October 6, 2021 - On Monday, Sharethrough filed its preliminary prospectus as it seeks to list on the TSX Index under the symbol "STRX". Since no pricing or share details have been released, we will circle back once those details are made known. 

Sharethrough is an advertising technology company centered on real-time programmatic advertising. It is one of the largest independent omnichannel and omniformat ad exchanges in the world and its platform  maximizes performance and return on ad spend for advertisers while driving superior monetization for publishers. 

A company that immediately comes to mind in terms of competition is Acuity Ads Holdings (TSX:AT) which is also focused on programmatic advertising - which is largely considered, next generation. There is however, a difference between Acuity's platform and Sharethrough as an exchange, but more on that later. Here is a nice graphic that explains Programmatic Advertising'

Over the past twelve months, the company has generated $59M in revenue, 7.6M in net income and $15.9M in adjusted EBITDA. It also achieved 65% programmatic revenue growth and 114% publisher net dollar-based retention rate. 

The company's core markets include the US Programmatic and US Programmatic US Video Spends, which are growing at a compound annual growth rate of 21 and 26% annually. In total it has relationships with 700+ active Publishers & App Developers and 23,000 domains and apps including Zulily, Vice, Voc, Newsweek, Daily Mail and Variety among others. 

The company's growth strategy is pretty simple - it is all about increasing market share through the addition of new publishers and partnerships with brands & agencies. The company also mentions international expansion in Europe and Asia Pacific as key long-term growth drivers. This can be done either organically or through M&A. 

In terms of financial performance, it is seeing exponential growth. Not surprising given that programmatic advertising has been booming which has led to big spikes in growth for others in the industry. Here is a nice chart that depicts current growth trajectory. The question investors must ask themselves, is 2021 growth sustainable over the long term. Keep in mind, their target markets are growing between 21-16% annually, so recent performance implies they are gaining market share. 

In 2020, the company posted a net loss which isn't all that surprising considering the significant drop in ad spend globally. However, it looks like it is back on track with positive net income and positive adjusted EBIDTA over the last twelve months. The company should continue to be profitable moving forward given its margins and efficiency. 

The competition in this area is fierce as digital advertising is a lucrative business. According to the company: 

"We compete for ad spend on our platform with other SSPs and advertising exchanges. This primarily includes large SSPs such as Magnite, PubMatic, TripleLift, Index Exchange and OpenX, and smaller private SSPs, as well as large digital advertising platforms such as Google, Facebook and Amazon"

Overall, this is yet another interesting company. There will be some publicly traded comparatives such as Magnite (NASDAQ:MGNI) and PubMatic (NASDAQ: PUBM) so once pricing is released, we will see how the company compares. In Canada, there is really only Acuity Ads  but that is a demand side platform vs an ad exchange. There is a difference and this blog from Acuity helps investors understand the difference.

Regardless, they are both in the same space and should in theory command similar multiples.