Slide 1: Q4 and FY 2022 Presentation
Q4 and FY 2022 Presentation February 08th , 2023 11
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation and our remarks contain forward-looking statements (within the meaning of The Private Securities Litigation Reform Act of 1995) that involve substantial risks and uncertainties, including statements regarding our expectations and beliefs about our busines
Slide 3: Presenters: CFO, CEO, General Manager CodeFuel
Maoz Sigron Doron Gerstel Tal Jacobson CFO CEO General Manager CodeFuel 3
Slide 4: Revenue ($M)
34% YoY Growth 640 Revenue ($M) We continue 478 to shift our 33% YoY business to Growth 328 where media 210 budgets are 158 118 trending Q4-20 Q4-21 Q4-22 2020 2021 2022 4
Slide 5: EBITDA ($M)
90% YoY Growth 133 EBITDA ($M) We continue to expand our margins 67% YoY 70 Growth Media margin 48 increased to 42%, compared with 33 29 40% in 2021 15 Q4-20 Q4-21 Q4-22 2020 2021 2022 5
Slide 6: Rule of 40
EBITDA Margin YoY Revenue Growth 70 65% 60% 62% 60% 60 55% 53% 54% 50 39% 40% Rule 0f “40” 40 35% 21% (TTM) 30 24% 23% 20% 20 16% 34% 10 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2019 2020 2021 2022 6
Slide 7: Expected Return
Exploit/Explore Exploit / Improve Execution Model Mature initiative Growth New Kill initiatives Explore / invent Proven model which Evidence Sustain has guided our Expected Return business planning and investment strategy Prototype Kill Innovation Risk 7
Slide 8: Expected Return: Exploit
Exploit Exploit / Improve Execution Model Mature initiative Growth New Video platform, Kill initiatives SORT and DR are all Explore / invent delivering on Evidence Sustain sustainable growth Expected Return Video Platfrom SORT Direct Response/ Search Advertising Prototype Kill Innovation Risk 8
Slide 9: Vidazoo Video Platform
Exploit / Improve Vidazoo Mature initiative Exploit Growth Video Platform New Kill initiatives “Vidazoo’s, ad optimization Sustain capabilities have significantly contributed Video Net New Land & to our overall Revenue Publishers Expand monetization effort.” 129% 69% 106% YoY YoY YoY Yoav Raif Growt
Slide 10: SORT
Exploit / Improve Mature initiative Growth Exploit SORT Kill New initiatives SORT is multi-award Sustain winning, including a prestigious Stevie Average Total New award for AI CTR Customers Customers (Q4) Deal size 1.33% 76 $137K 3x Google 191 33% increase 10
Slide 11: Direct Response Search Advertising
Exploit / Improve Exploit Mature Direct Response initiative Search Advertising Growth New Kill “In challenging times like initiatives these, advertisers are carefully evaluating the Sustain effectiveness of their budgets. Search tends to do relatively well in such an environment, given its strong me
Slide 12: Expected Return: Explore
Explore Exploit / Improve Execution Model Mature initiative Groawth In 2022, our explore New Kill initiatives generated $64 initiatives million in revenue and Explore / invent $26M in media margin Sustain Evidence while in 2023 our expectation is to double Expected Return that revenue to $110M and g
Slide 13: Live CTV
Explore / invent Evidence CTV Expected Return Explore Live CTV Kill Prototype Live CTV driving Innovation Risk massive momentum 6x growth since 2020 Purchase Intent 42% Lift CTV increase by 109% in Growth 2022 vs. 2021 96MM 70% Consumers Consumers Watched Live Sports Prefer To Watch This Year Live S
Slide 14: Retail Media
Explore Explore / invent Retail Media Evidence Expected Return In 2022 retail media Kill Prototype generated $23.2M Innovation Risk expecting to be $30M in 2023 14
Slide 15: Generative AI - ChatGPT
Explore Explore / invent Generative AI Evidence ChatGPT Expected Return “Every percentage Prototype Kill point of share it gains in search equals Innovation Risk roughly $2 billion in additional advertising revenue.” Amy Hood, CFO Microsoft 15
Slide 16: Financial Results
Financial Results 16 16
Slide 17: FY 2022 Financial Highlights
FY 2022 Financial Highlights $640.3M $132.4M $119.8M $2.47 $122.1M 34% YoY 90% YoY 100% YoY 57% YoY 72% YoY Growth Growth Growth Growth Growth Revenue Adjusted Non-GAAP Non-GAAP Operating EBITDA Net Income EPS Cash Flow 17 17
Slide 18: Quarterly LTM Revenue & Adjusted EBITDA Trends
Quarterly LTM Revenue & Adjusted EBITDA Trends QoQ Growth 700 LTM Revenue ($M & %Growth) 9% 160 LTM EBITDA ($M & %Margin) 640 7% 21% 600 7% 589 140 132 7% 551 514 19% 9% 113 120 500 9% 478 18% 14% 439 100 98 401 16% 400 7% 14% 352 83 15% 7% 328 80 5% -1% 70 288 13% 300 274 270 60 12% 56 47 200 12% 1
Slide 19: Inorganic Growth - Vidazoo Transaction
Inorganic Growth - Vidazoo Transaction 2022 2020-2022 2020-2022 Acquired 2022 2022 Acquisition Purchase EBITDA Revenue EBITDA EBITDA EBITDA PERI EBITDA Date Amount (1) CAGR CAGR Multiple (1) Multiple (3) Multiple Oct21 $93.5M $20.6M 101% 118% 6.5 4.5 8.5 Vidazoo Vidazoo PERI Multiple Financials Perf
Slide 20: Q4 2022 Financial Highlights
Q4 2022 Financial Highlights $209.7M $48.2M $38.7M $0.90M 33% YoY 67% YoY 119% YoY 45% YoY Growth Growth Growth Growth Revenue Adjusted GAAP Net Income Non-GAAP EBITDA EPS 20 20
Slide 21: Revenue ($M)
Q4 2022 FY 2022 34% YoY GROWTH 640.3 40% CAGR 2020-2022 478.5 Revenue ($M) 33% 328.1 YoY 33% GROWTH CAGR 2020-2022 209.7 158.0 118.3 Q4-20 Q4-21 Q4-22 2020 2021 2022 21 21
Slide 22: Q4 2022 Display Advertising
24% YoY GROWTH 35% 123.8 Video increased by 33% YoY CAGR • 75 Video platform publishers, 78% higher YoY Q4 2022 100.2 • 42% of total Display Advertising vs. 39% last year Display CTV increased by 42% YoY 68.4 10% of total Display Advertising Advertising SORTTM revenue up by 82% QoQ Revenues ($M) 21%
Slide 23: Q4 2022 Search Advertising
49% YoY GROWTH 85.9 31% RPM increased by 13% YoY Q4 2022 CAGR Search Number of publishers 57.8 increased by 37% YoY 49.9 Advertising Revenues ($M) 22 million daily searches - an increase of 26% YoY Q4-20 Q4-21 Q4-22 23 23
Slide 24: Business Diversification Is Key
Business Diversification Is Key 58% 63% 59% 42% Q4-20 37% Q4-21 41% Q4-22 24 Display Advertising revenue Search Advertising revenue 24
Slide 25: Continued Improvement in Media Margin
Continued Improvement in Media Margin Media Margin Media Margin Media Margin 37% 41% 42% Product mix continues to improve Ongoing optimization of Q4-20 Q4-21 Q4-22 our supply and demand assets through iHUB TAC TAC TAC Incremental revenue with low variable cost 63% 59% 58% 25 25
Slide 26: Efficiency Drives Profitability
640.3 iHUB as a shared infrastructure resource 478.5 Incremental revenue Efficiency Drives $308k with low variable cost Profitability 328.1 Offshoring our operations 33% $172k Revenue 28% EBITDA % OPEX+COGS/Revenue 23% EBITDA per FTE ($K) $78k 32.8 69.6 132.4 2020 2021 2022 26 $26M 26
Slide 27: Adjusted EBITDA
Q4 2022 FY 2022 90% YoY GROWTH 132.4 101% CAGR CAGR 67% 69.6 Adjusted EBITDA Q4’20-22 YoY GROWTH 77% 48.2 CAGR 32.8 28.9 15.3 Q4-20 Q4-21 Q4-22 2020 2021 2022 23% EBITDA/Revenue (vs. 18% in Q4’21) 21% EBITDA/Revenue (vs. 15% in Q4’21) 55% EBITDA/Revenue Ex-Tac (vs. 45% in Q4’21) 49% EBITDA/Revenue E
Slide 28: GAAP Net Income
Q4 2022 FY 2022 156% YoY GROWTH 99.2 2.21 119% GAAP YoY GROWTH Net Income 0.84 1.13 38.7 38.7 0.48 0.33 0.38 17.7 9.0 10.2 Q4-20 Q4-21 Q4-22 2020 2021 2022 GAAP EPS 28 28
Slide 29: Non-GAAP Net Income
Q4 2022 FY 2022 100% YoY GROWTH 119.8 2.47 77% Non-GAAP YoY GROWTH 1.57 Net Income 0.90 60.0 44.7 0.91 0.62 0.45 25.3 26.6 13.8 Q4-20 Q4-21 Q4-22 2020 2021 2022 Non-GAAP EPS 29 29
Slide 30: Cash from Operations ($M)
Q4 2022 FY 2022 72% YoY GROWTH 122.1 135% CAGR Cash from 71.1 Operations ($M) 32% YoY 72% GROWTH CAGR 38.2 28.8 22.2 12.9 Q4-20 Q4-21 Q4-22 2020 2021 2022 30
Slide 31: Net Cash as of Dec. 31, 2022 ($M)
430 390 353 342 322 Net Cash as of Dec. 31, 2022 ($M) 156 141 128 52 40 35 37 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2020 2021 2022 31
Slide 32: 2023 Guidance
Revenue 720-740 2023 Guidance Adj. EBITDA 640.3 14% YoY Growth 1 31% CAGR 20-23E “We expect the strong 8 business momentum 14% 66% YoY CAGR to carry on in 2023, 132.4 149-153 Growth 1 20-23E harnessing our 2022 2023E innovative capabilities and our efficiency $M 2022 2023 YoY measures Guidance Growt
Slide 33: Appendix
appendix 33
Slide 34: Balance Sheet Overview ($M)
Balance Sheet Overview ($M) Current Assets 31/12/2021 31/12/2022 Current Liabilities 31/12/2021 31/12/2022 Cash and cash equivalents 104.4 176.2 Accounts payable 107.7 155.9 Restricted cash 1.1 1.3 Accrued expenses and other liabilities 40.3 37.8 Short-term bank deposit 217.2 253.4 Short-term operat
Slide 35: Income Statement ($M)
Income Statement ($M) Full year ended, P&L - GAAP Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 2020 2021 2022 Display Advertising revenues 23.8 18.7 37.9 68.4 38.1 58.0 69.0 100.2 68.6 81.6 86.8 123.8 148.7 265.3 360.7 Search Advertising revenues 42.3 41.6 45.5 49.9 51.7 5
Slide 36: P&L Non-GAAP ($M)
P&L Non-GAAP ($M) Full year ended, P&L - Non-GAAP Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 2020 2021 2022 Display Advertising revenues 23.7 18.7 37.9 68.4 38.1 58.0 69.0 100.2 68.6 81.6 86.8 123.8 148.7 265.3 360.7 Search Advertising revenues 42.3 41.6 45.5 49.9 51.7 5
Slide 37: Non-GAAP Adjustments ($M)
Non-GAAP Adjustments ($M) Full year ended, Reconciliation of GAAP to NON-GAAP Results Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 2020 2021 2022 GAAP Net Income (Loss) from continuing operations 1.3 (2.2) 2.1 9.0 3.3 7.1 10.6 17.7 15.5 19.5 25.6 38.7 10.2 38.8 99.2 Share
Slide 38: Cash Flow Overview ($M)
Cash Flow Overview ($M) Full year ended, Cash Flow Results Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 2020 2021 2022 Operating activities Net Income 1.3 (2.2) 2.1 9.0 3.3 7.1 10.6 17.7 15.5 19.5 25.6 38.7 10.2 38.7 99.2 Adjustments required to reconcile net income to net
Slide 39: Thank You
Thank You
Slide 40: Q4-22 Actuals - The Quarter in Numbers
Q4-22 Actuals - The Quarter in Numbers EPS (NON-GAAP) $0.90 • Q4’22 Net Income (Non-GAAP): +49% QoQ New record!* • Q4’22 EPS (Non-GAAP ; Diluted): +48% QoQ New record!* Net Income ($M) EPS ($M) GAAP Net income Non-GAAP Net income GAAP Diluted EPS Non-GAAP Diluted EPS 44.7 $0.90 38.7 $0.62 $0.79 29.9