illumin Holdings Inc.

Good morning, everyone. Before we begin the official remarks, I will read the cautionary note regarding forward-looking information. Certain information to be discussed during this call contains forward-looking statements within the meaning of applicable security laws, including, among others, statements concerning the company's objectives, the company's strategy to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management and are subject to a number of significant risks and uncertainties that could cause actual results to differ materially from those anticipated. Please refer to the cautionary statements and the risk factors identified in our filings with CDAR and EDGAR for a more detailed explanation of the inherent risks and uncertainties that could affect such forward-looking statements. Following the presentation, we will conduct a Q&A session. I would now like to turn the conference call over to Tal Hayek, the co-founder and chief executive officer

Good morning, everyone, and welcome to our Q3 2023 podcast. investor presentation. Well, I like to start by the news that we already shared, that it is time for a new leader to take the lead here at Illumin. I will be taking the role of a vice chair of the board and will continue to work in the company and as an advisor role to the new CEO and of course in the board itself as well. We will be looking for a new leader to scale this company to a much, much bigger company. So somebody with experience in scaling a company. I have been doing this for 14 years now, and I think it's time for the next leader to come in and take it really to the next level. When I made this announcement, it was a sad and proud day for me, as I shared with the Illumin community. I co-founded this company many years ago, 14 years ago, and always feel like it's my baby. And... Just like the analogy I use is just like bringing a baby into this world. The baby becomes bigger and bigger and more mature. And one day they go to university. And when they go to university, it's a very sad day for the parents. But it's also a very proud day because they know that they prepped them to the world and now it's time for that baby to go and succeed on its own. I think that Illumine is in its best shape of its life. Illumine is now a very differentiated product. It has a product that allows marketers to create a consumer journey, something that That's exactly how they want to do it. That's how they design it. That's how they desire to do it. But until now, they couldn't have a way of doing it. The lumen, they have that. And we've seen the adoption of a lumen taking place. And we've seen the adoption of ourselves of a lumen growing very aggressively year over year. And we expect that to continue growing. We have some bumps around the road and we have to make some slight adjustments in order to make it grow on a consistent basis, but we do feel like we have the formula for success on that. I'd like to share that me and the other co-founders started this company in 2009 in a very small room. We scaled it very, very fast. We took it public first time in 2014, and we celebrated many successes and stood together through many hard times. And we do believe that Illumin is changing the world of advertising. I would like to thank my co-founder, the rest of the executive team, the management team of Illumin, and the entire Illumin community alongside with the investors for all the support they gave me personally along the time. I've been... receiving a lot of amazing thank you, a lot of supports for my decision. And it's just heartfelt to see what I've been getting. Well, till the time that we do find a new CEO, I will still be running this company. And we expect this search process that will take some time. So we do feel that sometimes in 2024, it will take place. And for that, we hired a search firm to help us search, and we will be looking for somebody that's aligned with our vision, which is to grow aggressively through self-serve and do it in a conscious way. Let's look at our Q3 financial results. So we delivered $29.6 million in revenue in Q3. Again, as I mentioned before, we would like to see higher revenues. Revenue growth year over year. We're still seeing revenue growth while many other competitors are showing that revenue is going down. However, there are two things that I would like to mention. Number one, we are seeing reduction in our managed service. This was always predicted. It's reducing a little bit faster than we expected. I think it's due to a couple of things. One is people are moving more and more into self-serve. And the economic situation, people are a little bit more scared about their budget. And so that's the reason we're saying that. With that, we are pleased that we're still seeing growth. Most importantly, what we've been tracking is our self-serve revenue. We would like to see the stacking effect every month on our self-serve revenue. And in Q3, we've seen that we're virtually flat from Q2. I want to remind everyone that it's a new journey for us. It really started Q3 of last year to start recruiting new customers, new logos. And we've been focusing on bringing in a lot of new logos. And we now found out that some of those new logos are not the right logos to bring in. So I would say that we're making great progress in bringing in that engine, the engine of growth on self-serve. But we do need to make some adjustments, and we started making some adjustments. And as you can see, we brought in less logos this quarter, and we're expecting the results from those less logos to be better in the future. We're already seeing the stacking effect back happening in Q4, and we're pleased by that. As far as Q4 is concerned in general, we're still seeing challenges on the managed side of the business. So again, Q4 is not going to be the results that we would like to see. And again, I think it's due to the financial situation. situation out there and due to the fact that more and more customers are moving into self-serve. Some of those customers are moving to our self-serve and it takes them a little longer to start spending to the same levels as it's something new for them. And I do believe we see the results in the future as well. And now I'd like to call on Nadim to share some of his thoughts about the sales side.

Thank you, Tal. I'm going to delve deeper into our third quarter numbers and give you a sense of how our pipeline and our self-service business overall is progressing. I really wanted to thank our incredible team and our wonderful customers. I'm so proud and lucky to be part of this amazing team and to be able to serve these truly transformational customers. As we had guided, we had a challenging Q3 with 2.4% year-over-year revenue growth. Quarter over quarter, our self-service business was flat, despite low seasonal spending and a longer time to ramp with many customers on holiday during August. We were happy with these results. Illumine continues to be a product that is resonating, has a unique and differentiated value proposition, and customers that will spend money through this platform. The business overall is coming into balance, while showing very moderate growth rates. Our strategy is to have a balanced business, given the durability of our self-service revenue, now comprising almost 40% of our revenue in Q3. On the last few calls, I've been talking about how important it is for us to track peak KPIs in our business. We'll delve deeper into a couple of those KPIs that we've been discussing over the last few calls. And you will continue to see what I see, that we're establishing the fundamentals of a great long-term sustainable business. Our late stage demo growth slowed a bit to 162 as we're looking to qualify poor quality spenders out of the business, out of the pipeline earlier, so we can focus on those customers and those deals that will bring us great revenue. They're what we call our ideal customer profile. I'm going to delve deeper into that in this call. We've learned a lot in the first half of the year relative to what target customers will spend, which ones won't spend, how they spend, how much they cost to serve, how much they cost to sell. While we saw a bit of a decrease in new logo growth in self-serve, it's as a result of our focus on the right, proper, ideal customer profile. Targeting the right ideal customer profile will provide a higher probability that a customer will spend on our platform, slowly increasing spending over time, and lower our total cost to serve. Last quarter, I mentioned we entered the quarter with 245 deals in pipe. We're entering Q4 with 316 deals in pipe. Continued momentum. While increasing the right customers, the ideal customers, make sure we narrow this to high-quality spenders. Our Q3 brand direct pipeline growth slowed as well due to seasonality as expected, yet continues to increase as a percentage of our overall total pipeline, again providing balance to the business and increasing our total addressable market, providing more predictability and more sustainability to the business. Looking at our self-service run rate number, we continue to see growth quarter over quarter coming in at $25 million. That's a $3 million increase from Q2. And again, that run rate is taking the final month of the quarter and multiplying it by 12. I want to remind everybody that we are a consumption-based model. We will have seasonal spenders. We will have companies that when they enter their fiscal year, they will take a little bit of time to ramp that spending as they enter that year. Over time, as we diversify across industries, that seasonality will decrease for our business. As we diversify across companies that have multiple year ends, we'll also decrease that seasonality in our spend. And it'll lead to a great business overall. Although we expect similar results in Q4, we are excited about the changes we're making. Changes that are going to transform our business, bring our business into balance, and materially growing our self-service business. I would now like to turn the call over to Elliot to update you on our business financials and thank everybody for their time today. Elliot.