Innovid Corp.

Greetings and welcome to the InnoVid Q4 2023 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brinley Johnson, Investor Relations. Thank you, Ms. Johnson. You may begin.

Thank you, Operator. Before we begin, I'll remind you that today's call may contain forward-looking statements and that the forward-looking statement disclaimer included in today's earnings release, available on our investor relations page, also pertains to this call. These forward-looking statements may include, without limitation, predictions, expectations, targets, or estimates regarding our anticipated financial performance, business plans, and objectives, future events, and developments. 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, and 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, today's call will include non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margins, and free cash flow. We use these non-GAAP measures in managing the business and believe they provide useful information to our investors. These measures should be considered in addition to and not as a substitute for our GAAP results. Reconciliations of the non-GAAP measures to their corresponding GAAP measures, where appropriate, can be found in our earnings release available on our website and our filings with the SEC. Hosting today's call are Zvika Netter, Innovid's co-founder and CEO, as well as Anthony Collini, Innovid's CFO. Both of them will participate in our Q&A session. I'll now turn the call over to Zvika to begin. Zvika, please go ahead.

Thanks, Brinley, and thank you all for joining the call today. I'm excited to share the progress Innovate has made in the past year. We provided critical technology infrastructure for many of the world's largest brands, agencies, and publishers. We empower them to create, deliver, and measure ad-supported TV experiences that people love across connected TV, linear TV, and other digital channels. And we continue to push the boundaries of what's possible in the fast-growing CTV industry through constant innovation on our enterprise software platform. We're very proud to close out a transformational year with a strong fourth quarter, bidding our guidance for both revenue and adjusted EBITDA, evidence of what we expect to achieve in 2024 and beyond. Today, I'll review our fourth quarter results and full year highlights provide some recent business updates, and share some thoughts on the year ahead. I'll then turn it over to our Chief Financial Officer, Tony Collini, who will provide further details on our Q4 and full-year financials, in addition to our 2024 guidance, followed by a Q&A. I am pleased to report fourth quarter revenue of approximately $39 million, reflecting 15% of annual growth and adjusted EBITDA of $8.3 million. which more than doubled year over year, resulting in a 21% adjusted EBITDA margin. Our operation profitability continues to increase as we generated $2.2 million in positive free cash flow this quarter. For the full year, we reported revenue of $140 million, reflecting as reported 10% growth and adjusted EBITDA of $19.4 million, a 14% adjusted EBITDA margin. We also generate $1.4 million in positive free cash flow over the full year, a $23 million improvement from 2022. We're proud of our financial performance in 2023 with improved revenue and adjusted EBITDA, which exceeded guidance each quarter throughout the year. 2023 was an important year, not only from a financial standpoint, but also from an organizational perspective. Given our strong conviction in the business, we strengthened the executive team with the best possible talent to drive and accelerate our growth and market position. We hired Dave Helmrich as Chief Commercial Officer and Tony Collini as Chief Financial Officer. We also promoted Yuval Pimper to Chief Technology Officer and Ken Marcus to Chief Operating Officer. Most recently, we welcomed Danny Cushion to the team as Chief Marketing Officer. Danny brings a wealth of experience in leading marketing organizations in both public and private technology growth companies. We are really excited about the new additions to our team who are already making an impact. Additionally, we reorganized the sales organization to drive accelerated growth in 2024. The commercial team has been focused on increasing wallet share from existing clients, adding new logos, and deepening our relationship with our most strategic clients. In the fourth quarter, We want new customers such as Philips for dynamic creative optimization and ad serving, Rain the Growth Agency for ad serving across their client portfolio, and Nextar Media for measurement. We also expanded existing customer relationships this quarter. For example, PetSmart, an ad serving client, added our measurement solution in Q4. In addition to these recent fourth quarter wins, we had a number of top global brands join us as clients throughout 2023, including Mazda US, Microsoft, Revlon, and Verizon, to name a few. As a result of our focused execution, we reported accelerating revenue growth and improved operation profitability in 2023 compared to last year. More specifically, Innovate CTB revenue from ad serving and personalization in the fourth quarter grew 14% year-over-year. Innovate XP, our measurement offering grew 14% in the fourth quarter and represented 22% of revenue. We are pleased with the ramp up in measurement as we continue to extend usage and we are optimistic about our growth prospects as we go to market with measurement as a critical piece of our comprehensive ad technology process. I am very proud of all the team accomplished this year. Despite the macro and geopolitical challenges, we made significant operational, strategic, and financial improvements to our business. Looking ahead to 2024, we see two key trends which are meaningful accelerators for CTV adoption and ad spend migration. First, more and more streaming platforms are implementing ad-supported offerings as subscription-only models have proven unsustainable. Just these past months, Amazon Prime Video introduced ads following other streaming giants such as Netflix, HBO, and Disney+. Second, live sports are also increasingly part of CTV programming. The recent news by ESPN, Fox, and Warner Bros. to launch a sports streaming platform in the fall is another step forward on the journey to 100% digital TV. And it's a huge step because sports is one of the last linear TV minstays. While ad spending has been suppressed in the past few quarters, we believe that ad spend re-acceleration on CTV is inevitable. As viewership continues to shift to CTV, ad dollars will follow to reach and engage consumers where they are. And as the TV market becomes more digital and more fragmented, we believe the need for our technology also expands. These market dynamics, technology capabilities, and unique partnerships will continue to drive growth in 2024 and beyond. Next, I'm happy to share updates related to the Innovit platform and our focus on innovation. From the early days when we founded Innovit, we've used our technology to push the boundaries of what's possible. We've always been focused on setting the bar for what the future of TV should look like. And we continue to work closely with our clients to understand the issues they face, both big and small. This insight informs where we focus and we're actively solving for some of the biggest challenges facing CTV today. Executing on our multi-year plan, we have continued to integrate our solutions on one powerful platforms with creative delivery and measurement capabilities working together to provide exceptional and client value. And as a data rich business with a unique CTV first gloss platform data set, we have the opportunity to provide even further value through the use of AI, with a focus on optimization across our full suite of products and solutions. An exciting point of how we're helping clients optimize was on display at Disney's Global Tech and Data Showcase event at CES last month. Powered by innovative technology, Disney Advertising introduced a dashboard for real-time creative optimization. The dashboard helps Disney's advertisers use real-time consumer insights such as web or app conversion data, to find which of the creatives are most effective. This allows them to automatically shift more investments to the winning creatives, improving performance in real time. While this is just one example, in 2024, we'll continue to invest in and release exciting new optimization capabilities, which we believe will solve challenges in the CTV ecosystem. We are currently engaging closely with several major brands, agencies, and publishers to test these new solutions and believe that what we offer will vastly improve efficiency, enhance transparency and control, and maximize ROI for our customers and partners. From day one at Innovate, we have focused on innovation, and we will continue to invest to bring new solutions to the market that provide meaningful value to brands, publishers, TV viewers, and the ecosystem as a whole. In summary, we remain committed to expanding our margins and positioning ourselves for accelerated growth. As I reflect on where we were when we entered 2023, our team's hard work and dedication in navigating this uncertain macro environment is commendable. We have made a consistent progress each quarter in strengthening operational execution and improving financial performance, operational profitability, and cash flow. I'm excited about our ability to make a meaningful difference in this industry and to generate value for our shareholders. With that, I'll ask Tony to take us through the numbers and provide some insights into 2024 expectations.