Illumin Holdings Inc. ((TSE:ILLM)) has held its Q3 earnings call. Read on for the main highlights of the call.
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During the latest earnings call, Illumin Holdings Inc. presented a mixed sentiment, highlighting robust growth in Exchange and adjusted Self service revenues. However, these positive developments were overshadowed by notable declines in Managed services and gross margins, alongside an increased net loss. While the company’s strategic pivot and leadership changes are promising, significant challenges in Managed services and profitability persist.
Exchange Service Revenue Surge
Illumin Holdings reported a remarkable 103% year-over-year increase in Exchange service revenue, reaching $20.5 million and now accounting for 54% of total sales. This surge underscores the company’s successful strategic shift towards outcomes-based platforms, marking a significant milestone in its growth trajectory.
Self Service Revenue Growth Adjusted for Client Exit
The Self service revenue stood at $8.3 million, appearing flat due to a large client pause. Excluding this factor, the revenue actually grew by 15% for the quarter and 34% year-over-year, with the addition of 23 new clients, highlighting the underlying strength of this segment.
Operational Restructuring and Cost Management
In a bid to enhance profitability and platform leverage, Illumin Holdings implemented cost containment and restructuring initiatives. These efforts resulted in a reduction of operating expenses from $18 million in Q3 2024 to $17.5 million in Q3 2025, reflecting the company’s commitment to financial discipline.
New Leadership to Drive Growth
The appointment of Brian Garrigan as Chief Revenue Officer marks a strategic move to bolster global sales and drive scalable growth. His leadership is expected to play a pivotal role in steering the company towards its ambitious growth objectives.
Decline in Managed Service Revenue
Managed service revenue experienced a significant decline, dropping to $9.4 million from $17.8 million in Q3 2024. This decrease was attributed to larger economic uncertainties and shifts in customer marketing spend, posing a challenge for the company.
Decreased Gross Profit and Margin
The gross profit for Q3 2025 was reported at $14.4 million, down from $17.2 million in Q3 2024, with a gross margin decline from 47% to 38%. This was primarily due to a shift in product mix and increased media-related costs, impacting overall profitability.
Increased Net Loss
Illumin Holdings reported a net loss of $2.1 million for Q3 2025, up from a net loss of $1.1 million in Q3 2024. This increase was driven by lower adjusted EBITDA and higher depreciation, amortization, and severance expenses, highlighting the financial challenges faced by the company.
Forward-Looking Guidance
Looking ahead, Illumin Holdings aims to scale its Exchange and Self service lines, focusing on product innovation and operational restructuring to drive profitability. The company plans to emphasize incrementality measurement and AI-powered optimization as part of its growth strategy, reflecting a forward-thinking approach to overcoming current challenges.
In summary, Illumin Holdings Inc.’s earnings call presented a complex picture of growth and challenges. While the company has made significant strides in Exchange and Self service revenues, it faces substantial hurdles in Managed services and profitability. The strategic pivot and leadership changes offer hope for future growth, but the path forward requires careful navigation of economic uncertainties and operational adjustments.