Q1 2024 Innovid Corp Earnings Call
Okay.
[music].
Operator: Good day, ladies and gentlemen, and welcome to the Innovid first quarter 2024 earnings call. Our host for today's call is Brinlea Johnson. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. I would now like to turn the call over to your host, Brinlea Johnson. You may begin.
Speaker Change: Good day, ladies and gentlemen, and welcome to the innovated first quarter 'twenty 'twenty four earnings call. Our hosts for todays call is Brent Lee Johnson at this time all participants are in a listen only mode. Later, we will conduct a question and answer session I would now like to turn the call over to your host.
Speaker Change: Friendly Johnson you may begin.
Speaker Change: Thank you operator before we begin I would like to remind you that today's call may contain forward looking statements and that the forward looking statement disclaimer included in today's earnings release available on our Investor Relations page also pertains to this call. These forward looking statements may include without limitation predictions expectations targets R. S.
Brinlea C. Johnson: Thank you, Operator. Before we begin, I would like to remind you that today's call may contain forward-looking statements and that the forward-looking statement disclaimer included in today's earnings release, available on our Investor Relations page, also applies to this call. These forward-looking statements may include, without limitation, predictions, expectations, targets, or estimates regarding our anticipated financial performance, business plans and objectives, future events, and developments. Changes in our business, competitive landscape, technological or regulatory environment, and other factors could cause actual results to differ materially from those expressed by the forward-looking statements made today.
Speaker Change: Regarding our anticipated financial performance business plans and objectives future events and developments.
Speaker Change: Changes in our business competitive landscape technological or regulatory environment and other factors could cause actual results to differ materially from those expressed by the forward looking statements made today.
Brinlea C. Johnson: Our historical results are not necessarily indicative of future performance, and 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.
Speaker Change: Our historical results are not necessarily indicative of future performance and 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, today's call will include non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin and free cash flow we use these non-GAAP.
Brinlea C. Johnson: In addition, today's call will include non-GAAP financial measures, including adjusted EBITDA, EBITDA margins, and free cash flow. We use these non-GAAP measures in managing the business and believe they provide useful information for our investors. These measures should be considered in addition to and not as a substitute for our GAAP results. Reconciliations of the non-GAAP measures to their corresponding GAAP measures, where appropriate, can be found in our earnings release available on our website and in our filings with the SEC.
Speaker Change: Measures and managing the business and believe they provide useful information for investors. These measures should be considered in addition to and not as a substitute for our GAAP results reconciliations of the non-GAAP measures to their corresponding GAAP measures where appropriate can be found in our earnings release available on our website and in our filings with the SEC.
Brinlea C. Johnson: Hosting today's call are Zvika Netter, Innovid's co-founder and CEO, as well as Anthony Callini, Innovid's CFO, both of whom will participate in our Q&A session. And now, I'll turn the call over to Zvika to begin. Okay.
Speaker Change: Hosting today's call are <unk>, <unk> co founder and CEO as well as Anthony Clini <unk> CFO, both of whom will participate in our Q&A session.
Speaker Change: And now I'll turn the call over to Zika to begin go ahead.
Zvika Netter: Thanks, Brinlea, and thank you all for joining the call today. We had a strong start to 2020.
Zika: Thanks, Randy and thank you all for joining our call today.
Zika: We had a strong start to 2024. This Q1 revenue grew over 20% and adjusted EBIT was significantly improved compared to Q1 last year.
Zika: Most recently, we launched our harmony initiatives and related product suite to optimize the CTV advertising ecosystem as we seek to keep TV opened for everyone and controlled by nowhere.
Zika: Today I'll review, our first quarter results provide several exciting business updates unpack the harmony initiative and share some thoughts on the rest of the year.
Zvika Netter: Q1 revenue grew over 20% and adjusted EBITDA significantly improved compared to Q1 last. Most recently, we launched our Harmony initiative and related products to optimize the CTV advertising ecosystem, as we seek to keep TV open for everyone and controlled by no one. Today, a review of first quarter results will provide several exciting business updates, unpack the Harmony Initiative, and share some thoughts on the rest of the year. I'll then turn it over to our Chief Financial Officer, Tony Callini, who will provide further details on our Q1 financials, updates on financial guidance, and we'll finish with Q&A.
Zika: I'll, then turn it over to our Chief Financial Officer, Tony Kelley, who will provide further details on our Q1 financials.
Tony Kelley: Updates on the financial guidance, and we'll finish with Q&A.
Zvika Netter: I am pleased to report first quarter revenue of $36.7 million, reflecting 21% growth over the last. Adjusted EBITDA improved from effectively break even last Q1 to $4.4 million in the first quarter of 2025, reflecting an adjusted EBITDA margin of 12% as operation profitability continues to improve.
Tony Kelley: I am pleased to report first quarter revenue of $36 7 million.
Tony Kelley: Reflecting 21% growth over the last year.
Tony Kelley: Adjusted EBITDA improved from effectively breakeven last Q1 to $4.4 million in the first quarter of 'twenty 'twenty four.
Tony Kelley: Reflecting an adjusted EBITDA margin of 12% as operation profitability continues to improve.
Zvika Netter: We also delivered another quarter of positive free cash, at $2 million, a $4.8 million improvement over Q1 of last year. In the first quarter, we signed new client wins, product expansion, and renewals with leading brands such as Eli Lilly, Hellion, Homes.com, and Verizon, as well as publishers like the Tennis Channel, owned by Sinclair. Our financial results and client wins are a gratifying reflection of our team's hard work and the power of our platform.
Tony Kelley: We also delivered another quarter of positive free cash flow.
Tony Kelley: At $2 million.
Tony Kelley: The $4.8 million improvement over Q1 of last year in the first quarter, we signed new client wins product expansion and renewals with leading brands such as Eli Lilly Hellion homes Dot com and Verizon.
Tony Kelley: As well as publishers like the tennis channel owned by Sinclair, Our financial results and client wins are a gratifying reflection of our team's hard work and the power of our platform.
Zvika Netter: Another important part of what makes Innovid unique is our focus on innovation. We push the boundaries of what's possible in the fast-growing CTV industry. And today, I'll share a few highlights of what we accomplished in Q1. In February, we launched a series of first-to-market interactive ads in partnership with Paramount+. During Super Bowl LVIII, the most streamed Super Bowl ever, dads engaged consumers with a new add-to-watch list unit to promote permanent plus content.
Tony Kelley: Another important part of what makes innovate unique is our focus on innovation.
Tony Kelley: We pushed the boundaries of what's possible in the fast growing CTV industry.
Tony Kelley: And today I'll share a few highlights of what we accomplished in Q1.
Tony Kelley: In February we launched a series of first to market interactive ads in partnership with Paramount plus <unk>.
Tony Kelley: During Super Bowl 58, the most streamed Super Bowl ever Dad's engage consumers with a new AD to watch list units to promote Permian plus content.
Zvika Netter: We also develop interactive ads for Pfizer, which draw viewers to their Let's Outdo Cancer website. As live sports and other high-value content continues to shift to the streaming platform, we believe this will further accelerate the increase in CTV viewership and advertising. More recently, we were recognized as the best measurement tool by Digiday in their 2024 Digiday Video and TV Awards, which highlight the company's campaigns and technologies for modernizing video and TV. This recognition exemplifies the power of our platform and the value our measurement solution provides to brands and the public.
Tony Kelley: We also develop interactive ads for Pfizer, which drove viewers to there, let's I'll do cancer website.
Tony Kelley: It is live sports and other high value content continues to shift to streaming platforms. We believe this will further accelerate the increasing CTV viewership and advertising spend.
Tony Kelley: More recently, we were recognized as the best measurement tool by D. Today in their 2024 digital video and TV Awards, which.
Tony Kelley: Which highlights the company's campaigns and technologies modernizing video and television. This recognition exemplifies the power of our platform and the value our measurement solution provides two brands and publishers.
Zvika Netter: We do not only help measure the efficiency and effectiveness of CTV advertising, but we also empower them to act on that intelligence to optimize their investment. Next, I'm very excited to share more about our new strategic initiative at Innovid.
Tony Kelley: We do not only help measure the efficiency and effectiveness of CTV advertising.
Tony Kelley: But we also empowered them to act on that intelligence to optimize the investments.
Tony Kelley: Next I'm very excited to share more about our new strategic initiatives.
Zvika Netter: A few weeks ago, we were joined by clients and industry partners, including ANA, the 4As, and the IVs, at the New York Stock Exchange and via global webcast as we launched our Harmony Initiative and products. Our Harmony Initiative was created to address some of the biggest challenges facing CTV advertising today. By optimizing CTV advertising at the infrastructure level, we believe we can improve efficiency, enhance transparency and control, reduce carbon emissions, and increase ROI to ultimately provide a better viewing experience that will benefit advertisers, publishers, edtech platforms, and, of course, CTV viewers.
Tony Kelley: A few weeks ago, we were joined by clients and industry partners, including a N a the four a's and the IV.
Tony Kelley: At the New York Stock Exchange and via Global webcast as we launch our harmony initiative and product suite.
Tony Kelley: Our harmony initiative was created to address some of the biggest challenges facing CTV advertising today by optimizing CTV advertising at the infrastructure level. We believe we can improve efficiency enhance transparency and control reduce carbon emissions and increase our ROI to ultimately provide better viewing.
Tony Kelley: Experience that will benefit advertisers publishers ethic platforms and of course CTV viewers.
Zvika Netter: Every day, our ad-serving capabilities, our award-winning creative technology, and our measurement capabilities help us deliver exceptional value to our clients. Now, with Harmony, we're adding an activation and optimization layer, powered by our CTV data set and our unique position in the ecosystem. On the data front, we deliver 1.3 billion TV ads a day and see trillions of data points, giving us an unrivaled view of the equity that covers programmatic and direct buys, the open web, and wall guarding.
Tony Kelley: Every day, our AD serving capabilities, our award winning creative technology, and our measurement capabilities help us deliver exceptional value to our clients now with harmony, we're adding an activation and optimization layer powered by our CTV dataset and our unique position in the ecosystem under.
Tony Kelley: The data front, we deliver 1.3 billion TV ads it Dave.
Tony Kelley: And C trillions of data points, giving us an unrivaled view of the ecosystem that covers programmatic and direct buys the open web and walled gardens.
Zvika Netter: This means we sit in the unique position to be able to deliver and, as a result, see and understand 100% of what our clients run on CTV. In addition, since we don't buy, bid on, or sell media, we're media agnostic and unbiased, which puts us in the best position, together with our partners, to solve the biggest challenges on CTV.
Tony Kelley: This means we sit in the unique position to be able to deliver and as a result see and understand hundred percent of what our clients running CTV. In addition, since we don't buy bid on or sell media, where are media agnostic and heightened bias, which puts us in the best position together with our partners.
Tony Kelley: To solve the biggest challenges in CTV.
Tony Kelley: We are releasing a series of product innovation throughout 2024 under the harmony products suite umbrella to openly share our unique data driven CTV intelligence with the industry.
Zvika Netter: We are releasing a series of product innovations throughout 2024 under the Harmony Product Suite umbrella to openly share our unique data-driven CTV intelligence with the industry. We believe this will help make the entire CTV advertising ecosystem better for the benefit of all advertisers, publishers, DSPs, and FSPs, and, of course, the viewers at home. One of the first product innovations to be released as part of the initiative is HarmonyDirect, which connects the Innovid buy-side ad server directly to the publisher ad server for the delivery of guaranteed, non-biddable CTV ad information. This streamlines the workflow for these types of campaigns to its purest form, removing all friction points, including technology hops, fees, and energy, with fewer hops and less budget going to intermediates.
Tony Kelley: We believe this will help make the entire CTV advertising ecosystem better for the benefit of all of our advertisers publishers DSP and SSP and of course the viewers at home.
Zvika Netter: Advertisers can drive better outcomes from the same investment because more is going to actual working media. Harmony Direct also aims to lower the risk of latency and fraud, provide a greener supply path, and improve fill rates for publishers. Agency and publisher partners, including Assembly, CMI Media Group, PMG, RPA, and Roku, are among the first to use HarmonyDirect. In line with our commitment to stay an unbiased, true partner to our customers and publisher partners, we are offering an impression-based software pricing model for our Harmony product suite, rather than a percentage of media models.
Tony Kelley: One of the first product innovations to be released as part of the initiative is harmony direct which connects to innovate by site at server directly to the publisher at server for the delivery of guaranteed none beatable CTV AD impressions. This streamlines the workflow for these types of campaigns to its purest for removing all friction.
Tony Kelley: <unk> points, including technology, hops fees, and energy waste with fewer hops and less budget going to intermediates.
Tony Kelley: Advertisers can drive better outcomes from the same investment because more is going to actual working media.
Tony Kelley: How many direct also aims to lower the risk of latency and fraud.
Tony Kelley: Provide the greener supply bass and improved fill rates for publishers.
Tony Kelley: Agency and publisher partners, including Assembly CMI Media Group P. M. G. R. P E and Roku are among the first to use harming direct.
Tony Kelley: In line with our commitment to stay an unbiased true partner to our customers and publisher partners. We are offering an impression based software pricing model for harmony product suite, rather than the percentage of media model.
Zvika Netter: For Harmony Direct, in particular, having a flat fee per impression model versus a take rate is increasing the amount of working media dollars that actually make their way from the advertiser to the publisher. This is a true win-win.
Tony Kelley: For how many direct in particular, having a flat fee per impression model versus a take rate is increasing the amount of working media dollars that actually make their way from the advertiser to the publisher.
Tony Kelley: This is a true win win.
Zvika Netter: Brands will have more dollars for working media, and publishers will have more revenue opportunities from the exact same budget. As I mentioned earlier, we have a roadmap of Harmony products that will continue to be released throughout 2025. We believe Harmony will better balance the value creation in CTV, which will accelerate budget shifting from linear TV to CTV. While still in the early days, we expect the Harmony strategy to help drive revenue growth over the long term by enhancing our cross-sell opportunities and strengthening our strategic positioning.
Tony Kelley: Brands will have more adults or four working media and publishers will have more revenue opportunities from the exact same budget.
Tony Kelley: As I mentioned earlier, we have a roadmap of harmony products that will continue to be released throughout 'twenty 'twenty four.
Tony Kelley: We believe harmony will better balance the value creation, CTV, which will accelerate budget shifting from linear TV to CTV.
Tony Kelley: While still in early days, we expect the harmony strategy to help drive revenue growth over the long term by enhancing our cross sell opportunities and strengthening our strategic positioning our products are becoming more and more connected and integrated increasing the overall stickiness of the <unk> platform.
Zvika Netter: Our products are becoming more and more connected and integrated, increasing the overall stickiness of the Innovid platform. However, since this initiative and products are still new, any commercial impact is not yet reflected in our 2024 guide. In summary, we had a great start to 2025, and we are excited about the opportunities ahead of us. We continue to innovate and release exciting new optimization capabilities to support and further drive the shift from linear to CTV.
Tony Kelley: However, since this initiative and product are still new any commercial impact is not yet reflected in our 2020 for guidance.
Tony Kelley: In summary, we had a great start to 2024.
Tony Kelley: And are excited about the opportunities ahead of US we continue to innovate and release exciting new optimization capabilities to support and further drive the shift from linear to CTV.
Zvika Netter: Financially, we are trending towards our long-term financial goals of over 20% sustained growth and 30% adjusted EBITDA margins. We believe we are well-positioned to become THE essential technology infrastructure for the future of TV advertising and to experience outsized growth when ad spend returns to its historic level. We remain committed to innovation and value creation for our customers and shareholders. With that in mind, I'll ask Tony to take us through the numbers and provide some insight into Q2 and meet your expectations.
Tony Kelley: Financially, we are trending towards our long term financial goals of over 20% sustained growth and 30% adjusted EBITDA margins. We believe we are well positioned to become the essential technology infrastructure for the future of TV advertising and to experience outsized growth when AD spend returns to its historic level.
Tony Kelley: We remain committed to innovation and value creation for our customers and shareholders.
Tony Kelley: With that last Tony to take us through the numbers and provide some insight into Q2 and full year expectations.
Tony Kelley: Tony.
Tony Kelley: Thank you Zika and good morning, everyone. It was another strong quarter of profitable growth and an encouraging start to 2024.
Anthony Callini: Thank you, Zvika, and good morning, everyone. It was another strong quarter of profitable growth and an encouraging start to 2024. We're pleased to report our second consecutive quarter of double-digit growth, our seventh straight quarter of year-over-year adjusted EBITDA margin expansion, and our third consecutive quarter of positive free cash flow. All contributing to continued business momentum entering 2024. Now, let me dig a little more into the numbers.
Tony Kelley: We're pleased to report our second consecutive quarter of double digit growth, our seventh straight quarter of year over year, adjusted EBITDA margin expansion and third consecutive quarter of positive free cash flow.
Tony Kelley: All contributing to continued business momentum entering 2024.
Speaker Change: Now, let me dig a little more into the numbers.
Anthony Callini: First quarter revenue grew 21% year over year to $36.7 million. Breaking that down further, ad serving and personalization revenues were up 23% year over year, while measurement revenue grew 11%. As a percentage of revenue, ad serving and personalization made up 79%, while measurement accounted for 21%.
Tony Kelley: First quarter revenue grew 21% year over year to $36 7 million.
Tony Kelley: Breaking that down further AD, serving and personalization revenues were up 23% year over year, while measurement revenue grew 11%.
Tony Kelley: As a percentage of revenue AD, serving and personalization made up 79% while measurement accounted for 21%.
Anthony Callini: The growth in ad serving and personalization reflects the emerging stabilization of advertising spend and continued shift to CTV. In fact, CTV revenue from ad serving and personalization grew 22% over last Q1. As a reminder, Innovid's ad serving and personalization revenue closely correlates with ad impression volumes served through our platform. Within this category, CTV impression volume increased 21% as more impressions continued to transition to CTV and represented 52% of all video impressions. Mobile video volume grew by 38% and represented 37% of all video impressions.
Tony Kelley: The growth in AD, serving and personalization reflects the emerging stabilization of advertising spend and continued shift to CTV.
Tony Kelley: In fact, CTV revenue from AD, serving and personalization grew 22% over last Q1.
Tony Kelley: As a reminder, <unk> AD, serving and personalization revenue closely correlates with AD impression volume served through our platform.
Tony Kelley: Within this category CTV impression volume increased 21% as more impressions continue to transition to CTV and represented 52% of all video impressions.
Tony Kelley: Mobile video volume grew by 38% and represented 37% of all video impressions, while desktop volume increased by 12% and reflected 11% of all video impressions.
Anthony Callini: While desktop volume increased by 12% and reflected 11% of all video impressions. Both mobile and desktop have been inconsistent throughout 2023 but demonstrated meaningful growth in the fourth quarter, and we are pleased to see that trend continue into the first quarter of 2024. All three of these devices represent consumers watching streaming applications, so it's also helpful to look at total video impressions, which grew 25% overall in the first quarter as compared to the first quarter of 2023.
Tony Kelley: Both mobile and desktop have been inconsistent throughout 2023, but demonstrated meaningful growth in the fourth quarter.
Tony Kelley: And we are pleased to see that trend continue into the first quarter of 2024.
Tony Kelley: All three of these devices represent consumers watching streaming applications. So it's also helpful to look at total video impressions, which grew 25% overall in the first quarter as compared to the first quarter of 2023.
Tony Kelley: The double digit growth in measurement revenues reflects the continued enhancement of our measurement capabilities to take full advantage of the valuable data set generated from the AD serving side of the business.
Anthony Callini: The double-digit growth in measurement revenues reflects the continued enhancement of our measurement capabilities to take full advantage of the valuable data set generated from the ad-serving side of the business. While the measurement business model is more subscription-oriented than ad serving, there is some seasonality with an anticipated step down from Q4 to Q1. As Zvika mentioned, we expect our unique ability to combine creative, delivery, and measurement solutions to provide differentiated client value and be a catalyst for continued revenue growth.
Tony Kelley: While the measurement business model is more subscription oriented and AD serving there is some seasonality with an anticipated step down from Q4 to Q1.
Tony Kelley: As Vicki mentioned, we expect our unique ability to combine creative delivery and measurement solutions to provide differentiated client value and be a catalyst for continued revenue growth.
Tony Kelley: It should be noted however that while we are pleased with this quarter's revenue growth AD spend in Q1, 2023 was materially impacted by a challenging macro environment.
Anthony Callini: It should be noted, however, that while we are pleased with this quarter's revenue growth, ad spend in Q1 2023 was materially impacted by a challenging macro environment. While we experienced a meaningful year-over-year improvement in the first quarter, we don't expect a continued sequential improvement in quarterly growth going forward as the quarterly comps continue to improve. Now, moving on to costs and expenses.
Tony Kelley: While we experienced the meaningful year over year improvement in the first quarter. We don't expect a continued sequential improvement in quarterly growth going forward as the quarterly comps continue to improve.
Speaker Change: Now moving on to costs and expenses.
Anthony Callini: Revenue, less cost of revenue, calculated out to 76% of revenue, improving from 73% in Q1 last year. Our margins continue to improve as the business scales, reflecting the operating leverage embedded in our business model. Q1 total operating expenses, excluding depreciation, amortization, and impairment, totaled $37.2 million, an increase of 1% from $36.7 million last year, but supporting 21% more revenue than in 2023. The employee count at the end of March was 472, as compared with 465 at the end of Q1 2023.
Speaker Change: Revenue less cost of revenue calculated out to 76% of revenue.
Speaker Change: Proving from 73% in Q1 last year.
Speaker Change: Our margins continued to improve as the business scales, reflecting the operating leverage embedded in our business model.
Speaker Change: Q1, total operating expenses, excluding depreciation amortization and impairment totaled $37 2 million, an increase of 1% from $36 7 million last year, but supporting 21% more revenue than in 2023.
Speaker Change: Employee count at the end of March was 472.
Tony Kelley: As compared with 465 at the end of Q1 2023.
Anthony Callini: We remain committed to managing our cost base while making strategic investments in high-growth areas to drive improved profitability and generate long-term value creation for our shareholders. Q1's net loss was $6.2 million, or a per share loss of $0.04. This compares with a net loss of $8.6 million and a per share loss of $0.06 in Q1 2023. The outstanding common share count at quarter close was 143.9 million shares.
Tony Kelley: We remain committed to managing our cost base, while making strategic investments in high growth areas to drive improved profitability and generate long term value creation for our shareholders.
Tony Kelley: Q1, net loss was $6 2 million or a per share loss of four cents. This.
Tony Kelley: This compares with a net loss of $8 $6 million and per share loss of <unk> <unk> in Q1 2023.
Tony Kelley: The outstanding common share count at quarter close was $143 9 million shares.
Tony Kelley: Adjusted EBITDA in the first quarter was $4 4 million, representing a 12% adjusted EBITDA margin of 4.3 million improvement as compared to adjusted EBITDA of just 100000% to 0.1% adjusted EBITDA margin in Q1 last year.
Anthony Callini: Adjusted EBITDA in the first quarter was $4.4 million, representing a 12% adjusted EBITDA margin. A $4.3 million improvement as compared to adjusted EBITDA of just $100,000 or 0.1% adjusted EBITDA margin in Q1 last year. You may recall that adjusted EBITDA margin each quarter in 2023 was an improvement over its equivalent quarter in 2022, and we have continued that trend in the first quarter of 2024. These improvements reflect the impact of sustained revenue growth, lower cost of revenue as a percentage of revenue, and operating costs that grew nominally over the prior year, demonstrating the leverage inherent in the operating model.
Tony Kelley: You may remember that adjusted EBITA margin each quarter in 2023 was an improvement over its equivalent quarter in 2022, and we have continued that trend in the first quarter of 2024.
Tony Kelley: These improvements reflect the impact of sustained revenue growth.
Tony Kelley: Lower cost of revenues as a percentage of revenue and operating costs that grew nominally over the prior year demonstrating the leverage inherent in the operating model.
Tony Kelley: Turning to the balance sheet and cash flow.
Anthony Callini: Turning to the balance sheet and cash flow, we ended Q1 in a strong financial position with $31.6 million in cash and cash equivalents with no outstanding balance on our revolving debt facility. As a reminder, we have $50 million available to cover that deficit.
Tony Kelley: We ended Q1 in a strong financial position with $31 6 million in cash and cash equivalents with no outstanding balance on our revolving debt facility.
Tony Kelley: As a reminder, we have $50 million available on that debt facility.
Anthony Callini: On a net cash basis, or to say it another way, cash and cash equivalents less outstanding revolver balance, the $31.6 million on hand at the end of Q1 2024 is an improvement compared to the $29.6 million on hand at the end of 2023 and $25 million at the end of Q1 2020. During the quarter, operating cash flow was $4.7 million, and free cash flow was $2 million, an improvement of $4.8 million over the $2.8 million of free cash flow used in Q1 2023.
Tony Kelley: On a net cash basis or to say it another way cash and cash equivalents less outstanding revolver balance to $31 6 million on hand at the end of Q1 'twenty 'twenty four is an improvement compared to the $29 6 million on hand at the end of 2023 and $25 million at the edge.
Tony Kelley: End of Q1 2023.
Tony Kelley: During the quarter operating cash flow was $4 7 million and free cash flow was $2 million an improvement of $4 8 million over the 2.8 million of free cash flow used in Q1 2023.
Anthony Callini: If we look at free cash flow on a trailing 12-month basis, we have seen an improvement of $22.1 million as compared to the same 12-month period ended March 31, 2023. Finally, let me touch on our outlook for the second quarter and an update for the full year 2024. We are encouraged by both a strong finish to 2023 and continued momentum into 2024 and remain committed to our long-term financial target of 20-plus percent annual revenue growth and 30-plus percent adjusted EBITDA margin.
Tony Kelley: If you look at free cash flow on a trailing 12 month basis, we have seen an improvement of 22.1 million as compared to the same 12 month period ended March 31st 2023.
Speaker Change: Finally, let me touch on our outlook for the second quarter and an update for the full year 2024.
Speaker Change: We are encouraged by both the strong finish to 2023 and continued momentum into <unk> 'twenty 'twenty four and remain committed to our long term financial target of 20 plus percent annual revenue growth and 30 plus percent adjusted EBITDA margin.
Anthony Callini: We are confident in the underlying strength of our business, opportunities for disruption in the market, and our ability to grow revenue in a profitable way. We see 2024 as a meaningful step towards achieving our long-term targets. In the second quarter of 2024, we expect total revenue in a range of $37.5 to $39.5 million, representing 9 to 14% year-over-year growth. We expect Q2 adjusted EBITDA in a range of 5 to 6 million, as compared to 4.5 million in the second quarter of last year. For the full year, we expect revenue of $157 to $163 million, reflecting 12 to 17% annual growth, and Adjusted EBITDA between $24 and $29 million.
Speaker Change: We are confident in the underlying strength of our business opportunities for disruption in the market and our ability to grow revenue in a profitable way.
Speaker Change: We see 'twenty 'twenty four is a meaningful step towards achieving our long term targets.
Tony Kelley: In the second quarter of 'twenty 'twenty four we expect total revenue in a range of 37.5 to $39 5 million, representing 9% to 14% year over year growth.
Tony Kelley: We expect Q2 adjusted EBITDA in a range of $5 million to $6 million as compared to $4 5 million in the second quarter of last year.
Tony Kelley: For the full year, we expect revenue of 157 to 163 million.
Tony Kelley: Collecting 12% to 17% annual growth.
Tony Kelley: And adjusted EBITDA between 24 and $29 million.
Tony Kelley: We had a strong start to the new year with continued revenue growth margin expansion and free cash flow generation with.
Anthony Callini: We had a strong start to the new year with continued revenue growth, margin expansion, and free cash flow generation. With exciting new product offerings, like Harmony, added to our existing capabilities, we believe we can continue to bring more value to our clients and reimagine what's possible in the industry. We are proud of our accomplishments and look forward to taking a leading role in improving the ecosystem for everyone. As Zvika mentioned, we remain committed to continued execution, innovation, and value creation for our customers and our shareholders. This concludes our prepared remarks. Zvika and I are now happy to take some questions. Operator, please begin the Q&A session.
Tony Kelley: With exciting new product offerings like harmony added to our existing capabilities. We believe we can continue to bring more value to our clients and re imagine what's possible in the industry.
Tony Kelley: We are proud of our accomplishments and look forward to taking a leading role in improving the ecosystem for everyone.
Tony Kelley: As Vicki mentioned, we remain committed to continued execution innovation and value creation for our customers and our shareholders.
Speaker Change: This concludes our prepared remarks, Zika and I are now happy to take some questions. Operator, please begin the Q&A session.
Tony Kelley: To ask a question at this time. Please press Star then the number one on your telephone keypad.
Operator: To ask a question at this time, please press star, then the number one on your telephone keypad. Once again, to ask a question at this time, please press star, then the number one on your telephone keypad. Our first question comes from Matt Condon with Citizens JMP. Your line is open.
Tony Kelley: Once again to ask a question at this time. Please press Star then the number one on your telephone keypad.
Tony Kelley: Our first question comes from Matt Condon with citizens JMP. Your line is open.
Matthew Dorrian Condon: Thank you guys for taking my question. My first one is just on demand throughout the quarter. Can you just give us an update just on the health of the overall market and maybe trends that you're seeing into 2Q? And then, maybe with the reorganization of the sales force in 2023 and with the product initiatives around Harmony Direct, can you just, well, just the Harmony Initiative more broadly and Harmony Direct and Instant Optimization, can you just talk about how your conversations with advertisers are going and maybe any sort of adoption that you're seeing of these Thank you so much.
Matthew Dorrian Condon: Thank you guys for taking my question. My first one is just on demand throughout the quarter can you just give us an update just on the health of the overall market and maybe trend that youre seeing in <unk> and then stepping back maybe with the reorganization of that sales force in 2020 debris and with the product initiatives around how many direct can you just well.
Matthew Dorrian Condon: Initiative more broadly and how many did recognize that optimization can you just talk about how your conversations with advertisers are coming in maybe any sort of adoption that you're seeing of these newer initiatives taking up. Thank you so much.
Speaker Change: Sure Hey, Matt on on macro perspective, we're seeing something similar to kind of the second half of 2023, we see a stable environment still it's less than quote unquote normal environment.
Zvika Netter: Sure. Hey Matt.
Zvika Netter: On a macro perspective, we're seeing something similar to kind of the second half of 2023. We see a stable environment. But still, it's less than quote-unquote a normal environment.
Zvika Netter: And we see sort of stable below normal, but something that's more predictable. I would say at the same time, we need to remember that the second half of this year, so we see this trend moving into the second quarter also. But in the second part of the year, we also have a combination of the election and the Olympics, and that can affect the industry dynamics when it comes to advertising. But overall, we're definitely seeing an improvement year over year, and we believe that will continue for the rest of the year. We're definitely going to keep an eye on the second half.
Speaker Change: And we see so our stable below normal.
Zvika Netter: But something that's a more predictable I would say at the same time, you know we need to remember that the second half of this year. So we see this trend moving into the second quarter also but the second part of the year. We also have we have a combination of election in Olympics and that can affect the industry dynamics when it comes to advertising, but overall, we're definitely seeing.
Zvika Netter: An improvement there year over year, and we believe that will continue for the rest of the year would definitely need to keep an eye on the second half.
Zvika Netter: In terms of the products around Harmony, I assume we'll have more questions and follow-ups in the future on that as an initiative, very excited about it. In terms of initial customer response, you could even see at the launch; we have a video on our website of the launch event. We had not just customers and partners; we also had three... you know, industry, very strong industry groups that represent the buyers, you know, the advertisers, the agencies, and the publishers and platforms, that's the ANA, 4As, and IAB, all on the stage with us.
In terms of the products are.
Zvika Netter: Around harmony.
Zvika Netter: I assume we'll have more questions and follow ups in the future also in that.
Zvika Netter: As an initiative.
Zvika Netter: We're excited about it.
Zvika Netter: In terms of initial customer response, you could even see on their lunch you know we have the video on our website of the launch event. We had there not just you know customers and partners. We also had three.
Zvika Netter: You know industry very strong industry.
Zvika Netter: Groups that represent the buyers you know the advertisers the agencies and publishers and platforms. That's D. A N a.
Zvika Netter: For as an iab all on you know on onstage with us So harmony is hitting on and absolutely the top critical challenges within CTV.
Zvika Netter: So Harmony is hitting on absolutely the top critical challenges within CTV. As expected, we definitely have a strong interest, I would say, first and foremost, from advertisers, brands, and agencies, and, of course, publishers. At the same time, these are early days, right? So we engage in conversations immediately. These are very important topics for everybody in the industry. At the same time, in terms of revenue, we just launched it. So these things usually take time. While the investment is clearly included in the operating plan, we don't expect, or in our guidance, we don't include revenue from Harmony just yet.
Zvika Netter: So as expected we definitely have a strong interest.
Zvika Netter: I would say first and foremost phone advertises brands and agencies and of course, our publishers.
Zvika Netter: At the same time. These are early days right. So engaged in conversations with immediately is a very important topics for everybody in the industry.
Zvika Netter: At the same time in terms of revenue, we just launched it. So these things usually take time, so we don't while the investment.
Zvika Netter: Investment is clearly included in the operating plan.
Speaker Change: We don't.
Zvika Netter: Specter room night guidance. We don't include the revenue from harmony just yet.
Speaker Change: Very helpful. Thank you.
Speaker Change: Thank you.
Zvika Netter: Your next question comes from Shyam Patil with Susquehanna. Your line is open.
Zvika Netter: Very helpful. Thank you. Your next question comes from Shaim Patel.
Operator: Your next question comes from Shaim Patel with Susquehanna. Your line is open. Good morning. This is Jason Alkersham. Thanks for taking call.
Operator: Yes.
Jason Alkersham: Thank you, Jason. Can you repeat the question, the first part of the question? I'm not sure I heard you clearly.
Jason Alkersham: Good morning. This is Jason anchor Sean Thanks for taking our question on the Harmony platform. You mentioned it works with DSP is on that can you elaborate more on how that works and can you provide any examples for it. Thank you.
Unknown Attendee: Can you pick the thank you Jason can you repeat the question. The first part of the question much I heard you clearly.
Jason Alkersham: Yeah, I'm a Harmony platform user. You mentioned that it works with DSPs. Can you elaborate on how that works? And can you provide any examples of that? Oh, of course.
Unknown Attendee: Homo harmony platform, you mentioned that it works with USPS can you elaborate on how that works and can you provide any examples of that.
Zvika Netter: So Harmony is working not just with DSPs, basically, maybe with a very quick overview of what it is. Harmony is designed to work with everybody in the industry. So that's advertisers, agencies, the tech platforms and programmatic tech platforms, that's DSPs, SSPs, and publishers, from a tech perspective, sales side, and ad services. So, the concept is to balance the entire CTV industry in a way that will tackle challenges that we're seeing today, which, you know, are, you know, they come with the territory when you're switching from linear broadcast television to a
Speaker Change: Oh of course, so harmony is working not just you know with DSP is basically a maybe a very quick overview of what it is harmony is designed to work with everybody in the industry. So that's advertisers agencies the tech platforms and programmatic tech platforms, that's dsp's ssp's.
Zvika Netter: And publishers from a tech perspective sell side at servers. So the concept is to balance the entire CTV industry in a way that will tackle challenges.
Zvika Netter: What we're seeing today, which you know or are they.
Zvika Netter: They come with a territory when you're switching from linear broadcast television to a digital environment. It kind of brings with it things like transparency frequency management measurement fraud, Although you know all the things that come with digital the Golar harmony as before CTV becomes as big as TV or it becomes all of television.
Zvika Netter: It kind of brings with it things like transparency, frequency management, measurement, fraud, all the things that come with digital. The goal of Harmony is, before CTV becomes as big as television or becomes all of television, to have all of us work together, programmatic platforms, ad servers, buyers, sellers, to create a better industry for everybody. So the DSPs definitely have a critical component, programmatic, basically, have a critical component of this because based...
Zvika Netter: To all of US work together programmatic platforms AD servers buyer seller.
Zvika Netter: To create a better industry for everybody.
Zvika Netter: So that is definitely have a critical component of programmatic basically have a critical component.
Zvika Netter: All of this because based.
Zvika Netter: It allows the programmatic environment allow us to make decisions in real time, and if you were to manage things like frequency extended reach optimize against outcome. This is something that the programmatic platform programmatic media buying platforms and selling platforms allowed us to do now innovate as an AD server on the buy side we have.
Zvika Netter: It allows the programmatic environment to make decisions in real time. If you want to manage things like frequency, extended reach, and optimize against outcome, this is something that the programmatic platform, the programmatic media buying platforms, and selling platforms allow them to do. Now, Innovid is an ad server on the buy side. We have no desire to be a DSP.
Zvika Netter: No desire to be a DSP. So we are partnering with them and the way to do it is by sending signals we.
Zvika Netter: So we are partnering with them, and the way to do it is by sending signals. We see 100% of the media plan. We see 100% of the campaign, which nobody else in the industry except other ad servers like Google can do. Campaign managers actually get to see everything. So what we're doing with Harmony was saying, instead of keeping this information just in our system, allowing our customers to allow this information to go into something like a DSP, SSP, and a publisher, so they can optimize with the 100% view that we have; they usually have 10% to 30% view; we see everything.
Zvika Netter: We see 100% of the media plan, we say, 100% of the campaign, which is nobody else in the industry accept other you know add services like Google compare manager actually get to see everything.
Zvika Netter: So what we're doing with harmony was saying instead of keeping this information just in our you know our system, allowing our customers to allow this information to go into something like a DSP SSP and publisher. So they can optimize with the 100% view that we have they usually have 10% to 30% of view, we see everything so they can.
Zvika Netter: So the goal with Harmony is for us to share that with them, and they can optimize against that. And in this case, everybody. But clearly, this is a very big initiative that can take, you know, an entire hour or three to share, and that's on our website, on the home page.
Zvika Netter: With the harmonies for us to share that with them.
Zvika Netter: And they can optimize against that and in this case everybody wins.
Zvika Netter: But clearly this this is this is this is a very big initiatives that can take you know an entire hour or 322 share and that's on our website on the homepage.
Speaker Change: Great. Thank you.
Zvika Netter: Your next question comes from Matthew cost with Morgan Stanley. Your line is open.
Matthew Andrew Cost: Your next question comes from Matthew Cost with Morgan Stanley. Your line is open.
Matthew Andrew Cost: Thanks for taking the question. So I think your commentary about what you're seeing in the overall market sounds constructive; you're talking about seeing some, you know, some real improvement, especially given the easier comp and one queue and stabilization. But But it does sound like, you know, there are areas of strength and weakness. You know, most of what we're hearing from checks and from others in the ad industry year to date is pretty positive commentary, broadly speaking, in terms of, you know, just volume of ad spend and even impressions at the market level. So I guess, what are the areas of particular strength and then weakness that you would call out that you're seeing year to date?
Matthew Andrew Cost: Thanks for taking my question. So I think your commentary about what you're seeing the overall market accounts construct Dave Youre talking about seeing some some real improvement, especially given the easier comp in <unk> and stabilization.
Matthew Andrew Cost: But it does sound like it.
Matthew Andrew Cost: Areas of strength and weakness.
Matthew Andrew Cost: Most of what we're hearing from checks and from others in the AD industry year to date.
Matthew Andrew Cost: Pretty positive commentary broadly speaking in terms of volume.
Matthew Andrew Cost: And even impressions at the market levels I guess, what are the areas of particular strength and then weakness that you would call out that you're seeing year to date. Thank you.
Speaker Change: Yeah, great. Thanks, Thanks, Matt I think.
Matthew Andrew Cost: We're really encouraged by the just the amount of impressions that are carried over from the from the fourth quarter.
Matthew Andrew Cost: Of 2023 into 2024.
Anthony Callini: So, you know, just a strong start to the year. And, you know, even with a bit of an easier comp in Q1, we're pleased to see some of the verticals that were strong before continue to be strong, and some that had struggled last year. You maybe take a bit of a step forward.
Matthew Andrew Cost: So just a strong start to the year and even with even with a bit of an easier comp in Q1.
Anthony Callini: Pleased to see some of the verticals that were strong before continue to be strong and some net.
Anthony Callini: I mean, that said, there's still some inconsistency between verticals. And then, you know, as we look out over the rest of the year, you know, what we've seen is there's, there's, there's potential headwinds and tailwinds for sure. And, you know, on the headwind side, the overall shift to connect to television continues to happen, things like live sports, things like more ad-supported content. And for us, those are all real positives.
Anthony Callini: Had struggled last year.
Anthony Callini: Maybe take a bit of a step forward.
Anthony Callini: There are still there's still some inconsistency between vertical.
Anthony Callini: And then as you know as we look out over the rest of the year.
Anthony Callini: We have seen is there is there is there is potential headwinds in tailwind for sure and on the headwind side.
Anthony Callini: Yeah, just the overall shift to connected TV continues to happen.
Anthony Callini: Things like live sports things like more AD supported content.
Anthony Callini: And what we don't know is when it's going to take effect and the, you know, the amount that will take effect when it does. On the potential potential headwind side for us, we have the election cycle that's coming, which, you know, granted, drives more volume, and a rising tide lifts all boats.
Anthony Callini: And for US those are all real positives and while we don't know is when it's going to take effect in the you know the.
Anthony Callini: Mount that will take effect.
Anthony Callini: When it does.
Anthony Callini: On the potential potential headwind sides for us we have the election cycle, that's coming which granted it drives more volume in a rising tide lifts all boats, but as you know we support brands.
Anthony Callini: And so it could have a bit of a cooling effect of brands in the second half of the year and the other part the Zika mentioned as the Olympics and again, that's that's great for the for the.
Anthony Callini: Kind of brand awareness in general, but a lot of times what the brands will do is is look for more and sponsorships than actual advertising. So there's.
Anthony Callini: So, you know, there's just this, there's some uncertainty, and we've baked that into our forecast. We feel pretty confident around that. And, you know, we're pleased that we were able to raise the guidance overall and actually tighten the range from what we had disclosed before. So I think it's kind of a combination of those things. But you know, in general, with the industry, we're seeing stabilization, and again, kind of the same trends in the verticals that continue to do well.
Anthony Callini: There's just there's some uncertainty and we've baked that into our forecast, we feel we feel pretty confident around that.
Anthony Callini: And I think where we're pleased that we were able to raise the guidance overall and actually tightened the range.
Anthony Callini: From what we had disclosed before so I think it's kind of a combination of those things, but you know in general with the industry, we're seeing a stabilization and again kind of the same trends in the verticals that continue to do well and some that and I'll call checkout is one that has gotten a bit by bit improved from.
Anthony Callini: And some that I'll call tech out is one that has gotten a bit, a bit improved from last year. So that's, you know, that's kind of how I would summarize how we're seeing things.
Anthony Callini: From last year.
Anthony Callini: So that's that's kind of how I would summarize our policy and thanks.
Speaker Change: Thank you.
Anthony Callini: Once again to ask a question. Please press Star then the number one on your telephone keypad.
Operator: Once again, to ask a question, please press star, then the number one on your telephone keypad. Your next question comes from Laura Martin on Needham. Your line is open.
Operator: Your next question comes from Laura Martin with Needham Your line is open.
Laura Anne Martin: Hi there. So the first thing, I think you mentioned that impressions for CTV grew about 21%, and impressions for video grew about 35%. So I'm curious as to why you think non-CTV is growing 50% faster than CTV. What's the trend you're seeing in the marketplace there with your brand clients?
Laura Anne Martin: Uh huh.
Laura Anne Martin: The first thing I think you mentioned that impression for CTV.
Laura Anne Martin: 21% and impressions for video grew about 35%. So I'm curious as to why you think non CTV is growing 50% faster than ptv, what's the trends youre seeing in the marketplace that with your brand clients.
Speaker Change: Yes, I mean I think it's.
Anthony Callini: Yeah, I mean, I think it's the different categories, and we had the same effect last quarter, where mobile, in particular, had a higher growth rate than CTV in the fourth quarter. And it really comes down to some comparables and really the comparables in the prior year. I think we're pleased that overall streaming transactions are up significantly year over year.
Laura Anne Martin: For the different categories, and we had the same effect last quarter.
Anthony Callini: Where the mobile in particular was was had a higher growth rate than that.
Anthony Callini: <unk> TV in the fourth quarter and it's it really in these two quarters in particular it comes down to some comparable and really the comparable in the prior year I think we're pleased that overall streaming transactions or are up significantly.
Anthony Callini: Year over year and that that that's the trend so the mix between mobile and CTV, while while it's interesting it's hard to look at one quarter.
Anthony Callini: And that that's the trend. So, you know, the mix between mobile and CTV, you know, while it's interesting, it's hard to look at 1 quarter individually and draw a lot of conclusions from that. But again, the broader trend is that streaming impressions overall are up, and CTV has grown over 20%. So, I think those are all really positive.
Anthony Callini: Individually and draw a lot of conclusions from that.
Anthony Callini: But again.
Anthony Callini: Again, the broader trend is that.
Anthony Callini: Streaming impressions overall are up and.
Anthony Callini: CTV has grown over over 20%. So I think those are those are all real positives.
Speaker Change: Okay and then.
Zvika Netter: Okay, and then go ahead, Laura. What I wanted to add is that since COVID started, what's interesting, you know, four years ago, when we see, we saw a lot of volatility, CTV never, at least from our shared numbers in terms of impressions, went down year over year or quarter, like it always kept going up. Well, definitely, what we call video, you know, mobile, desktop, digital video, absolutely saw quarters where it had a minus, you know, where it was shrinking. So from that perspective, you know, and CTV always went up. So in terms of an improved economy, you may see spikes in year over year growth, but in absolute numbers, it's not material. So, that's. Unknown Speaker.
Laura: Go ahead Laura.
Zvika Netter: What I wanted to add is that if remember you know since COVID-19 started what's interesting for.
Laura: Four years ago is when we see we saw a lot of volatility CTV never at least from our not shared numbers in terms of progression went down year over year or quarter over like it was always kept the.
Zvika Netter: Going up while definitely what we call video mobile desktop digital video absolutely.
Zvika Netter: So quarters, where it had a minus you know what it was shrinking so from that perspective, and CTV always went up so.
Zvika Netter: And in terms of improved economy, you may see spikes in year over year growth, but in absolute numbers, it's not.
Laura: Materials, so that's on that.
Speaker Change: I wanted to ask a question so yeah I just wanted to ask.
Laura Anne Martin: Yeah, I just wanted to ask. One of the things that you focused on in your announcement was that you wanted to bundle, you wanted to more successfully bundle like the core product with your TV squared product. Now we're adding the Harmony product. Is the Harmony product part of the bundle? Does it make sense not to continue with this sort of bundled strategy of putting your products together? And how does the pricing relate compared to your core product pricing, which used to be 32 cents round numbers? Is it at a similar price point? Could you talk about that, the bundling and the price point? Sure.
Laura Anne Martin: One of the things that on your analyst day, you Faisel.
Laura Anne Martin: He wanted to bundle.
Laura Anne Martin: More successfully bundle like the core product with like guaranteed and square.
Laura Anne Martin: Product now, we're adding the harmony product is the harmony product part of the bundle.
Laura Anne Martin: Continue with this sort of bundled strategy of putting our products together and how does the pricing relate.
Laura Anne Martin: <unk> to your core product pricing, where it used to be 32 cents round number.
Laura Anne Martin: Similar price points could.
Speaker Change: Could you talk about the bundling and the pipeline sure sure absolutely and thanks for referring are and I think that was back in September and November of last year. Two years ago. Yeah. Back then we already started talking about we presented the notion of optimization, we could not at that point to uncover.
Zvika Netter: Sure, sure, absolutely. And thanks for referring me.
Zvika Netter: Yeah, I think that was back in September or November of last year. It feels like years ago. Yeah, back then, we had already started talking about the notion of optimization. We could not, at that point, unveil our entire roadmap and strategy around harmony. So we refer to it at that time as optimization, which basically, to your point, absolutely, that's if you bundle, let's say three products, which are the creative technology, the delivery technology, which is our ad server.
Zvika Netter: Our entire roadmap and strategy around harmony, so we refer to it at that time as optimization, which basically to your point absolutely. That's if you bundle, let's say three products, which is the creative technology the delivery technology, which is our AD server and then with measurement are what you referred to see television square lifted acquisition from three years ago.
Zvika Netter: And then with measurement, what you refer to as the TV square, that's an acquisition from two years ago; it's our measurement product. So we have these three components that already work together beautifully. You know, the ad server feeds the measurement on, you know, 1.3 billion, actually, it's several billion data points, 1.3 billion TV impressions a day. So that already works together.
Zvika Netter: Our measurement product. So we had the three components that already worked together beautifully the AD server feeds the measurement.
Zvika Netter: On $1 3 billion actually its several billion data points $1 3 billion TV impressions.
Zvika Netter: Dave So that already works together, what really ties if it kind of wrapping everything together is the optimization, which now we gave you the name its harmony and its an entire industry initiative and that's absolutely basically what it is looking to do.
Zvika Netter: What really ties into kind of wrapping everything together is the optimization, which now we've given a name to, it's Harmony, and it's an entire industry initiative. And that's absolutely basically what it's looking to do, is to optimize any component of the entire CTV industry, that is, the creative, the delivery, but also the media component, things like reach, frequency, audiences, and outcomes. So that is a major kind of bundle and wrapper around all these things because what it wraps is not just the technologies we provide, which is the creative delivery measurement, but also the media side; by integrating with DSPs, SSPs, and publishers, it is looking to optimize all components of the CTV advertising industry.
Zvika Netter: Is to optimize any component of the entire CTV industry. That's the creative the delivery, but also the media component things like reach frequency audiences.
Zvika Netter: Outcomes.
Zvika Netter: That is a major kind of bundle and wrapper around all these things because what it wraps if not just the technology that we provide which is the creative delivery measurement, but also the media side by integrating with Dsp's Ssp's and publishers. It is looking to optimize all components of CTV.
Zvika Netter: CTV the CTV advertising industry, so from that perspective, it's something that the.
Zvika Netter: So from that perspective, it's something that... [inaudible] And as to the pricing, it's connected to that because today I mentioned things that I'd never mentioned before, things like media and DSPs and SSPs, in terms of us affecting and touching and getting ourselves involved in that side of the industry, and the way we're doing it and making sure that we're staying unbiased and kind of staying away from becoming part of So the fixed pricing model that says no matter what technology and what efficiency we're bringing to the industry and what outcome, we're staying with fixed CPM, like you mentioned, like ad serving, which guarantees that we're not, there's no take rate, we're not part of the food chain, we're enabling the food chain, we're enabling better results.
Zvika Netter: It connects everything better together in the entire industry and that's where the name harmony came from and that's the reason we had the Ada forays in the iab with us because it's really bringing kind of a connecting creating a better connecting tissue for the entire industry and as to the pricing.
Zvika Netter: It's connected to that because I today, I mentioned things that I never mentioned before things like media and DSP and SSP is in terms of as affecting and touching and getting herself involved on that side of the industry.
Zvika Netter: And the way, we're doing it and making sure that we're staying unbiased and kind of staying away from becoming part of this is the pricing model for the fixed pricing model that says no matter, what technology and what efficiency, we're bringing to the industry and what the outcome, we're staying with fixed CPM like you mentioned like AD serving.
Zvika Netter: Which guarantee that we're not there's no take rate were not part of the food chain, where enabling if which and we're enabling better results.
Zvika Netter: We're not, We did not share publicly specific pricing, but the pricing model is the same as an answer in terms of it's a fixed number multiplied by volume, and that would generate the harmony related revenue. We just didn't share publicly the exact rate card as we are now, starting to close our initial deals in the market.
Zvika Netter: We're not we did not to share publicly specific pricing, but the pricing model is the same as an answer in terms of its a fixed.
Zvika Netter: It's a fixed number and multiply by volume and that will generate the harmony related revenue.
Zvika Netter: We just didn't didn't share publicly the exact rate card as we are now.
Zvika Netter:
Zvika Netter: Starting to close the our initial deals in the market.
Laura Anne Martin: Okay, and is this going to be meaningful in 24? Or do you think it becomes meaningful in 25? What's the timing of when Harmony becomes a meaningful contributor to revenue, do you think?
Speaker Change: Okay and is this going to be meaningful in 'twenty four or do you think that becomes a meeting on 25 whats the timing of when harmony becomes a meaningful contributor to revenue do you think.
Anthony Callini: Tony, do you want to take that? Yeah, no, I think it's still pretty early. I mean, this is a big industry, and brands are going to move at their own pace. It's so hard to say at this point, which is why we haven't included it in our guidance. You know, certainly for 25, we think it will have effect. And, you know, it's probably a little bit of a to be determined for 2024.
Laura Anne Martin: Tony do you want to take that yeah, no I think that's it.
Anthony Callini: It's still pretty it's still pretty early I mean this is this is a big industry.
Anthony Callini: Brands brands are going to move at their own pace. It's so it's hard to say at this point, which is why we haven't included it in guidance certainly for 'twenty five we think it will all have the fact and and.
Anthony Callini: It's probably a little bit of a to be determined for 2024 and all.
Anthony Callini: And we'll, you know, as we see what the adoptions are like, we'll certainly keep everyone updated and incorporate it, you know, as appropriate into future guidance. But, you know, certainly, you know, for going into 2025, we think it'll have a meaningful impact. Bye!
Anthony Callini: As we see what the adoption of like we'll certainly keep everyone updated and incorporate it as appropriate into future guidance, but certainly going.
Anthony Callini: Going into 2025, we think at all it'll have a meaningful impact.
Laura Anne Martin: Right. Thank you, guys.
Speaker Change: Alright, Thank you guys.
Speaker Change: Great. Thank you. Thanks.
Speaker Change: At this time there are no further questions I'd like to turn the call back to management for any closing remarks.
Operator: At this time, there are no further questions. I'd like to turn the call back to management for any closing remarks.
Operator: Yes.
Zvika Netter: I want to thank everybody for joining us today, the analysts, shareholders, even some of our partners and, of course, employees. I'm extremely pleased with our first quarter results, the momentum that we started the year with, exceeding expectations across top line, bottom line, and free cash flow. And as you heard, I'm also incredibly excited about the Harmony Initiative and the products that we launched and share that we're going to continue to launch throughout the year and our ability to continue to innovate while keeping this financial, kind of strict financial framework both at the same time, investing in areas that, as we just discussed, are going to generate further momentum and grow for years to come. I look forward to keeping you updated every quarter on our progress. There's more content on the website about this Harmony Initiative. Have a great day. Thank you so very much.
Speaker Change: Thank you everybody for joining us today are the analysts shareholders, even some of our partners and of course employees.
Zvika Netter: Extremely pleased with our first quarter results the momentum the momentum that you know we started the year exceeding expectations across top line bottom line free cash flow and as you heard I'm also incredibly excited about the initiatives the harmony initiative and the products that we launched and share that we're going.
Zvika Netter: Continuing to launch throughout the year and our ability to continue to innovate while keeping this financial kind of strict financial framework. Both at the same time investing in areas that as we just discussed are going to generate further momentum and grow for years to come.
Zvika Netter: I look forward to keep updating you every quarter on our progress there is more content also on the website on this harmony initiative.
Zvika Netter: Have a great day. Thank you so very much bye bye.
Speaker Change: This concludes todays innovative first quarter 2024 earnings call. Thank you for attending and have a great day.
Operator: This concludes today's Innovid first quarter 2024 earnings call. Thank you for attending, and have a great day.
Operator: Okay.
Operator: Yeah.
Operator: Yeah.
Operator: Yeah.