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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good morning, everyone. Before we begin the official remarks, I will read the cautionary note regarding forward-looking information.
Certain information to be discussed during this call contains forward-looking statements within the meaning of applicable security laws, including, among others, statements concerning the company's objectives, the company's strategy to achieve those objectives as well as statements with respect to management's beliefs, plans, estimates and intentions and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts.
Such forward-looking statements reflects management's current beliefs and are based on information currently available to management and is subject to a number of significant risks and uncertainties and that could cause actual results to differ materially from those anticipated. Please refer to the cautionary statements and the risk factors identified in our filings with SEDAR and EDGAR for a more detailed explanation of the inherent risks and uncertainties that could affect such forward-looking statements. Following the presentation, we will conduct a Q&A session.
I would now like to turn the conference call over to Tal Hayek, the Co-Founder and Chief Executive Officer of AcuityAds, to update you on the operations of the business.
Good morning, everyone. My name is Tal Hayek, and I'm the CEO and Co-Founder of AcuityAds. It is my pleasure to welcome you today to our investor video presentation, coming to you from our Toronto office. I'd like to start by thanking the Acuity family for delivering a solid Q2.
Changes in the world of advertising is something that's happening very rapidly. And we're very happy to be with illumin to be in the forefront of it to be the ones that are changing the world of advertising. illumin is not just another DSP. It has a lot of differentiation. And I'd like to touch what problem is the illumin solving.
Well, there's two major problem that illumin are solving. The #1 problem that it's solving is that there's a huge gap between the way marketers plan, which is the consumer journey, and the way that programmatic gets delivered, which is a black box completely disregards to the consumer journey. And illumin gives marketers the ability to plan the journey and then with one click to execute on it. So that is a huge problem that the market has been waiting for, for a long time and illumin solves that.
The second problem that it's solving is the ease of use. So today, in order to use any other DSP, you need to be a highly trained expert. You probably need to go to hundreds of hours of training, and it takes you many long hours to set up campaigns.
Because illumin is a drag and drop system, very intuitive, you do not need to be a highly trained expert. You can be an average user and with very, very little training, you can start dragging and dropping things into your journey and campaign and execute on it and it takes you a fraction of the time that it will take you when you use any other DSP.
So as we see the success of illumin, we're continuing to invest into it for the rest of 2022 with lots of enhancements to the workflow. We're doing -- we're making improvements to improve and reduce the time it takes a person to set up campaign and to maintain a campaign.
Journey management, so making it easy to maintain those campaigns. So at the end of the day, one person will be able to maintain multiple more campaigns than they can on traditional DSPs. Improving the path, the whole concept of the path to support more complex campaign that will not need dozens and dozens of path to be created. So this is something that we introduced lately that we're seeing great results out of.
So we believe that Acuity and illumin is the best investment we can make. And this is why we keep buying our own shares as a company, and the management team keeps buying shares on a personal level too .
Q2 was all about illumin growth. In fact, we saw major illumin growth on self-serve as well, which is something that we're highly focused on. Overall, Q2 revenue grew by 18.6% sequentially quarter-over-quarter to $28.3 million and down 6.6% year-over-year.
Percentage of the illumin revenue versus overall revenue, we're seeing improvement ever since we started. So we launched illumin in Q4 of 2020, it was 4% of revenue. It is now 36% of revenue, and as we predicted, we do believe that we will exit the year with a run rate of 50% illumin revenue.
The number of clients using illumin, again, it's growing significantly. When we started, it was 9 clients using it Q4 2020. We now have 77 clients using it. And what we do all the time, it's all about bringing more customers and expanding the spend per client that we're seeing on illumin.
So when we saw last year, at the same time, Q2 of 2021, we saw $5.2 million revenue from illumin. And in Q2 2020, up 96% at $10.2 million in revenue. And the most exciting part that we're seeing is self-serve in illumin.
So we've communicated in the past that we made some investment in Q1 of this year. We set up a dedicated team, and we're starting to see great results for it. Still early days. But look, in Q3 of 2021, we hardly had any revenue coming from self-serve illumin. We now have over $1 million in Q3, and the future is looking rosy for that as well. From a client growth, in Q3 of 2021, we had 10 clients in self-serve illumin. We now have 31 clients on it. Our mission in life is to start adding more and more of those clients into the self-serve system.
And from a specific vertical, before I talk about the specific vertical growth, I do like to mention that we are a platform. And as such, we can deal with any vertical out there. And it's very easy for us to adapt from one vertical to another when economic condition changes as well.
But the 3 that I'd like to highlight right now is we've seen 26% growth in the tech space. We've seen 180% growth in the professional services space and 236% growth in financial and insurance space.
Elliot Muchnik will now talk about Q2 financials.
Thank you, Tal. Good morning, and thank you for joining us today. We are pleased to announce our Q2 2022 financial results, which demonstrate strong progress within our pipeline and illumin client expansion, factors that we believe position us well for the balance of the year.
We continue to focus on creating a strong foundation for delivering illumin to our clients around the world in expanding the reach and capability of our unique and industry-leading technology to advertisers.
The economic challenges we all face are creating greater uncertainty and volatility. This impacts the predictability of our revenues, and we continue to closely monitor and listen to our clients about their concerns and the challenges they may be anticipating in the future within the current environment. We strongly believe that our best path forward is to invest in our future, invest in our people, product and platform and in our organization's strength.
So despite these economic headwinds, we saw sequential growth in Q2 over Q1, both in overall revenue and in illumin's proportion of that revenue. We expect to build on that momentum and we do expect stronger year-over-year growth in the second half of 2022. And on that note, I would like to discuss our financial results for Q2.
Our total revenue was $28.3 million, an increase of 19% over Q1 at $23.8 million and a decline of 7% from the Q2 of last year at $30.3 million. Our managed services component of that revenue was $18.2 million in the second quarter of this year, compared to $23.6 million in Q2 2021, a decrease of 23%. We attribute the decline to the impact of the economic headwinds that are impacting certain industry segments and the growth of our self-serve component of our business.
Our self-serve revenue was $10.1 million or 36% overall, and it increased 52% over Q2 2021. This growth is driven by increased adoption of illumin by a number of major global brands, reflecting the ease-of-use design, which naturally lends itself to self-serve usage. Our focus and efforts here are showing great traction.
Our revenue from illumin overall rose 96% in Q2 to $10.2 million compared to $5.2 million in the Q2 of 2021. Year-to-date, illumin revenue is $18.1 million for the 6 months ending June 30, up over 118% for the same period last year. Gross profit or net revenue was $14.7 million in Q2 compared to $15.8 million in the Q2 prior year, a decrease of 7%.
Our gross margin in Q2 of this year was 51.9%, in line with prior quarters and the 52.2% we achieved in the second quarter of 2021. We continue to benefit from our system and our execution strength on generating strong margins but expect the percentage to decline slowly as the proportion of self-serve revenue continues to increase.
Our operating expense for Q2 equaled $16.7 million compared to $13.3 million for the same period in 2021, an increase of 26%. As we discussed in prior calls, the increase reflects our strategy to expand our capability and reach within the North American market as well as Europe and Latin America to build stronger brand presence and recognition and to continue to enhance and build on the functionality of our product. We are seeing the impact of these efforts in our pipeline and in the opportunities that are being created for our product. We strongly believe that we have the right foundation to build on for the second half of this year and for the future. And a significant part of the OpEx increase, or almost 1/3, are costs directly related to our NASDAQ listing, increases in insurance, listing fees, legal costs that are the most material aspects.
Operating expense as a percentage of revenue totaled 59.1% in Q2 compared with 43.9% in the same period 2021.
Adjusted EBITDA this quarter was $1.5 million compared to $5.4 million for the same period in 2021. This decrease of $3.9 million was primarily attributable to our growth initiatives already discussed along with the lower revenues. Our net income for Q2 was $0.9 million, which is down from an income of $3.4 million in Q2 of last year.
As we mentioned earlier, we are actively repurchasing shares under our normal course issuer bid during the second quarter of this year. And in this quarter, the company purchased in cash of 2.3 million of its common shares at an average price of $3.15 for a total consideration of $7.1 million. We are allowed under the regulatory rules to purchase up to a maximum of 5.5 million shares. And as of this week, we have purchased in total 3.5 million shares for a total of $11.1 million in consideration. And this share repurchase actively demonstrates our confidence in our balance sheet as well as our fundamental belief in the company's long-term prospects.
As of June 30, 2022, our cash and cash equivalent now stood at $92.5 million compared to $102.2 million at the end of December of last year. Much of this change is related to our share repurchase during this quarter that I just discussed.
As of this -- as of the end of the Q2, Acuity had 59.1 million common shares outstanding. On a fully diluted basis, 63.7 million. Our insider ownership is at approximately 13%. And in Q2, in addition to purchases and cancellation of shares under our NCIB, insiders of the company purchased 360,000 shares in the open market.
Our first half of the year was about making a number of important changes in investments to support future growth. Given the progress we have seen and the continued success and growth of illumin, we are bullish on our growth prospects for the second half of the year. With our investment in our organizational capabilities and our strong balance sheet, we remain focused on scaling the business and growing our team to create more opportunities and to build market share.
That growth trajectory also includes continued efforts on our targeted M&A strategy. We are seeing more aligned valuations in the private market than we had in the past 6 months and we will continue to explore accretive opportunities that fit our synergistic growth plans and to continue to build shareholder value.
And although we expect macroeconomic challenges to persist in the near term, we remain very optimistic about our growth opportunity this year and beyond 2022, especially in the long-term value generation for our shareholders. Our view is supported by our active and aggressive efforts on our normal course issuer bid over the last quarter and material open market purchases by insiders in the company.
And with that, I would like to pass it over to Tal for his concluding remarks.
Thank you, Elliot. So for closing, I'd like to highlight that in Q2, we saw a tremendous improvement and growth in self-serve illumin revenue, which is something that we're very excited about and we're very focused on, and we're going to work very hard to increase those numbers in the future.
We are very, very happy about the progress of all the investments we've been making. As you know, we made a lot of investments in the long term to help in the structure of the business, and we see things are moving forward very, very healthy.
In fact, into Q3, we already saw solid growth in overall revenue number, including illumin as well. And we believe that illumin and Acuity is the best investment that we can make, and this is why we're buying back our shares on a regular basis, again, because we believe that this is the best investment we can make. In fact, management is buying shares as well personally. We bought 361,000 shares and the majority of those shares were bought by me personally.
So as we are out watching the global situation carefully, again, I'm happy to report that in Q3, we're seeing very positive numbers. It's hard to predict how Q4 is going to look like. But the early indicators are showing great signs and we're looking forward to the future.
So with that, I'd like to thank everyone for joining us today. Thank you to the Acuity family for delivering. Thank you for the investors for being our supporters. We'd never do it without you guys. So again, thank you, thank you, thank you. And I would like to now go to Q&A.
[Operator Instructions] Our first question is coming from Darren Aftahi of ROTH Capital Partners.
Okay. Perfect. Just two things. One, sales force productivity. Can you talk about any kind of metrics? I know you guys hired a lot of people earlier in the year. Just trying to understand any kind of metrics to understand the kind of efficiency of those new sales hires.
And then obviously, there's a lot of macro uncertainty we've heard a lot of ad tech companies report. I'm just kind of curious some of the puts and takes. What verticals are you seeing some softness? What are some verticals where you guys are seeing some strength? And kind of what gives you confidence that you can get to 50% of revenue or better with illumin by Q4?
So let's start with the sales force because that's something we're obviously focusing a lot on. Whenever we make an investment into a sales force, there's a lag period before you start seeing the results. We've made a lot of the investments early on in the year. And we're starting to see great results. We also have hired different types of sellers, some that are way more experienced with more -- so let's see if it shorten the lag time. And we are seeing better results on that as well and faster induction.
So don't forget that the -- even though we're going to see the results this year, imagine the type of results you're seeing next year with those new sellers. So we're very happy about what we're seeing from the sales force. And that -- like I said earlier on, we're back to solid growth in Q3, and that's a huge part of it.
And regarding the macros and the economics and the vertical, the one thing that I'd like to point out is we're a platform. We can handle any vertical out there. So when there's an issue with one vertical, it's very easy to move to others with the example is what happened when the pandemic started and travel and entertainment went to zero. We lost 30% of our revenue. And very, very quickly, we were able to move to other verticals that were doing very well. I say that most of the top verticals that we have are not really related to -- or at risk by recession. And then there's many, many verticals that we can bring in, in case others are suffering.
Currently, we are not showing any other questions. [Operator Instructions]
Meanwhile, we can share that we are here in the Toronto office, which is -- very happy to see how it's coming back to life and the energy and people are back in the office. It's really, really great to see that.
I am showing no further questions, Tal, so I will hand it back over to you for any final remarks.
Sounds good. I'd like to thank again everyone for joining us this morning. I'm happy to report the Q2 numbers and very, very excited about what's happening in Q3 and beyond. illumin is changing the world of advertising, like we said, and we're very excited about the future. So thank you, everyone. Thanks very much.