Welcome to Tremor International's Q3 and nine-month 2021 conference call. At this time, participants are in listen-only mode with a question and answer session to follow at the end of the presentation. This conference call is being recorded and a replay of today's call will be made available on the investor relations section of Tremor's website and will remain posted there for the next 30 days. I will now hand the call over to Billy Eckert, Senior Director of Investor Relations for introductions and the reading of the safe harbor statement. Please go ahead.
Thank you, operator. Good morning, everyone, and welcome to Tremor International's Q3 and nine-month 2021 earnings call. With us on today's call are Ofer Druker, Tremor's Chief Executive Officer, and Sagi Niri, the company's Chief Financial Officer. This morning we issued a press release which you can access on our website at investors.tremorinternational.com. During today's call we may make forward-looking statements. All statements other than statements of historical fact could be deemed as forward-looking. We advise caution in reliance on forward-looking statements. These statements include, without limitation, projections about our future financial results and future business and statements concerning the expected development, performance and market share or competitive performance relating to products or services. All forward-looking statements are based on information available to us as of the date of this call.
These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those implied by these forward-looking statements, including unexpected changes in our business. More detailed information about these risk factors and additional risk factors are set forth in our filings with the U.S. Securities and Exchange Commission, including but not limited to those risks and uncertainties listed in the section entitled Risk Factors in our registration statement on Form F-1. Tremor does not intend to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in IFRS and non-IFRS terms.
We refer you to the company's press release for additional details, including definitions of non-IFRS items and reconciliation of IFRS to non-IFRS results. At this time, it is my pleasure to introduce Ofer Druker, CEO of Tremor International. Ofer, please go ahead.
Thank you, Billy, and welcome to everyone joining us on today's Q3 earnings webcast. Let me start by saying this quarter has been a significant period of growth for the company. Today, we reported our strongest quarter in corporate history, and we are encouraged by the momentum we have generated across our core verticals, which I will cover in more details on today's call. Afterwards, our Chief Financial Officer, Sagi Niri, will review the highlights of our Q3 financial results. Following that, we will be happy to take your questions. First, I would like to cover some brief performance highlights. For the three months ended September 30, 2021, we generated contribution ex-TAC of $76.7 million compared to $49.7 million in Q3 2020, 54% organic growth.
An adjusted EBITDA of $42.3 million compared to $19.6 million in Q3 2020, which is 2.2x growth. This reflected our strongest quarter reported today, highlighted by September being the strongest single month since the company inception. For the nine months ended September 30, 2021, we generated contribution ex-TAC of $213.4 million compared to $110.3 million in nine months of 2020, which reflects organic growth of 93%. An adjusted EBITDA of $107.2 million compared to $21.4 million during the period last year, which resulted in a 5x growth.
Our core growth driver is in CTV services, where our revenues grew 115% in Q3 2021 versus Q3 2020 and 188% in the nine-month period ended September 30, 2021 versus the same nine-month period in 2020. We also achieved a 49% EBITDA margin in Q3 2021 on a reported revenue basis and a 55% margin on net revenue, which is higher than the median of our direct peers. I emphasize that the core of this performance is the strength of Tremor end-to-end technology and business platform, which covers the three pillars of this business, DSP, DMP and SSP. Our end-to-end technology platform provides simplicity for our customers, better data empowerment for our advertisers and publishers, and is accelerating the industry move towards supply path optimization.
As we serve customers on both the demand side and supply side, Tremor obtains robust access to first and third-party data from both advertisers and media partners, which customers can leverage to generate better returns on ad spend and maximize their ad inventory revenue. Tremor's platform also offers customers key optionality on who they choose as a partner with to best suit their needs. Our DSP Tremor Video is compatible with our SSP and Unruly, as well as other providers. While our SSP can also be leveraged by other DSPs as well. Later in this presentation, I will touch upon the continued progress we are making in CTV, which is a key performance driver for Tremor. Tremor's consistent primary focus on video and CTV is proving prescient in today's market, leading to a meaningful growth across our exchange and putting us ahead of platforms only recently evolving from display.
We have enhanced our offering further through the acquisition of Spearad, our exclusive global ACR data partnership with VIDAA, and our recent launch of programmatic TV marketplace. I would like also to comment on perceived headwinds in our sector as it relates to challenges associated with IDFA changes and cookie deprecation that are impacting our industry players. We do not anticipate a significant impact on our business. Our end-to-end platform and presence across all screens provide us with the key advantages that reduce Tremor exposure to these issues. We believe this strategy has proven successful, and we will continue it to advance and enhance this model as we look to the future. It's also worth noting that although COVID-19 proved to be challenging, it has also served as an opportunity for Tremor by accelerating growth trends in segments that we have strong exposure in, such as CTV and video.
Recently, however, many companies have been citing supply chain constraints attributable to the COVID-19 pandemic as a negative catalyst for the sector, as certain advertisers have reduced budgets due to these constraints. While we have seen some evidence of lower advertising spend to this point in Q4 2021 in certain sectors, particularly automotive, due to chip shortages, we have seen stronger demand in other segments and the diversification of our customer base on both the demand and supply side has helped offset any significant adverse impact to our business. I will now shift the discussion to our vision and some of the key developments that have occurred since last quarter.
As I have stated before, four years ago, our senior team set a plan to transform Tremor into a market-leading company focused on video, data and CTV, with the ability to capture users across all screens, delivered through a full end-to-end tech platform. Our team has M&A execution experience and has successfully integrated companies in the past. We are constantly searching for strategic opportunities to acquire additional companies that can become meaningful contributors in video, data and CTV, such as what we accomplished with the recent acquisition of Spearad. We believe we have delivered on a promise to continue expanding and enhancing each element of our end-to-end platform with an emphasis on CTV, and will continue to do so going forward.
One recent example of this comes from the previously mentioned acquisition of Spearad, a global CTV ad server featuring a robust user interface with advanced tools for ad pod monetization. Spearad was purpose-built for broadcasters to deliver seamless TV-like experience in CTV and over-the-top environments. Spearad will integrate it into Tremor and Unruly SSP, enabling CTV header bidding, channel inventory management and ad pod management. This transaction was particularly compelling as the addition of a CTV ad server further expands our differentiation and strengthens our position within CTV, while also significantly deepening relationship with our media partners and further complementing our end-to-end CTV offering. Prior to this, media clients were reliant on either in-house ad servers or third parties, whereas now broadcasters with deep relationship with Tremor can leverage us for our ad server and header bidding capabilities.
This enables us to maintain more of the relationship in-house and allow us to better serve our customers through added technology solution. This will also allow us to potentially expand our revenue footprint with current customers, and we expect that it will also attract future media partners seeking to utilize this advanced technology solution. Not all ad servers have CTV ad pod monetization capabilities like Spearad, which is why we were particularly excited about adding the technology built by savvy industry veterans to our end-to-end platform. We anticipate this technology addition will allow us to capture a greater portion of CTV inventory through both current and future media partners and provide added benefit to help those partners better control their inventory and maximize revenue opportunities.
We will also continue to evaluate future strategic exclusive global partnerships that expand our data reach and differentiation within CTV, such as the partnership we recently announced with VIDAA. The partnerships give us exclusive global access to VIDAA's automatic content recognition, ACR data pre-installed on most Hisense Smart TVs and is also integrated into a number of premium original equipment manufacturers, such as Toshiba. These partnerships give us access on an exclusive basis to VIDAA global ACR data, accelerating our U.S. and international growth and footprint. We will utilize this data for targeting purposes, making us one of the only end-to-end technology platform outside of the walled gardens with this type of data exclusivity. The agreement provide us access to VIDAA distribution, which reaches approximately 20 million Smart TVs globally, and we will anticipate this reach could roughly double over the course of our partnership.
The data will be available for activation for customers on both sides of the end-to-end platform, which will enable the ability to offer proprietary measurement capabilities for TV intelligence campaign. I also want to highlight the recent launch of Tremor Programmatic TV Marketplace, which enable advertisers to access a centralized platform for planning CTV campaigns, facilitating 30 campaigns activation and providing greater transparency into the curation of data-driven audiences. Our TV marketplace give brands the ability to take even greater control over the planning, execution, and customization of their CTV campaigns, coupled with a more transparent view into the supply and audience targeting capabilities available to them. Within this marketplace, advertisers can activate deals leveraging Tremor content-level targeting solution enabled by TV-like content attributes from direct media partners.
By curating deals based on content attributes like genre and rating from Tremor media partners, advertisers can tap into traditional and linear TV buying tactics in digital environments like CTV at scale. This expansion of Tremor contextual capabilities also addresses the market need for more privacy-minded, verifiable targeting solution across CTV and video. Tremor also achieved a number of important business wins during the quarter. In Q3, we had 35 new U.S. supply partners across critical growth verticals such as sports, entertainment, and lifestyle, as well as original equipment manufacturers, OEM, and multicast video on demand, MVOD businesses. Our Unruly product team also streamlined revenue opportunities for publishers by rolling out consolidated and enhanced header bidding adapter on both the client side and server side. Publishers can now access Tremor Video demand for all Unruly formats via a single adapter rather than legacy versions.
Additionally, through Q3 2021, Tremor Video observed a major increase in adoption of our data-driven creative offering, Tr.ly, since 2020, including expansion across CTV, as well as substantial increase in client usage of our custom QR code solution for CTV. Tr.ly continues to be a differentiator for Tremor and is a unique offering and advantage within our end-to-end solution. Tr.ly is our in-house creative studio, and it allow us to provide custom data-driven creative solution for our advertising customer to align with their complex global campaign objective. Leveraging Tr.ly underpins our strategy of being completely end to end, where advertisers and media partners can utilize us in all key aspects of their buying process across all screens, which offers us numerous growth trajectories and differentiation of revenue streams.
Finally, our strong balance sheet and cash positions give us a strong foundation from which to continue exploring future growth opportunities through additional exclusive strategic global partnership or acquisitions. Tremor has a robust history and proven track record of successfully integrating this into our unified end-to-end platform, and we will continue to remain active in evaluating deals that can further complement and enhance our existing platform. With those comments complete, it's now my pleasure to turn the call over to Sagi to review our financial results.
Thank you, Ofer. Thank you everyone for joining us today. We are encouraged to see another record quarter of revenue and strong business momentum as we move into the Q4 of 2021. Today, I'll be discussing some of the highlights of our Q3 performance, as well as some of the key financial and operational drivers during the quarters. Tremor International achieved an outstanding record quarter in Q3, with revenue and adjusted EBITDA propelled by steady organic revenue growth. Our net revenue grew 54% in Q3 year-over-year and resulted in $76.7 million for Q3 2021 versus $49.7 million in Q3 2020, all of which were driven through strong organic growth.
Our CTV revenues grew 115% in Q3 2021 versus Q3 2020, and we are poised to continue this growth as more business is increasingly being transacted through programmatic platforms. During the same period, our video net revenues grew 58%. For the nine months ended September 30, 2021, CTV and video net revenues grew 188% and 112% respectively. As a result, we achieved adjusted EBITDA of $42.3 million in Q3 2021 and $107.2 million in the nine-month period of 2021, or adjusted EBITDA margins of 55% and 50% out of net revenue for the same period, respectively.
For the nine months ended September 30, 2021, Tremor generated $213.4 million in net revenues, which is an increase of 93% year-over-year. We continue to generate very strong adjusted EBITDA while investing in the critical areas of our business that can drive our future growth. Costs were lower than expected, driven by a postponement of our return to office, lower anticipated marketing event spend, and reduced travel and entertainment costs. We saw very strong year-over-year growth in Q3 and the nine-month period of 2021, which increased our EBITDA by 2.2x and 5x respectively, compared to the same period in 2020. We are focused on being highly competitive in the CTV space and entered the segment early.
With the enhancement we made to our offering during the pandemic, our efforts resulted in 115% year-over-year CTV revenue growth in Q3 2021. Our video net revenue increased 58% from $40.1 million in Q3 2020 to $63.4 million in Q3 2021, which was driven by our video capabilities and sharp focus on this segment. We delivered significant growth in the nine-month period of 2021 during which we exceeded market expectations and proved once again that our strategy is working. Representing the latest milestone in the evolution of our end-to-end video first platform and TV intelligence solution, our recent acquisition of Spearad and exclusive VIDAA partnership will enable more effective TV campaigns going forward for our partners in several important ways.
Enhance our TV intelligence solution not only by providing an exclusive data set, but also by providing an opportunity for real-time targeting capabilities. VIDAA has a global reach of approximately 20 million smart TVs, allowing us to provide our international partners with a scalable TV targeting and measurement solution across a premium supply footprint, which we didn't have before. Spearad is a purpose-built technology for broadcasters, addressing the unique needs of delivering a seamless TV-like experience for consumers that can benefit our media partners through operational and cost efficiencies, increased buyer power, maximized revenue opportunities, and advanced UI, and our customers with expanded access to premium global CTV and OTT supply and advanced ad pool targeting capabilities. We believe we have a competitive advantage with our omni-channel end-to-end platform versus other one-dimensional solution.
We have developed a profitable business model with high efficiency around operating costs, leading to operating leverage, economies of scale, and strong productivity. Among our ad tech peers, Tremor is one of the highest margin and operational profitability, resulting in a 49% adjusted EBITDA margin in Q3 2021 on a reported revenue basis and 55% on a net revenue basis. Turning to our cash flow, we generated net cash from operating activities of $44.6 million for Q3 2021 versus $4.5 million in Q3 2020, which is an increase of around 900%. For the nine months ended September 30, 2021, we generated net cash from operating activities of $121.4 million versus $11.7 million in the nine months ended September 30, 2020, a 940% increase.
As of September 13, we had $333.3 million cash and cash equivalents with no debt. We also experienced 99% free cash flow conversion during the quarter. Non-IFRS diluted earnings per ordinary share is $0.21 for Q3 2021 versus $0.11 in Q3 2020, and $0.56 for the nine months ended September 30, 2021 versus $0.07 for the nine months ended September 30, 2020. Finally, I'll now turn to our outlook. As a reminder, we expect that return to office marketing and travel costs will add an incremental $1.5 million-$2 million per quarter in operating expenses next year. For the Q4 of 2021, we expect net revenue to be at least $85 million, which represents year-over-year growth of approximately 16%.
In Q4 2021 adjusted EBITDA to be at least $42 million, which represents year-over-year growth of approximately 7%. We also expect annual 2021 adjusted EBITDA to be at least $149 million, which represent year-over-year growth of approximately 145%. An expected annual 2021 adjusted EBITDA margin of 50% as a percentage of net revenue compared to 33% in 2020. This guidance reflects anticipated full year organic contribution ex-TAC and adjusted EBITDA growth of approximately 62% and 150% respectively, and underscores that our efficient end-to-end model focused on CTV is helping us achieve excellent growth and profitability. We believe that our growth profile, efficient end-to-end model, and healthy balance sheet positions Tremor to continue taking advantage of a rapidly growing digital advertising market.
With my remarks completed, I'll turn the call back to Ofer.
Thank you, Sagi. To summarize, we believe we are well-positioned within the industry thanks to the key advantages we achieve from being completely end to end. Our unified platform provide advertisers and media partners with simplicity and better data empowerment, while also accelerating the industry move towards supply path optimization. We have built this platform with a heavy focus on CTV, video, and data, where our customers rely on our deep expertise and actionable insights, and which now accounts for 92% of our programmatic net revenue. We continue to believe that advertisers and media partners will rely on and allocate additional spend towards fewer companies with diverse portfolio of solution that can service them across all paths of the buying processes and across all screens, regardless of their service level needs.
We will also continue to deliver on our promise to expand and enhance our end-to-end CTV capabilities for customers, such as what we achieved through our recent acquisition of Spearad, which further complemented our end-to-end platform offering. We also have taken steps to further our U.S. and international footprint and accelerate our growth in those key markets while differentiating ourselves through global data exclusivity via our partnership with VIDAA. As we look ahead, we will continue to evaluate additional strategic acquisition opportunities while also continuing to make investment in our product, R&D, sales, and marketing to help propel future growth and increase our market share. Finally, on the investor relationship front, we anticipate being far more active with both U.S. and global investors through attending investor conferences, conducting tech demos, and participating in non-deal roadshows with the firms that cover Tremor.
We will be very busy working towards garnering additional interest from current and prospective shareholders. We believe that we have a compelling story and value proposition with strategic differentiation and advantages that more investors and customers will see the benefit of as we move ahead. We look forward to speaking with current and prospective investors at RBC Capital Markets Global Technology, Internet, Media and Telecom Virtual Conference on November seventeenth, and Raymond James Technology Investors Conference on December sixth, and ICR Conference on January tenth. We believe that we have significant room for growth and remain confident about our future. Operator, we will now open the call to investors' questions.
If you'd like to ask a question, please press star then one. If your question has been answered and you'd like to remove yourself from the queue, press the pound key. Our first question comes from Matt Swanson with RBC Capital. Your line is open.
All right, thank you, and congratulations on the results this quarter. Ofer, you mentioned SPO as kind of a growing theme, and it certainly seems like there's no better way for customers to take advantage of that than going with a full stack like Tremor. Can you talk about just kind of what sort of tailwind this has been for you during the quarter, during the year? Do you think there's a chance that that theme accelerates in 2022?
Thank you, Matt. Good morning. Yes, we started this process about two and a half years ago when we acquired in April 2019, when we acquired RhythmOne and connected the RhythmOne basically to Tremor and created an end-to-end solution platform that include a DSP and SSP. We believe that in this way it's creating a few elements which are really important for the advertisers, but also for the publisher. The first one is simplicity for them to buy the traffic, to run their campaigns according to their objectives and so on. The second one is around data, that is also an emphasis for us. The third one is the supply path optimization, meaning less mediators between basically the DSP and the buyer to the media and reaching their clients.
What we see in the market that many companies and of course advertisers and publishers are adopting that, and this will become a standard in the near future. We believe that it will grow in 2022, and it will support our growth also going forward.
Thank you. For Sagi, the profitable growth you're achieving this year, you know, is really noteworthy. When we think about the strength, particularly adjusted EBITDA, it was great to get that additional color on the returning expenses next year. How are you thinking about balancing investments in growth for the opportunities in front of you, compared to profitability when we're looking out to 2022?
Hey, Matt. Thank you. I think we are all aware that we want to grow the business organically and keep growing it into 2022 and going forward. We understand that in order to do that, we need to invest more in marketing, R&D, sales, and product. Having said that, and, you know, expecting the growth to come in 2022 and going forward, I think we still can maintain somewhere around the 45% adjusted EBITDA margins out of net revenue.
All right. Fantastic. Thank you for the time.
Thank you.
Thank you.
Our next question comes from Laura Martin with Needham & Company. Your line is open.
Good morning. I have three. The first is on these margins, just following up on the prior question. They are quite a bit higher structurally. You were at 55% in the quarter. You just said structurally, you can stay at 45%. Jeff Green, sort of, from over at The Trade Desk, did 41% in the quarter, but really only commits to 30% margins. The first question I have for you is, what is it about your business that structurally is so much more profitable than all the other ad tech firms? That's my first one. My second one is on your slide 14. I love this slide. Basically, if I look at on your CTV grew 115% year-over-year, and doing the math, it looks like online video grew 40%.
My question is cannibalization or additive, why is online video growing so much slower than CTV? My third is, again, referencing The Trade Desk again, Jeff Green said that he believes that CTV creates competitive advantage for the open internet to take share back from the big walled gardens. I'm interested in whether you agree with that, and if so, what your thinking would be supporting that thesis, because that would be wonderful for investors, if true. Thank you.
Thank you, Laura. It's Ofer. I would take maybe the third question that you ask about CTV, and that is giving an option for the open market to basically grow compared to the walled gardens.
Okay
I agree with this statement and with Jeff that saying that. I think that CTV is an open market first for other companies also to grow their business, and it's not controlled by the walled gardens, basically. That also is the reason that we signed this important agreement with VIDAA, which is an Israeli company, that basically is the operating system of this platform that allow us now to get ACR data from all the TV and CTV basically around the globe in an exclusive basis.
We believe that this competition will just enhance, and it's less related to the walled garden and also advertisers who like to reach more and more users through different channels and not just basically the legacy ones.
Thank you, Ofer. Laura, hey, good morning. I will answer the first two questions. Regarding profitability, yes, probably we are the highest profitability margin in our industry. I think that it's come from couple of parameters. Of course, the main one is our end-to-end platform and our end-to-end business model, where we are catering both sides of our partners, the media partners and advertisers and agencies. The second one is our infrastructure, tech and product infrastructure, where we are running very efficiently, and it's allowing to maintain a low code base. Both of that are contributing to our amazing adjusted EBITDA margins.
For your first question regarding CTV growth versus video growth, there is no cannibalism around that because CTV, of course, is the device that we are running on, and video is the format. We are very heavily generating revenue through video. It's more than 80% of our revenue is coming from video. The growth over there can be as high as we are doing in CTV, where we started, of course, lower. We're doing around 26% of our revenues through CTV, and probably it will grow still higher than our increase in video going forward.
Just to add one point to about the EBITDA margin and so on. We are talking about we grow our cost investment in basically all the related engines by around 30%, but our income grow by 100%. Of course, this extra income went down to EBITDA. That's why we see this growth in EBITDA compared to the market and to our focus, basically.
Thank you very much. Great results, you guys.
Thank you.
Thank you.
Our next question comes from Andrew Boone with JMP Securities. Your line is open.
Good morning, guys, and thanks for taking the question. Two, please. The press release highlighted strength in the creative offering. Can you just talk about the value that Tr.ly offers and how customers are leaning into it? Just how does that relate in terms of thinking through your relationships with advertisers as well as their agencies and Tr.ly? Question number two is on VIDAA, the international component, the global nature of that agreement was kind of highlighted multiple times. You know, going back to when we started our relationship with you guys, our understanding with the focus was more U.S.-based. Can you just step back and review kind of how you guys are thinking about international and any potential there? Thank you so much.
Of course. Good morning. I will start with the second question, if you don't mind, regarding VIDAA. First of all, our main focus is the U.S., and of course, close to 90% of our revenues are coming from the U.S. We still have, like, very nice infrastructure in the international markets, like in U.K., Germany, Singapore, Australia and Japan that is there, and it's, you know, it was suffering because of COVID and the non-ability to move the people here in order to train or to go there and raise more, move more knowledge between the companies. We feel that there is a big potential also internationally, and one of the things that we learned how to do in the last five years is running ACR targeting in the U.S.
We feel that there is a huge potential also in the international market. We think that it will be a differentiator for us in some of these markets, since VIDAA is a very major player in some of them, like Japan, Australia and also the U.K. We believe that it's important to mention it because we believe it will give us an edge and a differentiator in this market, and we'll be able to grow our revenues from middle of 2022 going forward. Regarding your first question about Tr.ly. Basically, the agencies and the advertisers are looking for unique and creative ways to basically enrich the offering.
It's not the video itself, it's around the video that is like enabling to get more information on the product or the service, point of contact, to download a brochure, to scan a QR and get more information or to download the product into their mobile phone and so on. We are able to do that through Tr.ly. That is growing very fast in the demand. We need to remember that the agencies conducted a few changes that lower the resources around that. Advertisers are looking for that, and it's giving them simplicity, again, when they're running with us to get all these services when they are running with us on the platform.
Another point is that the creative is now connected to our DMP and allow us basically to take decisions and to change the creative according to the data and according to the user that is basically watching the creative in order to adapt it to the goal and the KPI of the client, which is very meaningful.
Can I just follow up really quickly on that last point?
Of course.
Does Spearad accelerate that at all in terms of now having an ad server as well as then the creative elements? Can you just talk about how those two things are intertwined?
Of course it will accelerate it when you have an ad server and header bidder and mostly ad server such a sophisticated ad server as Spearad into the platform. It will enhance our capabilities of course, together with the, also even with VIDAA that is providing us data. All these elements together of course increasing the effectiveness of the ad that we are showing to the user according to different parameters and the KPI of the advertiser. I think that in general, we didn't spoke a lot yet about Spearad, but we are going to do that in the near future.
It's one of the most advanced platform that we saw that is incorporating a CTV ad server and header bidder in a platform that was built by very experienced internet ad veterans that basically built this platform and created it and sold a company like that in the past of ad serving to AOL a few years ago. Basically what we will be able to offer-
Thank you.
Basically what we will be able to offer is one-stop shop for all the data, creative, serving capabilities regarding CTV. That's what we enhanced basically in the last few months through the launch of Tr.ly, the acquisition of Spearad and the deal that we've done with VIDAA for the next couple of years.
Great. Thank you.
You're welcome.
Our next question comes from Johnathan Barrett with Panmure. Your line is open.
Thank you. Can you hear me guys?
Yes.
Great. Thank you. Just obviously, you changed your accounting a short while ago. I just wondered if you could first of all give just an update on the size of the billings that you are now involved with, just to give us a sense of scale, what the annualized run rate is, first of all. Then second, I wondered if you could give us a breakdown of your net revenue so that we can understand how you're getting paid by clients now or what elements you're getting paid for the most and or you know, how you're earning some of your revenues from perhaps from the media buying and selling side.
Just so we can get an understanding of that mix of income, and perhaps you can talk about how that mix is evolving as well, and what we might expect going forward. Then thirdly, just on, I suppose this is partly to do with Unruly, but I guess it's to do with the wider group as well. It just, what are you seeing in terms of the demands for putting up guarantees on better quality media, and, you know, financial commitments and the like? Yeah, just perhaps talk around that subject matter if you can.
Okay. I'll take the first two questions. We changed, like in 2020, our reporting basis. Instead of reporting only on a growth basis, we changed it where we are reporting now programmatic on a net basis and performance on a growth basis. Where you're seeing our reported revenue, it's a mix of growth and net. This is the reason we are emphasizing our contribution ex-TAC in order that we will be, you know, we can report on an apples-to-apples with our peers. As every other company, of course, billing and invoices are going on a growth basis, and this is how we are collecting the money and then paying to our media partners. We are not disclosing the growth revenues.
As per your question, what is coming out of programmatic and what is coming out of performance, I think we highlighted that in our press release. In Q3, programmatic revenues, which are on a net basis, almost 69%. The gap to the total of 76.7% is of course performance. The nine months, we generated $192 million in programmatic, which again, the gap to our $213.4 million of contribution ex-TAC is performance. Regarding MRG, Ofer, you want to take?
Yeah, MRG, usually companies are not providing exclusivity in this world anymore, like publishers are not providing exclusivity. We saw a very big advantage to get exclusivity from News Corp, which is one of the biggest publishers in the world, most respected one. As part of the deal of acquiring Unruly, we also provided an MRG to manage their media three years after the acquisition, basically. Usually when we are providing MRG, it's only for key media partners that we feel that it's can be a differentiator or very interesting for advertisers to get a hold of and to run their campaigns against. Usually it's not a practice anymore that is available so much in the industry. Most of the deals are done, as we mentioned, programmatically.
Okay. Can I just have one more follow-up question? Is that okay?
Of course.
Yeah. Just, we heard from ITV yesterday, in the U.K., about their desire to control the transaction process, and avoid middlemen. How does that sit with the wider video universe, in your view? I mean, do you think it's credible for them to run their own platform, that you know, actually is direct to advertisers or do you think they'll include you in that? How do you think that will go?
I think that this is exactly what I discussed when basically Matt asked his questions about the supply path optimization. Meaning that you are managing everything on one platform, meaning you are managing your DSP, which is the demand side, which is where the advertisers are basically running their campaigns, or we are running them for them through basically SSP that is connected to all the direct publishers. In the case of the publisher that you are talking about, he can basically manage all his media there, all his broadcasters under this platform. It's exactly what is done. As we mentioned, this is a phenomenon that is now growing. It's growing in two elements. One of them is that cooperation, strong cooperation between DSPs and SSP to create supply path optimization.
We feel that the more advanced one is what we created, which is one platform that basically everything can be managed on one platform, and basically you are avoiding or minimizing the usage of middlemen. This is the path and this is the vision that we created a few years ago, and that's what we are following now. I totally understand what they are trying and where they want to go, and it makes sense, and we are doing it already for a couple of years.
Thank you.
There are no further questions. I'd like to turn the call back over to Ofer for any closing remarks.
Thank you very much. As we said in the beginning, we are very excited about the results and the progress in the company, and we are looking forward to keep talking and making a progress with the company going forward. Thank you very much.
This concludes the program. You may now disconnect. Everyone, have a great day.