Tremor earnings fall despite record contribution numbers

The AIM-traded firm also had a record contribution ex-TAC of $309.7m for 2022 as a whole, compared to $302m in 2021, in line with market expectations.

It said it significantly expanded its connected television (CTV) market share, with record fourth quarter CTV spend of $99.6m, up 59% year-on-year, and a record CTV spend of $283.6m for the year, growing 41%.

The company said it achieved fourth quarter adjusted EBITDA of $36.9m, down from $54m a year earlier, and adjusted EBITDA of $144.9m for the year, slipping from $161.2m in 2021, which was also in line with market expectations.

Tremor said it maintained strong margins, including a 34% adjusted EBITDA margin on a reported revenue basis and 36% on a contribution ex-TAC basis in the fourth quarter, and a 43% adjusted EBITDA margin on a reported revenue basis, and 47% on a contribution ex-TAC basis for the year.

CTV spend for the 12 months ended 31 December made up 39% of total spend and 42% of programmatic spend.

Video revenue, including CTV, continued to represent the vast majority of Tremor's contribution ex-TAC at around 73% for the fourth quarter, and 79% for the year.

Tremor said it maintained a $115.5m net cash position as at 31 December, alongside a remaining $80m undrawn on its revolving credit facility, providing liquidity for its ongoing business needs, as well as for future potential strategic investments and initiatives.

Despite challenging market conditions, Tremor achieved a net retention rate of 80% during 2022.

“During the fourth quarter, we significantly expanded our CTV market share and customer base while working on the integration of new, enhanced, and differentiated technology and data capabilities around linear TV and CTV cross-planning, which we believe will prove to be critical for success in the future of digital advertising,” said chief executive officer Ofer Druker.

“In 2023, we will keep our focus on generating strong profitability and cash flow, deepening revenue relationships with leading brands, agencies, broadcasters, and CTV partners, completing the integration of Amobee, and unifying the company under one brand to more effectively convey the holistic value proposition of our end-to-end technology ecosystem in the market.”

Druker said that as macroeconomic uncertainty persisted, Tremor had observed customers consolidating budgets with fewer partners and more complete technology solutions in a bid to optimise budget deployment through data-driven planning and audience targeting.

“We believe our technology suite offers a comprehensive solution across planning, data, activation, and media unmatched in the open internet, strongly positioning the company with the potential to capture a larger share of existing customer budgets and attract new customers and partners.”

At 1106 GMT, shares in Tremor International were down 12.59% at 279.2p.

Reporting by Josh White for Sharecast.com.