Revenue Performance - Total revenue increased by $1.8 million, or 5%, from $34.5 million in Q3 2022 to $36.2 million in Q3 2023, driven by ad serving volume growth and measurement solution expansion [274]. - Total revenue increased by $7.8 million, or 8%, from $93.4 million in the nine months ended September 30, 2022, to $101.3 million in the same period in 2023 [294]. - Innovid anticipates that revenues from US sales will continue to constitute a majority of total revenues in future periods [270]. Advertising Trends - CTV accounted for 55% of all video impressions served by Innovid in Q3 2023, representing a year-over-year increase of 7% in CTV video impressions [261]. - The growth of CTV advertising is a key driver for Innovid's revenue, as TV ad spend shifts from linear to CTV [290]. Expenses and Cost Management - Research and development expenses decreased by $0.8 million, or 11%, from $7.3 million in Q3 2022 to $6.5 million in Q3 2023, primarily due to a reduction in personnel costs [278]. - Sales and marketing expenses decreased by $2.6 million, or 19%, from $13.7 million in Q3 2022 to $11.2 million in Q3 2023, driven by lower headcount [279]. - Research and development expenses decreased by $3.8 million, or 16%, from $24.3 million in the nine months ended September 30, 2022, to $20.5 million in the same period in 2023 [298]. - Sales and marketing expenses decreased by $4.1 million, or 11%, from $38.4 million in the nine months ended September 30, 2022, to $34.3 million in the same period in 2023 [301]. Impairments and Losses - Goodwill impairment increased by $14.5 million in Q3 2023, representing 14% of total revenue [283]. - Goodwill impairment increased by $14.5 million, or 100%, from $0.0 million in the nine months ended September 30, 2022, to $14.5 million in the same period in 2023 [303]. - Operating loss for Q3 2023 was $(4.3) million, or (12)% of revenue, compared to $(6.0) million in Q3 2022 [293]. - The net loss margin for the nine months ended September 30, 2023, was (30)%, compared to (16)% for the same period in 2022 [331]. Cash Flow and Financial Position - As of September 30, 2023, the company had cash, cash equivalents, and restricted cash of $48.1 million and net working capital of $73.4 million [323]. - For the nine-month period ended September 30, 2023, net cash provided by operating activities was $7.4 million, with a net loss of $(30.3) million adjusted for non-cash charges of $35.1 million [328]. - Net cash provided by investing activities for the nine months ended September 30, 2023, was $1.9 million, a significant improvement from net cash used of $106.8 million in the same period of 2022 [341]. Future Outlook and Strategy - The company plans to continue investing in advanced measurement capabilities to meet evolving advertiser needs in the CTV ecosystem [269]. - Innovid aims to attract new customers from competitors and expand its market share in the digital advertising space [267]. Other Financial Metrics - Finance income decreased by $7.6 million, or 72%, from $(10.7) million in the nine months ended September 30, 2022, to $(3.0) million in the same period in 2023 [319]. - Depreciation, amortization, and long-lived assets impairment increased by $5.3 million, or 153%, from $3.5 million in the nine months ended September 30, 2022, to $8.8 million in the same period in 2023 [302]. - Interest expenses for the nine months ended September 30, 2023, were $1.1 million, up from $0.4 million in the same period of 2022 [326]. - The company’s stock-based compensation for the nine months ended September 30, 2023, was $15.6 million, compared to $10.1 million in the same period of 2022 [331]. - The company’s legal claims expenses for the nine months ended September 30, 2023, totaled $1.5 million [331]. - The company recorded a net provision of $2,858 for the nine months ended September 30, 2023, representing an effective tax rate of (10.4)% [306]. - The New Revolving Credit Facility requires the company to maintain an adjusted quick ratio of at least 1.30 to 1.00 [325]. - The company recognized revenue when customers obtain control of promised services, following ASC Topic 606 [338].
Innovid (CTV) - 2023 Q3 - Quarterly Report