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Share Name Share Symbol Market Type Share ISIN Share Description
Taptica International Ltd LSE:TAP London Ordinary Share IL0011320343 ORD NIS0.01 (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 125.00 125.00 127.00 0.00 01:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Media 217.1 21.3 25.7 5.3 160

Tremor International Ltd Q1 2021 Trading Update

25/05/2021 7:00am

UK Regulatory (RNS & others)


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Tremor International Ltd

25 May 2021

25 May 2021

Tremor International Ltd

("Tremor" or the "Company")

Q1 2021 Trading Update

Organic sales traction underpins record Q1 results and strong momentum across 2021

Tremor International Ltd (AIM: TRMR), a global company offering an end to end software advertising platform , announces its results for the three months ended 31 March 2021.

Financial summary

   --    A record performance in Q1 2021, which is historically a quieter period for the Company 

o Net revenue increased 96% to $63.0 million (Q1 2020: $32.1 million)

o Programatic net revenue increased 105% to $55.7 million (Q1 2020: $27.2 million), underpinned by revenue growth in Connected TV ("CTV"), the self-serve platform and private marketplaces

o Adjusted EBITDA increased 4,935% to $27.5 million (Q1 2020: $0.5 million)

o Total cash and cash equivalents as at 30 April 2021 of $130 million with no debt, after conducting a buy back of $6.6 million during Q1 2021

-- All acquisitions are now fully integrated with Tremor delivering record levels of organic revenue growth

Non-GAAP highlights

 
                            USD thousands 
                           ----------------  -------- 
                           Q1 2021  Q1 2020  % change 
                           -------           -------- 
Net Revenue(1)             $62,988  $32,112       96% 
Adjusted EBITDA(2)         $27,519     $547     4935% 
Programmatic net revenue   $55,689  $27,204      105% 
 

Financial highlights

 
                                        USD thousands 
                                      -----------------  -------- 
                                      Q1 2021  Q1 2020   % change 
                                      -------            -------- 
Revenues                              $71,009   $38,611       84% 
Cost of sales                         $17,692   $13,258       33% 
Research and development expenses      $3,403    $3,521       -3% 
Selling and marketing expenses        $18,050   $18,169       -1% 
General and administrative expenses    $6,806    $9,933      -31% 
Depreciation & Amortisation            $9,883   $11,460      -14% 
Operating Profit                      $15,175  -$17,730 
 

Adjusted EBITDA reconciliation

 
                                        USD thousands 
                                      -----------------  -------- 
                                      Q1 2021  Q1 2020   % change 
                                      -------            -------- 
Operating profit                      $15,175  -$17,730 
Depreciation                           $1,954    $3,577      -45% 
Amortization                           $7,929    $7,883        1% 
Share-based payments                   $2,341    $5,228      -55% 
Restructuring & Acquisition-related 
 cost                                    $120    $1,589      -92% 
Adjusted EBITDA                       $27,519      $547     4935% 
 

(1) Net revenue is included in this announcement consistent with the Company's prior disclosures. The Company expects that, following its proposed initial public offering of American Depositary Shares representing its ordinary shares in the United States, the metric "net revenue" will be replaced with a metric currently referred to as "Contribution ex-TAC" in the Company's Registration Statement on Form F-1 ("the F-1"), which has been filed with the United States Securities and Exchange Commission ("SEC"). The F-1 remains subject to SEC review and comment and therefore the F-1 disclosure, including with respect to "Contribution ex-TAC", is subject to further review and amendment.

(2) Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortisation, non-recurring income/expenses and share-based payment expenses

Operational summary

-- Strong growth in Programmatic activity reinforces the Company's strategy to create an end-to-end platform, leveraging technology, data and business intelligence and targeting Video and CTV

-- The Company continues to invest in both R&D and product development, to further exploit additional growth opportunities. During Q1 2021, Tremor launched multiple product initiatives to better cater for demand and supply partners as well as enhancing its go-to-market capabilities

Revenue KPIs:

 
                         USD thousands 
                       -----------------  -------- 
                       Q1 2021   Q1 2020  % growth 
---------------------  --------           -------- 
 Connected TV           $17,606   $5,512      219% 
 PMPs                   $7, 095   $2,606      172% 
 Self-serve Platform   $ 4 ,266     $396      977% 
 

-- CTV continues to grow, and has become a key growth driver for the Company, accounting for 28% of net revenue and 32% of programmatic net revenue in Q1 2021

-- The Company's self-serve segment highlights the continued strength of its technology platform with clients now licensing Tremor's software to run campaigns

-- PMPs achieved strong traction with first tier global advertisers, creating further opportunity for long term growth

Outlook

Management remain confident in the medium to long-term prospects of the Company with Tremor well-placed to further benefit from the ongoing resurgence in the global digital advertising industry.

(1) As described in note 1 to the table above, the metric "net revenue" will be replaced following the Company's proposed initial public offering in the United States with a metric (currently expected to be "Contribution ex-TAC") that is subject to further review and amendment.

For further information please contact:

 
Tremor International Ltd                             via Vigo Consulting 
 Ofer Druker, Chief Executive Officer 
 Sagi Niri, Chief Financial Officer 
finnCap Ltd                                        Tel: +44 20 7220 0500 
 Jonny Franklin-Adams / James Thompson (Corporate 
 Finance) 
 Tim Redfern / Dicky Chambers (ECM) 
Stifel Nicolaus Europe Limited                     Tel: +44 20 7710 7600 
 Fred Walsh 
 Alain Dobkin 
 Nick Adams 
 Richard Short 
Vigo Consulting                                    Tel: +44 20 7390 0230 
 Jeremy Garcia 
 Antonia Pollock 
 

About Tremor International

Tremor is a global company offering an end to end software advertising platform, operating across three core capabilities - Video, Data and CTV. Tremor's unique approach is centred on offering a full stack of end-to-end software solutions which provides it with a major competitive advantage within the video advertising ecosystem.

Tremor Video helps advertisers deliver impactful brand stories across all screens through the power of innovative video technology combined with advanced audience data and captivating creative content. Tremor Video's innovative video advertising technology has offerings in CTV, in-stream, out-stream and in-app.

The media side of Tremor, Unruly, drives real business outcomes in multiscreen advertising. Its programmatic platform efficiently and effectively delivers performance, quality, and actionable data to demand and supply-focused clients and partners. Tremor has a meaningful number of direct integrations with publishers, unique demand relationships with a variety of advertisers and privileged access to News Corp inventory. Unruly connects to the world's largest DSPs and is compatible with most AdAge top 100 brands.

Tremor is headquartered in Israel and maintains offices throughout the United States, Canada, Europe, Asia-Pacific and Australia and is traded on the London Stock Exchange (AIM: TRMR).

Forward-Looking Statements

This trading update contains forward-looking statements (as defined in Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events. Words such as "expects, " "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding completion of the proposed offering. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by the Company at the time these statements were made. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable at the time made, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

TREMOR INTERNATIONAL LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

 
                                                               December 
                                                   March 31       31 
                                                     2021        2020 
                                                  ----------  --------- 
                                                   Unaudited   Audited 
                                                  ----------  --------- 
                                                      USD thousands 
                                                  --------------------- 
                    Assets 
 ASSETS : 
                                                      103,48 
     Cash and cash equivalents                             6     97,463 
     Trade receivables, net                         142,2 55    153,544 
     Other receivables                                16,336     17,615 
     Current tax assets                                1,374      2,029 
                                                  ----------  --------- 
 
 TOTAL CURRENT ASSETS                                263,451    270,651 
                                                  ----------  --------- 
 
     Fixed assets, net                                 3,110      3,292 
     Right-of-use assets                              16,639     18,657 
     Intangible assets, net                          217,411    224,500 
     Deferred tax assets                              31,939     31,717 
     Other long term assets                            1,993      1,834 
                                                  ----------  --------- 
 
 TOTAL NON-CURRENT ASSETS                            271,092    280,000 
                                                  ----------  --------- 
 
 TOTAL ASSETS                                        534,543    550,651 
                                                  ==========  ========= 
 
     Liabilities and shareholders' equity 
 
 LIABILITIES: 
     Current maturities of lease liabilities           7,764      9,047 
     Trade payables                                 109, 933    125,863 
     Other payables                                  41,1 29     47,122 
     Current tax liabilities                           3,647      3,162 
                                                  ----------  --------- 
 
 TOTAL CURRENT LIABILITIES                           162,473    185,194 
                                                  ----------  --------- 
 
     Employee benefits                                   504        495 
     Long-term lease liabilities                      10,647     12,162 
     Deferred tax liabilities                         14,408     15,963 
     Other long term liabilities                       6,447      7,824 
                                                  ----------  --------- 
 
 TOTAL NON-CURRENT LIABILITIES                        32,006     36,444 
                                                  ----------  --------- 
 
 TOTAL LIABILITIES                                   194,479    221,638 
                                                  ----------  --------- 
 
 SHAREHOLDERS' EQUITY: 
     Share capital                                       385        380 
     Share premium                                   263,775    264,831 
     Other comprehensive income                        2,494      3,330 
     Retained earnings                                73,410     60,472 
                                                  ----------  --------- 
 
 TOTAL SHAREHOLDERS' EQUITY                          340,064    329,013 
                                                  ----------  --------- 
 
 TOTAL LIABILITIES AND SHAREHOLDERS' 
  EQUITY                                             534,543    550,651 
                                                  ==========  ========= 
 

Date of approval of the financial statements: May 24 , 20 2 1

The accompanying notes are an integral part of these Condensed consolidated interim financial statements.

CONDENSED CONSOLIDATED INTERIM STATEMENT OF OPERATION AND OTHER COMPREHENSIVE INCOME

(Unaudited)

 
                                                      Three months ended 
                                                           March 31 
                                                   ----------------------- 
                                                      2021         2020 
                                                   ----------  ----------- 
                                                        USD thousands 
                                                   ----------------------- 
 
 Revenues                                             71, 009       38,611 
 Expenses: 
   Cost of Revenues (Exclusive of depreciation 
    and amortization shown separately below)          17, 692       13,258 
  Research and development expenses                     3,403        3,521 
  Selling and marketing expenses                       18,050       18,169 
  General and administrative expenses                   6,806        9,933 
  Depreciation and amortization                         9,883       11,460 
 Total Expenses                                        55,834       56,341 
                                                   ----------  ----------- 
 
                                                                ( 17 , 730 
 Operating Profit (Loss)                              15, 175            ) 
                                                   ==========  =========== 
 
 Financing income                                        (86)    (1, 104 ) 
 Financing expenses                                       798          216 
                                                   ----------  ----------- 
 
 Financing expenses (income), net                         712      ( 888 ) 
                                                   ----------  ----------- 
 
 
                                                                ( 16 , 842 
 Profit (Loss) before taxes on income                 14, 463            ) 
 
 Tax benefit (expenses)                             ( 1,589 )        2,583 
                                                   ----------  ----------- 
 
 Profit (loss) for the period                          12,874     (14,259) 
                                                   ==========  =========== 
 
 Other comprehensive income items: 
 Foreign currency translation differences 
  for foreign operation                                 (836)      (2,633) 
                                                   ----------  ----------- 
 
 Total other comprehensive income (loss)                (836)      (2,633) 
                                                   ----------  ----------- 
 
 Total comprehensive income (loss)                     12,038     (16,892) 
                                                   ==========  =========== 
 
 Earnings (loss) per share 
 Basic earnings (loss) per share (in 
  USD)                                                  0.096      (0.107) 
 Diluted earnings (loss) per share (in 
  USD)                                                  0.091      (0.107) 
 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

 
                              Share      Share     Other comprehensive   Retained 
                              capital    premium          income          Earnings    Total 
                            ---------  ---------  --------------------  ----------  --------- 
                                                      USD thousands 
                            ----------------------------------------------------------------- 
 
 Balance as of January 
  1, 2021                         380    264,831                 3,330      60,472    329,013 
 Total Comprehensive 
  income (loss) for 
  the quarter 
 Profit for the period              -          -                     -      12,874     12,874 
 Other comprehensive 
  Income: 
 Foreign Currency 
  Translation                       -          -                 (836)           -      (836) 
                            ---------  ---------  --------------------  ----------  --------- 
 
 Total comprehensive 
  Income (loss) for 
  the period                        -          -                 (836)      12,874     12,038 
                            ---------  ---------  --------------------  ----------  --------- 
 
 Transactions with 
  owners, recognized 
  directly in equity 
 Revaluation of liability 
  for put option on 
  non- controlling 
  interests                         -          -                     -          64         64 
 Own shares acquired              (3)    (6,640)                     -           -    (6,643) 
 Share based payments               -      5,394                     -           -      5,394 
 Exercise of share 
  options                           8        190                     -           -        198 
                            ---------  ---------  --------------------  ----------  --------- 
 
 Balance as of March 
  31, 2021                        385    263,775                 2,494      73,410    340,064 
                            ---------  ---------  --------------------  ----------  --------- 
 
 Balance as of January 
  1, 2020                         351    240,989                   494      58,778    300,612 
 Total Comprehensive 
  loss for the quarter 
 Loss for the period                -          -                     -    (14,259)   (14,259) 
 Other comprehensive 
  Income: 
 Foreign currency 
  translation                       -          -               (2,633)           -    (2,633) 
                            ---------  ---------  --------------------  ----------  --------- 
 
 Total comprehensive 
  loss for the period               -          -               (2,633)    (14,259)   (16,892) 
                            ---------  ---------  --------------------  ----------  --------- 
 
 Transactions with 
  owners, recognized 
  directly in equity 
 Revaluation of liability 
  for put option on 
  non- controlling 
  interests                         -          -                     -        (98)       (98) 
 Issuance of shares 
  in Business Combination          25     14,092                     -           -     14,117 
 Share based payments               -      5,013                     -           -      5,013 
 Exercise of share 
  options                           4        521                     -           -        525 
                            ---------  ---------  --------------------  ----------  --------- 
 
 Balance as of March                                           ( 2,139 
  31, 2020                        380    260,615                     )      44,421    303,277 
                            =========  =========  ====================  ==========  ========= 
 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(Unaudited)

 
                                                        Three months ended 
                                                              March 31 
                                                      ---------------------- 
                                                         2021        2020 
                                                      ---------  ----------- 
                                                           USD thousands 
                                                      ---------------------- 
 
 CASH FLOWS FROM OPERATING ACTIVITIES : 
     Profit (loss) for the period                        12,874     (14,259) 
     Adjustments for: 
          Depreciation and amortization                   9,883       11,460 
          Net financing expense (income)                    733        (908) 
          Loss on sale of fixed assets                       14            - 
          Gain on leases change contracts                 (307)      (2,825) 
          Share-based payment                             2,341        5,228 
          Tax expenses (benefit)                          1,589      (2,583) 
 
          Change in trade and other receivables          11,096    3 6 ,7 31 
                                                       (19,7 37   ( 33 , 216 
          Change in trade and other payables                  )            ) 
          Change in employee benefits                         3         (21) 
          Income taxes received                           1,699          984 
          Income taxes paid                               (816)        (529) 
          Interest received                                  79          199 
          Interest paid                                   (152)        (251) 
                                                      ---------  ----------- 
 
     Net cash provided by operating activities          19, 299           10 
                                                      ---------  ----------- 
 
 CASH FLOWS FROM INVESTING ACTIVITIES 
      Change in pledged deposits                          (267)          149 
      Leases Receipt                                        830          624 
      Repayment of long-term loans                            -          817 
      Acquisition of fixed assets                       (1,545)        (307) 
      Acquisition and capitalization of intangible 
       assets                                           (1,253)      (1,189) 
      Proceeds from sale of business unit                    59            - 
      Acquisition of subsidiaries, net of cash 
       acquired                                               -        6,208 
                                                      ---------  ----------- 
 
      Net cash provided by (used in) investing          ( 2,176 
       activities                                             )        6,302 
                                                      ---------  ----------- 
 
 CASH FLOWS FROM FINANCING ACTIVITIES 
      Acquisition of own shares                         (6,643)            - 
      Payment of call option liability                  (1,294) 
      Proceeds from exercise of share options               198          525 
      Leases repayment                                  (2,809)      (4,329) 
                                                      ---------  ----------- 
 
        Net cash used in financing activities          (10,548)      (3,804) 
                                                      ---------  ----------- 
 
      Net increase in cash and cash equivalents          6,57 5        2,508 
                                                      =========  =========== 
 
 CASH AND CASH EQUIVALENTS AS OF THE BEGINNING 
  OF PERIOD                                              97,463       79,047 
 EFFECT OF EXCHANGE RATE FLUCTUATIONS ON 
  CASH AND CASH EQUIVALENTS                             ( 552 )        (173) 
                                                      ---------  ----------- 
 
 CASH AND CASH EQUIVALENTS AS OF THE 
  OF PERIOD                                             103,486       81,382 
                                                      =========  =========== 
 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

   NOTE 1:         GENERAL 
   a.         Reporting entity: 

Tremor International Ltd. (the "Company" or "Tremor International"), formerly known as Taptica International Ltd., was incorporated in Israel under the laws of the State of Israel on March 20, 2007. The ordinary shares of the C ompany are listed on the AIM Market of the London Stock Exchange. The address of the registered office is 82 Yigal Alon Street Tel-Aviv, 6789124, Israel.

Tremor International is a global C ompany offering an end-to-end software platform that supports a wide range of media types (e.g., video, display, etc.) and devices (e.g., mobile, Connected TVs, streaming devices, desktop, etc.), creating an efficient marketplace where advertisers (buyers) are able to purchase high quality advertising inventory from publishers (sellers) at scale. Tremor Video Inc. ("Tremor Video"), a wholly owned subsidiary, is the Company's Demand Side Platform ("DSP") providing full-service and self-managed marketplace access to advertisers and agencies in order to execute their digital marketing campaigns in real time across various ad formats. RhythmOne PLC ("RhythmOne") and Unruly Holding Ltd ("Unruly"), both wholly owned subsidiaries, provide access to the Sell Side Platform ("SSP") which is designed to monetize digital inventory for publishers and app developers by enabling their content to have the necessary code and requirements for programmatic advertising integration. The SSP provides access to significant amounts of data, unique demand, and a comprehensive product suite to drive more effective inventory management and revenue optimization. The Company also provides a Data Management Platform ("DMP") solution which integrates both DSP and SSP solutions enabling advertisers and publishers to use data from various sources in order to optimize results of their advertising campaigns.

Tremor International Ltd. is headquartered in Israel and maintains offices throughout the US, Canada, EMEA and Asia-Pacific.

On April 1, 2019, the Company completed an acquisition transaction with RhythmOne and on January 4, 2020 the Company completed an acquisition transaction with Unruly. Following the acquisition of RhythmOne and Unruly, the Company invested and developed capabilities both in the DSP and SSP solutions which launched in 2020 to offer an end-to-end platform that provides customers access to an advertising marketplace in an efficient and scalable manner utilizing machine learning, artificial intelligence and advanced algorithms .

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and work force participation and created volatility and disruption of financial markets, the impact of which was most acute during the second quarter of fiscal year 2020. As of March 31, 2021, due to the ongoing impact of the COVID-19 pandemic on the Company's business, many of the estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, these estimates may change in future periods. Actual results could differ from the estimates.

   b.        Material events in the reporting period : 

On March 25, 2021, the Company paid USD 1,294 thousand to ADI founders for it's exercised part of the call option (as explained in note 17 to the financial statements for the year ended December 31, 2020), a lower amount than was originally scheduled, as part transformed to a conditional bonus. D.A. Consortium, Inc., a minority shareholder of ADI, exercised, effective March 5, 2021, its put option pursuant to the Shareholders Agreement dated July 17, 2016, as amended November 20, 2020, to sell to Taptica Japan GK, a wholly owned subsidiary, its entire shareholding in ADI, reflecting 2,120 Shares of ADI, for a purchase price equal to seven times the actual net profit of ADI for the last fiscal year, reflecting USD 1,120 thousand which was paid on April 2021. Following the closing of the put option exercise, the Company will own through its subsidiary 100% of the share capital of ADI.

On March 25, 2021, the Company's Board of Director approved, subject to the approval of the Company's Extraordinary General Meeting ("EGM") dated April 30, 2021, to grant to the Company's three Executive Directors, subject to the completion of the Company's initial public offering in the United States, an aggregate of 4,725,000 restricted share units (RSUs) and 2,025,000 performance share units (PSUs) pursuant to the Company's 2017 Equity Incentive Plan and the Company's Global Share Incentive Plan (2011). The RSUs and the PSUs are issuable, subject to compliance with the applicable vesting terms, into the same amount of Ordinary Shares of the Company. Pursuant the terms of the awards, the RSUs will vest gradually over a period of three years, with 8.33% of each such grant vesting each quarter, subject to the executive continuing to be employed by the Company on the applicable vesting date, and the PSUs will vest gradually over a period of three years, with 33.33% of each grant vesting each year, subject to (i) the executive continuing to be employed by the Company on the applicable vesting date, and (ii) compliance with performance-based metrics as will be determined by the Remuneration Committee of the Board of Directors. The fair value of the RSUs and PSUs granted to the executives directors as of April 30, 2021 is 720 pence (approximately 10 . 02 USD) per ordinary share based on the market value of the Company's quoted share price.

The estimated cost of these RSUs and PSUs on a 100% vesting completion will aggregate to approx. USD 67 million over the 36 months period commencing the day of the grant.

In addition, on April 30, 2021, the Company's shareholders approved at the EGM a special US dual listing bonus in the event the Company's initial public offering in the United States is successfully completed, of USD 500,000 to each of the Company's three Executive Directors, subject to the discretion of the Remuneration Committee of the Board of Directors, which are part of an aggregate US dual listing bonus pool of up to USD 5,000,000 approved by the Board of Directors.

The Company's shareholders also approved at the EGM, on April 30, 2021, to increase the aggregate available pool of the Company's 2017 Equity Incentive Plan and the Company's Global Share Incentive Plan (2011) by an additional 6,500,000 Ordinary Shares of the Company (with 80% of the increase allocated to the 2017 Plan and 20% of the increase allocated to the 2011 Plan).

   c.         Definitions: 

In these financial statements -

 
 The Company     -   Tremor International Ltd. 
 
 The Group       -   Tremor International Ltd. and its subsidiaries. 
 
 Subsidiaries    -   Companies, the financial statements of 
                      which are fully consolidated, directly 
                      or indirectly, with the financial statements 
                      of the Company such as RhythmOne PLC, Unruly 
                      Holding Ltd, Tremor Video Inc. 
 
 Related party   -   As defined by IAS 24, "Related Party Disclosures". 
 
   NOTE 2:         BASIS OF PREPARATION 
   a.         Statement of compliance: 

The condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and do not include all the information required for full annual financial statements. They should be read in conjunction with the financial statements for the year ended December 31, 2020 (hereinafter - "the annual financial statements").

The condensed consolidated interim financial statements were authorized for issue by the Company's Board of Directors on May 24 , 2021.

   b.        Use of estimates and judgments: 

The preparation of financial statements in conformity with IFRS requires management of the Group to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The preparation of accounting estimates used in the preparation of the Group's financial statements requires management of the Group to make assumptions regarding circumstances and events that involve considerable uncertainty. Management of the Group prepares estimates on the basis of past experience, various facts, external circumstances, and reasonable assumptions according to the pertinent circumstances of each estimate.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

   NOTE 3:         SIGNIFICANT ACCOUNTING POLICIES 

The accounting policies applied by the Company in these condensed consolidated interim financial statements are the same as those applied by the Company in its annual financial statements, there was no change in accounting policies or any new relevant standards during the quarter.

   NOTE 4:         SHAREHOLDERS' EQUITY 

Issued and paid-in share capital:

 
                                               Or dinary Shares 
                                          -------------------------- 
                                              2021          2020 
                                          ------------  ------------ 
                                               Number of shares 
                                          -------------------------- 
 
 Balance as of January 1                   133,916,229   124,223,182 
 Own shares held by the Group                ( 917,998 
                                                     )             - 
 Share based compensation                    2,676,968     1,277,533 
 Shares issued in business combination               -     8,525,323 
                                          ------------  ------------ 
 
 Issued and paid-in share capital 
  as of March 31                           135,675,199   134,026,038 
                                          ============  ============ 
 
 Authorized share capital                  300,000,000   300,000,000 
                                          ============  ============ 
 
   1)        Rights attached to share: 

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company. All shares rank equally with regard to the Company's residual assets.

   2)        Issuing new public shares: 

Following the acquisition of Unruly, the Company issued 8,525,323 shares at a quoted price of GBP 1 .51 (USD 1.98) per share to former Unruly shareholders which became admitted to trading on AIM on January 10, 2020 and are subject to a 18-months lock-up.

   3)        Own shares acquisition: 

As part of the Company's approvals in December 2020 for a share buyback program for a total consideration of USD 10 million, the Company purchased during the three months ended March 31, 2021, 917,998 shares for a total consideration of USD 6,643 thousand.

The Ordinary Shares acquired pursuant to the Buyback Program are classified as dormant shares under the Israeli Companies Law (without any rights attached thereon) and held in treasury.

On March 26, 2021 was decided that the Company's current USD 10 million buyback program, originally announced on December 20, 2020, will be paused while the Company pursues the Proposed Offering, which is expected to take place in the second quarter of 2021 after the SEC completes its review process, subject to market and other conditions.

   NOTE 5 :         EARNINGS (LOSS) PER SHARE 

Basic earnings (loss) per share:

The calculation of basic earnings (loss) per share as of March 31, 2021 and 2020 was based on the profit for the period divided by a weighted average number of ordinary shares outstanding, calculated as follows:

Profit for the period:

 
                                   Three months ended 
                                        March 31 
                                 --------------------- 
                                    2021       2020 
                                 ---------  ---------- 
                                     USD thousands 
                                 --------------------- 
 
 Profit (loss) for the period       12,874    (14,259) 
                                 =========  ========== 
 

Weighted average number of ordinary shares:

 
                                                 Three months ended 
                                                      March 31 
                                             ------------------------- 
                                                 2021         2020 
                                             -----------  ------------ 
                                                   Shares of NIS 
                                             ------------------------- 
                                                   0.01 par value 
                                             ------------------------- 
 
 Weighted average number of ordinary 
  shares used to calculate basic earnings     1 34 , 406 
  per share as of March 31                         , 286   133,122,300 
                                             ===========  ============ 
 
 Basic earnings (loss) per share 
  (in USD)                                         0.096       (0.107) 
                                             ===========  ============ 
 

Diluted earnings (loss) per share:

The calculation of diluted earnings (loss) per share as of March 31, 2021 and 2020 was based on profit or for the period divided by a weighted average number of shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, calculated as follows:

Weighted average number of ordinary shares (diluted):

 
                                            Three months ended 
                                                  March 31 
                                        -------------------------- 
                                            2021          2020 
                                        ------------  ------------ 
                                               Shares of NIS 
                                        -------------------------- 
                                              0.01 par value 
                                        -------------------------- 
 
 Weighted average number of ordinary 
  shares used to calculate basic          1 34 , 406 
  earnings per share                           , 286   133,122,300 
 Effect of share options issued            6,759,645 
                                        ------------  ------------ 
 
 Weighted average number of ordinary 
  shares used to calculate diluted 
  earnings per share                     141,165,931   133,122,300 
                                        ============  ============ 
 
 Diluted earnings (loss) per share 
  (in USD)                                     0.091       (0.107) 
                                        ============  ============ 
 
   NOTE 6:         SHARE-BASED PAYMENT ARRANGEMENTS 
   a.         Share-based compensation plan: 

The terms and conditions related to the grants of the share options programs are as follows:

   --    All the share options that were granted are non-marketable. 
   --    All options are to be settled by physical delivery of shares. 
   --    Vesting conditions are based on a service period of between 0.5- 4 years. 
   b.        Stock Options: 

The number of share options is as follows :

 
                                           Weighted average 
                     Number of options      exercise price 
                   --------------------  ------------------- 
                      2021       2020       2021      2020 
                   ---------  ---------  ---------  -------- 
                        (Thousands)             (GBP) 
                   --------------------  ------------------- 
 
 Outstanding at 
  1 January            3,781      4,828 
 Forfeited              (36)      (879)       1.60      3.26 
 Exercised             (105)      (605)       1.37      0.51 
 Granted                   -      1,405          -      1.60 
 
 Outstanding at 
  March 31             3,640      4,749 
                   =========  ========= 
 Exercisable at 
  March 31               240        679 
                   =========  ========= 
 
 

In January 2020, the Company's Board of Directors approved a change in the exercise price and vesting terms relating to 2,204,174 options for ordinary shares held by certain employees (the "Amended Options"), as follows:

 
                                 Originally granted         Amended Granted 
                              -------------------------  --------------------- 
                               Exercise                  Exercise 
    Grated         Number        price     Exercisable     price   Exercisable 
     date         of options     (GBP)      date from      (GBP)    date from 
--------------   -----------  ----------  -------------  --------  ----------- 
 
March 20,                                 March 20,                July 28, 
 2017                217,000     2.44      2019            1.60     2021 
                                                                   July 28, 
June 18, 2017        116,000     2.99     June 18, 2019    1.60     2021 
November 5,                               November 5,              July 28, 
 2017                391,000     4.31      2019            1.60     2021 
January 23,                               January 23,              July 31, 
 2018              1,163,000     4.37      2020            1.60     2021 
                                                                   July 31, 
June 20, 2018         52,000     4.37     June 20, 2020    1.60     2021 
                                                                   July 28, 
April 2, 2019        265,174  2.06-18.27  April 2, 2019    1.60     2021 
 

The options that had a vesting date up to July 2021 will now vest and become exercisable on July 2021, while the vesting and exercise periods of the rest of the options remain unchanged. The incremental fair value (amounting to USD 1,282 thousand) is recognized over the remaining vesting period. The new expiration date is one year after the last exercise date.

   c.         Information on measurement of fair value of share-based payment plans: 

The total expense recognized in the period ended March 31 , 2021 and 2020 with respect to the options granted to employees, amounted to approximately USD 424 thousand and USD 665, respectively.

   d.        Restricted Share Units (RSU): 

The number of restricted share units is as follows :

 
                                               Weighted-Average 
                         Number of RSU's     Grant Date Fair Value 
                        -----------------  ------------------------ 
                          2021     2020       2021         2020 
                        --------  -------  ----------  ------------ 
                           (Thousands) 
                        ----------------- 
 
Outstanding at 1 
 January                   3,777    3,969       2.364         2.372 
Forfeited                      -        - 
Exercised                  (747)    (673)       2.223         2.272 
Granted                       40    1,880       9.349        2. 426 
Restricted stock 
 units assumed in 
 acquisition during 
 the quarter                   -      415           -        2. 592 
                        --------  ------- 
 
Outstanding at March 
 31                        3,070    5,591       2.752         2.418 
                        ========  ======= 
 

The total expense recognized in the period ended March 31 , 2021 and 2020 with respect to the RSU granted to employees, amounted to approximately USD 1,091 and USD 2,711 thousand, respectively.

   e.        Performance Stock Units (PSU): 

The number of performance stock units is as follows :

 
                                                    Weighted-Average 
                             Number of PSU's      Grant Date Fair Value 
                            ------------------  ------------------------ 
                              2021      2020       2021         2020 
                            ---------  -------  -----------  ----------- 
                               (Thousands) 
                            ------------------ 
 
  Outstanding at January 
   1                            3,852    5,071        2.155        2.105 
  Forfeited                      (76)    (145)        2.179        1.973 
  Exercised                 ( 1 ,824)  (1,305)        2.179        1.973 
  Granted                          40      725        9.349        2.592 
                            ---------  ------- 
 
  Outstanding at March 
   31                           1,992    4,346        2.277        2.166 
                            =========  ======= 
 

The vesting of the PSU's is subject to continues employment and compliance with the performance criteria determined by the Company's Remuneration Committee and the Company's Board of Directors.

The total expense recognized in three months ended March 31, 2021 and 2020 with respect to the PSU granted to employees, amounted to approximately USD 826 thousand and USD 1,852 thousand, respectively.

f. Expense recognized in the statement of operation and other comprehensive income is as follows:

 
                                 Three months ended 
                                      March 31 
                               --------------------- 
                                  2021        2020 
                               ----------  --------- 
                                   USD thousands 
                               --------------------- 
 
 Selling and marketing                687      1,923 
 Research and development             143         22 
 General and administrative         1,511      3,283 
                               ----------  --------- 
 
                                    2,341      5,228 
                               ==========  ========= 
 
   NOTE 7:         OPERATING SEGMENTS 

The Group has a single reportable segment as a provider of marketing services.

Geographical information:

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of consumers.

 
              Three months ended 
                   March 31 
            --------------------- 
               2021        2020 
            ----------  --------- 
                USD thousands 
            --------------------- 
 
 America        63,260     33,619 
 APAC            4,550      4,084 
 EMEA            3,199        908 
            ----------  --------- 
 
 Total          71,009     38,611 
            ==========  ========= 
 
   NOTE 8:                SUBSEQUENT EVENTS 

On May 18, 2021, Tremor Video, Inc. ("Tremor") filed a complaint against Alphonso, Inc. ("Alphonso") in the Supreme Court of the State of New York, County of New York. The claim is for breach of contract, tortious interference with business relations, intentional interference with contractual relations, unjust enrichment, and conversion. The lawsuit arises out of Alphonso's breach of a Strategic Partnership Agreement and an Advance Payment Obligation and Security Agreement ("Security Agreement") with Tremor, along with related misconduct. Tremor complaint is for damages and other relief, including an order foreclosing on Alphonso's collateral under the Security Agreement, from the Court.

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END

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