Q1 2022 Innovid Corp Earnings Call

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Operator: Please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host Brinley Johnson Innovid IR. Thank you you may begin.

Please note this conference is being recorded. I will now turn the conference over to your host Brinley Johnson innovate IR. Thank you you may begin.

Speaker 1: Please note, this conference is being recorded.

I will now turn the conference over to your host Brinley Johnson innovate IR. Thank you you may begin.

Speaker 1: I will now turn the conference over to your host, brindley Johnson and a it irare. Thank you, you may be in.

Brinley Johnson: Thank you operator and everyone for joining us today welcome to Innovid's first quarter 2022 conference call.  Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward looking statements and the safe Harbor statement contained in today's earnings release also pertains to this call. If you have not received a copy of the release please direct yourself to the Investor Relations section of the company's website.

Speaker 2: Thank you operator, and everyone for joining us today. Welcome to any of its first quarter 2022 conference call. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward-looking statements, and the safe harbor statement contained in today's earnings release also pertain to this call. If you have not ceved the copy of the release, please direct yourself to the Investor relation section of the company's website. Changes in our business, competitive landscape, technological or regulatory environment and other factors could cause actual results to the fer materially from those expressed by these forward-looking statements made today. Our historical results are not necessarily indicative of future performance. As such, we can give no assurance as to the accuracy of our forward-looking statements and assume no obligation to update them, except as required by lawtoday. We are joined by za netter and of its co Founder and ce, who begin the call with the business updatethen you will turn the call over to Tanya kastin and of its CFO , who would discuss the financials of the company during the question and answer session. toloan Founder and CTO. We joining as well with that. I would like to pass the call over to a netter za. Please go ahead.

Direct yourself to the Investor Relations section of the company's website.

Changes in our business competitive landscape technological or regulatory environment and other factors could cause actual results to differ materially from those expressed by these forward looking statements made today.

Our historical results are not necessarily indicative of future performance as such we can give no assurance as to the accuracy of our forward looking statements and assume no obligation to update them, except as required by law.

Today, we are joined by Zvika Netter, Innovates cofounder and CEO, who will begin the call with a business update then he will turn the call over to Tanya Andreev-Kaspin, who will discuss the financials of the company.

And then he will turn the call over to Tania Andress Kathryn.

<unk>, who will discuss the financials of the company.

During the question and answer session, Tal Chalozin, founder and CTO, rejoining as well with that I'd like to pass the call over to Zvika Netter. Zvika please go ahead.

Zvika Netter: Thank you Brinley and good morning, everyone. It's been an exciting two and a half months for us since our last call and I'm looking forward to sharing todays update which expands upon our focus areas to continued growth and innovation.

Speaker 3: Thank you brley, and good morning everyone. It's been exciting two and a half months for us, to little ited, to our last call and then looking forward to sharing today's update, which expands upon our focus areas to continued growth and innovation.

Before jumping into individual business highlights I would like to shed the light on some of the tectonic shifts we're seeing in the broader television industry.

Speaker 4: Before jumping into novidits business highlights, I would like to shed the light on some of the econic shifts we're seeing in the broader television industry.

The past decade, and streaming has been marked by rapid expansion in subscription based market share.

Speaker 4: The past decade in streaming has been marked by rapid expansion in subscription-based market share.

The increasingly fragmented and saturated streaming market has driven leading subscription based services to embrace and ad supported agenda.

Speaker 4: Now the increasingly fragmented and saturated streamly market has driven leading subscription-based services to embrace and add supported agenda. Amazon recently doubled down on its ad supported streaming service, relaunching it under the freev brand in. Major streaming services such as Disney, class and even Netflix have been discussing adding advertising models for their services to attract additional subscribers and increase their remedy.

Amazon recently doubled down on its AD supported streaming service relaunching it under the freebie bricks and major streaming services, such as Disney plus and even Netflix has been discussing adding advertising models for their services to attract additional subscribers and increase the revenue.

There is more of a shift from linear TV to CTV. We believe advertising supported streaming is on the cusp of even more rapid expansion the.

Speaker 4: There's more than a shift from linear TV to CTV. We believe advertising support and streaming is on the cusp of even more rapid expansion.

The number of AD supported services in subscribers his short.

Speaker 4: The number of air-supported services in subscribers has short.

According to inside of intelligence 129 million people use.

Speaker 4: According to insider intelligence, 129 million people used and add supported streaming service by the end of 2021. by 2025, that figure is projected to rise to 165 million users.

<unk> streaming service by the end of 2021.

By 2025 that figure is projected to rise to 165 million users.

Since our growth is in line with AD supported CTV content.

Speaker 4: Since our growth is in line with that. Supported CTV content.

The future is bright.

Speaker 4: The future is bright.

Now onto the business highlights we achieved strong gains in our business that is driven by the combination of increased CTV advertising.

Speaker 5: Now on to the business highlights.

Speaker 4: We achieved strong gains in our business that is builduding by the combination of increased cttv advertising and new customer wins, including one of the largest TV advertisers in U's, which I'll speak to shortly.

And new customer wins.

Including one of the largest television advertisers in the U S, which I'll speak to shortly.

Adoption of personalized products and the expansion of our measurement business through the strategic acquisition of TD square, an independent global measurement and attribution platform for converged television.

Speaker 6: Increased adoption of personalized products and the expansion of our measurement business through the strategic acquisition of TV Square and independent global measurement and accupition platform for convered TV.

We delivered outstanding performance in the first quarter of 2022, surpassing our expectations and our prior guidance. Our team was able to make significant progress against our goals. Despite the increased volatility in the macro environment.

Speaker 7: We delivered outstanding performance in the first quarter of 2022, surpassressing our expectation in our prior guidance.

Speaker 6: Our team was able to make significant progress against our goals, despite the increased volatility in the macro environment.

Revenue increased by 44% year over year to $25 9 million on an as reported basis, 9% of the total quarterly revenue revenue or $2 4 million was attributed to TV square following the acquisition closing on February 28 2022.

Speaker 7: Revenue increased by 44% year of the year to 25.9 million on an as reported basis. 9% of the total quarterly revenue revenue, or two point four million, was attributed to TV squared following the acquisition closing on februarytwenty eighth of thousand and twenty-two.

Revenue for the quarter, when excluding TV squirt increased 30% year over year to $23 $4 million above our stated expectations of 17% to 22% growth.

Speaker 7: Revenue for the quarter, when excluding TV growth, increased 30% year-over-year to $23.4 million, above our stated expectations of 17 per to 22% growth.

Our net loss in the first quarter of 2022 was $7 4 million and adjusted EBITDA was negative $3 million.

Speaker 6: Our net loss in the first quarter of 2022 was $7.4 million. In adjusted EBITDA was negative $3 million, exceeding the expected range of negative three point five million to negative four point five mill dollars.

Exceeding the expected range of negative $3 5 million to negative $4 5 million.

According to E marketer CTV advertising spending is expected to grow 33% in 2022.

Speaker 6: According to E marketer, CT advertising spending is expected to both 33% in 2022 and our ctd business. Outpaced is growth rate in Q1 CTV revenue, excluding the TV square. The increased nearly forty-percent year-over-over-year accounting to 47% of total quarterly revenue, up from 44% in Q1 of 2020 one

And our CTV business outpaced this growth rate in Q1.

CTV revenue, excluding the TD square.

Increased nearly 40% year over year accounted to 47% of total quarterly revenue up from 44% in Q1 of 2021.

Q1 was prince formative too as.

Speaker 4: Q1 was transformative to it.

As we completed the strategic acquisition of television square, expanding our measurement of infrastructure to address the growing needs of marketers in today's converts TV marketplace with.

Speaker 4: As we completed a strategic acquisition of TV square, expanding our measurement infrastructure to address the growing needes of marketers in today's converg TD marketplace.

With TD square, our original emphasis on CTV has grown to encompass the broader converge TV landscape, including of linear TV and digital video in addition to connected TV.

Speaker 4: With TV square. Our original emphasis on cttv has grown to encompass the broader convergge TV landscape, including our linear TV and digital video, in addition to connected TV.

I will now expand on the strategic value and the opportunity created by the combination of television square.

Speaker 6: I'll now expand on the strategic value and an opportunity created by the combination of TV square.

Alternative for converge to the advertising is enormous.

Speaker 6: The opportunity for convergeually. The advertising is enormous.

Clients the world's largest advertisers have told us they need more robust measurement to both justify investment in optimized for better business outcomes with.

Speaker 7: Our clients. The world laricest advertisers have told us they need more robust measurement to both justify investment and optimize for better business outcomes.

With PV squared, where on unlocking measurement with a comprehensive view of TV advertising and audience built on the scale and automation of our independent Global AD server and software solution suite.

Speaker 4: Through TV squareds. We are unlocking measurement with a comprehensive view of TV advertising and audience built on the scale, on automation of our independent global acve and software solution.

So the combination of innovative TD squib capabilities. We believe we are in market, leading position to deliver the value across the entire television ecosystem and give advertisers exactly what they need.

Speaker 7: To the combination of inhividentent TV square capabilities, we believe we are in market leading position to deliver the value across the entire TV ecosystem and give advertisers exactly what they need.

Our independence, which has long allowed us to integrate and connect across the advertising ecosystem will continue to benefit our revolt measurement offering <unk>.

Speaker 6: Our independence, which has long allowed us to integrate and connect across the advertising ecosystem, will continue to benefit our revolved measurement offering.

<unk> ability to partner across advertisers agencies, and publishers and Mvpds means we have the opportunity to support an ecosystem, where all sides of the trade can win.

Speaker 8: innovitiability to partner across advertisers, agencies and publishers and MVPDs means we have the opportunity to support an ecosystem where all sides of the trade can win.

I mean, the industry with unbiased cross platform analysis that drives greater transparency accountability and trust between buyers and sellers.

Speaker 6: arming the industry with unbiased cross-platform analysis that drives greater transparency, accountability and trust between buyers and sell.

At the end of its foundation and AD, serving and creative optimization capabilities also gives our measurement solution a huge competitive edge through our ability to measure all impressions served through our platform and the tie the measurement and outcomes directly to creative optimization.

Speaker 6: We believe Inno, its foundation in adserving and creative of optimization capabilities also gives our measurement solution a huge competitive edge. Through our ability to measure, all impression serves to our platform and the tie of measurement and outcomes directly to creative optimization.

One month into the acquisition of TD square, we are already seeing positive signals of success.

Speaker 6: one month into the acquisition of TD square, we are already seeing positive signals of success.

This growth revenue has progressed in line with our expectations. Our joint go to market teams are prime fraction.

Speaker 6: Tv squared's revenue has progressed in line with our expectations. Our joint go-to-market teams are prime for action.

We are pleased to have already consolidated our development teams into a single engineering global organization and integrated our AD serving data into the TV cord measurement platform.

Speaker 4: We are pleased to have already consolidated our development teams into a single engineering global organization and integrated our adserving data into the TD squared measurement platform.

We are excited to provide our customers, we robust scalable independent platform to manage the increasingly complex and critical converts TD landscape.

Speaker 4: We are excited to provide our customers with robust scalable, independent platform to manage the increasingly complex and critical convergtv landscape.

With our independent currency grade measurement platform, followed by global AD server and backed by what I believe to be some of the talented teams in the industry. We believe we will make a profound impact on our clients and continue to innovate and grow the CTV broader converge TD market.

Speaker 6: With our independent currency-grade measurement platform, followed by a global ad server and backed by what I believe to be some of the talented teams in the industry, we believe it will make a profound impact on our clients and continue to innovate and grow the CTV broader conrogtiy market.

Now I'd like to build on the update we provided in our last conference call and share more details on the current and future development of our business.

Speaker 6: I'd now like to build on the update we provided in our last conference call and share more details on the current and future development of our business.

Like last time, we will provide these updates within the context of four growth drivers, which are volume growth product upsell geographic coverage and client base of retention in the expense.

Speaker 6: Like last time, I will provide these updates within the context of four growth drivers, which are: volume growth, product upsell, geoaphic coverage and client base retention and expansse.

Let's begin with volume growth and if it continues to benefit from the movement of eyeballs in spending from linear TV to CTV. Our focus on CTV innovation is what we believe has allowed our CTV video AD, serving and personalization impressions to volume growth of 36% year over year to surpass the market. According to a marketed deal.

Speaker 6: Let's begin with volume growth in it continues to benefit from the movement of iballs and spending from linear TV to ctd. Our focus on CTV innovation is what we believe has allowed our ctvo ad serving and personalization impressions to volume growth of 36% year-over-, year to surpass the market, according to e-marketed taate.

We have continued to invest in industry wide partnerships to bolster our CTV leadership position and are pleased to have extended our long standing partnerships with NBC Universal who named innovate as certified AD serving partner in the certified measurement program.

Speaker 6: We have continued to invest in industry-wide partnerships to bolster our ctd leadership position and are pleased to have exandended our long-standing partnerships with NBC Universal, who name innovativeas certified ad-serving partner in the certified measurement program.

In addition to selecting our platform as the enabling infrastructure behind peacocks, new behavior based sequential storytelling capabilities. During Q1 of 2020 as you may recall, we reported a 39% decline in year over year volume for the automotive category in Q4 of 'twenty one.

Speaker 6: In addition to selecting our platform as the enabling infrastructure behind Peacock's new behavior based sequential storytelling capabilities during Q1 of 2022, as you may recall, we reported a 31% decline in euroover-year volume for the automotive category in Q4 Twenty one

I'm very happy to report that we are seeing good signs of recovery in investment by the auto category to a similar level of spending that we saw in Q1 of 2021.

Speaker 4: I'm very happy to report that we are seeing good signs of recovery and investment by the auto category to a similar level of spending that we saw in Q1 of 2021 and.

Our supply chain issues continued to resolve we remain optimistic about the future growth of automotive category in there in terms of their TV spend.

Speaker 6: As supply chain gsues continue to resolve. We remain optimistic about the future growth of automotive category in terms of their TV spend.

Our second growth engine product upsell was fueled by growing adoption of personalization interactive creative experiences as we previously mentioned, we also believe measurement will become a core driver of our product upsell strategy as we continue to integrate and expand the TV squared offering into our platform.

Speaker 7: Our second growth engine, product upsell, was seeled by growing adoption of personalization interactive, creative experiences.

Speaker 6: As we previously mentioned, we also believe measurement will become a core drive of our product upseal strategy as we continue to integrate and expand the TV squared offering into our platform.

Our third growth engine geographic expansion, our international revenue measured as ads delivered outside of the U S grew 56% year over year in Q1 of 2022.

Speaker 7: Our third growth engine: geographic expansion. Our international revenue, measured as dilimited outside of the? U's, grew 56% year-over-year in Q1 of 2020 -two.

The addition of television spread to our product portfolio is a critical step in expanding our international measurement footprint across 75 plus markets in our Permian.

Speaker 7: The addition of TV square to our product portfolio is a critical step in expanding our international measurement footprint across 75 -plus markets in our purbam.

Tvs credit introduces a host of international clients and partners to our portfolio.

Speaker 6: tvsquare introduces a host of international clients and partners to our portfolio, while expanding our geographical footprint through the addition of the development center based on eddi brbro, Scotland.

We're expanding our geographical footprint through the addition of a development center based in Edinburgh, Scotland.

And last but definitely not least expanded our client base.

Speaker 6: In last but definitely not least, expanded our client base.

During Q1 of 2022, we onboard the many advertisers and publishers onto our platforms on.

Speaker 6: During Q1 of 2022. We onboard the many advertisers and publishers onto our platforms.

I am extremely excited to share with you that this list also includes general motors one of the largest TV advertisers in the U S was chosen innovate to advance our video advertising efforts.

Speaker 6: I'm extremely excited to share with you that this list also includes general mos, one of the largest TV advertisers in the U's, who has chosen innovative to advance their video advertising efforts.

Innovation is a core pillar for general Motors forward loading strategy, and we look forward to growing an evergreen partnerships to innovate across converged TD opportunities.

Speaker 6: Innovation is a core pillar for general mortls.

Speaker 6: forward-leading strategy and we look forward growing and evergreen partnership to innovate across converg TV opportunities.

When asked about the challenges in of itself for General Motors, David Spencer the manager of emerging media and partnerships at General Motors set in a quote.

Speaker 6: When asked about the challenges, in no, its sold for general motors, David spenser, the Manager of emerging median partnerships at general motorset and qute.

As we began to evaluate our current set of partners, we realized the need for an unbiased independent solutions that don't compromise on scale.

Speaker 6: As we began to evaluate our current set of partners, we realize the need for an unbiased, independent solutions that don't compromise on scale.

Ordering with innovative allowed us to build a clear path towards innovation within the converged space as well as the opportunity to build advanced video solutions.

Speaker 6: Partnering with innovative allowed us to build a clear path towards innovation within the converg TV space, as well as the opportunity to build advanced video solutions.

Yeah.

Speaker 9: ancpro.

The continued support of our growing and loyal customer base is a strong signal of the strength of our underlying business.

Speaker 6: The continued support of our growing and loyal customer base is a strong signal of the strength of our underlying business.

On the identity front, we have not seen a material impact on our business from the ongoing updates around privacy IRS changes in Ibs C and do not anticipate a substantial impact at this point with.

Speaker 6: On the identity front, we have not seen a material impact on our business from the ongoing updates of our privacy, IRS changes and IDSA and do not anticipate a substantial impact at this point. We continue to help our customers manage identity through innovbit key, our leading infrastructure approach to identity management.

We continue to help our customers manage identity through innovative key our leading infrastructure approach to identity management.

In summary, the.

Speaker 7: In summary.

The accelerating secular trends driving advertising supported CTV viewership and innovative market, leading infrastructure and personalization capabilities combined with our reinforced measurement offering and an expanding and cups customer universe of what we believe sets innovate for our next phase of growth. We are extremely optimistic about the future of <unk>.

Speaker 7: The accelerating secular trends driving advertising, supported ctd of viewership and innovative market leading infrastructure and personalization capabil, ities combined with our reinforced measurement offering and are expanding cups, customer universe of what we believe sets innovative for our next phase of growth. We are extremely optimistic about the future of innovative.

Ill turn it over to Tonya will go into greater detail regarding financial performance and expectations Tanya. Thank.

Speaker 4: I'll now turn it over to Tanya, who will go into greater detail regarding financial performance and expectations.

Speaker 7: Thank you. Thank you Rica, and good morning everyone. Let me start with a review for our first quarter results before discussing full year outlook.

Thank you Erika and good morning, everyone.

Let me start with <unk>, our first quarter results before discussing full year outlook.

In the first quarter of 2022 revenue increased by 44% year over year to $75 9 million on an as reported basis.

Speaker 10: In the first quarter of 2022, revenue increased by 44% year over-year to 25.9 million. On an, as reported basis, 9% of total quarterly revenue to four thousand was attributed to the the squared following the acquisition closing on February . twent-eight Y and 22.

9% of total quarterly revenue to Formula was attributed to this class Poland acquisition closing on February 28th planning planning too.

Revenue excluding Tennessee.

Speaker 11: Revenue excluding to this cur grew 30% year-over-year. cityily contributed 47% of this revenuue, up from 44% in Q1 per 20- 21, demonstrating nearly 40% year-over-year growth model. Contributed 38% and debth up 15% of revenues and grew respectively 23 and 20% year-over-year when excluding to squared.

30% year over here.

<unk> contributed 47% of this revenues up from 44% in Q1, 2021 demonstrating nearly 40% year over year growth mobile contributed 38% and 15% of revenues and grew respectively, 23, and 20% year over here.

When excluding can affect.

We expected the growth in <unk> to continue to be our primary rating in China and for the <unk> segment to account for an increasing share of our revenue mix outside of our expanding converge to the measurement offering.

Speaker 12: We expected the growth in CD to continue to be our primary revenue driver and for this CV segment to accounts for an increasing share of our revenue mix outside of our expanding converged to the measurement offering.

And about the media impressions volume.

Speaker 12: Speaking about video impressions volume, cityily accounted for 49% of all video impression volumme served by innovbit in Q1 2020, twoup from 46% in Q1 2020- one and grew 36% year over-year.

<unk> accounted for 49% of all media impressions millennium served by Internet and Q1 2022.

Up from 46% in Q1, 2021 and grew 36% year over year.

Mobile increased 32% year over year and accounted for 38% and desktop increased 20% and accounted for 13% of senior impressions served by end of it.

Speaker 10: Mobile increased 22% year-over-year and accounted for 38%, and Desk of increased 20% and accounted for 13% of V? ia impression served by innovbit. In trafl geographical breakdown, us is the main contributor to our revenue, accounting for 90% of total revenue and growing 42% year-over-year on as reported basisour revenue outside of the's, including the? A Park in me and Latin regions currently represent 10% of total revenue, up from 9% in the first quarter of twent thousand and 20 one.

In terms of geographical breakdown.

Is the main contributor to our revenue accounting for 90% of total revenue and 42% year over year on as reported basis.

Revenue outside of the U S, including the APAC EMEA and Latam regions. Currently represents 10% of total revenue up from 9% in the first quarter of 2021.

Our total international revenue grew 56% year over year on an as reported basis.

Speaker 12: Our total international revenue grew 56% year over year on as reported basis. As part of our gross strategy, we aim to expand our global presence- 4% yearoveraphies, poised to accelerated CTV growth. Moving to costs, gross profit in the first quarter was 19.5 million, with nearly 8% year over year growth on a reported basis. After completing the dequisition this quarter, our gross margins remained high at 75%, demonstrating a slight decrease from the gross margins of 79% in the first quarter of two 20, 20- one.

Our growth strategy, we aim to expand our global presence focusing on geographies points accelerated CTV growth moving to costs gross profit in the first quarter was $19 5, million% to 78% year over year growth on as reported basis after completing <unk>.

This quarter, our gross margins remain high at 75% demonstrating a slight decrease from the gross margins of 79% in this first quarter of 2021.

Cost of revenue in the first quarter of 2022 has included 0.4 mainline intangible asset amortization related to <unk> technology.

Speaker 12: Cost of revenue in the first quarter of 2022 has included zero- four thousand and tangible asset amortization related to tvsclared technology. A primary reason was sfllight year-over-year decrease in the gross margins.

Narrow arena, so it's flat year over year decrease in the gross margins.

Total operating expenses for Q1 of our $29 3 million.

Speaker 10: Total operating expenses for Q1 by 29.3 million to zero point three mill. one in operating expenses were attributed to the inclusion of tvviscurred operating results in the inter quarterly financials followalling acquisition date. Approximately 38% of the increase in operating expenses compared to Q1 of 20 to 21 was driven by stock-based compensation, onetime acquisition related and these spec transaction related expenses.

Three main lines and operating expenses were <unk> two the inclusion of <unk>.

Operating results in the interim quarterly financials, Poland acquisition date.

Proximately, 38% of the increase in operating expenses compared to Q1 of 'twenty or 'twenty, one was driven by stock based compensation onetime acquisition related and this tech transaction related expenses.

As we continue to invest in sales and marketing R&D and talent to support our long term growth goals and value creation, our operating expenses, excluding stock based compensation. This spec transaction and acquisition related expenses increased 6% to 6% year over year.

Speaker 12: As we continue to invest in sales and marketing, hindd and talent to support our long-term growth goals and value creation. Our operating expenses, excluding stock-based compensation, D spect, transaction and acquisition-related expenses, increased 66% year-over-year on as reported basis.

On as reported basis.

Net loss in this first quarter was $7 4 million or EPS of negative <unk>.

Speaker 10: Net loss in this first quarter was seven point four million or EPS of negative point zero Six.

Zero six.

From the acquisition date to March 31, 2022, Alright, and will also attributed to describe one mellon influence of casino and <unk> 5 million of intangible asset amortization. The total common stock outstanding as of March 31, 2022 was $172.

Speaker 12: From the acquisition dates through March thirty-first twent thousand and 22 operating losses attributed to TV, curred by one million, includive of zero, five thousand of intangible asset ammotization.

Speaker 12: The total common stock called standending as of March 30 first 2022 was one hundred 30 two point one million adjusted EBITDA for the first quarter was negative Street million representing a negative 12% adjusted EBITDA margin. A decrease in adjusted EBITDA from zero- four thousand in Q1 2020: one was driven by an increase in RD and self and marketing operational expenses, as well as G expenses address in the needs of the? U public companyfollowing the dequisition of the discurred how core business model remained strong, with significant operating leverage and high profth margins.

On the mainland.

Adjusted EBITDA for the first quarter was negative straightening alone representing and negative 12% adjusted EBITDA margins an increase in adjusted EBITDA from the old Formula in Q1, 2020, one wasn't driven by an increase in R&D and sales and marketing operational.

Spencer as well as G&A expenses addressing the needs of being a public company.

The acquisition of <unk>, our core business model remains strong with significant operating leverage and hi crush margins.

Moving to our balance sheet after.

Speaker 12: Moving to our balance sheet.

After the acquisition of to discourage our cash and cash equivalents ending balance on March 31, 2022 was $45 4 million down from $156 7 million as of December 31, 2021.

Speaker 12: After the acquisition of the curbeded, our cash and cash equivalence ending bals on March thirty-first 2022 will 45.4 million, down from 156.7 million as of December thirty-first 2021.

Purchase price for the acquisition was the 100 million cash from our balance sheet and 11 5 million shares of innovate and 950000 fold invested stock options from the company subject to the certain adjustments has declined and the stock purchase agreement finally I would.

Speaker 12: The purchase price for the acquisition was one million cash from our balance sheet and 11.5 million shares of innovative and 95 thousand for theinvested stock options of the company, subject to the certain adjustments as defined in the stock purchase agreement. Finally, I would like to go over our guidance. While this first quarter of 2022, our business grew faster than be expected. The broader advertising market outlook in the current and macroeconomical environment remains uncertain and we holdpe to see improved visibility in the year as the year progresses.

I'd like to go over our guidance.

This first quarter post 2022 our business grew faster than they expected the broader advertising market outlook in the current Martin macro economical environment remains uncertain and we hope this improved visibility into here as the year progresses.

For the second quarter of plenty plenty of total we expect revenue to be in the range of 33 to 35 mainland, reflecting 44% to 53% year over year growth on as reported basis.

Speaker 12: For the second quarter of 2022, we expect revenue to be in the range of 33 million per to 35 million, reflecting 44% 5-3% year-over-year growth on a reported basis and 18% to 25% year-over-year growth on the performa basis.

18% to 25% year over year growth on the pro forma basis.

We expect to the spreads contribution to the quarter end revenue to exceed six Milan.

Speaker 12: We expect this spread contribution to the quarterly revenue to exceed six millionwe expect adjusted in the range of minus three point five new ION to minus one point five million, while then anticipate the ability to realise synergies from the tvquared acquisition over time. We expect oparating expenses to trend higher in the quarters's followalling the acquisition and have reflected this in our second quarter EBITDA guidance.

We expect adjusted EBITDA in the range of minus $3 5 million to minus $1 5 million, while the anticipated the ability to realize synergies from due to this currency position over time.

Expect operating expenses to trend higher in the quarters foreign debt position and have reflected this in our second quarter EBITDA guidance.

For the full year of 2020 until we're pleased to share that we are increasing our total expected revenue to be in the range of 135 megawatts to 140 Mellon including to discount revenue. This guide reflects 15% to 55% year over year growth on an as reported basis and 24%.

Speaker 12: For the full year of 2022. We are pleased to shashow that we are increasing our total expected revenue to be in the range of 135 million, the 14 million including to the crirent revenue. This guide reflects 15% to 55% year-over-year growth on a reported basis and 24% to 29% year-over-year growth on performa basis. We expected quared contribution to our annual revenue to exceed 25 million. We remain confident in the previously provided guidance and continue to expected adjusted EBITDA for the full year, excluding to the squared, to remain positive. With that, I would like to hand the call back over to fleuts to take your questions.

9% organic growth on a pro forma basis.

<unk> contribution to our annual revenue to exceed $25 million.

We remain confident in the previously provided guidance and continue to expect adjusted EBITDA for the full year. Excluding <unk> remained positive with that I would like to hand, the call back over to the sneaker to take your questions.

Thank you Tanya.

Speaker 7: Thank you, danyer. Before we open the line for questions, I would like to take this opportunity. Thank you all for joining us on this call.

Before we open the line for questions I would like to take this opportunity to thank you all for joining us on this call.

We started the year strong energized and with solid performance, despite uncertain macro dynamics and plan to continue to push forward growing database business to the benefit of our customers and OTT viewers around the world. We are confident in our expansion into the broader converts TV measurement market through the acquisition of TD square and we expect it to further propel.

Speaker 4: We started the year strong, energized and with solid performance despite uncertain macrodynamics, and plan to continue to push forward growing the innovative business to the benefit of our customers and ultv viewers around the world. We are confident in our expansion into the broader converge TV measurement market through the acquisition of TV squared and we expected to further propel our growth.

Our growth.

Again, thank you for your time and with that we will open the line for questions. Operator. Please go ahead.

Speaker 4: Again Thank you for your time, and with that we will open the line for questions.

Speaker 6: Operator Please go a.

Thank you.

Speaker 13: Thank you. At this time, we will be conducting a question-and-answer session.

At this time, we'll be conducting a question and answer session.

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Our first question comes from the line of Andrew Boone with JMP Securities. Please proceed with your question.

Speaker 1: Our first question comes in the line of Andrew Boone with JMP Securities. Please receed your question.

Good morning, and thanks for taking my questions.

Speaker 14: Good morning and thanks for taking my questions just to start off in terms of guidance can you talk about the linearity. Within the quarter did you guys see any impact from the invasion of Ukraine that some of your other digital advertising perioders have highlighted and then secondly as we think about the reopening and just consumption of cttv overall can you talk about impressions per user or are you seeing any change on the consumer side in terms of either watching less cttv.

Just to start off in terms of the guidance can you talk about the linearity within the quarter did you guys see any impact from the invasion of Ukraine that some of your other additional advertising peers have highlighted.

And then secondly, as we think about the reopening and just consumption of CTV. Overall can you talk about impressions per user or are you seeing any change on the consumer side in terms of either watching with CTV.

Assuming less digital video.

Speaker 6: Consuming less digital video. Anything there to help us try to understand whether there is any impact in terms of the reopening and consumption overall as it relates to impressions. Thanks so much.

The thing there to help us try to understand whether there is any impact in terms of the reopening and consumption overall as it relates to impressions. Thanks, so much.

Thanks, Andrew Good morning, and again, thank you everybody.

Speaker 7: Thanks so din the morning and again, Thank you everybody.

So to the first quarter sorry first question in terms of what we're seeing within the quarter.

Speaker 15: So to the first quarter. I sorry for a question in terms of what we're seeing within the quarter. I mean we're very excited that we started the year strong and above our expectations actually.

We're very excited that we started the year strong.

And above above our expectations exiting.

A lot of this has to do with the recovery of the auto industry and even the CPG and if you recall, we saw a drop in.

Speaker 16: A lot of this has to do with the recovery in the auto industry at evenating the CPG. If you recall, we saw a drop in 4- it is just for the auto alone- of about 39% - sorry, 31% drop and now, as we reported, it's about flat year-over-year. So it's equal to Q1 21 which, while it flat M and a, it's a loed after the drop. So we're absolutely seeing recovery also in the CPG area.

Before I believe just for the auto alone.

39%, sorry, 39% drop.

And now as we reported it's about flat year over year, so it's equal to.

Q1 of 'twenty, one, which while it fluctuates a lot. It's a lot after the drop so we're absolutely seeing recovery also in the CPG area.

And we believe that if we stay consistent we cannot predict exactly how it evolves.

Speaker 4: And we believe that be stay consistent we cannot predict exactly how it evolve but that causes us to be optimistic and at the same time there are there're still as we alluded to a lot of uncertainties coming from different macro dynamics right once back to work and people spending more time to work and outside of homeump from one side other economical and geopolitical forces. So.

That causes us to be optimistic.

At the same time there are there are still as you alluded to a lot of uncertainties.

Coming from different macro dynamics right.

Back to work and people spending more time to work it outside of home for one side.

Other economical.

Your political forces.

No.

Theres no definitely explained there is no specific the way the revenue is driven by the volume of ads right.

Speaker 17: There's no, let's explain. There's no specific. The way the of the revenues driven is to buy the volume of ads right, So it's not necessarily directly connected to people spend more time or less time in general, for example, findunding somebody spends more time or less time with melix. You not see an impact on the advertising industry. So, if anything, we're saying more and more services like busneiness, class E, even netfics themselves talking about opening up. So it's the availability of inventory of the amount of ads that are available for advertises to buy, and for that we have a certain pretty significant portion for our clients.

It's not necessarily directly connected to people spend more time with less time in general.

For example, spending somebody spends more time or less time with Netflix you will not see an impact on the advertising industry.

Anything we're seeing more and more services like Disney plus is a netflix themselves talking about opening it up so if availability of inventory of the amount of ads that are available for advertisers to buy and for that we have a certain pretty significant portion for our clients.

So they're more inventory they buy the more volume we generate more revenue.

Speaker 4: So the more inventory they buy, the more volume we generate in, the more revenue. So I would say that the main thing that can impact that impact our revenue for up or down is the level of spending withbetween CTV and, as everybody in this call no, that trend for moving budgets from linear the CTV is constantly going up into the rights. It's not shrinking and we expect this to continue for at least five to 10 years until all the TV dollars will move into CTV.

I would say that.

The main thing that can impact that impacts our revenue for up or down as the level of spend within CPP and as everybody on this call know that trend for moving budgets from linear to CTV is constantly going up into the right. Its not shrinking and we expect this to continue for at least five to 10 years until all the TV dollars moving to CTV.

Speaker 14: And if I can speak one more in tall I know you were at the new fronts. This last week can you just talk about your conversations with advertisers and how they kind of developed I guess over the last few years and whether there is any change in terms of how advertisers arguing the.

Okay, and if I can sneak one more in Tallinn I know you're at the new fronts. This last week can you just talk about your conversations with advertisers and how okay.

Developed I guess over the last few years and whether there is any change in terms of how advertisers, arguing CTV.

Thanks, so much guys.

Speaker 6: Thanks so much, goodbye.

Speaker 14: Thank you so much, Andrew. Thanks for the question.

Thank you very much Andrew Thanks for the question.

Sure.

So we were first of all we're very excited to take part in the <unk>.

Speaker 18: Yes So we, first of all, we're very excited to take part in the ib new fronts for the first time. We're not sell media, but we obviously taking a bigger and bigger part in the CTV market and specifically in the measurement side of it. So that was our participation. Your question about what do we hear from marketers? I feel like the main thing is that for many years, CTV was, was the emerging platform and we're no longer in the place where CCTV is an emerging one it truly emerged in. Marketers now look more than anything into across media measurement platform. How do I look at at everything holistically in order to quantify our spend? This is is is clearly the talk of the town and, re again, very excited that you square acquisition, that we have a good answer for it.

<unk> new fronts for the first time.

We're not selling media, but the but we're obviously, taking a bigger and bigger part in the CTV market and specifically in the.

The measurement side of it so that was the our participation to your question about what do we hear from marketers I feel like the main thing is that.

For many years CTV was the was the emerging platform and we're no longer in the place where CTV as an emerging one that truly emerged.

And marketers now look more than anything into a cross media measurement platform, how do I look at the at everything Holistically.

In order to quantify.

Quantify their spend this is this is clearly the talk of the town.

Again, very excited with the cubic square acquisition that we have a good answer for you.

Thanks, so much.

Speaker 14: Thanks M. our next question comes from the line of schway ta kjuria withevercorre isi. Please consbute your question.

Our next question comes from the line of Schweitzer <unk> with Evercore ISI. Please proceed with your question.

Okay. Thank you two for me please.

Speaker 19: Okay Thank you too, for me, please. First one is: could you perhaps talk about the opportunity in measurement So that you called out? You called that out as one of your growth drivers. Help us with where you are today. What will accelerate that launch and the adoption of your measurement offerings and how you compare with perhaps, the competition that there is out there? And the second one is's fairly quick. You did address gross margin coming in light. Can you please repeat what drove that? Thank you.

First one is could you perhaps talk about the opportunity in measurement that you called out that you called that out as one of your growth drivers help us with where you are today, what will accelerate that.

Launch and the adoption of your measurement offerings and how you compare with perhaps the competition that is out there and the second one it's fairly quick.

You did address gross margin coming in like can you. Please repeat what drove that.

Thank you.

Thank you.

Speaker 7: Thank you, Red morning. Thanks for joining. So the obvoly. As you can see, the we. We made a big bet on measurements and not you know. We started two years ago investing in CTV measurements and insights. We hired a large team from Nielsen to do that a year ago. We came to the realization to our customers. But what they're looking for is not just, you know, the future of television, but all of television, what people referred to, converged TV measurement.

Thanks for joining so.

Obviously as you can see the we made a big bet on measurement and if not we started two years ago investing in CTV measurement and insights we hired a large thing for Nielsen to do that.

A year ago, we came to the realization through our customers that what they are looking for is not just the future TV, but all of television where people referred to with converged TV measurement.

Which means not just looking at how CTG performed but actually as I said earlier <unk> question the money moving from linear to effectively and that's going to take 510 years, whatever nobody knows exactly what's going to take a while before a very long time people people our customers the largest brands and advertisers in the world are going to spend at the same time on linear and CTV with physically.

Speaker 4: Which means not just looking at how C T you perform, but actually, as I said earlier and this question: their money is moving from linear to C? V and that's going to take 5, 10 years, whatever. Nobody knows exactly. It's going to take a while, for a very long time. people- people are customers. The largest brands and advertisers in the world are going to spend at the same time on linear and C to V. it'was physically the same device on the same household, same audience, but times in content, but through a different infrastructure.

The same device on the same household same audience for Latam St content, but through a different infrastructure.

So the Ah ha moment, because we have to go in in a way backwards and provide a solution both for linear and CTV into one single platform and it was clear we cannot do this through our own development. When we have to go out and acquire a company that clock has started more than a year ago.

Speaker 20: So the ahao was we have to go in in a way backwards and provide a solution both for linear n C, T V in a one single platform. And it was clear we cannot do this through our own developmentand we had to go and acquire a company. That's what we started more than a year ago and actually going public was part of financing and we did it lerally. two days after the I we try to turn ship with V squares and en half three months later we closed and now we're almost fully integrate it also. So the opportunity obviously a immense and, as we mentioned, I would say in the first quarter of the year, if we had our acquisition of T V V squared, there is a partbably more than half a billion dollars that went to investment in our acquisition in the future of T T V measurement. So we're not the only one that think there's amassiveopportun. I'm sure everybody here is aware of the kind of takeover of over Nielsen.

Going public was part of financing and we did it literally two days after the IPO, we started with TV squares in 253 months later, we closed.

And now we are almost fully integrated.

The opportunity obviously early days in this and as you mentioned I would say in the first quarter of the year, if we add our acquisition activity.

There is probably more than half a billion dollars debt.

That went into investment or acquisition in the future of TV measurement.

We're not the only one to think there is a massive opportunity and I'm sure everybody here is aware of the kind of.

Take over of over Nielsen.

Bye.

Speaker 6: By pies. So the concept of digitally delivering TV is dramatically disrupting how TV is being measured and, I believe, how TV will be paid for.

So the concept of digitally delivering PV. It is dramatically disrupting how television has been measured than I believe how TV will be paid.

Paid for in the future. So obviously, we're not the only one that's seeing this so there's a lot of money flowing into that space. What's unique why we believe we're set to succeed and win.

Speaker 4: In the future. So obviously we're not the only one that's ING this. There's a lot of money flowing in that space. What's unique- why would believe we're set to succeed and win- is because we're not just coming at it from a measurement perspective. We also have the ad further, which is an extreed sticky product that actually is provides the exhaust, all the data sets, or C T V measurement, and we have one hundred percent control over that and that's ours. We don't need to buy from anybody else, we don't need to get it, we already have it and we T V squared. We we acquired the linear data sets. We're putting this together now and we believe we're be in a proposition if if's not to do be the number one I don't think there'll be a number one thing. There'll be several players definite to be one of the leading T V measurement fast in future company in the world.

<unk>, we're not just coming at it from a measurement perspective, we also have the AD server.

Is it extremely sticky product that actually is provides the exhaust all the dataset for CPD measurement and we have 100% control over that and Thats ours, we don't need to buy it from anybody else, we don't need to get it we already have it.

And with <unk>, we acquired the linear dataset, we're putting this together now and we believe we'll be in a pole position.

It is not to be the number one I don't think there'll be a number why do you think there'll be several players definitely could be one of the leading TV measurement past and future company in the world.

So that's on the on.

Speaker 4: So that on on the first one Tanya, you may want to say the gross margin question.

The first one Tonya you may want to take the.

The gross margin question.

That's okay I can address it.

Speaker 21: Absolute can address I thank you are firstcial are as you could see I did address the K change in the gross margin. Previously what it in Q1 our gross marg on GAAP basis of 75%. Foreign acquisition importanted to keep in mind that our profitability profile and gross margins remain strong. We do see impact in Q1 specifically perhaps to will see down. The road impact on certain accounting are measures on the gross. Margin specifically would mentioned is that the gross margin in Q1 four in the acquisition included four hundred thousand dollars of intangible asset amortization related to the viscurred viscred technology and that the primary reason for the decline that you are seeing in Q1.

Thank you.

Or as you could see.

Did I address the change in the gross margin.

Previously what its Scott.

In Q1, our gross margin on GAAP basis, So 75% following the acquisition that's important to keep in mind that our profitability profile and gross margins remain strong.

Do see impact in Q1, specifically, perhaps it'll shape down the road impact on certain accounting.

Measures one anchored the gross margin specifically mentioned.

You mentioned is that the gross margin in Q1 <unk> on the acquisition included.

<unk> hundred.

<unk> thousand dollars of intangible asset amortization related to <unk> credit Suisse.

This technology.

And Thats the primary reason for the decline that youre seeing in Q1.

Okay. Thanks, Nick Thanks Donna.

Speaker 7: ok thanks goodbye thanks, Don.

Speaker 14: Our next question comes in the line of Dan solalon with BMO capital. Please proceed with your question.

Our next question comes from the line of Dan Salmon with BMO capital. Please proceed with your question.

Okay, great good morning, everyone.

Speaker 14: Okay great when everyone two questions. First we in your comments you said ipfa restrictions, other privacy headwinds not impacting you. I'm sorry if I missed it was in there, but does that include the loss of IP addresses? We see that moving out of the ecosystem more and more. Maybe just broadly. Maybe expand a little bit on how IP address and does or doesn't matter to innovit and CD advertising broadly and then second.

Two questions.

First.

And in your comments you said <unk>.

Hey restrictions other privacy headwinds not impacting you sorry, if I missed it if it was in there but does that include the loss of IP addresses we see that moving out of the ecosystem more and more maybe just broadly.

Maybe expand a little bit on how IP address does or does it matter to innovate in CTV advertising broadly.

And then second.

We closed on the TV square deal during the quarter as you've laid out the opportunity youre pursuing are very clearly already and as you said many people pursuing.

Speaker 22: You closed on the T square deals during the qu.ter you laid out the oortunityyou're pursuing are very clearly already and, as she said, many people pursuing measurement. Not to be a bummer, but I think it was the day following that that Nielsen filed lawsuit against TV squared for patent infringement. As always, you know that active Litigation you limited amly you can comment specifically regarding it. Could you tell us a little bit more about whether that was expected, whether it was a surprise? Anything you could have would be great.

Measurement.

Not to be a bummer, but I think it was the day following that to add Nielsen filed lawsuit against television squared for patent infringement.

As always we know with active litigation.

Limited amount that you can comment specifically regarding <unk> could you tell us a little bit more about whether that was expected whether it was a surprise any anything you can add would be great. Thanks.

Yes, Doug do you want to.

Speaker 7: Yes thatou do you want to take thatou definitely. My profounder in R CTO is definitely the right person to talk about the IP addresses and anything else related to the inconstructction and update pattern question.

It does.

Definitely.

Cofounded, our CTO is definitely the right person to talk about the IP addresses.

And anything else related to the construction uptick though.

I think question.

Doug.

Speaker 7: butb.

Sure.

Speaker 23: surethank. Thank you them for the question. So as like I noted in his prepared remarks, we don't see impact on our idea a cook pretortation and other identity changes that is happening, privacy changes that are happening right now. We don't see any headwinds because of that. To your question about IP address: we definitely use IP address in our products specifically around measurement, less around the server offering however, areawhere in the early days of any changes that happening on IP addressand we don't think that the unique on that by on the the IP side, we're heavily working already together with the many companies in the industry, the trade Des, live ramp and otherson alternative solution and we're we think that we we re leaving the pack on a lot of the investment on alternative identifiers.

Thank you Dan for the question.

So as Rick noted.

In his prepared remarks, we don't see impact on Oh by different cookie deprecation another.

Identity changes that is happening.

Privacy changes that are happening right now, we don't see any headwinds because of that.

To your question about IP address.

We definitely use IP address in our in our product specifically around measurement less around the AD server offering.

However anywhere in the early days of any changes that are happening on an IP address and.

And we don't think that individuals unique on that side.

On the on the IP side, where we're heavily working already together with many companies in the industry.

Trade desk life ramp and others.

I'll now turn the evolution.

Where are we.

Thanks.

The pack on a lot of the investment on Oh, no alternative identifiers.

Okay.

Speaker 14: And on the. By the way, it it's not a bumbermer, you know it's that question about there. You know it's called life and we got here, you know, dealing with life and we get there very far. Continue with de, with life and definitely with competition, I believe you know. Let me stick to the script. First we, we are a very early stage in the process, just to everybody. You know everything, as you right, like somebody does, the waited for the closing and it was ler that day after for the closing, not after the announcement. And to your question know, to the best of our knowledge, and there's something was brand new, both to the T V scours team, left ly to the team, we're very early St in the process and we we do not to be that nelsson actually will be successful and we have been advised a little reading right every that have. We have several good grounds of challenging the validity of nelsson complaint and it alleged patent.

And on the.

By the way, it's not a bummer.

Talking about the you know.

It's called life and we got there.

Dealing with life and we will get there very far I believe continuing with dealing with life and definitely would.

Competition.

I believe let me stick to the script.

We are in a very early stage in the process.

So everybody that's everything.

Somebody just the weighted for the closing.

And it was literally the day after the closing that after the announcement.

To your question no to the best of our knowledge and George This is something that was.

Brand new Beau.

Through the TV square Athena literally to the AWS team.

We're very early stage in the process and we do not believe that Nielsen actually will be successful.

Yes.

And we have been advised literally reading right out of the new debt.

We have several good brands with challenging the validity of Nielsen complaint.

Led spending.

Let's look at this as a back to the US innovate are significant.

Speaker 17: Let's look at this as, back to the is in a bit significant contender on the measurement, on the future of TV measurement. I think that's part of the asset.

Significant contender under measurement.

On the future of TV measurement.

I think thats part of the answer.

Okay.

Speaker 7: Not that's what I, what they did, we. They think the combination of the leading after for cpv, plus the TV data set, the measurement combined together were very fast in after months- first few months- we will bring to market what I believe is the only converge measurement system been connected with the- they were afraid optimization. All that to fit to each other is a very unique combination that.

What they did they.

They think.

The combination of their leading edge server for CTV, plus the TV datasets and measure when combined together.

Were very fast in industrial load.

Two months will bring to market.

What I believe is the only converged measurement assistant connected with the assay with creative optimization.

All that to say to each other is a very unique combination that.

<unk>.

I'm not aware at this point existing industry in a single stack.

Speaker 4: I'm not aware at this point, existing M, the D a single stack.

Maybe just one quick follow up on that would you say by the way we ended basically as we finish the fact with our talk so we would love to take questions.

Speaker 14: Maybe just one quick follow-up on that. Would you see sure, if I L? We ended as we finished the fact with our talk, So we were reluct at take questionions.

So just on that would it be that you would see the new converged solution that youre able to rollout as something that would be directly competitive with Nielsen one.

Speaker 24: And so, just on that, would it be that you would see the new convert solution that you're able to roll out, and something that would be directly competitive with Nielsen one?

We're not we're not.

Speaker 25: We're not. We're not. You know my well. They may be focusing on us. We're not focusing on them. We are focusing on our customers. Right? We have some of the largest T V spenders in the world. Now you know G M general motors 1- one of the largest T V spender in the? U's, which I believe would away, was one of the, if not the largest one on the Google deouble quick platform switch ING the innoofit. So there's a reason for that, even before measure right, and I think that's that's where the opportunity comes in.

While there may be focusing on us, we're not focusing on them.

We are focusing on our customers right. We have some of the largest the television spenders in the world now.

General Motors, one of the largest TV spend there in the U S.

Which I believe would away with one of the if not the largest one on the Google Doubleclick platform switching the end of it. So there is a reason for that isn't before measures right.

I think that's the that's where the opportunity comes in.

We have more and more large semi can named side not the 40%.

Speaker 4: We have more and more. You know large- some like you NAM, I'm not- but the 40% and growing from the top 200 adverters that are in charge of vent. 5% of the spent right, if we do the math for it's, it's going to be a very significant part of the T? V spend in the? U's is going to flow through the C? P side of things, through our plasma. That's massive amount of data. That is a function that does not exist in either any of the contenders or measurement companies. They they measure what happened over the air. They don't have the accuracy of delivering every single impression of T? V advertising at this scale for our clients, right? So when you connected to data sets, you're creating something that's very unique. Then you know our focus. We were first on interactive video and a lot of things. For C P? Z, it's less about be placing anything that somebody else has in market or plan to have the market, and it's more creating products that our customers are literally designing it for us. They're telling it: this is what I need to get, go and get it for me, So raise the money. We got it to them. We're putting it together, we're put their hands it. They like it, they LL buy more. What we're not focusing on, this or any other player, we want to leave the way ourselves.

<unk> and growing from the top 200 advertisers that are in charge of 75% of the spent right.

We do the math and path forward.

So it's going to be a very significant part of the TV spend in the U S is going to flow through the CTV side of things through our platform that's massive amount of data.

That is a function that does not exist in either any of the contenders our measurement companies they measure what happened over the year.

They don't have the accuracy of delivering every single impression of TV advertising at this scale.

Our clients right. So when you connect the two datasets youre, creating something that's very unique.

And our focus we were the first one interactive video and a lot of things for <unk>. So it's less about replacing anything that somebody else has in market or plan to have in the market and its more creating products that our customers are literally designing it for us. They are telling us. This is what I need to get going and get it for me. So we raised the money we got it to them.

Putting it together will put it in their hands and they liked it they buy more.

We're not focusing on this or any other player we want to lead the way ourselves.

Very helpful. Thank you Bob Thank you.

Speaker 7: Very helpful. Thank you both, Thank you.

Speaker 14: Our next question comes on the line of Laura Martin with neum. Please proceed with your question.

Our next question comes from the line of Laura Martin with Needham. Please.

With your question.

Hi, there good morning, I'd like to first follow up on an answer to get measure. My question. So what you said is you bought JD square to get the database for linear because your clients for the next five to 10 years, we're going to be integrating key keeping with linear but you also said that over time, we think that all linear comes to digital so by implication.

Speaker 26: Hi there, good morning. I'd like to first follow up on an answer you get to. That is measurement question. So what you said is you bought T V square to get the database for linear because your clients, for the next five to 10 years we're going to be integrating T TV with linear. But you also said that over time we think that all linear comes to digital. So, by implication, does the acquisition you made, a T V square become relevance over the seven to 10 year frame because really we're moving to it all digital world?

Patient does the acquisition you made of TV square become irrelevant over the seven to 10 year Frank.

Really we're moving to an all digital world.

And so a I'm not the person to all the smart people on this call probably have better things has been higher than I do on the future of how fast we will take right.

Speaker 27: And that. So a I'm not the person to. You know, all the smart people on this call probably have been than I that I do. On the future of how fast would take right, I would hope you know when we started no, we thought by the, the 15 later and it's probably tenens 15%. So it's going to take a long time, which is good, you know: five 10 15, 20 years. So I definitely believe linear television brocke television. It's here to stay fora long time. But you know technically, yes's some point in the future. Like almost all voice goes over the world. Right now, our transcisions over I, most the text is moving over i. there's no reason in the world byany piece of video, including theatrical, will stay in an analogue format like it is today. They were most the digital. So from a, the oitical perfective, absolutely were all move the digital and I guess that's one some of the companies that have been, you know, built on that have the most of the revenue in the legacy world are very worried about the future right, But in that that that is going to take a long, long time. So was that it's almost. Think about it as the bridge're meeting our customers in the future. In C T V thing guys, we still have 90% of our budget on the other side. We need, we need to provide solvisions. That's to help us Ma this transision and makes smart decision when what? You know, what should we move, how we should move, what's the impact of what we're moving? And so that's, that's the, the purpose of the acquisition. Now, in terms of it, we T just by dat. I' actually you know some of the da license in the market, So it's not the ATA much as the. And now this, the da. And being able to put data sets together: understanding household data- we talked about I? P household I connecting other D data sets like demographics. And the third piece, which is ex? Ing important of these: outcome right. So the court business of T V, where we not innovated with understanding television but then understanding outcomes and saying this was affect. But this was not affected customers like that. We like go daddy and teleon, which are very performance, the T V advertises, which eventually, I think most a lot of television will be a question about the R? I. So we're getting that. Plus, we're getting the outcome components that we're now implementing across linear and CTV. If, if we put this full picture in your mind, this will allow our customers to makes smart decisions about how fast the move the budget, what to buy where when, which demographics, and you see what creative works would. Creative doesn't work. That's considering what's in market today. That's pretty future ist IC. So I believe a very confident on the I we're going to get on this acquisition.

I would hope you know when we started enlink. We thought five years were 50 years later than it's probably 10% to 15%. So it's going to take a long time, which is good.

510, 15, 20 years, so I definitely believe linear TV broadcasters and it's here to stay for a long time, but secondly, yes at some point in the future like almost all voice calls over the world right now are transfusion for over IP. Most of Tech is moving over IP. There is no reason the worldwide any piece of video, including theatrical will stay in there.

Analog format like it is today it will move to digital so from a theoretical industrial perspective, absolutely. We're all both the digital and I guess, that's one some of the companies that have been built on that have the most of the revenue in the legacy world are very worried.

About the future right.

But that.

That is going to take a long long time. So the idea was that it's almost think about it is the bridge we're meeting our customers in the future in CTV.

We still have 90% of our budget on the other side, we need we need to provide a solution to that to help us make this transition and make smart decisions when.

What should we move how we should move what's the impact of what we're moving and so that's the purpose of the acquisition.

Now in terms of that we didn't just buy data actually some of the data has also licensed in the market. So it's not the data as much as the.

And now it is the data and being able to put datasets together understanding household data we talked about IPD.

Household diabetes connecting other datasets like the <unk> and the third piece, which is extremely important the outcome right. So the core business of television squared without innovated was understanding TV, but then understanding outcomes in saying this was effective but this has not affected the.

Customers like that we like Godaddy and peloton, which are very performance driven television advertising, which eventually I think most a lot of TV will be a question about the ROI.

We're getting that plus we're getting the outcome components that we're now implementing across linear and CTV.

If you put the full picture in your mind. This will allow our customers to make smart decisions about how fast they move their budget with what to buy where wind which demographics.

To see what creative works with creative doesn't work.

Yes.

What's in market today, that's pretty futuristic so I believe I'm very confident on the ROI, we're going to get on this acquisition.

Okay. Great. That's helpful could you just remind us of the political impact on your P&L in the second half of the year, how does the political affect your revenue side.

Speaker 28: Okay great, that's helpful. Could you just remind us that the political impact on your PO on the second half of the year? How does political affect your revenue upside?

Speaker 7: Historically for for interit. You know we're not focused on the political. Actually we we would say that in the last selection if we pulled back slightly from that, even from the little we had. So it's not a huge area of focus for us. We're focusing the largest T V advertisers that are always on and political is on enough. We may see some revenue through the T V squared acquisition because obviously it's related to performing, you know tracking, website visitation, social stuff, down up down ad and all that. So I expect to see some revenue through the measurement piece, but I would not say significant or that we're counting or banking on it.

Historically.

For <unk>, we're not focused on the political.

Actually I wouldn't I wouldn't say that the last election, we pulled back.

Slightly.

Some of that even from the little we had so it's not a huge area of focus for us.

We're focusing the largest television advertisers that are always on and political is on and off.

We may see some revenue through the <unk> acquisition, because obviously, it's related to performing senior tracking website visitation social stuff DAU app downloads and all that so I expect to see some revenue.

The measurement piece.

But I would not say its significant or that we're counting or banking on it.

Okay Super helpful. Okay. Thanks, very much thanks Laura.

Speaker 14: ok super help. ok, thanks very much, Thank floce.

As a reminder, if you would like to ask a question. Please press star one on your telephone keypad.

Speaker 14: As a reminder, if you would like to ask a question, please press Star one on your telephone key pad.

Our next question comes from the line of Shyam Patil with Susquehanna. Please proceed with your question.

Speaker 1: Our next question comes from the line of cheyanne peatel. What's souus, cohanna? Please proceive with your question.

Hey, guys good morning I.

Speaker 29: A good morning. Had a couple of questions. First one.

I had a couple of questions.

First one I wanted.

Supply chain issues that you guys had talked about.

Speaker 30: The supply chain issues that you guys had talked about in your in your first. In your fourth q- call you A- sounded like in your prepared remarks that you were, that you kind of all maybe less of a headwind from auto and T P'm. I'm just curious if you could elaborate on kind of what you're seeing there. Was that a comps issue? Was it something else? Are you seeing recovery there in? Just kind of curious what you're assuming for two Q and the rest of the year. And then second question.

In your in your first and your AR.

<unk> call.

Because it sounded like in your prepared remarks that you're that you kind of saw maybe less of a headwind.

From auto in CPG and I'm, just curious if you could elaborate on kind of what youre seeing there.

Was that a comps issue was it something else are you seeing recovery, there and just kind of curious what youre, assuming for <unk> and the rest of the year.

And then second question.

On measurement and you guys have talked about this quite a bit already on the call.

Speaker 30: On measurement. You guys have talked about this quite a bit already on the call.

Hi.

But.

Speaker 31: A.

Speaker 31: But do do you think that you can move up market with TV squared how quickly do you think that can happen and.

Do you do you think that you can move up market.

With TV squared.

How quickly do you think that can happen.

<unk>.

Kind of combining kind of what you said Zika already several times the call do you think combining.

Speaker 30: Kind of combining, kind of what you said za already several times But all, do you think combining their measurement with kind of your other data sets, given that you do have serving, do you think that gives you kind of unique, unique advantages to move up market and take shares, take share from some of the larger players? Thank you.

Their measurement with kind of your other datasets given that you do AD serving do you think that gives you kind.

Kind of a unique unique advantages to could you move up market and take shares six share from some of the larger class. Thank you.

Okay.

Okay.

Speaker 14: Thanks I am. So, on the supply chain, this is obviously any, since we, as you can see, we should passed guidance, So the progress that we saw in Q1 is faster than we.

Thanks, Guy and so.

So on the supply chain.

Obviously since we as you can see we surpassed the guidance. So the progress that we saw in Q1.

Faster than we are.

Dissipated in terms of recovery and as we shared in Q4 right.

Speaker 4: Anticipated in terms of recovery and everywe shared in Q4 right. It's not something that we have close control right. This is a very senior executive decision to spend more or less on TV advertising within.

It's not something that.

And we have closed controllable right. This is the very senior executive decision too.

Spend more or less on TV advertising within.

<unk>.

Within the brand marketers, our largest clients in the auto industry. So yes, we saw a significant year over year drop in Q4 30 points almost 31%.

Speaker 4: Within the brand marketers our largest clients in the auto industry. So yes we saw a significant year-over-year drop in Q4 thirty point almost only 1%. So moving that to from back to flat. So the level of volume that we saw on the au category in Q1 was similar to Q1 20 to 20 one which was cut quote unqucourse '. Pre supply chainises right if you remember that time but still cobit tard. So this is a very interesting kind environment we operating in last two and a half years. So that that you know definening communicates optimism in terms of the.

So moving back to from that to flat. So the level of volume that we saw from the auto category. In Q1 was similar to Q1, 2021 which was quote unquote pre supply chain issues, but if you remember that time, but still corporate card. So this is a very interesting environment. We're operating in the last two five years. So.

That definitely communicate optimism in terms of the.

Yeah.

Beside of the auto manufacturers.

Speaker 32: The side of the auto manufacturer that they're coming back to spend on a similar levels of last year Q1. If you look at this as a trend right, you can take that line and continue it. At the same time, we want to continue to be cautious, giving the macro and environment putting aside for a second supply chain. We actually have a different environment that we are with in right now and it's hard to predict how the rest of the year will evolve from that perspective. So, if you put the the two things together, that's what we kept our guiding and we will continue to monitor this closely. Specifically forauto category, the trend is very, very positive.

Theyre coming back to spend.

On a similar levels of last year Q1.

If you look at it as a trend right, we can take that line and continuous at.

At the same time, we want to continue to be cautious given the macro environment, putting aside for a second supply chain, we actually I have a different environment that we're living in right now and it's hard to predict how the rest of the year will evolve from that perspective.

If you put the two things together, that's why we kept our guidance and we will continue to monitor this closely specifically for auto category. The trend is very very positive.

So that's on the on the <unk>.

Speaker 16: So that's on the. The supply in similar PG, but spe PG was more scattered. We had some large C P GS that continue to spend sactly less, but continuents dum dropped dramatically in Q4. So we're definitely seeing recovery there, but it's almost more of a brand br by brand basis. Auto was across the Board. If you novate customer or not. We saw this everywhere. And also you start other companies, of course.

And similar to CPG, but specifically was more scattered you had some large.

<unk> Cpus that continued to spend slightly less but continuing some dropped dramatically in Q4. So we're definitely seeing recovery there, but its almost more of a brand by brand basis auto was across the board whether youre ahead of the customer or not we saw this everywhere and also you signed with other companies of course.

And then in terms of the the measurement component.

Speaker 33: And then in terms of the measurement component, where we're now in the integration, So I maybe elect IC. When you said, just to clarify: when you say upmarket, like what do you mean what? In what perspective? In terms of the Ty of client, the type of products.

Where we are now in the integration.

Maybe I'll ask but when he said that just to clarify when you say upmarket like what do you mean, and what and what perspective in terms of the type of clients.

A product.

Yes, so the way I.

Speaker 34: Yes So the way that it was that T V GR more focused on kind of that's and type advertisers and and you know your larger competitors get a lot of presss. You know they there's focused on you know the largest advertisers and the larger publishers and ob just caras at the combination. Now would it is part of your strategy to move up Mar'? that'sthat'sonehundred percent the move. I would say two things. First of all, the existing custommer basase is generating the T V square segment, customers segment and share with the rest of the team may be in the details on T V gro, U core business, the existing business. It's every said both's and B but also performance. You know very known plans that are more T V performance advertiser. They're looking for immediate clear R? Y, less on the brinding side which created a very, very advanced self service measure and platform. Because if you think about it, the performance customers are not like I'm going to run my for, you know over the year and it someone who help. They like every sent need to the accounted for. So from that's the fact we found the most advanced system in the market with self service capabilities from a strategic. So that's not going to continue, not going faster. It like to beclear and venueence the world fas innovate and expect to continue to see that with the existing customtocustomer basase. But there's also self sides. You customers like spectrum and effectivev and skies or there are very large and the P? D and publishers on the platform also using it to measure the performance of they P for their customers. That all stuff, everything we shareing, also the own nonorganic stuff we share. This is all coming from the.

I understood it was that.

TV is more focused on kind of.

SMB type advertisers okay.

And your larger competitors get a lot of press.

Focus on since at the largest advertisers in the large publishers and I was just curious if the combination.

If it's part of your strategy to move up market.

That's 100% of the move I would say two things first of all the existing customer base is generating a TV squared of segment customer segment and to share with the rest of the team was maybe less than.

And the details on <unk> core business existing business. It's as you said both smbs, but also performance very known brands that are more TV performance type advertisers they're.

They are looking for immediate clear ROI less on the branding side, which created a very very advanced self service measurement platform. Because if you think about it the performance customers are not like I'm going to run by Edinburgh over.

Over the year and some of them will help there like every set needs to be accounted for so from that perspective, we found the most advanced system in the market with self service capabilities.

From a strategic.

That's going to continue growing faster the right to be clear and continues to grow faster to innovate and expect to continue to see that with the existing customer base.

But theres also a sell side customers like a spectrum and effective and sky. So they are they are very large MVP.

Mvpds and publishers on the platform also using it to measure the performance of the campaign for their customers that all stuff everything we're sharing also the on the non organic stuff we shared.

This is all coming from the.

Tvs as his.

Speaker 4: Tv squared, as is business, to your zero point one hundred percent, that's to the move. What we're doing now is we're training the, the quinteicalcalled legacy, innovate sesthing, which is 100% focus on the top 2, 100 advertisers and there our accounty management team. To take the converge product, we already have all of our custommerers- C D V, da- for the last 3, four or five years- linear public information. So we have all the linear data, the same customers. You could it imagine putting this together and taking the market, that could be a very compelling offering. That's space to your question. And was TV is actually King measurement of that space? Was we were not a player in there? Obviously what we're, what we're doing right now- and they believe everybody else on the spending, including people who find lawsuits. That's that' the pl right. That exactly what they were're doing as we speak.

Business to your point, 100% and that's what we're doing now is we're training the.

Critical legacy innovate sales team, which is 100% focus on the top 200 advertisers and they're our account management team to take the converged product you already have all of our customer CTV data for the last 345 years linear there's public information. So we have all the linear data the same customers. So you could imagine putting this together and taken to market. This could be a very.

A compelling offering.

That space to your question.

Was that.

The PV Investor day measurement, because that space was we were not a player in there obviously, what we're doing right now and I believe everybody else understand including people who filed lawsuits.

That's right that's exactly what we're doing as we speak.

Got it then one more if I could sneak it in sure.

Speaker 14: Does had one more if I could take it in shortthha.

Speaker 31: But.

Netflix.

Speaker 27: Netflix their announcement on ambitions with AVOD. Can you just talk about?

Their announcement on.

Our ambitions with Avon can you just talk about.

What are your I mean, you guys see a lot of different things you guys have seen many many walled gardens, and CTD and kind of evolutions and.

Speaker 30: What I mean you guys see a lot of different things. You guys have seen many many Wall Gardens and CTV and kind of evolutions and.

So from your vantage point, what do you think this means for the industry.

Speaker 30: If from your Vantage point, what do you think this means for the industry? What do you think it means for you guys? Just just would love to get overall thoughts.

What do you think it means for you guys just would love to get your overall thoughts.

Hum.

Speaker 35: I would tell I'm sure you would love to take this one as a as a known a walstar speaker on the topic of abo and air Bo and everything in between.

Sure.

And you would love to take this one as a as a known Rockstar speaker on the topic of a blood in asphalt and everything in between.

Thank you very much Ken Thank you launch them.

Speaker 14: Thank you very much. Can Thank you much M in regards to Netflix, and I think I can combine a bunch of other announcement that we're recently about big streaming platform that are introducing and supported package like this in plus- and hwe are well on way on doing that, and Hulu and others. We think, first of all, we think that this is the way of the future, same way that television used to be a dual revenue model. streamingly will be the same and the second part is's obviously very much aligned with the strategy of innovative that tremendous media and good content will be Ed supported and our job is to create a platform that allows marketers to to enjoy that and essentially used technology to battle fragmentation, So more players are inevitable. This is very much aligned- aligned with our offerings.

In regards to Netflix and I think I can combine.

A lot of a bunch of other announcement that were recently about the big streaming platform that are introducing an AD supported package like Disney plus and HBO are well on our way on on doing that and Hulu and others.

We think first of all we think that this is the way of the future. The same way the TV used to be a dual revenue model.

<unk> will be the same.

And the second part is obviously very much aligned with the strategy of innovative that tremendous media and good content will be AD supported and our job is to create a platform that allows marketers to to enjoy that and essentially used technology to battle fragmentation. So more players are are inevitable.

It's very much aligned aligned with our offerings.

Just going to add one more thing specifically with Disney plus and maybe Netflix counting out with advertising, we think with those players we will see much more investment and better ad products.

Speaker 36: Just going to add one more thing specifically, with business plus and maybe Netflix coming out with advertising, we think- both players- we will see much more investment in better ad products.

As those companies historically really invested in user experience.

Speaker 36: As those companies historically really invested in user experience and innovating on on what are the viewers? The viewing experience part. This is very much aligned with what we've been doing and neckling for many years without personalization and advan creade product invested in better user experience around that, and we think that this would be great tailwind for all that.

And innovating on our.

And what are the viewers the viewing experience part this.

This is very much aligned with.

What we've been doing in equity for many years.

With our personalization and attract creative product invested in and better user extent around that and we think that this would be great tailwind for all of that.

Speaker 14: Thank you guys. Thank you Jo.

Thank you guys.

Sure.

Ladies and gentlemen, we have reached the end of our question and answer session. I will now turn the call over to CEO and co founder sneak another for closing remarks.

Speaker 14: Ladies and gentlemen, we have reached the end of the question and answer session.

Speaker 1: I will now turn the call over to CEO and co-founders vak annetter for closing remarks.

Thanks, Alex. Thank you everybody before we sign off I would like to take a moment and think first of all for all of you for your guidance Great question on a personal note I have to say that this is from all the three months. This is the part of winning for the most not the.

Speaker 16: Thanks Alex, Thank you everybody. Before we sign off, I would like take a moment and think principle for all of you for your guid and great question and the personal know that have to say that this is all the three months. This is the part of wentning for the most, not to not the recording as much as live to a looking forward to continue to talk with many of you a next coming months. Huge Thank you also that our customers, our partnerers- we heard about a lot of them and their trust and support in innovate- but most of all, to our really phenomenal teams. I believe we have some of the best teams in the world in the business, in our business and advertising tech make, with dri, commitment to excellence, kind of what have got us here through ups and downs and, as you can see now, a really strong and great quarter. We started the your strong, I believe, as far as it comes to innovate, internal K P I, new law gos new, new product innovation announcement partnershipships upsailing, retention. I expect to see a very strong year, no matter from the internal K P i- obviously when I affect be af affected, like everybody else, from macro economic situation, but extremely passionate and boomish and pair the Laura common there: 5, 10 years, 20 years. There's a lot more that's coming ahead of us. This is practically day 1, day to of the journey here. So thank you so much, have a lovely day in a great rekend and you should Thank you.

Let the recording as much as the light Q&A and looking forward to continue to talk with many of you next coming months.

Huge. Thank you also to our customers our partners, we heard about a lot of them and their trust and support and innovate, but most of all to a really phenomenal teams I believe we have some of the best teams in the world in the business and in our business and advertising there.

The relentless drive and commitment to excellence is kind of what got us here through ups and downs.

As you can see a really strong and great quarter or we started the year strong I believe as far as it comes to innovate internal kpis, new logos, new product renovation announcement partnerships upselling retention.

I expect to see a very strong year.

No matter.

Internal kpis, obviously, where the effect be affected like everybody else the macroeconomic situation, but extremely passionate and bullish and further Laura comment there are five to 10 years 20 years Theres a lot more that's coming ahead of US. This is practically day one day two of the journey here. So thank you so much have a lovely day and a great weekend.

Thank.

Thank you.

This concludes today's conference and you may disconnect your lines at this time.

Speaker 14: This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

You for your participation and have a wonderful day.