Yahoo Finance
Filing
July. 10, 2020
2020 Q1 Data
Price: $0.61 Shares:55m, Cap: $34m, Options+warrents: 10m
1.Business
(1) History
This is an Israeli company founded by Omri Brill in 2006. It was also known as Podium Advertising Technologies. It is an AdTech company focusing on online advertisement management, optimization and etc. It slowly grew its revenue to 1.1m in 2011. By 2019, it generated over 11m in revenue. It IPOed in the middle of 2019 through a reverse merger.
(2) Major business
The company's main products include a serial of software that manages different aspects of online ads including reporting, auditing, optimization, auto biding, etc. It has two main segments of customers.
1. Indirect customer: These customers are mainly ad agents. The company provides software and service for them to manage their ad account. This segment has a very high gross margin.
2. Direct customer: It manages the customer's ad campaign directly. It also pays the media cost for the customer. This segment has a much lower gross profit.
Since 2018, the company has intentionally tried to grow more of its indirect business over the direct business.
(3) Debt
$3.7m cash and no debt.
(4) Industry
Currently, google accounts for 40% of total online advertising and Facebook accounts for another 20%.
The Adtech industry has quite a lot of competition. Most of them are private companies. It is really hard to compare them without in-depth knowledge of online advertising.
2. Management
(1) Key person
Omri Brill is the founder and is the current CEO. He has a tech background and is the original creator of the Adcore software. So far the company has been managed pretty well.
(2) Insider ownership & Compensation
2. Management
(1) Key person
Omri Brill is the founder and is the current CEO. He has a tech background and is the original creator of the Adcore software. So far the company has been managed pretty well.
(2) Insider ownership & Compensation
Omri Brill originally owns all shares of Adcore. After the IPO, his shares had been converted into 40m new Adcore shares. Which is over 72%. On a diluted basis, he still owns over 60%.
3. Financial data(in USD$)
4. Valuation and comments
(1) Currently, the company is traded above 2 times its annual revenue. It has generated over 2m in income since 2018. It has been traded less than 15 times P/E. It is quite cheap.
5. Risk
(1) The company is a new public company.
(2) The online advertising business is quite dynamic and subject to quick changes.
(3) It is hard to tell how the company compares to other companies. What are its competitive advantages?
6. Conclusion
Overall, the company seems very profitable, grow very well, and is managed well. However, since it is new and in a very dynamic industry. Shouldn't invest heavily in the near term.
Overall, the company seems very profitable, grow very well, and is managed well. However, since it is new and in a very dynamic industry. Shouldn't invest heavily in the near term.
7.Links
Dec. 13, 2021
2021 Q3 Data
Price: 0.65, shares 63.5m. Market Cap: 41m. around 7m options < $0.65/share
1. Since Q4 2020, the company's US revenue dried out while APAC area revenue has been picked up. It had generated over US$30m in revenue for the TTM. However, the majority of those revenues are direct revenue which has a much lower margin.
2. In July 2021, the company started a new live online tutorial marketplace website called Amphy. It is still in a very early stage. During Q2 and Q3, the company had spent over USD$1m launching this service.
3. For the first 3Q 2021, real income is around USD$-500k. If added back the cost of Amphy, the real income could be around USD$0.5m.
4. Currently, the company has around USD$12m in cash and no debt. Most of the cash was from the options and warrants exercise.
5. The company's profit has been down quite a bit after the IPO. Currently, it probably generates just around USD$1m in annual income excluding the expense for Amphy. If removing the USD$12m cash from the cap, its market cap is around USD$20m which is around 20 P/E. However, as indicated by the management, it is intended to sacrifice profit for growth in the near term. The margin might pick up if it can grow its revenue. Also, there are two potential catalysts, 1) If Israel tourism recovers from the pandemic, it will resume Ad spending with Adcore. 2) The Amphy service might be worked out.
6. Overall, it might be worth the current price. However, the company still has lots of uncertainty, shouldn't invest heavily.
