Q1 2022 Innovid Corp Earnings Call
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Greetings. Welcome to Innovid's second quarter 2022 earnings call.
At this time, all participants are in listen-only mode.
A question and answer session will follow the formal presentation.
If anyone today should require operator assistance during the conference, please press star zero on your telephone keypad.
Please note this conference is being recorded.
At this time, I will turn the conference over to Brenly Johnson with Investor Relations. Brenly, you may now begin.
Thank you, operator and everyone for joining us today. Welcome to Innovid's second quarter 2022 conference call. Before I begin, I would like to remind our listeners that certain information provided on this call may contain forward-looking statements. The Safe Harbor Statement contained in today's earnings release also pertains to this call. If you've not received a copy of the release, please 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 should affirm materially.
from those expressed by the 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. In addition, our discussion today will include references to certain supplemental non-GAAP financial measures, which should be considered in addition to and not as a substitute for GAAP results. We use these non-GAAP measures in managing the business and believe they provide useful information for our investors.
Reconciliations of the non-GAAP measures to the corresponding GAAP measures, where appropriate, can be found in our earnings presentation available on our website, as well as our earnings release and our filings with the SEC. Today we are joined by Zika Neter, Innovid's co-founder and CEO , who begin the call with a business update. Then he will turn the call over to Tanya Ondriff-Kaspin, Innovid's CFO , who will discuss the financials of the company. During the question and answer session, Tal Chulosan, co-founder and CTO, will also be joining.
With that, I'd like to pass the call over to Zvika Neder. Zvika, please go ahead.
Thank you, Brumie, and thank you all for joining us today.
Innovate delivered strong results in the second quarter of 2022.
Despite a more challenging environment, we delivered revenue in line with our guidance, and Ibera at the higher end of our guidance, reflecting the strength of our business model.
Revenue increased by 45% year-over-year to $33.1 million on an as-reported basis.
TV Squared contributed $6.8 million or 21% of reported revenue, reflecting a 31% year-over-year growth for the TV Squared's business.
following the acquisition closing on February 28, 2022.
Our net profit was $4.3 million and adjusted EBITDA was at negative $1.7 million, at the high end of our expected range of negative $1.5 million to negative $3.5 million.
We believe our ability to record a strong adjusted EBITDA bottom line, even when facing challenges, is a testament to the strengths of our business model, strong margin profile, and our ability to control expenses.
By far the most exciting development of the second quarter was the launch of InnovidXP.
Innovit XP, our newly expanded converged TV measurement offering.
brought to life through the integration of innovative extensive CTV advertising software combined with TV squares robust linear TV data.
creating the first to market global cross-platform TV measurement solution.
that has quickly gained traction.
As a reminder, Innovit's focus and emphasis spans all forms of television.
whether the TV content is delivered via broadcast, also known as linear TV, or streamed across devices such as connected TV, mobile TV, or desktop TV.
CTV contributed 47% of total revenue in the second quarter.
when excluding TV Squared.
As we continue to gain traction against our roadmap and vision to unify advertising delivery, personalization and measurement for the converged TV landscape. We believe CTV will continue to be a driving force for the business.
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.
current and future development of our overall business.
and the momentum that we built around measurement and innovative speed.
Specifically, I will provide these updates within the context of our four key growth drivers.
which are volume growth, product upsell.
geographic coverage, and client-based retention and expansion.
Let's begin with volume growth.
I'm pleased to share that CTV set a new record in the second quarter. For the first time ever, 50% of all TV ads delivered to our platforms were streamed to connected television.
If you recall, Innovit was founded on the premise that one day the majority of TV content will be delivered through streaming channels.
That prediction is coming to life and our volume outlook is further supported by the ongoing migration of TV viewership toward not just CTV, but ad supported CTV.
which is the foundation of Innovitz Business.
The introduction of ad-supported offerings from large global streaming publishers is a win for all. More affordable content for viewers and wider audience to reach for advertising.
Netflix recently confirmed its plan to introduce a lower cost ad-supported tier in early 2023. Disney Plus will introduce its ad-supported tier later this year and plans to expand internationally next year.
And Warner Bros. Discovery just shared advertising is core to HBO and other networks growth strategy.
We believe a substantial share of Streams' future will be ad supported.
It's also important to note that innovative rise revenue based on the volume growth of ads served through our platforms or measured by our platforms and not as a percentage of media spent or what's referred to as take rate.
This means our business is typically less impacted by fluctuating media costs. In fact, we often benefit from the dynamics that increase pricing pressure and, assuming similar budgets, lower media costs equate to more volume.
and therefore more revenue to innovate.
We remain optimistic about our volume growth outlook.
As the CTV market matures, more and more TV media platforms are being added to the ecosystem on a regular basis.
each fighting for their individual piece of the streaming pie.
This reinforces the need for an independent scalable platform like innovative to integrate across all platforms and partners. Enabling brands to tap into the opportunity for enhanced reach engagement and performance through CTV advertising.
Our second growth engine is product upsell.
Right now, the entire TV industry is undergoing a transformation, a quest for better metrics and measurement that brings linear TV and string TV together.
Advertisers need a simple, scalable, independent, and actionable view of their investments.
whether they buy direct, programmatically, or both across all forms of TV.
that's fundamental to the future of television.
More than that.
They need a unified solution that allows them to achieve timely analysis to inform, test, invest and optimize continuously throughout the campaign lifecycle.
Last quarter, we shared that Innovate has successfully completed the acquisition of leading independent global TV measurement and attribution platform, TVSquared.
This quarter, the acquisition came to life through the launch of our unified measurement platform for CONVERGE TV.
Innovid XP.
Innovate XP is the first global unified cross-platform measurement solution directly integrated with ad-serving data and creative personalization.
The Innovit XP name reflects the direction where Innovit and the industry are heading. A cross-platform TV marketplace requiring independent, consistent measurement and outcomes across platforms and screens, regardless of where, when and how people watch.
We have seen early success with upselling our existing ad-serving clients to Innovit XP this past quarter, including several leading multinational and national restaurant chains, a worldwide employment platform.
Additionally, we have won several new clients, including an international design platform further expanding our client base.
We have also bolstered our measurement footprint through strategic partnerships spanning programmatic via Magnite's expanded measurement attribution program, forged a political TV advertising partnership with AdImpact and integrated with FreeWill by Comcast's newly launched international audience express offering.
Overall, measurement grew to account for 22% of total revenue in Q2.
and we predict measurement will be a driving force for our growth story moving forward.
force for our growth story moving forward. Why?
We believe our foundation in ad serving gives us an edge in measurement.
Think about it. Our platform already has the certification and scale to deliver ads everywhere.
which means Innovate XP is an out-of-the-box solution for brands with no additional implementation requirements.
It's an out of the box solution for brands with no additional implementation requirements. It's automatic.
And the best of all, through our unified platform.
Your measurement is tied to Adserve.
which is the way the digital ecosystem already transacts.
The launch of Innovit XP comes just one quarter after the acquisition of TV Square.
demonstrating our commitment to measurement innovation.
Beyond measurement, our advanced creative and personalization solutions continue to see significant growth in adoption.
Revenue from Creative Solutions grew 39% year-over-year this quarter, driven by a greater emphasis on experiences and performance.
Our third growth engine is geographic expansion.
Our international revenue measures ads delivered outside of the US rule 51 percent year-over-year in the second quarter
the launch of Innovate XP introduced a true global measurement platform to the market.
supporting the needs of global, regional, and local advertisers through measurement across 75 markets outside of the US.
We have several significant developments underway to expand Innovate XP's footprint and coverage internationally, and feel confident that our differentiated offering will unlock future opportunities in the international markets.
And last but definitely not least.
expanding our client base.
This past quarter, we secured numerous new advertiser clients for our ad delivery and personalization solution, including a multinational e-commerce company, a leading multinational restaurant chain, an international travel company, and one of the largest U.S. health insurance providers. After a short while, they Play
And, as previously mentioned, we successfully grew our measurement advertiser client base.
earlier this year.
Prior to finalizing the 2D2 acquisition, I shared that client-based diversification was one of the key areas the acquisition would advance.
We believe expanding our purview and traction across both the buy side and the sell side of the advertising Ecosystem is critical to fulfilling innovative mission to become preeminent measurement provider while the buy side Which includes Brian's and their agency partners is still our no star for the company
we have taken significant strides to deepen our engagement with the Excel side, which includes publishers and pay TV operators.
To that end, I'm pleased to share we expanded our multi-year measurement partnerships with Tubi, Fox's streaming service, demonstrating the power of Innovit XP for always-on incremental reach measurement across both Fox and Tubi.
The continued growth of our strong and increasingly diverse customer base is a signal for the strength of our underlying business.
Next, I'd like to address the macroeconomic factors that have impacted the advertising and technology landscape these past few months, and as a result, our guidance for the second half of the year.
We, like all companies, are not immune to economic headwinds. However, our emphasis is on CTV and its arguably stronger tailwinds.
Make me optimistic about our future.
Beyond large players moving to ad supported models, we see huge upside for CTV at large and believe sports will be the catalyst for CTV's new wave of hyper growth.
Audiences are leaving linear TV for streaming and live sports are critical content platforms for tracking audiences and revenue at scale.
The NFL recently threw their hat in the streaming ring with the introduction of NFL Plus, a move they see as key to their long-term success.
This comes on the tail of last year's move of Thursday Night Football to Amazon.
and according to NFL Commissioner.
Appending motion for NFL's Sunday ticket to move to a streamer post the 2022 season.
These strong tailwinds have supported our growth despite the headwinds that have impacted the industry, such as prolonged impact of COVID-related supply chain disruption, geopolitical uncertainties, and signs of suffering consumer spending.
We continue to take a pragmatic approach to ensure the realization of our long-term vision for the company.
This includes our focus on maintaining margins and realizing what we anticipate to be several millions in measurement synergies related to TV2 acquisition in the second half of this year.
To summarize the opportunity ahead, I'd like to share a quote from Andres Schulte.
CFO of Procter & Gamble, one of the world's largest advertisers.
In their last earning report, Andrei spoke about the importance of measurement to enable transformation.
Andres stated, and I quote, our ability to improve effectiveness of reach and quality of reach is allowing us to drive cost per effective reach down both in digital and in TV.
We've shifted more and more spend into digital.
Now, more than 50% of our advertising is in digital."
We are thrilled to be in the advertising TV business right now.
and look forward to bringing new innovations to life in support of our growing measurement focus.
We remain committed to our core 2022 strategies and will continue to make investment we believe are strategically important to capitalize on the streaming market and going converged TV market.
I will now turn it over to Tanya, who will go into greater detail regarding the financial performance and guidance.
Tanya?
Thank you, Sveka, and good morning, everyone. I will start with a review of our second quarter results before discussing our full year outlook.
InnoVid is a leading independent software platform that provides technology infrastructure for creating, delivering and measuring TV ads across CTV, mobile and desktop.
Innovit's platform generates revenue from three key offerings, ad-serving solutions, creative personalization solutions, and measurement solutions, now known as Innovit XP.
In the second quarter of 2022, our revenue increased by 45% year-over-year to 33.1 million on a reported basis.
The T2S business grew 31% year-over-year, contributing 6.8 million, or 21%, of total quarterly revenue following the acquisition completed in the first quarter of 2022.
With the acquisition of TASCURD, an independent global measurement and attribution platform, measurement becomes a significant revenue driver for InnoVid.
generating 22% of total quarterly revenue.
Ad serving and personalization services drove the remaining 78% of total quarterly revenue.
We expect the growth in CTV at serving and personalization, as well as measurement to continue to be our primary revenue drivers.
When excluding TFSQ, our Q2 revenue grew 15% year-over-year to 26.3 million.
CTV contributed 47% of this revenue, up from 45% in Q2 of 2021, growing 20% year-over-year when excluding TV2. Mobile contributed 38% and desk top 15% of revenue, and grew, respectively, 13% and 7% year-over-year, excluding TV2.
Revenue from ad serving and personalization services grew 16% year-over-year. This revenue is generated by serving ad impressions through Innovid's platform to various digital publishers across CTV, mobile and desktop environments.
Speaking to video impressions composition.
CTV counted for 50% of all video impression volumes served in Q2, up from 46% in Q2 of 2021, and grouped by 3% here over here.
Mobile increased 11% year-over-year and accounted for 38% of all video impressions' volume. And desktop decreased by 3% and accounted for 12% of video impressions served by Inuvit.
In terms of geographical breakdown,
The US is the main contributor to our revenue, accounting for 89% of total revenue and growing 44% year-over-year on an as-reported basis.
Our total international revenue grew 51% year-over-year on a reported basis and increased its share to 11% of the total quarterly revenue, up from 10% in the second quarter of 2021.
The majority of our clients are global advertisers and operate at a significant scale. Innoviserv's customers globally through a delivery footprint covering over 70 countries.
We plan to continue to grow our footprint in international markets in order to meet the needs of our global customer base.
Move into call.
Total operating expenses for the second quarter, including cost of revenues, were 42.3 million and grew 87% on as reported basis from 22.6 million in the second quarter of 2021.
A number of factors contributed to the increase in operating expenses.
First, nearly 50% of the increase, 9.6 million or 23% of operating expenses, were attributed to the inclusion of TV2 operating results in the second quarter of 2022.
Second, approximately 26% of the year-over-year increase in operating expenses was driven by the increase in stock-based compensation, one-time acquisition-related, and D-SPAC transaction-related expenses. The D-SPAC transaction-related expenses were driven by the increase in stock-based compensation-related expenses.
Lastly, the remaining 25% of the increase was the result of organic expansion of the operations.
The net profit in the second quarter was 4.3 million or an EPS of 0.03.
Net profit in Q2 benefited from finance income of $13.3 million, primarily derived from our warrants being revalued as a result of market volatility impacting the company's share price. Net loss attributable to TV-Squared in the second quarter was $2.3 million, inclusive of $4.7 million of intangible asset summarization. Adjusted EBITDA for the second quarter of 2022 was negative one.
the full quarter, as well as the organic growth in the operating expenses as I've noted before.
Starting in Q3, we expect the realization of certain post acquisition synergies to positively impact the company's profitability in the second half of 2022 and beyond.
Considering the current macroeconomic and geopolitical uncertainty, we believe that close monitoring of the macro trends and agility in expense management will allow us to adapt to any significant changes as quickly as necessary.
moving to our balance sheet.
After the acquisition of TVSquared, our cash and cash equivalents ending balance on June 30, 2022 was $44 million. Given our margin profile, we believe that we are well capitalized at this time.
The total common stock outstanding as of June 30, 2022 was 132.4 million.
Finally, I would like to go over our guidance.
In the second quarter of 2022, we delivered a solid quarter, and we achieved results with the in-guidance.
While we are seeing strong growth momentum in our client base in the start of this third quarter, the broader advertising market outlook in the current macroeconomic environment remains uncertain.
Our guidance for the second half of the year considers the potential impact of the current worldwide macroeconomic and geopolitical trends on the advertising industry and reflects a potential pullback in digital ad spending in the second half of the year.
For the third quarter of 2022, we expect revenue to be in the range of 33 million to 35 million, reflecting 41 to 49% year-over-year growth on as-reported basis.
and 12 to 19 percent year-over-year growth on the performer basis.
We expect adjusted EVID in the range of minus 2 milliliter to break even.
For the full year of 2022, we expect revenue to be in the range of $127 million to $132 million, including TV spread revenue. This guide reflects 41 to 46 percent year-over-year growth on an as-reported basis and 17 to 22 percent year-over-year growth on a pro forma basis.
We have revised our prior outlook for the full year of 2022 assuming impact at comparable rates across all revenue streams.
The change in full year guidance does not anticipate a disproportionate effect on any single line of business.
Total annual adjusted EBITDA now following the TV-Spare Decposition is expected to be negative 6 million or higher. We expect the adjusted EBITDA for the second half of the year to be nearly break-even or positive compared to the total adjusted EBITDA in the first half of 2022 of negative 4.7 million.
The significant operating leverage of our robust profitable core business and the realization of the post acquisition synergies are the main drivers for the anticipated adjusted EBITDA improvement in the second half of the year.
With that, I would like to hand the call back over to Tsvika to take your questions. Thank you.
Thank you, Tania, and thank you all for joining us on this call. We'll now open the line for questions.
Operator, please go ahead.
Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question today, please press star 1 from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pricing the Starkeys.
One moment please while we poll for questions.
Thank you and our first question is from the line of Shweta Kajuria with Evercore. Please just use your questions.
Thanks for taking my question. Could you please help us understand how you monetize Innovit XP, what your go-to-market strategy is and then how monetization is incorporated into the business? And then the second question is, could you please talk about vertical performance across the strong verticals, maybe shopping, travel, etc., versus maybe some of the weaker ones including auto?
and geographical performance as well. And the follow-up to that is, what do you think is the difference that's driving the performance versus Trade Desk, for example, that had a strong CTV revenue growth? So could you help us try and understand the differences and similarities there too, please? Thank you.
Sure. Good morning, Swetha, and thanks for joining us.
So, I think three to four questions here. I'll take them quickly one at a time. The monetization of XP is still, obviously we're very excited that we integrated the platforms, the CTV and linear TV measurement into a single offering.
within three months. Obviously, we had six months to prepare for this. So we are now in market with Innovit XP, a combined CTV and linear TV measurement solution.
So there's three main areas of revenue growth there, the classical existing client base of TV2 when we acquired.
a lot of direct-to-consumer, smaller local advertisers. Then there is the sell side which we are making a lot of progress, deals with publishers etc. The third one which is the most exciting from our perspective is the upsell to our large ad serving client, large CPGs, autos, etc. And I have to say that we are positively...
encouraged by the level of interest. And actually, we were able to close already several deals, upselling to our ad serving client. That was our main driver for the acquisition. It's actually happening. At this point, it is part of the
the monetization is based on an annual agreement that are a factor based on the media budget, so less on the impression level, but more on the media budget, and on an annual contract. But I believe these are the early days and we may explore other ways to monetize it. So currently it's based on the size of the media, but not a percentage, the size of the budget of the customer, and annual deal.
Your second question was on vertical. In vertical.
except what we saw in Q4, the drop in auto which was across the board, we are not seeing at this point a dramatic change in any of the verticals. We are seeing more generic spot decisions by certain brands that could be either strategic – not strategic I would say – looking into the economical environment. And we are absolutely still seeing supply chain.
that influence – there's a large CPG that was publicly in their earning call mentioning running short on supplies for two major product categories, lowering the media spend, and then increasing it again in Q3 when their supply came back. So we believe this is going to continue for the foreseeable future. It will be more about volatility rather than across the board an entire vertical.
there is a large CPG that was publicly in their earning call mentioning running short on supplies for two major product categories, lowering the media spend, and then increasing it again in Q3 when their supply came back. So we believe this is going to continue for the foreseeable future. It will be more about volatility rather than across the board and entire vertical changing.
Last, regarding the traders question, obviously we don't...
we don't monitor in other companies in terms of earnings and how. I would say that the key difference between us and most of the media companies, definitely the media buying and selling platforms like the DSPs and the SSPs is the take rate. It's basically that it doesn't exist at Inovit. So Inovit is a pure volume play. So things go up, we go up, and volume goes down, we go down which behaves very differently, and then can behave differently from how.
a percentage of media take rate. There's more flexibility, it's a bigger take rate, and it's more narrow. So we charge volume across the board including the wall gardens, including the open internet, including everything.
while the DSPs are obviously charging for what is only running on their platforms. It could be 15%, 20% of the plans. And based on the inventory they are buying, and how they price the media, so the actual revenue, because they don't report volume growth, the actual revenue can go up and down. And I would argue there is more control by the platform on that.
On the short term, on the long term perspective, I believe, innovators are more immune to price compression or margin compression.
because we're just – it's a flaccid for volume. And I believe, and thank you for asking this question, I believe this will continue as the markets continue to evolve. I believe this will be a point that we'll continue to discuss, and for people to better understand the different dynamics between how the unique business model innovates versus the media platforms.
Okay, thanks, Vika. Sure. Thank you.
The next question comes from the line of Laura Martin with Needham & Company. Please proceed with your question.
Good morning. Great numbers, you guys. Congratulations. So, Zika, my first thing is you've got quite a wide spread of guidance for 3Q versus quite a narrow guidance range for 4Q. My question is, we are hearing that visibility is falling as advertisers are pausing or delaying or just giving much shorter notice. Is your visibility on 3Q falling?
which is why I have a 700 basis point guidance range in organic growth. But then I don't understand why it's tightening so much for a full year. So can you talk about visibility in your business please first?
Yes, and thanks, Laura, for joining. Good morning. Good morning.
The dynamic is the volatility. So we have headwinds like every company in the space from Google, to DSPs, to social media, obviously advertising. We believe we'll see some overall advertising. We'll see an impact because of the economical situation. And you heard it on every quote. The tailwinds are extremely strong and that's what's – the tailwinds that include the move for net –
and I think we'll be accelerating the next three to six months, which can create to your point, can widen the spread. I can even share the thing we shared on the earning call where we said we are seeing a strong beginning of the third quarter, stronger than the end of the second quarter. It's just that it's in this environment where spending lots of money and lots of time growing it now exists. However we can certainly hope by the end of Fall everybody will get through the initial stages. Yet another chance to compos Defence Works
if somebody runs a product or somebody is concerned about something else, that can impact. So that is the reason. So we want to be of abundance of caution. We don't want to provide guidance that we will miss. So that's the reason for what we're seeing and kind of being more...
conservative on the fourth quarter and the overall year crisis. Okay, cool. And on political, I really liked your partnership you announced on political. Do you think that could be, like how big could political be in your 4Q this year as a revenue driver? What's your best guess?
It's political historically, and also even with the acquisitions, we are providing a measurement solution. It's not a significant revenue. It was never historically a significant revenue driver for Inovit since our focus is the large CPGs and autos that consistently deliver what was in the past a predictable revenue. It's still relatively predictable. So we are less focused on selling into and monetizing political campaigns.
Please proceed with your questions.
Good morning, thanks for taking my questions. It's exciting to see measurement now reach 22% of revenue. Can you provide us an update on the impact of measurement pricing? Where are we now in terms of CTMs?
So at this point, what you start seeing, since we are integrating measurement, the product is already integrated. We are now in market upselling to our existing client base. I believe we are going to…
evolve in terms of how we price it into maybe a more advanced way.
towards the end of the year as we are exploring better pricing mechanisms. So we were cautious at this point not to – so technically if you add that revenue since we don't price it on a volume base, it's more of an annual deal, a subscription annual deals. So if you take the overall revenue divided by impression we report you will get a much higher effective CPM per ad delivered. So we didn't want to share this number yet.
because we may evolve the way we're pricing it, and I think it will be more accurate to combine those numbers if the way we price it is similar. So at this point...
At this point we're not updating that number. Overall, to put measurement aside, it's a similar trend. We're not seeing any price pressure on any of our products. Actually, we're seeing great success on personalization. It's going very fast. CTV is now 50%. And XP is being, it's being adopted faster than we thought in terms of customer, like large customer interest. So the...
I believe that maybe by next year we will be more – we will come to market and explain how we are combining all the numbers to show an effective CPM. Mechanically, it obviously went up now, but I don't think it will be the right presentation to provide to investors.
Sure enough. And then just as we think about the macro environment, can you talk about what that's doing in terms of existing versus new clients? Are you seeing an elongation in terms of bringing new clients onto the platform? Clearly you've had success, right? We talked about GM last quarter. But then how does macro impact the maturation of kind of those cohorts versus new clients? Thanks so much. And thanks for the question. Actually, it's a great question because to make it very clear, It's pretty bandling it
And Laura asked about the guidance. On all KPIs in terms of beside volume what we're seeing, when a large CPG is running out of home care products, and as rightfully as they should in this environment, we do spending for a month and a half or two and then come back, all other KPIs are moving as planned up and to the right. So I would argue there's actually acceleration, positive acceleration of adoption. Because I believe at this point, especially the Netflix announcement it may provide shockwave throughout the industry if somebody was sleeping.
some of the other platforms out there besides Microsoft, which all of them are in a way also competing with the Netflix business.
So the fact that there are multiple, many wall gardens, I believe Netflix will also be some sort of a wall garden together with Microsoft. The fact there will be so many of them, and for brands like P&G, or Chrysler, or GM, they need to be everywhere, including Netflix.
So that would actually increase, it should increase and accelerate our market share win, winning new logos, upselling to personalization, upselling to measurement. The environment we are in is forcing advertisers to get more for every dollar. So if they reduce the budget let's say from $100 million a year to $80 million a year, they will still kind of do more with less. They still want to gain more. The only way to do it is do more personalization.
into measurement, while the overall volume may fluctuate in the short term, on the long run, extremely bullish growth on all KPI.
Thank you.
Thank you. Our next question will be coming from the line of Vasily Karajov with Cannonball Research. Please receive your question.
Thank you, good morning. I wanted to ask a big picture question. Given the bifurcation and performance in connected TV names this earnings season,
Can you tell us what you see in terms of growth drivers, walled gardens versus open internet or open connected TV, whatever we want to call it? What do you see in terms of trends that are driving the diverging performance from different companies that used to look like they performed in the lockstep and now that's not the case anymore? Thank you.
It's definitely very interesting dynamics. I would ask my co-founder and our CTO Tal who is working very closely. We both work with gardens and what you refer to as the open Internet. We work with all of them.
So, would you take that?
Sure, thank you very much, Vic. And thank you, thank you, Vasily. So first of all, just an important point about the World Garden versus open Internet. I think that the future of television and the future of connected television is not going to be a winner takes all. So there is not one massive World Garden like we see in search or social.
So there will be a lot of different companies. We see right now, and we definitely think that it will be a combination. It's not going to be just an open internet with a lot of different small apps. Obviously, as attested by many big apps like YouTube, even Hulu is defined as somewhat of a walled garden.
Amazon and many others who next week as well. All of those are very large world gardens.
And we think that the future will be a combination of all of them, not one side. To your question about the kind of bifurcation of performance this quarter, I think that there are many, many differences and reasons to that. Obviously, lapping hard comps from Q2 2021. And also, there are different type of advertisers that feel different platforms.
from smaller marketers to very large TV advertisers. But I think in the long term, that's really the big important point is that the long term of television, all linear will move into connected television. And it will be a mix of very large walled gardens and a long tail set of apps that allows users to just start on broadcast television.
to very large TV advertisers. But I think in the long term, that's really the big important point is that the long term of television, all linear will move into connected television. And it will be a mix of very large walled gardens and a long tail set of apps that allows users to just start on broadcast television. Thank you very much.
Thank you. At this time, we've reached the end of our question and answer session. I'll now turn it over to the management for closing remarks.
Thank you, operator. Thank you everybody for joining us today. I really appreciate the time. I know there's a lot of early calls today. And the time and attention to innovate, obviously we're extremely excited about what's going on and how things are evolving for us. We had a very solid quarter and started the year with a strategic move into expanding into measurement space, you know, with the launch of Innovid XP. And as we heard in the question, despite the uncertain macro...
This concludes today's conference. We may disconnect your lines at this time. We thank you for your participation.