Q4 2021 Perion Network Ltd Earnings Call

Speaker 1: These statements reflect the company's current views with respect to future events. These forward-looking statements involve known and unknown risks and uncertainties and other factors, including those discussed under the heading Risk Factors and elsewhere in the company's annual report on Form 20-S.

The company's current views with respect to future events. These forward looking statements involve known and unknown risks and uncertainties and other factors, including those discussed under the heading risk factors and elsewhere in the company's annual report on form 20-F.

Speaker 1: that may cause actual results, performance, or achievements to be materially different and any future results, performance, or achievements anticipated or implied by these forward-looking statements.

That may cause actual results performance or achievements to be materially different and any future results performance or achievements anticipated or implied by these forward looking statements. The company does not undertake to update any forward looking statements to reflect future events or circumstances as in prior quarters. A result reported today will be analyzed both on a GAAP and non-GAAP basis.

Speaker 1: The company does not undertake to update any forward-looking statements to reflect future events or circumstances. As in prior quarters, the results reported today will be analyzed both on a gap and non-gap basis. While mentioning Yibitha, we'll be ref-

While mentioning EBITDA will be referring to adjusted EBITDA.

Speaker 1: We have provided a detailed reconciliation of non-GAAP measures to their comparable GAAP measures on Form 6K, which has been filed and is available on our website as well. Hosting the call today are Doron Grisell, Perion's Chief Executive Officer, Mayos Segrone, Perion's Chief Financial Officer.

We have provided a detailed reconciliation of non-GAAP measures to their comparable GAAP measures on form 6K, which has been filed and is available on our website as well hosting the call today or Doron Gerstel, <unk>, Chief Executive Officer, <unk>, <unk> Chief Financial Officer.

Speaker 1: I would now like to turn the call over to Darong Grispell. Please go ahead.

Now I'd like to turn the call over to the longer spell. Please go ahead.

Speaker 2: Yeah. Hi, everyone. Thanks for joining our fourth quarter and annual 2021 earning call.

Yes, hi, everyone.

Thanks for joining our fourth quarter and annual 2021 earnings call.

Speaker 2: Together with me on this call is Moses Sigron, he is our CFO . Let's get started.

Together with me on this call is mostly grown.

As our CFO .

Let's get let's get started.

Speaker 2: So definitely the Q4 momentum continues and we are delivering a record revenue growth in the fourth quarter, and we actually doubled our net income. And there are few...

So definitely the Q4 momentum continues and we are delivering.

Record revenue growth in the fourth quarter, and we actually doubled our net income and there are few.

Speaker 2: points or few factors tailwinds factor that I would like to mention on this call and I definitely will dive in on some of them. First and foremost, I think that has to do with our diversification strategy and product that feeds different advertising channels.

Points or few factors tailwind factor that I would like to mention on this call and they definitely will dive in on some of them.

First and foremost I think that has to do with our diversification strategy and products.

Different advertising channel.

Speaker 2: high impact units. The pendulum is shifting from standard units to high impact units and it's all about engaging with new consumers. I'll show you a few examples of great campaigns that we're doing that are taking the concept of high impact, if it's CTV or video, to a different level.

Hi impact units depend on who is shifting from standard units to a high impact units and it's all about engaging.

With new consumer I'll show you. A few example of great campaigns that we're doing the taking the concept of high impact if we'd CTV or video to a different level.

Speaker 2: We are very proud. We're very proud of our IHAB, the Intelligent Hub. It's AI-driven technology that 2022 is going to be the first year, which is fully in operation. We have an estimate what is the total number of people

We are very we're very proud we're very proud of our.

I have the intelligence hub.

The AI driven.

Technology.

The 2022, it's going to be the first year, which is fully in operation.

We are have an estimate what is.

Speaker 2: what it's going to generate financially for our bottom line. And that's definitely something that I share with you when I talk more about 2022 guidance, but we're very happy with what we're able to deliver.

What is going to generate financially for our bottom line and that's definitely something that I share with you when I talk more about 2022 guidance, but we're very happy with what we're able to deliver.

Speaker 2: There is a strategic focus on video and CTV with the acquisition of VidaZoo that happened at the beginning of October the beginning of the quarter actually This is the Q4 is the first quarter that there are there are with us and I want to share with you Some of their great results in this quarter and how it fits really well with our focus strategy on video and CTV

There is a strategic focus on video and CTV with the acquisition of <unk> that happened at the beginning of October at the beginning of the quarter actually this is the Q4 is the first quarter that there are there are with us and I wanted to share with you.

Some of their great results in this quarter and how it fits really well with our focused strategy on video and CTV.

Speaker 2: Last but not least, with very successful two follow-ons that we did in 2021.

But not least with a very successful two follow ons that we did in 2021.

Speaker 2: and a great net cash from operation. We reach a point where we have more than $320 million in cash, it's no debt. We intend to continue with our, I consider it the unique acquisition framework and strategy. It's definitely proved itself over time. And now with more cash, we definitely looking ahead and there are some great opportunity in the market.

A great net cash from operation will reach a point, where we have more than $320 million in cash and no debt. We intend to continue with our I consider as a unique acquisition framework and strategy, it's definitely prove itself over time and now with.

More cash we have.

Definitely looking ahead and there are some great opportunity in the market.

Speaker 2: So let's dive in into the fourth quarter. So as I mentioned, the fourth quarter was our record revenue with 34% year over year growth between the fourth quarter 2021 with $158 million versus $118 million last year. Very much thanks to.

Let's dive into the fourth quarter.

So as I mentioned the fourth quarter is.

Our record revenue was 34% year over year growth between.

The fourth quarter 2021, with $158 million versus 118 last year very much thanks to <unk>.

Speaker 2: 311% growth in CTV. $46 million versus $11 million.

311% growth in CTV $46 million versus $11 million.

Speaker 2: Another two KPIs which we are very much keep attention to is the average deal size. I will look about what is the cause for increasing the average deal size by 29% and very much has to do with the cross screen synchronization. Very, very interesting concept that we bring to market. Average of $139,000.

Another two kpis, which we are very much keep attention to is the average deal size.

I will look about what is the what is the cause for increasing the average deal size by 29% and very much has to do with the cross screen synchronization very very interesting concept that we bring to market average of $139000.

Speaker 2: And as you all know, the whole advantage about increasing average dinsides is that the effort, the sales effort for $139,000 is the same as 108, and it can generate a very, very healthy net impact.

As you all know.

The whole advantage about increasing average deal size is that.

The effort this sales effort for $139000 is the same as the 108.

Generate a very fairly healthy.

Net income growth and customer retention is the other kpis that we keep retention tool.

Speaker 2: Growth in customer retention is the other KPI that we keep attention to and we improve this from 86% in last year to 91% this quarter.

Prove this from.

It's too from 86% in last year to 91% this quarter.

Speaker 2: So profitability was not behind. And when we actually doubled, double, hold on for a second.

So profitability was not behind.

When we actually doubled.

Doubled.

Going for a second.

Okay.

Pardon me, everyone I need you to please share your screen to show the slides. Thank you.

So you didn't you didn't see it.

Okay.

Speaker 2: My fault. So that's the revenue slide that I talked about. And now let's move to the profitability slide, where we double actually our revenue from the fourth quarter of 2020 to the fourth quarter of 2021, and we'll reach $29 million. Pay attention into

So.

That's.

The revenue slide.

Talked about the now lets move to.

The profitability slide.

Where we doubled actually our revenue from the fourth quarter of 2020 to the fourth quarter of 2021, and where we reached $29 million pay attention.

Into these numbers, which is the ratio between the EBITDA that we generate in the fourth quarter to the revenue ex Tac and we reached a very significant number of 45%.

Speaker 2: these numbers, which is the ratio between the EBITDA that we generate in the fourth quarter to the Revenue X-Stack, and we reach a very significant number of 45...

Speaker 2: What are the cause for this high profitability? I mentioned there have been spoke models and it has a huge potential of saving resources.

And where what are the cause.

This high profitability I mentioned, the hub and spoke model.

There's a huge potential.

Potential.

Of our saving resources. The second the second thing is the our investment that we did in the previous year on on automation and technology is really paying paying off and as you can see it while we are scaling our business label to leverage our expenses one of the major effort that we did.

Speaker 2: The second thing is our investment that we did in the previous year.

Speaker 2: on automation and technology is really paying off and as you can see while we are scaling our business we are able to leverage our expenses.

Speaker 2: One of the major efforts that we did, we established offshore operation on some of the repeat tasks that we have in India, and that's definitely helping us from a cost-structure standpoint.

We established offshore operation on.

On some of the repeat task that we have in India, and that's definitely helping us from a cost structure standpoint.

Yeah.

Speaker 2: display advertising. Our revenue is being structured or in two buckets. One is display advertising. The other one is the search advertising.

Display advertising, our revenue is being a structure or into a.

Two two buckets one is display advertising the other one is the search advertising.

Speaker 2: When it comes to display advertising, 46% year-over-year growth, $100 million in the fourth quarter, $68 million was in the previous year. Very much thanks to the CTV. I mentioned the CTV and video growth, but here you basically can see that CTV able to get a 31-new customer.

When it comes to display advertising, 46% year over year growth of $100 million in the fourth quarter $68 million in there.

Previous year very much thanks to the CTV I mentioned, the CTV and video growth, but here you basically can see that CTV able to get the 31 new customer.

Speaker 2: And more importantly, 20% of our customer, the active customer.

And more importantly, 20% of our customer.

The active customer 412 of them, so actually 92 customers using CTV, it's a 20% its actually double.

Speaker 2: 412 of them. So actually 92 customers using CTV. It's a 20% it's actually double From last year the number of customer that are using CTV I will show you for example of it. I am but format drive the appreciation and more importantly We are very happy with our ability to share formats that drive consumer all the way from awareness

From last year, the number of customer that are using CTV.

I will show you a few example of high end performance drive differentiation and more importantly, we are very happy with our ability.

To share formats that drive.

The consumer all the way from awareness.

Speaker 2: you know, to performance. Cross synchronization was the main factor behind the average increasing average deal size.

Two performance crossing synchronization was the main factor behind the ever increasing average deal size.

Speaker 2: I will show you the video's platform, which is completely changed the way we are working with Publishers and allows us to drive direct demand into their platform.

We'll share with you the vendors who platform which is completely change.

The way, we are working with publisher and allows us to drive direct demand into their platform.

Speaker 2: And most of all, we are really happy with the progress that we are doing on the vertical of retailers. That is all as to do with personalization. That's generated around $4.6 million in the quarter, working with retailers, and it's all just the beginning. Thank you very much.

And most of all we are really happy with the progress that we are doing on the vertical of retailer that is all has to do with personalization that generate around $4 6 million in the quarter.

Working with retailers and it's all just the beginning.

China.

Don.

Speaker 2: Okay, so this is a, this is an example that I want to show you with $800,000 campaign that we did that we.

Okay. So this is a this is an example that I want to show you with $800000 campaign that we do.

Deed.

That we did with <unk>.

Speaker 2: The brief was very interesting and they described it as the awareness to performance and the idea was to what extent we are able to synchronize few screen, the mobile screen, the desktop screen and the end the big screen which is the TV screen with here

The brief was very interesting and they describe it as the awareness to performance and the idea was to what extent, we are able to synchronize.

Few screen the mobile screen, the desktop stream and the and the Big stream, which is the TV screen with here. They go to action and the go to action is needs to be translated.

Speaker 2: the go to action. And the go to action is need to be translated into an actual buy, by the way, it's a live campaign. So if you have your smartphone with you, you can scan the QR code here and add to this very significant number of 73,000 products that we added to add will due to this campaign. So let me run it here.

Into an actual by Baidu its allowed light campaign since you have your.

Smartphone with you you can scan the QR code year, and we add to this very significant number of 73000 products that we added to add will do to these campaigns. So let me run it here.

Speaker 3: Look at this guy, he's really working out. You know what he'll get? Must say. You know what?

This is really working.

Do you know what here.

Do you know what.

Sure.

Got it.

Speaker 2: So we should get ads built. And one of the things that you scan the QR code, the beauty here that you drive it all the way from here to the checkout. And here you basically type the amount, the quantity in you there, you were saving on clicks, which is everything that has to do with the consumer funnel. And if you're asking what's next, this is next.

So we should get the advil and one of the things dwelling scandal.

The QR code the beauty here that you drive it all the way through.

From here from year to year, two the checkout and here you basically type the amount the quantity in your there you were saving on clicks, which is everything that has to do with the consumer funnel and if you're asking what snacks. This is next.

Speaker 2: The next big thing is that we are in case, you know, this retailer is out of stock. We are getting an online indication. If this is the case and suggesting all kinds of local, like, and alternative products that can be a great substitute based on inventory level. And why it's so important?

The next big thing is that we are in case.

The this retailer is out of stock we are getting an online indication. If this is the case and suggesting all kind of look alike. An alternative product that can be a great substitute based on inventory levels and why it's so important because if.

Speaker 2: because if advertisers pay so much to be a disspointed

They are paid so much to be at this point.

Speaker 2: so much to be at this point where this, this, and happen. And at the end, there is no inventory. Can you imagine the law?

So much to be at this point, where this can happen and at the end. There is no inventory can you imagine the loss.

Speaker 2: So we are adding this capability, which advertises it as a huge, huge value for them, and no doubt that they're increasing their amount of spend to 29% and that's a very, very neat technology that we develop.

So we are adding this capability, which advertisers see it as a huge huge value for them.

Doubt theyre, increasing their amount of spend to 29%.

That's a that's a very very neat technology.

That we develop.

Speaker 2: The next example, this is the next example, it's the live CTV example. The whole idea is very much keep the viewer engaged and not looking at the net break. It works really well. Now, it's down, stuff with DAC, when it fumbles into the goal line.

The next example.

This is the next example is the large CTV example.

The whole idea is very much keep the viewer engage and not look at it as the as the net break it works really well.

Start with that when it goes into the goal line and psychiatrist.

Speaker 4: Flight 4 Yingling is raising the bar by crafting the next generation of lightbeard with only 2.6 The next generation of lightbeard with only 2.6, the next generation of lightbeard with only 2.6

Right.

The box on crossing the next generation of lysine.

$2 six shares and 99 calorie.

Premium risk.

Although.

The second that's the next one sorry.

Speaker 2: Okay, so viewers get to enjoy sports content as each day line. They never goes to commercial break. Never goes to commercial break. That's the, that's the whole idea. And that was very much the brief that we got from draft king.

Okay. So viewers get to enjoy sports content is it stay like they never goes to commercial break never goes to commercial break.

That's the whole idea and that was very much the the briefs that we got from draft Kings.

Speaker 2: which they very much would love to get more and you see the quote here as how they view it. It's one of the main drivers behind the CTV growth that we've seen and very much a focus area for us.

Which they very much would love to get more and you see the quote here.

As how they view it it's one of the main driver behind the CTV growth that we've seen in a very much a focus area for us. The next one that I want to show you here, it's being interactive CTV here is another example that we did with HBO.

Speaker 2: The next one that I want to show you here, it's the Interactive CTV. Here is another example that we did with HBO.

Speaker 2: And I think that the most important part is this part, the win win. It's the win win for the viewers and the advertiser. And everything he has to do with engagement rate.

And I think that the most important part is this part the win win is a win win for the viewer and advertiser and everything has to do with the engagement rate.

Speaker 2: This is the interesting part, the 32% more memorable, advertising and as a result, interactivity drives.

This is the interesting part the 32% more memorable.

Advertising and.

As a result interactivity derived 47 more time spent with ads that's very much the idea you're able to see the interactivity here surviving.

Speaker 2: 47 more times 10 with ads. That's very much the idea. You're able to see the interactivity here. Surviving? Are you able to see it? I will stop it just to show you. I'll give it just. Oh, sorry, I couldn't. Nobody.

Yes.

<unk> software just to show you.

Yes. Thanks.

So good now, but here is a nice debt the interactive part I.

Speaker 2: I hope you can see my circle. So if you really engage with what they have to show next, you click on it. And then you are very much going deep into the advertising because this is what you want as a viewer. Instead of us bombarding with another minute and another minute that make it really annoying. So that's the ICTV.

I Hope you can see my circle. So if you really engage with what they have to show next you click on it and then you are very much going deep into the advertising because this is what you want is a viewer.

Stead of us bombarding wire bonding with another minutes in another minutes that makes it really annoying so thats the the ICD.

Speaker 2: Angle here 40% lift in engagement rate. Again, a very important factor to increase the spend. It's all has to do with return on edge spend and how it's being translated into this very important factor.

Angle here, 40% lift in engagement rate again, a very important factor to increase the spend it all has to do with return on AD spend and how it's being translated into this very important factor.

Another very.

Speaker 2: Portant innovation that we bring into the market is a platform that the videos are called the only one video monetization platform I have here a very interesting slide that we're showing and we try to

Important innovation that we're bringing to the market is.

A platform that the readers of call. It the all in one video monetization platform I have here, a very interesting slide that we're showing and were trying to compare it to other other companies and what they are known for.

Speaker 2: compare it to other companies and what they are known for. I think that the most important thing is that Vida Zulu is able to incorporate outstream the video player, edge servers, indication, monetization and pre-war monetization into a one platform.

That the most important thing is that video.

Build to incorporate our stream the video player AD server syndication amortization and pre war monetization into one platform.

Speaker 2: 50 publishers, which is around third of their install basis already using this platform. And the interesting part is really a line with what publisher would like, minimize the number of vendor and have one very much one console, one platform that covers all. We are very, very proud of what they're doing. It's creating. That's what I mean. And I called meant when I called it in previous call and mode.

50, publishers, which is around third of their installed base is already using this platform and the interesting part is really.

In line with what publisher Wood license.

Minimize the number of vendor and have one very much one console one platform that covers all.

We are very very proud of what they're doing is creating that's what I mean in a call when I called that in previous call and mode. This is the moat is a technology moat, it's very much protecting.

Speaker 2: This is a mode. It's a technology mode. It's very much protecting our customer from others because it's holistic.

Our our customer from from others, because it's holistic they need to cover all all parts of what publisher is looking on their video monetization platform.

Speaker 2: Then it's the cover all parts of what

Speaker 2: publisher is looking on their video monetization class.

Speaker 2: Search. Search is steep growing. We increase the number of publishers to 114 from 79. Search advertising is the second source of revenue for the company.

Search.

<unk> is is keep growing we increased the number of publisher to 114 from 79 search advertising is the second source.

<unk> of revenue for the company.

Speaker 2: I think we need to pay attention into this more than anything else. I think these are the most important KPIs when it comes because it's a direct impact of the geo expansion that I mentioned on previous course.

You will need to pay attention into this more than anything else. I think this is this is these are the the most important kpis when it comes because it has a direct impact of the Geo expansion that I mentioned on previous calls and of course. The fact that we are adding more publisher I put here at slide that compared the number of.

Speaker 2: And of course, the fact that we're adding more publisher, I put here a slide that compared the number of monetized searches, monetized searches is only searches that we are getting a revsher on.

Monetize searches monetize searches is only searches that we are getting a rev share on.

Speaker 2: And I tried to compare it between 2019, 2021. Just to show you, first of all, it's very much as to do with COVID. I think that people spend more time.

I tried to compare it between 22019, 2020 one.

Just to show you first of all it's very much has to do with covered I think that people spend more time.

Speaker 2: More time on screen but more time doing e-commerce. More time searching on has to do with commercial transaction.

More time on screen, but more time doing e-commerce more time searching.

On has to do with commercial transaction.

Speaker 2: If you're asking me what happened after COVID, I don't think it will go back to where it was before. I think that we definitely understand the advantage of searching before buying. No matter if this will be done online or not online, keep in mind that we are getting revshared on searches, not on the actual purchases.

If you're asking me what's happening after covered I don't think it will go back to where it was before I think that we.

We definitely understand the advantage of searching before buying no matter if this will be.

Dan on online or not online keep in mind that we are getting Rev share on searches not on the actual purchase itself. So monetize searches will never go back to just going to increase and we are very happy to see it because it has a direct impact on the fact that we are able to grow our search business.

Speaker 2: So, monetized searches will never go back. It's just going to increase. And we are very happy to see it because it has a direct impact on the fact that we are able to grow our search business by 16% on the year over year.

<unk> by 16% on the year over year.

Speaker 2: one of the most complicated however the most important slide in my presentation that you can feel that the Beginnernel fluid with the Exit of Velcro

One of the most complicated however, the most important slide in my presentation that sets to do if the hub.

Speaker 2: And for those who are first time see it, I will just give you kind of an insight. This side is the demand side. This side is the supply side, which you know, every advertising technology has. Most of our most of companies are taking position either on the demand side or on the supply side.

For those who are first time see it I will just give you kind of an inside this side is the demand side. This side is the supply side, which.

Every advertising technology.

Most of our most of companies are taking position are there on the demand side or on the supply side.

Speaker 2: Parion diversification strategy is very much calling from the ability to drive revenue from both sides of the open web.

Paragon diversification strategy is very much coming from the ability to drive revenue from both sides of the open web, but more importantly of this side is our ability to connect all our assets either from the demand side or from the supply side into this intelligent hub.

Speaker 2: But more importantly of this side is our ability to connect all our assets either from the demand side or from the supply side into this intelligent hub.

Speaker 2: This is the AI that we invest the most of our engineering budget, and it's starting definitely to pay off, and you're able to see the EBITDA contribution when I will talk about the 2022 guidance.

This is a.

This is the AI that we invest the most of our engineering budget and it starting definitely to pay to pay off and you're able to see the EBIT contribution when I will talk about the 2022 guidance.

Speaker 2: When it comes to the value of the hub, we're talking about reduced operational costs and reduced tech here on the millions of dollars that it will generate, but the one that we proud the most.

When it comes to the value of the hub, we're talking about reduced operational costs reduce stack here on the millions of dollars that it will generate but the one that we proud the most.

Speaker 2: is this one. How we able to increase our customer value through the fact that

Is this one how are we able to increase our customer value through.

The fact that we are.

Speaker 2: analyzing so much data. And I here give you kind of an indication about the huge amount of data that we are crunching on the daily basis every day. That's the amount of data from 70 million searches to use spend on social to 5 billion daily aid opportunities. Where does all data crunching is going?

Analyzing so much data and he'll give you kind of an indication about the huge amount of data that we are crunching on the daily basis. Every day, that's the amount of data from 17 million searches to you'd spend on social two 5 billion.

Daily eight opportunities, where this all data crunching is going and one of the things that we are proud. So much is sort, which is our cookie less technology. We launched we launched sort of the beginning of October not more than three months away.

Speaker 2: And one of the things that we are proud so much is sort, which is our cookie less of bright

Speaker 2: We launched, we launched sort beginning of October , not more than three months away. I mentioned it on our previous call, but now I'm so happy that I able to share with you that we have already more than 40 customers that are using sort, but more impressive guys. This is more impressive that we are able

I mentioned it on our our previous call, but now I'm. So happy that they are able to share with you that we have already more than 40 customers that are using sort, but more impressive guidance. This is more impressive that we are able to show that.

Speaker 2: that the CTR, the click through rate, is 2x higher than cookie-based targeting. That's...

The ctr the click through rate is two <unk> higher than cookie based targeting.

That's a drama.

Speaker 2: And you have some of the campaigns that is running, some of them are already, some will be started and some of our lives as we speak. But the most important thing here, that it's not required, any integration with the publisher, nor with the user, really a very, very advanced...

And you have some of the campaigns that is running some of them are already somewhere and we started in summary, our lives as we speak but the most important thing here that it snapped require.

Any integration with the publisher nor with the user really very very advanced AI technology that drives more and more customer and I would like to share with you that what we did here by the way you have here, how its demonstrate and how it.

Speaker 2: AI technology that drives more and more customer. And I would like to share with you that what we did here, by the way you have here, how it's demonstrated and how it looks in life. But what I want to share with you is this very, very interesting concept.

In life, but what I want to share with you is this very very interesting concept, which is how how effectively sourced can be a flywheel for our business.

Speaker 2: which is how effectively sort can be a flywheel for our business.

Speaker 2: So we start with the fact that 74% of the consumer that are engaged with this ad wants visible protection seal. This is the visible protection seal that we have on any sort, the any ad that is using so they feel they feel safe and thanks to that they click so they have more clicks and then what's happened?

So.

Start with the fact that 74% of the consumer.

Net or engage with Ed once visible protection C. This is the visible protection feel that we have on any sort any AD that is using sort so they feel they feel safe and thanks to that they place. So they have more claims and then what's happened.

Because they click more the click through rate is increasing so that's why we have two X higher click rate.

Speaker 2: And then what's happened is that there is a lot of we translate it into return on F spend to our advertiser. They are looking to spend more and looking to have it. They spend more with us. I mentioned that we have already 42 advertising.

And then what's happened is that there is a lot of we translated into return on AD spend to our advertiser. They are looking to spend more and looking to have it they spend more with US I mentioned that we are already 40 to advertise that.

Speaker 2: that the user sort, some of them looking at the standard. And that's why we are able to get more user that are doing it currently 208 million reachable user and

Using sort some of them looking at the standard and Thats why we are able to get more user that theyre doing is currently 208 million reachable user and counting.

Speaker 2: There is another very interesting thing, let's not forget that it's all AI-based.

Is another very interesting thing, let's not forget that it's all AI based so more clicks more data more data, it's all about the AI and more on the machine and machine learning that.

That we have and we are able to improve the model, we improve the model and able to get the higher performance, which is the great definition of sort flywheel.

Speaker 2: which is the great definition of sort flywheel. We are, we are analyzing the impact of the sort for 2022 and I will share it when I will talk about the guide.

We are we are analyzing the impact of the sort.

For 2022, and I will share it when I will talk about the guidance.

Speaker 2: With that, I would like to turn the call to Maos that will share with you some financial results of Q4 and 2021. Thanks.

With that I would like to turn the call to malls that we'll share with you some financial results of Q4 and 2021. Thank you.

Okay.

Yeah.

Speaker 5: Thank you, everyone. Good morning, everybody. 2021 was indeed a year when Deer Unseparated itself from the pack with accelerated financial performance and new record of revenue in the EBITDA.

Yes.

Thank you Ron good morning, everybody 2021 was indeed, a year when Darren separated itself from the pack with accelerated financial performance and near record of revenue and EBITDA.

Speaker 5: The widespread disruption brought on by the pandemic is challenging, but is also creating a remarkable opportunity for Pyrian. And we are very proud of our achievement. Sending it now.

The widespread disruption brought on by the pandemic is challenging but is also creating a remarkable opportunity for purion and we are very proud of our achievements.

Turning now to the quarter results.

Speaker 5: Revenue for the 440 was 158 million, an increase of 34% and 20% growth.

Revenue for the fourth quarter was $168 million, an increase of 34% and 20% growth.

Speaker 5: on a performer basis, which achieves all time record levels of quarterly revenue.

On a pro forma basis, we achieved all time record levels of quarterly revenue.

Speaker 5: Display advertising revenue was a record of 100.2 million during the 440 of 2021. Up 46% and up 23% on the performance base.

Display advertising revenue was a record of $100 2 million during the fourth quarter of 2021 up 46% and up 23% on a pro forma basis.

Speaker 5: Sales schedule sizing revenue was 57.8 million during the fall quarter of 2021 and increase of 60% your video.

Sales advertising revenue was $57 8 million during the fourth quarter of 2021, an increase of 16% year over year.

In terms of revenue mix.

Speaker 5: The supply advertising revenue of $100.2 million represented 63% of the 2021 for quarter revenue, compared to 58% in 2020. With sales advertising of 57.8 million, represented 37% of the 2021 for quarter revenue, compared to 42% in 2020.

Display advertising revenue of $1 2 million.

<unk> represented 63% of the 2021 .

Third quarter revenue compared to 58% in 2020 with search advertising of $57 8 million, representing 37% of the 2021 bulk water revenue compared to 42% in 2020.

Speaker 5: This change in revenue mix is aligned with our other type of mitigation profit.

This change in revenue mix is in line with our diversification strategy.

Speaker 5: Revenue excluding stock was 64.6 million, but all 41% of revenue compared to 43.4 million, all 37% of revenue in the fall quarter of 2020.

Revenue, excluding <unk> was $64 6 million or 41% of revenue compared to $43 4 million or 37% of revenue in the fourth quarter of 2020.

Speaker 5: The increase of 4% was primarily due to product mix, our continuous IAP efforts to serve the direct demand and supply in a closed look that is generating superior efficiency and performance. And the incremental revenue with low variable cost.

The increase of 4% was primarily due to product mix, our continuous efforts to serve demand and supply in a closed loop that is generating superior efficiency and performance and then cut.

The incremental revenue with low variable costs.

Speaker 5: OpEx and Koch's expenses were 25% of revenue in the full quarter of 2021, compared to 26% of revenue in the full quarter of 2020. The main reason for this reduction is due to our efforts to enhance process automation. The IAM that are a shared infrastructure resource and of showing our operation.

Opex and <unk> expenses were 25% of revenue in the fourth quarter of 2021 compared to 26% of revenue in the fourth quarter of 2020.

The main reason for this reduction is due to our efforts to enhance process automation.

And the shared infrastructure resources rental and off showing our operation.

Speaker 5: Net income was 17.7 million, all 44 cents per the Luta chair, an increase of 97 percent, compared to 9 million, all 30 cents per the Luta chair in the full quarter of 2020.

Net income was $17 7 million or 44 cents per diluted share an increase of 97% compared to 9 million or 30 cents per diluted share in the fourth quarter of 2020.

Speaker 5: Non-gap net income was 25.3 million of 62 cent per l luta share up 80 represent Compared to 13.8 million of 45 cent per luta share in the four quarters when it went

non-GAAP net income was $25 3 million or 62 cents per diluted share up 83% compared to $13 8 million or 45 center sale in the fourth quarter of 2020.

Speaker 5: Just a debita increased to 28.9 million in the full quarter of 2021, representing 18% of revenue compared to 15.3 million, representing 30% of revenue in the full quarter of 2020.

Adjusted EBITDA increased to $28 9 million in the fourth quarter of 2021, representing 18% of revenue compared to $15 3 million, representing 30% of revenue in the fourth quarter of 2020.

Speaker 5: And just as EBDA of revenue excluding stock was 45% during the full quarter of 2021, compared to 35% in the full quarter of 2020. Our effort to keep the medium margin level stable and to generate incremental revenue with low variable cost, having full clear efficiency and profitability.

Adjusted EBITDA of revenue, excluding stock was 45% during the fourth quarter of 2021 compared to 35% in the fourth quarter of 2020.

Our efforts to keep the media margin level stable and to generate incremental revenue with low variable costs have improved their efficiency and profitability.

Speaker 5: NetCase provided by Operation Activity was 28 million in the full quarter of 2021, compared to 12.9 million in the full quarter of 2020, reflecting a 1.23% year-old?book.

Net cash provided by operating activities was 28 million in the fourth quarter of 2021 compared to $12 9 million in the fourth quarter of 2020, reflecting a 123% year over year growth.

Speaker 5: As of the Santerity first 2021, we had cash, cash agreement and show them Bangladesh positive of 322 million compared to 16 million as of the Santerity first 2020.

As of December 31st 2021, we had cash cash equivalents and short term bank deposits of three onwards, when it's $2 million compared to $60 million as of December 31st management.

Turning now to the year the adults.

Speaker 5: This year, Pion continue to deliver exceptional growth in Christoph's stability and significant cash flow generation sticking to the diversity of our revenue stream and differentiation of our higher platform while delivering well ahead of guidance.

This year and continue to deliver exceptional growth increased profitability and significant cash flow generation sticking to the diversity of our revenue stream and differentiation of our platform, while delivering well ahead of guidance let.

Speaker 5: Let me share with you some of the top financial achievements for 2021.

Let me share with you some of the top financial achievements for 2021.

Speaker 5: Revenue for 2021 was $478.5 million, an increase of 46%. The IS revenue revenue.

Revenue for 2021 was a $478 5 million an increase of 46% the highest revenue annual EBITDA.

Speaker 5: EBITDA for 2021 was 70 million.

EBITDA for 'twenty, 'twenty, one or $70 million.

Speaker 5: An increase of one other 12% dyes EBITDA growth as.

An increase of one other 12% the highest EBITDA growth ever.

Speaker 5: EBITDA's revenue was 15% versus 10% during 2020.

<unk> revenue was 15% versus 10% during 2020.

Speaker 5: EBDA to revenue, excluding dark, was there to 7% versus 25% young 2020.

EBITDA to revenue, excluding <unk> was 37% versus 25% June 27.

Speaker 5: Netcash from operating activities was 71 million and increased of 2.21%.

Net cash from operating activities was $71 million an increase of 221%.

Speaker 5: We also continue to both the pure financial strength as a evidence by two successful capital market transactions during the EU, which added in aggregate more than 230 million to our balance sheet. This enabled us to continue the execution of our strategic plan of organic and inorganic growth.

We also.

Continued to bolster our financial strength is evidenced by two successful capital market transactions during the year, which ended in Hungary in the aggregate more than $230 million balance sheet.

This enable us to continue the execution of our strategic spend.

Gannett and inorganic growth.

Speaker 5: with a scalable operating model and power-trace balance sheet. We will position to continue to deliver possible goals and expect 2022 to be the third consecutive year of more than 25% revenue growth.

With a scalable operating model and prioritize balance sheet, well positioned to continue to deliver profitable growth and expect 2022 to be the third consecutive year of more than 25% revenue growth.

Speaker 5: We have built a durable sustainable platform for possible goals with clear earning power.

We have built a durable sustainable platform for profitable growth with clear earning power.

Speaker 5: This concludes my financial overview for the four quarter in the full year 2021. I will now turn the call back to the halls for closing statement. Thank you.

This concludes my financial overview for the fourth quarter and the full year 2021, I will now turn the call back to dawn for closing statements.

Thank you mode.

Let me share my screen.

Can you see it.

Speaker 2: Thanks. So, closing remarks. So, the title is the 2020, the momentum continues to 2022. And what I would like to share.

Thanks, So claw.

Closing remark. So the title is the 20 the momentum continue through 2022.

And.

What I would like to share.

Speaker 2: But I would like to share with you is where this sustainability and predictability is coming.

Okay, but I would like to share with you is where the sustainability and predictability stemming from.

Speaker 2: And it's all as to do with the three dimensions of fire diversification.

And it all has to do with the three dimensions of our diversification.

Speaker 2: We start and say that one of the most important things which sets us apart from other and the network and at the companies the fact that we are operating across the three main pillars of digital advertising. The search advertising. Search.

I will start and say that one of the most important thing, which set us apart from other <unk>.

Ed Network and at the company is the fact that we are operating across the three main pillars of digital advertising search advertising.

Search advertising, social advertising and display advertising.

Speaker 2: from connecting everything into our hub, allows us first to generate revenue from both sides of the open web as I mentioned. It's the demand in the system.

From connecting everything into our hub allows us.

First to two.

To generate revenue from both sides of the opening of the open web as I mentioned, the demand and the supply last but not least is the fact that we're able to connect all the hub and spoke model.

Speaker 2: Last but not least is the fact that we're able to connect all as a hub and spoke model and ability to not just to connect but also to drive, drive operational saving. We are F-

And the ability to not just to connect but also to drive a draw.

Drive operational savings.

We are estimating that due to the fact that we're able to.

Speaker 2: That's due to the fact that we're able to concentrate and all resources and basically as most inventions, work with shared resources, we're able to save $6 million on operational cost as well as on tax saving during 2022.

Concentrate in our resources and basically is more intervention work with shared resources, we're able to save $6 million on operational.

Operational cost as well as on tax savings during 2022.

Speaker 2: The other thing which is important, we are estimating that the source and the flywheel that I mentioned before capable to generate an additional $50 million on advertising budgets from our...

The other thing, which is important we are estimating that the source and the flywheel that I mentioned before.

<unk> to generate an additional $50 million on advertising budgets from our customers.

Speaker 2: So with that, we feel comfortable of improving our, modifying our guidance.

So with that.

We feel comfortable of.

Improving our or modifying our guidance.

Speaker 2: I put the new guidance here, which is a midpoint of $620 million in revenue and $90 million of EBIDA. I put it in the context of what we're able to achieve in 20 to 21 to 22.

Am I, putting at the new guidance here, which is the midpoint of $620 million in revenue and $90 million of EBITDA.

I put it in the context of what we are able to achieve in 'twenty to 'twenty one to 'twenty two.

Speaker 2: In order to emphasis one point is the sustainability and the predictability of our business model, which is in my opinion is one of our major major strengths.

In order to emphasize one point is the.

Sustainability and the predictability of our business model.

In my opinion is one of our major major strength.

Speaker 2: and allow us to also allow us to look at the growth.

Allow us to also allow us to look at the growth and also keep the organization very very profitable and in all are very proud of our ability.

Speaker 2: and also keep the organization very, very profitable and in all, very proud of ability to guide for 36% EBITDA to revenue extract in the 2020.

To guide for 36% EBITDA to revenue ex Tac in the 2022.

Speaker 2: With that, I very much would like to thank you for participating, but one last word. And with COVID around is a word that was a very, very challenging year for all of us, the 486 employees of Perion that are in, we count 11 countries.

With that I very much would like to thank you for participating but one last word.

And with Covid around his award it was a very very challenging year for all of US the five 486 employees.

<unk> that are in rig count 11 countries. So I would like to thank all of them without their endless dedication and contribution.

Speaker 2: So I would like to thanks all of them without their endless dedication and contribution.

Speaker 2: We will not able to achieve this great year. With that, we will open the line for Q&A. Thanks so much.

We will not able to achieve this great year.

With that we'll open the lines for Q&A. Thanks, so much.

Speaker 1: Thank you. We're not conducting a question and answer session. If you're dialed in on the telephone, please press star one to verbally ask a question.

Thank you well now be conducting a question and answer session. If a downturn on the telephone. Please press star one to verbally you ask a question.

Speaker 1: For zoom participants, you may type a question into the Q&A pod or you may use the raise your hand feature to verbally ask a question.

Presume participants you may type your question into the Q&A part or you may use the raise your hand feature to probably ask a question. Once again, if you'd like to ask a question over the phone. Please press star one on your telephone keypad.

Speaker 1: Once again, if you'd like to ask a question over the phone, please press star one on your telephone.

Speaker 1: For Zoom participants, please type a question to the Q&A pod or click the Raise Your Hand feature on your Zoom platform. One moment, please, while we pull for questions.

For Zoom participants. Please type your question into the Q&A part or click to raise your hand feature on your zoom platform. One moment. Please while we poll for questions. Our first question today is coming from Jason How senior line is now live.

Thanks, guys how are you.

Hi, Jason there on maybe start so that was.

Interesting example, you gave with advil on by Pfizer. So one of the questions that we get from clients.

What are you doing that Pfizer's agency of record ratified a huge company you probably have a master agency. What are you doing at their agency of record can do or is it because campaigns or so regional U S. Certain capabilities that may not work concerned you et cetera, but so like what are you doing that.

Currently the size of the Pfizer need you to do for AD. That's question, one and then I've got two follow ups for modest right. So.

I must say that we were a bit.

How would you use the word chutzpah, when we met with them because the Holy Grail in this industry is the ability to connect awareness to performance.

Speaker 2: because the only grail in this industry is ability to connect awareness to perform.

Speaker 2: And when we show them the concept that they're awareness dollars, which is they consider always as a top funnel.

And when we show them the concept that their awareness dollars, which is they consider always as a top funnel.

Speaker 2: is has can be with that campaign direct impact and be translated to actual by I mean there is no kind of estimation or modeling or whatever we are taking upon ourselves to drive that's it that was the concept.

It has can be with that campaign and direct.

Impact.

Be translated to actual buy I mean, there is no kind of estimation or modeling or what have you.

We are taking upon ourselves to drive sales.

Speaker 2: For them, it was always this concept that there is a gap between the awareness dollars and the performance dollars.

That was the concept.

Then there was always this.

The concept that there is a gap between the awareness and the performance.

Speaker 2: And once we came and said, guys, we're able to bridge, you know, those two parts of the funnel, in a very nice way, we're up to the challenge.

And once we came and said guys, we able to bridge.

Those two parts of the funnel.

In a very in a very nice way, we up to the challenge.

Speaker 2: And they very much said, okay, you know what, we'll give you, we'll give you that chance and there is only one KPI that they shared with us from the get go.

And they very much said, okay. You know what we will give you will give you that chance and there is only one kpis that they shared with us from the get go.

Speaker 2: You said, you know what? If you're up to the challenge, we wanna see how many boxes we're able to sell. That's very much it. And I must tell you that we are working with them closely on what we said, connected card 2.0, which the ability.

<unk> said you know what if you're up to the challenge we wanted to see how many boxes, we able to sell that's very much it.

And I must tell you that we are working with them.

Mostly on what we said connected car too.

Which the ability.

Speaker 2: and to connect the inventory part. That's is going to be a killer feature because think about Jason, the amount of dollars that advertisers are wasting.

And to connect the inventory part that is going to be key.

Killer feature because it think about Jason the amount of dollars.

That advertiser are wasting.

Speaker 2: on performance advertisement that at the end of it, you find yourself that you don't have the right size of your jeans or not having the right color of your shoes.

On performance advertisement that at the end of it you will find yourself that you don't have the right size of your gene story and not having the right color of your shoes.

Speaker 2: That's a few ways. And the ability on the fly to offer substitute products, I think that can be a very, very interesting. So in a way, there is another interesting level for you, maybe to discuss later on, is the verge between the EdTech and the Marks.

That's that's a few ways.

And the ability on the fly to offer substitute product I think that can be a very very interesting. So in a way. There is another interesting level for you to maybe to discuss later on is the verge between the uptick in the market.

Speaker 2: And which is a very interesting subject that we discussed internally, because if you see that we're taking into the advertising logistic aspects like inventory.

And which is a very interesting subject that we discuss internally.

Because if you see that we're taking into the advertising logistic aspects like inventory.

Speaker 2: It's beyond the traditional, I think, advertising or ethics framework that we were kind of thinking. And I'm, there are thrilled about this technology.

Beyond.

The traditional.

Zinc advertisement or ethnic framework that we were kind of thinking.

There are thrilled about this this technology.

Speaker 1: So, I was just too per you. Can you talk about the impact of Vita Zoo on gross margins in the quarter and how you're thinking about some of the benefits to that in next year or this year, 22? And then just on acquisition, I was just seeing a lot of cash given the decline in public market assets and presumably

So I was just <unk> can you talk about the impact of this view on gross margins in the quarter.

And how you're thinking about kind of the benefit to that in next year or this year 2002, and then just on acquisition, obviously, you're seeing a lot of cash given the decline in public market assets and presumably.

Speaker 1: You know, the impact there has been in decline as well and private market values is it taking longer to kind of close?

The impact if there has been in decline as well in private market values is it taking longer to kind of close the next acquisition or round of acquisitions that youre looking at.

Speaker 1: The next acquisition, you're around of acquisitions that you're looking at. Thanks.

Speaker 5: Thank you. Thank you Jason. So, um, um, um, based on, you know, this is not a surprise, you know, we did it. You did it again.

Thank you. Thank you Jason so.

And based on you know this is not a surprise.

Speaker 5: before closing the deal. So it's already embedded in the model that videos with part of fans, they are running with margin that is similar to the other business units or there is no negative or much positive. I can say that...

The due diligence before closing the deal so it's already embedded in the model.

It does respond the funds they are aligning with margin that is similar to the other business units. There is no negative or a much positive I can say that the fact that now we have another asset and we're able to use the app and to contribute more together.

Speaker 5: The fact that now we have another asset and we are able to use the app and to contribute more together Definitely help us to improve the period margin of the old so we stand on business before getting into period on

Currently our best to improve the margin as well so as a standalone business before getting into <unk>. They run with the same level is a bit lower but together with us as part of the reason that you can see that the quarterly margin is better is definitely the combination of <unk> into <unk>.

Speaker 5: Day one with the same level as us, a bit lower, but together with us as part of the reason that you can see that the quarterly margin is better, it's definitely the combination of Vida Zoo into Pion.

Speaker 5: We see the same trend for 2022 and our assumption for the guidance for 2022 is more at the same level of margin about 40 quits.

We see the same trend for 2020 , two and our assumption for the guidance for Venezuela.

Is more or less the same level of margin about 40%.

Speaker 5: This is about the first question. We have, again, the one we can touch about the M&A as well, but there is a list of companies on the list, definitely, the fact that the multiple moving down El Pas...

This is about the first question we have.

Again, we can talk about the M&A as well, but there is.

A list of companies on the on delays definitely.

The fact that the multiple moving.

Speaker 5: to have more opportunities actually and to have maybe others that were not part of the list before.

<unk> help us to have more opportunities actually end too.

And maybe are there that was not part of the list before so.

Speaker 5: So I think this is, you know, we have, you know, model that is unique.

So I think this is.

We have in <unk>.

Speaker 5: We have the cash, we have something that is also appetite for the target because there is synergy that you can do together. So what they can do by themselves, they can now do together with us and do better and be able to achieve the goals for the next two or three years together with current.

Model that is unique we have the cash we have something that is also appetite for the target because there is.

Synergy that we can do together so what they can do by themselves. They cannot they can now do together with us and do better and be able to achieve the growth for the next two or three years.

Speaker 5: So I think that the other way around there is a lot of opportunity, but this is a process that we're managing, and maybe the one can also elaborate more on that.

Together with good so I think that the other way around there is a lot of opportunity, but this is.

Also the <unk>.

Managing and maybe the oil and can also elaborate more on that.

No need.

Right.

Speaker 6: Thank you. Our next question today is coming from Andrew Murak, your line is now live.

Thank you. Our next question today is coming from Andrew Maraca. Your line is now live.

Speaker 7: Hey guys, thank you for taking my questions this morning. I had two. So one, I wanted to talk about the uptake of the high impact CTB formats. So if you showed the ad bill example, which I think was really helpful, but one other kind of broader feedback are you getting from clients using the formats and what do you think are some of the gating factors to broader adoption? And then second on the 22 guidance.

Hey, guys. Thank you for taking my questions. This morning, I had two so one I wanted to talk about the uptake of our high impact CTV formats. So as you showed the Advil example, which I think was really helpful. But what other kind of broader feedback are you getting from clients using the formats and what do you think are some of the gating factors to brought.

Their adoption and then second on the 'twenty two guidance, so it's sort of providing a $50 million incremental budget and IHOP, it's driving about $6 million of cost savings I guess, if you could help us with any incremental investments that you are thinking of for wide EBITDA margin is maybe flattish to slightly down year over year. Thank you.

Speaker 7: So it's sort of providing a 50 million incremental budget and I have this driving about six million in cost savings. I guess you can help us with any incremental investment that you're thinking of for why EBITDA margin is maybe flatish just slightly down your over here. Thank you.

Speaker 2: Yeah, so I think it's always to do with one thing in the high impact is all about the consumer engage.

So it's I think it's all has to do with one thing in the high impact is all about consumer engagement.

Speaker 2: There is a huge effort from advertiser to get this maximum engagement if it's the live CTV that you are getting their attention because the game is on. It is the interactive because you're able to gauge their engagement with the unit. And of course the fact that there is a go-to action and we talked about it in the example.

And there is a huge effort.

From Advertiser to get this maximum engagement if its the lives.

<unk> and get their attention because the game is on.

It is the interactive because youre able to gauge their engagement with the unit and of course. The fact that there is a go to action and we talked about it.

In the example.

Speaker 2: The way we are, so this is our focus. The focus is engagement and we know what's the engagement level on standard ads and we know what's the engagement on high impact ads. Yes, high impact ads are way more expensive for the advertisers.

The way we are so this is our focus the focus is engagement and we know what's the engagement level on standards and we know what the engagement on the high impact that yes.

Impact ads are way more expensive for the advertiser.

Speaker 2: But is it matter when you translate it into raw, into return on app spend? And this is the only thing that we're doing. So the way we're looking from a customer standpoint, we are...

But is it matter when you translate it into Ross into return on that spend and this is the only thing that we're doing so the way we're looking with from a customer standpoint, we are showed them. The Ross calculator that we have and we said the cost is really doesn't matter. What is really matter is what is the return.

Speaker 2: show them the raw calculator that we have. And we said the cost is really doesn't matter. What is really matter is what is the return. And we are trying to get as much away from the flood of standard advertising. That's the only way for us to get healthy margin. It's only way for us to increase the average deal size.

And we are trying to get as much away.

From the flood.

Standard advertising.

That's the only way for us to get healthy margin, it's only way for us to increase the average deal size.

Speaker 2: It's the only way for us to retain these customers. And it's definitely required us to invest more and more technology. All those kinds of things is new to the 2021. And there is growing investment that we're doing on 2022 to keep.

It's the only way.

For us to retain these customers.

And it's definitely require us to invest more and more technology.

All of those kind of things is new to.

The 2021 and there is growing the investment that we're doing in 2022 to keep.

Speaker 2: and make the gap on what we capable doing on high impact units better than. I mentioned one thing and I wrote, I took a note for the next call to show you what personalization level we're able to do with customer like Albertzons and others. We're taking it to the level that they're not able to get, combining it of course with the inventory factor.

And make the gap.

On what we capable doing on high impact units better than I mention one thing.

I took a note for the next call to show you what percent utilization level, we're able to do with customer like Albertsons and others.

We're taking it to the level that they are not able to to get combining it of course with the inventory factor.

Speaker 2: And so that's the edge. This is what we're thinking, you know, our niche within this huge universe of advertising and advertising spend up to this point.

So.

That's D. Edge. This is this is what we're thinking our niche within this huge universe of advertising and advertising spend.

Up to this point.

Speaker 2: Definitely breaking a great brand recognition and drive more and more budget into this

<unk>, a great brand recognition and drive more and more but.

Budget into this into this business.

Speaker 2: As far as your question, I mentioned that we are devoting more and more resources, engineering resources. I must tell you that

As far as as far as your question.

Mentioned that we are devoting more and more resources engineering resources I must tell you that.

Speaker 2: In order to establish or connecting all units into a central intelligent hub with a huge effort on our side, the huge technology effort, we had to establish a whole AI team that is going to do it, the amount of dollars that we pay to Amazon just to store and analyze and crunch this data, is piling every day.

In order in order to establish a connecting all units into a central intelligence hub.

Huge effort on our site the huge technology effort, we had to establish a whole AI team that is going to do it the amount of dollars that we paid to Amazon just to store and analyze and crunch This data display.

This filing every every day.

Speaker 2: But we couldn't be in this situation and I all want to look more on the sort the impact that would bring to the market with the sort and the flywheel that it will generate and I'm very happy. It took us a good two years to be in this position.

But.

We couldnt be in this situation and I always want to look more on the sort of the impact that we bring to the market with the sort and the flywheel that it will generate and I'm very happy.

It took us a good two years to be in this position.

Speaker 2: But now, as I mentioned, we start to see the fruits and we are just encouraging to invest more and more and turn it into a really effective mode, technology mode for our com.

But now as I mentioned, we start to see the fruits.

We are we are just encouraging to invest more and more and turned it into a really effective mode technology moat.

For our company.

Speaker 6: Thank you. Next question today is coming from War of Morton. Your line is now live.

Thank you. Our next question today is coming from Laura Martin Your line is now live.

Speaker 8: Hi there. Hi. Hi, hi. So maybe a couple following up on Jason's question, it sounds like you might be taking on physical inventory now. So can you speak to that and whether what that does to your working capital and cash needs in 2022?

Hi, there.

Hi, So maybe a couple of following up on Jason's question. It sounds like you might be taking a physical inventory now so can you speak to that and whether what that does to your working capital and cash needs. In 2020, Q second can you talk about what percent of your total fourth quarters.

Speaker 8: Second, can you talk about what percent of your total fourth quarter CTV?

Speaker 8: add revenue where these high impact add units and then third data you keep sort of harping on data Can we sell that revenue stream? Can we create a revenue stream out of data? Those are my three. Thank you very good. So one correct

Hey.

AD revenue, where these high impact AD units and then third data you keep sort of heartbeat on data can we sell that revenue stream can we create a revenue stream out of data. Those are my three thank you very good so one correction.

Speaker 2: By all means, we're not in the inventory business. We're not having this inventory. The only thing that we're having is that we're hoping a very useful...

By all means we're not in the in the inventory business, we're not we're not having this inventory the only thing that we're having.

Is that we are opening a very useful.

Speaker 2: Thanos, that allows us on the flight.

Tunnel debt.

That allows us on the fly.

Speaker 2: to understand if there is, for instance, for this Edville, whatever capsule I is, if there is an inventory, because you are about as a consumer to click and buy.

To understand if there is for instance for this Edwin whatever Capsulate. It is there is an inventory because you are about as a consumer to click and buy.

Speaker 2: to this screen and I will, it's important for me to share it, hold on for a second, yes?

Into this this screen and I will.

And for me to share with polygon.

Yeah.

Took us so much to be in this space, So I want to.

Speaker 2: want to show off, okay? Can you? So this is the, this is the, this is the ads we've seen. What is this? You don't need to.

Sure Okay.

So this is this is this is that we've seen.

Speaker 2: So the point here is while you are here and you are doing all as a consumer, you're doing all this journey and finally, finally you are here. This...

You don't need the cellphone. So the point here is while you are here and you are doing all as a consumer you are doing all this journey and finally.

Finally, our here.

This is the money time.

Speaker 2: And the question is that we were very much like looking at is what would happen if you click here, let's say you use the QR code that is here. And you are okay, you want to buy and there is no engine.

And the question is that we were very much like looking at is what would happen. If you click here, let's say you use the QR code that this year.

And you are okay, you want to buy and there is no inventory.

Speaker 2: That's very much the point. And what we want is to refresh this head, or actually this skew.

That's very much deployment.

And what we want is to refresh this ed.

Actually this SKU.

Speaker 2: which you have here with alternative look alike. So for instance, this is, let's say, this is a big size. And so we'll get, I don't know what, the same price you'll get to. Because the most precious thing for Edville is to get this consumer.

Which you have year with alternative look alike. So for instance, this is let's say this is the big sized it. So we'll get I don't know what the same price youll get to because the most stress just seeing for <unk> is to get this consumer two.

Speaker 2: to a point that they want to buy. And from that point, they must end it with a transaction. So we are not holding the inventory. We just refresh the ad unit with the most relevant alternative substitute skew that will end it with a transaction.

To a point that they want to buy and from that point. They must ended with a transaction. So we are not holding the inventory, we just refreshed the AD unit.

With the most relevant alternative substitute SKU that will end it with the transaction.

Speaker 8: That's clear? Yeah, why do you care? Do you only get paid if somebody actually buys the box? Thanks for the question.

Yeah.

Thats clear.

Do you all think why do you care you only get paid if somebody actually buy box. Thanks for the question. So no. We're not we are not getting paid on the 73000.

Speaker 2: So no, we are not getting paid on the 73,000.

Speaker 2: But you know why we care? Because I can tell you that $800,000 of Edville Campaign is now turning to $1.8 million. Only because...

But you know why we care because I can tell you that $800000 of Ed will campaign is now turning to one 8 million.

Only because theyre happy with the results.

Speaker 2: And we care a lot because this additional $908,000 was very much taking for someone else.

And we care a lot bigger.

Because this additional $908000 was very much taking for someone else.

Speaker 2: That's our business. It's a zero-thumb gain.

That's our business.

Zero sum game.

Speaker 2: And if we are able to show them that their loss is way higher and we're not putting our hands in their pockets, in other words, we're not asking for any dollars if this will be for the next campaign more than 100,000, we're getting more budget. That's it. That's why we care.

And if we are able to show them that they there Ross is way higher.

And we're not putting our hands in their pockets in other words, we're not asking for any dollars. If this will be for the next campaign more than 100000, we're getting more budget.

Thats it Thats why we care.

Speaker 2: Perfect. What about selling data as a new revenue stream and what for something? We are, that's great, great question. We are now developing the Ross 2.0, which is we call it internally SAS, but not the SAS that you know, but this is sort as a service.

Perfect what about selling data as a new revenue stream and what percent are you good.

That's great. Great question, we are now developing the raws to point out which is we call it internally SaaS, but not the <unk> that you know, but this is sort of as a service.

Speaker 2: And there is a growing, we'll be getting tons of leads from publisher that would like to adapt sort is their privacy technology on their site. So the idea that we have is taking it from internal to external and offer it as a service. This is definitely something that we will talk more about in the upcoming.

And there is a growing and well be getting tons of fleets from publisher that would like to adopt sort as their privacy technology on their site. So the idea that we have.

Is taking it from internal to external and offer it as a service and this is definitely something that we will talk more about in the upcoming calls.

Speaker 8: Okay, and then my last one was high impact CTV units as a percent of total CTV revenues you for.

Okay and then my last one was high impact CTV as a percent of total <unk> revenue in Q4.

Speaker 2: high-impact CTV. So for us, we are not. And I can tell about something which is close to 75% of high-impact CTV. That's the main thing that we're selling.

Hi impact CTV, so for US we are not.

Can tell about something which is close to 70, 75% of high impact CTV.

That's the main thing that with them.

Thank you. Our next question is coming from Mark Kelly. Your line is now live.

Yeah.

Speaker 7: Great, thank you very much. I appreciate you taking my questions. I'd love to go back to the example. I know we've talked about it a bit, but I'm just curious, how does the Walmart as the preferred retailer in that scenario factor into the conversation that you have with?

Okay, great. Thank you very much I appreciate you taking my questions.

I'd Love to go back to the example, I know we've talked about it a bit but.

I'm just curious how does the Walmart.

The preferred retailer in that scenario factor into the conversation that you have with <unk>.

Speaker 7: with AdVal and then I guess would it be possible to instead of showing the consumer alternative products if AdVal is out of stock.

With agile and then I guess would it be possible to instead of showing the consumer alternative products.

That holds out of stock.

Speaker 7: would it be possible to shift to like a target or something like that and still have you by the exact product you're you clicked on? And I guess I guess in this exact example. It's a great question and I must tell you.

It'd be possible to shift to like a target or something like that and still have you buy the exact.

Product, you're you clicked on.

And I guess I guess and this is.

Exact example, it's a great question and I must tell you.

Speaker 2: that there is, there is, we know.

Debt.

There is there is we know we need to know the detail there is a.

Speaker 2: We not know the details. There is a relationship between Edville and Walmart. So for that point,

Relationship between ethylene Walmart.

So for that point.

Speaker 2: We are able to do a lot in terms of switching, let's say, to target, but on this perspective, the advertiser is very much binding us to say what is in Walmart inventory. I believe that they participate on the dollars that has to do with this campaign. But.

We are we are able to do a lot in terms of switching let's say to target, but we are.

This person this perspective that the advertiser is very much binding us to say what is in warm winter inventory I believe that they participate.

On the dollars that has to do with the this campaign, but it's we're not.

Speaker 2: We're not, this is behind the scene. We know, we are, we are interact with that. We really don't know how the supply chain is working there. So, we are capable doing it. Let me put it this way, but we are prevent doing it in this case, specifically. Okay. Right, that's right. And then,

This is behind the scene.

We know what we're interact we said, we really don't know how the supply chain.

Working there so well.

We are capable of doing it let me put it this way but and.

And we are prevent doing it in this case specifically okay.

And then quickly just on the.

Speaker 7: on sort, you know, some of the click-through rates that you presented were we're interesting and obviously impressive. I guess, do you think you have to advertise to the consumer?

And some of the click through rate that you presented where were interesting and obviously in.

Impressive I guess do you think you have to advertise to the consumer.

Speaker 7: to make just, you know, people who aren't familiar with that tech and, you know, don't understand the industry, just the typical consumer, just making sure that that logo.

To make just people who aren't familiar with AD tech and don't understand the industry. It just the typical consumer just making sure that that logo.

Speaker 7: resonates with people that they, you know, that the general public knows that it's co-glyce and privacy, safe and all that stuff. And I'm bringing this up because I saw it.

Resonates with people.

That the general public notice.

That it's cookie less and.

And privacy safe and all that stuff and I'm, bringing this up because I saw that.

Speaker 9: that, you know, critio, which is not exactly the same thing as what you guys do, but they're...

<unk>.

<unk>, which is not exactly the same thing as what you guys do but there.

Speaker 9: They're supposedly have a Super Bowl ad coming up that kind of does the same thing that just makes the consumer more familiar with Critio and, you know, just That their privacy Center approach. I was just curious if you guys have to do something similar. Do you think

There.

Supposedly had a super Bowl AD coming out that kind of does the same thing that just makes the consumer more familiar with <unk> and.

Just that.

That their privacy.

Centric approach I was just curious if you guys have to do something similar do you think.

Speaker 2: So, at the end of the day, what TRITO is doing from DR standpoint, direct response, retargeting, we're not in this bit.

So at the end of the day, what <unk> is doing from.

Dr standpoint, direct response and re targeting we're not in this business.

Speaker 2: And the business is for that sake is an awareness campaign. And with that, I think that we are able to get to a great result. Keep in mind.

And the business is for that sake is an awareness campaign.

And with that I think that we are able to get to a great results keep in mind.

Speaker 2: for those who want to get into the technology a bit. If I personally want to get your attention, Mark, and I'm using a third party cookie, and I'm going specifically after you, that's not our business. That's considered to be...

For those who wants to get into the technology a bit.

I I personally.

Want to get your attention Mark and I'm using a third party cookie and ongoing specifically after you that's not our business.

<unk> consider to be a Dr business.

Speaker 2: Our business is our ability without using third party to compete to get the market like.

Our business is our ability without using third parties to compete to get the market like that.

Speaker 2: That's the idea. It's not about following you. You will be a victim because it can be what it's done before on third party cookie. It's my teacher, but the idea is not following specifically, you know, a specific consumer. I hope I make it clear. That's why we're looking sort is very much.

It's not about following view you will be a victim because it can be what it has done before on third party cookie it might be too, but the idea is not following specifically <unk> and <unk>.

Specific consumer I hope I make it I hope I make it clear that's why we're looking sort is very much.

Speaker 2: I use these slides in the previous presentation and we have to be more than happy to take it offline to see how short it works, but it's all about smart groups that we develop. Smart groups and we have dozens, if not hundreds of smart groups.

I use the slides in the previous presentation and.

It will be more than happy to take it offline to see how it works, but it's all about smart groups that we develop smart groups and we have dozens if not hundreds of smart groups that is very much allowing us to use a smart group, where it is appropriate in other words people that has this.

Speaker 2: that is very much allowing us to use a smart cooper is appropriate. In other words, people that have these certain traits are likely to hit on these types of ads, that's the technology instead of using third-party cooper. I hope it's clear in the difference between us and retail. Sure, you know, maybe it's given you the credit example, wasn't the best on my part. I guess I've met more about like...

Certain traits are likely to hit on these type of AD. That's the technology that we have instead of using third party cookies.

It's clear in the difference between us and retail sure maybe given indicated for example wasn't the best on my part I guess I meant more about like.

Speaker 2: making just the general consumer aware that sort and the co-culus privacy-centric solution like do you need to advertise to the general public? We are we plan we plan doing it but what we want to get and this is discussion that we have with some selected advertisers.

Making the just the general consumer aware that sort cookie less privacy centric.

Like do you need to advertise to the general public.

We are we are we plan we plan doing it but what we want to get in this discussion that we have with some selected advertiser.

Speaker 2: that look that consumer privacy is one of their values and one of the things that they will be associated.

That looked at consumer privacy is one of their values and one of the things that they will be associated with.

Speaker 2: So one of the things that would like to do is very much use some of those names that are there to be associated with this direction and doing it is a kind of a co-marketing activity. This is definitely something that we're working on. What you absolutely write, I think that in order to get an effective flywheel, no wonder I start with the number one.

So one of the things that we'd like to do is very much.

We use those some of those names that are there to be associated with this direction Ken.

And doing it as a kind of a co marketing.

<unk> activity.

This is definitely something that we're working on what you're absolutely right I think that in order to get an effective flywheel no wonder I start with the number one.

Speaker 2: that if 74% wants to be visible on the seal, they need to make sure that this is the seal and it's not part of the Hans beer logo.

Debt is 74% wants to be visible on the field they need to make sure that this is the scene and it's not part of the Huntsville logo.

Speaker 2: you're absolutely right. We need to get the their attention. I don't want to you know to spend our you know money on the Super Bowl, we're not there yet. But I think that there are way more effective ways to use our net margin. Let me put it this way.

Youre, absolutely right, we need to get their attention.

I don't want to spend our money.

Money on the Super Bowl, we're not there yet.

But I think that there are way more effective ways to use our net margin that we put it this way.

That's perfect. Thank you very much you're welcome.

Speaker 6: Thank you. Our next question today is coming from Eric Martin Luther. Your line is now live.

Thank you. Our next question today is coming from Eric Martin Your line is now live.

Speaker 7: Hey guys, congratulations on the quarter and the outlook. Thank you, Eric.

Hey, guys, congratulations on the quarter and the outlook there.

Speaker 7: It's not lost on me that you had already announced a positive Q4 and raised the 2022 outlook on I think it was December 8th. So it's good to see that there's still more more in the tank here.

It's not lost on me that you had already announced a positive Q4 and raised in 2020 to come I think it was December rate. So it's good to see that there is still more more in the tank here.

Speaker 7: My first question has to do with seasonality. Now that we've got this, the business kind of shifting more to the advertising side. And I know you gave a full year 2022, but you did not give to one. What is the kind of seasonal step down in revenue? Because we've got some moving parts here. There's a remnants of COVID. There's the acquisition of the Zizu. We've got more revenue coming from the advertising side. What's the right way to think about Q1 revenue seasonality versus Q4? We've got a lot of revenue coming from the advertising side.

My first question has to do with seasonality now that we've got this the business kind of shifting more to the advertising side.

And I know you gave a full year 2022, but you did not give tier one.

What is the kind of seasonal step down in revenue because you've got some moving parts here. There's no remnants of Covid. There is the acquisition of <unk>, We've got more revenue coming from the advertising side, what's the right way to think about Q1 revenue seasonality versus Q4.

Speaker 5: Mosley want to take it? That's yes, of course. So as we're looking on the entire year and the business that's acquired are similar to the business we all owe the air and the host is anality we expect in the same trend. About 20% in Q1, 24% Q2 and Q4, and more than 32% in Q4. This is more or less the line with our performance for 20%.

Most of you want to take it of course.

So.

We're looking on the entire year and the business that acquire though.

Similar to the business we already have.

Seasonality, we expect the same trend about 20% in Q1.

24% Q2, and Q4 and more than 30, 32% in Q4, this is more or less aligned with our pro forma for 2021.

Speaker 5: And we'll take also will be the same old things when it's

And well take.

Also we will be the same old thing its management team.

Speaker 7: Okay. All right. And then my second question has to do with the display. When I think about

Okay.

And then my second question has to do with the.

The display.

Speaker 7: It's wonderful to get more demand from your advertisers and agency, but when I just think about the mechanics of serving display and serving video, CTV, ICTG, there's a huge element of their creative that needs to take place here is undertone doing that creative or are the agencies doing the creative here? What's how are we getting the raw materials that go into these expand campaigns? The raw material is getting very much from the creative agency. This is the case.

When I think about the it's wonderful to get more demand from your advertisers and agency, but when I just think about the mechanics of serving display and serving video CTV ICT, there's a huge element of their creative needs to take place here is undertone doing.

Then Craig Jim or are the the agencies doing accretive here.

How are we getting the raw materials that go into these example campaigns.

The raw material.

Shifting very much from the creative agency is this is the case because of the IC TV that required to do multiple.

Speaker 2: because of the ICTV that required to do multiple, you know, type of video assets, which is more than if you can imagine one video because that's what we offer for our consumer. That's part of our response to the RSP. So the way we respond is basically saying, okay, we are suggesting, you know, using the ICTV technology. And with that say, that's what is required.

Type of of.

Video assets.

Which is more than if you can imagine one video because that's what we offer.

For our consumer.

That's part of.

Our response to the RFP. So the way we respond is basically saying, okay. We are suggesting using the ICP with technology and with let's say that's what is required.

Speaker 2: and for most we need to prove that this is efficient

First and foremost we need to prove that this is efficient because.

Speaker 2: what is required from the advertisers, ten point is to invest more, more creative, more dead. So they need to buy into the concept.

What is required from the advertiser standpoint is to invest more more creative more debt so they need to buy into the concept.

Speaker 2: that it will be more memorable by to the concept that they will spend more time. And again, all, as I mentioned, is translated into Ross, but we are not very much part of this production.

That it will be more memorable bite to the concept that.

They will spend more time and again, it's all as I mentioned is translated into loss, but.

We are now.

Very much part of this production.

Speaker 7: Good luck in 2022. Thank you very much. Thank you.

I understand.

Good luck in 2020, thank you very much thank you.

Speaker 6: Thank you. Our next question today is coming from Jeff Martin. Your line is now live.

Thank you. Our next question today is coming from Jeff Martin Your line is now live.

Speaker 7: Thanks, good evening, guys. Hey, Jeff. Congratulations on a great year. Thanks, thanks.

Thanks, Good evening, guys, Hey, Jeff Congratulations on a great year. Thanks. Thanks.

Speaker 9: Wanted to get a glimpse into how customer acquisition strategy may have evolved with the enhanced investment that you put into the IHUB.

Wanted to get a glimpse into how our customer acquisition strategy may have evolved with the enhanced <unk>.

Investments that you put into the I have.

Speaker 1: and the Huffins Book Model. Yeah, based on, you know, Q4 results looks like customer growth is continuing at a good pace. You've got some really interesting technology capabilities that drive significant improvement and performance. So, you know, how has your customer position strategy shifted over the past year and how do you see that continuing to shift as your hub is more robust? Great.??? ahahahahahaha so thats a shtmhster contour. See

The hub and spoke model.

Based on Q4 results looks like customer growth is continuing at a good pace you've got some really interesting technology capabilities that drive significant improvement in performance. So.

How has your.

Customer acquisition strategy shifted over the past year, and how do you see that continuing to shift Azure azure habits more robust.

Great. So I will use this.

Speaker 2: engineering slide as we like to call it. So in a way think about it that you know and impression no matter no matter where the impression source let's say whatever impression is coming you know into the hub

Engineering sliders, we'd like to call. It so in a way I think about it.

And impression no matter, what no matter worthy impression source, let's say whatever impression is coming.

Speaker 2: And at the same time, you know, request is coming to the house. And that's an I and R. And the point here that you have here is what is the match? That's very much.

The hub.

And at the same time.

Request is coming to the hub and that's in INR and the point here that you have here is what is the match.

That's very much David.

So this is the challenge.

Speaker 2: And the match here is, first of all, needs to very much needs to meet all kinds of targeting and everything like this. But let's look about it only from the economy.

And the mix here is first of all needs to very much needs to meet all kind of targeting and everything like this but let's look about it only from the economic side.

Speaker 2: And here it is the optimization element, the optimization element into the hub. In other words, what is the priority if you met all the other criteria, if all other criteria is being met, the priority always goes to asset.

And year it is the optimization and the optimization element into the hub in other words, what is the priority. If you met all the other criteria if all other contributors being met their priority always goes to asset.

That you own.

Speaker 2: Either you owned it or you operated because over there you have a higher growth margin.

You owned it or you operated because over there you have a higher gross margin.

Speaker 2: So it's like a waterfall if you think about it is okay. First match, if everything is okay, goes to here, second match, goes to here, stone and so forth. So we are able to drive more and more impression to request that is coming from our SF. Keep in mind that if it's a video or a TV, we want that those left, it will come through.

So it's like a waterfall if you think about it is okay. First match if everything is OK goes to hear second match those two here so on and so forth. So we are able to drive more and more.

Impression to request that is coming from our assets keep in mind that two if it's a video or CTV, we want the dose.

That will come through our.

Speaker 2: our videos to play in other words that it will play on the video to player that it will very much monetize on the videos of platform because that gives us another edge now

Our <unk> plus in other words that it will play on the VTS two player that it will very much monetize monetize.

On the on the video platform because that gives us an edge.

H now.

Okay.

Speaker 2: But here, all that has to do from serving in impression all the way to its destination. And if you are able to reduce the number of those changing between, let's put it this way, you're serving money, but you provide something else. And that's very much the point here that brand an agency.

Okay.

Yeah.

Yeah.

Got it.

It has to do from serving in <unk>.

Pressure all the way to its destination.

If you are able to reduce the number of those.

Changing between let me put it this way you would say the money, but you provide something else and that's very much following the point here that Brendan agency.

Speaker 2: are looking about what extent I able to deliver for them the transparency and the control when we are serving their ads.

Are looking about to what extent I able to deliver for them the transparency and the control when we are serving their edge.

Speaker 2: From the moment we received it, all the way where it's being published. Everything is being done in a very not as transparent, but from a point of a dashboard, 3.14, whatever you and privacy, take any elements that you have no surprises.

From the moment, we received it.

All the way, where it's been published everything is being done in a very transparent, but from a point of a dashboard 314, whatever you and privacy take any elements that you have no surprises.

Speaker 2: from the step point where we analyze the impression requests to the time that we publish it here, number of pieces, your cell phone, your big screen of that.

From that point, where we analyze fresh.

<unk> request to the tight we published here.

Great.

Yes.

Your cell phone your big screen.

Okay.

Speaker 2: a contribution of $6.5 million in what I'm saying.

Video.

Are translating it into.

Yeah.

Speaker 2: Thank you. We reached end of our question and answer session. I'd like to turn the floor back over to the Lord for any further closing comments. Guys, thank you. Thank you so much. I'm a apologize about the glitches that we have, but since we're dealing with creative and high impact and all those kinds of things.

A contribution of $6 $5 million in bottom line.

Thank you we've reached end of our question and answer session I would like to turn the floor back over to Todd for any further or closing states guys. Thank you. Thank you so much I'm I'm apologize glitches.

Glitches that we have.

Speaker 2: I think that it's better than to read it from a script. So my apology and thanks so much for your participation. They have a great year. Thanks.

But it.

It seems that we're dealing with.

Creative and high impact and all those kinds of things.

I think that is.

It's better than to read from a script so.

Speaker 6: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. I'd like to thank you for your participation today. Like, thanks. Thank you. Bye-bye.

My apology and thanks, so much for your participation have a great year. Thank you.

Thank you that does.

Today's teleconference and webcast you may disconnect. Your lines at this time and have a wonderful day bye bye. Thank you for your participation today like thank thank you bye bye.