Exhibit 99.1
|
Company announcement dated February 24, 2022, “Tremor International Reports Results for the Fourth Quarter and Full-Year Ended December 31, 2021”.
|
By: |
/S/ Sagi Niri
|
Name: |
Sagi Niri
|
Title: |
Chief Financial Officer
|
Exhibit List
|
|
• |
Contribution ex-TAC increased organically by 20% in Q4 2021 to $88.6 million compared to $74.0 million in Q4 2020 and increased organically by 64% for FY 2021 to $302.0 million compared to $184.3 million in FY 2020
|
• |
Adjusted EBITDA increased 38% in Q4 2021 to $54.0 million compared to $39.1 million in Q4 2020 and increased 166% for FY 2021 to $161.2 million compared to $60.5 million in FY 2020
|
• |
Contribution ex-TAC generated internationally increased organically by 33% to $26.8 million in FY 2021 compared to $20.1 million in FY 2020
|
• |
Compared with other ad-tech peers, Tremor has one of the highest margin and operational profitability financial structures, which resulted in a 53% adjusted EBITDA margin in Q4 2021 on a reported revenue basis, and 61% on a contribution
ex-TAC basis
|
• |
Cash position as of December 31, 2021: $367.7 million net cash
|
• |
Board of Directors approved a $75 million share repurchase program under which Tremor is authorized to purchase up to $75 million of its ordinary shares
|
• |
The share repurchase program is to be financed via existing cash reserves
|
• |
CTV spend grew by 47% in Q4 2021 to $62.5 million compared to $42.4 million in Q4 2020 and by 108% to $201.0 million in FY 2021 compared to $96.7 million in FY 2020
|
• |
CTV Contribution ex-TAC grew by 32% in Q4 2021 to $21.8 million compared to $16.5 million in Q4 2020 and by 118% in FY 2021 to $80.3 million compared to $36.8 million in FY 2020
|
• |
CTV Contribution ex-TAC accounted for 25% of total contribution ex-TAC in Q4 2021 compared to 22% in Q4 2020 and accounted for 27% of total contribution ex-TAC for FY 2021 compared to 20% in FY 2020
|
• |
Video revenue represented 80% of total Contribution ex-TAC for the twelve-month period ended December 31, 2021, up from 78% in the twelve-month period ended December 31, 2020
|
• |
Signed a unique and meaningful partnership with VIDAA, a subsidiary of Hisense, for exclusive global access to Automatic Content Recognition (“ACR”) data which begins on May 1, 2022
|
o |
The agreement is expected to accelerate the Company’s US and international growth starting in the second half of 2022 in key markets such as Canada, Australia, the UK and Germany
|
o |
Provides access to VIDAA’s distribution, reaching approximately 20 million smart TVs worldwide, which VIDAA expects to grow to more than 40 million in the coming years
|
o |
In January 2022, VIDAA also selected Unruly as its strategic Supply-Side Platform (“SSP”) to enable global access to all its video and native display media, while also integrating our newly acquired Spearad, to better enable control over
its CTV ad delivery with granular ad pod controls and targeting
|
• |
Acquired Spearad GmbH, a global CTV ad server and header bidder featuring a robust user interface with advanced tools for ad pod monetization, for $11.0 million, using the Company’s existing cash reserves
|
• |
Increased innovation and investment within CTV through the following new product launches in Q4 and FY 2021:
|
o |
Tremor Video’s Programmatic TV marketplace enabling advertisers to gain access to a diversified marketplace that features premium, TV-centric supply and curated Private Marketplace (“PMP”) packages
|
o |
Unruly’s content-level targeting solution which allows buyers to tap into traditional linear TV buying tactics with granular targeting options like genre, rating and show title within digital CTV and over-the-top environments, amidst
growing privacy regulations
|
o |
The ability to run display and audio campaigns within Tremor Video Demand-Side Platform (“DSP”) to better enable large video advertisers seeking complementary omnichannel solutions to their video campaigns
|
o |
TV Intelligence solution, enabling in-house TV retargeting and measurement solutions that provides advertisers with the ability to reach and engage TV viewing audiences at scale with data-driven creative
|
• |
Generated strong FY 2021 customer net retention rates of 150.3%
|
• |
Tremor’s data-driven creative offering, Tr. Ly, achieved a 74% increase in creative requests during FY 2021 compared to FY 2020
|
• |
Unruly continued to experience strong customer and partner traction:
|
o |
Added 42 new US supply partners during Q4 2021 across critical growth verticals in sports, entertainment, and lifestyle, as well as Original Equipment Manufacturers (“OEM”) and Multicast Video On-Demand (“mVOD”) businesses
|
o |
Unruly CTRL, Tremor’s self-service platform for publishers, saw PMP revenues increase 184% during Q4 2021, compared to Q3 2021
|
• |
Tremor International successfully executed a dual listing on the NASDAQ in June 2021 raising $134.6 million, net of issuance costs, in cash proceeds and enabling strong exposure to US markets, greater access to capital and increased
access to a broader investor base
|
• |
The Board has authorized Tremor to purchase up to $75 million of its ordinary shares on the AIM Market (the “Authority”) and the repurchase program will be financed through existing cash resources
|
• |
The repurchase program will be independently managed by finnCap Ltd, the Company's AIM broker, which will make trading decisions independently and without the influence of the Company
|
• |
In accordance with the AIM Rules, the repurchase program will be effected in accordance with the Authority in that the maximum price paid per ordinary share is to be no more than 105% of the average middle market closing price of an
ordinary share on AIM for the five business days preceding the date of purchase
|
• |
The repurchase program will commence March 1, 2022 and will continue until either September 1, 2022, or until it has been completed
|
• |
Share repurchases will be made in accordance with applicable securities laws and regulations, and any ordinary shares acquired as a result of the repurchase program will be announced to the market without delay
|
• |
Any ordinary shares acquired as a result of the repurchase program will be reclassified as dormant shares under the Israeli Companies Law (without any rights attached thereon) and will be held in treasury
|
• |
The share repurchase program does not obligate Tremor to repurchase any particular amount of ordinary shares and the program may be suspended, modified or discontinued at any time at the Company’s discretion
|
• |
Due to the limited liquidity in the issued ordinary shares, any repurchase of ordinary shares pursuant to the Authority on any trading day may represent a significant proportion of the daily trading volume in the ordinary shares on AIM
and may exceed 25% of the average daily trading volume, being the limit laid down in Article 5(1) of Regulation (EU) No 596/2014 and, accordingly, the Company will not benefit from the exemption contained in this Article
|
• |
Management remains confident in the medium- to long-term prospects of the Company with Tremor well-placed to further benefit from the anticipated ongoing resurgence in the global digital advertising industry
|
• |
Tremor’s guidance is based on the expectation that the global economy will continue to recover and that there will be no major Covid-19-related setbacks that may cause economic conditions to deteriorate or otherwise significantly reduce
advertiser demand
|
• |
Our guidance also considers the widespread global supply chain issues that limited advertising activity in Q4 2021 in certain verticals such as automobile manufacturing, with the anticipation that these challenges could continue to have
an impact in Q1 2022, as well as inflationary pressures
|
• |
Our end-to-end platform and wide range of revenue verticals help mitigate impacts faced by others from these challenges and accordingly, Tremor estimates:
|
o |
Q1 2022 Contribution ex-TAC of at least $73 million
|
o |
Q1 2022 Adjusted EBITDA of at least $33 million
|
Three months ended December 31
|
Twelve months ended December 31
|
|||||||||||||||||||||||
|
2021
|
2020
|
%
|
2021
|
2020
|
%
|
||||||||||||||||||
IFRS highlights
|
||||||||||||||||||||||||
Revenues
|
102.5
|
81.5
|
26
|
%
|
341.9
|
211.9
|
61
|
%
|
||||||||||||||||
Programmatic Revenues
|
74.5
|
67.3
|
11
|
%
|
266.6
|
161.6
|
65
|
%
|
||||||||||||||||
Operating Profit/(Loss)
|
24.4
|
20.8
|
17
|
%
|
74.5
|
(6.0
|
)
|
1,336
|
%
|
|||||||||||||||
Total Comprehensive Income/(Loss)
|
23.9
|
24.9
|
(4
|
)%
|
70.6
|
5.0
|
1,319
|
%
|
||||||||||||||||
Diluted EPS
|
$
|
0.15
|
$
|
0.15
|
0
|
%
|
$
|
0.48
|
$
|
0.02
|
3,009
|
%
|
||||||||||||
Non-IFRS highlights
|
||||||||||||||||||||||||
Contribution ex-TAC
|
88.6
|
74.0
|
20
|
%
|
302.0
|
184.3
|
64
|
%
|
||||||||||||||||
Adjusted EBITDA
|
54.0
|
39.1
|
38
|
%
|
161.2
|
60.5
|
166
|
%
|
||||||||||||||||
Adjusted EBITDA Margin
|
61
|
%
|
53
|
%
|
53
|
%
|
33
|
%
|
||||||||||||||||
Non-IFRS net Income (Loss)
|
43.3
|
28.7
|
51
|
%
|
126.8
|
38.3
|
231
|
%
|
||||||||||||||||
Non-IFRS Diluted EPS
|
$
|
0.27
|
$
|
0.20
|
35
|
%
|
$
|
0.83
|
$
|
0.28
|
201
|
%
|
• |
Tremor International Fourth Quarter 2021 and Full-Year Ended December 31, 2021 Earnings Webcast and Conference Call
|
• |
February 24, 2022 at 6:00 AM/PT, 9:00 AM/ET and 2:00 PM/GMT
|
• |
Webcast Link: https://edge.media-server.com/mmc/p/aiaow9os
|
• |
Participant Dial-In Number:
|
o |
US/CANADA Participant Toll-Free Dial-In Number: (888) 771-4371
|
o |
UK Participant Toll-Free Dial-In Number: +44 20 3147 4818
|
o |
INTERNATIONAL Participant Dial-In Number: (847) 585-4405
|
o |
Conference ID: 50282787
|
o |
Contribution ex-TAC: Contribution ex-TAC is defined as our gross profit plus depreciation and amortization attributable to cost of revenues and cost of revenues (exclusive of depreciation and
amortization) minus the Performance media cost (“traffic acquisition costs” or “TAC”). Contribution ex-TAC is a supplemental measure of our financial performance that is not required by, or presented in accordance with, IFRS. Contribution
ex-TAC should not be considered as an alternative to gross profit as a measure of financial performance. Contribution ex-TAC is a non-IFRS financial measure and should not be viewed in isolation. We believe Contribution ex-TAC is a useful
measure in assessing the performance of Tremor International, because it facilitates a consistent comparison against our core business without considering the impact of traffic acquisition costs related to revenue reported on a gross basis.
|
o |
Adjusted EBITDA: We define as total comprehensive income for the period adjusted for foreign currency translation differences for foreign operations, financing expenses, net, tax benefit,
depreciation and amortization, stock-based compensation, restructuring, acquisition and IPO-related costs and other expenses (income), net. Adjusted EBITDA is included in the press release because it is a key metric used by management and
our board of directors to assess our financial performance. Adjusted EBITDA is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Management believes that Adjusted EBITDA is an
appropriate measure of operating performance because it eliminates the impact of expenses that do not relate directly to the performance of the underlying business.
|
o |
Adjusted EBITDA margin: we define as Adjusted EBITDA as a percentage of Contribution ex-TAC.
|
o |
Non-IFRS Income (Loss) and Non-IFRS Earnings (Loss) per Share: We define non-IFRS earnings (loss) per share as non-IFRS income (loss) divided by non-IFRS weighted-average shares outstanding.
Non-IFRS income (loss) is equal to net income (loss) excluding stock-based compensation, cash and non-cash based acquisition and related expenses, including amortization of acquired intangible assets, merger related severance costs,
transaction expenses. In periods in which we have non-IFRS income, non-IFRS weighted-average shares outstanding used to calculate non-IFRS earnings per share includes the impact of potentially dilutive shares. Potentially dilutive shares
consist of stock options, restricted stock awards, restricted stock units, and potential shares issued under the Employee Stock Purchase Plan, each computed using the treasury stock method. We believe non-IFRS earnings (loss) per share is
useful to investors in evaluating our ongoing operational performance and our trends on a per share basis, and also facilitates comparison of our financial results on a per share basis with other companies, many of which present a similar
non-IFRS measure. However, a potential limitation of our use of non-IFRS earnings (loss) per share is that other companies may define non-IFRS earnings (loss) per share differently, which may make comparison difficult. This measure may
also exclude expenses that may have a material impact on our reported financial results. Non-IFRS earnings (loss) per share is a performance measure and should not be used as a measure of liquidity. Because of these limitations, we also
consider the comparable IFRS measure of net income (loss).
|
|
Three months ended December 31
|
Twelve months ended December 31
|
||||||||||||||||||||||
|
2021
|
2020
|
%
|
2021
|
2020
|
%
|
||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||
Net Income
|
24,400
|
21,185
|
15
|
%
|
73,223
|
2,139
|
3,323
|
%
|
||||||||||||||||
Taxes benefit
|
(601
|
)
|
(1,834
|
)
|
(948
|
)
|
(9,581
|
)
|
||||||||||||||||
Financial expense (income), net
|
564
|
1,404
|
2,187
|
1,417
|
||||||||||||||||||||
Depreciation and amortization
|
10,314
|
11,502
|
40,259
|
45,187
|
||||||||||||||||||||
Stock-based compensation
|
19,122
|
4,337
|
42,818
|
14,490
|
||||||||||||||||||||
Other expenses
|
-
|
1,700
|
-
|
1,700
|
||||||||||||||||||||
Restructuring & Acquisition costs
|
253
|
852
|
761
|
5,161
|
||||||||||||||||||||
IPO related one-time costs
|
-
|
-
|
2,938
|
-
|
||||||||||||||||||||
Adjusted EBITDA
|
54,052
|
39,146
|
38
|
%
|
161,238
|
60,513
|
166
|
%
|
|
Three months ended December 31
|
Twelve months ended December 31
|
||||||||||||||||||||||
|
2021
|
2020
|
%
|
2021
|
2020
|
%
|
||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||
Revenues
|
102,534
|
81,526
|
26
|
%
|
341,945
|
211,920
|
61
|
%
|
||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization)
|
(20,348
|
)
|
(17,352
|
)
|
(71,651
|
)
|
(59,807
|
)
|
||||||||||||||||
Depreciation and amortization attributable to Cost of Revenues
|
(4,396
|
)
|
(4,858
|
)
|
(16,605
|
)
|
(19,596
|
)
|
||||||||||||||||
Gross profit (IFRS)
|
77,790
|
59,316
|
31
|
%
|
253,689
|
132,517
|
91
|
%
|
||||||||||||||||
Depreciation and amortization attributable to Cost of Revenues
|
4,396
|
4,858
|
16,605
|
19,596
|
||||||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization)
|
20,348
|
17,352
|
71,651
|
59,807
|
||||||||||||||||||||
Performance media cost
|
(13,958
|
)
|
(7,537
|
)
|
(39,970
|
)
|
(27,638
|
)
|
||||||||||||||||
Contribution ex-TAC (Non-IFRS)
|
88,576
|
73,989
|
20
|
%
|
301,975
|
184,282
|
64
|
%
|
|
Three months ended December 31
|
Twelve months ended December 31
|
||||||||||||||||||||||
|
2021
|
2020
|
%
|
2021
|
2020
|
%
|
||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||
Net Income
|
24,400
|
21,185
|
15
|
%
|
73,223
|
2,139
|
3,323
|
%
|
||||||||||||||||
Acquisition and related items, including amortization of acquired intangibles and restructuring
|
6,939
|
8,721
|
27,233
|
33,776
|
||||||||||||||||||||
Stock-based compensation expense
|
19,122
|
4,337
|
42,818
|
14,490
|
||||||||||||||||||||
IPO related one-time costs
|
-
|
-
|
2,938
|
-
|
||||||||||||||||||||
Other expenses
|
1,700
|
1,700
|
||||||||||||||||||||||
Tax effect of Non-IFRS adjustments (1)
|
((7,200
|
(7,210
|
)
|
(19,435
|
)
|
(13,800
|
)
|
|||||||||||||||||
Non-IFRS Income
|
43,261
|
28,733
|
51
|
%
|
126,777
|
38,305
|
231
|
%
|
||||||||||||||||
Weighted average shares outstanding—diluted (in millions) (2)
|
161.0
|
140.3
|
152.7
|
138.7
|
||||||||||||||||||||
Non-IFRS diluted EPS (in USD)
|
0.27
|
0.20
|
35
|
%
|
0.83
|
0.28
|
201
|
%
|
(1) |
Non-IFRS income includes the estimated tax impact from the expense items reconciling between net income and non-IFRS income
|
(2) |
Non-IFRS earnings per share is computed using the same weighted-average number of shares that are used to compute IFRS earnings per share.
|
December 31
|
|||||||||||
2021
|
2020
|
||||||||||
Note
|
USD thousands
|
||||||||||
Assets
|
|||||||||||
ASSETS:
|
|||||||||||
Cash and cash equivalents
|
10
|
367,717
|
97,463
|
||||||||
Trade receivables, net
|
8
|
165,063
|
153,544
|
||||||||
Other receivables
|
8
|
18,236
|
17,615
|
||||||||
Current tax assets
|
981
|
2,029
|
|||||||||
TOTAL CURRENT ASSETS
|
551,997
|
270,651
|
|||||||||
Fixed assets, net
|
5
|
3,464
|
3,292
|
||||||||
Right-of-use assets
|
6
|
13,955
|
18,657
|
||||||||
Intangible assets, net
|
7
|
208,220
|
224,500
|
||||||||
Deferred tax assets
|
4
|
24,431
|
*16,073
|
||||||||
Other long term assets
|
672
|
1,834
|
|||||||||
TOTAL NON-CURRENT ASSETS
|
250,742
|
264,356
|
|||||||||
TOTAL ASSETS
|
802,739
|
535,007
|
|||||||||
Liabilities and shareholders’ equity
|
|||||||||||
LIABILITIES:
|
|||||||||||
Current maturities of lease liabilities
|
6
|
7,119
|
9,047
|
||||||||
Trade payables
|
9
|
161,812
|
125,863
|
||||||||
Other payables
|
9
|
42,900
|
47,122
|
||||||||
Current tax liabilities
|
8,836
|
3,162
|
|||||||||
TOTAL CURRENT LIABILITIES
|
220,667
|
185,194
|
|||||||||
Employee benefits
|
426
|
495
|
|||||||||
Long-term lease liabilities
|
6
|
7,876
|
12,162
|
||||||||
Deferred tax liabilities
|
4
|
1,395
|
*319
|
||||||||
Other long-term liabilities
|
20(c)
|
|
-
|
7,824
|
|||||||
TOTAL NON-CURRENT LIABILITIES
|
9,697
|
20,800
|
|||||||||
TOTAL LIABILITIES
|
230,364
|
205,994
|
|||||||||
SHAREHOLDERS’ EQUITY:
|
15
|
||||||||||
Share capital
|
442
|
380
|
|||||||||
Share premium
|
437,476
|
264,831
|
|||||||||
Other comprehensive income
|
698
|
3,330
|
|||||||||
Retained earnings
|
133,759
|
60,472
|
|||||||||
TOTAL SHAREHOLDERS’ EQUITY
|
572,375
|
329,013
|
|||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
802,739
|
535,007
|
Year ended
December 31
|
|||||||||||||||
2021
|
2020
|
2019
|
|||||||||||||
Note
|
USD thousands
|
||||||||||||||
Revenues
|
11
|
341,945
|
211,920
|
325,760
|
|||||||||||
Cost of Revenues (Exclusive of depreciation and amortization shown separately below)
|
12
|
71,651
|
59,807
|
187,246
|
|||||||||||
Research and development expenses
|
18,422
|
13,260
|
16,168
|
||||||||||||
Selling and marketing expenses
|
74,611
|
68,765
|
52,351
|
||||||||||||
General and administrative expenses
|
13
|
63,499
|
29,678
|
34,433
|
|||||||||||
Depreciation and amortization
|
40,259
|
45,187
|
32,359
|
||||||||||||
Other expenses (income), net
|
14
|
(959
|
)
|
1,248
|
(700
|
)
|
|||||||||
Total operating costs
|
195,832
|
158,138
|
134,611
|
||||||||||||
Operating Profit (Loss)
|
74,462
|
(6,025
|
)
|
3,903
|
|||||||||||
Financing income
|
(483
|
)
|
(445
|
)
|
(773
|
)
|
|||||||||
Financing expenses
|
2,670
|
1,862
|
1,088
|
||||||||||||
Financing expenses, net
|
2,187
|
1,417
|
315
|
||||||||||||
Profit (Loss) before taxes on income
|
72,275
|
(7,442
|
)
|
3,588
|
|||||||||||
Tax benefit
|
4
|
948
|
9,581
|
2,636
|
|||||||||||
Profit for the year
|
73,223
|
2,139
|
6,224
|
||||||||||||
Other comprehensive income (loss) items:
|
|||||||||||||||
Foreign currency translation differences for foreign operation
|
(2,632
|
)
|
2,836
|
139
|
|||||||||||
Total other comprehensive income for the year
|
(2,632
|
)
|
2,836
|
139
|
|||||||||||
Total comprehensive income for the year
|
70,591
|
4,975
|
6,363
|
||||||||||||
Earnings per share
|
|||||||||||||||
Basic earnings per share (in USD)
|
16
|
0.51
|
0.02
|
0.06
|
|||||||||||
Diluted earnings per share (in USD)
|
16
|
0.48
|
0.02
|
0.05
|
Share capital
|
Share premium
|
Other
comprehensive
income
|
Retained Earnings
|
Total
|
||||||||||||||||
USD thousands
|
||||||||||||||||||||
Balance as of January 1, 2019
|
198
|
72,663
|
355
|
51,053
|
124,269
|
|||||||||||||||
Total Comprehensive income for the year
|
||||||||||||||||||||
Profit for the year
|
-
|
-
|
-
|
6,224
|
6,224
|
|||||||||||||||
Other comprehensive Income:
|
||||||||||||||||||||
Foreign currency translation
|
-
|
-
|
139
|
-
|
139
|
|||||||||||||||
Total comprehensive income for the year
|
-
|
-
|
139
|
6,224
|
6,363
|
|||||||||||||||
Transactions with owners, recognized directly in equity
|
||||||||||||||||||||
Revaluation of liability for put option on non- controlling interests
|
-
|
-
|
-
|
1,501
|
1,501
|
|||||||||||||||
Issuance of shares (net of issuance cost)
|
184
|
175,166
|
-
|
-
|
175,350
|
|||||||||||||||
Own shares acquired
|
(41
|
)
|
(24,696
|
)
|
-
|
-
|
(24,737
|
)
|
||||||||||||
Share based compensation
|
-
|
16,042
|
-
|
-
|
16,042
|
|||||||||||||||
Exercise of share options
|
10
|
1,814
|
-
|
-
|
1,824
|
|||||||||||||||
Balance as of December 31, 2019
|
351
|
240,989
|
494
|
58,778
|
300,612
|
|||||||||||||||
Total Comprehensive income for the year
|
||||||||||||||||||||
Profit for the year
|
-
|
-
|
-
|
2,139
|
2,139
|
|||||||||||||||
Other comprehensive Income:
|
||||||||||||||||||||
Foreign currency translation
|
-
|
-
|
2,836
|
-
|
2,836
|
|||||||||||||||
Total comprehensive income for the year
|
-
|
-
|
2,836
|
2,139
|
4,975
|
|||||||||||||||
Transactions with owners, recognized directly in equity
|
||||||||||||||||||||
Issuance of shares in a Business Combination
|
25
|
14,092
|
-
|
-
|
14,117
|
|||||||||||||||
Revaluation of liability for put option on non- controlling interests
|
-
|
-
|
-
|
(445
|
)
|
(445
|
)
|
|||||||||||||
Own shares acquired
|
(15
|
)
|
(9,950
|
)
|
-
|
-
|
(9,965
|
)
|
||||||||||||
Share based compensation
|
-
|
18,770
|
-
|
-
|
18,770
|
|||||||||||||||
Exercise of share options
|
19
|
930
|
-
|
-
|
949
|
|||||||||||||||
Balance as of December 31, 2020
|
380
|
264,831
|
3,330
|
60,472
|
329,013
|
Share capital
|
Share premium
|
Other
comprehensive
income
|
Retained Earnings
|
Total
|
||||||||||||||||
USD thousands
|
||||||||||||||||||||
Total Comprehensive Income for the year
|
||||||||||||||||||||
Profit for the year
|
-
|
-
|
-
|
73,223
|
73,223
|
|||||||||||||||
Other comprehensive loss:
|
||||||||||||||||||||
Foreign Currency Translation
|
-
|
-
|
(2,632
|
)
|
-
|
(2,632
|
)
|
|||||||||||||
Total comprehensive Income for the year
|
-
|
-
|
(2,632
|
)
|
73,223
|
70,591
|
||||||||||||||
Transactions with owners, recognized directly in equity
|
||||||||||||||||||||
Revaluation of liability for put option on non- controlling interests
|
-
|
-
|
-
|
64
|
64
|
|||||||||||||||
Own shares acquired
|
(3
|
)
|
(6,640
|
)
|
-
|
-
|
(6,643
|
)
|
||||||||||||
Share based compensation
|
-
|
41,822
|
-
|
-
|
41,822
|
|||||||||||||||
Exercise of share options
|
17
|
1,353
|
-
|
-
|
1,370
|
|||||||||||||||
Issuance of shares
|
47
|
136,111
|
-
|
-
|
136,158
|
|||||||||||||||
Issuance of Restricted shares
|
1
|
(1
|
)
|
-
|
-
|
-
|
||||||||||||||
Balance as of December 31, 2021
|
442
|
437,476
|
698
|
133,759
|
572,375
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
USD thousands
|
||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Profit for the year
|
73,223
|
2,139
|
6,224
|
|||||||||
Adjustments for:
|
||||||||||||
Depreciation and amortization
|
40,259
|
45,187
|
32,359
|
|||||||||
Net financing expense (income)
|
2,023
|
1,310
|
(19
|
)
|
||||||||
Loss on sale of fixed assets
|
-
|
3
|
11
|
|||||||||
Gain on leases change contracts
|
(377
|
)
|
(2,103
|
)
|
(2,705
|
)
|
||||||
Gain on sale of business unit
|
(982
|
)
|
(503
|
)
|
(700
|
)
|
||||||
Share-based compensation and restricted shares
|
42,818
|
14,490
|
15,809
|
|||||||||
Tax benefit
|
(948
|
)
|
(9,581
|
)
|
(2,636
|
)
|
||||||
Change in trade and other receivables
|
(11,676
|
)
|
(39,351
|
)
|
36,466
|
|||||||
Change in trade and other payables
|
26,845
|
25,882
|
(34,203
|
)
|
||||||||
Change in employee benefits
|
(69
|
)
|
(23
|
)
|
(290
|
)
|
||||||
Income taxes received
|
2,231
|
1,168
|
3,184
|
|||||||||
Income taxes paid
|
(3,185
|
)
|
(2,855
|
)
|
(8,089
|
)
|
||||||
Interest received
|
496
|
517
|
604
|
|||||||||
Interest paid
|
(570
|
)
|
(1,117
|
)
|
(942
|
)
|
||||||
Net cash provided by operating activities
|
170,088
|
35,163
|
45,073
|
|||||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Change in pledged deposits
|
(11
|
)
|
229
|
841
|
||||||||
Leases Receipt
|
2,454
|
2,885
|
1,669
|
|||||||||
Repayment of long-term loans
|
-
|
817
|
-
|
|||||||||
Acquisition of fixed assets
|
(3,378
|
)
|
(594
|
)
|
(1,063
|
)
|
||||||
Acquisition and capitalization of intangible assets
|
(4,966
|
)
|
(4,858
|
)
|
(5,672
|
)
|
||||||
Proceeds from sale of intangible assets
|
-
|
-
|
6
|
|||||||||
Proceeds from sale of business unit
|
415
|
232
|
-
|
|||||||||
Increase in bank deposit, net
|
-
|
-
|
(57
|
)
|
||||||||
Acquisition of subsidiaries, net of cash acquired
|
(11,001
|
)
|
6,208
|
23,714
|
||||||||
Net cash provided by (used in) investing activities
|
(16,487
|
)
|
4,919
|
19,438
|
||||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Repayment of loans
|
-
|
-
|
(17,273
|
)
|
||||||||
Acquisition of own shares
|
(6,643
|
)
|
(9,965
|
)
|
(24,737
|
)
|
||||||
Proceeds from exercise of share options
|
1,370
|
949
|
1,824
|
|||||||||
Leases repayment
|
(10,009
|
)
|
(13,351
|
)
|
(12,607
|
)
|
||||||
Issuance of shares, net of issuance cost
|
134,558
|
-
|
-
|
|||||||||
Payment of financial liability
|
(2,414
|
)
|
-
|
-
|
||||||||
Net cash provided by (used in) financing activities
|
116,862
|
(22,367
|
)
|
(52,793
|
)
|
|||||||
Net increase in cash and cash equivalents
|
270,463
|
17,715
|
11,718
|
|||||||||
CASH AND CASH EQUIVALENTS AS OF THE BEGINNING OF YEAR
|
97,463
|
79,047
|
67,073
|
|||||||||
EFFECT OF EXCHANGE RATE FLUCTUATIONS ON CASH AND CASH EQUIVALENTS
|
(209
|
)
|
701
|
256
|
||||||||
CASH AND CASH EQUIVALENTS AS OF THE END OF YEAR
|
367,717
|
97,463
|
79,047
|
NOTE 1: |
GENERAL
|
a. |
Reporting entity:
Tremor International Ltd. (the “Company” or “Tremor International”), formerly known as Taptica International Ltd., was incorporated in Israel
under the laws of the State of Israel on March 20, 2007. The ordinary shares of the Company are listed on the AIM Market of the London Stock Exchange and the American Depositary Shares ("ADSs"), each of which represents two ordinary
shares of the Company, represented by the American Depositary Receipts ("ADR") are listed on the Nasdaq Capital Market (see Note 1d). The address of the registered office is 82 Yigal Alon Street Tel-Aviv, 6789124, Israel.
Tremor International is a global Company offering an end-to-end software platform that supports a wide range of media types (e.g., video,
display, etc.) and devices (e.g., mobile, Connected TVs, streaming devices, desktop, etc.), creating an efficient marketplace where advertisers (buyers) are able to purchase high quality advertising inventory from publishers (sellers) at
scale. Tremor Video Inc. (“Tremor Video’’), a wholly owned subsidiary, is the Company’s Demand Side Platform (“DSP”) providing full-service and self-managed marketplace access to advertisers and agencies in order to execute their digital
marketing campaigns in real time across various ad formats. Unruly Group, LLC (Former name RhythmOne, LLC), provides access to the Sell Side Platform (“SSP”) which is designed to monetize digital inventory for publishers and app
developers by enabling their content to have the necessary code and requirements for programmatic advertising integration. The SSP provides access to significant amounts of data, unique demand, and a comprehensive product suite to drive
more effective inventory management and revenue optimization. The Company also provides a Data Management Platform (“DMP”) solution which integrates both DSP and SSP solutions enabling advertisers and publishers to use data from various
sources in order to optimize results of their advertising campaigns. Tremor International Ltd. is headquartered in Israel and maintains offices throughout the US, Canada, EMEA and Asia-Pacific.
|
b. |
On April 1, 2019, the Company completed an acquisition transaction with RhythmOne and on January 4, 2020, the Company completed an acquisition transaction with Unruly. Following the acquisition of RhythmOne and Unruly, the Company
invested and developed capabilities both in the DSP and SSP solutions which launched in 2020 to offer an end-to-end platform that provides customers access to an advertising marketplace in an efficient and scalable manner utilizing machine
learning, artificial intelligence and advanced algorithms. As a result of those acquisitions and their influence on the Company’s operation and other changes in the industry practice, the Company has changed revenue presentation as of 2020
to a net basis with respect to its programmatic activity.
|
c. |
The global spread of COVID-19, which was declared a global pandemic by the World Health Organization in March 2020, has created significant volatility, global macro-economic uncertainty, and disruption in the business and financial
markets. The COVID-19 pandemic and efforts to control its spread have curtailed the movement of people, goods, and services worldwide, including in the regions in which we and our customers and partners operate, and are impacting economic
activity and financial markets. The spread of the COVID-19 pandemic has resulted in, regional quarantines, labor shortages or stoppages, changes in consumer purchasing patterns, and overall economic instability.
The Company has introduced a number of measures to mitigate the impact of COVID-and continues to monitor and assess the impact of the COVID pandemic on its operation, its customers and potential customers.
|
NOTE 1: |
GENERAL (Cont.)
|
d. |
Material events in the reporting period:
|
1. |
On March 25, 2021, the Company paid USD 1,294 thousand to ADI founders for its exercised part of the call option, a lower amount than was originally scheduled. D.A. Consortium, Inc., a minority shareholder of ADI, exercised, effective
March 5, 2021, its put option pursuant to the Shareholders Agreement dated July 17, 2016, as amended November 20, 2020, to sell to Taptica Japan GK, a wholly owned subsidiary, its entire shareholding in ADI, reflecting 2,120 Shares of ADI,
for a purchase price equal to seven times the actual net profit of ADI for the last fiscal year, reflecting USD 1,120 thousand which was paid on April 2021. Following the closing of the put option exercise, the Company owns through its
subsidiary 100% of the share capital of ADI.
|
2. |
On June 22, 2021, the Company completed its initial public offering in the U.S. of 6,768,953 American Depositary Shares ("ADSs"), at a public offering price of USD 19.00 per ADS, for aggregate proceeds of USD 128.6 million before
deducting underwriting discounts and commissions (the “Nasdaq IPO”). Each ADS represents two Ordinary Shares of the Company. The ADSs began trading on the Nasdaq Global Market on June 18, 2021, under the ticker symbol “TRMR”. The Company
also granted the underwriters of the Nasdaq IPO a 30-day option to purchase additional up to 1,015,342 ADSs from the Company at the initial public offering price of USD 19.00 per ADS, which the underwriters subsequently exercised in full on
July 15, 2021, for total additional consideration of USD 19.3 million in gross proceeds to the Company before deducting underwriting discounts and commissions.
|
3. |
Effective upon completion of the Nasdaq IPO, on June 22, 2021, the Company granted an aggregate of 4,725,000 Restricted Share Units (“RSUs”) and 2,025,000 Performance Share Units (“PSUs”) to its three Executive Directors, pursuant to the
terms of the Company’s 2017 Equity Incentive Plan and the Company’s Global Share Incentive Plan (2011). The grant of the RSUs and PSUs awards was approved by the Company’s shareholders on April 30, 2021 (subject to the completion of the
Nasdaq IPO). The RSU awards vest gradually over a period of three years, with 8.33% of each such grant vesting each quarter, subject to the executive continuing to be employed by a Company on the applicable vesting date. The PSU awards vest
gradually over a period of three years, with 33.33% of each grant vesting each year, subject to (i) the executive continuing to be employed by a Company on the applicable vesting date, and (ii) compliance with performance-based metrics
determined by the Compensation Committee of the Board of Directors of the Company.
The fair value of each RSU and PSU granted to the Executive Directors as of April 30, 2021, is 720 pence (approximately USD 10.02) per Ordinary Share, based on the market value of the Company’s quoted
Ordinary Shares on AIM.
|
NOTE 1: |
GENERAL (Cont.)
|
The estimated aggregated cost of the 4,725,000 RSUs and 2,025,000 PSUs awards, assuming 100% vesting, will be approximately USD 67 million over the three-year vesting period commencing June 22, 2021.
In addition, effective upon completion of the Nasdaq IPO on June 22, 2021, the Company’s three Executive Directors are entitled to a special bonus in recognition for their special contribution to the
completion of the Nasdaq IPO in the amount of USD 500,000, as approved by the Company’s shareholders on April 30, 2021 (subject to the completion of the Nasdaq IPO). The special bonuses payable to the Executive Directors were part of an
aggregate USD 2.9 million special bonus for the Company executives and employees, as approved and allocated by the Company’s Board of Directors (out of an aggregate USD 5 million that was initially approved).
On April 22, 2021, the Company’s shareholders approved an increase of 6,500,000 Ordinary Shares to the aggregate available pool of the Company’s 2017 Equity Incentive Plan and the Company’s Global Share
Incentive Plan (2011) (with 80% of the increase allocated to the 2017 Plan and 20% of the increase allocated to the 2011 Plan).
|
4. |
On October 18, 2021, the Company completed the acquisition of SpearAd (the " SpearAd") (See Note 20).
SpearAd's ad server technology will be integrated into Tremor's Unruly SSP, enabling CTV header bidding, channel inventory and ad pod management - complementing the
Company's existing robust end-to-end technology stack, which also includes the Tremor Video DSP.
|
e. |
Definitions:
In these financial statements –
|
The Company
|
-
|
Tremor International Ltd.
|
|
The Group
|
-
|
Tremor International Ltd. and its subsidiaries.
|
|
Subsidiaries
|
-
|
Companies, the financial statements of which are fully consolidated, directly, or indirectly, with the financial statements of the Company such
as Unruly Group LLC, Unruly Holding Ltd, Tremor Video Inc.
|
|
Related party
|
-
|
As defined by IAS 24, “Related Party Disclosures”.
|
a. |
Statement of compliance:
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board ("IASB").
The consolidated financial statements were authorized for issue by the Company’s Board of Directors on February 24, 2022.
|
b. |
Functional and presentation currency:
These consolidated financial statements are presented in US Dollars (USD), which is the Company’s functional currency, and have been rounded to
the nearest thousand, except when otherwise indicated. The USD is the currency that represents the principal economic environment in which the Company operates.
|
c. |
Basis of measurement:
The consolidated financial statements have been prepared on a historical cost basis except for the following assets and liabilities:
|
• |
Deferred and current tax assets and liabilities
|
• |
Put option to non-controlling interests
|
• |
Provisions
|
• |
Derivatives
|
d. |
Use of estimates and judgments:
The preparation of financial statements in conformity with IFRS requires management of the Group to make judgments, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The preparation of accounting estimates used in the preparation of the Group’s financial statements requires management of the Group to make
assumptions regarding circumstances and events that involve considerable uncertainty. Management of the Group prepares estimates on the basis of past experience, various facts, external circumstances, and reasonable assumptions according
to the pertinent circumstances of each estimate.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which
the estimates are revised and in any future periods affected.
|
e. |
Determination of fair value:
|
• |
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
• |
Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
|
• |
Level 3: inputs that are not based on observable market data (unobservable inputs).
|
• |
Note 17, on share-based compensation;
|
• |
Note 18, on financial instruments; and
|
• |
Note 20, on subsidiaries (regarding business combinations).
|
f. |
Correction of immaterial error
|
NOTE 3: |
SIGNIFICANT ACCOUNTING POLICIES
|
a. |
Basis of consolidation:
|
1) |
Business combinations:
|
2) |
Subsidiaries:
|
3) |
Transactions eliminated on consolidation:
|
4) |
Issuance of put option to non-controlling interests:
|
b. |
Foreign currency:
|
1) |
Foreign currency transactions:
|
2) |
Foreign operations:
|
c. |
Financial instruments:
|
1) |
Non-derivative financial assets
Initial recognition and measurement of financial assets
The Group initially recognizes trade receivables and debt instruments issued on the date that they are created. All other
financial assets are recognized initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument. A financial asset is initially measured at fair value plus transaction costs that are directly
attributable to the acquisition or issuance of the financial asset. A trade receivable without a significant financing component is initially measured at the transaction price. Receivables originating from contract assets are initially
measured at the carrying amount of the contract assets on the date classification was changed from contract asset to receivables.
Derecognition of financial assets
Financial assets are derecognized when the contractual rights of the Group to the cash flows from the asset expire, or the
Group transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. When the Group retains
substantially all of the risks and rewards of ownership of the financial asset, it continues to recognize the financial asset.
Classification of financial assets into categories and the accounting treatment of each category
Financial assets are classified at initial recognition to one of the following measurement categories: amortized cost; fair
value through other comprehensive income – investments in debt instruments; fair value through other comprehensive income – investments in equity instruments; or fair value through profit or loss.
Financial assets are not reclassified in subsequent periods unless, and only if, the Group changes its business model for the
management of financial debt assets, in which case the affected financial debt assets are reclassified at the beginning of the period following the change in the business model.
The Group has balances of trade and other receivables and deposits that are held within a business model whose objective is
collecting contractual cash flows. The contractual cash flows of these financial assets represent solely payments of principal and interest that reflects consideration for the time value of money and the credit risk. Accordingly, these
financial assets are measured at amortized cost.
|
NOTE 3:
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
Subsequent measurement and gains and losses
Financial assets at amortized cost
These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced
by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
|
2) |
Non-derivative financial liabilities
Non-derivative financial liabilities include trade and other payables.
Initial recognition of financial liabilities
The Group initially recognizes debt securities issued on the date that they originated. All other financial liabilities are recognized initially on the trade date
at which the Group becomes a party to the contractual provisions of the instrument.
Subsequent measurement of financial liabilities
Financial liabilities (other than financial liabilities at fair value through profit or loss) are recognized initially at fair value less any directly attributable
transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective interest method. Financial liabilities are designated at fair value through profit or loss if the Group
manages such liabilities and their performance is assessed based on their fair value in accordance with the Group’s documented risk management strategy, providing that the designation is intended to prevent an accounting mismatch, or the
liability is a combined instrument including an embedded derivative.
Transaction costs directly attributable to an expected issuance of an instrument that will be classified as a financial liability are recognized as an asset in the
framework of deferred expenses in the statement of financial position. These transaction costs are deducted from the financial liability upon its initial recognition or are amortized as financing expenses in the statement of income when
the issuance is no longer expected to occur.
Derecognition of financial liabilities
Financial liabilities are derecognized when the obligation of the Group, as specified in the agreement, expires or when it is discharged or cancelled.
Offset of financial instruments
Financial assets and liabilities are offset, and the net amount presented in the statement of financial position when, and only when, the Group currently has a
legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
|
NOTE 3: |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
3) |
Derivative financial instruments:
Economic hedges
Hedge accounting is not applied to derivative instruments that economically hedge financial assets and liabilities denominated in foreign currencies. Changes in the
fair value of such derivatives are recognized in profit or loss under financing income or expenses.
|
4) |
Share capital:
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognized as a deduction
from equity, net of any tax effects.
Incremental costs directly attributable to an expected issuance of an instrument that will be classified as an equity instrument are recognized as an asset in
deferred expenses in the statement of financial position. The costs are deducted from equity upon the initial recognition of the equity instruments or are amortized as financing expenses in the statement of income when the issuance is no
longer expected to take place.
Treasury shares
When share capital recognized as equity is repurchased by the Group, the amount of the consideration paid, which includes directly attributable costs, net of any
tax effects, is recognized as a deduction from equity. Repurchased shares are classified as a deduction in Share Premium. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity,
and the resulting surplus on the transaction is carried to share premium, whereas a deficit on the transaction is deducted from retained earnings.
|
d. |
Fixed Assets:
Fixed assets are measured at cost less accumulated depreciation. The cost of fixed assets includes expenditure that is directly attributable to the acquisition of the asset. Depreciation is provided on all
property and equipment at rates calculated to write each asset down to its residual value (assumed to be nil), using the straight-line method, over its expected useful life as follows:
|
Years
|
|
Computers and servers
|
3
|
Office furniture and equipment
|
3-17
|
Leasehold improvements
|
The shorter of the lease term and the useful life
|
An asset is depreciated from the date it is ready for use, meaning the date it reaches the location and condition required for it to operate in the manner intended by management.
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting year and adjusted if appropriate.
|
NOTE 3: |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
e. |
Intangible assets:
|
1) |
Software development:
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss
when incurred.
Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalized
only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group has the intention and sufficient resources to complete development
and to use or sell the asset. The expenditure capitalized in respect of development activities includes the cost of materials, direct labor and overhead costs that are directly attributable to preparing the asset for its intended use, and
capitalized borrowing costs. Other development expenditure is recognized in profit or loss as incurred.
In subsequent periods, capitalized development expenditure is measured at cost less accumulated amortization and accumulated impairment losses.
Where these criteria are not met, development costs are charged to the statement of operation and other comprehensive income as incurred.
The estimated useful lives of developed software are three years.
Amortization methods, useful lives and residual values are reviewed at the end of each reporting year and adjusted if appropriate.
|
2) |
Acquired software:
Acquired software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software licenses. These costs are amortized
over their estimated useful lives (3 years) using the straight-line method. Costs associated with maintaining software programs are recognized as an expense as incurred.
|
3) |
Goodwill:
Goodwill that arises upon the acquisition of subsidiaries is presented as part of intangible assets. For information on measurement of goodwill at initial
recognition, see Note 3a(1).
In subsequent periods goodwill is measured at cost less accumulated impairment losses. The Group has identified its entire operation as a single cash generating
unit (CGU). According to management assessment and quoted price of the shares as of December 31, 2021, no impairment in respect to goodwill has been recorded.
|
NOTE 3: |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
4) |
Other intangible assets:
Other intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortization and accumulated
impairment losses.
|
5) |
Amortization:
Amortization is a systematic allocation of the amortizable amount of an intangible asset over its useful life. The amortizable amount is the cost of the asset less
its accumulated residual value.
Internally generated intangible assets, such as software development costs, are not systematically amortized as long as they are not available for use, i.e., they
are not yet on site or in working condition for their intended use. Goodwill is not systematically amortized as well but is tested for impairment at least once a year.
The Group examines the amortization methods, useful life and accumulated residual values of its intangible assets at least once a year (usually at the end of each
reporting period) in order to determine whether events and circumstances continue to support the decision that the intangible asset has an indefinite useful life.
Amortization is recognized in the statements of other comprehensive income on a straight-line basis over the estimated useful lives of the intangible assets from
the date they are available for use, since this method most closely reflects the expected pattern of consumption of the future economic benefits embodied in each asset, such as development costs, are tested for impairment at least once a
year until such date as they are available for use.
The estimated useful lives for the current and comparative periods are as follows:
|
Trademarks
|
1.75-5 years
|
Software (developed and acquired)
|
3 years
|
Customer relationships
|
3-5.75 years
|
Technology
|
1-5.25 years
|
Others
|
1-1.5 years
|
Amortization methods, useful lives and residual values are reviewed at the end of each reporting year and adjusted if appropriate.
During 2020, the Company changed the expected useful life of intangible asset items. For further information see Note 7 regarding the basis of preparation of the financial statements.
|
NOTE 3: |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
f. |
Impairment:
Non-derivative financial assets
Financial assets, contract assets and lease receivables
The Group recognizes a provision for expected credit losses in respect of:
- Financial assets
at amortized cost;
- Lease receivables.
The Group has elected to measure the provision for expected credit losses in respect of financial assets and lease receivables at an amount
equal to the full lifetime credit losses of the instrument.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition, and when estimating
expected credit losses, the Group considers reasonable and supportable information that is relevant and available. Such information includes quantitative and qualitative information, and an analysis, based on the Group’s past experience
and informed credit assessment, and it includes forward looking information.
Measurement of expected credit losses
Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of the difference
between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive.
With respect to other debt assets, the Group measures the provision for expected credit losses at an amount equal to the full lifetime expected
credit losses, other than the provisions hereunder that are measured at an amount equal to the 12-month expected credit losses:
|
- |
Debt instruments that are determined to have low credit risk at the reporting date; and
|
- |
Other debt instruments and deposits, for which credit risk has not increased significantly since initial recognition.
|
f. |
Presentation of provision for expected credit losses in the statement of financial position
Provisions for expected credit losses of financial assets measured at amortized cost and are deducted from the gross carrying amount of the
financial assets.
Write-off
The gross carrying amount of a financial asset is written off when the Group does not have reasonable expectations of recovering a financial
asset at its entirety or a portion thereof. This is usually the case when the Group determines that the debtor does not have assets or sources of income that may generate sufficient cash flows for paying the amounts being written off.
However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group's procedures for recovery of amounts due. Write-off constitutes a de-recognition event.
|
g. |
Impairment of non-financial assets:
Non-financial assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognized for the amount by which an asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell
and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
Non-financial assets that were subject to impairment are reviewed for possible reversal of the impairment recognized in respect thereof at each
financial reporting date.
|
h. |
Restricted Cash and Deposit:
The Company classifies certain restricted cash and deposit balances within other current assets on the consolidated statement of financial
position based upon the term of the remaining restrictions. On December 31, 2021, and 2020 the Company had restricted cash and deposit of USD 2,061 thousand and USD 49 thousand, respectively.
|
i. |
Share Based Compensation:
Compensation expense related to stock options, restricted stock units and performance stock units. The Company’s employee stock purchase plan
is measured and recognized in the consolidated financial statements based on the fair value of the awards granted. The fair value of each option award is estimated on the grant date using the Black-Scholes option-pricing model.
Stock-based compensation expense related to stock options and restricted stock is recognized over the requisite service periods of the awards.
Determining the fair value of stock options awards requires judgment. The Company’s use of the Black-Scholes option pricing model requires the
input of subjective assumptions. The assumptions used in the Company’s option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment.
These assumptions and estimates are as follows:
Risk-Free Interest Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities approximating the
expected term of the awards.
Expected Term. The expected term of an award is calculated based on the vesting date and the expiration date of the award.
Volatility. The Company determined the price volatility based on daily price observations over a period equivalent to the expected term of the
award.
Dividend Yield. The dividend yield assumption is based on the Company’s history and current expectations of dividend payouts.
Fair Value of Common Stock. The fair value of common stock is based on the closing price of the Company's common stock on the grant date.
|
j. |
Employee benefits:
|
1) |
Post-employment benefits:
The Group’s main post-employment benefit plan is under section 14 to the Severance Pay Law ("Section 14"), which is accounted for as a defined contribution plan. In
addition, for certain employees, the Group has an additional immaterial plan that is accounted for as a defined benefit plan. These plans are usually financed by deposits with insurance companies or with funds managed by a trustee.
|
a) |
Defined contribution plans:
|
b) |
Defined benefit plans:
|
2) |
Short-term benefits:
|
NOTE 3: |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
k. |
Revenue recognition:
|
(1) |
Identifying the contract with customer.
|
(2) |
Identifying distinct performance obligations in the contract.
|
(3) |
Determining the transaction price.
|
(4) |
Allocating the transaction price to distinct performance obligations.
|
(5) |
Recognizing revenue when the performance obligations are satisfied.
|
NOTE 3: |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
NOTE 3: |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
l. |
Classification of expenses
|
m. |
Financing income and expenses:
|
NOTE 3: |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
n. |
Income tax expense:
|
• |
The initial recognition of goodwill; and
|
• |
Differences relating to investments in subsidiaries to the extent it is probable that they will not reverse in the foreseeable future, either by way of selling the investment or by way of distributing taxable dividends in respect of
the investment.
|
NOTE 3: |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
o. |
Leases:
|
(a) |
The right to obtain substantially all the economic benefits from use of the identified asset; and
|
(b) |
The right to direct the identified asset’s use.
|
NOTE 3: |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
— | Buildings | 1-8 years | |
— |
Data centers |
1-3 years |
NOTE 3: |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
p. |
Earnings per share:
|
q. |
New standards, amendments to standards and interpretations not yet adopted:
|
NOTE 4: |
INCOME TAX
|
a. |
Details regarding the tax environment of the Israeli company:
|
1) |
Corporate tax rate
|
2) |
Benefits under the Law for the Encouragement of Capital Investments
|
NOTE 4: |
INCOME TAX (Cont.)
|
NOTE 4: |
INCOME TAX (Cont.)
|
b. |
Details regarding the tax environment of the non-Israeli companies:
|
(1) |
US
|
(2) |
International
|
NOTE 4: |
INCOME TAX (Cont.)
|
c. |
Composition of income tax benefit:
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
USD thousands
|
||||||||||||
Current tax expense
|
||||||||||||
Current year
|
7,220
|
3,022
|
4,571
|
|||||||||
Deferred tax (income)
|
||||||||||||
Creation and reversal of temporary differences
|
(8,168
|
)
|
(12,603
|
)
|
(7,207
|
)
|
||||||
Tax benefit
|
(948
|
)
|
(9,581
|
)
|
(2,636
|
)
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
USD thousands
|
||||||||||||
Domestic
|
4,995
|
1,661
|
(639
|
)
|
||||||||
US
|
(961
|
)
|
(5,646
|
)
|
(416
|
)
|
||||||
International
|
(4,982
|
)
|
(5,596
|
)
|
(1,581
|
)
|
||||||
Tax Benefit
|
(948
|
)
|
(9,581
|
)
|
(2,636
|
)
|
NOTE 4: |
INCOME TAX (Cont.)
|
d. |
Reconciliation between the theoretical tax on the pre-tax profit and the tax expense:
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
USD thousands
|
||||||||||||
Profit (Loss) before taxes on income
|
72,275
|
(7,442
|
)
|
3,588
|
||||||||
Primary tax rate of the Company
|
23
|
%
|
23
|
%
|
23
|
%
|
||||||
Tax calculated according to the Company’s primary tax rate
|
16,623
|
(1,712
|
)
|
825
|
||||||||
Additional tax (tax saving) in respect of:
|
||||||||||||
Non-deductible expenses net of tax exempt income (*)
|
(6,218
|
)
|
(2,509
|
)
|
3,584
|
|||||||
Effect of reduced tax rate on preferred income and differences in previous tax assessments
|
(7,226
|
)
|
170
|
(1,433
|
)
|
|||||||
Utilization of tax losses from prior years for which deferred taxes were not created
|
(2,030
|
)
|
(5,887
|
)
|
(5,050
|
)
|
||||||
Effect on deferred taxes at a rate different from the primary tax rate
|
(3,329
|
)
|
(768
|
)
|
(873
|
)
|
||||||
Foreign tax rate differential
|
1,232
|
1,125
|
311
|
|||||||||
Tax benefit
|
(948
|
)
|
(9,581
|
)
|
(2,636
|
)
|
||||||
Effective income tax rate
|
(1
|
)%
|
129
|
%
|
(73
|
)%
|
(*) |
including non- deductible share-based compensation expenses.
|
NOTE 4: |
INCOME TAX (Cont.)
|
e. |
Deferred tax assets and liabilities:
|
Intangible Assets and R&D expenses
|
Employees Compensation
|
Carryforward Losses
|
Accrued Expenses
|
Doubtful Debt
|
Other
|
Total
|
||||||||||||||||||||||
USD thousands
|
||||||||||||||||||||||||||||
Balance of deferred tax asset (liability) as of January 1, 2020
|
(17,090
|
)
|
3,684
|
8,435
|
2,483
|
4,908
|
(2,501
|
)
|
(81
|
)
|
||||||||||||||||||
Business combinations
|
(4,409
|
)
|
85
|
2,330
|
250
|
168
|
530
|
(1,046
|
)
|
|||||||||||||||||||
Changes recognized in profit or Loss
|
4,626
|
1,190
|
3,380
|
1,723
|
(1,352
|
)
|
3,036
|
12,603
|
||||||||||||||||||||
Changes recognized in equity
|
(162
|
)
|
4,280
|
-
|
-
|
-
|
160
|
4,278
|
||||||||||||||||||||
Balance of deferred tax asset (liability) as of December 31, 2020
|
(17,035
|
)
|
9,239
|
14,145
|
4,456
|
3,724
|
1,225
|
15,754
|
Business combinations
|
(1,962
|
)
|
458
|
(1,504
|
)
|
|||||||||||||||||||||||
Changes recognized in profit or Loss
|
13,310
|
3,861
|
(4,714
|
)
|
(3,117
|
)
|
(623
|
)
|
(549
|
)
|
8,168
|
|||||||||||||||||
Changes recognized in equity
|
100
|
(1,026
|
)
|
(54
|
)
|
1,600
|
(2
|
)
|
618
|
|||||||||||||||||||
Balance of deferred tax asset (liability) as of December 31, 2021
|
(5,587
|
)
|
12,074
|
9,835
|
2,939
|
3,099
|
676
|
23,036
|
NOTE 5: |
FIXED ASSETS, NET
|
Computers and Servers
|
Office furniture and equipment
|
Leasehold improvements
|
Total
|
|||||||||||||
USD thousands
|
||||||||||||||||
Cost
|
||||||||||||||||
Balance as of January 1, 2020
|
5,574
|
724
|
1,735
|
8,033
|
||||||||||||
Exchange rate differences
|
13
|
14
|
4
|
31
|
||||||||||||
Additions
|
1,768
|
15
|
77
|
1,860
|
||||||||||||
Business combinations
|
346
|
411
|
73
|
830
|
||||||||||||
Disposals
|
(18
|
)
|
(32
|
)
|
(19
|
)
|
(69
|
)
|
||||||||
Balance as of December 31, 2020
|
7,683
|
1,132
|
1,870
|
10,685
|
||||||||||||
Exchange rate differences
|
(2
|
)
|
10
|
3
|
11
|
|||||||||||
Additions
|
2,010
|
44
|
58
|
2,112
|
||||||||||||
Business combinations (See Note 20)
|
-
|
1
|
-
|
1
|
||||||||||||
Disposals
|
(852
|
)
|
(742
|
)
|
(1,161
|
)
|
(2,755
|
)
|
||||||||
Balance as of December 31, 2021
|
8,839
|
445
|
770
|
10,054
|
||||||||||||
Depreciation
|
||||||||||||||||
Balance as of January 1, 2020
|
3,439
|
380
|
1,082
|
4,901
|
||||||||||||
Exchange rate differences
|
35
|
2
|
18
|
55
|
||||||||||||
Disposals
|
(16
|
)
|
(31
|
)
|
(19
|
)
|
(66
|
)
|
||||||||
Additions
|
1,523
|
472
|
508
|
2,503
|
||||||||||||
Balance as of December 31, 2020
|
4,981
|
823
|
1,589
|
7,393
|
||||||||||||
Exchange rate differences
|
(1
|
)
|
24
|
(2
|
)
|
21
|
||||||||||
Disposals
|
(852
|
)
|
(742
|
)
|
(1,161
|
)
|
(2,755
|
)
|
||||||||
Additions
|
1,570
|
164
|
197
|
1,931
|
||||||||||||
Balance as of December 31, 2021
|
5,698
|
269
|
623
|
6,590
|
||||||||||||
Carrying amounts
|
||||||||||||||||
As of December 31, 2020
|
2,702
|
309
|
281
|
3,292
|
||||||||||||
As of December 31, 2021
|
3,141
|
176
|
147
|
3,464
|
NOTE 6: |
LEASES
|
a. |
Leases in which the Group is the lessee:
|
- |
Offices;
|
- |
Data center;
|
1) |
Information regarding material lease agreements:
|
a) |
The Group leases Offices mainly in the United States of America (US), Israel, Canada and UK with contractual original lease periods ends between the years 2022 and 2027 from several lessors. The Group did not assume renewals in
determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement.
|
b) |
The Group leases data center and related network infrastructure with contractual original lease periods ends between the years 2022 and 2023. The Group did not assume renewals in determination of the lease term unless the renewals are
deemed to be reasonably assured at lease commencement.
|
2) |
Lease liability:
|
December 31
|
||||||||
2021
|
2020
|
|||||||
USD thousands
|
||||||||
Less than one year (0-1)
|
7,119
|
9,047
|
||||||
One to five years (1-5)
|
7,042
|
10,241
|
||||||
More than five years (5+)
|
834
|
1,921
|
||||||
Total
|
14,995
|
21,209
|
||||||
Current maturities of lease liability
|
7,119
|
9,047
|
||||||
Long-term lease liability
|
7,876
|
12,162
|
NOTE 6: |
LEASES (Cont.)
|
3) |
Right-of-use assets - Composition:
|
Offices
|
Data center
|
Total
|
||||||||||
USD thousands
|
||||||||||||
Balance as of January 1, 2020
|
13,155
|
3,560
|
16,715
|
|||||||||
Business combinations
|
1,026
|
-
|
1,026
|
|||||||||
Depreciation on right-of-use assets
|
(6,958
|
)
|
(4,422
|
)
|
(11,380
|
)
|
||||||
Additions
|
1,629
|
5,680
|
7,309
|
|||||||||
Provision for impairment
|
1,808
|
145
|
1,953
|
|||||||||
Lease modifications
|
(143
|
)
|
-
|
(143
|
)
|
|||||||
Disposals
|
(4,570
|
)
|
(77
|
)
|
(4,647
|
)
|
||||||
Exchange rate differences
|
(22
|
)
|
11
|
(11
|
)
|
|||||||
Balance as of December 31, 2020
|
5,925
|
4,897
|
10,822
|
|||||||||
Depreciation on right-of-use assets
|
(5,223
|
)
|
(2,312
|
)
|
(7,535
|
)
|
||||||
Additions
|
3,571
|
446
|
4,017
|
|||||||||
Provision for impairment
|
1,201
|
-
|
1,201
|
|||||||||
Lease modifications
|
-
|
7
|
7
|
|||||||||
Disposals
|
-
|
(189
|
)
|
(189
|
)
|
|||||||
Exchange rate differences
|
(50
|
)
|
-
|
(50
|
)
|
|||||||
Balance as of December 31, 2021
|
5,424
|
2,849
|
8,273
|
4) |
Amounts recognized in statement of operation:
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
USD thousands
|
||||||||||||
Interest expenses on lease liability
|
(570
|
)
|
(1,117
|
)
|
(779
|
)
|
||||||
Depreciation and amortization of right-of-use assets, net
|
(6,334
|
)
|
(8,855
|
)
|
(9,109
|
)
|
||||||
Gains recognized in profit or loss
|
7
|
1,829
|
1,749
|
|||||||||
Total
|
(6,897
|
)
|
(8,143
|
)
|
(8,139
|
)
|
NOTE 6: |
LEASES (Cont.)
|
5) |
Amounts recognized in the statement of cash flows:
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
USD thousands
|
||||||||||||
Cash outflow for leases
|
(10,579
|
)
|
(14,468
|
)
|
(13,386
|
)
|
b. |
Leases in which the Group is a lessor:
|
1) |
Information regarding material lease agreements:
|
2) |
Net investment in the lease:
|
Offices
|
||||||||
Year ended
December 31
|
||||||||
2021
|
2020
|
|||||||
USD thousands
|
||||||||
Balance as of January 1,
|
7,835
|
4,288
|
||||||
Sublease receipts
|
(2,454
|
)
|
(3,246
|
)
|
||||
Additions
|
301
|
7,094
|
||||||
Disposals
|
-
|
(301
|
)
|
|||||
Balance as of December 31,
|
5,682
|
7,835
|
3) |
Maturity analysis of net investment in finance leases:
|
Year ended
December 31
|
||||||||
2021
|
2020
|
|||||||
USD thousands
|
||||||||
Less than one year (0-1)
|
1,067
|
2,153
|
||||||
One to five years (1-5)
|
3,789
|
3,816
|
||||||
More than five years (5+)
|
826
|
1,866
|
||||||
Total net investment in the lease as of December 31,
|
5,682
|
7,835
|
NOTE 6: |
LEASES (Cont.)
|
4) |
Amounts recognized in statement of operation:
|
Offices
|
||||||||||||
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
USD thousands
|
||||||||||||
Gain from subleases
|
301
|
274
|
956
|
|||||||||
Financing income on the net investment in the lease
|
245
|
361
|
71
|
|||||||||
Total
|
546
|
635
|
1,027
|
NOTE 7: |
INTANGIBLE ASSETS, NET
|
Software
|
Trademarks
|
Customer relationships
|
Technology
|
Others
|
Goodwill
|
Total
|
||||||||||||||||||||||
USD thousands
|
||||||||||||||||||||||||||||
Cost
|
||||||||||||||||||||||||||||
Balance as of January 1, 2020
|
19,237
|
25,683
|
37,719
|
45,087
|
1,044
|
133,703
|
262,473
|
|||||||||||||||||||||
Exchange rate differences
|
-
|
529
|
567
|
73
|
47
|
1,280
|
2,496
|
|||||||||||||||||||||
Additions
|
4,858
|
-
|
-
|
-
|
-
|
-
|
4,858
|
|||||||||||||||||||||
Business combinations
|
-
|
10,427
|
10,054
|
1,658
|
1,068
|
17,878
|
41,085
|
|||||||||||||||||||||
Balance as of December 31, 2020
|
24,095
|
36,639
|
48,340
|
46,818
|
2,159
|
152,861
|
310,912
|
|||||||||||||||||||||
Exchange rate differences
|
(25
|
)
|
(272
|
)
|
(374
|
)
|
(166
|
)
|
(17
|
)
|
(1,338
|
)
|
(2,192
|
)
|
||||||||||||||
Additions
|
4,966
|
-
|
-
|
-
|
-
|
-
|
4,966
|
|||||||||||||||||||||
Disposals
|
(5,084
|
)
|
-
|
-
|
-
|
-
|
-
|
(5,084
|
)
|
|||||||||||||||||||
Business combinations (see Note 20)
|
735
|
-
|
-
|
6,540
|
-
|
5,189
|
12,464
|
|||||||||||||||||||||
Balance as of December 31, 2021
|
24,687
|
36,367
|
47,966
|
53,192
|
2,142
|
156,712
|
321,066
|
|||||||||||||||||||||
Amortization
|
||||||||||||||||||||||||||||
Balance as of January 1, 2020
|
9,232
|
11,458
|
7,857
|
22,597
|
1,044
|
-
|
52,188
|
|||||||||||||||||||||
Exchange rate differences
|
-
|
202
|
285
|
(162
|
)
|
70
|
-
|
395
|
||||||||||||||||||||
Additions
|
5,214
|
8,976
|
9,053
|
9,598
|
988
|
-
|
33,829
|
|||||||||||||||||||||
Balance as of December 31, 2020
|
14,446
|
20,636
|
17,195
|
32,033
|
2,102
|
-
|
86,412
|
|||||||||||||||||||||
Exchange rate differences
|
(8
|
)
|
(170
|
)
|
(256
|
)
|
(21
|
)
|
(21
|
)
|
-
|
(476
|
)
|
|||||||||||||||
Additions
|
5,522
|
9,320
|
9,142
|
7,949
|
61
|
-
|
31,994
|
|||||||||||||||||||||
Disposals
|
(5,084
|
)
|
-
|
-
|
-
|
-
|
-
|
(5,084
|
)
|
|||||||||||||||||||
Balance as of December 31, 2021
|
14,876
|
29,786
|
26,081
|
39,961
|
2,142
|
-
|
112,846
|
|||||||||||||||||||||
Carrying amounts
|
||||||||||||||||||||||||||||
As of December 31, 2020
|
9,649
|
16,003
|
31,145
|
14,785
|
57
|
152,861
|
224,500
|
|||||||||||||||||||||
As of December 31, 2021
|
9,811
|
6,581
|
21,885
|
13,231
|
-
|
156,712
|
208,220
|
NOTE 7: |
INTANGIBLE ASSETS, NET (Cont.)
|
NOTE 8: |
TRADE AND OTHER RECEIVABLES
|
December 31
|
||||||||
2021
|
2020
|
|||||||
USD thousands
|
||||||||
Trade receivables:
|
||||||||
Trade receivables
|
178,933
|
162,580
|
||||||
Allowance for doubtful debts
|
(13,870
|
)
|
(9,036
|
)
|
||||
Trade receivables, net
|
165,063
|
153,544
|
||||||
Other receivables:
|
||||||||
Prepaid expenses
|
13,110
|
14,053
|
||||||
Loan to third party
|
480
|
689
|
||||||
Institutions
|
1,050
|
1,165
|
||||||
Pledged deposits
|
2,647
|
872
|
||||||
Other
|
949
|
836
|
||||||
18,236
|
17,615
|
NOTE 9: |
TRADE AND OTHER PAYABLES
|
December 31
|
||||||||
2021
|
2020
|
|||||||
USD thousands
|
||||||||
Trade payables
|
161,812
|
125,863
|
||||||
Other payables:
|
||||||||
Contract liabilities
|
11,415
|
13,406
|
||||||
Wages, salaries and related expenses
|
16,406
|
13,853
|
||||||
Related Parties
|
-
|
2,746
|
||||||
Provision for vacation
|
1,003
|
554
|
||||||
Institutions
|
791
|
1,112
|
||||||
Ad spend liability
|
7,729
|
5,987
|
||||||
Liability for options on non- controlling interest
|
-
|
2,903
|
||||||
Others
|
5,556
|
6,561
|
||||||
42,900
|
47,122
|
NOTE 10: |
CASH AND CASH EQUIVALENTS
|
December 31
|
||||||||
2021
|
2020
|
|||||||
USD thousands
|
||||||||
Cash
|
77,537
|
44,825
|
||||||
Bank deposits
|
290,180
|
52,638
|
||||||
Cash and cash equivalents
|
367,717
|
97,463
|
NOTE 11: |
REVENUE
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
USD thousands
|
||||||||||||
Programmatic (1)
|
266,616
|
161,625
|
241,464
|
|||||||||
Performance
|
75,329
|
50,295
|
84,296
|
|||||||||
341,945
|
211,920
|
325,760
|
(1) |
In 2021 and 2020 programmatic revenue are reported on a net basis and in 2019 on a gross basis, and performance revenue reported on a gross basis for all years presented (see Note 3k).
|
NOTE 12: |
COST OF REVENUE
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
USD thousands
|
||||||||||||
Programmatic (1)
|
31,572
|
31,918
|
142,676
|
|||||||||
Performance
|
40,079
|
27,889
|
44,570
|
|||||||||
Cost of Revenue
|
71,651
|
59,807
|
187,246
|
(1) |
In 2021 and 2020 programmatic revenue are reported on a net basis and in 2019 on a gross basis, and performance revenue reported on a gross basis for all years presented (see Note 3k).
|
NOTE 13: |
GENERAL AND ADMINISTRATIVE EXPENSES
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
USD thousands
|
||||||||||||
Wages, salaries and related expenses
|
17,755
|
15,274
|
11,973
|
|||||||||
Share base payments
|
32,250
|
9,420
|
14,100
|
|||||||||
Rent and office maintenance
|
549
|
(483
|
)
|
232
|
||||||||
Professional expenses
|
7,136
|
4,766
|
1,282
|
|||||||||
Doubtful debts
|
4,958
|
(1,091
|
)
|
3,003
|
||||||||
Acquisition costs
|
253
|
524
|
2,840
|
|||||||||
Other expenses
|
598
|
1,268
|
1,003
|
|||||||||
63,499
|
29,678
|
34,433
|
NOTE 14: |
OTHER EXPENSES (INCOME), NET
|
NOTE 15: |
SHAREHOLDERS’ EQUITY
|
Ordinary Shares
|
||||||||
2021
|
2020
|
|||||||
Number of shares
|
||||||||
Balance as of January 1
|
133,916,229
|
124,223,182
|
||||||
Own shares held by the Group
|
(917,998
|
)
|
(5,277,220
|
)
|
||||
Share based compensation
|
5,564,808
|
6,444,944
|
||||||
Issuance of shares in IPO *
|
15,568,590
|
-
|
||||||
Issuance of Restricted shares **
|
370,000
|
-
|
||||||
Shares issued in business combination ***
|
-
|
8,525,323
|
||||||
Issued and paid-in share capital as of December 31
|
154,501,629
|
133,916,229
|
||||||
Authorized share capital
|
500,000,000
|
300,000,000
|
NOTE 16: |
EARNINGS PER SHARE
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
USD thousands
|
||||||||||||
Profit for the year
|
73,223
|
2,139
|
6,224
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
Shares of NIS
|
||||||||||||
0.01 par value
|
||||||||||||
Weighted average number of ordinary shares used to calculate
basic earnings per share as at December 31
|
144,493,989
|
133,991,210
|
111,231,769
|
|||||||||
Basic earnings per share (in USD)
|
0.51
|
0.02
|
0.06
|
NOTE 16: |
EARNINGS PER SHARE (cont.)
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
Shares of NIS
|
||||||||||||
0.01 par value
|
||||||||||||
Weighted average number of ordinary shares used to calculate basic earnings per share
|
144,493,989
|
133,991,210
|
111,231,769
|
|||||||||
Effect of share options on issue
|
8,212,903
|
4,714,985
|
3,576,114
|
|||||||||
Weighted average number of ordinary shares used to calculate diluted earnings per share
|
152,706,892
|
138,706,195
|
114,807,883
|
|||||||||
Diluted earnings per share (in USD)
|
0.48
|
0.02
|
0.05
|
NOTE 17: |
SHARE-BASED COMPENSATION ARRANGEMENTS
|
a. |
Share-based compensation plan:
|
• |
All the share options that were granted are non-marketable.
|
• |
All options are to be settled by physical delivery of ordinary shares or ADSs.
|
• |
Vesting conditions are based on a service period of between 0.5-4 years.
|
NOTE 17: |
SHARE-BASED COMPENSATION ARRANGEMENTS (Cont.)
|
b. |
Stock Options:
|
Number of
options
|
Weighted average
exercise price
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(Thousands)
|
(USD)
|
|||||||||||||||
Outstanding at 1 January
|
3,781
|
4,828
|
2.19
|
3.95
|
||||||||||||
Forfeited during the year
|
(359
|
)
|
(1,621
|
)
|
6.79
|
3.91
|
||||||||||
Exercised during the year
|
(652
|
)
|
(1,227
|
)
|
2.08
|
0.72
|
||||||||||
Granted during the year
|
3,256
|
1,801
|
10.76
|
2.21
|
||||||||||||
Outstanding at December 31
|
6,026
|
3,781
|
6.54
|
2.19
|
||||||||||||
Exercisable at December 31
|
1,540
|
51
|
Originally granted
|
Amended Granted
|
|||||||||||||
Grated
date
|
Number of options
|
Exercise price
(GBP)
|
Exercisable date from
|
Exercise price
(GBP)
|
Exercisable date from
|
|||||||||
March 20, 2017
|
217,000
|
2.44
|
March 20, 2019
|
1.60
|
July 28, 2021
|
|||||||||
June 18, 2017
|
116,000
|
2.99
|
June 18, 2019
|
1.60
|
July 28, 2021
|
|||||||||
November 5, 2017
|
391,000
|
4.31
|
November 5, 2019
|
1.60
|
July 28, 2021
|
|||||||||
January 23, 2018
|
1,163,000
|
4.37
|
January 23, 2020
|
1.60
|
July 31, 2021
|
|||||||||
June 20, 2018
|
52,000
|
4.37
|
June 20, 2020
|
1.60
|
July 31, 2021
|
|||||||||
April 2, 2019 (*)
|
265,174
|
2.06-18.27
|
April 2, 2019
|
1.60
|
July 28, 2021
|
(*) |
Granted as part of RhythmOne’s acquisition as listed above.
|
NOTE 17: |
SHARE-BASED COMPENSATION ARRANGEMENTS (Cont.)
|
2021
|
2020
|
|||
Grant date fair value in USD
|
4.3
|
1.04-1.73
|
||
Share price (on grant date) (in USD)
|
10.09
|
1.74-3.03
|
||
Exercise price (in USD)
|
10.76
|
1.89-3.06
|
||
Expected volatility (weighted average)
|
60%
|
60%
|
||
Expected life (weighted average)
|
3.75
|
3.5-3.75
|
||
Expected dividends
|
0.00%
|
0.00%
|
||
Risk-free interest rate
|
0.54%
|
0.15%-1.46%
|
c. |
Restricted Share Units:
|
Number of RSU’s
|
Weighted-Average Grant
Date Fair Value
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(Thousands)
|
||||||||||||||||
Outstanding at 1 January
|
3,777
|
3,969
|
2.364
|
2.372
|
||||||||||||
Forfeited during the year
|
(25
|
)
|
(46
|
)
|
7.861
|
2.511
|
||||||||||
Exercised during the year
|
(2,972
|
)
|
(3,480
|
)
|
4.447
|
2.296
|
||||||||||
Granted during the year
|
7,366
|
2,919
|
10.017
|
2.538
|
||||||||||||
Restricted stock units assumed in acquisition during the year
|
-
|
415
|
-
|
2.592
|
||||||||||||
Outstanding at December 31
|
8,146
|
3,777
|
8.606
|
2.364
|
NOTE 17: |
SHARE-BASED COMPENSATION ARRANGEMENTS (Cont.)
|
d. |
Performance Stock Units:
|
Number of PSU’s
|
Weighted-Average Grant
Date Fair Value
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(Thousands)
|
||||||||||||||||
Outstanding at January 1
|
3,852
|
5,071
|
2.155
|
2.105
|
||||||||||||
Forfeited during the year
|
(93
|
)
|
(206
|
)
|
2.253
|
2.211
|
||||||||||
Exercised during the year
|
(1,941
|
)
|
(1,738
|
)
|
2.204
|
2.185
|
||||||||||
Granted during the year
|
2,668
|
725
|
9.999
|
2.590
|
||||||||||||
Outstanding at December 31
|
4,486
|
3,852
|
6.796
|
2.155
|
e. |
Expense recognized in the statement of operation and other comprehensive income is as follows:
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
USD thousands
|
||||||||||||
Selling and marketing
|
7,094
|
4,515
|
1,257
|
|||||||||
Research and development
|
3,474
|
555
|
452
|
|||||||||
General and administrative
|
32,250
|
9,420
|
14,100
|
|||||||||
42,818
|
14,490
|
15,809
|
NOTE 18: |
FINANCIAL INSTRUMENTS
|
a. |
Overview:
|
December 31
|
||||||||
2021
|
2020
|
|||||||
USD thousands
|
||||||||
Derivatives presented under current assets
|
||||||||
Forward exchange contracts used for hedging
|
947
|
836
|
||||||
Derivatives presented under non-current assets
|
||||||||
Forward exchange contracts used for hedging
|
241
|
1,335
|
||||||
Total
|
1,188
|
2,171
|
b. |
Risk management framework:
|
NOTE 18: |
FINANCIAL INSTRUMENTS
|
c. |
Credit risk:
|
d. |
Exposure to credit risk
|
December 31
|
||||||||
2021
|
2020
|
|||||||
USD thousands
|
||||||||
Cash and cash equivalents
|
367,717
|
97,463
|
||||||
Trade receivables, net (a)
|
165,063
|
153,544
|
||||||
Other receivables
|
4,076
|
2,379
|
||||||
Long term deposit
|
431
|
499
|
||||||
Long term receivables
|
241
|
1,335
|
||||||
537,528
|
255,220
|
(a) |
At December 31, 2021, the Group included provision for doubtful debts in the amount of USD 13,870 thousand (December 31, 2020: USD 9,036 thousand) in respect of collective impairment provision and specific debtors that their
collectability is in doubt.
|
Allowance for Doubtful debts
|
||||||||
2021
|
2020
|
|||||||
USD thousands
|
||||||||
Balance at January 1
|
9,036
|
22,376
|
||||||
Business combination
|
-
|
1,201
|
||||||
Allowance for doubtful debts expenses
|
4,958
|
(1,091
|
)
|
|||||
Write-off
|
(93
|
)
|
(13,397
|
)
|
||||
Exchange rate difference
|
(31
|
)
|
(53
|
)
|
||||
Balance at December 31
|
13,870
|
9,036
|
e. |
Liquidity risk:
|
NOTE 18: |
FINANCIAL INSTRUMENTS (Cont.)
|
f. |
Market risk:
|
g. |
Sensitivity analysis:
|
2021
|
2020
|
|||||||||||||||
GBP/USD
|
+10%
|
|
-10%
|
+10%
|
|
-10%
|
|
|||||||||
USD thousands
|
||||||||||||||||
Profit / (Loss)
|
(2,587
|
)
|
2,587
|
(2,853
|
)
|
2,853
|
||||||||||
Increase / (Decrease) in Shareholders’ Equity
|
(379
|
)
|
379
|
528
|
(528
|
)
|
2021
|
2020
|
|||||||||||||||
NIS/USD
|
+10%
|
|
-10%
|
|
+10%
|
|
-10%%
|
|
||||||||
USD thousands
|
||||||||||||||||
Profit / (Loss)
|
(721
|
)
|
721
|
(387
|
)
|
387
|
||||||||||
Increase / (Decrease) in Shareholders’ Equity
|
(721
|
)
|
721
|
(387
|
)
|
387
|
NOTE 18: |
FINANCIAL INSTRUMENTS (Cont.)
|
NOTE 19: |
RELATED PARTIES
|
Year ended
December 31
|
||||||||
2021
|
2020
|
|||||||
USD thousands
|
||||||||
Share-based compensation
|
31,283
|
7,061
|
||||||
Other compensation and benefits
|
6,752
|
3,932
|
||||||
38,035
|
10,993
|
NOTE 20: |
SUBSIDIARIES
|
a. |
Details in respect of subsidiaries:
|
The Group’s ownership | ||||||||||
Principal
|
interest |
|||||||||
location of
|
in the subsidiary for the
|
|||||||||
the |
year ended
|
|||||||||
Company’s
|
December 31
|
|||||||||
Name of company | activity | 2021 |
2020
|
|||||||
Taptica Inc
|
USA
|
100
|
%
|
100
|
%
|
|||||
Tremor Video Inc
|
USA
|
100
|
%
|
100
|
%
|
|||||
Adinnovation Inc
|
Japan
|
100
|
%
|
57
|
%
|
|||||
Taptica Japan
|
Japan
|
100
|
%
|
100
|
%
|
|||||
Taptica UK
|
United Kingdom
|
100
|
%
|
100
|
%
|
|||||
YuMe Inc*
|
USA
|
100
|
%
|
100
|
%
|
|||||
Perk.com Canada Inc
|
Canada
|
100
|
%
|
100
|
%
|
|||||
R1Demand LLC*
|
USA
|
100
|
%
|
100
|
%
|
|||||
Unruly Group LLC
|
USA
|
100
|
%
|
100
|
%
|
|||||
Unruly Group US Holding Inc*
|
USA
|
100
|
%
|
100
|
%
|
|||||
Unruly Holdings Ltd*
|
UK
|
100
|
%
|
100
|
%
|
|||||
Unruly Group Ltd
|
UK
|
100
|
%
|
100
|
%
|
|||||
Unruly Media GmbH
|
Germany
|
100
|
%
|
100
|
%
|
|||||
Unruly Media Pte Ltd*
|
Singapore
|
100
|
%
|
100
|
%
|
|||||
Unruly Media Pty Ltd
|
Australia
|
100
|
%
|
100
|
%
|
|||||
Unruly Media KK
|
Japan
|
100
|
%
|
100
|
%
|
|||||
Unmedia Video Distribution Sdn Bhd
|
Malaysia
|
100
|
%
|
100
|
%
|
|||||
Unruly Media Inc
|
USA
|
100
|
%
|
100
|
%
|
|||||
SpearAd GmbH
|
Germany
|
100
|
%
|
0
|
%
|
* |
Under these companies, there are twenty-nine (29) wholly owned subsidiaries that are inactive and in liquidation process.
|
NOTE 20: |
SUBSIDIARIES (Cont.)
|
b. |
Acquisition of subsidiaries and business combinations during the current period:
|
USD thousands
|
||||
Cash and Cash equivalents
|
154
|
|||
Accounts Receivables
|
20
|
|||
Other assets
|
8
|
|||
Fixed Assets
|
1
|
|||
Intangible assets
|
7,275
|
|||
Deferred tax Liabilities
|
(1,504
|
)
|
||
Trade payables
|
(99
|
)
|
||
Other Payables
|
(28
|
)
|
||
Net identifiable assets
|
5,827
|
USD thousands
|
||||
Cash and cash equivalents at SpearAd
|
154
|
|||
Acquisition- Related costs
|
(253
|
)
|
||
Acquisition of subsidiary
|
(99
|
)
|
NOTE 20: |
SUBSIDIARIES (Cont.)
|
USD thousands
|
||||
Consideration transferred
|
11,016
|
|||
Less fair value of identifiable net assets
|
5,827
|
|||
Goodwill
|
5,189
|
c. |
Acquisition of subsidiaries and business combinations during the prior periods:
|
NOTE 20: |
SUBSIDIARIES (Cont.)
|
NOTE 21: |
OPERATING SEGMENTS
|
Year ended
December 31
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
USD thousands
|
||||||||||||
America
|
304,686
|
180,515
|
261,534
|
|||||||||
APAC
|
20,931
|
20,804
|
33,052
|
|||||||||
EMEA
|
16,328
|
10,601
|
31,174
|
|||||||||
Total
|
341,945
|
211,920
|
325,760
|
NOTE 22: |
CONTINGENT LIABILITY
|
a. |
In January 2018, AlmondNet, Inc. and its affiliates (Datonics LLC and Intent IQ) contacted RhythmOne asserting that RhythmOne’s online advertising system infringes eleven U.S. Patents owned by the AlmondNet Group. As of the date of this
report, a claim was never filed and RhythmOne is currently in a commercial agreement with AlmondNet’s affiliate. The Company believes that the likelihood of a material loss is remote but at this point is unable to reasonably estimate any
potential loss and financial impact to the Company resulting from this matter.
|
b. |
On May 18, 2021, the Company filed a complaint against Alphonso, Inc. (“Alphonso”) in the Supreme Court of the State of New York, County of New York (the “Court”), asserting claims for breach of contract, tortious interference with
business relations, intentional interference with contractual relations, unjust enrichment, and conversion.
|
NOTE 22: |
CONTINGENT LIABILITY (Cont.)
|
NOTE 23: |
SUBSEQUENT EVENTS
On February 23, 2022, the Board of Directors approved a share buyback program of up to USD 75 million.
|