In the third quarter earnings call, NexSys, a data-first EdTech platform, reported a robust financial performance with record results. The company saw its contribution ex tax climb to $85.5 million, marking a 12% increase from the same period last year. Programmatic revenue also rose to $81.6 million, a 10% year-over-year growth. The integration of MoVI's technology and a rebranding to Nexen have been pivotal in these improvements. NexSys CEO Ofer Druker and CFO Sagi Niri discussed the company's strategic advancements, including the integration of Generative AI across its platform, which is expected to enhance user experience and customer outcomes.
Key Takeaways
- NexSys reported a significant year-over-year increase in Q3 contribution ex tax and programmatic revenue.
- Growth was broad-based across CTV video, display, and mobile sectors, with CTV revenue alone surging 52%.
- The integration of MoVI's technology and rebranding to Nexen have been key to performance improvements.
- NexSys is integrating Generative AI to enhance user experience and customer outcomes.
- The company added 138 new advertisers and 61 new supply partners in Q3.
- A new $50 million share repurchase program is set to begin on November 19, 2024.
- NexSys is considering transitioning from IFRS to US GAAP for its NASDAQ listing and to attract U.S. investors.
Company Outlook
- NexSys plans to expand its data licensing and technology investments.
- The company aims for a contribution ex tax of $340-$345 million and an adjusted EBITDA of approximately $107 million in 2024.
- NexSys is optimistic about the future, with a focus on innovation and execution in data, CTV, privacy, and programmatic capabilities.
Bearish Highlights
- The travel vertical saw a decline in the reported quarter.
- The competitive landscape poses challenges, with concerns raised about growth disparity between different types of platforms.
Bullish Highlights
- Strong growth in Connected TV (CTV) advertising is expected to continue.
- The company's end-to-end platform approach is seen as advantageous for efficiency, privacy, and data synchronization.
- A healthy pipeline for new commerce media partnerships and international expansion with The Trade Desk (NASDAQ:TTD) is anticipated to contribute to future results.
Misses
- There were no specific financial misses reported in the earnings call.
Q&A Highlights
- CEO Ofer Druker defended the company's end-to-end approach against concerns about the competitive landscape.
- CFO Sagi Niri discussed the strategic plan to transition to US GAAP for NASDAQ listing compliance.
- Druker attributed improved sales execution to refined messaging and team alignment post-Amobi acquisition.
- NexSys does not view political contributions as material to its growth strategy, focusing instead on technological capabilities and market conditions.
As NexSys navigates the advertising landscape, it continues to leverage its technological advancements and market positioning. The company's strategic direction and commitment to innovation and execution remain central to its optimistic outlook for the future.
Full transcript - None (TRMR) Q3 2024:
Operator: Thank you for standing by. My name is Janine, and I will be your conference operator. Welcome to NexSys third quarter earnings call. At this time, participants are in listen-only mode with a question and answer session to follow at the end of the presentation. The call is being recorded, and a replay of today's call will be made available on Nexon's Investor Relations website. I will now hand the call over to Billy Eckert, Vice President of Investor Relations, for introductions and the reading of the Safe Harbor statement. Billy, please go ahead.
Billy Eckert: Thank you, Operator. Good morning, everyone, and welcome to Nexon's third quarter earnings call. During today's call, we will discuss our financial and operating results for the three and nine months ended September 30, 2024, as well as our forward-looking guidance. With us on today's call are Ofer Druker, Nexon's Chief Executive Officer, and Sagi Niri, the company's Chief Financial Officer. This morning, we issued a press release which you can access on our IR website at investors.nexon.com. During today's conference call, we will make forward-looking statements. All statements other than statements of historical fact could be deemed as forward-looking. We advise caution and reliance on forward-looking statements. These statements include, without limitation, statements and projections regarding anticipated future financial and operating performance, market opportunity, growth prospects, strategy, financial outlook, partnership and anticipated benefits related to those partnerships, anticipated benefits related to the potential changes in the company's trading security structure, anticipated benefits related to the company's intended growth and platform investments, forward-looking views on economic and industry conditions, as well as any other statements concerning the expected development, performance, and market share competitive performance relating to our products or services. These statements are based on information available to us as of the date of this call. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those implied by these forward-looking statements, including unexpected changes in our business, unexpected changes in macroeconomic or industry conditions. More detailed information about these risk factors and additional risk factors are set forth in our filings with the US Securities and Exchange Commission, including but not limited to, those risks and uncertainties listed in the section entitled risk factors in our most recent annual report on Form 20-F. Nexon does not intend to update or alter its forward-looking statements whether as a result of new information, future events, or otherwise, except as required by law. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in IFRS and non-IFRS terms. We refer you to the company's press release for additional details including definitions of non-IFRS items and reconciliations of non-IFRS results. At this time, it is my pleasure to introduce Ofer Druker, CEO of Nexon. Ofer, please go ahead.
Ofer Druker: Thanks, Billy. Since late last year, we significantly improved the company performance. Our improvement is a direct byproduct of our hard work integrating the MoVI's technology data assets and talent base fits with a challenging macroeconomic condition as well as our rebrand to Nexen. The combination of which has boosted our spending with the industry. Since early 2024, we achieved significantly better results than in 2023. As our business thrives and markets are on better footing, as evidenced by our ability to generate record Q3 results and accelerate our growth prospect by winning partnerships with some of the world's top companies. After enhancing our tech product, data, and advanced PCB capabilities, Nexen is being recognized as a strategic partner that can drive superior results regardless of our customers' across the industry choose to work with us. It is clear. NexGen is now viewed as the data-first EdTech Platform. That enhances outcomes and solves key problems across the supply chain with data-driven video advanced TV and audience targeting capabilities, unlike any other in the industry. Our strategy to seamlessly connect our robust data distribution our flexible platform to fuel better customer outcomes is the winning value proposition that is leading more and more partners to select Nexen as the platform of choice. A key advantage for Nexen is that we are one of the pioneers and leaders in the concept of owning and operating an end-to-end platform. A trend that others in EdTech are trying to catch up to. Operating a full-stack platform brings efficiency and simplicity to our partners. And customers that adapt multiple solutions across our end-to-end ecosystem typically save costs while generating improved results in ROI. Our end-to-end platform includes a flexible full-service state-of-the-art DSP and SSP, centered around a data platform. It is unique and differentiated in the marketplace. And our data strategy strongly complements and significantly advances the benefits created by our full-stack infrastructure. FlowMobi regained even greater combined technology and data benefits Enrich. Which are now providing massive advantages for NexGen and its customers in the market. Following the integration, our robust data is now fully intertwined into our advanced technology solution across our platform. Enabling our partners to better fulfill the needs better service the clients and win new accounts. As I will touch on later, we plan to incorporate Gen AI more and more across our platform to further enhance our combined tech and data capabilities and competitive advantage, to drive even better results and usability for our customers. Customer prospect continues to increasingly embrace our data-powered end-to-end approach. A great example is our partnership with Stegwin, which continues to add that a growing number of solutions within our product suite is there are driving better results when leveraged together. Segment recently ran an analysis of our performance against another major DSP for one of its clients. Our combined data and technology offerings significantly outperformed generating far superior returns on ad spend a tremendous reduction in cost per customer acquisition and a notable increase in CPM efficiencies. Data is a key element for the success of any advertising campaign. This is the main reason customers lately have been seeking to partner with Next (LON:NXT) k. If the company has robust and unique data capabilities, and assets that feel better results. Our tools like Nexmo Discovery (NASDAQ:WBD) enable advertisers to find and target audiences unlock insights, visual trends, and extend likely to engage or buy audience reach to achieve better returns. Advertisers are also able to onboard their first-party data onto our platform and enrich it with our data sets or any other data set of their choosing. Improving the results when activating campaigns on Extra DSP while enhancing the power of our recently launched data platform. Our data platform combined our data assets capabilities and application in one place and also feature a unified ID graph solution. Our ID graph combines and de duplicates several identifiers into a merged graph enabling increased scale, frequency capping, and better targeting and distribution at the person and household level while furthering our already strong positioning to address change in privacy and identity. We are also adding curated media capabilities to our roster of data offering. In short, our differentiated ability to connect the data and edtech supply chain through our data onboarding, audience enrichment, activation, and measurement capabilities separate Nexen from the pack. Our holistic set of data capabilities have also led to new opportunities in growth areas like commerce media. As Connective Media by United Airlines recently selected Nexen, as a preferred data platform partner. The partnership extends first-party data from United customers and minus plus program members to advertisers leveraging NexGen for activation across premium off-site CTV linear and digital content. Our clients can leverage this data to their end of insights or to campaigns and loyalty, one of the leading performance agencies in the U. S. Has been an early adopter. Enabling its clients to reach new audiences. We strongly believe in the importance of CTV advertising as it reflects the critical conduit to better understand and more effectively reach likely to engage or buy audiences. Our full-stack platform benefits TV advertisers and streaming platform as we bring unique demand and supply to each type of the transaction, while enabling cost efficiencies. We also own the relationship with all the world's major CTV OEMs, provide access to premium supply for many of the largest streaming players, and possess exclusive EBITDA assets. Within our data offering, we stand out for our unique and advanced CTV data solution, Such is our discovery tool and exclusive global Asia data capabilities enabled by our partnership with Vita. Which amplify the effectiveness and appeal of our TV-focused Correct. We have built these capabilities over several years and as a result, today, NextGen is a leader in CTV advertising data and technology. We believe we are well-positioned to capitalize over the long term amidst continued growth in ESSA plus TV content and large sports growing digital. Our differentiated TV data assets and capabilities led us to win a strategic partnership with The Trade Desk in Q3, resulting in our ACL data segments becoming available on their platform for activation in the U. S. UK. Canada, and Australia. Next one segments, enable the traders clients to unlock unique targeting capabilities that can enhance their TV advertising efforts. While we gain another channel to expand our data licensing revenue We also recently entered another partnership with SpeckedUp. In which our ACI data segments became available for activation in the U. S. Within their programmatic platform. The Takeda platform connects to our SSP and this partnership creates increased data licensing revenue opportunities And says as a testament to customers leveraging several solutions within our ecosystem. Underscoring the strategic nature of our platform. Data licensing reflects a significant long-term opportunity for Nexen. In addition to this recent wins, we are in advanced discussions with many others seeking to license our data, including some of the industry's largest and most recognized brands. As I mentioned, large sports is shifting to CTV. Creating opportunities for Nexen amid strong and growing advertiser demand. Our relationship with Fox Fubo, and DIRECTV amongst others driving sports-related telwing. For example, folks have a plethora of live college football inventory. An accent. Has been able to complement their sales effort enabling them to maximize yield and monetization. Additionally, other partners are granting Nexen access to LiveNesten I'm And other major sports inventory. Driving better monetization for these customers while creating robust and unique opportunities for our advertiser clients. Our data-driven political solution launched in Q3 also enabled us to capitalize on the U. S. Election cycle. Particularly in Q4, and generates what we believe will reflect record annual political contribution ex tax for Lexus Based on results we have seen to this point in the year, These tools empowered our political advertising customers to gain deeper insights and maximize audience reach. And our data and audience capabilities drove better targeting and engagement with multicultural voters. This emerged as a key feature that we believe will serve us in the future as many companies increasingly focus on diversity and seek solution to help them prudently address the topic. In Q3, we added an all-time high one hundred and thirty-eight new actively spending first-time advertisers Customers. This included thirty-one new enterprise self-service customers and two new independent agencies leveraging Nexen's self-serve offering. We also added sixty-one new supply partners in Q3 highlighted by premium streaming customers and new audio Finally, we believe, inclusive of Gen AI and machine learning, NexGen is uniquely situated to harness the full power of AI as we operate a full-stack platform connected by data, which benefits customers across all steps of their workflows. Over several years, we have developed deep machine learning AI and data capabilities by integrating Gen AI, we can amplify the power of NexGen platform across planning, activation, and monetization. We believe Nexen is an AI edge due to our many data signals we collect and utilize, AI solutions are dependent on robust data to generate accurate signals and excess seats on a plus route because we operate an end-to-end full-stack platform can also incorporate AI very broadly and effectively. Gen AI can benefit Nexen across many use cases in driving incremental opportunities, predictive analytics, data enrichment, customer support automation, content creation and personalization Creative ideation and optimization. We are now actively integrating Gen AI into our core products to drive better usability and customer success. In the recent months, we have built out a J and A I team and partnership roster featuring OpenAI and others to execute on this initiative. In the near future, we've seen our data and clinic solution we anticipate releasing a Gen AI powered in platform virtual assistant to help customers find and reach new audiences, generate audience segments and seamlessly activate them on our DSP and SSP. Our first priority is to leverage NII to empower our discovery tool to drive additional value and generate better results around audience creation, gaining granular insights on target within those created audiences, extending likely to engage or buy audience reach and activating those enhanced and extended audiences on our DSP. We expect this will make discovery more user frenzy widen its utility beyond senior industry analysts and further the depreciation and appeal of Flexend platform. Contextication we plan to introduce GenAI powered Copilot in capabilities within our DSP as part of a new and enhanced user interface. These features will proactively extract key insights find enhancement opportunities, and offer campaign optimization suggestion in real time. We believe these upgrades and others planned in the future we further position our platform technology and data capabilities as the primary driver of better customer results. Looking at are poised to continue accelerating our growth. In 2025, we expect our recently launched partnership and data licensing opportunities Scale. And our Gena Eye field enhancement to attract more partners to our platform. This catalyst, alongside our data, CCTV and video capabilities, and flexible platform position us to continue capitalizing on large multi solution revenue opportunities grow our market share and showcase our value as the best in class strategic partner for the industry. With that, I'm happy to turn the call to Sagi.
Sagi Niri: Thank you, Ofer. In Q3, we generated contribution ex tax of $85.5 million achieving 12% growth from Q3 2023. Programmatic revenue was $81.6 million in Q3 reflecting 10% growth from Q3 2023 while contribution ex tax from our non-programmatic business line increased slightly year over year from a dollar perspective. Growth in Q3 was broad-based driven by enhanced sales execution, scaling partnerships, and improved market conditions. We observed strength in CTV video, display, mobile, and PNP and increases across ten of our eleven industry verticals with the biggest increases reflected in our government finance, health, and automotive vertical. On the opposite side, in Q3, we observed the year-over-year decrease in our travel vertical. We achieved a major year-over-year increase in CTV revenue in Q3 generating $29.7 million in CTV revenue which reflected 52% growth from Q3 2023. Q3 2024, was the second-best CTG revenue quarter in Nexon's history reflecting strong results for the second consecutive quarter as CCV revenue represented 36% of programmatic revenue up from 26% in Q3 2023. ATV revenue growth was driven by benefits related to our partnership with LG Ads, and strong sales execution amidst a continued shift by new and existing customers into our premium CTV solution. We strongly believe that our differentiated advanced TV Technology. And that's a solution robust CPV. OEM partnership, platform's ability to flexibly cater to both sides of the CTV advertising ecosystem and access to premium supply positions us to capitalize on what we believe to be a long-term CTV growth opportunity still in early innings. Video revenue continued to account for most of our programmatic revenue, expanding to 71% in Q3 2024, from 66% in Q3 2023. This year-over-year increase was driven by video revenue strength, fueled by CTG outpacing programmatic revenue growth. We continue to expect video revenue to be a primary growth driver over time? And for Nexen to remain one of the most heavily indexed ad tech companies to video on the open Internet. Our advanced TV offering and audience extension across the video advertising ecosystem have emerged as key reasons for major industry players to increasingly choose to partner with Nexen for their video advertising needs. Elsewhere, contribution ex tax from display grew 21% year over year in Q3 while self-service contribution at SaaS increased 15%. Contribution ex tax from PMT grew 52% and contribution ex tax from mobile grew 4% year over year. On political contribution ex tax, while we didn't see much of a lift in Q3, as we anticipated in Q4, we saw this number increase sharply heading into election day in the US. To this point in 2024, we generated approximately $10 million in political contribution ex tax, which we believe will ultimately result in an annual political contribution ex tax record for Nexen. In Q3, we also generated adjusted EBITDA of $31.6 million which reflected a 49% year-over-year increase from Q3 2023. Our adjusted EBITDA growth was a byproduct of higher contribution EBITDA improving cost efficiencies and our platform model's ability to generate significant operating leverage particularly as an increasing number of customers choose to adopt multiple solutions within our ecosystem. Our adjusted EBITDA margin in Q3 increased to 37% as a percentage of contribution ex tax from 28% in Q3 2023 and we remain confident in our ability to further expand our adjusted EBITDA margin over time. In Q3, we generated over three times more net cash from operating activities year over year, generating $39.9 million in net cash from operating activities compared to $13.1 million in Q3 2023. As of September 30, we had $166.5 million in net cash $90 million undrawn on our revolving credit facility and no long-term debt. We also reported non-IFRS diluted earnings per ordinary share of $0.14 in Q3 2024 compared to $0.09 in Q3 2023. During Q3, we repurchased roughly 5.1 million ordinary shares reflecting an investment of £14.1 million or $18.3 million. From March 1, 2022, through September 30, 2024, we invested around $137.2 million in our repurchase buying back roughly 33.4 million ordinary shares for 21.6% of shares outstanding. We received approval to launch a new $50 million ordinary share repurchase program which is expected to begin on November 19, and expected to continue until May 19 or completion. Our previous program expired on November 1. It says remain. At prices the board believes continue to reflect the discount to fair value following the end of the upcoming program, we will consider initiating an additional one thereafter. With that, I'll turn to our outlook. For the full year 2024, we are reaffirming our guidance for contribution ex tax in a range of approximately $340 million to $345 million and for programmatic revenue to reflect approximately 90% of full-year 2024 revenue. We are also now raising our full-year 2024 adjusted EBITDA guidance to approximately $107 million from approximately $100 million. In Q4 2024, we anticipate achieving a strong quarter from a contribution ex back and adjusted EBITDA perspective as we continue to see momentum from Q3 carrying over into the fourth quarter. Our debt-free balance sheet and cash-generating abilities also enable us to continue investing in share repurchases in Q4 2024 and 2025 which we view as one of our key capital priorities assuming our shares continue to trade at all around levels our gold team to reflect a discount to fair value. As Ofer mentioned in Q4 2024, and 2025, we will also boost our data and technology investment to favor our platform depreciation and advantages we have a core focus on increasing our AI edge by incorporating Gen AI across our core product. Looking ahead, we will continue focusing on expanding revenue relationships with customers through increased spending and multi-solution adoption, attracting new partners to our platform, and growing our data licensing and CCV revenue opportunity. Through a combination of our flexible end-to-end platform's ability to service the industry holistically across formats, devices, and the data and FX supply chain as well as our collective robust and unique data and technology solution which help attract and drive better ROI for customers we believe we remain well-positioned for sustainable long-term growth expanded profitability and ethics leadership. Finally, this morning, we announced that our board of approved submission of several changes to our stock exchange structure for shareholders to consider and vote on at our upcoming AGM in December. If the proposal is approved, we believe this evolved structure can significantly benefit NexGen and its shareholders over the long term. If shareholders approve the proposal, the company intends to exchange its NASDAQ-listed ADRs to NASDAQ-listed ordinary shares and terminate the ADR facility conduct a reverse talk split. At a two-for-one ratio. Which will allow for a one-to-one exchange for ADRs to ordinary shares. And delete from the end. We believe these proposed changes are beneficial for several reasons. These reasons include, amongst others, increasing the potential to attract U. S. Investors reducing the complexity of the company's reporting, and regulatory compliance structure consolidating and likely increasing liquidity, and possible inclusion in major indices which the company shares are precluded from due to its current ADR structure. Additionally, we also believe these proposed changes better align our stock with other U. S. Listed at the company help reduce price volatility, that can result from being dual listed and save costs. Our AGM circular provides greater detailed information on this proposal the timing of the proposed changes and its effect on trading for our U. S. And UK investments. We also intend to host calls for both US and UK investors and analysts ahead of our AGM to provide greater details on the proposed changes timing of those changes, and our strategic rationale. Over the last several quarters, we've enhanced our tech, data, and security capabilities, We've granted to clarify our platform's value proposition and boasted our sales effort and team a combination of which has our results pending within the industry and long-term growth Position. Following this milestone, we believe it is now time for our trading structure to also undergo advancement to further align our business improvement and stronger results, with our future capital appreciation potential. We look forward to continuing to work hard to save our gonna partners and shareholders? And are excited about these potential changes and for what lies ahead. Operator, we'll now take questions.
Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. I would like to remind everyone for one question, one follow-up. Should you have a question, and you will hear a prompt that your hand has been raised. Should you wish to withdraw, please press star followed by the number one again. Are using a speakerphone, please lift the handset before pressing any keys. Our first question comes from the line of Matt Swanson from RBC Capital Markets. Please go ahead.
Matt Swanson: Alright. Thank you guys so much for taking my question. Ofer, I really appreciated the Stadwell example. I've still had to had DSP. Yeah. Example. I guess with all these new capabilities and and then everything else that you guys are now investing in around data and Gen AI, could can you a little bit more about how you get you know, customers and advertisers to to see the new next and then to to kind go to market with all these new capabilities.
Ofer Druker: Of course. Good morning, Matt. I think that the entry point for us that we are now presenting to new advertisers and clients is our discovery. Our discovery tool is a very powerful tool that we basically acquired through the acquisition of Hamobi. It's a it's a very amazing ability to basically connect and integrate a lot of datasets into one platform platform in order to learn about audiences. And, basically, what we are doing, we are showing through this platform and ability for the advertiser to learn about this potential audience, to learn about the insights and sentiment of the audience regarding this product or service that he's trying to to offer. To create audiences and to activate them very simple in a in a very simple mode, on our platform, basically, on our SSP or DSP that he wants to. And even measure results. So everything is basically now all the data efforts that we are doing. The ability to run and to follow a campaign from end to end and to follow the journey of the campaign across all the systems, are basically translated to a very powerful capability on the discovery tool that basically enable the advertisers to do what I just mentioned. And this is how we are basically demonstrating it to them. And, of course, advertisers react reaction is very good for the platform and to the ability because it's giving them a lot of capabilities that they cannot find in any other manner. In other other platform. And also the simplicity of the activation of the audience and the learning on on our platform is very meaningful because they don't need to take the data out and file a place to activate it, which usually is very complicated. Or to upload data. The second thing that we are enabling on on the discovery is basically for leading advertisers to upload their data first party data in, and you reach it without data. And I will give just one example. Which is our PVIC Is that but enable them to basically match their data and enrich it with our TV data and it's giving them a lot of insight in order to push more campaigns to CTV, more campaigns to linear if they choose to do that and so on. And it's unique and very powerful tool. So this is basically the window that we are giving to advertisers in order to to choose and to understand our capabilities that are getting more mature lately, and we feel that we are in the right spot in the right place in the right time in order to serve our client's port side. By the way, advertisers and major publishers. I hope that answer your question.
Matt Swanson: Yeah. No. That's that's perfect. And maybe this answers is similar, but I I think on first blush when people saw these strong growth you had in CTV, the the assumption would be maybe there political contribution, but it sounds like that wasn't really the case in q three. So could you talk a little bit more just kind of about where you guys are seeing success that led to such a strong growth right there?
Ofer Druker: Of course. So political was part of that, but it's not the major force, of course, that that generated this blog. This block is coming from a few elements. One of them is that we are working on technology for CTV for the last more than five years. From 2019, And I think that we got to a point that we can really offer to to advertisers and to publishers a very strong tech stack that enable them to to run their campaign in the most efficient manner and also to publishers to offer their media the most efficient efficient manner and to sell audiences and not just media. This is, of course, Eight integrated with a lot of algorithm and and and machine learning that we build over the years. That are optimizing our capability to run CTP. If if you will check back in the last five years, we are talking about it, and we are demonstrating that. Basically, The second point is also the fact that we are increasing always the the publisher list that we got and the partner list that we got on the CPD front. From ability to reach additional users and additional audiences in the market, and it's working very well because point one that I said, our technology capability that basically we can prove to these publishers that we can add to them value and we can add to them more revenues that they don't see from other from other connection that they got to other SSPs because we have also a whole Cisco (NASDAQ:CSCO). And the third element that helped us this year is also the LG settlement that basically enable us to require much more media much more quality media in the market. And enable us to grow our revenues. So this is the major three elements. And the fourth one is what I said before. Which is the discovery. So basically, today, people are choosing to buy more CTVs. So if you are able to show them the discovery tool, teach them how work with them about their audiences and enable them to learn about their insights and and sentiment and also direct it to CTV it's, of course, an important element at El Paso. And the last point, which is not connected to us but connected to the market, I think that the market now in a better shape. So it's helping people to in in a good in a good market condition, people direct more spend or solicitivity.
Operator: Thank you. Our next question comes from the line of Laura Martin from Needham. Please go ahead.
Laura Martin: And then for you, I'm sorry. So the first thing you talked a lot about was your end-to-end platform and you think that gives you competitive advantage. But I would just point out that most of the end-to-end platforms during the quarter grew twelve percent. And the single-sided platforms, Vyen and Trade Desk, grew twenty-five percent. So right now, it looks like the single-sided platform have a big competitive advantage in terms of being adopted by new clients. So if you could talk about why you think end-to-end platforms have an advantage, and if they do, why their growth rate isn't closer to the single-sided platform? I'd be interested in that answer. And then you basically, you use the word data in almost every sentence. And so if data is important, that means scale is important. Because trade desk wins. If data is important, it just goes bigger. So does that is there something you bring to data? You don't have as much of it as you're not that big. So is there some you bring to the data that adds value, or do you need to be buying things because you need to be double and triple your current size?
Ofer Druker: Thank you. I will start with your second point about data. You are mentioning that in every sentence because it's incorporated about ninety percent of our. Usually now, advertisers are running campaigns, and they are using data in order to enhance their their their to get the results that they are looking for. And we basically already, for the last is. Implementing that And, also, we have a very strong BNP ID graph curated media that we're launching. That is all about data because we believe that this is the future. That's why I mentioned a lot. And we have yes, we have a lot of unique stuff that we are having on the data side. I think that we are one of the only companies in the in the open web that has basically an agreement with the OEM to August their their ACR data and utilize it in order to get targeting. And we are very dominant and and active in the PV TV world mini. To gain this data and incorporate it, they can reach other datasets in order to get more insights for for advertisers about their their audiences related to TV. So I think that when you're looking at these two points, more than ninety percent of our campaigns are a copy using data in a very big manner in order to achieve better results. Second thing, we have a lot of unique datasets Also, to remind you about United, they choose to to to load to upload their data about MyRIS Plus MileagePlus on our another that another platform. And we are gaining a lot of other sources of data from our activities and from other companies that are basically launching their campaigns. Of course, Consent. So I think that on the data elements, it's good that we are mentioning it because this is part very important part of our What we are doing? Regarding your first point about first part, you know, one-sided campaigns, I think that when you are including the the trade desk, it's a little bit there in know, changing the picture. But the traders themselves also operate with an SPO which means that they have Already achieving more and more what we call end-to-end capabilities. And also, other companies are doing the same. In the in the Spectro, meaning they are adding different capabilities in order to close the loop and we have to be able to touch Side to side? I think that our advantage comes from the fact that we have fully functional BSP and fully functional on the other side. Which is connected to our DSP. Which not a lot of companies that we just mentioned Got it. So it's a I think that eventually you have so many advantages to have end-to-end solution, which are fully functional, because of efficiency, because of privacy, because of data synchronization, Because when we talk about Gen AI, you have ability to basically follow the the signals of the data end to end is giving you a lot of more capabilities to integrate the the the machine learning algorithm that we already built, and to utilize them through the JNI in a much more perfect manner when you are controlling end-to-end solution. So I strongly believe in that, and I cannot argue with your numbers, but I think that end-to-end solution has a lot of advantages. And in general, I think that the other companies are basically building these capabilities and using different things before that.
Laura Martin: Those are super helpful. And, Sai, the one for you If you're gonna delist basically offshore and be a NASDAQ listed company. Any thoughts about moving the US GAAP out of IFRS?
Sagi Niri: At some point? Yeah. That's a good question. Yes. We are considering that. You know, we will we may lose our status going forward, so we acknowledge that somewhere in the timeline, we should move to US gas it's something that we are taking into consideration, and, of course, it will help us you know, to get into more in this size. So it's something that is on the table, and we are and and probably we will move to that in in some point of time.
Laura Martin: Okay. Thanks very much, guys. Great number. Thanks.
Ofer Druker: Thank you. You're welcome.
Operator: Thank you. Our next question comes from the line of Andrew Marok from Raymond (NS:RYMD) James. Please go ahead.
Andrew Marok: Hi. Thanks for taking my questions. Maybe one that I think you've touched on in in a couple of your previous answers. But, again, I heard the phrase strong sales execution a couple of times in your remarks. I guess, what's changing there? Is that is it really just the result of the broader product offering you're The cell or are there some maybe internal measures that drove either better efficiency efficiency or anything you can call out there? And kinda how does that play into your investment priorities for the sales force over the near term?
Ofer Druker: I will I will take this one. Yes. I think that after the acquisition of Amobi, what we saw is that we needed enough data rebranding that Basically, we're done last year. And we needed to to basically sharpen our message in the market and as you know, when you when you just making a move and changing your messaging and changing your not not having yet, like, a very sharp message It's, of course, affecting your sales team. Because they need a very sharp and and understanding about what you are basically offering and how it will be basically communicate with the tech stack that you got and what are the unique capabilities that we got So I think that in the last nine months, we see a really good good improvements on that. So our sales team are more aligned with our offering I think that our sales materials, our messaging outside, our rebranding, everything is is getting more mature and more sharpened. And it's helping, of course, our sales people to to drive better results. So it's not we we didn't change the matrix. We are counting cash and sales, basically. But I think that we are very much shopping message inside and outside that is helping us to achieve better result. Again, you want Great. Let me
Andrew Marok: No. No. That's fine. Yeah. Okay. I I appreciate it. So maybe one one quick one on on four q and and political if I could. We'd heard from some other companies in the industry maybe a little bit of a crowding out in October as as political kinda heated up. Doesn't sound like that's the case from your neck of the woods. So I guess what's kind of embedded in the four q guide in terms of post election, it's macro assumptions, and things like that if you're coming off of a strong political in October and early November. Thank you.
Ofer Druker: Andrew, I think that, you know, as as we said earlier, it was, you know, on a on a full year 2024, political contribution exact where records for Nexa. And having said that, it's not, you know, a lot Some of it, of course, came in q three, and some of it came in q four. I think as Arthur mentioned, you know, our we are seeing the trend of q three keeping into q four. And we are seeing we we really don't see any drops you know, post political election day revenues and, of course, we have a tight forecast that we are maintaining inside the pipeline. I think, you know, as offer mentioned, The the the growth drivers that are within our company for a long time is now materializing, And I think as Ofer mentioned, you know, data is a huge opportunity, of course. CTV, we are well positioned that we grew more than fifty percent year over year. And, of course, we think our TV capability, food, cream supply, end to end footprint, make this a key growth driver that does amazingly with the customers. So I think nothing changed. Political was you know, nice for us. It's not material, and we are moving first thing ahead.
Andrew Marok: Appreciate it. Thank you. Bye
Ofer Druker: Thank you.
Operator: Thank you. Our next question comes from the line of Matt Condon from Citizens JMP Securities. Please go ahead. One moment. I will put him back on the queue. Please give me one moment. Guess (NYSE:GES) I accidentally dropped him. My apologies. Okay. For now, we will jump to Mark Kelley. Question from CECL. Please go ahead.
Mark Kelley: Great. Thank you. Good morning, everyone. Maybe I just two for me. I guess the first one just on the you know, political side. Appreciate the color there. And I know, you know, you guys don't really consider it material, but I guess how do we think about seasonality as we go from q four to q one? You know, as we take that political out? That's my first question. And then the second one is At what point do you think we might see your CTV growth outpace PMP growth. You know, which would imply that we're seeing more open exchange programmatic inventory in CPV. Thank you.
Sagi Niri: Hey, Mark. Thank you for the question. Good morning. I think, you know, if we are taking political I'm not sure the comparison between Q4 and Q1 is a legit one. As you know, you know, q one is the is the toughest queue within the within the calendar year, and q four is the is the I think that what we will see and we talked about it earlier is that our growth driver are in place. We are putting a lot of emphasize on new initiative around AI and general AI in 2025. We are going to invest There? And I think that all the capabilities offer mentioned regarding our discovery dataset end to end and other capabilities that we have place that brought us to this point of time. But we are seeing the the growth quarter over quarter. I'm sure that q one 2025 will be Better or much better than q one 2024. If that's what we're asking. So I think we have all the all the capabilities we need in place. And as we mentioned on other calls, now it's all around execution and and and we are doing great job on the on the offense with the team, of course. And we will see, you know, greater revenue generation going forward.
Ofer Druker: On your other question about when CTV will bypass PNP, it's it's it's not a this you know, it's not like a one to apple to apple competition, but in general, PTP is making a meaningful part of our PNP activity, basically. But I feel that PMP will be always bigger because on PMP, you have also other activities that is coming from other BSPs in our in our case. That are not buying just a TV. They are buying also video, online video, and they buying also display. So in general, I don't think that it's like a Apple (NASDAQ:AAPL) to Apple competition, and I think that CTV is growing very fast, but I think that PNP is also, in our case, is growing very fast because this is basically following the trend of the market. And and the agencies and the advertisers are now buying more programmatic than they used to, so the PNP will continue to grow. But, of course, there are other opportunities in the market also.
Mark Kelley: Okay. Thank you both.
Operator: Thank you. Our last question comes from the line of Matt Condon from JMP Securities. Please go ahead.
Matt Condon: Thank you so much for taking my question. My first one is just on the potential for additional commerce media partnerships You know, it's nice to see the partnership with United, but can you just remind us or update us on pipeline of additional companies that you are potentially looking to partner with.
Ofer Druker: So it's basically, you know, you need a few examples in order to start selling it. And I think that we we started now because of the discovery tool that I mentioned before. Because of the end-to-end solution, because of our deep reach in in media, which is CTV and also other formats. We are making it's making more it's becoming more interesting for these type of clients basically to choose to work with us. And because of the fact that we are putting a precise on on our on our DNP, basically, data management platform, that is very robust and enable them basically to load their data, to enrich it with PDF data or other data that they choose to bring in or for us to connect. And to be able to to better target and to better utilize their media. I cannot, of course, share with you, like, pipeline because it's not something that we can do in this this session, but there is a a very healthy pipeline of companies that are reaching out and we are reaching out to them in order to build it because we feel that people are looking exactly for the solution that we are offering, which is very strong DNP, enabling to upload your data in which it utilizes very very easily. And get more insight and sentiment about your audience and even measure your results after running the campaign.
Matt Condon: Okay. Yeah. That was great. That's that's very helpful. And then my second one is just on your partnership with the trade desk. Just wanted to hear if there's any early indications of demand coming to that channel or maybe when we can expect that start contributing to results. Potentially, in 2025.
Ofer Druker: So the relationship with the credit is around around the data. Just started, like, last quarter. And it's building up. Meaning, we started no spin. Australia, but it's building up. People need to get educated. The traders care got, of course, a lot of data sets on the platforms, and we are one of them. But we are building traction with them. And with their clients. And it's it's it's becoming more and more interesting, and the idea is to open more and more markets together. Globally because the this is basically our our strategy and and it's matching their strategy. I cannot tell you that it's the full strategy because I'm not representing them, but general, In this case, yeah, They want to expand with us internationally, and and that's what we will do in the in the new unit.
Matt Condon: Thank you so much.
Operator: Thank you. That concludes our Q and A session. I would now like to turn the call over to Ofer for closing remarks.
Ofer Druker: Thank you. Thank you everyone for getting on this call this morning. We strongly believe we made the right strategic decision in the past few years. We got really good tech product, to cover what is important to our industry today. Which we believe is data, CTB, privacy, Gen AI, very strong programmatic capabilities. Next year, we believe we got what we need from second product perspective, and we will put attention back to innovation and execution and good luck and we are excited about the future. And I want to use this opportunity to thank our teams and our employees around the globe that are working very hard in the past few months, And in general, know that we achieve this goals, and we are excited about it. So thank you everyone and have a nice weekend.
Operator: Thank you for joining the conference call for today. You may now disconnect.
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