20
May 2024
Nexxen International
Ltd
("Nexxen" or
the "Company")
Nexxen Reports Results for
the First Quarter Ended March 31, 2024
Generated record Q1
programmatic revenue, 34% year-over-year Adjusted EBITDA growth,
and $37.7 million net cash from operating
activities
Reaffirming full year 2024
Contribution ex-TAC and Adjusted EBITDA guidance
Completed $20 million
Ordinary share repurchase program and launched additional $50
million program
Strengthened balance sheet
through repayment of outstanding $100 million long-term
debt
Nexxen International
Ltd. (AIM/NASDAQ: NEXN) ("Nexxen" or the "Company"),
a global, unified advertising technology platform
with deep expertise in video and Connected TV
("CTV"), announced today its financial
results for the first quarter ended March 31, 2024.
Financial
Summary
·
Contribution
ex-TAC: Generated Contribution
ex-TAC of $69.7 million in Q1 2024, reflecting a 4% organic
increase from $66.9 million in Q1 2023. Contribution ex-TAC growth
was driven by strength in programmatic revenue, display, mobile
video, audio, data products, and PMPs, partially offset by a
decline in CTV revenue.
·
Programmatic
Revenue: Programmatic revenue was
$65.6 million in Q1 2024, reflecting a 5% organic increase from
$62.5 million in Q1 2023, as well as a Q1 record. Programmatic
revenue growth was driven by year-over-year increases in
programmatic display, and mobile and desktop video
revenue.
·
CTV
Revenue: CTV revenue was $18.8
million in Q1 2024, reflecting an 11% decrease from $21.3 million
in Q1 2023. CTV revenue in Q1 2024 remained impacted by reduced CTV
advertising activity from some of Nexxen's largest small and
mid-sized agency customers, who continued to opt for the Company's
lower-cost programmatic display and mobile and desktop video
solutions. The Company, however, has observed sequential CTV
revenue growth to this point in Q2 2024 from the same point in Q1
2024, driven by improving market conditions and its partnership
with Alphonso Inc. and LG Electronics, Inc. beginning to
accelerate.
·
CTV and
Programmatic Revenue Percentages: CTV revenue in Q1 2024 represented 29% of programmatic
revenue, compared to 34% in Q1 2023. Programmatic revenue increased
to 88% of revenue in Q1 2024 compared to 87% in Q1 2023.
·
Adjusted
EBITDA: Generated Adjusted EBITDA of
$11.9 million in Q1 2024, a 34% increase from $8.9 million in Q1
2023.
·
Adjusted EBITDA
Margins: Achieved a 17% Adjusted
EBITDA Margin on a Contribution ex-TAC basis, and 16% on a revenue
basis, in Q1 2024, compared to 13% on a Contribution ex-TAC basis,
and 12% on a revenue basis in Q1 2023.
·
Video
Revenue: Video revenue continued to
represent a majority of the Company's programmatic revenue at 66%
in Q1 2024 compared to 75% in Q1 2023. Despite the year-over-year
decrease, driven by a combination of increased programmatic
display, reduced CTV, and increased programmatic revenue, the
Company believes its video revenue percentage remains above the
industry average and that it is positioned to drive long-term video
revenue growth.
·
Liquidity
Resources: As of March 31, 2024, the
Company had net cash of $144.9 million, consisting of cash and cash
equivalents of $244.9 million, offset by approximately $100.0
million in principal long-term debt, as well as $80 million undrawn
on its revolving credit facility. On April 9, 2024, the Company
fully repaid its approximately $100 million outstanding principal
long-term debt balance which expanded the undrawn amount on its
revolving credit facility from $80 million to $90 million. The
Company intends to prioritize capital allocation on share
repurchases, strategic internal growth and innovation investments
and initiatives, and ongoing business needs.
"In Q1 2024, we completed our
rebrand, enhanced our data suite with premium on-the-go streaming
data, and expanded our TV partnerships, now boasting strong
relationships with all the world's major CTV OEMs. Positioned as a
go-to strategic partner at the forefront of the TV and video AdTech
ecosystems, Nexxen is poised to capitalize on a growing opportunity
in an improving market," said Ofer Druker, CEO of Nexxen. "We also
recently introduced our innovative Nexxen Data Platform, enabling
better data monetization, forged exciting new partnerships with
industry leaders, and boosted spending and product adoption among
our largest clients. These achievements, combined with our
visibility into the remainder of the year, enable us to confidently
reaffirm our full year
guidance."
Operational Highlights
·
Completed rebrand
to Nexxen, enabling the Company to drive large multi-solution
end-to-end partnerships with the industry's major players
o Changed the Company's parent name to Nexxen International Ltd.
and its stock tickers from "TRMR" to "NEXN" in January
2024.
o The
rebranding has enhanced the sales team's ability to seamlessly
package multiple solutions for customers and prospects and driven
greater industry recognition.
·
Expanded CTV
partnerships, resulting in Nexxen having strong relationships with
all the world's major CTV OEMs, and enhanced TV Intelligence with
access to premium on-the-go streaming data via exclusive PeerLogix
partnership
o Reached an agreement, and launched a three-year strategic
partnership with Alphonso Inc. and LG Electronics, Inc. The
agreement included a cash prepayment and, through the partnership,
advertisers transacting programmatically through Nexxen's platform
gained access to a portion of LG's premium CTV inventory. Nexxen is
also providing Alphonso the rights to utilize the Company's
discovery and segmentation tools.
o Nexxen recently partnered with Roku, the number one TV
streaming platform in the U.S. by hours streamed, further expanding
the Company's reach and relationships in the CTV and streaming
space. Nexxen has directly integrated with Roku, providing its
customers access to premium supply in the Roku Channel.
o Expanded strategic partnership with TCL FFALCON ("TCL") beyond
access to CTV and OTT supply in the TCL Channel, to also include
exclusively selling TCL's native display inventory as a preferred
supply partner.
o Entered an exclusive partnership with PeerLogix, bolstering
the Company's TV Intelligence solution with premium on-the-go
streaming viewership data critical to enabling a holistic view of
audiences for advertisers across the fragmented digital media and
streaming landscape.
·
Generated greater
international TV Intelligence momentum, growing adoption in the
U.K., and launching in Australia, with further major international
market expansion expected later in 2024
o The
Company generated increased TV Intelligence adoption in the U.K.
during Q1 2024 after launching the solution in Q4 2023.
o Recently launched TV Intelligence in Australia which is
generating strong initial demand. The Company believes the launch
further differentiates its platform with Australian customers given
Nexxen's strong and growing reach in that market.
o Nexxen plans to launch TV Intelligence in additional major
markets, including Canada, later in 2024, enhancing and expanding
the Company's international CTV growth
opportunity.
o Nexxen's international TV Intelligence momentum is being
supported by VIDAA's growing global reach. VIDAA, the primary CTV
operating system for Hisense (and a subsidiary of Hisense),
surpassed a reach of over 25 million CTVs in late 2023, and was the
fastest growing major smart TV operating system globally in 2023,
after growing shipments 23%. Nexxen has global ACR data exclusivity
on VIDAA-powered smart TVs until at least the end of
2026.
·
Enhanced the
strength, versatility, and usability of the Company's suite of data
offerings through the launch of Nexxen Data Platform, enabling
robust data monetization opportunities
o Recently launched Nexxen Data Platform, building and expanding
upon Nexxen's proprietary data management platform ("DMP"), Nexxen
Discovery and TV Intelligence assets.
o The
platform brings together data from several sources including
first-party data from Nexxen clients, exclusive Nexxen data assets
such as global ACR data from VIDAA and streaming data from
PeerLogix, and multiple third-party sources, in a secure and
privacy compliant manner.
o Customers can leverage Nexxen Data Platform to onboard and
enrich their own first-party data through Nexxen's suite of data
solutions, enabling better planning, more targeted campaigns, and
expanded reach to seamlessly activate in campaigns.
o The
launch positions Nexxen to monetize its suite of data solutions
more effectively through licensing, media network, and reseller
agreements, each of which can drive incremental SaaS revenue,
reflecting significant long-term high-margin growth
opportunities.
o The
Company is also launching its proprietary Nexxen unified identity
graph solution. The solution will be accessible through Nexxen Data
Platform and will combine and deduplicate multiple identifiers into
a merged graph. This will enable increased scale, frequency
capping, and better targeting and attribution at the person and
household level, while serving as a centerpiece for helping
customers address changes in privacy and identity, including cookie
deprecation.
o Nexxen Data Platform has already been adopted by key partners,
including Stagwell, and the Company is currently in discussions
with several other potential partners regarding usage of the
platform and the licensing of Nexxen's data.
·
Entered into
strategic partnership with Stagwell
o In
an important partnership for Nexxen, brand clients of the Stagwell
Marketing Cloud will be able to leverage Nexxen Data Platform,
specifically Nexxen's proprietary identity graph and Stagwell's
clean room capabilities, to gain deeper insights into audiences,
enhance engagement, and effectively maximize campaign results
through compliant, unified, and comprehensive views of audiences
across touchpoints and devices.
o Through the partnership, audiences will be securely activated
in campaigns through Nexxen's end-to-end platform.
·
Added a
substantial number of new buy- and sell-side customers in Q1 2024,
while generating increased spending and product adoption amongst
some of the Company's largest clients
o Added 88 new actively-spending first-time advertiser customers
to Nexxen DSP in Q1 2024 across several industry verticals
including travel and transportation, food and beverage, finance,
and government, as well as others. This figure included 7 new
enterprise self-service advertiser customers and two new
independent agencies leveraging the Company in a self-service
capacity.
o Nexxen SSP added 54 new supply partners, including 47 in the
U.S., across several verticals and formats including CTV, mobile
app and gaming, display, and online video.
Share Repurchase Program
Updates
Completed $20 Million Ordinary Share Repurchase
Program
o Nexxen repurchased 6,225,844 Ordinary shares during Q1 2024 at
an average price of 203.36 pence, reflecting a total investment of
£12.7 million, or $16.1 million.
o The
Company announced the completion of its $20 million Ordinary
Share repurchase program
on April 25, 2024. Through the $20 million Ordinary share
repurchase program, the Company repurchased 7,641,797 Ordinary
Shares at an average price of 206.28 pence.
o From
March 1, 2022 through April 25, 2024, the Company invested
approximately $115 million in 27,054,443 Ordinary shares,
repurchasing approximately 17.5% of shares outstanding,
underscoring Nexxen's commitment to shareholder friendly capital
allocation and maintaining a prudent balance sheet.
Launched New $50 Million Ordinary Share Repurchase
Program
o The
Company launched a new $50 million Ordinary Share repurchase
program on May 7, 2024, following approval from its Lenders which
will continue until the earlier of November 1, 2024 and the date
the program is completed. The program does not obligate Nexxen to
repurchase any particular amount of Ordinary Shares and the program
may be suspended, modified, or discontinued at any time at the
Company's discretion, subject to applicable
law.
o Upon
completion of the current share repurchase program, the Company's
Board of Directors intends to evaluate the potential for an
additional share repurchase program, subject to then current market
conditions and necessary approvals.
Financial
Guidance
o Nexxen reaffirms its previous financial guidance for the full
year 2024:
· Full
year 2024 Contribution ex-TAC in a range of approximately $340
- $345 million
· Full
year 2024 Adjusted EBITDA of approximately $100 million
· Full
year 2024 programmatic revenue to reflect approximately 90% of full
year 2024 revenue
o Although spending by select small- and mid-sized agency
customers remained cautious in Q1 2024, management has observed a
gradual easing of macroeconomic headwinds and uncertainty, and an
increase in budgets and spending thus far in Q2 2024 and expects
advertising demand to increase throughout the remainder of the
year, particularly in H2 2024 around events such as the 2024 U.S.
election cycle.
o Management is encouraged by macroeconomic improvement driving
increased budgets among its largest customers, as well as the
Company's success generating new partnerships with major industry
players and expanding its roster of customers which leverage
multiple self-service enterprise solutions and transact end-to-end
across Nexxen's platform.
o As a
result of the Company's differentiated and unique CTV and streaming
data partnerships and offerings, alongside improving market
conditions, and its partnership with Alphonso Inc. and LG
Electronics, Inc. beginning to scale, management now expects
sequential CTV revenue growth in Q2 2024 vs. Q1 2024 and maintains
confidence in achieving CTV revenue growth in full year 2024
compared to full year 2023, with acceleration expected in H2 2024.
Management also believes the launch of Nexxen Data Platform
strongly positions the Company to achieve data licensing revenue
growth in full year 2024 vs. full year 2023.
o Management continues to anticipate Adjusted EBITDA growth and
Adjusted EBITDA Margin expansion in full year 2024 compared to full
year 2023, amidst the expectation for increased Contribution
ex-TAC, as the Company's model provides
significant operating leverage, enabling most of the anticipated
increase in Contribution ex-TAC to translate to Adjusted
EBITDA.
First Quarter 2024 Financial
Highlights ($ in millions, except per share
amounts)
|
Three months ended March
31
|
|
|
|
|
|
IFRS highlights
|
|
|
|
Revenues
|
74.4
|
71.7
|
4%
|
|
Programmatic revenue
|
65.6
|
62.5
|
5%
|
|
Operating loss
|
(6.6)
|
(15.2)
|
57%
|
|
|
|
|
|
|
Net loss margin on a gross profit
basis
|
(14%)
|
(41%)
|
|
|
|
|
|
|
|
Total comprehensive loss
|
(7.3)
|
(17.3)
|
58%
|
|
Diluted loss per
share
|
(0.05)
|
(0.12)
|
61%
|
|
|
|
|
|
|
Non-IFRS highlights
|
|
|
|
Contribution ex-TAC
|
69.7
|
66.9
|
4%
|
|
|
|
|
|
|
Adjusted EBITDA
|
11.9
|
8.9
|
34%
|
|
Adjusted EBITDA Margin on a
Contribution ex-TAC basis
|
17%
|
13%
|
|
|
|
|
|
|
|
Non-IFRS net income
(loss)
|
1.2
|
(5.0)
|
123%
|
|
Non-IFRS diluted earnings (loss) per share
|
0.01
|
(0.03)
|
123%
|
|
|
|
|
|
|
|
First Quarter 2024 Financial
Results Webcast and Conference Call Details
· Nexxen
International First Quarter Ended March 31, 2024 Earnings
Webcast and Conference Call
· May
20, 2024, at 6:00 AM PT / 9:00 AM ET / 2:00 PM
BST
·
Webcast
Link: https://edge.media-server.com/mmc/p/kehztdpg
·
Participant
Dial-In Numbers:
o U.S.
/ Canada Participant Toll-Free Dial-In Number: (800)
715-9871
o U.K.
Participant Toll-Free Dial-In Number: +44 800 260 6466
o International Participant Toll-Free Dial-In Number: (646)
307-1963
o Conference ID: 3531937
Use of Non-IFRS Financial
Information
In addition to our IFRS results, we
review certain non-IFRS financial measures to help us evaluate our
business, measure our performance, identify trends affecting our
business, establish budgets, measure the effectiveness of
investments in our technology and development and sales and
marketing, and assess our operational efficiencies. These non-IFRS
measures include Contribution ex-TAC, Adjusted EBITDA, Adjusted
EBITDA Margin, Non-IFRS Net Income (Loss), and Non-IFRS Earnings
(Loss) per share, each of which is discussed below.
These non-IFRS financial measures
are not intended to be considered in isolation from, as substitutes
for, or as superior to, the corresponding financial measures
prepared in accordance with IFRS. You are encouraged to evaluate
these adjustments and review the reconciliation of these non-IFRS
financial measures to their most comparable IFRS measures, and the
reasons we consider them appropriate. It is important to note that
the particular items we exclude from, or include in, our non-IFRS
financial measures may differ from the items excluded from, or
included in, similar non-IFRS financial measures used by other
companies. See "Reconciliation of Revenue to Contribution ex-TAC,"
"Reconciliation of Total Comprehensive Loss to Adjusted EBITDA,"
and "Reconciliation of Net Loss to Non-IFRS Net Income (Loss),"
included as part of this press release.
o Contribution
ex-TAC: Contribution ex-TAC for
Nexxen is defined as gross profit plus depreciation and
amortization attributable to cost of revenues and cost of revenues
(exclusive of depreciation and amortization) minus the Performance
media cost ("traffic acquisition costs" or "TAC"). Performance
media cost represents the costs of purchases of impressions from
publishers on a cost-per-thousand impression basis in our non-core
Performance activities. Contribution ex-TAC is a supplemental
measure of our financial performance that is not required by, or
presented in accordance with, IFRS. Contribution ex-TAC should not
be considered as an alternative to gross profit as a measure of
financial performance. Contribution ex-TAC is a non-IFRS financial
measure and should not be viewed in isolation. We believe
Contribution ex-TAC is a useful measure in assessing the
performance of Nexxen, because it facilitates a consistent
comparison against our core business without considering the impact
of traffic acquisition costs related to revenue reported on a gross
basis.
o Adjusted
EBITDA: We define Adjusted EBITDA
for Nexxen as total comprehensive income (loss) for the period
adjusted for foreign currency translation differences for foreign
operations, financial expenses (income), net, tax expenses
(benefits), depreciation and amortization, and stock-based
compensation. Adjusted EBITDA is included in the press release
because it is a key metric used by management and our board of
directors to assess our financial performance. Adjusted EBITDA is
frequently used by analysts, investors, and other interested
parties to evaluate companies in our industry. Management believes
that Adjusted EBITDA is an appropriate measure of operating
performance because it eliminates the impact of expenses that do
not relate directly to the performance of the underlying
business.
o Adjusted EBITDA
Margin: We
define Adjusted EBITDA Margin as Adjusted EBITDA on a Contribution
ex-TAC basis.
o Non-IFRS Income (Loss) and
Non-IFRS Earnings (Loss) per Share:
We define non-IFRS earnings (loss) per share as
non-IFRS income (loss) divided by non-IFRS weighted-average shares
outstanding. Non-IFRS income (loss) is equal to net income (loss)
excluding stock-based compensation and amortization of acquired
intangible assets, and also considers the tax effects of Non-IFRS
adjustments. In periods in which we have non-IFRS income, non-IFRS
weighted-average shares outstanding used to calculate non-IFRS
earnings per share includes the impact of potentially dilutive
shares. Potentially dilutive shares consist of stock options,
restricted stock awards, restricted stock units, and performance
stock units, each computed using the treasury stock method. We
believe non-IFRS earnings (loss) per share is useful to investors
in evaluating our ongoing operational performance and our trends on
a per share basis, and also facilitates comparison of our financial
results on a per share basis with other companies, many of which
present a similar non-IFRS measure. However, a potential limitation
of our use of non-IFRS earnings (loss) per share is that other
companies may define non-IFRS earnings (loss) per share
differently, which may make comparison difficult. This measure may
also exclude expenses that may have a material impact on our
reported financial results. Non-IFRS earnings (loss) per share is a
performance measure and should not be used as a measure of
liquidity. Because of these limitations, we also consider the
comparable IFRS measure of net income.
We do not provide a reconciliation
of forward-looking non-IFRS financial metrics, because reconciling
information is not available without an unreasonable effort, such
as attempting to make assumptions that cannot reasonably be made on
a forward-looking basis to determine the corresponding IFRS
metric.
The information contained within
this announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 (as implemented into English law) ("MAR"). With the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
About Nexxen
Nexxen empowers advertisers,
agencies, publishers and broadcasters around the world to utilize
video and Connected TV in the ways that are most meaningful to
them. Comprised of a demand-side platform (DSP), supply-side
platform (SSP), ad server and data management platform (DMP),
Nexxen delivers a flexible and unified technology stack with
advanced and exclusive data at its core. Our robust capabilities
span discovery, planning, activation, measurement and optimization
- available individually or in combination - all designed to enable
our partners to reach their goals, no matter how far-reaching or
hyper niche they may be. For more information, visit
www.nexxen.com
Nexxen is headquartered in Israel
and maintains offices throughout the United States, Canada, Europe
and Asia-Pacific, and is traded on the London Stock Exchange (AIM:
NEXN) and NASDAQ (NEXN).
For
further information please contact:
Nexxen International Ltd.
Billy Eckert, Vice President of Investor Relations
ir@nexxen.com
Caroline Smith, Vice President of
Communications
csmith@nexxen.com
KCSA
(U.S. Investor Relations)
David Hanover, Investor Relations
nexxenir@kcsa.com
Vigo
Consulting (U.K. Financial PR & Investor
Relations)
Jeremy Garcia / Peter Jacob / Aisling Fitzgerald
Tel: +44 20 7390 0230 or nexxen@vigoconsulting.com
Cavendish Capital Markets Limited
Jonny Franklin-Adams / Charlie Beeson / George Dollemore (Corporate
Finance)
Tim Redfern / Harriet Ward (ECM)
Tel: +44 20 7220 0500
Forward Looking
Statements
This press release contains
forward-looking statements, including forward-looking statements
within the meaning of Section 27A of the United States Securities
Act of 1933, as amended, and Section 21E of the United States
Securities and Exchange Act of 1934, as amended.
Forward-looking statements are identified by words such as
"anticipates," "believes," "expects," "intends," "may," "can,"
"will," "estimates," and other similar expressions. However, these
words are not the only way Nexxen identifies forward-looking
statements. All statements contained in this press release that do
not relate to matters of historical fact should be considered
forward-looking statements, including without limitation statements
regarding anticipated financial results for full year 2024 and
beyond; anticipated benefits of Nexxen's strategic transactions and
commercial partnerships; anticipated features and benefits of
Nexxen's products and service offerings; Nexxen's positioning for
accelerated growth and continued future growth in both the U.S. and
international markets in 2024 and beyond; Nexxen's medium- to
long-term prospects; management's belief that Nexxen is
well-positioned to benefit from future industry growth trends and
Company-specific catalysts; the Company's expectations with respect
to Video revenue; the potential negative impact of ongoing
macroeconomic headwinds and uncertainty that have limited
advertising activity and the anticipation that these challenges
could continue to have an impact for the remainder of 2024 and
beyond; the Company's plans with respect to its cash reserves; its
continued focus in 2024 on expanding its base of end-to-end
customers, growing data licensing revenue and expanding its
streaming, TV, and agency partnerships to drive growth and
increased profitability; the expectation of launching its TV
Intelligence solution in additional major international markets in
2024, enhancing and expanding the Company's international CTV
growth opportunity; the anticipated benefits from the Company's
strategic partnership with Stagwell; the anticipated benefits from
the Company's investment in VIDAA and its enhanced strategic
relationship with Hisense; the anticipated benefits of the
rebranding of the Tremor group to Nexxen, and the Company's plans
with respect thereto, as well as any other statements related to
Nexxen's future financial results and operating performance. These
statements are neither promises nor guarantees but involve known
and unknown risks, uncertainties and other important factors that
may cause Nexxen's actual results, performance or achievements to
be materially different from its expectations expressed or implied
by the forward-looking statements, including, but not limited to,
the following: negative global economic conditions; global
conflicts and war, including the current terrorist attacks by
Hamas, and the war and hostilities between Israel and Hamas and
Israel and Hezbollah, and how those conditions may adversely impact
Nexxen's business, customers, and the markets in which Nexxen
competes; changes in industry trends; the risk that Nexxen will not
realize the anticipated benefits of its acquisition of Amobee and
strategic investment in VIDAA; and, other negative developments in
Nexxen's business or unfavourable legislative or regulatory
developments. Nexxen cautions you not to place undue reliance on
these forward-looking statements. For a more detailed discussion of
these factors, and other factors that could cause actual results to
vary materially, interested parties should review the risk factors
listed in the Company's most recent Annual Report on Form 20-F,
filed with the U.S. Securities and Exchange
Commission (www.sec.gov)
on March 6, 2024. Any forward-looking
statements made by Nexxen in this press release speak only as of
the date of this press release, and Nexxen does not intend to
update these forward-looking statements after the date of this
press release, except as required by law.
Nexxen, and the Nexxen logo are
trademarks of Nexxen International Ltd. in the
United States and other countries. All other trademarks are
the property of their respective owners. The use of the word
"partner" or "partnership" in this press release does not mean a
legal partner or legal partnership.
Reconciliation of Total Comprehensive Loss to Adjusted
EBITDA
|
Three months ended March
31
|
|
|
|
|
($
in thousands)
|
|
|
|
Total comprehensive loss
|
(7,286)
|
(17,289)
|
58%
|
Foreign currency translation
differences for foreign operation
|
412
|
(620)
|
|
Tax expenses (benefits)
|
(225)
|
3,461
|
|
Financial expenses (income),
net
|
545
|
(758)
|
|
Depreciation and
amortization
|
15,793
|
16,989
|
|
Stock-based compensation
|
2,634
|
7,074
|
|
Adjusted EBITDA
|
11,873
|
8,857
|
34%
|
Reconciliation of Revenue to Contribution
ex-TAC
|
Three months ended March
31
|
|
|
|
|
($
in thousands)
|
|
|
Revenues
|
74,432
|
71,737
|
4%
|
Cost of revenues (exclusive of
depreciation and amortization)
|
(14,538)
|
(16,097)
|
|
Depreciation and amortization
attributable to Cost of Revenues
|
(11,766)
|
(11,927)
|
|
Gross profit (IFRS)
|
48,128
|
43,713
|
10%
|
Depreciation and amortization
attributable to Cost of Revenues
|
11,766
|
11,927
|
|
Cost of revenues (exclusive of
depreciation and amortization)
|
14,538
|
16,097
|
|
Performance media cost
|
(4,750)
|
(4,881)
|
|
Contribution ex-TAC (Non-IFRS)
|
69,682
|
66,856
|
4%
|
|
|
|
|
Reconciliation of Net Loss to Non-IFRS Net Income
(Loss)
|
Three months ended March
31
|
|
|
|
|
($
in thousands)
|
|
|
Net
loss
|
(6,874)
|
(17,909)
|
62%
|
Amortization of acquired
intangibles
|
7,057
|
7,643
|
|
Stock-based compensation
expense
|
2,634
|
7,074
|
|
Tax effect of Non-IFRS
adjustments (1)
|
(1,645)
|
(1,820)
|
|
Non-IFRS income (loss)
|
1,172
|
(5,012)
|
123%
|
|
|
|
|
Weighted average shares
outstanding-diluted (in millions) (2)
|
144.5
|
143.4
|
|
|
|
|
|
Non-IFRS diluted earnings (loss) per share (in
USD)
|
0.01
|
(0.03)
|
123%
|
(1) Non-IFRS income (loss) includes
the estimated tax impact from the expense items reconciling between
net loss and non-IFRS income (loss)
(2) Non-IFRS earnings (loss) per
share is computed using the same weighted-average number of shares
that are used to compute IFRS earnings (loss) per share
CONDENSED CONSOLIDATED
INTERIM STATEMENTS OF FINANCIAL POSITION
(Unaudited)
|
|
|
|
March
31
|
|
December 31
|
|
|
|
|
2024
|
|
2023
|
|
|
|
|
USD
thousands
|
Assets
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
244,937
|
|
234,308
|
Trade receivables, net
|
|
|
|
155,509
|
|
201,973
|
Other receivables
|
|
|
|
8,788
|
|
8,293
|
Current tax assets
|
|
|
|
7,372
|
|
7,010
|
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS
|
|
|
|
416,606
|
|
451,584
|
|
|
|
|
|
|
|
Fixed assets, net
|
|
|
|
18,977
|
|
21,401
|
Right-of-use assets
|
|
|
|
31,244
|
|
31,900
|
Intangible assets, net
|
|
|
|
355,406
|
|
362,000
|
Deferred tax assets
|
|
|
|
14,218
|
|
12,393
|
Investment in shares
|
|
|
|
25,000
|
|
25,000
|
Other long-term assets
|
|
|
|
767
|
|
525
|
|
|
|
|
|
|
|
TOTAL NON-CURRENT ASSETS
|
|
|
|
445,612
|
|
453,219
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
|
862,218
|
|
904,803
|
|
|
|
|
|
|
|
Liabilities and shareholders'
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
|
Current maturities of lease
liabilities
|
|
|
|
12,295
|
|
12,106
|
Trade payables
|
|
|
|
148,764
|
|
183,296
|
Other payables
|
|
|
|
40,671
|
|
29,098
|
Bank loan
|
|
|
|
99,203
|
|
-
|
Current tax liabilities
|
|
|
|
6,367
|
|
4,937
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
|
|
|
307,300
|
|
229,437
|
|
|
|
|
|
|
|
Employee benefits
|
|
|
|
228
|
|
237
|
Long-term lease
liabilities
|
|
|
|
23,808
|
|
24,955
|
Long-term debt
|
|
|
|
-
|
|
99,072
|
Other long-term
liabilities
|
|
|
|
7,204
|
|
6,800
|
Deferred tax liabilities
|
|
|
|
657
|
|
754
|
|
|
|
|
|
|
|
TOTAL NON-CURRENT LIABILITIES
|
|
|
|
31,897
|
|
131,818
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
|
339,197
|
|
361,255
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY:
|
|
|
|
|
|
|
Share capital
|
|
|
|
402
|
|
417
|
Share premium
|
|
|
|
397,337
|
|
410,563
|
Other comprehensive loss
|
|
|
|
(2,853)
|
|
(2,441)
|
Retained earnings
|
|
|
|
128,135
|
|
135,009
|
|
|
|
|
|
|
|
TOTAL SHAREHOLDERS' EQUITY
|
|
|
|
523,021
|
|
543,548
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
862,218
|
|
904,803
|
CONDENSED CONSOLIDATED
INTERIM STATEMENTS OF OPERATION AND OTHER COMPREHENSIVE
LOSS
(Unaudited)
|
|
Three
months ended March 31
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
Revenues
|
|
74,432
|
|
71,737
|
|
|
|
|
|
Cost of Revenues (Exclusive of
depreciation and amortization shown separately below)
|
|
14,538
|
|
16,097
|
|
|
|
|
|
|
|
|
|
|
Research and development
expenses
|
|
12,381
|
|
13,247
|
Selling and marketing
expenses
|
|
27,134
|
|
28,574
|
General and administrative
expenses
|
|
11,140
|
|
12,036
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
Total operating costs
|
|
|
|
|
|
|
Operating loss
|
|
6,554
|
|
15,206
|
|
|
|
|
|
Financing income
|
|
(2,425)
|
|
(2,927)
|
Financing expenses
|
|
2,970
|
|
2,169
|
|
|
|
|
|
Financing expenses (income), net
|
|
545
|
|
(758)
|
|
|
|
|
|
|
|
|
|
|
Loss
before taxes on income
|
|
7,099
|
|
14,448
|
|
|
|
|
|
Tax expenses (benefits)
|
|
(225)
|
|
3,461
|
|
|
|
|
|
Loss for the period
|
|
6,874
|
|
17,909
|
|
|
|
|
|
Other comprehensive loss (income) items:
|
|
|
|
|
Foreign currency translation
differences for foreign operation
|
|
412
|
|
(620)
|
|
|
|
|
|
Total other comprehensive loss (income) for the
period
|
|
412
|
|
(620)
|
|
|
|
|
|
Total comprehensive loss for the period
|
|
7,286
|
|
17,289
|
|
|
|
|
|
Loss per share
|
|
|
|
|
Basic loss per share (in
USD)
|
|
0.05
|
|
0.12
|
Diluted loss per share (in
USD)
|
|
0.05
|
|
0.12
|
CONDENSED CONSOLIDATED
INTERIM STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
|
Share
capital
|
|
Share
premium
|
|
Other comprehensive income
(loss)
|
|
Retained
earnings
|
|
Total
|
|
USD
thousands
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2024
|
417
|
|
410,563
|
|
(2,441)
|
|
135,009
|
|
543,548
|
Total comprehensive loss for the period
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
-
|
|
-
|
|
-
|
|
(6,874)
|
|
(6,874)
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation
|
-
|
|
-
|
|
(412)
|
|
-
|
|
(412)
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the period
|
-
|
|
-
|
|
(412)
|
|
(6,874)
|
|
(7,286)
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners, recognized directly in
equity
|
|
|
|
|
|
|
|
|
|
Own shares acquired
|
(17)
|
|
(16,075)
|
|
-
|
|
-
|
|
(16,092)
|
Share based payments
|
-
|
|
2,660
|
|
-
|
|
-
|
|
2,660
|
Exercise of share options
|
2
|
|
189
|
|
-
|
|
-
|
|
191
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2024
|
402
|
|
397,337
|
|
(2,853)
|
|
128,135
|
|
523,021
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2023
|
413
|
|
400,507
|
|
(5,801)
|
|
156,496
|
|
551,615
|
Total comprehensive loss for the period
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
-
|
|
-
|
|
-
|
|
(17,909)
|
|
(17,909)
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation
|
-
|
|
-
|
|
620
|
|
-
|
|
620
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss) for the
period
|
-
|
|
-
|
|
620
|
|
(17,909)
|
|
(17,289)
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners, recognized directly in
equity
|
|
|
|
|
|
|
|
|
|
Own shares acquired
|
(7)
|
|
(8,741)
|
|
-
|
|
-
|
|
(8,748)
|
Share based payments
|
-
|
|
7,042
|
|
-
|
|
-
|
|
7,042
|
Exercise of share options
|
2
|
|
129
|
|
-
|
|
-
|
|
131
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2023
|
408
|
|
398,937
|
|
(5,181)
|
|
138,587
|
|
532,751
|
CONDENSED CONSOLIDATED
INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Three
months ended
March 31
|
|
|
2024
|
|
2023
|
|
|
USD
thousands
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
Loss for the period
|
|
(6,874)
|
|
(17,909)
|
Adjustments for:
|
|
|
|
|
Depreciation and
amortization
|
|
15,793
|
|
16,989
|
Net financing expense
(income)
|
|
430
|
|
(858)
|
Loss (gain) on leases
modification
|
|
(4)
|
|
-
|
Share-based compensation and
restricted shares
|
|
2,634
|
|
7,074
|
Tax expenses (benefits)
|
|
(225)
|
|
3,461
|
|
|
|
|
|
Change in trade and other
receivables
|
|
45,684
|
|
68,576
|
Change in trade and other
payables
|
|
(19,361)
|
|
(84,270)
|
Change in employee
benefits
|
|
(7)
|
|
2
|
Income taxes received
|
|
453
|
|
159
|
Income taxes paid
|
|
(433)
|
|
(2,034)
|
Interest received
|
|
1,961
|
|
2,883
|
Interest paid
|
|
(2,325)
|
|
(1,959)
|
|
|
|
|
|
Net cash provided by (used in)
operating activities
|
|
37,726
|
|
(7,886)
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
Change in pledged deposits,
net
|
|
(27)
|
|
634
|
Payments on finance lease
receivable
|
|
443
|
|
277
|
Acquisition of fixed
assets
|
|
(2,719)
|
|
(2,015)
|
Acquisition and capitalization of
intangible assets
|
|
(3,618)
|
|
(4,349)
|
Repayment of loan
|
|
27
|
|
-
|
|
|
|
|
|
Net cash used in investing
activities
|
|
(5,894)
|
|
(5,453)
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
Acquisition of own shares
|
|
(15,970)
|
|
(8,952)
|
Proceeds from exercise of share
options
|
|
191
|
|
131
|
Leases repayment
|
|
(4,027)
|
|
(4,504)
|
Net cash used in financing
activities
|
|
(19,806)
|
|
(13,325)
|
|
|
|
|
|
Net increase (decrease) in cash and
cash equivalents
|
|
12,026
|
|
(26,664)
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AS OF THE BEGINNING OF
PERIOD
|
|
234,308
|
|
217,500
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE FLUCTUATIONS ON CASH AND CASH
EQUIVALENTS
|
|
(1,397)
|
|
(349)
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AS OF THE END OF
PERIOD
|
|
244,937
|
|
190,487
|