2022 IR Newsletter
Hello everyone,
We are pleased to bring you the latest edition of our IR Newsletter which highlights recent Company releases, news stories and interviews we’ve been featured in, events at which we participated, awards and recognition we received, and product updates, enabling you to stay up to date on the Tremor International story and the evolution of our business. Please note, all financial information related to Tremor International in this newsletter refers to results we’ve generated and disclosed through the first nine months of 2022.
During 2022 we achieved several major milestones and executed on critical steps towards realizing our long-term strategic vision of becoming the leading end-to-end video- and Connected TV-focused digital advertising technology platform, powered by unique TV data.
First, the Company continued to expand its robust market share within Connected TV (CTV). CTV is one of digital advertising’s fastest growing subsegments, which eMarketer predicts will grow at an approximately 22% CAGR over the next several years. As of the end of Q3 2022, video including CTV accounted for over 80% of our net revenues, which we believe indicates that we have placed our focus and emphasis on the correct verticals to capitalize on future growth opportunities within the industry. During our latest earnings release on November 14th, we announced that CTV spend on our platform grew to a Q3 record of approximately $73 million in the quarter, which reflected a 45% year-over-year increase. For the first nine months of 2022, CTV spend grew to a record of approximately $184 million, which reflected a 33% increase from the same prior year period.
Remarkably, the Company was able to achieve this market share expansion within CTV while maintaining its core focus on achieving strong profitability and robust cash flow generation, which we find to be especially prudent during periods of challenging macroeconomic conditions. During Q3 2022, we generated an adjusted EBITDA margin of 46% and, for the first nine months of 2022, we generated an adjusted EBITDA margin of 50% (both of which reflect percentages of net revenues). For both the three and nine months ended September 30, 2022, we also achieved 99% free cash flow conversion.
We believe this ability to generate strong profitability and cash flow also positioned us to acquire Amobee (the largest acquisition in Company history) and invest in VIDAA, a smart TV operating system and subsidiary of Hisense, all while repurchasing a substantial number of shares at, what we believe to be, discounted valuation levels.
During Q3 2022, we closed our acquisition of Amobee for $239 million (as adjusted), creating one of the largest end-to-end CTV- and Video-focused platforms in the market. The acquisition drives significant additional financial scale, advertising demand, and buying power to our platform, and dramatically expands our global customer base and talent footprint. In addition, we believe the acquisition substantially enhances our enterprise self-service DSP, data, and omnichannel capabilities while creating a new ability to partner with, and sell into, linear TV broadcasters, opening a much larger addressable market. The combination of Amobee’s Advanced TV planning technology, Tremor’s strength within CTV, and our in-house SSP, Unruly, will enable broadcasters and advertisers to plan campaigns across linear and digital simultaneously. We believe this is a unique, differentiated, and game-changing technology that solves a significant problem for customers who are seeking guidance and assistance navigating the ongoing convergence between linear TV and CTV.
As we work towards fully integrating Amobee (a process we expect to be largely completed by the end of H1 2023), we intend to continue focusing on cross-selling complementary DSP capabilities between the Tremor Video and Amobee DSPs, strategically shifting advertiser spend on Amobee’s DSP to acquire media from the Unruly SSP as well as making inroads and “landing and expanding” with linear TV broadcasters to assist them with linear planning, cross-planning, and their digital assets. As we indicated in our Q3 earnings release, we increased our initially anticipated total annualized operating cost synergy forecast attributable to the acquisition from $50 million to $65 million. We increased this guidance after we were able to turn the segments we acquired from Amobee positive on an adjusted EBITDA basis within the first three weeks of closing the acquisition, furthering our proven track record of successfully acquiring and quickly integrating companies.
In Q3 2022 we also completed our strategic $25 million investment in VIDAA. Through the investment, we gained an equity stake in VIDAA, extended the exclusive global agreement to share VIDAA’s ACR data for global measurement and targeting across our end-to-end platform, and VIDAA granted Unruly ad monetization exclusivity in the US, UK, Canada, and Australia. We are excited about this investment for both Tremor and its customers for several reasons.
According to Comscore, Hisense (which also controls the Toshiba smart TV brand) as of February 2022 was one of the fastest-growing major smart TV OEM brands and accounted for an approximately 10% share of the US smart TV OEM market (including Toshiba’s reach). Hisense during Q2 2022 also rose to number two globally in terms of worldwide volume share of shipment (according to Omdia). As VIDAA and Hisense’s reach continues to grow, we believe the desirability of our ACR data footprint will increase for advertisers, other ad tech companies, and streaming providers. Streaming services, for example, can see what viewers watch on their platforms but not what is viewed outside of those platforms on the connected TV, creating data gaps which ACR data can help fill. As AVOD continues to grow in popularity, and as other major OEMs monetize ACR data in-house (similar to a walled garden), we believe the investment in VIDAA will prove to be a differentiator and value-add for Tremor and its global customers seeking solutions within the open internet.
Additionally, as VIDAA and Hisense continue to pursue content and sports sponsorship opportunities, we believe Tremor remains strongly positioned to provide desirable, exclusive, and unique advertising opportunities for its customers due to Unruly’s ad monetization exclusivity in key markets. We believe the FIFA World Cup in Qatar was the first proof-of-concept for Tremor around the opportunity created by partnering with smart TV operating systems, content providers, major sports organizations, and smart TV OEMs to create a unique viewer and advertiser experience. We also expect additional exclusive sports-related content opportunities through our relationship with VIDAA and Hisense in the future.
Even as we successfully completed a $239 million strategic acquisition and $25 million investment, we were also able to opportunistically invest in our own shares at discounted valuations to generate what we believe will be long-term value for our shareholders. During Q3 2022, we completed our $75 million ordinary share repurchase program and subsequently launched an additional new $20 million ordinary share repurchase program, which is still ongoing.
Finally, in 2022 we continued to garner powerful industry recognition while winning several major technology awards. For example, in Q2 2022, Tremor Video and Tr.ly were proud to have been awarded the Digiday 2022 Content Marketing Award for Best Use of Data for a campaign produced for Pure Michigan, the state’s tourism bureau. Additionally, Tremor International was selected by AdExchanger as one of its Top 50 Programmatic Power Players. More recently, during Q4 2022, Tremor International’s DSP, Tremor Video, and SSP, Unruly, were named 2022 Digiday Technology Award winners for Best Buy-Side Programmatic Platform and Best Sell-Side Programmatic Platform, respectively.
We celebrated several incredible operational achievements in 2022 that further enhanced the Company’s ability to offer unified customer solutions across planning, activation, data, and media, and we remain excited for the future. As customers seek to continue consolidating spend and budgets with fewer trusted platforms and partners that can solve multiple needs across their entire workflow, generate enhanced returns through the incorporation of differentiated data solutions, and enable them to achieve cost-savings, we feel more confident than ever in our positioning within the industry, long-term strategy, and core strategic focuses.
We hope you find this newsletter to be helpful and, as always, if you have any questions, any feedback, or if you’re interested in connecting with the investor relations team or management, please reach out to ir@tremorinternational.com. Please also feel free to sign up for email alerts regarding important Tremor International news, filings, or upcoming events Here.
This newsletter, as well as additional investor-centric information, can also be accessed on our investor relations website at https://investors.tremorinternational.com
Thank you!
Tremor International Investor Relations
Tremor International Third Quarter 2022 Earnings Webcast
Tremor Participates in Needham’s 2023 Growth Conference
Tremor Presents at Raymond James’ 2022 Technology Investors Conference
Tremor Participates in RBC’s 2022 Global Technology, Internet, Media, and Telecom Conference
Tremor International Announces Definitive Agreement to Acquire Amobee
Tremor’s Amobee Acquisition Creates New Opportunities: CEO Druker
Sports Programming Highlights Need for Better Ad Currency: Unruly’s Steven Sottile
Tremor International Reports Results for the Third Quarter and Nine-Month Period Ended September 30, 2022
Tremor Video and Unruly, Tremor International’s DSP and SSP, Win 2022 Digiday Technology Awards for Best Buy-Side and Sell-Side Programmatic Platform
Tremor International Announces $20 Million Share Repurchase Program
Tremor International Announces Closing of Strategic $25 Million Investment in VIDAA
Tremor International Announces Closing of Amobee Acquisition
Tremor International Hires Chance Johnson, Increasing Focus on Enterprise Partnerships
Tremor International Produces In-Depth Forecast of 2022 FIFA World Cup Viewership Trends
Wpromote Selects Unruly as a Preferred SSP
Unruly Partners with NewsGuard to Provide Advertisers with Robust Brand Safety Measures
Big Tech in the Game of Live Sports: The Impact for Consumers and Brands (from New York Advertising Week)
Roads for Monetization are Clearer with CTRL Deal Forecasting
WTF is in the CTV tech stack?
Tremor Video and Unruly, Tremor International's DSP and SSP, Win 2022 Digiday Technology Awards for Best Buy-Side and Sell-Side Programmatic Platform
Tremor International Recognized as a Top 50 Programmatic Power Player for 2022 by AdExchanger
During H2 2022, we made several DSP platform enhancements to bolster our insights, targeting and workflow improvements including:
- DSP List Page Analytics – Allows DSP users to view performance trends of their campaigns and spend broken out by IO, Package and Line Item. This feature helps users compare metrics across multiple placements for quick and easy campaign optimizations.
- DSP All Deals Management Page - Allows DSP users to view all available deals in one centralized location to streamline campaign set up.
- DSP Scheduled Power Edit – Allows DSP users to schedule in advance, at their convenience, when campaign edits take place.
- DSP Creative Bulk Upload Universal Template – Streamlines the Creative upload process for DSP users for display, video, and audio files.
- DSP Bulk Edit Updates – Allows DSP users to edit multiple packages and line items simultaneously to expedite campaign set up.
- DSP LiveRamp RampID Retargeting – DSP users can collect website data and leverage RampIDs to retarget users within the platform. Previously, website data collection was dependent on cookie-based pixels, so this option provides a targeting alternative once cookies are deprecated.
We also strengthened our measurement solutions by partnering with leading third-party vendors Swoop and Catalina to inform in-flight optimizations, maximize campaign performance, and increase ROI.
Our H2 2022 supply-side platform enhancements focused on improving publisher usability and enhancing deals capabilities in our self-service platform including:
- Publisher Account: Payment History – Publishers can now view payment history from 2019 onward, providing transparency for payments received from Unruly.
- Unruly CTRL UI Improved User Controls – A series of updates for improved usability and upgraded capabilities for publishers were released including:
- Publisher Deals Forecast – A self-service tool that gives publishers the ability to forecast request volume for all targeting available in CTRL Inventory Packages. This allows publishers to maximize revenue opportunities, increase efficiency and gain actionable insights.
- CTRL Deals Dayparting – Gives publishers the ability to select multiples time ranges per day, this feature supports live sports content that runs across days.
- More flexibility and control when creating Inventory Packages:
- Select All – The ability to 'Select All' gives users a broader range of options about linking ad placements when creating/editing Inventory Packages.
- Search by ID – Users can search by Inventory Package ID providing increased options from the only previous option of searching by package name.
- Continued expansion of the CTRL suite of targeting capabilities:
- Content Channel and Network Targeting – Added Channel and network content-level targeting capabilities to provide a more TV-like buying experience for advertisers.
- Audience Targeting – Publishers can layer pre-defined curated audiences based on demo, interest, and TV viewing behaviors on PMP deals giving publishers more opportunities to target audiences that are important to their buyers.
AdExchanger - How Tremor International Is Using Amobee to Boost Its Programmatic Supply
VIDAA - VIDAA Brings Global Football Content to Google TV™ and Other Android TV™ OS Devices Globally
Next TV - World Cup Coup: Google TV and Android TV Devices Get Access to FIFA+ App Via VIDAA Deal
Digiday - How FIFA World Cup Fans Engage is Changing and Brands are Paying Attention
Digiday - How Marketers are Tailoring Data-driven Creative to Engage Audiences on CTV
Digiday - How Brands are Planning Holistic TV Campaigns to Maximize Effectiveness in 2023
AdExchanger - Streaming Sports is in Desperate Need of Standardized Measurement
ExchangeWire - The Power and Potential of CTV - Q&A with Steve Broadhead, Unruly
Video Week - Viewers Are Settling Into the AVOD Trade-Off
AdExplainer - Data-Driven Linear Vs. Addressable TV
Ad News - Outlook 2023 - Adtechs Prioritise Privacy, Programmatic and Personalisation
Digiday - How Programmatic is Bridging the Gap between Linear and CTV/OTT in 2023
This IR Newsletter contains forward-looking statements, including forward-looking statements within the meaning of Section 27A of the United Stated 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 Tremor identifies forward-looking statements. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding the anticipated financial results for Q4 2022, full year 2022, and full year 2023; anticipated benefits of Tremor’s strategic transactions and commercial partnerships; anticipated features and benefits of Tremor’s products and service offerings; Tremor’s positioning for continued future growth in both the US and international markets in the fourth quarter of 2022 and beyond; Tremor’s implementation of a substantial share repurchase while also continuing to evaluate strategic opportunities to acquire companies and invest in technology, products, sales and marketing to further expand its platform; Tremor’s medium- to long-term prospects; management’s belief that Tremor is well-positioned to benefit from anticipated future industry growth trends and Company-specific catalysts; the potential negative impact of inflationary pressures, rising interest rates, geopolitical and macroeconomic uncertainty, recession concerns, and the widespread global supply chain issues that have limited advertising activity and the anticipation that these challenges could continue to have an impact for the remainder of 2022 and beyond; the anticipated impact of the FIFA World Cup on Tremor’s anticipated performance; the anticipated benefits from the Company’s investment in VIDAA and its enhanced strategic relationship with Hisense; the anticipated benefits and synergies from the Amobee acquisition and ability of Tremor to continue to recognize those synergies; Tremor’s ability to continue to execute on cross-selling opportunities and its introduction of new technology products to a significantly larger customer base and addressable market; the timing to complete the technology integration of Amobee, as well as any other statements related to Tremor’s future financial results and operating performance. These statements are neither promises nor guarantees but involve known and unknown risks, uncertainties and other important factors that may cause Tremor'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, potential negative developments in the COVID-19 pandemic and how those developments may adversely impact Tremor’s business, customers and the markets in which Tremor competes, changes in industry trends, the risk that Tremor will not realize the anticipated benefits of its acquisition of Amobee and strategic investment in VIDAA, including as a result of an inability to integrate Amobee’s business effectively and efficiently into Tremor, other negative developments in Tremor's business or unfavourable legislative or regulatory developments. Tremor 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 Tremor’s most recent Annual Report on Form 20-F, which was filed with the U.S. Securities and Exchange Commission (www.sec.gov) on March 15, 2022. Any forward-looking statements made by Tremor in this IR Newsletter speak only as of the date of this IR Newsletter, and Tremor does not intend to update these forward-looking statements after the date of this press release, except as required by law.
Tremor, and the Tremor logo are trademarks of Tremor 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 press release does not mean a legal partner or legal partnership.