Q3 2021 Tremor International Ltd Earnings Call

November 11, 2021

Welcome to tremor National third quarter, and nine months 2021 conference call. At this time participants are in listen only mode.

The question answer session to follow at the end of the presentation. This conference call is being recorded and a replay of today's call will be made available on the Investor Relations section of <unk> website or main posted there. The next 30 days.

I will now hand, the call over to Billy accurate senior director of Investor Relations for introductions and the reading of the Safe Harbor statement. Please go ahead.

Thank you operator.

Everyone and welcome to <unk> International's third quarter and nine months of 2021 earnings call.

With us on today's call are overdue, Kurt Tremors, Chief Executive Officer, and fiduciary the company's Chief Financial Officer.

This morning, we issued a press release, which you can access on our website at investors thought trauma International Dot com.

During today's call we may make forward looking statements all statements other than statements of historical fact could be deemed as forward looking.

We advise caution and reliance on forward looking statements.

Statements include without limitation projections about our future financial results and future business and statements concerning the expected development performance and market share or competitive performance relating to products or services.

All forward looking statements are based on information available to us as of the date of this call.

These statements involve known and unknown risks uncertainties and other factors that may cause our actual results to differ materially from those implied by these forward looking statements, including unexpected changes in our business.

More detailed information about these risk factors and additional risk factors are set forth in our filings with the U S Securities and exchange Commission, including but not limited to those risks and uncertainties listed in the section entitled risk factors in our registration statement on form F. One.

Tremor does not intend to update or alter its forward looking statements, whether as a result of new information future events or otherwise except as required by law.

Additionally, the company's press release and management statements. During this conference call will include discussions of certain measures and financial information and I F. R. S and non I F. R. S terms.

We refer you to the company's press release for additional details, including definitions of non I FRS items and reconciliation of I F. R. Aspinall and I FRS results at this time, it's my pleasure to introduce <unk> CEO of Tremor International Ofer. Please go ahead.

Thank you Billy and welcome to everyone joining us on today's third quarter earnings webcast, Let me see.

Followed by saying this quarter has been a significant period of growth for the company today, we reported our strongest quarter in cooperative story and we are encouraged by the momentum we have generated the growth our core verticals, which I will cover in more details on today's call.

Afterwards, our Chief Financial Officer will review the highlights of our Q3 financial results. Following that we will be happy to take your questions.

First I would like to cover some brief performance highlights for the three months ended September 32021, we generated contribution ecstatic or $76 7 million U S dollars compared to $49 7 million in Q3 2020, 54%.

Organic growth.

And adjusted EBITDA.

$40 million to $43 million compared to $19 6 million.

In Q3, 'twenty, 'twenty, which is 2.2 times growth.

This reflected our strongest quarter reported today I'm delighted by September being the strongest single month since the company's inception.

For the nine months ended.

September 30, 21, we generated contribution ex deck of $213 4 million U S dollars compared to one other thing.

$3 million.

Nine months of 2020, which reflects organic growth of 92% and adjusted EBITDA of U S. Dollar one other than $742 million compared to $21 $4 million during the period last year, which resulted in a five times growth.

Our core growth drivers in <unk> services.

Revenues grew one other than 15% in Q3, 2021 versus Q3, 2020 and 188% in the <unk>.

Nine months periods ended September 32021 vessels.

The nine months build in 2020.

We also achieved a 49% EBITDA margin in Q3 2021, when our reported revenue basis, and a 55% margin on net revenue, which is the higher than the median of our direct peers.

I emphasize the core of this performance is the strength of trim or end to end technology and business platform, which covers the three pillars of this business DSP DSP and SSP. Our end to end technology platform provides simplicity for our customers better that the empowerment flow.

Advertisers and publishers and is accelerating the industry move towards supply path optimization.

As we serve customers on both the demand side and supply side Trimble obtains robust access to first and third party data from both advertisers and media partners, which customers can leverage to generate better returns on ad spend and maximize their inventory revenue.

DRAM OS platform also offers customers key opportunity on who they choose as a partner with to best suit their needs or the DSP tremor video is compatible with our SSP unruly as well as other providers.

SSP can also deleveraged by other DSP as well.

Later in this presentation I will touch upon the continued progress we are making in CTV, which is a key performance driver for Trinity.

Trimble consistent primarily focused on video and CTV is proving compression in todays market, leading to a meaningful growth across our exchange and putting US ahead of platforms only recently evolving from this thing.

We have enhanced our offering further through the acquisition of spirit or exclusive global ACL about the partnership with Vida and our recent launch of programmatic TV marketplace.

I would like also to comment on placebo headwinds in our sector.

Relates to challenges associated with ICU IV fee changes and cookie deprecation that are impacting our industry players, we do not anticipate a significant impact on our business.

End to end platform and presence across all screens provide us with the key advantages that reduce <unk> exposure to this issue.

We believe this strategy is proving successful and we will continue to advance and enhance this model as we look to the future.

It's also worth noting that although COVID-19 proved to be challenging. It is also said, there's an opportunity for trimble by accelerating growth trends in segments that we have strong exposure in <unk>.

Such as CTV and video.

Recently, however, many companies have been citing supply chain constraints attributable to the COVID-19 pandemic as a negative catalyst for the sector.

Certain advertisers have reduced budgets due to these constraints.

While we have seen some evidence of lower advertising spend to this point and Q4, 2021 and filter and sector, particularly automotive due to chip shortages, we have seen stronger demand in other segments and the diversification of our customer base on both the demand.

And supply side.

Offset any significant adverse impact to our business.

I will now shift the discussion to our vision.

And some of the key development of course since last quarter.

I have stated before four years ago, our senior team set a plan to transform <unk> into a market leading company focused on video data in CTV with the ability to capture users the growth across all screen.

Leave it through a full end to end Tech platform. Our team is M&A execution experience and has successfully integrated companies in the past.

We are constantly searching for strategic opportunities to acquire additional companies.

It can become meaningful contributors in video and CTV.

Such as what we accomplished with the recent acquisition of spirit.

We believe we have delivered on our promise to continue expanding and enhancing each element of our end to end platform. We can emphasize on CTV and we'll continue to do so going forward.

One recent example of this comes from the previously mentioned acquisition of Spirit, a global CTV AD server, featuring a robust user interface with advanced tools for airports monetization.

Spirit was purpose built for broadcaster to deliver seamless T V like experience in CTV and over the top environments spirit will integrate it into tremor unruly SSP.

Billing CTV header bidding channel inventory management and export more management.

This transaction was particularly compelling is the addition of our CTV AD server further expense or depreciation and strengthen our position within CTV.

But also significantly deepening relationship with our media partners and further complementing our end to end CTV offering.

Prior to this media clients were reliant on either in house edge servers, or third parties, whereas now broadcaster with deep relationship with tremor can leverage us for our AD server and Adobe their capabilities there.

Enabling us to maintain more of the relationship in house and allow us to better serve our customers through added technology solution.

This will also allow us to potentially expand our revenue footprint with current customers and we expect that it will also attract future media partners seeking to utilize this advanced technology solution.

Not all servers.

Servers as CTV airport monetization capabilities like spirit, which is why we were particularly excited about adding that technology built by several industry veterans to our end to end platform.

We anticipate this technology addition will allow us to capture a greater portion of CTV inventory through both current and future media partners and provide added benefit to help those partners better control their inventory and maximize revenue opportunities.

We will also continue to evaluate future strategic exclusive global partnership that expand our reach and differentiation within CBS television.

Such as the partnership we've recently announced with visa the partnerships give us exclusive global access to beat US automatic content recognition ACL data pre installed on most Iceland smart STB and he's also integrated into a number of premium original equipment manufacturer sausage Toshiba.

These partnerships give us access on an exclusive basis to be their global ACR data accelerating O U S and international growth and footprint. We will utilize this data for targeting purposes, making us one of the only end to end technology platform outside of the walled gardens.

With this type of data exclusivity.

The agreement provides us access to retail distribution, which reaches approximately 20 million smart Tvs globally, and we will anticipate this reach group roughly doubled over the course of our partnership there.

The data will be available for activation for customers on both sides of the end to end platform, which will enable the ability to offer proprietary measurement capabilities for TV intelligence campaign.

I also want to highlight the recent launch of tremor programmatic TV marketplace, which enable advertisers to access the centralized platform for planning CTV campaigns, facilitating Turkey, compared this activation and providing greater transparency into the correlation of data driven audiences.

Our TV marketplace give brands the ability to take even greater control over the planning execution and customization of their CTV campaign, coupled with a more transparent view into the supply and audience targeting capabilities available to them within this marketplace advertisers can act.

<unk> deals leveraging treble content liver targeting solution enabled by TV like concrete attributes from direct media partners.

By Curating deals based on content attributes like Zama and rating from Trimble media partners advertisers can tap into traditional media television buying tactics and digital environments like CTV at scale.

This expansion of tremor contextual capabilities also addresses the market needs for more privacy mindful.

Verifiable targeting solution across CTV and video.

Travel also achieved a number of important business wins during the quarter. In Q3, we added 35, new use supply partners across critical growth verticals, such as sports entertainment and lifestyle as well as the original equipment manufacturer OEM and multi cast.

Video on demand.

<unk> businesses.

Unwieldy product team also streamline revenue opportunities for publishers by Rolling out consolidated then an NSAID there'll bidding adopter on both the client side and service side.

Bobby shelves can now access tremor video demand for all unwieldy formats via a single adapter.

Other than legacy version of dish.

Suddenly through Q3, 'twenty, one tremor video observed a major increase in adoption of our data driven creative offering truly since 2020, including expansion across CTV as well as substantial increase in client usage of our costume QR code solution for.

CTV.

Really continues to be a differentiator for travel and a unique offering and advantage within our end to end solution truly is our in house creative studio and it'll allow us to provide costumes.

Driven creative solution for an advertising customer to align with their complex global campaign objective.

Leveraging truly underpins our strategy of being completely end to end with advertisers and media partners can utilize us in all key aspects of their bank.

Process across all screens, which offers us numerous growth trajectories and differentiation of revenue streams.

Finally, our strong balance sheet and cash position gave us a strong foundation from which to continue exploring future growth opportunities through additional exclusive strategic global partnership will acquisitions.

<unk> is a robust history and proven track record of successfully integrating this into a unified end to end platform and we will continue to remain active in evaluating deals that can further complement and in.

<unk> our existing platform.

With those comments complete it is now my pleasure to turn the call over to <unk> to review our financial results.

Thank you all fir. Thank you everyone for joining us joining us today, we are encouraged to see another record quarter of revenue and strong business momentum as we move into the fourth quarter of 2021.

Today I'll be discussing some of the highlights of our Q3 performance as well as some of the key financial and operational drivers during the quarters.

<unk> International achieved an outstanding record quarter in Q3 with revenue and adjusted EBITDA propelled by steady organic revenue growth.

Our net revenue grew 54% in Q3 year over year and resulted in $76 7 million for Q3 2021 versus $49 $7 million in Q3, 2020, all of which was driven from strong organic growth.

Our CTV revenues grew 115% in Q3 2021 versus Q3 2020, and we are poised to continue this growth as more business is increasingly being transacted through programmatic platforms. During the same period, a video and as revenues grew 58%.

For the nine months ended September 32021, CTV and video and its revenues grew 188% and 112% respectively.

As a result, we achieved adjusted EBITDA of $42 $3 million in Q3, 2021, and $107 2 million in the nine months period of 2021, or adjusted EBITDA margins of 55% and 50% out of net revenue for the same period.

Respectively.

For the nine months ended September 32021, tremor generated $214 $4 million in net revenues, which is an increase of 93% year over year. We continue to generate very strong adjusted EBITDA, we're investing in the critical areas of flower.

Business that can drive our future growth.

Costs were lower than expected driven by the postponement of our it tends to office lower anticipated marketing events, then and reduced travel and entertainment costs. We saw very strong year over year growth in Q3, and the nine months period of 2021, which increase our EBITDA.

Two two times and five times, respectively compared to the same period in 2020.

We are focused on being highly competitive in the CTV space and entered the segment early with the enhancement we made to our offering during the pandemic. Our efforts resulted in 115% year over year CTV revenue growth in Q3 2021, our video net revenue in <unk>.

58% from $48 $1 million in Q3, 2020 to $63 $4 million in Q3, 2021, which was driven by our video capabilities and sharp focus on this segment we.

We delivered significant growth in the nine months period of 2021 during we exceeded market expectations and proved once again that our strategy is working.

Representing the latest milestone in the evolution of our end to end video first platform and TV intelligent solution. Our recent acquisition of spirit and exclusive via the partnership will enable more effective TV campaigns going forward for our partners in several important ways.

Enhance our TV intelligence solution not only by providing an explosive data set but also by providing an opportunity for real time targeting capabilities.

Peter has a global reach of approximately 20 million smart Tvs, allowing us to provide our international partners with a scalable TV targeting and measurement solution across the premium supply footprint, which we didn't have before.

Spirit is the proposed to build technology for broadcasters addressing the unique needs of delivering a seamless TV like experience for consumer that can benefit our media partners through operational and cost efficiencies increased buyer power maximize revenue opportunities and advanced UI.

And our customers with expanded access to premium global CTV, and OTT supply and advanced AD targeting capabilities.

We believe we have a competitive advantage with our omnichannel endpoint platform versus other one dimension of solution. We have developed a profitable business model with high efficiency around operating costs, leading to operating leverage economies of scale and strong productivity.

Among our <unk> peers tremor is one of the highest margin and operational profitability, resulting in a 49 adjusted EBITDA margin in Q3 2021.

On a reported revenue basis, and 55% on a net revenue basis.

Turning to our cash flow, we generated net cash from operating activities of $44 6 million for Q3 2021 versus $4 5 million in Q3, 2020, which is an increase of around 900 per cent for the nine months ended September 32.

2021, we generated net cash from operating activities of $121 4 million versus $11 $7 million in the nine months ended September 32020, and 940% increase.

As of the 13th of September, we had $333 $3 million cash and cash equivalent with no debt.

We also experienced a 99% free cash flow conversion during the quarter.

Non <unk> diluted earnings per ordinary share is 21 cents for Q3 2021 versus 11% in Q3 2020.

And 56 and for the nine months ended September 32021 versus 7% for the nine months ended September 32020.

Finally, I will now turn to our outlook as a reminder, we expect that we tend to office marketing and travel cost will add an incremental $1 5 million to $2 million per quarter in operating expenses next year.

For the fourth quarter of 2021, we expect net revenue to be at least $85 million, which represents year over year growth of approximately 16% in Q4, 'twenty one adjusted EBITDA to be at least $42 million.

Which represents year over year growth of approximately 7%.

We also expect annual 2021, adjusted EBITDA to be at least $149 million.

Each represent year over year growth of approximately 145% and expected annual 2021, adjusted EBITDA margin of 50% as a percentage of net revenue compared to 33% in 2020.

This guidance reflects anticipated full year organic contribution ex Tac and adjusted EBITDA growth of approximately 62% and 150%, respectively and underscores that our efficient end to end model focused on CTV is helping us achieve excellent.

Growth and profitability.

We believe that our growth profile efficient end to end model and healthy balance sheet positions tremor to continue taking advantage of a rapidly growing digital advertising market with my remarks completed altura.

On the call back to offer.

Thank you Siggi to summarize.

We believe we are well positioned within the industry. Thanks to the key advantages we achieve from being completely end to end our unified platform provides advertisers and media partners with simplicity and better data in Poland.

While also accelerating the industry moves towards supply path optimization.

We have built this platform with the heavy focus on <unk> video and data with our customized rely on our deep expertise and actionable insights and which now accounts for 92% of all appropriate domestic net revenue.

We continue to believe that advertisers and media partners really rely on an allocated additional spend towards fewer companies with a diverse portfolio of solution that can service them across all parts of their buying processes and across all screens, regardless of their service level needs.

We will also continue to deliver on our promise to expand any names our end to end CTV capabilities for customers such as what we achieved through our recent acquisition of spirit.

Which further complement.

Our end to end platform offering.

We also have taken steps to further out of the U S and international footprint and accelerate our growth in those key markets, while differentiating ourselves through global that exclusivity.

Partnership with Vida.

As we look ahead, we will continue to evaluate additional strategic acquisition opportunities. While also continuing to make investments in our product R&D sales and marketing 12, propel future growth and increase our market share.

Finally on the Investor relationship front, we anticipate being far more active with both U S and globally in vessel.

Attending investor conferences conducting tech Devils and participating in non deal roadshows with the firm's discovered treadmill, we will be very busy working towards garnering dish.

The additional interest from current and prospective shareholders.

We believe that we have a compelling story and value proposition with strategic differentiation and advantages that small investors and customers will see the benefit of as we move ahead. We look forward to speaking with current and prospective investors at RBC Global technology Internet media and telecom.

<unk> conference.

On November 17, and the Raymond James Technology Investors Conference on December six and Needham growth Conference on January 10.

We believe that we have significant room for growth and remain confident about our future.

Operator.

We'll now open the call to investor questions.

If you'd like to ask a question. Please press Star then one if your question has been answered and you'd like to remove yourself from the queue pass the pound key.

Your first question comes from Matt Swanson with RBC capital Your line is open.

Alright, Thank you and congratulations on the results this quarter.

Ofer, you mentioned spo as kind of a growing theme.

It certainly seems like there is no better way for customers to take advantage of that going with a full stack like Trevor could you talk about just kind of what sort of tailwind. This has been for you during the quarter during the year and do you think there's a chance that that scheme accelerates in 2022.

Thank you Matt good morning.

Yes, we started this process about two and half years ago. When we acquired in April 2019, when we acquired it in one and connected within one basically to treble and created.

End to end solution platform that include the DSP and SSP and we believe that it this way, it's creating a few elements, which are really important tool for the advertisers, but also for the publisher.

First of all it is simplicity for them to buy the traffic to run their campaigns. According to the objectives for the <unk>.

One is around data that is also an emphasis for us. The third one is the supply path optimization, meaning less.

The acres between basically the debt.

The DSP and the buyers to their to their media and reaching their clients.

But what we see in the market.

Many companies and of course advertisers and publishers is adopting that and this will become a stand up in the near future. So we believe that it will grow in 2022 and it will support our growth also going forward.

Thank you and then and for Society.

Comparable growth you're achieving this year is really noteworthy.

When we think about the strength, particularly adjusted EBITDA. It was great to get that additional color on the returning expenses next year, but how are you thinking about balancing investments in growth for the opportunities in front of you compared.

Compared to profitability when we're looking out to 2022.

Oh, Hey, Matt Thank you.

Sure.

I think we are all aware that we want to grow the business organically and keep growing it into 2022 and going forward.

We understand that in order to do that we need to invest more in marketing R&D.

And product.

Having said that then you're now expecting the growth to come in 2022 and going forward I think we still can maintain somewhere around the 45%.

Adjusted EBITDA margins out of our net revenue.

Fantastic. Thank you for the time.

Okay. Thank you.

Okay.

Our next question comes from Laura Martin with Needham <unk> Company. Your line is open.

Good morning.

Great.

Martin just following up on the prior question there are quite a bit higher structurally you're at 55% in the quarter. You just structurally you can Scott 40.

5%, Jeff Green startup.

<unk> got 10, 41% in the quarter, but really only connect 30% margins.

First question I have for you is what is it about your business that structurally is so much more profitable and all the other AD Tech firms. That's my first one my second one is on your slide 14, I love that slide basically.

Okay.

Great, Okay, 115% year over year and doing the math it looks like online video.

No.

40% my question of cannibalization or arrogant why online video growing so much slower than CTV and then Mike.

Again, referencing that shifting trade desk again, Jeff Green he believes that.

Okay.

Creates competitive advantage for the open internet to take share back from the schedule walled gardens.

Interested in whether you agree with that.

So what youre thinking it would be.

And that thesis.

That would be wonderful alright investors it's true.

Yes.

Thank you Noah its offered I would take maybe the first question that you ask about CTV and that is giving you an option for the open market to come to basically to grow compared to the walled gardens.

I agree I agree with this statement and we just saying that.

Think that CTV is an open market first before other companies also to grow their business and it.

Controlled by the walled gardens basically.

And there is a lot of opportunities in growing elements independent companies that can basically grow the business in parallel.

Deb.

And that's also the reason that we sign this disagreement important agreements with Veda, which is an <unk> company.

Basically it's the operational system of this platform that allow us now to get the ACL data from four wall do television and CTV basically around the globe.

Exclusive basis, and we believe that this competition, we adjust enhance.

It is less related to the to the walled garden and also advertisers who would like to reach more and more users through different channels and adjusting.

Basically the legacy one.

Thank you Ofer.

Hey, good morning, I will answer the first two questions. So regarding profitability, yes, probably we are the highest.

Profitability margin in our industry I think that it's come from capital power matters of course. The main one is our end to end.

Platform and our end to end business model, where we are catering both sides.

Our partners in the media partners and advertisers and agencies.

The second one is our infrastructure and product infrastructure, where we are running very efficient efficiently and it's allowing to maintain a low cost base of both of that are contributing to our amazing.

Adjusted EBITDA margin.

For your first question regarding CTV growth versus video growth. So there is no cannibalism around that because <unk> of course is the device that we are running on and video is the format. So we are very heavily.

Generating revenue through video, it's more than 80% of our revenues coming from videos of the grow over there.

Can be.

Hi, as we are doing in CTV, where we started of course lower.

We are doing around 26% of.

Our revenues for CTV and probably it will grow it will grow.

Still higher than our increase in video going forward.

Just to add one point too about the.

The EBITDA margin and so we are talking about we grow our cost investments.

In basically all the related.

<unk> by around 30%, but income grow by 100% in schools.

This extra income went down to EBITDA. That's why we see this growth in EBITDA compared to to the market as to our forecast basically.

Thank you very much great results guys.

Thank you.

As a reminder to ask a question. Please press Star then one.

Our next question comes from Andrew Boone with JMP Securities. Your line is open.

Good morning, guys and thanks for taking my question two please.

The press release highlighted strength in the accretive offering can you just talk about the value that truly offers and how customers are leaning into it and then just how does how does that relate in terms of thinking through your relationships with advertisers as well as their agencies and truly.

And then question number two is on beta.

The international component of the global nature of that agreement was kind of highlighted multiple times.

Going back when.

When we started our relationship with you guys our understanding with the telcos as opposed to more U S. Based so can you just step back and review kind of how you guys are thinking about international and any potential there. Thank you so much.

Of course, good morning, So I will start with the second question if you don't mind.

Regarding Vita so first of all our main focus is the U S and of course close to 90% of our revenues are coming from the U S. But we still have like very nice infrastructure in the international markets like in U K, Germany, and Singapore, Australia and Japan.

Is there any.

No it was suffering because of COVID-19.

Non ability to move the people here in order to train or to go do and rates move.

<unk> move more knowledge between the companies.

But we feel that there is a big potential foothold internationally and one of the things that we learn how to do it in the last five years is surrounding ACR targeting.

And we feel that there is a huge potential social in the international markets. So we think that it will be a differentiator for us in some of these markets seems to be that is a very major player in some of them like Japan, Australia and also the U K.

So we delivered it is important to mention it because we believe it will give us an edge in a differentiator in this market and we will be able to grow revenue.

Middle of 'twenty, two going forward.

Regarding.

Regarding your first question about truly so basically the agencies and advertisers are looking for unique and creative ways to basically enrich their offering it's not the video itself is it's.

It's around the video that is like enabling to get more information on the product or the service point of contact to download to Bruce Shaw to scan a QR.

More information or to download a product into the.

Mobile phone and so on.

And we are able to do that through truly that is growing very fast in the demand and also we need to remember that the agency has conducted a few changes that lower the resources around that so advertisers are looking for that and it's giving the simplicity again when they are running with us to get all these services when they are running with us on their platform.

And another point is that the creative is now connected to our VIP and allow us basically to take decisions and to change the creative according to the data and according to the user that is basically watching the creative in order to adapt to the goal and the Kpis.

The clients.

She is very meaningful.

Can I just follow up real quick on that last point.

Here at accelerate that at all in terms of now having an AD server as well as the creative elements can you just talk about how those two things are intertwined.

So of course, it will accelerated when the.

Server and then there'll be the most.

Such a sophisticated AD serving our spirit into the platform. It will enhance our capabilities of course together with also even with where the debt is created providing us data.

So all these elements together with growth in creating increasing the effectiveness of the of the ads that we are showing to the user.

According to the different parameters, Linda <unk> and I think that in general we didn't spoke a lot yet about spirit, but we are going to do that in the near future.

One of the most advanced platform. The three so that is incorporating and CTV AD server and there'll be there in the platform that was built by by very.

Very very experienced and enter into an eventual death rates that basically build this platform.

And created.

And so the company like that in the past.

A few weeks ago.

Basically what we will be able to offer what basically what we will be able to offer a one stop shop for all the debt.

Creative.

Serving capabilities regarding CTV, that's what we are what we announced basically in the last few months through the allowance of truly the acquisition of spirit.

The deals that we've done we agree that for the next couple of years.

Great. Thank you.

Youre welcome.

Our next question comes from Jonathan Barrett with Panmure. Your line is open.

Thank you can you hear me guys.

Yes.

Great.

Just.

Obviously, you changed your accounting short while ago I just wondered if you could first of all consistent update on the size of the buildings that you are now.

<unk> just to give us scale.

Scott.

Run rate is.

First of all.

And then second.

I wondered if you could.

Give us a breakdown of your net revenue so that we can understand.

How youre getting paid by clients.

What elements you are getting price pool.

Or how youre running some of your revenues.

Yeah.

Alright.

Just so we can get it on the mix of income and perhaps you can talk about.

How that mix is evolving as well and what we might expect going forward.

And then thirdly.

Just on <unk>.

Hum.

But I guess for the group as well.

What are you seeing in terms of bridge loans or putting up guarantee.

Better quality media.

Financial commitments and the like.

Perhaps talk around Mexico.

Mexico, if you can.

Okay I'll take.

The first two questions. So.

We change like in 2020 already reporting basis, instead of reporting only on a growth basis, we changed it where we are reporting now programmatic on a net basis and performance.

On a gross basis of where youre seeing our reported revenue its a mix of growth.

And that and this is the reason we are emphasizing our.

Contribution ex TAC you noted that we will be we can report on an apples to apples with our peers.

And every other company of course billing and invoices are going on a gross basis and this is how we are collecting the money and then paying.

The meat to our media partners.

We are not disclosing the growth the gross revenues.

And as per your question, what is coming out of programmatic and what is coming out of <unk> I think we highlighted that in our press release.

In Q3, we did in programmatic revenues, which are on a net basis almost 69%.

So the gap to the total of $76 7 million of course performance on in the nine months, we generated $192 million in programmatic, which again the gap.

$213 4 million.

Contribution ex Tac is performance.

Regarding <unk> you want to take.

Yes.

Usually companies are not providing exclusivity in this world anymore like publishers are not providing exclusivity we saw a very big advantage to get exclusivity from new new scope, which is one of the biggest publishers in the world's most respected one so part of the deal of acquiring unruly. We also provided that MLG to manage their media three years after that.

The acquisition basically.

Usually when we are providing MLG is only four key media partners that we feel that it can be a differentiator or very interesting for us.

To get to an old off and to run their campaigns against but usually it's not a it's not a practice anymore that is available so much in the industry.

And most of the worst of the deals are done as we mentioned programmatically.

Okay.

Of course.

Yes.

We heard from <unk>.

Good day.

In the UK.

About that.

The control of the transaction process.

And the voyage middleman.

How does that.

Yes.

We deploy the video EEG burst in your view I mean do.

Do you think it's credible for them to run their own.

Platform.

Yes.

Correct.

Your advertisers or.

Or do you think they will.

Could you in.

How do you think that could go.

I think that.

This is exactly what I discussed when they basically met ask us questions about the <unk>.

And supply path optimization, meaning that you are managing everything on one platform, meaning youre managing your DSP, which is the demand side, which is where the advertisers are basically running their campaigns that we're running them for them.

Through basically.

<unk> that is connected to order direct publishers in the case of the publisher that you are talking about you can basically manage all these media. They all these broadcaster under under this this platform. So it's exactly what it is.

As we mentioned this is a phenomena that is now growing is growing at two elements. One of them is that corporations strong cooperation between DSP and SSP to create supply path optimization, but we feel that the more advanced one is will it be created which is one platform that basically everything can be managed in one platform and <unk>.

Basically you are avoiding or minimizing the usage of measurement. So this is the this is the path and this is the vision that we created a few years ago and Thats. What we are following now so I totally.

And what they are trying and where they want to go and if it makes sense and we are doing it already for a couple of years.

Okay.

There are no further questions I'd like to turn the call back over to Alpha for any closing remark.

Thank you very much.

We said at the beginning we're very excited about the results and the progress of the company.

We are looking forward to to keep talking and making good progress with the company going forward. Thank you very much.

This concludes the program you may now disconnect everyone have a great day.

[music].

Welcome to Tri merge National third quarter, and nine months 2021 conference call. At this time participants are in listen only mode for the question and answer session to follow at the end of the presentation. This conference call is being recorded and a replay of today's call will be made available on the Investor Relations section.

Painless website or main posted there for the next 30 days.

I will now hand, the call over to Billy Eckert Senior director of Investor Relations for introductions and the reading of the Safe Harbor statement. Please go ahead.

Thank you operator, good morning, everyone and welcome to Tremor International's third quarter and nine months of 2021 earnings call.

With us on today's call are overdue, Kirk Somers, Chief Executive Officer, and fiduciary the company's Chief Financial Officer.

This morning, we issued a press release, which you can access on our website at investors <unk> Sharma International Dot com.

During today's call we may make forward looking statements all statements other than statements of historical fact could be deemed as forward looking.

We advise caution and reliance on forward looking statements.

These statements include without limitation projections about our future financial results and future business and statements concerning the expected development performance and market share or competitive performance relating to products or services.

All forward looking statements are based on information available to us as of the date of this call.

Tremor does not intend to update or alter its forward looking statements, whether as a result of new information future events or otherwise except as required by law.

We refer you to the company's press release for additional details, including definitions of non I FRS items and reconciliation of I F. R. S to non <unk> results at this time, it's my pleasure to introduce overdue Burke CEO of Tremor International Ofer. Please go ahead.

Thank you Billy and welcome to everyone joining us on today's third quarter earnings webcast. Let me start by saying this quarter has been a significant period of growth for the company today, we reported our strongest quarter incorporating story and we are encouraged by the momentum we have generated the growth our core verticals, which I will.

Cover in more details on today's call.

Afterwards, our Chief Financial Officer will review the highlights of our Q3 financial results. Following that we will be happy to take your questions.

First I would like to cover some brief performance highlights for the three months ended September 32021, we generated contribution ecstatic of $76 7 million U S dollars compared to $49 7 million in Q3 2020, 54%.

Organic growth and adjusted EBITDA.

$42 3 million compared to $19 6 million in Q3, 2020, which is 2.2 times growth.

This reflected our strongest quarter reported to date.

Delighted by September being the strongest single month since the company inception.

For the nine months ended.

September 30, 21, we generated contribution ex deck of $213 4 million U S dollars compared to one other thing.

$3 million in nine months of 2020, which reflects organic growth of flat to 2% and adjusted EBITDA of USD $107 $2 million compared to $21 $4 million during the period last year, which resulted in a five times growth.

Our core growth drivers in CTV services, well revenues grew one other than 15% in Q3 2021 vessels Q3, 2020, and one other thing 88% in the nine months period ended September 32021 vessels.

The nine months period in 2020.

We also achieved a 49% EBITDA margin in Q3 2021, when our reported revenue basis, and a 55% margin.

Net revenue, which is the other than the median of our direct peers.

I emphasize the core of this performance is the strength of tremor end to end technology and business platform, which covers the three pillars of this business.

S P DSP and SSP, our end to end technology platform provides simplicity for our customers better that the empowerment for EBIT.

And publishers and is accelerating as the industry moves towards supply path optimization.

As we serve customers on both the demand side and supply side Trimodal obtains robust access to first and third party data from both advertisers and media partners, which customers can leverage to generate better returns on AD spend and maximize their AD inventory revenue.

<unk> platform also offers customers key opportunity on all day choose as a partner with to best suit their needs. Our DSP tremor video is compatible with our SSP annually as well as other providers, while our SSP can also be leveraged by other DSP.

When.

Later in this presentation I will touch upon the continued progress we are making in CTV, which is a key performance driver for Jamie.

Trimble consistent primary focus on video and CTV is proving compressions in todays market, leading to a meaningful growth across our exchange and putting US ahead of platforms. All the recently evolving from display.

We have enhanced our offering further through the acquisition of spirit, our exclusive global ACL data partnership with Vida and our recent launch of programmatic TV marketplace.

Well, we'd like all slow.

To comment on placebo headwinds in our sector.

It relates to challenges associated with IV <unk>.

Changes in Cookie deprecation that are impacting our industry players, we do not anticipate a significant impact on our business.

And platform and presence the growth all screens provide us with the key advantages that we do.

<unk> exposure to this issue.

We believe this strategy is proving successful and we will continue to advance and enhance this model as we look to the future.

It's also worth noting that although COVID-19 proved to be challenging. It is also served as an opportunity for tremor by accelerating growth trends in segments that we have strong exposure such.

Such as CTV and video <unk>.

Recently, however, many companies have been citing supply chain constraints attributable to the COVID-19 pandemic as a negative catalyst for the sector as a certain advertisers have reduced budgets due to these constraints.

While we have seen some evidence of lower advertising spend to this point in Q4 2021 in certain sectors, particularly automotive due to chip shortages, we have seen stronger demand in other segments and the diversification of our customer base on both the demand.

And supply side.

Set any significant adverse impact to our business.

I will now shift the discussion to our vision.

And some of the key developments that have occurred since last quarter.

As I have stated before four years ago, our senior team set a plan to transform <unk> into a market leading company focused on video data in CTV with the ability to capture users the growth across all screen delivered through a full end to end tech platform. Our team is M&A exit.

<unk> experience and has successfully integrated companies in the past.

We are constantly searching for strategic opportunities to acquire additional companies.

That can become meaningful contributors in video and CTV such.

Such as what we accomplished with the recent acquisition of spirit.

We believe we have delivered on our promise to continue expanding and enhancing each element of our end to end platform with an emphasize on CTV and we'll continue to do so going forward.

One recent example of this comes from the previously mentioned acquisition of Spirit, a global CTV AD server, featuring a robust user interface with advanced tools for airport monetization.

Spirit was purpose built for broadcaster to deliver a seamless <unk> experience in CTV and over the top environments spirit will integrate it into <unk> annuity SSP, enabling CTV header bidding channel inventory management and at Baltimore management.

This transaction was particularly compelling is the addition of our CTV AD server further expense or depreciation and strengthen our position within CTV, but.

While also significantly deepening relationship with our media partners and further complementing our end to end CTV offering.

Prior to this media clients, where reliance on either in house AD servers or third parties, whereas now broadcaster with deep relationship with tremor can leverage us for our AD server and Adobe their capabilities this enabling us to maintain more of the relationship.

And they allow us to better serve our customers through added technology solution.

Not all servers as CTV airport monetization capabilities like spirit, which is why we will particularly excited about adding that technology built by several industry veterans to our end to end platform.

We will also continue to evaluate future strategic exclusive global partnerships that expand our reach and differentiation within <unk> such as the partnership we've recently announced with Veeva. The partnerships give us exclusive global access to beat us automatic content recognition.

ACR data pre installed on most Eiffel Smart TV and is also integrated into a number of premium original equipment manufacturer subsets Toshiba.

These partnerships give us access on an exclusive basis to be their global ACR data accelerating our U S and international growth and footprint. We will utilize this data for targeting purposes, making us one of the only end to end technology platform outside of the walled gardens with this.

Of that exclusivity.

The agreement provides us access to video distribution, which reaches approximately 20 million smart Tvs globally, and we will anticipate this reach good roughly doubled over the course of our partnership.

I also want to highlight the recent launch of tremor programmatic TV marketplace, which enable advertisers to access a centralized platform for <unk> campaigns, facilitating Turkey, compared this activation and providing greater transparency into the corporation of data driven audiences.

Our TV marketplace gives brands the ability to take even greater control over the planning execution and customization of their CTV competitors, coupled with a more transparent view into the supply and audience targeting capabilities available to them within this marketplace advertisers scale.

Activate deals leveraging treble content level targeting solution enabled by TV like content attributes from direct media partners.

By Curating deals based on content attributes like genre and rating from treadmill media partners as well.

Those can tap into traditional media television buying tactics in digital environments like CTV at scale. This expansion of travel contextual capabilities also addresses the market needs for more privacy mindful.

Verifiable targeting solution across CTV and video.

Travel also achieved a number of important business wins during the quarter.

In Q3, we added 35, new use supply partners across critical growth verticals, such as sports entertainment and lifestyle as well as the original equipment manufacturer OEM and multi cast.

You on demand and Vod businesses.

Unruly product team also streamline revenue opportunities for publishers by rolling out consolidated and enhance header bidding adaptor on both the client side and service side.

Bobby shelves can now access tremor video demand for all unwieldy formats Vi's single adapter.

Rather than legacy version Ado.

Additionally, through Q3, 'twenty, one tremor video observed a major increase in adoption of our data driven creative offering truly since 2020, including expansion across CTV as well as substantial increase in client usage of our costume QR code salute.

<unk> for CTV truly.

Truly continues to be a differentiator for travel and a unique offering and advantage within our end to end solution truly is our in house creative studio and it'll allow us to provide costume data driven creative solutions for our advertising customer to align with their complex global.

Campaign objective.

Leveraging truly underpins our strategy of being completely end to end, where advertisers and media partners can utilize us in all key aspects of their buying process across all screens, which offers us numerous growth trajectories and differentiation of revenue streams.

Trimble has a robust history and proven track record of successfully integrating this into a unified end to end platform and we will continue to remain active in evaluating deals that can further complement and enhance our existing platform.

With those comments complete it is now my pleasure to turn the call over to <unk> to review our financial results.

Thank you all fir. Thank you everyone for joining us joining us today.

We're encouraged to see another record quarter of revenue and strong business momentum.

We move into the fourth quarter of 2021.

Today I'll be discussing some of the highlights of our Q3 performance as well as some of the key financial and operational drivers during the quarters.

<unk> International achieved an outstanding record quarter in Q3 with revenue and adjusted EBITDA propelled by steady organic revenue growth.

Our net revenue grew 54% in Q3 year over year and resulted in $76 7 million for Q3 2021 versus $49 7 million in Q3, 2020, all of which was driven from strong organic growth.

Our CTV revenue grew 115% in Q3 2021 versus Q3 2020, and we are poised to continue this growth as more business is increasingly being transacted through programmatic platforms. During the same period, our video and as revenues grew 58%.

For the nine months ended September 32021, CTV and video net revenues grew 188% and 112% respectively.

Respectively.

For the nine months ended September 32021, tremor generated $213 $4 million. The net revenues, which is an increase of 93% year over year. We continue to generate very strong adjusted EBITDA, we're investing in the critical areas of our.

Business that can drive our future growth.

Were lower than expected driven by the postponement of our return to office lower anticipated marketing events, then and reduced travel and entertainment costs. We saw very strong year over year growth in Q3, and the nine months period of 2021, which increased our EBITDA by.

Two two times and five times, respectively compared to the same period in 2020.

58% from $48 $1 million in Q3, 2020 to $63 $4 million in Q3, 2021, which was driven by our video capabilities and sharp focus on this segment, we delivered significant growth in the nine months period of 2021 during we exceeded.

Market expectations and proved once again that our strategy is working.

Representing the latest milestone in the evolution of our end to end video first platform MTV intelligence solution. Our recent acquisition of spirit and exclusive via the partnership will enable more effective TV campaigns going forward for our partners in several important ways.

<unk> enhanced our TV intelligence solution not only by providing an exclusive data set but also by providing an opportunity for real time targeting capabilities.

<unk> is a global reach of approximately 20 million smart Tvs, allowing us to provide our international partners with a scalable TV targeting and measurement solution across the premium supply footprint, which we didn't have before.

Spirit is the proposed to build technology for broadcasters addressing the unique needs of delivering a seamless TV like experience for consumers that can benefit our media partners through operational and cost efficiencies increased buyer power maximize revenue opportunities and advanced UI.

And our customers with expanded access to premium global CTV, and OTT supply and advanced AD targeting capabilities.

We believe we have a competitive advantage with our Omnichannel Android platform versus other one dimension of solution. We have developed a profitable business model with high efficiency around operating costs, leading to operating leverage economies of scale and strong productivity.

And our <unk> peers.

<unk> is one of the highest margin and operational profitability, resulting in a 49 adjusted EBITDA margin in Q3 2021.

On a reported revenue basis, and 55% on a net revenue basis.

Turning to our cash flow, we generated net cash from operating activities of $44 6 million for Q3 2021 versus $4 5 million in.

In Q3, 2020, which is an increase of around 900% for the nine months ended September 32021, we generated net cash from operating activities of $121 4 million.

Versus $11 $7 million in the nine months ended September 32020, and 940% increase.

As of the 13th of September, we had $333 $3 million cash and cash equivalent with no debt.

We also experienced a 99% free cash flow conversion during the quarter.

Non <unk> diluted earnings per ordinary share in 'twenty one.

For Q3, 2021 versus 11% in Q3 2020.

<unk> 56 and.

For the nine months ended September 32021 versus seven four.

For the nine months ended September 32020.

Finally, I will now turn to our outlook as a reminder, we expect that return to office marketing and travel costs will add an incremental $1 5 million to $2 million per quarter in operating expenses next year.

For the fourth quarter of 2021, we expect net revenue to be at least $85 million, which.

<unk> year over year growth of approximately 16% in Q4, 'twenty, one adjusted EBITDA to be at least $42 million.

Which represents year over year growth of approximately 7%.

We also expect annual 2021, adjusted EBITDA to be at least $149 million.

Each represent year over year growth of approximately 145% and expected annual 2021, adjusted EBITDA margin of 50% as a percentage of net revenue compared to 33% in 2020.

Growth and profitability.

Thank you so again to summarize.

We believe we are well position within the industry. Thanks to the key advantages we achieve from being completely end to end our unified platform provides advertisers and media partners with simplicity and better data in Poland.

While also accelerating the industry move toward supply path optimization.

We have build this platform with the heavy focus on <unk> video and data with our customized rely on our deep expertise and actionable insights and which now accounts for 92% of our property dramatic net revenue.

We continue to believe that advertisers and media partners will rely on an allocated additional spend towards fewer companies with a diverse portfolio of solution that can service them across all parts of their buying processes and across all screens, regardless of their service level needs.

We will also continue to deliver on our promise to expand and enhance our end to end <unk> capabilities for customers such as what we achieved through our recent acquisition of spirit.

Which further complement.

Our end to end platform offering.

We also have taken steps to further our U S and international footprint and accelerate our growth in those key markets, while differentiating ourselves through global data exclusivity.

Partnership with Vida.

Finally on the Investor relationship front, we anticipate being far more active with both U S and global in vessel.

Who are attending investor conferences conducting tech demos and participating in non deal roadshows with the firm's discovered trimble, we will be very busy working towards garnering the.

Additional interest from current and prospective shareholders we.

We believe that we have a compelling story and value proposition with strategic differentiation and advantages that more investors and customers will see the benefit of as we move ahead. We look forward to speaking with current and prospective investors at RBC Global technology Internet media and telecom.

<unk> conference.

On November 17, and the Raymond James Technology Investors Conference on December six and Needham growth Conference on January 10.

We believe that we have significant room for growth and remain confident about our future.

Operator.

We'll now open the call to investor questions.

If you'd like to ask a question. Please press Star then one if your question has been answered and you'd like to remove yourself from the queue Pascal Donkey.

Our first question comes from Matt Swanson with RBC capital Your line is open.

Alright, Thank you and congratulations on the results this quarter.

Ofer, you mentioned spo as kind of a growing theme.

Thank you Matt good morning.

Yes, we started this process about two and half years ago. When we acquired in April 2019, when we acquired it in one and connected the rhythm one basically to treble and created.

End to end solution platform that include the DSP and SSP and we believe that it this way, it's creating a few elements, which are really important for for the advertisers, but also for the publisher.

First of all on the simplicity for them to buy the traffic to run their campaigns. According to the objectives for the second one is around that that is also an emphasis for us and the third one is the supply path optimization, meaning less.

<unk> between basically the <unk>.

The DSP and the buyers to their to their media and reaching their clients.

But what we see in the market that many companies and of course advertisers and publishers are adopting that and this will become a standard in the near future. So we believe that it will grow in 2022 and it will support our growth also going forward.

Thank you and then and for Society.

Critical growth you're achieving this year is really noteworthy and when we think about the strength, particularly adjusted EBITDA. It was great to get that additional color on the returning expenses next year, but how are you thinking about balancing investments in growth for the opportunities in front of you.

Compared to profitability when we're looking out to 2022.

So thank you.

I think we are all aware that we want to grow the business organically and keep growing it into 2022 and going forward.

We understand that in order to do that we need to invest more in marketing R&D sales and product.

Having said that then you're now expecting the growth to come in 2022 and going forward I think we still can maintain somewhere around the 45%.

Adjusted EBITDA margins out of our net revenue.

Fantastic. Thank you for the time.

Okay. Thank you.

Our next question comes from Laura Martin with Needham <unk> Company. Your line is open.

Good morning.

As always Mark and just following up on the prior question.

A bit higher structural you're at 55% in the quarter you just structurally you can stay at 45.

5%, Jeff Green startup.

10, 41% in the quarter, but really only connect 30% margins.

The first question I have for you is what is it about your business structurally is so much more profitable and all the other AD Tech firms. That's my first one my second one is on your slide 14, I love that slide basically.

Yes.

<unk> grew 115% year over year and doing the math it looks like online video.

No.

Chris My question of cannibalization or additive.

Online video is growing so much slower than CTV and then my third is again referencing convention and trade desk again, Jeff Green.

Please.

Okay.

Create competitive advantage for the open internet to take share back from the stag walled gardens and I'm interested in whether you agree with that.

So what youre thinking.

According that.

That would be wonderful for investors it's true.

Yes.

Thank you Laura it's offered I will take maybe the first question that you asked about CTV and that is giving you an option for the open market to come to basically to grow compared to the walled gardens. So I agree I agree with this statement and we just saying that.

Think that CTV is an open market first before other companies also to grow their business and it's not.

Controlled by the walled gardens basically.

And there is a lot of opportunities in growing elements independent companies that can basically grow the business in parallel to that.

And that's also the reason that we sign this disagreement important agreements with data, which is in essence company that basically is the operational system of this platform that allow us now to get the ACO data from for all the television and CTV basically around the globe in the next.

Elusive basis, and we believe that this competition will just enhance.

It's less related to the to the walled garden and also advertisers wed like to reach more and more users through different channels and or just the.

Basically the legacy one.

Thank you Ofer.

Hey, good morning, I will answer the first two questions. So regarding profitability, yes, probably we are the highest.

Profitability margin in our industry.

I think that it's come from couple of power centers of course. The main one is our end to end.

That form in our end to end business model, where we are catering both sides of our partners media partners and advertisers and agencies.

Adjusted EBITDA margins.

For your first question regarding CTV growth versus video growth. So there is no cannibalism around that because <unk> of course is the device that we are running on.

And video is the format. So we are very heavily.

Generating revenue through video, it's more than 80% of our revenues coming from videos of the grow over there.

Can be.

Hi, as we are doing in CTV, where we started of course lower.

Doing around 26%.

Our revenues for CTV and probably it will grow it will grow.

Still higher than our increase in video going forward.

Just to add one point too about the.

The EBITDA margin and so and we are talking about we grow our cost investments.

In basically all the related.

<unk> by around 30%, but income grow by 100% of course.

This extra income went down to EBITDA. That's why we see this growth in EBITDA compared to to the market as to our forecast basically.

Thank you very much great results guys.

Thank you.

As a reminder to ask a question. Please press Star then one.

Our next question comes from Andrew Boone with JMP Securities. Your line is open.

Good morning, guys and thanks for taking my question two please.

The press release highlighted strength in the accretive offering can you just talk about the value that truly offers and how customers are moving into it and then just how does how does that relate in terms of thinking through your relationships with advertisers as well as their agencies and truly.

And then question number two is on Vida.

The international component the global nature of that agreement was kind of highlighted multiple times.

Going back.

When we started our relationship with you guys or understanding of telco support is more U S. Based so can you just step back and review kind of how you guys are thinking about international and any potential there. Thank you so much.

Of course, good morning, So I will start with the second question. If you don't mind regarding Vita. So first of all our main focus is in the U S and of course close to 90% of our revenues are coming from the U S. But we still have like very nice infrastructure in the international markets like in U K, Germany.

In Singapore, Australia, and Japan that is there any says they know it was suffering because of COVID-19 and not an ability to move the people here in order to train or to coda and rates move.

The move more knowledge between the companies.

But we feel that there is a big potential source of internationally and one of the things that we learn how to do it in the last five years is surrounding ACI, we're targeting in the U S and we feel that there is a huge potential social data I mentioned on market. So we think that it will be a differentiator for us in some of these markets seem to be there is a very major player in some of them like Japan.

In Australia and also the U K.

So we delivered it is important to mention it because we believe it will give us an edge in a differentiator in this market and we will be able to grow revenues.

From middle of 'twenty, two going forward.

Regarding.

So regarding your first question about truly so basically the agencies and advertisers are looking for unique and creative ways to basically enrich the offering it's not the video itself.

It's around the video that is like enabling to get more information on their product or the service point of contact to download to Bruce Shaw to scan a QR code.

And get more information or to download a product into there.

Mobile phone and so on.

And we are able to do that through truly that is growing very fast in the demand and also we need to remember that the agencies conducted a few changes that lowered the resources around it. So advertisers are looking for that and it's giving the simplicity again when they are running with us to get all these services when they are running with us on their platform.

The clients, which is very meaningful.

Can I just follow up real quick on that last point erratic.

Here at accelerate that at all in terms of now having an AD server as well as been creative elements can you just talk about how those two things are intertwined.

So of course, it will accelerate <unk> web.

Server and that'll be the most.

Such a sophisticated thats over a spirit into the platform, which will enhance our capabilities of course together with also even with data that is created providing us data.

So all these elements together of course, increasing increasing the effectiveness of the of the add that we are showing to the user.

According to two different parameters in the API of the Advertiser and I think that in general we spoke a lot yet about spirit, but we're going to do that in the near future.

One of the most advanced platform. The three so that is incorporating and CTV AD server and there'll be there in the platform that was built by by very.

Very very experienced and into.

It'll events veterans that basically build this platform.

<unk> created.

So the company like that in the past.

Two.

A few years ago.

Basically what we will be able to offer what basically what we will be able to offer a one stop shop for all their data.

Creative.

Our service capabilities regarding CTV, that's what we are what we announced basically in the last few months through the allowance of truly the acquisition of spirit and the deals that we've done we agreed upon for the next couple of years.

Great. Thank you.

Youre welcome.

Our next question comes from Jonathan Barrett with Pangaea. Your line is open.

Thank you can you hear me guys.

Yes.

Great.

Just.

Obviously, you changed your accounting short while ago I just wondered if you could first of all consistent update on the size of the buildings that you are now.

In Poland with just give us a.

Scott.

Run rate is.

First of all.

And then second.

I wondered if you could.

Give us a breakdown of your net revenue so that we can understand.

How youre getting paid by clients.

While elements you're getting paid for.

Or how youre, writing some of your revenues.

Yes.

Alright.

Just so we can get it understand the mix of income and perhaps you can talk about how that mix is evolving as well and what we might expect going forward.

And then thirdly.

Just on <unk>.

<unk> got married with you, but I guess, the void of group as well it just what you're seeing in terms of the demands for putting out guarantee.

Better quality media.

Financial commitments and the like.

Perhaps talk around subject matter if you can.

Okay I'll take.

The first two questions. So.

We change like in 2020 already reporting basis, instead of reporting only on a growth basis, we changed it where we are reporting now programmatic on a net basis and performance.

On a gross basis of where youre seeing our reported revenue its a mix of growth.

And that and this is the reason we are emphasizing our.

Contribution ex Tac noted that we will be we can report on an apples to apples with our peers.

And every other company of course billing and invoices are going on a gross basis and this is how we are collecting the money and then paying through the through the meat to our media partners.

We are not disclosing the growth the gross revenues.

And as per your question, what is coming out of programmatic and what is coming out of <unk> I think we highlighted that in our press release.

In Q3, we did in programmatic revenues, which are on a net basis almost 69%.

So the gap to the total of $76 7 million of cost performance on in the nine months, we generated $192 million in programmatic, which again the gap to our $213 $4 million of contribution ex Tac is performance.

Regarding <unk> deal for you want to take.

Yes.

Part of the deal of acquiring unruly. We also provided then MLG to manage their media three years after the acquisition basically.

Usually when we are providing a much is only four key media partners that we feel that it can be a differentiator or very interesting for advertisers to get in all doors and to run their campaigns against but usually it's not a it's not a practice anymore that is available so much in the industry.

And most of the worst of the deals are done as we mentioned programmatically.

Okay.

Of course.

Yes.

And we heard from <unk>.

Right.

In the UK.

About that.

The control of the transaction process.

Boyd's middleman.

Ah.

How does that.

Why the video universe.

Do you think it's credible for them to run their own.

Platform.

The <unk>.

<unk> direct.

<unk> or <unk>.

Or do you think they will include you in how.

How do you think that recall.

I think that.

This is exactly what I discussed when they basically Matt ask us questions about <unk>.

Through basically.

<unk> that is connected to auto direct publishers in the case of the publisher that you are talking about you can basically manage all these media they're all these broadcaster under under this this platform. So it's exactly where it is.

As we mentioned this is a phenomena that is now growing is growing at two elements. One of them is that corporations strong cooperation between DSP and SSP to create supply path optimization, but we feel that the more advanced one is supposed to be created which is one platform that basically everything can be managed on one platform and <unk>.

Basically you are avoiding or minimizing the usage of measurement. So this is this is the path and this is the vision that we created a few years ago and Thats. What we are following now so I totally understand what theyre trying and where they want to go and if it makes sense and we are doing it already for a couple of years.

Thank you.

There are no further questions I'd like to turn the call back over to Alpha for any closing remarks.

Thank you very much.

We said at the beginning we're very excited about the results and the progress of the company and we're looking forward to to keep talking and making good progress with the company going forward. Thank you very much.

This concludes the program you may now disconnect everyone have a great day.

Q3 2021 Tremor International Ltd Earnings Call

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