All right, we are going to get started. Thank you all for coming. I'm Maria Ripps, internet analyst here at Canaccord Genuity, and it's my pleasure to introduce Tony Callini, Innovid's Chief Financial Officer, and Guy Kuperman, Chief Strategy Officer. Gentlemen, thank you so much for joining us today. Yeah. Thank you for having us. Thank you for having us. Awesome. So perhaps, we could start with an overview of your platform, which employs a model that is open access, independent, and purpose-built for CTV. Where does the company sit sort of in the ad tech stack, and how do you create value for advertisers, publishers, and then everyone else in the ecosystem? Sure, sure. And thank you again for having us, and hi, everyone, it's great to see you. Innovid is an enterprise software that is sold mostly to large brands, Fortune 500s, brands and/or their agencies, and our software is doing four key things. One is we provide creative technology, so you can take a TV ad that was shot, and then through technology amplify it, make it better with the use of data and interactivity and others. So that's creative technology. We have an ad server, an ad delivery mechanism that's a critical infrastructure in our industry. The fact that we are making sure that the ads that are being filmed in the connected television could go from the brand that is shooting the ad to the entire very fragmented, connected television universe, and we can touch about it more, as we speak. Third piece of that is measurement. We provide measurement tools for our brands. And lastly, it's optimization. This is a relatively new product for us, but with those four modular and integrated offering, we sell an enterprise software suite to brand and agencies. Unlike many other companies in the advertisement technology space, we don't buy or sell media. We don't participate in the media game. If you're familiar with our industry, we're not a DSP or SSP, we're not a demand-side platform, a sell-side platform, we're a pure enterprise software. Everything we do is license our software through different business models. Great. So let's talk about sort of the broader CTV opportunity, where sort of advertiser spend is growing at a pretty nice pace. What are some of the key growth drivers over the next few years, and how much of this expected growth is predicated on sports moving to CTV? Yeah, that's a great question. So what is happening today is that viewers are changing their behavior. They're moving from watching linear TV, watching channels, to watching streaming content and streaming apps and streaming devices, right? So we're spending more time with Netflix, with Amazon Prime Video, with Peacock now, with the Olympics and others, with Hulu and Roku and such. As we are spending more time with that, advertisers need to be where the viewers are, right? So they need to be where the eyeballs are, and hence they're shifting their budgets from linear to CTV. We are seeing several tailwinds when it comes to CTV consumption. One is that more platforms that used to be subscription-based, such as Netflix and Amazon Prime, are introducing ad tier options to their viewers, and hence, the amount of inventory in the market is expected to go up with more players. And to your point, Maria, live sports is a big portion of that. So we're seeing more and more live sports rights shifting from linear to connected television, to streaming. Again, the Olympics recently was a nice example of that. The more sports rights will shift from linear to connected television, our hypothesis is also that cord cutting will accelerate b ecause many households in the U.S. keep their cable subscription or satellite subscription in order to watch the NFL or in order to watch their sports package. If and when the sports package will become available through streaming, then we are expecting to see an accelerated shift to streaming and connected television. That, that makes sense. And maybe more broadly, what are you seeing in the advertising environment now, especially as we sort of head into the second half of the year? Yeah. So the general advertising market. We are very focused on connected television video; 55% of what we do is in CTV, and the rest of it, most of it, is in video in general. But high level, I can say their advertising market is stabilizing. If we look 18 months ago, right? Or 12 months ago, there was a lot of discussions about recession and such, so you're seeing more of stabilization and still with some level of uncertainty. I would say that the election cycle adds some uncertainty to the market in the second half of the year, where you suddenly have potentially new players that are coming in, bursting in with money that is coming and going. Brands sometimes, advertisers sometimes sit in the sidelines while that happens. And also in the macroeconomics, right? There is some mixed signals out there, I'm sure you and your audience are— so you're seeing some very positive signs, and on the flip side, some more alarming signs. So I would say stabilization and a bit of a mixed bag of signals. Yeah, I'd say there's still just a general cautiousness that, that we see in the market. The other interesting thing is that the advertising spend has not really matched the viewership shift. Mm-hmm. So the viewers are shifting over to connected television much faster than the spending is, and that's. I think if you've seen other kind of major secular changes in technology, that tends to happen, where there's just a stickiness and a stubbornness to ultimately move over. Right. It does happen, it just doesn't happen quite as fast. Right. So let's talk about one of your newer strategic initiatives called Harmony. Can you maybe just talk about what that is and sort of how do you see that sort of impacting your platform and the space overall? Sure, sure. So Harmony is a strategic initiative for us that includes several products, but, you know, I'll start touching on that. But in general, in order for money to shift faster from linear TV to connected television, connected television universe needs to operate in a good manner, right? And I can tell you, for example, high frequency of ads, someone sitting in their home and watching the same ad over and over again, for example, is an annoying problem, and it is a persistent problem in our industry. And there are others, right? There are, you watching not the most optimal creative, like you're watching ads that have no relevance to you. And there is others issues in the CTV universe that we believe that Innovid as an enterprise software player with the view that we have can solve for. So, when a client or a large brand, an auto brand, is running a campaign or multiple campaigns, there is only one entity that can see the campaign in its fullest, where it goes to each publisher individually, and where it can go to a DSP or multiple DSP, and that's us. That's the buy-side ad server. Mm-hmm. This is where we play. With this very unique view of the CTV universe, we believe that we can use the data that our clients have, in order to help them optimize their campaigns. And as such, we started delivering different type of functionalities of optimization. So instead of just doing the delivery and reporting back and telling you: "Here is your dashboard," we're actually taking an action during the campaign and providing signals either to the DSPs or the publishers, telling them: "Hey, this household might have overexposure. You don't want to serve the tenth ad to this household. Why won't you divert the spend to another household?" Or we can send signals to the clients or the publishers saying: "This creative with this blue sweater work much better than this creative with the red sweater and created more traction for you. Why won't you optimize now, not in a dashboard, not in a report, but go ahead and send this blue sweater ad more?" And this is what we do. We announced that we started in April. We announced the Harmony initiative, and we announced more functionalities just two weeks ago. We have amazing partners tapping into our Harmony initiatives, such as VIZIO and Roku, and some buy side. So that's on the pub side. We have some brands and agencies that are tapping in. We have Yahoo DSP announcing that they're our partner. So we are excited to see a lot of excitement in the industry around this offering. Mm-hmm. From a revenue standpoint, we look at it as a 2025 and future contributor. We do see some traction now, but so far, we kept our revenue guidance in place for this year. And, I, I did wanna ask you about two specific features, Harmony Direct and Harmony Frequency, and I think you touched on Harmony Frequency. Yes. Maybe talk about Harmony Direct- Sure. A little bit more, and why is it such an attractive feature for your partners? Absolutely. So Harmony Direct is actually what's called supply path optimization, going back to optimization. Most of connected television is bought directly, not through programmatic channels. So this is, as an example, this is Toyota buying directly from Disney. And it does not—there is no element of real-time bidding or biddable impression, so there is no auction happening in real time against this media, because it was bought directly and previously. Within those non-biddable ads, within this universe where it's direct, we provide now a workflow tool that is better—that is integrated from the buy side to the sell side, that enables you to streamline this process without the need for operating intermediators that are not necessarily needed for this type of inventory. So that's Innovid's Harmony Direct in a nutshell, and some of the names that I mentioned before are the folks that are already tapping into that and are leveraging this workflow. Can you maybe talk about sort of your monetization strategy here? I think you talked about an impression-based pricing model for Harmony products, so just talk about the rationale behind that. Sure. Do you wanna take it? Yeah, I can take that one. I mean, essentially, the model that we have is very straightforward. It's a P times Q, so it's a fixed rate for impressions, and so, which is similar to how we do our ad serving. Regardless of how much a customer will pay for the media itself, it's just based on the flat number of impressions. Mm-hmm. Got it, got it. And maybe just to add to that, unlike other, as I said in the opening, unlike taking a take rate, right? So again, because we don't participate in the media, we don't affect the media, we also are not taking a percentage out of the media which is very, common business model for most of our peers. So to some extent, from a profile standpoint, we are not as similar to our peers as it might look. Got it. That makes sense. So let's talk about maybe innovation next. You've recently launched a series of first-to-market interactive ads in collaboration with a couple of high-profile partners, such as Paramount and Pfizer, I believe. Can you maybe talk about this initiative more broadly, and how impactful it could be both to your platform and, and the space? Yeah. We really love interactive ads at Innovid. Just to explain what it is, these are ads that you can take your remote control and do stuff with, right? In front of the television. It could start from show me more, and it goes all the way to shoppable. You could almost buy things. The overall notion of TV not being just branding, just, okay, here is the shampoo ad or the diaper ads, but it can actually do stuff, and you can do stuff, i t's very intriguing, and we have a lot of pride in award-winning campaigns and award-winning technology in the space. We're named by Forrester as the leading creative technology platform out there. So very proud of all of these initiatives. Level of adoption of interactive ads, as you see in your television, I assume we're all now watching and streaming, is not extremely high. Mm-hmm. QR codes became more popular than other formats, but some of—a nd there are some stuff out there, and adoption is, I would say, relatively slow. Mm-hmm. We are a big believer in the space. We have the technology in space. We have SDKs that is running, a software development kit that is running across the CTV universe to enable that. So we are very excited about the prospect. Current adoption is not in the highest. Got it. Got it. So there have been a lot of discussions around Gen AI, as I'm sure you well know and how Gen AI is reshaping sort of digital advertising. Can you maybe talk about how you leverage Gen AI tools in your suite of products? For sure. So we introduced several Gen AI capabilities into our platform that. And And we have some very cool demos. If you guys are interested in our IR website, some shameless plug, but take a look from our last investor day that you can really create hundreds of thousands of permutations of advertisements using AI in a click of a button. So the prospect is fantastic. Going back to what we've discussed before and the pace of adoption within our industry, our clients are Fortune 500, right? These are very large brands. Their adoption of those super sophisticated new tools needs to go through several scrutinies and such. So it's there, it exists. I can tell you that we are very excited about AI when it comes to efficiency and when it comes to actually back-end usage. And we have more and more AI tools and capabilities that are embedded into our core offering, which support margin expansion, right? And better efficiency and less error. This is not Gen AI. Right. So Gen AI, again, super cool, super excited, we have it in place. We need to see higher adoption. Got it. So let's talk about your operating model in that sort of a—l et's go over a couple of financial questions. Maybe for the broader audience, can you give us a quick rundown on your revenue model and sort of your go-to-market strategy? Yeah. So on the revenue model, we talked a little bit about it so far, but there's really two broad pieces. Rough number, 75% of our business is volume-based, and so again, it's number of impressions, just times a flat rate for those impressions. And that's primarily the ad serving, personalization side of the business. Then we have another side of the business, which is measurement, which takes all that ad serving data that we're able to generate, and essentially gives performance information back to our customers, and that's more like a traditional SaaS model. So it's a subscription over time. There is a little bit of volume component if it kind of exceeds the top end of whatever subscription tier that the customers did. And so, you know, that's generally the different revenue models. So again, 75/25 split. The way that we go to market is essentially we have a focus, and this aligns with our growth strategy. So from a growth strategy perspective, we think a couple things are going to drive our growth. One is just going to be the secular trends and more volume out there, more connected television volume, as again, as that comes over from linear television. But we do have a suite of products, and so cross-sell is a pretty big future growth driver for us. Most of our clients at this point have one to two of our products, so there's a really rich opportunity just to sell. And we have a team that's focused just on cross-sell. So then there's another team that is really focused on new logo acquisition. I think for us in this market, we're at a, you know, kind of an attractive position in terms of we have many, many of the top global brands out there, but there's a lot that we don't have yet, and so we have a team that's focused on that. That's all what we would consider the buy side, so these are the advertisers. Then we have another group that's focused on more of the sell side or the publishers. That's generally how we go to market. Got it. Got it. So last week, last week, you reiterated your 2024 guidance for revenue growth between 11% and 16%, I believe, and EBITDA margins well in the teens. What's embedded in your outlook sort of for the second half of the year, both from the macro standpoint and sort of product innovation standpoint? Sure. I mean, the product innovation, I think, as Guy mentioned before, it's still relatively early days for Harmony in the market, so we really haven't factored that in too much at this point. It's really more of a 2025 and 2026 driver. As we look at the second half of the year, there are some pretty good industry tailwinds, including the growth in connected television. And as we looked at our Q2 performance, one of the things we're most pleased about is that connected television video impressions and revenue grew 20%. And this is the second straight quarter that that grew 20%. And so we would expect that to continue in the second half of the year. There are, you know, the continued shift to live sports, you know, more adoption from ad-supported platforms. Those are all nice tailwinds for us. There's also some potential headwinds, which is the election, and— Mm-hmm. The election is typically a headwind for us, just because we are in the volume business, and our customers are the brands. We typically, you know, don't do political advertisements, and brands tend to pull back a little bit during an election cycle because of the price of the media. So those are kind of the things that are mixed into the revenue projections. On the operating model side, in terms of profitability, you know, we've been able to successfully grow our EBITDA margin each quarter, I think, over the last eight quarters, and expect to continue to do that going forward. It's a very leverageable operating model. Mm-hmm. This is a traditional software business. The gross margins are very high, typically around 80%. There's not a lot of incremental spend that we have to do. So really, as we scale, the unit economics are great, and a lot of that should fall to the bottom line. Got it. Anything you can share in terms of how much Harmony can add as investors look towards 2025 and 2026? It really depends on the market. I mean this is. We believe there's a pretty big upside there. I think we— we'd like to see a little bit more, kind of data coming back to us from the market before we kind of refine that a little bit more. But for us, this is probably, you know, one of the biggest product launches in company history. And we think the nice thing about it is we're solving real problems in the industry, and this is the way that we do development is we listen to our customers, we try to understand what the pain points are in the industry, and we feel like we're the best situated to solve for that. We're independent. We don't benefit by take rates in terms of we don't benefit if somebody pays more or less. We're actually just trying to make it more efficient for the advertisers t o make their ROI a little bit better and make it a better experience for the publishers. And so, you know, we think Harmony fits right inside that box and really could be, you know, pretty impactful for the industry and for us as well. And maybe more broadly, how should investors think about sort of key building blocks behind your sort of long-term financial targets of over 20% sustained top-line growth and 30% adjusted? Yeah, I think it's those same things, just extended out a little bit more. Yeah. We have not yet seen the inflection point of the volume coming over to connected television in a permanent way. And as I mentioned before, a lot of spend is still stubbornly stuck on the linear side, and we think it'll come over. So I think 2025 and 2026, that could be the time where there's a real inflection point, and the curve starts to bend a little bit more. And then with our operating again, we're a software company, so if you look at any successful enterprise software company out there, you'll probably see about 30% margins. And with an 80% gross, you know, gross margin, it's not hard to see with that, with scale, that you know, you can get to a 30% margins. Well, maybe I'll ask one more question, and then we can see if there are any questions from the audience. So can you maybe talk about the competitive landscape more broadly, and are there any recent changes, sort of, that you would highlight for investors? Sure. So our key competitor on our core offering, which is the ad server, is Google. Google acquired a company called DoubleClick more than a decade ago, and through that, it has the stronghold of the infrastructure of ad tech. DoubleClick and Google were. It started with display and search and such, while, when we started, we built the CTV video kind of first platform in mind, and through that, we've been able to take market share. As mentioned here before, we have today about 50% of the top 200 TV advertisers in the space working with our platform. When they work with our platform, it's on an exclusive nature, meaning they all of their CTV and video campaigns that are running are being managed by our platform. So that's that. In terms of competitive dynamics, I would say that there are antitrust litigation going for Google. Some of it is less relevant for us, the latest with search. We're not in the search business, but there is one that is very relevant for us about advertising, and that is coming up this fall, that is actually associated with the DoubleClick acquisition. From a very high level, the chatter and the discussion about the importance of being an independent software vendor, not part of a media-owning business, is getting hold in our industry, and I think brands get it. So the more you speak with our clients and target clients, the more that our independent, where the data is going to sleep at night and what is their data actually doing and who is it serving, becoming a more and more important discussion. So that's definitely a competitive dynamic to call out. Got it. Well, let's see if there are any questions from the audience. All right, I'll ask another one. So last week, you announced a partnership with Nielsen. Yep. To simplify and improve ad measurement. Yep. Can you just spend a minute talking about, like, this collaboration and what it brings to your advertising partners? Absolutely. So, by the way, going back to your question before, we are a CTV-first platform, and building interesting and value creation partnership out there in market is part of what we do. So we're very proud of this partnership with Nielsen. Nielsen is the largest—i t's a household brand, right? Like the largest measurement player out there, that is a currency player, and they provide their currency tools and others. And they as the market is shifting from linear to CTV, they chose to partner with us to power Nielsen ONE. Nielsen ONE is their core measurement offering on the CTV side. And leveraging the infrastructure that we have and the view that it creates across the entire spend. So we are very excited about this partnership. It opens a new opportunity for us in an area that we didn't play. Mm-hmm. We're not a currency player, and solidified our position, in market. This is something that is coming up, and we're working on integrations and data testing and such, but very excited about this upcoming partnership. Great. Well, with that, I think we're out of time. Tony, Guy, thank—