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Innovid Corp. (CTV)·Q2 2024 Earnings Summary

Executive Summary

  • Delivered double-digit growth and profitability expansion: revenue $38.0M (+10% YoY), Adjusted EBITDA $5.9M (+29% YoY) with 15.5% margin (8th consecutive quarter of expansion). CTV impressions +21% YoY; total video impressions +14% YoY .
  • Mix remains healthy: Ad Serving & Personalization 78% of revenue (up 11% YoY), Measurement 22% (+6% YoY). Management reiterated FY24 guidance and introduced Q3 outlook ($40–$42M revenue; $6.5–$8.5M Adj. EBITDA), citing macro uncertainty and the U.S. election cycle .
  • Product and partnerships are a clear catalyst: launched Harmony Frequency (holistic frequency management) and announced a collaboration with Nielsen to integrate Innovid’s ad serving with Nielsen ONE; Yahoo DSP as a launch partner for Harmony Frequency .
  • Liquidity remains solid: $30.6M cash and no revolver balance; Q2 operating cash flow $1.2M and free cash flow use $(1.3)M (38% YoY improvement), reflecting ongoing efficiency gains amid continued investment in Harmony .

What Went Well and What Went Wrong

  • What Went Well

    • Consistent profitable growth: “another quarter of double-digit, profitable revenue growth,” with Adjusted EBITDA margin up to 15.5% and CTV impression volume +21% YoY .
    • Strategic momentum: Launched Harmony Frequency; Nielsen collaboration to provide a seamless cross-media workflow; additional Harmony partners (Goodway Group, Vizio; Yahoo DSP as partner) .
    • Segment stability and scale benefits: Ad Serving & Personalization +11% YoY, Measurement +6% YoY; gross margin proxy (revenue less cost of revenue) improved to 76% of revenue as scale and automation/AI increase leverage .

  • What Went Wrong

    • GAAP profitability lagged: net loss $(10.5)M; net loss margin (28%); tax on income spiked to $7.8M in Q2 (vs $1.3M in Q2’23), pressuring GAAP results despite non-GAAP margin expansion .
    • Mixed device trends: desktop impressions −9% YoY; mobile +13% YoY but inconsistent through cycles; macro variability across verticals continues (retail weak; CPG/pharma strong; auto improving) .
    • Free cash flow consumption in Q2: FCF $(1.3)M) despite positive OCF, reflecting ongoing capex/internal software investment cadence .

Financial Results

MetricQ4 2023Q1 2024Q2 2024
Revenue ($M)$38.617 $36.738 $37.951
Net Loss ($M)$(1.658) $(6.234) $(10.542)
Diluted EPS ($)$(0.01) $(0.04) $(0.07)
Adjusted EBITDA ($M)$8.275 $4.396 $5.872
Adjusted EBITDA Margin (%)21.4% 12.0% 15.5%
Net Loss Margin (%)(4.0%) (17%) (28%)
Operating Cash Flow ($M)$4.274 $4.652 $1.234
Free Cash Flow ($M)$2.150 $2.021 $(1.253)

Segment breakdown and growth

MetricQ4 2023Q1 2024Q2 2024
Ad Serving & Personalization (% revenue)78% 79% 78%
Measurement (% revenue)22% 21% 22%
Ad Serving & Personalization YoY Growth+15% +23% +11%
Measurement YoY Growth+14% +11% +6%

KPIs

KPIQ4 2023Q1 2024Q2 2024
CTV Impression Volume YoY+16% +21% +21%
Mobile Video Impressions YoY+21% +38% +13%
Desktop Video Impressions YoY+5% +12% −9%
Total Video Impressions YoY+16% +25% +14%
CTV Share of Total Video Impressions52% 52% 54%
CTV Ad Serving Revenue YoY+14% +22% +21%

Notes:

  • S&P Global consensus estimates were unavailable for CTV this quarter due to a data mapping limitation; see Estimates Context for details.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/ActualChange
RevenueQ2 2024$37.5M–$39.5M (5/7/24) $38.0M actual Delivered within range
Adjusted EBITDAQ2 2024$5.0M–$6.0M (5/7/24) $5.9M actual At high end
RevenueQ3 2024—$40M–$42M New
Adjusted EBITDAQ3 2024—$6.5M–$8.5M New
RevenueFY 2024$156M–$163M (raised on 5/7/24) Reiterated $156M–$163M Maintained
Adjusted EBITDAFY 2024$24M–$29M (raised on 5/7/24) Reiterated $24M–$29M Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2023)Previous Mentions (Q1 2024)Current Period (Q2 2024)Trend
Harmony initiative/optimizationFramed 2024 as optimization year; showcased Disney real-time creative optimization at CES Formal launch of Harmony; introduced Harmony Direct; impression-based pricing; early partners (Assembly, CMI, PMG, RPA, Roku) Launched Harmony Frequency; Yahoo DSP as partner; Goodway Group and Vizio joined; continued roll-out plan Accelerating productization and adoption
Measurement strategyInnovidXP grew; SaaS + usage model; rising usage expected Measurement +11% YoY; 21% mix; subscription-like model provides steady growth Measurement +6% YoY; +7% QoQ; Nielsen collaboration to streamline cross-media workflow Stable growth; strategic validation via Nielsen
CTV adoption/live sportsEmphasis on ad-supported CTV and sports as catalyst CTV impressions +21% YoY; brands moving to CTV; total video impressions +25% CTV impressions +21% YoY; Amazon Prime Video and live sports cited as ecosystem drivers Sustained double-digit CTV momentum
Macros/election/OlympicsOutlook flagged election headwind potential Stable but below-normal macro; election/Olympics could affect 2H mix Guidance embeds 2H uncertainty (election cycle) despite solid momentum Cautious 2H posture maintained
Vertical trendsMixed; some verticals lag (tech/finance/insurance) CPG/pharma strong; tech improving Auto strengthening; retail weakest; CPG/pharma strong; others mixed Mixed, with auto improving
Walled gardens/access—Emphasized neutrality/media-agnostic position; cross-partner optimization Serving into Amazon Prime Video and other walled gardens; neutrality cited as win driver Clear access and neutrality positioning
AI/automation for leverageOperating leverage and automation/AI to expand margins —Expect AI/automation to further improve margins over time Ongoing efficiency lever

Management Commentary

  • “I am pleased to report Innovid delivered another quarter of double-digit, profitable revenue growth… We continue to invest significantly in strategic innovation for the future of CTV, while also delivering Adjusted EBITDA margin expansion.” — Zvika Netter, CEO .
  • “Q2 marks the third consecutive quarter of double-digit revenue growth, eighth straight quarter of adjusted EBITDA margin expansion and fourth consecutive quarter of free cash flow improvement.” — Anthony Callini, CFO .
  • On Harmony Frequency: “the first holistic frequency management solution for CTV and digital advertising… prevent overexposure, maximize budget by reallocating spend to underexposed households… include Yahoo DSP as one of our first to market partners.” — CEO .
  • On Nielsen: “collaborating with Nielsen… to provide a seamless workflow and holistic view of the cross-media ad universe… testing the technical integration in the coming months.” — CEO .

Q&A Highlights

  • Sequential 2H ramp: Management expects momentum to build through 2H on CTV volume growth, cross-sell/upsell, while balancing election-related uncertainty; reiterated full-year guidance .
  • CTV inventory and Prime Video: Live sports and new ad-supported services are key drivers; Amazon Prime Video cited as contributing to CTV impressions growth .
  • Verticals: CPG/pharma strong; auto improving; retail weakest this quarter; finance/insurance/tech/telecom mixed but stabilizing .
  • Walled gardens access: Innovid serves into Amazon Prime Video and YouTube; neutrality and CTV focus help win share versus incumbents .
  • Harmony targeting universe: Harmony designed for both buy- and sell-side; Harmony Direct reduces “tax” in the supply path; Frequency solution coordinates cross-ecosystem capping and underexposure reallocation via DSP signals .

Estimates Context

  • S&P Global (Capital IQ) consensus for Q2 2024 EPS, revenue, and EBITDA was unavailable for CTV due to a data mapping limitation at the time of request; as a result, we compare actuals to company guidance instead . Values retrieved from S&P Global were unavailable.
  • Versus guidance: revenue $38.0M landed within the guided $37.5–$39.5M; Adjusted EBITDA $5.9M was near the high end of the $5.0–$6.0M range .

Key Takeaways for Investors

  • Profitable growth is compounding: 8th straight quarter of Adj. EBITDA margin expansion to 15.5%, supported by 10% revenue growth and operating leverage from automation/AI .
  • CTV secular tailwind intact: +21% YoY CTV impressions and +21% YoY CTV ad serving revenue again in Q2, with growing CTV share (54%) of total video impressions .
  • Harmony broadens TAM and deepens moat: Harmony Frequency and Direct address key pain points (frequency waste, supply path costs) and reinforce Innovid’s neutral platform role; the Nielsen collaboration validates strategic relevance and could unlock longer-term monetization .
  • Balanced but cautious 2H stance: Management embeds election-related uncertainty despite strong CTV drivers; Q3 guide implies continued double-digit growth and further margin progress .
  • Watch verticals and devices: Auto recovery and CPG/pharma strength are positives; retail weakness and desktop decline continue to weigh on the mix .
  • Liquidity and flexibility: $30.6M cash, no revolver draw, $50M available; near-term FCF variability likely as innovation investments continue, but trailing improvements are evident .
  • Stock reaction catalysts: Execution on Harmony (notably Frequency rollout and DSP/publisher integrations), progress on Nielsen integration, and sustained CTV share gains should be incremental positives if monetization follows .

Other Documents Searched

  • Q2 2024 press release (8‑K Item 2.02) and full financial statements read in full .
  • Q2 2024 earnings call transcript read in full .
  • Prior two quarters: Q1 2024 8‑K and call; Q4 2023 8‑K and call read in full .
  • Other CTV press releases during fiscal Q2 (Apr–Jun 2024): none found in the system corpus; notable product and partnership items were included in the Q2 press release and call .