Tremor International Ltd.

First quarter ended March 31st, 2023 conference call. At this time, participants are in a listen-only mode with a question and answer session to follow at the end of the presentation. This conference call is being recorded and a replay of today's call will be made available on the Investor Relations section of Tremor's website. I will now hand it over to Billy Eckert, Vice President of Investor Relations, for introductions and the reading of the Safe Harbor Statement. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to Tremor International's first quarter-ended March 31st, 2023 earnings call. With us on today's call are Ofer Druker, Tremor's Chief Executive Officer, and Sagi Neri, the company's Chief Financial Officer. This morning, we issued a press release, which you can access on our website at investors.tremorinternational.com. During today's conference call, we will make forward-looking statements. All statements other than statements of historical fact could be deemed as forward-looking. We advise caution and reliance on forward-looking statements. These statements include, without limitations, statements and projections regarding our anticipated future financial performance, market opportunity, growth prospects, strategy, and financial outlook, and forward-looking views on macroeconomic and industry conditions, as well as any other statements concerning the expected development, performance, and market share or competitive performance relating to our products or services. All forward-looking statements are based on information available to us as of the date of this call. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those implied by these forward-looking statements, including unexpected changes in our business or unexpected changes in macroeconomic or industry conditions. More detailed information about these risk factors and additional risk factors are set forth in our filings with the U.S. Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled Risk Factors in our most recent annual report on Form 20F. Trello does not intend to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures of financial information IFRS and non-IFRS terms. We refer you to the company's press release for additional details, including definitions of non-IFRS items and reconciliations of IFRS to non-IFRS results. At this time, It is my pleasure to introduce Ofer Druker, CEO of Trevor International. Ofer, please go ahead.

Thank you, Billy, and welcome to everyone joining us today. I will begin by providing an overview on the progress of our key initiatives, as well as on our results and strategy. Then we'll end the call over to our CFO, Sagi Neri, to discuss our financials. We will then open the call for questions. As a reminder, Q1 2023 results reflect the combined performance of Tremor International and Amobi, while Q1 2022 figures do not include results from Amobi. During the first quarter, we made excellent progress executing on our strategic vision to combine Tremor International and Amobi to create an horizontally integrated CTV and video-focused edtech platform. fueled by unique and exclusive data that offers a unified comprehensive solution for advertisers and agencies, as well as publishers and broadcasters. We believe once the integration is completed, our platform will feature some of the most robust, effective, and differentiated capabilities for both sides of the ecosystem. As you may recall, shortly after closing the acquisition, we quickly executed an initial efficiency plan over Q3 and Q4 2022 to consolidate our team into one, achieving roughly $50 million in annualized operating cost savings. In Q1, after evaluating both the Tremor Video and Amopi DSPs, we made a strategic decision to move Tremor Video CTV and video algorithm and capabilities to the Amopi DSP given its stronger enterprise self-service capabilities and will sunset the Tremor Video DSP. We also successfully moved the majority of the managed business over to the Amobi DSP during Q1, giving us enhanced confidence that our plan to largely conclude the technology integration of Amobi by the end of H1 2023 remains on track. We continue to expect total annualized operating cost synergies of approximately $65 million related to the integration, including the previous $50 million we achieved. And we'll continue to seek additional saving opportunities to drive further efficiency. In Q1, we also invested significant and necessary resources and management efforts, making the material progress on the combination, integration, and enhancement of our combined sales team. Along those lines, we successfully unified our sales processes and sales platforms into one and provided advanced training to our combined team, which we believe better prepares the company for its next phase of growth and its accelerated CTV market share gains. As we mentioned in our call, combining the sales team and processes took longer than initially anticipated. However, We now feel confident in our positioning with customers and prospects following this investment. Amovi customers have recently begun demonstrating increased interest in the company's CTV and video solution and are increasingly leveraging Unruly for Inventory to realize the data and cost advantages of transacting end-to-end. We have also recognized some notable recent improvements in the advertising environment since early Q1 and anticipate continued momentum in advertising demand for the remainder of 2023, particularly in the second half. We feel that we successfully achieved much of the integration heavy lifting, mainly over Q4 and Q1, which requires significant management team focus. Now, with the sales team and processes unified and the advertising markets showing signals of ongoing recovery, We're encouraged by the early signs of momentum. We also believe the advanced tech platform we have created through the acquisition and integration, as well as our recent investment in innovation, strongly prepare us to take a leadership position in the new era of CTV. We believe the CTV advertising ecosystem is poised for a massive boost and accelerated growth and linear TV advertisers increasingly seek to significantly expand their reach into the streaming ecosystem to reach engaged and expanding audiences. We feel from both technology and operational perspective that we are well situated to work with these advertisers and that our recently released growth planning tool can enable better incremental reach than most going practices and offering available in the market. Our progress achieving our technology strategy was recently further underpinned by the launch of our first two-market cross-platform planning solution, which we are incredibly excited about, as it is a solution the industry has been seeking for years. The technology enables linear advertisers to expand into streaming and CTV, reduce deduplication that occurs when presenting ads across platforms and further enhance our CTV growth opportunity. This capability strongly positioned the company as advertisers and agencies take solutions that enable them to optimize returns on ad spend and more effectively and efficiently plan and deploy spend across linear TV and CTV to reach desired incremental audiences. We believe our ability to now offer customers linear planning and cross-planning capabilities significantly expands our total addressable market. According to eMarketer, advertisers in the next few years will spend nearly $100 billion annually advertising in the US on linear TV and CTV. With our new solution, we feel that we are optimally positioned to capitalize on this enlarged opportunity as we will be able to help customers better navigate the continued expansion of combined linear TV and CTV advertising, with solutions equipped to assist them as two platforms converge. Many major broadcasters and agencies are involved in extensive testing of this product, and we are encouraged by early signs that this tool can drive larger deals, increase product adoption, and higher levels of CTV-related activity on our platform. While we are encouraged that the integration of our mobile technology and sales team will help accelerate our future CTV growth, which we have already seen evidence of so far in Q2, we are also pleased to have achieved strong CTV growth during Q1 ahead of this initiative bearing fruit. CTV, one of our primary focuses as a business, delivered strong performance during Q1 2023, as we were able to generate CTV revenues of $21.3 million, reflecting EVO VRE growth of 34%. Our continued growth and market share gains within CTV are a byproduct of the intentional strategic investments we have made to enhance our product capabilities over the past several years. for the benefit of our customers and partners. We continue to feel very strongly that we are well positioned for leadership within the industry, particularly to achieve further growth and share gains within CTV for several reasons. We believe advertisers will continue flocking to CTV and increasingly leverage programmatic solutions amidst expectation for continued growth in the ad-supported content particularly as broadcasters and advertisers further expand into CTV. This represents trends that we are heavily indexed to and have been increasing our footprint in. For example, CTV revenue reflects 34% of our programmatic revenue in Q1 2023 versus 27% in Q1 2022. while programmatic revenue reflects 87% of revenue during Q1 2023 compared to 73% in Q1 2022. Additionally, we continue to believe that customers will increasingly partner with horizontal end-to-end platforms because of their proven ability to better optimize supply paths and provide strong cost and data advantages for customers. As the lines between DSPs and SSPs continue to blur, we feel that we have strong comparative operational advantage versus peers moving towards end-to-end that have operated as one-sided businesses for several years. We have deeply rooted and rapidly expanding relationship on both sides of the ecosystem and also believe we have attack advantages as our scaled platform is operated horizontally for several years. We also believe the added capabilities and larger market opportunities gained through Amobi, coupled with the expected benefits from our VIDA investment, will further enhance our CTV growth opportunity. In the first quarter, we generated contribution XTAC of $66.9 million, reflecting a decrease of 6% year-over-year. While contribution XTAC declined in Q1, Programmatic revenues was $62.5 million during Q1, which reflects 6% year-over-year growth, serving as a strong underlying indicator for our progress. As expected, Q1 was challenging as advertisers, particularly early in the quarter, reduced spending amidst continued market pressures. January was a very weak month for advertising. While February and early March were slightly better, and late March showed signs of improvement. I'm pleased to report that we have observed significant growth in advertiser activity on our platform to this point in Q2 compared to Q1, and as a result, except sequential, quarterly, and year-to-year growth in contribution XTAC and CTV revenues during Q2. We believe this growth will be driven by improved advertising conditions. Our recent Salesforce enhancements greater anticipated level of CTV-related cross-selling, and increased interest in our combined platform suite of technology, planning, and data solutions. As a result of the historically weak contribution XTAC generated during U1, we generated adjusted EBITDA of $8.9 million, resulting in an adjusted EBITDA margin of 12% as a percentage of revenue and 13% as a percentage of contribution XTAC. As Sagi will touch on later, our end-to-end infrastructure enable high degree of operating leverage, so when the advertising environment is weak, shocks to our contribution extract can have outside impact on our profitability. While these margins were historically weak for us, our ability to achieve some degree of profitability amid challenging market conditions in Q1 highlighted the efficiency, durability, and resiliency of our model and a core reason we intentionally choose to operate horizontally. With that said, we are cautiously optimistic we will achieve significant sequential quarterly growth in profitability and adjusted EBITDA margin expansion during Q2 2023 compared to Q1 2023. and meets the expectation of higher contribution expectations. We are importantly continuing to expand our relationship in CTV, while our partners at VIDA and iSENSE further increase their scale, offering, and reach. For example, we recently announced a partnership with TCL S Falcon. The partnership grants advertising leveraging MOBI direct access to TCL S Falcon innovative ad units on premium CTV inventory in the TCL channel through Annuli, providing the opportunity to deliver impactful and relevant ads to audiences across the U.S., Europe, and APAC. In addition, SVDA, a CTV operating system and streaming platform in which we invested $25 million, continues to grow its distribution, our global exclusive ACL data agreements, enabled by our investment, is expected to increasingly benefit Remo. Later this year, we expect VIDA's reach to grow to a significant enough level of smart TVs in the market that we will be able to generate revenues from advertisers seeking to leverage this critical and fast-scaling global ACR dataset for CTV targeting and measurement. This, coupled with our ad monetization exclusivity, in the US, UK, Canada, and Australia on video media give us optimism for strong future CTV-related revenues opportunities as VIDA continues to onboard more ad-supported content and as its offerings, such as VIDA Free, continue to scale. VIDA parent company, iSense, which ranked number two globally for TV shipments in 2022, also announced it will make NBA League Pass accessible on iSense TVs in North America, beginning with 2023-2024 season. Sport-related CTV advertising opportunities are amongst the most desired by advertisers, given significant and consistent fans' viewership. Through our relationship with VIDA and iSense, we anticipate potential additional revenue opportunities related to this development, as well as future CTV-related sport advertising opportunities. In Q1, we completed our $20 million ordinary share repurchase program, repurchasing approximately 2.5 million ordinary shares, which reflected an investment of 7.3 million pounds, or $8.8 million. From March 1, 2022 to March 31, 2023, between our two completed programs, we repurchased roughly 19.4 million ordinary shares, or approximately 13% of shares outstanding, reflecting a total investment of approximately 77.3 million pounds, or $95 billion. We will continue to evaluate initiating a new repurchase program to sales remains as discounted valuation, as well as other capital allocation strategies. During Q1, the company added 45 new actively spending first-time advertiser customers across travel, real estate, and financial services verticals, as well as others. And Woolley added 62 new supply partners, including 49 in the U.S. during Q1, and MediaApp, and award-winning media agency, also selected on Wooly as a preferred SSP. Finally, as a key milestone in our progress combining and integrating Amobian, Tremors companies and tech platforms, we will announce our new unified brand name by the end of this quarter. When we rebrand, we will consolidate all of our brands under one name, as we believe this will enhance our commercial focus and best convey the value proposition of our unified horizontal platform. With that, it's my pleasure to turn the call over to Sagi.