Innovid Corp. (CTV) on Q4 2022 Results - Earnings Call Transcript
Operator: Greetings. Welcome to the Innovid's Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host John Williams, Innovid's Investor Relations. Thank you. Please go ahead.
John T. Williams: Thank you, operator. Before we begin, I will remind you that todayâs call may contain forward-looking statements. And that the Safe Harbor statement in today's earnings release available on our Investor Relations page, also pertains to this call. 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, todayâs call may include non-GAAP financial measures. 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 the corresponding GAAP measures where appropriate can be found in the earnings presentation and 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; Tanya Andreev-Kaspin, Innovid's CFO; and Tal Chalozin, Founder and CTO, who will participate in our Q&A session. I will now turn the call over to Zvika to begin.
Zvika Netter: Thanks, John, and thank you all for joining the call today. I will start with a few comments on the current environment and its impact on Innovid, some high-level thoughts about the fourth quarter, and some recent business highlights. Our CFO Tanya Andreev-Kaspin will then provide details on our performance and initial 2023 guidance, followed by Q&A. I'm excited to share with you an update on Innovid's progress, including our fourth quarter and full year 2022 results. We recently completed our first full year as a public company, and I'm proud of how our team has executed against our strategic objectives in a challenging environment. Innovid remains exceptionally well-positioned as the clear leader in building the critical technology infrastructure for the future of TV advertising. We believe that the CTV segment is and will continue to be the area of growth in the advertising industry, and this is why it's our primary area of focus here at Innovid. In 2022, we had a number of important accomplishments. Our full year revenue grew 41% year-over-year, we continued our drive towards positive adjusted EBITDA, and our balance sheet remains strong. Measurement became a significant revenue driver for Innovid this year. Following our acquisition of TVSquared and represented 20% of our full year annual revenue. We're excited about the synergies realized through the acquisition, as well as the growth opportunities ahead. We build meaningful client relationships and added a number of exciting wins. Our clients make a strategic decision to invest in our critical and independent infrastructure software, and continue to do so despite headwinds in advertising volume and lighter spend across the overall market. We remain very focused on the things that we can control, executing against our strategic objectives, leveraging the synergies and accelerating the growth of our spend TVSquared acquisition, cross-selling and deepening our customer connections. The shift from linear to CTV continues to drive our growth as we add more customers and gain more share. In Q4, we reported 13% revenue and 19% impression growth in CTV, compared to the same period in 2021. Our CTV accounted for 49% of revenue, and 52% of total video impressions, excluding TVSquared. For the full year, total revenue grew 41% to $127.1 million. And we delivered $1.2 million in adjusted EBITA. Our results offer a clear evidence that demand continues to grow despite difficult advertising environment. Let me cover some additional highlights from the quarter. There are three key metrics that we report annually to demonstrate how mission critical our platform is for our customers. Even in a challenging environment, our net revenue retention or NRR, in 2022, was 111% and our core client count in 2022 increased by 60% overall. Equally important, our core client retention rate was 90%. Simply put, our customer base is growing. And the customers we have are not only staying with us, they are using our platform more and more every year. I'm happy to note recent year wins including CMI Media agency, plus one other large player in the pharma and health care vertical. We will also note several recent client cross-selling expansions including Canva and Goodwill Group, as well as several partnerships including Fox, The Trade Desk, Vizio and Kinetic. We recently announced two very exciting leadership updates, an addition and a promotion that further align our leadership around operational excellence. The addition of David Helmreich as Innovid's new Chief Commercial Officer who leads the commercial alignment across our revenue related functions, including sales, marketing and account management. The promotion of Ken Markus, previously our Chief Client Officer to Chief Operating Officer, who now leads operational alignment across the organization. Both Dave and Ken are up and running in their new roles and are closely partnering to deliver on scale and profitability. I'm very excited to have them both in this new important positions. And finally, in November, we hosted our first ever Investor Day, and the replay is still available on our website. It was a great event with members of our senior leadership team highlighting our strategic initiatives and the significant opportunity ahead of us. Innovid's approach since day one has always been neutrality. We don't buy or sell media at all. And we firmly believe the advertising industry needs to separate critical infrastructure and measurement technology for advertisers from media buying and selling. That's how we built and run our business since day one. Focus on advertisers is very clear desire and need for transparency and alignment of interest with their tech providers. The recent antitrust suit filed by the Department of Justice against Google for monopolizing multiple digital advertising technology products, reinforces our view that neutrality in this industry is critical to our customers and to the industry at large. We'd encourage everyone looking to understand the current state of competition and the total addressable market opportunity in the advertising and advertising technology sectors to read the complaint. We're glad to see that the industry is becoming more aware of the risk of mixing both business models under one umbrella. And we're looking forward to showing our existing and potential customers just why our approach is better for them and better for the industry. As the industry evolves, Innovid is in the leading position. Let me focus on how we are directly addressing the current macro environment and why Innovid is positioned for success in 2023. First, I'm confident we will continue to take market share from Google campaign manager. When the economy and the ad market bounces back, we believe we are well-positioned to see growth multiplier effect as our growing customer base ramps back up and our clients activate more features of Innovid capabilities. Our platform remains mission critical for our customers, and our ad server personalization and measurement capabilities remain highly differentiated. Second, we remain laser-focused on profitable growth. We expect positive adjusted EBITDA for the full year of 2023, which Tanya will discuss later. And we read that our long-term target of 30% plus adjusted EBITDA margin over the long run. And finally, we are maintaining a strong balance sheet focused on a maximum capital flexibility, and optionality. We believe our quarter end cash position provides more than enough runway to comfortably fund the business as we shift from burning to building cash. I'm proud of what Innovid and its team has accomplished in 2022. And I'm even more excited about the future. With that, I'll hand it over to our CFO, Tanya Andreev-Kaspin to discuss our fourth quarter results and the 2023 financial outlook. Tanya?
Tanya Andreev-Kaspin: Thank you, Zvika, and good morning, everyone. We are pleased with our Q4 and full year results, particularly given the challenging macroeconomic backdrop in 2022 and the fourth quarter specifically. Q4 revenue grew 30% year-over-year to $33.7 million on a reported basis, or 5% on a pro forma basis. Measurement, which has become a significant revenue driver following our TVSquared acquisition grew 16% on a pro forma basis, and represented 22% of total revenue in Q4 and 20% of full year revenue. Ad serving and personalization services were up a combined 2% year-over-year and represented 78% of total revenue in Q4 and 80% of full year revenue. As a reminder, our ad serving and personalization revenue closely correlates with ad impressions volume search through the Innovid platform. Q4 CTV volume grew 19% year-over-year, and represented 52% of all video impressions. This is up from 46% in the previous year. Mobile volume decreased by 6% and accounted for 35% of all video impressions, while desktop volume decreased by 8% and represented 13% of all video impressions. As the overall ad environment bounces back, we expected growth in our core CTV business will continue to outpace other channels and continue to grow as a percentage of overall video impressions. Additionally, our unique combination of CTV ad serving personalization and measurement solutions will further boost our growth over time. On to our geographic breakdown. In Q4, U.S revenue grew 27% on a reported basis and represented 89% of our total revenue in the quarter and 90% for full year 2022. The U.S remains the global center of CTV innovation and adoption and as deploys most of its investment. International revenue grew 57% year-over-year and represented 11% of quarterly revenue, up from 9% in Q4 last year. As you know, our target clients are composed of the largest Global TV advertisers. We defined a core client as an advertiser or publisher that generates at least $100,000 of annual revenue. Innovid prior to acquiring TVSquared, we only included their advertisers in that definition. In 2022, our core clients generated approximately 88% of our annual revenue versus 91% last year. At year-end 2022, we had 174 total core clients, which includes 41 from TVSquared versus 109 at the year-end of 2021. Excluding TVSquared contribution Innovid core clients growth exceeded 20% in 2022. Core clients annual retention was 90% on a pro forma basis, down from 97% retention of core Innovid platform clients in 2021 prior to the acquisition. Annual core clients net revenue retention was 111% compared to 127% in 2021. 2022 retention metrics were impacted by the expansion of our core client definition, and the inclusion of a different client mix, following the TVSquared integration. Both metrics, however, are showing strong healthy trends in a year with particular challenging macro trends impacting advertiser spend. Moving on to expenses. Cost of revenues increased by $3 million in Q4 2022 as compared to Q4 2021. The increase is primarily attributable to the TVSquared acquisition. Revenue less cost of revenues were 75% of revenue in Q4 2022, down from 79% in Q4 2021, again, due to the TVSquared acquisition and the subscale nature of TVSquared as a standalone entity. We believe the fully integrated business will eventually operate at or close to our pre-acquisition margin. We expect this metric to improve over time as revenue bounces back, the business scales and the cross-selling accelerates. Total Q4 operating expenses excluding depreciation, amortization and impairment costs were $35.8 million, up 3.3 million or 10% year-over-year. Most of the increased $3 million is due to an increase in stock-based compensation. The remaining increase is due to our acquisition of TVSquared, which was largely offset by a reduction in one-time expenses, particularly IPO-related expenses incurred in Q4 of last year. We ended this year with 531 employees, an increase of 1% year-over-year on a pro forma basis. And this is before the headcount reduction that is taking place in the first quarter of 2023. Net loss in the fourth quarter was $3.4 million, or per share loss of $0.03. Adjusted EBITDA in Q4 was $3 million representing 9% adjusted EBITDA margin, up from 7% last year. We are very comfortable with our cash position and liquidity given our margin profile and our expectation for positive full year 2023 adjusted EBITDA. We ended the year with $47.5 million in cash and cash equivalents and short-term bank deposits on our balance sheet and $20 million in debt. We also have available an additional $30 million revolving line of credit at favorable terms, if needed. Year-end share count was 133.9 million shares. Finally, I would like to discuss our outlook. While the macro environment has reduced visibility, we remain confident in the resilience and strong strategic positioning of our business and are committed to profitable growth in 2023. For the first quarter of 2023, we expect total revenue in the range of $27 million to $29 million, representing 4% to 12% year-over-year growth and as reported basis. We expect Q1 adjusted EBITDA in the range of negative $3 million to negative $1 million. As typical, we expect Q1 will be the lowest point in the year for adjusted EBITDA margin. By the end of Q1, we expect to complete our recently announced 10% headcount reduction. And our outlook today includes the impact of those cost savings actions on our operating model. We will also remind you that when the TVSquared acquisition took place in Q1 of 2022, there were $4.4 million in the one-time acquisition and IPO-related expenses reflected in those quarterly results that will not repeat in Q1 of 2023. Also beginning in Q2 we will no longer distinguish between pro forma and as reported basis, since it will be lapping a full year since the TVSquared acquisition. We have seen some encouraging early indicators in 2023. But today, given the current advertising market, we suggest modeling flat revenue year-over-year as a starting point, with a return to more normal quarterly revenue seasonality than we saw in 2022. We are carefully managing operating expenses and expect full year 2023 adjusted EBITDA margin will improve on a year-over-year basis. To be clear, even if revenue is flat year-over-year, we expect improved profitability versus 2022. Given our focus on cost management and operational efficiency, we expect to be even more profitable if the environment improves. In conclusion, Innovid is very well-positioned to emerge from the current market downturn strategically and financially stronger, with a unique and fully integrated platform that is absolutely critical for our customers. We are taking actions today to ensure our future success. Thanks again for joining the call. Zvika, Tal and I are now ready to answer your questions. Operator, please begin the Q&A session.
Operator: The first question is coming from Andrew Boone of JMP Securities. Please go ahead.
Andrew Boone: Hi, good morning. Thanks so much for taking my questions. I'd like to start with the DOJ case against Google. Can you guys help us understand what that could mean for Innovid and how clients are actually talking to you about it? And then secondly, just on the guide, and thinking about 4Q revenue, it's really healthy growth in terms of core clients. That was really exciting to see, but can you just help us understand more what's going on with individual clients? Should we think about that as a headwind of per client spend? Or how do we think about just the deterioration there? Thanks so much.
Zvika Netter: Thanks, Andrew, and thanks for the questions. Yes, as you can see, I mean, we are very engaged, excited, interested in this case, clearly, because neutrality has been a core part of Innovid since day one 15 years ago, 10 years ago, we talked about how critical it is to and we don't come from ad tech, Tal and I are the Co-Founders, went to this industry from a banking industry. And we saw that there is a flaw in the system where media buying and selling technology is mixed together and media assets are mixed together with infrastructure software. And we decided strategically that Innovid is not going to buy or sell media, at the same time is providing infrastructure. And this is why we build Innovid as a critical software infrastructure company for the future of television. And we kept true to that for years and years, though you can make a lot of money in media. And finally -- and not a lot of people heard understood that, but this is a very long-term play for us, as we are planning to become a very large scalable organization to provide the infrastructure for the future of TV advertising. And it is very encouraging that the U.S government is basically saying what we've been saying for a long time, that there is a significant issue in the system where you own both the media and the platform, the technology platform. So the fact that the there is a focus, there is definitely we expect and will help us tell our story both to this audience, the investors and of course to our customers or those more so important thing that was who are not our customers, that theyâre assuming they're going to go and read this whether it's in the newspaper or read the lawsuit itself, the attention to that should help us tell our story. That's on the DOJ. And I think it's definitely going to take years. But the focus on it is definitely something that we share the same passion about the separations of entities. And when it comes to the guide 4Q, you said the core clients and the overall, I mean, as we indicated, we are closing more business. And it's kind of connected to your first question. On a strategic path, our differentiation from our competition, which is mostly Google campaign manager, our investment additional products like personalization, and measurement, up selling, to existing clients, retention rate, all these key KPIs are very, very strong throughout Q4, which was not as strong from a top line perspective. And also, if you look, we see our outlook as we see it for the year at this point, it's at least we are seeing the industry and this is all from our perspective, all affected by macroeconomic, where everybody is seeing advertising and TV spend, is going down. Overall, the advertising spend is going down because of the economical situation. And that is the only thing that we see that when we're factoring and we're saying all the core KPIs that we control are continued to do very strong. And -- but the macroeconomic is such that we basically planned the budget -- we planned against a flat year. And we took measures and are taking measures to make sure it's a profitable year. So that under any circumstances, the plan is that we'll have a better EBITDA this year, than last year. And this is all part in our journey to get to 30% plus EBITDA and we know we get a lot of questions in that. And this is why we're committed even in this environment to keep and be profitable. And if the outcome is better from a top line as the company recovers faster than what we think as some of our peers, then it's an upside.
Operator: Andrew, did you have any additional questions? The next question is coming from Shyam Patil of Susquehanna. Please go ahead.
Shyam Patil: Hey, guys, congrats on first year as public company. I had a few questions. First, in terms of the guidance, you guys just comes a little bit on it. I'm just curious, how are you guys thinking about the seasonality linearity of the guide by quarters, say, 2Q and 3Q? And how much of the outlook for the year would you say is, macro kind of what you're seeing now versus other factors? And how much of it is -- what you're actually seeing here from customers versus kind of taking additional conservatism was up to that?
Zvika Netter: So I would address your second question first. Let's start with the first one, it makes more sense. So, as you indicated, we saw software Q4 versus Q3, which is a very rare thing for this industry, right? If anybody knows, the advertise, definitely the TV advertising industry Q1 is the lowest, Q4 is the highest. And it's kind of goes up and goes down and goes up and goes down for tens and tens of years. So it actually pretty predictable model. The -- what happens since COVID, we started seeing different shockwaves in this and while 2021 was a normal cycle and 2022 started as a normal cycle and Q4 we started seeing a decline, and that's why you saw difference between Q3 and Q4, which is a rare situation. And it's after Q4, I believe, for the entire industry, not just Innovid. So the questions, in terms of cycles, how do we, we are assuming that this year we'll have "the seasonality will be normal". So -- because the economy, the macro economy is already impacting Q4, you see Q1, so based on our analysis and our budget and plan, we took that throughout the entire year in terms of the plan. So there's an overall macro compression with the normal seasonality, if that makes sense. So, obviously, if, again, some people suggested that things will be better sooner, right. So then you'll have another abnormal seasonality, where you have a weaker than normal for staff, let's say and a stronger second half. We're not saying that's what we're suggesting, but what we're planning against is a normal seasonality on a weaker economy. And to your last question, absolutely 100% what you're seeing on the top line is a factor of macroeconomics, because if you look at the old core KPIs, retention of key core clients, and the amount of core clients, we close more logos in Q4, and in Q1, we retained a lot of them. We are upsetting more, our NRR even for last year was 111%. We believe -- so, all this -- there's -- strategically Andrew asked about Google and the DOJ, which is the Google is the biggest source of market share for us. So currently we're not aware of any macro dynamics that will impact our internal KPIs. But when because we are pure software, and we're not a media business, we don't have a lot of margin to play with, we're not buying and selling, we're selling software. So -- and it's based on volume. So once volume goes down, because spend goes down, it impacts our top line. Once it goes up, it will improve not just the top line, but the way we configure the company this point dramatically our bottom line.
Shyam Patil: Thank you. And then I had a quick follow-up. It seems like this morning to kind of earnings reports, not just this quarter, but over the past couple of quarters, connected TV and retail media are the two biggest trends in media right now. Certainly connected TV you guys are very well-positioned to kind of all know how you guys are involved there. But regarding retail media, how does that -- how -- can you talk about how that could be an opportunity for you guys? Or how you feel about that opportunity going forward?
Zvika Netter: Sure. I have my Co-Founder, Tal here, which I'm sure we love to answer that. Tal?
Tal Chalozin: Sure. Thank you very much, Zvika and thank you Shyam for the call. Yes, you're absolutely correct. As you've seen from many other players in the in the space, CTV is clearly the biggest trend in media followed by retail media. And we've been saying it for a very long time. Something interesting to see is that as we've shown software can really make an impact in television, same goes for retail media. So far all of the focus has been other companies has been on the media targeting space. But obviously retail media can play a lot in measurement, by virtue of the big data for better outcome. And on personalization, in a shape of over more personal life, commercial leveraging the data of a weaker media network. We've spoken in the past about strong partnerships we have with Target, leveraging Innovid for personalization, we spoke last quarter about retailers such as eBay, leveraging InnovidXP for better measurement. And we're going to share a lot more in the future on that line. But we're absolutely aligned. The CTV and retail media network are great utilization of how software is going to innovate the media.
Shyam Patil: Got it. Thank you guys.
Operator: Thank you. We do have a follow-up coming from Shyam Patil of Susquehanna. Please go ahead.
Shyam Patil: Yes. Hey, guys. I had a few follow ups as well, if it's okay, if I ask these. On connected TV, I guess it's kind of an industry question as well as Innovid question. How do we see kind of the use of alternative IDs or IDs in general, or maybe broader not just targeting, things like their changes going on in the industry where some of the walled gardens that exist in CTV, you may try to hold back some data that was previously available for targeting. So I'm just curious what you guys see happening there and how you think Innovid is positioned to capitalize on that or take advantage of any situation that may come up.
Zvika Netter: Tal, do you want to take this question?
Tal Chalozin: Sure. Thanks again, for the question, Shyam. First of all, I think you hit a very important point that when we do talk to investors, there's a big confusion on this point around walled garden and the fragmentation of the connected television space. The market is extremely fragmented by many large players such as Amazon, YouTube, Roku, and many other any other kind of newcomers to the advertising space, Netflix, and Disney Plus, all of them are behaving in somewhat of a walled garden and to your point, creating their own identify or creating their own ways to insert data and extract data out. So we think that the market is amazing. We fragmented, this is why we think that a strong software platform that helps orchestrate media in the streaming space is mandatory for marketers. To your point about identifiers, we did share in the past, our heavy investments in products, so we call it the key part of InnovidXP, which is doing exactly what you just described. We don't believe that the industry needs yet another identifier, because there are many out there and the market will become even more fragmented. So what we think is there's a need for a spine that connects all of those identifiers in the best way possible, and allow marketers to just traverse the industry and deliver the right message to everyone and collect as much data out. And this is what we're doing in partnership with many of the names that I mentioned. And we will continue to push on that front.
Shyam Patil: And can you guys talk a little bit more about your measurement offering? And what like just -- what kind of uptake or kind of new business activity you expect in a software mapping? Is this something that encourages kind of facilitate adoption because of the need for greater efficiency and effectiveness? Is it or is it more of an additional kind of add on that maybe it's impacted by the macro in a more negative way? So how do you guys think about the measurement offering that you guys have and how the current macro will be impacted?
Zvika Netter: Sure. I mean, the answer is yes and yes to those questions. And I'll explain the -- we are absolutely seeing the decision to acquire TVSquared exactly a year-ago, in a significant transaction for Innovid immediately post-IPO was a very strategic long-term move for us. Because what we heard from our customers is that the need to better understand how television performs versus CTV. So not just looking at CTV as a standalone, kind of almost connected to your question on identity and household identity. So the ability to see the entire household and saying, X percent, let's say 70% is watched on linear and 30% watch on connected TV. When you're moving tens of billions of dollars from one site to another, really critical to see the entire picture. So for us, combining our excellence in CTV measurement and TVSquared, TV measurement combined, created a very unique offering. So from the market acceptance perspective, and we're not surprised by it because we heard the customers before we made the transaction. So we're definitely seeing we're happy with the acquisition, with integration. And the level of adoption we've seen is actually from a revenue perspective, definitely around the number we expected to see this year. And it this is a journey. These things -- measurement is a major play, and it takes years to build attraction, the adoption and the acceptance because -- some of it is science, some of it's almost art. The -- as when we -- so from that perspective, strategically, we're extremely happy with this and we're happy with the results and we're definitely seeing adoption. At the same time, as TV advertising is all advertising budgets in an environment like this go down, that is obviously effects also investment. Now, you could argue that in a time like this, you actually need and Marc Pritchard, the CMO of P&G said, I think last month at the keynote of the ANA Conference in Florida, spoke about some key things that they want to invest in. And it's exactly what you said. It's looking at optimizing reach, how many households you reach at what frequency and what's the return on investment, kind of the basic stuff that any CEO and any CFO will do. And this is optimizing return on investment. So measurement is absolutely a key component of that. But it's -- the tricky is, yes, there's going to be more interest and more investment in measurement, while the budgets overall are going to shrink. So while our measurement product is more like SaaS, it's a fixed fee throughout the year. It will be naive to assume that a year like this will be the last one . entire year. .It's not going to impact the amount of money we make from that product, while adoption we absolutely expect will continue to go up
Shyam Patil: Thank you. I just had one last one, if I could sneak in. Any commentary you guys can offer in terms of the pricing context, we've heard other companies talk about the scatter market and the impact on connected TV growth. Just curious if there's anything you can offer their scatter market. I'll leave it there. Thank you.
Zvika Netter: Tal, you want to take this?
Tal Chalozin: Of course. In general, those terms are scattered or spot thrown out. By many other companies. something important about Innovid is that we service the whole market, we absolutely don't care what part of the market is picking up more and more initiatives, programmatic. Deserves one and upfront buys over others. There's clearly throughout the years always fluctuation from one side to another when times are a little tight. We are seeing a little more focus on the programmatic side of the house. When it's the beginning of the upfront season, we are seeing a big focus on that market. But again , the beauty of our offering is that we really don't pick sides. We offer software solutions for marketers across the board, that service literally every impression and every side of the market.
Shyam Patil: Thank you, guys.
Operator: Thank you. The next question is coming from Shweta Khajuria of Evercore ISI. Please go ahead.
Shweta Khajuria: Okay. Can you please talk about the entire quarter trends that you saw from Q3 to Q4. Seasonally, Q4 is the strongest, but you mentioned that it actually worsened. So help us think about what you saw. Anything that in particular, you can call out and then what you've seen so far were 2 months, almost 2 months into the quarter. So anything that you can call out this quarter that you've seen as it progressed, that'd be helpful.
Tal Chalozin: So you're absolutely right, the trend, basically, the way the way to look at this is 2021 was a normal year in terms of seasonality, 2022 started normal. And in Q4, I would argue you can see also something like YouTube results, which is obviously you can see like you already started seeing some decline in Q3, and definitely Q4, it was felt by the industry and you see it all over. So the -- I would say, that if you look at 2022, the seasonality was disrupted after a nice run, in terms of seasonality sequencing was it starts disruptive in Q4 and resulted in us taking action to make sure because profitability is extremely important to us. And in this environment, also to our shareholders, we took action to make sure that in plan 2023 in a way that under even flat circumstances, we are going to be profitable, EBITDA positive, while maintaining our strategic goals. So in terms of Q4, specifically, some people ask us about, verticals specific verticals, because that's like going to the post-COVID supply chain issues and the word like ripple effects where one part of the industry will be hurt more than another part of the industry. So we're happy to report that auto, which is again, you see it on television. So the stuff you see on television is how we make money. So auto has recovered and "back to normal". And we see in Q4, like consumer electronics, technology telco, was declining more than usual, right? So it's like -- but these are specific verticals. I don't -- the key thing here is the macro, because the macro impacts everybody. So even if you'll see different verticals, and you'll see some recovery in Q1 from certain verticals, the big story here is that the macro environment and their overall spend, and I'm not sure anybody has a crystal ball to say like how exactly this year will pen out from the economy perspective and advertising spend perspective. But in terms of how we model this year, we model this is a flat, normal, but normal cycles, so normal seasonality. And if there'll be a recovery earlier, then you'll see a much stronger H2 than compared to H1, but this is not how we are modeling our investments for this year.
Tanya Andreev-Kaspin: Okay. Thanks, Shweta.
Zvika Netter: Thank you, Shweta.
Operator: Thank you. Ladies and gentlemen, this brings us to the end of today's question-and-answer session and today's teleconference. We would like to thank you for your participation and interest in Innovid. You may disconnect your lines or log off the webcast at this time and enjoy your weekend.
