Innovid Corp. (CTV) Q2 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong financial performance, with revenue and EBITDA growth, improved cash flow, and a net cash position. Despite uncertainties in the ad market, the company has strategic collaborations, like with Nielsen, and a focus on CTV, which is driving growth. The Q&A indicates confidence in guidance and highlights new customer wins. However, management's vague responses about partnership impacts and Harmony details slightly temper enthusiasm. Overall, the positive financials and strategic initiatives suggest a stock price increase in the short term.
Key Financial Performance
Revenue $38 million, up 10% year-over-year. Growth attributed to a continued shift to CTV and stabilization in ad spending.
Adjusted EBITDA $5.9 million, up 29% year-over-year from $4.5 million. Improvement due to sustained revenue growth and lower cost of revenues as a percentage of revenue.
Adjusted EBITDA Margin 15.5%, up from 13% year-over-year. Margin expansion reflects operating leverage and cost management.
Free Cash Flow Use of $1.3 million, a 38% improvement over the $2 million used in Q2 2023.
Net Loss $10.5 million, improved from a net loss of $19 million in Q2 2023.
Cash and Cash Equivalents $30.6 million, a 31% improvement compared to $23.4 million at the end of Q2 2023.
Total Operating Expenses $37.9 million, up 6% from $35.9 million last year.
Ad Serving and Personalization Revenue Up 11% year-over-year, making up 78% of total revenue.
Measurement Revenue Grew 6% year-over-year, accounting for 22% of total revenue.
CTV Impressions Increased by 21% year-over-year, reflecting the transition to CTV.
Mobile Video Volume Grew by 13%, representing 35% of all video impressions.
Desktop Volume Decreased by 9%, reflecting 11% of all video impressions.
Total Video Impressions Served Grew 14% year-over-year.
Operating Highlights
New Product Launch: Introduced Harmony Direct, which streamlines the supply path, making it more sustainable and transparent. Launched Harmony Frequency, the first holistic frequency management solution for CTV and digital advertising.
Market Expansion: New partnerships with Goodway Group and Vizio as part of the Harmony initiative. Expanded partnerships with leading brands such as WNBA, Eli Lilly, Lundbeck, Purple Innovation, Habit Burger, and The Wonderful Company. Collaboration with Nielsen to provide a seamless workflow for cross-media ad measurement.
Operational Efficiency: Adjusted EBITDA grew 29% to $5.9 million, with an adjusted EBITDA margin increase to 15.5%. Revenue grew 10% year-over-year to $38 million, with CTV impressions increasing by 21%.
Strategic Shift: Launched the Harmony initiative to optimize CTV advertising and improve efficiency and ROI. Focus on integrating measurement solutions with the Harmony initiative to enhance client value.
Risk or Challenges
Competitive Pressures: The company faces ongoing competitive pressures in the CTV advertising market, which requires continuous innovation and strategic partnerships to maintain its market position.
Regulatory Issues: There are potential regulatory challenges that could impact the CTV advertising landscape, particularly as the industry transitions to a fully digital future.
Supply Chain Challenges: The complexities of the CTV ecosystem present supply chain challenges, particularly in optimizing the supply path for advertisers and publishers.
Economic Factors: The company anticipates continued uncertainty in the economic environment, particularly due to the upcoming US election cycle, which may affect advertising spending.
Market Dynamics: The ad market dynamics are inconsistent, with some verticals resuming normal spending levels while others remain cautious, impacting overall revenue growth.
Guidance & Outlook
Harmony Initiative: Launched in April 2024 to address challenges in CTV advertising, focusing on optimizing advertising infrastructure for efficiency, ROI, transparency, and consumer experience.
Harmony Direct: A product under the Harmony initiative that streamlines the supply path, improving sustainability and transparency, with early results showing up to 15% improved yield.
Harmony Frequency: A new frequency management solution for CTV and digital advertising, currently in beta testing, aimed at preventing ad overexposure and improving budget allocation.
Nielsen Collaboration: A strategic partnership with Nielsen to enhance ad measurement capabilities and provide a holistic view of cross-media ad campaigns.
Q3 2024 Revenue Guidance: Expected total revenue in the range of $40 million to $42 million, representing 13% year-over-year growth at the midpoint.
Full Year 2024 Revenue Guidance: Reiterating prior guidance of $156 million to $163 million in revenue, reflecting 14% annual growth at the midpoint.
Q3 2024 Adjusted EBITDA Guidance: Expected adjusted EBITDA in the range of $6.5 million to $8.5 million.
Full Year 2024 Adjusted EBITDA Guidance: Adjusted EBITDA expected between $24 million and $29 million.
Long-term Financial Targets: Targeting 20%-plus annual revenue growth and 30%-plus adjusted EBITDA margin.
Shareholder Return Plan
Free Cash Flow: In Q2 2024, free cash flow was a use of $1.3 million, a 38% improvement over the $2 million of free cash flow used in Q2 2023. On a trailing 12-month basis, free cash flow improved by $14 million compared to the same period ended June 30, 2023.
Net Cash Position: At the end of Q2 2024, Innovid had $30.6 million in cash and cash equivalents, reflecting a 31% improvement compared to $23.4 million of net cash at the end of Q2 2023.
Debt Facility: Innovid has no outstanding balance on its revolving debt facility, with $50 million available.
Key Q&A
Earnings Word Cloud
CTV Transcript
The company's financial performance shows strong growth in adjusted EBITDA and net income, indicating operational efficiency. The strategic partnership with Nielsen and the stock repurchase program are positive catalysts. The guidance is optimistic, with a focus on long-term revenue and margin targets. Despite some uncertainties in political ad spend and the competitive environment, the overall sentiment is positive, suggesting a stock price increase in the short term.
The earnings call reveals strong financial performance, with revenue and EBITDA growth, improved cash flow, and a net cash position. Despite uncertainties in the ad market, the company has strategic collaborations, like with Nielsen, and a focus on CTV, which is driving growth. The Q&A indicates confidence in guidance and highlights new customer wins. However, management's vague responses about partnership impacts and Harmony details slightly temper enthusiasm. Overall, the positive financials and strategic initiatives suggest a stock price increase in the short term.
CTV Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
