- Reports Q1 revenue increased to $30.5
million, up 18% year-over-year
- Connected TV (CTV) accounted for 54% of video impressions in
Q1 2023, vs. 49% in Q1 2022
NEW
YORK, May 9, 2023 /PRNewswire/ --
Innovid Corp. (NYSE:CTV) (the "Company"),
an independent advertising platform for delivery, personalization,
and measurement of converged TV across linear, connected TV (CTV),
and digital, today announced financial results for the first fiscal
quarter ended March 31, 2023.
"We are pleased with our first quarter results, which reflect
our expected further growth in CTV and solid expansion of our
client base," said Zvika Netter,
Co-Founder and CEO. "While the challenging macro environment
continues to weigh on clients' advertising spend, our team is
executing well against our plan. We have prioritized expanding our
Adjusted EBITDA margin, as evidenced by our improved full year
guidance, and are maintaining our sharp focus on future profitable
growth."
"Innovid's growing customer base relies on our critical
infrastructure software to power their advertising delivery,
personalization, and measurement needs. As CTV continues to gain
share and the unique nature of our robust product offering becomes
even more apparent, we expect the breadth and depth of our client
relationships will deepen even further and drive additional growth
as advertising market trends stabilize – and eventually
improve."
First Quarter 2023 Financial Summary
- Revenue increased to $30.5
million, reflecting growth of 18% on an as-reported basis
and 1% on a pro forma basis versus the same period in 2022.
- Measurement contributed $7.0
million, up 1% on a pro forma basis, representing 23% of
revenue.
- CTV revenue, excluding TVSquared, increased to $12.2 million, up 11% year-over-year.
- Net loss was $(8.6) million,
compared to a net loss of $(7.4)
million for the same period in 2022.
- Adjusted EBITDA* increased to $0.1
million, compared to $(3.0)
million for the same period in 2022.
- Cash and cash equivalents as of March
31, 2023 were $45.0
million.
Recent Business Highlights
- Connected TV, excluding TVSquared, represented 54% of all Q1
2023 video impressions (vs. 49% in Q1 2022). CTV growth continues
to outpace the overall advertising market.
- As Advertising-Based Video on Demand (AVOD) subscriber bases
grow and the CTV market further fragments, measurement services
have become even more essential for advertisers. At 23% of Q1
revenue (and 20% of FY 2022 revenue), measurement services are a
significant contributor to Innovid's business.
- We renewed our agreement with Verizon and are excited to expand
our video ad-serving and DCO partnership to include XP measurement.
We also expanded our relationship with Disney Advertising, building
on our multi-year Hulu relationship to provide outcomes measurement
for local and national advertisers across Disney's addressable
footprint.
Financial Outlook
Innovid is providing the following financial guidance for Q2 and
full year 2023:
- Q2 2023 Revenue in a range between $31
million and $33 million.
- Q2 2023 Adjusted EBITDA* in a range between $0 and $2
million.
- FY 2023 Revenue slightly higher than FY 2022.
- FY 2023 Adjusted EBITDA* positive for the full year, Adjusted
EBITDA margin* of at least 5% for the full year.
*See Use of Non-GAAP Financial Information and Reconciliation of
GAAP to Non-GAAP Financial Measures table.
Conference Call
The Company will host a conference call and webcast to discuss
first quarter 2023 financial results today at 8:30 a.m. Eastern Time. Hosting the call will be
Zvika Netter, Co-founder and Chief
Executive Officer, Tanya
Andreev-Kaspin, Chief Financial Officer and Tal Chalozin,
co-founder and Chief Technology Officer. The conference call will
be available via webcast at investors.innovid.com. To participate
via telephone, please dial 877-407-3211 (toll free) or 201-389-0862
(international). Following the call, a replay of the webcast will
be available for 90 days on the Innovid Investor Relations
website.
Non-GAAP Measures and Certain Operational Metrics
Innovid prepares audited financial statements in accordance with
U.S. generally accepted accounting principles ("GAAP"). Innovid
also discloses and discusses non-GAAP financial measures such as
Adjusted EBITDA and Adjusted EBITDA margin.
We use Adjusted EBITDA and Adjusted EBITDA margin as measures of
operational efficiency to understand and evaluate our core business
operations. We believe that these non-GAAP financial measures are
also useful to investors for period-to-period comparisons of our
core business. Additionally, these figures provide 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.
These non-GAAP financial measures have limitations as analytical
tools and should not be considered in isolation or as substitutes
for an analysis of our results as reported under GAAP. Some of the
limitations of these measures are:
- they do not reflect changes in, or cash requirements for, our
working capital needs;
- Adjusted EBITDA does not reflect our capital expenditures or
future requirements for capital expenditures or contractual
commitments;
- they do not reflect costs of acquiring and integrating
businesses, which will continue to be a part of our growth
strategy;
- they do not reflect one-time, non-recurring, bonus costs and
third party costs associated with the SPAC merger transaction and
regulatory filings;
- they do not reflect income tax expense or the cash requirements
to pay income taxes;
- they do not reflect our interest expense or the cash
requirements necessary to service interest or principal payments on
our debt; and
- although depreciation and amortization are non-cash charges
related mainly to intangible assets, certain assets being
depreciated and amortized will have to be replaced in the future,
and Adjusted EBITDA does not reflect any cash requirements for such
replacements.
- Other companies in our industry may calculate these non-GAAP
financial measures differently than we do, limiting their
usefulness as a comparative measure. You should compensate for
these limitations by relying primarily on our US GAAP results and
using the non-GAAP financial measures only supplementally.
- Adjusted EBITDA is defined as net loss attributable to Innovid,
excluding (1) depreciation and amortization, (2) stock-based
compensation, (3) finance income, net, (4) transaction related
expenses, (5) acquisition related expenses, (6) retention bonus
expenses, (7) legal claims, (8) severance cost, (9) other taxes,
and (10) taxes on income. We calculate adjusted EBITDA margin as
adjusted EBITDA divided by total revenue.
Innovid has provided a reconciliation of adjusted EBITDA to net
loss, the most directly comparable GAAP measure, for historical
period in the appendix hereto but is not able to provide a
reconciliation of the projected adjusted EBITDA to expected net
income (loss) attributable to Innovid for the second quarter of
2023 or the full-year 2023, without unreasonable effort, 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 and expected growth. 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
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 SEC on March 3, 2023, 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
U.S. Securities and Exchange Commission. 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) powers advertising delivery,
personalization, and measurement across linear, connected TV (CTV)
and digital for the world's largest brands. 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 innovid.com or follow us on
LinkedIn or Twitter.
Contacts
Investors:
John T. Williams
IR@innovid.com
Media:
Caroline Yodice
cyodice@daddibrand.com
INNOVID, CORP. AND
ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS (In thousands, except stock and per stock
data)
|
|
|
March 31,
2023
|
|
December 31,
2022
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
45,015
|
|
$
37,541
|
Short-term bank
deposits
|
—
|
|
10,000
|
Trade receivables, net
(allowance for credit losses of $155 and $65 at March 31, 2023 and
December 31 2022, respectively)
|
39,945
|
|
43,653
|
Prepaid expenses and
other current assets
|
5,692
|
|
2,640
|
Total current
assets
|
90,652
|
|
93,834
|
Long-term
deposit
|
265
|
|
277
|
Long-term restricted
deposits
|
401
|
|
430
|
Property and
equipment, net
|
16,968
|
|
14,322
|
Goodwill
|
116,976
|
|
116,976
|
Intangible assets,
net
|
28,788
|
|
29,918
|
Operating lease right
of use asset
|
2,450
|
|
2,910
|
Other non-current
assets
|
813
|
|
938
|
Total non-current
assets
|
166,661
|
|
165,771
|
TOTAL
ASSETS
|
$
257,313
|
|
$
259,605
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Trade
payables
|
4,919
|
|
3,361
|
Employees and payroll
accruals
|
9,867
|
|
10,165
|
Lease liabilities -
current portion
|
1,891
|
|
2,186
|
Accrued expenses and
other current liabilities
|
7,166
|
|
5,474
|
Total current
liabilities
|
23,843
|
|
21,186
|
Long-term
debt
|
20,000
|
|
20,000
|
Lease liabilities -
non-current portion
|
1,347
|
|
1,636
|
Other non-current
liabilities
|
8,024
|
|
6,554
|
Warrants
liability
|
1,587
|
|
4,301
|
Total non-current
liabilities
|
30,958
|
|
32,491
|
TOTAL
LIABILITIES
|
54,801
|
|
53,677
|
COMMITMENTS AND
CONTINGENT LIABILITIES
|
|
|
|
Common stock: $0.0001
par value - Authorized: 500,000,000 at March 31, 2023 and
December 31, 2022; Issued and outstanding: 136,616,734 and
133,882,414 at March 31, 2023 and December 31, 2022,
respectively
|
13
|
|
13
|
Additional paid-in
capital
|
361,948
|
|
356,801
|
Accumulated
deficit
|
(159,449)
|
|
(150,886)
|
Total stockholders'
equity
|
202,512
|
|
205,928
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
257,313
|
|
$
259,605
|
INNOVID, CORP. AND
ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except stock and per stock
data)
|
|
|
Three months ended
March 31,
|
|
2023
|
|
2022
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues
|
$
30,485
|
|
$
25,862
|
Cost of revenues
(1)
|
8,265
|
|
5,926
|
Research and
development (1)
|
7,117
|
|
7,254
|
Sales and marketing
(1)
|
11,637
|
|
10,351
|
General and
administrative (1)
|
9,650
|
|
11,455
|
Depreciation and
amortization
|
2,030
|
|
673
|
Operating
loss
|
(8,214)
|
|
(9,797)
|
Finance income,
net
|
(2,475)
|
|
(2,311)
|
Loss before
taxes
|
(5,739)
|
|
(7,486)
|
Taxes on
income
|
2,824
|
|
(37)
|
Net
loss
|
(8,563)
|
|
(7,449)
|
|
|
|
|
Net loss
attributable to common stockholders
|
$
(8,563)
|
|
$
(7,449)
|
Net loss per stock
attributable to common stockholders
|
|
|
|
Basic and
diluted
|
$
(0.06)
|
|
$
(0.06)
|
Weighted-average
number of stock used in computing net loss per stock
attributable to common stockholders
|
|
|
|
Basic and
diluted
|
136,008,998
|
|
124,245,358
|
|
|
(1)
|
Exclusive of
depreciation and amortization presented separately.
|
INNOVID, CORP. AND
ITS SUBSIDIARIES
CONDENSED STATEMENTS OF CHANGES IN TEMPORARY EQUITY AND
STOCKHOLDERS' EQUITY
(In thousands, except stock data)
|
|
|
Common
stock
|
Additional
paid-in
capital
|
Accumulated
deficit
|
Total
stockholders'
equity
|
|
Number
|
Amount
|
Balance as of
December 31, 2021,
|
119,017,380
|
$
12
|
$
293,719
|
$
(132,476)
|
$
161,255
|
Common stock and equity
awards issued for acquisition of TVS
|
11,549,465
|
1
|
47,151
|
—
|
47,152
|
Stock-based
compensation
|
—
|
—
|
1,496
|
—
|
1,496
|
Stock options
exercised
|
1,521,927
|
—
|
462
|
—
|
462
|
Net loss
|
—
|
—
|
—
|
(7,449)
|
(7,449)
|
Balance as of
March 31, 2022 (unaudited)
|
132,088,772
|
$
13
|
$
342,828
|
$
(139,925)
|
$
202,916
|
|
|
|
|
|
|
|
Common
stock
|
Additional
paid-in
capital
|
Accumulated
deficit
|
Total
stockholders'
equity
|
|
Number
|
Amount
|
Balance as of
December 31, 2022
|
133,882,414
|
$
13
|
$
356,801
|
$
(150,886)
|
$
205,928
|
Stock-based
compensation
|
—
|
—
|
4,897
|
—
|
4,897
|
Stock options exercised
and RSUs vested
|
2,734,320
|
—
|
250
|
—
|
250
|
Net loss
|
—
|
—
|
—
|
(8,563)
|
(8,563)
|
Balance as of
March 31, 2023 (unaudited)
|
136,616,734
|
$
13
|
$
361,948
|
$
(159,449)
|
$
202,512
|
INNOVID, CORP. AND
ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except stock and per stock
data)
|
|
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
(Unaudited)
|
|
(Unaudited)
|
Net loss
|
$
(8,563)
|
|
$
(7,449)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
2,030
|
|
673
|
Stock-based
compensation
|
4,533
|
|
1,496
|
Change in fair value
of warrants
|
(2,714)
|
|
(2,787)
|
Changes in operating
assets and liabilities
|
|
|
|
Decrease in trade
receivables, net
|
3,708
|
|
163
|
Increase in prepaid
expenses and other current assets
|
(2,922)
|
|
(1,950)
|
(Increase) / decrease
in operating lease right of use assets
|
459
|
|
431
|
Increase/ (decrease)
in trade payables
|
1,558
|
|
(191)
|
Increase / (decrease)
in employees and payroll accruals
|
(299)
|
|
1,704
|
Increase / (decrease)
in operating lease liabilities
|
(584)
|
|
(410)
|
Increase in accrued
expenses and other current liabilities
|
3,162
|
|
1,107
|
Net cash provided by
/ (used in) operating activities
|
368
|
|
(7,213)
|
Cash flows from
investing activities:
|
|
|
|
Acquisition of
business, net of cash acquired
|
—
|
|
(99,568)
|
Internal use software
capitalization
|
(3,091)
|
|
(1,671)
|
Purchase of property
and equipment
|
(89)
|
|
(97)
|
Withdrawal of
short-term bank deposits
|
10,000
|
|
—
|
Decrease (increase) in
deposits
|
7
|
|
3
|
Net cash provided by
/ (used in) investing activities
|
6,827
|
|
(101,333)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
loans
|
5,000
|
|
—
|
Repayment of
loans
|
(5,000)
|
|
—
|
Payment of SPAC merger
transaction costs
|
—
|
|
(3,180)
|
Proceeds from exercise
of options
|
250
|
|
462
|
Net cash provided by
/ (used in) financing activities
|
250
|
|
(2,718)
|
Increase (decrease) in
cash, cash equivalents and restricted cash
|
7,445
|
|
(111,264)
|
Cash, cash equivalents
and restricted cash at the beginning of the period
|
37,971
|
|
157,158
|
Cash, cash
equivalents and restricted cash at the end of the
period
|
$
45,416
|
|
$
45,894
|
Supplemental
disclosure of cash flows activities:
|
|
|
|
(1) Cash paid during
the period for:
|
|
|
|
Income taxes paid, net
of tax refunds
|
$
203
|
|
$
165
|
Interest
|
$
362
|
|
$
61
|
(2) Non-cash
transactions:
|
|
|
|
Business combination
consideration paid in stock
|
$
—
|
|
$
47,152
|
Reconciliation of
cash, cash equivalents, and restricted cash reported within the
condensed consolidated balance sheets
|
|
|
|
Cash and cash
equivalents
|
45,015
|
|
45,441
|
Long-term restricted
deposits
|
401
|
|
453
|
Total cash, cash
equivalents, and restricted cash shown in the condensed
consolidated statements of cash flows
|
$
45,416
|
|
$
45,894
|
Key Metrics and Non-GAAP Financial Measures
Adjusted EBITDA
In addition to our results determined in accordance with
US GAAP, we believe that certain non-GAAP financial measures,
including Adjusted earnings before interest, taxes, depreciation
and amortization ("EBITDA") and Adjusted EBITDA Margin are useful
in evaluating our business. The following table presents a
reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to
the most directly comparable financial measure prepared in
accordance with GAAP.
|
Three months ended
March 31,
|
(in
thousands)
|
2023
|
|
2022
|
Net loss
|
$
(8,563)
|
|
$
(7,449)
|
Net loss
margin
|
(28) %
|
|
(29) %
|
Depreciation and
amortization
|
2,030
|
|
673
|
Stock-based
compensation
|
4,625
|
|
1,592
|
Finance income, net
(a)
|
(2,475)
|
|
(2,311)
|
Transaction related
expenses (b)
|
—
|
|
228
|
Acquisition related
expenses (c)
|
—
|
|
4,203
|
Retention bonus
expenses (d)
|
297
|
|
—
|
Legal claims
|
314
|
|
—
|
Severance cost
(e)
|
821
|
|
92
|
Other
|
272
|
|
—
|
Taxes on
income
|
2,824
|
|
(37)
|
Adjusted
EBITDA
|
$
145
|
|
$
(3,009)
|
Adjusted EBITDA
margin
|
0.5 %
|
|
(11.6) %
|
|
|
(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)
|
Transaction related
expenses consist of costs related to the SPAC merger
transaction.
|
(c)
|
Acquisition related
expenses consists of professional fees associated with the
acquisition of TVS.
|
(d)
|
Retention bonus
expenses consists of retention bonuses for TVS
employees.
|
(e)
|
Severance cost in 2023
is related to the personnel reductions that occurred during the
first quarter of 2023. In 2022, severance cost related to exit
costs for TVS employees.
|
Operational Metrics
In addition, Innovid's management considers number of core
clients, annual core clients retention and annual core clients net
revenue retention in evaluating the performance of the business.
These metrics are reported annually. Prior to our acquisition of
TVS in 2022, our definition of a core client included only
advertisers that generated at least $100,000 revenue in a twelfth-months period.
Following our acquisition of TVS, we have included publishers as
core clients.
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SOURCE Innovid