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Nexxen International(NEXN) - 2024 Q4 - Earnings Call Transcript
NEXNNexxen International(NEXN)2025-03-05 17:56
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Financial Data and Key Metrics Changes - In Q4 2024, Nexxen International Ltd. generated a contribution ex-TAC of 105.2million,markinga16105.2 million, marking a 16% year-over-year growth and an all-time quarterly record [31] - Adjusted EBITDA for Q4 was 44.3 million, reflecting a 38% increase from Q4 2023, with an adjusted EBITDA margin of 42%, up from 35% in Q4 2023 [36][37] - Contribution ex-TAC per active customer increased to approximately 526,000,representinga69526,000, representing a 69% growth from 2023 [37] Business Line Data and Key Metrics Changes - Programmatic revenue reached 98.7 million in Q4, a 15% increase from Q4 2023, also an all-time quarterly record [32] - CTV revenue was 37millioninQ4,reflectingan8637 million in Q4, reflecting an 86% growth year-over-year and accounting for 38% of programmatic revenue, up from 23% in Q4 2023 [33] - Contribution ex-TAC from data products grew by 102% year-over-year in Q4 [36] Market Data and Key Metrics Changes - The U.S. election cycle contributed approximately 6 million in political contribution ex-TAC in Q4 2024 and about 10millionforthefullyear[36]−Thecompanyadded112newactivelyspendingfirst−timeadvertisersand73newsupplypartnersinQ4[22][23]CompanyStrategyandDevelopmentDirection−ThecompanyisfocusedonenhancingitsplatformthroughAIcapabilitiesandgenerativeAIinnovations,aimingtoimproveuserexperienceandtargetingprecision[14][25]−NexxenInternationalLtd.ispositionedtocapturemarketshareintheCTVspace,leveragingitsend−to−endplatformandstrongrelationshipswithpublishersandadvertisers[20][21]−ThecompanyplanstodeepenitsAIcapabilitiesandexpanditsCTV,omnichannel,anddatalicensingrevenueopportunitiesin2025[45][46]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementnotedanormalizedenvironmentpost−electioncycleandexpressedconfidenceinexecutingtheirstrategyfor2025[58][59]−Thecompanyanticipatesgeneratingapproximately10 million for the full year [36] - The company added 112 new actively spending first-time advertisers and 73 new supply partners in Q4 [22][23] Company Strategy and Development Direction - The company is focused on enhancing its platform through AI capabilities and generative AI innovations, aiming to improve user experience and targeting precision [14][25] - Nexxen International Ltd. is positioned to capture market share in the CTV space, leveraging its end-to-end platform and strong relationships with publishers and advertisers [20][21] - The company plans to deepen its AI capabilities and expand its CTV, omnichannel, and data licensing revenue opportunities in 2025 [45][46] Management's Comments on Operating Environment and Future Outlook - Management noted a normalized environment post-election cycle and expressed confidence in executing their strategy for 2025 [58][59] - The company anticipates generating approximately 380 million in contribution ex-TAC for full-year 2025, with programmatic revenue expected to account for about 90% of total revenue [41] Other Important Information - The company repurchased approximately 4.5 million ordinary shares in Q4, reflecting an investment of $20.1 million [38] - Nexxen International Ltd. has transitioned to a single U.S. ordinary share listing on NASDAQ, which is expected to enhance its long-term capital appreciation potential [24] Q&A Session Summary Question: Can you talk about the go-to-market improvements and how you're looking to build on some of this momentum into 2025? - Management highlighted the importance of brand improvement and data integration in enhancing market understanding and response [54][56] Question: What are you seeing in Q1 so far and how do you think about the environment in your full-year guidance? - Management indicated a stable environment and continued execution of their strategy without unexpected changes affecting 2025 results [58][59] Question: Can you elaborate on the data product growth and its future trajectory? - Management confirmed significant growth in data products, particularly ACR data, and emphasized the preference to integrate data with media services for better margins [62][67] Question: What is the guidance for programmatic revenue and what constitutes the remaining 10%? - Management clarified that 90% of revenue will come from the end-to-end ecosystem, with the remaining 10% related to legacy performance activities [70] Question: How is the company positioned to grow its CTV business? - Management noted that the company has unique demand and is able to grow its publisher base by offering additional value beyond traditional SSP relationships [80] Question: Can you discuss the opportunity to move down market into the SMB performance territory with generative AI? - Management acknowledged that generative AI will simplify platform usage, enabling the company to reach smaller advertisers more effectively [88][90] Question: What are the key levers for growth in data licensing revenue in 2025? - Management identified winning new business and enhancing engagement with existing partners as primary growth strategies [93][95]