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Innovid Corp. (CTV)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 revenue was $36.7M (+21% YoY) and Adjusted EBITDA was $4.4M (12.0% margin); the company generated $2.0M in Free Cash Flow. Innovid explicitly stated it exceeded both revenue and Adjusted EBITDA guidance for Q1, and raised FY 2024 guidance, a clear near‑term catalyst.
  • Mix and KPIs were healthy: ad serving and personalization comprised 79% of revenue (CTV impressions +21% YoY); measurement contributed 21%. Management noted total video impressions +25% YoY, supported by stabilization in ad spend and continued migration to CTV.
  • Guidance raised: FY 2024 revenue to $156–$163M (from $154–$162M) and FY Adjusted EBITDA to $24–$29M (from $22–$28M); Q2 2024 guided to $37.5–$39.5M revenue and $5.0–$6.0M Adjusted EBITDA.
  • Strategic update: launch of Harmony initiative (incl. Harmony Direct), with early adoption by agencies and publishers; this aims to optimize the CTV supply path and frequency management over time. Management emphasized Harmony’s long‑term impact but excluded 2024 revenue contribution from guidance.

What Went Well and What Went Wrong

What Went Well

  • Exceeded revenue and Adjusted EBITDA guidance; raised full‑year revenue and Adjusted EBITDA outlook. CEO: “We exceeded our revenue and Adjusted EBITDA guidance… and generated positive free cash flow.”
  • Strong CTV and platform KPIs: ad serving/personalization revenue +23% YoY; CTV impressions +21% YoY; total video impressions +25% YoY. CFO: “CTV represented 52% of all video impressions.”
  • Harmony initiative momentum: launch of Harmony Direct with first adopters (Assembly, CMI Media Group, PMG, RPA, Roku) and award recognition (“Best Measurement Tool” by Digiday).

What Went Wrong

  • GAAP profitability remains negative: net loss of $6.2M (per‑share loss $0.04), with taxes and operating costs limiting near‑term GAAP results despite margin expansion.
  • Management flagged macro inconsistency by vertical and potential H2 headwinds from U.S. election and Olympics sponsorship dynamics.
  • Measurement growth (+11% YoY) trailed ad serving; while improving sequentially from Q4 seasonality, the subscription‑oriented model has inherent seasonality and slower ramp vs. impression‑correlated ad serving.

Financial Results

MetricQ1 2023Q4 2023Q1 2024
Revenue ($USD Millions)$30.485 $38.617 $36.738
Net Loss ($USD Millions)$(8.563) $(1.658) $(6.234)
Net Loss per Share ($USD)$(0.06) $(0.01) $(0.04)
Adjusted EBITDA ($USD Millions)$0.145 $8.275 $4.396
Adjusted EBITDA Margin (%)0.5% 21.4% 12.0%
Operating Cash Flow ($USD Millions)$0.368 $4.274 $4.652
Free Cash Flow ($USD Millions)$(2.812) $2.150 $2.021

Segment revenue mix (converged TV platform):

SegmentQ3 2023Q4 2023Q1 2024
Ad Serving & Personalization (% of revenue)77% 78% 79%
Measurement (% of revenue)23% 22% 21%

KPIs (YoY growth in impressions):

KPIQ3 2023Q4 2023Q1 2024
CTV Video Impressions (%)+7% +16% +21%
Mobile Video Impressions (%)+8% +21% +38%
Desktop Video Impressions (%)−12% +5% +12%
Total Video Impressions (%)—+16% +25%

Notes:

  • Management emphasized revenue less cost of revenue ratio improvement (Q1 2024: 76% vs 73% in Q1 2023; Q4 2023: 78%), supporting operating leverage.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2024$154–$162 $156–$163 Raised
Adjusted EBITDA ($USD Millions)FY 2024$22–$28 $24–$29 Raised
Revenue ($USD Millions)Q2 2024—$37.5–$39.5 New Q2 guidance
Adjusted EBITDA ($USD Millions)Q2 2024—$5.0–$6.0 New Q2 guidance
Revenue ($USD Millions)Q1 2024$34–$36 Actual $36.738 Beat vs guidance

Note: CFO referenced $157–$163M for FY revenue on the call; the press release states $156–$163M—use press release values as official.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q3 2023, Q-1: Q4 2023)Current Period (Q1 2024)Trend
AI/technology initiativesInstant Optimization launch; generative AI integrated for creative generation and optimization. Harmony initiative launched; Harmony Direct streamlines supply path; focus on optimization layer powered by CTV data. Expanding from optimization features toward infrastructure-level CTV optimization.
Macro/ad spend environmentCautiously optimistic; uneven verticals, mobile/desktop inconsistency; improving toward Q4. Stable but “below normal”; caution around elections and Olympics in H2. Stabilizing but mixed; watch H2 macro/event impacts.
Live sports & CTV adoptionSports streaming drives CTV viewership and higher brand spend; linear <50% milestone. Live sports shift to streaming accelerates CTV viewership and ad dollars. Positive secular tailwind continues.
Measurement partnershipsDisney real‑time creative optimization dashboard powered by Innovid. Recognition as “Best Measurement Tool”; measurement remains 21% mix. Strengthening platform credibility and utility.
Vertical trendsStrength in CPG/pharma; weakness finance/tech/insurance; auto improving; retail mixed. Similar mix; tech improved; potential H2 caution noted. Broad stabilization; selective recovery.

Management Commentary

  • CEO: “We exceeded our revenue and Adjusted EBITDA guidance, demonstrated continuous improvement, and generated positive free cash flow for the quarter.”
  • CEO on Harmony: “Optimize the CTV advertising ecosystem… keep TV open for everyone and controlled by no one.”
  • CFO: “Second consecutive quarter of double-digit growth, seventh straight quarter of year-over-year adjusted EBITDA margin expansion and third consecutive quarter of positive free cash flow.”
  • CFO on mix: “Ad serving and personalization made up 79%, while measurement accounted for 21%.”
  • Management tone on macro: “Stable below normal… keep an eye on the second half [election, Olympics].”

Q&A Highlights

  • Macro and verticals: Encouraging carry‑over from Q4 into Q1; strong CPG/pharma; tech improving; retail softness; potential H2 headwinds from elections/Olympics.
  • Harmony adoption and pricing: Harmony designed to work across DSPs/SSPs/publishers; flat fee per impression (software pricing) to remain unbiased; early days—no 2024 revenue in guidance.
  • Device mix: CTV impressions +21% YoY; mobile growth outsized due to comps; total streaming impressions up; caution drawing conclusions from a single quarter.
  • Guidance framework: FY raised; Q2 guided to 9–14% YoY revenue growth; Harmony excluded from FY 2024 guidance pending adoption.

Estimates Context

  • Wall Street consensus (S&P Global) for EPS, revenue, and EBITDA was unavailable via S&P Global for CTV at the time of this analysis; therefore, comparison to sell‑side estimates could not be made. Values retrieved from S&P Global were unavailable due to mapping constraints.*
  • The company delivered above its Q1 guidance and raised FY outlook; in absence of consensus data, sell‑side models likely need to reflect higher FY revenue and Adjusted EBITDA ranges and Q2 guide.

Key Takeaways for Investors

  • Q1 was a clean beat versus internal guidance with double‑digit growth and positive FCF; FY guidance raised—near‑term sentiment driver.
  • CTV secular tailwinds remain intact; device mix and impression growth signal sustained shift to streaming and platform leverage for ad serving margins.
  • Harmony initiative is strategically significant (supply path and frequency optimization) with broad ecosystem participation; revenue contribution excluded from 2024, pointing to 2025+ upside optionality.
  • Measurement credibility building (Digiday award; Disney collaboration in Q4) supports cross‑sell and platform stickiness; measurement mix at ~21%.
  • Watch H2 election/Olympics dynamics; guidance already bakes in caution. Position sizing should reflect event risk with a bias to CTV beneficiaries.
  • Execution on operating leverage continues (76% revenue less cost of revenue in Q1; margin expansion vs 2023); monitor EBITDA progression vs long‑term 30% target.
  • Near‑term trading: focus on Q2 delivery vs guide ($37.5–$39.5M revenue; $5–$6M Adj. EBITDA) and Harmony adoption updates; medium‑term thesis: platform‑led optimization of converged TV and accelerated linear‑to‑CTV budget shift.