GLN reported annual revenue of $20 Million, up 106% since 2017 and trailing combine revenue of $48,000,000. Exceptional growth for our first year as a publicly traded Company (See 2018 audited financials www.sedar.com filing and our website: https://glninc.ca/financials/). Here are the answers to a few great questions we have received about our financials, specifically, margins, accounts receivable and EBITDA.
Why are Accounts Receivable so high in Digital Advertising?
The typical payment cycle in media and digital advertising can range from 60 to 90 days and in some cases 120 days.
GLN reported revenue of $20 Million in 2018 with $10 Million of Accounts Receivable yet to be collected. Subsequent to year end we have collected several million more. This percentage of AR collection is well within industry norms.
In December we acquired CTV (Connected Television) companies 495 Communication & ImpressionX, which increased revenue by $28 Million (trailing revenue) with an additional $10 Million in AR.
All 3 companies combined trailing revenue was $48 Million for 2018 with $20 Million AR. Our outstanding AR entity was 41%, compared to nearly 50% for Acuity ads year end, and is well within a typical range for the industry.
Why did we adjust margins to 30% in Q4 and 36% for 2018?
GLN management discussed this possible adjustment during the last 4 conference calls.
The industry standard margin is typically around 30%. GOOGLE disclosed their margin is approximately 35%, but they’re GOOGLE. Many of the other competing ad exchanges range between 25-30%. We decided to strategically align GLN’s margins with the industry standards for marketing purposes.
We are focusing on the long-term success of GLN and have made shorter term adjustments in order to align with our customers and industry expectations and provide sustainable value for our shareholders.
And finally, why was EBITDA lower than expected?
We have an aggressive growth strategy through accretive acquisitions which allows us to scale and grow quickly to critical mass. Although the strategy is capital intensive, the large investments back into the company we anticipate will pay off in the long term (already realized by two large acquisitions). As a high growth company, we must analyse each opportunity, acquisition and tech advancement that comes along, knowing that every cent of any executed investment will come out of EBITDA.
We are working on a mobile platform project we believe has great potential. This opportunity would give us exclusive rights to represent a significant number of users on potentially millions of USA mobile handsets. We anticipate that this exclusive, direct to consumer opportunity will positively increase value to all our shareholders. As such, we decided to take a modest amount of the EBITDA, around $800K, and invest it in the R&D of this opportunity. EBITDA would have been $3.1M had we not had this one-time $800k expense.
We will be releasing more news on this project in the near future.
We would like to thank everyone for their continued support and value feedback on our first annual financial results as a public company. It’s an exciting time to be in ad tech with the surge of connected television and mobile, and we look forward to our continued success in 2019!
The best is yet to come.
Forward Looking Statements
Good Life Network’s 2018 Financial Statements Q&A Forward-looking statements relate to future events or future performance and reflect the expectations or beliefs regarding future events of management of GLN. This information and these statements, referred to herein as “forward‐looking statements”, are not historical facts, are made as of the date of this news release and include without limitation, statements regarding discussions of future plans, estimates and forecasts and statements as to management’s expectations and intentions with respect to the performance of the company. These statements generally can be identified by use of forward-looking words such as “may”, “will”, “expect”, “estimate”, “anticipate”, “intends”, “believe” or “continue” or the negative thereof or similar variations. These forward‐looking statements involve numerous risks and uncertainties and actual results might differ materially from results suggested in any forward-looking statements. Important factors that may cause actual results to vary include without limitation, risks relating to the digital advertising industry and general economic conditions, success of acquisitions and any growth strategies implemented by the company. In making the forward‐looking statements in this post, the Company has applied several material assumptions, including without limitation that any acquisitions and corporate directives and initiatives will be successfully completed in the time expected by management and produce the desired results, generate the anticipated revenue and expand GLN’s global reach per management’s expectations. GLN does not assume any obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements, other than as required by applicable securities laws. Additional information identifying risks and uncertainties is contained in GLN’s filings with the Canadian securities regulators, which filings are available at www.sedar.com.
