Q3 2022 Perion Network Ltd Earnings Call
Not undertake to update any forward looking statements to reflect future events or circumstances as in prior quarters. The results reported today will be analyzed both on a GAAP and non-GAAP basis.
Ill mentioning EBITDA, we will be referring to adjusted EBITDA. We have provided a detailed reconciliation of non-GAAP measures to their comparable GAAP measures in our earnings release, which is available on our website and has been filed on form 6K.
Posted on the call today are Doron Gerstel, <unk>, Chief Executive Officer, <unk>, <unk>, Chief Financial Officer, I would now like to turn the call over to Durand Group sale. Please go ahead.
You very much good morning, and good afternoon, everyone. Thanks for joining our third quarter earnings call together with me on the call most grown our CFO .
Before we delve into the quarter results.
Let's start by looking back to the last eight quarters.
<unk> the rule of 40 model and apply.
Two out of the business.
So we will report these views by investors, who see the long term health and sustainability of our business.
It can also be used by management to make long term predictions and decision.
In my opinion, the best way to assess performance smooth the convergence plans, both revenue growth and EBITDA margin. The fact that Purion passes there who will do look for these remarkable for an EDA company and has done so in the last eight quarters as you can see.
This slide.
<unk> needs to be viewed with these valuation lens, even though it's applied to a high growth scalable software company.
In my knowledge.
To our industry.
Now I want to deal with the elephant in the room, a big elephant, which can be summarized in one question given our quarterly results.
Can we keep outperforming our peers I keep asking this question.
And I think it's more relevant today than ever before.
Therefore, paramount is uniquely able to react and size of opportunity based on current trends that might change.
But what will not change is our DNA to continue identifying trends and turn them into business opportunities.
Looking at the last eight quarters, our ability to exceed the rule of 40 is not a serious of anomaly or one off success quite the opposite.
We are outperforming the industry because we are building on the fundamental recognition.
The <unk> must be able to respond underlying respond to the trends with ability and agility.
Let's look at the current <unk> trends that we see and more importantly are we able to react to those trends.
Advertisers are looking for ways to increase customer engagement to enhance to enhance their brand equity, especially these days moving away from standard units and those that are not investing of brand equity in these difficult economic times.
It's proven that they will pay the price what.
What we will show later on with you use cases is to help extend our high input sweep for display and CTV nuts, just keep the customer engagements really high but allows us to keep our margin.
The next one advertising shifting direct response budget from social channels to search and advertising our intent to action solution known for search advertising is doing exceptionally well that will bring some figures. How this is changing.
In terms of advertising allocation bus.
Third advertiser recognize that consumers are voting for our brand.
To protect their privacy.
Our reaction sorties, gaining huge momentum and we will talk about sort and huge momentum that we experienced in the third quarter.
Last but not least advertiser undergoing margin pressure due to rapid rise in cost of goods.
Our IHOP enable us to absorb pressure and maintain our high margin and the fact of the matter we increased margins this quarter.
Diving deeper into our revenue.
So our revenue growth demonstrates our ability to continue shifting our business.
Our media budget our trend for example, the growth of privacy trend the growing demand for high impact CTV, they need fully tailored transform their media business and the fact that advertising targeting.
That generation in console game solution that they demonstrated in our last earnings call.
These are all reflected in this performance.
These shifts are likely to increase not decrease in velocity, therefore ability to react becomes mandatory to continue outperforming the industry.
From an EBITDA standpoint are our IHOP intelligent hub is a great example of technology innovation that serve our clients and our all financial results balancing supply and demand yields better efficiency, both for our clients and for Paragon.
We also benefit from operational efficiency utilizing shared resources for all advertising solution.
We believe that the pressure on advertising inventory due to the macroeconomic environment will reinforce our central control system IHOP optimizing demand.
And supply media margin increased to 41% compared to 39% in the third quarter last year.
From an advertising driving standpoint, as I pointed out the trend shows the multiple ways in which advertisers seeking to build brand recognition make an impact while respecting privacy the growth of video driven by our visa acquisition that happened last year demonstrates our.
The ability to identify the right acquisition target and empower interrupt in order to continue to grow their business.
There are moments when consumer wants to lean in to a small screen.
And others when they want to lean back.
And take it in the immersive experience of large screens.
Therefore, our ability to provide cross interest synchronization is a key factor.
Capture attention and provides a higher return on AD spend to our clients.
I showed you this slide what we made a little acquisition.
Model has served us well by attracting publisher to have an end to end video platform.
Eliminates the friction of multiple vendors as you can see we have nearly doubled the number of new publisher using video platform and achieve robust growth in the new spend at the same time, we believe <unk> will continue to grow.
I want to take a moment and.
To dig into example, which I think you will find very compelling.
These demonstrate the power of two of our core competencies working together on one hand, the high impact AD unit and then the other hand target that CTV.
We ran at depth and this test we measure effectiveness of conventional standard CTV AD unit.
<unk>, our high impact CTV Sweet as you can see on the screen.
We didn't buy tracing the user that landed on clients website in both cases.
You can see they're high impact unit achieved a 400% increase in site visits and 400% higher conversion rates.
Results like this.
Why advertisers will pay a premium for our high power high impact units premium in 30 to $32 CPM.
Impaired to higher lower team when it comes to standard <unk>.
<unk> by itself drive another very important.
<unk>, which is average deal size, which increased by 10% to $117000.
Hi price CPM.
Help us maintain and grow our margins.
The need for high impact will grow since advertiser are constantly looking to increase consumer attention.
Okay.
We're content, we're continually innovating new ways to measure the effectiveness of our high impact unit. So today I am pleased to unveil our newest tension trade measurement.
This revolutionary way to measure consumer engagement as you can see from the slide.
And with our high impact units in a real time, let me put this technology innovation and perspective.
You may know that for decades, the traditional way to measure consumer engagement, we have been as unit has been <unk>.
This works by following consumer eyes, as they interact with an AD unit to measure effectiveness.
Our researchers and data scientists, who are not satisfied with the one dimensional model of measuring attention.
So working with our partner system. One we developed a model that includes stout along with site.
We measure that through real time analysis, they literally races attention and displayed and consumer reaction.
This will provide our advertisers with the future validation of the efficacy of our high impact unit and will keep justifying our pricing model enhance our margin.
We have a number of initiatives inside failure, which provide us with a pipeline of scalable revenue opportunities one of them is our retail media solutions.
You probably know that many retailers are building their own media platform is the way to generate value from their first party data build and activate loyalty and compete against the Giants like Amazon and Walmart.
The breakthrough for US is this solution enable us to shift our transactional business to an always on always on spend which provide the predictability and sustainability. We are always looking for and the excitement of this business is that we're not waiting for the Io.
We're not waiting for the campaign. This is the constant my what month by month spend over a course of the year as you can see by the prestigious logos.
On this slide this is being rapidly adopted by some of the America. Most successful retailers, while the revenue contribution is still modest the growth potential even the Tam is huge.
So it is a powerful technology for protecting privacy without storing any personal data our storage business has been rapid.
Lee growing as a result of privacy trend I mentioned before in fact as you may know the FTC recently requested comment commentary on their proposed privacy regulation and Purion submitted a detailed perspective.
I'll be happy to share with you know what.
What will our submission is size of our vision that the future of digital advertising bus acknowledged consumer privacy solid function of the effective flywheel that gets even more valuable and more effective as more data flows into it.
No matter, which metrics you look that versus cookies versus Google benchmark versus Ross stores comes out on top lastly, taking a look at the quotes for Mercedes.
I believe pricing is so important that it wants to be associated with it and guess what without compromising on the results. So you were able to see that.
The debate faded campaign here with 58%.
CCR lifting source versus contextual and 53% CPR lift sort versus third party.
Going back to the trends I mentioned earlier today, and our ability to react to them, having a central hub is pivotal to increase our profitability and future growth.
We cannot predict what will happen on either side of the open window open width demand or supply those are market forces, but we can be confident that by being in the center and having good two way visibility we can optimize their benefits.
For us and for our clients.
In its first year high hub contribute 40% of our year over year EBITDA growth and more importantly, our ability to capture signals from all channels to a central hub as you can see on your screen and analyze them.
Is the main factor behind sort superior performance over other conventional targeting methods.
The trends of our advertisers shift budgets towards direct response continue payer.
Pay attention to what Phillipe Schindler, Chief business Officer, and Google said recently.
I will read it for all of us in challenging times like this advertiser are carefully evaluating the effectiveness of their budgets.
Such advertising tend to do relatively well in that environment, given its strong visibility and focus on delivering ROI is also well suited to quickly adjust to changes in consumer behavior.
And us being a strategic partner of Microsoft Bing definitely enjoy this trend.
On top of.
The latest change of Apple privacy, and Facebook reviews attribution window are causing advertisers to shift budget to search advertising.
We are evaluating these shifts on both and empathy.
Advertisers looking to pay more or there are reflected in the 2% increase in RPM.
And hiring intent of searcher increase their CPR ratio by 27%.
With that I will turn the call Tomorrow with mall.
Thank you Don Don Please let me share my screen. Thank you.
Thanks.
Okay.
Yeah go ahead please.
Thank you Don and good afternoon, and good morning to those of you joining us from the U S.
I am happy to be here today to present, there and strong results for the third quarter of 2022 as you can see <unk> performing extremely well we are over performing our industry in each of the financial metrics consistently improving our results during the last two years, despite the global macroeconomic challenges in <unk>.
Market volatility.
They are the industry is not immune to the challenges we are navigating our way between the market shifts thanks to our diversification strategy, our ability to execute our agile business model and our innovative solutions.
Given the sense of our sustainable and predictable business model, which gives us good visibility and the action we have taken to reduce costs and penetrate new fast growing market segment. We are updating our guidance and are positive about next year.
Let's look at the key financial achievements this quarter, reflecting the strength of our business model and our ability to execute our strategy Rev.
Revenue of $158 6 million, reflecting 31% year over year growth the highest quarterly revenue since 2014, adjusted EBITDA of 33 million, 21% of revenue compared with 15% last year, reflecting 87% year.
Over a year ago.
Net GAAP net income of $25 6 million, 141% year over ergo, the highest quarterly net income since 2014.
non-GAAP diluted earnings per share of 61.
Reflecting 53% year over a year ago.
Turning now to the quarterly results in more detail.
The third quarter revenue was $158 6 million, an increase of 31% year over year. The strong continued revenue growth reflect the CAGR of 38%.
Display advertising revenue increased by 26% year over year to 86.8 million, 55% of total revenue.
Market adoption of our holistic video platform solution continued to live video revenue more than tripled year over year, representing 44% of display advertising revenue.
The number of video platform published shows increased by 88% year over year from 34% to 64 and their revenue retained video platform partnerships increased by 67% year over year.
They are in CTV is also gaining traction growing by 134% year over year, representing 9% of total display advertising revenue.
Our unique privacy first class solution is seeing more interest from advertisers and agencies, who are becoming more aware of the importance of kind of consumer privacy.
The number of salt customer rose to 140, this quarter, 11% increase quarter over quarter.
<unk> customer spending increased by 25% during that period, now representing 17% of display advertising revenue.
The third quarter sales advertising revenue increased by 38% year over year to $71 8 million in line with the recent trend of advertisers favoring unintended like this brand advertising the year over year increase in revenue was driven by a 42% increase now P M and <unk>.
68% increase in partnership.
The $16 9 million daily searches are nevertheless reflect an increase of 15% year over year.
Let's look at the revenue mix, which reflect our strategic business diversification.
The third quarter, the stereotactic revenue accounted for 55% of the total revenue compared with 57% in 2020, one with sales as attorney represented 45% of revenue compared with 43% in 2021 we.
We continue to expand into fast growing video CTV, and our retail business, which now accounted for 57% of display advertising compared with 28% in Q3 'twenty 'twenty. One we are benefiting from the current shifts to high intent search advertising.
Our media margin continued to improve year over year revenue, excluding Tac was $65 million of 41% of revenue compared with $47 4 million in the third quarter of 2021 of 39% of revenue.
Over the last years, we have created the embedded in them with several processes and automation by leveraging data and buying power in order to control and improve their media buying system. This has resulted in better financial terms Atlanta.
Atlanta into better selling power, which is reflected in our financial results and more specifically in the media market.
Third quarter, Opex, and Cogs amounted to $31 7 million or 20% of revenue compared with $33 1 million or 27% of revenue last year. These impressive achievements reflect the execution of our business strategy.
<unk> DNA and state of mind is growing the business, while keeping and improving efficiency over.
Over the last few years, we invested millions in technology automation and offshoring part of our business. We have improved budget control and are consistently looking for new initiatives and efficiency.
On a GAAP basis, net income was $25 6 million or 53 cents per diluted share an increase of 141% compared with $10 6 million or 20 cents.
Lenny eight cents per diluted share in the third quarter of 2021.
On a non-GAAP basis net income was spending $9 9 million or 61 cents per diluted share an increase of 94% compared with $15 4 million or 40 centers diluted share in the third quarter of 2021.
Adjusted EBITDA of $33 million, reflecting 94% year over year growth adjusted EBITDA margin of 21% compared with 15% last year.
Adjusted EBITDA to revenue, excluding <unk> increased from 37% in the third quarter of 2021% to 51% during the third quarter of 2022.
Our external financial performance is not limited to P&L only operating cash flow was $34 7 million compared with $14 2 million in the third quarter of 2021, reflecting one under 45% year over April .
As of September 30th when entering into we had cash cash equivalents and short term bank deposits of $319 million compared with 322 million as of December 31st mainly to anyone we are continuously generating positive cash flow.
$390 million in cash will serve as a valuable resource to execute both organic and inorganic growth opportunities.
This concludes my financial overview, the long tail doors.
The silicon.
Given our strong performance.
And our sustainable and predictable business model and the good visibility into the fourth quarter, we're increasing our guidance for 2020 to substantially.
More specific we are calling for $630 million to $640 million in revenue by the end of the year and at least $120 million of EBITDA. This represents 72% year over year on the EBITDA growth or 33% year over year.
Growth from the revenue side.
Another note here is that our K here on the revenue between 'twenty to 2022 is 39% and the CAGR on the EBITDA on these three years these 91%.
And ignored.
Let me go back to why how I started this presentation.
So I became the CEO in April of 2017, My mission has been to build a company of the future for the future. This means the company that would be strategically diverse and also lightweight and fluid.
So our future volatility, where new trends will be marriage, others would become less relevant and we are a successful company needed to shorten their reaction cycle or it would be out run by circumstances beyond its control.
We build a company that makes the trends the trends.
And what and that's why we are outperforming the market and can continue to do so.
In the year, those four trends may change, but it doesn't matter and comparing because we won't be able to react immediately to the new trend gain market share in a high profitability, while driving client satisfaction.
I'd like to close this call by thanking my team because without their ability and agility, we would not be where we are today and together we will continue achieving what we do next thanks, so much with that let's open the lines for Q&A.
Thank you we will now be conducting a question and answer session.
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Our first questions come from the line of Eric Martin Annuity with Lake Street Capital markets. Please proceed with your questions.
Yes, congratulations on the strong quarter and a good outlook just curious to know I know you released your prelim Q3 results on October 5th.
What did you learn during the month of October as far as the.
The trends in the industry different maybe than what you saw in Q3.
So it didn't I don't think that there are changes in October , but what we are able to see these days is that this is going to be definitely a strong.
Holiday season.
Definitely when it comes to <unk>.
Demand for our advertiser on on all channels.
Okay and as far as your competitors go and just other players in digital marketing, there's definitely been a dramatic deceleration you went through some of the reasons why Iberia has has not experienced those same deceleration but.
And I know, you're not giving guidance on 2023, but the organic growth that you've guided to for Q4.
I believe we're in the neighborhood of high 20%.
The sustainability of that beyond Q4.
So I'm not saying that that's what the heart of our presentation and our ability.
To keep growing the way we did in the last.
Eight quarters.
I think the diversification is definitely something which is.
Important, but our ability to identify.
Those trends and react weekly is giving us a lot of.
A lot of confidence on our ability to maintain and grow our business.
The foundation is definitely there the foundation for the hub perspective, given you see huge cost leverage.
And in the fund based and of our ability to go after new markets I think that's what we're able to achieve those leases with resellers.
It's definitely evidenced through retail marketing is one of these.
We are investing a lot in developing new.
Hi impact.
Format, mainly for the CTV.
We have advanced conversation with Microsoft's advertising.
As far as our ability to leverage our great reputation.
The search part of their business into vendor and promote IQ. The two acquisition that Microsoft word with Ivy. This is all part of 2023.
So we are there.
Quite optimistic we are aware of what is going wrong.
Is that we need to really work harder.
How we performed in the past.
Okay, and then lastly, you talked about taking share.
And social is that anecdotal color that you're getting I mean or do you have a view into the.
Your customers are telling you a we're pulling this much out of social emerge shifting it over to Serge specifically on that direct response budget shift, though there are there until I think two major event. This afternoon on social and one has to do with iOS 14.
That was kind of a year ago.
Second effective distribution Windows Facebook has been reduced from 28 days to seven days those are mega.
Mega event when it comes to advertiser that definitely we view the effectiveness of <unk>.
Social advertising.
From a targeting standpoint.
And deaths, we definitely see shifts.
From social.
Into search because there is nothing compare to.
The intent of the consumer that you're able to target.
In search advertising, so we see a rise but it is an evidence of it we shared the RPM increased and the CPR.
This all reflected the advertiser, we need to pay more.
The to have their end associated with the keyword <unk>.
This year or this time compared to last year.
Is the ctr shows that there are more qualified quantify the with respect to high intent consumer that will be exposed to those ads will be reflected on the CPR.
So all in all definitely a shift in particularly towards the part of what we keep saying for a long time the carrying on.
Very interesting position that we are able to capitalize on those shift that is happening and this is the nature of this industry.
Because of all the eyes of the Chief Digital Officer.
The mid to allocate its budget wisely among those three main pillars.
They ship budget because of what's happened and the question is how we will be victim of being a point solution. That's not able to do anything when there is different trends or you were able to divest your offerings and capitalize on those plans and I'm glad that we are on.
The lesser than before.
I am glad of that as well thanks for taking my questions. Thanks, so much.
Okay.
Thank you. Our next question is come from the line of Laura Martin with Needham and company. Please proceed with your questions.
Hey can you hear me Okay, Yes, we can hear you hi, Laura.
Hi, Hi, Hi, so great numbers Wow, what a performance congratulations.
I guess my first question is as you think about cost next year one of the things I'm curious about is we have Twitter LN off half of their workforce and matter today laid out 18% of their workforce I'm wondering if that.
My first question is does that give you opportunities to pick up some excellent engineers that maybe sales or cost, but really upgrade and add to our talent base because of some of these talented people are getting laid off and you're in that sort of digital.
Digital AD industry right.
In light of our HR who's already all over.
We will be there you'd be leaking and they're using any other resources because there are some great engineers, there and then we have great.
Israel is a small community and I'm glad that Facebook has a huge lab here some of them are.
Unfortunately.
Looking for a new home and I think that we have will be huge data sciences team that is working on our IHOP.
And they're hearing me now.
<unk> a good place with them, but we are we have faced the greatest opportunity when it comes to Twitter and let's say that there is a very interesting things that we know that that has to do with private eight nothing from the employment.
There are some invitation.
Advertiser is kind of their own defense, they're not sure yet what is going on.
And we will see it immediately when theyre shifting budget to other channels.
I don't know how long this trend will continue but I can tell you that advertiser acting quite quickly when they are shifting from channel or with each channel.
And that's something that we noticed immediately after.
The announcement of this tweak the Alaska acquisition.
And then on interactive AD units. So I'm wondering how important you feel that that is a driver to your 2023 Robyn Hal.
About the interactive Reggie.
Oh.
So again Noah.
I'm not.
Laura.
Can you hear me up for now we hear you, but I didn't hear the question where else can you repeat.
Yeah. So I was asking about how important our interactive AD unit to drive revenue from 2023.
So interactive and unique especially on the CPU side is part of what we call high impact sweep.
<unk> does not get paid retrofit it's a feature.
There are some dislike it.
Some not.
And there is I can tell you that I talked a bit about the laid back type of experience.
It is really interesting to know to what extent when you're laid back.
Our performance CTV.
Pretty much under kind of a question Mark.
The interactive towards very well as a way to interact with your TV make connection.
I must say that at this point the majority of our advertiser is looking at it.
It's more of a passive.
Then we were kind of hoping.
So.
Is there, but it's not more than let's say, 10% to 15% for Billboard CTV spend.
Very helpful. Thank you very much congratulations on great numbers.
Yes.
Thank you. Our next question will come from the line of Andrew Morocco with Raymond James. Please proceed with your questions.
Hi, Thanks for taking my questions.
So the trends on sort look really encouraging.
I guess, what does it take to get sort more involved and more advertisers campaigns is it really just an awareness issue right now and then secondly kind of separately on the search market I guess could we drill down a little bit there because your search business is growing well in excess of the total search market.
Just to get a little sense of some of the drivers there we understand the shift towards surgeon in a pressured macro environment of what particularly are you guys doing well. Thank you.
Thank you so first of all absorbed so there are two drivers.
Behind sort, which makes it.
Quite important per year I used the word flywheel, but we truly believe that the supply.
First and foremost for the technology and data standpoint, more salt campaign, we're doing the better we are.
That said this.
Very important figure.
I'm happy that we are able to perform with no keep in mind that there are two forces here that are pushing saw one is coming from advertisers.
They realized that consumer preferred brand protector privacy, it's part of a bigger movement, which is the ESG movement and when we're dealing with a premium advertiser.
A very important argument.
However at.
At this point with all the respect to privacy, they said well, we love what you're doing but we don't want to compromise on performance.
All of them with no exception and we say this was one of them.
Expecting us to do in <unk> B C benchmark.
The third party and sequenced.
And contextual targeting in order to benchmark their performance resource.
The other thing, which is very interesting is what's happening in our.
From a legislation standpoint.
And that's a very very interesting movement, even though it will take time.
We have the feeling the deaths this train definitely left the station.
So that's what makes it really sort of moving now to your question.
We are working as we speak right now on sort of the service.
In other words currently sort is being used as farrell with no exception.
And we are our intention is to go beyond scenario and have it as a service and service that we were able to work with publisher audio DSP and make it.
<unk>.
So far we are in.
We've just completed a very very crucial that keep in mind that we need to meet the very rigid.
Our response time, reaching blip in two seconds on the service so it's quite a technology challenge.
But so far definitely so good there is a great market reaction to it so for product market is.
Currently we check this box.
So all in all all in all we are very very cold.
Confident on our ability to.
Provide these services even on the first half of next year.
Now when it comes to the second question that has to do.
With what we are doing better when it comes to search advertising.
So what do we are doing better and very much has to do with our partners. Microsoft advertising. So Microsoft identified that there is a time and they are putting a lot of airports.
Behind it it has to do with new products that we launch.
Doing good in this quarter is closing Microsoft trends all in all there is a huge effort from their side.
And what they realized is what's happening.
With Google and other search so big extending to new country. They are putting more resources on product.
And this reflected on R&M.
Great. Thank you.
All right.
Thank you. Our next question will come from the line of Jeff Martin with Roth. Please proceed with your questions.
Great dynamics.
I, just Greg Hi, congrats on a wonderful quarter.
Wanted to drill down a little bit more on the publisher growth within search up 60% year over year, you are expanding into new countries, but curious if there's if there's things beyond that if ft.
And the high impact capabilities within search are attracting publishers or is there anything in particular that is driving that other geographies and what your outlook for additional.
And facing and publisher additions over the next 12 to 18 months looks like.
So just a small correction the high impact has to do with the display in searches.
Things to do with the high impact.
Hi, Brett sweetness redoing, but to your question when it comes to publisher.
Definitely with the new products that we're launching we're looking about two parameters.
The increase in spend the existing publisher.
<unk> is doing and the other one that our ability to.
To attract net new publisher, that's going very well.
<unk> and <unk>.
The fact that we are become bigger and bigger and it gives us also a better Rev share rate, which we are able to share with our publisher and makes us even more competitive compared to other.
The partner.
And so this.
This gives us an advantage to attract even more published.
Great and then just was curious if you could give some insight into the potential to continue to grow.
The average.
Campaign size or average client spend.
117000 in the quarter and that's up nicely year over year, what are some of the factors as we head into 2023 that will enable us to continue to grow absolutely. So.
The main the main factor of course, it has to do with the units. So the whole notion of going into an eye impact with both the standard.
You spend more yet.
It's all needs to be translated to a higher return on ad spend.
The effort to educate our customers and adult.
Don't measure up desktop what you spent miniature map measure off based on what you gain out of this campaign, even though you're paying premium and I mentioned, the $32 CPM, which is a very very high number.
So the it has to do with continue with the high income. That's one second it's very important for us to come with this campaign with multiple screens.
I mentioned, how important is to have the one campaign the ability to run it to multiple screen and ability to synchronize between.
Those screens, because it's quite different on price and it's very effective because the consumer is changing screen and is willing to work at work at all and you name it.
So.
That's another factor, while we are able to have more screens in a single campaign that increased dramatically the strength now.
Now it fits very well the agency and the plans that are looking more than ever to minimize the number of vendors.
So when you are coming with holistic solution.
Cover all of their needs on multiple screen. They are willing to give you more and more business.
And it's not particularly considering that getting 117000 dollar average still io.
So it's the same effort in getting the name from a sales standpoint, it's the same network.
Everything is the same effort because.
<unk> created is being done in activation has been down and you need to set the plumbing that we need to do reporting and you need to have depth.
That's the net net net.
Margin that we're able to get so this is one of the I think the most important parameters.
That we that we should look that and we've been doing tremendous efforts to increase.
This spend but at the same time it needs to be translated to increased value of the perception of the customer otherwise it will.
Cannot be done.
Okay and then last question for me, if I could you've got a pretty sizable.
Cash for at this point.
Could you give us a look under the hood, our M&A might look like in 2023 are you planning on continuing down that strategic path.
Yes, so first of all I must say that I answered. This question beginning of 2022 and honestly I was I.
I was kind of thinking that we were able to do if I remember I said, one it may be two reasons.
Yeah.
The situation of the business.
I think that we all understand that.
We worked really hard to do.
This position, where we have now close to $400 million of net cash and no debt. It gives us a wonderful position.
We are looking for a pretty specific target that we identified.
I can tell you that we are definitely focusing.
On it.
The intention and now needs to be more careful than last year. So the intention is definitely being in 2020.
Is the intention.
There are some great opportunity is there.
<unk> for us.
I'm I'm I'm very optimistic.
Great. Thank you.
Thanks.
Yeah.
Thank you. Our next question is coming from Nevada, Mark Kelly with Stifel. Please proceed with your question.
Great. Thank you very much.
I wanted to ask you about the you called out strong holiday season is your expectation for this year.
<unk>.
<unk> just one company in particular, they called out a lack of an early holiday.
Ramp in Ad spend.
And it sounds like maybe youre not seeing that I guess is the shape of the fourth quarter playing out as you would typically expect so far that's my first question and the second one is if you answered this I apologize but.
Can you please give us the pro forma growth rate.
For three Q1 finished here thank you.
Very good so as far as the Q4 so.
So far November nine.
We're definitely which we are all going through the quarter.
We are.
We are definitely not seeing any slowdown.
Claims as they were before.
It may be changing mix between the different channel yes.
That's definitely something.
Which we could then.
Project.
But as I mentioned before the fact that we are diverse and it gives us a way to capitalize on these changes in the overall.
Looks as we planned.
Perfect. Thank you and then on a pro forma growth for <unk>, if you could give us that that'd be great.
Mark Thank you for the question.
With the pro forma.
Above 15% for Q3.
Again this is as mentioned during the last quarter, it's difficult for us to measure the exact number due to the synergy that we have with win readers Lou and the rest of the business community, which is good.
But if this is more or less the number.
And again as mentioned during the last call.
Part of the <unk>.
Benefit as S&P for dozens of join them contribute a lot to the bottom line to the EBITDA.
Alright, Thank you and our 15, one five right.
That makes sense, okay. Thanks very much.
Thank you. Our next question comes from the line of.
Jason <unk> with Oppenheimer. Please proceed with your questions.
I'll ask one.
So it's very clear as earnings are playing out obviously a lot. This morning last night that you know right now being a demand side platform is definitely.
More attractive place to be because you control effectively like the buying decision as opposed to accepting bands.
In addition.
Being multi platform is.
Increasingly important and then you're also seeing significant benefit by having supply side capabilities on the margin and controlling inventory so far as you've seen companies scaled two sided marketplaces, it's been an incredibly difficult I'm talk about.
Kind of where you see the kind of plan from here kind of both organically and through M&A continuing to be a two sided marketplace, which is clearly working in your favor. Thank you yeah. So.
So first of all Jason write off and that's the message that's a good description I think of.
Of Hawaii, we're able to perform.
Quarter after quarter.
I can tell you this from organic standpoint, there is a lot.
That we can grow I mentioned few areas.
On the display side, we definitely putting a lot of efforts.
On retail media I think that definitely the customers that we're talking with are very much behind.
On their media business, the only wants to be where Amazon and more marked than others are today they have the data.
Debate at this point.
The challenge for US is to take them in from where they are today to where they need to be and I'm very happy that we're able to do it even in an always on session. It is only the start.
But that's definitely an area that we are planning to invest more that's that's from a vertical perspective.
When it comes to the video there is quite a very interesting thing that's happening also.
Those publishers that are enjoying are very much getting all their video business on our platform, which gives us another very interesting what we quote stickiness kind of business.
The cost of transitioning or the cost of switching is so high and we're always looking for those kinds of things that gives us more stability more predictability on our business. So I think that there is.
Great.
Great way organically.
To grow the business as I mentioned in the call in terms of the acquisition.
Yes, we are.
We identify.
Two two areas, where we are one CTV is definitely remain high we truly believe.
There are some very very interesting company in this domain.
We're going after those companies.
We are where we are today and what we are wants to accomplish this vision to be a company that.
Definitely they are present.
Our leadership position in the domain not lift and that is not going to be a technology acquisition.
Definitely a business acquisition and which are.
Prominent towards tier agency and customer. This is what we put in this is the screening that we're doing the design and there are some interesting opportunities there.
The area we achieved.
Something that we start working that historically, the only thing to do is digital out of home.
We think that this is really interesting.
Actually when we are looking about the convergence of digital out of home and retail.
Having screens in the retail is very interesting.
At least this is something that we are hearing from our retail business. So those are the two areas.
But at this point, we're looking at.
Okay.
Hello.
Hello.
Almost that you can go to the next question Oh, Thank you Mike.
Yeah.
Operator.
Thank you there are no further questions at this time, so I'll hand, the call back over to you for any closing comments.
Very good alright, guys. Thank you very much.
Joining.
See you next time, thanks again.
Bye Bye bye bye.
Thank you. This does end todays teleconference. You may disconnect. Your lines at this time. Thank you for your participation and enjoy the rest of your day.
<unk>.