iClick Interactive Asia Group Limited - Enterprise Solutions Business Extends

Rhea-AI Summary

The quarterly earnings report for iClick (Nasdaq: ICLK) for Q3 2020 shows record revenue of US$68.9 million, a 27% year-over-year increase. The company's Enterprise Solutions segment experienced a remarkable 236% growth, driven by strong market demand. Adjusted EBITDA rose by 225% year-over-year to US$4.7 million, maintaining positive adjusted net income for the fourth consecutive quarter. The company expects Q4 revenue between US$73 million and US$76 million, with an annual forecast of US$240 million to US$260 million.

Positive

• Record revenue of US$68.9 million in Q3 2020, up 27% year-over-year.
• Enterprise Solutions revenue increased by 236% year-over-year to US$8.8 million.
• Adjusted EBITDA rose 225% year-over-year to US$4.7 million.

Negative

• Net loss of US$7 million attributed to fair value losses in convertible notes and derivative liabilities.

NEW YORK, Nov. 30, 2020 /PRNewswire/ -- Record-Breaking Growth iClick (Nasdaq: ICLK) released its quarterly earnings ended September 30, 2020 on November 24. The company's high-margin SaaS Enterprise Solutions business has been enjoying very strong market demand since the announcement of its Tencent partnership. Riding on the strong momentum, the Enterprise Solutions segment reported record-breaking growth for the fourth consecutive quarter in the third quarter of 2020.

3Q-2020 Earnings Highlights

Returned record revenue and gross profit, marking fourth consecutive quarter of sequential growth in the Enterprise Solutions segment.

Adjusted EBITDA increased by 225% year-over-year, and marked the fourth consecutive quarter of positive adjusted net income.

Well-capitalized cash position to enable business plan execution and active M&A strategy.

Business Update & Outlook 

Share Repurchase Program - As of September 30, 2020, iClick has purchased the company's shares for an aggregate value of US$0.7 million, since the management announced a share repurchase program on January 15, 2020, in which it may purchase up to US$10 million worth of its own ADS over the 12-month period ending on December 29, 2020.

For the fourth quarter of 2020, management expects the company's revenue to range between US$73 million and US$76 million, or a quarter-over-quarter increase of 6% -10%, and a year-over-year increase of 28% - 33%. Among which, Enterprise Solutions revenue is expected to range from US$8.5 million to US$10.5 million. Growth profit is expected to be between US$20.5 million and US$23.5 million, representing a year-over-growth of 20% - 38%.

And for the full year of 2020, management expects its revenue to range between US$240 million and US$260 million (a YoY growth of 20% - 30%), gross profit to range between US$70 and 75 million (a YoY growth of 23% - 32%), and adjusted EBITDA to be between US$14 million and US$17 million, compared to adjusted EBITDA of US$6 million in 2019.

Third Quarter 2020 Results Details:

Record-breaking growth in revenue from Enterprise Solutions business.

Total revenue grew ~27% year-over-year to US$68.9 million, attributable to the increase in contributions from existing Marketing Solutions, and especially from Enterprise Solutions.

Marketing Solutions revenue grew 17% year-over-year to US$60 million, and Enterprise Solutions revenue grow 236% year-over-year to US$8.8 million, mainly resulting from the increasing integration need for online and offline consumers' behavioral data.

Growth billing was US$167.1 million, representing a 7% year-over-year decrease. The decrease was primarily due to the Company's efforts to optimize its client base, in order to achieve better credit control and to retain and/or attract financially sound customers amid uncertain macroeconomic environment.

Significant year-over-year growth in adjusted EBITDA and net income.

Gross profit grew 48% year-over-year to US$20 million, primarily owing to continual expansion of Marketing Solutions and increasing contribution from the higher-margin Enterprise Solutions.

The company reported adjusted EBITDA of US$4.7 million, increased 225% year-over-year, mainly due to strong gross profit growth. Though the net loss totaled US$7 million, mainly due to the fair value losses in convertible notes of US$1.4 million and in derivative liabilities of US$6.3 million, "adjusted" net income was US$2.4 million, up from US$0.5 million from a year ago, which marked the fourth consecutive quarter of positive adjusted net income.

Strong cash flow position allowing business expansion and the pursuit of M&A opportunities.

iClick's cash position has further enhanced following the equity financing in September.  As of September 30, 2020, the Company had cash and cash equivalents, time deposits and restricted cash of US$128 million, more than doubled from US$61 million as of Dec. 31, 2019.

The Company is well-capitalized, not only able to better execute its business plan, but also able to actively seek M&A opportunities as part of its long-term growth strategies.

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RISK FACTORS:  Earnings targets and opinions concerning the composition of market sectors included in this report reflect analyst judgments as of this date and are subject to change without notice. A risk to our earnings targets is that the analyst's estimates or forecasts may not be met. This report contains forward-looking statements, which involve risks and uncertainties. Actual results may differ significantly from such forward-looking statements. Factors that may cause such differences include, but are not limited to, those discussed in the "Risk Factors" section in the issuer's SEC filings available in electronic format through SEC Edgar filings at www.sec.gov.

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SOURCE iClick Interactive Asia Group Limited

FAQ

What were iClick's earnings for Q3 2020?

iClick reported earnings of US$68.9 million for Q3 2020, a 27% year-over-year increase.

What is the expected revenue range for iClick in Q4 2020?

iClick expects Q4 2020 revenue to range between US$73 million and US$76 million.

How much did iClick's Enterprise Solutions revenue grow in Q3 2020?

Enterprise Solutions revenue grew 236% year-over-year to US$8.8 million in Q3 2020.

What was iClick's adjusted EBITDA for Q3 2020?

iClick's adjusted EBITDA for Q3 2020 was US$4.7 million, representing a 225% year-over-year increase.

What is iClick's full-year revenue forecast for 2020?

For the full year of 2020, iClick forecasts revenue between US$240 million and US$260 million.