Innovid Reports Q2 2024 Financial Results

Q2 2024 revenue increased 10% year-over-year to $38.0 million
Q2 2024 net loss improved year-over-year to $10.5 million and Adjusted EBITDA* increased 29% year-over-year to $5.9 million
Adjusted EBITDA margin increased to 15.5%, the eighth consecutive quarter of expansion
CTV impression volume from ad serving and personalization increased 21% year-over-year

Innovid Corp. (NYSE:CTV) (the "Company"), an independent software platform for the creation, delivery, measurement, and optimization of advertising across connected TV (CTV), linear TV, and digital, today announced financial results for the second quarter ended June 30, 2024.

“I am pleased to report Innovid delivered another quarter of double-digit, profitable revenue growth,” said Zvika Netter, Co-Founder and CEO. “Since the beginning of 2024, we have made momentous progress, including the launch of our strategic Harmony Initiative and new partnerships with leading players in the market. We continue to invest significantly in strategic innovation for the future of CTV, while also delivering Adjusted EBITDA margin expansion.”

Second Quarter 2024 Financial Summary

Revenue increased to $38.0 million, reflecting year-over-year growth of 10%, compared to $34.5 million for the same period in 2023.
Net loss was $10.5 million, compared to a net loss of $19.0 million for the same period in 2023, an $8.5 million improvement year-over-year.
Adjusted EBITDA* grew to $5.9 million, an increase of 29% year-over-year, compared to $4.5 million for the same period in 2023, representing a 15.5% Adjusted EBITDA margin.*
Operating cash flow was $1.2 million, compared to $0.6 million for the same period in 2023.
Free cash flow* use of cash was $1.3 million, compared to use of cash of $2.0 million for the same period in 2023, a $0.7 million improvement year-over-year.

Recent Business Highlights

Innovid launched Harmony Frequency, the first holistic frequency management solution for CTV and digital advertising, with Yahoo DSP as a launch partner.
Innovid announced today a collaboration with Nielsen with the intent to provide a seamless workflow solution and holistic view of the cross-media ads universe. The integration aims to bring Innovid’s ad serving infrastructure together with Nielsen ONE to simplify and improve ad measurement.
Goodway Group and Vizio recently joined the Harmony initiative, alongside previously announced partners Roku, PMG, Assembly, and CMI Media Group.
Recent new client wins and product expansions with leading advertisers and publishers such as Spectrum, WNBA, Eli Lilly, Lundbeck, Purple Innovation, Habit Burger, and The Wonderful Company.
CTV impression volume from ad serving and personalization increased 21% year-over-year, while Mobile video impressions from ad serving and personalization grew by 13% year-over-year, and desktop impressions from ad serving and personalization decreased by 9% year-over-year.
Innovid joined the broad-market Russell 3000® Index during the 2024 Russell US Indexes annual reconstitution.

Financial Outlook

Innovid is providing the following financial guidance for Q3 and reiterating full year 2024 guidance:

Q3 2024 revenue in a range between $40 million and $42 million, reflecting year-over–year growth between 10% and 16%.
Q3 2024 Adjusted EBITDA* in a range between $6.5 million and $8.5 million.
FY 2024 revenue in a range between $156 million and $163 million, representing annual growth between 11% and 16%.
FY 2024 Adjusted EBITDA* in a range between $24 million and $29 million.

*See non-GAAP financial measures and reconciliation of GAAP to non-GAAP tables.

Conference Call

The Company will host a conference call and webcast to discuss second quarter 2024 financial results today at 8:30 a.m. Eastern Time. Hosting the call will be Zvika Netter, Co-founder and Chief Executive Officer and Anthony Callini, Chief Financial Officer. The conference call will be available via webcast at investors.innovid.com. To participate via telephone, please dial (+1) 877-407-3211 (toll free) or (+1) 201-389-0862 (toll-free international).

Following the call, a replay of the webcast will be available for 90 days on the Innovid Investor Relations website.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures under the rules of the U.S. Securities and Exchange Commission. This non-GAAP information supplements and is not intended to represent a measure of performance in accordance with disclosures required by generally accepted accounting principles. Non-GAAP financial measures are used internally as measures of operational efficiency to understand and evaluate our core business operations, as well as comparisons to peers as similar measures are frequently used by securities analysts, investors, ratings agencies and other interested parties to evaluate businesses in our industry. Accordingly, Innovid believes it is useful for investors and others to review both GAAP and non-GAAP measures in order for (a) period-to-period comparisons of our core business, (b) comparisons to peers as similar measures are frequently used by securities analysts, investors, ratings agencies and other interested parties to evaluate businesses in our industry, and (c) providing an understanding and evaluation of our trends when comparing our operating results, on a consistent basis, by excluding items that we do not believe are indicative of our core operating performance. However, these non-GAAP financial measures should not take the place of GAAP financial measures in evaluating our business. The primary limitations associated with the use of non-GAAP financial measures are that these measures may not be directly comparable to the amounts reported by other companies and they do not include all items of income and expense that affect operations. Innovid management compensates for these limitations by considering the company’s financial results and outlook as determined in accordance with GAAP and by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in the tables attached to this press release. We are not able to provide a reconciliation of the projected Adjusted EBITDA to expected net (loss) income attributable to Innovid for the second quarter of 2024 or the full year of 2024, without unreasonable effort. This is due to the unknown effect, timing, and potential significance of the effects of taxes on income in multiple jurisdictions, finance (income)/expenses including valuations, among others. These items have in the past, and may in the future, significantly affect GAAP results in a particular period.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1996. The Company's actual results may differ from its expectations, estimates, and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," "aim," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company's expectations regarding its future financial results, expected growth, and future market opportunity. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results, including Innovid's ability to achieve and, if achieved, maintain profitability, decrease and/or changes in CTV audience viewership behavior, Innovid's failure to make the right investment decisions or to innovate and develop new solutions, inaccurate estimates or projections of future financial performance, Innovid's failure to manage growth effectively, the dependence of Innovid's revenues and business on the overall demand for advertising and a limited number of advertising agencies and advertisers, the actual or potential impacts of international conflicts and humanitarian crises on global markets, the rejection of digital advertising by consumers, future restrictions on Innovid's ability to collect, use and disclose data, market pressure resulting in a reduction of Innovid's revenues per impression, Innovid's failure to adequately scale its platform infrastructure, exposure to fines and liability if advertisers, publishers and data providers do not obtain necessary and requisite consents from consumers for Innovid to process their personal data, competition for employee talent, seasonal fluctuations in advertising activity, payment-related risks, interruptions or delays in services from third parties, errors, defects, or unintended performance problems in Innovid's platform, intense market competition, failure to comply with the terms of third party open source components, changes in tax laws or tax rulings, failure to maintain an effective system of internal controls over financial reporting, failure to comply with data privacy and data protection laws, infringement of third party intellectual property rights, difficulty in enforcing Innovid's own intellectual property rights, system failures, security breaches or cyberattacks, additional financing if required may not be available, the volatility of the price of Innovid's common stock and warrants, and other important factors discussed under the caption "Risk Factors" in Innovid's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commissions (“SEC”) on February 29, 2024, as such factors may be updated from time to time in its other filings with the SEC, accessible on the SEC's website at www.sec.gov and the Investors Relations section of Innovid's website at investors.innovid.com. You should carefully consider the risks and uncertainties described in the documents filed by the Company from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Most of these factors are outside the Company's control and are difficult to predict. The Company cautions not to place undue reliance upon any forward-looking statements, including projections, which speak only as of the date made. The Company does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.

About Innovid

Innovid (NYSE:CTV) is an independent software platform for the creation, delivery, measurement, and optimization of advertising across connected TV (CTV), linear, and digital. Through a global infrastructure that enables cross-platform ad serving, data-driven creative, and measurement, Innovid offers its clients always-on intelligence to optimize advertising investment across channels, platforms, screens, and devices. Innovid is an independent platform that leads the market in converged TV innovation, through proprietary technology and exclusive partnerships designed to reimagine TV advertising. Headquartered in New York City, Innovid serves a global client base through offices across the Americas, Europe, and Asia Pacific. To learn more, visit https://www.innovid.com/ or follow us on LinkedIn or X.

INNOVID, CORP. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands)

June 30, 2024

December 31, 2023

Assets

Current assets:

Cash and cash equivalents

30,580

49,585

Trade receivables, net

45,762

46,420

Prepaid expenses and other current assets

5,375

5,615

Total current assets

81,717

101,620

Long-term restricted deposits

430

412

Property and equipment, net

20,449

18,419

Goodwill

102,473

Intangible assets, net

22,309

24,318

Operating lease right of use asset

11,047

1,435

Other non-current assets

799

1,278

Total assets

239,224

249,955

Liabilities and Stockholders’ Equity

Current liabilities:

Trade payables

6,548

2,810

Employee and payroll accruals

9,312

14,060

Lease liabilities—current portion

1,354

1,200

Accrued expenses and other current liabilities

11,849

7,426

Total current liabilities

29,063

25,496

Long-term debt

—

20,000

Lease liabilities—non-current portion

10,053

634

Other non-current liabilities

10,536

7,528

Warrants liability

664

307

Common stock

Additional paid-in capital

388,467

378,774

Accumulated deficit

(199,573

)

(182,797

)

Total stockholders’ equity

188,908

195,990

Total liabilities and stockholders’ equity

239,224

249,955

INNOVID, CORP. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited and in thousands, except share and per share data)

Three months ended June 30,

Six months ended June 30,

2024

2023

2024

2023

Revenue

37,951

34,546

74,689

65,031

Cost of revenue (1)

9,097

8,591

17,829

16,856

Research and development (1)

7,304

6,876

13,625

13,993

Sales and marketing (1)

12,215

11,460

23,841

23,097

General and administrative (1)

9,297

8,924

19,832

18,574

Depreciation and amortization

2,831

2,064

5,455

4,094

Goodwill impairment

—

14,503

—

14,503

Operating loss

(2,793

)

(17,872

)

(5,893

)

(26,086

)

Finance income, net

(78

)

(248

)

(120

)

(2,723

)

Loss before taxes

(2,715

)

(17,624

)

(5,773

)

(23,363

)

Taxes on income

7,827

1,335

11,003

4,159

Net loss

(10,542

)

(18,959

)

(16,776

)

(27,522

)

Net loss per share common share—basic and diluted

(0.07

)

(0.14

)

(0.12

)

(0.20

)

Weighted-average number of shares used in computing net loss per share:

Basic and diluted

144,772,932

137,643,910

143,574,479

134,296,569

(1) Exclusive of depreciation and amortization presented separately.

INNOVID, CORP. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited and in thousands, except share and per share data)

Three months ended June 30, 2024

Common stock

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity

Shares

Amount

Balance as of March 31, 2024

143,861,609

382,935

(189,031

)

193,917

Stock-based compensation

5,496

Issuance of common stock:

—exercised options and RSUs vested

1,942,048

Net loss

(10,542

)

(10,542

)

Balance as of June 30, 2024

145,803,657

388,467

(199,573

)

188,908

Three months ended June 30, 2023

Common stock

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity

Shares

Amount

Balance as of March 31, 2023

136,616,734

361,948

(159,449

)

202,512

Stock-based compensation

5,658

Issuance of common stock:

—exercised options and RSUs vested

2,120,370

—

364

Net loss

(18,959

)

(18,959

)

Balance as of June 30, 2023

138,737,104

367,970

(178,408

)

189,575

Six months ended June 30, 2024

Common stock

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity

Shares

Amount

Balance as of December 31, 2023

141,194,179

378,774

(182,797

)

195,990

Stock-based compensation

9,614

Issuance of common stock:

—exercised options and RSUs vested

4,609,478

Net loss

(16,776

)

(16,776

)

Balance as of June 30, 2024

145,803,657

388,467

(199,573

)

188,908

Six months ended June 30, 2023

Common stock

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity

Shares

Amount

Balance as of December 31, 2022

133,882,414

356,801

(150,886

)

205,928

Stock-based compensation

10,555

Issuance of common stock:

—exercised options and RSUs vested

4,854,690

—

614

Net loss

(27,522

)

(27,522

)

Balance as of June 30, 2023

138,737,104

367,970

(178,408

)

189,575

INNOVID, CORP. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited and in thousands)

Six months ended June 30,

2024

2023

Cash flows from operating activities:

Net loss

(16,776

)

(27,522

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

5,455

4,094

Goodwill impairment

—

14,503

Stock-based compensation

9,025

9,865

Change in fair value of warrants

357

(3,279

)

Loss on foreign exchange, net

251

—

Changes in operating assets and liabilities:

Trade receivables, net

658

415

Prepaid expenses and other assets

535

(1,390

)

Operating lease right of use assets

404

902

Trade payables

3,739

1,060

Employee and payroll accruals

(4,748

)

804

Operating lease liabilities

(444

)

(1,130

)

Accrued expenses and other liabilities

7,430

2,626

Net cash provided by operating activities

5,886

948

Cash flows from investing activities:

Internal use software capitalization

(4,280

)

(5,591

)

Purchases of property and equipment

(587

)

(189

)

Withdrawal of short-term bank deposits

165

10,000

Increase in deposits

—

Net cash (used in) provided by investing activities

(4,702

)

4,247

Cash flows from financing activities:

Proceeds from loan

—

10,000

Payment on loan

(20,000

)

(10,000

)

Proceeds from exercise of options

614

Net cash (used in) provided by financing activities

(19,920

)

614

Effect of exchange rates on cash, cash equivalents and restricted cash

(251

)

—

(Decrease) increase in cash, cash equivalents, and restricted cash

(18,987

)

5,809

Cash, cash equivalents, and restricted cash at the beginning of the period

49,997

37,971

Cash, cash equivalents, and restricted cash at the end of the period

31,010

43,780

INNOVID, CORP. AND ITS SUBSIDIARIES

OTHER INFORMATION

(Unaudited and in thousands)

RECONCILIATION OF GAAP NET LOSS TO NON-GAAP ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN PERCENT

Three months ended June 30,

Six months ended June 30,

2024

2023

2024

2023

Net loss

(10,542

)

(18,959

)

(16,776

)

(27,522

)

Net loss margin percent

(28

(55

(22

(42

Depreciation and amortization

2,831

2,064

5,455

4,094

Goodwill impairment

—

14,503

—

14,503

Stock-based compensation

5,187

5,334

9,025

9,958

Finance income, net (a)

(78

)

(248

)

(120

)

(2,723

)

Retention bonus expenses (b)

148

132

445

Legal claims

206

342

1,134

656

Severance cost

415

—

415

845

Other

(14

)

—

272

Taxes on income

7,827

1,335

11,003

4,159

Adjusted EBITDA

5,872

4,542

10,268

4,687

Adjusted EBITDA margin percent

15.5

13.1

13.7

7.2

(a)

Finance income, net consists mostly of remeasurement related to revaluation of our warrants, remeasurement of our foreign subsidiary’s monetary assets, liabilities and operating results, and our interest expense.

(b)

Retention bonus expenses consists of retention bonuses for certain TVS employees.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO NON-GAAP FREE CASH FLOW

Three months ended June 30,

Six months ended June 30,

2024

2023

2024

2023

Net cash provided by operating activities

1,234

580