Nexxen International - Q2 2023

Transcript

Operator (participant)

Welcome to Tremor International's second quarter ended June 30th, 2023 conference call. At this time, participants are in a listen-only mode, with a question and answer session to follow at the end of the presentation. This conference call is being recorded, and a replay of today's call will be made available on the Investor Relations section of Tremor's 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 (VP of Investor Relations)

Thank you, operator. Good morning, everyone, and welcome to Tremor International's financial and operating results call for the three and six months ended June 30th, 2023. With us on today's call are Ofer Druker, Tremor'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.tremorinternational.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 our anticipated future financial and operating performance, market opportunity, growth prospects, strategy, financial outlook, partnerships and anticipated benefits related to those partnerships, and forward-looking views on macroeconomic and industry conditions, as well as any other statements concerning the expected development, performance and market share or competitive performance relating to our products or services. All forward-looking 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 or 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 U.S. 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. Tremor 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 IFRS to non-IFRS results. At this time, it is my pleasure to introduce Ofer Druker, CEO of Tremor International. Ofer, please go ahead.

Ofer Druker (CEO)

Thank you, Billy, and welcome to everyone joining us today. I will begin by providing an overview of our results and strategic initiatives. I will then hand the call over to our CFO, Sagi Niri, to discuss our financials. We'll then open the call for questions. As a reminder, Q2 and H1 2023 results reflect the combined performance of Tremor International and Amobee, while Q2 and H1 2022 figures do not include the results from Amobee. Several years ago, beginning with the acquisition of RhythmOne in 2019, we embarked on a mission and strategic journey to become leaders in the CTV advertising arena. We strongly believed and correctly predicted that CTV was the next major frontier for advertisers to reach potential customers, enhance brand recognition, and drive future growth.

After more than four years, highlighted by significant organic growth, a public listing in the US, the creation of key partnerships, and the successful acquisition and integration of three additional companies, I am pleased to report that Q2 reflects an important milestone on our path to CTV leadership. In parallel with the completed integration of Amobee, a massive tech-rich acquisition we announced last September, which armed us with significantly added scale and important data, planning, and enterprise DSP capabilities, we took a very important step to rebrand our major products and platforms under a single united brand, Nexxen. The intent of the rebrand was to simplify our story to the market, and it seems that this intention has been well received by customers and prospects, resulting in an overall better understanding of our business.

While the rebrand was just announced in June 2023, and it's still early days, we believe it will drive massive improvement in our market position. The name Nexxen is a nod to the horizontal nature of our platform, borrowing from the Latin word nectere, which means to connect or bind. We believe the new name captures our ability to link different parts of the ecosystem, including the demand and supply side, as well as linear and connected TV, to create something that is both future-facing and impactful. As part of the rebrand, we changed the name of our DSP to Nexxen DSP, our SSP to Nexxen SSP, and our Ad Server to Nexxen Ad Server, with Nexxen SSP and Nexxen Ad Server collectively going to market as Nexxen CTRL. The rebrand has simplified the value proposition of our unified data-driven platform for our sales teams, customers, and prospects.

It has also positioned our sales teams to achieve greater success, packaging multiple solutions for customers to enable them to better accomplish goals, all of which we are confident will drive increased revenues per account over time. We also plan to change our parent company name from Tremor International to Nexxen International, which is a subject to shareholders vote at our AGM later this year. During the second quarter, we achieved our ambitious targets of both completing the majority of the technology integration of Amobee and realizing $65 million in annualized operating cost synergies by the end of Q2 2023. We believe this underscores the efficiency of our horizontal operating model and our proven track record of successfully integrating large-scale acquisitions in a timely manner for the benefit of customers and shareholders.

As I mentioned, we strongly believe in CTV and bet on its growth since 2019, working for several years and investing significant resources to enhance our technology capabilities and footprint in the segment. We believe we now possess one of the most scaled, data-fueled, and comprehensive unified horizontal ad tech platform in the open internet, which we are confident will enable us to gain share within CTV for years to come. Our platform boasts differentiated and exclusive data, including exclusive global ACR data through VIDAA, as well as robust and unique planning, activation, targeting, and measurement solutions. These solutions are purpose-built for advertisers, agencies, CTV publishers, and broadcasters to optimize return and exceed KPIs, particularly within CTV.

Our ability to cater to both sides of the ecosystem enable us to holistically serve customers, providing them significant data and cost advantages while positioning the company to maximize future revenues and profitability. We quickly executed our integration plan, saving significant costs through the reorganization of our now unified employee base, as well as through technology, vendor, and data hosting cost saving associated with consolidation of our DSPs into a significantly enhanced Nexxen DSP. We believe Nexxen DSP is one of the most powerful DSPs in the open internet. It features robust enterprise self-service and media buying capabilities, unmatched linear and CTV cross-planning technology, and critical TV data, including exclusive global access to VIDAA's ACR data for targeting and measurement. The combination of which is extremely beneficial for advertisers and agencies.

Following the bankruptcy of MediaMath, we believe the Nexxen DSP is one of the only major DSP options remaining in the open internet, and that we will benefit from both the added scale of the Amobee acquisition as well as this industry consolidation. Over the past several months, we have also worked hard to enhance our combined sales capabilities, go-to-market strategy, and overall market awareness. We believe this combination puts us in a stronger position to accelerate future revenue growth and increase our base of customers, adapting multiplied tech solutions across our ecosystem going forward. Through the Amobee acquisition, we added two important technology capabilities that we are particularly excited about. We believe both strongly enhance and complement our already robust platform and position us extremely well to attract new customers and encourage current customers to increase spending on our platform.

As announced in April, we launched our first to market Cross-Platform Planner, enabling broadcasters, advertisers, and agencies to holistically plan campaigns simultaneously across linear TV and CTV. While CTV is expected to grow at much faster CAGR of around 17% through 2025, according to eMarketer, and its primary focus for Nexxen, linear TV currently represent a significantly larger market. We believe the ability to cross-plan campaigns will accelerate our CTV opportunity, as we can now serve linear advertisers seeking to expand into CTV to reach incremental audiences and enhance returns as the two formats converge. This is a unique technology that will take time to accelerate adoption, but we believe it will generate value for our customers and drive long-term strategic partnerships. We have already seen adoption by and significant interest from some of the world's largest agencies and broadcasters.

The second pivotal technology gained through Amobee is Nexxen Discovery, which helps advertisers leverage and organize significant amounts of data simultaneously across web, social, media, and TV, to enable enhanced audience knowledge and better audience targeting to more efficiently and effectively plan campaigns. By leveraging Nexxen Discovery, advertisers and agencies can integrate powerful audience data into campaign plans to seamlessly activate through our DSP with a push of a button, and ultimately maximize return on advertising spend. This offering has generated adoption by and significant interest from both customers and prospects, and we have confidence it will continue to drive additional customers to our platform. We also announced a partnership with Scope3, creating a first to market green media product for CTV. The partnership enables Scope3 carbon emission measurement methodology to be applied to CTV inventory, with buyers able to access GMP curated views through the Nexxen SSP.

This allows customers to achieve performance goals while mapping and measuring carbon emission of media spend within CTV. This tool has generated significant interest from and adoption by agencies, and sustainability has become an increasingly core focus for them and their customers. Continued strategic investment in creating products purpose-built for success within CTV has been core to our ability to generate as much momentum as we have in the format, and we believe it will be instrumental to us continuing to grow share in the future. In Q2 2023, we delivered [LTE] year-over-year and quarter-over-quarter increases in contribution ex-TAC, CTV revenues, and programmatic revenue.

We also significantly improved adjusted EBITDA and adjusted EBITDA margin compared to Q1 2023, due to higher contribution ex-TAC, driven by increased demand for our programmatic solutions and improved environment compared to early Q1 2023, and the cost benefit associated with completing the Amobee integration. However, contribution ex-TAC was partly offset by declines in our performance business, as well as continued challenging advertising conditions, driven by macro uncertainty, which to degree, reduced advertiser spending and willingness to try and adapt new products. The decline in our performance business was expected as we devoted more resources to our core programmatic business. In addition to challenges in the broader environment, lower than expected contribution ex-TAC in Q2 was also the result of some unexpected sales team turnover and longer and more complex sales cycles related to our strategic focus on driving enterprise deals featuring multiply technology solutions.

This, in some cases, pushed larger expected deals out to 2024. As conditions improve over time and as advertisers' appetite to increase spending and adopt new efficient CTV-related solutions increase, we are confident that we will be better positioned than ever to capitalize on growth opportunities within CTV and to re-accelerate contribution ex-TAC growth. During the second quarter, we generated contribution ex-TAC of $80.2 million, reflecting a year-over-year increase of 13% from $70.8 million in Q2 2022, as well as 20% increase from Q1 2023. For H1 2023, we generated contribution ex-TAC of $147.1 million, reflecting an increase of 4% compared to $141.8 million in H1 2022. Contribution ex-TAC growth was driven primarily by increased programmatic revenue.

We generated programmatic revenue of $76.3 million in Q2 2023, reflecting 26% growth from $60.7 [billion] in Q2 2022, as well as 22% growth from Q1 2023, and programmatic revenues of $138.8 million in H1 2023, reflecting 16% growth from $119.8 million in H1 2022. We also successfully expanded within CTV, generating Q2 CTV revenues of $24.7 million, reflecting 5% year-over-year growth from $23.6 million in Q2 2022, as well as 16% growth from Q1 2023. We generated CTV revenues of $45.9 million during H1 2023, reflecting 17% year-over-year growth from $39.4 million in H1 2022.

In addition, we significantly improved adjusted EBITDA and margin in Q2 2023, delivering adjusted EBITDA of $21 million, which increased 137% from $8.9 million in Q1 2023. We generated this impressive quarter-over-quarter increase despite an approximately $1.7 million adjusted EBITDA headwind related to the bankruptcy of MediaMath. While the bankruptcy of MediaMath did have an impact on our adjusted EBITDA during Q2 2023, we believe we may benefit from potential new advertisers and talent additions related to this major DSP company exiting the market. Our adjusted EBITDA margins increased to 25% on revenue basis and 26% on contribution ex-TAC basis in Q2 2023, doubling from adjusted EBITDA margins of 12% on a revenue basis and 13% on a contribution ex-TAC basis in Q1 2023.

Please note that Amobee was operating at a significant loss when we acquired the company, which reduced our margins compared to periods prior to the acquisition. This increase following the completed integration underscore our success, optimizing our cost structure to expand profitability, which we continue to expect to further improve over H2 2023 compared to H1 2023. Our partners at VIDAA and Hisense continue to achieve success, growing global share and distribution. VIDAA now serves as a CTV operating system for over 21 million connected TVs in approximately 180 countries. Hisense, including Toshiba, according to the data from AVC Revo, had the fastest growth rate in the world for CTV shipments in H1 2023, shipping approximately 12.4 million smart TVs, a year-over-year increase of roughly 22%.

Hisense global shipment share increased to approximately 14%, a record high for Hisense. They continue to rank second in the world for global TV shipment share. As Hisense continue to grow market share, and as VIDAA Hisense CTV operating system continue to grow distribution, we expect to benefit from revenues opportunities associated with our investment in VIDAA, and anticipate customers will increasingly seek to leverage VIDAA ACR data for CTV targeting and measurement. Our investment enables global ACR data exclusivity and ad monetization exclusivity on VIDAA media in the U.S., U.K., Canada, and Australia for several years. We believe this reflects an incredibly powerful partnership, given VIDAA and Hisense growth rate, and as most major OEMs operate as walled gardens, offering very unique data and advertising opportunities for our customers.

Finally, we continue successfully growing our advertisers and supply partners base in Q2 and H1, while also retaining the vast majority of our largest and most significant customers. During Q2 2023, the company added 65 new actively spending first-time advertiser customers, including 30 new enterprise self-serve advertiser customers, and added 110 new actively spending first-time advertiser customers during H1 2023 across travel, CPG, and entertainment vertical, as well as others. Nexxen Studio, formerly Unruly, also launched the industry's first voice-activated ad, able to run across all CTV environments, further expanding on our company robust and significant CTV capabilities.

Additionally, we added 112 new supply partners, including 100 in the U.S. during Q2 2023, and 174 new supply partners, including 149 in the U.S. during H1 2023, across several verticals and formats, including CTV, broadcast TV, live sport, and gaming. H&L, a multi-service agency, following its satisfaction with the Nexxen DSP, expanded its product adoption to leverage more of our solution, including Nexxen Discovery, VIDAA's ACR data, and our cross planner. Now, that we have rebranded, completed the unification integration of our platforms and people, and added new CTV capabilities, we anticipate being able to generate more success stories like H&L, where partners adopt multiply technology and data solution across our product suite, particularly as market conditions improve. With that, it's my pleasure to turn the call over to Sagi.

Sagi Niri (CFO)

Thank you, Ofer. Today, I will review the highlights and key financial and operational drivers of our Q2 and H1 2023 performance, and will also discuss our forward-looking guidance. As a reminder, Q2 and H1 2023 results reflect the combined performance of Amobee and Tremor International, while Q2 and H1 2022 results do not include results from Amobee. For the three months ended June 30, 2023, we generated contribution ex-TAC of $80.2 million, reflecting 13% growth compared to $70.8 million in Q2 2022, as well as 20% growth from Q1 2023. For the six months ended June 30, 2023, we generated contribution ex-TAC of $147.1 million, reflecting an increase of 4% compared to $141.8 million in H1 2022.

Growth in contribution ex-TAC over Q2 and H1 2023 was driven largely by a significant increase in programmatic revenue and increased CTV revenue. We experienced strength in food and automotive vertical during Q2 2023, as well as in our PMP business. On the opposite side, softness was observed in our retail vertical and also in non-CTV related video and mobile formats, which were down year-over-year in Q2 and H1 2023, as well as in our non-core performance business as expected, as the company continued to strategically shift its sales focus into CTV. Programmatic revenue for the three months ended June 30, 2023, was $76.3 million, which reflected a 26% increase compared to $60.7 million in Q2 2022, as well as 22% growth from Q1 2023.

For the six months ended June 30, 2023, we generated programmatic revenue of $138.8 million, which reflected a 16% increase from $119.8 million in H1 2022. Programmatic revenue, as a percentage of revenue, increased dramatically to 91% in Q2 2023, and 89% in H1 2023, compared to 80% in Q2 2022, and 76% in H1 2022. We expect this increased programmatic footprint to remain the norm, given the added programmatic base gained through Amobee, combined with the strategic shift of sales resources into our core programmatic business.

We also continue to extend our CTV share despite challenging market conditions, generating CTV revenue of $24.7 million in Q2 2023, reflecting 5% growth compared to $23.6 million in Q2 2022, as well as 16% growth from Q1 2023. For the six months ended June 30, 2023, we generated CTV revenue of $45.9 million, which reflected a 17% increase from $39.4 million in H1 2022. Our success in CTV is no accident and has been driven by significant product investment and sales resource shift into this high growth segment over the last several years. We continue to expect to generate further momentum in CTV going forward, as this is a core focus of the business where we see a strong growth runway, particularly as market conditions improve.

Video revenue continued to account for a majority of our programmatic revenue at 71% in Q2 2023, and 73% in H1 2023. Video revenue, as a percentage of programmatic revenue, was down slightly from 75% in Q1 2023, but this was largely attributable to a significant increase in programmatic revenue in Q2 2023. Video revenue, as a percentage of programmatic revenue in both Q2 2022 and H1 2022, was 93%, and year-over-year decreases are attributable to the addition of Amobee, which had a historically stronger non-video revenue base, year-over-year decrease in non-CTV related video revenue, and significant year-over-year increase in programmatic revenue.

Over time, we expect to cross-sell our video capabilities to Amobee customers, increase the number of customers leveraging us for multiple solution within video, and attract new customers seeking our video solutions, which is expected to increase video revenue as a percentage of programmatic revenue. During Q2 2023, we also generated significantly improved adjusted EBITDA of $21 million, which increased 137% from $8.9 million in Q1 2023, despite an approximately $1.7 million adjusted EBITDA headwind, related to the bankruptcy of MediaMath. This significant rebound in adjusted EBITDA was attributable to a combination of higher contribution ex-TAC generated during Q2 2023, compared to Q1 2023, as well as cost benefits from the complete Amobee integration.

The approximately $65 million achieved in total annualized cost saving related to the Amobee integration was largely attributable to the reorganization of the Amobee employee base into Tremor International, as well as reduced technology, vendor, and data hosting fees associated with the consolidation of Tremor Video and Amobee DSPs into the Nexxen DSP. For H1 2023, we generated $29.9 million of adjusted EBITDA. Q2 and H1 2023 adjusted EBITDA, compared to $39.1 million in Q2 2022, and $77.8 million in H1 2022. As adjusted, adjusted EBITDA over the three and six months ended June 30, 2023, was impacted by the integration of Amobee, which was generating losses when we first acquired the company, as well as a weaker advertising demand environment earlier in 2023.

We will continue to work towards further optimizing our cost structure on an ongoing basis to improve profitability. We believe, as we generate higher levels of contribution ex-TAC, that the majority of increased contribution ex-TAC will flow through to adjusted EBITDA, given the strength of our horizontal operating model, which enables strong and increasing degrees of operating leverage. For the three months ended June 30, 2023, we generated an adjusted EBITDA margin of 25% on a revenue basis, and 26% on a contribution ex-TAC basis, which doubled from Q1 2023, when we generated an adjusted EBITDA margin of 12% on a revenue basis and 13% on a contribution ex-TAC basis. For H1 2023, we generated an adjusted EBITDA margin of 19% on a revenue basis and 20% on a Contribution ex-TAC basis.

Q2 and H1 2023 adjusted EBITDA margins compared to 50% on a revenue basis in Q2 2022, and 55% on a contribution ex-TAC basis in H1 2022. We continue to expect adjusted EBITDA margins to improve in H2 2023 compared to H1 2023. Turning to our cash flow. We generated $11.9 million in net cash from operating activities during Q2 2023, and $4 million in H1 2023, after generating net cash from operating activities of $30.4 million during Q2 2022, and $46.5 million in H1 2022. Year-over-year decreases were largely attributable to a weaker advertising demand environment compared to the prior year's periods.

During H1 2023, we incurred approximately $5.7 million in severance and retention bonus, related costs associated with the reorganization of Amobee employee into the Tremor International base. As of June 30, we had $94.2 million in net cash, as well as $80 million undrawn on our revolving credit facility. We intend to leverage our considerable cash reserve in the future for the ongoing need of the business, as well as to support our future strategic investments and initiatives, including potential future share repurchase program and acquisitions. We also generated non-IFRS diluted earnings per ordinary share of $0.06 for Q2 2023, and $0.03 for H1 2023, versus non-IFRS diluted earnings per ordinary share of $0.16 in Q2 2022, and $0.33 in H1 2022. Finally, I now turn to our outlook.

We continue to expect stronger contribution ex-TAC, programmatic revenue and CTV revenue in H2 2023 versus H1 2023 and H2 2022, with the majority of H2 2023 growth anticipated in Q4 2023. The combination of several factors have caused us to lower our full year 2023 contribution ex-TAC and adjusted EBITDA forecasts. First, we believe that continued challenging macroeconomic conditions, which have driven uncertainty and cautiousness in the advertising demand environment, will continue to drive lower spending by major agencies and advertisers in H2 2023, and will also limit their willingness to adopt new platforms and products over the near term.

Major advertisers and agencies, including some of our largest customers, have reduced budgets and spending estimates for the second half of the year, which we believe will particularly impact our managed service business, while we are also seeing supply growth outpace ad budgets growth, driving short-term pressure on CPMs. We believe these factors will alleviate as macro conditions improve and ad budgets begin to expand again. As mentioned earlier, we also believe that longer and more complex sales cycles will challenge our contribution ex-TAC expectations. While intentional, due to our ongoing strategic focus on expanding our programmatic footprint, we anticipate that continued decline in our performance business in H2 2023 compared to H2 2022, will also impact our full year 2023 contribution ex-TAC.

Our heightened emphasis on driving growth within our programmatic and enterprise solutions, which we continue to believe is in the best long-term interest of the business and where the industry is heading, has also, to an extent, driven lower overall take rates for the company amid this strategic revenue mix shift. Additionally, although we experienced some degree of increased stability in our sales organization as a result of combining the Amobee and Tremor team and providing significant training, recent sales team turnover over the last few months is expected to negatively impact H2 2023 results. That said, we expect to remedy this situation and have already allocated the resources necessary to unlock significant budgets for these pivotal positions in key metro areas. In some cases, we've already filled vacancies and are working hard to quickly ramp up new employees to drive future revenue growth.

We anticipate being very active in the talent market over the near term, particularly for experienced sales and marketing team members with significant experience driving programmatic CTV and video revenue growth. As a result of all these factors, we are lowering our full year 2023 contribution ex-TAC expectation to a range of approximately $320 million-$330 million, from a previously expected $400 million.

We are also lowering our full year 2023 adjusted EBITDA expectations to be in a range of approximately $85 million-$90 million, from a prior range of $140 million-$145 million, due mainly to the expectation for lower contribution ex-TAC. We continue to anticipate increasing our adjusted EBITDA in H2 2023 versus H1 2023, and to generate higher adjusted EBITDA during H2 2023 than we did in H1 2023. However, we do not currently expect Adjusted EBITDA or Adjusted EBITDA margin in H2 2023 to be higher than in H2 2022. We continue to expect programmatic revenue to reflect approximately 90% of full year 2023 revenue. With my remarks completed, I'll turn the call back to Ofer.

Ofer Druker (CEO)

Although the macroeconomic environment remains challenging, limiting advertisers' near-term willingness to spend and adapt new products and platforms, we believe these conditions and contribution aspect growth will improve over time. We also believe that as our new products and unified platform gains more traction in the marketplace, and as our sales and marketing teams continue to ramp efforts, the length of our sales cycle will shorten for large enterprise deals featuring multiply technology solutions. With the integration of Amobee now complete and the business operating under our new unified Nexxen brand, we believe we are ideally positioned to offer advertisers, agencies, CTV publishers, and media broadcasters a state-of-the-art platform designed to unlock more favorable outcomes and returns within CTV. We continue to feel we are well positioned to capitalize on the rapid growth and adoption of CTV over the long term.

As the market continues to favor horizontal solutions like we have operated for years, as the industry is now more data-driven and more obsessed with efficiency than ever before. We also believe the newly added CTV capabilities and scale gained through Amobee will give us an increasing edge over time, especially when coupled with the growing distribution of VIDAA Hisense and the powerful partnership and exclusivity we have via the relationship. Following significant investment in CTV-related product development over the last several years, our platform is now more technology-based and customer-centric than ever for partners on both sides of the ecosystem. While it's taking more time than initially expected to accelerate growth and for our platform and new capabilities to gain more significant traction with customers in the market, we feel very strongly that these investments will pay off over the long term.

We remain confident that our data-driven, horizontal technology platform will continue to position us as a key CTV partner and first call for advertisers and agencies, and increasingly drive new and current customers to adopt multiply solutions and increase spending across our ecosystem in the future. We remain excited for what's to come, and want to thank our customers, employees, partners, and shareholders for their continued support. Operator, we will now take questions.

Operator (participant)

If you would like to ask a question, please press star one on your telephone keypad. We'll pause for a moment to compile the Q&A roster. Your first question comes from the line of Matt Swanson from RBC Capital Markets. Please go ahead. Your line is open.

Matt Swanson (Director)

Yeah, thank you for taking my questions. Sagi, I, I think both from your comments and what we've seen from peers, it's obviously a complicated macro environment right now, do you mind breaking down the guidance a little further and maybe focusing on what parts of the business have remained the most durable? Then any color on how much of a Q4 recovery is embedded in guidance and kind of what gives you confidence around that from a timing perspective?

Sagi Niri (CFO)

Thanks, Matt, for the question. Okay, you asked a couple of question in one question. I'll try to answer everything. I think we are not seeing like, you know, as the industry is suffering from macroeconomic headwinds, I think we are suffering as well. We are more of a pure branding player, while the other are doing a little bit tweaks into some performance and more display media. Having said that, we are not seeing like a major weakness in one of our revenue streams. You know, customers, agencies are pushing back their campaigns and their spend into H2. Some of them are completely moving it out. We are not seeing anything on any specific verticals because we are very diversified.

I think when we are looking on H2, at the beginning of 2023, probably a lot of people thought that H2 is going to be a massive recovery. As long as we are seeing it now and we are trying to be cautious, we are not seeing a huge recovery. Of course, Q4 will be the stronger over the year. We are anticipating like a moderate 20% growth from Q4 to Q3, which, if I'm looking on our peers, is somewhere around the average of what we are seeing. We are thinking the same. Of course, now it's mid of August, so we have a very clear forecast around what will happen in Q3 and good visibility around Q4. We are not we are trying to be realistic, and cautious together.

Matt Swanson (Director)

That's, that's, that's really helpful. Then, Ofer, maybe on a product side, it was great to hear some more about the Cross-Platform Planner. It just feels really well-positioned for kind of the moment we're in right now in CTV. Could you just expand a little bit more, specifically, I guess, on the feedback you're hearing from customers on this solution? Then maybe just, you know, helping us think about how this materializes over time in terms of how, you know, customers who have adopted will ramp with it.

Ofer Druker (CEO)

Of course. Thank you, Matt, for the question. I think that when you're looking at the industry, and we mentioned it several times in the past, CTV is becoming more and more mature and bigger in the market. When advertisers wants to reach their audiences, and if they are linear advertisers in the past, they need to consider also running on basically streaming and CTV. They cannot reach their targets just on linear anymore. I think it's becoming evident also on a national level and most likely also on the local level. Basically, advertisers needs to reach also CTV and streaming.

When we are looking at that, I think that our timing to go up with this solution that allow basically linear advertisers to spend also in a, in an efficient manner on CTV and linear, is very meaningful because they need it, but they need to do that smart. They cannot basically run in blind way, both on both sides, because then they will lose a lot of dollars that will run and create duplication to the same user, and we show him the same ad and the same reach, linear and CTV, which is not efficient. Basically, we can offer them now to do that in the most smart area. I think that the slogan of better planning, better results, is like it's coming very clear to that now. In the past, it was more of a slogan, but now it's reality.

Meaning, when you're looking at the big broadcasters and the big TV station, they need this tool in order to basically offer a spread and to direct some of the, some of the money into CTV and, and, and streaming in order to reach their target audience that they are trying to reach. I think that it's a long process. It's not happening overnight. The broadcasters, the linear advertisers are learning that. We see very good reaction already in the market from big broadcasters, big agencies that like the product. They feel that it's needed and unique in the market, and I think that we are in a good, in a good path around that.

It's not something that happened overnight, but I think that it will give us a lot of power in the future, in the midterm and long term, because basically, what does it mean? It means that we can basically help advertisers that are linear advertisers, which is like around $60 billion in the U.S., to spend and to move also to, to CTV. A lot of people are talking about this conversion, but I think that we can really offer a solution that basically enable them to run smartly on both platforms. We can help them also to do what we call the user extension, because we have a very big SSP that is rich with CTV media, that can basically fulfill their needs in order to reach their audiences in any campaign that they are running.

I feel that the timing, the need and the reaction in the market are very good. We need to be a little bit patient because it's not a solution that is being embedded overnight. It takes some time to basically integrate it and to learn, to educate and to teach and work together with the partners in order to operate it in the smart manner. I think that this is the challenge now, but as we see, it's like the reaction and the solution is being accepted very well in the market. The fact that we are the first one to issue that, it's also giving us the title again, of the innovator of the CTV world. That is very important. I hope that I answered your question.

Matt Swanson (Director)

Yeah. Thank you.

Ofer Druker (CEO)

Thank you, Matt.

Operator (participant)

Your next question comes from the line of Laura Martin from Needham & Company. Please go ahead. Your line is open. Give me one moment here.

Ofer Druker (CEO)

Hello, Laura.

Laura Martin (Managing Director in Entertainment and Internet)

Okay. Can you hear me okay?

Ofer Druker (CEO)

Of course.

Laura Martin (Managing Director in Entertainment and Internet)

Hi! Can you hear me?

Ofer Druker (CEO)

Yes.

Laura Martin (Managing Director in Entertainment and Internet)

Okay, fantastic. Could you bring us up to date on the Hisense beta measurement product you guys were working on? Whether that's, when that's gonna have an impact on your revenue, and then if you're gonna actually sell it to third parties? Could you update us on that, please?

Ofer Druker (CEO)

Of course. First of all, Hisense is growing very immensely, as we can see by the numbers. It's not related to our efforts, it's related to their efforts, but they are becoming a very strong player in the CTV, globally and also in the U.S. We already reached numbers that are efficient for us to do targeting and measurement. As you know, we didn't build our own solution. We are now in discussions with several companies about measurement. Also, we'll open some of the segments into DSPs in order to allow people to use this data, in order to target and in the future or in parallel to measure.

I think that we reached an interesting point because we are talking about it for a long time, but it's like long processes about building the infrastructure, building the technology, testing it with a live TV manufacturer that he has also other challenges, of course, and he needs to make sure that the user experience is, like, perfect. That's what we try to achieve, of course, and we achieved with Hisense, and that own also Toshiba, just to mention. I think that we are now in the moment that it will start to play in our favor in the fronts of targeting and measurement, and we will basically empower also other companies and allow them to use this data.

We are also going to open the international markets very soon, and it will be a very unique solution because. In the U.S., it's something that is around for six, seven years, but in the U.K., in the other market, it's very small or not existing at all. We are going to basically launch it in some of the markets that we are being active in. I'm sure that it will bring us a lot of value and also to the market, because we are basically enabling our advertisers and clients to target much better and to measure the results with ACR data.

Laura Martin (Managing Director in Entertainment and Internet)

Super helpful. My second question is on Amobee. As we've taken down the projections for the full year so much, and you guys talked about sales force turnover, and elongating the sales cycle, which sounds like part of that is you have to hire sales. In the short term, was Amobee actually additive to your business, or is it actually hurting your combined financials? What's your point of view on that?

Ofer Druker (CEO)

It's not hurting us, but we need to remember that in the last nine months, we placed a lot of resources, attention into the integration for Amobee. It was a bigger company than us. We have to remember that when we started this integration, they were, like, about 1,000 employees. We were around 600 employees. To integrate these two big companies into one, it's taking time. The second thing is to, to create the synergies and to basically reduce costs. We reduced costs by $65 million, which is about 20% of our growth, which is very difficult to do. It's like when you are flying, it's basically changing the engine of an airplane while you are flying, and we did it.

I think that if we weren't doing that in the beginning, we will suffer today a lot because it's a loss that was generated. We took this decision of acquiring Amobee, not based on the short term, but on the long term and what technology they can offer us. I think that also on that front, when you're looking at the technology front, we basically managed to integrate these two companies, two DSPs, two DMPs, all the activities around it in a very short period of time. In, like, in the end of the second quarter, we already sunset one of our DSPs. We have, we have already one platform, one sales force, one teams that are operating together, which is a very meaningful event, and it's not easy to conduct.

I think that it's not slowing us down, and it just gave us the opportunity now to rebrand. We also conducted the rebranding in June. We changed the names of all the companies, we unified them, we unified the products. We did a lot of work across the company in order to do that, which will help us to do three things. First of all, internally, to give the people association to the new brand, so it's not a brand that. It's a brand that we choose. It's the first time that we choose a brand, and we didn't adopted a brand. The second thing is to make it more clear to all the clients and partners and potential partners, what we really can offer.

In our last meetings with people, suddenly it's become evident to them what we can really offer to them, because before that, it was much more confusing with all the different brands that we were using. The third point is also to the financial markets, to investors, shareholders, to understand what we are offering to the market, which is very powerful. I think that in general, when you're looking at what we achieved with, with Amobee, is a lot. I will mention two elements that I feel that will give us a lot of power in the future, or even three elements. One of them is the, the DSP itself. The DSP that of Amobee is very rich in functionalities of enterprise solution. It's very common.

You can look, you can look at all the sentiment of clients and the market, to the brands, to the capabilities that it represent. It's very powerful, and I think that the future belongs to the enterprise solution, meaning if you want to create stability, if you want to create prediction, you need to have an enterprise solution in your company, you have a strong one, so people will use it. We can offer them more and more capabilities, like you can see with our last deal with H&M, that started with the DSP, but moved along to using our ACR data, using our DMP, using our, using our SSP, which is exactly what we are trying to achieve.

I think that the DSP was very meaningful, and to build these whole functionalities by yourself will take you years. As we know, we don't have years to get better on the enterprise solution. You need to, you need to get these capabilities today. The second two elements-

Laura Martin (Managing Director in Entertainment and Internet)

Yes.

Ofer Druker (CEO)

... is the planning tool. The planning tool of the cross-platform that is very unique, like I mentioned to Matt. It will give us value in the mid and long term, and I think that it's very powerful, and we need to plan for the long time, for the long term. We cannot work for quarter, for quarter. I think it will be a mistake. After serving so many years in the industry, I learned that you need to plan and to build things that will serve you in the future. The discovery tool, that is basically a very powerful element because the DSP by itself, it's a in a way, it's a commodity.

If you have all this planning tool, if you have the discovery tool, that is enabling advertisers to learn about their audiences, to create segments and so on, and to, in a click of a button, to launch as a segment to targeting on our DSP, I think it's very powerful, and it's giving the agencies and the brands the reason to adopt our DSP. That's what we are doing, and I'm really glad for the acquisition of Amobee, and I think that it was really the missing part for us in the strategy, and now we feel completed, and that's why we rebranded, and we are ready for the future.

Laura Martin (Managing Director in Entertainment and Internet)

Thank you very much.

Ofer Druker (CEO)

Thank you, Laura.

Operator (participant)

Your next question comes from the line of Andrew Marok from Raymond James. Please go ahead. Your line is open.

Andrew Marok (VP)

Hi, thanks for taking my questions. In the context of your commentary around longer sales cycles and some of the sales staff turnover and things like that, citing a few notable wins in the quarter, bringing on 65 new advertisers, over 100 new supply partners, what does the ramp period look like for a new customer or a supply partner for you? Are they materially contributing in the near term, or is there a test phase before committing more substantially?

Ofer Druker (CEO)

Okay, I will split my answer to two. On the supply side, the outcome is much shorter. Basically, when you integrate a new supply source, that first of all, the integration is not long, it's in a matter of weeks, and also the testing is not long. It's a matter of less than a few weeks. It can done, some of that can be done in parallel. The effect of the media side is faster. Regarding the new wins of advertisers, it's a longer process, and I will explain why. Basically, advertisers don't need to use five or six DSPs. They are trying to lower the number of DSPs that they are using.

They are trying to lower the number of systems that they are using because of two elements. First of all, they cannot train their people on so many platforms. It's becoming very complicated. The second thing is cost. You know, they don't need so many platforms, they don't need so many complications to complicate their, basically, activity. When we are coming in, we need to basically replace someone, which usually takes more time, and people are scheduling their, let's say, RFIs or consideration for the future, so it takes some time to integrate.

We already see a lot of interesting conversations that in the past, like what, when I'm talking about the past, let's say before we acquired Amobee, we were never being even considered, but now we are talking to top retailers, to top travel, travel company, to top other companies that are showing interest in our solution because of all the elements that I indicated to Laura also, and to Matt before. I think that it's a longer process, but it will do two things that, you know, can be very interesting for investors and shareholders. One of them, it's long-term revenue. Basically, even when it's taking us time to integrate our solution and to win an account, it will also take time to take us out of there.

If the future, if someone wants to change, it's giving you more stability, and it's a long-term solution, and you can sit and work with these companies for many, many years. Usually, if you are providing them good service, they have no reason to replace you. We are very working together and transparent with our customers, so we don't see any reason for people to, to switch. The second thing, it's giving a lot, a better predictability about how much revenues we can generate in the future compared to the managed business, which is an IO that is being renewed all the time.

In this process, you have a discussion with the client about how much they are going to spend in the next quarter, how much money they are going to spend next year, what is their need from technology perspective, and you can address it in a much better way. I think that the longer process, it's painful in the beginning, but it's much better in the future because it's giving us predictability and stability to our business in the future, which is, of course, something that you really need when you're running a big business and you want to basically lead the market of CTV. You need to have these anchors that are working with you closely in order to win the accounts.

Andrew Marok (VP)

Great, thank you. Just a quick one. I know you, you mentioned a little bit on the call the impact of the MediaMath bankruptcy. I was wondering if you could go into any more detail in terms of the customer overlap or, or the potential revenue opportunity that could provide to you, having one fewer competitor in the market. Thank you.

Ofer Druker (CEO)

Of course. MediaMath, of course, we, we used to work with them. They used to buy on us media. We look at them as, and we feel bad for them to, to lose their business in so many ways. We know the people for a long time. They are colleagues from the industry, so it's not ever nice to see something like that, that it's happening. The other side, it's opened a lot of their clients to review. These clients are looking at the market, trying to replace MediaMath. We need to remember that the MediaMath shutdown happened over, almost overnight. It's not like, it was not like a, a planned process that people were saying, "Let's listen, in April 2024, we will shut down our service." No.

It happened in a, in a, in a notice of a few days, or even less than that, of a few hours, so basically, they shut down their business. Some of their clients are already adopted other solution, including ours. Some of them are still searching, I think that we are, of course, in the mix, we are trying to win as much business as we can, I think that we have a very good chance to do that. I think that eventually, this solution that we saw of MediaMath, this bankruptcy, it just shows so in a, in, in light or giving an highlight to the fact that you need an end-to-end solution, and you need a horizontal solution in order to win in this market.

One-sided companies will face difficulties to win and to stay in the market because of, of course, of margin issues and capabilities to, to basically manage the future. It's giving us another evidence that the solution and the, and the strategy that we choose in 2018, when we choose to be end-to-end horizontal integration, gave us a lot of power and is giving us reassurance that we are on the right side. Also, I must say, from initial discussions with some of their clients, they see the same. They don't want to switch platform, they don't want to change platform every two or three years. They want to keep their clients and to keep the test, the, the infrastructure that they choose to use, and I think that with us, they can feel much safer because they see the performance of our company.

Andrew Marok (VP)

Great. Thank you.

Ofer Druker (CEO)

Thank you.

Operator (participant)

Your next question comes from the line of Eric, Eric Martinuzzi from Lake Street. Please go ahead. Your line is open.

Eric Martinuzzi (Founding Partner, Senior Research Analyst, and COO)

Yeah, I was curious to dive into the linearity of demand here. You came out of the Q1 print, you know, it was the end of May, and I'm just, there was softness earlier in the year. Just curious to know what you saw in June versus May and April, and then maybe if you could comment on July versus June?

Ofer Druker (CEO)

I didn't understand the first part of the question. You asked about what we saw?

Eric Martinuzzi (Founding Partner, Senior Research Analyst, and COO)

Yeah, linearity of demand. You, you know, you were 2/3 of the way through the second quarter when you gave your outlook or reiterated the outlook for the year, and now we've got a pretty substantial reset. Just wondering when you saw the weakness?

Ofer Druker (CEO)

Okay, of course. I will give also after that, Sagi, if he wants to add something, but from my perspective, you know, the last few years didn't acted like as usual. I'm 25 years in this business. Usually, you see heavy lifting and much better results in the second half of the year. We saw it already several times in the last few years. For example, in 2020, even that is true, at the beginning of the year started very weak because of Corona, if you remember. We saw a very big pickup in the second half. In 2021, it was starting okay, then there was the unrest in the U.S. We are mostly U.S.-based, 90%, more than 90% of our business is in the U.S.

We saw, again, weakness a little bit in the middle of the year, and then we saw a better finish of the year in 2021. In 2022, I think that all the year was starting because after the invasion of Russia to Ukraine, the sentiment, the macroeconomics, everything, I think that the second half of the year was not as strong as people expected, usually the Q4. People were feeling that in this year, basically, what will happen is that we started soft, but people will like to invest their money in marketing in order to grow their business. We'll see a very strong second half of the year. We also believe in that also because we saw that evident also in the few last years.

What we encountered in the last few weeks is that we saw that if we are looking at that, and we are already in the middle of August, and we see also our peers that reconsider their Q3 numbers, it means that that, the second half of the year will not be for sure, a great, a great, momentum. We decided to be more cautious, to prevent from adjusting a few times or changing our course a few times but to do that once. We look at it, and we are looking at it in a very cautious way, and we feel that if the market will pick up, great, but if not, we are ready for that.

I think this is more about experience and being transparent, and not about still believing that Q4 will be, will make us miracles, you know, because we have to be careful if we are in the middle of August, and we see that the market is not as strong as was expected. Even that, as you can see, we show improvement in the two halves. Even if we are saying that in the first half, we generated between around $140 something million, we are saying in the second half, we do much more than that, which is about 20% more, which is, makes sense.

I think that we need to be cautious and careful because the market is very hard to predict, and I, I feel that the macroeconomic is very fragile and changing, and we need to be, we need to be listening to the, to the voice of the market and to, to take, a cautious when we are sharing results and forecast with the market.

Sagi Niri (CFO)

Yes, I, I agree with Ofer, and I think that, you know, per your question, we saw in the second quarter after our Q1 earnings, like, in June itself and through June, decreases in in advertisers' appetite and, and spend. We saw some pushback into H2, and we even saw some cancellation of campaigns. We waited until now in order to forecast exactly how our Q3 is going to look like. As Ofer mentioned, we are not counting on a amazing Q4. We think it will be strong, but not as strong as we anticipated before. Again, we are seeing our peers as well. Taking all of that into consideration, we decided, or the outcome is the, the lower guidance that we took now out.

Eric Martinuzzi (Founding Partner, Senior Research Analyst, and COO)

Thank you.

Operator (participant)

Your next question comes from the line of Andrew Boone from JMP Securities. Please go ahead. Your line is open.

Andrew Boone (VP)

Good morning, guys. Thanks for taking my question. I wanted to go back to Laura's question and ask about Amobee. If we go back to the disclosure at the time of the acquisition, it was $150 million of contribution ex-TAC when you guys acquired it. Can you talk about where the business is today? How much of that stuck around, and maybe how do we think about the, the retention of those customers?

Ofer Druker (CEO)

Yeah, I will take this one, and, Sagi, feel free to fill any gaps that I left. In general, I think that, again, I think that what we also reported last time, I think it's still standing, and from our last check, of course, is that it's not about losing clients, it's about dropping budgets by the advertisers and by the clients. Meaning, people are adjusting their budgets according to the macroeconomic environment. They can run on your platform, but they spend less than they used to or less than they planned to, which makes sense, and we see that across the board in all, almost all verticals, basically, that related to branding. We need to remember that these people are like us.

They are facing uncertainty, they don't want to spend their money now, they don't know what will happen in some senses tomorrow, they are more cautious than they used to. I, I don't think it's about losing business. It's not about losing clients. It's about people that are dropping their spend in order to protect themselves, to keep their cash, to look at the future, to start to try and understand what, when is the right time for them to start spending again or investing in, again, heavily in order to retain their clients, to engage with them, and to win new clients. I think this is the major issue. We don't see any major failure or drop of clients or stuff like that.

It's happening more on the ground of people dropping their or lowering their spend, lowering their activity in order to cross this storm that is happening in the macroeconomics, in order to understand where they are standing, and as I mentioned, how to use their resources in the best way. That's the major stuff. Just to, maybe to add one more thing after looking at that from perspective of many years in this industry, I think that what we see is that we are a company that, as Sagi mentioned, we are purely branding company. This is the first thing to be cut when there is difficulties and macroeconomic challenges. When people are feeling the relief and the change in momentum, this is the first thing that will grow.

I feel that we choose the right, the right model. We are running on branding. We are putting our emphasis on, on CTV and video. More than 70% of our revenues is, is video. We are heavily invested in CTV, and we are winning on that front, and we are using data. I don't think that it can be a, a challenge, that this is the right way to, to run a business today in the ad tech, when, when, when you're looking at all the trends and everything that is done around it. I think that in every company, in every economy, there are cycles.

Now I think that the uncertainty, the advertisers and the partners, when they are looking at the future, they have doubts, they have still question marks, and they are waiting to see when will be the right time for them to, to keep running and to push their big budgets in order to win accounts and to win market share again. That's the major things.

Andrew Boone (VP)

Then I'm gonna ask a tough question here. Understood the difficulty in terms of thinking about 2024 with the current macro environment, given the fact that guidance seems to imply that we're exiting Q4 with basically flat programmatic revenue ex-TAC, can you guys just talk about when, when should we start to think about the recovery for 2024? Should we expect you guys to grow in line with programmatic, or could headwinds continue into next year? Thanks so much.

Ofer Druker (CEO)

Okay. Regarding headwinds, it's the $1 trillion question I think. Nobody knows what will happen to the sentiment in the market and the macroeconomics. I wish I knew. But I think that I can look at our company and what we did in the past nine months almost, and what we are planning to do. I think that by concluding the integration of the technology, the integration of the companies, finishing the cost reduction that we've done, I think that it's giving, like, much more clear view to the managers, to the company about the future. There is a lot of dust that went down that allow us now to focus on the business, which is very meaningful.

The size of what we mentioned about sales and sales cycles and so on, to get people into the picture, to prepare the sales materials, to conduct, to send, to teach the and to train on the, about the next pitch, how to address, to change the targets of the people in order to reach new clients in a different manner and so on, in order to not just to take their campaign, but also to integrate a solution which is technology-oriented. It's taking time. I feel that we made a lot of progress from the beginning of the year. We are in different position. I look positive at 2024.

I think that from our company perspective, of course, I cannot guess how the market will look like, but if the market will show signs of improvements, I think that we'll enjoy from that in a very big way. If not, I think that the numbers that we provided make sense because we took into account still headwinds, but we look at it that we are much more prepared in order to deal with them, and we are much more ready in our infrastructure and about our training and people on the ground in order to win accounts in any condition and to be able to basically grow the company again.

Andrew Boone (VP)

Thank you, guys.

Ofer Druker (CEO)

Thank you.

Operator (participant)

We have no further questions. Ofer, I'll turn the call back to you for closing remarks.

Ofer Druker (CEO)

Thank you. Thank you everyone for your questions and for listening and taking into account, of course, what our input. I think that I'm really excited about where we are now, because it seems maybe that we are talking every quarter, but I'm looking at it also from multi-year process that we've done. I think that since 2019, what we choose to do, to be horizontally integrated, to have end-to-end solution, in the beginning, people look at us as, like, "Why you are doing that?" And, "It's crazy. Everybody's trying to specialize. Why you are doing this end-to-end solution?" I think that now there is no question about it. I saw the headlines of some of the analysts. I saw also on this call, about the future of SSP, the future of a standalone DSP.

I think that there is no doubt that you need horizontal integration, and I think that we predicted that, and we act on that since 2019. I feel proud about it because I think that it's very hard to, to look at trends and fulfill them so early, and I think that we've done it in a very powerful way. We made also four major acquisitions during this time in order to, to solidify and to bring these capabilities all together into one platform. Usually, I'm not using marketing slogans, but in this case, when I'm looking at it, one platform, endless opportunities, is true. We have everything that advertisers and publishers need in order to reach their KPIs.

We did it in a long process that we concluded it in the end of the second quarter, basically, when we finished the integration of Amobee into our business. We don't see any more major acquisitions that we need in order to build the best tech. We have that. This is one. The second thing is around CTV. Also the decision that we made in 2019 when we invested in RhythmOne, that was they acquired YuMe before, is to run very strongly on CTV, and we are doing that. We're still growing on the CTV front. We are challenging the market. We are bringing innovation, we are bringing solutions that are needed.

We focused at the future, and I think that we are providing great solution for the trends and the needs of publishers and advertisers. I think that we are our plan is keep doing that. I think that also the rebranding now, as I mentioned before, it's the first time that we choose a brand and we didn't buy a brand or adopt a brand. I think it's very meaningful for the company, for the clients, to present this new brand, unification and consolidation of all the capabilities under one brand. I think it will be helpful and powerful. You just don't judge these things over two months, three months, you judge them over a course of time.

I think that we are coming to the market in a very full tech stack and very strong one, that if you will bring the best experts to, to examine our platform, they will tell you that we have the most comprehensive solution, most fitting the trends and the needs and the challenges and the risk of the market, in order to win in the future. I think that this is what we try to build, and we did it, and we are proud of that, and we worked very hard in order to achieve that. I think now it's time for execution. As we proved in the past, we know how to execute. It takes some time, sometimes. It's not happening overnight. We have the right people, we have the right talent. We are growing our sales teams.

We are growing our teams in order to get, like, more, more market share in the market. We have the resources to do that, which is very important. We are going to do that during 2024 and going forward. I feel very secure about the position, the technology, the infrastructure that we created, so I'm excited about it and we are looking forward for the future. We hope, all of us, that the macroeconomic will change and will give us a boost, because, of course, when the market, the trend, the sentiment is better, things happen faster, and we hope that it will happen. If not, we will cross the storm. We believe in the future of the company. We are ready for that in any case.

Thank you, everyone, for the call today, and as I say, we are positive. We are looking excited for the future, and I think that we are well equipped to win in this marketplace and to provide a good solution for all the stakeholders and outcome in the company. Thank you very much.

Operator (participant)

This concludes today's conference call. Thank you for your participation, and you may now disconnect.