Kick off the afternoon session here at Day One RBC TIMT Conference. We're super excited to welcome back Ofer Druker, the CEO of Nexxen. And it's been a big year for Nexxen. That's what we were just talking about. So for those less familiar with the story, maybe a brief overview of kind of your role in the ad tech ecosystem, but then also what's driven some of the success we've seen so far this year.
Thank you, Matt. Happy to be here, honestly, and I think that we have really a great year this year, and hopefully just the beginning. About our position in the market, for many years now, we basically prefer, or we want to be a flexible ad tech platform that can include DSP and SSP connected deeply to data because we believe this is the winning formula, and we started that basically already in 2019, so it's like a long trend that we believe in, and we feel that this year, basically the macroeconomics and also the taste and the wishes of the advertisers is to work with data in order to improve the results and they understand the benefit that we can provide thanks to the rebrand that we generated and we launched a year ago, or a little bit more than that.
I think that now is a time that we feel that people really appreciate our offering and interacting with it.
And then something you talked about full stack, and this actually came up on your earnings call, was this idea that we're starting to see more and more companies kind of blending, right? At least feature functionality, even if they're not saying the words from a DSP to an SSP. Nexxen has both, obviously, and then also a connected data platform, which is differentiated in the market. How do you view kind of this dynamic of being on both sides? And what kind of competitive advantage when you go to your customers, does it give Nexxen?
Thank you for this question, so first of all, yes, a lot of our peers are basically talking now in different ways about end-to-end solution. First of all, we are happy about it because it's validating our strategy that we started 2019, and it's giving us like an additional understanding that we choose right. The advantage that we got is that even if they are saying that they are end-to-end solution, they don't have a full technology side to side, meaning most of them are, if we are looking at the major SSPs, they have an SSP, which is fully functional, but on the DSP side or on the demand side, they're basically operating an Ad Server, not a fully functional DSP.
And when you are functioning and when we are utilizing our DSP, of course, the advertisers are getting much more capabilities than to utilize an ad server that is usually more limited in its capabilities. And on top of that, I think that the fact that we have such a deep data expertise and platform, it's enabled us to do much more because when you are really sitting on end-to-end solution and you are utilizing data in full scale, you are enabling the advertisers to reach better their targets, to measure them, and for the publishers to be able also to sell audiences and not just media, which is very important. So I think that the fact that everybody talking about end-to-end is supporting our strategy, but the fact is that we have fully functional DSP and SSP, most of them don't.
The second thing is that we added another layer of data that is basically enabled us to generate additional value for our clients and for our publishers.
Yeah. So everybody's kind of helping to increase the interest in end-to-end, but don't have the products that deliver it. Yeah, that creates an opportunity.
Or when they are doing that, I think that the results that people will experience when they're using fully functional platform, it's different. It's better.
Yeah. Yeah. I mean, so thinking about the fully functional platform, we're starting to see some of the benefits from all the work that you did integrating Amobee. It was Amobee. But that certainly doesn't happen overnight. So you went through a lot of work of heavy lifting last year, and you recently commented this idea of now being able to shift from defense to offense. So could you talk a little bit more about kind of the thought process, but also the advancements that have been going on in the underlying business that maybe weren't as apparent to us or to the market because of some of the noise of the integration?
Of course. So I think the decision to acquire a DSP that is enabling us to also offer enterprise solution, meaning self-serve, is very meaningful and right. Meaning we think that this decision was a good one and we feel strongly about it. It's also enabled us to acquire additional technologies around data that we can talk in the future, maybe in a few minutes. But in general, when you look at that, Amobee was a very big company. It has about 1,000 employees when we acquired them. We used to have about 600. So to have a company that's 600 buying a 1,000 people company, it's not easy. The second thing that we decided to do is not to keep them in silos, because if you keep them in silos, you are basically killing the effect of the integration and the acquisition.
And we decided to basically integrate the platform into one. The fact that we added DSP and they added DSP, of course, it's challenging. The fact that basically we added data management platform and they added data management platform is challenging. We needed to evaluate two platforms and decide which one we are evaluating, which one we are elevating, which one we are sunsetting. And we didn't use ego in this decision. We chose to use the Amobee platform because the Amobee was more built to enterprise solution and also to we knew that we can basically move all algorithm and machine learning systems into the platform in order to support in a better way CTV and video. And that's what we've done. But it's like many companies, it will take them many years to do that. We basically integrated the platform in around nine months.
But it's, again, to build a story, to train the people, to build the alignment about all the teams around what we are trying to achieve is, of course, difficult and it's taking time, and we did it over the last two years, but we gained from that a lot.
Yeah.
If you think about it, the enterprise solution platform that we are now able to provide to agencies, like we announced Tinuiti, for example, utilizing our platform in full scale and other agencies that are utilizing our agency in full scale. The fact that we have all these data capabilities that came from Amobee, and Amobee built like amazing technology around data, but they never connected it together. They worked in silos, and when we connected them together, we see the blessing in that, and it's like adding a lot of value to each part of our solutions, basically.
Mostly the Discovery tool that is basically enabling clients to launch on our platform, learn about their audience very quickly, learn about their sentiment to their products, insight about their products, create audiences, and utilize it on our DSP in everything on one platform, which is saving the clients a lot of time, money, and complication.
Yeah. Maybe building on that idea of the combined data assets, the middle layer of your full stack is the data management platform. And it gets maybe a little less attention sometimes than DSP, SSP, but it's really, it's the engine that makes the machine work. And data at the end of the day feels like the greatest differentiator within the advertising ecosystem. So could you just discuss a little bit some of your offerings with the data platform, Nexxen Discovery, and then your TV capabilities?
Of course. So of course, we believe strongly in data. I think that data is enabling advertisers to reach better results, to learn more about the audiences in the first place, to learn about insights, and to get like more understanding about the sentiment of the user to their products, to their services. And when you look at that, I think that also for measurement, you need data today. So to measure what is the success of your campaign when you run it, it's very important to all the data, basically. Now, we strongly believe, as we said, in data, but we also believe in CTV and in general in TV because this is the center of the house. Most of the interesting content and the time that people are consuming right now is shared between their mobile and their TVs. Sometimes they're doing it in parallel.
If they're younger than me, they are able to do that. But in general, when you look at that, people are spending a lot of time in front of their TVs. We signed a very exclusive and unique agreement with Hisense, which is an OEM of TVs, but they invested and built an operating system that's called VIDAA. The VIDAA solution can be integrated in a lot of OEMs. About 100 OEMs already, or even more, basically integrated VIDAA into them. We invested in that company $25 million a few years ago in order to be their partners, in order to build this relationship, unique relationship with them. Guess what? Maybe it's luck, maybe it's the partnership, but Hisense now basically delivering TVs second in the market after Samsung. Internationally, for sure. They are growing very fast.
It's helping us because we are able to harvest the data and utilize it in order to do targeting on CTV, but not only. We can basically use our TV data now. When people are buying other formats, we can basically utilize the TV data in order to tell the advertisers what these people are watching so they can target according to this behavior also on other formats of media. I think that we have like a different level of differentiation. It's not just differentiation. It's like different level of capabilities when we talk about it compared to our peers. I believe that this is the winning formula, meaning flexible platform that's end to end with a very strong data sets that also connected to TV like we do.
Our TV Intelligence platform also includes not just Hisense because people are not trying to buy just Hisense users. They are trying to buy TV or CTV. Our TV Intelligence is basically integrated and collecting data from about 60 million households in the U.S. We have very strong presence and we just enhance it also internationally with Hisense when we built it in Australia, Canada, U.K., and more countries to come. We signed an interesting agreement with The Trade Desk around it.
Yeah. And if data is the input that we're focused on, it feels like attribution is really the output. I think the way we focused on it coming into this year is we talked about the separation of kind of the art and science of marketing. And this year, people are talking a lot more about it as like the CFO putting pressure on the CMO, basically saying, "Prove it." Right? And so can you just talk about how ROAS affects your customer conversations and spend and then just kind of the visibility that you get from a full stack platform?
Of course. So first of all, I think that CMO needs to prove every day how he is using his money in order to make a difference. And it can be, of course, as you mentioned to the CFO about bringing new business or creating more sales or more engagement with the product of the company, for sure. I think it's like the importance of that is changing over the time because when it's tough times, it's more important. When everything is like happy, it's like less of an issue. But I think that last year was very difficult. So people were very cautious about their investment in media and so on. And for us, it's great because I'm always saying that we prefer to come with facts and with numbers, not with feelings and emotions and slogans.
Because I think that when you are coming with numbers, it's very easy to convince people to buy from you or to work with you and to invest more money with you, and that's for many, many years that I'm in this business. That's the only way that I know. Meaning when you are coming with numbers, it makes your sales much easier, so our platforms are set for that. Our Amobee platform that we acquired was mostly about performance. We added to that another layer that basically allows us to do that on CTV, on video, and so on.
We feel that now we have a very strong platform that from a performance perspective, when people are checking the performance of our platform compared to our peers, we are able to generate in most cases better results because of the fact that we are also one platform and there is less, there is more synchronization of data on both sides. We can use the data for attribution. We can add enrichment to the data from other sources because of our data management platform. So in general, I think that from the CFO, we like the CMO that chooses us basically to utilize their spend or to utilize their investment in order to get more traction to their services and to their products.
Maybe shifting to an area of your own internal investment. I don't think any of you have been to a meeting today where Gen AI did not come up. So we'll keep that going. It's been an area of investment for you. If you could comment on the roadmap of Gen AI at Nexxen and then secondarily how you see it impacting the broader ad tech market and just do you feel there's an advantage in AI from being full stack and then also your data platform?
Yes, so you know I'm many years in this industry and I like these buzzwords that people are using all the time. Full stack, CTV, all this stuff that when you sometimes dig inside, you see that it's nice, but it's not really meaningful for them. I think that Gen AI can be very powerful to our industry in general. I think that Gen AI will influence our industry in a very big manner, to my opinion. I think that when you look at that for good, I think, because it will allow the advertisers and the clients to utilize the power of the platform in a more meaningful manner, and you don't need all the time to be the most expert or most, you don't need to bring all your leaders to the room in order for people to utilize your technologies and platform.
I think that when you are end-to-end solution, basically, and with a company like us that control and have so much data assets, what is Gen AI? Gen AI basically needs to get a lot of signals back in order to be able to make a decision. They need to have an opportunity to make the decision along the way of the campaign. We have both. When we look at that, I think that our opportunity on Gen AI is the most meaningful one. We are going to, we are investing already, but we are going to issue that in the first quarter next year. We didn't want to confuse the market and our people in the fourth quarter. We are going to do that early next year. We are going to do that in two elements.
One of them is with our DSP, basically to create like a copilot that will enable the advertisers to be able to choose the right audiences and to make optimization of their campaign or to create more upside to their campaigns, basically real time with our copilot and to utilize the best, basically data sets in order to do that. The second thing is on the Discovery tool. The Discovery tool is an art, honestly. It's like something that when you dig in and you see the platform, you fall in love if you like data and you like to see what's going on with your services and products.
When I saw it for the first time, it's like it's giving you belief again in online marketing because you're saying, "Okay, people went to online marketing because you can really collect all this data and utilize it in a smart manner." So I feel that Gen AI will basically enable us to utilize the Discovery tool in a much more meaningful manner to be in front of much more clients. And I feel that when people will test it and utilize it, they will utilize our platform because what we did, we connected the Discovery tool to activation on our platform, on our DMP or SSP. So if you are a DSP, you can buy media from that. If you are an SSP, you can basically start, as I said, sell audiences and not media, which is very powerful. So I strongly believe in that.
We are going to invest in that. And the beautiful thing is that also all the work that we've done, all the algorithm and machine learning that we've done in the past several years, we will be able to integrate under the Gen AI in order to win. And we built it from both sides, also from the publisher side and also from the advertiser side. So combining them together, I think will bring something very powerful to this industry. And again, I think that this industry will benefit from that. The clients of this industry of edtech, thanks to Gen AI, will be able to basically get more out of the technology and out of the opportunity that we are providing them.
So maybe we'll shift from the biggest buzzword in tech to the biggest buzzword in ad tech, and we'll go to CTV. So I guess it's such a rapidly evolving ecosystem. How have you seen the environment change throughout the last year and how you operate in it? And then thinking through, you just came off a quarter growing 52% in CTV. What are the biggest catalysts to your growth and success? And how do you see whether it's the market evolving or Nexxen evolving 2025 and beyond, you building your position there?
Okay. So I agree. CTV is a very big thing in our industry. I'm not sure that CTV by itself is a buzz because I think people are using it sometimes as an expression and something that they got. But when you check, you see that it's 1% or 2%. For us, as you saw, it's very meaningful. And I think that when you're looking at CTV, I think that, as I said, it's in the center of the house. I believe that in the future, it's not related just to advertising. The TV will be the operating system of the house. You will be able to do everything because it's like everybody sharing the TV, the TV, let's say, in the living room, and you will be able to use it as an operating system. But if you're talking about CTV, why we are successful and so on.
So in the last five years, we invested a lot of resources. I don't believe in shortcuts, and we don't believe in magic. We believe in hard work, and we believe in dedication and focus. And for us, CTV was focus of our activity for the last five years. And we invested a lot of our resources, a lot of our development teams in order to build the technology and the algorithm and the machine learning to basically execute better on CTV. So we adjusted our DSP. We adjusted our SSP in so many ways to be the best for CTV. And it takes time to recognize it in the market, but I think that people recognize it more and more. And people are coming to us because of our CTV activity, because of our agreements with the data partners, because of our agreement with Hisense.
We have an amazing relationship with the rest of the OEMs. Don't understand us wrong. With Samsung, with LG, with TCL, with VIZIO, all of them. We are working with them closely in different manners. Our agenda is, of course, to grow it. I think that what happened this year, as we see alignment, people, first of all, our people learn how to operate better our platforms because of the integration that was happening. Our salespeople sharpened their message to the market. Our marketing teams did a better job explaining what we are trying to achieve. I think all of that came together with macroeconomics, which is better this year than last year. Last year, it was awful. This year is better. People are willing to invest in CTV.
And in the past, they prefer to shift their budget to other stuff like display and so on. And this year, they kept their also budget on CTV, which was helpful for us. But we believe that this is just an opening for us for next year. Meaning what we discussed before about the Gen AI Discovery tool, the data sets, everything that we build around ACR partnership will help us to even grow it in the future and to grow our position in the future. And when you compare us to other players in this market, you can understand that we are now accelerating. They are already at their peak. And when you look at that, this is something that will give us a lot of room to grow our business in the future.
Yeah. Well, and to your point, it feels like the missing link in CTV revenue growth for the industry as a whole, that's always been data and be able to accurately target. You've gone over the ACR data with ACR automatic content recognition, basically data about what you're watching when you're utilizing the operating system. I guess, how do you think about some of your unique data sets and how you think about using them internally? And as you mentioned, the licensing opportunities that also come with the data.
Of course. So internally, it's easy because we are doing it from 2016. We are part of the pioneers of using ACR in order to run campaigns for clients. And we are doing it since then. And we are doing it, I think, in a very interesting manner and very efficient manner. And we'll keep doing that. And we are adding to that a layer, like you said, attribution or measurement that we can add for ourselves through our platforms, basically. And it's very successful for us. And we are now expanding. So when you look at international markets, we are taking it sometimes as obvious that we also can do that in other markets. But most of the OEMs are not doing it internationally. We are one of the only ones that are doing that, for example, in the U.K. We are doing it.
We will open more markets, Australia and Canada. Other companies are doing it mostly in the U.S. The second thing about partnership, we are utilizing this data in order to tighten more strong partnership with leaders of this industry, for example, The Trade Desk and StackAdapt that are basically getting from us or buying from us segments in order to target on our media, and it's helping us to grow our revenues from CTV thanks to the data that we are sharing with them, so we are building it with people that we can see that we are sharing with them the same values that we feel that they can build the future with us, and we are doing it in a, it just started in the last, from Q3, it started, so I think that next year it will be accelerated a lot.
And it will bring a lot of partnership into our system because people want to share this data and they want to utilize it. And most of the other ACR data, to the people that are not familiar, are running in walled garden. So we can offer it to other people when they cannot get it in other places. So this is something very meaningful. And we want to keep it like that and to give it to people to be able to utilize this data in a way that is, of course, supporting our business.
Yeah. Earlier today, we were actually talking about this, that when the press release came out for the quarter, it was the strength of CTV and the strength of Adjusted EBITDA, which I feel like, you know, from all the way time back to your listing in the U.S., like those were the two kind of core parts of the thesis. So we just touched on the CTV side, the Adjusted EBITDA strength, where you recently just raised guidance for the full year. And when you were talking about Amobee, it came to my head right away about how you turn that company break even before it even entered the door. And so it's core to your.
Three weeks after.
Three weeks after. I was off by three weeks. But can you just talk us through like how you're maintaining such strong profitability, how you think about balancing revenue growth? We've clearly gone over a lot of investment initiatives for the year and how you're thinking about investing in the integrated platform and Salesforce.
Of course. So for us, to be profitable, to generate EBITDA is like key. We don't see it in any other manner. We are not trying to build a dream. We are trying to build a business that's generating cash. You can see our cash conversion also is very high. We are generating cash all the time and we'll keep doing that. I think that when we traded also in AIM, the British audience are looking a lot also on your EBITDA levels. So you need to keep it growing and so on, which we did. I think that eventually we understand that we need to balance between EBITDA and growth of net revenue. And in the last two years, it was difficult to do that because of what I said, because of the fact that we were busy integrating, consolidating, improving the synchronization and the processes in the company.
But we kept profitable and we even grow the EBITDA because of discipline of all the elements in the company and our business model, which enables us because we are end-to-end to keep much more margin from every dollar that is coming to the mix. So it's not just discipline or playing cheap. It's being basically smart about the business model that we are operating, and we will keep doing that. And I think that from now on, what we see now with our Phase 2 Nasdaq, hopefully the shareholders will approve it, is to invest more of the money that we see that we are able to generate in order to grow the company. Now, in our case, it's not really an investment like other companies that are showing that they are investing now and they will see the upside in I don't know when.
We are looking at that as very short cycles. So every time that you are adding more resources and they are done in a proper way, they can basically generate immediately outcome and increasing revenues and profits. So basically the investment is turning over to increasing of revenues and EBITDA in the future. So we look at that as a value. We look at that as an important element to keep our independence. And we have to remember the last point that we made all this acquisition. We bought a lot of shares. We made the acquisition of Amobee, north of $200 million of cash. We invested in VIDAA in cash. We have no debt.
We have cash in the bank because of the way that we are managing the business and the way that we are looking from a strategic perspective how we can grow it, but keeping the EBITDA and the cash generative in place.
So you mentioned this briefly in that answer, but you had some exciting news coming out of Q3. And so Nexxen structure right now, for people that don't know, is ordinary shares trade on the U.K. on the AIM, the alternative investment market, and it's ADR trades at a two for one ratio in the U.S. on the Nasdaq. So you announced that you're now in the process of shareholders potentially approving, exchanging the ADRs for ordinary shares. So it'd be a reverse split, a delisting from the AIM and consolidating all under one U.S. listing. Can you just talk about why you're doing this, why now, and what are the benefits?
Of course. So a few things. First of all, when you're looking at our peers in the market, all of them are traded in Nasdaq. So we want to be, we feel that when you look at our multiple where we trade our value, it's lowered compared to our peers that are traded in Nasdaq. This was always indicated to us by our shareholders. And most of them are international shareholders that are looking at Nasdaq and saying, we want like that. We want to be there. So I think that it makes sense to us from a valuation perspective. The second thing is liquidity. The liquidity of the share now split between two stock exchanges. So when we will be traded in one, I think that we'll have more liquidity that will bring more investors into the share. And simplicity.
Investors in the U.S. and everywhere don't look for something that they need to put so much thought about the structure of the company to understand how they can benefit from that or what is the risk. They prefer to have same, same, same. So basically, when we are looking at that and we will move to Nasdaq, hopefully soon, it will happen probably if it's supposed to be approved on December 20, and then in mid of February, it will happen. We'll be traded as regular share in Nasdaq, and it will bring much more simplicity to shareholders and investors in the U.S. to invest in us. The last point is to work in three legal zones, meaning U.S., Israel, and England. It's not easy. Everyone has you have to be strict about every move you are making, and sometimes it slows you down. Additional cost, of course.
Lastly, not in order to, I think that the U.K. investors, the U.K. stock exchange is not about technology. It's about other stuff. It's about banking, finance, oil, real estate, and stuff like that, but not about technology. So most of the big investors there are not interested to invest in technology. So it doesn't make sense for us to stay there.
This conference has reached RBC's all-time record size, so we are still very much interested in investing in technology here.
I have no doubts.
All right. Well, with that, we are at time. Always a pleasure to have you, Ofer.
Thank you.
Look forward to seeing you again next year.
And as I said in the beginning, we feel it all at RBC, honestly. Thank you.