Release Date: August 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nexxen International Ltd (TTTPF, Financial) reported record Q2 contribution ex-TAC and CTV revenue, alongside significantly expanded adjusted EBITDA.
- The rebranding to Nexxen has driven greater market recognition and facilitated new and expanded partnerships with industry leaders.
- The integration of Amobee has enhanced Nexxen's data capabilities, leading to improved audience segmentation and data enrichment offerings.
- Nexxen's data platform has attracted key new partners, such as Stagwell and United Airlines, unlocking new revenue opportunities.
- The company achieved a 27% year-over-year increase in adjusted EBITDA, reflecting improved cost efficiencies and operating leverage.
Negative Points
- Nexxen observed a year-over-year decrease in its travel and technology verticals during Q2.
- Despite improvements, the company still faces challenges in fully capitalizing on its data platform and identity graph launch.
- The integration of Amobee required significant effort and time to align sales teams and offerings, impacting short-term performance.
- Nexxen's reliance on macroeconomic conditions means that any downturn could negatively affect its advertising revenue streams.
- The company is still in the early stages of its retail and commerce media strategy, with uncertain revenue impacts from new partnerships.
Q & A Highlights
Q: Could you dive deeper into the dynamics that led to the growth in CTV, particularly the mix of benefits from more adoption of premium solutions versus increased CTV supply?
A: Ofer Druker, CEO: The market is in better condition, leading to increased investment in CTV channels. Our advanced tools and technology for CTV, including targeting and measurement capabilities, have enhanced results for clients. The release of our data management platform and integration of ACR data with VIDAA have further improved audience insights and targeting.
Q: How should we think about margins moving forward, considering the benefits from previous investments and new investments in GenAI, sales, and marketing?
A: Sagi Niri, CFO: We achieved a 32% adjusted EBITDA margin this quarter. We expect margins to settle around 30% for the year, with potential for improvement in 2025. The margin will vary with seasonality, likely exceeding 32% in Q4.
Q: Could you talk about your GenAI roadmap and where you plan to integrate it into your product portfolio?
A: Ofer Druker, CEO: We plan to integrate GenAI into our discovery platform, which helps advertisers source audiences and gain insights. This integration will enhance the platform's capabilities, leveraging our data and activation tools to provide better insights and segment creation.
Q: Regarding the United Airlines partnership, is there immediate revenue, or does it attract new advertisers in e-commerce?
A: Ofer Druker, CEO: The partnership with United Airlines marks our entry into retail and commercial data. We expect revenue from operating their media sales and offering their data to our clients programmatically. The data set is significant, with over 100 million travelers, and we anticipate meaningful revenue in the future.
Q: Following the integration of Amobee, how has sales execution improved, and how do you feel about the sales force now?
A: Ofer Druker, CEO: The integration of Amobee required aligning sales teams and offerings. We've improved our sales processes, educated our teams, and refined our product offerings. This has led to better market understanding and increased revenue from existing clients.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
