Good day, everyone, and welcome to the Perion Third Quarter 2019 Earnings Conference Call. The press release detailing the financial results is available on the company's website at perion.com. Before we begin, I'd like to read the following Safe Harbor statement. Today's discussion will include forward looking statements. These statements reflect the company's current views with respect to future events.
These forward looking statements involve known and unknown risks, 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, the results reported today will be analyzed both on a GAAP and a non GAAP basis. While mentioning EBITDA, we will be referring to 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 the call today are Doron Gerstel, Perion's Chief Officer and Moe Sigron, Perion's Chief Financial Officer and Dan Axe, President of Undertone. I would now like to turn the call over to Duran Gersell. Please go ahead.
Thank you, and good morning. For me, the 3rd quarter results are more than just a strong set of financial data points that validate our strategy and operational progress. They are defining proof that we have transformed the very structure and foundation of our organization. When I joined Perion in 2017, our expense and capital structure was unsustainable for a company of our size. Our advertising offering was narrowly focused and search was in decline.
In addition, we were reactive to changing market condition and lacked the technological innovation to differentiate ourselves in an evolving and competitive market environment. The results we are reporting today are a combination of our efforts, relentless execution, significant investment in technology, financial discipline and a shift in corporate culture and buy in from the entire organization into a strategy that demands accountability and innovative thinking. Over the years, the ad tech industry has no shortage of companies that have been able to raise significant capital to capitalize on industry trends to drive short term growth. But with a few exceptions, this industry has led sustainably profitable investment opportunities. Over the past 2 years, we have repositioned Perion for a long term profitable growth by strengthening our underlying financial structure and innovating our core technology to better align with the diverse and increasingly sophisticated needs of our customer.
We have improved our balance sheet quarter after quarter, while simultaneously delivering on our guidance year after year and showing consistent improvement. We are executing with precision. Underpinning our success in our suite of solutions that span across display, search and social, the 3 pillars of digital advertising. This suite makes Perion uniquely positioned to capitalize on opportunities whenever they emerge. We don't have to place bets because as brand and agency shift their ad budget holistically across different platform and channels to maximize their digital strategy objectives, we have the product and services to capitalize on these movements.
This diversity is foundational to our long term strategy and it is the catalyst that will allow us to transition to a more sustainable, predictable and profitable operating model. During the Q3, we generated more than $11,000,000 of cash, increased EPS by 37% year over year and increased net income by 31% year over year. To put that into perspective, we generated more cash in the 1st 3 quarters of 2019 than all of last year, and we ended the quarter with more than $52,000,000 of cash on the balance sheet and net cash position of $33,000,000 We grew total revenue by 15% year over year in the Q3, a clear indication that our strategy is working. We remain laser focused on increasing our earnings and cash flow. When I joined Perion, search was considered to be a melting ice cube where revenue decline was planned by design.
The conventional wisdom was that assets should be minimally maintained and milk for short term cash flow. Today, we reported our 5th consecutive quarter over quarter growth and 4th consecutive quarter of a year over year growth. The investment we have made to turn this business around have not just changed the fundamentals of our underlying business, but has changed the perception of an industry that was waiting for reinvention. We are excited to report that out of all search revenue, only 2% is left from the legacy business contributed by the merger we had with Conduit in 2014. Under the leadership of Tal Jacobson, we have built a deep moat around our search business and dramatically changed the revenue trajectory and business opportunities through innovation.
Our offering has changed dramatically in the last 2 years. We were leveraging a sophisticated platform that uses big data and machine learning to provide publisher with the ability to integrate an embedded search functionality within their existing platform in a variety of different ways in order to augment and enhance the user experience. As a result, we are mining 13,000,000 search queries per day on a platform that provide meaningful insight to publisher who use it. The value proposition of our offering has changed from a quick revenue booster to a win win offering that optimizes traffic monetization for higher RPMs, which in turn translates into better earning and cash flow for publisher and Permian. We have created a virtuous circle where volume translates into quality and the unique searches we provide to Bing are providing insight to our customers.
This dynamic is not only positioning to attract higher quality publisher partners and expand our addressable market, but is a key differentiator that provide a dynamic for sustainable value. Microsoft is pleased with the success that has resulted from the close collaboration. As a result, we are actively working on innovating the partnership in a bold new way and in the Q4, we are expect to launch our first co developed application with them. We believe this could further bolster our relationship over time and particularly as we look to formalize an extension of our current agreement. I want to turn to Andre to now.
From my perspective, our advertising business is very much at the same point that our search business was just a few quarters ago, and we are nearing a major inflection point. I am confident that in time, the improvement we have experienced in search will begin to materialize in advertising as well. Our ongoing investment in Undertone continues to advance as agency and brands are increasingly recognized the value of our Synchronized Digital Branding solution. We have put a special focus on integrating Undertone's high impact display and video offering with our social media platform to create a meaningful and trackable cross channel advertising journey. Our new partnership with Pinterest announced in the Q3 enhancing our social media offering provide us access to the largest social platform and allow us to provide better synchronization capabilities.
During the Q3, we appointed Daniel Axe, who was a member of the Perion Board as the President of Undertone. Dan is a proven leader with a broad managerial expertise in technology business. He brings a demonstrated ability to drive success in digital business that need to master complex supply and demand dynamics and deeper on the integration of data, sales, operation and product to achieve an ideal market fit and dramatically accelerate business trajectory. Dan has been a key contributor in Undertone's new strategy direction and it's an honor to introduce him to you on the call. Dan?
Thank you, Doron. It's a pleasure to be here. I joined Perion as President of Undertone after having deep involvement with the company and its prospects at the Board level. What excites me about the opportunities ahead are the following 5 powerful drivers of future growth. 1st, Undertone is recognized in the market as a quality of set brand safe ad network that partners closely with its Fortune 500 customers to provide the highest possible KPIs in a trusted publisher environment.
2nd, as the ability to attract users with cookies becomes less and less relevant due to privacy concerns, the role of creative and grabbing attention becomes more and more relevant.
Undertone and its pixel studios have
a reputation for creating high impact ad units. 3rd, as you mentioned, our Synchronized Digital Branding solution is resonating with our customers because they recognize the need to deliver strategically targeted messages across the entire consumer journey across multiple channels and platforms. 4th, as we transition, we continue to prioritize margins, profitability and the development of long term relationships with our clients over short term races for low margin sales. A good example of this is our decision to replace our current alliance with Alfonso, a CTV provider with better and higher margin alternative. In addition, proprietary creative units in a brand safe environment will support our margins.
Lastly, our development efforts to scale Undertone's offerings are progressing as planned and we remain on track to formally launch a full new product suite in the first half of next year. We remain laser focused on driving Undertone's momentum and augmenting its revenue and earnings trajectory. I've made a career out of improving businesses and launching new growth directions, and I see significant untapped opportunity that I'm eager to exploit. With that, I'd like to turn the call over to Maoz to review the financial results of the Q3. Maoz?
Thank you, Dan. We are pleased with the strong results we achieved during the Q3 of 2019 and encouraged by the business progress we have made year to date. As a result of this continuous progress, our net cash position continued to grow and has reached its highest level in the last 5 years. In the Q3 of 2019, revenue for Perion totaled $65,800,000 composed of $21,600,000 from advertising and $44,200,000 from search and other revenues. Total revenues increased by 15% from $57,200,000 in the Q3 of 2018.
This increase was primarily achieved as a result of a 43% growth in search and other revenue as a result of additional publishers, higher RPMs and growing number of unique searches. Advertising revenues decreased by 18% as a result of the transition from selling formats to becoming unintegrated solution. However, despite the decline in revenue, period gross margin in the advertising business increased year over year as we continue to prioritize margin over short term sales. Search and other revenues represented 67% of Q3 2019 revenues with advertising contributing 33%. Customer acquisition costs and media buys in the Q3 of 2019 were 34,200,000 dollars or 52 percent of revenue compared to $28,800,000 or 50 percent of revenue in the Q3 of 2018.
Net income for the Q3 of 2019 was 2,900,000 dollars or $0.11 per diluted share compared to $2,200,000 or $0.08 per diluted share in the Q3 of 2018. Therion non GAAP net income in the Q3 of 2019 was $5,000,000 or $0.18 per diluted share compared to $4,300,000 or $0.16 per diluted share in the Q3 of 2018. Adjusted EBITDA in the Q3 of 2019 was $7,600,000 compared to $6,700,000 in the Q3 of 2018. As of September 30, 2019, we had cash, cash equivalents and short term deposits of $52,000,000 compared $43,100,000 as of December 31, 2018. As of September 30, 2019, total debt was $18,800,000 compared to $40,500,000 as of December 31, 2018.
This concludes my financial overview for the Q3. I will now turn the call back to Doron.
Thank you, Maoz. We are executing with precision and discipline. We have strengthened Perion's financial position, improve our balance sheet and are strategically managing the business to maximize earnings. Looking forward, I am confident that our advertising business is very much at the same point that our search business was just few quarters ago. We are building a deep moat that will become clear over the next several quarters as has the moat around search, where our results demonstrate our capability to dramatically change the revenue curve through new leadership, significant technology investment and deep insight into the needs of the marketplace.
We remain focused on building a more sustainable, predictable and profitable operating model. Based on our current visibility, we are reaffirming our full year guidance for adjusted EBITDA of $25,000,000 to $27,000,000 and now expect it to reach or exceed the top end of the range. With that said, operator, will you please open the call for questions. Operator? Thank
We'll hear first from Eric Martinuzzi from Lake Street.
Congratulations on the strong third quarter results. I wanted to particularly call out just not only the growth, but the 2nd sequential quarter on quarter growth there, that double digit 15% growth is terrific to see as is the cash flow. I have a clarification and then I would like to ask a couple of questions after that. The adjusted EBITDA performance was excellent in Q3, certainly was well ahead of my own estimate and it was about $2,000,000 more than the consensus. Just you're comfortable with reaching or exceeding high end of the old guided range, just why not bump up the range like you have done in the past?
Is there some reason for why you're a little bit hedging on your guidance on the adjusted EBITDA?
No, there is no reason and we are basically stated that we expect to reach and even exceed. I think that we always we are building here trust and we always would like to be under promise and over deliver, I think as expected in this market. But I think the statement that we put about reaffirming the full guidance is a very, very strong statement.
Okay. So really just conservatism. Okay. On the search side, terrific growth there, up 43%. You talked about a couple of different levers that are driving the growth in search.
I'm curious to know the mix right now. Obviously, your legacy business is really not a part of the equation anymore, but the mix between search publisher versus browser extension, can you take me a layer deeper there? You called out search publisher growth, but if I were to look at the percentage of search traffic right now, maybe between browser extension and search publisher, what is that?
Right. So, first, thanks for the question because on the first time, at least that as long as I'm on board, we try to elaborate more about our search business. And 1st and foremost, let me reiterate the fact that the main I think the main success that has to do with the company and one will look at it as a bend the curve, but what is behind it, I think is even more impressive, The fact that not much left, I mean, dollars 2,000,000 out of, what is it, once like above $150,000,000 on an annual basis is coming from the legacy. This is by itself a great milestone for the company or for the others that we're very much looking about the legacy business that is being transferred that has to do with the reverse merger that happened in 2014 and the company had to definitely reinvent itself when it comes to the search because what is very much pass through with this acquisition is not relevant anymore. And that was where what was the main trigger of the decline of this business for years since the merger.
And the company was repeated about it again and again. We understand back then, and that was early 2017, that this is definitely something that we cannot change, the decline of the tail. We cannot change because that very much has to do with governance and things which is outside of our power to change, but we can do. And the whole idea was to come with a new stream of product that very much help us to change the decline and showing growth. And I think the numbers speak by itself as far as the 4th quarter of Q4 that we're showing a year over year growth.
That's a very important one point. The second point, which I think is very much need to be noted, is the effort that we did in terms of the slice and dice, the data that we have that creating a meaningful insight that we can share with our publisher based on the growing amount of searches that we deliver, 13,000,000 searches a day that's definitely be considered as a big data. And the question is to what extent we're able to transfer back the value of it into our partners. And that's amazing work and effort that has been done on our side and that's being reflected 1st and foremost on the RPM. And RPM is RPM is first is being driven by quality of searches.
The higher quality with higher intent, let's give you a higher RPM. And these efforts reflected on what we are doing. I don't think we can disclose the distribution on the different browser. That definitely will not serve the purpose for obvious reason, which has to do with competitive landscape. We rather leave it to us.
But I can tell you that looking a bit ahead, even for this quarter, we are really exciting about what is going to happen because it's really the 1st joint solution where 2 companies team up to bring to market the first product. We are really excited about this opportunity that we're able to merge our technology and definitely Microsoft being understanding what is needed. And we're looking in a very, very bright future on our search mediation business unit.
Last question for me is maybe well, first of all, Daniel, congratulations to you on your appointment as President of Undertone. One of the key next drivers from a financial perspective in the business is getting that Undertone, getting the advertising business back to growth. When you talk about launching a new product in the first half of twenty twenty, is that the same thing as being able to financially model growth for the advertising business in that same timeframe? Are they not necessarily related?
This set of product suites will allow us clearly to garner new revenue and give us either a parity or competitive advantage over other customers other competitors that we deal with. It's hard for me to ascribe specific revenue to the suite of products that we are building right now and will be ready in the first half. So it's hard for me to give you a specific thing and say we're confident of what we're doing is going to contribute to our growth.
Understand. Thank you for taking my questions.
Thank you for the congratulations. That's nice of you.
We'll move next to John Noble from Taglich Brothers.
Hi, good morning. Well, good afternoon in Israel and thanks for taking my questions. Dan, congratulations on your position at Undertone. I just was hoping that you could talk a little about the success of your API business since its launch in early 2018. I see that it's, I guess, a little over a year.
It's already contributing approximately 10% to your search revenue, which was a pretty nice ramp up. I was hoping you could also talk about its contribution to search revenue going forward.
Yes. So, we definitely talked about it and I think I mentioned it in the previous and when I talked about it, it has to do a lot about what we are and the relationship that we have with our publisher. Very much has to do with the fact that we transfer a lot of insight to our publisher as far as how they able to optimize their sites in order to get the most out of this integration. And so there is a huge progress here on 2, let's say 2 vectors. 1, as far as what is our ability to have more and more publisher and we invested a lot on a ramp up on boarding publisher because as you can imagine, there is a long, long tail of publisher that we can target and we definitely need to automate this process.
The onboarding process, that's one. So, it's one effort is to get more of them in order to increase, of course, the percentage of our API business out of the entire search revenue. And this is 1. The second effort is what we are providing them. So other than automated onboarding platform that allows them to really monetize their site as fast as possible, We call it time to optimization.
It's definitely what we are providing them as far as insight and data that at the same amount of content that they have, at the same amount of traffic, they're able to enjoy a higher rev share that's coming through a higher RPM. So those are the two efforts that we are working at and we are very pleased that our existing publisher able to get to do more with their existing asset. And at the same time, there is a tremendous effort on our hand is to accelerate the adoption of new publisher. With that together, we are growing the revenue of this segment of search.
Okay. I was hoping I think in the presentation you actually broke out over the last year or so, the contribution of the search excuse me, to search that the API business percentage of. Do you have that broken out for the 3rd quarter, what the API business was in regard to your total search revenue percentage maybe?
Can you ask again? I didn't Yes. I think the
percentage of the API business in regard to your search revenue. I know I think it was broken out in the presentation. It was it ramped up to about 10 percent in a short amount of time. So I'm just trying to get an idea of the traction growth that we're looking at here.
Yes. The traction is definitely positive, and we're expecting to exceed the number. It has to do with a few other large publishers that we are targeting right now. I think it's too early to say and to point here a number and how fast we're able to exceed the 10%. Okay.
Fair enough.
And in September, you launched what you call the Synchromatic Marketplace. I was hoping you could talk a little about this and what you believe its potential is in growing your advertising business?
So, one of them, the synchronized digital branding and as we'd like to call it the marketplace and an evidence for it, it very much has to do with the fact that we are doing tremendous effort to incorporate our social platform into what we describe as the consumer journey or what more specifically we're basically saying to what extent the air journey is very much aligned with the consumer journey. And this effort requires definitely to plan and execute on different type of channels of advertising. This marketplace and the way they demonstrate is the partnership that we have with Pinterest and our ability to get this valuable partner into our synchronization marketplace and allows us to develop a journey here which definitely taking into consideration those audience that their journey is very much crossing Pinterest and very much aligned with the funnel from that we described before. So that's a great example of the marketplace.
And I mean, this should lift all boats here, not just the advertising business, but it should benefit the search business also?
That's exactly the vision because at the end of the day, the idea that all those pillars will integrate it into offering, it's harder from a search standpoint. So, the next to come by the way is in the marketplace is integration with Amazon, which we definitely see it as a very important element, especially for those e commerce journey that are at least third of the campaigns that we are doing. So this is the next to come. We have quite ambitious roadmap as far as integrating more and more players, channels that are definitely relevant in our marketplace.
Well, that's good to hear. I just have one final question. I know that in the 1st month of your partnership with Alfonzo, you had made mention of generating 28 RFPs and you grew your pipeline by $5,000,000 I was hoping that you might be able to put out any metrics, current metrics on this partnership, if there's any update on a change in those numbers, what does it look like today?
So the overall trend is definitely continuing. We were quite, fact of the matter, really encouraging about the market reaction. At the same time, when we're doing it, we were definitely looking at the margin. And that was the key decision for us to definitely not bind to one partner, but to looking for others. And so from a financially, the trend is there and we're expecting to have even higher margin on the revenue that is being generated that has to do with connected TV integration.
That's all I have. Guys, once again, thanks for taking my questions.
Thank you very much.
We'll share next from Chris McGinnis from Sidoti and Company.
Good afternoon. Thanks for taking my questions and Dan, congratulations as well. I apologize if these have been asked or if you mentioned this in the kind of your opening statements, been on a couple of different calls. But can you just maybe dig into the advertising business a little bit? I thought from last quarter, we were expecting to see maybe a little bit more modest declines for the back half of the year.
Just maybe talk about what maybe changed there? And again, I apologize if you already addressed this.
No, I didn't address this and you're more than welcome doing it. The point the main, I think that the planning factor that we took in 2019 is definitely has to do with the transition that Thunderton is going through. And we took, I think, 1, a brave, but on the other hand, a decision of investing more on positioning Undertone on offering a solution, enhanced solution rather than focusing on a single edge unit. And I think we described in previous call very much in detail the whole concept of the synchronized digital branding, why you are believe on an ad journey rather than a single ad unit. That's definitely set us apart, Set us apart with all the movement that is happening in other EdTech company and other DSPs company, which very much focusing, as I mentioned, in 1 ad unit.
This commoditization is something that we are avoid of playing at and we are very much targeting luxury brands that are looking for quality, brand safety. Yes, we are more expensive than others in the market, but we are delivering way, way greater results. And any time when you're coming with this new concept, which require a huge investment on our side, it also requires some education of our market, to what extent they are willing to invest on a different approach in their display, video in the digital segment. And that's that so we are on one hand, we are really happy with the fact that it resonates and it allows us really to capture the attention of some Fortune 500 clients, as we mentioned, that are investing $1,000,000 and up on campaign with us that has to do with the new positioning. On the other hand, I must say that this process of educating a market on this new concept is taking longer than what we anticipated.
We think that require more and more training, more and more education, more and more proof points and we're investing a lot about measuring and benchmark our KPI and performance of this campaign that is a journey based campaign to other campaign has no doubt, no doubt whatsoever because it's clear on the performance that we have a superior solution. And now it's just matter of roll it out to the field and get agencies and some extent brand trying out and adopting the solution.
Understood. That makes sense actually. And can you talk about the launch in the first half of next year? What is different than maybe the way you go to market? Can you just talk a little bit about the changes that you expect in the first half of the year with the new product suite versus where you're at today or how you're going to market?
Thank you.
Yes, definitely. So it's been a long time and we didn't launch it yet, but in 2019, we are working with actually 5 design partners on this solution. We're able to do some initial sales. So, we're able to turn them into a paid customer on what we called an enhanced platform. So we were very much taking the foundation of the social platform known as Facebook Management Platform, an FMP solution that definitely enhanced it to a cross channel platform.
So the concept is very much enhanced Undertone position and coming with the productization or what we like to call it internally, we're satisfying the concept of what Undertone is selling, the Synchronoss Digital Branding. That's the vision. And as Dan mentioned, this is we're planning a GA in H1 2020. And based on the initial response from our first customer, paid customer and large customer that we are discussing it, we have all but being very, very optimistic on this effort.
Great. I appreciate the time today and good luck in next quarter.
Thank you very much.
We'll hear from a private investor, Derek Klaviy. Please go ahead.
Good afternoon, Tanya. I'm encouraged by a strong quarter here, especially with search and the continued free cash flow. Can you talk a little bit about your estimate for free cash flow on an ongoing basis? And then how you see the optionality associated with that free cash flow? And if you're considering a buyback at this point?
Okay. So we're not providing estimate on the future cash flow, but definitely you're able to see the trajectory and you're able to draw a line here without us giving a specific number. We are definitely expecting that the trend will continue. With that, we are fully aware of the fact that from a positive net cash situation, we surpassed the $30,000,000 We are reducing the debt substantially. And all in all, we reached over $50,000,000 in cash.
That's giving us great options, I must say, and we're looking on all direction. And I can tell you that personally management is looking for acquisition opportunities because we definitely want to accelerate market adoption of what we're selling. We truly believe that there are great opportunities out there to enhance our product offering. And that's our intention. And I'm very much glad that we are turn this very important tipping point from a positive net cash.
For those of you not remember, company had a negative cash for a long, long time. And I think we turned this point somewhere in 2018, which is a significant milestone. And since then, we are improving. We accelerate and we were pay off completely our bonds and we are reducing our debt. We consolidate all debt on one loaner.
And now it's very much a time to look about all options.
Thank you. Can you talk a little bit more about the process of becoming compliant with GDPR for Microsoft Bing and how that's positioned you relative to your competitors?
Yes, definitely. So the GDPR or the CCPA, as you know, is not that apply for our business with Microsoft Bing because there is nothing that has to do with privacy nor cookies or anything that has to do with targeting, retargeting that companies that are focusing on display, display advertising is facing. So that's very much not apply to Bing. However, and I want to hint and say that there is a lot of efforts between the company that has to do with consumer safety. And I can definitely say that the joint efforts that we're doing on joint product is definitely in this line where there is a huge effort from a Bing site to come with a secured browser and making sure that they are very much following this trend and demand that is coming from the consumer, but it's nothing to do with the GDPR or CCPA.
Thank you. Then lastly, can you talk a little bit about the Captain Growth acquisition and how that fits into your overall structure?
Yes, very much. Thanks for the question. So we are very happy with the integration of Capten Growth. Captain Growth is pivot to the success of our new platform. As I mentioned, we introduced it to our design partners and able to do some initial sales.
Captain Growth for those that don't remember Essence has to do with channel optimization. In other words, whenever you are offering a cross channel and you are dealing with before pre campaign planning or even in flight, means during campaign optimization as far as what is the next best action. In other words, where I should put my next incremental dollar and where in which channel I would invest this, that's when Capstone Growth coming into play. And we are very happy with the integration. We are very happy with the fact that they're coming with a superior solution.
We call it optimization center in our platform. That's really resonate. The way it's being done, and I don't want to go too much into it, but it has to do with the transparent versus black box that others are doing. Tremendous, tremendous success of this acquisition.
Thanks a lot, Jerome. I really appreciate it. I'm a private investor for the purposes of this call, but I do represent a larger investor and hope to see you once you have a larger market cap on the institutional side. You're certainly garnering some attention from some institutional investors in the U. S.
Great job.
Thank you. Thank you.
Thank you.
We'll hear next from George Marotta from Pareto.
Yes. Hi. Thanks for taking my call.
I had a couple of questions
election spending and also the Olympics. Is that a plus or minus for your business? Or can you comment if it has any effect on your business?
First of all, it's a huge plus. Our spending is growing and we are part of the pie. Fact of the matter, there are 2 things that we are doing. One, we enhanced our Washington, D. C.
Office. We always had an office in D. C. And definitely because of the election, we hired more people and we're very much prepared for the election because the estimate is between $1,000,000,000 to $3,000,000,000 spent on digital, 1. 2nd, the fact that we definitely have an arm and platform that can support social together with what we're doing in display.
And that's the marketplace of the Synchronized Digital Branding help us a lot because a lot of those political advertisers are looking to merge between the 2 channels. One is the social and the other one in display. And I think that what we've seen so far in a smaller scale, we believe that the spend will grow, that this combination, the fact that we augment the 2 is helping us a lot. So this is one. As far as the Olympics, one of the things that we I think we shared back then has to do with our strategic partnership with Associated Press.
This helped us very much on the Winter Olympic Games that we did the sponsor content together with AP, something that the market really like. Again, a very unique product that we have to offer advertisers to tap on this type of event and that's a good example. We have strengthened our partnership with AP. And as I said, I think we're coming with a quite unique product to the market. So all in all, we are expecting that that definitely will help us change and bend the curve on advertising on these two events, which we are well prepared for.
And thank you for that. On the call earlier, you'd mentioned Amazon. I wasn't clear,
what are you doing with them? So, first of all, it's not unique to us. Amazon has an open API. In other words, whenever you very much would like to use your advertising campaign as part of in Amazon as an advertising platform, anyone can do it. The question is, is the context.
And I don't know if you know I'm sure you're aware, I think that this time Amazon passed the $2,000,000,000 of digital advertising dollars. The context here is very interesting because while we are developing a journey and we are very much monetized well or monitor well, where is the specific consumer in the journey is finding out what is the right time for us showing them an ad on Amazon, basically targeting the same consumer. And so the fact that we are integrating with Amazon has to do with the context of the journey that we are pushing so hard. As additional channel underlying our ability to do the cross channel. So it's not the Amazon as a standalone effort, it's Amazon on the context of an ad journey.
Thank you, George. Is
it clear?
Yes.
Okay. Thanks.
At this time, we have no additional callers in the queue. I'd like to turn the conference back over to Mr. Gerstel for any additional or closing comments.
So the only comment the only closing comment here is that we are going to be in the States and we're looking to see you face to face and elaborate more on what we did and our plans for the future. And thank you very much for being on this call. Highly appreciated. Thank you.
That does conclude today's teleconference. We thank you all for your participation.