Thank you for standing by. My name is Janine, and I will be your conference operator. Welcome to NexSys third quarter earnings call. At this time, participants are in listen-only mode with a question and answer session to follow at the end of the presentation. The call is being recorded, and a replay of today's call will be made available on Nexon's Investor Relations website. I will now hand the call over to Billy Eckert, Vice President of Investor Relations, for introductions and the reading of the Safe Harbor statement. Billy, please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to Nexon's third quarter earnings call. During today's call, we will discuss our financial and operating results for the three and nine months ended September 30, 2024, as well as our forward-looking guidance. With us on today's call are Ofer Druker, Nexon's Chief Executive Officer, and Sagi Niri, the company's Chief Financial Officer. This morning, we issued a press release which you can access on our IR website at investors.nexon.com. During today's conference call, we will make forward-looking statements. All statements other than statements of historical fact could be deemed as forward-looking. We advise caution and reliance on forward-looking statements. These statements include, without limitation, statements and projections regarding anticipated future financial and operating performance, market opportunity, growth prospects, strategy, financial outlook, partnership and anticipated benefits related to those partnerships, anticipated benefits related to the potential changes in the company's trading security structure, anticipated benefits related to the company's intended growth and platform investments, forward-looking views on economic and industry conditions, as well as any other statements concerning the expected development, performance, and market share competitive performance relating to our products or services. These statements are based on information available to us as of the date of this call. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those implied by these forward-looking statements, including unexpected changes in our business, unexpected changes in macroeconomic or industry conditions. More detailed information about these risk factors and additional risk factors are set forth in our filings with the US Securities and Exchange Commission, including but not limited to, those risks and uncertainties listed in the section entitled risk factors in our most recent annual report on Form 20-F. Nexon does not intend to update or alter its forward-looking statements whether as a result of new information, future events, or otherwise, except as required by law. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in IFRS and non-IFRS terms. We refer you to the company's press release for additional details including definitions of non-IFRS items and reconciliations of non-IFRS results. At this time, it is my pleasure to introduce Ofer Druker, CEO of Nexon. Ofer, please go ahead.

Thanks, Billy. Since late last year, we significantly improved the company performance. Our improvement is a direct byproduct of our hard work integrating the MoVI's technology data assets and talent base fits with a challenging macroeconomic condition as well as our rebrand to Nexen. The combination of which has boosted our spending with the industry. Since early 2024, we achieved significantly better results than in 2023. As our business thrives and markets are on better footing, as evidenced by our ability to generate record Q3 results and accelerate our growth prospect by winning partnerships with some of the world's top companies. After enhancing our tech product, data, and advanced PCB capabilities, Nexen is being recognized as a strategic partner that can drive superior results regardless of our customers' across the industry choose to work with us. It is clear. NexGen is now viewed as the data-first EdTech Platform. That enhances outcomes and solves key problems across the supply chain with data-driven video advanced TV and audience targeting capabilities, unlike any other in the industry. Our strategy to seamlessly connect our robust data distribution our flexible platform to fuel better customer outcomes is the winning value proposition that is leading more and more partners to select Nexen as the platform of choice. A key advantage for Nexen is that we are one of the pioneers and leaders in the concept of owning and operating an end-to-end platform. A trend that others in EdTech are trying to catch up to. Operating a full-stack platform brings efficiency and simplicity to our partners. And customers that adapt multiple solutions across our end-to-end ecosystem typically save costs while generating improved results in ROI. Our end-to-end platform includes a flexible full-service state-of-the-art DSP and SSP, centered around a data platform. It is unique and differentiated in…

Thank you, Ofer. In Q3, we generated contribution ex tax of $85.5 million achieving 12% growth from Q3 2023. Programmatic revenue was $81.6 million in Q3 reflecting 10% growth from Q3 2023 while contribution ex tax from our non-programmatic business line increased slightly year over year from a dollar perspective. Growth in Q3 was broad-based driven by enhanced sales execution, scaling partnerships, and improved market conditions. We observed strength in CTV video, display, mobile, and PNP and increases across ten of our eleven industry verticals with the biggest increases reflected in our government finance, health, and automotive vertical. On the opposite side, in Q3, we observed the year-over-year decrease in our travel vertical. We achieved a major year-over-year increase in CTV revenue in Q3 generating $29.7 million in CTV revenue which reflected 52% growth from Q3 2023. Q3 2024, was the second-best CTG revenue quarter in Nexon's history reflecting strong results for the second consecutive quarter as CCV revenue represented 36% of programmatic revenue up from 26% in Q3 2023. ATV revenue growth was driven by benefits related to our partnership with LG Ads, and strong sales execution amidst a continued shift by new and existing customers into our premium CTV solution. We strongly believe that our differentiated advanced TV Technology. And that's a solution robust CPV. OEM partnership, platform's ability to flexibly cater to both sides of the CTV advertising ecosystem and access to premium supply positions us to capitalize on what we believe to be a long-term CTV growth opportunity still in early innings. Video revenue continued to account for most of our programmatic revenue, expanding to 71% in Q3 2024, from 66% in Q3 2023. This year-over-year increase was driven by video revenue strength, fueled by CTG outpacing programmatic revenue growth. We continue to expect video revenue…

Thank you. Ladies and gentlemen, we will now begin the question and answer session. I would like to remind everyone for one question, one follow-up. Should you have a question, and you will hear a prompt that your hand has been raised. Should you wish to withdraw, please press star followed by the number one again. Are using a speakerphone, please lift the handset before pressing any keys. Our first question comes from the line of Matt Swanson from RBC Capital Markets. Please go ahead.

Alright. Thank you guys so much for taking my question. Ofer, I really appreciated the Stadwell example. I've still had to had DSP. Yeah. Example. I guess with all these new capabilities and and then everything else that you guys are now investing in around data and Gen AI, could can you a little bit more about how you get you know, customers and advertisers to to see the new next and then to to kind go to market with all these new capabilities.

Of course. Good morning, Matt. I think that the entry point for us that we are now presenting to new advertisers and clients is our discovery. Our discovery tool is a very powerful tool that we basically acquired through the acquisition of Hamobi. It's a it's a very amazing ability to basically connect and integrate a lot of datasets into one platform platform in order to learn about audiences. And, basically, what we are doing, we are showing through this platform and ability for the advertiser to learn about this potential audience, to learn about the insights and sentiment of the audience regarding this product or service that he's trying to to offer. To create audiences and to activate them very simple in a in a very simple mode, on our platform, basically, on our SSP or DSP that he wants to. And even measure results. So everything is basically now all the data efforts that we are doing. The ability to run and to follow a campaign from end to end and to follow the journey of the campaign across all the systems, are basically translated to a very powerful capability on the discovery tool that basically enable the advertisers to do what I just mentioned. And this is how we are basically demonstrating it to them. And, of course, advertisers react reaction is very good for the platform and to the ability because it's giving them a lot of capabilities that they cannot find in any other manner. In other other platform. And also the simplicity of the activation of the audience and the learning on on our platform is very meaningful because they don't need to take the data out and file a place to activate it, which usually is very complicated. Or to upload data. The second thing that we are enabling on on the discovery is basically for leading advertisers to upload their data first party data in, and you reach it without data. And I will give just one example. Which is our PVIC Is that but enable them to basically match their data and enrich it with our TV data and it's giving them a lot of insight in order to push more campaigns to CTV, more campaigns to linear if they choose to do that and so on. And it's unique and very powerful tool. So this is basically the window that we are giving to advertisers in order to to choose and to understand our capabilities that are getting more mature lately, and we feel that we are in the right spot in the right place in the right time in order to serve our client's port side. By the way, advertisers and major publishers. I hope that answer your question.

Yeah. No. That's that's perfect. And maybe this answers is similar, but I I think on first blush when people saw these strong growth you had in CTV, the the assumption would be maybe there political contribution, but it sounds like that wasn't really the case in q three. So could you talk a little bit more just kind of about where you guys are seeing success that led to such a strong growth right there?

Of course. So political was part of that, but it's not the major force, of course, that that generated this blog. This block is coming from a few elements. One of them is that we are working on technology for CTV for the last more than five years. From 2019, And I think that we got to a point that we can really offer to to advertisers and to publishers a very strong tech stack that enable them to to run their campaign in the most efficient manner and also to publishers to offer their media the most efficient efficient manner and to sell audiences and not just media. This is, of course, Eight integrated with a lot of algorithm and and and machine learning that we build over the years. That are optimizing our capability to run CTP. If if you will check back in the last five years, we are talking about it, and we are demonstrating that. Basically, The second point is also the fact that we are increasing always the the publisher list that we got and the partner list that we got on the CPD front. From ability to reach additional users and additional audiences in the market, and it's working very well because point one that I said, our technology capability that basically we can prove to these publishers that we can add to them value and we can add to them more revenues that they don't see from other from other connection that they got to other SSPs because we have also a whole Cisco. And the third element that helped us this year is also the LG settlement that basically enable us to require much more media much more quality media in the market. And enable us to grow our revenues. So this is the major three elements. And the fourth one is what I said before. Which is the discovery. So basically, today, people are choosing to buy more CTVs. So if you are able to show them the discovery tool, teach them how work with them about their audiences and enable them to learn about their insights and and sentiment and also direct it to CTV it's, of course, an important element at El Paso. And the last point, which is not connected to us but connected to the market, I think that the market now in a better shape. So it's helping people to in in a good in a good market condition, people direct more spend or solicitivity.

Thank you. Our next question comes from the line of Laura Martin from Needham. Please go ahead.

And then for you, I'm sorry. So the first thing you talked a lot about was your end-to-end platform and you think that gives you competitive advantage. But I would just point out that most of the end-to-end platforms during the quarter grew twelve percent. And the single-sided platforms, Vyen and Trade Desk, grew twenty-five percent. So right now, it looks like the single-sided platform have a big competitive advantage in terms of being adopted by new clients. So if you could talk about why you think end-to-end platforms have an advantage, and if they do, why their growth rate isn't closer to the single-sided platform? I'd be interested in that answer. And then you basically, you use the word data in almost every sentence. And so if data is important, that means scale is important. Because trade desk wins. If data is important, it just goes bigger. So does that is there something you bring to data? You don't have as much of it as you're not that big. So is there some you bring to the data that adds value, or do you need to be buying things because you need to be double and triple your current size?

Thank you. I will start with your second point about data. You are mentioning that in every sentence because it's incorporated about ninety percent of our. Usually now, advertisers are running campaigns, and they are using data in order to enhance their their their to get the results that they are looking for. And we basically already, for the last is. Implementing that And, also, we have a very strong BNP ID graph curated media that we're launching. That is all about data because we believe that this is the future. That's why I mentioned a lot. And we have yes, we have a lot of unique stuff that we are having on the data side. I think that we are one of the only companies in the in the open web that has basically an agreement with the OEM to August their their ACR data and utilize it in order to get targeting. And we are very dominant and and active in the PV TV world mini. To gain this data and incorporate it, they can reach other datasets in order to get more insights for for advertisers about their their audiences related to TV. So I think that when you're looking at these two points, more than ninety percent of our campaigns are a copy using data in a very big manner in order to achieve better results. Second thing, we have a lot of unique datasets Also, to remind you about United, they choose to to to load to upload their data about MyRIS Plus MileagePlus on our another that another platform. And we are gaining a lot of other sources of data from our activities and from other companies that are basically launching their campaigns. Of course, Consent. So I think that on the data elements,…

Those are super helpful. And, Sai, the one for you If you're gonna delist basically offshore and be a NASDAQ listed company. Any thoughts about moving the US GAAP out of IFRS?

At some point? Yeah. That's a good question. Yes. We are considering that. You know, we will we may lose our status going forward, so we acknowledge that somewhere in the timeline, we should move to US gas it's something that we are taking into consideration, and, of course, it will help us you know, to get into more in this size. So it's something that is on the table, and we are and and probably we will move to that in in some point of time.

Okay. Thanks very much, guys. Great number. Thanks.

Thank you. You're welcome.

Thank you. Our next question comes from the line of Andrew Marok from Raymond James. Please go ahead.

Hi. Thanks for taking my questions. Maybe one that I think you've touched on in in a couple of your previous answers. But, again, I heard the phrase strong sales execution a couple of times in your remarks. I guess, what's changing there? Is that is it really just the result of the broader product offering you're The cell or are there some maybe internal measures that drove either better efficiency efficiency or anything you can call out there? And kinda how does that play into your investment priorities for the sales force over the near term?

I will I will take this one. Yes. I think that after the acquisition of Amobi, what we saw is that we needed enough data rebranding that Basically, we're done last year. And we needed to to basically sharpen our message in the market and as you know, when you when you just making a move and changing your messaging and changing your not not having yet, like, a very sharp message It's, of course, affecting your sales team. Because they need a very sharp and and understanding about what you are basically offering and how it will be basically communicate with the tech stack that you got and what are the unique capabilities that we got So I think that in the last nine months, we see a really good good improvements on that. So our sales team are more aligned with our offering I think that our sales materials, our messaging outside, our rebranding, everything is is getting more mature and more sharpened. And it's helping, of course, our sales people to to drive better results. So it's not we we didn't change the matrix. We are counting cash and sales, basically. But I think that we are very much shopping message inside and outside that is helping us to achieve better result. Again, you want Great. Let me

No. No. That's fine. Yeah. Okay. I I appreciate it. So maybe one one quick one on on four q and and political if I could. We'd heard from some other companies in the industry maybe a little bit of a crowding out in October as as political kinda heated up. Doesn't sound like that's the case from your neck of the woods. So I guess what's kind of embedded in the four q guide in terms of post election, it's macro assumptions, and things like that if you're coming off of a strong political in October and early November. Thank you.

Andrew, I think that, you know, as as we said earlier, it was, you know, on a on a full year 2024, political contribution exact where records for Nexa. And having said that, it's not, you know, a lot Some of it, of course, came in q three, and some of it came in q four. I think as Arthur mentioned, you know, our we are seeing the trend of q three keeping into q four. And we are seeing we we really don't see any drops you know, post political election day revenues and, of course, we have a tight forecast that we are maintaining inside the pipeline. I think, you know, as offer mentioned, The the the growth drivers that are within our company for a long time is now materializing, And I think as Ofer mentioned, you know, data is a huge opportunity, of course. CTV, we are well positioned that we grew more than fifty percent year over year. And, of course, we think our TV capability, food, cream supply, end to end footprint, make this a key growth driver that does amazingly with the customers. So I think nothing changed. Political was you know, nice for us. It's not material, and we are moving first thing ahead.

Appreciate it. Thank you. Bye

Thank you.

Thank you. Our next question comes from the line of Matt Condon from Citizens JMP Securities. Please go ahead. One moment. I will put him back on the queue. Please give me one moment. Guess I accidentally dropped him. My apologies. Okay. For now, we will jump to Mark Kelley. Question from CECL. Please go ahead.

Great. Thank you. Good morning, everyone. Maybe I just two for me. I guess the first one just on the you know, political side. Appreciate the color there. And I know, you know, you guys don't really consider it material, but I guess how do we think about seasonality as we go from q four to q one? You know, as we take that political out? That's my first question. And then the second one is At what point do you think we might see your CTV growth outpace PMP growth. You know, which would imply that we're seeing more open exchange programmatic inventory in CPV. Thank you.

Hey, Mark. Thank you for the question. Good morning. I think, you know, if we are taking political I'm not sure the comparison between Q4 and Q1 is a legit one. As you know, you know, q one is the is the toughest queue within the within the calendar year, and q four is the is the I think that what we will see and we talked about it earlier is that our growth driver are in place. We are putting a lot of emphasize on new initiative around AI and general AI in 2025. We are going to invest There? And I think that all the capabilities offer mentioned regarding our discovery dataset end to end and other capabilities that we have place that brought us to this point of time. But we are seeing the the growth quarter over quarter. I'm sure that q one 2025 will be Better or much better than q one 2024. If that's what we're asking. So I think we have all the all the capabilities we need in place. And as we mentioned on other calls, now it's all around execution and and and we are doing great job on the on the offense with the team, of course. And we will see, you know, greater revenue generation going forward.

On your other question about when CTV will bypass PNP, it's it's it's not a this you know, it's not like a one to apple to apple competition, but in general, PTP is making a meaningful part of our PNP activity, basically. But I feel that PMP will be always bigger because on PMP, you have also other activities that is coming from other BSPs in our in our case. That are not buying just a TV. They are buying also video, online video, and they buying also display. So in general, I don't think that it's like a Apple to Apple competition, and I think that CTV is growing very fast, but I think that PNP is also, in our case, is growing very fast because this is basically following the trend of the market. And and the agencies and the advertisers are now buying more programmatic than they used to, so the PNP will continue to grow. But, of course, there are other opportunities in the market also.

Okay. Thank you both.

Thank you. Our last question comes from the line of Matt Condon from JMP Securities. Please go ahead.

Thank you so much for taking my question. My first one is just on the potential for additional commerce media partnerships You know, it's nice to see the partnership with United, but can you just remind us or update us on pipeline of additional companies that you are potentially looking to partner with.

So it's basically, you know, you need a few examples in order to start selling it. And I think that we we started now because of the discovery tool that I mentioned before. Because of the end-to-end solution, because of our deep reach in in media, which is CTV and also other formats. We are making it's making more it's becoming more interesting for these type of clients basically to choose to work with us. And because of the fact that we are putting a precise on on our on our DNP, basically, data management platform, that is very robust and enable them basically to load their data, to enrich it with PDF data or other data that they choose to bring in or for us to connect. And to be able to to better target and to better utilize their media. I cannot, of course, share with you, like, pipeline because it's not something that we can do in this this session, but there is a a very healthy pipeline of companies that are reaching out and we are reaching out to them in order to build it because we feel that people are looking exactly for the solution that we are offering, which is very strong DNP, enabling to upload your data in which it utilizes very very easily. And get more insight and sentiment about your audience and even measure your results after running the campaign.

Okay. Yeah. That was great. That's that's very helpful. And then my second one is just on your partnership with the trade desk. Just wanted to hear if there's any early indications of demand coming to that channel or maybe when we can expect that start contributing to results. Potentially, in 2025.

So the relationship with the credit is around around the data. Just started, like, last quarter. And it's building up. Meaning, we started no spin. Australia, but it's building up. People need to get educated. The traders care got, of course, a lot of data sets on the platforms, and we are one of them. But we are building traction with them. And with their clients. And it's it's it's becoming more and more interesting, and the idea is to open more and more markets together. Globally because the this is basically our our strategy and and it's matching their strategy. I cannot tell you that it's the full strategy because I'm not representing them, but general, In this case, yeah, They want to expand with us internationally, and and that's what we will do in the in the new unit.

Thank you so much.

Thank you. That concludes our Q and A session. I would now like to turn the call over to Ofer for closing remarks.

Thank you. Thank you everyone for getting on this call this morning. We strongly believe we made the right strategic decision in the past few years. We got really good tech product, to cover what is important to our industry today. Which we believe is data, CTB, privacy, Gen AI, very strong programmatic capabilities. Next year, we believe we got what we need from second product perspective, and we will put attention back to innovation and execution and good luck and we are excited about the future. And I want to use this opportunity to thank our teams and our employees around the globe that are working very hard in the past few months, And in general, know that we achieve this goals, and we are excited about it. So thank you everyone and have a nice weekend.

Thank you for joining the conference call for today. You may now disconnect.