Q1 2023 Perion Network Ltd Earnings Call
Speaker 1: You them, I did.
This discussion includes forward looking statements. These statements reflect the company's current views with respect to future events. These forward looking statements involve known and unknown risks and uncertainties and other factors, including those discussed under the heading risk factors and elsewhere in the Companys annual report on form 20-F that may cause actual results.
<unk> or achievements to be materially different and any future results performance or achievements anticipated or implied by these forward looking statements.
The company does 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.
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.
File on form 6K.
Hosting the call today are <unk>, Chief Executive Officer, <unk>, <unk>, Chief Financial Officer, and Tau Jacobson General manager of <unk> fuel in Perionyx, Chief Executive Officer effective August one 2023.
I'd now like to turn the call over to Jerome herself. Please go ahead.
Hello, everyone and welcome Thanks for joining <unk> first quarter of 2023 earnings call together with me on the call are mostly grown our CFO .
Jacobs on my successor as CEO .
First.
It's rare to be excited about being with fitbit.
But this is one of those time I say that because today. The 12 time in the last three years.
Use the same headline describing our financials.
Our momentum continues.
It's not the first time, you have heard me state and restate that our unique diversification slots disease is what's behind our ability to deliver business results that are sustainable and predictable.
Continuing agility to grow topline and Bottomline no matter the state of macroeconomic conditions.
<unk> has been demonstrated over the last three years.
Can see from the slides.
Even most recently where the industry has been challenged by reduction in digital advertising spending in fact.
Our strategy of supporting the three main pillars of digital advertising is especially relevant in these times when <unk> are under pressure and grasping grappling with uncertainty in fact, just last week. The Federal Reserve described the economy is rocky and bumpy.
The unavoidable results of this dynamic environment is that budgets are continually influx more dramatically than ever before.
Advertisers shift between channels.
Between the awareness campaign and performance campaigns and.
<unk> between Omnichannel objective in other words between online sales and driving foot traffic.
Maryland is perfectly poised to capture the southern move in advertisement spend preference proactively not reactive.
We don't need to scramble the wind shift we are prepared whenever and wherever the market move because we have the platform and the infrastructure in place to support it.
The strategic advantage of being ahead of the market due to our investment in technology.
It allows us to compete and win the game markets and gain market share in the most pioneering cutting edge ethics sector, where innovation matters.
In more detail when we look at the growth drivers.
I also want to point out before I get to the specific results that there are three pillars provide us with another competitive advantage that makes our predictability and sustainability possible.
Supporting those pillars provide us with valuable insights about consumer behavior and advertiser preferences.
We're then able to react immediately our R&D and product team analyzed these insights and bringing innovative solutions to the market.
Agility is our primary core competence.
Now I'll move on discussion of our specific results in revenue service.
We continue to outpace the category with a year over year growth, 16%, which is higher than the digital advertising market.
Without that we had robust and healthy growth across all our pillars and sub theaters.
At the same time, our growth has come from both new clients and extended engagements with current points for me. This is an essential signal that we are doing the right thing demonstrating our efficacy with current clients and using it as a lever to break new ones also.
Important to note as I pointed out earlier that we are growing in areas that are the most sophisticated from a technology point of view that includes video and CTV Soar, our kooky three innovation retail media and search.
Search, yet, which I must not have said a year ago.
Because of this transformation being created by open AI and <unk>, which is being driven by Microsoft being our long term strategic partner.
I remember last quarter, when I open the kimono and talked about how we are using to explore it in explorer framework to guide our strategy and execution well.
This is what has happened with search more specific with some of the business opportunities we've seen emerging we've seen search.
Thanks to the disruptive possibilities of integrating AI into search we have a whole new initiatives now.
Now firmly in the explore quadrant.
Next I'll discuss our EBITA, which exceed Q1 of last year by 38% in other words.
Almost 50 cents of every dollar of net revenue.
We are particularly proud of this accomplishment.
Everything I've talked about in terms of macroeconomic and they are all key and bumpy ride wear on.
Im often.
By menu of fuel and at conferences about how we are able to continually generates results.
<unk> appeared to challenge the laws of gravity and physics.
This is especially compelling given that the achilles' heel of many epic is their inability to drive the top line and still maintain a high profitability.
The answer is that we're able to capture and analyze data signals from all channels and through both sides of the open web into our central hub.
We are using advanced AI to develop a bidding system that maximize our unit revenue, while reducing our <unk> costs by doing this we uniquely combine efficient bind with the ability to meet our customers' <unk> return on ad spend.
<unk>.
At the same time, one advertiser or other extreme raw pressure. This is a true competitive advantage for us.
I've mentioned this before it is a paradigm that invest invest stars and venture firms that apply to identify the markers of the healthy growth protect III and software company.
Even though it's not common for.
For Elephantoid thing Epic company, we are very own Crs itself at the forefront of incorporating AI technology in our solution and that needs to be benchmark.
With more sophisticated hi Tech company.
Do we stay at the Formula you should add your trailing 12 month growth rate in percentage terms to your EBITDA margin is the result is 40 or more youre doing great. You can see how we measure up right here.
It's something we look at all the time and fiscal discipline that drive us.
Because I said before if you over index to topline and ignore profitability you put yourself on a slippery slope that is extremely difficult to correct.
I'll move to search advertising now.
Been reliable and significant growth driver for <unk> and it has become even bigger contributor based on recent investment Microsoft has made in chip GPT.
I just want to reflect their search numbers were boosted by a significant increase of 29% in the number of publishers. They.
<unk> the potential and wants to be part of it is the result average daily traffic increased dramatically by nearly 50% year over year and are now close to 830 million monetize search <unk> on an everyday basis.
We believe that the massive media attention to check GPT for is driven in material portion of this and it will continue to see growth that exceed our enormity projector.
<unk> is the real competitive advantage now.
In depth Cascades immediately to our business.
Next I'd like to provide some context and visibility into a retail lithia almost business as I see it as a very important role driver.
Behind the confidence.
I'm sure you know that just about every major retailer.
The C V S to target the launch their own media network to compete with threats from Amazon and Walmart, what we feel that <unk> is the day I'd driven platform that enables this retailer.
Maximize the value of their inventory with AD units that identify consumers signal and respond with timely and Personalised promotion.
For example, if the.
The weather is lousy and it's a good day to Cook at home are intelligent platform deliver it like that you can see it on the screen.
We can personalize its tail and can do it in Albany channel fashion across all stream as you can see it from the following examples from the moment you wake up until you go to bed, we consolidate multi dataset, including retailer first party day.
External signal like weather and location.
Driven decision we feed our AD.
Platform solution.
<unk> wanted to we need creative on an omnichannel basis in other words.
<unk> messaging according to the consumer journey.
Display video C T V and digital out of home using a dynamic messaging deliver.
We deliver 14th time return on <unk> driving results digitally, replacing all school print circular even allowing three tailored to shut off promotion.
<unk> to a negative margin.
Retail platform is changing the business dynamics of our clients.
<unk> transaction I will campaign to always on that improving the sustainability and predictability of our business.
Commerce platform is blown by 60% year over year in terms of revenue.
Y 32 per cent in terms of new customer you can see some of the logos and the bulk of the screen.
<unk> $46 billion in 2023, and virtually little innovation in retail media you can see why we're so bullish on <unk>.
<unk>, we are capitalizing on privacy.
Mm.
Study after study reveals the consumer will choose brand, which protect their privacy over branch did not in fact more than 80% of consumer care about their privacy.
The power of the appeal of sore <unk> totally anonymous solution.
<unk> consumer privacy, and a unique and honorable way, which is why we are attracting brands, we want to be associated with the privacy first principle.
Those include brand that rainstorm and say this to the United Nations in fact.
For the 18th customer adopted sort in the first quarter of 2023 and in total.
157 customers that are using our privacy first technology.
That's just one reason sources of exploding.
It is also the results in the Ottawa believer so.
<unk> has been verified by third party researchers to deliver superior results to feed themselves.
That's why existing source customer spending are increasing their spam by 93% year over year.
This one more critical point to make here.
And that's the connection there is one more critical point to make here, so and that the connection between privacy N E. S. G environment, so certain governments.
To live up to his standards means that you have to protect user privacy.
Seeing investor legislator and regulators bank unprecedented attention to this essential right. This is why you'll be sort will continue to be a major contributor to revenue in a visa.
From that drove driver for you can see by the number.
Right now 26 per cent you have <unk>, an increase of 63% for the new property sure Advil for video platform.
Who is on fire.
Alrighty platform is meeting a large and growing G for property insurance for looking for fast results in less than $10 resources to build the complex high maintenance internal system.
The platform advantage is what's behind our land and expand sales growth engine is proof of their revenue form retained video platform publisher increased by 71% and everage revenues or property sure increased by 22%.
One fact that for you what our sales team are focused on getting initial attraction and mortgage yep, extendable footprint, which enable us to move our capabilities and go forward.
This display on the Sly you know a full sweep video platform survey each and every one of these components as you can see it.
Half of the slide is independently valuable and collectively power.
We aren't asking clients to call me to everything gets one because we are confidential firepower of the holistic platform is they learn more and more about it.
To conclude the the more the more they experienced.
The more service they consume.
<unk> number five.
The one that I think is making the most impact on our business.
R I house.
As you know a higher be the key to our differentiation.
We spent tens of millions of dollars to build the moon each connects all the signal.
Platform. This provides efficiencies which have led to unique business advantage on many levels.
But before describing the benefits of the IHOP, we must reiterate is going forward.
Without having all the pieces of the business connected we would be managing a very costly inefficient fragmentate visit.
On a given day, we kept you into I have data.
Billions of data requests from various media channels.
One example of effectively leveraging this amount of data is creating an AI driven BB beating strategy.
Optimizes the match between supply and demand to maximize our coffee at the same time it assures the highest performance <unk>.
Oh, Hi, how open architecture is a foundation that enable us to make it positions, we shot instantly optimize because the plug in into the center of our ecosystem.
Ethics grows more complex.
Multi dimension up the value of Iowa hour, IHOP will only become way more meaning.
With that I was trying to call tomorrow.
Oh.
Yes. Thank you, though on good afternoon, and good morning to those of you joining us on the U S.
I am happy to be here today to present the results for the first <unk>.
A fair and business has been evident installed the last three years building great momentum on both the top and bottom line.
<unk>.
Continuing in the first quarter of 2023.
<unk> is the market has been impacted by slowed down in advertising activity driven by microeconomics challenges.
Diversified business model Ichnology differentiation and innovation focused approach continue to enable us to navigate our way to market your changes.
After <unk> we are in.
Racing revenue <unk> moving romantically.
This is the result of a continuous April St. Paul via performance into a boom operational efficiency.
Let's look at the main financial achievements or the first quarter.
Revenue go by 16% to a 155.2 medium.
Most of it.
By 20% to 65.3 million with 45% margin compared with 33 per cent last year.
<unk> grew by 38% to $31.3 million with 22% margin compared with 18% last year.
Net income of 23.8 million increase by 54 per cent you over the years non Gabe diluted earnings per share increased by 36% to 60 cents <unk> now.
Let's move to the quarterly results in more detail.
That Avenue of the first quarter of 2023 was $145.2 million an increase of 16 per cent you over here, reflecting a strong continuously you take care of 30%.
<unk> quarterly standardizing revenue increased by 16% to you over the years to 79.9 million 55 per cent of total revenue.
This was driven primarily by the continuous market adoption of a realistic video platform the increase in salt written media and <unk>.
Video revenue increased by 26 per cent you over here.
Representing 44% of the stereotyping revenue compared with 41% and the <unk> the.
The number of video platform partnerships increased by 63 per cent you over here. So 46 to 75 the revenue from recent video phone recent video platform partnerships increased by 71% the over here.
<unk>, the new Bill video <unk> increased by 22%.
Innovative glucanase targeting solar solution is being increasing adopted by the market in ninth of consumer going to win and increasingly to refresh it when companies to protect consumer privacy.
The number of salt customer was 157.
Entering an increase of 142 per cent you over here.
Customer spending increased by 93 per cent, representing 17% on <unk> Avenue compared with 7% last year.
C. T V revenue increased by 12% year over year, representing 8% of the Toyota display advertising revenue.
Can you tell me their revenue increased by 60 per cent.
Does anything 8% of this today.
Compared with 60% last year, the number of Red meat, a customer increased by 32. Please send you over the years.
<unk> got a search advertising revenue increased by 515 per cent you over the year to 65.3 medium 45 per cent of total Avenue.
A thorough search business was living by a sharp increase classic user consumer interested J G. P D, which which continued to like being ecosystem is benefiting from that exciting change.
The song increase or 49% in Avilla daily searches and the 29 per cent increase impoverishes more than offset it's been a 2% decline in off here and wait for this quarter.
The first quarter say that that'd be good Avenue accounted for 55 per cent of total revenue.
Sure that is the accounting for 45% of total revenue.
Revenue <unk> 65.3 million, Oh, 45 per cent of 11, compared with 43% of revenue in the first quarter of 20th minute too.
Medium as you continue to show yoga.
Water after quarter intelligent, we have developed liberate data bank power to control and improve the overall <unk> results.
This resulted in better selling and buying power.
Taking insulin continuous involvement in media mountain.
We take great pride in our ability to implement efficiency measures and progress in our day to day operation.
Each and every efficiency measure shows a continuous improvement over the last three years.
<unk> counted.
26% of revenue this quarter compared with 28% in the first quarter of 2022 and 32 per cent in 2021 six per cent improvement over the last three years.
The only the center of <unk> S. T has risen from 18000 in 2021 to 45020 spending too.
62000 <unk>.
<unk> impressive achievements is a clear demonstration.
Ongoing increasing productivity.
The execution of our business strategy and Elizabeth Bennet enrichment duration.
Over the past few years, we have invested in innovation information and.
The eighth of pasture that allows incremental top and bottom line was on a low cost basis.
We have improved our budget control and consistently looking for new efficiency initiatives.
This show all our efficiency and cost control measures.
Both with focus groups and I margin business translate into impressive bottom angles.
First quarter adjusted EBITDA was 31.3 medium, reflecting 38% you available adjusted EBITDA knowledgeable spending 2% compared with 18% lost Ya <unk>.
<unk> interest on 42 per cent in the first quarter of 20, 22% to 48% in the first quarter of 20 minutes away.
On again basis first quarter net income was 23.8 million Oh 48 cents dilutive chair.
Chris at 54% compared with 15.5 million <unk> in the first quarter of 22.
Ultimately our net profit include two additional profit sauces, Wohlfeil iced tea as fast as I was Comcast position and disciplined cash management, which <unk> to generate 8.4 million financial income during the third quarter second.
Second we also enjoy a low effective tax rate of around 50 per cent.
<unk>.
This means that more of our pre tax income when averse to him.
On a non-GAAP basis transporter net income was 29.9 million Oh, <unk> chair and an increase of 44% compared with 20.7 million Oh for the <unk>. The chair in the first quarter was mainly furniture.
First quarter operating cast over 17.8 million compared with 23.6 million in the first quarter of 2000.
Alright, and character was affected by about 8 million customer collection shift.
<unk> to April it's been it's been to Spain.
And the one time change in Woking Jessica Lynch.
As of March 31st 2023, other cash and cash equivalents short term deposits and marketable securities amounted to.
<unk> up over six 6 million since the previous quarter. The 6.7 million increase is primarily a result of 17.8 million indication of operations.
The offset by 13.3 million cash based in connection with acquisition.
This concludes my financial overview, and now I will end over to dawn. Please.
Please go ahead.
Thank you. Thank you I'm on I will wrap up with guidance for the balance of the year. This confidence is based on everything I've shared with you together with small.
But as I said earlier the markers of a successful at the companies are.
Both their ability to drive revenue growth and profitability. Therefore, we are increasing our guidance as we are expecting another strong performance here.
<unk> two seven I'm at $35 million, which represent 50% yoga, you grow and increasing R. E b the guidance to at least at least $155 million.
Authenticate, 17% year over you Brooks.
As you see in the need to receive or it's easy to pass the results by paying too much for traffic and getting squeezed on margin side.
<unk> is projected to grow at a greater pace than our revenues are.
<unk> deals and coupons for revenue and profitability.
<unk>. This is my laughter, Nicole allow me to conclude or the person no. It's b.
Been a privilege to lead this company for six years and to work with the most talented team I have ever worked with before.
<unk>.
Customer and partners, who believe enough and last but not least who you are investor community. It's been an honor to stand before you to tell our story and to answer your question.
It couldn't be more excited to turn their back on and forward you over to my friend and call It sounds Jacobsen.
And now for the last time, I will turn it over to the floor operator.
Banking, we will now be conducting a question and answer session.
To ask a question. Please press star one on your telephone keypad.
A confirmation countable indicate your line and then the question queue.
You May press start to to remove yourself from the queue.
Participants using speaker equipment, and maybe that third pick up your handset before pressing the star keys.
Recovering analysts who join US we assume please click the <unk> icon.
One moment, please while <unk> Paul for your questions.
Our first question is coming from the line of Laura Martin 80 My Company. Please proceed with your questions.
Good morning spec capsule enamored of this uhm you guys.
<unk>, let's start with a I.
During one of the physicians to benefit from a I <unk>.
<unk> and Bang, but I'm also interested so I'm interested in what kind of client reception, you're getting now because it's really going into chat G. T. K more aggressively <unk> and I'll ask that when you think about your business. The rest of your business outside of search how do you think about the wrong at <unk>.
And your display.
My first question.
Thanks, Laura So first and foremost I think that no our publisher and this is something that I mentioned.
One hour on our call.
Really exciting about what's going on yeah, it's not being translated.
Much direction with them, but they want to be part.
Mention the process of the two property sure.
Between Us and Microsoft Smith model.
<unk>, so we're very rigid.
According to the process and the moment did they heard that Microsoft is going to invest heavily around it and they put in.
They're a search and technology is the first example to us or to utilize their investment.
Their economy, and I must say that at this point without having any evidence.
Or even more than the how the church GBT can help <unk>.
<unk> from an audience perspective of a consumer perspective, it's the same.
At this point being.
What they're doing and you know very well what's going on here is very much using the church GBT behind the scenes.
It's not something which is being translated as much getting market share.
They pointed out this every point on market share one search is worth $2 billion for them. So what good humor is doing.
First of all it's a great <unk>, who am I supposed to be the adopting the you know the search browser.
I think I'm Gonna, we mentioned it on the last call at this point they have a three per cent market here and there is a huge huge run race with them you know to take especially.
Amount of investment.
<unk>.
Having said wrong discussing standpoint between us and being I can tell you.
Disclosing much because we are in a very sweet N D. A <unk>.
Huge cooperation between the two companies.
One of my.
<unk> with the phone.
Able to get out of here, but she's achieved running.
Currently she's running the Microsoft advertising and she basically said does that's.
Being is going to be definitely something very attractive.
For their part now.
The other part of your question and I think that this is.
It's beyond what we able to imagine what the church GBT is going to make it.
Quite the transformation quite a transformation and I would say that.
The search.
Interaction.
We've seen and experienced in let's say the last 20.
20 years.
Not going to be the same.
We will have a chance to look at the two years from now it will be completely different the interaction user experience engagement between consumer and the search engine no doubt about it.
Okay and then my other question.
Sorry, My other question is on pay T V I was really interested.
C T V revenue grid, 12%. The overall Guinea outgrew 26 per cent, which is quite a slowdown in C. T. D. So could you uhm actually taken care of in more detail why video revenue growing so much faster than C. T V revenue in the first quarter.
Yeah hold on for a second I need to move here and move.
<unk> okay. So.
<unk> technology glitch.
And so when it comes to the T V and especially with the publisher. So let's distinguish there is the low hanging fruit here.
And this has to do with the market our visa platform.
And this is.
<unk> described this following this concept of men and expand.
<unk> with one component and then.
We are very much meeting the needs in the marketplace.
Property sure.
Looking to increase substantially.
Here the ability to monetize will be.
That's our main effort to this point and every publisher and I mentioned in a very important and a key.
<unk>.
K P I for us.
Is the retention detention retention.
Retention dollars is very high.
Every publisher, that's we able to take and use our platform.
It's the lifestyle is publisher huge.
So for my company standpoint, we make a decision that we are very much would like to to focus in this area and kept here as much as the weekend more market share and we are gaining market share and we're very happy with his progress as I mentioned on the recording.
Now from the CPB perspective, and that's a very interesting question and the.
The company is looking to maximize it's margie.
<unk>.
I think that we are reaching your pointing CTV where prices is the dwarf.
March is the draw it's become.
Use the word commodity.
When it comes to the CVV, we are very much focuses on line <unk>.
Which we are able to grow yes modest way back the most important for us is to keep the margin.
So.
Nope.
<unk> by you know the large percentage.
CPB too I mean for me growth perspective.
What we are doing is very unique.
At this point.
You can just as I mentioned the grief March.
Thank you very much thank you.
Thank you. Our next question is coming from the line of Jason <unk> Oppenheimer. Please proceed with your questions.
Alright, Thanks, So first of <unk>.
With what's next it's been a pleasure working with you and I look forward to keeping the team in line.
So two questions first on just on the third side I think one of the questions people are gonna have is why you didn't see a tailwind from kind of improved C. B C that are being I mean is it while they are getting you know meaningfully Moore you said, it's just.
You know, it's not having an impact on broad cpc's and just just some call and you know, giving you didn't you didn't really right I don't think we're taking up search numbers that much for the year are you kind of not assuming that there's a kind of benefit the C. B C. At some point this year at the first question and then second Uhm.
You guys are very successful integrating SSB capabilities.
And how it both allowed you to kind of better target ads as well as safety do you think you click on a bolt on additional access the capabilities in the current form or do you also need to bring additional D. S. P capabilities as well to kinda Matchbox side. Thank you.
Thank you very much.
Sure.
[noise], Yeah can you hear me.
Yeah, you're great.
Alright, so to your first question when it comes to the <unk> the chip.
<unk> G P P as a driver.
I must tell you that at this point, it's very very difficult for us to simulate.
And our numbers for this year.
<unk> taking.
The chip GPT, you know extra you know, let's say a tailwind into the numbers and that's according to our model.
And that's that's definitely something that we believe will impact substantially.
Our business.
But as I mentioned, the before it's really difficult for us to translate it.
Into town.
Tangible model engagement and how it can be translated into a monetization. So we're very cautious here.
And we are not and we're not taking it into the model as I mentioned, so that's that's would be on top that's.
That's the great over here.
Now.
Now as far as the S. A C V S B connection you're right on right on I mean.
Definitely that's one of the areas, where we are investing the most.
Of integrating.
Especially with more ssp's.
We are facing a huge demand on one side that needs to be always balance with the other side.
We are very much trying doing it on our own that's the preference because we are saving.
Right quite a chunk of intermediate or that are very expensive to get but.
But what is more important as you can you can imagine that in case that we don't have the supply we need to get disciplined no matter, what it will cost because otherwise we disappoint our customer.
And we wanted to keep <unk> got four of <unk> will not be able to deliver they will go with something else somewhere else.
So this is a very very important and very strategic for the company.
Increase the number of visits to integrate it at the same time since we have assets on the supply side.
For instance, Venus was very much connected to a very two quite different dsp's.
That's the beauty of the mortgage so yes. The priority is our on demand that is coming from undertone.
But guess what they very much working with others. Some of the big ones that are are looking to get quality first second tier publisher.
That are part of the <unk> network. So it goes both <unk>.
I mean, I would think an organic when I was saying acquired I didn't mean acquired trap.
Other company given that you guys have a ton of cash and are looking for emanated, Oregon and would you look at buying an F. S P or to make it worse. You also have to buy a D. B is kind of what I'm asking can you buy one side right now, giving your scout or do you kind of need to buy bulk that you're gonna go in that direction.
So that's a very good question. So the be honest the preference is always going closer to the customer and in this case being a.
More on the demand side.
Because I think it's more precious.
Being close to the customer.
Preference is doing your direct and that's with an agency.
And that's very much where we're looking yet so.
That's looking on the on the SSP site, that's become quite commodity and I don't think for April .
By doing this acquisition to differentiate ourselves, especially with the latest.
A movement that some of the large vsp's already announcing that they can offer and SSP capability in a way.
Just the cost for the customer so to your question.
We our preferences the demand side of the house.
Thank you.
[noise]. Thank you are next questions come from the line of Andrew Morocco, Raymond James.
Andrew you're free to talk.
Great. Thanks for taking my questions and their own best of luck in your next chapter Uhm too if I could please one on <unk>.
What can you tell us about the new search publishers that are coming online with the 29% year over year growth is there any notable concentration in vertical type a publisher et cetera, and then sort any progress on the monetization plans. Thank you.
So there is no <unk>.
Something in common they're not coming from any kind of a vertical and the only thing is that all of them with no exception is a very loyal customer.
Customer base in <unk>.
Basically the only way for those publisher to be able to you know.
Monetize their effort is true search.
And that's why they're moving I suspect that they're moving from other search.
<unk> to being snapped we seem to be let me put it. This way. This is something that we know for sure well you know, we don't know where are they coming but you can guess.
And they would like to add it is not the exclusive relationship.
Relationship in other words I suspect that they are working with a couple search providers, but the fact that they end up being into the mix is is a very important signal in the market.
Because every search that they provide to you is not the search that they provide to the competitor.
So it's it's a very important win for Microsoft being being on their ability to gain market share.
And that's that's that's very much very much clear now in terms of sorts.
Making headway in terms of sort of a service.
Not significant yet in terms of in terms of revenue.
We are defining it as a three phase approach. The first one is that we're using sort internally in are owned and operated site index was done we were checking the technology.
I mentioned the important of latency time that will not take the latest once we were.
Cite the publisher, we schooling soars to get verification or to get better targeting the second is his performance every test like this require a benchmark with faith.
A cookie is using cookies tactics.
Tactics.
Benchmark of sort and we've just this one so first phase using our own on on an operator.
And is very much moving outside of our own an operator and working with father at this point not charging.
Third face is very much defined you what is the business what is the business model I must tell you that once we are now have a discussion with fixed sternal publisher.
We tend to believe.
The outcome and that has to do because of the very bad, let's say financial situation of publisher that instead of them paying they will pay for us with an inventory.
Which is equivalent $4 for us I mean, it is it's the same it is.
Alright <unk>.
Cash that they need to spend with <unk>, but at the same time.
We are able to provide them direct demand and as a result of they're giving us a reduced price.
Of their inventory and in this way, it's a win win situation.
Understood. Thank you you're welcome.
Thank you our next questions come from the line of Jeff Martin Roth. Please proceed with your questions.
Thanks <unk>.
I wanted to check in with you what you're seeing competitively sort.
<unk>, yeah, you've been in the market with it for over a year now I would imagine there's a lot of a lot of.
Competitors out there trying to come up with a similar solution. So curious what what you're seeing out there competitively.
So yeah right on I mean, so.
<unk> very interesting situation, where everyone is saying <unk>. That's the that's the big news at this point there keep responding there solution at this point I think it is 2024 even.
<unk> I I I I truly believe it's not the technology challenge I think it has to do it for business challenge.
I think the past this point, where they stimulate the day after they will pull the plug of cookies and what this is going how this is going to impact their avenue.
And I think they are trying to find an alternative that will that will allow them to not get the hit financially.
I can tell you that I'm very skeptical.
As far as them finding.
A solution that will you know on one hand protect user privacy on the on the other hand and will not impact your room.
And in this in this case I think that a lot of companies with no matter. When this is going to happen. They are getting prepare for this day.
Lot of homegrown type of solution.
Few solution is being built with the notion.
Of marketed outside is kind of using it as a product.
This is something that we did from the first line of code with the notion of selling it or installing it outside of our domain, yes, we need to and saw a very rigid process, you know to eat our own dog food, but the.
The product was designed to be used by third party and it architecturally is being used all consume as a service rather than internal product.
I'm not seeing many like this in the market. So I don't think that the the point there is a competition.
Question will be what will happen when publisher will be forced to use this type of solution. Currently it's it's a luxury.
Currently it's not something that they are being forced to use.
Because they have an alternative.
So I don't I think that the when this will come.
Competition will be far more furious.
Alright, and then my second question relates to your land and expand strategy had some pretty significant customer Graf in the corner does that suggest you could see you know revenue growth acceleration as we progress throughout the year.
Customers expand with Ya.
So the interesting part ear and your mortgage smiling because they developed a very efficient forecasting system.
What are they able to see what is the progress of expansion or forgiven publisher in of course, so first year second year. So on and so on so that's that that gives us a great visibility and into our revenue growth.
Gives us a <unk> visibility of the lifetime lifetime value of a property sure of course, we need to sorted by tiers of publisher and because.
Because.
The bigger the more complex one definitely are going to consume more products could besides the fact that they're going to pay more because of scale.
So this model is one of the main factor.
<unk>, our ability to increase visibility.
A beyond the actual insertion order that we getting from agencies in and brands.
Great. Thank you and good luck in the next century.
Thank you.
Thank you. Our next question comes from the line of Eric Martinez.
Like Street. Please proceed with your questions.
Yeah, I wanted to dive in the video growth within the display Rev. You talk about video I forget.
20, something perfect overall, but.
<unk>.
26, okay, but CTV, what's up only 12% what's.
<unk> would have been on the higher growth side of that that 26% number.
Yeah, I I think I answered. This question I think that don't get.
Oh and he's looking for Margie, that's that's that's the story.
And even though <unk> dollar a C. T V seems to work more than other dollars I think that there is a there is a cost free and the margin of C. T V and if we go abroad CTV not any kind of unique vertical.
There is a huge price reduction and that's impacted the March.
While we are looking to optimize our margin we are very much defined.
An area it vertical within the C. T V market, where we are gaining a substantial market share. That's live C. P V mainly on sports event.
This is an area that we have specialized with our creative.
<unk> inability to drive the greater engagement than it was before.
And keep <unk>. So it was by design.
That we're not all over the city city market, that's very very easy.
For the company to do.
It's quite difficult to keep the margin when you were doing it.
So it does have a veto to success.
That.
Maybe I need a better understanding of <unk>, they're more kind of traditional web publisher not pointed S. A T V or.
Okay.
<unk>.
It is a business is all over the map whenever videos video, they're doing but <unk> concept is offering their platform and the platform as many.
Many many components.
And the whole idea of this is that.
Property sure broadcast or whatever they will eventually.
Mu all their technology assets or technology vendor.
Vendors around video to a single platform.
That there is a huge advantage you know for for them to every single single point or ability to see everything at once and there is a lot of interaction between the component.
And we are happy that we are able to educate the market towards and I mentioned it in a way that it's that done over we're not coming or new.
Client sell the platform, we sell the platform conflict, but we urge to take one two component.
First phase and then move along.
That's very much the strategy that's applied to to all type of all type of screens.
Okay. Thanks.
Thanks for taking my question.
[noise]. Thank you there are no further questions at this time I would now like to hand, the call back over to Iraq or style or any closing comments. Thank.
Thank you very much as I mentioned on there so.
The next venture.
Bye bye.
Bye bye thank you.
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