Earnings Call Transcript - PERI Q3 2022

Operator, Operator

Hello, everybody, and welcome to the Perion Network Third Quarter of 2022 Earnings Conference Call. Today's conference is being recorded. The press release detailing the financial results is available on the company's website. Before we begin, I'd like to read the following safe harbor statement. Today's discussion includes forward-looking statements. These statements reflect the company's current views with respect to future events. These forward-looking statements involve known and unknown risks and uncertainties and other factors including those discussed under the heading Risk Factors and elsewhere in the company's annual report on Form 20-F that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements anticipated or implied by these forward-looking statements. The company does not undertake to update any forward-looking statements to reflect future events or circumstances. As in prior quarters, the results reported today will be analyzed both on a GAAP and non-GAAP basis. While mentioning EBITDA, we will be referring to adjusted EBITDA, and we have provided a detailed reconciliation of non-GAAP measures to their comparable GAAP measures in our earnings release. Hosting the call today are Doron Gerstel, Perion's Chief Executive Officer; and Maoz Sigron, Perion's Chief Financial Officer. I would now like to turn the call over to Doron Gerstel. Please go ahead.

Doron Gerstel, CEO

Thank you very much. Good morning, good afternoon, everyone. Thanks for joining our third quarter earnings call. Together with me on the call is Maoz Sigron, our CFO. Before I dive into the quarter results, let's start by looking back at the last 8 quarters, taking the rule of 40 model and applying it to our business. The rule of 40 is used by investors to see the long-term health and sustainability of a business. It can also be used by management to make long-term predictions and decisions. In my opinion, the best way to assess performance through the convergent plan of revenue growth and EBITDA margin. The fact that Perion passes the hurdle of the rule of 40 is remarkable for a healthy company and has done so in the last 8 quarters. There are needs to be viewed through this valuation lens, even though it's applied to a high-growth scalable software company and not, to my knowledge, to our industry. Now I want to deal with the elephant in the room. A big elephant, which can be summarized in one question, given our quarterly results: How can we keep outperforming our peers? I keep getting asked this question, and I think it's more relevant today than ever before. Perion is uniquely able to react and size opportunities based on current trends that might change. But what will not change is our DNA to continue identifying trends and turning them into business opportunities. Looking at the last 8 quarters, our ability to exceed the rule of 40 is not a series of anomalies or a one-off success. Quite the opposite, we are outperforming the industry because we are built on the fundamental recognition that adtech must be able to respond with underlying agility to the trend. Let's look at the current four trends that we see, and more importantly, how we are able to react to those trends. Advertisers are looking for ways to increase customer engagement to enhance their brand equity, especially these days, moving away from standard ad units. Those that are not investing in brand equity in this difficult economic time will pay the price. What we will show later on with a few use cases is to what extent our high-impact suite for display and CTV keeps customer engagement really high and allows us to maintain our margins. The next trend is that advertising is shifting direct response budgets from social channels to search and advertising. Our intent-to-action solution known for search advertising is doing exceptionally well, and we will bring some figures on how this is changing in terms of advertising budget allocation. Third, advertisers recognize that consumers are voting for brands that protect their privacy. Our SORT solution is gaining huge momentum, and we will talk about SORT and the huge momentum that we experienced in the third quarter. Last but not least, advertisers are undergoing margin pressure due to rapid rises in the cost of goods. Our iHub enables us to absorb pressure and maintain our high margin, and in fact, we increased our margin this quarter. Diving into our revenue, our revenue growth demonstrates our ability to continue shifting our business to where media budgets are trending. For example, the growth of the privacy trend, the growing demand for high-impact CTV, the need for retailers to transform their media business, and the fact that advertisers are targeting Generation Z in console gaming solutions that I demonstrated in our last earnings call. These are all reflected in this performance. These shifts are likely to increase, not decrease in velocity. Therefore, our ability to react becomes mandatory to continue outperforming the industry. From an EBITDA standpoint, our iHub, Intelligent Hub, is a great example of technology innovation that serves our clients and our financial results, balancing supply and demand yields better efficiency, both for our clients and for Perion. We also benefit from operational efficiency, utilizing shared resources for all advertising solutions. We believe that the pressure on advertising inventory due to the macroeconomic environment will reinforce our central control system, optimizing demand and supply. Media margin increased to 41% compared to 39% in the third quarter last year. From an advertising revenue standpoint, as I pointed out, the trend shows the multiple ways in which advertisers are seeking to build brand recognition, make an impact while respecting privacy. The growth of video driven by our Vidazoo acquisition, which happened last year, demonstrates our ability to identify the right acquisition targets and empower entrepreneurs to continue to grow their business. There are moments when consumers want to lean into a small stream and others when they want to lean back and take in the immersive experience of a large screen. Therefore, our ability to provide cross-synchronization is a key factor to capture attention and provide higher return on ad spend to our clients. I showed you this slide when we made the Vidazoo acquisition. The model has served us well by attracting publishers to have an end-to-end video platform that eliminates the friction of multiple vendors. As you can see, we have nearly doubled the number of new publishers using the Vidazoo platform and achieved robust growth in new spend at the same time. We believe Vidazoo will continue to grow. I want to take a moment and dig into an example, which I think you will find very compelling. It demonstrates the power of two of our core competencies working together: on one hand, the high-impact ad unit, and on the other hand, targeted CTV. We conducted an in-depth test measuring the effectiveness of conventional standard CTV ad units versus our high-impact CTV suite, as you can see on the screen. We did it by tracking the users that landed on clients' websites in both cases, and as you can see, the high-impact units achieved a 400% increase in site visits and 400% higher conversion rate. Results like this are why advertisers will pay a premium for our high-impact unit. Premium means $32 CPM compared to relatively lower teens for standard ads. That, by itself, drives another very important KPI for us, which is average deal size, which increased by 10% to $117,000. High-priced CPM helps us maintain and grow our margin. The need for high impact will grow since advertisers are constantly looking to increase consumer attention. We are continually innovating new ways to measure the effectiveness of our high-impact units. So today, I'm pleased to unveil our new attention trade measurement. It's a revolutionary way to measure consumer engagement, as you can see on the slide, with our high-impact units in real-time. Let me put this technology innovation in perspective. You may know that for decades, the traditional way to measure consumer engagement with an ad unit has been through eye tracking, which works by following consumers as they interact with an ad unit to measure effectiveness. But our researchers and data scientists were not satisfied with the one-dimensional model of measuring attention. So working with our partner, System One, we developed a model that includes sound along with sight. We measure that through real-time analysis, literally placing attention and display to see consumer reactions. This will provide our advertisers with future validation of the efficacy of our high-impact units and will continue justifying our pricing model, enhancing our margin. We have a number of initiatives within Perion, which provide us with a pipeline of scalable revenue opportunities. One of them is our retail media solution. Many retailers are building their own media platforms as a way to generate value from their first-party data, build and activate loyalty, and compete against giants like Amazon and Walmart. The breakthrough for us is that this solution enables us to shift our transactional business to an always-on spend, providing the predictability and sustainability we always look for. The excitement of this business is that we're not waiting for the IO; we're not waiting for the campaign; this is a constant month-by-month spend over the course of the year. As you can see by the prestigious logos on the slide, this is being rapidly adopted by some of America’s most successful retailers. While the revenue contribution is still modest, the growth potential given the Total Addressable Market is huge. Our SORT business has been rapidly growing as a result of privacy trends I mentioned before. In fact, the FTC recently requested commentary on their proposed privacy regulation, and Perion submitted a detailed perspective. I'll be happy to share with you our submission, a size of our vision for the future of digital advertising while acknowledging consumer privacy. SORT functions as a flywheel that becomes even more valuable and effective as more data flows into it. No matter which metric you look at versus cookies, versus Google benchmarks, versus third-party data, SORT comes out on top. Lastly, take a look at the quote from Mercedes; they believe SORT is so important that they want to be associated with it without compromising on results. You can see the Mercedes campaign here with a 58% CTR lift for SORT versus contextual and a 53% CTR lift for SORT versus third-party data. Going back to the trends I've mentioned earlier today and our ability to react to them, having a central hub is pivotal to increase our profitability and future growth. We cannot predict what will happen on either side of the open web—demand or supply. Those are market forces. But we can be confident that by being in the center and having two-way visibility, we can optimize the benefits for us and for our clients. In its first year, iHub contributes 40% of our year-over-year EBITDA growth. More importantly, our ability to capture signals from all channels to a central hub, as you can see on your screen, and analyze them is the main factor behind SORT's superior performance over other conventional targeting methods. The trends where advertisers are shifting budgets towards direct response continue. Pay attention to what Philipp Schindler, Chief Business Officer of Google, said recently: "In challenging times like this, advertisers are carefully evaluating the effectiveness of their budget. Search advertising tends to do relatively well in such an environment, given its strong visibility and focus on delivering ROI. It's also well suited to quickly adjust to changes in consumer behavior." As a strategic partner of Microsoft Bing, we definitely enjoy this trend. On top of this, the latest change in Apple privacy and Facebook reviewing the attribution window are causing advertisers to shift budget to search advertising. We are evaluating this shift on both ends. Advertisers looking to pay more for their ads are reflecting a 42% increase in RPM, and the hiring intent of searchers increased their CTR ratio by 27%. With that, I will turn the call to Maoz. Maoz?

Maoz Sigron, CFO

Thank you, Doron. Doron, please let me share my screen. Thank you. Good afternoon and good morning to those of you joining us from the U.S. I am happy to be here today to present Perion’s strong results for the third quarter of 2022. As you can see, Perion is performing extremely well. We are overperforming our industry across each of the financial metrics, consistently improving our results during the last two years despite the global macroeconomic challenges and market volatility. The adtech industry is not immune to these challenges, but we are navigating our way through the market shifts thanks to our diversification strategy, our ability to execute, our agile business model, and our innovative solutions. Given the strength of our sustainable and predictable business model, which gives us good visibility, and the actions we have taken to reduce costs and penetrate new fast-growing market segments, we are updating our guidance and are positive about next year. Let's look at the key financial achievements this quarter, reflecting the strength of our business model and our ability to execute our strategy. Revenue of $158.6 million reflects a 31% year-over-year growth, the highest quarterly revenue since 2014. Adjusted EBITDA of $33 million, 21% of revenue compared with 15% last year, reflects an 87% year-over-year growth. GAAP net income of $25.6 million reflects a 141% year-over-year growth, the highest quarterly net income since 2014. Non-GAAP diluted earnings per share of $0.61 reflects a 53% year-over-year growth. Turning now to the quarterly results in more detail. The third quarter revenue was $158.6 million, an increase of 31% year-over-year. This strong continued revenue growth reflects a CAGR of 38%. Display advertising revenue increased by 26% year-over-year to $86.8 million, accounting for 55% of total revenue. Market adoption of our holistic video platform solution continued to rise. Video revenue increased by more than 3% year-over-year, representing 44% of display advertising revenue. The number of video platform publishers increased by 88% year-over-year from 34% to 64%, and the revenue from retained video platform publishers increased by 67% year-over-year. Perion CTV is also gaining traction, growing by 134% year-over-year, representing 9% of total display advertising revenue. Our unique privacy-focused SORT solution is seeing more interest from advertisers and agencies who are becoming more aware of the importance of consumer privacy. The number of SORT customers rose to 140 this quarter, an 11% increase quarter-over-quarter. SORT customer spending increased by 25% during that period, now representing 17% of display advertising revenue. The third quarter sales advertising revenue increased by 38% year-over-year to $71.8 million, in line with the recent trend of advertisers favoring our intent-to-respond advertising. The year-over-year increase in revenue was driven by a 42% increase in RPM and a 60% increase in publishers. The 16.9 million daily searchers on average reflects an increase of 15% year-over-year. Let's look at the revenue mix, which reflects our strategic business diversification. The third quarter display advertising revenue accounted for 55% of total revenue compared with 57% in 2021, while search advertising represented 45% of revenue compared with 43% in 2021. We continue to expand into fast-growing video, CTV, and retail business, which now accounts for 57% of display advertising compared with 28% in Q3 2021. We are benefiting from the current shift to intent-driven search advertising. Our media margin continued to improve year-over-year. Revenue, excluding TAC, was $65 million or 41% of revenue compared with $47.4 million in the third quarter of 2021 or 39% of revenue. Over the last year, we've created the intelligence app with several other processes and automation by leveraging data and buying power to control and improve cadence in our media buying system. This has resulted in better financial performance, which translates into better selling power, as reflected in our financial results and specifically, in the media margin. Third quarter OpEx and COGS amounted to $31.7 million or 20% of revenue compared with $33.1 million or 27% of revenue last year. This impressive achievement reflects the execution of our business strategy. Perion's DNA and state of mind is to grow the business while keeping and improving efficiency. Over the last few years, we invested in media technology, automation, and offshoring parts of our business. We've improved budget control and are consistently looking for new initiatives for Perion's efficiency. On a GAAP basis, net income was $25.6 million or $0.53 per diluted share, an increase of 141% compared with $10.6 million or $0.28 per diluted share in the third quarter of 2021. On a non-GAAP basis, net income was $29.9 million or $0.61 per diluted share, an increase of 94% compared with $15.4 million or $0.40 per diluted share in the third quarter of 2021. Adjusted EBITDA of $33 million reflects a 94% year-over-year growth, with an adjusted EBITDA margin of 21% compared with 15% last year. Adjusted EBITDA to revenue, excluding TAC, increased from 37% in the third quarter of 2021 to 51% during the third quarter of 2022. Our excellent financial performance is not limited to P&L only. Operating cash flow was $34.7 million compared with $14.2 million in the third quarter of 2021, reflecting 145% year-over-year growth. As of September 30, 2022, we had cash, cash equivalents, and short-term bank deposits of $390 million compared with $322 million as of December 31, 2021. We are continuously generating positive cash flow. The $390 million in cash will serve as a valuable resource to execute both organic and inorganic growth opportunities. This concludes my financial overview. Doron, please go ahead.

Doron Gerstel, CEO

Given our strong performance in our sustainable and predictable business model and the good visibility into the fourth quarter, we're increasing our guidance for 2022 substantially. More specifically, we are calling for $630 million to $640 million in revenue by the end of the year and at least $120 million of EBITDA. That represents a 72% year-over-year growth in EBITDA or a 33% year-over-year growth on the revenue side. Another note here is that our CAGR in revenue from 2020 to 2022 is 39%, and the CAGR on EBITDA over these three years is 91%. In closing, let me go back to how I started this presentation. Since I became CEO in April of 2017, my mission has been to build the company of the future for the future. That means a company that will be strategically diverse, lightweight, and fluent in a future of volatility where new trends will emerge while others become less relevant, and where a successful company needs to shorten reaction cycles or it will be outpaced by circumstances beyond its control. We've built a company that can transact trends, and that’s why we are outperforming the market and can continue to do so. In a year, those four trends may change, but it doesn't matter to Perion because we will be able to react immediately to the new trends, gain market share in high profitability while driving client satisfaction. I’d like to close this call by thanking my team because without their variability and agility, we would not be where we are today. Together, we will continue achieving what we do next. Thanks so much. With that, let's open the line for Q&A.

Operator, Operator

Our first question comes from Eric Martinuzzi with Lake Street Capital Markets.

Eric Martinuzzi, Analyst

Yes. Congratulations on the strong quarter and the good outlook. Just curious to know, I know you released your preliminary Q3 results on October 5. What did you learn during the month of October as far as the trends in the industry, different maybe than what you saw in Q3?

Doron Gerstel, CEO

So I don’t think that there are notable changes in October, but what we are seeing these days is that this is definitely going to be a strong holiday season. Definitely, when it comes to demand for our advertisers across all channels.

Eric Martinuzzi, Analyst

Okay. As for your competitors and other players in digital marketing, there has been a significant slowdown. You mentioned some reasons why Perion hasn't experienced the same slowdown. While I understand you are not providing guidance for 2023, I believe you indicated that the organic growth target for Q4 is in the high 20% range. How sustainable is that growth beyond Q4?

Doron Gerstel, CEO

I must say that the heart of our presentation and our ability to keep growing like we have in the last 8 quarters is definitely related to diversification. But our ability to identify trends and react quickly gives us a lot of confidence in our ability to maintain and grow our business. The foundational support we have in our hub gives us huge cost leverage, and we are making significant progress with our new markets and clients, particularly in retail marketing and high-impact formats, mainly for CTV. We have advanced conversations with Microsoft Advertising. As far as leveraging our strong reputation from the search part of the business into Xender and promoting IQ, these two acquisitions from Microsoft Advertising are all part of 2023. We are quite optimistic while being aware of the surrounding dynamics. It makes us want to work even harder than how we performed in the past.

Eric Martinuzzi, Analyst

Okay. And then lastly, you talked about taking market share in social. Is that anecdotal color that you're getting? Or do you have a view into your customers telling you they’re pulling this much out of social and shifting it over to search, specifically regarding that direct response budget shift?

Doron Gerstel, CEO

There are two major events that happened regarding social. One has to do with iOS 14 from last year, and the second is Facebook's reduction of attribution windows from 28 days to 7 days. These are significant events affecting advertisers' views on the effectiveness of social advertising from a targeted set. We definitely see a shift from social to search because there is nothing that compares to the intent of the consumer that you can target in search advertising. We are observing a rise there, evidenced by the RPM increase and CTR. This reflects that advertisers need to pay more to associate their ads with keywords this year compared to last year, and the CTR indicates more qualified high-intent consumers that can be exposed to those ads.

Operator, Operator

Our next questions come from the line of Laura Martin with Needham & Company.

Laura Martin, Analyst

Can you hear me okay?

Doron Gerstel, CEO

Yes, we can hear you.

Laura Martin, Analyst

So great numbers. Wow, what a performance, congratulations. I guess my first question is, as you think about costs next year, one of the things I'm curious about is we have Twitter laying off half of their workforce and Meta today laying off 13% of their workforce. I'm wondering if that gives you opportunities to pick up some excellent engineers and maybe build your talent base because of some of these talented people getting laid off in your ad industry?

Doron Gerstel, CEO

Right on, our HR is already all over it. They are using LinkedIn and all other resources as some excellent engineers are looking for a new home. Perion is a close-knit community and I’m glad that Facebook had a significant layoff. Our data scientist team is actively working on our iHub, and they are hearing me now that this is a good place for them. We see great opportunities here. When it comes to Twitter, we notice some hesitation among advertisers related to privacy. They are currently on the fence and we see that they are quickly shifting budgets to other channels.

Laura Martin, Analyst

And then on interactive ad units, I'm wondering how important you feel that that is a driver to your 2023 revenue?

Doron Gerstel, CEO

Interactive units, especially on the CTV side, are part of what we call high-impact suite. It is not the pivot of our strategy, but it is a feature. There are some advertisers who like it, and some who do not. I can tell you that when it comes to the laid-back experience, the performance of CTV is somewhat under question as viewers tend to be more passive than we hoped. So, at this point, the interactive units make up about 10% to 15% of the overall CTV spend.

Operator, Operator

Our next questions come from the line of Andrew Marok with Raymond James.

Andrew Marok, Analyst

So the trends on SORT look really encouraging. I guess, what does it take to get SORT more involved in more advertisers' campaigns? Is it really just an awareness issue right now? And then secondly, separately, on the search market. I guess, could we drill down a little bit there because your search business is growing well in excess of the total search market? Just to get a little sense of some of the drivers there. We understand the shift towards search in a pressured macro environment, but what particularly are you guys doing well?

Doron Gerstel, CEO

Great. So first on SORT, two key drivers are behind it. I refer to it as a flywheel, and we truly believe that. The first driver is technology and data—more SORT campaigns we execute, the better we perform. There are two forces pushing SORT this year: one comes from advertisers realizing that consumers prefer brands that protect their privacy. This is part of a bigger ESG movement. When dealing with premium advertisers, that’s a significant argument. However, they still express concerns about performance. All of them are expecting us to conduct benchmarks on SORT against third-party and contextual targeting to measure performance. The second driver is the legislative discussions currently taking place; while it may take time, we feel that this trend has begun. Now regarding your second question, we are actively working to transition SORT from being an internal tool at Perion to a service we can offer to other publishers and DSPs. We've just completed a cautious task concerning this, while ensuring that we meet very strict response times. So far, we are seeing positive market reactions and are very confident about providing the service in the first half of next year.

Operator, Operator

Our next questions come from the line of Jeff Martin with ROTH.

Jeffrey Martin, Analyst

Great. Can you hear me?

Doron Gerstel, CEO

Yes.

Jeffrey Martin, Analyst

Congrats on a wonderful quarter. I wanted to drill down a little bit more on publisher growth within search, up 60% year-over-year. You're obviously expanding into new countries. I was curious if there are specific factors beyond that; if the high-impact capabilities within search are attracting publishers? Is there anything in particular driving that growth? What does your outlook for additional increases in publisher additions over the next 12 to 18 months look like?

Doron Gerstel, CEO

Just to clarify, the high impact pertains to display, not search. Regarding publisher growth, it is certainly linked to our new product launches and engagement with existing publishers regarding their spending and our ability to attract net new publishers. As we grow, our better web share also allows us to be competitive with other partners, which gives us an edge in attracting publishers.

Jeffrey Martin, Analyst

Great. I was curious if you could give some insight into the potential to continue growing the average campaign size or average client spend, which is about $117,000 in the quarter and up nicely year-over-year. What are some factors as we head into 2023 that will enable that to continue to grow?

Doron Gerstel, CEO

The main factor for growth has to do with the units, mainly our transition to high-impact units rather than standard ones, which naturally costs more. It needs to translate to higher returns. We have been working to educate our customers to assess us based on campaign outcomes rather than just spending. The premium nature of our CPM, at $32, is indicative of that strategy. Additionally, having campaigns with multiple screens contributes significantly; it results in more spend since it caters to agencies and brands wanting to minimize vendor numbers. So our holistic solutions addressing multiple screens are a key part of increasing average spend. Achieving an average deal size like $117,000 reflects that effort. Overall, we are investing heavily to boost spend while ensuring we provide value to our customers.

Jeffrey Martin, Analyst

Great. Last question from me—could you give us a look under the hood at what M&A might look like in 2023? Are you planning on continuing down that strategic path?

Doron Gerstel, CEO

Yes, I must say that I addressed this question at the start of 2022. Honestly, I thought we would have the ability to execute 1 or maybe 2 transactions, but the situation has evolved differently. We understand that we've worked hard to maintain close to $400 million in net cash and no debt, which gives us policy flexibility. We’re focusing on accretive specific targets that we have identified. I’m optimistic about executing M&A in 2023, keeping in mind to approach with caution.

Operator, Operator

Our next questions come from the line of Mark Kelley with Stifel.

Mark Kelley, Analyst

I wanted to ask you about your expectation of a strong holiday season this year. Criteo is just one company in particular that called out a lack of an early holiday ramp in ad spend. It sounds like maybe you're not seeing that. Is the shape of the fourth quarter playing out as you would typically expect so far? That's my first question. And the second one is, if you answered this, I apologize, but can you please give us the pro forma growth rate for Q3 with Vidazoo?

Doron Gerstel, CEO

So far, November 9, we are definitely not seeing any slowdown. Planning for the mix between the different channels may change, but as I mentioned before, our diverse strategy gives us the flexibility to capitalize on those changes. Overall, we are looking as per our initial plan. As for the pro forma growth rate with Vidazoo in Q3, if I may, I’d like to confirm that we are above 15%. As previously mentioned, measuring the exact number can be difficult due to synergies between Vidazoo and the rest of our business units, but that’s about the figure.

Maoz Sigron, CFO

Yes, Mark, thank you for the question. The pro forma growth rate is indeed about 15%. Again, as mentioned during the last call, it's challenging for us to measure the exact amount due to the synergy between Vidazoo and the rest of the business unit, which is presenting strong performance.

Operator, Operator

Our next questions come from the line of Jason Helfstein with Oppenheimer.

Jason Helfstein, Analyst

I'll ask one. It’s very clear as earnings are playing out, obviously, a lot this morning and last night that being a demand-side platform is evidently a more attractive way to be because you control effectively the buying decision as opposed to accepting bids. In addition, being multi-platform is increasingly important. You’re also witnessing significant benefits from having supply-side capabilities on the margins and control of inventory. So far, as we've seen companies scale two sides of the marketplaces, it's been incredibly difficult. Talk about where you see the plan from here, both organically and through M&A, continuing to maintain a two-sided marketplace, which is clearly working in your favor?

Doron Gerstel, CEO

First, Jason, that’s a good description of why we're able to perform well quarter after quarter. I can tell you that from an organic standpoint, there’s plenty of growth left. I’ve mentioned several areas, particularly putting significant effort into retail media. Customers are eager to enhance their media business to compete with Amazon and Walmart. The challenge for us lies in guiding them from their current status to where they need to be, and I’m happy that we can achieve this with an always-on strategy. We see great potential here. Additionally, in video, publishers are increasingly transitioning their video business onto our platform, which adds stickiness and stability to our revenue. We are also looking at acquisition targets in areas like CTV, where there are several very attractive companies. Our focus is strategic: we’re looking for businesses with leading positions in their domains, not just technology acquisitions. We're also exploring the digital out-of-home space as it converges with retail, which presents exciting opportunities.

Operator, Operator

There are no further questions at this time. So I'll hand the call back over to you for any closing comments.

Doron Gerstel, CEO

Very good. All right, thank you very much for joining us today. We look forward to seeing you next time. Thanks again. Bye-bye.

Maoz Sigron, CFO

Bye-bye.

Operator, Operator

Thank you. This does end today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and enjoy the rest of your day.

Doron Gerstel, CEO

Thank you.

Operator, Operator

Goodbye.