Innovid Corp.

Greetings. Welcome to InnoVid's second quarter 2022 earnings call. At this time, all participants are in listen-only mode. Any question and answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. At this time, I'll turn the conference over to Brinley Johnson with Investor Relations. Brinley, you may now begin.

Thank you, Operator, and everyone for joining us today. Welcome to InnoVid's second quarter 2022 conference call. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward-looking statements. The safe harbor statement contained in today's earnings release also pertains to this call. If you've not received a copy of the release, please direct yourself to the investor relations section of the company's website. Changes in our business, competitive landscape, technological or regulatory environment, and other factors could cause actual results to differ materially from those expressed by the forward-looking statements made today. Our historical results are not necessarily indicative of future performance. As such, we can give no assurance as to the accuracy of our forward-looking statements and assume no obligation to update them except as required by law. In addition, our discussion today will include references to certain supplemental non-GAAP financial measures which should be considered in addition to and not as a substitute for GAAP results. We use these non-GAAP measures in managing the business and believe they provide useful information for our investors. Reconciliations of the non-GAAP measures to the corresponding GAAP measures, where appropriate, can be found in our earnings presentation, available on our website, as well as our earnings release and our filings with the SEC. Today we are joined by Zika Netter, Innovid's co-founder and CEO, who will begin the call with a business update. Then he will turn the call over to Tanya Andreev-Caspin, Innovid's CFO, who will discuss the financials of the company. During the question and answer session, Tal Cholozin, co-founder and CTO, will also be joining. With that, I'd like to pass the call over to Zvika Nader. Zvika, please go ahead.

Thank you, Bruni, and thank you all for joining us today. Innovate delivered strong results in the second quarter of 2022. Despite a more challenging environment, we delivered revenue in line with our guidance and EBITDA at the higher end of our guidance, reflecting the strength of our business model. Revenue increased by 45% year-over-year to $33.1 million on an as-reported basis. TV Squared contributed $6.8 million, or 21% of reported revenue, reflecting a 31% year-over-year growth for the TV Squared's business, following the acquisition closing on February 28, 2022. Our net profit was $4.3 million, and adjusted EBITDA was negative $1.7 million. the high end of our expected range of negative 1.5 million to negative 3.5 million. We believe our ability to record a strong adjusted EBITDA bottom line even when facing challenges is a testament to the strength of our business model, strong margin profile, and our ability to control expenses. By far the most exciting development of the second quarter was the launch of InnovateXP. InnovateXP our newly expanded converged TV measurement offering was brought to life through the integration of Innovate's extensive CTV advertising dataset combined with TVSquare's robust linear TV dataset, creating a first-to-market global cross-platform TV measurement solution that has quickly gained traction. As a reminder, Innovate's focus and emphasis spans all forms of television. Whether the TV content is delivered via broadcast, also known as linear TV, or streamed across devices such as connected TV, mobile TV, or desktop TV. CTV contributed 47% of total revenue in the second quarter when excluding TV squared. As we continue to gain traction against our roadmap and vision to unify advertising delivery, personalization, and measurement for the converged TV landscape, we believe CTV will continue to be a driving force for the business. I'd now like to build on the update we provided in our last conference call and share more details on the current and future development of our overall business and the momentum that we've built around measurement and innovative XP. Specifically, I will provide these updates within the context of our four key growth drivers, which are volume growth, product upsell, geographic coverage, and client-based retention and expansion. Let's begin with volume growth. I'm pleased to share that CTV set a new record in the second quarter. For the first time ever, 50% of all TV ads delivered through our platforms were streamed to connected television. If you recall, Innovate was founded on the premise that one day the majority of TV content will be delivered through streaming channels. That prediction is coming to life and our volume outlook is further supported by the ongoing migration of TV viewership toward not just CTV, but ad-supported CTV, which is the foundation of Innovate's business. Introduction of ad-supported offerings from large global streaming publishers is a win for all. More affordable content for viewers and wider audience to reach for advertising. Netflix recently confirmed its plan to introduce a lower-cost ad-supported tier in early 2023. Disney Plus will introduce its ad-supported tier later this year and plans to expand internationally next year. And Warner Brothers Discovery just shared advertising is core to HBO and other networks' growth strategy. We believe a substantial share of streaming's future will be ad-supported. It's also important to note that Innovate derives revenue based on the volume growth of ads served through our platforms or measured by our platforms and not as a percentage of media spent or what's referred to as take rate. This means our business is typically less impacted by fluctuating media costs, In fact, we often benefit from the dynamics that increase pricing pressure and, assuming similar budgets, lower media costs equate to more volume. And therefore, more revenue to innovate. We remain optimistic about our volume growth outlook. As the CTV market matures, more and more TV media platforms are being added to the ecosystem on a regular basis, each fighting for their individual piece of the streaming pie. This reinforces the need for an independent, scalable platform like Innovit to integrate across all platforms and partners, enabling brands to tap into the opportunity for enhanced reach, engagement, and performance through CTV advertising. Our second growth engine is product upsell. Right now, the entire TV industry is undergoing a transformation, a quest for better metrics and measurement that brings linear TV and streaming TV together. Advertisers need a simple, scalable, independent, and actionable view of their investments. Whether they buy direct, programmatically, or both across all forms of TV, that's fundamental to the future of television. More than that, they need a unified solution that allows them to achieve timely analysis, to inform, test, invest, and optimize continuously throughout the campaign lifecycle. Last quarter, we share that Innovit has successfully completed the acquisition of leading independent global TV measurement and attribution platform, TVSquared. This quarter, the acquisition came to life through the launch of our unified measurement platform for converged TV, InnovitXP. InnovitXP is the first global unified cross-platform measurement solution directly integrated with ad-serving data and creative personalization. The InnovitXP name reflects the direction where Innovit and the industry are heading. a cross-platform TV marketplace requiring independent, consistent measurement and outcomes across platforms and screens, regardless of where, when, and how people watch. We have seen early success with upselling our existing ad serving clients to InnovateXP this past quarter, including several leading multinational and national restaurant chains, a worldwide employment platform. Additionally, we have won several new clients, including an international design platform further expanding our client base. We have also bolstered our measurement footprint through strategic partnerships spanning programmatic via Magnite's expanded measurement attribution program, forged a political TV advertising partnership with Ad Impact, and integrated with Freewheel by Comcast's newly launched international Audience Express offering. Overall, measurement grew to account for 22% of total revenue in Q2, and we predict measurement will be a driving force for our growth story moving forward. Why? We believe our foundation in ad serving gives us an edge in measurement. Think about it. Our platform already has the certification and scale to deliver ads everywhere, which means InnovateXP is an out-of-the-box solution for brands with no additional implementation requirements. It's automatic. And the best of all, through our unified platform, Your measurement is tied to AdServe, which is the way the digital ecosystem already transacts. The launch of InnovateXP comes just one quarter after the acquisition of TV Squared, demonstrating our commitment to measurement innovation. Beyond measurement, our advanced creative and personalization solutions continue to see significant growth in adoption. Revenue from creative solutions grew 39% year-over-year this quarter, driven by a greater emphasis on experiences and performance. Our third growth engine is geographic expansion. Our international revenue measures of ads delivered outside of the US grew 51% year over year in the second quarter. The launch of InnovateXP introduced a true global measurement platform to the market, supporting the needs of global, regional, and local advertisers through measurement across 75 markets outside of the US. We have several significant developments underway to expand InnovateXP's footprint and coverage internationally, and feel confident that our differentiated offering will unlock future opportunities in the international markets. And last, but definitely not least, expanding our client base. This past quarter, we secured numerous new advertiser clients for our ad delivery and personalization solution, including a multinational e-commerce company, a leading multinational restaurant chain, an international travel company, and one of the largest U.S. health insurance providers. And, as previously mentioned, we successfully grew our measurement advertiser client base. Earlier this year, prior to finalizing the 3D Squared acquisition, I shared that client-based diversification was one of the key areas the acquisition would advance. We believe expanding our purview and traction across both the buy side and the sell side of the advertising ecosystem is critical to fulfilling Innovit's mission to become preeminent measurement providers. While the buy side, which includes brands and their agency partners, is still a no-star for the company, we have taken significant strides to deepen our engagement with the sell side, which includes publishers and paid TV operators. To that end, I'm pleased to share we expanded our multi-year measurement partnerships with Tubi, Fox's streaming service. demonstrating the power of innovative speed for always-on incremental reach measurement across both Fox and Tubi. The continued growth of our strong and increasingly diverse customer base is a signal for the strength of our underlying business. Next, I'd like to address the macroeconomic factors that have impacted the advertising and technology landscape these past few months, and as a result, our guidance for the second half of the year. We, like all companies, are not immune to economic headwind However, our emphasis on CTV and its arguably stronger tailwinds make me optimistic about our future. Beyond large players moving to ad-supported models, we see huge upside for CTV at large and believe sports will be the catalyst for CTV's new wave of hypergrowth. Audiences are leaving linear TV for streaming, and live sports are critical content platforms for attracting audiences and revenue at scale. The NFL recently threw their hat in the streaming ring with the introduction of NFL Plus, a move they see as key to their long-term success. This comes on the tail of last year's move of Thursday Night Football to Amazon. And according to NFL Commissioner, a pending motion for NFL's Sunday ticket to move to the streamer post the 2022 season. These strong tailwinds have supported our growth despite the headwinds that have impacted the industry such as prolonged impact of COVID-related supply chain disruption, geopolitical uncertainties, and signs of softening consumer spending. We continue to take a pragmatic approach to ensure the realization of our long-term vision for the company. This includes our focus on maintaining margins and realizing what we anticipate to be several millions in measurement synergies related to TV squared acquisition in the second half of this year. To summarize the opportunity ahead, I'd like to share a quote from Andre Schulte, CFO of Procter & Gamble, one of the world's largest advertisers. In their last earning report, Andre spoke about the importance of measurement to enable transformation. Andre stated, and I quote, our ability to improve effective best of reach and quality of reach is allowing us to drive cost per effective reach down both in digital and in TV. We've shifted more and more spend into digital. Now, More than 50% of our advertising is in digital." We are thrilled to be in the advertising TV business right now and look forward to bringing new innovations to life in support of our growing measurement focus. We remain committed to our core 2022 strategies and will continue to make investment we believe are strategically important to capitalize on the streaming market and growing converged TV market. I'll now turn it over to Tanya, who will go into greater detail regarding the financial performance and guidance. Tanya?