Slide 1: Q3 / 2022 Presentation
Q3 / 2022 Presentation Nov 09th , 2022 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: Doron Gerstel CEO, Maoz Sigron CFO
Doron Gerstel Maoz Sigron CEO CFO 3
Slide 4: Rule of 40
EBITDA Margin YoY Revenue Growth 70 65% 60% 60% 62% 60 55% 13% 53% 51% 50 12% 15% 16% 39% 18% 40 40% Rule 0f “40” 35% 10% 19% 19% (TTM) 30 10% 24% 23% 20% 20 16% 10% 12% 11% 10 12% 3% 11% 10% 13% 25% 29% 48% 52% 46% 46% 37% 34% 32% 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2022E 2019 2020 2021 2022 4
Slide 5: 4 market trends that explain why we're able to outperform
Advertisers are looking for ways to increase customer engagement to enhance their brand equity, moving away from standard ad units High Impact Suite for Display / CTV 4 market Trends Advertisers shifting direct response budget How we reacted from social channel to search advertising Intent to action
Slide 6: Revenue ($M)
38% 31% CAGR YoY Q3’20-22 GROWT H 159 Revenue ($M) We continue 121 to shift our business to where 83 media budgets are trending Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2021 2022 6
Slide 7: EBITDA ($M)
94% 87% CAGR Q3’20-22 20-22 YoY GROWTH EBITDA/Revenue Ex TAC % 33 EBITDA ($M) 51% We continue to expand our margins 18 Media margin 37% increased to 41%, compared with 39% 9 in Q3 2021 26% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2021 2022 7
Slide 8: Advertising Revenue ($M)
51% CAGR Q3’20-22 20-22 Advertising 26% YoY Revenue ($M) GROWTH 87 CTV revenue increase by 134% 69 Video revenue increase by 209% 38 SORTTM drives more advertisers Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2021 2022 8
Slide 9: Vidazoo video platform
Video Player Content More new Vi Display Management System (CMS) publishers start using Vidazoo Outstream Yield Management platform – 88% increase Video Studio Client Side Support (Auto video generation from Vidazoo AD Prebid, VAST, VPAID. Article) Google IMA JS SDK Platform More spend from Full Ser
Slide 10: High Impact CTV performs at 4x higher rate
High-Impact CTV High Impact CTV Branded Skin with Auto-Rotating Image & Offer Persistent Advertiser Logo Carousel Increases Message Increases Brand Recognition Awareness & Consideration perform Enticing Messaging Via immersive surround Call-To-Action With Persistent Advertiser Website at 4x Higher –
Slide 11: First-to-market Innovation: Attention Trace
First-to-market Innovation Developed in collaboration with System1 Research “Attention Trace” Human-centered approach Measurement complements machine-captured performance data of engagement Second-by-second mapping Unlike simple and as consumers engage with creatives. traditional Brands use the metr
Slide 12: Emerging Business Update
Data Decisioning Emerging Integrations & Optimization Engine Business Update “Always – On” Solution for Retailers & CPG Advertisers Proven 19:1 61% 7X $2.83 46% Attribution Online Lift In Incremental Cost Per Increase ROAS Association Lift In Store Incremental In Brand For Top (Retailer Site Data) W
Slide 13: Privacy matters to advertisers, which is why SORT matters
More Spend 74 Existing SORT customers Increase their spend by 22% QoQ Privacy matters to advertisers … More Costomers 58 New SORT START HERE More Clicks 300M+ which is why Customers in Q3 Impressions delivered 4.2M Clicks SORT matters more than ever Flywheel Additional Data “with privacy-compliant t
Slide 14: Advertisers recognize consumers favor brands that protect privacy
Campaign Goals Advertisers Drive Awareness of Mercedes Benz CPO Vehicles recognize that & Sales Event at local dealerships consumers Generate interest of owning CPO vehicles among in-market, increasingly existing & new customers favor brands Drive Actions/Intent-On-site that protect their privacy 58
Slide 15: iHub Benefits
iHub Benefits Demand Supply Social Operational Platform efficiencies O&O High- Network Video impact Monetization Display Reduce &CTV Platform media cost High- iHub CTV Network intent signal Video&Display Capture and analyze Network data signals for SORT 15 Perion Assets
Slide 16: Search Advertising ($M)
26% 38% Search CAGR Q3’20-22 20-22 YoY Advertising GROWTH 72 ($M) “In challenging times like these, advertisers are carefully evaluating the 52 effectiveness of their budgets. 46 Search tends to do relatively well in such an environment, given its strong measurability and focus on delivering ROI. It
Slide 17: Financial Results
Financial Results 17 17
Slide 18: Quarterly Overview Q3 2022
Quarterly Overview Q3 2022 18 18
Slide 19: Q3 Financial Highlights
Q3 22 Financial Highlights $158.6M $33M $25.6M $0.61M 31% YoY 87% YoY 141% YoY 53% YoY Growth Growth Growth Growth Revenue Adjusted GAAP Net Non-GAAP EBITDA Income EPS 19 19
Slide 20: Q3 2022 Revenue
38% 31% YoY CAGR GROWTH Q3’20-22 158.6 121.0 Q3 2022 83.4 Revenue ($M) Q3 20 Q3 21 Q3 22 20 $26M 20
Slide 21: Q3 2022 Display Advertising Revenues
51% 26% YoY CAGR GROWTH Q3’20-22 Video increased by 209% YoY 86.8 Video platform publishers is up 88% YoY (From 34 to 64) Q3 2022 69.0 44% of total Display Advertising vs. 18% last year Display Advertising CTV increased by 134% YoY 9% of total Display Advertising 37.9 Revenues vs. 5% last year ($M)
Slide 22: Q3 2022 Search Advertising Revenues
38% 26% YoY GROWTH CAGR Q3’20-22 71.8 RPM increased by 42% YoY Q3 2022 52.0 Number of publishers 45.5 Search increased by 60% YoY Advertising 16.9 million daily searches Revenues - an increase of 15% YoY ($M) Q3 20 Q3 21 Q3 22 22 $26M 22
Slide 23: Business Diversification Is Key
Business Diversification Is Key 45% 57% 55% 45% 55% Q3 20 43% Q3 21 Q3 22 23 Display Advertising revenue Search Advertising revenue 23
Slide 24: Continued Improvement in Media Margin
Continued Improvement in Media Margin Media Margin Media Margin Media Margin 40% 39% 41% Product mix continues to improve iHub delivers unparallel Q3 20 Q3 21 Q3 22 optimization of our supply and demand assets TAC TAC TAC Incremental revenue 60% 61% 59% with low variable cost 24 24
Slide 25: Efficiency Drives Profitability
158.6 iHub as a shared infrastructure resource 121.0 Incremental revenue Efficiency Drives 83.4 with low variable cost Profitability 32% Offshoring our operations 27% 20% Revenue 27.1 33.1 31.7 OPEX+COGS % To Revenue Q3 20 Q3 21 Q3 22 25 $26M 25
Slide 26: Q3 2022 Net Income GAAP
89% Net income GAAP 141% YoY Diluted EPS YoY GROWTH GROWTH 0.53 25.6 Q3 2022 Net Income 10.6 0.28 GAAP 0.08 2.1 Q3 20 Q3 21 Q3 22 Q3 20 Q3 21 Q3 22 26 26
Slide 27: Q3 2022 Net Income Non-GAAP
Net income GAAP Diluted EPS 94% 53% YoY YoY GROWTH GROWTH 0.61 29.9 0.40 Q3 2022 Net Income 15.4 Non-GAAP 0.21 5.9 Q3 20 Q3 21 Q3 22 Q3 20 Q3 21 Q3 22 27 27
Slide 28: Q3 2022 Adjusted EBITDA
94% 87% 21% YoY CAGR GROWTH Q3’20-22 EBITDA 33.0 Compared to To Revenue 15% Q3 2022 In Q3 2021 Adjusted EBITDA 17.6 51% EBITDA 8.7 Compared to To Revenue 37% Ex TAC In Q3 2021 Q3 20 Q3 21 Q3 22 28
Slide 29: Q3 2022 Cash from Operations
129% 145% YoY CAGR GROWTH Q3’20-22 34.7 Q3 2022 Cash from Operations 14.2 ($M) 6.6 Q3 20 Q3 21 Q3 22 29
Slide 30: Net Cash as of Sep 30, 2022
390 353 342 322 Net Cash as of Sep 30,2022 156 ($M) 128 141 52 40 35 37 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2021 2021 30
Slide 31: Thank You
Thank You
Slide 32: Increased 2022 guidance
Revenue 22 EBITDA 22 32% CAGR 630 “Given our strong Revenue 20-22E EBITDA to 635 YoY 39% performance and our 478 GROWTH sustainable 72% CAGR and predictable 20-22E 328 YoY 91% business model, GROWTH 8 33 70 120+ we are increasing our 2020 2021 2022E guidance for 2022 substantially.” $M 2021 Prior 20
Slide 33: 4 market trends that explain why we're able to outperform
Advertisers are looking for ways to increase customer engagement to enhance their brand equity, moving away from standard ad units High Impact Suite for Display / CTV 4 market Trends Advertisers shifting direct response budget How we reacted from social channel to search advertising Intent to action
Slide 34: Appendix
appendix 34
Slide 35: Balance Sheet Overview ($M)
Balance Sheet Overview ($M) 35
Slide 36: Income Statement ($M)
Full year ended, 9 Months ended, P&L- GAAP Q1-20 _Q2-20 _Q320 Q4-20 Q121 _Q221__Q3-21 _Q421 _Q122 _Q222 _Q3-22 2020 2021-2022 Display Advertising revenues 238 187 379 684 381 580 690 1002 686 816 868 148.7 265.3 236.9 165.1 236.9 Search Advertising revenues 423 416 455 49.9 S17 S17 520578567651 718
Slide 37: P&L Non-GAAP ($M)
Full year ended, 9 Months ended, P&L- Non-GAAP 2021 | 2021-2022 | Display Advertising revenues 265.3 165.1 236.9 Search Advertising revenues 213.2 155.4 193.7 Traffic acquisition costs and media buy 288.0 1947 2506 Media Margin 1% of Revenues 45.3% 39.0% 40.2% 36.8% 38.9% 39.7% 39.2% 40.9% 43.3% 41.
Slide 38: Non-GAAP Adjustments ($M)
Non-GAAP Adjustments ($M) 38
Slide 39: Cash Flow Overview ($M)
Cash Flow Overview ($m) Full year ended, 9 Months 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 2020 2021 2022 Operating activities Net Income 43 (22) 21 90 33 74 106 177 155 195 256 10.2 38.7 605 21.0 605 Adjustments required to reconcile net income
Slide 40: Thank You
Thank You