Q4 2024 Perion Network Ltd Earnings Call
Music
Right.
[music].
Yes.
[music].
Okay.
Yes.
[music].
Sure.
[music].
Hello, everybody and welcome to the parallel networks fourth quarter and full year 'twenty 'twenty four earnings Conference call. Today's conference is being recorded and an archive of the webcast will be posted on the company website.
The press release detailing the financial results is available on the company's website at Www Dot Perry on Dot com.
Before we begin I'd like to read the following safe Harbor statement.
Today's 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 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 performance 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 a non-GAAP basis, while mentioning EBITDA, we will be referring to adjusted EBITDA. We have provided a detailed reconciliation of non-GAAP measures took that comparable GAAP measures in our earnings release, which is available on.
Our website and has also been filed on form 6K.
Tal Jacobson: Hosting the call today are Tal Jacobson periods, Chief Executive Officer, and you'll have to do Barry <unk> Chief Financial Officer.
Speaker Change: I would now like to turn the call over to Tal Jacobson. Please go ahead.
Speaker Change: Good morning, everyone and thank you for joining us today, it's pretty honest Q4, 'twenty 'twenty four earnings call 2024 was a pivotal year for us at <unk>. It.
Speaker Change: It was a year of laying the foundation for transformation that is now coming to life.
Speaker Change: Over the past year, we have been strategically aligning our technologies operations envision.
Speaker Change: Setting the stage for the launch of the Purion one strategy.
Speaker Change: With Barry on one we are uniting all of our technologies under one platform.
In all our business units and brands under one roof.
Speaker Change: While this strategy is expected to attract more customers to our unified platform.
Speaker Change: It is also transforming our organization to become more efficient than ever before other this new strategy, we focus on AI development for both customer facing products and operational efficiency solution.
Speaker Change: We believe that billion one is the perfect platform for a deeply fragmented 700 billion dollar industry, an industry that is forcing advertisers to navigate a complex maze of platforms formats and channels. The focus has long been on where Ed.
Speaker Change: <unk> run if.
Speaker Change: If it CTV open web digital out of home or social rather than what truly matters, reaching the right customers at the right moment with the right message to drive exceptional results. This fragmentation leads to inefficiencies wasted spend.
Speaker Change: <unk> and missed opportunities.
Speaker Change: At Varian, we believe this complexity shouldnt be the advertisers problem to solve.
Speaker Change: That's why we're building billion won to unify simplify and amplify the advertisers journey, ensuring advertisers can focus on impact and resorts not execution challenges the foundations a failure in one are based on advanced AI capabilities that infuse.
Personalized messaging for every brand moment, they're all of Purion, one is to solve the complexity of Omnichannel advertising.
Speaker Change: And provide a unified AI driven advertising infrastructure that deliver precision efficiency and measurable results.
Speaker Change: In this pivotal moment in failures history I'm happy to reveal a first look at our failure on one platform. This platform will unite all of our technologies in one place. It provides our customers with an advance portal into creative insights and planning.
Speaker Change: Of any brands next great advertising moment, Marian one will bring together CTV digital out of home retail media, social and open web capabilities under a single AI driven platform.
Speaker Change: It is a fundamental change in how digital advertising should work.
Speaker Change: Instead of Siloed solutions Purion, one will provide advertisers with a seamless intelligent platform that optimizes campaigns across every major channel with billion won brands will benefit from greater economics, enabling every advertising dollar to be optimized for them.
Speaker Change: Maximum impact the platform will offer increased efficiency to eliminate execution friction and streamline processes.
Speaker Change: It's advanced AI, driven performance will automate optimization at scale in a smarter supply path when reached DSP and SSP with premium inventory.
Speaker Change: The failure on one platform will be gradually rolled out to our customers in the upcoming months.
Speaker Change: To fully capitalize on our new strategy and accelerate our transformation, we've strengthen our leadership team with some of the best talent in the ethic industry I'd like to welcome three exceptional leaders to our management team.
Speaker Change: Stephen Yeah, a Google veteran joined Us as our new Chief revenue officer to lead our advertising sells worldwide.
Speaker Change: Kenny low and X <unk>, an expert medic steps in as our chief product Officer.
Speaker Change: In Mena Guib, who was part of the leading team that architected the Samsung adds technologies.
Speaker Change: Next on the role of our Chief Technology Officer, Mena will lead all our technologies, including our advanced AI solutions infrastructures.
Speaker Change: Our exceptional management team of tier one leaders in the ethic industry is instrumental we believe it will expand our reach.
Speaker Change: Deepen customer relationships and unlock new growth opportunities.
Speaker Change: While preparing for this transformation, we continue to deliver strong performance on all of our three core growth engines.
Speaker Change: Digital out of home and CTV.
Speaker Change: Alongside our retail media as we continue to see adoption of our technologies with retailers.
Speaker Change: All of our growth engines have consistently outpaced the market.
Speaker Change: And we believe they will continue to be the drivers of our future success.
Speaker Change: In 'twenty 'twenty, four or digital out of home grew by 50% year over year far outpacing the 10% year over year market growth reported by E. Marketer. This reflects a programmatic innovation and Purion is the ability to drive higher performance than the industry.
Tree.
Speaker Change: Our CTV solutions grew by 30% year over year, surpassing the 23% year over year market growth our investments in advanced targeting and cross device solutions continue to drive this momentum as you recall, we expanded those capabilities with a new part.
Speaker Change: And the ship with Experian, which we announced during Q4.
Speaker Change: Retailers continue to adopt our solutions, our retail media grew by 62% year over year more than tripled the industry, 20% year over year growth.
Speaker Change: Each of these areas represent a high growth high value market integrating them into pelion, one gives us a unique competitive advantage positioning us to accelerate future growth.
Speaker Change: Today, we're introducing a new way of looking at our results by breaking them down into channels.
Speaker Change: We believe this provides greater transparency into the new Purion one structure.
Speaker Change: It reflects our evolution into a platform that delivers greater efficiency and value.
Speaker Change: By aligning our reporting with our strategic focus we enhanced visibility and foster a more meaningful conversation with our investors and customers.
Speaker Change: Now our CFO allowed to Barry will walk you through our financial results.
Barry: Thank you Todd and thank you all for joining us today.
Speaker Change: 2024 was a challenging year for period. Nevertheless, we ended the year, both profitable and with positive operating cash flow.
Speaker Change: In addition, we met the annual revised guidance that we provided in June 'twenty 'twenty four for revenue adjusted EBITDA and adjusted EBITDA to contribution ex Tac margin the strength of our balance sheet allows us to execute on our capital allocation priorities and growth plans, both organic and Nonorganic.
Speaker Change: As of December 31, 2024, we repurchased a total of $5 2 million shares for a total of $46 $9 million.
Speaker Change: As we enter 2025 under the Purion one strategy, we are unifying our technologies and brands into a singular cohesive ecosystem.
Speaker Change: As part of this change we have started streamlining our operations and optimizing costs through head count reductions during the first quarter of 2025. This will also allow us to strengthen our ability to attract and serve more customers.
Run more efficient sales and marketing operations maximize synergies across our entire organization and leverage a unified and connected data platform to drive smarter decision, making and higher margins. We expect the sufficiency measures to continue to have positive impact on our profit margins through 'twenty, 'twenty, five and going into <unk>.
Speaker Change: 26, moving to our financial results for.
Speaker Change: For the full year revenue amounted to $498 $3 million, a 33% decrease year over year.
Speaker Change: This is mainly related to the decrease in search revenue and the weakness in our open web video and standard at four months. However, the decline in revenue was partially offset by continued strong performance of our growth engines.
Speaker Change: Adjusted EBITDA was $50 $9 million, resulting in a 10% adjusted EBITDA margin and a 24% ex Tac margin.
Speaker Change: GAAP net income for the full year was $12.6 million, while non-GAAP net income was $64 million.
Speaker Change: During 2024, we generated cash flow from operating activities of $6 $9 million and adjusted free cash flow of $16 6 million as of December.
Speaker Change: Remember 31, 2024, net cash, including cash equivalents short term bank deposits and marketable securities were $373 3 million turning to our fourth quarter performance revenue was $129 $6 million compared with $234 $2 million in.
Speaker Change: The same period last year.
Speaker Change: Our adjusted EBITDA for the fourth quarter was $15 $5 million, resulting in a 12% adjusted EBITDA margin and a 28% ex Tac margin.
Speaker Change: GAAP net income for the fourth quarter was $4 9 million, while non-GAAP net income was $16 $1 million, resulting in a non-GAAP diluted earnings per share of 33 since our cash flow from operating activities remain positive generating $4 3 million advertising solutions.
Speaker Change: Revenue for the fourth quarter was $104 $1 million down 13% year over year, representing 80% of total revenue. This decrease was expected due to the declining open with video and standard AD formats as advertisers are shifting their budgets towards social video and higher end solutions.
Speaker Change: This decline was partially offset by the continuous momentum from our core growth engines, CTV and digital out of home channels and our retail vertical digital out of home increased by 57% year over year in the fourth quarter on a pro forma basis, representing 27% of advertising solutions revenue.
Speaker Change: For the full year digital out of home increased by 50% and represented 21% of advertising solutions revenue, our CTV business increased by 10% year over year in the fourth quarter, representing 15% of advertising solutions revenue versus 12% last year for the full year.
Speaker Change: <unk> increased by 30%, representing 13% of advertising solutions versus 8% in 2023, our retail media business, a fast growing market vertical posted another strong quarter, primarily boosted by our digital out of home business.
Speaker Change: In the fourth quarter retail media revenue grew by 34% year over year to $27 million for the full year 2020 for retail media revenue delivered an impressive 62% growth in comparison to 2023, reaching $86 million I would like to highlight that all three groups.
Speaker Change: Engines outpace the market growth in 2024, according to Emarketer digital out of home AD spending in the U S grew by 10% year over year compared with experienced 50% growth CTV grew by 23% year over year compared with parents, 30% growth and retail media grew by 20%.
Speaker Change: Year over year compares with variance, 62% growth turning to our search advertising revenue for the fourth quarter totaled $25 $5 million accounting for 20% of our total revenue as we previously discussed we did not renew our contract Microsoft being that ended on December 31 2024.
Speaker Change: Sure yet in 2025, there is a tail period in which we expect to generate revenue.
Speaker Change: Overall, our search advertising is expected to remain stable representing about 20% of our total revenue in the fourth quarter. The contribution excluding traffic acquisition costs margin was 42% compared with 39% in the fourth quarter of 2023 on an annual basis contribution ex Tac margin.
Speaker Change: It was 43% compared with 42% in 2023.
Speaker Change: This is primarily due to the changes in our product mix focusing on more profitable solutions adjusted EBITDA for the fourth quarter was $15 $5 million or 12% of revenue and 28% of contribution ex tuck. This compares to $53 9 million or 23%.
Speaker Change: 59%, respectively in the fourth quarter of 2023.
For the full year, adjusted EBITDA totaled $50 $9 million or 10% of revenue and 24% of contribution ex Tac.
Speaker Change: This compares to $169 $1 million or 23% and 55% respectively. In 2023 during the second half of 'twenty 'twenty, four we implemented cost reductions and efficiency measures.
Speaker Change: This helped us moderate the year over year decrease in adjusted EBITDA that resulted from the business declined in the first half of the year on a GAAP basis, our fourth quarter net income was $4 9 million or 11 cents per diluted share versus a $39 4 million in Q4 of 2023 or <unk> 78.
Speaker Change: <unk> per diluted share.
Speaker Change: On a non-GAAP basis, net income was $16 1 million or 33 cents per diluted share versus $52 $9 million in Q4 of 2023 or $1.04 per diluted share.
Speaker Change: For the full year GAAP net income was $12 $6 million or 25 cents per diluted share versus $117 $4 million in 2023 or $2.34 per diluted share.
Speaker Change: non-GAAP net income was $64 million or $1.27 per diluted share versus $167 4 million or $3.33 per diluted share in 2023.
Speaker Change: During the fourth quarter of 'twenty 'twenty, four we generated $4 $3 million in both cash from operations and adjusted free cash flow.
Speaker Change: On a full year basis, we generated $6 $9 million in cash from operations and $16 $6 million in adjusted free cash flow. This.
Speaker Change: This gap in 2024 between adjusted EBITDA and adjusted free cash flow is attributed to the year over year change in the working capital related to our business with Microsoft Bing and the post acquisition investment in Hive six working capital.
For 2025, we expect our cash flow conversion from EBITDA to resemble best performance patterns. We expect to continue our decade long track record of generating positive cash flow from operations and adjusted free cash flow.
Speaker Change: In the fourth quarter, we continue with our share buyback program and repurchased another one 6 million shares for a total of $13 $4 million.
Speaker Change: To date, we spent $46 $9 million repurchasing shares against our total authorization of $75 million.
Speaker Change: As of December 31, 2024, we had on our balance sheet $373 $3 million in cash cash equivalents short term bank deposits and marketable securities.
Speaker Change: Entering fiscal year, 2025, and given our strong financial position, we are confident in our ability to execute our capital allocation strategy balancing between share repurchases organic investments and selective acquisitions that complement our growth strategy.
Speaker Change: Looking ahead towards 2025, we are providing our full year financial guidance and we are introducing our core key performance indicators.
These indicators provide a more accurate and helpful way to assess the strength of our business.
Speaker Change: As a result going forward, we will begin sharing our revenue breakdown by advertising channels digital out of home CTV web and search.
Speaker Change: <unk> 25 will be a transformative and exciting year for us at period, one in which we are focusing on solutions that are more profitable and better align with our mission to make digital advertising more effective for our customers and in turn make our business more efficient.
Speaker Change: For the full year 2025, we expect to generate revenue of $400 million to $420 million adjusted EBITDA of $40 million to $42 million.
Speaker Change: And adjusted EBITDA contribution ex Tac margin of 22% to summarize we ended 2024 on a positive note and we are excited for what's to come for failure in 2025.
Speaker Change: With that I will now pass it back to the operator for the Q&A session. Thank you.
Speaker Change: If you wish to ask a question that we ask that you. Please use the raise hand function at the bottom of your screen or if you have dialed in please press star nine.
Speaker Change: Our first question comes from Andrew <unk> with Raymond James Andrea Please on mute your line and ask a question.
Speaker Change: Great. Thank you for taking my questions I appreciate the new disclosure format and wanted to talk quickly about the open web business, so things pretty tough there right now and looking like it might continue into 2025 based on some of the shifts that I've talked about but in your estimation how much of that is addressable via the Perry on one rework that youre working on.
Speaker Change: And how much is down to just tough conditions in the space overall.
Speaker Change: Thank you for the question.
Speaker Change: You're absolutely right.
Speaker Change: <unk> web is an industry that is a channel is not is going to grow.
Speaker Change: But we do believe that for us within one platform is we're onboarding new advertisers to use our platform for all the channels. We do think that we time, our open web will will start to strengthen again.
Speaker Change: So we are optimistic on that but we're also putting a lot of focus on CTV and out of home.
Speaker Change: Of course, you have the the growth areas appreciate that and then really quickly if you could maybe give us a little sense of the Perry on one re orgs effect on 2025 outlook I guess, what kind of has to still be done behind the scenes and how much is figured into the guide in terms of incremental cost for any remaining work to be done or potential top up.
Speaker Change: Disruption is as clients get moved over thank you.
Speaker Change: Sure. So then thank you for the question. So first of all I said.
Speaker Change: Regarding the paying one strategy.
Speaker Change: First of all as far as this change we already are.
Speaker Change: Some are some measure in a hole in the first quarter was 25 and <unk>.
Speaker Change: Boeing took some head count reductions and.
Speaker Change: I believe that going into the future.
Speaker Change: Ability of unified everything together, let's say it will help us to run.
Speaker Change: Much more efficient sales and marketing.
Speaker Change: The operations.
Speaker Change: By having the platform within the agency they only have access to all of our offering.
And it will be much more efficient.
Speaker Change: In our surf Beach, and they will have all of the everything in place to be able to increase the budget in my desk.
Speaker Change: To allow us to be much more efficient in our efforts. In addition to that we already took into consideration when he started the guidance.
Speaker Change: Some of those.
Speaker Change: Some of those initiatives inside.
Speaker Change: Mostly around the.
Speaker Change: Operational efficiency and of course, the ability to leverage our leverage all of the data.
Speaker Change: And two to enjoy from our.
Speaker Change: Improved margins.
Speaker Change: Into the 220 phone.
Speaker Change: Having said this we.
Speaker Change: Do expect that the full impact of this change will actually be reflected in slide 26.
Speaker Change: But some of them disability scores inflicted in 2025, mostly the.
Speaker Change: Second earlier.
Speaker Change: Our next question comes from Jason <unk> with Oppenheimer. Please on mute your line and ask your question.
Speaker Change: Yes.
Speaker Change: Jason Please hit Star six on mute your line.
Speaker Change: Okay can you hear me now yes.
Speaker Change: Okay, Great Hey, so two questions like you bought or on Purion one.
Speaker Change: One I guess is it when you think about making a shift or does it allow you once you're done to kind of.
Speaker Change: Let's talk about how you're planning to use automation to actually improve the gross margins of kind of the dollars that will move through Purion. One and then I guess, it's like you just talked about in your last answer you think theres going to be an efficiency on the sales and marketing. So is it you think both there is a long term benefit to gross margin.
Speaker Change: <unk> an efficiency of executing the campaign using automation on top of that it improves the go to market because the tools will be with your customers and so you won't have to spend as much on sales and marketing and then maybe tie that back to how much of a slowdown in open web will you proactively slowing.
Speaker Change: Because the cost of running these campaigns wasn't productive as opposed to the market caused the slowdown in that spend thank you.
Speaker Change: Yes.
Speaker Change: Three questions there. Thank you.
Speaker Change: Thanks.
Speaker Change: So let's start with automation. So we are absolutely focusing on a lot of automation and AI driven.
Speaker Change: One autonation too.
Speaker Change: Reduce the level of manual work that we do today.
Speaker Change: So as we scale, we do see better efficiency. So that's that's that's a core factor of this or the organization how do we get more work.
Speaker Change: With less manual work.
Speaker Change: Let's say it goes adding hand, with our sales and marketing.
Speaker Change: So currently when we're getting.
Speaker Change: New campaigns, it's a lot of manual work and we're shifting that towards automation. This is an ongoing work we've started that.
Speaker Change: Six or seven months ago, and we're just in the middle of the process, but we do expect to become more and more efficient.
Speaker Change: As to marketing.
Speaker Change: We had five different brands up until now now we only have one.
Speaker Change: So the marketing dollars are now focused on only one brand, which should give us for the same money should give us five tons more efficiency on our marketing dollars toward the old brand.
Speaker Change: As for the web.
Speaker Change: So you've asked it I think you're absolutely right.
Speaker Change: We've when we look at this new organization, we realize a lot of things we have are still exist since 1999.
Speaker Change: A lot of things are still kind of legacy with old technology.
Speaker Change: So some of the things we we needed to figure out are we going to continue to do those with all technology that are not it's not really relevant or the future.
Speaker Change: Or rebuild that or just let it go.
Speaker Change: We've decided to on some things that are with lower margins and that needed re factoring to the technology to just let them go.
Speaker Change: And this is why you actually see.
Speaker Change: Lowered guidance and it was.
Speaker Change: We previously thought of did it because we wanted to focus on the high growth parts.
Speaker Change: And we didn't want to be invest in all technology that wasn't in the future.
Speaker Change: And and we only want to focus on high margin products.
Speaker Change: And this is why.
Speaker Change: Everything is very alive within.
Speaker Change: One platform the new Super her.
Speaker Change: Talented executives that we brought onboard and even the guidance, which is super focus.
Speaker Change: On the strategic parts and the high margin parts.
Speaker Change: I hope that answer the question.
Speaker Change: Yeah. That's good color. Thank you. Thank you.
Speaker Change: Our next question comes from Eric Martinez Z from Lake Street. Please on mute your line and ask a question.
Speaker Change: Yes, the CTV growth for the year was up 30%, but it did slowed to a 10% growth rate in Q4, just wondering what sort of growth rates you baked in for 2025.
Speaker Change: So thank.
Speaker Change: Thank you.
Speaker Change: So regarding the city, New York or efficacy CTV Q4 was 10%.
Speaker Change: We actually saw in Q4, some biologics also to the out of home under the anyway.
Speaker Change: So some of those dollars in Q4 were actually shifted.
Speaker Change: Out of home.
Speaker Change: No.
Speaker Change: And I think that as you mentioned the overall unit performance of our CTV.
Speaker Change: And clearly outperformed the market.
Speaker Change: And if we're looking at 25.
Speaker Change: We believe that also in 25 will be.
Speaker Change: We'll be bidding at least beating the market growth for our Pacific Islands.
Speaker Change: Yes, okay.
Speaker Change: We do expect to continue to meet beat the market on CTV.
Speaker Change: Okay.
Speaker Change: Then your.
Speaker Change: I missed it but you commented on the translation of adjusted EBITDA.
Speaker Change: So that the midpoint was about 41 million of adjusted EBITDA, what does that translate into for free cash flow.
Speaker Change: Sure.
Speaker Change: Excellent.
Speaker Change: So even though our EBITDA this year is lower than 2024, when our cash, though we do expect it.
Speaker Change: To be.
Speaker Change: Much higher than 2024 and that you can give you a little color is.
Speaker Change: Please move forward.
Speaker Change: One time gaps that happens.
Speaker Change: Mostly as a result of the year over year change in the working capital related to our search activity.
Speaker Change: And of course building the.
Speaker Change: The working capital for.
Speaker Change: For high spec following.
Speaker Change: The acquisition.
Speaker Change: In 2025, we are excited with our.
Speaker Change: Cash flow conversion from the EBITDA will be would be best to do the normal a rate as we see.
Speaker Change: Before 2024.
Speaker Change: Meaning that the adjusted free cash flow and the EBITDA will be very close to each other.
Speaker Change: Okay. Thank you for taking my questions.
Speaker Change: Thank you Bill so cash cash flow wise.
Speaker Change: Should be better year.
Speaker Change: In 2024.
Laura Martin: Our next question comes from Laura Martin with Needham and payer, please amit to align and ask your question.
Speaker Change: Hey, Joe loved the new disclosures agree with Andrew on that.
So I wanted to start with retail media vertical so up 34% when I think of retail media tell I think CTV only can you confirm with the mix of the reach of our media vertical is and then secondly, a lot of people are your competitors are saying that opens up new total addressable market because you can attract.
Speaker Change: Smbs to retail media can you talk about whether you are getting new clients and retail media and then third specifically related to reach on media are there other verticals like this one.
Speaker Change: That we.
Speaker Change: We should be thinking about.
Speaker Change: They are becoming as large as retail media vertical that you breakout.
Speaker Change: Yes, that's true it's great to hear.
Speaker Change: And thanks for the question.
Speaker Change: So.
Speaker Change: Retail media is really a way of measuring how much.
Speaker Change: Retailers are adopting our technologies and you're absolutely right CTV was the engine that started it all with us.
Speaker Change: It turns out a lot of our retailers, we were able to ship them into more and more solutions among them wave, which is our audio is still small but it is.
Speaker Change: He is getting there.
Speaker Change: Absolutely asphalt so our retail media.
Speaker Change: Clay plays a lot into physical stores I don't know few diagnosis, but.
Speaker Change: Physical stores are still represents roughly I think 85%.
Speaker Change: Acquisitions versus online.
Speaker Change: These four grocery so our platform and our activity is going to be focusing a lot on how do we drive people back to grocery stores physical grocery stores to all our solutions and that might be.
Speaker Change: No.
Speaker Change: Out of home CTV web audio the entire thing.
Speaker Change: And you're absolutely right Smbs are absolutely on the table.
Speaker Change: Now that we have a platform we're working on creating that.
Speaker Change: And the second phase two also smbs.
Speaker Change: I'll start with since we have Stephen yet, which comes with 25 years of experience with big agencies retailers.
Speaker Change: Tier one brands, we're going to start with that but smbs are definitely on our roadmap maybe not for 2025, but for going forward absolutely is something on our radar.
Speaker Change: Does that answer.
Speaker Change: It's fantastic My other question is on the agenda today are large language sounds like youre integrating.
Speaker Change: Not only automating, but also use it in the large languished models like you used to be using open AI because of your close relationship with Microsoft but Kevin.
Speaker Change: Give us the breakup given the divorce. My question is are you using different large clients, which bottles as the backbone for Perry on one are using multiple lines are you still using the open AI back.
Speaker Change: Resi English model can you just talk about what's happening on the back of the arm.
Speaker Change: Perry on one another and your generative usage.
Speaker Change: Yes, absolutely.
Speaker Change: It's an excellent question, so even though Microsoft.
Speaker Change: We're in good terms, so we know there will be.
Speaker Change: Is there and we didn't ditch open AI, but we do experiments more and more with the Google capabilities and now our our lab are actually looking at the.
Speaker Change: Deep seek.
Speaker Change: Randoms just to see their capabilities, obviously, there are way cheaper so a lot more efficient.
Speaker Change: It's a bit early days for that.
Speaker Change: With them.
Speaker Change: We're working with we're testing all the all the infrastructure is out there to make sure that we have the right one.
Speaker Change: With the right structuring cost luxury obviously those things are expensive.
Speaker Change: Okay and just my understanding is let's say you move to deep stake, which is much less expensive.
Speaker Change: Would you stay on more than one or once you build on deep sea or use it.
Speaker Change: There is a pretty high do you have to sort of stay with whichever one you build your capabilities.
Speaker Change: No. So everything we do stays on.
Speaker Change: We might see.
Speaker Change: So deep sea, even open source, so we might take.
Speaker Change: But that but anything stays on our environment.
Speaker Change: <unk> is an open source it stays in our environment.
Speaker Change: Maybe we want to use there are different versions or their updates.
Speaker Change: We won't build anything that has a high cost of switching.
Speaker Change: Okay. That's super helpful. Okay, great. Thanks, very much and let love any discussion. Thank you.
Speaker Change: Our last question comes from Jeff Martin with Roth Capital. Please on mute your line and ask your question.
Jeff Martin: Thanks, Good evening guys.
Jeff Martin: Wanted to drill down a little more on open web it's up 46% of advertising solutions revenue in the fourth quarter.
Speaker Change: With you are expecting that to kind of level off and grow at some point, what what sort of things internally are you doing to facilitate that inflection and could you pinpoint when in 2025, you anticipate that inflection.
Jeff Martin: Okay.
Jeff Martin: So hum on the west part of the open web channel.
Speaker Change: We don't you don't see.
The big change in 2025.
Speaker Change: I think the major wins that we're aiming for is out of home and CTV and that's also if we can increase web then.
Speaker Change: We would absolutely love that but the major focus is on avoids them solutions open web is pretty crowded.
Speaker Change: So we're focusing on more advanced solutions for CTV, Kalydeco and all across the board for retail media.
Speaker Change: So that's really the focus but again since we're agnostic platform whatever the client wants and that's what we're going to deliver what is pushing for a specific channel.
Speaker Change: But that's how we've modeled 2025.
Speaker Change: Great and then one more if I could on on the capital allocation as we head into further into 2025 and thinking beyond that at the same time.
Speaker Change: How are you thinking about your acquisition strategy relative to the companies.
Speaker Change: <unk> focus on Paragon, one getting that in place starting to see the benefit from that maybe help us understand how you're thinking about.
Speaker Change: Potential acquisitions relative to the pay online strategy.
Speaker Change: So that's a good question.
Speaker Change: Within Purion one we obviously, we took a lot of effort to consolidate everything all the business units all the brands and all the technologies.
Speaker Change: We can Hudson tend to break that again.
Speaker Change: So whatever we're going to buy.
Speaker Change: TS has to be has to fit within this platform and additional features to those customers.
Speaker Change: So it's built in edge and extremely synergetic solution.
Speaker Change: We will never again.
Speaker Change: By companies that are going to be stand alone.
Speaker Change: Yes.
Speaker Change: So that's how we're thinking about it but to be honest, we're now mainly focusing on our organic.
Speaker Change: Growth.
Speaker Change: Making sure this transition.
Speaker Change: It works well, we just added.
Speaker Change: To be amazing executives.
Speaker Change: To make sure that this transition goes well.
Speaker Change: Unification transition.
Speaker Change: So we have a lot on our plate, but we still look at it as a great companies and as I said whenever we're going to find something it has to be part of this one platform.
Speaker Change: Tvs sedan.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: This concludes the Q&A session I will now hand, it back to Tal Jacobson and cheaper he for closing remarks.
Tal Jacobson: Thank you for joining us today.
Speaker Change: We're excited about the future and we hope to see you again next time. Thank you. Thank you.