Q4 2021 Tremor International Ltd Earnings Call
Welcome to tremor internationals fourth quarter and year ended 2021 conference call. At this time all participants are in a listen only mode with a question and answer session to follow at the end of the presentation. This conference call is being recorded and a replay of today's call will be made available on the <unk>.
Bester relations section of <unk> website, and will remain posted there for the next 30 days I will now turn the call over to Billy Eckert Senior director of Investor Relations for introductions and the reading of the Safe Harbor statement. Please go ahead.
Thank you operator.
Everyone and welcome to Tremor International's fourth quarter and full year ended December 31, 2021 earnings call.
With us on today's call are overdue tremors, Chief Executive Officer, and Seguin here, the company's Chief Financial Officer.
This morning, we issued a press release, which you can access on our website at investors that tremor International Dotcom.
During today's conference call, we will make forward looking statements.
All statements other than statements of historical fact that could be deemed as forward looking.
We advise caution and reliance on forward looking statements.
These statements include without limitation projections about our future financial results and future business and statements concerning the expected development performance in market share or competitive performance relating to products or services.
All forward looking statements are based on information available to us as of the date of this call.
These statements involve known and unknown risks uncertainties and other factors that may cause our actual results to differ materially from those implied by these forward looking statements, including unexpected changes in our business.
More detailed information about these risk factors and additional risk factors are set forth in our filings with the U S Securities and exchange Commission, including but not limited to those risks and uncertainties listed in the section entitled risk factors in our registration statement on form F. One.
<unk> does not intend to update or alter its forward looking statements, whether as a result of new information future events or otherwise except as required by law.
Additionally, the company's press release and management statements. During this conference call will include discussions of certain measures and financial information.
<unk> Rs and not Ifr S terms.
We refer you to the company's press release for additional details, including definitions of non <unk> items and reconciliations of <unk> to non <unk> results.
At this time it is my pleasure to introduce Overdrew occur Chief Executive Officer of Tremor International Ofer. Please go ahead.
Thank you Billy and welcome everyone joining us today.
So by saying that I'm extremely pleased with our results for both the fourth quarter and full year.
121 represented the strongest growth and profitability in the company history.
During the fourth quarter and full year, we continue to validate our strategy of being an end to end.
This platform with a focus on CTV video and data and continue to experience strong market adoption of our products.
We remain encouraged by the results we are dealing with.
We believe that our strong balance sheet profitability and cash flow will enable us to maintain continued growth both organically and through potential M&A, while adding value for our shareholders to the $75 million share buyback, we announced today.
Okay.
I will begin by giving an overview of our thoughts and strategy followed by our Chief Financial Officer.
We will review the highlights of our Q4 and full year 2021 financials. We will then open the call up for questions.
For the three months ended December 31, 2021, we generated contributes impacted.
$88 6 million.
Compared to $74 million in Q4 2020.
Representing 20% organic growth and adjusted EBITDA.
Before millions of oil.
Compared to $39 1 million in Q4.
Which reflects one full time school.
This result.
Delighted by continued growth in advertiser spend on CTV, which increased 47% during Q4 2021 compared to Q4, 2020 and greater adoption of our <unk>.
And buyers that enable programmatic offering.
The rapid adoption of this technology solution supported our ability to generate strong profitability.
The efficiency of our platform.
End to end strategy and the growth we achieved in this segment drove a 53% adjusted EBITDA margin in Q4 2021 when is it.
Both of the revenue basis, and 61% margin on a net revenue basis.
We believe this margin represents the best in class.
Our industry.
For the 12 months ended December 31, 2021, regenerative contribution ex Tac of $302 million compared to $184 3 million during the full year 2020.
Reflecting organic growth of 64% and adjusted EBITDA of $161 2 million compared to $60 5 million during the same period last year.
Reflecting $2 seven times growth.
This record result reflected the best year in travel history, and serve as an indicator that customers prefer offering which provides simplicity.
Through our differentiated end to end technology and business platform.
Full year growth for travel in 2021 was also driven by increased CTV spend across our platform, which increased one 8% compared to 2020.
While we also continue to see this.
The necessity of our managed service offering we are currently seeing and.
And expect to continue observing coal growth driven.
By our self service solutions and programmatic.
We believe the key to our continued growth and success.
Depreciated end to end technology and business platform, which is comprised of a demand side platform data management platform supply side platform and most recently, particularly silver.
Our strong focus on product development and every acquisition we have successfully integrated over the last period has driven us towards creating the platform we have today.
With the ability to service a wide variety of customers across all screens.
We believe <unk> is the most efficient model in the industry as customer desires simplicity.
To enhance their returns and targeting workforce and to move towards supply path optimization.
Because when we maintain relationship with both advertisers and publishers, we are able to connect with them directly in the most efficient way, while providing better installation against these policy changes.
Got two miles leveraging us for their end to end buying also enjoyed strong pricing advantages.
Because we consolidate all transaction within one ecosystem to maximize advertising budget going to the publishers.
Our end to end model also enabled us to generate strong 2021 customer net retention rate of 153%.
We believe this strong retention rate.
Evidence that our model is working well and fulfilling our customer holistically.
Furthermore, we believe this model is better for Trimble and its shareholders as it's enabled maximum revenue opportunities and profitability through the the cost efficiencies, we achieved completing costs across both sides of our platform.
All in our global server infrastructure.
They give you any video remain key growth driver for <unk>, as we saw 27% and 80% of our contribution ex Tac effectively generated in these segments.
End of 2021.
As revenues grew 118% and 69% respectively during the year.
According to E marketer U S advertising spend on CTV is projected to grow its express separately, 24% CAGR through 2025, while U S AD spend on video and CTV combined is projected to grow at roughly 17% CAGR through.
2025.
We believe our footprint in this fast growing segment should result in strong continued growth footprint.
We have also taken steps to enhance and differentiate.
Offering we didn't CTV as evidenced by the recent acquisition of spirit, our exclusive global ACL, that's our partnership with visa the launch of programmatic TV marketplace and the launch of our content level targeting solution.
<unk> is also well positioned for challenges within the industry due to its robust footprint end to end technology and business platform and focus on CTV.
Privacy changes has been a significant team.
The industry, particularly around IBSA changes and cookie depreciation.
In addition, last week, Google announced a multiyear initiative to build the privacy sandbox.
Which will limit sharing of using you little background with third parties and operate without growth.
<unk>.
<unk> is well positioned to address all of these changes due to our end to end operating model as our DSP and SSP showed the same audience growth, which eliminate that loss.
When thinking platform.
Our exposure to cookies from a revenue standpoint is also relatively low.
Allow treble Annie.
And these customers do remain well positioned for privacy changes compared to other industry peers with higher level of third party cookie exposure.
We are confident that this combination of factors ensure we remain able to meet our customers' needs.
Regarding challenges associated with supply chain constraints and inflation.
Evidence of lower advertising things during Q4, 2021, which have continued to disappoint in Q1 2022.
In certain sectors, such as automotive due to a cheap focuses.
However, this issue is being offset by increased demand in other segments such as TPG.
Ali diversified customer base across our end to end platform.
Offsets any significant adverse impacts to our business.
We achieved a lot during Q4 2021.
<unk> help us to strengthen our offering within seating.
In October 2021, we strengthened our CTV and that's a capability truly unique and meaningful partnership with visa.
Which provide us exclusive global access to ACR data starting later this year.
The partnership is expected to accelerated our U S and international growth and we anticipate this growth will mainly stuff in the second half of 2022 in key markets, such as Canada, Australia, the UK and Germany.
This powerful data partnership, which we will utilize for targeting purposes provide access to distribution.
We believe with the quality, which is the proximity 20 million smart Tvs worldwide.
And we expect this reach to grow to more than 40 million Tvs in the coming years.
Vida is the operating system for major Oems that include Iceland, Toshiba and other.
Powerpc mixed <unk>, the only end to end technology platform with this type of exclusive that the outside of the walled garden.
Visa is also proving that its relationship with treble extend deeper than <unk>.
In January we selected <unk> as its strategic SSP to enable global access to all digital native display media, while also integrating our newly acquired CTV AD server.
To enable better control over the CTV AD delivery with.
With granular airport controls and targeting.
In October 2021, we acquired experience, which provides trimble with the global CTV assembler and Adobe, though featuring a robust user interface with advanced tools for Ed both monetization.
We anticipate that the addition of the spirit technology will allow us to capture a large segments of global CTV inventory through both current and future media partners, while providing added benefits to those policy better control their inventory and maximize revenue opportunities like.
Like it would be the policy, we anticipate additional spirit will open greater opportunities internationally.
And we have already.
Adoption of the technology by policies such as Vietnam.
We focus the main contribution from this acquisition will sell during the second half 2022.
In October we increased our investments in CTV by announcing the launch of our programmatic TV marketplace, which is centralized platform for plenty of TV campaigns.
The allowance enabled advertisers to gain access.
The diversified marketplace with feature premium TV centric supply and curated BNP packages.
Advertisers also gained the ability to leverage and efficient planning process to help improve and streamline costs inventory and reach while gaining greater transparency into what inventory is included in each package.
In December we introduced.
Testacy unruly the content level targeting solution, which provides a new contextual solution for buyers and meet growing privacy regulation.
Content level targeting allow buyers to tap into traditional linear TV buying taxi with granular targeting option like January rating.
So title within digital secretly an over the top environment.
We believe the solution successfully positioned tremble and its customers for future changes in pricing.
Well I think 'twenty, one was an amazing year for tremble from a business win perspective, and I will go over the major wins and highlights from both the fourth quarter and full year.
As we mentioned in the fourth quarter, we significantly enhanced.
Our offering and innovation within CTV through our partnership with visa and the acquisition of spirit and the launches of programmatic TV marketplace and content that level targeting.
Our SSP unduly significantly increased its reach and added 42, new U S supply policies. During Q4 2021 across critical growth verticals in both entertainment and lifestyle as well as OEM and multicast video on demand businesses.
Yeah.
This update annually.
The five new U S.
Supply partners during Q3 2021.
All of them really control offering.
Amazing feedback from premium partners in the Citadel in.
During Q4, 2021 BP revenue from these cell therapy platform for publishers, So an increase of 184% compared to Q3 2021.
Truly.
In our creative studio was heavily involved in many deals we promoted with customers and inbound campaign, while enhancing engagement.
For Manhattan.
During 2021 creative request to truly increased 70, focusing.
Truly generated about 21000 unique video creative and create stickier relationships and spending trends with our customer.
Truly is a differentiator for us.
There's not many DSP OSP.
Creative studio you know.
This powerhouse drives iron levels of campaign spend through our platform.
Example, new and existing clients we have been.
Look the campaign.
In 2021.
An average of 301% more.
The campaign will leverage truly creative solution.
Our data driven creative studio has experienced strong and growing adoption and combines two of our greatest advantages are robust.
And our ability to provide all screen creative solution to better support our advertisers' needs and connecting with consumers.
Last year, we also recognized the cloud video API.
Looking for complementary Omnichannel solution to their video campaign, which drove us to launch the ability to run display and audio campaigns.
Yeah.
Additionally, we launched our TV intelligence solution, enabling in our CBOE targeting and measurement solution that provides advertisers the ability to reach and engage T V viewing audiences at scale with data driven video creators.
This solution receive a further 3000 vida that's our policy.
The launch of programmatic TV marketplace, and the launch of our content level targeting solution, which also targeting capabilities for customers.
Finally, we successfully executed a dual listing on the NASDAQ in June we generated $134 $6 million in cash proceeds.
Net appreciation.
And enabled strong exposure to the U S market.
Greater access to capital and increased access to broader investor base.
Today, we.
We are also very pleased to announce a $75 million.
Share buyback program, which allow us to return significant value to <unk>.
And take advantage of.
The opportunity amid macro pressure that many companies within ethic have been under recently.
We increased our cash balance by $273 million to $367 $7 million.
At the end of 2021 hour.
Our strong balance sheet.
Cash generated business enable us to implement despite it while we also continue to evaluate opportunities to acquire companies and continue to invest in technology sales and marketing.
Finally, since our last earning calls we have delivered on our promise to engage more proactively with the U S and international investment community.
In November we presented our Q3 update for UK and vessels and participated in RBC Global Tech.
Conferences.
In December we.
Participated and Raymond James Conference and in January we participated the Needham annual growth conference.
We also conducted a significant number.
Two shell investor meetings and participate in India with normal banking in I O.
Finally, we recently launched our inaugural quarter really.
<unk>, which we intend to update each quarter, we're making vessels more aware of main developments with trim.
Lisa Scott on the Investor Relations tab on our website.
It is now my pleasure to turn the call over to <unk> to review our financial results.
Thank you Ofer, we were excited to see another record quarter of revenue profitability and strong business momentum closing guidance on caustic 2021 and moving into the first quarter of 2022.
Today I will review highlights of our Q4 and full year 2021 performance as well as some of the key financial and operational drivers for the quarter and year.
<unk> International achieved an outstanding record quarter in Q4 with revenue and adjusted EBITDA propane may continued organic revenue growth.
Q4, 2021, net revenue increased 20% to $88 6 million compared to $74 million in Q4, 2020, all of which was driven from strong organic growth.
This growth was particularly impressive when considering the higher levels of political spend from the U S election cycle across I think during Q4 2020.
CTV spend on our platform grew 47% in Q4 2021 versus Q4 2020, and we are well positioned to continue this growth and more business is increasingly being transacted through programmatic platforms.
We also continue to generate very strong adjusted EBITDA margin, while investing in the critical areas of our business that can drive future growth.
For Q4, 2021, and we generated adjusted EBITDA of $54 million, which.
Collected 38% growth from Q4, 2020, and adjusted EBITDA margins of 53% out of reported revenue and 61% out of net revenue.
For the 12 months ended December 31st 2021, net revenue increased an impressive 64% to $302 million.
Compared to $184 3 million in.
In the full year 2020 period.
All of which was driven from strong organic growth.
We focused on being highly competitive CPB and video space.
As a result of the enhancements we made to our offering during the pandemic CTV spend on our platform grew 108% in 2021 versus.
2020, while our video net revenue grew 69% from $143 4 million during 2020 to $242 6 million during.
During 2021.
We continue to generate very strong adjusted EBITDA when investing in the critical areas of our business that can drive our future growth.
Costs were lower than expected driven by a postponement of our intend to office lower marketing spend and reduced travel and entertainment costs.
During 2021, we generated full year adjusted EBITDA of $161 2 million.
Which reflected 166% growth from 2020 and finished the full year, we've adjusted EBITDA margin of 53% as a percentage of contribution ex Tac.
The significant growth and profitability. We achieved during 2021 was driven by our data driven end to end technology and business platform with a focus on the key growth segments in the market CTV video and data usage.
Our growth exceeded market expectation and proved once again that our strategy is working and our products and services adoption is accelerating.
We believe we have a competitive advantage with our end to end platform versus point solutions. We have developed a highly profitable business model with efficiency around operating costs, leading to operating leverage and economies of scale.
Tremor is able to achieve significant profitability due to our ability to fleet costs across both sides of our end to end platform, while maximizing revenue opportunities.
We also achieved cost efficiencies as we own and operate our global service infrastructure, which result in significantly lower cost than we were to operate exclusively on third party cloud services.
As we mentioned previously we believe we have best in class industry margin and operation on profitability and from Q4 and full year 2021 generated adjusted EBITDA margin of 61% and 53% out of net revenues respectively.
Turning to our cash flow, we generated net cash from operating activities of $48 7 million from Q4 2021 versus $23 5 million in Q4 2020, an increase of 107%.
For the 12 months ended December 25, 2021, we generated net cash from operating activities of $171 million versus $55 2 million in.
In the 12 months ended December 31st 2020, which represents a 384% increase.
As of December 31, we had $367 7 million cash and cash equivalents with no debt.
We also experienced 98% free cash flow conversion during the quarter and for the full year 2021.
Non <unk> diluted earnings per ordinary share is 27% for Q4 2021 versus 'twenty.
In Q4, 2020, an increase of 35%.
And <unk> for the 12 months ended December 31st 2021 versus <unk> 28 for the 12 months ended December 31st 2020, which represents a 201% increase.
As we look ahead in order to continue achieving strong organic growth in the business and monetize our new partnership and acquisition, we intend to increase our investment in product and R&D as well as sales and marketing.
Finally, I'll now turn to our outlook as a reminder, we expect US we tend to often marketing and Robin.
We will add approximately an incremental $1 million per quarter in operating expenses this year.
For the first quarter of 2022, we expect net revenue to be at least $73 million in Q1, 2022, adjusted EBITDA to be at least $33 million.
These guidance underscores that our efficient end to end model focused on CTV is helping us achieve excellent growth and profitability.
We believe that our growth profile and efficient end to end model, which enable strong profitability investments for growth and a healthy balance sheet position tremor to continue taking advantage of the rapidly growing digital advertising in CTV market, both in the U S and internationally.
With my remarks completed I'll turn the call back to offer.
Thank you Siggi.
To summarize several is a very strong finish to 2021 and what was a transformational year for the business.
We achieved strong organic growth without contribution from acquisition.
We believe our data driven end to end technology and business platform focused on CPB and video reflects the preferred model that our customers desire to the simplicity installation comprises see changes.
The bulk of industry trends and ability to maximize retail.
The 64% contribution ex the growth and customer adoption, we achieved during 2021 and the fact that we are seeing other in the industry I tend to replicate this structure all enhance our confidence that the model is working.
This model also benefit shareholders.
It enables significant profitability and cash generation.
Which allow us to expand our investments in technology sales and marketing to grow the business organically, while evaluating future M&A opportunities.
We also look forward will.
Returning value to shareholders through a $75 million buyback, we just announced.
<unk> also continued to call previous promise to enhance and expand the CTV data and video capabilities, which now accounts for $80.
The sense of our net revenue and 91% of our programmatic mis revenue.
Our exclusive global ACL, that's a policy shift with visa will enable targeting within highly desirable doctors and accelerate our international growth around <unk> as we look to monetize the unique and meaningful partnership in the second half of 2022.
We are also extremely pleased to have beta select family as a strategic SSP and integrate spirit, which position treble well for future U S international growth within aggressively growing partner, who wants to come.
Our recently acquired <unk> TV AD server and then there'll be the period allow us to capture a greater portion of CTV inventory globally with current and future media partners.
The launch of programmatic TV marketplace and content level targeting.
Further our innovation and differentiation within CTV, while providing better installation against privacy changes.
Finally, we look forward to continue to engage with both U S International and vessels through continued participation in conferences take demos in India with FEMSA to cover trim.
We believe we have a compelling value proposition for investors and remain excited for additional future opportunities to tell our story.
Operator, we will now open the call to investor questions.
And we all get through our questions and answers in just one moment.
Yeah.
And our first question from Matt Swanson of RBC capital.
Alright. Thank you guys. So much for taking my questions and congratulations on a strong finish in what's been kind of a challenging environment here.
Ofer I think you did a great job of explaining kind of the lack of risk from some of the signal loss, but kind of flipping that based on all the.
New offerings, you have whether it be the programmatic TV marketplace contact Michael targeting the creative suite and obviously, both your datasets coming from data and the data you get to a full stock what do you think of the pet Patel.
Potentials for single loss to actually be a catalyst for the company and to be something that becomes more about market share gains than risk, especially kind of in the wake of spo.
Hi, Matt.
It's a great question and a great point to discuss.
That.
What we understand what we see now in the marketplace is that everybody is preparing of course for this and lots of signals in the market I came to that trend.
<unk> in general is better.
Suited to deal with it because basically every line.
<unk> growing on CTV had mobile Mechel cookie cutter.
Both of the businesses.
The second thing is the end to end solution that we spoke about the data that we are able to gather from the scale that we do.
<unk>.
So I think that it can become like a potential advantage in the future, but right now and I hope that all of the other companies in all our peers and of course preparing themselves also for this situation, but I think as we've mentioned also I did notice that we are.
Well situated in this situation in order to calculate in the company when the August regulation and changes in securities come into effect.
And I think that when people are now viewing and looking for partners for long term. They can rely basically on treadmill to be their partner for the long run.
Yeah, absolutely and then siggi kind of thinking through guidance.
Helpful to get the context around the supply chain of inflation concerns in Q1, but then we also had better coming out in the second half as well as.
Expectations for a turn of a lot of political spend.
Can you give us some context on how that might kind of work out in terms of full year seasonality does this feel like maybe a more of a back half loaded year.
Yes, So hey, Matt.
Thanks for the question I think again.
Again, as we said.
Previously, we don't have like a real concentration on any vertical.
Hi, Jane.
The issue of course affecting the macro.
Globally, I think that we are well positioned in order to increase some other verticals that are not affected from that issue.
And we did it in the past and during 2021 and probably will do it in 2022 regarding Vita I think again as aforementioned its keatsian interest of Mei we.
You gave us a lot of exclusive ACO that which we can.
Execute for the first time outside of the U S internationally.
So we are very excited in doing that and take our international activity much favor and scale it up in 2022.
Again, we are waiting for that as well as our clients and publishers.
And partners and it's what happened.
One more thing to add to Siggi spirit that we have.
<unk> last October .
In the first quarter now is being integrated into an early and we believe that it would make it a major effect.
I think on the second half of this year.
We know these cycles between integrating AD servers and other bidders are taking longer time than usual business. So we believe that it will start affecting the business.
Mostly in the second half of the year going forward.
Alright, Thank you guys.
Our next question from lore.
Sure.
Our next question from Laura Martin of Needham.
Needham.
Great numbers, you guys should be really proud of it.
Congratulations.
Sure.
I have a couple of them so 38% of your net revenue came from third party DSP is my recollection and I'm really interested in the trade desk announced open past and whether that has a positive or negative impact on tremor as the largest DSP try to squeeze out some of that supply path.
Optimization can you comment on that.
Thank you Laura and I am yes.
Yes, I think that.
The trade desk move will create a few a few things in the marketplace from what I understand until now.
One of them.
Publishers that basically.
Avi shares will basically we left too sorry, I'm sorry.
I will rephrase my question.
I think that when you look at that Bob.
Bobby shares already got more than one way to connect to Peter.
To fill those traffic and basically they will make therefore did not pay more China is to work with SSP. If they have an advantage of doing that unruly and trimble. In this case, it's got a lot of inputs to bring in a lot of value to bring to publishers like additional that are unique for unique and exclusive deal.
<unk> that we bring from our DSP when we sell it and self serve them from Pmt's and so on so I believe that in this case when publishers.
Talking with us and they will switch to auto platform in other systems in order to connect to us in order to get the trade desk and I think that we have no issue with that because we really bring value.
In cases, and SSP doesn't bring value to.
These publishers I think that the publishers will basically will not be able to.
Then we'll look to connect with this SSP animals. So basically I think that this move is the trade desk is basically reinforcing and accelerating of the supply path optimization, but there is a company that so much so much advantages to work with the working with publishers that we delivered so much advantages I don't think that we have any.
Issues connected them and we already know that we can connect to prepaid and other means in order to run campaigns on them even through the trade desk.
The trade desk, so for us it's a it's a.
Yeah.
No issue or even in some cases, because the number of places that we work with the Treasury trade is lower it will give us some advantage.
Yeah.
Sure Michael.
Three we are very happy from their announcements.
It's validating our end to end.
Solution.
The other thing the.
Vantage is that as well.
Super helpful really thank you and then my second and my last question will be about.
I'm really excited about the bottom of funnel advertising opportunities for CTV and so that that that naturally takes you to the ecommerce convergence with CTV I'm interested in your thoughts there one of your competitors said that not to have an ecommerce strategy in 2022 is not having a mobile strategy 10 years ago.
Okay. That's hyperbole, but my question is when you think about CTV over the next year or two do you agree with him that e-commerce and bottom of funnel that is gonna be a big growth driver for CTV ad revenue.
Thank you for that I, just want to remind you that in our previous conversation we spoke about it and I mentioned that I think that.
The big volumes of CTV media will be fulfilled also by performance related campaigns, which why doing that with me and of course lower funnel in E. Commerce is a very big part of that but there are also you can send products or services through performance. So for sure. We do that it said, we should think that this will be.
Three major player and I agree with the statement that.
You just said that if you are not building.
Lower fund them or e-commerce strategy around CTV, probably missing something very big and we agreed to that and we believe that CTV will open also to performance advertising and performance video because it's.
But in other verticals. If you remember that we spoke about in the past and I think that it will <unk> citigroup.
We are we know that and we are getting ready for that.
This is something that is on our platform.
That's super helpful. Thank you guys great numbers congratulations.
No.
Our next question from Mark Kelley of Stifel.
Okay, great. Thanks, very much I appreciate you taking my questions I had.
Two two.
Two quick ones. The first one is on the increase in R&D.
For this year I guess.
Is there a component of that but that's kind of onetime in nature.
To get ready for this.
Upcoming beta partnership.
The first one and the second one is can you remind us what political wise.
Q4 of last year, just to give us a better sense of that.
The growth ex political thank you.
I will start by saying that we are putting a lot of emphasized in the last two years on technology and innovation, mainly in <unk> and you can see also and we spoke about all the things that we've done in the past year and we spoke about the television marketplace. We spoke about content based targeting.
And we are talking about of course spirit and the integration of spirit into our technology texting full integration basically not just connection and when we are talking about David of course to build it and to integrate it into our ecosystem all of that of course is innovation and things that the NAND side.
Abilities around CTV.
And we are proud of that and I think that in this.
In this ecosystem that we are living now we need to invest in technology and innovation around mostly around CTV. Because this is a major part of our future in a very big revenue source already of today youre going to Miss philosophy.
More than 25% of radio.
So I.
I think that we will keep innovative evo vacating and building tools around CTV and we can talk about so he can talk about one time and about the political now yes.
Yes so.
Again to add to what author said I don't think its a one time increase in R&D and product, which we are doing all the time.
And we're doing it on selling marketing and sales.
With an increased investment in sales and Ofer said, because we are a technology company and we need the.
More and more common.
Component.
Order book of business up and by the way, it's not related to weight that we've done it before and probably will do it more in the future and data as well as investing a lot on their side.
Could develop some towards in order to help.
Them and.
To facilitate their ACO that time their inventory.
Regarding political spend I don't have the exact number of the absolute number was eating now in Q4.
And then within between Q3 2020, it wasn't like very material, but we did.
To some extent with its couple of millions of dollars on that as well.
Okay very helpful. Thank you both I appreciate it.
Thank you.
Our next question from Andrew Boone of JMP Securities.
Hi, good morning, and thanks for taking my questions.
Two please the deck talks about a 74% increase in credit requests in 2021 can you talk about the drivers just behind the greater use of creative and and then just I know you mentioned the competitive differentiation in your prepared remarks, but can you just talk a little bit more about that of whether thats truly an on ramp for new customer.
Or whether it just drives more spend like how should we think about that.
Great.
Yes.
<unk>.
I think that the pandemic in general created the situation that creative is getting much more stage in this business because people want to control better the.
How they engage with their customers because there's a lot of sensitivity in your local schemes that the panel just the pandemic, but also in the world in the last two years a lot of social unrest.
That was related to.
In the U S and in other places as we see today, so people wants to control.
The way they engage with their clients and potential customers. So I think that what's happened in the last two years is something that is transformational in many ways because advertisers and clients are looking to or looking to get like better creative response and better options in order to run their campaigns. So.
I feel that I was asking the bus and I think that when I'm thinking about this again and again I think that this is something that the states will be spun debbie meaning that people will like to control more of their messaging targeting as part of that and we are already doing a lot around that and we are signing a lot of unique and exclusive that's our focus.
In order to United States targeting capability, but on top of that you can see a lot of it.
Importance now.
Round the messaging.
In order to create more efficient creative so we saw a very big trend in the last two years that mostly 2021 that people are using this solution that we provide and we are unique in that because we don't know a lot about a lot of other fees or DSP.
Other thing, though providing this capability to their clients and we're doing that as part of the package when youll have free.
To the clients and their customers to run with us.
That makes a lot of sense and then my second question I wanted to touch on on the contextual tools that Youre talking about are you seeing more demand for this for advertisers is.
There are greater privacy announcements like where are we in terms of the adoption curve for for contextual towards more broadly across digital advertising. Thanks, so much.
Thank you, yes, we.
We saw that when we announced the solution we got their local trade equal that approached us to avoid formation and to get to know more about the product because they want to test it and use it and I think that it shows that people are.
Taking into account that there would be changes around privacy and the need to adapt and to learn about more tools.
That are capable of using in order to run.
Quickly in the marketplace also after these changes we will call. So we already engaged with a lot of clients and customers around that and I think that it will just enhance because we just saw now will get this sent box issued its Android, which is of course, creating more.
Let's say requests from people to find solutions for targeting so I feel that it is.
The right solution at the right time and together with other advantages that we got and we spoke with met before about end to end solution and the fact that we do.
Mostly around England city via mobile.
We are using.
Audience growth, which are shared by the BOP by the DSP and SSP and so on we are providing them like peace of mind that without being able to stay and we can provide them solutions.
Future.
Thank you so much.
Our next question from Andrew <unk> of Raymond James.
And thanks for taking my question you talked in the past about your focus on programmatic revenue versus non programmatic over the last couple of quarters, we've seen the non programmatic accelerate while programmatic came in at about 11% this quarter.
Some of the moving pieces that went into the dynamic in <unk> and how should we be thinking about the growth in their respective lines into 2022.
So again I think as we said in the past.
Performance is where we grew in its hour.
However.
We are proud of that having said that we're not investing a lot in that activity is like.
Activity that we did a lot in the past and we're calling it like a legacy.
Again, we are not able to grow this part of the business, but we are not angry.
If it's happening so in 2021 what the F&B, we estimated that this activity will decrease by 5%, but it.
Increased since then.
Going into 2022, I think that the aim is to.
To keep this activity on a flat basis.
This is what we are aiming by the way the beginning we wanted to to estimate it is a decrease but we sold a number we saw the trend.
So we are keeping it flat.
Understood. Thank you.
And this concludes our question and answer session, we might turn the call back to offer trucco for closing comments.
Thank you. Thank you everyone.
As I said.
A very exciting year last year, and we finished very strongly.
Thank you for your support and your interest in <unk> for the question.
Hope to see you soon.
Additional cost that we will have joined them. Thank you very much.
Okay.
And thank you ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect.
Thank you.
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