and benefiting from — the demise of third-party cookies. As that story continues to evolve, all investors care about is continued revenue growth and scaling it through RAMP’s invested capital to eventually reach profitability. So far, so good. RAMP's earnings are heading in the right direction with every passing quarter, but the road ahead is still blurred by a not-to-distant cookieless horizon.
RAMP’s QoQ revenue was up 10% ↑ from a year earlier.
Based on Q4-2020 revenue of $127M, RAMP's forward run-rate expectation for 2021 was $508M — and just like its adtech peers, management got one toe close to the finish line at $506M.
RAMP’s stock price is down -24% ↓ and trading at a 52-week low.
Unicorn Status: “In” with $2.3B in market cap value taking the #4 position in our portfolio.
Integral Ad Science / Content Verifcation / IAS
Minor News: Other than IAS's acquisition of Context, a Paris-based company that uses some flavor of artificial intelligence to do image and video classification, we don't see much going on at IAS that makes marketers better off. Of course, if you're a marketer that wants to feel like you're better off, but you're not actually any better off at all, then IAS of DV might have just what you need. We can’t help but wonder: If content verifications are so good at what they do, then why can’t they catch players like Gannett’s domain misrepresentation snafu before advertisers get a bill for their fees? Bob Hoffman summarized this story well in his Saturday post (March 13) saying, “not a single fraud detection company, or media auditing firm unearth the fact that...billions of ads went to the wrong places?” The best analogy we can come up with is an investor buying junk bonds that get rated A+ no matter what just to feel better about.
QoQ revenue change from one year earlier was up 31% ↑
With Q4-2020 revenue at $78M, IAS's forward annualized expectation for FY2021 was $313M — management exceeded by a slim 3%, coming in at $324M.
That didn’t help the stock performance, down 31% ↓ since the Q4 earnings call and heading to a 52-week low.
Unicorn Status: “In” with $2B in market cap, but trading just above a 52-week low.
DoubleVerify / Content Verifcation / DV
No Big News: DV is in the same boat as IAS, but with $211M in cash and no debt vs. IAS with just $73M in cash and $242M in long-term debt, they have more wiggle room to make changes.
QoQ revenue change up 35% ↑
Based on Q4-2020 revenue of $78M, DV's 2021 run-rate goal was $312M — management made it by 5%, coming in at $327M.
Stock performance since earnings is down -13% ↓
Unicorn Status: “In” with $3.4B in market cap and #3 on our list, but just like IAS it’s trading just above a 52-week low.
Taboola / Content Recommendation / TBLA
Most Incredulous News: Just when you thought programmatic advertising was the beacon of high standards, Taboola was awarded the Gold Standard 2.0 Certification by the IAB UK. By achieving this highly coveted and totally unbiased certification means Taboola has gone through an incredibly thorough vetting process, and IAB UK assures the world that Taboola "upholds the high standards in brand safety, user experience, and more." The part we like best is "and more"... whatever that means. Anywho… Taboola’s biggest problem is dealing with the general macro trend taking marketers toward a flight to inventory quality. That’s not where Taboola plays today. With $319M in cash but $285M in debt, that’s too much dry powder to get into a new game.
QoQ net revenue (ex-TAC) from 2020 was up 54% ↑
Q4-2020 revenue was $93M, implying a 2021 run-rate expectation of $372M. Management exceeded it by 19%, with FY2021 revenue coming in at $441M.
Taboola’s stock price is down -24% ↓ since Q4 earnings and heading toward a 52-week low.
Unicorn Status: “In” but just by a hair at $1.1B.
Outbrain / Content Recommendation / OB
Biggest News: Outbrain released a new product called “Engagement Bid Strategy” (EBS), which is supposedly yet another AI-based performance optimization solution that does not use website cookies or tracking codes. Evidently, EBS analyzes campaign performance and audience behavior data directly from the advertiser analytics system and automatically optimizes campaigns. We used a gibberish translator to put this in layman’s terms: “EBS unulyzas cumpuegn parfirmunca und uodeanca bahuveir dutu deractly frim tha udvartesar unulytecs systam und uotimutecully iptemezas cumpuegns.” We’re glad you get it now!
QoQ ex-TAC net revenue was up 15% ↑ from 2020.
With $59M in Q4-20 revenue and an annualized run-rate expectation for 2021 at $234M, OB squeezed through by 3%, coming in at $240M.
It’s the same story as Taboola. OB’s stock price since earnings is down -22% ↓ and very close to a 52-week low.
Unicorn Status: “Out” and by a long shot at just $610M in market cap.
Zeta Global / DSP (with data provider components) / ZETA
Biggest News: Nothing notable to report with Zeta, but we do wonder what percentage of its revenue is managed service? From a valuation perspective, Quo Vadis is okay with running a managed service business as long as it’s layered on great tech, and only if senior management can find awesome line managers that can materially increase labor productivity and extract surplus value like Criteo and Trade Desk do with their managed service staff. We think any adtech company’s attractiveness to media agencies that look to cut costs and suffer talent shortage/weakness as clients add pressure to spend media budgets with fewer resources translates to more managed service demand for those who can handle it and sustain it.
QoQ revenue was up 18% ↑
With Q4-2020 revenue at $114M, ZETA's forward expectation for 2021 was $456M. Management made it a real nail-biter, coming in at $458M.
Zeta’s stock is down -7% ↓, but up overall from its IPO date.
Unicorn Status: “In” at $2.0B in market cap and one of the better more recent stock performers.
Tremor / DSP / TRMR
Nothing Major to Report: Nothing major to report with Tremor. Like their smaller DSP competitors, building and sustaining an efficient managed-service offering is top of mind when thinking about how smaller players will compete for advertiser and agency attention.
Just like Zeta, QoQ revenue was up 18% ↑ from 2021.
TRMR's forward run-rate expectation for 2021 was $348M, and management got really close with $341M, falling 2% short.
Nonetheless, stock performance since their earnings announcement is up 7% ↑
Unicorn Status: “Out” at $830M in market cap.
AdTheorent / DSP / ADTH
Biggest News: One thing that’s different about ADTheorent compared to other smaller players is 15% net profit margins. You can push out all kinds of press announcements, but all investors care about at the end of the day are the profits squeezed from revenue growth and cash flow. If you can’t do that, then expect stock price pressure.
QoQ revenue was up 17% ↑ from 2021.
ADTH fell -12% short of run-rate expectations in 2021, coming in at just $165M.
For one reason or another, investors like the revenue story, moving the stock up 35% ↑ since Q4 earnings.
Unicorn Status: “Out” at $813M in market cap, but the stock price is performing after Q4 earnings.
Acuity / DSP / ATY
News: Nothing earth-shattering to report.
QoQ Revenue change from one year earlier, up just 5% ↑
With just $35M in Q4-20 revenue, ATY's forward run-rate expectation for FY2021 was $140M — management missed, coming in way low at $122M.
Stock performance since their earnings announcement a few days ago is down -15% ↓
Unicorn Status: Way “Out” at just $145M in market cap ATY is the smallest player in our portfolio.
Innovid / Ad Serving / CTV
News: No news is good news, isn’t it?
QoQ revenue was up 13% ↑ from 2021.
CTV fell 2% short of run-rate expectations, coming in at just $90M in 2021.
But similar to AdTheorent, moderate revenue growth pushed the price up 44% ↑
Unicorn Status: “Out” with just $760M in market cap
Buzzfeed / Publisher / BZFD
Buzzfeed does not report Q4 and FY21 numbers until March 22. The company just went public in December and the stock is off 55%, so we’re looking forward to seeing how management is going to right the ship and move from $622M market cap toward Unicorn status.
Viant / DSP / DSP
With just $365M in market cap, Viant is the second smallest company we track. We’ll see where they stand when they report Q4/FY21 on March 28.
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