Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Innovid Corp (CTV, Financial) reported a 6% year-over-year revenue growth to $38 million for Q3 2024.
- CTV ad serving and personalization revenue increased by 12% year-over-year, with CTV impressions reaching a record high of 58%.
- Adjusted EBITDA grew by 29% to $8 million, achieving a 22% adjusted EBITDA margin.
- The company has expanded its partnership with Netflix, enhancing its visibility and increasing ad-serving capabilities.
- Innovid Corp (CTV) is implementing AI and workflow automation, leading to improved operational efficiency and a 50% growth in impressions from clients using the platform without additional service layers.
Negative Points
- Total revenue for the third quarter fell below expectations due to political ad spending crowding out traditional brand spending.
- There was slower than anticipated growth in cross-selling additional products to clients, with measurement revenue growing only 1%.
- Mobile impressions declined by 2%, and desktop video impressions grew only 5%, which muted overall growth.
- The shift towards a software-only model, while improving margins, is expected to exert near-term revenue pressure.
- The company has lowered its full-year revenue guidance due to persistent revenue headwinds, including political ad spending and muted cross-sell activity.
Q & A Highlights
Q: Was there any change in the competitive environment or customer behavior due to political ad spending?
A: (CEO) There was no change in the competitive environment. The political ad spending grew significantly, pushing large brands out temporarily. We saw a drop in CPG and financial services, but no significant churn or product changes.
Q: Can you explain the sales force reorganization to facilitate greater cross-sell?
A: (CEO) We are moving from selling mostly the ad server to a platform sale that includes multiple products. The previous structure did not yield desired results, so we made changes to better execute our strategy and expect to see results next year.
Q: How much of an uplift should we expect as political ad spending rolls off?
A: (CFO) It's too early to quantify the uplift, but we have seen a slight bounce back post-election. We remain confident in our long-term growth targets and are focusing on profitability until we see more revenue momentum.
Q: Will the self-service product be a headwind to growth in 2025?
A: (CEO) The self-service model is scalable and offers better margins. While it grew faster than expected, impacting short-term revenue, it is a positive trend for long-term growth and efficiency.
Q: How does Innovid make money from the partnership with Nielsen?
A: (CEO) We haven't disclosed financial details yet, but we have a structure in place for revenue generation once the joint product is in the market. It's still early days for revenue impact.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
