TREMOR INTERNATIONAL LIMITED ((NEXN)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call of TREMOR INTERNATIONAL LIMITED painted a picture of robust growth and strategic advancements, tempered by certain challenges. The company reported significant growth in its Connected TV (CTV) and data products, along with improved profitability and strategic improvements in its trading structure. However, it also acknowledged challenges such as declines in certain revenue segments and macroeconomic uncertainties. Despite these hurdles, the focus on AI innovation is seen as a promising avenue for long-term growth.
Record Quarterly and Annual Contribution
Nexxen International Ltd. achieved record quarterly and annual contributions, excluding traffic acquisition costs (ex-TAC), for its programmatic and CTV revenues. This was accompanied by a notable expansion in profitability, marking a significant milestone for the company.
Strong Revenue Growth in CTV
CTV revenue soared by 86% year-over-year, reaching $37 million. This achievement not only set a new quarterly record but also increased CTV’s share of programmatic revenue from 23% to 38% compared to Q4 2023.
Increased Adjusted EBITDA
The company reported a 38% increase in adjusted EBITDA from Q4 2023, reaching $44.3 million. This figure represents the second-highest quarterly adjusted EBITDA in the company’s history, highlighting its strong financial performance.
Impressive Contribution ex-TAC Growth
Contribution ex-TAC grew by 16% year-over-year, reaching $105.2 million, setting an all-time quarterly record. This growth underscores the company’s successful strategies in enhancing its revenue streams.
Data Products Growth
Contribution ex-TAC from data products saw a remarkable 102% year-over-year growth, driven by increased licensing and usage of data solutions. This indicates a strong demand for the company’s data offerings.
Capital Structure Improvements
Nexxen International Ltd. streamlined its trading structure by consolidating to a single U.S. ordinary share listing on NASDAQ. This move is expected to enhance long-term capital appreciation potential.
Decline in Mobile Video Revenue
The company experienced a year-over-year decline in mobile video revenue, particularly within the travel and education verticals. This segment’s performance highlights areas needing attention.
Challenges in Macro Environment
The earnings call acknowledged the fragile macroeconomic environment, which could potentially impact business performance. The company remains cautious in navigating these uncertainties.
Limited AI Innovation Short-Term Gains
While generative AI remains a focus, the company noted that short-term gains are limited, indicating a need for a long-term focus to fully realize AI’s benefits.
Forward-Looking Guidance
Looking ahead to fiscal year 2025, Nexxen International Ltd. anticipates a contribution ex-TAC of approximately $380 million, with programmatic revenue expected to make up about 90% of total revenue. The company forecasts an adjusted EBITDA of around $125 million and plans to expand CTV and data licensing revenues compared to 2024. Strategic priorities include continued investment in AI capabilities and maintaining a focus on share repurchases and platform investments.
In conclusion, TREMOR INTERNATIONAL LIMITED’s earnings call reflects a positive sentiment with notable achievements in CTV and data products, alongside strategic advancements. While challenges persist, particularly in certain revenue segments and the macroeconomic landscape, the company’s focus on AI innovation and strategic investments positions it well for future growth.