Innovid Reports Q4 and Fiscal Year 2022 Financial Results
Innovid Corp. (NYSE: CTV) announced a robust fourth quarter, reporting revenue of $33.7 million, a 30% increase year-over-year. The Q4 net loss improved to $(3.4) million, and adjusted EBITDA reached $3.0 million, yielding a 9% margin. For FY 2022, revenue totaled $127.1 million, up 41% from 2021, with a net loss of $(18.4) million, worsening from $(11.5) million in 2021. CTV revenue surged 24% year-over-year, representing 48% of total revenue. Looking ahead, Q1 2023 revenue guidance is $27-$29 million, with adjusted EBITDA expected to be negative.
- Q4 revenue growth of 30% YoY to $33.7 million
- Adjusted EBITDA increased to $3.0 million with a 9% margin
- FY 2022 revenue grew by 41% to $127.1 million
- Strong client growth of 60% YoY and retention rate of 90% in FY 2022
- CTV revenue grew 24% YoY, making up 48% of total revenue
- Net loss increased to $(18.4) million in FY 2022, worse than $(11.5) million in 2021
- Q1 2023 adjusted EBITDA guidance is negative, forecasted between $(3) million and $(1) million
- Reports Q4 revenue grew to
$33.7 million 30% year-over-year - Reports Q4 net loss improved to
$3.4 million $3.0 million 9% adjusted EBITDA margin* - CTV accounted for
51% of all video impressions in FY 2022, up from46% in FY 2021
"We delivered a strong fourth quarter and are pleased with the strategic progress we've made during our first full year as a public company, despite a more challenging recent market backdrop," said
Fourth Quarter 2022 Financial Summary
- Revenue increased to
$33.7 million 30% on an as-reported basis versus the same period in 2021. - Measurement contributed
$7.5 million 16% on a pro forma basis, representing22% of revenue. - CTV revenue, excluding TVSquared, grew to
$13 million 13% year-over-year, representing49% of total revenue. - Net loss improved to
$(3.4) million $(7.6) million - Adjusted EBITDA* increased to
$3.0 million $1.8 million - Cash and cash equivalents and short-term bank deposits as of
December 31, 2022 were$47.5 million
Full Year 2022 Financial Summary
- Revenue was
$127.1 million 41% on an as-reported basis versus the same period in 2021. - Measurement contributed
$25.2 million 26% on a pro forma basis, representing20% of revenue. - CTV revenue, excluding TVSquared, was
$50 million 24% year-over-year, representing48% of total revenue, up from45% in 2021. - Net loss was
$(18.4) million $(11.5) million - Adjusted EBITDA* was
$1.2 million $5.4 million
Recent Business Highlights
- Connected TV (CTV) revenue, excluding TVSquared, grew
24% year-over-year in 2022, and represented48% of our total FY 2022 revenue (up from45% in FY 2021) and51% of all FY 2022 video impressions (vs.46% in FY 2021). CTV growth continues to outpace the overall advertising market. - Our customers view
Innovid's software platform as mission-critical infrastructure, evidenced by strong FY 2022 core client growth (+60% YoY), high core client retention (90% in FY 2022), and impressive net revenue retention (111% in 2022). - Recent wins and cross-sells include
Canva ,Goodway Group ,CMI Media (part of WPP), and partnerships with Fox and TheTradeDesk. We added and expanded client relationships and deepened cross-selling efforts across our delivery, personalization, and measurement capabilities, closing new deals with partners in multiple key verticals.
Financial Outlook
- Q1 2023 Revenue in a range between
$27 million $29 million - Q1 2023 Adjusted EBITDA in a range between
( and$3) million ( .$1) million - FY 2023 Revenue similar to FY 2022.
- FY 2023 Adjusted EBITDA* positive for the full year, Adjusted EBITDA margin* to improve year-over-year.
*See Use of Non-GAAP Financial Information and Reconciliation of GAAP to Non-GAAP Financial Measures table.
Conference Call
The Company will host a conference call and webcast to discuss fourth quarter and full year 2022 financial results today at
Non-GAAP Measures and Certain Operational Metrics
The non-GAAP financial measures that
Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under GAAP. Some of the limitations of Adjusted EBITDA are:
- It does not reflect changes in, or cash requirements for, our working capital needs;
- It does not reflect our capital expenditures or future requirements for capital expenditures or contractual commitments;
- they do not reflect costs of acquiring and integrating businesses, which will continue to be a part of our growth strategy;
- they do not reflect one-time, non-recurring, bonus costs and third party costs associated with the SPAC merger transaction and regulatory filings;
- It does not reflect income tax expense or the cash requirements to pay income taxes;
- It does not reflect our interest expense or the cash requirements necessary to service interest or principal payments on our debt; and
- Although depreciation and amortization are non-cash charges related mainly to intangible assets, certain assets being depreciated and amortized will have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.
Innovid has provided a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP measure, for historical period in the appendix hereto but is not able to provide a reconciliation of the projected adjusted EBITDA to expected net income (loss) attributable to Innovid for the first quarter of 2023 or the full-year 2023, without unreasonable effort, due to the unknown effect, timing, and potential significance of the effects of taxes on income in multiple jurisdictions, finance expenses including valuations, among others. These items have in the past, and may in the future, significantly affect GAAP results in a particular period.
We define a core client as an advertiser or publisher that generates at least
Forward Looking Statements
This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1996. The Company's actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," "aim," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company's expectations regarding its future financial results, expected growth and the expected benefits resulting from its partnerships. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results, including
About
Contacts
Investor Contact:
Head of Investor Relations
IR@innovid.com
Media Contact:
chris@crenshawcomm.com
CONSOLIDATED BALANCE SHEETS (In thousands, except stock and per stock data)
| |||
2022 | 2021 | ||
ASSETS | |||
Cash and cash equivalents | $ 37,541 | $ 156,696 | |
Short-term bank deposit | 10,000 | — | |
Trade receivables, net of reserves of | 43,653 | 35,422 | |
Prepaid expenses and other current assets | 2,640 | 3,131 | |
Total current assets | 93,834 | 195,249 | |
Long-term deposit | 277 | 310 | |
Long-term restricted deposits | 430 | 462 | |
Property and equipment, net | 14,322 | 4,840 | |
116,976 | 4,555 | ||
Operating lease right of use asset | 2,910 | — | |
Intangible assets | 29,918 | — | |
Other non-current assets | 938 | 116 | |
Total non-current assets | $ 165,771 | $ 10,283 | |
TOTAL ASSETS | $ 259,605 | $ 205,532 | |
LIABILITIES AND STOCKHOLDER' EQUITY | |||
Trade payables | 3,361 | 5,026 | |
Employee and payroll accruals | 10,165 | 7,742 | |
Current portion of long-term debt | — | 6,000 | |
Lease liabilities - current portion | 2,186 | — | |
Accrued expenses and other current liabilities | 5,474 | 3,082 | |
Total current liabilities | 21,186 | 21,850 | |
Long-term debt | 20,000 | — | |
Lease liabilities - non-current portion | 1,636 | — | |
Other non-current liabilities | 6,554 | 3,455 | |
Warrants liability | 4,301 | 18,972 | |
Total non-current liabilities | 32,491 | 22,427 | |
TOTAL LIABILITIES | 53,677 | 44,277 | |
COMMITMENTS AND CONTINGENT LIABILITIES | |||
STOCKHOLDERS' EQUITY: | |||
Common stock of | 13 | 12 | |
Additional paid-in capital | 356,801 | 293,719 | |
Accumulated deficit | (150,886) | (132,476) | |
TOTAL STOCKHOLDERS' EQUITY | 205,928 | 161,255 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 259,605 | $ 205,532 | |
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except stock and per stock data)
| |||||||
Three months ended, December, 31 | Year ended | ||||||
(Unaudited) | (Unaudited) | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Revenues | $ 33,698 | $ 25,967 | $ 127,117 | $ 90,291 | |||
Cost of revenues (1) | 8,376 | 5,339 | 30,187 | 17,698 | |||
Research and development (1) | 6,842 | 7,601 | 31,118 | 24,299 | |||
Sales and marketing (1) | 11,869 | 9,475 | 50,266 | 32,841 | |||
General and administrative (1) | 8,688 | 10,080 | 39,144 | 20,641 | |||
Depreciation, amortization and impairment | 2,662 | 174 | 6,143 | 661 | |||
Operating loss | (4,739) | (6,702) | (29,741) | (5,849) | |||
Finance expenses (income), net | (2,693) | 508 | (13,348) | 4,386 | |||
Loss before taxes | (2,046) | (7,210) | (16,393) | (10,235) | |||
Taxes on income | 1,383 | 408 | 2,017 | 1,237 | |||
Net loss | (3,429) | (7,618) | (18,410) | (11,472) | |||
Accretion of preferred stock to redemption value | — | (24,070) | — | (77,063) | |||
Net loss attributable to common stockholders | $ (3,429) | $ (31,688) | $ (18,410) | $ (88,535) | |||
Net loss per stock attributable to common stockholders (2) – | |||||||
Basic and diluted | $ (0.03) | $ (0.59) | $ (0.14) | $ (3.31) | |||
Weighted-average number of stocks used in computing net loss per stock attributable to common stockholders (2) – | |||||||
Basic and diluted | 133,687,918 | 53,898,933 | 130,756,484 | 26,745,020 | |||
STATEMENTS OF CHANGES IN TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT) (In thousands, except stock data)
| |||||||||||||||||
Temporary equity | Common stocks | Additional | Accumulated deficit | Total stockholders' equity (deficit) | |||||||||||||
Number | Amount | Number | Amount | Number | Amount | ||||||||||||
Balance as of | 73,690,340 | $ 86,997 | 16,275,609 | $ 2 | 1,914,328 | $ (1,629) | $ 10 | $ (48,113) | $ (49,730) | ||||||||
Accretion of preferred stocks to redemption value | — | 77,063 | — | — | — | — | (4,172) | (72,891) | (77,063) | ||||||||
Conversion of redeemable convertible preferred stock into common stock | (73,690,340) | (164,060) | 73,690,340 | 7 | — | — | 164,053 | — | 164,060 | ||||||||
Reverse recapitalization, net | — | — | 25,154,340 | 3 | (1,914,328) | 1,629 | 124,394 | — | 126,026 | ||||||||
Conversion of Legacy Innovid Warrants | — | — | 507,994 | * | — | — | 5,080 | — | 5,080 | ||||||||
Warrant exercised** | — | — | 132,392 | * | — | — | — | — | — | ||||||||
Stock-based compensation | — | — | — | — | — | — | 3,273 | — | 3,273 | ||||||||
Stock options exercised | — | — | 3,256,705 | * | — | — | 1,081 | — | 1,081 | ||||||||
Net loss | — | — | — | — | — | — | — | (11,472) | (11,472) | ||||||||
Balance as of | — | $ — | 119,017,380 | $ 12 | — | $ — | $ 293,719 | $ (132,476) | $ 161,255 | ||||||||
Common stock and equity awards issued for acquisition of TVS | — | — | 11,549,465 | 1 | — | — | 47,151 | — | 47,152 | ||||||||
Stock-based compensation | — | — | — | — | — | — | 14,945 | — | 14,945 | ||||||||
Stock options and RSUs exercised | — | — | 3,315,569 | * | — | — | 986 | — | 986 | ||||||||
Net loss | — | — | — | — | — | — | — | (18,410) | (18,410) | ||||||||
Balance as of | — | $ — | 133,882,414 | $ 13 | — | $ — | $ 356,801 | $ (150,886) | $ 205,928 | ||||||||
* Represents an amount less than ** The warrant was exercised in
| |||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, except stock and per stock data)
| |||
Year ended | |||
2022 | 2021 | ||
Cash flows from operating activities: | |||
Net loss | $ (18,410) | $ (11,472) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation, amortization and impairment | 6,143 | 661 | |
Stock-based compensation | 13,781 | 3,273 | |
Change in fair value of warrants | (14,671) | 762 | |
Founders notes forgiven | — | 459 | |
Transaction costs allocated to warrants | — | 2,750 | |
Changes in operating assets and liabilities | |||
Increase in trade receivables, net | (4,045) | (618) | |
(Increase)/ decrease in prepaid expenses and other assets | 755 | (1,823) | |
Decrease in operating lease right of use assets | 1,831 | — | |
Increase/ (decrease) in trade payables | (622) | 1,500 | |
Increase in employees and payroll accruals | 1,710 | 1,236 | |
Decrease in operating lease liabilities | (2,335) | — | |
Increase in accrued expenses and other liabilities | 4,302 | 851 | |
Net cash used in operating activities | (11,561) | (2,421) | |
Cash flows from investing activities: | |||
Acquisitions of businesses, net of cash acquired | (99,097) | — | |
Internal use software capitalization | (9,961) | (2,594) | |
Purchase of property and equipment | (488) | (549) | |
Founders' note receivable | — | (459) | |
Proceeds from sale of property and equipment | — | — | |
Change in short-term bank deposit | (10,000) | — | |
(Increase)/ decrease in other deposits | 120 | (85) | |
Net cash used in investing activities | (119,426) | (3,687) | |
Cash flows from financing activities: | |||
Proceeds from reverse recapitalization, net* | — | 149,252 | |
Proceeds from loans | 14,000 | — | |
Loan repayment | — | (3,033) | |
Repayment of acquisition liability | — | (126) | |
Payment of SPAC merger transaction costs | (3,185) | — | |
Proceeds from exercise of options | 985 | 1,081 | |
Net cash provided by financing activities | 11,800 | 147,174 | |
(Decrease) increase in cash, cash equivalents and restricted cash | (119,187) | 141,066 | |
Cash, cash equivalents and restricted cash at the beginning of the year | 157,158 | 16,092 | |
Cash, cash equivalents and restricted cash at the end of the year | $ 37,971 | $ 157,158 | |
Supplemental disclosure of cash flows activities: | |||
(1) Cash paid during the year for: | |||
Income taxes paid, net of tax refunds | $ 785 | $ 535 | |
Interest | $ 675 | $ 259 | |
(2) Non-cash transactions: | |||
Conversion of redeemable convertible preferred stock into common stock | $ — | $ 164,060 | |
Conversion of Legacy Innovid Warrants | $ — | $ 5,080 | |
Accrued acquisition liability | $ — | $ — | |
Accretion of preferred stocks to redemption value | $ — | $ 77,063 | |
Accrued transaction cost, not yet paid | $ — | $ 3,185 | |
Business combination consideration paid in stock | $ 47,152 | $ — | |
Reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position | |||
Cash and cash equivalents | $ 37,541 | $ 156,696 | |
Long-term restricted deposits | 430 | 462 | |
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ 37,971 | $ 157,158 | |
Key Metrics and Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S. GAAP, we believe that certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA Margin, are useful in evaluating our business. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenue. The following table presents a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to the most directly comparable financial measure prepared in accordance with GAAP.
Three months ended | Year ended | |||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | ||||
Net loss | $ (3,429) | $ (7,618) | $ (18,410) | $ (11,472) | ||||
Net loss margin | (10.2) % | (29.3) % | (14.5) % | (12.7) % | ||||
Depreciation, amortization and impairment (a) | 2,662 | 174 | 6,143 | 661 | ||||
Stock-based compensation | 3,826 | 962 | 13,878 | 3,273 | ||||
Finance expense (income), net (b) | (2,693) | 508 | (13,348) | 4,386 | ||||
Transaction related expenses (c) | 1 | 7,200 | 393 | 7,200 | ||||
Acquisition related expenses (d) | — | 161 | 4,971 | 161 | ||||
Retention bonus expenses (e) | 862 | — | 3,152 | — | ||||
Legal claims | 407 | — | 1,506 | — | ||||
Other (f) | 9 | — | 923 | — | ||||
Taxes on income | 1,383 | 408 | 2,017 | 1,237 | ||||
Adjusted EBITDA | $ 3,029 | $ 1,795 | $ 1,225 | $ 5,446 | ||||
Adjusted EBITDA margin | 9.0 % | 6.9 % | 1.0 % | 6.0 % | ||||
(a) In third quarter, 2022, the Company recorded impairment charges of (b) Finance expense (income), net consists mostly of remeasurement related to revaluation of our warrants, remeasurement of our foreign subsidiary's monetary assets, liabilities and operating results, and our interest expense. In a prior period it also included transaction costs allocated to warrants (c) Transaction related expenses consist of one-time, non-recurring bonus payments to certain members of management, professional fees associated with the SPAC merger transaction and (d) Acquisition related expenses consists of professional fees associated with the acquisition of TVS (e) Retention bonus expenses consists of retention bonus for TVS employees (f) Other consists predominantly of exit costs for a former TVS employees | ||||||||
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