What happened

Shares of the ad tech company AcuityAds Holdings (ILLM 2.65%) were more than 23% lower as of 12:15 p.m. on Wednesday after the company reported third-quarter earnings results.

So what

Acuity reported earnings per share in Canadian dollars of $0.06 ($0.048) on total revenue of CA$27.5 million ($22.2 million), which beat on earnings per share but missed on revenue.

The company's relatively new flagship product, illumin, which allows clients to plan and execute ad campaigns in real time, saw revenue grow to CA$7.4 million, up 42% from the sequential quarter. However, total revenue declined from the sequential quarter.

"I am incredibly proud that since the launch of illumin only one year ago, the Company has already seen cumulative revenue of [CA]$17.3 million from this innovative software offering," CEO Tal Hayek said in a statement.

Hayek added, "We also saw further signs of recovery this quarter in COVID-affected industries such as travel, leisure and entertainment."

Person holding their head, while watching a red line move downward.

Image source: Getty Images.

Now what

I think investors were looking for a bigger beat and much more revenue in the quarter, which has led to the big drop today. Expectations for illumin are sky high, and while the platform is growing and does seem to have a bright future, it is not yet living up to expectations, especially as revenue in other areas of the business declines.