Nexxen Q4 2023 IR Newsletter
Hello Everyone,
We are pleased to share the Q4 and FY 2023 edition of the Nexxen (formerly Tremor International) IR Newsletter. Please note, all financial information related to Nexxen in this newsletter refers to results generated and disclosed through our Q3 2023 earnings release. Results for the three and nine months ended September 30, 2023 include the combined results of Nexxen and Amobee while results for the three and nine months ended September 30, 2022 include results from Amobee from September 12, 2022 through September 30, 2022.
Q4 2023 capped off a transformational year for Nexxen (whose name recently changed from Tremor International after shareholders approved to change the parent company name at the latest Annual General Meeting). In 2023, we completed the integration of the largest acquisition in our Company’s history, Amobee, which created one of the most comprehensive unified end-to-end platform offerings in all of Ad Tech. We also launched several critical data and planning solutions purpose-built to help customers succeed in the future TV advertising ecosystem, bolstered our sales and marketing efforts through key senior hires, rebranded to Nexxen, and strengthened our talent base across the organization. The combination of these achievements, we believe, strongly positions us for success in 2024 and beyond.
In October, we announced the appointment of two new executives to our leadership team, welcoming Ben Kaplan as Chief Marketing Officer and Ariel Deitz as Vice President of Enterprise Sales. Ben brings a strong Ad Tech product marketing background, and we believe his experience and expertise is a perfect fit that can help advance the value proposition of our unified platform in market with customers, prospects, and major industry players. Ben was most recently head of product marketing at PubMatic and has also led teams across other major tech and media companies including Meredith Corporation and X (formerly Twitter). Ariel Deitz joined our Company from Amazon Ads and is tasked with accelerating growth within our enterprise offering, which was significantly enhanced via the completed integration of Amobee. We believe these hires, in addition to several other key hires made throughout 2023 within our sales and marketing organization, further amplify the power of our rebrand, position us better to capitalize on the holistic value of our unified platform and strongly compliment the strength of our technology and data product suite. We were also pleased to recently welcome a new Chief People Officer, Gretchen Johnson, who is responsible for the continuous development of Nexxen’s culture, as well as ensuring the Company hires and retains best-in-class talent. Prior to joining Nexxen, Gretchen held the position of Chief People Officer at Siprocal, a gaming distribution, monetization, and engagement platform, and brings direct Ad Tech experience, having served as VP / Group Director of Talent Management at Digitas (the integrated marketing services brand within Publicis Groupe).
Additionally, after initially rebranding our products and platform to Nexxen in June 2023 to simplify our story and value proposition for customers and prospects, shareholders voted in late-December to approve changing the name of our parent company to Nexxen International. In connection with the parent Company name change, the Company’s shares now trade as Nexxen International Ltd. under the ticker “NEXN” in both the U.S. (NASDAQ) and U.K. (AIM) markets.
We also recently shared that we’ve achieved further progress accelerating monetization related to our exclusive global access to VIDAA’s automatic content recognition (“ACR”) data, gained through our investment in VIDAA, a fast-growing CTV operating system and subsidiary of Hisense. While we’ve already been monetizing this ACR dataset in the U.S. for CTV targeting and measurement for some time, in November we also launched the offering in the U.K., which we believe offers a strong and unique value proposition for customers in that region given the size and scale of the growing audience reach we have there. We also intend to launch the ACR data offering in Australia during Q1 2024 and will look for opportunities to expand to additional major markets over time. It’s clear that VIDAA’s global ACR data is becoming extremely attractive to advertiser, agency, and targeting and measurement partners in the U.S. and internationally, and we continue to believe this key differentiator can drive significant revenue for the Company over time through both new and existing customers.
During the fourth quarter, we also released our financial results for the three and nine months ended September 30, 2023, highlighted by strong programmatic growth over both periods.
Key highlights from the three and nine months ended September 30, 2023:
- Generated $76.6 million in Contribution ex-TAC in Q3 2023 (+18% year-over-year) and $223.7 million for the nine months ended September 30, 2023 (+8% year-over-year).
- Generated $74.2 million in Programmatic revenue in Q3 2023 (+23% year-over-year) and $213.0 million for the nine months ended September 30, 2023 (+18% year-over-year).
- Significantly expanded Programmatic revenue to 93% of revenue in Q3 2023 (from 85% in Q3 2022) and 90% for the nine months ended September 30, 2023 (from 79% in the same prior year period).
- Video revenue reflected 66% and 70% of programmatic revenue for the three and nine months ended September 30, 2023, respectively, with CTV revenue representing 26% and 31% of programmatic revenue, respectively, for the three and nine months ended September 30, 2023.
- Generated $19.6 million in CTV revenue in Q3 2023 (-21% year-over-year) and $65.6 million for the nine months ended September 30, 2023 (+2% year-over-year).
- Generated $21.3 million in Adjusted EBITDA in Q3 2023 and $51.2 million for the nine months ended September 30, 2023.
- Added 113 new actively spending first-time advertiser customers in Q3 2023, and 223 for the nine months ended September 30, 2023, as well as 109 new supply partners in Q3 2023, and 283 for the nine months ended September 30, 2023, while retaining the overwhelming majority of major customers.
- Maintained a strong net cash balance of $98.9 million as of 09/30/2023 (while also leaving $80 million undrawn on the Company’s revolving credit facility).
On December 18th we also announced we received approval from the Israeli court to initiate a new $20 million Ordinary share repurchase program which our Board of Directors subsequently approved, and which launched on December 20th. The share repurchase program is being financed through existing cash resources and will continue until the earlier of June 18, 2024 or until it has been completed. The initiation of this new share repurchase program follows two recently completed programs in which we repurchased approximately $95 million of our Ordinary Shares, representing roughly 13% of shares outstanding, from March 1, 2022 through March 31, 2023. The Company's Board of Directors also indicated that, should Ordinary Shares continue to trade at prices the Company believes reflect discounted valuation levels, and if the Company remains cash generative in the future, it will consider launching additional future share repurchase programs following the completion of the ongoing $20 million Ordinary Share repurchase program. The Company's Board of Directors believes repurchasing the Company's shares at what it believes reflects discounted valuation levels, represents a strong investment opportunity that can generate long-term value for its shareholders.
2023 was by no means an easy year for us, the industry, or the world. The year was challenged by continued well-known difficulties in market and industry conditions that drove uncertainty and reduced advertising budgets. It also included unthinkable tragedy stemming from the terrorist attack that occurred on October 7th in Israel, where our Company is headquartered, and where many of our employees and their families call home. While the conflict weighs heavily on our thoughts, and while certain Israel-based team members have been called to active duty, our business activities and operations have remained relatively unaffected, as over 85% of our Contribution ex-TAC is generated in the U.S. (as of 09/30/23) which is also where the overwhelmingly largest base of our employees sit. We commend the bravery of our active-duty employees in service to their country and intend to honor them by continuing to provide best-in-class service and solutions to our customers and partners in their absence and by supporting them and their families in every way we can.
Despite these challenges, we achieved tremendous milestones and believe we have a lot to be excited about. With Amobee now fully integrated, we truly feel that we have created one of the most robust and comprehensive unified platform offerings in all of Ad Tech with unique, data-driven, and forward-thinking solutions purpose-built to help customers succeed within video and CTV advertising now, and in the future, on both sides of the ecosystem. The steps we’ve taken to unite our brands, products, and company under Nexxen, and further strengthen our talent base across the organization, have also helped improve our positioning within the industry, and enabled our sales, marketing, and hiring efforts to better compliment the strength of our technology and data products.
We are excited for what 2024 can bring and, as always, we want to thank our employees, customers, and shareholders for their continuous and ongoing support.
We hope you find this newsletter helpful and if you have any questions or feedback, or if you’re interested in connecting with the investor relations team or Company management, please reach out to ir@nexxen.com.
Please also feel free to sign up for email alerts regarding important news, filings, or upcoming events on the bottom of our investor relations website homepage at https://investors.nexxen.com/.
Thank you!
Nexxen Investor Relations
Nexxen (Formerly Tremor International) Third Quarter 2023 Earnings Webcast
Nexxen’s CEO, Ofer Druker, Participates in Raymond James TMT and Consumer Conference
Schwab Network - Nexxen’s Chief Strategy Officer, Ken Suh, - If NBA Goes Streaming It Could Transform the Entire Industry
Nexxen / Magna Webinar on How Repeating Ads Affect CTV Viewers, Brands & Platforms (Ally Appelbaum - Senior Director of Publisher Development + Shan Mathis - Senior Research Manager at Magna Media Trials)
Tag - Member Spotlight (Karim Rayes, Nexxen’s Chief Product Officer)
VideoWeek - How ACR Data Feeds into Omnichannel Buying (with Nexxen’s MD EMEA, Steve Broadhead)
Nexxen (Formerly Tremor International) Reports Results for the Three and Nine Months Ended September 30, 2023
Israeli Court Share Repurchase Approval and Launch of New $20 Million Ordinary Share Repurchase Program
Nexxen Launches TV Viewership Audiences in U.K., Expands TV Intelligence Offering in U.S.
Nexxen Enhances Leadership Team, Further Bolstering CTV Expertise Across Advertising Ecosystem
Nexxen SSP Partners with Taiv to Expand CTV OOH Offering
Unwrapping the Magic: Nexxen Studio Reveals the Most Engaging Christmas Adverts of 2023
Managing Cognitive Load: Embracing New Perspectives at Nexxen's Engineering Group
Nexxen DSP Platform Enhancements
During Q4 2023, we continued to improve the user experience, workflows, and pricing efficiencies within our DSP platform for our customers including:
- Improved average page load time and increased console speed by adding additional servers and optimizing our reporting data storage.
- Streamlined the activation process for Bulk Edit Site and App lists.
Driving Incremental Value for Customers Through Data and Supply Curation
We invested in combining our data and supply assets to provide clients with compelling portfolio options to meet their business needs. Additionally, we bolstered our TV Intelligence data set and reporting capabilities.
- Onboarded ~700 new Nexxen Data segments from an industry-leading data provider including auto, demo, lifestyle, housing, financial psychographic and purchase predictors.
- Rolled out Performance Audience Targeting in beta, which is an optimization tool that targets consumers who have a higher propensity to take action and therefore lowers overall CPA for our customers.
- Boosted our Smart TV native display offering in the US and Canada by partnering with TCL and Samsung which helps to further solidify our position as leaders in the CTV space.
- Enhanced our TV Intelligence solution for clients via the following:
- Beginning January 1, 2024, we will be the exclusive provider of unrestricted streaming viewership data across digital devices from Peerlogix further strengthening our offering in market.
- We can now syndicate our exclusive Hisense VIDAA and Android ACR data to third party platforms for audience targeting to diversify our revenue streams.
- We now offer iSpot’s Conversion Analytics Report which ties TV ad impressions from digital and linear campaigns to web activity (website visits, purchases, etc.).
Nexxen SSP & Ad Server Enhancements
In Q4, there were a variety of enhancements made to both the SSP and the Ad Server, including specific efforts around our capabilities to prepare for 2024 as Nexxen SSP was chosen to participate in Google’s Privacy Sandbox Protected Audiences beta.
- BVOD (“Broadcaster Video on Demand”) Connect is an industry-wide solution in Australia for managing reach and frequency across all broadcasters using a universal ID that incorporates co-viewing and enables the targeting of OzTAM demos (Australia's official source of television audience measurement) as a common data set if the buyer wants to use it. To support this in our SSP, internal and external users can now choose BVOD Standard or a BVOD First Party Data in “Inventory Package Type.” This initiative allows our advertisers in Australia to take advantage of this industry effort.
- An enhancement was made to our Exchange workflow that allows internal users to create forecasts from the CTRL UI for a more streamlined user experience. This creates more efficiency in forecasting.
- Key-value pair targeting was released in our CTRL platform, giving SSP publishers the opportunity to more closely match content with audiences, and create more targeted deals that can command higher CPMs. Publishers using the CTRL platform can create up to 5 custom ‘keys’ that can be paired with up to 1000 ‘values’ for these custom-targeted deals. This fully self-service feature also allows publishers to upload their data directly onto the platform.
- A new feature was released that enables SSP publishers to transact in their preferred currency when creating a deal. This will make it easier and more efficient when setting up deals. Currencies now include CAD, EUR, GBP, JPY, SGD, TRY, USD.
- New Nexxen Ad Server accounts created via the CTRL SSP are now named with the same name as the CTRL account name making it much easier to set up accounts across the CTRL platform.
- In Nexxen Ad Server, order numbers are now visible in a drop down that is easy to find. Previously, if users were unclear of the order number, they would have to navigate back through previous screens. This feature greatly enhances ease of use by publishers.
- Nexxen Ad Server Channel Performance reporting enhancements included the removal, addition, consolidation, and updating of reporting for a better user experience and work-flow ease.
- Publishers can now target App Bundles that they are passing through inbound requests in Nexxen Ad Server. Previously, this could only be done through custom key-value pair targeting. This feature makes it easier for publishers to target traffic from specific apps that they are trying to monetize.
Nexxen TV Planning Enhancements
During the fourth quarter, the Nexxen TV Planning platform was further enhanced with a focus on XP planning for broadcasters and a new effort soon to launch utilizing the planning platform for demand-side advertising customers.
- Data-driven linear planning feature enhancements included features specific to our broadcaster partners including allocating budget to spec for A&E, providing more clarified forecasting results, and Fox category ingestion which automated a previously manual process, streamlining workflows and alleviating potential human errors.
- In preparation to launch our managed service demand side cross-screen planning and activation solution in Q1 2024, Nexxen SSP deals were curated for plans to be optimized off of this supply space.
2023 Recap: Key Product Launches
- Expanded our TV data sets within Nexxen Discovery to include exclusive Hisense ACR and streaming media app data into Nexxen Discovery and relaunched our TV Intelligence offering to include a suite of data-driven TV solutions including planning, activation, and measurement.
- Officially announced the launch of our cross-platform planner (XP) and highlighted the work we’ve done with Fox and A&E.
- Completed the combination of Tremor and Amobee DSP and relaunched as Nexxen DSP.
- Launched numerous first-to-market partnerships including high-attention CTV PMPs with Lumen and Green Media CTV curated deals with Scope3.
- Integrated the Spearad Ad server UI into CTRL to create a streamlined user experience between the Ad Server and the SSP and rebranded as Nexxen CTRL.
Cynopsis Awards Nexxen SSP the 2023 Best of the Best Rising Star Award for Best SSP
Nexxen’s Chief Legal Officer and Head of Corporate Development, Amy Rothstein, Wins 2023 Stevie Award for Women in Business in the Category of Female Executive of the Year (Business Services, 11 to 2,500 Employees)
Videoweek – The 2024 C-Suite Prediction List
ExchangeWire – Predictions 2024: Data Futures
Digiday - Q&A: How Brands and Retailers are Using Commerce Media and Data for More Accurate Campaigns
Ad Exchanger - Ad Tech Companies Are Trying to Make CTV Out-Of-Home Happen
Insider Intelligence - Strategies for Getting the Most Out of CTV Advertising, from Warner Bros. Discovery, Tubi, and More
ID5 – 2024 Visionaries: AdTech Trends, Predictions and Beyond!
Marketing Brew - Marketers to Spend Most of Holiday Budgets in November
Digiday – Lacking Financial Incentives, Sustainability Remains a Hope, Not a Promise, in Digital Advertising Next Year
Digiday – Some Agency Execs are Mystified by Heightened Invalid Traffic Counts from Google Compared to DSP Reports
Media Post – Ad Overfrequency Sucks!
Ad Week - This Nonbinary VP Found Ad Tech More Inclusive Than Network TV
Digiday - Why SPO is About Efficiency, Not Cutting Back on Effective Technology
This IR Newsletter contains forward-looking statements, including forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities and Exchange Act of 1934, as amended. Forward-looking statements are identified by words such as “anticipates,” “believes,” “expects,” “intends,” “may,” “can,” “will,” “estimates,” and other similar expressions. However, these words are not the only way Nexxen International, or any of its affiliates, identify forward-looking statements. All statements contained in this IR Newsletter that do not relate to matters of historical fact should be considered forward-looking statements including without limitation statements regarding any partnerships, acquisitions, our tech stack, other products and/or offerings of Nexxen and any other subsidiaries affiliates and any benefits thereof. These statements are neither promises nor guarantees but involve known and unknown risks, uncertainties and other important factors that may cause Nexxen’s actual results, performance, or achievements to be materially different from its expectations expressed or implied by the forward-looking statements including, but not limited to, the following: negative global economic conditions; global conflicts and war, including the current terrorist attacks by Hamas, and the war and hostilities between Israel and Hamas and Israel and Hezbollah, and how those conditions may adversely impact Nexxen’s business, customers, and the markets in which Nexxen competes; changes in industry trends; and, other negative developments in Nexxen’s business or unfavourable legislative or regulatory developments. Nexxen cautions you not to place undue reliance on these forward-looking statements. For a more detailed discussion of these factors, and other factors that could cause actual results to vary materially, interested parties should review the risk factors listed in the Company’s most recent Annual Report on Form 20-F, filed with the U.S. Securities and Exchange Commission (www.sec.gov) on March 7, 2023. Any forward-looking statements made by Nexxen in this IR Newsletter speak only as of the date of this IR Newsletter, and Nexxen does not intend to update these forward-looking statements after the date of this IR Newsletter, except as required by law.
Nexxen, and the Nexxen logo are trademarks of Nexxen International Ltd. in the United States and other countries. All other trademarks are the property of their respective owners. The use of the word “partner” or “partnership” in this IR Newsletter does not mean a legal partner or legal partnership.