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Innovid Corp (CTV) Q1 2024 Earnings Call Transcript Highlights: Strong Revenue Growth and ...

GuruFocus Research
·4-min read

  • Q1 Revenue: $36.7 million, up 21% year-over-year.

  • Adjusted EBITDA: $4.4 million, improved from breakeven last year.

  • Adjusted EBITDA Margin: 12%, indicating improved operational profitability.

  • Free Cash Flow: $2 million, a $4.8 million improvement from Q1 last year.

Release Date: May 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Innovid Corp reported a strong start to 2024 with a 21% growth in Q1 revenue, reaching $36.7 million.

  • Adjusted EBITDA significantly improved from breakeven last year to $4.4 million in Q1 2024, with a margin of 12%.

  • The company achieved positive free cash flow of $2 million, a $4.8 million improvement over Q1 of the previous year.

  • Innovid Corp launched the Harmony initiative aimed at optimizing the CTV advertising ecosystem, enhancing efficiency, transparency, and ROI.

  • The company secured new client wins and product expansions with major brands and publishers, indicating strong market acceptance and growth potential.

Negative Points

  • Despite positive growth, the overall ad spend environment remains below normal, indicating potential market volatility and challenges.

  • The Harmony initiative, while promising, is still in its early stages and its commercial impact is not yet reflected in the 2024 guidance.

  • There are uncertainties in the advertising market due to external factors like election cycles and the Olympics, which could affect ad spending patterns.

  • Innovid Corp's net loss was $6.2 million in Q1 2024, although it was an improvement from the previous year's $8.6 million loss.

  • The company faces inconsistent performance across different advertising verticals, which could impact long-term growth stability.

Q & A Highlights

Q: Can you update us on the overall market health and trends moving into Q2, and how are the Harmony initiative and product conversations progressing with advertisers? A: Zvika Netter, CEO, noted a stable market environment similar to the latter half of 2023, with improvements year-over-year and expectations of continued stability. The Harmony initiative has garnered significant interest, particularly from advertisers, brands, and agencies, due to its focus on critical CTV challenges. However, as it's still early days for Harmony, its revenue impact isn't included in the 2024 guidance yet.

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Q: Could you elaborate on how the Harmony platform works with DSPs and provide examples? A: Zvika Netter, CEO, explained that Harmony is designed to work with all industry stakeholders, including DSPs, SSPs, and publishers, to address challenges like transparency and frequency management in CTV. Harmony aims to share Innovid's comprehensive campaign data with these platforms to allow for real-time optimization, enhancing the overall efficiency and effectiveness of CTV advertising.

Q: What are the specific areas of strength and weakness in the ad market you're observing this year? A: Anthony Callini, CFO, highlighted the continued growth in streaming impressions and a positive start to the year, driven by strong performance in certain verticals and a stabilization in others. He noted potential headwinds and tailwinds, including the ongoing shift to CTV and upcoming events like elections and the Olympics, which could impact advertising dynamics.

Q: Why is non-CTV growing faster than CTV, and what trends are you seeing with your brand clients? A: Anthony Callini, CFO, attributed the faster growth in non-CTV to specific quarterly comparables and emphasized that the overall increase in streaming impressions is a positive trend. He noted that while the mix between mobile and CTV varies, the significant year-over-year growth in streaming transactions is what's most relevant.

Q: Is the Harmony product part of the bundled strategy with your core products, and how does its pricing compare? A: Zvika Netter, CEO, confirmed that Harmony ties together Innovid's creative, delivery, and measurement solutions, optimizing all aspects of CTV advertising. He explained that Harmony's pricing model is fixed, similar to Innovid's ad-serving, ensuring the company remains unbiased in the advertising food chain.

Q: When do you expect Harmony to become a meaningful contributor to revenues? A: Anthony Callini, CFO, stated that it's still early to predict Harmony's impact for 2024, and its contribution to revenue will be more apparent in 2025. The company will update its guidance as adoption progresses.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.