CTV - Earnings call 3 2023

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Operator

Greetings, and welcome to Innovid Q3 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.It is now my pleasure to introduce your host, Brinlea Johnson. Thank you, Ms. Johnson, you may begin.

Brinlea Johnson

Thank you, operator.

on remind that today's included call. the today's release I forward-looking may in begin, page earnings and Relations statements forward-looking available we you to call that contain our also Before pertains Investor this our statement disclaimer forward-looking events limitation, expectations, and estimates include developments. targets business plans without financial our anticipated performance, may and statements or These predictions, regarding objectives, future from and those our indicative Changes by are to landscape, other environment factors competitive regulatory results results could business, statements in differ of forward-looking or materially expressed the historical made actual cause technological future today.Our performance. necessarily not law.In And of today's non-GAAP include measures, give our can obligation flow. call no including accuracy and financial adjusted EBITDA adjusted statements cash to by assume free no the except as margin addition, such, forward-looking them, and to will assurance we update EBITDA, as required as provide believe for We our the business use and measures managing these useful information in they non-GAAP investors. considered and measures in These addition a be not substitute our results. to should GAAP for as whom Anthony now Zvika Callini, our in to are begin. non-GAAP filings and call earnings to appropriate, well turn CEO; both the where over be of Netter, the Innovid's session.And as of will our can I'll the today's Innovid's measures, GAAP in Co-Founder their available SEC.Hosting as call and the corresponding in found with participate on website our release CFO, Reconciliations Q&A to measures Zvika ahead. go Zvika,

Zvika Netter

joining all, thank and Brinlea, today. for you, call Thanks, the

then year.As to region.I continuing in close hard them our our would are development track quarter and We a to a excellent deliver in around Before the great track, reported you know, and I I despite for and Q&A.I our business on guidance, the world start special to I the exceeding on like situation updates and Financial strong Israel heartbreaking to begin, work. thanks of details is give for quarter teams Anthony many by our will located third for updated to our share their report like newly QX followed guidance to teams to recent further appointed would thank some Chief EBITDA. prior and pleased on revenue of results provide will out an both one and turn third will it our performance adjusted our highlights. Officer, we provide delivered quarter, who call a over am Callini, with

solid well are a continued execution the to We in for full fourth XXXX. positioned quarter year deliver

least adjusted year raising to we margin fronts. margins continue grew growth of result, for strong metrics proud our to to margins to a last QX. team's X% our grew committed We full we adjusted at macro the revenue from to EBITDA as million QX and last the to a adjusted I'm which environment quarter XX% as all more positioning of execute EBITDA prior.This the ourselves year-over-year, of EBITDA our X% This is EBITDA are and importantly, in QX doubled and our improves.Looking XX% As on guidance, now outperforming ability financial remain improve of expanding adjusted the and revenue consecutive compared expect our we guidance our than to QX XXXX follows at quarter. accelerated compared in $X.X negative quarter, and XX% third

last our that improving in over profitability free the positive few as million demonstrate quarters products bottom Additionally, are at profitable core. we $X.X results operation flow our ] line [ generated quarter.Our cash their increased, this

invest we We new continue innovative business expansion technologies. margin in to even a as model generate where have exciting and we

Video CTV.We viewers as continue implementing Recently, Video Prime television We of streaming ad-supported through Prime CTV viewership. watch more and ad-supported overall more have ads TV a industry, moat into creates are huge see in year. our shift next partners announced it the strong offerings. been Innovid.There's for join transformation rapid and a our competitive will on to and also This and trend the platforms Amazon market inevitable more value introduce will capitalizing the

that CTV the continue which the TV ad-serving that impacted revenue is eyeballs linear our by be U.S. expect once we where viewership below widely outpacing time quarter dollars behind trend and revenue macroenvironment, overall growth. year, first to the opportunity us This a believe total will CTV.Another will milestone. spent time, from in shift ad year, the of XX% fell for with our the and grew to ad revenue personalization and to transition we was a as meaningfully in this benefit Even as We budgets it reported last advertising align in world X% grew over massive more can measurement inertia CTV normalize to capitalize on compared platforms.Innovid X% impressions quarter. third representing budgets the XX% position to InnovidXP, on continue accelerate, offering, major last growth driver, to

continue and with we pleased cross-sell this new quarter are by also Revlon, to including OnRunning. usage.Growth Bausch as in measurement Fanatics, extend ramp-up Health the wins, was We significant fueled and customer

large such for our to measurement our inventory.Turning have prove addition, their solutions partners NBCUniversal of publisher help platform. as existing value to the usage In commitment expanded of their

our these videos, into ]. Those ad copy new the future Innovid in and AI to over generate can reach latest is our on and the to customer by platform we strategies. data can our deliver of powerful third-party to continue for feeds based business images, [ invest new set before Using are consumers then to value an seen technologies. creative exceptional This CTV sophisticated that using optimal to We data-rich measured how AI in foundation TV AI clients.I'm that a functionality and AI based set first Innovid data and data ways able set. and generates unique, announce excited on the that have voice in unparalleled the Generative is implemented tools breakthroughs power be leading streamed, never optimized brands ads engines, clients will engines platform.

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lower by solution and most drive technology. to creative Instant data goes using our proprietary Optimization the optimize beyond the considerable to for serve Our market opportunity at selecting impactful intelligently see to delivery CTV time.We the management investments outcomes

to excited seen quarters out the product adjusted and are we've expanding about momentum cash new last the EBITDA free margins We sign enhancements, few clients valuable flow.We revenues, expand continue over with positive our and partnerships. the roll improved existing increasing

has different excitement York verticals, to and has We and City.Before Although in over the across the around thank plan has Tanya, we Innovid. been to future to Financial are our in his normalizes, for over in Day by the Callini, call experiencing I want Tanya performance public demonstrated to date He are you to sustainable the welcome in finance has committed remain Officer, XX not growth. in for SaaS new believe helping at success upcoming built market am Investor of key Chief tenure. viewership call margins. optimization a a operational Chief our well future strong last spend our levels growth turn positioned share we all higher and expanding Financial in the wish possesses we pillar experience experience fully and Innovid rebounded financial best and over Innovid her experience Tony, a and years. contributions her I about XX the which welcome margins.As Tony to our we've encouraged leading our to and higher we way rates during profitability excited as pipeline team. more scale to bring Tony theme shift Tanya we on software linear and new are CTV to product November New to private execution Once companies. years to I your endeavors.I continued at in is CTV all the team XX market over innovation from main growth extensive XXXX, technology the quarters, including and first Anthony companies our enterprise earnings our deep Officer. last few our expect

Anthony Callini

all is driving grew to reflecting in revenues join Thank Zvika, ad-serving X% break dig by results. few the once for Innovid and everyone. quarter straight incredibly guidance good the and welcome, It's the passionate and experienced the of clearly been further, EBITDA a evident apparent to team. to revenue that market. excited part were into more are sustainable little a X.X% end and adjusted personalization range down up you our of is spend profitable be here customers growth me. million. opportunity weeks, X% the this a operating numbers. EBITDA the second beat strong let morning, an you the but only We I'm QX powerful combination of and ad warm secular to The from dedication contribute and world-class pressure the a year-over-year, on that delivered of heard in year-over-year continued a leading again to platform, long-term revenue XX%, margin trends migration, $XX.X Zvika, leverageable model of business, CTV attributes we our If broader expansion.Now me value.As just growing creating in top

our served compared data which a and to comes full to Innovid TV.Measurement products ad-serving business. X% take as CTV revenue As correlates side category, generated increased closely grew valuable as platform. from set from ad our build the to out as revenue personalization continue and X% impressions more the this we ad-serving impression QX Within volumes ad-serving transition revenue, last with personalization, continue to reminder, through to of of advantage the connected

XX%, percentage grew impression CTV quarter. over excluding volume of measurement more X% while ad-serving QX, comments up this for revenue activity CTV CTV made and measurement, the few accounted XX%.A a X%. and year, in grew QX on revenue, last As personalization video

while backdrop the the less -- quarters in impressions and video in CTV deal been and of reached quarter reflected decreased total with CTV. high another growth by in all revenue, of market. XX% QX volume the inconsistent via XX% demonstrated of coming of continued even against calculated video desktop grew to improving and all have the we volume XX% video Mobile share gaining XX% desktop constant has this while impressions, above of cost from X% point XXXX, year. X mobile represented revenue, of impressions.Both in Additionally, last of XX% by first XX% uncertainty Revenue and the out impressions

in impact to to profitability while expenses. our loss operating leverage As improved The quarter pleased loss long-term that compared common our of in compensation embedded managing the and a protecting and drive operating reflecting cost This base $XX of that our the $XX reflects ended in revenue position on year stock-based line. quarter, end the our margins see debt share share or model.Now decrease a to XX% impairment, shareholders.QX of was of X% investments QX the Employee per decrease million net ] additional our creation QX. revenue equivalents $X.X to $X.X improvement totaled XXX, business million was on report the during committed We're and total excluding value to a XX% on remain drawn XX% the the was XX% for revenues strong margin million in percentage XXX.X in improve, continuing as XXXX. compared as outlook areas the count in touch modest end financial scales, previous and with million $XX.X of continue we cost and moving year. million And with million lower expenses, $XX.X QX EBITDA lower EBITDA expenses, are on improvement cash high-growth generated $X.X in in $X.XX. and adjusted efficiency QX to count of facility outstanding an to business we excluding operating cash year million, X% the [ quarter XX% the as in full me year at efforts a reduction growth, a shares. million, for just million in cash Adjusted our quarter positive of $X.X from the the of and free last impact available revolving an XXXX.Finally, was an representing last from resulted amortization of comp.We a integration and million and TVSquared our acquisition, QX fourth costs.We let at $XX.X depreciation, to flow,

early trends the quarters financial performance, far business recent as We anticipate over last are strength strong thus our continued well given underlying as confident in the of QX. few and in returns

million XX% total QX the $XX revenue to expect year-over-year representing We of growth. $XX million, in range X% to

growth the We quarter last to range million, million We spend creation I of $X.X happy our session. the QX we positioned in million for to ad EBITDA remarks. please $XX.X million, innovation the future prepared our and uncertainty fourth to year.For we are TV shareholders.This XX%.In of of reflecting in are full X% the to revenue for EBITDA historic now across encouraged some to and million in as $XXX an market. expect outsized year, million business, value growth and the team's to advertising believe reflecting momentum technology committed well EBITDA to expect $X.X we customers and We compared of essential ad take returns the of adjusted of adjusted least concludes the X% annual to in the seeing infrastructure and $X.X Zvika Q&A and the levels. are $XXX questions. and million experience are become the remain between Operator, at begin conclusion, $XX.X results as by we proud work our third even to quarter margin broader the more light and

Operator

of The the from Instructions] first Boone comes [Operator Securities. JMP with question line Andrew

Matthew Condon

on it results XXXX to into profitability growth us? And can you And Instant then, philosophy My and just is just is wanted the bring expect -- your Tony we and how heading This to and for the to when? influence Andrew. model Optimization. onboard, expect one here also between frame I here? what and on opportunity we for back just your Matt then and us and tell first Can just welcome thoughts get it should on

Zvika Netter

on important it closing definitely Yes, topic year, and a this in a so even and for you theme picked way, lot us but on forward we that pushing so for flywheel. be XXXX an major that's worked a will optimization, a

out, creative the the step, the our engine to you the X all the The that massive results.So, The major amount the us. data. outcome, ad campaign we release these on is unique platforms you and to is this the next of into we generates data. connecting the core, post right, strategy. see that can outcome was is the together, the we done server acquisition all zoom a But output that to is have output If now key very that at measurement see -- of and the step, delivery on which which is big and InnovidXP, and then data input the it year, allow based have understand based solution,

the technology, be including time. of Instant to models, some to live AI creative, of just the looking Day, just the the In set of optimization this and close is going basically the the forward the demo data unprecedented of able affect release. universe, have some impact we these to demos. outside the Optimization think campaign to some strategy constantly do And We're it, meet recommendation, and real investors analysts actually release not the but of definitely is And campaign Investor heart to that.And AI month. strategy, messaging actually our and the we're where hear can at that's initial I Google the is that loop. live the this end then to that in

but ofâ€¦So is not and sense about to our we the So the additional We're partners. value to way there's see a talking we generation opportunity, and customers generate think revenue yet this it'll give opportunity definitely it, path next investment. better for terms in massive year, of a significant a hence,

Anthony Callini

company very challenging profitability. to last of showing here's the that ourselves create market I lot coming for through really guidance couple growth. the of so I year space. for way is, that the reasons balance key, think or to And trends.So, profitability, a work has you in growth of stakeholders the X I over up this QX for think think really some the margins, set due see about opportunity margins and of our numbers tell the attractive that's me, even the do we're expand But I because to think look expanding my the represent such around done quarters right, and So, breakout some CTV best last main things. opportunity at to mindful even for the done and kind there.So, really how profitable gave between we is of one growth position it's the I'll was developing and margins, higher why of driving balancing growth of the think as forward, as the work is turns over value really that and of value to been to and that, some some same there, all long-term belief a personal we that's we the those through nice sustainable And shareholders. is the of just in in time market long-term there's as growth we've for expanding macro shareholders to an hard kind

on just over time. kind the So seen personal a company of that's I've my and and short thoughts relatively what in views just general here

Operator

Next the with of comes line to Patil Shyam question Susquehanna.

Aaron Samuels

just were they fourth in for environment? be that quarter ad improvement? on to also a from steady first a looked Patil. the ad demand the and that an macro any things in the And to expecting bit you a That would Shyam This assumes terms how share from guidance. unpack you helpful if have generally environment? of just you as have Maybe third color Samuels of quarter, well. maybe I Are And Could or is as little on where on what October follow-up well. remain Aaron suggesting bit is

Anthony Callini

Yes. to take I and can try color. add Zvika some Aaron, this certainly

there So -- look broader to are think encouraging at there yes, the QX, we I as some still things market. in us some that that I there's uncertainty mean, are are and things

we're certainly the macro of see in and that some sharp to and confidence think while increase reflects guidance turned we So, corner I a the that terms haven't to in up it's yet not time. the right starting our the

So are that There rebounded verticals you haven't quite that a verticals I ] some some say Traditionally, lot yet. the would are positive a see company where quarter tailwinds last year. seasonality didn't has seen [ that historically positive. see are optimistic.There from cautiously fourth is and of perspective

And haven't guidance, of and seen we're we our December kind October us -- in yet. seasonality really so but confidence gives hits that of terms November

So things. of all trying balance to those

be So but is a the of what we the to able number different data would I confident we increase feel to did. say guidance enough way that points,

Aaron Samuels

for one And then maybe question Zvika.

I the of we've refresh exposure to broadly? think big how more media. us and retail retail you CTV now past Innovid Obviously, sort substantial about being media Innovid on you're thinking in opportunity trends Can exposure. CTV the talked has right about that media and

Zvika Netter

Sure.

-- what's with of of data it's terms the unique, In course, sets. retail media,

actually some retailers data. customers been of those the we So, the have of are ad-serving striking -- large

already the And have so place. in relationship we

that -- the shoppable can of product ads believe more that As equation for on better loop, Measurement the definitely to prove we with and including being into target thesis several XXXX the look see the loop. have going much using retail deliver and used that as media and data you their the to and more ability we so data the for now already ROI platforms -- side And in they're and actually about those customers. and media future if -- working think to partners, do the our into close a we what we're if ads that closing we to to target you partnerships about and ] talked comes really platforms. more, personalize to space.I those optimization, in that's strategy platforms is other platforms, [ become

and use to execute in retail audience what's loop So better on and target retail XXXX. but customers sets for close of product, absolutely, able what's be outcome any data-rich then not implement not environment only also working. create to that shoppable platforms something can that, any for execute give a the on a which other media, later have working messaging, to the understand ] key data specific [ target the this then theme here very environment our outside the and the dramatically what's that media.So optimization, areas, see but and And environment those that can the is unique on is us and improve the working based feedback

Operator

from ISI. comes question Next Khajuria Shweta Instructions] of Evercore [Operator the line with

Shweta Khajuria

raising level Could advertiser in your you in vertical what guidance confidence at any on little and experienced the know auto right You giving what please the about quarter. verticals?I you in and comment the terms more brand But for fourth talked and now? certain you're just -- high whether hearing quarters sentiment had the bit of you on a a prior October headwind. one granularity fourth of

given in, political seen do in advertising if have you verticals, stand versus or quarter? start some then spend ad-serving terms you in where of the political some other any to flow of strike the comments?And key provide fourth you CPG perhaps the could So now

Zvika Netter

Sure.

fourth -- feel regarding terms trend. and comfortable pretty of quarter, the as in So, we in terms the mentioned Tony

quarter. the not And we year, -- of We started year normal". seen last course, tipping of third have "behaves a end the at this seeing

from linear general. on so up keeps viewership. numbers surpassed right the pushing customers in audience Definitely, that into in there fact what that reduced normal. declined TV with is of CTV it's to move that the helps spending brand So continues TV on the CTV, But It's advertising, -- to terms the are advertising. advertising their

invest, still growth pretty certain say, to about last supply seeing positive We're even we decrease. consistent year, a and right.And last forward we're would terms a into seeing comment the insurance increase more contracts, like it's where -- -- was we healthy up that in to their to our in general technology perspective.Now companies, verticals vertical-specific looking see pharma part your others, brand seeing indication closely a and also investment positive. now you back companies, dynamics. Overall, spend services, largest some CTV in other And if and we're compared related a from those of like some marketing. year. it even auto, of budgets, all will What behavior CPG continue it's dynamics. is seeing year-over-year see in the can earning compared more that not the verticals economy calls, to of following and we're anything obviously nice to specific So like aggressively go days customers' a And of areas in I financial spend compared to some we're terms they verticals, their are are giving

not not So pretty seeing we sudden volatility. we while helps also, significant are comfortable overall, extreme customers. we're our And We're that providing feel decisions us.So not about overall, next year guidance, by QX. seeing for

us performance-oriented. itself, That's not it's both We that on things an in in regarding an through tools, uptick side sales that be area creative heavily usually heavily on terms that with measurement. invest. goes we helps like an definitely that the ads, the with political to line.And measurement the they bottom tend on see area more It not is "brand" personalization, side, political we of top But area front comes revenue. an and we're on political work that So -- on. plan ads focused -- and line and publishers

Operator

of Next the comes Patil Shyam question with from Susan. line

Aaron Samuels

Tony. this Clearly, I not some just about additional to providing if any One more margin seen this forward? can profile Innovid's is to you Innovid's XXXX wanted margin know how point, you're guidance question. about share color see year. for going there's expansion This for at think nice over but

Anthony Callini

at adjusted well. Yes. we XX-plus obviously, a No give I EBITDA And lot of to as being and margin thought that. business really all. that said mean, we the forward march something see it's think percent we've past I to a to business in this problem Yes, that continuing

the to with yet. a once measurement, as You're the ] scalable I as and combine is right, think you going mentioned is growth the you'll a larger a that of margins in be from as way. to the GTV a with nice, nice revenue. see in about But a guidance fall revenues model, amount and bottom we talked business a grow kind to leverageable haven't underlying nice XXXX before, of it a of of Again, the percentage we're model serving, healthy [ of profitable. see really market And combination.And And line. business we position kind larger through that's to this I cost that, turn, ad is

so percent business. is grower a reason shouldn't no And healthy why be XX-plus this there and a margin

Aaron Samuels

about of available how these may significant a as an view cutting do have accelerant driver the CTV, one channels. you become through then just Innovid Could available streaming exclusively and And ] Live CTV you growth sports benefit from more through this viewership speak question. [ increasingly last more and trends? and in and phenomenon? And for maybe those cases, cord more

Zvika Netter

installed from the get or WiFi, people that to include moving getting massive an live ] YouTube, with running -- more And The and want TV and cut are platform. to getting that at kind streaming, connected of in and more also is the to analog viewership these phone to apps, smart digital -- the as to something behavior. mean is a Absolutely. through to -- get more exclusively are environment, connecting this the Apple -- -- and adopt a as basically streaming as like first on Amazon, definitely more app, and you cable platforms being driver digital CTV it. main to really long not of rights major by native a comfortable more a on as thing like streaming people.The a viewership you're driver and that, available behavior you're more smartphone. -- as you -- users and that get are of some using completely that is you nailed [ I sports start sports Once bought least get them Google

So of is sports of that's kind takes place. a advertising These thing.Clearly, where spots. lot are brand one lucrative

brands. focus large our on is So those

So, there spenders are on definitely that.

ability CPM is So also, same intenders instead ability like toddlers and going the better the ad situation everybody, the the families it's real to And whether perspective, publisher in for that segment or the segment kids helpful. to from sell auto higher of with Bowl a target ad, also Super to -- to home. a break a or that at relevant as audience, an showing time, you're for

how to by do like X very You can impossible literally XX or to right that household. the XX segmenting and It's the more broadcasting. live million unique is about think the if streaming.And getting generate you technology million possible absolutely at in the right And or do hits with second. you million audience can split to imagine it same revenue creative you're because requires it, sending

it. were So this is partners for in heavily We invested and area moving where Olympics, an is we exciting extremely that's us the something this forward.

Operator

I to questions no turn to There for the Netter Zvika closing you. over at this are would like now further time. Thank floor comments.

Zvika Netter

and exceeding thank -- also challenging excited as the really moving television morning. all for I environment as to opportunities really first again more and about our I'm moving us more all inventories spoke excited partners.I'd different where ahead from can that, expectations reasons. just business more I'm would this all for to we year more at to the Thank hopefully, sports, about world forward our later like joining this in present this remind to team for to and around streaming, going this advertisers investors@innovid.com. Investor more e-mail And of about our Day of us all up and you order and and value coming we're to November our highlight XX month information, teams, register in on more strategy. like we you can you generate our products get our

forward Looking you great day. Have to all see a there.

Operator

This you. Thank today's concludes teleconference.

your Thank for You at may lines disconnect your time. participation. you this

Innovid (CTV) 8 Nov 232023 Q3 Earnings call transcript