Greetings, and welcome to Innovid Q3 2023 earnings call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brinlea Johnson. Thank you, Mrs. Johnson. You may begin. Thank you, operator. Before we begin, I'll remind you that today's call may contain forward-looking statements and that the forward-looking statement disclaimer included in our today's earnings release, available on our investor relations page, also pertains to this call. These forward-looking statements may include, without limitation, predictions, expectations, targets, or estimates regarding our anticipated financial performance, business plans and objectives, future events and developments. Changes in our business, competitive landscape, technological or regulatory environment, and other factors could cause actual results to differ materially from those expressed by the forward-looking statements made today. Our historical results are not necessarily indicative of future performance, and as such, we can give no assurance as to the accuracy of our forward-looking statements and assume no obligation to update them, except as required by law. In addition, today's call will include non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA margins, and Free Cash Flow. We use these non-GAAP measures in managing the business and believe they provide useful information for our investors. These measures should be considered in addition to, and not as a substitute for, our GAAP results. Reconciliations of the non-GAAP measures to their corresponding GAAP measures, where appropriate, can be found in the earnings release available on our website and in our filings with the SEC. Hosting today's call are Zvika Netter, Innovid's co-founder and CEO, as well as Anthony Callini, Innovid's CFO, both who won't participate in our Q&A session. And now I'll turn the call over to Zvika to begin. Zvika, go ahead. Thanks, Brinlea, and thank you all for joining the call today. Before I begin, I would like to thank our teams around the world for their hard work. We reported an excellent quarter and are on track to close out a great year. As many of you know, one of our development teams is located in Israel, and would like to give a special thanks to them for continuing to deliver on track despite the heartbreaking situation in the region. I will start our call with our Q3 results and provide some recent business updates and highlights. I will then turn it over to our newly appointed Chief Financial Officer, Anthony Callini, who will provide further details on our Q3 performance and share updated guidance, followed by Q&A. I am pleased to report we deliver a strong Q3, exceeding our prior guidance for both revenue and Adjusted EBITDA. We are well positioned for continued execution in the Q4 to deliver a solid full year 2023. As a result, we are raising our full year revenue and Adjusted EBITDA guidance and now expect Adjusted EBITDA margins of at least 12%, compared to 10% prior. This is the third consecutive quarter of outperforming our guidance, and I'm proud of the team's ability to execute as we continue to improve financial metrics on all fronts. We remain committed to expanding our margins and positioning ourselves for accelerated growth as the macro environment improves. Looking at the quarter, our Q3 revenue grew 5% year-over-year, and importantly, we more than doubled our Adjusted EBITDA to $6.5 million compared to last Q3. This follows a strong Q2, in which our adjusted EBITDA margin grew from negative 5% in Q2 of 2022 to 13% last quarter. Additionally, as our operation profitability increased, we generated $4.1 million in positive free cash flow this quarter. Our improving bottom line results over the last few quarters demonstrate that our products are profitable at their core. We have a business model where we generate margin expansion, even as we continue to invest in exciting, new and innovative technologies. We have a strong competitive moat and are capitalizing on our inevitable transformation of the market as more and more viewers watch television through CTV. We continue to see more streaming platforms implementing ad-supported offerings. Recently, Amazon Prime Video announced it will join the overall ad-supported CTV trend and will introduce ads into Prime Video next year. This creates huge value for the industry, our partners, and Innovid. There's also been a rapid shift in TV viewership. This quarter, it was widely reported that Linear TV viewership fell below 50% in the U.S. for the first time, which is a major milestone. Even in a world where ad budgets continue to be impacted by the macro environment, we expect that advertising dollars will meaningfully shift to align with eyeballs and time spent on CTV platforms. Innovid CTV revenue from ad serving and personalization grew 9% over last year, outpacing our overall revenue growth. We believe the inertia behind the trend will continue to accelerate, position us to benefit once ad budgets normalize, and we can capitalize on this massive opportunity as more impressions transition to CTV. Another growth driver, Innovid XP, our measurement offering, grew 8% as compared to last year, representing 23% of total revenue in the Q3. We are pleased with the ramp-up in measurement as we continue to cross-sell and extend usage. Growth this quarter was also fueled by significant new customer wins, including Revlon, Fanatics, Bausch Health, and On Running. In addition, existing large publisher partners, such as NBCUniversal, have expanded their commitment for usage of our measurement solutions to help prove the value of their inventory. Turning to our platform, we continue to invest in new functionality to power the future of TV and how brands can reach consumers in new and powerful ways, using the latest breakthroughs in AI technologies. Innovid is a data-rich business that generates an unparalleled CTV data set. This data set is the optimal foundation for sophisticated AI tools that can deliver exceptional value to our clients. I'm excited to announce that we have implemented leading generative AI engines into our platform. Using these AI engines, our clients will be able to generate images, videos, voice-over, and ad copy based on the first and third-party data feeds. Those never-seen-before unique creative ads are then streamed, measured, and optimized by Innovid Platform based on customer set strategies. We have also implemented a natural language query engine into our platform that will allow our clients to gain valuable information and insights about their CTV campaigns via a conversation-like interface. Now, I would like to share with you a few words regarding our 2024 product strategy. Innovid's ability to apply AI algorithms to our ad server data uniquely positions us to optimize CTV ad investments. In October, we launched Instant Optimization, a machine learning solution that empowers converged TV advertisers to immediately improve ad performance. Our Instant Optimization solution goes beyond measurement by intelligently selecting the most impactful creatives to serve at the delivery time. We see considerable opportunity to optimize the CTV market to drive outcomes for lower investments using our proprietary data and technology. We are excited about the momentum we've seen over the last few quarters with increasing revenues, expanding Adjusted EBITDA margins, and improved positive Free Cash Flow. We continue to roll out the valuable product enhancements, sign new clients, and expand our existing partnerships. Although the market has not fully rebounded and we are experiencing different spend levels across our verticals, we are encouraged by the continued shift in viewership from linear to CTV and believe we are well positioned for growth. Once the market normalizes, we expect higher future growth rates and higher profitability margins. As we've demonstrated over the last few quarters, we remain committed to operational execution and expanding margins. We plan to share more about our excitement around 2024, including our product innovation and pipeline, in which CTV performance optimization is the main theme at our upcoming Investor Day on November 30th in New York City. Before I turn the call over to Anthony Callini, our new Chief Financial Officer, I want to thank Tanya for all her contributions to Innovid over the last 11 years. Tanya has been a key pillar in our success to date and has built a strong finance team during her tenure. Tanya, I wish you all the best in your future endeavors. I am excited to welcome Tony to his first Innovid earnings call as our new Chief Financial Officer. Tony has over 20 years of financial experience at leading private and public technology companies. He possesses deep experience in helping growth companies scale in a sustainable way and bring extensive SaaS and enterprise software experience to our team. Tony, welcome to Innovid. Thank you for the warm welcome, Zvika, and good morning, everyone. I'm incredibly excited to join Innovid and be part of this experienced and passionate team. It's only been a few weeks, but the opportunity here is clearly apparent to me. The combination of a growing business, strong secular trends in CTV migration, a leading platform, world-class customers, and a leverageable operating model are all powerful attributes that contribute to creating sustainable long-term value. As you just heard from Zvika, our dedication to driving profitable growth is once again evident in our results. We beat the top end of the revenue guidance range by 3.5% and delivered an adjusted EBITDA margin of 18%, the second straight quarter of EBITDA expansion. Now, let me dig a little more into the numbers. Q3 revenue grew 5% year-over-year to $36.2 million. If we break that down further, ad serving and personalization revenues were up 4% year-over-year, reflecting the continued pressure on ad spend in the broader market. As a reminder, Innovid's ad serving and personalization revenue closely correlates with ad impression volume served through our platform. Within this category, CTV revenue, which comes from ad serving and personalization, increased 9% as more impressions continued to transition to connected TV. Measurement revenue grew 8% as compared to last Q3 as we continued to build out our products to take full advantage of the valuable data set generated from the ad serving side of the business. As a percentage of revenue in Q3, ad serving and personalization made up 77%, while measurement accounted for 23%. A few more comments on the CTV activity this quarter. Q3 CTV revenue, excluding measurement, grew 9% over last year, and CTV video impression volume grew 7%. Additionally, we reached another high point this quarter with 55% of all video impressions coming in via CTV. Mobile volume grew by 8% and represented 35% of all video impressions, while desktop volume decreased by 12% and reflected 10% of all video impressions. Both mobile and desktop have been inconsistent in the first three quarters of 2023, while CTV has continued gaining share of total video impressions and demonstrated constant growth even against the backdrop of the uncertainty in the market. Revenue, less cost of revenue, calculated out to 77% of revenue, improving from 75% in Q3 last year. As the business scales, our margins continue to improve, reflecting the operating leverage embedded in our business model. Now, moving on to expenses. We're pleased to report that we are continuing to see the impact of efficiency efforts and the integration of the TVSquared acquisition, as Q3 total operating expenses, excluding depreciation, amortization, and impairment, totaled $35.8 million, a decrease of 7% from $38.6 million last year. Employee count at quarter end was 460, a 14% decrease compared to the previous year, and resulted in a 16% reduction in compensation expenses, excluding stock-based comp. We remain committed to managing our cost base while protecting investments in high growth areas to drive improved profitability and long-term value creation for our shareholders. Q3 net loss was $2.7 million, or a per share loss of $0.02. The outstanding common share count at the end of the quarter was 140.1 million shares. Adjusted EBITDA was $6.5 million, representing an 18% adjusted EBITDA margin, as compared to just 8% in Q3 last year and 13% in Q2. This improvement reflects the impact of our modest revenue growth, lower cost of revenues as a percentage of revenue, and lower operating costs. We ended Q3 in a strong financial position, with $47.7 million in cash and cash equivalents, and $20 million drawn on our revolving debt facility, with an additional $30 million available on that line. And during the quarter, we generated $4.1 million in positive free cash flow, an improvement of 78% from $2.3 million in Q3 2022. Finally, let me touch on our outlook for the Q4 and the full year 2023. We are confident in the underlying strength of our business and anticipate continued strong financial performance, given recent trends over the last few quarters, as well as early returns thus far in Q4. We expect Q4 total revenue in a range of $35 million-$37 million, representing 4%-10% year-over-year growth. We expect Q4 Adjusted EBITDA in a range of $5.5 million-$7.5 million, as compared to $2.9 million in the Q4 last year. For the full year, we expect revenue of $136 million-$138 million, reflecting 7%-9% annual growth, and Adjusted EBITDA between $16.6 million and $18.6 million, reflecting an Adjusted EBITDA margin of at least 12%. In conclusion, we are proud of the team's work and encouraged by our Q3 results and the momentum we are seeing in the business, even in light of the broader uncertainty across the ad market. We believe we are well positioned to become the essential technology infrastructure for the future of TV advertising and to experience outsized growth as ad spend returns to more historic levels. We remain committed to innovation and value creation for our customers and shareholders. This concludes our prepared remarks. Zvika and I are now happy to take some questions. Operator, please begin the Q&A session. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your questions from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. The first question comes from the line of Andrew Boone with JMP Securities. Please go ahead. Thank you, guys, for taking my question. This is Matt on for Andrew. My first one is just on Instant Optimization. Can you just tell us or frame the opportunity for us, and then also just bring it back to the model, and how can we expect it to influence results, and when? And then, Tony, you know, welcome aboard, and I just wanted to get your thoughts here on your philosophy between growth and profitability and, and what we should expect heading into 2024 here. Thank you. Thanks, Matt. Yes, so you definitely picked on an important topic for us that we worked a lot on this year, but even so, will be a major theme for 2024, and that's pushing forward on optimization. And in a way, closing a flywheel. If you zoom out, you see that we have, you know, the ad server at the core, the key delivery engine that generates massive amount of data. The input into it is creative and campaign strategy. The output is the data, but then, you know, post the acquisition and the release of Innovid XP, our measurement and outcome solution, now we can see the results. So, the next step, which is the big major step, is connecting all these three platforms together, which was done this year to allow to understand based on the output, based on the outcome, right? And all the data that we have that is very unique to us, I think kind of unprecedented outside of the Google universe. This, the data set that we have, is to impact then the campaign strategy, basically to close the loop. And that's where optimization and the heart of it, you know, the AI models that can constantly do that. And the release of Instant Optimization is not just, here are some recommendations, but actually to be able to affect the creative, the messaging, and the campaign strategy in real time. And this is just the initial release. We're definitely looking forward to meet investors and analysts at the end of this month. Our investor day, we're going to actually demo live some of these technology, including some live AI demos, so we'll give a better sense. In terms of opportunity, we think there's a massive opportunity to generate value for our customers and partners. We're not talking yet about, you know, on next year, but this is definitely a path to additional revenue generation, the way we see it, and hence the significant investment. Thanks, Zvika. Hey, Matt, how are you? Yeah, so, you know, here's how I think about the balance between growth and profitability. And I'll tell you, that's really one of the main reasons why this was such an attractive opportunity for me is, you know, the company's done a lot of work over the last year or so to expand margins and at the same time represent some growth, even in a market that's been, you know, challenging just due to some of the macro trends. So, you know, my personal belief is really the best way to create value for shareholders and really all stakeholders, is through sustainable, long-term, profitable growth. I think, you know, we've done the hard work to really set ourselves up for that, and it's nice to see that coming through in the numbers over the last couple of quarters. Even as we look to Q4, and some of the guidance that we gave there, kind of expanding margins, you know, showing higher growth there. So I think as we think forward, we're very mindful of balancing those two things. You know, I do think there's the opportunity for some breakout growth as the market turns around because of our position in the CTV space. But, you know, driving profitability, expanding margins is kind of key, right, to developing out that long-term value for shareholders. So that's kind of my personal thoughts and just views on the company in general and what I've seen here just over a relatively short time. Great. Thank you. Thank you. Next question comes to the line of Shyam Patil with Susquehanna. Please go ahead. Hi, this is Aaron Samuels on for Shyam Patil. Thank you for taking our questions. Maybe first, just on the Q4 guidance, could you unpack a bit what that assumes in terms of the macro and ad environment? Or are you expecting things to generally remain steady from where they were in the Q3, or is that suggesting maybe a little bit of improvement? And also, if you have any color to share on how October looked, just from an ad demand environment, that would be helpful as well. And I have a follow-up as well. Thank you. Yeah, Aaron, I can try to take this, and Zvika can certainly add some color. So, yeah, I mean, I think as we look at Q4, there's, you know, some things that are encouraging to us, and there are some things that, you know, there's still uncertainty in the broader market. So I think the increase in the guidance certainly reflects our confidence that, you know, while we haven't turned a sharp corner and it's not up and to the right yet in terms of the macro, that we're, you know, we're starting to see, you know, some signs. So I would say cautiously optimistic. You know, there's some verticals that are positive. There's some verticals that haven't quite rebounded yet. You know, traditionally, Q4 is where you see a lot of seasonality from a positive tailwinds perspective, that historically the company's seen and didn't see last year. And so, you know, October kind of gives us confidence in terms of our guidance, but we haven't seen November and December, really, that seasonality hits yet. So, trying to balance all of those things. So, you know, a number of different data points, but what I would say is we feel confident enough to be able to increase the guidance the way that we did. Excellent. And then maybe one question for Zvika. I think in the past, we've talked about sort of the big media trends right now being CTV and retail media. Obviously, Innovid has substantial CTV exposure. Can you refresh us on Innovid's exposure to retail media and how you're thinking about that opportunity more broadly? Thank you. Sure. In terms of, you know, with Retail Media, what's unique, of course, it's the data sets. So we have been breaking, though some of the, you know, the large retailers are actually customers of the ad serving data. And, you know, and so we already had the relationship in place. As Retail Media comes in and they become, you know, data platforms and media platforms, they're now on the other side of the equation as partners. Definitely using data to personalize and target, better target, ads that we deliver into those platforms. Measurement is a product that's being used more and more to prove ROI to their customers, and so we have already several partnerships in that space. I believe, and then if we look into the future, that we're gonna see much more, including, the ability to do shoppable ads and, you know, and really closing the loop. If you think about what we talked about, the thesis and our strategy for 2024 for optimization, working with those platforms that you can actually close the loop, so better target, you know, target the messaging, target the audience to a specific product, be able to create a shoppable environment, and then close the loop and see what's working. And based on that, not only execute on retail media, but also execute later in other areas, but use the very unique data sets that those platforms have to understand what's working and what's not working, and then implement this outside of retail media. Absolutely, any data-rich environment and data environment that can give our customers feedback on the outcome is something that can dramatically improve the optimization, which is the key theme here for us for 2024. Great. Thank you very much. Appreciate the answers. Thank you. A reminder to all the participants that you may press star one to ask a question. Next question comes from the line of Shweta Khajuria with Evercore ISI. Please go ahead. Okay, thank you for taking my questions. Could you please comment, just at a high level, what you experience and what you're hearing in terms of brand advertiser sentiment right now? You talked a little bit about October and your confidence in giving and raising the guidance for the Q4, but any more granularity on whether on certain verticals. I know in one of the prior Q4s, you had the auto vertical headwind. So where do you stand now, given the strike versus perhaps CPG or some of the other key verticals, if you could provide some comments. And then have you seen any political spend start to flow in in terms of political advertising, ad serving in the Q4? Thank you. Sure. Thanks, Shweta. So in terms, and as Tony mentioned regarding the Q4, we feel, you know, pretty comfortable in terms of the trend. We have not seen, l ast year, we started seeing it tipping at the end of the Q3. And, of course, this year, quote, unquote, "behaves normal," so it's a surpassed normal. It's definitely there are customers that reduced their spending on brand advertising, on TV advertising. TV advertising declined in general, but what helps, you know, with CTV is the fact that the audience continues to move from linear to CTV, so that keeps pushing the numbers up into the right in terms of viewership. So the budgets, even if a certain brand contracts, you can see increase in their CTV, CTV spend from that perspective. Now, in terms of specific verticals, we're seeing a pretty consistent behavior where some verticals like CPG and pharma continue to invest, I would say, more aggressively compared to others, and we see nice year-over-year growth compared to last year, even compared to the healthy part of last year. And other areas like you know, financial services, insurance companies, technology companies, we are seeing a decrease. Overall, it's a positive, you know, it's still a positive. We're obviously looking forward that all verticals will go up into the right. To your comment on about auto, we're not seeing anything, you know, back, back those days, it was more related to supply and, like, vertical specific dynamics. What we're seeing now is general, you know, economy dynamics, and we're also following closely, you know, some of our largest customers' earnings calls, and they are giving some indication in terms of their spend and investment in marketing, so that helps us. So overall, we feel pretty comfortable about Q4. And overall for next year also, while we're not providing guidance, we're not seeing significant volatility. We're not seeing, you know, sudden extreme decisions by our customers. So that helps us plan both for top line and bottom line. Regarding political ads, on that front, political ads is not an area that we're heavily focused on. It comes and goes, and they tend to be more performance-oriented. We work with, on the measurement side, on the sales side, with publishers, in terms of creative tools, personalization, things like measurement. That's, that's an area that we, we definitely see an uptick in, in, in political revenue. But the, on the, on the, on the brands, quote, unquote, "the brands itself," it's, it's not necessarily usually an area that we heavily invest. Yeah. Okay. Thank you very much. Thank you. Thank you. Next question comes from the line of Shyam Patil with Susquehanna. Please go ahead. Thanks for taking one more question. This is for Tony. Clearly, Innovid's seen some nice margin expansion over this year. I know you're not providing guidance for 2024 at this point, but just wanted to see if there's any additional color you can share about how to think about Innovid's margin profile going forward. Thank you. Yeah, no, no problem at all. Yeah, I mean, obviously, that's something that we give a lot of thought to as well. And I think we've said in the past that we see this business, you know, really being a 30%+ adjusted EBITDA margin business and, you know, continuing to march forward to that. You know, you're right, we haven't talked about 2024 guidance yet. But, you know, this is a scalable model, and the underlying business is profitable. And, you know, as you combine the ad serving CTV with the measurement, you know, that's kind of a nice combination. And as I mentioned before, once we see the market turn, I think, you know, we're gonna be in a position to really grow in a nice way. And with that, you'll see a larger and larger amount of that growth kind of fall through to the bottom line. You know, again, it is a leverageable business model. you know, nice, nice, healthy margins, from, you know, from cost of revenues, as a percentage of revenue. And so, you know, there's no reason why, you know, this shouldn't be a, a healthy grower and a 30%+ margin business. Really helpful. Thank you. And then just one last question. Live sports have become increasingly available through streaming and CTV, and in more and more cases, more exclusively available through those channels. Could you speak about how Innovid may benefit from these trends? And do you view this as a significant driver for CTV viewership growth and maybe an accelerant of the cord-cutting phenomenon? Absolutely. I mean, this is. You nailed it. Sports and live sports are a massive driver of behavior, viewership behavior. And the more rights that are being bought by some of the streaming platforms, and that include, you know, digital, kind of digital native, like Apple and Amazon, Google through YouTube, as long as these are available also on streaming and definitely exclusively on streaming, that is a major driver to get more and more people. The first thing you want to get people is not to cut cable completely or something, is at least get them to start, you know, connecting to the Wi-Fi, running the app, getting comfortable with using that, like moving from an analog phone to a smartphone. Once you're in that smart environment, you're getting installed more and more apps, and really, you're basically getting more users to adopt CTV as a main connected TV as a main viewership platform. So that's one thing. Clearly, sports is where a lot of brand advertising takes place. These are kind of lucrative spots, so our focus is on those larger brands, so they're definitely spenders on that. So that is also helpful. And also, the ability to, you know, better target in real time, as you're going to an ad break, instead of showing the same ad, like a Super Bowl situation to everybody, the ability to, segment the audience, and from a publisher perspective, sell that segment for a higher CPM for the relevant, whether it's, auto intenders or families with kids or toddlers at home, you can imagine how you can generate more revenue by segmenting the audience and sending the right creative to the right, household. And that is impossible to do with live broadcasting. It's absolutely possible to do in streaming. And if you think about it, it requires very unique technology because you're getting like 1 million, you know, or 10 or 100 or 50 million hits, literally the same split second. So this is an area where we heavily invested it. We were partners in the Olympics, and this is something that's extremely exciting for us moving forward. Great. Thank you again. Thank you. There are no further questions at this time. I would now like to turn the floor over to Zvika Netter for closing comments. Thank you all for joining us this morning. I would like to first also thank again our team around the world for exceeding all expectations you know this year and hopefully moving forward as you know in this challenging environment from different reasons. I'm really excited, as we just spoke about sports, I'm really excited about all the opportunities ahead as more and more inventory is moving to television streaming, and we can generate more value to our advertisers and partners. I'd like to highlight and remind you all about our Investor Day, coming up later this month on November 30, where we're going to present more of our products, more of our teams, our business strategy. In order to get more information and register for that, you can email us at investors@innovid.com. Looking forward to see you all there. Have a great day. Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.