Geeks: 14% decrease in revenue along with the transition to profitability – the capital market

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Geeks
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(Formerly Algomizer), which develops technology systems for Internet advertising and marketing (MarTech), reports a decrease of about 14% in revenues, along with a net profit of about NIS 285,000.

The company’s revenues in 2020 amounted to NIS 131 million, a decrease of 14% compared to NIS 152 million in 2019. The decrease is attributed to the effects of the corona crisis that led to a slowdown in essential power activity in the number of searches, a decrease in global advertising budgets

In annual summary, the net profit amounted to NIS 285,000, compared with a net loss of NIS 43 million in 2019. The transition to a net profit is attributed to the process of streamlining and reducing operating expenses. In addition, in 2020, there was a decrease in financing expenses following the repayment of loans, which also contributed to an increase in net profit.

Operating profit amounted to NIS 3.3 million, compared with an operating loss of NIS 6.4 million in 2019 – an increase of 152%. According to the company, the transition from loss to operating profit is despite the effects of the corona crisis, thanks to the streamlining process that led to a decrease in the group’s operating expenses.

The annual EBITDA (operating profit before depreciation and amortization) amounted to NIS 9.6 million, an increase of 43% compared to NIS 6.7 million in 2019. Adjusted EBITDA was NIS 10 million, an increase of 14% compared to NIS 8.8 million in 2019.

The company explained that “the corona crisis has affected the market in which the company operates in two opposite directions: on the one hand, the field of digital advertising, especially during the second and third quarters of 2020 was affected by declining global advertising budgets, declining demand for Internet advertising space and / or declining RPM. “Second, the restrictions on gathering and leaving home have caused a large audience to operate on the Internet for the purpose of consuming information and content as well as for work purposes – this trend has had a positive effect on the daily amount of searches.”

The company estimates for the future that “if and to the extent that the corona crisis continues and intensifies, the company’s management may continue to decline RPM and consequently the company’s advertising revenues based on global advertising budgets; cash flow from the company’s current operations; “Distribute dividends in the future. However, in the company’s management, the Corona crisis will not harm the company’s ability to service its debts in the future in light of actions it has taken and continues to take that allow it to continue its business operations.”.

Amichai Hadad, CEO of Geeks: “We achieved an improvement this year in most financial parameters. The transition to a net profit in Corona – a consequence of the streamlining and targeting processes we took this year. During 2020, with the outbreak of the Corona crisis, the company closely monitored changing conditions and took various actions. The actions taken by the company included, among other things, streamlining and reducing expenses, streamlining media purchasing, upgrading computer equipment – to enable continuous work from home for all employees, etc.