Welcome to the Perion Network First Quarter of 2021 Earnings Conference Call. Today's atperion.com. Before we begin, I'd like to read the following Safe Harbor statement. Today's discussion includes statements involve known and unknown risks, 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 and 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, these results reported today will be analyzed both on the GAAP and a non GAAP basis. While mentioning EBITDA, we will be referring adjusted EBITDA. We have provided a detailed reconciliation of non GAAP measures to their comparable GAAP measures in our earnings release, which is available on our website and has also been filed on Form 6 ks. Hosting today's call 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 Mr.
Dorian Gerstel. Please go ahead, sir.
Thank you, and good morning, everyone. There is no doubt that our Q1 represents a very strong start to the year, continuing the momentum we enjoyed in 2020 and setting the stage for another successful year in 2021 beyond. In the Q1, we delivered revenue of $89,800,000 a 36% increase from the Q1 of 2020. Display and social advertising revenue was the main growth driver with 61% increase to $38,100,000 and search and other revenue increased 22 percent to $51,700,000 We remain highly profitable as GAAP net income increased by 148% and adjusted EBITDA by 41%. From a capital position, we have fully repaid all our outstanding debt for the first time since 2014 Perion is debt free.
We moved the company from having negative $42,000,000 net cash in 2017 to positive $128,000,000 by the end of the Q1. I'm proud of this accomplishment, which 1st and foremost reflect Perion management fiscal discipline as well as our ability to deploy our capital to grow shareholder value without coming up against leverage constraints. To that point, we completed a successful and over subscribed follow on offering in January, grossing $66,000,000 Strong balance sheet and debt free situation allow us to further invest in technology to continue and improve our competitive position in marketplace. We accomplished this growth, increased our profitability and saw significant improvement in our balance sheet, thanks to our belief that execution is essential part of our strategic plan, which many of you heard us speak at length at our recent Investor Day. Our strong performance during the Q1 of 2021 was due to our ability to capitalize several macro factors.
1st, millions of consumers were stuck at home and increasingly surfing the web during the pandemic, which dramatically benefited the ad supported Internet. 2nd, many advertisers pulled back their budget during the uncertainty of the early weeks months of pandemic last year. They released those budgets late in 2020 and this momentum has continued into 2021. 3rd, while travel advertisers slashed their budget overall during last year, the rise of e commerce meant that more marketers had reason to shift advertising dollars online where they could influence a purchase close to action. This offset declines in travel and entertainment.
Finally, a lot of you are wondering about the extent to which some of the new consumer behavior will stick and which will revert to the way it was. Let me tell you, we continue to see a meaningful shift in consumer behavior as the pandemic has accelerated the digitalization of nearly all aspects of our lives. Consumers are spending an increasing amount of time online and more and more of this time is dedicated to shopping. Consumers are ordering meals online for pickup or delivery. They are cutting the cord and turning to digital sources as well as rapidly growing new platform like CTV for sports and entertainment and news consumption.
As TechCrunch has said, we saw and I quote, we saw 5 years' worth of e commerce growth in just a few months. As a result, online advertiser use of measurable performance based, cost per action buying models made it easier to justify increased investment. 2 thirds of online advertising revenue came from performance pricing models, while 32% use CPM models. This performance based model impacted our search business. Performance advertiserlabssearchadvertising.
It is high intent category where they can easily see the return of their investment. The long term renewal with Microsoft Bing help us even farther, giving publisher confidence in our search offering and help drive our 22% growth in this segment. While the pandemic is declining and life is starting to resemble what we remember as normal, it is clear that consumer behavior will be forever changed. Digitization is here to stay and the brands that do not respond will face an extinction level event. What that means is our clients, brand and advertiser, are intensively monitoring consumer behavior and adjusting their spend on platforms that are winning the war for attention.
Perion is positioned perfectly for these data driven advertiser insights wherever and however advertisers seek to invest to attract consumer, Perion has a solution. Our As I mentioned, Perion has a unique capability to generate revenues from both the demand and supply side of the open Internet. On one hand, we are a demand side platform that serve agencies and brands with innovative suite of cross channel and high impact creative units, including running and managing interactive digital CTV ad campaigns that we deliver to smart TVs. And we are also a publisher site platform that brings 1st and third parties a content monetization system for our owned and operated assets as well as sites such as Newsweek and Entrepreneur and other prominent websites. We also developed a solution and innovative products that connect publisher with the leading search engine like Bing, delivering high quality leads.
We sit at the hub, at the center of where the supply and demand side meet. We enjoy a holistic view and benefit from the virtuous feedback loop that provides unique and accurate insight, making our data inherently more valuable. We generate 1st party data that will be invaluable as cookies become part of a digital history. Paragon dotai, our SaaS actionable performance monitoring platform, integrates massive amount of data from cross social channels. We process that using proprietary technology and algorithms to drive enhanced ROI for our customer across their Paragon release earlier this year exceeded our internal expectations.
We ended the Q1 with 7 new clients and we believe this number will increase significantly in the quarters ahead. This will weave together to put Perion in a unique place with a large technology moat within the digital advertising ecosystem. With that, I'd like to turn the call over to Maoz to review the financial results for the Q1. Maoz? Thank you, Laurent.
Q1 reflects continued strength of the business momentum from the second half of twenty twenty, and we expect this trend to continue throughout 2021 and in the following year. Our performance during the quarter was echoed by a 26% pro form a revenue growth and improved adjusted EBITDA margin. Turning to the quarterly results. During the Q1 of 2021, revenue for Perion totaled 89 point $8,000,000 an increase of 36% from $66,100,000 in the Q1 last year. This revenue is composed of $38,200,000 from display and social advertising, representing 42% of 2021 Q1 revenue, with search advertising and other revenues contributing $51,700,000 and representing 58%.
On a pro form a basis, assuming we own ContentIQ and PubOcean in both periods, revenue for Perion increased 32%. Our display and social advertising revenue increased 61% and 32% on a pro form a basis. This increase was primarily due to a, a CTV solution serving as a key driver for expanding our customer base and a contributor to 11% increase in average deal size B, the successful launch of Therion actionable performance monitoring SaaS system for social advertisement that was already chosen by 7 new customers C, the contribution and synergies from ContentIQ and Pub Ocean, which were acquired in 2020. Search advertising and other revenue increased by 22% as a result of a higher number of daily monetizable search grades we delivered to Microsoft Bing and others. Our daily number of searches was 17,700,000 compared to 12,200,000 last year.
In addition, we added 13 new publishers to our network during the quarter. Customer acquisition costs in the Q1 of 2021 were $54,900,000 or 61 percent of revenue compared to $36,100,000 or 55 percent of revenue in the Q1 of 2020. The increase as a percentage of revenue is primarily due to the acquisition of Content IQ and which carry a higher traffic acquisition cost and product mix. Our media margin remains stable at around 39%. In fact, this margin has remained stable around 40% for each of the last 4 quarters.
While total revenue increased significantly during the Q1 of 2020 compared to the Q1 of 2020, GAAP SG and A totaled $14,700,000 or 16% of revenue compared to $13,600,000 or 21 percent of revenue during the Q1 of 2020. This improvement is a result of an ongoing management efficiency effort, demonstrating the scalability and leverage potential of Therian's business model. Therian's GAAP net income for the Q1 of 2021 was $3,300,000 or $0.09 per diluted share compared to $1,300,000 or $0.05 per diluted share in the Q1 of 2020. Non GAAP net income in the Q3 of 2021 was $7,000,000 or $0.19 per diluted share compared to $5,000,000 or $0.17 per diluted share in the Q1 of 2020. Adjusted EBITDA increased to $8,800,000 or 10% of revenue for the Q1 of 2021 from $6,200,000 or 9% of revenue in the Q1 of 20 20.
Cash from operating activities for the Q1 was $13,500,000 compared to $2,500,000 last year. As of March 31, 2021, we had unrestricted cash, cash equivalents and short term bank deposits of $128,000,000 compared to $60,300,000 as of December 31, 2020. As previously disclosed, in January, we completed a follow on public offering, which was oversubscribed 7 times, generating net of $61,000,000 We paid off $6,200,000 of our debt early and ended the quarter with 0 debt on the balance sheet. This concludes my financial overview. I will now turn the call back to Doron for a closing session.
Thank you, Maoz. As a closing note, I'd like to take a moment here to thank my management team and every parent associate around the world for their talent, passion and resilience. We would not be in a strong position we are without their efforts. Business evolution, which is based on financial excellence, strategically growing each business segment and through that increasing our profitability. We now have a fortress balance sheet with $128,000,000 in cash and no debt.
Despite the global pandemic and to some degree because of it, Teryon continues to excel. Based on the strong first quarter and our continued momentum, we're increasing our 2021 annual guidance. We now expect revenue between 390 $1,000,000 to $410,000,000 and adjusted EBITDA between $39,000,000 to $41,000,000 To provide a cushion of confidence, I want to note that our 2021 guidance does acquisition. Both would represent upside to our guidance and the fact that we are not including any projections of performance. Looking further out, we remain laser focused on achieving sustainable and highly profitable double digit annual revenue growth.
With that, we are reaffirming our strategy to deliver substantial value to our stakeholders and achieving our $500,000,000 annual revenue goal sooner than originally anticipated. It is important for our investor and our team to declare a long term mission and organize behind it. It is a measure of my confidence in our plan, our technology, our market understanding, and most of it that the team beside me. With that said, operator, will you please open the call for questions? Operator?
Thank We'll now take our first question from Laura Martin of Needham. Please go ahead.
Can you hear me okay? 22% growth is the midpoint of the range. And I'm just wondering why you wouldn't have gone higher? Like it feels like momentum is much more robust. And also specifically, why you wouldn't include travel, which is such a big driver of Bing and other search engines?
Why wouldn't you include travel and have higher why wouldn't you expect higher growth than what you're updating the guidance to?
Yes. Yes. So thanks for the question. So, 1st and foremost, keep in mind that we are still, I think, early in the year. Even though we have a great visibility on the Q2 and to some extent, definitely to other quarters, we need to be cautious.
I think that the most important thing is that we are continuing at the same pace as we finish 2020. In 2020, it was 26% and our midpoint is 22%. And we are definitely allowing ourselves to take as we are taking every year a conservative approach even though we are very happy of the guidance, the improved guidance that we provide. Aside to your second question, the word that I was using and referring to travel oriented advertiser was material rebound. Even though we've seen some changes, it's not to the extent that 15% of our revenue is coming from this vertical, which is travel oriented advertiser.
We are in the low we are between, let's say, 3% to 5% at this point. And we would what we took is again a conservative very conservative assumption that it will be difficult for this signal to recover because we almost approach the summer and it has to do with setup time and this is what we are hearing from our advertisers and that their plan is moderate for this year. So in the context of providing a careful guidance, we were taking this assumption.
And then maybe stepping back on industry comments since you're an expert. I'm very interested in sort of as you think about the industry, when cookies go away, could you talk about how disruptive you think that's going to be from a headline risk versus a substantive point of view as we go through 2022 next year?
Yes. So, 1st and foremost, I think that we need to look about those companies that their business model is very much performance, but it's based on retargeting. They are very, very much depend on cookies, allowing them to track potential consumer along the journey. And I think that their model is going to face definitely some challenges. We are very much on our performance is quite different.
Are not depending on cookies because we are very much based on all of our performance advertising on what's called the search advertising that has to do with our partners, Bing and also Yahoo. So, to that extent, these changes are not impacting the performance part of our business. And as far as the other part, which it has to do with display advertising, we need to distinguish between advertising, which is based on a publisher, which is on the network or a publisher that is part of our network. Publisher, this is our network, publisher that we owned and operated or publisher that we are monetizing their content is completely in a different category. And for us, we definitely recognize it as the first party data.
I think that just to end it, I think that one of the main advantages that we have a company that we prepared ourselves because we knew that this is this will come sooner or later is the fact that we are able to generate revenue both from the left side, the demand and the right side, the supply of the open Internet. It will become an advantage when more and more the cookies become a constraint for other players in digital advertising and because we are able to definitely use this as an advantage for data, ability to target our audience and ability to drive to a higher frequency and reach in order to provide a higher return for our advertiser.
Thank you very much.
You're welcome.
Thank you. We'll now take our next question from John Egbert of Stifel. Please go ahead.
Great. Thanks for taking my question. The daily search volume growth hi. The daily search volume growth and recovery in revenue was pretty impressive. Can you talk about the on ramps fueling this growth in recent quarters?
How impactful have content monetization synergies been in driving query volume? And as people go back in the office in mass in the months ahead, even if they're going in fewer days in pre COVID, do you have any views on where daily search volumes could settle out at? I mean, it seems like a risk that some of the PC queries could shift back to mobile in that environment. And have one follow-up, if I could, after that.
Yes, sure. So first and foremost, we are very pleased with the growth and currently we are reporting an average daily average searches of 17,000,000 searches a day. One of the most important things that we are very much track and trying to bucketize the number of searches. It has to do with 3 categories. The category that the most important for us is transactional category.
Those category of search is categories that represent a high intent for shopping. It goes to informational searches or informative searches or directional searches. We are focusing for a reason on transactional type of searches. So what we've seen, it's not just that the number, the absolute number of searches is growing to 17,000,000. Their proportion of transactional search within the 100% of searches is growing.
And that's the interesting part because as you know, that's what very much impact the revenue more than anything else. And now, if this would stay when people will go back to the office, if this will stay afterwards, I think I feel that the quote that I provided from TechCrunch is definitely there. People, because of the pandemic, start to understand that they're able to shop smart and shop online and that's definitely accelerate the adoption. We not see it growing even though we are very much U. S.
Focused and we see that the recovery is there and in most areas, life is back to normal. I will call it the new normal because we've seen that every day that goes by, every day that goes by, the number of transactional searches is just growing, just growing. And we tend to believe that this will definitely will continue. Now, to the next part of your question, what we did, we very much try and think from a use case perspective, the content monetization and the search. And one of the most interesting use case that we bring in will have to do with display to search.
And since we are very much defining the content for those that are reading the content, either on our own and operated sites or sites that we operate like Newsweek and Entrepreneur, we are targeting our search unit and forecast for those readers that are in exploring stage. Explore means that they are not ready to make a buy decision. Explore means that they want to they're almost there. They're showing a high degree of intent, but they're still struggling between Verizon and the other mobile provider. They are not sure yet, but they are almost there.
And for that, we find a very, very effective unit, which for them, suggesting keywords that they feel that as if they would like to search more and those keywords are translating for us in searches that we provide to our partners. So what we like about the fact that we're able to combine 2 assets that we have into a synergy use case that generate a very, very substantial income and very good margin for us. Great. And then
just one follow up on CTV, you obviously called it out as a driver of bigger deal sizes. Are you able to quantify the contribution to display in 1Q or maybe just a directional sequential trends there? And then any line of sight either in new signed deals for inventory or new deals coming in the next few quarters that could kind of take that up to the next level of growth?
Right, right. So, I think that Dan Ax is on the call. He is the President of Undertone, which is very much behind the main the CTV driver. Dan, you there?
Yes, I'm here. In terms of your question of asking, so I can't disclose, for example, our pipeline of deals, but I could answer that more qualitatively to give you a sense of why I think there's going to be substantial growth. Would that satisfy you?
Yes, Any color you can provide would be great.
Okay. Yes. So part of the reason this is growing, let me take it from 2 angles. The first thing is our positioning as a business, which says if you are an advertiser that wants high impact advertising, which is our specialty, We now offer the largest screen in the home. So what we do is we create now multi screen capabilities with our known our well known capability for structuring and designing creative advertising networks.
And now we could articulate a campaign using that creative across any screen, either in the household, on your mobile phone, etcetera. So that's the first thing that we are the source to go to and the market is understanding that we are the source to go to. Secondly, we're applying that creativity now to interactive television. Let me explain the different levels of that and why it's a growth driver for Undertone and Perion in general. So first you have just standard CTV, which is just a video you distribute.
That's not a lot of value add, but of course it's good advertising. But on top of that, we create what's called movie, we can create bubbles arising from the bottom of the ocean and other effects, which make the ad particularly appealing. The next level is what we call interactive advertising, which is where we actually start creating additional you can use your television remote to create additional experiences. We might have other videos sitting on the site. And so, you can now, for example, you see a Mercedes video, the standard 32nd spot, we'll have other videos you can click on that show the cargo or the interior sections.
So you could turn a 30 second spot into a 90 second spot or more. This is very powerful for an advertiser. Not only getting more time, but you're actually getting signals about what a consumer may be interested in. And then finally, there's dynamic CTV, which adjust the ad based on personalization factors. So this is a tsunami.
The ability to add Undertone's creative capabilities to what in the past has been straight video advertising is huge. So the ability of not just CTV to do a better job articulate ads across all screens in the household is, in my opinion, very strong business position and will power our growth going forward. Great. Thank you.
You're welcome.
You're welcome.
Thank you. We'll now take our next
out of COVID, it's super clear that the traditional ad agency is in a tough place, has most of their infrastructure is set up for linear, non digital and just it's clear that that much more that we're not going backwards. So can you talk about how that sets you up to the extent that you should see more demand for your DSP and agency related products? And again, kind of CTV being example of a product that would benefit from more demand coming through you? And then the second question, updated thoughts on M and A. Are we likely to see any transactions this year?
Thank you.
Yes. Thanks. Hi, Jay. So, I think that this year or so for advertisers also very important. And I think it's and the fact that they were trying more and spend more on digital advertising and they spend more not just on digital opposed to their conventional way of advertising.
It allows them very much to measure the return of ad spend. And what we've seen with our advertiser that this ability to correlate advertising spend to performance, to revenue, to something which is an actionable and meaningful way, definitely shifting dollars towards digital advertising, more of the performance side for that reason. And something which I think it's more interesting, the tools allows advertisers, as I mentioned on the call, to track very much consumer behavior. And the ability is to what extent advertiser able, and I want to emphasize, live on the spot on shifting dollars where consumer is very much spend their time. And I think that this is definitely this agility and ability to do it.
So, let me ask it this way, maybe the question wasn't clear. So, agencies try to do certain things in house, they have outside services they bring in like yours, right? So I guess what I'm asking is given that agencies seem like they're going to be under a lot of cost pressure coming out of COVID and most of did not downsize in headcount during COVID. I wonder if that positions you to win more agency business because of that. So in other words, are you seeing more client wins both on the advertiser side and the agency side relative to 6 months ago, a year ago?
So maybe talk about that.
Yes. So the only thing that we basically see and as I mentioned, we increase our average deal size And it very much has to do with something which is quite basic, and it has to do with the performance. And I think that agency understand that in order to retain their customer, they must show them a higher return on ad spend. So even though they have been a huge cost pressure and they very much would like to do everything in house, they are under greater pressure is to showing better results. And I think that this is very much drive more dollars into these type of companies like us that investing on technology.
They're trying to be ahead. And Ben was mentioning the fact that we have the ability to run 1 campaign in multiple screens. By the way, if we're talking about the cost pressure from the agency side, we definitely see our agency would like to minimize the number of vendors, which gives us another advantage because the fact that we cover the 3 main pillar of digital advertising is very much in line of what they are looking for is to have less vendor that they're able to adjust their offering across those three channels. So, what we've seen is that agency are very much forced to work more with companies that providing the sophistication and the technology that they're able to show to their brands and in this way keep them for years to come.
And then the M and A question?
So on the M and A question, we are working intensively on our M and A pipeline and in various areas, which I mentioned on the previous call. We are doing we're doing it we're doing some progress. We're not in a stage that we definitely can disclose it, but it's taking more and more of our management time.
Thank you.
Thank you.
Thank you. We'll now take our next question from Eric Martinuzzi of Lake Street. Please go ahead.
Congratulations as well on getting the debt paid off.
Thank you, Eric.
Major milestone going back to your arrival, Doron. So that's terrific. I had a question on the seasonality of the business. Historically, I would say, and this is Q1 versus Q2. Normally, I have those roughly flat on both the advertising and the search.
Maybe it's a question for Maoz. Where do you see the seasonality in Q2 versus Q1 on the 2 segments?
So, as if we're ignoring 2020 as not affecting here with COVID, we're expecting 2021 to move back to normal. So, starting slowly with Q1 and then Q2 and Q3 are similar and higher level of revenue in Q4. And again, if we're moving to the segment search and advertising, we're also expecting the same trend. Q3 and Q4 should be the same and Q4 should be stronger. On advertising, the improvement or the increase in Q4 is much higher than the search.
Okay. And then could you I missed it when you gave the pro form a numbers on the total revenue and then the advertising revenue. Could you give those again?
Yes, of course. So just a minute. So, as a whole, we're talking about 26% consolidated. And on advertising, we're talking about 32%.
Okay. And then the search is all organic at 22%, correct?
Right.
On the search side, and this is my last question, there's obviously we've got Verizon Media is going to be changing hands here coming out of Verizon and going into Apollo Group. I know the transaction is still yet to close, but what are your thoughts on potential because I would assume that part of your relationship with Bing is there's the demand from the advertisers who are trying to gain access to the Yahoo! AOL properties as well. What are your thoughts on potential impacts to Perion from the sale of Verizon Media?
Right, right. A great question. So, first and foremost, Yahoo and Verizon Media is a valued parent partner. We wish them great success as a private company. I can say that we expect to continue fruitful partnership.
We believe that under the new management, it should expand even with new synergistic opportunities. And as far as I can tell, and we've not been disclosed before that we had a conversation yesterday with some key executives that are managing our account. And I think that Yahoo so let's say let's put it this way. I think that now they will be under greater pressure as being a media only company to further increase their revenue and to find new, as I said, opportunities to work with their partners. So I'm looking at it in a very optimistic way.
Understand. Thanks and congratulations on the quarter and the outlook.
Thank you. Thank you.
Thank you. We'll now take our next question from Jeff Martin of ROTH Capital Partners. Please go ahead.
Thanks. And I echo the compliments on the guidance and the balance sheet improvement. It's great to see. Thanks. Why are you one clients, 64 deals in Q4, dollars 6,500,000 of revenue.
Do you have those metrics for the Q1?
Yes. We have the metrics on the revenue side. And as I mentioned, the most first of all, the focus was for us, since we are offering a multi screen, especially when it comes to new accounts is to very much focusing on having a CTV as part of the offering. And as I mentioned on the press release and on the call, we've seen it as a key driver of our ability to acquire new customer by adding the CTV element and the big screen capability into our holistic multi screen type of offering. That's what it meant.
It was more important for us to use it as acquiring new deals than to have CTV dollars by itself, which is in the neighborhood of $2,000,000 in the
implications for search growth for the balance of the year?
7 publishers. It's not 7. The 7 is on the Paragon AI. On the search, we're talking about 13 new publishers. So, 13 new publishers on the search side of the business, search advertising and 7 new brand clients that are using paragon dotai, which is our SaaS platform, optimizing social spend for brands, a platform that we released on January this year, and we are very happy with the progress that they're doing.
Okay.
And then could you us kind of get a framework for what your growth expectation is for search for this year?
We're not we are providing a consolidate guidance, but we believe that the trend that we have seen in Q1 will continue.
Very good. Thanks for your time.
Thank you.
Thank you. We'll now take our next question from Chris McGinnis of Sidoti and Company. Please go ahead.
Yes, good morning. Thanks for taking my call. Nice quarter. Hi. And congrats on the balance sheet.
Thank you.
Just maybe just digging on the CTV, you just talked about the different formats and that dynamic sounded the most intriguing. Can you talk about kind of the demand you're seeing and how you're pushing maybe to certain areas, whether it's that dynamic or whether it's the standard you're seeing? Thanks.
Right. So, Dan, you want to take this one?
Yes. I'm happy to say, again, we are starting to as we've introduced our ICTV components, we're starting to see a growing mix of the demand overall for ICTV, which it plays perfectly into what we want because that's truly a value adding function. I am convinced that over time, either branded where a creative skin, QR codes and the like are added to the video, and then also interactive elements as I discussed earlier, in my mind, undoubtedly become a larger percent of the mix and we're starting to see that now. Thanks for taking my questions. Welcome to
We'll now take our next question from Jon Nobile of Taglich Brothers. Please go ahead.
Hi, Doron and Moses. Thanks for taking my question. Once again, congratulations on beating expectations. I just have one question. If you could talk a little about your recently launched Actionable Performance Monitoring System, specifically how this differs from other performance monitoring systems and the competitive advantage you believe that this brings the company?
Yes. Okay. Thanks for the question. So, 1st and foremost, we are the system is focusing on there are 3 layers. At first, we are very much once the brands install the system, we are providing an assessment, an assessment that has to do with the spend across all social channels.
Based on this assessment, we are providing the 2nd layer, which is a recommendation. What is the right mix or the right spend that should get the highest return on spend? And the third factor, we're able to translate those recommendation into action. In other words, shifting dollars from this channel to that channel. Now, we are working with, I can say, Fortune 500 brands that are spending tens of 1,000,000 of dollars on social advertising.
But the most to our surprise, at this point, they are not having a consolidated view, not just in terms of reporting, not the consolidated view in terms of what is the total spend, but consolidated monitoring as far as what works, what's not working and what is the best channel to get the desired action. And we were using this the analogy was very much to actionable performance monitoring that I know of the date of the enterprise software. And we tried very much to implement it into the digital sphere of social. I can tell you that the assessment part before going into recommendation is a great selling tool because without much of efforts to implement it, we are able to provide to our customer what is going to be the immediate saving from changing the preference or changing the investment between the different social channels. And that's something that we're being used as a great sales tool, allow us to very much reduce our sales cycle time and ability to get attention of large investors.
The ability to connect between the 3 layers, the assessment, recommendation and action is something which is unique to our platform. There is another very important factor that part of the assessment that we're using, we are very much tracking a lot of data and we can share with our customer what is the benchmark in their vertical. In other words, when it comes to retail, we can say, okay, for this social spend, retail customer without mentioning the name, you are below or above the benchmark for this vertical. And that gives them also an indicator what they can strive because they have no idea what is the standard and what should be their goals in terms of return on ad spend on social that has to do with their vertical.
And how has the feedback been from the
clients? So, first of all, the feedback was that if we are we launched it in January and by the end of March, we had 7 clients and very, very large clients were under NDA. I cannot disclose the name. And the fact that we're able to close what I consider is an enterprise software SaaS deal, which has, of course, a recurring element into it, the highest possible degree of stickiness in a cycle month of 2 and 2 month cycle time and something which is new in the market. I'm very, very happy with the results and this is continuing into the Q2.
I can already share with you on our Investor Analyst Day that this concept was done together with Havas Media, a global agency that has 130 offices around the world that very much standardized all their entire social spend on this platform. They were our design a partner, worked with us more than a year to have, in my opinion, a great product market fit because this is already being used with their customers as well. We are in the midst of rolling it out to more and more of their customer. This is the overall Havas spend on social advertising is 100 of 100 of 1,000,000 of dollars.
Okay. That's great.
Conference back over to Mr. Doron Grissel, sorry for any additional or closing remarks.
Yes. Thank you guys for your
Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect.