Q1 2022 Ironsource Ltd Earnings Call
Any such forward looking statements.
We also note that the financial information discussed on this call reflects estimates based on information available now and could differ materially from the amounts ultimately reported an iron sources other SEC filings.
During this webcast unless otherwise specifically noted all comparisons are year over year comparisons with the corresponding prior year period.
For financial information that has been expressed on a non-GAAP basis. We've included reconciliations to the most directly comparable GAAP measures.
Other than with respect to adjusted EBITDA guidance for which we have not provided a reconciliation because certain items that impact adjusted EBITDA or out of the company's control and or cannot be reasonably predicted and accordingly, our reconciliation is not available without unreasonable effort.
Please refer to the tables and slide presentation accompanying today's earnings release for these reconciliations.
The presentation of this financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP.
We use these non-GAAP financial measures for financial and operational decision, making and as a means to evaluate period to period comparisons.
We believe that these measures provide useful information about operating results enhance the overall understanding of past financial performance and future prospects.
And allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.
With that I'd like to turn it over to Tom Hill.
Thank you Daniel and thanks for joining us today.
We're very pleased to sell the year on a strong note continuing to deliver highly profitable revenue growth.
Well one of the few software companies that grew revenues more than 55%, while also achieving an adjusted EBITDA margin of more than 30%.
Now more than ever having a strong balance sheet of our net cash balance of $441 million and highly profitability is critical to succeed.
As important we are proud of how our solutions continue to serve the key consumer trends will be opt economy up developers and telcos worldwide.
So first let's go over the key numbers.
In the first quarter, we achieved record results with total revenues of $190 million up 58% year over year.
We also had adjusted EBITDA of $59 million up 49% year over year.
Our success in the quarter was primarily driven by continued execution and performance and we saw market share gains in both existing and new customers.
Our EBITDA margin was 31% consistent with our long history of providing profitable revenue growth, while also benefiting from operating leverage.
We're again, so the stickiness of our platform and the value. It provides to our customers with a very high dollar based net expansion rate, 153% for the quarter.
During the quarter, we completed the integration of <unk> and now have a global team of almost <unk> hundred with close to 50% of the head count in R&D.
This acquisition will help fuel our future growth and Tam expansion as we discussed last quarter.
More broadly as our results show I also serves as the gateway to the App economy.
We help app developers turned our apps into successful businesses with our Sonic up solution suite and helped carriers and Oems engage with our customers with our aura telco solutions suite with.
We strive to innovate and provide solutions that address our customers' needs and allow them to take advantage of new opportunities and help our customers successfully weather changes in the industry.
One of the key reasons, our platform is able to drive value for customers is the unique combination of multiple data types and how we analyze them.
The breadth of our solution means I also get App centric data from a number of different sources on the platform.
First party data from supersonic publishing.
Third party data from our SDK, which is widely integrated in our up partners.
And on device data from aura.
We funnel all these data through our machine learning algorithms, which were build predominantly on contextual models from day one.
With a constant growth in data flowing we created a powerful flywheel of data advantage, while prioritizing privacy, which is well positioned for the post <unk> world and for future changes.
This approach of analyzing op centric data from multiple sources is a point of differentiation for our company.
Now I'd like to move to some of the key factors behind our strong quarter.
With some of the larger trends and then cover products and partnership developments.
First our lend and expense strategy.
<unk> of the heart of our platform approach and continues to perform extremely well as you can see by our 153% dollar based net expansion rate.
The breadth of our solution means that we have multiple points of entry to land with new customers and multiple potential avenues to expand with them.
We see that more often than not new customers will start using one solution and then expand to use additional solutions over time.
A great example is hyper Baird.
The largest mobile game developer and publisher in Mexico HIFU.
<unk> started using Luna earlier this year, making it the fifth islands, our solution hyper beard is using <unk>.
<unk> started with level play mediation, then added beating than user acquisition and cross promotion all in the past couple of years.
Second our focus on up growth and marketing.
In today's hyper competitive market incremental profitable growth is critical to running a successful business.
Paid marketing across channels is a prerequisite to achieve these growth.
This quarter, we continued to invest in solutions that helps apps meet these growing challenge.
First we announced the launch of the new lunar platform. The only cross channel marketing software that includes automated creative production and management.
When that closes to marketing loop.
All channels, so up marketers can build create deep.
Deploy them across every major channel and optimized to drive fulfillment all in one unified platform.
Luna helps customers like the leading dating app bumble to grow at scale by analyzing and optimizing their marketing across channels to drive performance.
As we mentioned last quarter, we believe that these marketing software increases our overall Tam as we're able to capitalize on significant additional streams of marketing spend in the app economy, increasing our share of wallet with customers.
Second we continue our product innovation around iOS ecosystem with tools to help customers grow their user base on iOS after.
It was being first to market in Q4 with a product supporting apples custom product pages. This quarter, we announced the general availability of Luna sales heads.
This product allows up markers to better create manage and optimize campaigns on Apple's search ads channel that has seen an increase in spend in the last year.
The product allows upmarket to automate and streamline campaigns creation keyword management in discovery and data analysis. It also provides our automated optimization.
All from within the same platform will up marketers manage campaigns on other channels.
Essentially marketers can now optimize our campaigns on Apple's search ads, while utilizing the cross channel marketing capabilities of island for Luna.
Both of these products constitute important added value and differentiation in the market by helping upmarket as grow their user base profitability on iOS.
Third we launched our marketability testing tool for mobile gaming apps, which allows game developers to assess product market fit very early by evaluating whether a game can be marketed at scale.
This tool is critical in a competitive industry, where the cost of investing in the growth of our product that doesn't have the potential to scale can drive huge efficiencies and wasted spend.
This is a decision making tool that offers a predictive sandbox matching the game to the audience.
Each resulting in market to build these core that gives the developer clarity on which titles to investing and launch it.
It is the only tool in the market that addresses the question of gay marketability together with a competitive analysis to support that decision, providing the app developers with a go no go conclusion.
It allows developers to focus our time on those apps likely to be successful while also not missing out on a potential heat.
Finally, we're seeing growing interest in the unique on device growth opportunity that <unk> offers.
Leading brands like Pinterest, Twitter and United Airlines are leveraging <unk> native on device inventory to connect with users of their first setting up a new device and drive more app installs.
This enhanced offering for upmarket Earth is particularly important for ops in categories beyond games, who invest heavily in user growth and up marketing.
The size of the mobile App, adding full market is over $100 billion and it is growing at a double digit CAGR.
We're also seeing a continuing trends of brands looking to connect with consumers in app, where they spend much of their time.
For example brands like Frito lay and sparkling eyes using reach interactive enough ads to build brand awareness with customers. We are also seeing tier one big brand commerce apps leveraging unique in app advertising experiences that enable a value exchange for users.
In these instances users playing a game can receive in game currency in exchange for making a purchase India.
These AD experience enables a win win win.
The game up generates revenues from user engaging we didn't add.
The users opt in to an offer from an advertiser's they find valuable.
Which results in a better results for the advertiser.
And the user easily awarded within the game App for engaging with and Ed.
Receiving concrete in game value in exchange.
These add functions more like native in App transaction engine, and we're seeing it get a lot of traction in apps outside of games, particularly in social e-commerce lifestyle and utilities, providing islands service with a key differentiated offering to increase our market penetration.
<unk> in these segments.
In addition, we're also continuing to see the power of our business platform for customers of all sizes.
Many smaller independent developers see Ireland serve as the platform of choice to published or games, using our supersonic publishing solution.
We are focused on prototyping and automating the publishing process, creating a more effective transparent and seamless path to support the growth and profitability for published games.
In Q1 2022 color match was the most downloaded hyper casual game in the U S.
This follows highly successful games, we saw in 2020 in 2021 like joint Slash Enbridge race.
In addition, during the past couple of years more than 30 games published by supersonic reached the top 10 in the U S.
This is a strong testament of the robustness of our platform and how we help developers of all sizes in stages achieve success.
Now, let's move to <unk>.
As we discussed last quarter, the <unk> solution as of the end of 2021 had been installed cumulatively in over one 1 billion devices, which reflects our strong leadership position in the market.
In 2022, and we're seeing a number of carriers ramping up their use of aura.
We're in partnership with Samsung and Vodafone that we announced in the second half of last year to the two new customers that we announced last quarter from leading telecom operators in Europe and Asia.
While it's difficult to predict the pace and timing of ramp ups, we believe that in the coming quarters, we will start to benefit from these partnerships efforts.
These partnerships are a testament of the unique value proposition of the <unk> solution suite, which goes far beyond our promotion.
By providing a solution for managing the entitled device experience will enable to continually expand to new touch points, giving telcos additional opportunities to engage with other users providing value and drive incremental revenue.
Since <unk> integrated a device level, it's very easy to add an additional in life touch points, such as news entertainment, our gaming hub, which encourages users to engage rebuild device and the telcos brand more often.
To summarize this has been a good start of the year in a challenging macro environment.
With the launch of new products and expansion of our partnerships, we see the dialysis platforms continue to provide growing value to customers.
Our results clearly validate our approach and prove that we are able to provide a robust and differentiated offering to the market with.
We plan to continue build our platform offering through technological innovation and strategic M&A in order to increase the use of our platform by existing customers and gain market share with new customers.
With that I will turn the call over to SaaS to provide you with details on our financial performance and guidance for the quarter.
Thank you Tom Hill, who are excited to sell deal with delivering strong results.
As Thomas mentioned Q1, 2022 was a record quarter, both topline and bottomline and higher than our guidance, we generated $190 million of revenue compared to $120 million in Q1 of 2021, representing double digit.
Growth of 58%.
For the quarter Suncor is 90% of our total revenue and the oil was 10%. The overall growth in the quarter was fueled mainly by the expansion of Sonic Nols solutions suites within our platform.
Our revenue is driven mainly by our large customers. This group grew to $319 seven customers in Q1 2022.
Up from 292 in Q1 last year.
Representing <unk> growth of 36%.
These numbers were achieved while maintaining a very high gross retention rate of 19, 9% in Q1.
This large customer this represents 94% of forward total revenue in the trailing 12 months of Q1 of 2022.
Due to the increasing usage of our solutions, we are able to cross sell and upsell a greater portion of power solutions to them.
As well as general growth in the number of new customers that contributed more than $100000 in revenue.
Our customers range from large global enterprises to small independent <unk>.
As of the end of Q1, we reached 7000 customers using our platform.
This compares to approximately 4000 customers at the end of Q1 of 2021.
Oil dollar based net expansion rate for Q1 remains very healthy at 153%. It is within the guidance provided last quarter and reflects our business model, which is focused on customer success.
As we communicated previously we continue to expect our dollar based net expansion rate to remain very healthy in 2022 and be at a similar level to our historical range.
We had another strong profitable quarter, we generated adjusted EBITDA of $59 million in Q1 2022.
Representing <unk> growth of 49% from our adjusted EBITDA of $40 million in Q1 of last year.
This growth was driven mainly by revenue growth across all of our solutions.
We delivered an adjusted EBITDA margin of 31% in Q1.
In line with our guidance as.
As we continue to invest in the future will follow a business while focused on.
Sustained profitability and positive free cash flow.
Our increase in Opex for the quarter reflects the combination of our ongoing rate of investments in the business.
As well as a step up in hiring.
<unk> <unk> of acquisition completed in the past few quarters.
And then more normal cost structure post <unk>, including travel events and neither of operation cost.
Our non-GAAP diluted EPS for the quarter was five <unk>.
And with $441 million of cash and cash equivalents as of the end of Q1 2022.
Our decline in cash and tissue equivalents compared to the previous quarter was due to the closing of the <unk> acquisition in early Q1.
Now, let me turn to guidance.
Our guidance takes into consideration the following factors.
The near term growth to objectively headwinds that some will follow mobile gaming customers are facing Susan.
Seasonal trends and overall macro uncertainty.
For the second quarter of 2022.
Total revenue is expected to be in the range of $180 million to $185 million.
Representing 35% growth on the yearly basis at the midpoint.
Adjusted EBITDA is expected to be in the range of $52 million to $54 million.
Representing 15% growth on a yearly basis at the midpoint.
We expect the fully diluted share count to be approximately 1.15 billion shares.
For full year 2022.
Due to the factors I just mentioned we are slightly adjusting our guidance for the year were.
We expect total revenue to be in the range of $750 million to $780 million.
Compared to 792 $820 million previously representing 38% growth at the midpoint.
Adjusted EBITDA is expected to be in the range of $230 million to $240 million compared to $255 million to $265 million previously.
Representing 21% growth at the midpoint.
In summary, we.
We are pleased with our first quarter as those and despite those lower the guidance. We are confident in our market opportunity in the App economy I am very proud of what our team has accomplished as we continue to execute and maintain market leadership.
With that I will turn the call back to Daniel.
Thank you Rafi.
Before we open the call for questions, we'd like to share answers. The three questions that we've gotten from analysts that we think might be of interest.
Afterwards, we will go to your live questions.
The first question comes from Dylan Becker at William Blair.
The question is.
How much of growth in large customers comes from the ability to leverage tools like iron source that requires significantly less capital for developers to get up and running.
We've seen more and more successful businesses established across app stores than ever before.
And that's being enabled by products like yours.
But how are you thinking about this broader tailwind and iron source positioning here.
Omer. This question is for you.
Thank you Dean and field question I also asked as a software company developers.
It has become easier than ever to create in that it has also become how they've been able to commercializing it.
Today, there are over $4 7 million at the close of the <unk>, but the only very fuel successful. This will Sonic solutions suite comes in it is built to help developers launch grill and scared them into successful businesses.
Allows developers to focus on creating great apps and content, while we provide the infrastructure for the business expansion.
This past quarter, we had 397 large customers, which is a 36% <unk> increase the growth and allows customers largely attributed to our lend and expense strategy, which we had highlighted in the prepared remarks.
Success of this strategy as illustrated by the fact that the majority of allows customers use both our user acquisition tools and other monetization tools.
Our future positioning is focused on two areas first we aim to expand our softgel offering within our platform second we aim to extend our reach into new markets to attract new customers and expanding our <unk> offering we have taken both in organic and <unk>.
<unk> approach.
Publishing solution is an example of a product, which we developed in house that in two years has become one of the largest game publishing solutions in the market.
Luna platform is evidence of the new product offering that is based primarily on two acquisitions that we did last few Luna and Vidal go, which we believe significantly expands our Tam with marketing software.
Therefore, you should expect that going forward, we will continue to strive to innovate and expand our product offering to address our customer needs.
In expanding into new markets. We currently see a big opportunity in XD owned game.
<unk> is still in its early days if beyond games are an important growth driver in the long term with $50 billion that we highlighted last quarter.
Our platform based approach is relevant to the whole economy and meaningful UA and monetization tools are relevant Philips beyond gains as well.
We believe that there is an opportunity to increase penetration into X beyond games like social ecommerce lifestyle and utilities, which are the areas. We have identified that could use our tool for user acquisition, all while expanding into Ed as a source of revenue.
In terms of revenue side, as we mentioned before 10% of our Sonics sales in almost all of the aura sales come from apes beyond games, we believe that shell will likely increase in 2022, and we are excited about this opportunity in used to come.
The next question comes from Eric Sheridan at Goldman Sachs with fingerprinting become an increasing focal point within the broader app ecosystem can.
Can you help us better understand how much exposure iron source has two it should apple start to police it.
And how do you view the <unk> system as a way to differentiate yourself among an ever evolving app ecosystem.
So.
This question is for you. Thank.
Thank you Eric for your question.
Well one of the platforms that have benefited from the release of the App trucking transparency framework for ADT by Apple in iOS 13 five.
We do not know what Apple's plans are with respect to the continuing evolution of ATT and how such plans will take effect if at all.
However, we believe that we have already demonstrated our ability to quickly react and adjust to changes introduced by Apple.
One reason for our ability to quickly adopt is that our model is predominantly based on contextual data.
This is combined with additional key elements in the success of our platform.
The scale and breadth of offering.
As we previously mentioned, Idaho sourced guests App centric data from a number of different sources on the platform, which is different from others in the industry.
First our SDK is widely used in last quarter 89 of the top 100 gains in the U S use the Atlas platform almost every major game developer uses our solution.
Second.
Our <unk> solution suite has been integrated with over $1 1 billion devices globally.
Giving us significant device level data.
Third we're able to leverage first party data from our publishing software, which has generated more than 2 billion downloads to date.
While we continue to work with attribution solutions provided by our partners well one of the few platforms that have been able to successfully work with one of the component of Apple's ATT scan.
In fact in many cases, we're actually seeing higher level of attributed installs when looking at scanning installs compared to installs of Mmp's distribution companies.
Therefore based on our experience to date, we believe our continued ability to quickly react and adjust to changes while leveraging our advantages.
As it relates to the second part of your question on Aura.
Ora enables telecom operators to enrich the device experience by creating new engagement touch points, the deliver relevant content to their users.
These touch points, a cure or across the entire lifecycle of a device.
From the time, a usual first setup their new device until the trade it in.
<unk> provides an on device distribution channel for App developers as well as a platform to expand adoption of content and services for telecom operators.
As I just mentioned <unk> has been integrated on over $1 1 billion devices globally.
Giving us significant device level data that puts us in a unique position to perform targeting and attribution that is not based on common device identifiers, such as Google advertising.
But based on proprietary OLED device Yuval information.
The next question comes from Colin Sebastian at Baird.
My question is can.
Can you update us on the progress with integrating recent acquisitions and what is your view on the outlook for further M&A and market consolidation.
So this question is for you.
Thank you calling for your question.
We're very pleased thus far for the integration of <unk> and <unk>.
<unk> integration is essentially complete and as part of the rebranded lunar platform that we announced during the quarter.
<unk> marketing software solution fits well with the automated at creative production and management solutions that together comprise the overall winner platform.
We have been in front of many customers in recent months and thus further reception has been going well.
The <unk> integration is far along and we're happy to see that it is going as planned.
We are combining product and integrating the platform in order to provide a clear offering to customers.
We are moving to common collaboration and engineering platforms as well as common ERP HR and CRM systems, while also looking at consolidating facilities.
Overall, <unk> has a proven track record of identifying acquiring integrating and growing acquisitions and we remain excited by our inorganic growth prospects, which will complement our ongoing organic growth initiatives.
With regard to the second part of your question on overall market consolidation.
The consolidation of the gaming industry is natural for an industry at this stage of growth. It continues the trends we've seen in recent years, but the larger scale.
Economies of scale in the gaming industry is critical and that has been the driving force.
As we look at the industry. We may also see new players entering this market and acquiring game developers to build franchises, which is a trend we have not seen much in the past.
Our view on consolidation is that it will lead game developers to further focus on what they do best which is to create great games.
So further consolidation will only strengthen our position in the market as we have seen over the past few years.
More broadly the industry is moving towards using platforms.
Given our machine learning algorithms scale and breadth of available solutions, we continue to predict that deal one gaming companies with increased businesses with us over time.
We therefore believe that we will see further consolidation on the platform side and see ourselves as a market consolidators are small players have more difficulty to compete.
Thank you Tom out with that we will now open the floor to your questions operator.
Thank you if you'd like to ask a question. Please press star followed by one on your telephone keypad, if you'd like to ensure your question. Please press star followed by two patents.
So I'll ask you a question. Please ensure you off you said locally.
Our first question comes from Stephen Ju.
Credit Suisse. Steven Your line is now open.
Alright. Thank you so asaf any other detail that you can add in terms of the softer outlook.
For the full year.
Training Sonic Aro are supersonic I get that these are all interconnected.
Or any other commentary you can offer.
In terms of what you may be seeing from a regional softness perspective until there.
The sweat coin example that you had on the deck is pretty interesting.
It seems like more app developers, who primarily rely on subscription so other consumer payments should adult.
Some form of AD driven strategy to supplement the earnings so.
This is a free to play example, but with even Netflix talking about adding AD supported consumer offerings. It seems like more developer of should be thinking along these lines. So can you talk about I guess the.
Opportunity that theoretically be incremental inventory could provide for you as well as potential challenges from a supply demand perspective on inventory.
Thanks.
Hi, Stephen This is Omar thanks for joining today I will let Omar addressed your second part of the question and then I will address the first part.
Thanks, Tomer and Hi, Stephen Thank you for your question and when we're looking at the <unk> opportunity. We're extremely excited about this and we divided into two segments listen we're doing the business of today, Kevin products today already provide great value for <unk> gains both in UAE and donate monetization if.
<unk> about 10% of Sonic and most of all our revenues already and we expect this to continue and grow but like you said to me is a huge opportunity here around the business of tomorrow like I'm sure that many of you heard about Netflix comments about re leasing and it supported version that had the Swift going example, that we spoke about and in general.
What we're doing is think about the concept of doing AD supported payments lifestyle any transaction that all subscription exit have massive scale you can watch Netflix will one day, you'll get we'll bill mildly competing offers from other games <unk> advertisers. We already have many examples we see that work we have the best technology to support.
These at massive scale and we think of this is creating a transaction engine for the economy and are very excited and bullish about this direction exactly what you said about Netflix.
Paul So Steven on your first part of the question regarding guidance. So some additional color to help you guys understand our view ahead of the guidance the updated guidance guidance we provided.
Across everything that we do here in iron schools, you've over the last few quarters, you've I hope you get a feeling of our approach to guidance.
And it's a very prudent and transparent one.
Any fool can you continue to be so and while we don't see any core indications of declining in the in the performance of the platform.
Our business model is really aligned with the customers we serve.
Meaning when they generate more revenues.
Also generate more revenue most of our business model is based on Rev share.
Given some of the gaming companies out there, which all of our customers that have communicated low growth lower growth rates due to macroeconomic and other.
Reasons, we believe that the responsible thing to do here is to take that into consideration. This is why we ultimately decided to slightly lower our guidance our outlook by 5% to make sure we take into consideration whats happening out there in the in the macroeconomics So again.
We don't see a slowdown in the platform or any indication into coal kpis, but we want to be.
<unk> tried to anticipate any potential effects due to the fact of the bay.
They guided some some lower numbers going forward and finally, I would say that I would add that we are a very profitable company with EBITDA margins greater than 30%.
And we intend to focus on that I'll remind you all we guided that in the long term our EBITDA margins will be in the mid Forty's. We've already been in the 40, then we we.
We plan to to continue balancing between topline growth and profitability with a higher emphasis on profitability and continued monitoring macro economic developments and what's happening with our customers in the next few quarters.
Thank you.
Thank you. Our next question is from.
Matthew cost of Morgan Stanley Matthew Your line is now open.
Okay, everyone. Thanks for taking the question.
I guess, just a follow up there on the guidance understanding I think youre very clear about how things in <unk> and so far youre not seeing any indications in the core kpis above a slowdown I guess when you think about the rest of the year and the macro environment, what sort of macro environment does your guidance.
Contemplate because like if I look at the guide I think you did.
Average it over four quarters, it kind of implies implies total revenue more or less staying flat between here and the end of the year.
I guess like is the backdrop for that a weakening environment, where you are continuing to gain share is it a flat environment.
What are you assuming that theres a lot of pressure on your customers between here and the end of the year just out of Prudence, what is the macro backdrop of your guidance.
Sure Hey, Matt.
So again to add additional color on that.
<unk>.
In Q1, and we believe that also in the next quarters. We believe we will continue gaining market share we've seen it very strongly in Q1 and we believe this will continue to be the case all the indications in the plot from showed that.
What is it.
<unk> to Elliott about macro environment is we assume that the reports the guidance by some of the gaming companies out there some weakness in the guidance is mostly around our ability to invest in user acquisition that might go down that's our assumption.
<unk> again based on macroeconomics and.
And we don't know yet if this will happen for sure right, but we are trying to be again as I said earlier prudent and conservative in a way taking that into consideration and it really depends on their ability to continue growing and investing.
Gracie if they can be how many new titles. They will release, how the general market will look like us for that but again to emphasize we see a strong market share final source, we're seeing increase across all the different areas in the platform in our ability to grow market share, but we are conscious.
<unk> of the guidance that they gave them we want to take that into account, while continuing our style for guidance and being very prudent.
And careful ahead of future quarters.
Okay. Thank you.
Thank you Matthew our next question comes from Tim Nolan of Macquarie. Tim Your line is now open.
Hi, Thanks.
Maybe I'll ask a question about four if you could please help us understand what the market penetration opportunity is in the markets where you operate there.
And then is there a sort of market penetration for take or you could give us like what percentage of <unk>.
Devices or telco operators or whatever are you are you on and what type of.
Growth in that penetration rates, you think you could see over time.
The $1 1 billion device number I think you mentioned just now in Q1 is that the same as the number you gave for Q4 and is that number rising.
I'll now let you take this one sure sure Hi, Tim Thank you.
So I don't think we updated our.
Accumulated.
Or a device installed but it is growing it's growing significantly and basically for US again theres two growth drivers for us. The first is simply continuing to add additional touch points to our existing customers. This is something that drives unit economics growth that is very significant and is something that Dave.
It's growing across all of our partners unit economics are growing dramatically and the second is of course, the onboarding new customers and again, we haven't released the actual names and this is because of.
Marketing reasons.
The reasons on the telco side and it will be hopefully approve them soon but we have on boarded major.
A major new telcos significant ones.
Across the World and we also on boarded additional OEM.
We're very pleased with our pipeline of new customers and it's going to continue to grow.
For the foreseeable future.
Okay.
I guess maybe.
Given that you.
Don't necessarily have a lot of direct competition in the markets, where aura is already established or is building a presence.
Is there still a lot of runway to add further penetration of devices for or in those countries.
Yes, yes. So the first is the main thing that is slowing us down a bit compared to I would say our work with on the developer side is simply the rates.
That telcos adopt and beliefs and new features of our platform. There are again, a bit more prudent and a bit more slow in increasing touch points. So again, the main growth driver for us.
New touch points with our existing customers, we have grown in our unit economics. Since we started in hundreds of percent and we see no cap to that in terms of new product new features that we can deploy within our existing telco partners.
An additional again today and this is the feedback that we're getting from customers. We are the best solution in the market for telcos to engage our users on device and we have significant number of telcos both in the U S and outside of the U S.
That will eventually adopt our solutions again, some have already are already live and we will announce them soon big companies with that are selling a lot of devices.
So the growth is again I would.
If you want me to quantify it I would say our future growth is maybe 30%, 40% new customers.
And 60% from increasing our touch points and increasing our unit economics within existing customers and again this can grow almost indefinitely.
Okay that helps thanks very much.
Thank you Tim next question comes from Jason Bazinet of Citi. Jason Your line is now open.
Okay. So I guess this quarter, we've seen unity picked out in guidance from a data issue Apple have them do it because of it.
Counting issue related to ASC 606 related to MAU Province, you guys, all the narratives or sort of different.
Sort of odd question, we're getting from clients.
Which I don't think its correct, but I just wanted to check is that some clients are speculating that somehow.
Apple of its acquisition of low part of the sort of injected some sort of headwinds for everyone else in the industry and I don't think Thats correct. I think it's just the remediation, but I guess, if you could comment on that narrative that sort of shortly around the street I think that would be helpful to clients.
Sure.
Sure Hey, Jason.
For the question I think it's an important one.
No.
I don't want to comment about what Uniti guided end up not being guided but I can reiterate what what I just said earlier.
We truly don't see any indications in the platform for slowing.
For slowing down on numbers all future growth.
And you've seen the results in Q1, they were very strong, but I think it is very important to take into consideration the macroeconomics, meaning it's quite clear to everyone that it's either we are in or we're entering a recession of some sort and that cannot be.
Uh huh.
That cannot have a zero effect out there right. So I think it's this is why.
I think some of the gaming companies out there.
Lower their guidance.
And that will have an implication also on the platforms.
Specifically on your question on Mop up so mop-up, he's a mediation to firm that up loving acquired and I continued that.
In the last quarter for example in Q1, specifically on the mediation, we grew our share of voice by 15% quarter over quarter, meaning it didn't so its down quite the opposite because some of the mobile.
A previous multi customers had to move had too.
Migrate to other mediations and some of those.
Migrated to our mediation. So <unk> is down quite the opposite to be to be honest. So I don't think that is the reason I think they're there.
Reason for our.
Slightly lower guidance, 5% is strictly in directly connected to our view above.
About potential macro effects in our approach to you guys and to our investors well, we have been and we compete we will continue being responsible prudent and have a very transparent dialogue with the investors.
We appreciate that thank you very much.
Thank you for your question next.
Next question comes from Bernie Mcternan of Needham <unk> Co. Your line is now open.
Great. Thanks for taking the question.
Commenting that youre hearing from from.
Other gaming companies that week.
Weakening there guy, but are you seeing anything on the supersonic business that's weaker.
Just wondering because since you're running your own publishing platform or if there is anything to read on what youre actually seeing in your results that would impact the guidance.
Hey, Bernie Omar will take you take this one sure. Thanks, Bernie So we don't sell publishing Softgel supersonic King in February 2020, and have seen great success with it since inception supersonic published about 50 games and had been downloaded more than 2 billion timed and when Youre looking at 2021, we.
Became the third biggest publishers publisher in the U S. Sales of downloads Q1 has also been extremely successful carload Mitch as an example, and needed availability. That's used supersonic was the most downloaded hyper casual game in the world.
Supersonic is actually we look at that the publishing software we look at it as really.
A great demonstration of the power level of El Salvador, and El Tuttle, because when an indie developers using supersonic theyre basically using all of our different solutions all of our different capabilities and despite what we spoke despite the fact that we are seeing still minor decreases and maybe some lower margin from some gaming comes.
<unk> indie developers of all using supersonic <unk> seen great success that is overbuild filming that may be potential slight decline in the ecosystem. So that's a great example of how our technology provide great value and great <unk> thousands.
Understood and then since you're not seeing anything necessarily impact your core business is it fair to assume that maybe the investment levels.
Kind of the organic investments that you guys are making in the company are continuing at a normal rate. So it is a pullback on a potential macro issue on the guide, but you're still investing.
Would there be if there was a real macro hitting the revenue of the business. When you take a more aggressive approach in pulling back on some investments.
Sure Barneys, so that was what I.
I was referring to earlier so we've previously mentioned that.
For forever and ever since inception islands versus being focused on top line growth, we've been growing tremendously fast, but forever and never will be in a very very profitable company.
EBITDA margins consistently above 30% and sometimes.
Touching the 40% even exceeding it and we said that long term, we will reach the mid <unk>.
<unk>, we are constantly monitoring what's happening out there and if we see increased macro effect. If we see increased slowdown in we would adjust and we will we will focus primarily on EBITDA, we think that our EBITDA margins consistent EBITDA margin.
The key reasons for our success and robustness and such a strong balance sheet that helps us and enabled us being very strong both organically and inorganically being market consolidators, and we will of course adjust.
In that case, we will reach higher multiple higher.
EBITDA multi.
Higher EBITDA percentages.
Rather than originally planned.
Got it thanks for putting a finer point on that tomer.
Our next question comes from Colin Sebastian of Bad Colin Your line is now open.
Alright. Thanks.
And good afternoon.
I'm just curious I mean, we're seeing a pretty significant shift in time spent on social platforms.
Such as.
Obviously tictoc is gaining a lot of share.
I'm curious how your platform performs with those types of structural changes in the audience and the components of the of the audience.
And with respect to mobile gaming App install ads those are those tend to be different across those platforms, but do those shifts represent more of a risk or an opportunity for for the platform overall.
Hey, Colby and good to have you.
I'll, let you take this one sure thanks Toni for the question.
I think that what we're seeing and it's very important is that despite what was speaking about potential.
Softness we some of our gaming partners, we still see users playing games at the same rate. So we still see them continue to install gains do you see high usage time, and we're still seeing them spending a lot of deal time on mobile games, and we believe that that will only continue and grow.
So we don't see any impact which is related to differences in usage, you'll say social platforms.
Thank you. Our next question comes from <unk> Shah of Deutsche Bank. Your line is now open.
Hey, guys. This is Dan on for Bob and Thanks for taking the question.
I wanted to ask about you mentioned you recently launched a search AD Im curious what's been the feedback so far and the adoption with customers and how should we think about the opportunity more broadly with Apple search AD. How large is this becoming as a portion of your customers overall ad budgets.
Yes, so <unk> I'll take the question. Thank you.
So we've seen great adoption full flow fall product, it's part of the overall Luna Cross channel marketing fulfill which means that now our customers can manage all of their advertising on all of the channels and we just launched a new tool specifically aimed for managing the advertising on April April search and.
And the other accolades were diving and we have seen great adoption by it we actually launched many unique features around it including automation of the process and things that provide great value for customers and we have seen we have seen great adoption in general we do see an increase in the April advertising activity and we are making sure that we.
We'll be Z platform of choice for customers to manage and optimize their activity with epilepsy advising.
Unfortunately, we have run out of Toronto.
Today's Q&A session I would love to pulse co packed over to Daniel Amir for any closing remarks.
Thank you all for listening to the call today, and we are planning to participate in a number of conferences this quarter.
Adam Wedbush Oppenheimer Jefferies Baird and William Blair. So we have a lot of conferences and we hope to see you all in these conferences and thank you and have a great day, thanks for dialing in.
Ladies and gentlemen. This concludes today's call you may now disconnect your lines.
Okay.
Sure.
Okay.