Innovid Announces Financial Results for the Nine Months Ended September 30, 2021

  • Revenue of $64.3 million is up 41% over last year, driven by 65% growth in revenue from CTV
  • Adjusted EBITDA of $3.7 million surges 201% vs. one year ago, representing a 6% adjusted EBITDA margin
  • Expected to start trading as Innovid, under the new ticker symbol “CTV” on December 1, 2021, after completing a merger with ION Acquisition Corp. 2 Ltd.

Innovid, a leading independent connected TV (CTV) advertising delivery and measurement platform, reports results for the nine months ended September 30, 2021, as part of its planned merger with ION Acquisition Corp. 2 Ltd. (“ION”) (NYSE:IACB). The combined company will operate under the Innovid name and trade on the NYSE under the CTV ticker symbol to align with Innovid’s capabilities and leadership position in the CTV advertising ecosystem.

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Innovid’s core ad delivery solution provides advertisers a consolidated interface to streamline ad serving, operating as the infrastructure through which CTV ads are delivered across all media including direct buys, programmatic inventory, the open web, and walled gardens. Innovid’s platform also allows advertisers to tap into value-added features designed to increase the performance of advertising creative through personalization and interactivity, as well as provide deeper insights into CTV advertising reach, frequency, and engagement.

“Innovid’s recent results demonstrate the gains our purpose-built for CTV technology has made in addressing the needs of the world’s largest advertisers as they continue to shift investments from broadcast TV to CTV,” said Zvika Netter, Co-Founder and CEO of Innovid. “As part of this shift, compared to the same period last year we experienced nearly tripled CTV revenue growth outside the U.S. market, and nearly doubled the usage of our data-driven personalized creative solutions. Our position as a neutral tech provider free of media bias has allowed us to capture a large and growing market share. We are particularly excited about the high-growth potential of CTV beyond the U.S market, including China where we have recently expanded our capabilities and will continue to work with our clients and partners to deliver the optimal CTV viewing experience around the world.”

Innovid Welcomes Industry Veterans To Board

Innovid’s leadership team spans decades of experience across a diverse set of technology, advertising, and measurement sectors and we recently announced that Steven Cakebread and Rachel Lam are expected to join the Innovid Board of Directors post-closing.

Mr. Cakebread is currently the Chief Financial Officer of Yext, Inc. after having served in various senior executive roles at companies such as Pandora Media Inc., Salesforce, D-Wave Systems, and Xactly Corporation. He has an extensive public-company background and is the published author of The IPO Playbook. Mr. Cakebread currently serves on the board of directors of Bill.com (NYSE:BILL) and Tunein.com. He previously served as a member of the board of directors of Service Source, Solar Winds, and eHealth.com.

Ms. Lam is the Co-Founder and Managing Partner of Imagination Capital. Previously, she founded the Time Warner Investments Group where she led numerous investments in and exits from portfolio companies including Maker Studios (sold to Disney), Bluefin Labs (sold to Twitter), Admeld (sold to Google), and the Tremor Video IPO, among others. Prior to Time Warner, Ms. Lam spent several years in investment banking within the M&A group at Morgan Stanley and the Media and Telecommunications group at Credit Suisse. Over the years Ms. Lam has served on twenty boards of directors and currently serves on the boards of Magnite (NASDAQ: MGNI) and Porch Group (NASDAQ: PRCH), as well as on the non-profit board of The Center for Reproductive Rights.

“We are looking forward to working with Steve and Rachel,” continued Netter. “Steve’s financial and leadership experience with large corporations like Pandora and Salesforce combined with Rachel’s extensive background in investments and advertising technology position the Innovid leadership team well for our next phase of growth and role as leaders in the rapidly changing CTV advertising industry.”

Highlights for the Nine Months Ended September 30, 2021

  • Revenue for the nine months ended September 30, 2021, totaled $64.3 million, an increase of 41% compared to the same period in 2020
  • Revenue from CTV grew 65% year over year, continuing to drive Innovid’s growth
  • CTV accounted for 46% of all video impressions served by Innovid during the nine months ended September 30, 2021, up from 39% in the same period in 2020
  • CTV international revenue from outside the U.S. market grew nearly tripled year-over-year
  • Adjusted EBITDA for the nine months ended September 30, 2021, was $3.7 million, representing a 201% increase over the prior nine-month period’s Adjusted EBITDA loss of $3.6 million.

The growth and scaling of CTV was the key driver of Innovid’s revenue growth. As TV ad spend continues to shift from linear to CTV, we continue to benefit from the natural volume growth of CTV impressions we delivered for our existing and new customers. We have driven consistent positive net revenue retention of our core client base, largely through increased CTV advertising volume, as legacy TV budgets migrate from linear TV to CTV. We believe our open platform and purpose-built technology for CTV, combined with our position as a media-independent provider, has allowed us to win a large and growing market share, while the growth of CTV combined with our usage-based revenue model has further contributed to our rapid growth.

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COVID-19 pandemic

The novel coronavirus (“COVID-19”) pandemic has created, and may continue to create significant uncertainty in macroeconomic conditions, and the extent of its impact on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and the impact on our customers. Based on public reporting and our observations, some advertisers in certain industries, such as the automotive industry, decreased their short-term advertising spending in light of supply chain disruptions and/or labor shortage. This in turn could negatively impact our revenues from such advertisers.

We have considered the impact of COVID-19 on our estimates and assumptions and determined that there were no material adverse impacts on the consolidated financial statements for the nine months ended September 30, 2021, and year ended December 31, 2020. As events continue to evolve and additional information becomes available, our estimates and assumptions may change materially in future periods.

Further information about ION and Innovid can be found in the definitive proxy statement/prospectus, which was declared effective by the SEC on November 10, 2021. This guidance is subject to the risks and uncertainties described in the “Forward Looking Statements” below.

Additional Information and Where to Find It

In connection with the proposed Business Combination, ION has filed a registration statement on Form S-4 with the U.S. Securities and Exchange Commission, which includes a proxy statement/prospectus and certain other related documents, which will be both the proxy statement to be distributed to holders of shares of ION’s Class A Common Stock in connection with ION’s solicitation of proxies for the vote by ION’s stockholders with respect to the Business Combination and other matters as may be described in the definitive proxy statement, as well as the prospectus relating to the offer and sale of the securities of ION to be issued in the Business Combination. ION’s stockholders and other interested persons are advised to read the preliminary proxy statement/prospectus included in the Registration Statement and the amendments thereto and the definitive proxy statement/prospectus and documents incorporated by reference therein filed in connection with the Business Combination, as these materials will contain important information about the parties to the Business Combination Agreement, ION and the Business Combination. After the Registration Statement is declared effective, the definitive proxy statement/prospectus will be mailed to ION’s stockholders as of a record date to be established for voting on the Business Combination and other matters as may be described in the Registration Statement. Stockholders will also be able to obtain copies of the proxy statement/prospectus and other documents filed with the SEC that will be incorporated by reference in the proxy statement/prospectus, without charge, once available, at the SEC’s web site at www.sec.gov, or by directing a request to: ION Acquisition Corp 2 Ltd., 89 Medinat Hayehudim Street, Herzliya 4676672, Israel, Attention: Secretary, +972 (9) 970-3620.

Participants in the Solicitation

ION and its directors and executive officers may be deemed participants in the solicitation of proxies from ION’s shareholders with respect to the Business Combination. A list of the names of those directors and executive officers and a description of their interests in ION is contained in ION’s registration statement on Form S-4, which is available free of charge at the SEC’s website at www.sec.gov, or by directing a request to ION Acquisition Corp 2 Ltd., 89 Medinat Hayehudim Street, Herzliya 4676672, Israel, Attention: Secretary, +972 (9) 970-3620.

Innovid and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the shareholders of ION in connection with the Business Combination. A list of the names of such directors and executive officers and information regarding their interests in the Business Combination will be contained in the Registration Statement.

No Offer or Solicitation

This press release shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Business Combination. This Current Report on Form 8-K shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of section 10 of the Securities Act, or an exemption therefrom.

Non-GAAP Financial Measures

Innovid prepares audited financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). Innovid also discloses and discusses non-GAAP financial measures such as Adjusted EBITDA and Adjusted EBITDA Margin. The non-GAAP financial measures that Innovid uses may not be comparable to similarly titled measures reported by other companies. Also, in the future, Innovid may disclose different non-GAAP financial measures in order to help its investors meaningfully evaluate and compare its results of operations to its previously reported results of operations or to those of other companies in Innovid’s industry. Non-GAAP results adjust for certain non-cash items and other items presented in the reconciliation table later in this release. Innovid believes that these measures are relevant and provide useful information to investors by providing a baseline for evaluation and comparing its operating performance against that of other companies in Innovid’s industry. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP.

Adjusted EBITDA

Innovid uses Adjusted EBITDA and Adjusted EBITDA Margin as measures of operational efficiency to understand and evaluate our core business operations. We believe that these non-GAAP financial measures are useful to investors for period to period comparisons of our core business and for understanding and evaluating trends in our operating results on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.

These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under GAAP. Some of the limitations of these measures are:

  • they do not reflect changes in, or cash requirements for, our working capital needs;
  • Adjusted EBITDA does not reflect our capital expenditures or future requirements for capital expenditures or contractual commitments;
  • they do not reflect income tax expense or the cash requirements to pay income taxes;
  • they do not reflect our interest expense or the cash requirements necessary to service interest or principal payments on our debt; and
  • although depreciation and amortization are non-cash charges related mainly to intangible assets, certain assets being depreciated and amortized will have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.

In addition, other companies in our industry may calculate these non-GAAP financial measures differently than we do, limiting their usefulness as a comparative measure. You should compensate for these limitations by relying primarily on our U. S. GAAP results and using the non-GAAP financial measures only supplementally. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenue.

The table later in this release presents a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to the most directly comparable financial measure prepared in accordance with GAAP.

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