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Innovid Corp. (CTV)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 revenue of $38.3M grew 6% YoY but came in below the company’s prior Q3 guidance amid political ad spend crowding out brand budgets; adjusted EBITDA rose 29% YoY to $8.4M with margin expanding to 22% .
  • Management lowered FY24 revenue guidance to $150.5–$152.5M, while raising the lower bound of adjusted EBITDA to $26.7–$28.7M; Q4 revenue guided to $37.5–$39.5M and adjusted EBITDA to $8–$10M .
  • Strong CTV momentum: CTV impressions +13% YoY, CTV share reached a record 58% of total impressions; offset by mobile (-2%) and weaker desktop (+5%) volumes, and slower-than-expected cross-sell in measurement (1% growth) .
  • Strategic catalysts: Netflix impression verification partnership, expanding Harmony initiative adoption (LG Ad Solutions joined), and a $20M stock repurchase program authorization—supporting valuation and margin trajectory into 2025 .
  • S&P Global consensus estimates were unavailable; relative-to-guidance comparisons show a revenue shortfall and an EBITDA outperformance versus Q3 guide midpoints [GetEstimates error; see Estimates Context].

What Went Well and What Went Wrong

What Went Well

  • Ninth consecutive quarter of adjusted EBITDA margin expansion to 22% and seventh consecutive quarter of positive operating cash generation; free cash flow of $3.7M in Q3 .
  • CTV leadership: ad serving/personalization CTV revenue +12% YoY; CTV impressions +13% YoY; CTV share of total impressions hit 58% (largest to date) .
  • Strategic wins: Netflix impression verification partnership; Harmony frequency beta showed >50% reduction in overexposed audiences; LG Ad Solutions joined Harmony; AdExchanger award recognized Harmony’s innovation .

What Went Wrong

  • Top-line below expectations: revenue growth muted by political ad crowding out brand spend (not a political ad vendor); softness in CPG and financial services noted .
  • Cross-sell headwinds: measurement revenue growth slowed to 1% YoY; sales force reorganization underway to improve platform bundling and cross-sell motion .
  • Mix shift pressure: faster-than-anticipated adoption of software-only (self-service) offering lowered near-term revenue growth, despite better unit economics and margin benefits .

Financial Results

Consolidated Metrics (USD Millions, EPS in USD)

MetricQ1 2024Q2 2024Q3 2024
Revenue$36.738 $37.951 $38.251
Net Income (Loss)$(6.234) $(10.542) $4.665
EPS (Basic)$(0.04) $(0.07) $0.03
EPS (Diluted)$(0.04) $(0.07) $0.03
Adjusted EBITDA$4.396 $5.872 $8.356
Adjusted EBITDA Margin %12.0% 15.5% 21.8%
Net Income Margin %(17)% (28)% 12%
Free Cash Flow$2.021 $(1.253) $3.745

Versus Company Guidance (Q3 2024)

MetricPrior Guidance (Mid)ActualDelta
Revenue$41.0 $38.251 −$2.749
Adjusted EBITDA$7.5 $8.356 +$0.856

Segment Mix and Growth

MetricQ1 2024Q2 2024Q3 2024
Ad Serving & Personalization mix of revenue79% 78% 78%
Measurement mix of revenue21% 22% 22%
Ad Serving & Personalization YoY growth+23% +11% +7%
Measurement YoY growth+11% +6% +1%
Revenue less Cost of Revenue (% of revenue)76% 76% 78%

KPIs and Device Mix

KPIQ1 2024Q2 2024Q3 2024
CTV share of total video impressions52% 54% 58%
CTV impression volume YoY+21% +21% +13%
Mobile video volume YoY+38% +13% −2%
Desktop video volume YoY+12% −9% +5%
Total video impressions YoY+25% +14% —

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ4 2024—$37.5–$39.5 New
Adjusted EBITDAQ4 2024—$8.0–$10.0 New
RevenueFY 2024$156–$163 $150.5–$152.5 Lowered
Adjusted EBITDAFY 2024$24–$29 $26.7–$28.7 Raised (lower bound), top end maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2024)Previous Mentions (Q2 2024)Current Period (Q3 2024)Trend
AI/workflow automationHarmony launch; optimization layer vision Investment within normal R&D run-rate Expanded AI use driving efficiency and margin Strengthening
Cross-sell executionBundled platform strategy emphasized Measurement +6% YoY; cross-sell opportunity Measurement +1% YoY; sales reorg to improve cross-sell Weaker, corrective actions underway
Political ad impactAnticipated election/Olympics dynamics Second-half uncertainty from election Political spend crowded out brands; softness in CPG/FS Headwind fading post-election
Harmony initiativeIntroduced; Direct launched Frequency launched in beta; partner adds Frequency reduced overexposure >50%; LG Ad joined; award recognition Momentum building
Partnerships (Netflix/Nielsen)Announced NYSE launch; partner list growing Announced Nielsen collaboration Netflix impression verification; Nielsen integration progress Expanding
Software-only model——Accelerating adoption; margin positive, short-term revenue pressure Mix shift toward self-service
International CTV——Scaling global ad-supported CTV creates opportunity; worldwide delivery except China Emerging tailwind
Regulatory/Google antitrustNeutral, unbiased platform positioning —Industry focus on unbiased tech; potential tailwind Supportive backdrop
Margin trajectoryLong-term 30% target reiterated Continued margin expansion; leverageable model Tracking well; 30% achievable over next couple years Positive trajectory

Management Commentary

  • “We delivered the ninth consecutive quarter of improved Adjusted EBITDA margin* demonstrating our ability to expand profitability and our leverageable operating model.” — Zvika Netter, CEO .
  • “Revenue…came in below our expectations…political dollars crowding out traditional spend…slower than anticipated growth in cross-sell…software-only adoption accelerated.” — Zvika Netter, CEO .
  • “Ad serving and personalization…up 7%, while measurement…grew 1%…CTV…58% of all video impressions…largest share to date.” — Anthony Callini, CFO .
  • “We are lowering our full year revenue expectations…reaffirming the top end of our adjusted EBITDA guidance and raising the lower end.” — Anthony Callini, CFO .
  • “Innovid was selected as one of two partners for impression verification within Netflix’s ad-supported platform.” — Zvika Netter, CEO .
  • Non-GAAP usage and reconciliation context provided in press materials .

Q&A Highlights

  • Political Ad Cycle: Brands pulled back as political spend surged (~500% increase in CTV political spend), notably in CPG and financial services; competition unchanged—impact was volume-driven .
  • Cross-sell & Sales Reorg: Strategy intact but prior structure/incentives underperformed; reorganization underway to improve platform selling (measurement, creative optimization, Harmony) .
  • Software-only Offering: Faster-than-expected adoption; large brands in-housing and seeking control/data; near-term revenue headwind but margin-accretive and expands reach to smaller advertisers .
  • Nielsen Collaboration Economics: Contractual framework anticipated but timing early; not expected to generate Q4 revenue; strategic positioning for future monetization .
  • Margin Path: Continued expansion likely; 30% adjusted EBITDA margin seen as achievable over next couple years, pacing with market growth and investment needs .
  • International CTV: Global opportunity expanding as ad-supported tiers scale; Innovid delivers ads worldwide (except China); revenue largely U.S.-based global brands today .
  • Buyback: Board authorized up to $20M repurchase program—capital return and valuation conviction .

Estimates Context

  • Wall Street consensus (S&P Global/Capital IQ) was unavailable for CTV this quarter due to a mapping error, so we cannot provide beat/miss versus S&P consensus for revenue or EPS. Values would normally be retrieved from S&P Global; consensus was not accessible at this time.
  • Relative-to-guidance assessment: Revenue was below the company’s prior Q3 range ($40–$42M), while adjusted EBITDA exceeded the prior Q3 guidance midpoint (see Financial Results tables) .

Key Takeaways for Investors

  • Margin expansion and cash generation offset top-line softness; software-only mix and AI automation are structurally accretive to margins, supporting the long-term 30% EBITDA margin target .
  • CTV fundamentals strong: record 58% share of impressions, ongoing secular shift from linear to CTV (including live sports), and key platform partnerships (Netflix, Roku, VIZIO, LG Ad Solutions) underpin medium-term growth reacceleration expectations into 2025 .
  • Near-term top-line headwinds should fade post-election; sales reorg aimed at improving cross-sell in measurement and Harmony, a key lever to restore double-digit revenue growth .
  • The $20M buyback authorization signals management/Board confidence and could serve as a support/catalyst amid valuation disconnects .
  • Watch for Q4 delivery within guidance and FY24 adjusted EBITDA at/above the raised lower bound; a clean U.S. ad market and Harmony adoption are critical swing factors .
  • International expansion potential grows with ad-supported tiers outside the U.S.; Innovid’s infrastructure is already global, positioning for incremental demand .
  • Regulatory backdrop (Google antitrust focus) highlights Innovid’s neutrality/value proposition and may be a tailwind for independent, unbiased ad serving and measurement .