Nexxen International - Q1 2024 Results
20/05/2024 07:00
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RNS Number : 9953O Nexxen International Ltd 20 May 2024
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
2024 2023 %
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
(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 (http://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 (mailto:ir@nexxen.com)
Caroline Smith, Vice President of Communications
csmith@nexxen.com (mailto:csmith@nexxen.com)
KCSA (U.S. Investor Relations)
David Hanover, Investor Relations
nexxenir@kcsa.com (mailto: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
(mailto: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
(https://www.globenewswire.com/Tracker?data=gPgQB1DRd3uO04Pe1Nw8HIpq46d0Dt1v2Oxk6rZfSqGQFu9JJd9FAB5SQGpGWUSLBV6GTasGV0uIK2SWvdiElw==)
) 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
2024 2023 %
($ 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
2024 2023 %
($ 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
2024 2023 %
($ 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
USD thousands
Revenues 74,432 71,737
Cost of Revenues (Exclusive of depreciation and amortization shown separately 14,538 16,097
below)
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 15,793 16,989
Total operating costs 66,448 70,846
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)
(19,806) (13,325)
Net cash used in financing activities
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
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